Mesothelioma Bill [Lords]

Tracey Crouch Excerpts

Monday 2nd December 2013 Commons Chamber

[Tracey Crouch (Chatham and Aylesford) (Con)]

It is a pleasure to speak on this issue, on which I have a great deal of knowledge from working in the insurance industry for five years before I became a Member of Parliament and from representing a constituency with very high levels of mesothelioma. Britain has the highest rate of mesothelioma in the world and sadly that rate is rising. In the past five years, the south-east of England has had the highest rates of deaths from mesothelioma compared with anywhere else in the UK. Medway, with its heavy industry and dockyard history, is a particular hot spot.

Mesothelioma is a horrific disease that is contracted exclusively by exposure to asbestos. Those who are diagnosed are often dead within a year. For many years, lawyers and insurers have taken their time to settle claims through civil procedures, leaving great financial uncertainty for sufferers and their families. A great deal has been done to speed up civil claims for victims and tribute ought to be paid to the work of Senior Master Whitaker for making that happen. However, there remains a small yet significant group of people who contracted mesothelioma but could not be compensated either because of poor record keeping by their employer or their employer’s insurer, or because neither existed any more.

The Bill will help to rectify that and is therefore welcome, but it still contains shortcomings that, if Ministers, insurers and lawyers were open-minded, could be rectified at little extra cost to them. Before going into detail, I congratulate Lord Freud on his sterling efforts to introduce the Bill. From my own experience of working in the insurance industry and alongside lawyers, I know that the negotiations would have been very difficult. He deserved the praise he received from peers on both sides of the House as the Bill progressed through the other place, but it still lacks fair compensation for victims of this dreadful disease.

In my preliminary discussions with interested parties, there was consensus on one point: the Bill will give sufferers something. That is true and something might be better than nothing, but the Bill puts the something squarely in the pockets of the insurers and lawyers, and not as much as there should be in the hands of the victim. The victim is the one who turned up to work and was exposed to asbestos. The victim is the one who happened to work for a company that kept shoddy records. The victim is the one who will die through no fault of his own. The Bill has room for improvement, based on further compromise.

Their lordships debated the Bill on a set of assumptions that have been revised since it has progressed to this place. The goalposts have moved. It is a shame that what should be a simple piece of legislation has become so mired in suspicion and confusion regarding what is and is not included in the levy. When the Bill was discussed in the Lords, Lord Freud made it clear that the levy could not be more than 3% gross written premium. That was to ensure that insurers financing the scheme would not incur additional costs that would be passed on to their existing customers. At that point, the levy agreed with the insurance industry was 75% and equated to, as illustrated in the Department for Work and Pensions’ own analysis in support of the Bill, 2.79% GWP in the first four years of the scheme and 2.27% GWP in the first 10 years of the scheme.

Since the debate in the Lords, the assumptions relating to legal costs have changed. Their lordships debated a fixed legal fee of £2,000, but we are now debating a fee of £7,000. In truth, there is total confusion about who will pay the fee. As the Association of British Insurers understands it, it will be paid by claimants out of their compensation which the Government will uplift accordingly. Not only is it unclear what precisely the fee is for, but what the other 25% is paying to administer. It would be helpful if the Government clarified who pays the legal fees. Is it the claimants out of their compensation or the insurance companies out of the administration fee? If it is the claimants, we need to be absolutely clear that when they are awarded £57,000 of compensation, £7,000 of legal fees will have to be deducted from that award.

Lawyers, insurers and the Government are, unsurprisingly, at loggerheads on the fixed fee, presumably because if it is acceptable for this scheme, why could it not be applied to civil claims? Where would it fit into the LASPO review that the Ministry of Justice is expected to complete and report on next year? At the heart of the Bill is supposed to be the fact that the victim is coming into the scheme at last resort. A lot of what is required will have already been done, so lawyers in a civil claim might not be as necessary as they would be in this scheme. Senior Master Whitaker has helped a great deal and the Department is clear that in some circumstances a medical report would be enough. The underlying point, however, is that because of the revised estimates, about which I remain sceptical, there is no room to raise the compensation limit from 75% to 80%—a much fairer level of financial recompense for victims of the disease. In his introduction, the Minister said that 75% is not the important figure and that the 3% levy is. With the greatest respect to the Minister, it is the level of compensation that is important to the victim, not what the level of GWP is to the insurance industry.

[Mark Reckless (Rochester and Strood) (Con)]

My hon. Friend mentioned that Medway is a hot spot for the disease. There have been 42 deaths in my constituency in the past five years—a greater number even than in her constituency, and about three times the national average. She mentioned the 3% and 75% figures. Is it not the case that the changes to which she referred will affect the sums relating to the 3% cap? If that is so, will it not be open to Ministers to show some compromise or movement in the direction that she is so ably arguing for?

