Unauthorised Overdrafts

Yasmin Qureshi Excerpts

Wednesday 8th February 2017 Westminster Hall

[Rachel Reeves]

I thank my hon. Friend for speaking on behalf of her constituent. We have all experienced people in our patches being ripped off by banks. Frankly, that is not what people expect. They expect to be able to trust their high street bank to give them a good deal and treat them fairly, yet in my hon. Friend’s constituent’s case, that just is not happening.

[Yasmin Qureshi (Bolton South East) (Lab)]

I congratulate my hon. Friend on securing this excellent debate. She talked about the Which? report. She will be aware that NatWest customers face fees of £180 for exceeding their limit by £100 for 30 days, and that Lloyds and Santander demand £160. That is completely uncalled for.

[Mrs Cheryl Gillan (in the Chair)]

Order. I remind Members that interventions need to be very short and punchy, particularly when we have only half an hour.

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[Rachel Reeves]

I agree. What really worries me is that most of the £1 billion that is made every year from unauthorised charges is made on the backs of those who are most financially vulnerable. It is a bitter irony that it is now a better deal for some people who need short-term credit to go to a payday lender rather than their high street bank. Most of us regard banks as more reputable and fairer to customers, yet for many people that is just not the case.

Huge progress has been made on the charges faced by people who access finance through payday lenders, as my hon. Friend the Member for Makerfield (Yvonne Fovargue) mentioned, with the introduction of a cap following great work by my hon. Friend the Member for Walthamstow (Stella Creasy), so why are banks still allowed to get away with these unfair practices? There was some hope last year that this problem would be addressed when the Competition and Markets Authority undertook a review of the retail banking market. The CMA recognised the issue and the inquiry’s chair subsequently told the Treasury Committee that unauthorised overdrafts are

“the biggest single problem in the personal banking market”.

The CMA published its review of retail banking on 9 August, but frankly its conclusions and proposals were a missed opportunity. It found that overdraft users make up almost half of those with personal current accounts and that many find it hard to keep on top of their arranged or unarranged overdrafts. It acknowledged that failing to do so can be costly, since overdraft users can accumulate high costs from the complicated mix of interest, fees and charges.

The review goes on to say that overdraft users, like other personal current account customers, have very low switching rates, which is particularly striking given that they often have the most to gain from switching. One reason for that is that overdraft users can be uncertain about whether they will be able to obtain an overdraft facility from a different bank or when such a facility would be made available to them and are therefore worried about moving accounts,. Anyway, none of the major high street banks has a great offer for customers who are financially vulnerable.

When it came to remedies, the CMA’s proposals, quite frankly, fell well short of the mark. Some measures will go some way to addressing problems for some people, but not for those who most need support. One proposal says that customers need to be given clear notice when they are going overdrawn and that banks will be required to notify customers when they are going into an unarranged overdraft. Customers also need to be given the opportunity to avoid incurring charges, and the alerts that banks will be required to provide will inform them of a grace period during which they have an opportunity to avoid charges by paying more money into their account.

Critically, the CMA fell short of proposing an independently set maximum cap on the charges on overdrafts, as we have with payday loans. Instead, the report said that banks will be required to set their own ceilings on their unarranged overdraft charges in the form of a monthly maximum charge. However, most banks already have that. The problem is not that banks do not have a maximum charge—they do, and it might be £5 a day or £90 a month—but that the maximum charge is much too high.

The major four high street banks, which make up 77% of the current account market, already set their own caps on charges, and those charges can be up to £100 a month. The CMA’s proposals represent little more than business as usual for those banks. Competition in this section of the market is weak, and in the past few years it has got weaker still with the merger of many of our high street banks. Heavy unarranged overdraft users are the least likely to switch banks accounts. Banks make more than £1 billion from unarranged overdraft charges and, given the substantial revenues they generate, there is little financial incentive to lower existing charges.

Ultimately, the proposals in the CMA report might take small steps towards helping some, but for the majority of people who are already struggling and do not have the means to prevent unauthorised overdrafts even if they are alerted to them, they will do little, if anything, to help. The monthly maximum cap as proposed by the CMA will likely do nothing to stop the deepening of a person’s debt crisis, with punitive and disproportionate charges.

I do not want to deny the banks the right to charge for the services they provide, but I do want some fairness and proportionality. It is not fair to charge £5 a day or £90 a month for being a few pence over an overdraft limit, and it is not fair to whack charges on customers who are struggling with debt, in the knowledge that the charges will make their problems worse, not better. Banks need to take some responsibility for their customers.

As the Competition and Markets Authority admitted at a meeting of the Treasury Committee, the measures proposed in the report are geared at everybody and not in particular those who are financially vulnerable, for whom no direct action is proposed. When I asked whether the banks were taking advantage of financially vulnerable customers, it conceded that those customers who are least likely to switch are a “captive audience” for the banks and their excessive charges.

Ultimately, the Competition and Markets Authority report was a huge opportunity finally to put an end to what it calls “uncomfortably high” charges and to address what it said was the

“biggest single problem in the personal banking market”.

However, the opportunity was squandered. In effect, it passed the buck by asking the Financial Conduct Authority to respond to the recommendations. Peter Vicary-Smith, the chief executive of Which?, said to the Treasury Committee that the Competition and Markets Authority had left the heavy lifting and the difficult decisions for the Financial Conduct Authority to make. In response to that buck-passing, the new chief executive of the Financial Conduct Authority, Andrew Bailey, has made the welcome decision to include this issue in its ongoing review of high-cost short-term credit, which will report later this year.

The Financial Conduct Authority needs to do more to tackle the detriment caused by persistent overdraft use. I have been pleased by the focus that the FCA has placed on this issue so far, picking up where unfortunately the CMA left off. StepChange Debt Charity says that the review

“should include looking at what more can be done by lenders to support people who are trapped in an overdraft cycle and give them better and more affordable ways of paying back their debts.”

[Yasmin Qureshi]

Does my hon. Friend consider that what the banks are doing is insidious, bearing in mind that they and the Government can borrow at very low rates of interest?

[Rachel Reeves]

My hon. Friend is right. The bank rate is so low and banks are being given access to money at such low rates from the Bank of England. The problem is that they are not passing that on to their customers, and certainly not to those who most need it. The banks should be doing much more to ensure that those low interest rates are passed on, because that would give the whole economy a boost as well as helping those people who most need it.

