Financial Services Bill (Second sitting)

Stella Creasy Excerpts

Committee stage & Committee Debate: 2nd sitting: House of Commons
Tuesday 17th November 2020 Public Bill Committees

[Ms Eagle]

Q Please do.

Catherine McGuinness: I feel I missed a couple of points there. It is true that part of the way we will retain our global leadership in standard setting is by bilateral dialogue and co-operation, regulator to regulator, with other countries. There is also the question of how we work with the multilateral organisations. We need to take a good look at how we engage, on our new footing, with the Basel committee—how we engage with other global standard setters. We have a good story to tell. I think next year gives us a very good opportunity, as we take up the presidency of the G7 and with COP26 coming up. I have already mentioned our potential leadership on green standards. We should really look at next year as part of this new chapter for financial services, and look at how we can make clear our place in standard setting, and in that conversation around global standards.

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

Q My colleague, Angela, has asked most of the questions that I wanted to ask. I just want to get a bit of clarity. Clearly, there is the question of whether your members are thinking about how the Bill will affect the future landscape for their operation. Could you give us some sense of how you feel the Bill will affect the many who are thinking about whether to stay in the UK or go overseas? What issues around the regulatory framework would be the tests for them? Are there things that we could do in the Bill to make it even more likely that people will commit to the UK, and are there things that would make it less likely?

Emma Reynolds: There are measures in the Bill that do, as I understand it, reflect some of the measures that the EU has taken around prudential requirements. In the past, there has been a bit of a one-size-fits-all for different sizes of companies. For smaller companies that carry a smaller risk, you need to take a proportionate approach to regulation. That is by no means saying that we want lower standards, or a race to the bottom; it is about considering firms of different sizes and the risks that they bring.

Obviously, there are challenges every time there is a significant change such as this, and 1 January will look and feel very different, but there are some opportunities, too. For example, we will be in a position where the UK is making laws and regulations for one member state. I mentioned the fast-moving challenges coming up, involving socioeconomic changes to do with covid, FinTech and green finance; the UK will have more flexibility and agility, and so can perhaps act more quickly than before, or than the EU can, operating with 27 member states.

Catherine McGuinness: I think that is right. To add to what Emma has said, the Bill is very helpful in demonstrating the planned way forward. People will be looking for an ongoing commitment to high standards—and, yes, agility in how we make our rules, but also a rigor in that. We cannot stress often enough the importance of this country’s openness to welcoming trade and business, and to high standards, against our strong regulatory backdrop.

It is very welcome that the Treasury will be looking at the strong patchwork of the bases on which people can come into the UK and operate here—the overseas persons exemption and so on. The Treasury will look at how that whole framework can be knitted together in a more coherent manner, as I understand it. What people will be looking for is an ongoing commitment to high standards and the ability to do their business.

[The Chair]

Are there any further questions? In that case, I thank our two witnesses on this fifth panel. Emma and Catherine, thank you for your evidence.

Examination of Witnesses

Adam Farkas and Constance Underwood gave evidence.

--- Later in debate ---

[Andrew Jones]

Q That is very interesting. Do you have any data that can quantify some of the anecdotal evidence that you have just been giving us? If you can, could you please circulate it around the Committee?

Peter Tutton: Yes, I will dig some out.

[Stella Creasy]

Q Peter, thank you for articulating so clearly all the different challenges that we face in trying to prevent debt as well as deal with its consequences. I have a couple of questions about the Bill and some of its provisions, and then about your sense of where we might be able to make some progress in strengthening the protection for consumers from unaffordable debt.

With the debt repayment schemes, I think all of us recognise that the breathing space is a very positive development. First and foremost, I want to ask for your view on the midway review element. Do you have any thoughts on what impact that might have as currently drafted?

Peter Tutton: It is a good question. We were very concerned initially about the midway point, simply because it could be very expensive and hard to administer the debt advice. The provision is now not quite as onerous, so we are not having to do full outbound calls and things like that. We are now reasonably comfortable with it as something that is a touching point, where clients touch in with us to ensure that they are still engaged with the process. That is something we do anyway. If someone has come for advice and there is a recommendation that the next step of a particular debt solution requires them to do further things for us to help them, we will follow up and keep in contact with them to ensure that they do not drop out of the process and that they have some help. The initial relief of having spoken to someone about it can lead people to think, “Well, I’ve got that out that way,” whereas it is important to keep going and get people into the debt solution.

