Ministerial and other Maternal Allowances Bill

Debate between Stella Creasy and Jim Shannon

Committee stage & 3rd reading & 3rd reading: House of Commons & Committee: 1st sitting & Committee: 1st sitting: House of Commons
Thursday 11th February 2021 Commons Chamber

[Stella Creasy]

I rise to speak to a number of amendments. Before I do so, I will acknowledge some Members across the House who have done such amazing work in raising issues of equality when it comes to pregnancy and maternity in this place. I believe there is a high degree of cross-party consensus that we need to act.

I also put on the record my support for the many men who have spoken today about the importance of fathers. Let me be clear: there will be no equality for pregnant women and new mums until fathers are able to step up and equally do their bit. It is not a zero-sum game; it is about parents being able to support each other, and the importance to women’s equality of not being left literally holding the baby.

Let me put on the record my thanks for the work of my right hon. and learned Friend the Member for Camberwell and Peckham (Ms Harman); my hon. Friend the Member for Hackney South and Shoreditch (Meg Hillier), who was a trailblazer in her time and continues to fight for women’s rights; my right hon. Friend the Member for Normanton, Pontefract and Castleford (Yvette Cooper); and, indeed, my hon. Friend the Member for Enfield North (Feryal Clark), who spoke bravely and set out her own fears for what would happen. That is one of the tests we must face in this place.

I take the point that the Paymaster General is making when she says that this is not a perk, but I think it is quite difficult to make that argument when faced with another Member of the House who is in exactly the same position as the Attorney General but will be unable to access the maternity leave that we have all agreed it is important that new mums should be able to access.

I want to put on the record my support for the words of my hon. Friend the Member for Leeds West (Rachel Reeves). If Members have not read her books, trying to correct the record of the absence of our understanding of what women parliamentarians have done, they really should.

I also want to mention the right hon. Member for Basingstoke (Mrs Miller). I said in my earlier contribution that one of the things I thought was missing from the debate was a recognition of the legislation that she has proposed to try to help women facing redundancy in pregnancy, and to make real the promise, which I think we all expect for our constituents, that we will not make someone who is pregnant redundant. As we know, even before the pandemic, 50,000 women a year were facing that situation. I think about the narrow scope of this Bill and contrast it with what her Bill could do for thousands of women in this country. If she is able to bring it forward, she will have my support.

I also want to thank the current Chair of the Women and Equalities Committee, the right hon. Member for Romsey and Southampton North (Caroline Nokes), who is doing an amazing job. She spoke today about the importance of equalities impact assessments. New clause 1 is about exactly why that matters. Obviously, we usually expect those assessments to be done for any form of Government legislation, because we recognise that we cannot be blind to the consequences of legislation for different sections of our society.

We have an Equality Act in this country and we protect certain characteristics for a reason, because we know that not everyone in our society faces a level playing field. Pregnancy is a protected characteristic for just that reason—to enable us to say, “Actually, in our society in 2021, women who are pregnant in our communities face discrimination.” We recognise that if we address the challenges that they face and remove those barriers, we shall all benefit. This legislation seeks to do that, and I recognise that. That is why I will support it, and why I think it is the right thing to do.

However, as the Paymaster General herself said, this legislation does that for a maximum of 115 women. In a society of 70 million people, that cannot be enough. That cannot be the message that we send from Parliament. That is why it is important that we have an equalities impact assessment of this legislation, and that we recognise that it does not take place in a vacuum, but in an unequal society where women who are pregnant face discrimination. We see that in our public life. We have already talked about this place briefly, and I do want to return to that, because I think it is important.

I acknowledge that the Paymaster General has recognised the timetable that I am setting her. I want to put that on the record, because I think that should be part of an equalities impact assessment where I believe the discrimination is against those of us who are pregnant, and there are human rights elements of this. But we cannot be blind, either, to the message that this legislation, in the way it is crafted, will send to our sisters in local government and regional Assemblies, or indeed to our sisters who are employees of this House.

[Jim Shannon]

Will the hon. Lady give way?

[Stella Creasy]

Happily. In fact, if I did not give way to the hon. Gentleman, I would feel that I had missed out.

--- Later in debate ---

[Jim Shannon]

I thank the hon. Lady for what she is saying, because I wholeheartedly agree. An example of that is a young girl who works for me. She is my PPS but also a councillor. She was able to get maternity leave because she works for me in this place, but not for her role as a councillor. I want to quote quickly from her. She cried, for she felt pressurised to return to the council after a couple of weeks, not by any person in her group but because she knew that no one else could take over from her, vote for her or speak for her. Today we have an opportunity to get this right for Ministers and for MPs, but I believe we must do the same for the Northern Ireland Assembly, the Scottish Parliament, the Welsh Assembly and every council. This is about equality, and we need that for everyone.

[Stella Creasy]

I always knew that the hon. Gentleman and I would eventually find common cause, even if we have disagreed on other human rights issues. He is right; we have a leadership role to play. Indeed, I would argue that this is leading legislation, because we know that in other Administrations there are not formal maternity provisions. That is why it is so frustrating that we are missing this opportunity to go further and help our colleagues.

Northern Ireland (Executive Formation etc) Act 2019

Debate between Stella Creasy and Jim Shannon

Monday 28th October 2019 Commons Chamber

[Jim Shannon]

I thank my hon. Friend and colleague for raising that. He is absolutely right. The request was made and the Under-Secretary of State said that he would respond, but unfortunately that has not yet happened. That would have been immensely helpful for this debate tonight.

Even in England prior to 1967, back-street abortions were always illegal. Rather than acknowledging the point, however, the Northern Ireland Office has sought rather disingenuously to point to the Northern Ireland guidance as if it offered protection to pregnant women comparable to that of the law. The guidance, however, has no legal weight unless it is referring directly to statute, and for the most part it is merely saying what the NHS, which is under Government control, will do and making suggestions about what everyone else should do.

The suggestion that there is an appropriate substitute for the law is clearly not true and completely inappropriate, given the important matter at hand: women’s safety. While the Northern Ireland Office can encourage people to act in a particular way through guidance, it cannot require people to act.

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

I thank the hon. Gentleman for giving way because he has raised this issue before. Let me try to be helpful to the Secretary of State by referring to the guidance that he has issued about this very point. It is simply not the case that there are no regulations. In particular, abortion pills are a prescription-only medicine, the sale and supply of which are unlawful without a prescription, and that is not affected by any of the changes that came into law last week.

The suggestion that somehow there is no regulation of access to abortion medication is misplaced. I understand that the hon. Gentleman has that concern, but if he reads the regulations and looks at the existing medical regulations about abortifacients, he will find that regulation is in place. I hope that the Secretary of State, who probably has not got round to writing the letter to the hon. Gentleman, will find that a helpful intervention.

[Jim Shannon]

I am very capable of reading the information. The information that I have is contrary to what the hon. Lady has just said.

Northern Ireland (Executive Formation etc) Act 2019 Section 3(5)

Debate between Stella Creasy and Jim Shannon

Wednesday 16th October 2019 Commons Chamber

[Jim Shannon]

I thank my hon. Friend for her intervention. She has made the case clearly, and I agree with her.

[Stella Creasy]

Will the hon. Gentleman give way?

[Jim Shannon]

The hon. Lady has had her chance.

It would have been one thing for this House to vote to impose abortion on Northern Ireland in the face of every Member of Parliament representing Northern Ireland voting against the measure, in the knowledge that the most recent abortion vote of any UK legislature on primary legislation was in the Northern Ireland Assembly in February 2016, when the people who should be making the decision voted not to change our law in any way. A national opinion poll last week showed that the majority of people in Northern Ireland do not want to see the liberalisation of abortion planned by Members of this House.

When I think about what will be imposed on my part of the United Kingdom from Tuesday, I am left utterly speechless. Between 22 October 2019 and 31 March 2020, the only law on this that will be in place in Northern Ireland will be the Criminal Justice Act (Northern Ireland) 1945, which is not engaged until the point at which a child is capable of being born alive. That effectively means that we would have a legal void in protections for the unborn until at least 21 weeks of gestation, and potentially up to 28 weeks’ gestation. It means that from Tuesday some unborn animals subject to research will have more statutory protection in Northern Ireland, thanks to the Animals (Scientific Procedures) Act 1986, than some unborn human beings. It is absolutely unbelievable that anyone would do this, and the Members responsible need to look at themselves very seriously. It is deeply troubling.