I have been calling on and will continue to urge the Financial Conduct Authority to look at setting a cap for banks on unauthorised overdrafts as has already been done for payday lenders. It must look at such lending by banks in exactly the same way and not shy away from setting a cap for banks, too.

I also urge the Government to take action, because while the Financial Conduct Authority undertakes its review, every single day more financially vulnerable customers are being exploited and more and more are being pushed further into a cycle of debt. That is simply not acceptable. The justification for a cap in these markets has been made with the introduction of a cap in the payday lending market, and those are two different sources for the same short-term credit for people who need it immediately. They can either go to a payday lender or go into an unarranged overdraft. Whichever option they decide on to meet their short-term needs, they should not be exploited. The Government recognised that for payday lending and now need to recognise that on unarranged overdraft charges.

Frankly, it is a disgrace that the banks are charging more than payday lenders for short-term lending and getting away with it, so the Government should take action. That is why I am calling on the Minister and the Government to legislate for a cap on overdraft fees and charges, as they have already done for payday lending through the Financial Services (Banking Reform) Act 2013. That would allow the FCA to implement such a cap without delay and without the risk of the banks taking the matter to the courts.

It is not right that the banks are making huge profits at the expense of the most vulnerable. Anything less than an independently set cap on overdraft charges will not be enough. I urge the Minister and the Government to act now, and I ask that as a first step the Minister will agree to meet me and representatives of Which? and StepChange to discuss this issue further so that we can ensure that all customers are afforded the protection they deserve.

Budget Resolutions and Economic Situation

Yasmin Qureshi Excerpts

Wednesday 16th March 2016 Commons Chamber

[Yasmin Qureshi (Bolton South East) (Lab)]

They say that the first casualty of war is truth, and sadly, that seems to be the default position of the Conservative party. The country, however, has a right not to be misled by this Tory Government and by the previous Con-Dem Government, whose mantra was, to a man and to a woman, that the financial crisis had been created by the Labour party. The Government know full well that it was caused by, among other things, the sub-prime mortgages in the United States of America and the collapse of Lehman Brothers, and that many other countries faced the same financial crisis.

I hear some sighs and moans from Conservative Members. Perhaps I should take them on a trip down memory lane. When Labour came to power in 1997, the ratio of GDP to national debt was 40.4%. By 2007-08, after 10 years of Labour government, it was 36.4%. However, by 2011 it was 60%. In 1997, the total public sector debt was £352 billion. What do Conservative Members think it is now? It is £902 billion. What was the level of Government borrowing in 1997-98? It was £7.8 billion. What do Conservative Members think it is now? It is £145 billion. When Conservative Members tell us how prudent they are with the economy, that is just plain rubbish. The facts do not bear it out.

The Chancellor talks of trying to cut the national debt. It currently stands at £1.5 trillion, which is 82% of GDP. So much for the Government’s economic competence. Again in pursuit of a falsehood, the Chancellor said that the United Kingdom had the fastest-growing economy in the world. Absolute rubbish. The IMF has said that the economies of the USA, Spain and Ireland have grown the fastest. One reason why they have grown so fast is the fact that their Governments invested in their economies. The USA’s financial stimulus package is worth £831 billion, so it is not surprising that its economy recovered.

Another missed opportunity in the Budget was the opportunity to help regenerate our economy. The Chancellor cut capital gains tax, but I should have liked him to put money aside for the building of more affordable homes. When Labour came to power in 1997, it inherited millions of derelict homes that were not fit for human habitation. It spent £25 billion on trying to repair those homes, which created jobs—proper, solid jobs that allowed people to pay income tax. Of course, the building of homes does not just provide jobs for labourers; it provides jobs in related sectors supplying cement, pipes, electric wiring, baths and toilets. I suppose the Government could not care less, because to them an affordable home is a home that costs about £450,000. I am not sure that many Labour Members, or many voters in this country, could afford homes of that sort.

The Government could also have taken the opportunity to invest in renewables. So much work was going on, so many companies were producing stuff, and that was creating jobs. But what did the Government do? They scrapped all that. Now they say that there is an energy crisis, and that in order to deal with it, they will start fracking all over the United Kingdom, even though it has been well established that most fracking is dangerous. Lancashire is a beautiful county, but it seems that the Government have overridden local people’s and local authorities’ objections and granted exploratory licences, so the whole of Lancashire will be wrecked. Moreover, given the geography of the county, there is a real risk that our water will be poisoned. The Government say that they are concerned about energy, but they could have taken steps that would have saved energy, and there would have been no need for the fracking that will ruin and pollute our country. But we know that a Tory politician recently said, “Go and frack in the north, where they don’t mind. Just don’t do it in my backyard in the south.”

It is reprehensible that this Government should take money from the most vulnerable disabled people while giving others tax cuts. It is surprising to see how they really do not care about the ordinary person.

There are many other things that I could say about this Budget, but I shall end with these points. Everyone knows that hundreds of millions of pounds has been wasted on academies in the past few years. Even though there are some fantastic schools, there is no record to show that academies have better standards. Even so, the Government want to force every school to become an academy. At the same time, they talk about wanting to give local people power. They say that they want to give local people a voice in their community, yet at every stage they override the wishes of local people. This hypocrisy—

[James Berry]

Will the hon. Lady give way?

[Yasmin Qureshi]

No, I am sorry; I am coming to the end of my speech.

The other fiction that exists is that of the northern powerhouse. As a north-west MP, I have not seen that. The electrification of our railways has been cancelled or delayed, and I do not see anything else happening. This Budget is all about smoke and mirrors.

Tax Credits

Yasmin Qureshi Excerpts

Tuesday 20th October 2015 Commons Chamber

[Clive Efford]

I am taking my time, Mr Deputy Speaker.

The Prime Minister and others were asked specifically, “Will you cut tax credits?”, and the answer was no.

[Yasmin Qureshi (Bolton South East) (Lab)]

I agree with everything my hon. Friend is saying. Does he agree that this cut is being imposed because the Conservative party, for ideological reasons, does not like poor or working people, and only wants to help and enrich the rich people?

[Clive Efford]

Absolutely.

