Covid-19: Economy Update

Stella Creasy Excerpts

Thursday 22nd October 2020 Commons Chamber

[Rishi Sunak]

My hon. Friend is a rightly proud champion of her businesses in central London. Obviously, what is happening not just to our capital city but to all our city centres is incredibly sad. We all want to see them springing back to life and vibrancy. Hopefully, the measures that we have announced today will provide some support and breathing space to help them get through a difficult period until they can get back on their feet and do exactly what we want them to do, which is return to where they were—bustling and welcoming us all back into their shops and restaurants.

[Stella Creasy (Walthamstow) (Lab/Co-op) [V]]

The Chancellor says that he has been talking to the people who are worried about their livelihoods and the businesses facing redundancy, so he will know that those redundancies are falling particularly heavily on mums. We know from the data produced by the Office for National Statistics last month that 79% of the increase in redundancies has come from women, and we know that it is mums who are losing their jobs, but his Department is sitting on £1.7 billion of unspent tax-free childcare funding. Will he use that money to ensure that our childcare sector can support every parent who wants to get back to work and to stop the tsunami of unemployment that we are about to face?

[Rishi Sunak]

The hon. Lady is right to highlight the particular importance of good-quality childcare, which, as she said, enables mums to be able to protect their employment. I am happy to look at the specific suggestion that she mentioned, but I think that we have recently made—in the previous Budget and before—some changes to the operation of tax-free childcare, so that it is more available to more people. She is right that the take-up has not been what was forecast, which is why we put the changes in place to broaden the approach and broaden the eligibility for it, but I am happy to look at her specific suggestion.

Economic Update

Stella Creasy Excerpts

Wednesday 8th July 2020 Commons Chamber

[Stella Creasy (Walthamstow) (Lab/Co-op) [V]]

One word that has not been mentioned so far is childcare, yet we know that two thirds of women who want to return to work in the next couple of months cannot because they cannot get any, and that 71% of our voluntary sector childcare agencies are already operating at a loss, risking their closing in the coming weeks. So can the Chancellor set out what funding he is providing now to make sure that parents can get back to work?

[Rishi Sunak]

With regard to nurseries, for example, we have already included them in the business rates holidays for this year, and also ensured that the funding that they receive from Government remains constant throughout this crisis. On top of that, they have access to our other areas of support—bounce back loans and others—but of course we keep everything under review.

Economic Outlook and Furlough Scheme Changes

Stella Creasy Excerpts

Tuesday 16th June 2020 Commons Chamber

[Jesse Norman]

I am very interested in my hon. Friend’s suggestion. It is not squarely a Treasury matter—it is more an industrial strategy and Department for Business, Energy and Industrial Strategy matter—but I would be delighted to meet her on the topic.

[Stella Creasy (Walthamstow) (Lab/Co-op) [V]]

May I associate myself with my many colleagues in remembering our dear lost friend Jo Cox today? On 11 May, the Prime Minister told us:

“If people cannot…get the childcare that they need, plainly they are impeded from going to work, and they must be defended and protected on that basis.”—[Official Report, 11 May 2020; Vol. 676, c. 29.]

A survey by Pregnant Then Screwed shows that 71% of women trying to return to work in the next three months cannot do so because of childcare. So will the Minister set out exactly what he is going to do to protect and defend those women from redundancy and discrimination in the workplace?

[Jesse Norman]

I thank the hon. Lady for her question. I have not seen the survey that she describes. but I will look at it and discuss it with the Minister for Equalities, my colleague the Exchequer Secretary. Of course there can be no shying away from this issue and if it is as the hon. Lady describes, we will look closely at it. I thank her for that.

Draft Environment, Food and Rural Affairs (Amendment) (EU Exit) Regulations 2019

Stella Creasy Excerpts

Wednesday 13th March 2019 General Committees

[David Rutley]

I thank the hon. Lady for setting out her views so clearly. I just wish she would speak a bit more clearly so we could understand her views completely. Her concerns are understood, but we are in challenging circumstances. All I can do is commend, as I have before, the incredibly hard work of officials in the devolved Administrations and the Department for Environment, Food and Rural Affairs. I know she does not suggest this is not the case, but they have been working at pace. I have been working with them—sometimes trying to encourage greater speed and sometimes trying to keep up with them. The good news is that we are definitely through the vast majority of the SIs. There are several more to do, as she says, over the next few weeks, but when you are having this much fun, you just want to carry on, surely?

[Stella Creasy (Walthamstow) (Lab/Co-op)]

Given the concern that we could see statutory instruments referring to, as my hon. Friend the shadow Minister said, issues as broad as the production of wine and of horse semen, and the import and export of both, does the Minister not recognise that sometimes “more haste, less speed” is a worthwhile principle in making good legislation, even on something as difficult as this, and therefore that the problem with trying to push through so many statutory instruments at short notice is that we could miss things that are important to vital industries in this country, including equine and vinery services?

[David Rutley]

I thank the hon. Lady for her point. I understand we are covering a lot today, but—perhaps I need to do better at communicating this; I will try once more—the draft regulations are about transferring powers. There is a clear theme. The regulations are about technical operations, and I hope that has come through at least to some degree in the comments that have been made.

With the Committee’s permission, I will move on to some of the more detailed points that the hon. Member for Stroud raised. On animal imports in relation to the effect of leaving the EU on the animal trade and pet travel more generally, I want to reassure him that DEFRA has carried out extensive engagement on imports of animals and animal products. Even where consultation has not been required, there has been extensive engagement: the Department has engaged with over 300 stakeholders to date, with 50 events on this, so there has been close co-operation.

The hon. Gentleman also talked about impact assessments. As he knows, because we have been through this many times before—I am getting a glare from the hon. Member for Bristol West—

Affordable Credit for People on Low Incomes

Stella Creasy Excerpts

Wednesday 5th December 2018 Westminster Hall

[Stella Creasy (Walthamstow) (Lab/Co-op)]

Thank you for letting me speak, Sir David. Do not worry: I promise I will be quick. I rise simply, and possibly at my own risk, to disagree with my right hon. Friend the Member for Birkenhead (Frank Field)—I admire him immensely for his work on poverty and perhaps, given the time of year, he can be the ghost of Christmas yet to come for the Minister—because there is a silver bullet in this circumstance. All of us deal with people in our communities who are struggling because there is too much month at the end of the money and are borrowing to put food on the table, to keep a roof over their head and to put petrol in their car to get to work. They need us to recognise the lessons of payday lending—the lessons of those interest rates. It is not about the decimal point; it is about hooking people into debt.