It also means that from Tuesday, quite unlike any other part of the United Kingdom, we will effectively have unregulated abortions, with all the attendant risks for women. The Government say in this report that they intend that the NHS will not significantly change the way it provides abortions until 31 March, but I find the emphasis that they place on this deeply disturbing. The Minister knows that; I spoke to him this afternoon about it.

Abortions need not come from the NHS. From Tuesday, it will be legal for private clinics to provide abortions in Northern Ireland. The Independent Health Care Regulations (Northern Ireland) 2005 place a statutory duty on the Regulation and Quality Improvement Authority to register and inspect independent hospitals and clinics that meet the stated requirement for registration, but those regulations are wholly inadequate. We must have legislation in place that protects people.

Currently, there are two conditions that would require an independent clinic to be registered with the RQIA: the first is that an independent clinic intends to carry out a prescribed technique or make use of prescribed technology; and the second that a medical practitioner working in the clinic is not otherwise engaged in providing services to health and social care in Northern Ireland. Abortion provision is not a prescribed technique or technology under the regulations, which means that only independent clinics that do not employ any doctors who also work for the NHS will be subject to this regulation. Again, a minefield of regulation.

Moreover, and this is of huge concern, this regulation will be quite unlike that pertaining to abortion clinics in England, where the activity of providing abortions is subject to abortion-specific regulation and the premises are subject to abortion-specific regulation and a series of abortion-specific required operating standard procedures. It is about the technical parts of the procedure. The Minister knows this; we talked about it this afternoon. None of those abortion-specific regulations will apply in Northern Ireland on Tuesday for at least five months.

Another important safeguard that currently applies in England but will not apply in Northern Ireland on Tuesday is regulation 20 of the Care Quality Commission (Registration) Regulations 2009, which deals with requirements relating to the termination of pregnancies. What is most shocking, however, is that the change in law means that from Tuesday there will be nothing to prevent someone without any medical qualifications at all from offering abortion services. With respect, I say that Government will thus cross a line that has never been crossed before: Government will potentially make backstreet abortions legal. This should not be about going back to the pre-1967 days, but it will be on Tuesday unless the Assembly returns by Monday. That recall is in process and hopefully can be achieved; if it can, this can be stopped, and the responsibility will lie with the Northern Ireland Assembly’s elected representatives, as it should.

Regardless of what one thinks about abortion, we cannot countenance this outrageous legislative framework for a day, let alone five months. In that context, I have a simple question for the Government and those in the Northern Ireland Office specifically: what were Government thinking when they agreed to the text of section 9 of the 2019 Act in the other place? They could have stood up for the women of Northern Ireland, as I am doing tonight, for the unborn and for babies alive in the womb, and pointed out that the safety implications of what section 9 proposed were just as inappropriate for the women of Northern Ireland as they would be for the women of England. They did not. This has to count as one of the most serious failures of governance that I have ever encountered. I say this honestly and respectfully to the Minister and to Government.

Reproductive Rights

Debate between Stella Creasy and Jim Shannon

Wednesday 16th May 2018 Westminster Hall

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

I beg to move,

That this House has considered access to reproductive rights around the world.

It is a pleasure to serve under your chairmanship, Mr Hosie, in a debate that should concern everybody in the country who is committed to equality. Abortion lies at the heart of equality for women, and men and women can never truly be equal until they have equal control over their own bodies. Abortion is the most common procedure that women of reproductive age undergo, and one in three women in Britain under the age of 45 have an abortion in their lifetime. In truth, those of us committed to equality and to ensuring that women are able to make choices about their own bodies can never be too vigilant, or think that the law in this country, let alone around the world, brings us equality and human rights. That is because there are continued attacks on that basic freedom for women, and that is what the debate is about.

I have seen and read the Minister’s words, and he knows that I am a fan of his persuasive abilities. However, I want to test whether the Government will learn the lesson of the suffragette movement, which is that it is deeds not words that matter, especially when it comes to equality. The Government must not simply say that they are committed to ensuring that women have the right to decide their own sexual and reproductive health; it matters that they act, including in response to any threats to that right.

There is a big variation around the world in access to abortion. Although 98% of countries permit abortion to save the life of a woman, only 62% allow it to preserve a woman’s mental health, and 63% to preserve a woman’s physical health. Only 27% of countries provide abortion on request. There has been some progress. For example, in recent years there has been a heated national debate in Bolivia when it was discovered that women were being turned in by their healthcare providers. A 16-year-old girl who arrived at hospital haemorrhaging was later apprehended and accused by hospital staff of having had an abortion. New legislation in Bolivia now allows abortion in the first eight weeks of pregnancy for a broad range of circumstances.

Canada decriminalised abortion in 1988. As a result, not only is Canada’s abortion rate lower than in the United Kingdom, but it enjoys the world’s lowest rate of maternal mortality from abortion. Abortion is legal in many parts of South Asia, including India, Nepal and Bangladesh, although it is not always accessible. In some African countries, for example, South Africa and Ethiopia, abortion is permissible and reasonably accessible.

[Jim Shannon (Strangford) (DUP)]

Does the hon. Lady agree that sensitivity to African culture must be foremost when dealing in and with African nations, and that we must always take into account their belief systems regarding sexual health and reproduction?

[Stella Creasy]

First and foremost, we should listen to African women, and they are consistently clear that they would like control over their own bodies. Being forced to continue an unwanted pregnancy is no freedom or liberation at all.

For every country where there is progress, we also see the tightening grip of the anti-choice movement. Let us not call it “pro-life”; there is nothing pro-life about forcing a woman to continue an unwanted pregnancy. In Europe—our own continent—Poland now has some of the strictest rules on abortion in the world, and abortion is allowed only if the pregnancy is the result of rape or incest, if the woman’s life is in danger, or in cases of severe or fatal foetal abnormality. Consequently, 80,000 Polish women a year go abroad or seek illegal abortions at home.

America now has a President who says that women should be “punished” if they have an abortion, and a Vice-President who believes that women who have a miscarriage should report it and hold a funeral. One Governor signed a law that states that it is illegal to have an abortion once a foetal heartbeat has been detected. Given that heartbeats can be detected as early as six weeks into a pregnancy—sometimes before a women even realises she is pregnant—that is no freedom or liberation at all.

In El Salvador, abortion is illegal with no exceptions, and that horrendous ban violates the basic human rights of women in that country. At least 23 women and girls remain in prison as a result of the abortion ban, and one woman, Teodora del Carmen Vasquez, walked out of prison a few weeks ago after more than a decade of imprisonment. She was marked as a criminal because she began bleeding and suffered a stillbirth. She was sentenced to 30 years for aggravated homicide, and released only after the Supreme Court ruled that there was not enough evidence to show that she had killed her baby. Abortion may be permitted in Rwanda, but Rwandan police unjustly arrest and imprison hundreds of women on abortion-related charges—such women make up 25% of the female prison population.

The number of maternal deaths resulting from illegal abortions represents the truth: banning abortion does not stop abortion; it simply makes it unsafe. In Africa, a quarter of all those who have an unsafe abortion are adolescent girls. Indeed, about half of the 20,000 Nigerian women who die from unsafe abortions each year are adolescents. It is insulting to suggest that African women do not deserve the rights that we would fight for in our country and around the world. Africa shows us how vital international aid is, as is the job that the Minister is intended to do. Abortion is relatively legal in Zambia, but only 16% of women have access to abortion facilities—in Zambia’s Central Province, there is just one medical doctor for more than 110,000 patients.

Closer to home we see the impact of restrictions on access to healthcare services for women. In the Republic of Ireland, the Protection of Life during Pregnancy Act 2013 imposed an almost total criminalisation of abortion. Ireland is one of a few countries in Europe with such highly restrictive abortion laws. The Irish constitution currently affords equal rights to the life of a foetus and to the life of a woman. However, the 18,000 women from Ireland who have travelled to the UK since 2012 reflect the fact that stopping access to abortion does not stop abortion, it just puts people at risk, including—increasingly—at risk from taking pills they have bought online. At the end of this week the Irish will go to the polls. I plead for dignity, for compassion in a crisis, and to ensure that every Irish person can care for their own at home, that there will be a yes vote.