If I were to accuse people of lying, Mr Deputy Speaker, you would rightly rule me out of order, but the people out there will have to make up their own minds. When the Justice Secretary went on to Martha Kearney’s programme, he was specifically asked what the Government would do on tax credits, and he said, “No, we’re going to freeze them for two years.” I do not know what the definition of a lie is, but I know that people outside the House will make up their own minds—although we cannot use that language in here.

We know the Conservatives have lost the argument. This started at the autumn statement when the Chancellor said, “Britain deserves a pay increase, and Britain is going to get a pay increase”, but Government Members did not know when they cheered him that he was going to cut tax credits and make people worse off. Even the increase in the national minimum wage—it is not a national living wage, it is a Tory living wage—will be wiped out for those on it by the cut to tax credits.

I say to those who are upset about these proposals: it is not good enough just to have a chat in private with the Chancellor or the Prime Minister. This is where they represent their constituents—here in the House of Commons—and if they do not agree with what their Front-Bench team are telling them to do, they should join us in the Lobby tonight to vote against what the Government are doing to people on tax credits.

Oral Answers to Questions

Yasmin Qureshi Excerpts

Tuesday 9th December 2014 Commons Chamber

[Chris Ruane (Vale of Clwyd) (Lab)]

11. What proportion of recipients of tax credits are in employment.

[Yasmin Qureshi (Bolton South East) (Lab)]

13. How many employed people are in receipt of tax credits.

[The Exchequer Secretary to the Treasury (Priti Patel)]

Tax credits provide financial support to low-income households. In April 2014 there were 3.3 million families in work receiving tax credits. That had fallen from 4.8 million in April 2010. In total there are 4.7 million families receiving tax credits, 71% of whom are in work.

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[Priti Patel]

I thank my hon. Friend for his question. It is fair to say that this Government are not returning to the failed policies of the past as seen under the Labour party. The key measure explaining why we have had so much growth in our economy is our focus on our long-term economic plan, which is securing a better future for our economy, for the country and, of course, for hard-working taxpayers.

[Yasmin Qureshi]

rose—

[Mr Speaker]

The hon. Lady’s opportunity is now. Her moment has arrived; her voice should be heard.

[Yasmin Qureshi]

Thank you, Mr Speaker. Will the Minister confirm that 10 million households will be affected by the two-year freeze on tax credits and benefits and that the average household will be £974 worse off? This will hit working people the most, and women in particular, so will the Government reconsider their position?

[Priti Patel]

I come back to my earlier point about employment increasing and more women being in work than ever before. When it comes to tax credits, universal credit will go on to replace the current complex and broken system of means-tested benefits—introduced by the Labour party, by the way—and we are the party that has supported people to get into work and reduce dependency rather than confining them to dependency and welfare.

The Economy and Living Standards

Yasmin Qureshi Excerpts

Thursday 12th June 2014 Commons Chamber

[Yasmin Qureshi (Bolton South East) (Lab)]

The Gracious Speech represents a missed opportunity. We missed the opportunity to carry out a number of good things to revive our economy and give our people a good standard of living and the conditions they deserve, and that, as we all accept, is something that concerns the country at large.

I would have liked to see at least four things in the Gracious Speech. The first relates to jobs. It is important that people are secure in their jobs and properly remunerated, yet nothing has been done on zero- hours contracts, which are being abused by many unscrupulous employers. At the same time, despite the Government’s promises, the issue of the minimum wage has not been addressed. I know that the next Labour Government will confront that matter and raise the amount.

Labour has also pledged to work with the private and voluntary sectors to ensure that there is a paid job for every 18 to 24-year-old who has been claiming jobseeker’s allowance for the past 12 months or more, and for every adult over the age of 25 who has been claiming JSA for more than 24 months. That policy has been costed at £1.9 billion. Once we instigate it, it will lead to savings on other benefits.

We know that people want to work, but some are not able to do so because of high child care costs. Labour says that, to help people to work, it will allow 24 hours’ free child care for three to four-year-olds and a guaranteed access to wraparound child care through primary school. There are now 578 fewer Sure Start children’s centres and 35,000 fewer child care places. That will be changed by a future Labour Government. We believe that support for child care will help people to get back into work.

Another important issue is housing. Everyone wants a decent home in which to live, and house-building is at its lowest level since the 1920s. The previous Labour Government spent £20 billion on repairing homes, and a future Labour Government will build at least 200,000 homes by 2030, creating 230,000 construction jobs. We will also ensure that local councils have “use it or lose it” powers over developers who hold on to land with planning permission and do not build homes on it. We will also establish a help-to-build guarantee scheme to increase access to finance for small builders.

Rising energy prices was another issue that was missing from the Gracious Speech. If Labour comes into power, we will freeze prices until 2017. All of the issues I have mentioned should be addressed.

Consumer Rights Bill

Yasmin Qureshi Excerpts

Tuesday 13th May 2014 Commons Chamber

[Philip Davies]

It is a pleasure to follow the hon. Member for Walthamstow (Stella Creasy). I was, surprisingly, rather encouraged by her response to my amendments. It could be a red-letter day for me, getting support across the House for some of my amendments.

I want to focus mainly on new clause 13, which is about the labelling of halal and kosher meat at the point of sale. With your permission, Mr Deputy Speaker, I will seek to press it to a vote, should the opportunity arise. It is an issue of great importance to the public, and we have heard an awful lot of commentary on it in the media and among many of our constituents in recent weeks. They would appreciate seeing where their Member of Parliament stands on the issue.

[Yasmin Qureshi (Bolton South East) (Lab)]

When the hon. Gentleman says that the issue is of great importance to the country, he means the Daily Mail and The Sun.

[Philip Davies]

The hon. Lady needs to get out more, to be perfectly honest. She would find that there is widespread concern about the issue. She can vote accordingly and should not have anything to fear from a debate or a vote. I do not see why she should seek to object to either thing—that is what we are supposed to be here in Parliament to do, after all.

As you know better than anyone, Mr Deputy Speaker, I enjoy the cut and thrust of debate in the Chamber, but I am well aware of the time limitations and that other Members want to speak. I have given way once, but I will try to resist the temptation to give way many times because I want to hear what others have to say, too, and there is a lot to get through.