[Tracey Crouch]

My hon. Friend is right that our constituencies are particularly affected and I am delighted to see him in his place to debate this important issue. He makes an important point. The Government have set a cap of 3% and there is no room for manoeuvre unless they are willing to stand up to the insurance industry and say that there is a firm view on both sides of the House that the 75% they have currently negotiated is not good enough. They need to agree on another figure. I believe that 80% would be appropriate as a good compromise between the 90% being called for by the lawyers—they cite the Financial Services Compensation Scheme as a useful comparator—and the 70% the insurers were originally willing to accept. Furthermore, with the previous assumptions under which their lordships debated the Bill, 80% would have been 2.98% GWP over the first four years and 2.42% over 10 years. Now, with the 3% cap, under the new legal costs associated with the scheme, there is no room for manoeuvre. I find that disappointing, unless the Minister is willing to stand up to the insurance industry and discuss this.

[Mr Anderson]

The hon. Lady is making a compelling case. Does she agree that, as the Minister said, the employers were 100% to blame, that the insurance companies have had 100% contributions for many years, that the Government are asking for 100% clawback on DWP benefits and that, sadly, 100% of the victims are dead? Is there not a clear moral case for this House to accept nothing less than 100% compensation for the people who have died?

[Tracey Crouch]

I am grateful to the hon. Gentleman for his intervention. I was persuaded by the 100% argument, but having read the House of Lords debate, I now think that 100% would not be right. There is room for compromise on the percentage and we need to ensure that we put the victim at the heart of the compensation scheme—not the insurers and lawyers who may ultimately benefit from it.

I am also concerned about the lack of clarity on assumptions relating to the age of people diagnosed with mesothelioma. Some think that those accessing the scheme will be younger than the current age group of claimants going through civil schemes, whereas the Department has assumed that there will be an older age group. I tend to believe that, as employers’ liability insurance has been compulsory since 1972, and given this disease’s latency, those unlikely to be able to trace their insurer, making them eligible for this scheme, would surely be older and the younger workers would be fewer. Again, there is room for negotiation with the insurance industry over the compensation levy.

I understand that the industry is worried about a cohort of younger people who might access the scheme because of exposure in schools and other areas with a less obvious asbestos risk. I am afraid that that is bunkum, because not only would schools have some form of liability insurance, but it would be possible to access compensation via civil procedures. For me, the current 25% running cost of the scheme is far too high, and I genuinely think that this is a poor outcome for the sufferer and a good outcome for the industry, which, as the hon. Member for Blaydon (Mr Anderson) said, has behaved poorly over many decades in this area.

[Mike Penning]

I am conscious that during the course of the debate I may be able to alleviate some concerns across the House about how the scheme is proceeding. Earlier in her comments, my hon. Friend asked whether the legal fees would be in addition or inclusive. They are clearly in addition to any payments that the person receives from the scheme.

[Tracey Crouch]

We will have an interesting discussion about that in Committee. The representations I have received are contrary to what the Minister says, suggesting that the fees would still come from the claimant, albeit that the Government will uplift the amount of compensation payable in the first place. A victim might get £57,000, for example, but would then have to pay the £7,000 fee out of it—unless the legal fee comes in lower than that, in which case they get to keep the difference.

[Mike Penning]

Let me clarify once and for all that the legal fee of £7,000 is outside the payment. If people do not spend £7,000, they keep the difference. It is outside, not part of, the compensation.

[Tracey Crouch]

As I say, we will have an interesting debate in Committee. Is the Minister saying that the insurance industry will pick up the legal fee? Where is this magic legal fee coming from? Who is paying for it? If it is not the claimant, it must surely be in the 25% administration costs. Officials have said that it is not within those costs, so we are going to have an interesting debate about where this £7,000 is coming from and, indeed, what it actually equates to.

[Stephen Phillips (Sleaford and North Hykeham) (Con)]

The Bill went through the other place on the basis that the legal fees would be £2,000, yet we are now told that they are £7,000. The Minister needs to respond to my hon. Friend’s earlier point that one could move to an 80% level of compensation and accommodate it if the legal fees were indeed £2,000 within the 80% of gross written premium. One could not do it otherwise. It could not be accommodated if the legal fees were £7,000. There is room for manoeuvre if the assumption on which the other place proceeded—namely that the legal fees would be £2,000—is correct, but the Minister needs to be clear in the concluding speech about where this £7,000 figure has come from.