But who are we to lecture? We should not forget how we treat women in our own backyard, particularly in Northern Ireland, which has some of the harshest laws and punishments in Europe for women who undergo an abortion. A woman with an unwanted pregnancy in Northern Ireland must either travel to the mainland or procure abortion pills online. Since the Government agreed to fund those abortions on the NHS, more than 700 women have travelled to England or Scotland from Northern Ireland. However, those are the women who are able to travel and get away from family commitments, who are not in a coercive relationship, and who have their travel documents. Little wonder that the United Nations condemned the United Kingdom for its treatment of Northern Irish women, which it called cruel, degrading and inhuman.

The Minister might say that each of those examples is due to separate policy decisions in those countries, but I want to sound the alarm and call attention to the fact that that might not be the case. Increasingly, around the world, far-right organisations and extreme religious groups are co-ordinating and funding anti-abortion and anti-choice campaigns. We in this House are used to debating the impact of foreign countries interfering in our democracy—perhaps in referendums—and we should be alive to the fact that those foreign organisations and countries are interfering in a woman’s basic right to choose. The real “The Handmaid’s Tale” is now unfolding.

In 2013, American and European campaigners met in this capital city to plan their campaign. It is called Restoring the Natural Order: an Agenda for Europe, and it seeks to overturn basic laws on human rights related to sexuality and reproduction. Since that meeting, we have seen the impact of those organisations, and the funding they have provided. We have seen how they produced results in Poland with the ban on abortion, and with bans on equal marriage in several central European countries and action on LGBT rights. We have seen how they have targeted international aid in the UK, Europe and America.

In 2013-14 the European Citizens Initiative, One of Us, called on the European Commission to propose legislation that would ensure that EU funds could not be used to fund abortion. It garnered 1.7 million signatures, and although the EU rejected that petition, given the impact it would have on women’s healthcare, that was by no means a one-off. Such rhetoric is coming back.

Credit Cards: Cost Regulation

Debate between Stella Creasy and Jim Shannon

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.

--- Later in debate ---

[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.

Statutory Sex and Relationships Education

Debate between Stella Creasy and Jim Shannon

Tuesday 31st January 2017 Westminster Hall

[Jim Shannon]

If that is what the hon. Lady was saying, that is good news—I think we are probably on the same wavelength. To me, this is essential for any family: the right to teach their child the morality and the standards they hope their child will stick to, and the right to withdraw their child from a lesson that they feel will not complement how they teach their child. Again, that is an absolute must for me and the people I represent.

I read a very interesting article by Andrea Williams, chief executive of Christian Concern, which warned that making SRE compulsory would remove the freedom of parents to decide how and when their child is educated on this subject. She wrote:

“For many years, sex and relationship education has not provided a godly stance on sexuality or sexual relationships. Instead, it reflects our society’s increasingly liberal sexual norms.”

It is important that we make the distinction—draw the line—between those two. She continued:

“Making SRE mandatory would limit parents’ freedom to withdraw their children from these lessons if so desired and usurp their responsibility in deciding what they should and should not be taught at what age.”

That is a very important comment from a lady who is greatly respected.

I do not believe that making SRE mandatory can or should happen. As parents, the buck stops with us. We do the best we can with our children and we must be allowed to do so in moral teaching. With the spread of social media, more and more of our young people are taking and sending inappropriate photos, and that can lead to unsafe situations. This is something that parents must take on board and discuss with their children; those who do not wish to do so can allow the school to do so. The choice must be available for parents and I stand firmly by that view.

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

rose—

[Jim Shannon]

I am happy to give way.

Private Finance 2/Private Finance Initiative

Debate between Stella Creasy and Jim Shannon

Monday 5th September 2016 Commons Chamber

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

Most MPs can show in their constituencies where there are rotting floors, outdated buildings and potholes. Some may even have made a website about it, but the truth is that this is no laughing matter. We know that our schools in this country are falling apart, and that investment in our education buildings is 18% lower in 2014 than it was in 2009. Britain is now ranked 24th by the World Economic Forum for the quality of its infrastructure, down from 19th in 2006, and we cannot see this getting any better. Indeed, spending on infrastructure has nose-dived since Brexit.

Whatever some may say about fixing these problems, all of it has to be paid for, and Governments of all persuasions, including the previous Labour Government as well as the current Government, have used private finance to build. It is the equivalent of getting a mortgage or even remortgaging our home to pay for a new roof or an extension. Crucially in these deficit-denying times, it is seductive not only because it spreads payments for new schools, hospitals and stations and their management over decades or more, but because it keeps them off the books.

[Jim Shannon (Strangford) (DUP)]

According to a report of 2014, in Northern Ireland there were some 39 PFI projects with a staggering total cost of £7.3 billion for the maintenance and so forth. Does the hon. Lady agree that any further PFI must be an absolute last resort and indeed should only be permissible in cases of extreme need?

[Stella Creasy]

I hope to convince the hon. Gentleman that there may be many alternatives to PFI, because the question for us is: at what cost have we engaged in this borrowing? We now pay £10 billion a year in PFI repayments, equating to £3,400 for every man, woman and child in Britain. These projects are worth £57 billion, but we are committed to paying back £232 billion by 2050.

It is clear that PFI has addressed some of the project management issues we had in the public sector that made it so bad at building. As the National Audit Office highlights, it has dramatically cut late delivery of projects and overspending on buildings, but as the Treasury Committee points out, it is “sub-optimal value for money”.

One hospital was charged £52,000 to demolish a £750 shelter for smokers, and a school had to pay £302 for a plug socket to be replaced, five times the cost of the equipment it wanted to plug into it. In my constituency of Walthamstow, we have seen first-hand the damage done. My local hospital, Whipps Cross, is part of the Barts health foundation, which has the largest UK PFI deal, at £1.1 billion. By 2049 the amount paid back will be £7 billion. Last year alone the trust shelled out £148 million, equivalent to the salaries of 6,000 nurses, of which half was the interest paid on the loan. Its deficit of £90 million has led managers to downgrade nursing posts. It is little wonder the Care Quality Commission placed my local hospital into special measures as the quality of care declined.

The Minister will, I have no doubt, say his Government have reviewed PFI and made cuts to the costs, renegotiating to buy fewer lightbulbs and to do less cleaning, saving us a whole £1.6 billion out of about £220 billion, but as the NAO has pointed out, no one has really considered whether private finance itself is value for money.

Tonight I want to ask three simple questions: whether the terms of PFI—the rates we pay to borrow this way—are the best we as taxpayers can get to build schools and hospitals; whether even now we can save money on the costly deals that have been signed by Governments of all persuasions, and which are draining our public services of much-needed money; and above all whether the Government are doing enough to secure the competition for our business as taxpayers.

Of course it is hard to answer those questions without the data on what we are paying. I know that the Government do not have those data, because I have asked. I tried asking all the hospitals around the country what rate they were paying, because on 8 February this year Treasury Ministers told me that they do not hold those data centrally. Most NHS trusts refused to disclose the information, claiming that it was commercially sensitive, but those that did were very revealing. Their data showed that, in December 1994 under John Major’s Government, two PFIs in Durham—one for the Dryburn district hospital and one for the Bishop Auckland general hospital—had rates of return of 15% and 18% respectively. In comparison, the 10-year gilt rate was just over 8% at the time. In December 2002, the Crosshouse maternity hospital in Kilmarnock was rated at 16%, while a month later Edmonton acute services were rated at 14%. The gilt rate was 4.6% at that time. In March 2010, the Leeds Wellbeing Centre offered a return of 14% and the Liverpool University hospital redevelopment offered 11%. The long-term gilt rate was then 4.2%.

Some people will argue that we cannot make a direct comparison with gilt rates, so let me flag up the fact that equity returns on the stock market have averaged between 5% and 6% per annum over the past 30 years. It is therefore clear that PFI investors got a great rate, and that was no accident. Critically, research from Edinburgh University shows that these rates do not vary as other premiums do in our financial markets, and that they stay well above the cost of other forms of funding. So public bodies might know full well that the premiums are high, but if that is the return that the market expects for managing the projects and there is no alternative, there is not much they can do without the Government’s help.

I should also point out that those are the rates for when the contracts were signed. As we now know, much profit has been made by selling the debts on. The South London Healthcare NHS Trust, which collapsed, had two large PFI contracts, one of which was offering investors annual returns of 71%. Most PFI contracts were let on an expectation of an already high rate of return of 15% to 17%, but refinancing has seen some returns to investors rise to over 70%.

In 2007, a new standard contract clause was created to allow authorities to request this financial information in order to track the returns that investors were creating. However, there is little evidence that the clause has been used or even that the Government have promoted it, so it is hard for us to see just how much taxpayers’ money is being recycled into higher payments for investment funds rather than into infrastructure for the UK. Again, no central database exists.