--- Later in debate ---

[Andrew Percy]

I want to speak primarily to new clause 22, but first let me briefly speak in support of new clause 14. I thought I was the only person who had problems with switching, believing it to be another in the long list of failures in my life, but since I got elected I have realised that there is a massive issue to address so I fully support that provision. I have some sympathy with new clause 13, as I would like to see better labelling, but I am not sure I can support it as drafted.

On new clause 22, I should declare that I do not have any buy-to-let properties—I struggled enough to qualify for one mortgage, so the idea of qualifying for a further mortgage is probably a bit of a joke. Going through the list of other Members who have relevant interests, I noted that an awful lot of them were on the Opposition Benches. I assume that no Labour Members who rent out a property do so through a letting agent that charges fees, because to do so would be to fall foul of a word we are not allowed to say in here.

With this new clause we have a campaign going on. We have student union politics at the moment whereby the Opposition pick an issue and throw it out there in the hope it gets some traction. They do not think it through; there is nothing more to it than that. This time the issue is letting agent fees. It is my belief that they have not spoken to the letting agents or to many of the tenants who have to pay the fees—if they had, they would not be proposing this measure in such a way. I want a sensible debate on this, but we do not get it. As I have said, what we have had is an orchestrated campaign in which Labour opponents, many of whom live in massive houses in particular constituencies, have been told by the Labour party centrally here in London to parrot a particular line. They do not care about it to the extent that they have ever stood up and talked about it before. My Labour opponent, who wrote to me about this, certainly never had a word to say about it before she was told to do so by Labour headquarters in London. That is what is going on here. We are not having a sensible debate about this measure, which hits some of the big cities such as London, or about repeat fees. Labour has taken this scattergun approach in the hope of trying to drum up support for the measure, but what will happen is that rents will go up, because these charges will not disappear; the tenant will have to pay them in some way.

In many houses in my constituency, particularly in Goole which is relatively poor, the landlords do not charge bonds. They say is that if they cannot charge a relatively small fee—the biggest company in my constituency, Goole Property Centre, does not charge repeat fees or fees to people who do not then get a property—they will charge bonds instead. The cost of getting into a property to begin with could double or quadruple in my constituency.

I can tell Members what some of the letting agencies use their fees for. A large number of those who are renting are foreign tenants, and the agencies try to provide somebody who speaks their language and who gives them additional support, often getting them signed up to gas and electricity. They also help out with some of the simple things, which lead to a huge number of letters in my postbag. I am talking about things like bin collections—how to follow the rules—and community cohesion problems, which occur when large numbers of foreign migrants live in homes in multiple occupation. Landlords use their letting fees to subsidise such activity, and that is what will disappear. This is an ill-thought out policy from the Labour party. Let us have a sensible debate about it. The hon. Member for Sheffield South East (Mr Betts) said that it was too early to make a decision, because we need to see what happens with the trial in Scotland. Unfortunately, Labour has decided not to wait, but wants to continue with a student union type approach to try to build something around the cost of living issue. It is a bit pathetic in my view, which is why I will not support this measure until we have a proper and sensible debate.

[Yasmin Qureshi]

I am concerned about the way in which this debate on halal and kosher has been taking place in the country and about some of the things that have been said in the Chamber. At the heart of this debate is a suggestion that somehow the halal and kosher slaughtering processes are more painful for the animal than the stunning process. Some 90% of the meat in this country is stunned, so we are talking about just 10% of meat. I am sure that Members can see behind what the hon. Member for Shipley (Philip Davies) is saying. He claims that the whole country is concerned about the issue. As somebody who is virtually a vegetarian, but occasionally will eat meat, I am concerned not just about the rights of animals but about the issue of experimentation on animals, which I speak up about and campaign against. The newspaper that is going on about halal meat does not talk about experimentation on animals, which is real cruelty. We know that it just wants to have a go at one particular group of people. I want to deal with one central question, which seems to be the accepted wisdom of everyone here, and that is whether the kosher and halal method of slaughtering is more painful.

A scientific study was carried out by Professor Schultz and his colleague at Hanover university in Germany. They took one group of animals and followed the halal and kosher slaughtering process, and then took another group and followed the stunning process. They placed electrodes on the animals concerned and monitored the level of pain experienced by the animals. If anyone is squeamish here, they can place their hands over their ears. This is what they said about the halal method:

“The first three seconds from the time of Islamic slaughter as recorded on the EEG did not show any change from the graph before slaughter, thus indicating that the animal did not feel any pain during or immediately after the incision…For the following 3 seconds, the EEG recorded a condition of deep sleep—unconsciousness. This is due to the large quantity of blood gushing out from the body…After the above-mentioned 6 seconds, the EEG recorded zero level, showing no feeling of pain at all…As the brain message…dropped to zero level, the heart was still pounding and the body convulsing”—

at this point, the Royal Society for the Prevention of Cruelty to Animals and other organisations might say that the animal is suffering, because it is convulsing, but the reason for that is not pain, but that the blood is leaving the body and the bones in the body structure are convulsing. That is not pain—[Interruption.] I wish hon. Members would listen.

With the stunning method, although the animal appeared to fall unconscious after the stunning, in fact the EEG graph

“showed severe pain immediately after stunning”.

Let us be realistic about stunning. It is not a nice little prick; it is done via an electric shock or sometimes, with some animals, a pistol. We are not talking about a painless death.

[Mr Philip Hollobone (Kettering) (Con)]

Will the hon. Lady give way?

[Yasmin Qureshi]

No, I will not, because I only have a few minutes.

The third thing to notice is that the

“hearts of animals stunned by C.B.P. stopped beating earlier as compared to those of the animals slaughtered according to the”

halal meat method. No one wants to talk about the science, because the accepted wisdom goes with the prejudice that I am sorry to say certain newspapers in this country show towards certain groups without looking at the evidence.

[Nigel Adams (Selby and Ainsty) (Con)]

Will the hon. Lady give way?

--- Later in debate ---

[Yasmin Qureshi]

No; as I said, I am not going to give way.