There is some element of the midway review that is not dissimilar from the kinds of things that we would do anyway. The important thing is that the way it is done in practice should not become an onerous burden that does not really have any practical use to it. I think we are sort of there. We are talking to the Insolvency Service about the guidance and the way it will work. I think we will get to a place that we can live with. My operational colleagues who are implementing this are not saying it is unworkable at the moment, so we are reasonably comfortable with it, but time will tell. [Inaudible.] If, six months in, it turns out to have been really onerous with no practical effect, that is something we would ask the Treasury to come back and look at again.

[Stella Creasy]

Q I ask because I wonder whether you can give us your professional opinion on whether there is a point at which a breathing space should stop. It might become apparent in the review process that somebody is in a level of debt for which a breathing space is not suitable. If it becomes apparent that the person will not be able to repay under the terms of the breathing space, do you perhaps have in mind a length of time over which it would be appropriate to look at some other form of intervention? Do you have a view about when to end the breathing space, essentially?

Peter Tutton: That is a good question. Our starting point here is that we would end the breathing space scheme as soon as it is no longer needed. At the moment, people come to us in a variety of different situations, and a number of different debt solutions are appropriate for them. If the most appropriate solution for them is a debt relief order, which is a type of insolvency for people with very low incomes or with disposable incomes and no assets, and they want to do it, we would put them into that as quickly as we can. If that can be done—sometimes it can, and sometimes it cannot—before the breathing space period ends, the breathing space will end.

There is actually a provision in the Bill that means that if you are in a debt solution before the review, it will end. It certainly is not a case of putting people in breathing space until it comes to the end of its 60 days, and then putting them in a solution. We will always try to get people into the right solution as quickly as they can. The other end of your question is that there might sometimes be cases whereby there is a debt solution but, for whatever reason, it takes a bit longer to get them into it. In exceptional circumstances, there might be a case to extend the breathing space, if for some reason it takes us longer to get someone into a DRO or something like that.

There is another question about this. One of the problems with debt relief solutions at the moment—debt relief orders and bankruptcy in particular—is that they have fees. These people are so poor and their debts are so big that they need to go into insolvency, but they have to find a fee, and the fee is hundreds of pounds for bankruptcy. Very few of our clients could afford that; they would have to save up for a year or two years to meet the fee.

There is a bit here that Government will need to think about, in relation to breathing space, if someone has come for advice and we have given them protection and worked out that the best thing for them is bankruptcy, but it will take them ages to find the fee to actually go bankrupt. They will fall out of that statutory protection, as it were, back into the mosh pit before they can get their protection in bankruptcy.

So you raise a really good question. There are two ends to it. One bit is that we would not keep people in longer than we needed to; that is a case of getting them into the debt solution they need. But there may be other people who will not be able to progress to the right debt solution for them, for a variety of reasons, before the breathing space runs out. That is something that Government may look at. Perhaps we need to build some evidence of that problem as we go along, but it would be good to do a quick review to see whether there are circumstances where the period needs to be extended or, indeed, whether elsewhere in Government we need to look at things like the barriers to accessing debt relief that mean it is not a good option, either because of the cost of getting into it or because it is still quite a stigmatising process and puts people off. There is another need, elsewhere in Government, to look at how the whole debt relief thing is working.

[Stella Creasy]

Q I am conscious that I have one other element that I want to ask you about, but just on that, let me ask this. You have talked about debt relief orders. Obviously, you can access them only if you have less than £50 left after all your outgoings. You seem to be saying that actually the cost of moving into some other forms of debt relief that might be part of this would be something that would be helpful to make the breathing space work. Is it worth looking at those thresholds, as part of making the breathing space process work, so that people can move in, rather than being stuck in a breathing space or, possibly, stuck in a position where you get to the point where you need to write off a debt entirely?

Peter Tutton: The particular issue with the insolvency schemes for England and Wales—well, one of the issues—is the application fee. That is a point that is slightly different from the threshold; that is an issue about people having to find money to pay for those solutions.