I know the Minister knows this in his heart. I know he recognises that payday lending is not the only spectre hanging over Christmas for people this year. Indeed, in our country now, people are better protected when taking out a payday loan than when they are using many of the other forms of credit. My right hon. Friend talked about Provident. Provident takes many incarnations in this country. Vanquis credit cards are pushed in my local community; Vanquis is also owned by Provident. Credit cards in this country are the new form of unaffordable debt for so many. The rates of interest, especially on the credit cards targeting people on a low income or with a bad credit history, lead them into higher levels of debt than they would get into with a payday loan. Guarantor loans rip apart communities and families as people get into debt and then have to tell someone else, who has guaranteed the loan, that they have got into debt. The companies are chasing two people at the same time for the same loan.

All those examples, all those scenarios, are things that we could stop if we learned the lessons of payday lending. Wonga may not exist now, but the industry carries on in this country. It has gone from 400 to 150 companies, but the point is that it is not pushing people into debt in the way that it was two or three years ago—when it caused the concern that my right hon. Friend and my hon. Friend the Member for Warrington South (Faisal Rashid) now express for other forms of credit in this country.

I know that the Financial Conduct Authority has ruled out bringing in a cap for all forms of credit, but I again ask the Minister: how much more evidence do we need about these companies and the way they are evolving before we learn the lessons of payday lending?

In the Financial Times this week, the owners of Amigo Loans boasted about how the lack of regulation and the changes in regulation have benefited their industry. By not capping all forms of credit, in essence, we are pushing people into other forms of high-cost credit and towards other legal loan sharks. How much longer do our communities have to suffer? The truth is that they are suffering. I am a Labour and Co-op MP, so I would love to see more credit unions, but they cannot compete with such companies and their rapacious behaviour, or with the way they have evolved to evade legislation.

We need comprehensive legislation. Please, let us not have another year of the Minister and me arguing, yet again, about the benefits of that silver bullet. There is no single better thing that we could do than cap the cost of all forms of credit in this country to give an even playing field, to make sure that the banks treat people fairly, to make sure that all forms of new credit treat people fairly, and to give our communities hope for 2019 when their wages do not match up.

Customs and Borders

Stella Creasy Excerpts

Thursday 26th April 2018 Commons Chamber

[Stella Creasy (Walthamstow) (Lab/Co-op)]

My mother, who reaches a milestone birthday today, has taught me many things in life, including what she calls the “eat the frog” rule, which is that, if we have something difficult to do in life, there is no sense in prevaricating. I am here today to plead with Ministers to eat the frog and admit that there is no better alternative for this country than remaining in the customs union. After two years, it has become patently apparent that there is no better alternative.

In the short time available to me, I want to speak up for our remaining in the customs union. I reject the argument that those who challenge our leaving it are traitors. The only traitor is the person who does not speak up for the country’s best interests and who believes that democracy stopped the day after the referendum. We know that being able to trade in the way the customs union allows—making it as easy to buy and sell goods in Berlin and Budapest as in Birmingham and Belfast—is the best outcome for our communities. When the Government said they were taking the red tape challenge, I did not realise they meant creating more of it, yet that is exactly what leaving the customs union will do.

I am a fan of technology—I am a geek, I love it—but even I recognise that we do not have the hovercrafts with scanners to make frictionless trade and a lack of infrastructure at our borders a reality. We hear from those in Dover—people who work every day on our borders—that just a two-minute delay would mean a 17-mile queue to Ashford; a four-minute delay a queue to Maidstone; six minutes and it goes to the M25; and eight minutes and it goes to the Dartford crossing, I know what that would do to businesses in my constituency and around the country. Whatever new technology has been created, it cannot make up for the delay and the impact on just-in-times.

Then there is the extra paperwork involved. At the moment, we have 55 million customs declarations a year, but if we leave the customs union, that could increase to 255 million, which means British businesses large and small having a lot more paperwork. We might have a free trade agreement, but we will not have a paper-free trade agreement, and that matters to them. It matters because it is not within our gift. It is not just about the rules we create—when we trade, we are only 50% of the partnership; it is about the rules that those we trade with create.

That is why the customs union is so important. We learned that lesson not least from a time in Irish history when there was a trade deal between Ireland and Britain. After 1965, the tariffs that had applied to trade since 1923 did not disappear, which is why the Irish delegation demanded that goods be labelled “Made in Britain”. That caused Denis Healey to inquire whether we should stamp that phrase on the balls of the bullocks that were being shipped to Ireland, to which Paddy Hillery replied that bullocks do not have balls, but they still need paperwork. Such paperwork will be damaging to all our constituents and will result in massive costs to manufacturing. That is before we even get on to the impact of the World Trade Organisation.

--- Later in debate ---

[Mr Speaker]

I emphasise that if there are further interventions, which are legitimate in parliamentary terms, the time limit will have to be cut for remaining speakers.

[Stella Creasy]

I completely agree with my hon. Friend. Our car industry imports 60% of its components, so a British-made car probably has a German exhaust, Spanish-designed seats and French windows.

We have talked a lot about trade, but I also want to talk about people. It is clear that leaving the customs union will damage the lives of thousands of people in Northern Ireland and Ireland. We know that to be clear because we have no alternative. Ireland has 208 border crossings—more than the EU has with the rest of Europe. There will clearly be change. The consumers who may get cheaper goods are the same workers who will face the race to the bottom that will result from leaving the customs union and entering into the mythical free trade deals that we are being offered. We have heard that £25 billion annually will be lost to GDP.

Please, Minister, on this day of all days, listen to Ma Creasy and eat the frog—admit that the customs union is the best option, not just for our economy and British business, but for all our futures.

[Mr Speaker]

Happy birthday to Mummy Creasy.

Financial Guidance and Claims Bill [Lords]

Stella Creasy Excerpts

3rd reading: House of Commons & Report: 3rd sitting: House of Commons
Tuesday 24th April 2018 Commons Chamber

[Stella Creasy (Walthamstow) (Lab/Co-op)]

I am delighted that we have finally got our time to debate the Bill; some people in Parliament might not be, but I believe that consumer protection is one of the most important things we can do in this place, because it speaks to the incremental unfairness that people face in life that individuals cannot face on their own but which together as a society we can tackle. In that sense, I rise to support amendments very much in that vein, and one of their common themes is that they come from Co-operative as well as Labour MPs. The co-op movement was founded on the values of consumer activism so I want to put on the record my support for amendments 31, 1 and 2, which my hon. Friend the Member for Harrow West (Gareth Thomas) will be speaking to later. I also want to get onto the next group, which are in the name of my other Co-op colleague, my hon. Friend the Member for Liverpool, Wavertree (Luciana Berger), amendments 5, 6 and 7 on mental health and debt.

In particular, however, in speaking to my new clause 1 and amendment 4, on the FCA’s potential role in tackling the impact of high-cost credit on our society, I want to repeat my Cassandra impression on debt. The Bill is about the fair treatment of consumers. I urge the Minister and the Government, in my Cassandra-like way, to learn the lessons of the payday lending industry. I do not need to tell any Member that the nation is drowning in debt, as we all have seen in our constituency surgeries. We owe more as individuals than do the Government: total household debt in June 2016 was £1.23 trillion, which is more than the Government’s national debt.