I am very concerned about how animals are treated and reared and concerned that they should not be treated cruelly when they are transported. We should have a proper scientific debate about slaughtering, because the evidence is out there. Concern is perpetuated because most people do not know how the halal or kosher methods of slaughter take place. If they looked into the studies that have been done in America—I do not have the time to go into all of them—they would find that this is a proper system with the animal’s level of pain being monitored—[Interruption.] I know that Government Members do not want to hear this, but I am sorry: they are going to have to listen to me. I have the Floor, and I am not—[Interruption.]

[Madam Deputy Speaker (Mrs Eleanor Laing)]

Order. The House must listen to the hon. Lady.

[Yasmin Qureshi]

Thank you, Madam Deputy Speaker.

I am probably saying something that a lot of people are finding a bit difficult to swallow, but it is about time that the counter-argument and the full facts were presented to the country and to Parliament. For far too long, the debate has been skewed, because certain sections of the media want to deal with just one aspect, but they are misleading people. A myth is being perpetuated that somehow kosher and halal methods, carried out as they should be, are more painful and cause more suffering to the animal, but that is incorrect. The stunning method is probably more painful, so banning things or labelling based on “humaneness” or whether animals are being treated properly is wrong. I want to say more, but I will leave it at that, because others want to speak.

[Julian Sturdy (York Outer) (Con)]

I will not detain the House for long. I want to talk about new clause 13. I was hoping that my hon. Friend the Member for Shipley (Philip Davies) would not divide the House on it, but it has highlighted yet again the extremely important issue of food labelling and consumer choice, and the work that still has to be done.

I start with a simple principle and question. Should consumers be allowed to know where their food has come from, how it has been prepared and how it has been slaughtered? For me, the answer to that simple question is yes so that consumers can make an informed choice. However, I accept that the issue is more complicated than that and more complex than this simple new clause. I am not being critical of my hon. Friend when I say that, and I completely understand why he has worded it as he has. However, although I have great sympathy with new clause 13, I cannot support it as it stands.

Budget Resolutions and Economic Situation

Yasmin Qureshi Excerpts

Wednesday 19th March 2014 Commons Chamber

[Yasmin Qureshi (Bolton South East) (Lab)]

There was much in the Chancellor’s speech with which I disagreed, but at least I gave him the courtesy of listening, unlike Government Members, who gave no such courtesy to the Leader of the Opposition. In fact, when my right hon. Friend was talking about the crisis of living standards, there was a great deal of laughter among Government Members. The country will have seen exactly what they stand for.

The Chancellor began his speech—and Government Members have repeated this—with the mantra, “Oh, the recession was caused by the Opposition.” Somehow, it was financial mismanagement by the Labour Government that caused the economic crisis. That is not true, because there was a worldwide recession. Perhaps I can help Government Members with some facts and figures. When Labour came to power in 1997, the ratio of gross domestic product to national debt was about 47%, but by 2001, after four years of Labour government, that percentage was in the low 30s. [Interruption.] It came down to 33%, so it was 10% less than it was when the Conservative party was in power. It was not until 2008-09 that the ratio of GDP to national debt went up. Everybody knew why it did—there was a global recession. At the end of the day, the Labour party was not in power in the USA, Japan, Germany or other countries. To claim that the financial crisis was somehow caused by the Labour party’s mismanagement is complete and utter nonsense. Government Members should really stop peddling these myths and lies.

[Damian Collins]

The hon. Lady has missed out the fact that the Labour party was running a deficit before the recession, when the economy was growing. That is why we were in the mess we were in.

[Yasmin Qureshi]

That is absolutely wrong. A few years after we came into office, the amount of the receipts coming in was more than the national debt, the GDP net. After the debate I can certainly give the hon. Gentleman the facts and figures from the Institute for Fiscal Studies, which show how prudently we looked after the economy. Yes, we spent, but guess what? We spent on hospitals and schools. We took millions of children out of poverty. We provided working tax credits for poor families. I do not remember Opposition Members at the time complaining when new schools and hospitals were being built or refurbished in their constituencies. I do not remember any Members complaining about that. That was real investment. The suggestion that the previous Labour Government spent money on throwing parties or something is ridiculous. It was real investment in our country’s infrastructure, which created jobs and made ordinary people’s lives better.

[Mr MacNeil]

The hon. Lady says that no Members complained when schools were built in their constituencies, but they did. I remember writing long letters about the private finance initiative and the false comparison with the public sector, which was based on a false equation. I think they were built expensively under the Labour Government. I am sorry to have to bring that up after she was so generous in giving way.

[Yasmin Qureshi]

I agree that there were some problems with PFI. I am not one of those who say that everything was perfect. However, to suggest that spending on our country’s infrastructure, which created jobs, made people better off and led to between £80 billion and £90 billion being spent on the national health service, was somehow a waste of money is, I think, a real insult to the people of this country.

If my memory serves me correctly, the Opposition at the time agreed fully with the Government’s spending analysis. They did not object to any of it and said that they would carry on spending at the same rate. Therefore, to try to suggest that somehow money was spent recklessly is absolute rubbish. The myths that Government Members have been peddling for the past four years should stop. The Government parties should recognise that they have been in power for four years and should start thinking about what they have done.

We know that on average families are £1,600 worse off. Energy prices have gone up and up. We have said that there should be an energy price freeze until 2017. If the Government really want to help ordinary people, why do they not do that and reform the energy sector? The education maintenance allowance, which helped 16 to 18-year-olds from poor families to stay in school, was abolished, which again hit the poorest in our society the hardest. The Chancellor today announced a new garden city, but it has taken him four years. We have been arguing for four years that more house building projects are needed. It is great that something is now happening, but we have had to wait too long for it.

I would like the Chancellor to have frozen energy bills until 2017, which would have been really helpful. Young people should have been put back to work with a jobs guarantee scheme, which we have said would be funded by a tax on bankers’ bonuses. Free child care should be extended to 24 hours for three to four-year-olds, and we should also cut taxes for 24 million people on lower incomes, with a lower 10p starting rate of income tax. That would help a lot of ordinary working people. The Government should also cut business rates for small firms so that we can create more jobs. That, too, would help ordinary people and small businesses.

Finally, we should consider the issue of equality, pay gaps and wealth distribution. It is said that things are better now than 28 years ago, but recently there have been various articles and a lot of discussion about the fact that the pay gap is too large. Even the International Monetary Fund, hardly a hotbed of communism, has said that countries with a great deal of inequality have economic as well as social problems as a result. Steps should be taken to narrow the gap even more. There should have been real measures to tax the really wealthy in our society, especially their homes, so that we can reduce the gap.