[Tracey Crouch]

I am grateful for my hon. and learned Friend’s intervention. The irony is that, when the Bill first started in the House of Lords, the figure of £7,000 was debated, but the assumption was subsequently revised down to £2,000 and then back up to £7,000. Under the original £7,000 assumption, however, the DWP calculations were exactly the same as they were when £2,000 was being discussed. Unfortunately, it is completely unclear to anyone who has paid any attention to this Bill precisely who is paying for this, what it includes and how the victim can still be put at the heart of it all.

On one particular point, I pay tribute to the insurance industry. It improved over the years in its financing of research into mesothelioma. This began when I was working at Aviva—I am not talking all the credit for it, but it did—as an attempt to stop the last Government from following the lead of Scotland and legislating too harshly on other asbestos diseases such as pleural plaques. As it happens, I supported the last Government’s resistance to following Scotland and was pleased that the top four insurers contributed to research funding into mesothelioma instead. That said, the funding runs out next year, and there has currently been no voluntary commitment—not just from the top four, but from all EL insurers—to contribute further money into research. I think that is a dreadful shame, which will have a major impact on future treatments to alleviate suffering at a time when we expect meso-diagnosis to spike. I share the views of the British Lung Foundation—supported, I believe, by the Association of British Insurers—about building the continuation of funding directly into the Bill. It is sad that a £4 billion EL industry cannot make a voluntary offering, spread equally across all insurers. If that is so, we parliamentarians now have a statutory opportunity to force them to do so.

[Mr Anderson]

The hon. Lady is generous in giving way. Is she aware that when the pleural plaques legislation went through the other place and the Law Lords decided that it would no longer be compensated, KPMG estimated that the insurance companies had a £1.4 billion windfall, so surely a little bit of that could go into the research that she is talking about?

--- Later in debate ---

[Tracey Crouch]

I do, indeed, remember that. I remember having long conversations about pleural plaques with the hon. Member for Jarrow (Mr Hepburn), who has been a long-time campaigner on the issue. As it happens, I disagreed with the idea of compensating pleural plaques. Everybody involved with this Bill well knows that I am passionate about mesothelioma—a disease from which people will die, and quickly—but I have never thought of extending the provisions to other diseases. I supported what the industry did on pleural plaques, but I understand the hon. Gentleman’s point.

Let me quickly turn to the issue of benefit recovery. While I agree that this scheme should follow civil procedures and recover benefits from those who have received payments until their compensation has been paid, I think it incredibly unfair that a claimant who is getting the equivalent of 75% compensation to that from a civil claim must repay 100% of his benefits. To return to the main point of the Bill, the claimant is accessing the scheme because of poor practices by employers and insurers after having been negligently exposed to asbestos. I feel that the victim is the one who will lose out here, so I hope we get an opportunity to look carefully at the recovery issue in Committee.

Finally, let me briefly mention secondary exposure. I understand why diagnosis of mesothelioma caused by secondary exposure from asbestos is excluded from this Bill, but this is an area that I genuinely hope the Department is looking at pursuing. The numbers are small, but I would hazard a pretty good guess that most victims of secondary exposure will be women, who are sufferers of this dreadful cancer purely because they did their wifely duty and washed their husband’s overalls. These women deserve to be compensated, too. They receive payment under the Child Maintenance and Other Payments Act 2008, so it is an accepted cause of suffering, but a proper compensation scheme should be considered for the future.

While I worked in the industry, I campaigned hard for better, faster justice for those who would die from mesothelioma. I may have been an irritant in the industry, but I was passionate that, after decades of poor behaviour, something had to change. Improvements were made and I was proud to be a part of those small, but important developments. However, in the middle of a constant stand-off between insurers and lawyers remains a person who will die a most horrible death, and at present this Bill, while welcome in principle, still puts too much in the pockets of other interested parties. I hope that Ministers both in this place and the other place will remain open-minded and listen to the concerns of colleagues on both sides and ultimately be willing to go back to the insurers and lawyers and fight just a little harder for the victims of mesothelioma. To my mind, it is the very least that they deserve.

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[Mr Buckland]

I am certainly not going to insult my hon. Friend, but what I will say is that payments after death are governed by the 1976 Act and payments before death fall under common law, so different rules and regimes apply. As I have said, in Scotland there has been some move to try to align certain aspects—but not by any means all aspects—of the rights of dependants, relating to mesothelioma in particular.

