Financial Guidance and Claims Bill [Lords]

Debate between Yvonne Fovargue and George Freeman

3rd reading: House of Commons & Report: 3rd sitting: House of Commons
Tuesday 24th April 2018 Commons Chamber

[George Freeman (Mid Norfolk) (Con)]

Given the shortness of time, I will be brief. I thank the Minister and congratulate him on providing the House with what we were looking for this afternoon. I congratulate the hon. Member for Liverpool, Wavertree (Luciana Berger), my hon. Friend the Member for Plymouth, Moor View (Johnny Mercer), the right hon. Member for North Norfolk (Norman Lamb), the Breathing Space campaign and the 80-odd colleagues on both sides of the House who have supported the proposal.

I thank the Minister and the Government for signalling what many people in the House and across the country hugely welcome: an appetite for cross-party working in pursuit of looking after the most vulnerable in society, in the spirit of the Prime Minister’s mission when she arrived in No. 10 two years ago. This will send a signal that we are serious.

Secondly, I echo the comments made by my neighbour, the right hon. Member for North Norfolk (Norman Lamb), about the importance of understanding the vicious cycle of mental health and debt, and the way in which the two are so often implicated here. Recent figures from ComRes have shown that 56% of people in work say that payday struggles are their biggest anxiety. Often that anxiety can lead to further complications in terms of depression, which can lead to mental health problems, which in turn can undermine their ability to earn and work. That often leads into a cycle that makes both the indebtedness and the mental health suffering worse, as I know from my own experience. Sixty years ago, my father won the Grand National and 10 years later he suffered a life collapse from a combination of indebtedness, bankruptcy, mental health issues and head injuries, which in those days were not well treated. It is a sign of how far we have come as a society and as a politics that we now talk about these issues so much more openly and we offer so much more help.

I shall close with my third point, which relates to the importance of that taboo. So many people in our society still suffer in silence from debt, which knows no boundaries and is no respecter of class, political affiliation or geography. People who may appear at ease and prosperous—and often those who appear most that way—are struggling in misery behind the scenes and compounding that misery through their inability to feel confident enough to talk about it. That is why, along with the co-chair of the all-party group on inclusive growth, the right hon. Member for Birmingham, Hodge Hill (Liam Byrne), we are working on a small campaign this summer with StepChange, the Money Advice Service, the Financial Conduct Authority and Martin Lewis called “Share not Shame” to encourage people to talk more openly about their indebtedness issues and to seek the help that is available. Many people in this country are paying far too much for debt that could be provided at a minimum—at a fraction of the price—and their debts could be rescheduled in a way that takes the pressure and shame from them. I welcome warmly the undertaking the Minister has given today and congratulate those Members who have led the campaign on this, which will signal across the country that this Parliament is taking their interests very seriously.

[Yvonne Fovargue]

I rise to speak to my amendment 30, which would improve the timeframe for the breathing space, ensuring its introduction by the end of 2019. That would provide greater certainty, because the current timeframe centres on the establishment of the SFGB, which is potentially moveable. I have proposed a realistic target, allowing sufficient time for the necessary preparation work. I am assured of that by the debt advice providers themselves; they say it gives enough time to plan and develop the new systems to deliver the new protections to all.

Let us not forget that debt often pushes people into a mental health crisis and that debt and depression necessitate people visiting the doctors’ surgery. They are suffering depression, but it is not that; it is the debts that are depressing them. The breathing space and statutory debt repayment plans, properly set up, will give people time and space to get debt advice, stabilise their finances through periods of temporary difficulty and put in place a long-term sustainable solution to their debts. That is not just of benefit to the individual; it benefits the creditors as well, because they know they will be getting their money back, in a fair way, over a fair period of time.

I hope that the Minister will also confirm some details of how the breathing space scheme will work. As I have said on a number of occasions, it is essential that the length of time involved is sufficient to ensure that people are not put back into the harmful uncertainty of unmanageable debt before they have that long-term plan in place. Six weeks has been mentioned, and such a period may help some people, but I have said many times that three months is probably more realistic. I have mentioned how long it takes to get people to come in and deal with the debts, with the need to open carrier bags full of envelopes that people have not had the courage to open. If we are going to start with six weeks, provision must be made for extensions to be made to that; it cannot just finish at six weeks, as it often takes longer than that to get an appointment.