Average UK unsecured debt is now £14,000 and will be £19,000 by the end of the Parliament. The number of people who have gone bankrupt in the last year has soared to its highest level since the financial crisis. The reasons are not rocket science: there is simply too much month at the end of their money. Research now shows that economic insecurity has become the new normal for at least 70% of the UK’s working population, who the RSA has described as “chronically broke” and that 32% of the UK’s workers—people who are earning a wage—have less than 500 quid in savings and 41% have less than a grand. It is little wonder that a third are desperately concerned about debt.

Unemployment rates might still be dropping, but we all know that the cost of living has not dropped, and personal debt has filled the vacuum. So, too, has that insecurity, with 1 million on zero-hours contracts and nearly 2 million people in temporary work—and that is even before we get on to those in self-employment. In my constituency, 15% of people are self-employed. These are people who cannot predict their incomes. It is little wonder that the high-cost credit industry has been preying on these people.

One in 10 UK adults say their incomes change significantly from month to month, and almost half say they have experienced at least one monthly drop in income, with the average monthly drop being £385. Who of us could afford to lose that much from our monthly budget without there being consequences? Nearly half those people were self-employed or in that insecure work, which makes budgeting, on which much of the Bill depends, so difficult, and more than half said that one reason they experienced problems was an unexpected expense—a quarter had had two unexpected expenses.

The costs that people face when the washing machine breaks down or the landlord puts the rent up cannot be planned for, but they are all too frequently an everyday part of life. It is little wonder that nearly 6 million households now spend more than 60% of their income on essential outgoings. They have little flexibility in their budgets to begin with, so when those unexpected costs come, of course they turn to borrowing.

We know that that is not the case for everyone. We know that there are very wealthy people whose incomes are about five times as much as those of the people in the bottom half of our income stratosphere. That is what the new clause and the amendment are about. There are people who can manage borrowing well within their budgets, but the reality of modern-day Britain is that there are many more people for whom borrowing in itself becomes the problem. We know that 25% of the UK’s lowest-income households are struggling with debt and experiencing that “chronically broke” feeling. It is little wonder that it causes so many mental health challenges.

It is not the traditional demons to which people who are struggling are now turning. We did make progress on payday lending—the so-called legal loan sharks—but that industry does not go away; it simply mutates. It simply finds new ways in which to prey on those people. The new clause and the amendment are about credit cards. I would wager that most Members have one credit card, if not two, in their pockets. Many of us may also have had that conversation with constituents who have come to us when they are about to be evicted because they cannot pay their rent and are behind with their costs. When we ask them, “Do you have any debt?” they say, “No.” When we ask, “Have you a credit card?” they say, “Of course.” Because credit cards are so ubiquitous in our society, we do not think of the danger that they can be.

That is why I tabled the new clause and the amendment. As the Minister knows, I am frustrated with the Financial Conduct Authority, which has been looking into credit cards but does not see the risk. This is where I become Cassandra, because the risk is all too obvious. Of course there are people for whom credit cards work well, but we know that a significant chunk of the British population are in persistent debt and that their credit cards are an integral part of that debt. They are paying about £2.50 in interest and charges for each £1 of their borrowing that they repay. That matters, because we stopped it happening in the payday lending industry by introducing a cap.

My simple question to the Minister is this. Why do we want to protect one group of consumers from that kind of persistent debt, but fail to learn the lessons when it comes to other types of product? The issue is not whether the credit involves a payday loan or a credit card; it is the credit itself, and the cost of the credit. I hope to convince the Minister of that.

When we look into consumer debt, we can already see just how damaging credit cards have been. At the end of 2016, consumer credit debt amounted to £236 billion, which is about 15% of total household debt, but it accounts for half the interest payments that are made each year. When the FCA conducted a survey of credit card debt, it found that 19% of consumers—one in five—paid just the interest rather than the repayment charges. What could be called “zombie debtors” had 5.1 million accounts. On average, it would take them more than 10 years to pay off their debt. They are stuck in debt because of their credit cards. Little wonder that 40% of adults say they sometimes struggle to make it to payday, and a third of them say that it is because they are making credit card repayments. Debt is breeding difficulty, and difficulty is breeding more debt for them and their communities.

[Luciana Berger (Liverpool, Wavertree) (Lab/Co-op)]

I thank my hon. Friend for making such an impassioned speech about such a serious issue. I am sure that there are Members in all parts of the House who meet constituents in their surgeries and hear about their credit card debts, involving not just one card but, in some cases, two, three, four, five, six, seven or eight. It is the people with the most debt who are preyed on by those who give them access to additional cards, which only add to their burden.

[Stella Creasy]

My hon. Friend is absolutely right. It is no surprise that she has done so much work on the link between debt and mental health issues.

We are already seeing in the credit card industry the same patterns that we saw in the payday lending industry. If we are honest, we must admit that it took us too long, as a House, to act in respect of that industry. So many of us saw people in our constituency surgeries who were losing their homes and people who were massively in debt because they had become stuck in payday loans that they were using to pay for basics such as rent and food. But when we did act, what a difference it made. Bringing in a cap on the cost of credit has led to an 86% reduction in the number of people going to citizens advice bureaux with problems caused by payday lending. So one question for us is what the consequences will be if we do not act on credit card lenders. The Minister may say to me that the credit card industry is completely different from the payday loan industry—that is what he said when we had an Adjournment debate about this—so let me try to convince him that the two are intertwined.

I see in my local community, as other Members may have seen, companies such as Vanquis, Aqua and Capital One—indeed, Vanquis is owned by Provident, which is a doorstep lending company—offering credit to people who have bad credit histories and driving them into the same level of debt as payday loans did. Indeed, the FCA’s data shows exactly that, which is why it is such a mystery to me that it does not choose to learn the lessons from the payday lending industry and act accordingly.

Someone who has an Aqua credit card with a monthly interest rate of 3.992%, has borrowed £1,000 and is only paying the minimum monthly payment will pay £480 in interest by the end of the first year. By the end of the second year, the figure will be nearly £1,000—as much as they borrowed, which is the cap that we have put on payday lending. By the end of the third year, bearing in mind that a big group of consumers get stuck in this way for 10 years, they will have paid back double what they owed. Such companies are targeting our communities in much the same way as the payday lending industry did. They are targeting people with insecure incomes, because they have seen a new market. As I said, this industry does not go away; it just mutates.

Citizens Advice’s recent research about insecure income shows us just how much of a problem there is. People with high levels of income volatility are also five times as likely as others to have accessed this form of high-cost credit to meet the essentials—to put food on their table, to put petrol in their car to get to work and to pay their rent. Those are not costs that they can cut back on but the costs of everyday living. People with volatile incomes are also more likely to be paying fees and charges on cards, as well as overdraft fees.

