Cash Acceptance

Paul Maynard Excerpts

Monday 20th March 2023 Westminster Hall

[Paul Maynard (Blackpool North and Cleveleys) (Con)]

It is a pleasure to serve under your chairmanship, Ms Bardell. I thank the hon. Member for Linlithgow and East Falkirk (Martyn Day) for his presentation of the topic.

I declare an interest: I am a member of the Consumer Council for Link, which runs the national network of free-to-use ATMs. It also assesses the impact of banking closures and looks at what should replace them, whether it is a banking hub such as the one in Cambuslang, which the hon. Member for Rutherglen and Hamilton West (Margaret Ferrier) mentioned, or one of the alternatives.

The hon. Member for North Ayrshire and Arran (Patricia Gibson) and I are often in this Chamber discussing this very topic. When we were first here, almost three years ago, I made the point then the issues are twofold: acceptance of cash and access to cash. There is no point accessing cash if it cannot be spent, as she said; but here is no point accepting it in the first place if no one has it to spend.

This debate is not really about acceptance of cash; that is a misnomer. It is about who pays for our cash system. Is it businesses? Retailers do not get to keep every penny if people pay by cash, and the extra costs associated with handling cash and with the cash system are passed on to consumers. The financial services sector —everyone boos it quite happily—passes the cost on to account holders. Fundamentally, the cost of our cash system always ends up back with the customer. Tinkering with the intermediaries handling the cash and introducing new rules, as some have advocated today, will not change that fact, even if it makes for some media-friendly, savvy headlines in the Daily Mail.

[Mr Alistair Carmichael (Orkney and Shetland) (LD)]

The hon. Gentleman makes a very good point. Nothing in life is free; eventually, somebody has to pay for it. This trend has been driven by Governments of all colours for decades. The most significant move towards a cashless society was the Labour Government’s decision to prevent people from being able to access pensions at the post office by handing over a pension book, and insisting that all pensions go into bank accounts. There will have to be a different culture in Government before they have the authority to lecture banks.

[Paul Maynard]

I take the right hon. Gentleman’s point, but I am not lecturing the banks on the basis of being a politician. I apologise if my approach today is technocratic, but I am not seeking to be political. The Minister can explain what the Government are actually doing on this front.

We have all had substantial lobbying on this issue. My inbox has been full of press clippings, videos of the hon. Member for Linlithgow and East Falkirk and so on. I am a little troubled by the emphasis on the compulsory acceptance of cash, and particularly by the suggestion that we should adopt something like the Spanish legislation that limits card payments to a €30 minimum. If someone wants to spend less than €30, they cannot use a card. That seems to be the very opposite of payment choice, and the cost would be passed on to consumers through higher prices. The cost to retailers comes in the form of driving further to deposit the takings at the end of the day. If they have to drive a long distance, they might have to close earlier to get to the post office or bank before it closes. That means they forgo income, so they might have to raise their prices.

In my constituency, the signs in shops saying “No card payments under £3” or, “No card payments under £5” have disappeared since the pandemic. That is progress; it gives people more choice. New technology, such as handheld card readers, has made payments both easier and cheaper, although I recognise that the hon. Member for Inverness, Nairn, Badenoch and Strathspey (Drew Hendry) might intervene to say that broadband is still not good enough in many rural areas to make such things reliable, particularly in the tourism sector.

Before people out there start to shout at me, let me say that I certainly do not believe that cash should be killed off and that the future is entirely digital—far from it. People will always need cash, particularly the financially vulnerable and marginalised in society. My constituency of Blackpool North and Cleveleys has eight of the 10 poorest neighbourhoods in the country, and I know that some people rely on cash to manage their income. Some are nervous about using technology; they may struggle to remember their PIN or manage their personal finances. They may be among the 1.8 million people who are still unbanked, relying on a jam-jar approach and monitoring pots of money for bills, which cannot be done with a card.

I was troubled by some of the proposals briefed out ahead of this debate. One suggestion was that in return for requiring businesses to accept cash, certain denominations of coin would be done away with—giving with one hand while taking with the other. That fills me with dread. Another suggestion was requiring “exact-amount services”, which is a euphemism for “rounding up”—something priced at 33p would be priced at 35p, for example. That would make no sense in the midst of a cost of living crisis. There is no mandate for it from the public, and it has no legitimacy in the eyes of consumers or, indeed, retailers.

The Minister is here to tell us what the Government have done, but I will make brief reference to the legislation on access to cash, which is entirely welcome. I would love him to talk about free access to cash, but I bet he will not—he has been disappointing me on that front for some time, so I will not hold my breath. I am also a bit frustrated that the policy statement explaining how we will guarantee access to cash will not come out until we pass the legislation, so we cannot judge how spot on it is, but he may be listening to me on that.

I have not heard many people talk about the notion of cashback without purchase, something for which the Government have legislated. It solved a long-term problem known as the £3.22 issue. Someone may want to take out a precise amount of money—they might not want £10 or £20 because they are managing their finances. They cannot take £3.22 out of an ATM, but they can now take out that amount from their local PayPoint in the newsagent without having to make a purchase. It is life changing for many people in areas such as the one I represent, but all the vested interests in this debate hate talking about cashback without purchase. They do not want people to know about it. They would far rather that the most vulnerable people in my constituency went down to a pay-to-use ATM.

The banks have produced some fascinating research into why people in the most deprived parts of this country often go to a pay-to-use ATM, which may charge £2 or £2.50 to take out small amounts of money, when they are actually very near to a free-to-use ATM. Understanding that strange behaviour is a real challenge for the financial services sector, and it is something that I find frustrating about this entire debate.

I commend the work of the access to cash review and Natalie Ceeney, who has done so much on access in recent years. Like her and the group, I believe that banking hubs are the way forward, but I also know from Link’s work scrutinising the impact of bank closures that the introduction of a banking hub is not the only remedy to bank closures. I think of post offices, ATMs, and deposit-taking “reverse” ATMs. I was doing my own private secretary work, as a sort-of pretend Minister, by checking on my phone what happened in Holt when Barclays closed; I understand that an ATM is now going to be installed. When I checked Axminster, I found that its residents are getting a banking hub—I am not sure when, but congratulations on that. I am sure they have heard how good it was in Cambuslang.

Many campaigners ask, “Is this enough? Are we going far enough and fast enough? Why aren’t they all open now? Why doesn’t a banking hub open the moment the bank shuts its doors?” but 38 banking hubs and 38 more deposit-taking ATMs have been announced so far, which is a pretty good first step. I would love things to move faster—that might stop the Daily Mail campaigning against banking hubs—but they are a rather new concept and certain legalities need sorting out. Indeed, in one case, they are still trying to remove asbestos from the preferred location. People who thought that the moment a branch shut a banking hub would pop up as a like-for-like replacement misunderstood the situation.

