Oral Answers to Questions

Debate between Penny Mordaunt and Charlie Elphicke

Wednesday 21st November 2018 Commons Chamber

[Penny Mordaunt]

I can confirm that, and indeed, we are developing small grant programmes and UK aid match to enable more community groups, as well as Administrations, to contribute to such humanitarian disasters.

[Charlie Elphicke (Dover) (Ind)]

I urge the Secretary of State to reject the representations from the party opposite, which will result in duplication, waste and less help to those who need it. Will she also take back control of our budget from the European Union?

[Penny Mordaunt]

This coming Monday will be the last development meeting of the EU that the UK will attend. It is my sincere wish that we will be able to continue working with our EU partners on humanitarian issues and others, but I have said that we will not do this for as long as the EU discriminates against British NGOs and suppliers.

Oral Answers to Questions

Debate between Penny Mordaunt and Charlie Elphicke

Monday 20th February 2017 Commons Chamber

[The Minister for Disabled People, Health and Work (Penny Mordaunt)]

We have been seeking views on this through the “Work, Health and Disability” Green Paper. We are also investing £100 million in trialling voluntary employment initiatives to consider what works for this group, including embedding employment advisers within the NHS talking therapy services.

[Charlie Elphicke]

I thank my hon. Friend for that reply. Does she agree that local voluntary groups, such as the Talk It Out mental health group in my constituency, do invaluable work to help people to be work-ready, and that we must do more to support them?

[Penny Mordaunt]

I agree that voluntary organisations have huge insight and expertise that we can tap into, and I commend the work of Talk It Out in my hon. Friend’s constituency. We are recruiting 200 community partners throughout the Jobcentre Plus network so that we can ensure we reach all those organisations and benefit from their huge experience and wisdom.

Oral Answers to Questions

Debate between Penny Mordaunt and Charlie Elphicke

Monday 8th September 2014 Commons Chamber

[Charlie Elphicke (Dover) (Con)]

T8. May I welcome the massive support the Department has given to coastal communities like mine in Dover and Deal, and the great backing to high streets, of which Deal’s is officially and definitively the best in the country?

[The Parliamentary Under-Secretary of State for Communities and Local Government (Penny Mordaunt)]

I congratulate my hon. Friend and his constituents on what they have managed to secure themselves in terms of on local growth. Deal is a fantastic example of a thriving high street, which I myself visited only a few weeks ago. It is already award winning, but I wish it good luck in the great British high street contest, which it has entered. I look forward to visiting Betteshanger park sustainable energy centre, which has secured £2.5 million of coastal communities funding to bring together business, education, heritage, green technology and tourism.

Capping Welfare Spending

Debate between Penny Mordaunt and Charlie Elphicke

Wednesday 10th July 2013 Westminster Hall

[Charlie Elphicke]

I thank the hon. Gentleman for that interesting intervention, but I cannot agree with him. When the current Government came to office, the interest bill was the same as the entire education budget—I think that I am right in saying that. It was a very substantial amount. That is not a great showcase for fine administration of the public finances. It is well understood that the country’s debt was entirely out of control. I take his important point about social mobility and helping people to get out of the traps of poverty. Universal credit will make work pay, incentivise work and encourage people to do well, and that lies at the heart of much what the Government are doing. I approve of that approach. We need to build in incentives, by on the one hand limiting the amount of benefit and on the other hand encouraging work and making it pay.

[Penny Mordaunt (Portsmouth North) (Con)]

For too long, people in my constituency who were out of work for considerable periods, because they had challenges that needed to be overcome, did not get the proper, expensive advice and support that they needed to get back into the workplace or into it for the first time. Does my hon. Friend agree that in these difficult times, with a limited pot of money, we are better off spending money on top-quality advice, rather than increasing the welfare budget?

[Charlie Elphicke]

Absolutely, and a lot of Government policy has been about that. The Work programme is a key part of giving people the tools, education and support to get back into the world of work and understand the rhythm of a working day.

Gift Cards

Debate between Penny Mordaunt and Charlie Elphicke

Tuesday 9th July 2013 Westminster Hall

[Penny Mordaunt]

I am grateful to the hon. Lady for her intervention. She is absolutely right to say that this matter disproportionately affects those people on the lowest incomes. As she rightly said, the Farepak incident, which happened before I was elected to this House, has been going on for a number of years, so it is really time that the Government acted to stop such poor practice continuing.

[Charlie Elphicke (Dover) (Con)]

I congratulate my hon. Friend on securing this important debate. Is she aware that the matter affects failing retailers as well? A YouGov poll in March 2013 found that 86% of people believed that gift cards should be regulated to protect consumers against failing retailers? Does that not show the importance of taking action as soon as possible?

[Penny Mordaunt]

I agree with my hon. Friend and I am grateful to him for his expertise. As I share a corridor with him in Parliament, I know that he is a champion of consumers in Dover and Deal and I am grateful to him for his support on this issue.