There are practical alternatives, and in her excellent speech my hon. Friend the Member for Chatham and Aylesford (Tracey Crouch) made a point that deserves re-emphasis. The work of the senior master of the Queen’s bench division, Master Whitaker, should be singled out for particular praise because he and his colleagues have developed specialist lists that, in effect, create a fast-track procedure for the efficient resolution of liability issues. The fast-track procedure allows for summary judgment to be passed where sufficient evidence has been demonstrated by claimants about exposure to asbestos in breach of duty and where defendants then have to show cause—reversing the burden, as it were—on evidence why that liability should not be proved. With the resolution of liability, interim payments can be made to claimants and their families to meet the claimants’ needs during life, but that interim payment does not bring resolution or quantum to a close. That can be achieved by a stay of the claim until after death, to allow the full quantum—the final value—of that claim to be properly assessed.

It is important that we make these points because if we are truly to address the needs of victims and their families, we have to understand what they need, rather than just make glib assumptions about brevity and the need to tie things up before the tragic event of the death of a victim.

We know that over the next 30 years mesothelioma will claim about 60,000 lives, and that means about 2,500 people will be dying every year from this aggressive cancer. This particular scheme deals with last-resort claims where there is no other alternative. Already we have seen welcome changes by the Government in the other place, by conceding the 70% levy and raising it to 75%, on figures that at the time in question still represented under 3% of the gross written premium for employer liability insurance. I know that these figures have been updated, but when this Bill reaches Committee more particularity must be given as to the basis for those updated figures, because it is crucial if we are to have a meaningful continuing negotiation with the insurance industry—which I think we should—that we know precisely what we are dealing with.

I know my hon. Friend the Minister cannot commit himself and the Government to particular figures today, but I urge him—and I know he will listen—to keep those figures open and to look to see if we can get a greater proportion, and whether we can achieve 80% as my hon. Friend the Member for Chatham and Aylesford suggested. The more we get, the more justice we will deliver for the victims and their families.

[Tracey Crouch]

Does my hon. Friend agree that the insurance industry is unlikely to walk away from this scheme because of a very small uplift to 80%, given that it already has an incredibly bad reputation, thanks to the way it has dealt with mesothelioma victims? The notion that, all of a sudden, the entire scheme is going to fall apart because of a small, continuous uplift to 80%, and that the insurance industry is just going to walk away, is absolute nonsense.

[Mr Buckland]

I agree with my hon. Friend. I do not believe that the industry, which has rightly been criticised for lack of action and lack of resolution, would dare risk further opprobrium by appearing to be even more unreasonable at the end of what has already been a lengthy—some would say over-prolonged—negotiation process.

My hon. Friend made an interesting point about the industry’s argument regarding the likely age of claimants. Her point has real merit and force, because as she rightly says, given the changes in the law—the Employers’ Liability (Compulsory Insurance) Act 1969 and the introduction of compulsory employers’ liability some 41 years ago—the issue of traceability of insurers surely belongs to a period before the introduction of such legislation. That must mean that the cohort of claimants who would be eligible under this scheme will be older, rather than younger. I fail to see any clear basis for the assertion that we will be dealing with a younger group of claimants. It is important that we as legislators, both here and in Committee, seek to challenge and probe at every stage glib assertions made on behalf of an industry that, although it is now coming to the table, should have done so some years ago.

I welcome the Bill and all measures that create a degree of justice for those who, as a result of unfortunate accident, are unable to trace employers or insurers. But at the very least, when we make such legislation, it is our duty to ensure that we drive the best possible deal for our constituents and that they get in fullest possible measure the justice they so clearly deserve.

Oral Answers to Questions

Tracey Crouch Excerpts

Monday 10th December 2012 Commons Chamber

[Mr Duncan Smith]

I disagree with the hon. Gentleman. The figure I gave in my response to the last of the questions showed that, in actual fact, the pilots are beginning to show categorically that if there is proper management by local authorities, the number of people defaulting is very low. That we can deal with. [Interruption.] Instead of playing games, paying this direct and treating housing benefit tenants as children, does he not think that part of the reason why they crash out of work early is that they cannot cope with the extra responsibility? By getting them ready for that responsibility before they go to work we are doing them a favour, and that figure shows we are supporting them.

[Tracey Crouch (Chatham and Aylesford) (Con)]

T2. Later this week, my constituent Danny Shingles will go into hospital to have a debilitating polycystic kidney removed. I am sure that the Secretary of State is aware that cysts on kidneys burst, poisoning the body and creating great discomfort. While preparing for his operation Mr Shingles is also having to appeal a decision to stop his disability living allowance and employment and support allowance, despite the fact that after his operation he will be entitled to have them again. This is causing my constituent much unnecessary stress, so will the Secretary of State review the guidance given to assessors to ensure that all factors, including the scheduling of operations, are taken into account when making decisions about whether someone is entitled to benefits?