Campaigners set the bar so high that I think they will not be satisfied until they have a maternity unit included in the hub, as well as everything else—they almost seem not to want to win this battle that they have been fighting for so long. We need to keep the pressure on those introducing the banking hubs; we need to ensure that the pace of their introduction accelerates and that these initial hurdles are overcome, but I do not think we should talk down the idea of banking hubs because somehow they are not perfect.

I wonder if the aspirations are too high. I listened carefully to the House of Lords debate on the Financial Services and Markets Bill, in the special way that the House of Lords does it. Their lordships suggested in one amendment an obligation on banking hubs to have a representative from every single bank. That just is not feasible. Digital-only banks, such as Monzo and First Direct, offer a better service to customers because they do not have the overheads of a physical network. We would wholly undermine their business model if we were to insist that banks like Monzo suddenly have to recruit someone to physically exist in a banking hub. That makes no sense at all.

What the banking hubs should be used for is digital training and addressing financial exclusion. Someone mentioned decimalisation—I think it was the hon. Member for Linlithgow and East Falkirk. To me, a more pertinent example is the switch from analogue to digital television and the emphasis, training and preparation that went into that process, so that no one was left unserved when analogue was switched off. People knew it was coming and were helped through that process. I am not saying that cash will ever be switched off, nor do I want it to be, but we could learn from that process how we walk and talk people through it.

I want to make two final points. One is around deposit-taking ATMs. This may sound like a rather anodyne and technocratic point—I suppose it is—but not all ATMs are equal. Members may have heard me refer earlier to the challenges retailers face in having to go much further to deposit their takings at the end of the day. A deposit-taking ATM is fundamental to solving that problem.

The post office is not always the solution. My post office in Cleveleys is tiny, despite it being a town of 16,000; people queue out the door even when there are no financial services activities, let alone every time a bank branch closes and they have to start using the post office again. I was speaking to the postmaster of the nearest post office to where I live. I have been hearing worrying tales that local businesses are struggling to deposit cash because the banks are putting limits on the amount a business can deposit in any one calendar year, to the point that some businesses are having to shut down, simply because they cannot deposit the cash takings at the end of the day. I tell the financial services sector and all those banks that normally monitor what I say in this place that I am not happy. I expect an email tomorrow morning from at least one of those banks that are obsessed with everything I say. This policy is a real deterrent.

I end on a note of agreement, though, with the UK Cash Supply Alliance. I know I have been giving them a bit of a hard time in the debate. This is the most technocratic issue imaginable, but it is the cost of the hardwiring of our cash system. The wholesale distribution of cash remains far too costly—£5 billion to the economy overall—and there is far too much duplication. We have not seen the radical reform I believe was needed when the Bank of England set up the wholesale distribution steering group to try to find an alternative model. I fear that some in the cash distribution sector are defending their commercial turf under the guise of protecting customer interests. That is simply not good enough.

I had a fascinating trip to Vaultex near Warrington several years ago. Vaultex is one of the cash-handling and cash-distribution centres that covers the north of England. All our bank notes come in and come out of the centre. I have never stood near so much money in my life. There is absolutely no chance of getting in or out with it—it even has a special roof that a helicopter cannot be landed on just to avoid any shenanigans—but what I saw there was duplication after duplication. Every bank required their bank notes to be counted, stored and separated in a specific way; there was no attempt to rationalise the process. I sat there thinking, “If only more banks could agree to handle their money in the same way, it would start to reduce this £5 billion cost.” I do not know how that is going. I gather there were proposals for a public utility model that would help to bring it all together to reduce the costs, but it is such an opaque process. The Bank of England does not update the minutes on its website for this wholesale distribution steering group, so I know very little about what is going on, which is frustrating.

Reducing that £5 billion cost is the answer to what we have been discussing today, making it cheaper and more affordable for small businesses to keep taking cash. If that does not happen, we will have a problem. The best way to protect the acceptance of cash is not by penalising consumers with higher costs or penalising retailers by forcing them to raise costs, but by addressing the reason why retailers choose not to accept cash in the first place, which is about cost and convenience. We should reduce the cost of wholesale distribution, and make depositing cash easier with more deposit-taking ATMs. If we do that, we will start to tackle the vested interests which have hovered ghoulishly over this debate for far too long.

[Hannah Bardell (in the Chair)]

I call the SNP spokesperson.

--- Later in debate ---

[Andrew Griffith]

The hon. Lady makes an important point, although perhaps not the one she intended, about some of the challenges of cash in a rural location.

[Paul Maynard]

Will the Minister give way?

[Andrew Griffith]

I will because my hon. Friend made some strong points earlier.

[Paul Maynard]

Does the Minister think it is important to recognise that cashback without purchase is a voluntary decision by the retailer? Retailers are not obliged to embark upon it if they do not wish to; it is a commercial enterprise.

[Andrew Griffith]

My hon. Friend is absolutely right. That is one of the principles in how we have approached the issue. Although we are taking powers in the Financial Services and Markets Bill to mandate access to cash and cash machines, we must remember that 95% of the population are within 2 km of a free cash machine.

Illegal Money Lending

Paul Maynard Excerpts

Tuesday 29th November 2022 Commons Chamber

[Paul Maynard (Blackpool North and Cleveleys) (Con)]

It is a pleasure to serve with you in the Chair, Madam Deputy Speaker. I will endeavour to make concision my watchword, with my eye half on the clock, but I want to give this issue an airing. Illegal money lending is a growing and pernicious problem in constituencies such as mine, but it receives little attention and is almost surrounded by stigma. I am grateful to the Centre for Social Justice for its assistance in preparing for today’s debate, particularly Matthew Greenwood, who authored an exceptional report on the issue.

On the surface, illegal money lending sounds as though it might be a rather low technical offence—lending money as a business without approval from the Financial Conduct Authority. In practice, however, it is a frequently devastating crime that sees the exploitation of the financially vulnerable and carries with it deep financial, mental and physical costs. No two cases of illegal money lending are the same, but, in England today, the Centre for Social Justice estimates that up to 1 million people could be borrowing from an illegal money lender. Those people each experience illegal lending in their own way and for their own reasons. It is dangerous to over-generalise and I will try to avoid doing so.

Anyone can be the victim of an illegal money lender—indeed, anyone can be an illegal money lender—but known victims tend to share a number of common experiences. Just over 60% have an income below £20,000 a year and almost half live in social housing. That constitutes a large proportion of my constituency, as Blackpool has eight of the 10 most-deprived neighbourhoods in the country. Illegal money lending is a danger that stalks every street in the centre of Blackpool. It is a risk to almost every home, but those who are often the victims have limited awareness of it.