[Stella Creasy]

Q Yes, but my question was particularly on the debt relief orders, because you have to be on such a low income for them to be possible. Is there a case, from what you are saying, in terms of making this legislation work, to be more flexible about that threshold—to make it, say, the bottom two deciles, rather than the bottom one decile of income before you can access a debt relief order?

Peter Tutton: It makes some sense to look at this, because a debt relief order is so much cheaper than bankruptcy. Debt relief orders have a restriction on debt size and, as you say, a restriction on disposable income, both of which are to safeguard the creditors, because the Insolvency Service will not do a full investigation. The idea is that it is the people who have really got no money, no assets, and so if we let them into insolvency without an investigation, there is nothing squirreled away that otherwise would benefit creditors.

DROs have been running for many years now, and I think you are right: it is time to look at whether we could have an easier route into them rather than bankruptcy, which might mean lifting the disposable income threshold a bit or the debt threshold a bit, or both. There is now a bunch of people for whom we would be advising bankruptcy who are never going to get into bankruptcy because they cannot afford it, and often it is the debt size as well.

I think it is the right time for the Government to do this. Given what we might see after the fallout from covid of more households, more people, facing financial difficulty, it is a good time to review how these debt solutions work at the moment and to see what can be done to increase accessibility for those who need that help.

[Stella Creasy]

Q May I be cheeky and ask one final question? Obviously, we are talking about where debt has occurred. I would very much welcome your professional opinion about where you see debts being generated by particular products and what you think has worked to prevent that. You and I have previously talked about the benefits of capping forms of credit to prevent people from getting into debt in the first place. We have seen in the last six months concern about the “Buy now, pay later” industry, which currently is not regulated by the FCA but is a form of credit. What is your experience of where the best interventions are to prevent debt and whether there might be things that we could do in this Bill to help that in the first place, before we get to a debt breathing space?

[The Chair]

Order. Can we be a little briefer? We are slightly straying from the scope of the Bill. A very quick answer, please, Peter Tutton.

Peter Tutton: That is a good point. There are things we can do. There are a number of interventions, from lending rules to product features and price. Also, on the relationship between who is using high-cost credit, there is a social policy point here. Is there more to be done to give people affordable alternatives, so that they do not have to go to those products? It would be good to talk more about all of that, because it is absolutely key.

We estimate that survival borrowing under covid—people having to borrow to make ends meet—is up to about £6 billion. There is a big pile of debt building there, which people will not be able to afford to pay down. Some action now to give them an alternative and think about how to deal with that debt is timely and important. We should try to do something now before it gets much bigger.

Financial Services Bill (First sitting)

Stella Creasy Excerpts

Committee stage & Committee Debate: 1st sitting: House of Commons
Tuesday 17th November 2020 Public Bill Committees

[Harriett Baldwin]

Q The FCA has not prepared anything specific demonstrating that—it is a hunch based on what is in the Bill—but has it done any cost-benefit analysis of the breathing space measures that you mentioned?

Sheldon Mills: All these measures are Government proposals, so the cost-benefit analysis that is required will be carried out by the Government and not by us. Once the Bill has been passed, in whatever form—we are bringing forward rules and regulations—we will undertake a cost-benefit analysis. I am giving an indicative view, as opposed to one based on a cost-benefit analysis that we are not required to carry out at this stage.

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

Q I should like to explore what you have said, particularly about how the Bill will benefit consumers—after all, we are all concerned about the regulation of financial services markets. You set out your interest in the debt respite scheme. We all agree that that is very welcome, but debt prevention is an ultimate aim. How do all three of you think that this way of regulation will help businesses and households with debt prevention?

Sheldon Mills: It is a broader question than the Bill, but I will answer by giving our approach to debt.

As a regulator, our approach is not to have a policy on whether people should be able to access credit, but we are concerned about the impact on people of firms providing credit. We want firms to be able to provide credit in a way that treats individuals fairly, takes account of their needs and circumstances and, in particular, supports vulnerable customers if they are in debt.