We might not know what we are paying, but we do know who we are paying, and it is often the same companies, with 45% of projects funded by the same people. Firms such as Dalmore Capital, Semperian, Kajima, Innisfree and Barclays crop up time and again, and they often invest together too. This dominance by a small group of companies matters because this Government are continuing to use their services in their proposed replacement for PFI, known as PF2. PF2 separates out the service element—the building management—from the capital, which involves the building of the project. So far, so good. Those lightbulbs might be replaced after all, if their cost is not connected to the cost of building the schools.

However, PF2 is supposed to attract more long-term investors by increasing the requirement for equity—the most expensive bit of the deal—potentially making it even more expensive to the public purse than PFI. It also expects us as taxpayers to take on more—not enough to be in charge of the project, but more to cover the cost. So it is not that different from PFI. It is still about us borrowing money from private companies to build things, at rates that are not transparent or competitive with the alternative sources of finance that we could raise.

Are there better ways to borrow to build? Certainly the calculations used by the Government in the Green Book to compare the cost of these deals with public spending have not made that question easier to answer. They set the value of public sector borrowing at 3.5% real and 6 % nominal since 2003, despite the cost of public borrowing being well below that for over a decade. The Treasury Select Committee has suggested that the Government review the Green Book, but it is not clear that the Government have heard that message. Will the Minister tell us whether PF2 is using the same calculations as PFI, at the very time when the cost of borrowing to the public sector is even lower? The Green Book also includes the shadow price of tax—the money that private companies will pay in tax in the UK as a result of getting this business. That money is set against the cost of borrowing from those companies to decide whether the deal is better than using public money to fund a project.

The lack of information about such projects means that the Government are simply unable to verify whether the tax presumptions are accurate. The NAO suggests not. The companies themselves continue to be sited overseas. Innisfree and Palio Partners are sited in Guernsey, and Semperian is registered in Jersey. PF2 will do nothing to tackle that or to stop the resale of shares in such deals, which make more money by taking advantage of the fact that Governments do not default. What does the Minister make of the bosses of the Sandwell and West Birmingham Hospitals NHS Trust, who admitted that they could not stop Carillion, investors in the PF2 for the Midland Metropolitan hospital, from selling on its equity investment to generate the kind of profits that we saw under PFI?

At a time when huge spending cuts are being threatened and when the NHS faces a financial shortfall of £20 billion by 2020 alone, to continue to pay inflated rates to rich investors is to continue to ignore the problems. A quarter of single-tier and county councils now spend the equivalent of 10% of their revenue on debt servicing. The answer to the first question is no; private deals are not always a good deal. We therefore need to answer a second question: if we cannot get out of them, can we renegotiate? Can we consolidate to reduce the repayments and put the savings back into front-line services? To date, sadly only Northumbria NHS Trust has done that and only at great expense to the council and with minimal savings. Imagine the savings that could have been achieved had the Government negotiated a group of the contracts with these companies at the same time. The savings in interest could be paying down debt or paying nurses and teachers properly.

We then face our final question: why are we borrowing only from these companies? Why are more companies not competing for our business as taxpayers? In the past few years, this Government have been making it harder for local government to pay down its debts. The Public Works Loan Board could use the Government’s financial strength as a borrower to secure much lower rates and then pass them on to public bodies. Instead, they changed the early repayment terms in 2007. In 2010, changes were made to loans to make it harder, not easier, for local councils to borrow efficiently.

If that does not excite Ministers, perhaps they will support an alternative in the shape of the new municipal bond agency created by local councils. The agency seeks to lend at margins of between 0.6% and 1% over the underlying Government funding rate. Currently, if a council wants to borrow money for 30 years from the Public Works Loan Board, it will charge just over 2%. In contrast to the complexity of PFI or PF2, municipal bonds are simple and transparent. Bonds are issued to the market to raise funds and local government lending is at a fixed rate.

The Government could make pensions funds more likely to invest in partnerships with Government by being more transparent about the deals and the returns to be made. The current Pensions Infrastructure Platform has led to such companies buying old PFI debt, but that can change. The Manchester and London local government pension funds have recently acted together to invest in windfarms and biomass, so there is clearly a market. With Government support, that could be the basis for a UK sovereign wealth fund—the people’s money used for the people’s projects. The sad truth, however, is that no such innovations are coming from this House or the Treasury, so why are we throwing good money after bad trying to make private finance initiatives work? With a Prime Minister who has pledged to put infrastructure investment at the heart of post-Brexit economy, Britain cannot afford to keep making expensive mistakes.

I have five simple questions for the Minister. First, will he commit to publishing the rates at which public agencies are borrowing so we can have greater transparency of the costs incurred to the taxpayer and so that we can check whether, as many fear, PF2 will be more expensive than PFI? When will the Government publish the equity returns data, promised since last year, on the PF2 deals? Secondly, is the minister not perturbed by the relationships between a small group of institutional investors in these deals and the lack of competition for taxpayers’ business? If so, will he ask the Competition and Markets Authority, which acts on the behalf of consumers—as taxpayers, we are consumers—to review the sector and explore whether barriers to new entrants exist? Thirdly, will the Government help public bodies saddled with PFI and PF2 contracts to renegotiate debts and get the costs down to save money for front-line services? Fourthly, will the Government rewrite the Green Book to reflect the real costs and benefits of public borrowing versus private borrowing? Fifthly, what does he make of the new Eurostat rules published in March that consider the equity stakes that the Government intend us to take out under PF2 to be direct financing, meaning that they should be on the books? Does that not undermine the point of PF2 in the first place?

Finally, how will the Minister stop money simply going overseas into tax havens and into higher profits for private companies, not public services for the people? As things stand, 46 schools, and many more hospitals, will be built using £700 million of that PF2 control total, at a time when borrowing is at an exceptionally low cost for government. Do not take my word for that. Instead, take the word of Leo Quinn, the chief executive of Balfour Beatty, who recently said that “money is effectively free”. There is no excuse not to act, to tackle the costs of existing PFI contracts and the lack of competition for our business as taxpayers, so that we can really get value for money and so that instead of injecting our cash into profits for private companies overseas, we can inject our money into the kind of projects that will get Britain’s economy and Britain’s people back into business.

Refugee Crisis in Europe

Debate between Stella Creasy and Jim Shannon

Tuesday 8th September 2015 Commons Chamber

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

It is sobering to realise that one in every 122 people in the world is a refugee, internally displaced or seeking asylum. The hon. Member for Gravesham (Mr Holloway) might be surprised to learn that they are not just coming from Syria. People face political persecution in Pakistan and in Iran. Those coming to us today from Syria, Lebanon, Sudan, Eritrea, Somalia, Afghanistan, Sri Lanka and Zimbabwe are not a new phenomenon—the Huguenots, the Jews, the Ugandan Asians, the Vietnamese boat people and the Kosovans came before them. Every generation faces those who meet the test of being people who are

“outside their country and cannot return owing to a well-founded fear of persecution”.

[Jim Shannon]

One of the greatest groups of people persecuted across the world includes those of a Christian denomination or religious view. Does the hon. Lady accept that many of those who are trying to escape Syria have been given the ultimatum of convert or die? In other words, they are being asked to give up their Christianity and their beliefs. We need to respond to that welfare need, too.

[Stella Creasy]

The hon. Gentleman raises the point about the well-founded fear, but my point is that every generation faces the test that the 1951 convention sets us. When a person comes to us and says, “I am in danger, will you help me?”, how we answer defines us as much as it defines their future. As the hon. Member for Gravesham said, it is a moral question. When we signed the convention in 1951, nobody could have predicted the situation that we are in now, but the fact that we could not predict it does not absolve us of the responsibility to answer the question. We are not absolved when the people fleeing the murderous intent of ISIL ask, “Will you help?” Our answer should be yes. When people are fleeing sexual violence in the Democratic Republic of Congo, will you help? Yes. When people are fleeing the repressive regime of Robert Mugabe, will you help? Yes. When people are fleeing civil war in Sudan and Eritrea, will you help? Yes. How we answer says as much about us as it does about them, so when we quibble about numbers and qualify them by saying that we will take 20,000 but over a number of years, or perhaps that we will take not 20,000 but up to 20,000—

Rent-to-own Sector

Debate between Stella Creasy and Jim Shannon

Tuesday 14th July 2015 Westminster Hall

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

It is a pleasure, as always, to serve under your chairmanship, Mr Hollobone, and it is a genuine pleasure to take part in this debate. The Treasury Minister might be surprised to see a shadow Minister from the Business, Innovation and Skills team but, as he knows, I have form in this area. I am secretly delighted that he is now in the Treasury, especially on the issue of debt. I hope he will be the cuckoo in the nest of the Treasury when it comes to getting right the issue of how we help people in debt.