Sometimes illegal money lenders are called loan sharks, but I am not fond of that phrase, because the problem is much more insidious than the almost-cartoonish quality of “loan shark” suggests. The lender is not an unknown quantity circling menacingly outside the front door; too often, they are a friend or relation popping round for tea and sitting on the sofa. When people are struggling to afford the costs of everyday items and bills, and often unable to access credit, they turn to someone they know and consider a friend, or even a family member they trust, but they are deceived.

Simply, that lender is not a friend, but a fraud who deceives their victims with an offer of financial support that does not materialise in practice. Having advanced money to their customer illegally, the lender does not adhere to the stringent credit regulations put in place more widely to protect consumers but exploits their sense of obligation to repay for financial gain.

We have an excellent illegal money lending team in this country, who I know the Minister supports and works with closely. They can evidence annual percentage rate repayments into the thousands, as people are emotionally manipulated into a deep sense of obligation to repay a so-called mate who once ostensibly helped them out.

[Jim Shannon (Strangford) (DUP)]

Will the hon. Gentleman give way?

[Paul Maynard]

I will, of course. I was waiting for the moment.

[Jim Shannon]

I commend the hon. Gentleman for bringing this forward. In Northern Ireland, we have real problems with illegal money lending, and paramilitaries are usually involved. People on estates are desperate, with energy prices and everything else rising to a level that is absolutely beyond their means, and they think the only way out is via illegal money lenders. In these trying times, with the rise in the cost of living, many may be tempted to go down this route for a quick loan, so does he agree that more needs to be done—I am looking forward to the Minister’s response—to make people aware of the damage that loan sharks can cause? A £100 loan could mean an £800 repayment, and that is outrageous.

[Paul Maynard]

I thank the hon. Member for his intervention. As ever, he speaks a lot of sense. His evidence from Northern Ireland shows why we cannot generalise about this issue—there are specific circumstances there—but I join him in looking forward to the Minister’s reply, and I am sure those points will be taken on board.

I was struck by one example in which an illegal lender took all a young girl’s money in repayments because she felt obliged to him, as he had taken the effort to go round and put drops into her pet dog’s eyes because she could not manage it herself. What an awful situation to be in. Coercion and intimidation are all too often encouragements to repay, and that should not be the case.

What about when a victim cannot pay? Illegal lenders have been known to add arbitrary late fees, causing the debt to spiral out of control, and to threaten their victims and even demand sexual favours. I know the Minister is more than familiar with the practices of illegal lenders and their economic abuse, but for the benefit of a wider audience, let me tell the House about Michelle. Michelle met her lender on the school playground. She needed money and her friend—her lender—offered to meet that need. She thought she was borrowing from a friend. When she struggled to repay, her lender made it her business to know when money went into her account so they could make her repay. The more she repaid, the more she needed to borrow, but that was not all. Michelle received threats, and she had her windows smashed. As she tried to sleep at night, she was shouted at, making her own home an unsafe place to stay. It got so bad that Michelle and her two children were put into temporary housing. Why? Because she borrowed £50.

I raise these issues not only because they are a blight on our communities, but because we are facing an increase in the cost of living. Those on the sharpest edges will be pushed further away from financial inclusion and the legal credit market into the hands of the most unscrupulous. I very much welcome the financial support that the Government have already given to support people’s incomes, but we must do all we can to prevent illegal money lenders from taking hold by supporting the illegal money lending team to do its job and provide long-term, scalable market solutions to financial exclusion.

The illegal money lending team is a specialised body equipped to identify and prosecute illegal money lenders, but its current scale is insufficient to meet rising demand. Money is scarce, but support to improve the team and its data capabilities would go a long way to improve understanding of this issue and better tackle it. I know the Minister will be aware of the consumer credit levy that raises funds for the team, but perhaps funds could be found from elsewhere in the Department, even in these straitened times. Another part of this support must surely be improving the quality of debt advice and its ability to identify clients who are borrowing from illegal lenders.

It is worth touching briefly on the Help to Save scheme, which is one of my pet favourite projects of the entire Government. It is a fantastic mechanism by which people on universal credit and some legacy benefits can save for a rainy day. To date, His Majesty’s Treasury reports that the scheme supports almost 360,000 people, but this is well below 10% of even those on universal credit. Improving access to and the uptake of this solution to financial resilience is a priority.

May I make a wider point? I have participated in numerous online sessions, meetings there, speeches—you name it—and often all I hear is how we remedy the consequences of poor financial resilience, not how we avoid it in the first place. Help to Save should be front and centre in all our debates about this, not waiting for things to go wrong when we could solve them further upstream. I urge the Minister, as he is new to the job, to make Help to Save a personal passion, because it can make so much of a difference to so many lives.

Finally, let me touch on credit unions and the consumer credit market more widely. Accessing credit should be something that everyone can do. It should not be stigmatised as wrong for certain types of people, as sadly I often hear in this place. We need to do much better through innovation at ensuring that those who most need credit can access credit that is affordable, and that successful repayments can open the door to future, cheaper forms of credit. That journey—the focus of the much lamented and unadvanced Woolard review—is crucial if consumers are to steer clear of illegal lenders.

Part of creating a healthy credit ecosystem is emphasising the role of credit unions, which are strong, community-focused organisations that offer low-cost, alternative credit. However, they are not currently up to the task of plugging the entire credit gap because of over-prescriptive legislation that is both old and in need of modernisation, as well as designed in such a way that it limits their growth, scalability, size and membership.

I know that this is an area of work that the Minister is taking an interest in, and I welcome the provisions in the Financial Services and Markets Bill, which he is shepherding through the House. The Bill will help to expand credit unions’ coverage across the credit spectrum and improve access to services, but if we are to truly scale these lending bodies, we need to reimagine what is called the common bond. By tweaking existing legislation to allow credit unions to have a maximum membership rather than a maximum potential membership, we might allow them to cover a wider geographic area, pool their talent into bigger, more professional bodies and compete with one another to offer the best services. That would create scale, and it seems to me to be a sensible, market-oriented Conservative policy. If only we had so many more of them at the moment. Come along—it cannot be that difficult.

More widely, it is important that the consumer credit market is fit and able to serve customers across the credit spectrum. I urge the Minister to undertake work to see whether the Bill can be adjusted to accommodate those views. Reimagining the common bond, promoting strategic mergers and supporting the illegal money lending teams to clamp down on illegal lenders are small tweaks. I know that those are issues that he takes seriously. I hope—I ask this in every Adjournment debate—he will meet with me and the Centre for Social Justice to discuss how we can take this agenda forward. I thank him for his time today and for listening to me. I thank hon. Members present and hope that, as I have been concise, the staff of the House can make it in time for kick-off.

Financial Services and Markets Bill

Paul Maynard Excerpts

2nd reading
Wednesday 7th September 2022 Commons Chamber

[Richard Fuller]

My right hon. Friend is absolutely right. He will know that the question of access in urban areas is very different from that in rural areas. I can give him the assurance that he seeks.