That is why it is frustrating that, from the get-go, the FCA ruled out capping the cost of credit on credit cards and so learning the lesson from payday lending. It thinks the answer is to ask people to pay back money earlier, as if they have the spare cash to do that. It is not a fair fight for individual consumers against credit card companies, just as it was not a fair fight against payday loan companies. That is why we should intervene to set a fair market and learn the lessons about capping.

My new clause 1 does something simple: it asks the new financial guidance and claims body to step in, because the FCA is not doing its job and looking after the interests of consumers. It is not recognising, as Cassandra does, the risk that is coming and acting to avoid it. It says that persistent debt is when somebody pays 100% in interest and charges on top of the amount to be repaid, but it is not applying its own rule to credit cards even though we have seen how effective it has been in the case of payday lending.

I ask the Economic Secretary to show the leadership that this issue needs and that I believe the House would support. If he says today that he will take a strong hand with the FCA and not let it wait years and years, watching our constituents get into consistent debt with credit cards, logbook loans or any other form of high-cost credit, he will have my backing. I have tabled my amendment and new clause to give him the opportunity to tell us that he gets it. The House does not want to wait another five or six years watching our constituents get into debt, as we did with payday lending. I am sure the Government would not want to be forced to cap the cost of credit, as we had to force them in that case, and I am sure that he is proud of the difference that capping the cost of credit for payday lending has made to millions of consumers in this country.

FCA data shows us that millions of credit card owners need our help and protection now, which is why I have tabled the new clause and amendment. I believe that there will be support for them, but I want to give the Economic Secretary the opportunity to do what I know he wants to do, which is to ensure that we do not leave it so long this time. I look forward to hearing what he says, and I hope that other Members will support my call, because frankly, there are too many people in our constituencies who need and deserve nothing less.

Oral Answers to Questions

Stella Creasy Excerpts

Tuesday 27th February 2018 Commons Chamber

[Mr Philip Hammond]

Strictly, this is an issue for my right hon. Friend the Transport Secretary, and he is looking at how to improve productivity in the railway and how to ensure that every pound we invest in the railway delivers the maximum possible benefit to railway users. He will make further announcements in due course.

[Stella Creasy (Walthamstow) (Lab/Co-op)]

T8. Could the Chancellor set out the benefits or otherwise of the arrangements the Government appear to have for a customs union between Camden, Islington and Westminster?

[Mr Hammond]

I am sure that when I go home and reflect on it, the deep meaning of that question will become clear to me. What I will say to the hon. Lady is that if we look at how goods and services flow freely between different parts of our own economy, and indeed between different parts of the United Kingdom, we see at once the huge benefit that it brings to have frictionless borders as we move our goods and services.

Finance (No. 2) Bill

Stella Creasy Excerpts

3rd reading: House of Commons & Report stage: House of Commons
Wednesday 21st February 2018 Commons Chamber

[Helen Whately]

I thank my hon. Friend for making such an important point. This Government have given thousands of young people the opportunity to have a job. It was not that long ago that everyone was always talking about NEETs—the big debate was about all those young people not in education, employment or training. Those numbers have now shrunk phenomenally under this Government’s leadership.

[Stella Creasy (Walthamstow) (Lab/Co-op)]

The hon. Lady has mentioned the power of numbers to be able to track progress. Obviously, new clause 9 is about the power of numbers to be able to track progress in tackling inequality. If she thinks that those numbers were so important in the battle to ensure that we did not leave young people behind, why does she not think the same when it comes to women and ethnic minorities?

[Helen Whately]

I am not surprised by the hon. Lady’s intervention. The point is that there is a thorough impact analysis of the Budget. Where does it get us if we endlessly go around these things, again and again?

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[Rachel Maclean]

My hon. Friend makes a very important point. As she says, the national living wage helps people from all sectors of society, including those with protected characteristics. Our record on these policies speaks for itself.

[Stella Creasy]

The hon. Lady is promoting the Government’s record. One reason why the Labour party wants to get explicit equality impact assessments—not the tax information and impact notes, which I think is what she has been told the Government do produce—is that the evidence is showing counter to what she suggests. For example, we know that the gender pay gap between women in their 20s and men in their 20s has actually started to grow under this Government. It is now five times what it was six years ago. I do not know where the hon. Gentleman from Scotland got his data. I got mine from the Office for National Statistics, if he wants to have a look. Can the hon. Lady account for that? Does she not understand that having the data—understanding where Government policy is either promoting or helping to deal with the situation—would help us all to make progress?

[Rachel Maclean]

The hon. Lady is a passionate advocate for addressing the gender pay gap. I will come to the issues she raises shortly.

[Rachel Maclean]

My hon. Friend really reinforces my point, which is that it is about putting pounds in the pockets of people up and down the country. That is what this Government have done, informed by fairness from the day that we came into office.

[Stella Creasy]

The hon. Member for Cheltenham (Alex Chalk), as ever, needs clarification. There is data that shows us that the gender pay gap is growing. We are asking for analyses of the impact of Government policy so that we can understand it. We are talking about two different things. I hope that clarifies, for him and for the hon. Member for Redditch (Rachel Maclean), why the new clause matters.

--- Later in debate ---

[Stephen McPartland]

I do agree with my right hon. and learned Friend. I have another colleague from Hertfordshire here as well—my hon. Friend the Member for Hitchin and Harpenden (Bim Afolami). We have seen massive investment in our area. I am very proud of the number of primary schools that have been expanded and rebuilt in my constituency. A couple of secondary schools have also been rebuilt, creating great opportunities for the pupils. I am also very proud that all the primary schools in my constituency are rated “good” or “outstanding”. It is probably one of the few constituencies in the country where that is the case. Four of my six secondary schools are good, and the other two we are currently dealing with. I hope that by the time of the next election I will be one of the few Members of Parliament where every single child in my constituency will be in a good or outstanding school.

I do not believe that new clause 9 provides equality of opportunity and equality of aspiration. It will do nothing to help people in my constituency from disadvantaged—

[Stella Creasy]

We are all concerned to see good schools, I think. Does the hon. Gentleman recall a former Prime Minister who argued that sunlight was the best form of disinfectant? Having the numbers to track why, disproportionately, young men from black and ethnic minority backgrounds do worse in our schools, for example, and whether Government policies are influencing that, or whether their parents’ income might be an issue, would help him to understand how he gets those better schools.

[Stephen McPartland]

The hon. Lady and I agree on a lot of things and disagree on others. We have debated issues across this Chamber and in Committee Rooms. I do not think that figures will help those children. Figures are just retrospective and talk about what is possibly happening.