[The Parliamentary Under-Secretary of State for Work and Pensions (Esther McVey)]

I would like to meet my hon. Friend to discuss this case, as I do not know the full facts.

Specialist Disability Employment

Tracey Crouch Excerpts

Tuesday 10th July 2012 Commons Chamber

[Maria Miller]

I can absolutely understand that hon. Members are speaking with a great deal of passion, because this is a very important issue that affects some of the most vulnerable people in our constituencies. However, I gently remind the hon. Gentleman that if we are truly going to be people who stick up for disability equality and for disabled people in this country, who number some 6.9 million, then these are the changes that we need to make and that disabled people and disabled people’s organisations have called for. The previous Government were fully aware of that. The modernisation plan has not done what was required, and we are now taking that money and making it work harder for disabled people.

[Tracey Crouch (Chatham and Aylesford) (Con)]

Royal British Legion Industries, which is based in Aylesford, employs many disabled people in its factories. We must be very mindful in this place that whenever politicians make an announcement about disability employment, it can be incredibly frightening. Will the Minister therefore reassure my constituents that this Government will do all they can to continue to provide good-quality employment for disabled people?

[Maria Miller]

My hon. Friend is absolutely right to remind us all that what we say here can cause a great deal of fear and concern among the people we represent. Therefore, at all points in time, we should stick to the facts. In this case, the facts are that the £350 million budget for specialist employment support is being protected and that today’s announcement will mean that more than 8,000 extra disabled people will be able to be supported. She speaks with a great deal of knowledge in this respect. The organisation that she mentions has also been involved in the Work programme, which is also there to support disabled people.

Oral Answers to Questions

Tracey Crouch Excerpts

Monday 5th March 2012 Commons Chamber

[Steve Webb]

I am sure the whole House would agree with the hon. Gentleman that high energy prices, poor home insulation and a lack of competition in the market are all issues for pensioners—and my right hon. Friend the Secretary of State is very much aware of them. I can tell the hon. Gentleman that 600,000 of the poorest pensioners received £120 off their electricity bills this winter through the warm home discount scheme—something that will be expanded in future winters.

[Tracey Crouch (Chatham and Aylesford) (Con)]

10. What steps his Department is taking to support people with mesothelioma.

[The Minister of State, Department for Work and Pensions (Steve Webb)]

The Department provides support for sufferers of mesothelioma by way of compensation paid through the industrial injuries scheme. The main benefit is a weekly industrial injuries disablement benefit, while lump sum compensation payments are also available through the Pneumoconiosis etc. (Workers’ Compensation) Act 1979 and the diffuse mesothelioma scheme 2008.

[Tracey Crouch]

I thank the Minister for that reply. He will be aware that, because of its shipbuilding and industrial heritage, Medway has the second highest rate of mesothelioma deaths in the UK. His Department has been in active discussions with various stakeholders regarding a compensation fund of last resort for some time now. Given that we are expecting a spike in mesothelioma deaths in the next few years, will he advise us when the discussions will conclude and the outcomes will ensue?

[Steve Webb]

My hon. Friend is a powerful advocate on behalf of her constituents on this terrible condition. We accept that this process is taking longer to conclude than we had hoped. I can assure her, however, that my noble Friend Lord Freud is continuing in active discussion with the insurance industry and others, and that we are determined to bring forward our proposals as soon as possible.

Welfare Reform Bill

Tracey Crouch Excerpts

Wednesday 1st February 2012 Commons Chamber

[Mr Byrne]

I spent much of this morning perusing the helpful Conservative party briefing on the Bill—I am sure that Government Members have a copy—page 2 of which contains a useful summary explaining how I, the shadow Business Secretary, the shadow work Minister and the Leader of the Opposition have set out clearly their support, in principle, for the Bill. However, we want to give the Government the chance to institute important safeguards—for example, not allowing the cap to kick in if someone has not been offered the chance to work and instituting new safeguards for homelessness, on which they have had to spend a lot of money today. The Government have not listened to any of that, and now they have had to come back to the House accepting half of Labour’s amendment and spending a huge amount of money, thus burning many of their savings.

[Tracey Crouch (Chatham and Aylesford) (Con)]

Will the right hon. Gentleman give way?

[Mr Byrne]

I will give way, but then I want to set out where I think we both agree.

--- Later in debate ---

[Tracey Crouch]

I am grateful to the shadow Secretary of State for giving way. Having read the Conservative briefing, he will recall saying last week that he thought the benefit cap right in principle. Why, then, will he vote against it this evening?

[Mr Byrne]

We will seek a vote on Labour’s amendment on Labour’s benefit cap, and we are disappointed that the Government are trying to invoke financial privilege to prevent us from having that vote again in the House of Lords, where the Government know they will lose.