We work closely with debt charities. Some of the issues that we are seeing, which we all face and of which the FCA is cognisant, include the accumulation of debt among certain parts of the population, which is why it is important that rules and processes are in place to support people with debt management and why a breathing space policy forms an important part of that. I think that answers your question, but you might have more specific questions.

[Stella Creasy]

Q I do, but I should like to hear about one of the roles that the FCA has tacked on to the Financial Services Act 2012—investigating regulatory failure. The Bill is about how we address that regulatory regime and the things to which you have regard under that regime. Your colleagues might have a view on whether explicitly having regard to whether a product or a firm is likely to cause debt—unsustainable, unaffordable debt—should be built into the new regulatory regime, given some of the investigations that have, or have not, taken place over the past couple of years.

Sheldon Mills: I think it is for Government to decide whether we should have that “have regard” regime, but there are current rules that firms should take account of the needs of customers. If customers are clearly displaying signals that they are taking on debt that is not affordable—and, in that sense, is not sustainable—firms should have in place mechanisms to ensure that they do not provide further credit or loans to them. There are rules in place on unaffordable lending.

It is for Government to decide whether we have “have regards”, but I do not think that we necessarily need them. I agree that there are issues with debt throughout society that we need to tackle, but I believe we have the right rules in place to ensure that firms make appropriate lending decisions.

[Stella Creasy]

Q Perhaps I can come at that question from another angle, because the FCA has been performing this role for several years now. Are there any examples of where the Financial Ombudsman Service has stepped in? I am thinking particularly of the high-cost credit industry, where a lack of proactive regulation in the past could be addressed by having stronger, robust, and clearer direction from us that we wish to see the FCA intervene to protect consumers from unaffordable debt, and to have regard to firms that may be promoting unaffordable debt.

Sheldon Mills: You will have seen that we have done a significant amount of work in relation to high-cost credit and unaffordable lending. We have put caps in relation to forms of high-cost credit; we have tackled payday loan operators; we have a business priority that relates to consumer credit; we have introduced a review, which our former interim CEO, Chris Woolard, is undertaking in relation to aspects of unsecured consumer credit. We are extremely proactive in this area, and the overall system—in terms of the regulatory system—works well. The fact that consumers are able to go to the Financial Ombudsman Service, where they have had certain issues and the service is therefore enabled to give redress to those customers, is an important part of the system. However, I would not want you to think that that we are not proactively seeking to tackle the issues in this area.

[Stella Creasy]

Q A final question to you and colleagues. With that in mind, in moments where there has not been as strong an intervention and early in the process of new products coming to the UK, could you tell us a little bit about what you see coming ahead? We are all very aware of FinTech coming to these shores, and you will be dealing with an awful lot of legislation, as my colleagues pointed out, that you will be onshoring. When you do your horizon scanning—this is a question to all three witnesses—are there any particular products or markets that we should be aware of when thinking about how this legislation will be applied in the coming, say, five years?

Sheldon Mills: I will let my colleagues go first, then I will come in.

Edwin Schooling Latter: Let me raise one area where work is under way. FinTech was mentioned, but the area of crypto-assets has been popular in some quarters. That is an example of an area where we have taken a very proactive approach to putting limitations on where those can be marketed to retail investors who may not fully understand the difficulties of valuing those, the risks attached to them, or the possibilities that they would lose all of their money the more speculative end of that product range.

Sheldon Mills: I would agree with Edwin. The main area which we will see in relation not just to financial services, but to any product, is the continued development of digital means both of accessing and of providing products and services. Our approach to that is twofold: one approach is to encourage innovation. These products and services can bring efficiency and lower cost, and they can bring different levels of access for consumers, including vulnerable consumers. However, while doing that, we ensure we are clear on the ethics and consumer protection aspects of these new forms of products and services. Those are some of the areas where we will see future opportunities and challenges within the financial services system.

[Stella Creasy]

Q Do you regret, then, not moving more quickly on the buy now, pay later industry, because that is not regulated by the FCA at the moment, yet that is exactly an industry which we all now recognise is causing consumer detriment to people on low incomes?

Sheldon Mills: With respect, I cannot regret not acting on something which I do not regulate. However, what we are doing is looking at that area through the form of this review. As you know, and as is implicit in your question, that does sit outside our specific regulation.