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[Mel Stride]

Yes. My right hon. and learned Friend makes a very important point. As I have already pointed out, around major fiscal events we have household distributional analysis, which covers welfare, taxation and public expenditure. It takes a cumulative approach to that information and it is often relied upon by Government to take subsequent decisions. We also have, on substantial individual tax and national insurance contribution measures, tax impact and information notes—the so-called TIINs—which were introduced in 2010 and were not there under the previous Labour Government. We are, therefore, doing a number of things, both in the context of major fiscal events and on a tax-by-tax, national insurance-by-national insurance change basis, which look to provide just the kind of information that informs decisions around equality.

The third part of new clause 9 relates to the taxes to which this analysis would apply. On income tax, as I have said, we are looking at impacts on households. We may raise the personal allowance, as we did in the last Budget. That is now up to £11,500. It could be argued that that disproportionately favours one sex over another, but when we look at the effect on the household, income is typically distributed within families, within households and within the family unit. That is extremely difficult—in fact, I would go as far as to say impossible—to capture.

[Stella Creasy]

The Minister made that point the last time we tried to discuss this issue. Forgive me, but he seems to be presuming that a household is a man and a woman. Has he managed to get his head around single person households and single women, because women’s incomes are disproportionately hit by Government policy? At the very least, could he manage to measure the women who are affected by his tax and policy changes who do not live with a man who might confuse him?

[Mel Stride]

If the hon. Lady can come up with a sure-fire way of identifying women who live with men who do not confuse them, we will probably make some progress. The point I am making is that this area is riddled with huge complexity, yet new clause 9 seeks to achieve the presentation of reports and assessments that have the imprimatur of Government and the Treasury upon them. They are relied upon to take very important decisions, yet the arguments I am prosecuting suggest that we would actually end up with an incomplete picture. In fact, I would go further than that and say that they could be misleading in a way that would be unhelpful to what I know the hon. Lady is seeking to achieve and indeed what the Government are also seeking to achieve.

--- Later in debate ---

[Chris Philp]

My hon. Friend makes a very important point. The fact that the tax gap is 6% rather than the 8% bequested to us by Gordon Brown sounds like a theoretical point, but that two percentage point difference, as she rightly says, amounts to billions of pounds funding the NHS and schools. In debating these avoidance measures, we are not talking about something theoretical and of academic interest: it is precisely these measures that fund our public services, and that is why they are so important.

Turning to the Opposition’s amendments and new clauses, I was rather surprised, on looking at the amendment paper earlier today, to see that new clause 6 once again calls for a review and analysis—analysis which, I am sure, is already conducted by the Treasury, as the Financial Secretary will no doubt point out. But there was an absence—a silence and a desert; tumbleweed was rolling across the amendment paper—where I would have expected to see an abundance of ideas that we might have adopted from the fertile mind of the shadow Chief Secretary. If he could not have proposed ideas in an amendment for some arcane parliamentary procedural reason, he might at least have done so in his speech.

The Financial Secretary to the Treasury is an extremely attentive and receptive Minister. Had the shadow Chief Secretary proposed some constructive ideas, I am sure that the Financial Secretary would have listened carefully. I am very disappointed that after all the noise and, I dare say, bluster—I hope that is not unparliamentary—that we heard in the shadow Chief Secretary’s speech, we did not hear any concrete ideas. We cry out for and are open to new ideas, yet we did not hear any in what was otherwise an amusing and entertaining speech. I am disappointed.

If the Financial Secretary is in the market for new ideas on avoidance, as I am sure he is, one idea is that we could give some thought to ensuring that the Land Registry records the ultimate beneficial ownership of property and land. We discussed that yesterday in our debate on sanctions, and it was suggested by David Cameron a couple of years ago. When the ultimate beneficial ownership of those properties changed, we might then levy stamp duty on that change as though the physical property had been transferred. A lot of high-end residential property is held in non-UK corporate wrappers, and when the property is transferred, rather than selling it, as we would sell our properties, ownership of the company is transferred. There is no record of that in the UK and therefore no stamp duty is paid. That idea might well raise some more stamp duty. I could hardly criticise the shadow Chief Secretary for his lack of ideas without proposing at least one myself. I hope that Ministers will give some thought to that idea in due course.

In conclusion—[Hon. Members: “Hear, hear!”] I am glad I have said something that finds favour among Opposition Members. I must have set a record for the number of interventions taken, though there was only one from my own side. The action on the bank levy contemplated in the Bill is the right one. We are taxing banks more heavily than non-banks. We are raising more money than ever before, but we must be mindful of the risk of driving these companies or part of them overseas at a time when they contribute 9% of our total income.

On avoidance and evasion, I am proud that this Government have delivered the lowest tax gap in the world and improved by a quarter the position that they inherited. That pays for public services, as pointed out by my hon. Friend the Member for Redditch (Rachel Maclean). It is a good record, and I am proud of it. I look forward to supporting the Bill.

[Stella Creasy]

I rise to support the amendments tabled by the Opposition and to speak to my amendments 1 to 4.

I was into PFI before all the cool kids were. These amendments speak to a long-held concern of mine, which is that it is not enough for us as politicians to identify when something has gone wrong and to shrug our shoulders and say, “It’s complicated.” The consequences for the communities we represent and for this country’s public finances are so toxic that it is vital we act.

George Bernard Shaw said:

“Political necessities sometimes turn out to be political mistakes.”

Let me be clear that I am not seeking to blame anyone. Governments of all colours used PFI. It started in 1992 and has gone on to the present day. Absolutely, the last Labour Government used PFI to fund things, and it was not an ideological decision; it was a very simple one about keeping borrowing off the books.

However, we know now just how costly these decisions have been for this country. Every single school, hospital, street lighting system and motorway built was needed, but we know now that the consequence of these costs is that we may not be able to build such things in the future. I am in the Chamber today to propose a way in which Parliament can now act to get money back for our public services, because everyone of us has one of these projects in our constituencies.

We can talk about the numbers involved: £60 billion of capital building, on which we will pay back £200 billion. These companies are truly the legal loan sharks of the public sector, charging an excessive rate of interest in comparison with public sector borrowing for building and running services for us. Conservative Members may say that the cost I am talking about includes services, so it is worth breaking down the charges. Last year alone, this country paid out £10 billion in PFI repayments, over half of which was for interest and charges. The money we are paying for PFI is not paying for schools and hospitals to be run; it is paying the profits of the companies we borrowed from to be able to build them in the first place.

The National Audit Office has done absolutely sterling work uncovering just how bad a value-for-money calculation it was to go for PFI. On average, these projects are 2% to 4% more expensive than Government borrowing at the time. In total, with charges and fees included, they are now, on average, 40% more expensive than having worked with the public sector.