It is important to start by debating a principle on which both sides agree—the principle that people should be better off in work. Back in 1971, my right hon. Friend the Member for Birkenhead (Mr Field) pointed out the dangers of the poverty trap and the possibility of changes in the tax and benefits system resulting in people not being better off in work. Frankly, little progress was made in tackling that problem during the 1980s and the 1990s, which was why the institution of tax credits under Labour was such an important part of our welfare reform. Together with the national minimum wage, it ensured that people were better off in work. It was wise, therefore, for the Government to accept the principle of tax credits in their proposed changes to universal credit. That, too, is a principle that we support, and it is why we are in favour of a benefit cap, but we would like one that does not backfire and one that works in practice. That is what our amendment sets out.

Credit Unions

Tracey Crouch Excerpts

Wednesday 23rd November 2011 Westminster Hall

[Tracey Crouch (Chatham and Aylesford) (Con)]

As always, Mr Streeter, it is a pleasure to serve under your chairmanship. I congratulate my hon. Friend the Member for East Hampshire (Damian Hinds) on securing the debate.

The hon. Member for Islwyn (Chris Evans) spoke passionately about financial literacy. He might be interested to learn that a young lady doing work experience with me this week is watching the debate from the Gallery. She told me before we came to Westminster Hall that, as part of her enrichment class, she has just studied the role of credit unions. I have no idea what an enrichment class is, but the fact that it is studying credit unions is a fantastic way to ensure that youngsters learn about a variety of sources—

[Cathy Jamieson (Kilmarnock and Loudoun) (Lab/Co-op)]

The hon. Lady makes an important point. Does she agree that it is important that credit unions can operate from an early stage in schools and involve young people much more directly than by simply learning about them?

[Tracey Crouch]

I agree. As many providers as exist should be entitled to teach children about the variety of sources of financial awareness. I have been to primary schools in my constituency and seen big banks supporting financial education programmes, which I think is fantastic, but we should get as many people in there as possible.

I proudly declare, like many Members here, that I am a member of a credit union: Kent Savers, the county-wide credit union. I am also soon to be a member of Medway credit union, which covers part of my constituency. Like others, I am passionate about tackling high-cost credit, lending and financial inclusion, and see credit unions as part of the answer. That stems from my experience of living the high life in London as a young graduate and stupidly running up debts, from which I was saved by my bank manager, and of representing a constituency that has pockets of deprivation and associated personal debt problems.

In the current economic climate, we must pay particularly close attention to how much debt people take on as pressure inevitably increases on household budgets. As Members of Parliament, we have a duty to promote accessibility to fair and equitable credit, particularly, although not exclusively, for those on low incomes. That is why I share the enthusiasm for credit unions and believe that we must raise their profile. I am sure that I join many hon. Members here in having done so through local media.

I have met representatives of Kent Savers and Medway credit union, the latter as recently as last Friday, and have learned a great deal more about credit unions’ services, benefits and duties. Northern Irish Members will be interested to know that they spoke favourably of the credit unions in Ireland and Northern Ireland. One director is from Ireland and is helping to bring that experience to Medway.

As a mutual, a credit union has an ethos of responsibility and inclusion—traits especially welcome in Medway, which, sadly, has problems with unmanageable debt. Responsibility and inclusion go hand in hand and are crucial features in running credit unions fairly and equitably. Much is admirable in credit unions’ ability to open up opportunities to take out reasonable loans for people on low incomes or with bad credit history. The alternatives, as I have found in Medway, are far less appealing. As in the constituency of my hon. Friend the Member for Thurrock (Jackie Doyle-Price), several high-cost credit lenders have set up shops prominently situated on busy high streets. They are the antithesis of credit unions.

Consumers took out £1.9 billion in payday loans last year, which is £500 million more than in the previous year. That trend is a concern and it is broadly reflected in the Medway area. Shockingly, at the local citizens advice bureau recently, a record £3 million in unsecured personal debt walked through the doors in one week. I have since been informed that loans and the interest associated with payday lending account for a worrying proportion of that £3 million. That is a great shame, and I have campaigned against it as a local Member of Parliament.

Such businesses deal in large sums of money and small print. They are identifiable by their glossy shop fronts, but they offer less attractive interest rates, targeting people on low incomes who are in financial difficulty. Sure, if they pay back the loan in time, the rate might be lower over 30 days than a high street bank’s overdraft charge, but the very fact that someone has gone to a payday loan company rather than a bank might indicate that they are a credit risk. No controls are placed on borrowing—a remarkable difference from credit unions.

