Oral Answers to Questions

Debate between Steve McCabe and John Glen

Tuesday 20th December 2022 Commons Chamber

[John Glen]

I agree with the right hon. Gentleman about the imperative of chasing down all waste. The Government are providing continued funding for the Bulb Energy special administration regime while the sale of Bulb’s customers to Octopus is pursued by the energy administrator as an exit route from the SAR, but I will look at what the right hon. Gentleman said and reflect carefully on what we can do further.

[Steve McCabe (Birmingham, Selly Oak) (Lab)]

8. Whether he has had recent discussions with the Secretary of State for Education on the potential merits of increasing student maintenance loans in line with actual rather than forecast levels of inflation.

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

Treasury Ministers meet regularly with Ministers at the Department for Education to discuss matters of shared interest, including student finance. The Government are considering options for changes to loans and grants for 2023-24, and an announcement will follow in due course.

[Steve McCabe]

The Institute for Fiscal Studies reports that the real value of maintenance loans is the lowest for seven years. Rents, which account for 45% of bills, are rising; food costs are rising; one in 10 students are using a food bank; and 80% say they cannot make ends meet. Why does the Minister not make his Christmas present a proper increase in the level of maintenance loans? Because it is a loan, he would not even have to pay for it.

[John Glen]

I thank the hon. Gentleman for his question. I have a lot of respect for him and I recognise the issue that he refers to. Of course, many higher education providers have hardship funds that students can apply to, and there is £261 million—a quarter of a billion pounds—of student premium funding available this year to support disadvantaged students. On the specific issue of the uprating, of course there needs to be a delay to operationalise those additional sums. That is at the core of the issue. However, as I said, the Department for Education will report on the matter in due course.

Breathing Space Scheme

Debate between Steve McCabe and John Glen

Wednesday 19th June 2019 Commons Chamber

[John Glen]

The hon. Lady makes a very reasonable point about the nature of the training for debt advisers. I cannot give her a specific commitment on that, because there are so many partners involved, but I will look into it and see what can be done to advance that very reasonable observation about the quality of advice given.

[Steve McCabe (Birmingham, Selly Oak) (Lab)]

I welcome the proposals, although it has taken us since 2017 to get to this point and it is going to take another two years to get the first part operational. I am glad the Minister is moving swiftly and not dragging his feet.

Two problems for people who get into debt, particularly over tax credits or benefit clawback, are the interest charges that are applied as they try to repay and the management fees charged on top by debt-recovery agencies, which mean that the debt increasingly expands. The Minister could have a direct input on both those things; why does he not put a ceiling on those charges, rather than simply using a freeze?

[John Glen]

The hon. Gentleman makes an interesting point, but that is not an area for which I have direct responsibility. Reclaimed overpayments—for example, from universal credit—will be included in the scheme. I cannot comment on things that are outside my control, but I hear his point about doing this as quickly as possible.

Credit Cards: Cost Regulation

Debate between Steve McCabe and John Glen

Wednesday 7th February 2018 Westminster Hall

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

It is a pleasure to serve under your chairmanship, Mr McCabe. I thank the hon. Member for Walthamstow (Stella Creasy) for raising this significant issue with characteristic passion. I will seek to answer the specific questions she has raised about the role of the FCA and how fluid the situation is.

Consumer credit, including credit cards, plays an important role in our economy, helping consumers to smooth their income, spread costs over time and cope with unexpected financial shocks. However, risk is inherent in any credit product, so it is vital that consumers are treated fairly and protected from unscrupulous or predatory practice. The Government recognise that and are working with the regulator to ensure that such activity is curtailed.

I think it will be helpful if I set out first what the Government have already done on consumer credit. Our vision is of a well functioning and sustainable consumer credit market that responsibly meets the needs of all consumers. That is why we fundamentally reformed regulation of the consumer credit market, transferring regulatory responsibility from the Office of Fair Trading to the Financial Conduct Authority on 1 April 2014. The Government have given the FCA a robust set of powers, designed to protect consumers, in three key areas. The FCA assesses every firm’s fitness to lend and it has put in place a binding standard on firms. The FCA requires all firms to assess each customer’s ability to repay. The hon. Lady gave the example of Vanquis being able to lend £1,000 without any checks. I repeat: all lenders must make that assessment of their customers’ ability to repay. Firms must also treat customers who fall into arrears fairly. Thirdly, the FCA monitors the market. The characterisation of the FCA as passively waiting for a crisis does not do justice to the actions it has taken. I will go on to set those out and describe how they are still under review.