[Paul Maynard (Blackpool North and Cleveleys) (Con)]

I, too, welcome all the provisions, but will the Minister confirm that when he says “access to cash” what he actually means is free access to cash, not paid-for ATMs.

--- Later in debate ---

[Paul Maynard (Blackpool North and Cleveleys) (Con)]

Thank you very much, Madam Deputy Speaker. What a lucky boy I am to have another minute to spend—gosh! I refer the House to my entry in the Register of Members’ Financial Interests as a member of the consumer council for LINK, which not only manages the nation’s ATM network but is the overarching body that can get new banking hubs in place. It is important for people to bear that in mind in listening to my comments. I would have paid tribute to my hon. Friend the Member for Salisbury (John Glen) if he were still here. Unfortunately, he is not, but he was always patient as I chased him around Westminster trying to ask about yet further nuance on access to cash.

One thing that we have learned today from listening to hon. Members is that access to cash is the wrong way to talk about the issue. It is about not just cash but access to face-to-face banking. Those who are reliant on cash, whether they are elderly or in financial need, must be able to speak to someone about their financial situation and not just interrogate a computer. We have heard from hon. Members about how reliant so many are on cash as a budgeting tool—increasingly so, given the cost of living crisis—with a jam jar approach to managing bills.

The Bill’s provisions on access to cash need to be about more than ATMs and ensuring that we can spew out cash to consumers; people need somewhere to spend it. The underlying problem is the economics of our cash system—the hidden wiring—and no one has mentioned the provisions in the Bill about the wholesale distribution of cash. If it costs too much for a retailer to use cash, why would they keep on accepting it? They need to be able to deposit it in an ATM just as much as a customer needs to be able to withdraw it to spend it in the first place. Far better still would be more local cash recycling, which would avoid the need for nationwide banknote distribution, if only for environmental reasons.

We must be careful not to accept the rather irresponsible narrative that, somehow, we are on the precipice of all ATMs disappearing. Some 94% of cash withdrawals are still from free-to-use ATMs, and LINK subsidises any ATM that was here in 2018 and no longer has an alternative within 1 km. Should that ATM disappear, LINK will fund a replacement. There is a strong backstop to ensure the presence of ATMs in our communities.

As I said, the debate has moved far beyond ATMs, and towards face-to-face banking, largely thanks to the Herculean efforts of Natalie Ceeney, who wrote the original access to cash review back in 2019. She has banged chief executives’ heads together across the banking sector to ensure that they move forward on banking hubs, which, as we have heard, are making such a difference in Belper and Barton-upon-Humber as well as more and more places across the country. LINK is doing a fantastic job, looking at already announced and planned bank closures to identify where access to cash and face-to-face banking is already being reduced. Where those gaps are appearing, it is working with the overarching company that has been set up to fill those gaps. It assesses each closure and recommends better cash services for places without any branch services left to be delivered by a dedicated operating company.

Some have expressed concerns about the slow roll-out of banking hubs. We have had two pilots that have proved that they are workable measures. However, things such as asbestos removal and finding the right location in a community need to be factored in by a sector that has not previously had to act as a property developer. Some delay is therefore perhaps understandable, and I would rather that we got it right in each community than rushed to buy any old place and hoped for the best.

The creation of an overarching duty for the Financial Conduct Authority is very much the icing on the cake for the work that has gone on so far. It should be seen as a reason to take satisfaction. I think that those criticising the Bill for not going far enough do not fully understand what has already occurred. They need to recognise a win when they see one and then raise it. However, I do seek some clarifications from the Minister. I have sought one already, and he has been uncharacteristically reticent at the Dispatch Box in telling me what I want to hear, and he is normally very good at telling me exactly what I want to hear. Now, he knows where I lurk most mornings, and I will be there tomorrow if he wishes to approach me over my coffee and whisper sweet nothings into my ear about having heard my plea.

There is no point in offering us access to cash if that access costs £2.75 at cash machines in the poorest part of my constituency. That diminishes access to cash, because people will find it even harder to access cash should that cash machine mean that a free-to-use ATM has disappeared. All of this is meaningless unless the word “free” is introduced into the debate.

Secondly, the Government are putting out their access to cash statement. Can the Minister reassure me that it will not just be some crude measure of geographical accessibility—two miles here, one kilometre there or whatever? That would not reflect the need in the likes of Mitcham and Morden, which is a very urban constituency rather like mine. My right hon. Friend the Member for Dumfriesshire, Clydesdale and Tweeddale (David Mundell) spoke earlier. He has a vast rural area where one kilometre, frankly, will not mean much on the hills and the moorlands.

[Alison Thewliss]

The hon. Gentleman is making an excellent point on the proximity of cash machines and arbitrary limits. The city centre of Glasgow is right at the heart of my constituency. Putting a couple of kilometres around that would basically knock out every other cash machine that was not on Buchanan Street, so I agree with his point. Does he agree with me that the Government have to think more carefully about such limits?

[Paul Maynard]

I very much welcome that. The challenge for the Government is that the access to cash statement must reflect what good access looks like—not just to a cashpoint, but to wider in-person banking services. It cannot just be “Can I get a bank note out of a machine?” It has become increasingly common in my own local area for cash machines not to have been filled up. There is not much point in having a cash machine without any bank notes in it, as if it were a rather decorative antique object.

One important feature that does not require legislation, but which deserves a great deal of comment—more than the two minutes I now have—is the right for communities to review any decision taken on whether they should have a banking hub. Not only is LINK assessing any closure of a bank branch already announced, but the right for a community to request a review of cash access. I am sure every single Member worth their salt in this place will be sitting down looking at the map of their constituency and saying, “I need a review there, there, there and there.” I am sure LINK will not thank me for doubling or quadrupling its workload in that regard, but it is a fantastic opportunity and a mark of how far this debate has moved. In my view, the legislation should specify a simple, fair and independent process that allows communities to appeal decisions. That could easily be placed in the legislation as an additional duty for the FCA. It will help the communities, the banks and LINK by ensuring a fair, independent and transparent method for communities who are not satisfied to have issues quickly considered under the oversight of the FCA. There is a great deal of suspicion out there about the banks and their approach to their branch networks. I do not want communities to appeal or to ask LINK to have a look and then be very disappointed about why they do not get the banking hub they might think they are entitled to. The process must be clear and transparent for communities to have confidence in it.

In summary, the Government proposals ensure that the FCA has the powers it needs to tackle the issue of access to financial services. After many years—my hon. Friend the Member for Salisbury is back now. He missed me saying well done to him. Don’t duck out for your starring moment! I don’t know. [Laughter.] This issue has taken far too many years to solve. It has not his fault either; it has been very complex. Too many communities have lost the banks they already had. Too many have been reduced to a single bank or to no bank at all. We now have a robust process in place to identify the locations, to find an alternative, to find a solution, without people having to drive miles away. For that reason alone, the Bill is to be welcomed. But it can be improved with one single four-letter word: free. Please, Minister, free me from my anticipation and make cash free to access.