First, I acknowledge the work that the all-party group, the hon. Member for Blackpool North and Cleveleys (Paul Maynard), and my hon. Friend the Member for Makerfield (Yvonne Fovargue) have been doing in this area. I want to talk a little about some of the work that was done on this issue for the Consumer Rights Act 2015, and I also want to say something about the broader context in which the firms operate. Finally, as I always like to be helpful, I would like to suggest some proposals for making progress on this issue to the Minister, and test whether he is willing to support them.

I congratulate the hon. Member for Blackpool North and Cleveleys on securing this debate. He said he is concerned that shadow Front Benchers may not be aware of these companies and may make the same mistake that others have made in thinking that the rent-to-own sector is about housing. Let me reassure him that the Opposition call a spade a spade. Legal loan sharking takes many forms. My hon. Friend the Member for Makerfield and I are as concerned about the rent-to-own sector and debt management companies as we are about payday lenders. That is why we have been campaigning for a number of years for reform of the sector.

Hon. Members will recognise concern in my part of town about what we call the “BrightHouse knock”—when we are knocking doors during campaigns, we have to be careful not to knock like the bailiffs, because people think we are BrightHouse coming to repossess their goods. I may have expressed some surprise when my hon. Friend cited BrightHouse’s statement that it does not repossess goods—it seems, then, that that is happening only in my part of town.

Rent-to-own companies are legal loan sharks. They operate in exactly the same way as the payday lending industry and a number of other consumer credit industries. They lend in a way that is designed to encourage a persistent relationship. The problem is that they lend in a way that does not ensure that people have access to fair credit, but ensures that they continue to pay something back weekly. They make sure they always get money out of people. In what other industry is there such a high default rate, yet such high profits to be made? That should surely tell us that it is not a competitive industry, and that there are problems that need to be addressed. We have all seen at first hand people in our communities who are exploited by that predatory model of lending.

[Jim Shannon (Strangford) (DUP)]

I apologise for not being on time, Mr Hollobone. I flew in this morning. We stayed for 12 July, which, as hon. Members will know, is a special day in Northern Ireland.

I, too, have great interest in this issue. My constituents regularly come to me when they have entered into hire-purchase arrangements, and sometimes arrangements with loan sharks as well. What I see is their desperation. They have made a decision based on what is right at that moment in time, rather than what is good for them in future. Does the hon. Lady have any idea about how the Consumer Rights Act can be better utilised, or how someone can control it, to ensure that when people make such desperate decisions, we can help them at the right time?

[Stella Creasy]

I do not want to keep the hon. Gentleman on tenterhooks. I have some ideas, growing on the work that the all-party group and my hon. Friend the Member for Makerfield have done on the industry. The hon. Gentleman is absolutely right that we can do things to change the situation. We need to recognise that it is predatory lending. The hon. Member for Blackpool North and Cleveleys talked about vulnerable people being exploited, and that practice is much more widespread than people realise.

The hon. Member for Strangford is right; people make what is probably the right decision for them at the time about where they could get a freezer, cooker or other basic consumer goods that their family need to live. The hon. Member for Blackpool North and Cleveleys was tempted into a discussion about consumerism and modern life, but the reason we began campaigning on legal loan-sharking in my community was that we could see that people were trying to make ends meet and needed to be able to wash their kids’ clothes so that they had school uniform. Those companies were their only option, and the method of lending increasingly prevented them from going to other companies. It affected their credit histories so they could not borrow from other parts of the industry.

Frankly, it is very expensive to be poor in this country, and the problems are compounded by the companies in question and by predatory lending. Consumers lack choice, and that distorts the market price that they pay. Some hon. Members have already talked about the method of selling, “pay weekly”. For the shadow Front Bench the issue is the mindset—lending to people in a way that means they cannot get away. We have all seen examples of what has been mentioned, when people pay double the cost of a washing machine, cooker or TV, and then some, only to have the goods repossessed like that—I do not know whether Hansard can record my clicking my fingers, but it is that quick. As soon as someone falls behind for a week the company comes round. There is no breathing space or recognition that something about the lending may have got people into difficulty so that they cannot make their repayments. There is no such responsibility.

The Opposition have tabled several proposals to deal with the companies in question, and other legal loan sharks, for some years. The Minister is aware of that and I know that he shares my concern about the companies. We may differ on how best to deal with them and with predatory lending, but he too is concerned about it. During the passage of the Consumer Rights Act we tried to address the issue of warranties and insurance sold with products, and how that breached people’s consumer rights. They would be sold a product with a requirement that created a lack of clarity and transparency about what they were buying. I recognise that some companies now say that those things are not compulsory, but we all know about the hard sell. I remember the Minister talking about his experience of being on the BrightHouse mailing list. I am interested to know whether he has finally managed to disentangle himself from that. He will know how hard the companies push the products, as part of the original deal that was agreed to. Even if they are not now compulsory, the arrangements are still difficult for consumers to get out of.

The Minister may take the opportunity, now he is no longer in coalition, to suggest that he was held back by his former partners in his attempts to deal with the problems, and say that he is now free to get to grips with legal loan sharks. He is among friends as far as wanting that freedom to be exercised. During the passage of the Consumer Rights Act, Jenny Willott, the then Under-Secretary, said:

“If a warranty provides no more than the statutory rights and there is a charge associated with it, whoever is selling the warranty may well be in breach of consumer protection regulations. When shops sell goods and the warranty is purchased at the same time, the full cost must be disclosed and consumers must be informed of their statutory rights. Consumers also have the right to cancel the extended warranty within a set period, and those rights must be made known to the consumers when they purchase the warranty.”—[Official Report, 13 May 2014; Vol. 580, c. 623.]

The Under-Secretary was adamant that our proposals for prohibiting such agreements were covered under the consumer rights measures that were being introduced, so one of my questions to the Minister today is what he knows about the implementation of such rights since then. After all, the Act has been passed, and the Government set up a consumer rights implementation group. Is the issue of rent-to-own companies being investigated by that group? How are we making sure that consumers can exercise the rights they now have under the Act? That would also extend to marketing methods—the Minister will know about marketing lists—and how companies tell people their rights and make sure they know that they do not have to take out insurance or an extended warranty. Often such warranties are not worth the paper they are written on and offer consumers no additional protection or benefits. Is that being made plain to people?

Why does all that matter? Why must we get to grips with those companies? It is because we know the issue is fundamentally about debt. Consumer and personal debt in this country are rising into what might be called uncharted territory. Since March, unsecured personal debt has gone up £48 billion. Personal debt is rising three times as fast as wages. The Minister and I disagree about the Budget and whether it will make things worse or better, but we know people are finding that there is too much month at the end of their money. Therefore the companies we are talking about—and their credit agreements and their predatory lending behaviour—are here to stay, unless we show the political will to tackle them and unless we recognise how they make people’s already difficult situation worse. I may disagree with the hon. Member for Blackpool North and Cleveleys about the Government’s decision to abolish the term “child poverty”, but we can all agree that making it difficult for people to make ends meet by leaving them stuck with companies that exploit them and squeeze out every last penny will do no one any favours.

The hon. Member for Blackpool North and Cleveleys talked about mortgage debt, and many people with mortgages go to the companies because they have no alternative. If interest rates go up just 2% families will have to find £1,000 extra a year in interest alone, to keep a roof over their head. If they are also trying to pay off an expensive cooker or freezer, we can see what is coming down the road for them. Some of us who fought to retain the social fund will know about the lack of alternatives. Many credit unions do wonderful work trying to come up with alternatives, but the lack of options is compelling people towards the companies in question. In the context where personal debt is rising—and that will cause a massive economic problem for us and put our recovery at risk—there is a compelling case to be much more proactive about predatory lending in the consumer credit market.