[The Chair]

Victoria, I think you were about to say something.

Victoria Saporta: Sorry, I am conscious of the time. I have basically one comment to make in our particular area. I agree very much with Sheldon on digitalisation and with Edwin on crypto. Another particular area that we are looking at—

Future of Financial Services

Stella Creasy Excerpts

Monday 9th November 2020 Commons Chamber

[Rishi Sunak]

My hon. Friend is rightly proud of this industry, given her constituency, and she is right that we should not rest on our laurels. We may be world beating today, but we want to remain the most competitive place to do business. The initiatives that we have launched today, for example the listing reform, which was mentioned, the investment funds regime reform, or Solvency II, will provide opportunities for us to tweak and flex our regulation going forward, and attract capital and business so that the industry can continue to grow and go from strength to strength.

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

Citizens Advice tells us that 6 million of our constituents have already fallen behind on a bill during the pandemic.  One group exploiting the FinTech explosion that the Chancellor is talking about are the legal loan sharks of the credit sector. In the last financial crisis, the coalition Government waited too long to act and the Wongas of this world ripped off millions of our constituents, yet someone is now better protected if they take out a payday loan than credit card debt, because at least the interest rate is capped. As millions of our constituents face a terrible Christmas, will the Chancellor please learn the lessons of the last financial crisis when dealing with the financial sector? Will he please bring in a cap on the cost of all credit, so that we make sure that some of these new FinTechs—the buy now, pay laters of this world—are not the kinds of financial companies that we get coming to our shores to exploit our constituents yet again?

[Rishi Sunak]

I know the hon. Lady has spent an enormous amount of time in this Chamber focused on these issues, and rightly so. The FCA is currently taking action to address the issues in the buy now, pay later sector, but more generally to her important question around debt and consumer credit, it is worth bearing in mind that we have provided around £38 million to debt providers this financial year, bringing the total to £100 million. Colleagues will know that from May next year, the breathing space initiative that was recently passed in this place will provide a period for individuals who are struggling with debt issues to take a pause and agree a repayment plan. Indeed, in the Bill we are considering later, the Economic Secretary to the Treasury, my hon. Friend the Member for Salisbury (John Glen) will be introducing provisions for statutory debt repayment plans, which will further help those who are struggling paying back credit.

Covid-19: Disparate Impact

Stella Creasy Excerpts

Thursday 22nd October 2020 Commons Chamber

[Kemi Badenoch]

My hon. Friend is absolutely right. We must reduce fear and build confidence among ethnic minority people in engaging with NHS services. Phase 3 of the NHS covid-19 response is taking urgent action to reduce health inequalities and regularly assess progress. NHS trusts are encouraged to restore services inclusively, so that they are used by those in greatest need. Covid wards and spaces are being separated, which should give people confidence to return and allow more routine procedures to continue.

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

The Minister mentioned further research. One area where there is very specific and clear research is pregnancy. The UK obstetric surveillance system showed that black pregnant women were eight times more likely to be hospitalised than white pregnant women due to covid, and half of all pregnant women in hospital due to covid are from black and ethnic minority backgrounds. That research came out in May and June this year. Will she update us on what is being done to protect black pregnant women from the risks of covid and whether there will be an investigation into that specific issue?

[Kemi Badenoch]

I thank the hon. Lady for that question. I co-hosted a roundtable on maternal mortality rates for ethnic minority women with the Minister for Patient Safety, Mental Health and Suicide Prevention on 2 September, to develop appropriate solutions to benefit pregnant women and their babies during this period. Given that covid-19 has fundamentally changed the way that women access maternity services, the national maternity safety champion and chief midwifery officer for England published a four-point plan for all maternity services in England to follow. That includes increasing support for at-risk pregnant women, reaching out to and reassuring pregnant ethnic minority women with tailored communications, ensuring that hospitals discuss vitamin supplements and nutrition in pregnancy with all women, and ensuring that all providers record on maternity information systems the ethnicity of every woman, as well as other risk factors. This topic has been of particular interest to me, because I returned from maternity leave after having my third child this year, so it is close to my heart. I am doing quite a lot of work on it and will continue to do so.

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.