Safe Hands Funeral Plans

Paul Maynard Excerpts

Thursday 12th May 2022 Commons Chamber

Motion made, and Question proposed, That this House do now adjourn.—(Miss Dines.)

[Paul Maynard (Blackpool North and Cleveleys) (Con)]

I apologise to the Minister, who will not have anticipated my bobbing up for two minutes.

I commend the hon. Member for Rutherglen and Hamilton West (Margaret Ferrier) for securing the debate. Like her, I have been contacted by numerous constituents who had Safe Hands policies and are in deep distress. Some of them have relatives who are very near death and are unsure what will happen to them. I welcome Dignity’s proactive approach, but I remain deeply concerned that many more firms in a similar situation will withdraw from the market before FCA regulation takes full effect. I am not yet clear that Dignity has the capacity to cope with that level of demand, or that the industry as a whole has the willpower to address this issue.

This reminds me, to some extent, of the Farepak scandal about 10 years ago, although those sums were relatively small compared with the sums invested in funeral plans. I represent one of the most deprived communities in the United Kingdom, and the cost of a funeral can be one of the largest unexpected bills faced by families in my constituency. Many of them will have invested in these plans, not just for the emotional security but for the financial security, too. The risk is that, as an alternative, they will have to resort to the very dangerous lending practices of loan sharks and doorstep lenders.

I urge the Minister to explain what more he can do, and to accelerate the no-interest loan pilot, on which I know he is working. The perfect vehicle for dealing with these large, unexpected costs is to allow the state to provide an interim solution to give people more financial stability. These costs are a genuine worry for dozens, if not hundreds, of people in my constituency, and I join the hon. Member for Rutherglen and Hamilton West in looking forward to hearing what the Minister has to say.

Oral Answers to Questions

Paul Maynard Excerpts

Tuesday 7th December 2021 Commons Chamber

[Mr Simon Clarke]

Transport sits at the heart of the spending review that has just concluded, and of course we have the £96 billion integrated rail plan. I am very happy to look at the scheme to which the hon. Member refers, but obviously Transport Ministers are engaged in a constant process of making sure that we deliver the projects that are the best value for money and result in the greatest transport bonuses across the country.

[Paul Maynard (Blackpool North and Cleveleys) (Con)]

Can the Chancellor confirm that, contrary to industry suggestions, the Government remain committed to legislating for access to cash as soon as possible?

[The Economic Secretary to the Treasury (John Glen)]

Absolutely, I can. We will legislate, regardless of what the industry brings forward.

Black Friday: Financial Products

Paul Maynard Excerpts

Tuesday 23rd November 2021 Westminster Hall

[Paul Maynard (Blackpool North and Cleveleys) (Con)]

It is a pleasure to serve under your chairmanship, Mr Robertson. I congratulate the hon. Member for Walthamstow (Stella Creasy) on securing the debate, and I congratulate Pip on taking the sensible decision to fall asleep during his mother’s speech. He had a nice long sleep, as we can all observe, which was perhaps a sensible decision by him. None the less, we heard a powerful contribution from the hon. Lady, most of which I strongly agree with. She clearly set out for us some of the challenges that we now face.

I of course welcome the fact that the Government are looking to regulate the buy now, pay later sector through the Financial Conduct Authority. I am pleased to see so many buy now, pay later companies falling over themselves, begging to be regulated—“Regulate us, please!”—but they might not be quite so happy when we get to see the detail. That will be the test of the buy now, pay later sector: not its good intentions now, but what it makes of the regulations at the end of the process.

I am concerned that the consultation fails to capture the true nature of the consumer detriment, focusing only on the absolute value of the goods but failing to capture how the market is changing with this type of credit. That is strange, given the wider policy environment. It was the Woolard review that first took us down the path of regulating buy now, pay later, but it had much more to say about improving access to lower-cost, short-term credit for the more financially vulnerable. Both issues need addressing in parallel, not separately, and I see no evidence—I might be wrong—that the Government are adequately progressing the wider agenda of the Woolard review on improving access to low-cost, short-term credit.

I know that some people out there believe that the BNPL type of product should be banished out of existence and is a fundamental evil that drives demand for fast fashion. It is a very easy target to strike. However, I represent a relatively deprived part of the country and believe that my constituents should not be denied access to the short-term, low-cost credit that more affluent constituents take for granted. That should not be one more example of the poverty premium that people face in their daily lives. At the moment, the least well-off are disproportionately penalised by the poverty premium, which sees them subjected to higher insurance premiums and offered a much smaller range of affordable credit products, if any at all exist for their particular financial circumstances.

That is my first reservation about the consultation: it views the consumer detriment as relatively small because of the low value of the goods overall. We know that, on average, low-income families have only £95 in savings, so even a single late payment fee can have a devastating impact on a household’s financial circumstances. We need to view these financial transactions in the same way as we see credit cards, loans or mortgages. The last time I had to remortgage, a few years ago, it was a six-hour epic, as every single line of my expenditure was gone through in great detail and I had to justify virtually everything that I spent.

It is the percentage of someone’s disposable income, not the overall amount, that matters when making such decisions, and assessing affordability must be based on maximum transparency between the buy now, pay later provider and the customer, but also between providers. As the hon. Lady said, people cannot rack up multiple debts with Klarna, Laybuy, Clearpay and all the other new companies that are coming on the market. We need to move the focus to the behaviour of the borrower over the lifetime of their financial activities, looking at all their borrowing rather than having just a single test for their credit risk or a single affordability assessment in isolation. It cannot just be a credit check that, if they fail, makes their ability to obtain credit in the future that bit harder, because that is the opposite of putting them on a pathway to more affordable credit. People might be able to afford a loan at a particular point in time but then be hit by a family bereavement that changes their financial situation. Allowing lenders to see a wider picture of spending habits requires much speedier progress on open banking than we have seen so far.

I am also interested in examining the future of the sector. The consultation on regulation cannot just meet the market as we see it at the moment; it must meet the market that we will see in years to come. Consider the issue of rent to own, on which both I and the hon. Member for Walthamstow attended debates well before 2015. That sector went on a long journey, from the relatively innocuous ubiquity of Radio Rentals, which many of our parents used to buy their first TVs back in the late ’70s, to the more problematic practices of BrightHouse and PerfectHome in the 21st century. We know where that journey ended. I still walk past the boarded-up BrightHouse shop on Abingdon Street in the centre of Blackpool, which I named the most dangerous place in Blackpool because it was sucking people in and trapping them in long loans of high-cost credit.

