Oral Answers to Questions

Debate between Jo Swinson and Ann McKechin

Thursday 8th January 2015 Commons Chamber

[Jo Swinson]

Unsurprisingly, I disagree with the perspective at the end of the hon. Lady’s question. I agree that there are serious issues with zero-hours contracts. Although they work well for many people, as backed up by Chartered Institute of Personnel and Development surveys, there are other examples—she highlights some from her constituency—where that type of contract is not used as it should be. That is why we are taking action through the Small Business, Enterprise and Employment Bill to ban exclusivity clauses and why we are going further, with the development of sector-specific guidance to show what the proper and responsible use of these contracts looks like.

[Ann McKechin (Glasgow North) (Lab)]

The Minister will be aware that in parcel and distribution services there is not only widespread use of zero-hours contracts but, as we have seen with the collapse of City Link, increased use of self-employed contractors, who have ended up with no rights to redundancy, with losing pay, and with being increasingly abused. How will the Minister regulate the sector so that we halt this race to the bottom in labour conditions?

[Jo Swinson]

The hon. Lady raises a genuine point. The Government do recognise this as an area of concern, particularly as regards different employment statuses. My right hon. Friend the Business Secretary announced a review of employment statuses so that there can be greater clarity about the issues and we can see whether we need to make changes to the way in which different employment statuses are currently set out. The review is ongoing and we expect it to report over the next couple of months.

Oral Answers to Questions

Debate between Jo Swinson and Ann McKechin

Thursday 20th November 2014 Commons Chamber

[Jo Swinson]

The key is not only increasing the fine to £20,000, but enabling that fine to be levied per worker rather than per employer. The fine, which is of course linked to the amount of arrears, covers all but three cases found over the last year. None of the others would have reached the £20,000 maximum. We will be fining employers more when they break the law, because those responsible employers who abide by the law deserve to know that those who break the law will be properly punished.

[Ann McKechin]

Seatruck, which operates domestic ferries between Aberdeen and Lerwick and Ullapool and Stornoway, pays its Estonian national seafarers as little as £3.66 an hour, while it benefits at the same time from the tonnage tax scheme operated by this Government. Is it not about time that we tackled the people who are undermining the national minimum wage, particularly for seafarers, by ensuring that regulations are tough enough to capture this group of people?

[Jo Swinson]

The hon. Lady raises the issue of seafarers, which has been raised by other hon. Members. I know that my predecessor, when I was on maternity leave, was dealing with this issue, and we continue to look at it. I reiterate to all hon. Members who have constituents concerned about not being paid the national minimum wage that Her Majesty’s Revenue and Customs will investigate every single complaint made to the pay and work rights helpline on 0800 917 2368. If people will please report instances of where the national minimum wage is not properly being paid, we can investigate and enforce it to ensure that people get what they deserve.

Oral Answers to Questions

Debate between Jo Swinson and Ann McKechin

Thursday 18th July 2013 Commons Chamber

[Jo Swinson]

Significant action is being taken. The Office of Fair Trading has referred the industry to the Competition Commission because of widespread non-compliance. It is taking its own enforcement action, which has already resulted in a third of the lenders that have responded so far—the rest are due to do so this month—leaving the market altogether as a result of the tough action being taken. We have given the FCA stronger powers to enable it to ban products, impose unlimited fines and order money to be paid back to consumers who have been ripped off. That is a pretty comprehensive package of action to clamp down on this unscrupulous and irresponsible lending behaviour.

[Ann McKechin]

If other jurisdictions, such as Florida, already have effective real-time recording systems that stop borrowers accumulating unpayable debts, why cannot we have such a system here, now?

[Jo Swinson]

Such systems rely on the industry to be able to update them. The industry is looking at and working on that. We have credit reference agencies, which work well in many of the credit markets, but the real-time issue that the hon. Lady raises is a genuine one and more difficult to set up than the systems in place. We are encouraging the industry to address that, because it will help to improve affordability assessments.

High Cost Credit Bill

Debate between Jo Swinson and Ann McKechin

Friday 12th July 2013 Commons Chamber

[Jo Swinson]

I thank my hon. Friend for her description of my hon. Friends the Members for Shipley and for Christchurch as the Batman and Robin of Fridays in the House. We will obviously have to wait to hear what Members want to say.

[Ann McKechin]

I am grateful to the Minister for giving way. Does she agree that the basic problem is that self-regulation, as in other jurisdictions across the world, has completely failed, and that time is of the essence and that we need to get on with regulation now, not in another two years?

[Jo Swinson]

I absolutely agree with the hon. Lady: that is exactly the point I was making. We have tried to work with the industry and it has produced its voluntary codes, but the Citizens Advice survey suggests that it is not sticking to them. The industry also committed at the time to monitor the compliance with those codes by this summer. Only one of the four main trade associations in the industry has said that it will do that monitoring; the others have not even agreed to comply with that. That is why we are transferring consumer credit regulation to a new independent regulator, the Financial Conduct Authority, which will have real teeth to clamp down on the problems in this market.

Oral Answers to Questions

Debate between Jo Swinson and Ann McKechin

Thursday 7th February 2013 Commons Chamber

[Ann McKechin (Glasgow North) (Lab)]

11. What assessment he has made of the effect on consumer behaviour of Government advice on debt.

[The Parliamentary Under-Secretary of State for Business, Innovation and Skills (Jo Swinson)]

The Government established the Money Advice Service in July 2011 to co-ordinate and monitor free debt advice. We also support advice through the National Debtline and Citizens Advice. Nevertheless, the evidence suggests that many people are still unaware that there is free debt advice and so fall prey to high up-front fees and profit-driven advisers. Today, I am therefore announcing a new debt management protocol that will protect consumers and ensure they know where to go for free debt management advice.

[Ann McKechin]

Last week, I listened to a pointless radio advert from the Money Advice Service that advised people how to get a mortgage. Surely debt advice from the Government should focus on priorities such as vulnerable families who are finding it difficult to afford basic food or their rent, far less the luxury of obtaining a mortgage.

Oral Answers to Questions

Debate between Jo Swinson and Ann McKechin

Thursday 20th December 2012 Commons Chamber

[Ann McKechin (Glasgow North) (Lab)]

1. What assessment he has made of the effect of payday lenders in areas of social deprivation.

[The Parliamentary Under-Secretary of State for Business, Innovation and Skills (Jo Swinson)]

The Government are not aware of any robust research that quantifies the effect of payday loans on areas of social deprivation, but I expect that there are links. We are very concerned about the findings of the interim report from the Office of Fair Trading’s payday compliance review and strongly support any enforcement action that the OFT takes. Payday lending can work for some people in some circumstances, but it is not a solution to long-term financial difficulty.

[Ann McKechin]

Scotcash, which represents many vulnerable families in Glasgow, has brought to my attention a payday loan agreement in which the APR is a staggering 7,200,000%. Given that Which? has indicated that more than 48% of those who take out payday loans believe that they will not be able to repay them, is it not now time for the Minister to commit to firm statutory regulation in 2013 rather than relying on wishy-washy voluntary codes?

[Jo Swinson]

The hon. Lady raises two specific issues in her question. Although there is concern about high interest rates, just as when someone hires a car for three days they do not look at the annual cost of doing so, with short-term credit the APR is not necessarily the most relevant statistic. The hon. Lady’s second point was on affordability assessments and the detrimental effect of people being lent money they should not be lent when debt advice would be much more appropriate. That is a significant concern. The Government are considering the OFT’s review and the OFT is already taking action—it has opened formal investigations into several payday lenders. We expect the final report early in the new year and the Government are committed to ensuring that we take action on this issue.