Even Her Majesty, who is not known for getting involved in the political issues of the day, has expressed concern about the level of poverty and the situation of the poor. If the Queen starts getting involved in these issues, that is a wake-up call for everybody—not just for the Government, but for my party. However, the coalition is in power and it should be looking at the issue of inequality.

Apart from the fact that it is only right that society should be more equal and fair, addressing inequality makes economic sense. Problems with mental and physical health often arise from financial difficulties and cost the economy about £40 billion. Addressing inequality makes sense, but there was nothing in the Chancellor’s speech that helps the ordinary working poor person.

[Several hon. Members]

rose—

--- Later in debate ---

[Simon Danczuk]

I will not give way. These trains were needed in the north to provide vital links between our cities. There is no better example to show where this Government stand and what their priorities are.

Let me give the House another example: the new homes bonus. According to the National Housing Federation, it has taken £104 million from councils in the north and given £342 million to councils in the south, stuffing money into the back pockets of well-off local authorities—that is the reality of it. The regional development fund was supposed to counter many of these issues by pumping regeneration money into the north of England, but even that has been a failure under this Government, with more than £2 billion of the £2.6 billion budget still lying in Government coffers—it has not even reached the targets it was supposed to reach.

Perhaps the worst example of this Government’s southern bias is the way that they have treated business rates. Delaying the revaluation of business rates was a cynical and calculated move designed only to insulate southern businesses from paying fair rates. That is the reality. We now have the ridiculous situation in which struggling retail centres, such as Rochdale high street, are effectively subsidising places such as Regent street in London where business is booming. It is outrageous, and business people in the north of England are quite rightly furious about it.

[Yasmin Qureshi]

Does my hon. Friend think that the reason for this unequal distribution of resources is that there are hardly any Conservative MPs in the north-east and the north-west?

[Simon Danczuk]

I appreciate the intervention. The reality is that the Government are writing off the north of England, because they know they will not have any success there in the forthcoming general election.

Financial Services (Banking Reform) Bill

Yasmin Qureshi Excerpts

Wednesday 11th December 2013 Commons Chamber

[Mr Speaker]

Order. I should explain to the House that I have exercised some latitude so that the hon. Member for Chichester (Mr Tyrie) could offer a bit of background on the parliamentary investigation. I did that because I thought that it would be genuinely helpful to the House and because there would be no other opportunity for those observations to be made. That said, I would not want it to be thought that that will be the normal rubric on these occasions. The normal rule of thumb, which must continue to apply, is that Members should attend to and focus their remarks exclusively on the amendments and should not engage in what might be called a wider dilation. I hope that that is helpful to the House.

[Yasmin Qureshi (Bolton South East) (Lab)]

I will bear in mind your observations, Mr Speaker, but I hope you will indulge me if I occasionally say something a bit different. I will of course spend most of my time on the amendment.

I want to set the matter in context. I volunteered to serve on the Bill Committee. I am told that it is traditional for Members to have to be nudged into serving on Committees for Finance Bills, unless of course they are Ministers or shadow Ministers. I wanted to serve on the Committee perhaps because I am a bit geeky or because I am interested in esoteric things; perhaps it is because of my legal background that I am interested in these matters.

I also had a more serious reason for volunteering. We need to bear in mind that this country’s economy relies heavily on the financial services industry, and that a massive banking and financial crisis occurred in 2008, not only in the UK but in similar economies around the world. We know that the crisis started as a result of the collapse of Lehman Brothers and of the sub-prime mortgage market in the United States, which led to the collapse of many banks around the world. Economies like ours—in the USA, Japan, France and Germany, for example—suffered as well.

--- Later in debate ---

However, the Government will do more. We want to put an end to the unfair costs of borrowing from payday lenders and to prevent the spiralling costs faced by those struggling to repay.

[Yasmin Qureshi]

We welcome the change, but it will not start until January 2015. Our amendment (a) says that it should start from October 2014, because people spend the most, and often build up the most debt, in the period up until Christmas. Therefore, what is the harm in bringing the date forward by three months?

[Sajid Javid]

If the hon. Lady will allow me, I will answer her questions when I consider the amendment she mentions.

There is a growing evidence base, including lessons from other countries, that a cap on costs is the right way forward for consumers. That is why the Government tabled an amendment in the other place to require the FCA to impose a cap on the cost of high-cost credit and short-term loans—not just an interest rate cap but a cap on all fees and charges, including default charges and roll-overs.

--- Later in debate ---

[Sajid Javid]

I assure the hon. Gentleman that we as a Government have spoken to many stakeholders, including hon. Members, on this issue. Many people have done a good job and deserve credit for looking at the evidence in more detail.

[Yasmin Qureshi]

rose—

[Sajid Javid]

I will take this as a final intervention, because I need to plough on in the interests of time.

[Yasmin Qureshi]

I thank the Minister for giving way; it will not take long. Following the point made by my hon. Friend the Member for Cardiff South and Penarth (Stephen Doughty), will the Minister also congratulate my hon. Friend the Member for Walthamstow (Stella Creasy), who has played a great part in raising and campaigning on the issue?

[Sajid Javid]

I will. The hon. Member for Walthamstow, my hon. Friend the Member for Worcester (Mr Walker) and many other Members have shown great concern in this area and have made a welcome contribution to the debate.

Cost of Living

Yasmin Qureshi Excerpts

Wednesday 27th November 2013 Commons Chamber

[Sajid Javid]

The hon. Gentleman needs to listen more closely to my remarks. He will be interested to know that unemployment increased by 104% in his constituency during Labour’s last term. The bail-outs and the other action the previous Government took did not help unemployment in his constituency but, thankfully, under this Government, unemployment there is down by 24%.

It is good to remind ourselves that office and government are a privilege given to us by the people of the United Kingdom. We are the tenants; the British public are our landlord. The Labour party was the tenant who trashed the house. It is left to this Government to clean up its mess.

We need to treat the public with the respect they deserve. We know that times are tough. Labour left our country a lot poorer, and families are feeling it. That is why we had to put in place a long-term, sustainable economic plan to fix things.