With that idea in mind perhaps I may give the Minister some suggestions for things to do, and things to raise with the Financial Conduct Authority. He will know that I have a slight sense that the Financial Conduct Authority is playing catch-up. If the banks were tyrannosaurus rex, legal loan sharks are the velociraptors of the consumer credit market. They are fast, nimble and ever-evolving, and that is evident when we compare the rent-to-own sector with the way lending is done by the lumbering beasts of banks. That is why voluntary action is not enough to deal with the companies. Will the Minister make a commitment to work with the Financial Conduct Authority and to get it to expand its remit, to look at the industries in question and how they can change? In particular, could there be a requirement on lenders to provide pre-contractual information on both the cash price of goods and the total cost of the credit agreement: the difference between the price at the start and what it could be by the end of the agreement? If consumers could have that up-front they would know exactly what the cost would be, including any additional fees and charges.

Companies could be banned from requiring consumers to take out additional products alongside the initial credit agreement—separating out the insurance and warranty to make it clear that, aside from its not being compulsory to buy them, it would be illegal to try to sell such additional products at the same time. The companies could be required to undertake affordability checks based on the possible total cost of the agreement rather than the initial up-front price of the good, so that companies would have to reflect, when doing the affordability check, on what debt people could possibly get into by borrowing in that way, and whether they could pay the money back. We clearly need to change the way affordability checks are done. [Interruption.] The Minister says from a sedentary position that they already do this, but clearly they do not, given the levels of debt that people are getting into. We need to recognise that it is possible for affordability checks to deal with the potential cost of the goods—the doubling of prices—rather than the minimum that someone could pay. They should deal with the maximum that someone could pay.

My hon. Friend the Member for Makerfield made a powerful point about breathing space. The companies do not give people breathing space when they get into financial difficulty. We want the Government to make a commitment to end fees for debt management. The fact that people have to pay to get out of debt compounds the issue, and I would like a time scale for that change. We recognise that the debt advice industry needs to grow. We would like the Government to use the levy—in fact, to double the levy on the companies—to pay for that. The Minister may want to take up that idea; I do not know. However, we all know that having to pay to get out of debt extends the debt. It makes it harder for people to get into a debt-management agreement. With the companies we are talking about, it would be good to stop the clock once people start the process of getting a debt-management agreement, so that no more interest would be accrued, and there would be no more pressure, visits or BrightHouse knocks on the door.

I encourage the Minister to go further and talk to his colleagues in the Department for Work and Pensions about a reinstitution of the social fund—funding for alternative ways in which people could get white goods in particular. I am sure that the Minister will know from his constituency that people cannot go without a washing machine or cooker. We may disagree about iPads but we can certainly agree that there is a case for basic white goods to be provided.

It would be helpful to hear from the Minister about the commitment that the Government made last year to reviewing personal debt. We have not seen any further information, so will he update us on that review and the work that is being done? There is also the issue of how credit histories are affected by this form of predatory lending, because, even if customers get out of payments required for an individual credit agreement, if that affects their future ability to borrow and to go to alternative or mainstream providers, there is a problem.

[Jim Shannon]

I apologise again for not being here for the whole debate. I am conscious of how many good groups there are—I have them in my area—such as the citizens advice bureaux, Christians Against Poverty, the Churches and many others. They offer good advice and can often come to an agreement with the hire purchase companies or mortgage groups to reduce the fees to a payment system that is manageable. Does the hon. Lady think that it is important to recognise what such groups do to help people in poverty and debt?

[Stella Creasy]

The hon. Gentleman pre-empts my final point, which is that what we really want is an alternative, but for an alternative to exist, it has to be funded, because this is not a fair fight. What I have noticed, as we have exerted pressure on the Government to tackle the payday lending industry, is that it is retreating from our high streets but that it is being replaced by the rent-to-own industry. This industry and legal loan sharking have evolved because there is no reform. We need an industry that works, because we need people to be able to borrow in this way to make ends meet—because they are not earning enough—and we need to end legal loan sharking by reforming the way in which these companies operate. That requires alternatives. However, our credit unions, housing providers and alternative forms of financing are struggling in an environment in which these companies are making a great deal of money from exploiting people. That is why it is right that the Government not only step in and are much tougher about regulating—learning the lesson of capping the cost of credit by capping what these companies can charge—but look at how we support the alternatives to grow and how we can level the playing field.

My final point is about the particular case for mainstream credit providers. Will the Minister commit to talking to mainstream credit providers, particularly to our banks, to ask them to review how many of their customers have entered into these agreements? I think he would be surprised—just as we found with payday lending companies—that half a million customers from one bank alone, who could have gone to it for a personal loan, were going to payday lenders. We need to make the case that these forms of lending and problems with debt are now so mainstream in Britain and so much part of modern life that there is a case not to see this as separate, small industry but part and parcel of how we help people to make ends meet. The mainstream credit providers have a vested interest in working with credit unions and providers—the Hoot credit union, for example—who do alternative forms of white goods provision to help their customers, because the consequences for the mainstream providers will become apparent when people default on their mortgages and personal loans.

This is not an either/or any more. We have to end legal loan sharking in Britain in its many forms. I hope that the Minister will take in good faith those examples of things that he could do now and accept what the priorities are. I look forward to a positive response from him and hope he will join the Opposition, as the cuckoo in the nest, in saying: let us end predatory lending in Britain once and for all.

Women Entrepreneurs

Debate between Stella Creasy and Jim Shannon

Wednesday 18th March 2015 Westminster Hall

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

It is a pleasure to serve under your erudite chairmanship and beady eye this morning, Mr Robertson; you will ensure that all of us are well-served this morning.

I congratulate my hon. Friend the Member for Feltham and Heston (Seema Malhotra) on securing this debate. I know that this is a subject she is really passionate about. She has done a lot of research on it, which really shows in the insight she offers into it and the things that we can do about it.

I also want to put on record my interest in and support for the fact that there are a number of MPs here. May I venture to say to the hon. Member for Upper Bann (David Simpson), who sadly has now left Westminster Hall—

[Jim Shannon]

He will be back.

[Stella Creasy]

I am pleased that the hon. Gentleman will be back, because it is good to see male MPs supporting the idea that there is a gender gap that needs to be addressed. However, may I venture to say that that is not necessarily a concern because of his wife but because when 51% of the population are not fully utilised it is a concern for us all that we are missing out on the contribution that they could make? Frankly, sorting this issue out would help a lot of men, because it would help our economy, and therefore it perhaps has less to do with his wife and more to do with his constituents. It is because of them that he should be concerned about why we have such a gender gap. In particular, my hon. Friend set out well the particular gender gap that we see in the UK, because the situation is not the same in other countries, which should be very telling about what we can do in this country to address these issues.

A number of Members have already pointed out that there would be many more businesses if women were starting up businesses at the same rate as men. However, it is worth considering the situation in other countries. It is not only America that has a higher level of female entrepreneurship than the UK but countries around the world. Therefore, there is something happening in the UK. It is also worth noting that we have a higher rate of churn in the UK, so even when women start up businesses here they are failing more often than in other countries. Women entrepreneurs here are also less likely than elsewhere to attribute the closure of their business to business failure and more likely to cite personal reasons as one of the reasons why their businesses were not successful.

Why does this issue matter to us all? It is because equalising the labour market participation rates of men and women would boost the UK economy by an average 0.5 percentage points every year, with a potential gain of 10% of GDP by 2030. Given the recession that we have just gone through and given the fact that our recovery appears to be beginning to slow, getting more women into business and into leading more businesses would clearly make a tremendous difference to us all and our future economic position. Indeed, the Royal Bank of Scotland has calculated that boosting female entrepreneurship could deliver an extra £60 billion to the UK economy.

--- Later in debate ---

[Stella Creasy]

Again, my hon. Friend shows her experience in this area. What we are certainly seeing is that women who start businesses tend to bring forward new products, as opposed to men who start businesses, who tend to bring forward competitor products. So women are certainly driving innovation.

My point in referring to the online economy is to set on the record that Labour thinks this issue is less about women bringing their previous experience of purchasing to business so much as their ability to use the opportunity that online behaviour offers to open up markets to people. When someone is bringing a new creative product to the market, having a window that sells to millions of people rather than perhaps having a window just in their local high street opens up the potential for greater success, and it is important that we consider that and ask ourselves how, for example, we can support more women to learn skills, such as coding, to be able to sell online.

A number of Members today have obviously focused on women themselves and what might be stopping them from getting into business. Certainly, one of the issues that people have come up with is child care. So let us be very clear that there probably is an issue around child care and helping women to be able to juggle, which suggests men are holding women back, because, after all, it takes two to have a baby. One thing that I would be interested to hear the Minister’s view on is how we can make men hold up their part of the bargain in looking after children, so that their wives can be the successful entrepreneurs that they want to be.