Focusing on the areas that are most likely to cause consumer harm, the FCA has a broad enforcement toolkit to punish breaches of its rules. The FCA’s enforcement arm supports its objectives by making it clear that there are real and meaningful consequences for firms and individuals who do not follow the rules. There is no limit to the fines it can levy. Crucially, it can force firms to provide redress to consumers. For example, in October 2017 the FCA announced that BrightHouse, a rent-to-own firm, will pay over £14.8 million in redress to customers in respect of agreements that may not have been affordable and payments that should have been refunded. That is just one example of the effectiveness of the FCA enforcement action. In total, the FCA issued fines of nearly £230 million last year, and as of December 2017 it had secured £734 million in redress for more than 1.47 million customers in the consumer credit market.

I turn now specifically to credit cards. When the Government gave the FCA responsibility for consumer credit regulation in 2014, it sought to build a sound understanding of the credit card market and to assess whether it was working well in the interests of consumers. To that end, as the hon. Lady mentioned, the FCA conducted an extensive study of the credit card market between 2014 and 2016. It found that competition within the industry was working well for the majority of consumers, but identified concerns about the scale and extent of problematic credit card debt. Last year the FCA consulted on remedies to tackle persistent credit card debt and proposed a robust package of remedies to tackle the issues—

[Steve McCabe (in the Chair)]

Order. There is a Division in the main Chamber, so we will have to suspend the sitting and you will all have to come back to conclude. We will suspend for 15 minutes.

Childcare Vouchers

Debate between Steve McCabe and John Glen

Monday 15th January 2018 Westminster Hall

[John Glen]

As a former policy person, I acknowledge the detail of the hon. Lady’s analysis, and that there is more work to be done. I shall take that back to the Treasury as we try to address all dimensions of the productivity challenge.

The Government think it is right that we replace childcare vouchers with tax-free childcare from April 2018. However, I would like to reassure any parent who is currently receiving vouchers but is not eligible for tax-free childcare that there will be no automatic withdrawal of the voucher scheme. If they currently receive vouchers and their employer continues to provide them, they can continue to receive vouchers as long as they stay with that employer.

[Steve McCabe]

I acknowledge what the Minister says, but what will he do about parents who may change their employer? Presumably those parents will be discriminated against.

[John Glen]

I think they will be eligible for the tax-free childcare scheme.

Again, I thank all those who signed the petition, and all hon. Members who spoke this afternoon. As I have set out, tax-free childcare will help more households, and is better targeted and simpler, than childcare vouchers. HMRC has done extensive work to ensure that the childcare system is ready for full roll-out. It is therefore right that we continue with the reform as planned, to the benefit of millions of households around the country.

Relationships and Children’s Well-being

Debate between Steve McCabe and John Glen

Tuesday 21st October 2014 Westminster Hall

[Steve McCabe]

I certainly accept that we would not want to try and explain family breakdown over a period of just four years. I will make the point later that there are a variety of issues; I am simply focusing on the fact that if we are considering the impact on how Government policy assists, we should not ignore the economic factors.

The hon. Member for Congleton referred to Dr Coleman and the OnePlusOne group, which makes the point that evidence shows that where couples enjoy a good employment situation, that in itself leads to a stronger relationship. That may be because they have fewer financial worries or a stronger sense of personal identity. I do not want to dwell on the issue unduly, but I do want to make the point that we have heard about family centres and the need to give Government support, and there are a couple of things from the past four years on which we should reflect. We should ask whether the decision to scale down Sure Start has necessarily been in the best interests of children.

[John Glen]

rose—

[Steve McCabe]

I thought that might tempt the hon. Gentleman to intervene.

[John Glen]

I would just like to point out that across the country there are 420 of the children’s contact centres to which I referred, and they have never, throughout their existence, received any support from the state, but are supported by volunteers up and down the country.

[Steve McCabe]

The hon. Gentleman is right: contact centres do not receive state funding. Sure Start centres did, but there are 628 fewer of them since the Government came to power, and I suggest that they have in the past been used as a source of support for a number of parents and families.

Likewise, there is an issue about the availability of child care. That is why, to be fair, both parties are putting quite a stress on child care availability at present. We disagree about the best way to provide it. Obviously, I am much more attached to Labour’s model of providing between 15 and 25 hours for three and four-year-olds. We have to recognise the cost of child care.

I noticed that the hon. Member for Enfield, Southgate (Mr Burrowes), in what was a very thoughtful speech in a number of areas—I certainly agree with him on the question of kinship and grandparents—mentioned the married couple’s tax allowance. It is worth pointing out, if that is an instrument of policy to help families and children, that it is available only to one third of married couples. It applies to only 4 million of the 12.3 million married couples, and only about one third of them have children, so when it comes to targeting a policy to help children, it would be possible to do a bit better.