[Yasmin Qureshi (Bolton South East) (Lab)]

The Minister says that Labour left the economy in difficulties or a mess, but does he accept that, in 2006, the GDP to national debt ratio was about 42%, whereas it is now 91%? How is that responsible?

[Sajid Javid]

The hon. Lady—[Interruption.]

Money Transfer Accounts

Yasmin Qureshi Excerpts

Wednesday 17th July 2013 Westminster Hall

[Rushanara Ali]

I thank the hon. Lady for her intervention. She has added an important perspective to the debate, which is that the issue also affects countries that people might not have thought about.

I commend parliamentarians, because some 46 Labour MPs have already signed a letter to Barclays, and I know that the all-party group on Somaliland and Somalia has also made representations to the Government. MPs and parliamentarians from both sides of the House, and many other people, have raised the alarm bell with the Government. That highlights our deep concern about how decisions that have been made in the past, not just by Barclays but by other banks such as HSBC, to remove banking facilities that are affordable for hard-pressed families who are trying to get support to other parts of the world, have been supported rather than punished. We should encourage people to give, and I hope that the Government will consider the issue closely.

According to the Financial Times, more than 250 money transfer companies are now facing closure following the decision by Barclays to withdraw the service. Other banks have already withdrawn it, so the suggestion that those small and medium-sized companies could go elsewhere is nonsense. We need to ensure that the decision of those banks does not send a signal to other banks that there is something wrong with such businesses and that other banks should not do business with them, which is essentially what has happened. That is the insidious conclusion that is being drawn at the moment. Allegations are being made that those businesses, many of which are in our constituencies, are engaged in activity that is not legal.

Barclays has said to me that it is concerned about only the 1% of companies that represent 46% of the problem. The Government and regulatory authorities should consider how to assist Barclays and other companies that need to clean up operations where there are problems. If that 1% is a problem, assistance should be provided to address that problem rather than involving the 99%, in the case of Barclays, that do not pose a problem. If that logic were applied to the banking sector, for instance, we would not have a banking sector left. I ask the banking sector to have some empathy and to think about what the consequences would have been for it if, during the financial crisis, all companies in the sector had had to be shut down just because there were certain bad apples.

I hope the Minister will consider the issue and answer the question about how we can focus and zoom in on the areas where there are cowboy operators, which none of us want. The diaspora and ethnic minority communities in this country and across the world do not want to see cowboy operators; they want legitimate, well regulated mechanisms for sending money to loved ones.

As I said, 45 other MPs and I supported the letter to Barclays bank that the Minister has seen, and I look forward to hearing what he, his Department and the regulatory authorities will do to try to help with this important matter. We are asking for some breathing space. We are asking Barclays—I do not believe this is an unreasonable request—to extend the date from August by another six months to give the Government, the regulatory authorities and the Minister the breathing space to bring people together, including the British Bankers Association, the banks and interested parties such as the money transfer agencies and the communities that use their facilities, wherever possible, to arrive at a solution that does not lead to the industry’s closure.

More than $3.2 billion of remittance a year is sent from the UK, and remittance amounts to some $530 billion worldwide, which is more than the total global international development budget. We must act internationally in concert with our American partners. The decision to apply fines to Standard Chartered and HSBC has led to the decision by UK banks such as Barclays to stop remittance facilities. Frankly, the companies have nothing to do with what has happened in the US with the breaching of sanctions, or with the other cases in which banks have been involved, but they are being punished.

If we do not find a way to address the problem, the risk is enormous, because there will be no legitimate ways for people to send money to remote parts of the world. Of course, there is virtually no way for people to get assistance to countries such as Somalia through a legitimate route. We need a constructive way forward, and I hope the Minister can explain how his Department and officials will work with the banking sector to develop an industry-wide solution so that we can ensure that the remittance and money transfer industries are strengthened in light of the crisis, rather than destroyed.

I also hope that the Minister will consider that if banking facilities to money transfer agencies end, what is likely to happen is what used to happen before a regulated mechanism was in place. On the whole, people who are not wealthy want cheap and affordable means to get assistance to their loved ones, particularly in times of desperation and crisis, such as when a family member has died and money needs to be sent quickly for burials and associated costs, or when there is an urgent health care emergency, likely or actual conflict or a humanitarian emergency, as was the case in Somalia and the rest of east Africa in 2011 and as is likely to happen in future. If there is no legitimate route to send money, there is a major risk that the industry will be driven underground and that clandestine mechanisms will be used to get money to family members. If that happens in the billions of pounds, we will not be providing remitters with the back-up, support and legal mechanisms to send money safely to their loved ones. It will also mean that some countries are unlikely to be able to monitor the amount of money flowing into their economy, leading to inflationary pressures.

Furthermore, there are security issues. People worry, rightly, that their money might end up in the wrong hands, and potentially in the hands of extremists. In countries such as Somalia and Somaliland, there are grave concerns about that risk.

[Yasmin Qureshi (Bolton South East) (Lab)]

I congratulate my hon. Friend on securing this debate. She mentioned that more than £2 billion in remittances is sent abroad. It is important to emphasise that although that is a large amount, people often send small amounts— £50 or £100—to their family. Small businesses are therefore incredibly important to people without a lot of means who send small amounts of money.

[Rushanara Ali]

My hon. Friend is absolutely right. The amounts of money are often small. People work hard to make a living and provide a bit of support. I know that because many of my constituents tell me stories about how they are supporting the education of distant relatives or immediate family members by sending them money every month. During Ramadan, which we are in right now, people have a duty to give charity, or zakat. They want to give it to people they know who are poorer, and not through charitable organisations, where administration costs are high compared with direct giving. There are many occasions on which people give small amounts of money. For example, the Muslim community in Britain contributes £100 million in charitable giving during the month of Ramadan alone.

A local activist in my constituency recently said:

“There is simply no other legal way of sending money to Somalia. If these firms are closed, it just means people will have to carry large amounts of money from airport to airport, and all that’s achieved is that everyone will end up a criminal.”

We cannot risk criminalising people who are simply trying to support their families.

Another major opportunity is at risk. Ethnic minority communities have insights and connections in their countries of origin. I see that in my constituency, as I know other right hon. and hon. Members do. They have insights into how to trade with their countries of origin, and affordable remittance facilities are critical to doing so. We are closing off opportunities for small businesses to operate and develop. It is also costing more than 3,000 jobs here in the UK and jobs in those countries.