Labour’s child care proposals will probably help a lot of women entrepreneurs. For example, there is our proposal to increase the number of hours of free child care that are available. With child care costs rising by up to 30%, there could be many parents—for example, the women who want to be the next Anita Roddick or Laura Tenison—who find their ability to be entrepreneurial being hampered as a result of this Government, because they find they cannot afford the child care necessary for them to spend the time setting up a business.

Today, therefore, I will set out four areas that I would like to hear the Government’s response about. They are less to do with women and more to do with the environment that we are asking women entrepreneurs to enter.













First, hon. Members talked about finance. Clearly, finance matters. The evidence shows us that women start businesses undercapitalised, and with not just less finance, but fewer human resources and less social capital. That puts them at a disadvantage by comparison with their male counterparts. Not having the same level of resource is a factor in respect of confidence and risk-aversion among female entrepreneurs. It is important to say that it is not always a bad thing that women are risk-averse, but we should recognise it when they do not have the same resources, and so cannot take the same risks, as their male counterparts. We must consider how to ensure that they have access to more resources, rather than encouraging them to take more risks, and we should recognise that their lack of confidence may not be misplaced and that they might not have the resources to succeed.

How much of a barrier is finance? Some 10% of female entrepreneurs say that access to finance is their only barrier to entrepreneurship, and that it is a particular challenge in respect of expanding in the way they would like to. Again, that appears to be a bigger problem in the UK than in other countries, particularly in Europe. Women in Europe are much more likely to be able to access finance to start and run their businesses than their UK counterparts. Some 20% of women in the UK have tried to get money to start a business but have been turned down, compared with only 11% of European female entrepreneurs.

My hon. Friend talked about the Aspire fund, which was set up in 2008 to try to deal with this challenge and ensure that there was a dedicated pot of money to support women in business. As she said, as of last year only £4.7 million of the £12 million had been invested. It is worth comparing that with other forms of start-up finance backed by the Government to see what the difference is. For example, in the same period, the enterprise finance guarantee scheme, set up to provide assistance to small businesses with an annual turnover of less than £41 million, has offered £2.6 billion, and £2.3 billion has been drawn down. The regional growth fund, which matches private finance with public assistance, has awarded £2.6 billion, of which £1.15 billion has been drawn down. There is a differential. It would be interesting to hear the Minister’s view on why the Aspire fund has not been as successful in promoting and supporting women’s businesses as some other start-up funds.

Research by Strathclyde university states that decisions regarding women and finance are based on the interaction between women, who may lack confidence—perhaps because they recognise that they do not have the same level of resource to start a business—and those offering them finance, who may have a certain attitude and approach. There is an interesting challenge for us: if we can change the attitudes of those offering finance—for example, through the Aspire fund—will more women go into business?

Secondly, we have to acknowledge the issue of confidence. I challenge slightly the vicious circle that the hon. Member for Strangford mentioned: he said that dedicated schemes for women could undermine their confidence. I assure the hon. Gentleman that the other way of looking at that is that it recognises that they are a priority. Dedicated schemes, with mentoring and support for women, recognising that there is a gap, and bringing other women forward are helpful and supportive.

Some 38% of women in the UK, compared with just 3% of women in Europe, take advice from Government business support projects. Women are more likely to use all forms of business support than men, whether public or private, and are more likely to access support from professional services. It is important that mentoring schemes exist. It matters that other women are in business, because you cannot be what you cannot see. It is a simple principle, but seeing other women being successful in business offers a road map for women, showing them how they could be successful.

I pay tribute, as other hon. Members have, to a women’s business forum in my constituency. I venture to say that that forum, run by the amazing Jo Sealy, is more successful than our general business forum.

[Jim Shannon]

I just want to go back one sentence, with the hon. Lady’s permission, and talk about confidence. I was saying that we all have different natures. I have a different nature from other gentlemen in this Chamber, and the hon. Lady is different from other ladies here. It is important, when encouraging ladies to take a job up or move forward with their idea for entrepreneurship, that it is done in such a way that their confidence is encouraged. It is not that what is happening is not right; it is right for some, but perhaps not right for all.

[Stella Creasy]

I thank the hon. Gentleman for his clarification. My point is that he was querying whether a gendered approach to mentoring might not be counter-productive. I wanted to reassure him that such an approach is important for a lot of women, because it shows them a road map of where they could get to.

I also pay tribute to Simone Roche of Women 1st, Kate Hardcastle of Insight with Passion, Bev Hurley of Enterprising Women, Heather Jackson of An Inspirational Journey, and Margaret Wood of Opportunity Plus, who supports older women entrepreneurs. There are a number of schemes out there, and what they all have in common is that they were set up by women volunteering. Some of them have become social enterprises. I share the concern of my hon. Friend the Member for Feltham and Heston that, over the last couple of years, the work to support women doing that work has been downgraded. My second question for the Minister is: does he share our concern and think there should be a renewed effort to support and prioritise those mentoring networks, not just in local enterprise partnerships?

My hon. Friend and colleague the Member for Feltham and Heston is a fan of the work of the national Women’s Business Council, which was set up for a year as an independent body. Does the Minister think there is a case for making that a perpetual scheme and for considering how it could support mentoring, using and drawing on the experience there?

Thirdly, with regard to women finding it hard to see other women whom they might aspire to be, does the Minister share my disappointment and concern about the slow pace of progress in getting women into leadership positions in business across the piece? He must be disappointed with the slow pace of change, given the diversity dividend that comes from getting more women into boardrooms. He must also share the disappointment of his colleague, the Minister for Business and Enterprise, about the decisions of many businesses to appoint women to non-executive positions. The vast majority of women who have gone into leadership positions on business boards during the past couple of years have simply been appointed as non-execs and have not been in decision-making positions. I know that the Minister will be worried about that unacceptable situation, because it sends a message to women entrepreneurs that there are not women to trade with. Does he think that there is now a case for getting on with looking at what quotas could offer us, in respect of non-exec and exec positions, and the way that businesses are working with women?

My final questions to the Minister are about women to trade with. There is a slow pace of change when it comes to not just women in boardrooms and in entrepreneurship, but women to trade with. In a world economy, the way our businesses work with other businesses could provide huge opportunities for women entrepreneurs, but at the moment, women-owned businesses are winning less than 5% of corporate and public sector contracts.

The Government’s adviser has called for the Government to collect data on diversity in procurement processes, and said that the pre-qualification questionnaire should ask about women-owned business. Is the Minister concerned that the talk about removing the pre-qualification questionnaire for contracts smaller than €250,000 may mean that we will not see that level of engagement with the question of whether the Government are selling to women and doing all they can, through their own supply chain, to promote women’s business?

Although UK Trade & Investment measures women-led firms that export, we do not measure women being sold to and traded with in our economy. The Government have dismissed the idea of having a quota for tenders and the idea of measuring the number of women being sold to, although clearly that would help us understand the scale of the challenge and whether the Government are doing what they can. If the Minister wants insight into what difference that could make, he should look no further than that socialist utopia, the United States of America, where some 30% of all businesses are majority female-owned and the number of women-owned businesses continues to grow at twice the rate of all US firms. Women are increasing their economic clout and driving the American recovery. That is not happening by accident; it is being driven by the US Government’s deliberate choice. The USA Women’s Business Ownership Act 1988 put in place long-term infrastructure to support women’s enterprise development. The quotas and targets set by the US Government for women in their supply chain are changing the behaviour of companies in America.

In 1994, the federal Government established a 5% spending goal for federal agencies to encourage contracting with women-owned small businesses. That target has not yet been met, but it is almost being met and it is making a massive difference to women entrepreneurs in America. Indeed, it is changing the debate not just in the public sector in America, but in the private sector. Companies such as Walmart—again, not perhaps seen as a socialist leader, if the Minister is worried about that—have introduced “women-owned” labels since last year, allowing consumers to clearly identify products created by women-led businesses and buy accordingly. That company sees a commercial interest in this.

The Minister may be worried that I am talking straight away about bringing in a direct quota for selling to women. I recognise that first and foremost we have to ask the question, so will the Minister commit the Government to asking, in the public sector, about selling to women and to starting to monitor just how women’s businesses are being traded with in this country? Through that, we can understand the gaps in the industry. Perhaps there is a role in that for the Women’s Business Council and that dedicated lead on women’s entrepreneurship and business that my hon. Friend the Member for Feltham and Heston set out so clearly as being required.