The interest rate matters because the costs are not necessarily about the management of a project; they are about the profits being made. Every single MP who is being lobbied about their schools and hospitals needs to recognise that 20% of the extra money the Government say they are giving to schools and hospitals will not touch the sides of emergency wards or go into the budgets of teachers to pay for the books and classes our schoolchildren need. It will go straight out of our public sector into pure profit for these companies.

The Centre for Health and the Public Interest has gone through the accounts of the few hundred companies running schools and hospitals to identify just how much money is involved. It found that they will get £1 billion in the form of pre-tax profit from NHS deals alone, which total just 125 of the 700 PFI projects. For example, the company holding the contract for University College London has, alone, made £190 million in the past decade out of the £725 million the NHS has paid out. In short, it has made enough in profits to build and run an entire hospital.

We have to talk about the human cost. I became interested in PFI when I saw the damage it was doing to my local hospital, Whipps Cross in Walthamstow, and to schools such as Frederick Bremer School in Walthamstow. Its headteacher is now desperately struggling to balance her budget in the face of this Government’s swingeing cuts to the schools budget, but the one repayment she cannot cut is the PFI one. Barts, the biggest PFI in our NHS—with a £1 billion capital build, and £7 billion repaid—is paying £150 million a year, of which £74 million is interest alone. It is no wonder that the hospital is in such persistent financial difficulty.

[Wes Streeting]

My hon. Friend is making a powerful case. Whipps Cross University Hospital also serves my constituents. To the east, the cost of PFI at Queen’s Hospital in Romford is such that it is creating enormous financial pressures on the Barking, Havering and Redbridge University Hospitals NHS Trust. Does she agree with me that that underpins the urgency of the need to tackle this issue? We should not stick to the ideological dogma of the past, but look at what has really happened and claw back some of that excessive greed to better fund our public services.

--- Later in debate ---

[Stella Creasy]

My hon. Friend—my next-door neighbour MP—pre-empts my argument. My amendments relate specifically to the 700 existing contracts, because I believe—I am glad my Front Benchers support this—that we can and must do something urgently about the damage these 700 contracts are doing every single day in schools where headteachers are having to consider sacking people but cannot cut the repayments, and in hospitals that are having to cancel operations but cannot reduce the repayments to their lenders.

There is a sixth-form college in Haywards Heath with no sixth form, because nobody will take on the school’s PFI debt. We keep talking about Northamptonshire Council, which is selling its own buildings because it is going bankrupt. It will owe £240 million to just five PFI deals in the next two to five years, of which £77 million is interest payment. Surrey Council is also in financial difficulties. It has £386 million of PFI commitments that it will not be able to reduce, of which £51 million alone is interest.

Credit Cards: Cost Regulation

Stella Creasy Excerpts

Wednesday 7th February 2018 Westminster Hall

[Stella Creasy (Walthamstow) (Lab/Co-op)]

I beg to move,

That this House has considered regulation of the cost of credit cards.

It is a pleasure to serve under your chairmanship, Mr McCabe. I hope that by the end of the debate we will actually have done more than consider the cost of credit cards. This is a familiar place for me to come to raise concerns with Ministers about personal debt in this country. However, I hope that I get a better hearing today than I did several years ago, when I came here repeatedly to warn the Government about the dangers of payday lending, because I believe that we are again on the cusp of another massive personal debt crisis in this country. There are proactive things that we can do to tackle that, one of which is dealing with credit cards.

We have to be honest: this is a nation in debt up to its eyeballs. Individuals actually owe more than the Government, with total household debt standing at £1.23 trillion. Most of that total is mortgage debt, but £117 billion of it is from credit cards and loans—a 15% increase in the last couple of years alone. The average UK household now has £14,000-worth of debt, and that is expected to rise to £19,000 of unsecured personal debt by the end of this Parliament. It is little wonder that the number of people going bankrupt in this country is soaring. Indeed, the number of people taking out individual voluntary arrangements is also soaring.

[Jim Shannon (Strangford) (DUP)]

I thank the hon. Lady for securing this pertinent and important debate. Does she agree that credit card companies must play their part in ensuring that small retailers are still able to use card machines as a payment option? It must be the credit card companies, not the small businesses, that pay the bill.

[Stella Creasy]

I appreciate that the hon. Gentleman has a particular concern. I hope I can convince him that the regulation of credit cards that I am interested in is about their cost to the consumer in the first instance.

I do not think the reason we have such a personal debt crisis in this country is rocket science. There is simply too much month at the end of the money for too many people. We now know that economic insecurity is the new normal, with at least 70% of Britain’s working population defined as “chronically broke”. Some 32% of UK workers have less than £500 in savings, and 41% less than £1,000. Almost 30% are desperately concerned about their debt, because it is not just about everyday living costs; it is about the financial shock that might come because someone loses their job or their relationship breaks down. Too many people live on that edge now.

It is worrying that, unlike in previous years when insolvency rates have increased so much, unemployment rates are still dropping. That tells us that people are in full-time work, but are still unable to pay the basic costs of living, such as utility bills and rent. Combine that with inflation increasing at about 3% a year and stagnating wages, and it is not hard to see why personal debt is booming in this country.

[Paul Girvan (South Antrim) (DUP)]

On credit card debt, a lot of people are suckered in with introductory interest-free periods and their credit limit being increased, to a degree where they end up putting a noose around their neck. Ultimately they are unable to repay because of their lack of savings, as the hon. Lady has already identified, and as a consequence they end up paying at exorbitant interest rates once the interest-free period runs out.

[Stella Creasy]

The hon. Gentleman prefigures much of what I will say about who I believe are the new Wongas in our society.

It is not possible to make the argument that the millions of people on zero-hours contracts and in temporary work can manage their repayments and can be confident about the amount of money coming into their households. With millions of people now self-employed, and more people in England likely to be employed in the gig economy than working for the NHS in a few short years, it is clear that insecure, precarious work and precarious finances are the new norm for millions of people in our country.

[Tulip Siddiq (Hampstead and Kilburn) (Lab)]

I thank my hon. Friend for securing this important debate. Many of my constituents rely on organisations such as Citizens Advice to support them when they are in dire credit card debt. At the West Hampstead Women’s Centre in my constituency, bespoke Citizens Advice surgeries often lead to referrals to specialist services, such as the face-to-face disability and debt service. However, since 2010, Citizens Advice has seen its funding slashed from £178 million a year to £99 million a year. Does my hon. Friend agree that, in addition to taking on credit card companies, we need to ensure that debt management services are protected as well?

[Stella Creasy]

I completely agree with my hon. Friend. The idea is that this is just a problem for a few hundred thousand people, but debt, worrying about debt and the causes of debt are mainstream concerns in this country. Debt management, debt advice and the work of Citizens Advice is very important, but I also believe that, when we see these problems growing again, there is a role for us to step in before they get any worse. I made a call to action several years ago about payday lenders. We did not listen then until it was too late. I hope the Government will listen now.