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[Simon Danczuk]

That is exactly the point that I am leading on to. People in my community send money back to their families—in this instance, in my constituency, to Pakistan, Kashmir and Bangladesh. At this important time of Ramadan, as my hon. Friend the Member for Bethnal Green and Bow pointed out, people rely on the businesses that we are discussing to help them send charitable contributions to the countries from which they originate. We should not underestimate that. Friends and families out in other countries may be exceptionally poor and reliant on such charitable donations, in particular at this important time of year of Ramadan, to help them to celebrate Eid and to buy new clothes, so that they can have a reasonable time at a key point in the Islamic calendar. As a result of the changes, my constituents, instead of being able to use a good, local and independent firm, which complies with all the regulations, will have to use one of the banks, Western Union or MoneyGram.

[Yasmin Qureshi]

On the point about small businesses following regulations, may I share with my hon. Friend my experience of sending money abroad? In my constituency, the regulations are followed with passport copies, addresses and so on. Does he agree that it is disingenuous of the banks to use that as an excuse for not carrying out transactions for those companies?

[Simon Danczuk]

Absolutely. That does seem to be an excuse, and is the crux of where we are.

Another point that has been made clear to me is that without the small independent firms in towns such as Rochdale, my constituents, instead of paying a flat fee of £5 and receiving a good exchange rate, will have to use Western Union or MoneyGram, pay a flat fee of £20 and receive a less competitive exchange rate. They will have to use a less local and less personalised service and pay more for it. That is the consequence, which can only be described as outrageous.

I have some points for the Minister to consider. First, why is Barclays closing these accounts after it made businesses spend thousands of pounds on compliance? Secondly, why are Western Union and MoneyGram not affected? I believe that Western Union in registered in southern Ireland, not the UK, for tax purposes and perhaps that is an issue in its own right. Thirdly, will the banks benefit and start to do the sort of business that they are denying small independent firms from doing? The changes will push such businesses underground, which could feed the criminal fraternity. I urge the Minister to do all that he can to remedy the situation.

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[Mike Gapes (Ilford South) (Lab/Co-op)]

I apologise to my hon. Friend the Member for Bethnal Green and Bow (Rushanara Ali) and to the Minister. I have a Select Committee meeting at a quarter to 4 and hope that they will accept my apologies for having to leave.

I want to comment briefly on two things. First, my hon. Friend the Member for Cardiff South and Penarth (Stephen Doughty) referred to the position taken by Ministers at the beginning of July; but unfortunately, I am going to disappoint him. I have received a letter dated 10 July from Lord Deighton, in response to representations that I made in June on behalf of constituents. He said:

“I hope your constituents will be able to secure banking facilities from another bank, or make alternative contractual arrangements, rather than close. I cannot oblige the banks to make facilities available. The choice of business customer is a commercial decision for banks to make.”

He simply refers to the fact that the Office of Fair Trading will examine support for small and medium-sized enterprises later in 2013.

As for the 12 August deadline, which businesses in my constituency face, I received a letter from a Mr Duale of the largest organisation that transfers money to the Somali community—other Members may have received the same letter—and it pointed out how just a few weeks after the international Somalia conference in London, when we pledged £180 million of support, the damage implied by the decisions that have been made could outweigh that increased support.

Other hon. Members have talked about the effects elsewhere. I have constituents in various organisations who are very concerned about the impact in countries all over the world. My constituent Mr Shah of Zak Money Exchange, Ilford lane says that the business could close and that eight employees would lose their jobs. He raised the same concerns that others have raised: why cannot the nationalised banks do more? Barclays may have got into trouble, and we have heard about Mexican drug barons and money laundering, but why cannot other banks do something?

Barclays’ reputational damage in this country is an issue. I suspect that many people who will be affected by what is happening will have bank accounts—their own commercial bank accounts for their small businesses, or personal accounts. It is not good for Barclays’ reputation if the perception arises among millions of British people that it has a down on the poor and on migrant communities. Barclays should consider that carefully.

As for Western Union, there is a wider issue to do with the relationship between the United States, the US authorities—perhaps in particular US jurisdictions—and their way of dealing with extraterritoriality. We have the potential through the forthcoming European Union-US negotiations, which are to do with trade and international co-operation, to exert pressure back from the European side. Britain is more significant than many European countries in such matters, but we should not ignore the potential to raise with the US authorities, at all levels, the effect of their behaviour globally on communities in the UK, in the wider European context and worldwide. That is a matter for another debate—perhaps tomorrow—but I want to highlight the need for us to be more robust about the issues.

It is true that we need to eradicate money laundering, crack down on terrorist and drug financing, and all the rest. However, an alternative to the present arrangements is that people will start to take money in suitcases through airports and smuggle it across borders, making themselves vulnerable to being taken prisoner—to hostage taking, banditry and piracy. That is a bigger global threat than some of the other problems that are cited.

[Yasmin Qureshi]

I should like to comment on the point about fears of money laundering and drug dealing. People in my constituency—I do not know about other parts of the country—who use small companies to send remittances are hard-working people who earn very ordinary amounts of money. They send very ordinary amounts: £50, £100 or £150. They do not send thousands and thousands of pounds, and therefore those small businesses feel insulted that somehow they are being tarnished by the suggestion that they are laundering money.

[Mike Gapes]

People are right to feel that way, because it appears on the one hand that Barclays and on the other that the Government do not care. The Minister says, “This is a commercial matter and we are not going to get involved.” However, Barclays, without giving reasons to people in small money exchange firms, is simply saying, “Sorry, we are no longer prepared to deal with you.” It is not saying that those people have done anything irregular or illegal; it is saying only that the facility is no longer available. That is terrible.

In a wider context, we have been criticising the banks for their failure to support small and medium-sized enterprises; yet it seems in this context that the Government are not prepared to get off their seat and do anything to help the poorest communities globally and the people in Britain who are trying to transfer money, which, as has been said, is a larger amount than the international development assistance that is transferred from states to countries and people in the poorest countries in the world. Instead, the Government say, “This is nothing to do with us. This is simply a commercial arrangement.” I am sorry, but that is not good enough.