I would like to see this scheme cover all relevant debts, including benefit debts, council tax debts and debts owed to central or local government. If creditors are excluded, they will be able to put the unhelpful pressure on the debtors, which will reduce the scheme’s viability and effectiveness. This has to stop creditors across the board making unaffordable repayment demands. For example, claimants on universal credit can have 40% of their benefit withheld to pay off third-party creditors, with another 40% going on paying back benefit advances—that is 80% of the money. That leaves them with 20% of what is considered the minimum amount required to live on, and that is simply unaffordable.

There is widespread unfair pressure from Government creditors. As StepChange says, bailiffs are often the first port of call rather than a last resort. Clients rate the DWP, HMRC and councils far worse than other creditors—far worse than payday lenders—for treating them unfairly. The Government should adhere to best practice, and I hope that the Minister will agree that it is in all our interests to ensure that no vulnerable people are put into a position where they are unable to pay off their debts.

Consumer Rights Bill

Debate between Yvonne Fovargue and George Freeman

Tuesday 28th January 2014 Commons Chamber

[George Freeman]

Perhaps the hon. Lady could explain that to the hon. Gentleman. I pay tribute to her commitment to the subject. We heard all too little of such commitment during the 13 years of the Labour Government. Her commitment is all the more welcome for that.

I strongly welcome the Bill. It is deregulatory, pro-consumer and pro-business. After saying something about some of the measures in it, I will turn to one or two points it is appropriate to think about on Second Reading, such as the changing pace of technology and how it is changing the landscape, and the way in which the debt crisis and the model of broken public finances we inherited from the previous Government demand that we embrace a more radical model of consumer empowerment and citizenship to drive the recovery all hon. Members want.

The truth is that consumer law is currently not clear enough. It is often out of date, and it is confusing and incomplete. The Bill sets out a simple modern framework of consumer rights. Twelve pieces of legislation currently govern them, and I welcome the fact that there will now be only one.

[Yvonne Fovargue]

Will the hon. Gentleman give way?

[George Freeman]

I will not take interventions because of the instruction from Madam Deputy Speaker to keep moving.

[George Freeman]

Thank you, Madam Deputy Speaker, for that very helpful clarification. If I can finish my point, I will happily take an intervention.

I welcome the fact that there will be one simple Act to govern what has hitherto been covered by 12. I also welcome that, underpinning the Bill, are core consumer principles. People will have the right to get what they pay for; for goods and digital content to be fit for purpose; and for services to be provided with reasonable care and skill. We will also have the right to have faults in purchases put right free of charge, or to be provided with a refund or replacement. The reforms will enhance measures to protect consumers when appropriate.

I welcome the deregulation to reduce business burdens and costs. I also welcome the modernisation of the legal framework to ensure that consumer law keeps pace with technology. It clarifies the law when it is written in legal jargon and streamlines consumer rights, remedies and enforcement powers.

[Yvonne Fovargue]

The hon. Gentleman mentions the modernisation of consumer rights. Does he agree that it is time to change the bill of sale legislation, which was introduced in the 1800s, but which is now used to create log book loans—people give their log books for loans and can have their cars repossessed if they miss so much as one small payment? The legislation obviously does not intend to allow that, and it is time to modernise it.

[George Freeman]

The hon. Lady makes an interesting point, some of which is dealt with in the Bill. It will be interesting to see whether it is picked up in Committee.

Consumers spend more than 59 million hours a year dealing with goods and services problems, which costs an estimated £3 billion a year to the British economy. The Bill is deregulatory by nature, which means that consumers and businesses will find it easier to resolve problems with faulty goods and substandard services, and, for the first time, corrupted digital downloads. I noted with great interest that the executive director of Which?, Richard Lloyd, has said that the Bill

“brings consumer law into the 21st century, extending rights into digital content for the first time, and making it easier for people to understand their rights and challenge bad practice.”