We are already hearing that buy now, pay later is being used not just for pizza but for the weekly food shop. That should really give us pause for thought. Higher-value goods are now being bought through buy now, pay later. It is not just fashion, which we automatically link with Klarna and the advertising that we see. I read in the paper just this week about a new market entrant, humm, from Australia, that specialises in much larger consumer goods—something that makes me go “humm” when I wonder whether that is desirable.

We must also think more about the retailers, as the hon. Member for Walthamstow said. They are as much the beneficiaries of this market as are the buy now, pay later providers themselves. The whole business model works only if it increases sales for the retailers; otherwise, why would they bother paying the buy now, pay later provider a percentage fee? That fee is what justifies this form of market.

If that becomes our default payment mechanism in a cashless society—which I am afraid that, as we debate here, we seem to be sleepwalking into—we may need to look again at how we monitor the internet shopping experience and the customer journey through a website. Will regulations that were framed around the idea of purchasing clothing work for goods that could cost thousands—much larger consumer goods and consumer electronics? Where do the retailers sit in all of this? There is a real commercial dynamic at work here.

I was speaking to ASOS just last night, at a reception in the Churchill Room. They said that they had worked with Alice Tapper of GoFundMe, a noted campaigner whom I am sure the hon. Member for Walthamstow has spoken with at length. She has worked with ASOS to redesign its website to ensure that it is a friction-filled—not frictionless—journey for the consumer, so that there are multiple occasions when consumers are asked to pause and consider what they are about to purchase, and so that buy now, pay later is not the default, pre-ticked option on the checkout form. Those are all very simple measures, but they are not measures that the Treasury can effect. They come under the Advertising Standards Authority and other types of regulation. The consultation on regulation will not solve everything; there are other agencies that have to take other steps.

None the less, there are better solutions out there, and the Government are committed to them—not least no-interest loans. I am at risk of reading out a paragraph from my previous speech, when the Minister was here and I did not get an answer, so let me have another go, if he is listening. I am obsessed with reforming local welfare assistance schemes so that people can access the white goods that they need. The Government have a very good idea: no-interest loans. Providing those should not be rocket science. The original idea came from Australia—the same place from where humm is now arriving on our shores, and where Good Shepherd Australia has been operating micro-finance for many years. Surely, to introduce them here must be cut-and-paste. Indeed, some of their regulations on buy now, pay later are a model of what we are planning to do here. Rather than building a programme from scratch, why not try to move faster by looking at what works in other jurisdictions? This matters, because the cost of replacing white goods is terrible for so many families, who fall into debt as a consequence. We need only listen to the Liverpool-based End Furniture Poverty campaign and look at the pilot schemes that Fair4All Finance is launching to tackle the concept of appliance poverty.

The hon. Member for Walthamstow also mentioned FinTech, perhaps in the sense that it is almost a risk that you never know what it will come up with next. Equally, I think that FinTech is actually part of the potential solution. There are companies out there and emerging—Auden Financial is one that I happen to know quite well—that are looking to use FinTech to provide the low-cost, short-term, ethical credit that I think has to be the end goal. We all talk in this place about FinTech. We all swoon, almost, at the wonderful thought of what a fantastic business it is. I am not sure that we as politicians always understand it terribly well, but we need to keep asking how we can work with that sector so that it does good and not bad.

There will always be disruptors, and I want to disrupt the business of high-cost, short-term credit; that is what I want to disrupt. There is a gap in the market for a new provider to come along and do things differently. No one should be denied the opportunity to own things. Everyone should have the ability to choose how they spend their money and to choose how they access a form of credit that is regarded as affordable to them and does not place them in greater difficulty. At the moment we are not in that position, but there are multiple ideas out there. Restricting access to buy now, pay later, properly regulating it, and treating it like any other form of credit and not least in a way comparable to how we treat consumer detriment from credit cards, has to be one step along the path. There is a much wider agenda that the Treasury needs to embark on to embrace the whole Woolard review, not just one small paragraph.

I commend what the Minister is doing. Like the hon. Member for Walthamstow, I know that he is on the side of the angels. But it is the job of those on the Back Benches to say, “Go further; go faster. Do it yesterday.”

Access to Cash

Paul Maynard Excerpts

Wednesday 20th October 2021 Westminster Hall

[Sara Britcliffe (Hyndburn) (Con)]

It is a pleasure to serve under your chairmanship again, Mrs Miller, and I congratulate the hon. Member for Pontypridd (Alex Davies-Jones)—I hope I have said that correctly—who is also a friend.

Access to cash is a massive challenge for the next few years. Although our use of electronic payments via card or mobile phone has increased, and although almost all shops now accept non-cash payments—a move accelerated by the pandemic—there is still a large minority of people, particularly older people, who cannot access electronic payments. According to the Library, in the constituency of Hyndburn, we have gone from having 15 local units in 2015 to just five in 2021. To get more information about the scale of this problem in Hyndburn and Haslingden, I put out a physical banking survey in the town of Haslingden, which recently lost a bank branch, and an online survey in the town of Hyndburn. We have also recently lost our Barclays branch in Accrington.

The results were informative. First, I had a 20% response rate, which many Members will know is a huge return on any survey. This confirmed that this was a real issue that people felt very strongly about. Secondly, and perhaps unsurprisingly, there was an age difference; 80% of respondents who did not have easy access to an ATM were of the older generation—aged 56 or above. In general, the older the respondent, the more they found access to cash was limited. Similarly, 46% of respondents to my survey did not use online banking, and more than three quarters of that group were aged 66 and over. Most interestingly given the context of the debate, an overwhelmingly large proportion of respondents said the biggest improvement to banking services that they would like to see in the area was not only access to cash, but access to ATMs that did not charge. This is an important point to remember.

[Paul Maynard (Blackpool North and Cleveleys) (Con)]

Is my hon. Friend aware of the research by NatWest showing that many people who use paid-for ATMs are go further to use them than they would if they used free-to-use ATMs? Does she agree that more research is needed as to why people are heading for paid-for ATMs when they do not need to?

[Sara Britcliffe]

I agree with my hon. Friend, who knows about this issue across Lancashire and in constituencies such as mine; I was not aware of the research conducted but agree that more is needed. It is not enough to simply map where the nearest ATM is; we need to ensure that everyone has access to free-to-use ATMs that do not disadvantage those who cannot afford to pay a fee.

If I may ask for the patience of my colleagues, I would like to drill down into the numbers and look at how people responded to the survey. I asked, “Do you have easy access to an ATM near your home?” About 60% of people said no, or “only somewhat.” When asked to explain, the majority of those who said “only somewhat” had access only to fee-charging ATMs. If I were to take this survey further and drill down into much tighter geographic areas, I would bet that the more rural an area, the less able to access cash people are. In some ways the conclusion is obvious: the fewer the people, the fewer the cash machines. If, over the ATM map, we layer a map of fee-charging cash machines, it becomes obvious that the more rural an area, the more likely that people will not only struggle to access cash, but will have to pay for it as well.