We know that not everybody is struggling, and that Britain is a nation of contrasts, where some people have seen their wealth balloon because of property and pension rights. However, we also know that there are too many for whom debt is just everyday life. It is debt on basic payments—on food, rent and travelling to work costs. We know that 25% of the UK population now struggles with debt. Not everybody is in trouble, but enough are, and the reason is the nature of the products they use to deal with their debt, particularly credit cards.

I hope the Minister will understand why we need to act, because credit cards are the acceptable face of modern debt for people. All of us have one; I am sure if Members were to open up their wallets and purses, they would have, if not one, then maybe two or three with them. There are 30 million cardholders in the United Kingdom. Indeed, the Financial Conduct Authority has been investigating the credit card market.

[Jim Shannon]

The hon. Lady has been very gracious in giving way. I appreciate that very much. Does she appreciate, as I and many others in the House do, the good work of Christians Against Poverty, church groups, Citizens Advice and those who step into the gap to give advice and help people to manage their affairs when they get into debt?

[Stella Creasy]

I happily join the hon. Gentleman in supporting Christians Against Poverty, which very kindly came and ran a workshop for activists in my local community not a few weeks ago, to help residents to understand what they should say to somebody who is struggling with debt.

People often do not see credit cards as debt because they are just a fact of life. We know that the Financial Conduct Authority will tell the Minister that the market is working well for most, and that people shop around when getting a credit card, are able to compare rates and understand what they are buying. However, the problem comes when we look deeper and see the connection between those who struggle with debt and the nature of the credit cards they have.

Credit card debt is £263 billion—about 15% of total household debt—but it accounts for half of all interest payments made each year. That is the first signal that we need to look more closely at the interest rates on these cards. A whopping £28 billion is repaid each year, which accounts for 41% of all consumer debt, up from 33% in 2008. The average balance of those making just minimum repayments—the zombie debtors, who are paying off the interest but not the capital—is about £5,000; that is what they owe. However, 15% of zombie debtors owe more than £10,000. Crucially, when the FCA looked into this, it found that 20% of the people who ended up paying interest on their credit card did not expect to do so when they took it out. The reason is that life does not always go the way we expect it to. Jobs disappear. Relationships break up. The cost of living gets higher and higher.

Little wonder that there are 5 million accounts that, with people making just minimum repayments, it is estimated it will take 10 years to pay off the balance. It is no wonder that four in 10 British adults are worried about their credit card debt. They understand that what seemed like the best way to manage their finances has quickly got them into a situation that they cannot get out of. Forty per cent of adults in this country say that they struggle to make it to payday and, of those, 30% say that credit card repayments are causing them the problem. The FCA has identified that; it has identified those people whom it would say are in difficulty because of their credit card debt. It considers more than half those people to be “potentially vulnerable” because they have few resources to fall back on, even if they are managing to make some repayments.

The FCA has also identified that one third of people do not really understand the interest rates that they are paying on their credit cards. Again, it is the point about interest rates and what it will actually cost people to use these cards, even if they are flipping between zero-rate-interest cards. It identified that people who switch are switching because they think that they are getting a better balance offer—crucially, they are not getting out of debt.

The point of today’s debate and raising this issue with the Minister is to ask him not to wait until the situation gets worse, because we know the consequences of waiting until it gets worse. Let us learn the lesson from those legal loan sharks, the payday lenders—the people who were lending £100 to people who were ending up paying an average of £260 back. They were using payday loans when they were unregulated to pay for their basic living; 53% of them were using them just as people are using credit cards—to pay for groceries and utility bills. They were paying for things that they could not go without. Three in five borrowers on a payday loan said that they could not go without the item for which they had taken out the loan.

Let me tell the Minister that when we do act—when we recognise the consequences of leaving a situation to fester, as we did with payday loans—it makes a massive difference. Bringing in a cap on the cost of credit saw a 45% reduction in the numbers of people going to the citizens advice bureau in difficulties with payday loans; indeed, there has been an 86% reduction since 2016.

These credit card companies are truly loan sharks pretending to be the good guys. We know that what matters is in the small print. Many of us may have looked at our own credit card interest rates and seen that they vary from between 0.8% and 2% a month, but we also know that those basic interest rates on credit cards have been rising over the past 11 years, from an average of 15% to 23% now. As the hon. Member for South Antrim (Paul Girvan) pointed out, the zero balance transfer deals have been lengthening, but what is happening is that the credit card companies are making up for competing to get people to switch, by increasing the interest rates. And that is before we get on to the credit cards for people who are in bad credit—the new Wongas: the Vanquises, the aquas and the Capital Ones, which offer interest rates of 30% to 60%.

The Minister will point me to the research by the Financial Conduct Authority that shows that about 45% of people borrowing on cards for those with bad credit have found them useful for building up a credit history, but let us think about the other 55%—those who, as the FCA has identified, are in severe or serious arrears as a result of getting these cards. I see Vanquis in my town centre in Walthamstow, preying on people.

[Kirstene Hair (Angus) (Con)]

The hon. Lady mentions the FCA. In December 2017, it published revised proposals that would see lenders reduce or even cancel credit card interest and charges for customers who are in persistent debt, so positive work is going on.

[Stella Creasy]

I thank the hon. Lady for pointing out the research that I am quoting and the paper that I have read. This is my concern. Having read exactly what the Financial Conduct Authority is doing, I think that it is missing a trick, and I am appealing to Ministers to intervene. Let me explain why.

We can look at companies such as Vanquis, which offers people £1,000 straight off—no credit checks, no questions asked. It is owned by Provident, which is a high-cost-credit legal loan shark. It targets people with the blithe claim that as long as they can afford the minimum repayment every week, they can rebuild their credit. Alternatively, we can look at the aqua credit card, with an interest rate, superficially, of 3.9%. If someone borrows £1,000 from that company and makes the minimum payments, they will have paid £480 within one year, £680 within 18 months, £800 within two years and £1,000 in interest by 28 months. Those figures reflect exactly the sort of lending and patterns of repayment and costs of interest that we recognised were wrong for payday lenders, yet now that is happening in the credit card industry.

There is a simple principle at issue here. We recognised that it was wrong to ask people to pay back more than they had borrowed; up to 100% was a fair amount of interest to be charging. Why have we intervened and said that that was wrong in the payday lending industry, but are letting it happen with credit cards? That is exactly what is happening: people are paying back in interest double what they have borrowed.

Yes, the FCA conducted a market study, and yes, parts of the market are working well for some consumers. Therefore, if we act where the market is not working well for the other consumers, we can stop these problems before they get worse. I do not understand how the FCA can justify not bringing the same lessons that we have learned from payday lending, about not asking people to pay back in interest double what they have borrowed, to the credit card companies, even though we recognise that that is wrong in the payday loan industry—but that is what has happened.

