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Lord Empey Excerpts

Monday 10th September 2018 Lords Chamber

[Lord Empey (UUP)]

My Lords, I congratulate the noble Lord, Lord Hodgson of Astley Abbotts, on securing this debate. I had the privilege of serving as a member of your Lordships’ Select Committee on Financial Exclusion, which was very ably chaired by the noble Baroness, Lady Tyler of Enfield, in 2016. I commend its report to your Lordships. We looked at a range of issues that were causing financial exclusion. One issue to which we drew attention was the closure of so many bank branches—which has accelerated in the 18 months or so since the committee reported. Even last week we heard of substantial further closures. We understand the trends in how finance works. We would all love to see a situation where people could get bank accounts. A lot more people have them than used to, but there are still about 1.5 million who do not and are still struggling. The irony is that they get into a trap where the less you have the more things cost. That cannot be right. We took evidence from a range of bodies and went to see organisations in Coventry and the east of London which were helping people. We had piles of written evidence.

More than one government department is involved in this and we need to join things up. I draw noble Lords’ attention to the point made by the noble Lord, Lord Hodgson, about direct debits going out on a specific day. Many people who are on zero-hours contracts have periods when they are paid erratically. For them, it is extremely difficult to tell in advance whether they will have a particular amount in their account when they do not know how many hours they are going to be working that week or month. The banks have a basic bank account which we know does not make them money. We discovered that very little effort was made to promote it and I can understand why.

There is a need for joined-up thinking. We also discovered that the primary source of taking people to court for non-payment of rent or anything else was the public sector. It was the public sector that was leading the charge in this. I have a big disagreement with the Government in how they handle housing benefit here; we do it differently at home. I believe that rent should be paid to the landlord, not to the tenant. I understand that it is very nice to be able to say that we teach people to manage their own accounts. That is all very well, but anyone who has served a constituency over the years, and run advice centres, knows the sorts of people who are vulnerable. Think of the pressures on a young mum who is on her own with two or three youngsters. Back home, on the day when the money was due to be paid the sky would darken with all the vultures ready to pounce. There were crooked lenders and all sorts. There was an army of bailiffs running around trying to chase people down for rent. That is a disincentive to bring housing stock into the rental market.

Rent should be paid directly to the landlord. At least that would guarantee a roof over the family’s head, which would be some progress. That system works far better than leaving it open for someone to pounce on a vulnerable person, who is often a woman on her own with children. They may have addiction problems or all sorts of other issues. Under our system, at least the roof over their head is paid for and there is therefore no need for bailiffs to go chasing round trying to track people down. There are so many temptations because of the demand to get hold of that cash, and in an admittedly small number of cases, exorbitant lenders go round chasing after people, particularly those with addiction issues. The people who suffer most in those circumstances are the children in the family. In some cases, they are in a bad enough condition as it is.

I ask the Minister to take account of this issue, which was raised by some members of the committee when it was sitting. There are bank closures and the only way to have a card is to have an account. But if your account is charging exorbitant rates of interest then if you draw down cash on the card you pay even more than if you are making a purchase. It is a vicious cycle and I hope that the Government can join up and break it, once and for all.