The emergence of payday loan shops on high streets and the accessibility of easy credit on the internet appear to offer a quick fix. It might be financial inclusion of a sort, but the reality of high-cost credit is very different. It can be irresponsible on the part of the lender and self-defeating for the consumer, placing them deeper into debt and excluding them from accessing the lending market in the future, which credit unions do not do.

On Monday, I was pleased to note the Government’s response to the consumer credit and personal insolvency review. I was particularly encouraged to learn that they will consider the possibility of imposing a variable cap on the cost of high-cost credit that can be charged in the short to medium-term high-cost credit market, while talking up the credentials of credit unions as an alternative.

It is worth making the point that credit unions are more than just a lending service. To take out a loan, members must first commit to saving, which is an equally important feature of managing their finances. Given that only 20% of people in the UK reportedly put aside money each month, more clearly needs to be done to encourage saving. Credit unions offer a great opportunity to help to reverse that trend with a more innovative method of depositing cash, receiving a dividend and earning the possibility of taking out a loan. By committing to saving, members provide a cushion for those unexpected emergencies that we hear so much about from payday loan lenders, while avoiding astronomical interest rates.

I learned last week that Medway credit union is developing a Christmas savings scheme that encourages members to put aside money for Christmas essentials. Christmas is an expensive time of year. Given the pressure on families to spend, the temptation for those on low incomes to buy now and pay later is strong. However, under the scheme, reserves gradually built up over time will be on hand to cover the cost of the festive family season and steer families away from alternative high-cost credit. Most importantly, what makes the Christmas saving scheme attractive is that it is secure.

Credit unions have an important role to play for older people, who are often financially excluded. I have spoken before in this Chamber about my concerns for the financial welfare and education of our pensioners. Financial difficulty is not limited to younger generations seeking loans to cover rent, bills or insuring the family car. I read a worrying report called “Debt and generations” commissioned by the Consumer Credit Counselling Service, and I urge hon. Members to read it. It revealed a minority of older people with extremely high levels of debt and a notable number of older households with high repayment-to-income ratios.

For instance, 12% of over-55s have a repayment-to-income ratio of 30%, compared to only 9% of those aged 18 to 24. Also, a great many older people are less able to mitigate the effect of an unexpected bill or change in circumstance. A reduction of just £50 to their monthly income, for example, doubles the likelihood of the oldest age groups becoming financially vulnerable and, potentially, taking out costly loans to meet the shortfall. I think we all agree that it would be far more preferable for older people faced with those difficulties to approach credit unions instead.

I am conscious of the time, so I will finish by saying that the Government have taken some welcome steps with the legislative reform order and other measures. I think we all welcome those steps and I look forward to reading the Government’s study, to which their formal response on consumer credit alludes, on credit unions and how they will be encouraged to grow and prosper.

Welfare Reform Bill

Tracey Crouch Excerpts

Wednesday 9th March 2011 Commons Chamber

[Tracey Crouch (Chatham and Aylesford) (Con)]

May I begin by congratulating the Government on introducing the Bill? I firmly believe that its proposals have the potential radically to reform our welfare system for the better, and we are in dire need of such reform. Those trapped within the system, and the millions of taxpayers who pay for it, will note that Labour intends to vote against such reform later today.

It is vital that we assess the broken welfare system that this Government inherited, to put the need for reform into perspective. Under Labour, we saw ballooning welfare expenditure, an increase in workless households and the absurdity of some housing benefit awards dwarfing the average family income. The Government simply must urgently address that appalling legacy by establishing fairness and an ethos of individual responsibility as cornerstones of our welfare system.

I welcome the notion of a universal credit and the merging of a number of working-age benefits. By replacing housing benefit, the child tax credit, the working tax credit, income support and the employment and support allowance with one single benefit, we replace a tired, confusing welfare system with a simpler, more transparent one. This simplification will help to combat the serious issue of benefit fraud, which is estimated to cost the taxpayer £1.5 billion per year—another reason why the Bill ought to be welcomed on both sides of the House.

Undoubtedly the most progressive aspect of the universal credit is its potential to incentivise those who are unemployed back into work, with no one left worse off by entering employment. The previous Government created a welfare system that discouraged people from working. As a result, there is a troubling number of cases of people languishing on benefits who have become accustomed to that way of life. I see that in my own constituency.

I am proud that this Government recognise that more must be done to help get these people back into employment, either through personalised support for those who are seeking work or through tough sanctions for those who are not. Although the universal credit will act first and foremost as a safety net for those out of work, it has motivation and conditionality at its heart, which, coupled with the Government’s Work programme, which focuses on the long-term unemployed, ought to be welcomed.