The House will agree that that is a welcome step.

I welcome the fact that underpinning the Bill is the principle of fairness and helping customers when things go wrong, as they sometimes do. The measures will provide a firm foundation for empowering consumers, which will benefit businesses that treat consumers fairly.

Many businesses provide their customers with enhanced rights, but the truth is that even the best businesses still spend significant time and resources—more than they should have to spend—understanding the law and training their staff to apply it. The Bill will benefit businesses by reducing many of the burdens they face because of complicated consumer law. I particularly welcome the competition affairs tribunal.

My support for the Bill is genuine, but I wanted to mention one or two aspects of it that reveal, within our society, a view of consumer rights that is, at times, rather too narrow and that does not embrace broadly enough a concept of true consumer and citizen empowerment on the scale we need to drive a sustainable recovery and to reform how we deliver public services and put this country back on its feet. There are three specific areas in which the challenge of unleashing citizen and consumer power are urgent.

First, some markets—banking, utilities and telecoms—are holding back our recovery. Secondly, I am struck that the consumer rights conversation is framed around consumables, point-of-purchase rights and commercial rights in the commercial market. Many of those concepts could and should apply equally in the public sector and public services. Thirdly, it is also important to have active and empowered consumers in supply chains to drive them. That subject may not entertain all hon. Members, but I know that the Secretary of State feels particularly strongly about it.

In the bigger markets—banking, utilities and telecoms —we inherited from the previous Government an extraordinary concentration of power. One or two institutions had a very unhealthy predominance in each of those key markets, which are vital to the proper functioning of a free market economy. What we need as we try to recover from that toxic legacy of debt and dysfunctional markets is an insurgency of empowered consumer citizens to drive a new paradigm of choice, and to demand and insist that that which is available in so many fields of public life is available in banking, utilities and telecoms.

In banking, why is it still so difficult for bank customers to take their accounts to different banks? I would like to see consumer power, and consumer frustration with some banks, driving much more insurgency and the creation of new banks. First Direct appeared nearly 20 years ago, which was a stunning moment for our generation, who had never seen an online bank. We tapped the mouse and wondered whether it could be trusted and whether it would work. It turns out that First Direct was a stunning new entrant that catalysed all sorts of reforms in banking market. Why not have more now? Our banking sector is dominated by too few big banks, which were propped up by a very unhealthy burst of crony capitalism under the previous Government and shored up in the crisis that that incubated. We need to release customers to drive that insurgency in banking.

I would argue that the same is true with some of the utilities. Following privatisation in the ’80s, we saw those markets consolidate under the previous Government. For 13 years, we did not see or hear very much about that. We have inherited, particularly in energy, a small number of big companies that now pass on substantial global commodity price rises to customers, who have all too little real choice and power to drive across the market. To a lesser extent, the same is true for telecoms and broadband. We still see a very powerful monopoly provider in BT. Of course, other providers are able to operate on the railway tracks, but I do not think that in the telecoms market, given the extraordinary empowering impact of the underlying core technology, we have seen a parallel opening up of consumer power. Going the final mile to get broadband into deep rural areas to drive a rural renaissance, in my constituency and in East Anglia more generally, will require us to support consumers through some sort of voucher mechanism—I welcome the steps the Government are taking on this—to be more empowered to choose satellite, digital or any one of the insurgent broadband providers appearing on the market.

On public services, as important as the measures in the Bill are and as important as this subject is, they are still framed, as is the wider public debate on consumer rights, within the notion of point-of-purchase and consumerist trade descriptions legislation. It is principally concerned with the rights of the consumer at the point at which they buy a consumable. However, the concepts, ideas and rights enshrined in this useful Bill could and should go further. In fact, a number of the reforms that the Government are rightly unlocking in other areas of government will demand that they do. For example, why can patients in the health service, parents in the education system, or even pupils—possibly not young pupils, but sixth-form pupils—not have greater choice, transparency and consumer rights in the public services they receive? I would argue that a sixth former in a failing school who is receiving a bad education has just as many rights as the consumer of faulty electronic goods at a supermarket checkout. We need to extend this principle more broadly across public services.