All the FCA’s remedies at the moment require people to have the cash to be able to act—to be able to make quicker repayments and to be able to pay back earlier—when actually what we are seeing is a nation that does not have spare cash in its pocket, let alone when facing economic shocks. These companies are entering into voluntary agreements with the Financial Conduct Authority. We are not learning the lessons of asking legal loan sharks, like turkeys, not to speak in favour of Christmas. These companies are making millions of pounds from pushing people into debt in exactly the same way as the Wongas of this world did, yet still the FCA is standing by.

There are things that we can count on in the coming months. We can count on the fact that the economic situation will still be uncertain for people, that there will still be precarious work as the new norm, that people will not be able to plan. We can count on the fact that the cost of living is still going to go up—that if we want to put food on the table, keep a roof over our head and put petrol in our cars to get to work, it is going to get more expensive. We can count on divorce, house moving and redundancy still being facts of life. And yes, we can count on the fact that some parts of these markets work well, but not enough of them do, so I am asking the Minister to learn from history. Do not wait until millions more British people are stuck in spirals of debt with credit cards. Do not think that credit cards are acceptable and high-cost credit and payday lending are things of the past. This market is mutating, but it is still firmly focused on exploiting communities such as mine, exploiting people in financial difficulty, exploiting people who have few options. If the FCA feels too timid to be able to act, then just as we did before, let us give it muscle. Let us bring in a cap on the cost of credit cards, just as we did with payday lending, and recognise legal loan sharking in this country for what it is. I look forward to what the Minister has to say.

--- Later in debate ---

[John Glen]

As I was saying, last year the FCA consulted on remedies to tackle persistent credit card debt. It proposed a robust package of remedies to tackle the issues that it identified in the market.

[Stella Creasy]

The Minister mentions that the FCA consulted on persistent debt. The FCA defines persistent debt as paying 100% in interest and charges on top of the principal repaid over an 18-month period. Given the evidence that that is exactly what people are doing on these credit cards, and the fact that we intervened and capped the cost of credit through payday loans when we saw that, will the Minister explain why it is acceptable not to do that for credit cards when it is okay to do it for payday loans?

[John Glen]

I will come on to that. As ever, the hon. Lady is eager to intervene. Let me finish what I want to say, and I will give her the answer that she wishes to hear.

The remedies include requiring firms to take steps to encourage customers to repay debt quicker and to avoid getting into persistent debt in the first place. Where customers are not able to repay their debt in a reasonable period, firms will be required to offer forbearance. Firms will also be required to use the data available to them to identify customers at risk of financial difficulty earlier and to take appropriate steps.

The FCA’s rules apply to all credit card companies, including those that lend at the higher interest rates, some of which the hon. Lady mentioned, to customers with poor credit ratings. All lenders have a duty to treat customers fairly and to lend only to those who can afford to repay. We expect the FCA to publish a final policy statement soon, and I will look carefully at what it says to see how we can take this forward. It seems a bit unreasonable not to wait for the final policy statement before we conclude where the FCA has got to with it.

As an additional weapon in its armoury, the FCA has worked with the industry’s leading body, UK Finance, to secure a voluntary agreement with its members to restrict unsolicited credit limit increases, giving customers more control over their accounts. All customers will be made aware that they can choose not to receive offers, and customers in persistent debt will not receive any unsolicited credit limit increases at all. New customers will be given the choice of how credit limits will be applied to their account, and firms will make it easier for existing customers to decline offers of a credit limit increase by reminding them of their options.

The combination of existing FCA powers and the proposed package of remedies is a very robust arsenal.

[Stella Creasy]

Will the Minister give way?

[John Glen]

No, I will continue.

The measures are a demonstrable commitment by this Government, the regulators and the industry to tackle structural issues within the credit card market. [Interruption.] If the hon. Lady did me the courtesy of listening, as I did to her, it would be quite helpful.

Thinking about the limits that should be put on the cost of credit card borrowing, which I think the hon. Lady referred to, it is important to note that the Government have already given the FCA the power to cap all forms of credit, and the FCA can do that if it thinks it is necessary to protect consumers. However, it is neither this Government’s mandate nor our role to intervene in a functioning and competitive market. In addition, a credit card cap would be inherently more complex than the price cap introduced on payday loans in 2015. Payday loans are fixed-term, discrete loans, whereas credit cards provide a revolving credit facility—they are quite different.

What the Government can do, and already have done, is ensure that there are regulatory checks and balances in place to ensure fairness. The FCA has said that it will keep the issue of a mandatory cap on the cost of credit, including credit cards, under review. The FCA will monitor the effectiveness of its credit card remedies, and can take further action if necessary.

[Stella Creasy]

Will the Minister give way?

[John Glen]

No, I am not going to give way.

[Stella Creasy]

The Minister has not answered my question. With the greatest respect to the Minister, I asked him a very specific question about the disparity between it being unacceptable for people with payday loans to pay double in interest what they had taken out, and those 5 million people who are stuck in 10 years-worth or more of credit card debt continuing to pay those rates. I would like his specific answer on that unacceptability.

[John Glen]

I did directly explain that there is a distinct difference between the nature of a payday loan and a credit card facility. I explained that very clearly and I am sorry the hon. Lady did not hear it.

It will be helpful to set out some of the things that the Government have done with respect to dealing with people in financial difficulty. The Government are delivering on their manifesto commitment to implement a breathing space and debt management plan. The call for evidence on the breathing space scheme recently closed, and the Government have committed to consult on a policy design proposal in the summer.

We set up the Money Advice Service, which spent close to £49 million on providing 440,000 debt advice sessions last year. We are now going further to ensure that consumers can gain easier access to financial guidance and debt advice by creating a new single financial guidance body, which will bring together the Pensions Advisory Service, Pension Wise and the Money Advice Service. The new body will make it easier for consumers to get help with all aspects of their financial lives, as well as having a statutory duty to improve financial capability and to commission free-to-use debt advice. The Bill to create the new body is currently before the House of Commons.

I thank the hon. Lady for raising this issue—I acknowledge that it is very important—and for speaking with such fervour. I share some of the concerns that she has expressed. Millions of people in this country use credit cards regularly, and the Government are committed to ensuring that they are treated fairly and not encouraged to fall into persistent debt. I hope the hon. Lady understands that a cap on the cost of credit card borrowing is not an effective solution. It is a blunt, interventionist approach to a complex issue. The Government have given the FCA strong powers to take action, and the FCA is putting in place measures to tackle persistent debt in the credit card market. This is not a static issue, however, or one that I and the Government are not interested in examining on an ongoing basis. The Government and the FCA are committed to ensuring that it remains under constant review.

Question put and agreed to.

Resolved,

That this House has considered regulation of the cost of credit cards.