Ultimately, if we want to give women confidence that their businesses will be supported, that they will be successful and that we can bridge the confidence gap, we have to show that the issue is a priority. The Opposition are committed to that; I hope that the Minister will show a similar commitment, so that we can all benefit from the increase in economic activity and productivity that bringing more women into the UK economy would offer.

Consumer Rights Bill

Debate between Stella Creasy and Jim Shannon

Monday 16th June 2014 Commons Chamber

[Stella Creasy]

It is fascinating finally to come to the end of consideration of the Bill in this Chamber.

[Jim Shannon (Strangford) (DUP)]

On a point of order, Madam Deputy Speaker. I stand to be corrected, but I thought that those who wanted to speak on Third Reading did so before the shadow spokesperson. Am I wrong?

[Madam Deputy Speaker (Dame Dawn Primarolo)]

You are wrong, yes. The Minister opens Third Reading, and the Opposition Front Bencher responds; we then hear from other participants. If we have enough time, and it is relevant to do so, we then hear the wind-ups. Do not worry—I will not forget you.

Finance (No. 3) Bill

Debate between Stella Creasy and Jim Shannon

Tuesday 26th April 2011 Commons Chamber

[Stella Creasy]

I am sorry that the hon. Gentleman has not been listening closely. Let me make it very clear: the figures from the Office for Budget Responsibility that I cited refer to this past year. Forgive me, but as far as I am aware, his party has been in power during that time and it has presided over this increase in the private debt that households are now taking on.

Let us talk about some of the things that are causing that increase. VAT is costing a family with children an extra £450 this year, on average, due to the rocketing cost of buying basics such as telephones and clothes and of getting a boiler or a washing machine fixed. That is before they even consider getting out and about to spend money. Many Conservative Members have talked about fuel prices, but the increase in VAT is adding £1.35 to the cost of filling up a 50-litre tank with unleaded fuel. The cut in fuel duty gives back only 1p, but the VAT increase costs us almost 3p a litre.

Those who are in work are finding it even harder to make ends meet as a result of the Budget. Since 5 April, 750,000 more workers have been dragged into the higher rate of income tax, and benefit recipients have lost £2.7 billion-worth of payments. Cuts to child care support have taken £1,500 a year from families. The £48 that people will get through the personal allowance increase in the Budget is barely a tenth of the amount that families will have to pay back through increased VAT. In two years’ time, 1.5 million families—including many in places such as Walthamstow—will lose all their child benefit. Credit Action has pointed out that, of the 45 changes to the tax and benefit system made in the Budget, 26 will have a negative impact on households.

There will also be fewer chances of getting a better-paid job, or of getting back into work, because unemployment is set to be higher in every year of this Parliament as a result of this Government’s actions.

[Jim Shannon (Strangford) (DUP)]

Those in the 16-to-25 age bracket who are unemployed will soon top the 1 million mark. Does the hon. Lady share my concern, and that of many other hon. Members, about what the future holds for them?

[Stella Creasy]

I absolutely agree with the hon. Gentleman. I have been a close reader of the work of Paul Gregg at Bristol university, who has shown how unemployment can scar young people and affect their earning potential for life. I am extremely worried about young people in this country who are facing unemployment and have little prospect of a place on a training scheme or in a university.

There is little sign that these pressures on family finances will ease. With the current wage squeeze expected to continue until at least 2013, average wages are expected to fall to less than £25,000, which is more than £1,800 lower than in 2009. People do not have the pounds in their pockets that they need in order to keep spending in the way our economy needs if it is to grow. If we add to that the anticipated rise in interest rates and mortgage payments, which has been one area of respite in the past few years, we can see that things are going to get a lot bleaker. As our newspapers warn daily, and as the Bank of England has pointed out, interest rates are likely to climb, piling pressure on the 60% of low to middle-income families who are already struggling to pay their bills.

It is no wonder that four in 10 people are worried about their current level of debt, with 4 million fearing redundancy and 4 million more having taken on debt in recent months. We know that the cuts that we have seen so far are just the beginning. The ones that families across the UK felt this month accounted for a mere 10% of the total savings planned before 2015 from changes in the tax credit and benefit system. More than 40% of the cuts kick in in 2013.

Loading debt on to households helps this Government to cut the deficit at the pace they desire, but it is the job of Opposition Members to challenge them on the cost and consequences to all of doing so. In an economy where jobs and growth are in short supply, such debts do not just mean lower consumer spending, higher levels of bankruptcy or repossessions. Nearly 30% of British parents admit they are arguing over their family finances and a third of parents are suffering the stress of sleepless nights because they are worried about money.

Such changes also directly impact on our chances for economic recovery. As the Bank of England pointed out,

“prospects for consumption…have an important bearing on the outlet for activity”,

but it added:

“Near-term prospects have weakened further over the month. The squeeze on households…was likely to dampen consumption materially over the next year or so.”

Even after a sharp reduction in its private consumption forecasts, that favourite of the hon. Member for West Suffolk, the Office for Budget Responsibility, expects British households to account for just over a fifth of economic growth this year and for almost a third next year. The truth is that if the average family is not willing to dig itself deeper into debt, those figures might have to be revised.

The Bill reflects the Government’s complacency about the challenge. There is no commitment to act on these problems—only a general sense of unease, summed up best by the Minister for Equalities, the hon. Member for Hornsey and Wood Green (Lynne Featherstone), who wrote:

“What is tough—and will get tougher—is losing jobs. People in work will mostly get by—somehow. People on benefits will mostly get by—somehow. But for those who lose their job—it will be devastating. The cuts were announced last year. Their impact has yet to fully hit. This budget promised growth. The proof will be in the pudding. And the question will be whether there’s a new job to be found within a time frame that can keep health, hearth and home together—and we need to keep a watch over that.”

Well, I want to do more than keep a watch over that, and I hope to answer a question posed by Government Members about what policies Labour Members could suggest.

Today, I argue that we could do more than squabble over Keynes or the Ricardian equivalence; we could do something to help those people in immediate danger of insolvency and bankruptcy. At present, this Bill is missing that. Given the large numbers of people facing financial difficulty, we should be deeply concerned about the strategies that families have to cope with these pressures and how the Bill could do something to help.

To cover costs, more and more people are turning to sources of credit, which might seem like short-term solutions but quickly become long-term problems. The number of people who say they are likely to use an unauthorised overdraft this month has nearly doubled since July last year—from 900,000 to 1.6 million. Similarly, the payday lending industry in the UK, with its 4,000% interest rates and more, has quadrupled in the past 18 months.

Being able to borrow in a way that does not leave a long-term scar on the family finances is the new dividing-line in our society. Those who can access mainstream credit might just scrape by in austerity Britain. Those with little option but the legal loan sharks, maxing out their credit cards or racking up unauthorised debt, could spend a generation or more trying to become debt-free.

This Government want to pretend that such kinds of personal debt are solely a private matter, but Opposition Members see the social and economic consequences and we must beg to differ. A lack of regulation of the high-cost credit market in comparison with other countries allows that industry to go unchecked in the UK. Recognition of the problems caused by casino banking in the City is widespread across the House, but that is only half the battle; we should not forget the financial needs of those in our communities. For the sake of our economic recovery and for the sake of those families, credit should not be lent in a way that is detrimental to consumers without those who profit from exploiting them being made liable for the consequences.

When this Government announced their Budget, I asked a simple question: how can they be so keen to show that they are so tough on national debt, yet so blind to the growing crisis of personal debt that their policies are stoking? Today, with this Bill before us, we are no closer to an answer, but thousands more edge closer to personal financial problems as a direct result. That is why I will table amendments to review whether the supplementary charge or the bankers’ levy could be applied in a way that would disincentivise negative, high-cost credit lending. It is time that this Government put the fortunes of every family first. Other countries have done that to protect their consumers, and I do not see why British consumers should be denied the same opportunity.

Let me offer an open invitation to Treasury Ministers to do what their colleagues in the Department for Business, Innovation and Skills have signally failed to do, and respond to the concerns of Members throughout the House. I invite them to meet us to discuss how we could cap the total cost of credit. Campaigners all over the country who support such action—Churches, trade unions, community groups and consumer associations—would thank them for taking it.

I hope that Members who share my concern about personal debt will support my amendments, and will join me in holding the Government to account for what they are doing to the personal finances of families in every constituency in the country.