Financial Services Bill

Debate between Yvonne Fovargue and Andrew Mitchell

Report stage & 3rd reading & 3rd reading: House of Commons & Report stage: House of Commons
Wednesday 13th January 2021 Commons Chamber

[Yvonne Fovargue (Makerfield) (Lab) [V]]

It is a pleasure to follow the hon. Member for Blackpool North and Cleveleys (Paul Maynard). I, too, want to focus on new clause 7, but I also want to mention breathing space, which is addressed in new clauses 22 and 23, and the statutory debt repayment scheme, which is dealt with in clause 32. We all know that BNPL has exploded in the past year. More and more retail outlets, and even online gambling companies, are using it, and it is being sold to companies on the basis that, on average, customers spend 40% more. It is also being sold to customers as an easy way to spread the load, with the thought, “There are no credit checks so it is not debt.” But of course it is, because people are using someone else’s money to pay and it then has to be repaid. I looked into the business model for one company and found that 25% of its income is predicated on late fees and people being unable to pay on time. Surely that has to ring alarm bells, with the echoes of the high-cost lenders and their practices. The regulation is needed sooner rather than later and I look forward to a swift response to the Woolard review.

Breathing space is welcome, and I have long called for it; 60 days will often be enough, but there will be a need for flexibility in exceptional circumstances. The scheme was designed prior to the pandemic, where people are furloughed, have lost their job or have a period of illness, and 60 days is not long enough to give people time to recover from a temporary financial difficulty caused by the pandemic and set up a long-term solution. People affected by the pandemic simply need a bit more time to straighten themselves out. I also think that the midway review needs to be looked at again. It simply wastes time and resources, which are scarce in the debt field.

Breathing space alone is not enough, however, given the impact of coronavirus on household finances. Bailiffs’ visits should be suspended, as they were during the first national lockdown, and other enforcement action should be halted when a debt adviser alerts the creditor that a client has financial or other issues due to coronavirus. We should also be suspending the use of non-priority benefit deductions from universal credit and bringing forward plans to extend the repayments over a longer period.

Moving on to the statutory debt repayment plan, I am pleased that the intention is that people seeking debt advice should not be charged for any aspect of the plan. It has always seemed counterintuitive that people in debt should be charged to get out of the very same debt. However, there are areas that need to be tightened—for example, where creditors are objecting to the level of payments. That needs to be seen within the existing debt advice methodology and budget standards. We cannot have creditors objecting just because they do not like the level or they think that someone else has more. There is a common standard, and creditors need to accept that.

In general, the Bill is a welcome step forward in assisting people in debt, but the landscape of debt solutions is complicated and difficult to navigate. I believe that a full review of all debt solutions needs to be undertaken to clarify and simplify, and to ensure that people in debt are always able to access the solution that best suits their needs.

[Mr Andrew Mitchell (Sutton Coldfield) (Con)]

I draw the House’s attention to my entry in the Register of Members’ Financial Interests. I rise to say just a few words about new clause 4 and amendment 7, both of which I support. New clause 4, on the facilitation of economic crime, has been ably tabled by the right hon. Member for Barking (Dame Margaret Hodge), who, together with me and many others across the House, has sought to drive forward this agenda. The agenda is driven forward by the Bill, which has been so ably handled by my hon. Friend the Minister. It goes with the grain of Government policy and builds on the changes already achieved. I do not think that the House should be divided on it today, but we should send a signal to the Government about the importance of pursuing this agenda.

We have, as I said, achieved considerable change. The right hon. Member for Barking and I managed to persuade the Government to introduce open registers of beneficial ownership, both for the overseas territories and now for the Crown dependencies. The Foreign Office was not in favour of that at the time, but it now strongly supports it, so progress can be made. We are building on the excellent G8, where these matters were first championed by David Cameron as Prime Minister, and also on the recent US legislation. The evidence of the Paradise and Panama papers showed without any doubt the sophistication of financial advisers and the fact that there is an inequality of arms in so much of this. They are ahead of the financial enforcement authorities, and we need to be aware of that. The Bill helps, but new clause 4 would drive the matter further forward in clamping down on the facilitation of economic crime. I hope that the Minister will send a clear message on that when he sums up. I would also say to him that the reforms to Companies House led the world, but the trouble is that Companies House has become a sort of library, rather than an investigator. What it needs is more resources, and I very much hope that he will make the point across Government that Companies House with more resources would be an extremely valuable tool in the fight against economic crime.

Amendment 7—the genocide clause, as it were—has been tabled so ably by my right hon. Friend the Member for Chingford and Woodford Green (Sir Iain Duncan Smith). He makes the point that money cannot somehow be divorced from its provenance. We have had much focus on money laundering, on dirty money and on money stolen by corrupt dictators from Africa, by business people and by warlords. Shining the light of transparency on this is incredibly important, and this is a good amendment because it underlines our abhorrence of genocide. I have worked with much pleasure with the hon. Member for Bethnal Green and Bow (Rushanara Ali) on what the UN Committee that visited Burma and Bangladesh referred to as the genocidal activities over the Rohingya, and with my right hon. Friend the Member for Chingford and Woodford Green on the human rights abuses in China. The House is right to take a very strong line on the issue of genocide. If global Britain means anything, it is driven by values. These values matter, and when regimes such as the Saudis, for example, butcher journalists in foreign consulates or imprison women campaigning for human rights, we should speak out.