I visited Canada a few years ago to study its rehabilitation programmes for those who had suffered some kind of personal injury, and I was struck by the completely different mentality. The programmes, which were often as much about psychological as physical rehabilitation, were entirely designed to get people back into work. Canada’s insurance system simply does not encourage a sit-at-home attitude; our current welfare system does precisely the opposite.

Although I am in no doubt about the positive impact the universal credit will have on our welfare system, there are areas that I believe we must be particularly careful in addressing. By creating an overarching single benefit, we have to take this opportunity to make sure that the flaws in the system are remedied. Although I congratulate the Government on addressing the way in which people with mental health conditions were treated under the previous Government, I would like a reassurance that, where necessary, carers will be able to accompany those with particular conditions to their work capability assessment. Assessments of the needs and suitability for work of those with mental health conditions must be more comprehensive, compassionate and consistent. I welcome the Government’s broad acceptance of Professor Harrington’s review of these issues.

The Bill presents the opportunity to restore faith in a broken system. Undoubtedly, we must provide the means for those who are out of work to re-enter employment, while supporting those in genuine need. A system based on conditionality, with strict requirements for out-of-work benefits, will also be fairer for the taxpayer. Most importantly, we must shift the emphasis from what claimants cannot do to what they can do.

These bold welfare reforms must be carefully implemented, and people will be understandably anxious about how they will affect their lives, but I share the Government’s belief that they are necessary and for the better, and I am confident that, in time, this will be proven.

Oral Answers to Questions

Tracey Crouch Excerpts

Monday 22nd November 2010 Commons Chamber

[Tracey Crouch (Chatham and Aylesford) (Con)]

11. what recent progress has been made on the work capability assessment independent review led by Professor Malcolm Harrington.

[The Minister of State, Department for Work and Pensions (Chris Grayling)]

Professor Harrington will publish his report on the work capability assessment tomorrow. He will be available to take questions and I hope Members will come forward and put any issues and concerns to him, and indeed to me, during the course of the day.

[Tracey Crouch]

I thank the Minister for that reply. Can he assure the House that those who have varying support needs because they have fluctuating conditions will be considered accordingly during the assessment process?

[Chris Grayling]

I am very happy to give my hon. Friend that assurance. This issue—along with that of people with mental health issues—has been of paramount importance to me, and it is one of the subjects to which I asked Professor Harrington to pay the closest attention. I hope my hon. Friend will see tomorrow that he has recommended a number of measures that will help in that respect, but I can also assure her that we will continue to review this issue. We will continue to study the process as it unfolds, and we will make further improvements as and when necessary.

Welfare Reform

Tracey Crouch Excerpts

Thursday 11th November 2010 Commons Chamber

[Tracey Crouch (Chatham and Aylesford) (Con)]

Unfortunately, there has been much scaremongering about the impact of welfare reform on those who are disabled or who have mental health conditions. Will the Secretary of State assure the House that the most vulnerable members of society will still get the support that they need?

[Mr Duncan Smith]

Yes, I can give such an assurance to my hon. Friend. We have for some time needed to simplify and streamline the current disability payments and to target the support obviously and particularly on the most severely disabled people through the universal credit, which will happen, and through reform to disability living allowance. DLA will not be incorporated into the universal credit—it will continue as a separate allowance because it is non-work related. I can promise her that that is uppermost in our minds in the design of the system.

Oral Answers to Questions

Tracey Crouch Excerpts

Monday 19th July 2010 Commons Chamber

[Maria Miller]

I thank the hon. Gentleman for his question concerning an issue that I know he cares about and puts a lot of thought into. The carers whom I have met since taking up my position feel strongly that it is not only the financial benefits and supports that are important, as they also want the ability to get into work. At the moment, one in five carers are forced to quit work rather than to carry on, as they would like to. We will therefore focus on making sure that these people get access to flexible working, personalised budgets and direct payments and, in the long term, we will have a commission for long-term care. That is how we can ensure that the support for carers is in place. There were measures in the Budget that will help to make sure that financial support is there for carers, particularly in the area of housing.

[Tracey Crouch (Chatham and Aylesford) (Con)]

There are 21,000 carers in Medway. They do an invaluable job which is often unrecognised, but the benefits system remains incredibly complex, and many are unaware of their entitlements. What plans has the Minister to simplify the system to make it more accessible to them?

[Maria Miller]

My hon. Friend has hit the nail on the head. Carers find it incredibly difficult to navigate the benefits system. We will do all that we can to remove any disincentives preventing people from going out to work. The one thing that we will not do is implement the policy of clawing back 1.5% of carer’s allowance, as the last Government did. That is the last announcement that carers would want to hear at this time.