I also met with Cardtronics, and will briefly mention what it suggests. It states that the Government must protect ATMs:

“ATMs are the only sustainable national infrastructure that can maintain free access to cash 24/7 and must be protected through independent calculation of the interchange fee paid to ATM providers.”

It also says that the Government must protect key schemes:

“Membership of LINK and the Post Office banking framework should be made mandatory for banks to ensure these schemes are protected to ensure access to cash”.

It says that the Government must protect cash acceptance. There is a huge opportunity to work with local post offices, which would go a long way towards solving this problem and ensuring that all our constituents have easy access to cash.

--- Later in debate ---

[Paul Maynard (Blackpool North and Cleveleys) (Con)]

It is a pleasure to serve under your chairmanship, Mrs Miller. I congratulate the hon. Member for Pontypridd (Alex Davies-Jones) on securing a debate on what has probably been my favourite subject in my time in Parliament. As a member of the LINK Consumer Council, it is a subject that I am interested in. One hon. Member described at great length what LINK is, so I do not need to repeat that, thank goodness.

Hon. Members have described at some length how the use of cash is important to the most vulnerable in our society. I will quote one survey, which is from the organisation Which?, which found that two in five people reported being unable to pay with cash at a shop and did not have another payment method. Two in 10 people in that situation could not buy the medicine that they needed. That should surely show us why it is important to protect access to cash as a source of spending power and to insist on the acceptance of cash by shops, as the hon. Member for Makerfield (Yvonne Fovargue) said.

Back in December 2020, my right hon. Friend the Member for Dumfriesshire, Clydesdale and Tweeddale (David Mundell) and I were at a slightly less well-attended debate to talk about this issue. We urged Ministers and the industry to move rapidly towards addressing it. Rarely, I am going to praise a Minister—shock, horror—and say they have moved at some pace, both the industry and Government, by conducting the consultation we have heard about.

Industry bodies such as UK Finance, as well as Natalie Ceeney, who has been mentioned by the hon. Member for Pontypridd, and the banks themselves have worked hard, looking at what will best address the challenges that we face. The main project they have identified is called a shared banking hub. There is one in Cambuslang in Scotland and one not far from Southend, if it is worth observing, in Rochford. Both of those have worked extremely well. Banks have come together, shared premises and the consumers have loved it. It has moved the debate on from closing bank branches to how to provide more access to financial services.

We are now reaching the crunch moment. You may not be aware of it, Mrs Miller, but right now in the darkened corridors of the City of London, banks are discussing how to make access to cash happen, and they are going to resolve all these issues by early December. I say to the banks, they have to put up or shut up. They have to roll up their sleeves, dot the i’s and cross the t’s, overcome the commercial nerves and stop jockeying for commercial positions. They should not get lost in an alphabet soup of ACAG, JACSG and WDSG, and should stop the arbitrary waffling, focus on shared branches—what level, how many and how they are going to pay for it.

The investment that shared branches would require would be a tiny fraction of their turnover. They have no excuse. They have been discussing this for more than two years. If they do not resolve these issues, the likes of me will be baying for their blood. I will demand financial penalties commensurate with the investment that is forgone. We need to change now. I have seen in my constituency that they know the legislation is coming. They are shutting branches as we speak. There should be a compulsory moratorium on all bank branch closures from 1 January 2022 until the point at which that legislation takes effect. The banks have no further excuses. We have been on this issue for long enough. The time has come. We have solutions out there; we know what will work; we know the legislation is coming; we know that the FCA is the best vehicle to oversee it. Get on with it.

Oral Answers to Questions

Paul Maynard Excerpts

Tuesday 7th September 2021 Commons Chamber

[Steve Barclay]

My hon. Friend is absolutely right. The package of measures that my right hon. Friend the Chancellor took improved on the economic scoring that was forecast for the pandemic, including the figure for unemployment, which will now be 2 million lower at its peak than was estimated. That package of measures has helped to prevent many of the worst outcomes that were forecast by the Office for Budget Responsibility as we went into the pandemic.

[Paul Maynard (Blackpool North and Cleveleys) (Con)]

One group whose living standards have been impacted during the pandemic has been low-income individuals who have used buy now, pay later credit products to buy online. I very much welcome the Government’s announcement in the spring of regulation of this sector. Will the Minister update me on the progress being made in regulating the sector given that it is become of increasing importance, as Citizens Advice reported just last week?

[Steve Barclay]

I understand that by the end of October there will be reassurance on that, and I am happy to take that up with my hon. Friend following this session.

Covid-19: Household Debt

Paul Maynard Excerpts

Thursday 8th July 2021 Westminster Hall

[Paul Maynard (Blackpool North and Cleveleys) (Con) [V]]

Just last month, the financial service provider Auden Financial published its “Pandemic Penalty” report, which contained a number of troubling statistics. Some 50% of its clients now have savings of less than £100. The report found that single-parent families are the most likely to resort to short-term loans, and a third of them rely on food banks. The 18-to-35 age group is the most likely to apply for short-term credit, but also the most likely to be rejected. Only half those in financial difficulty have actually made contact with money advice providers. Surely those who turn down those borrowers need to do a better job of signposting them to the help that they clearly need.

All those statistics show just what an endemic problem debt is in this country as we reach, I hope, the end of the covid pandemic. It is no wonder that people find themselves in financial crisis when the unexpected strikes—from a fridge no longer working to a family bereavement. I congratulate the hon. Member for Makerfield (Yvonne Fovargue) on securing the debate and setting out such a broad spectrum of views and considerations.

Debt advisers do a fantastic job, as the hon. Lady said. I welcome the increased funding from the Money and Pensions Service, but I am also aware that debt advisers may not have the specialist knowledge needed to interrogate tax debt and to ascertain whether or not debt that an individual is informed about is actually owed in the first place. TaxAid and Tax Help for Older People, two charities that help with tax cases, looked at the data from 66 cases on their system from August 2019 to just before the covid pandemic started. The total debt for those 66 cases when they first approached TaxAid was more than £230,000. After Tax Aid had done its work, only £46,000 of that debt remained: only 25% of what was originally cited.

To me, that illustrates powerfully the point that checking that a debt is owing in the first place should be the first step. However, that requires specialist tax knowledge rather than general debt knowledge, which is relevant to the latter stage once the actual amount of the debt is established. It is all very well for us to have the finest system in the world for arranging debt repayments and dealing with debt, but why do we not aspire to similar excellence in checking whether debt is due in the first place?

Like the hon. Member for Makerfield, I welcome the introduction of the Breathing Space initiative, but, as the We Are Debt Advisers network has observed, 60 days may not be long enough to exhaust all other potential sources of income, particularly when we can see that Department for Work and Pensions decisions around extra benefits, such as the personal independence payment, are taking far longer than 60 days. Can the Government look again at whether they can be more flexible about that 60-day period, to recognise when people are in the process of securing extra income?