It is a terribly unjust position in which the holders of gift cards find themselves when the shop that issued the card goes into administration. Such people should not be treated as ordinary creditors. A grandmother who buys her grandchildren the once-ubiquitous WHSmith voucher for Christmas does not regard herself as having lent Smith’s any money. On the contrary, she has made a purchase. Indeed, her circumstances are just the opposite of a creditor’s, who might expect to receive some interest on his loan, as her gift card is worth less and less as time passes, due to the effects of inflation. It is as illogical to deny gift card holders the right to redeem their vouchers as it would be to demand that people who had bought their goods return them to the shop to help pay off the creditors. It is from that essential point that we must proceed today. A gift card is not a bond certificate; the money has not been loaned to the company. Quite simply, the collection of the product has been deferred, which is, in any case, to the advantage of the company. That principle has already been recognised at an EU level in respect of e-money, which is money put on to pre-paid cards or gift cards bought through third parties. Those moneys must be kept in segregated accounts pending the use of the cards, so that the consumer is protected.

In Britain, that scheme is regulated by the Financial Conduct Authority, a successor to the Financial Services Authority. Individual retailers may opt in to the scheme, but, for perhaps obvious reasons, the temptation seems to have been uniformly resisted. Although there is no mandatory and regulated scheme for cards issued by companies independently for use in their own shops, there appears to be no impediment to its introduction. Already many retailers that issue their own unregulated cards accept the regulated cards issued by third parties, such as the One4all card, including Argos, Boots, B&Q, Currys, Debenhams, Topshop and the aforementioned WHSmith. In all, the Gift Voucher Shop, which is responsible for the One4all card, has more than 1,500 corporate clients. Surely that is a double standard that should not be allowed to continue. Two customers who intend to spend their vouchers at the same shop could thus be in the absurd situation that one can have a full refund and the other receives nothing. The matter is left entirely to the discretion of the administrator.

It is true that under the Consumer Credit Act 2006, those who bought vouchers with credit cards are protected, but only if they bought between £100 and £30,000 of vouchers. The problem here is twofold: people who buy vouchers as savings, perhaps against the expense of Christmas, are very unlikely to use credit cards; and those who buy vouchers as gifts to put towards say the purchase of white goods on a wedding list are unlikely to do so to the sum of £100. Chargeback offers some protection to consumers using certain debit cards, such as Visa, American Express and MasterCard. In all circumstances, there is a 120-day window in which to make a claim for a refund, and the claim must be made by the purchaser, not the holder of the voucher. Once again, that is contingent on a given card supplier operating the scheme, and, in all circumstances, those who bought vouchers with cash, which is a likely scenario when smaller sums are involved and if the people buying them are paid in cash, are entirely exposed.

What is hard to understand is why the administrator is allowed to appropriate the money held against vouchers for the purposes of winding up the business. As I said earlier, that is akin to telling anyone who has previously bought something from that shop to return it without a refund, or the practices of the most artless playground bully.

Some administrators are prepared to accept vouchers, such as those for Nicole Farhi and Blockbuster. Holders of Republic vouchers were not so fortunate, which meant that the administrator simply took £1.2 million in advance payments. That is £1.2 million with just one retailer. The evidence of total sales suggests that there is still a demand for gift vouchers. Last year, more than £4 billion was spent on their purchase and, as they are not exchangeable for cash, one can only assume that retailers like them, too. How many of the people who contributed to that £4 billion knew that they, or the vouchers’ intended recipients, were so vulnerable?

Currently, holders of gift cards are well down the order of priority for creditors. They are on a par with Her Majesty’s Revenue and Customs, suppliers and unsecured creditors, but behind secured creditors, the costs of insolvency, and debts due to preferential creditors and employees. I do not argue too much with the order of creditors other than to say that employees should never be an afterthought. My point is simply that gift card holders do not belong on a list of creditors at all. It is not possible to exchange gift vouchers for cash, which is further proof that they are not a form of credit as there is never any prospect of getting back one’s money. It would be bizarre if this were permitted when a company went into administration. Rather, it should be possible to redeem one’s vouchers. That would resolve some of the concerns of the Association of Business Recovery Professionals about the knock-on effects of promoting holders of vouchers up the list of preferred creditors. R3, as it is known, is anxious that were card holders prioritised, businesses and suppliers, which are currently with card holders in the fifth tranche of those to be paid by administrators, would be even worse off.

I mentioned my experience with Portsmouth FC’s administration, and I understand only too well the hardship that is borne by small businesses that must extend credit in order to get the trade they need to survive when they are left hanging on administrators’ decisions. The same goes for employees, who are placed in the invidious position of waiting in limbo to know whether they will have a job in the future or be paid for the work they have already done.

There is also a concern that preferred creditors—those who issue secured loans—would be more wary of extending cheap or reasonable credit in the future if the list of preferred creditors were to be expanded to include gift card holders. At a time when small businesses and retailers are still concerned that lending is not getting through to the degree that is needed, that concern must not be dismissed.

R3 has put forward three possible solutions—a requirement to purchase bonds against the value of issued gift cards; the ring-fencing of the money used to buy cards until they are redeemed; and the extension of the 2006 Act to include purchases under £100. However, each of these solutions has problems. In the case of the first two, they would handicap solvent businesses by restricting cash flow and they could make administration more likely. Equally, extending the 2006 Act would come into effect only if administration procedures began, but cash buyers would still be out in the cold.

If one takes all of these factors into account—the need to protect the viability of going concerns and to treat gift card holders equitably, without undermining lending or supplier confidence, or disadvantaging employees —the solution seems clear. If vouchers are allowed to be redeemed, the administrator does not need to surrender the money that it has on deposit through the sale of gift cards. Instead stock, which would be very likely to be sold off at a generous discount to raise money quickly, would be exchanged for the vouchers.