May we look again at debt relief orders? As a former Minister for legal matters, I know that such legal instruments can be made available and charged for only on a cost recovery basis. Some £90 to obtain a debt relief order is a burden on those already in debt. I would welcome a proper Government review of whether that truly represents nothing more than cost recovery.

On the issue of the no-interest loans, which I very much welcome—not least because of my interest in reforming local welfare assistance schemes—may I ask what progress has been made? In my view, this should not be rocket science. The original idea came from Australia, where Good Shepherd Australia has been operating microfinance for many years. To introduce it here must be a matter of cut and paste, rather than starting from the beginning to build a programme from scratch. This type of project is important, because the cost of replacing white goods is terrible for many families, who fall into debt as a consequence. We need only listen to the Liverpool-based End Furniture Poverty campaign and look at the pilot schemes that Fair4All Finance are launching to tackle what they term “appliance poverty”.

With so many people living in unfurnished, private rented properties and on low incomes, over 1 million people are lacking either a cooker, fridge freezer or washing machine. No cooker may mean a focus on costly takeaway meals for those who are time poor and no washing machine might mean a £7 trip to the launderette for a single load of washing. Getting into debt to pay for these essentials is simply not the answer.

If we are to tackle the issue of problem debt more fundamentally, we must also address the tools that people choose to manage that debt through the various forms of credit open to them, often at the highest cost to those with the greatest debts. That means the Government have to react promptly to the Woolard review, which looked at the wide picture of financial resilience, rather than just the promise of regulation for buy now, pay later that much of the media fixed on.

That wider objective should be helping those in debt out of it, and preventing those just about managing from going into debt in the first place. As Theodora Hadjimichael, chief executive of Responsible Finance, said recently,

“Withdrawals from the subprime market mean a vacuum in access to credit. Without responsible lenders stepping in to fill it, the options available to individuals who need to plug a gap in income or pay for one off expenses may become increasingly dire”.

That is very much the situation I believe we are looking at. At the moment, the least well-off are disproportionately penalised within a poverty premium that sees them subjected to higher insurance premiums and a much smaller range of affordable credit products, if any at all exist for their particular financial circumstances.

I do not believe the answer is a whack-a-mole approach that knocks out every credit option one by one. People on whatever level of income should be able to choose to pay for goods using credit, including buy now, pay later. The challenge is to ensure that those products are transparent and affordable. We need to move the focus to the behaviour of the borrower over a lifetime—looking at all their borrowing, rather than just a single test of their credit risk or a single affordability assessment. People might be able to afford a loan at a particular point in time, but then be hit by a family bereavement, which ends up changing their entire financial situation. Doing that requires much speedier progress on open banking than we have seen so far and for our lenders to see a wider picture of spending habits.

We also need greater diversity in the market. Community, voluntarist solutions exist but cannot be scaled up quickly. The arguments get quite techy quite quickly—community development, financial institutions, FinTech and how the Financial Conduct Authority regulates the sector. It is much harder to get political purchase here because it gets so complex. MPs get stuck into a “something must be done” rut that expresses itself in attempts to stop things rather than starting better alternatives.

The Government have introduced initiatives to help people build up their savings, but the payroll-based Help to Save scheme is not as transformative as it could be and perhaps needs supercharging. There are a numerous savings schemes for those on lower incomes, but all are voluntary and do not have people nudged into them in the way that occurred with workplace pensions. Ministers have spoken of replicating the contracting-in model of the workplace pensione scheme to create what are known as sidecar savings schemes for those in work. What is actually happening with that?

We need to offer a route to asset accumulation for everyone, and those in poverty three years in three should have access to the same nudge as everybody else to start building their own safety net, which would be their first recourse if misfortune struck. Government support for that nudge would reduce demands on other streams of Government welfare assistance and create a pathway out of indebtedness. So yes, we need to deal with today’s covid-related debt, but we should use this opportunity to fashion new approaches that enable a better credit market and better systems to deal with those who will inevitably, sadly, fall into debt. We will never have a world without debt, but we can help to prevent people from falling into debt, help people out of that debt, and above all create a world without destitution. That should always be our first goal as a responsible Government.

Government's Management of the Economy

Paul Maynard Excerpts

Tuesday 23rd February 2021 Commons Chamber

[Paul Maynard (Blackpool North and Cleveleys) (Con) [V]]

Let us be clear about this debate: it was Labour who failed to fix the roof while the sun was shining, so that when the financial crisis struck, we lacked the resilience we needed as a nation to do what was necessary. Labour spent a decade pretending that it never happened—that it was a global crisis that did not affect us here and was nothing to do with them. But there was no money left, as that famous letter said. Despite having spent the last few weeks campaigning to regulate the “Buy now, pay later” sector, it is clear that Gordon Brown was the founder of the Klarna approach: he spent now and bought now, expecting the British people to be the ones to pay later.

After 2010, the Conservatives did fix the roof, and we now have the financial resilience we need to do what we have had to do to protect jobs and livelihoods as the coronavirus wave broke across our shores. Labour harp on about those they claim have not benefited from a Conservative Government, both before and during the pandemic. However, it would be remiss of me, representing a constituency with so much deprivation, not to observe that it is this Conservative Government who cut income tax by around £1,200 for the average basic rate taxpayer, by lifting the income tax threshold to £12,500. Labour’s approach, of course, was to abolish the 10p rate of income tax. Income inequality, however we measure it, is lower than it was in 2009-10, and a third fewer children live in a workless household. Although there is more to do to tackle in-work poverty, I find it hard to credit that some see this reduction still as a bad thing.

We introduced a national living wage, which raised incomes in areas of low average incomes such as my constituency, and universal credit to address the challenges of seasonal unemployment, which were such a scourge in seaside resorts, and let us not forget that the top 1% in this country pay a greater share of income tax than they did when Labour was in power.

To be fair to the shadow Chancellor, who I believe is that rare thing, a thoughtful politician, I do not think she would deliberately seek to drive the economy over the cliff. However, I fear that she would be too busy rummaging in the glove box for a Labour road map to see what was fast approaching. In her Mais lecture in January, she quoted Gordon Richardson’s 1978 Mais lecture, in which he said:

“We are now at an historical juncture when the conventional methods of economic policy are being tested.”

In trying to apply that to now, she seemed to miss the irony that it was a criticism of precisely the statist solutions that Labour offered in the 1970s and is reheating now.

Like every Opposition day debate so far in this Parliament, this debate has had an air of unreality about it. It is only thanks to Conservative policies that we are in the position we are in to deal with the crisis we face now.

[Mr Deputy Speaker (Mr Nigel Evans)]

We now go to Nadia Whittome. Nadia, can you hear me? We will go to the next speaker and come back.