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Some 60 per cent. of low-income families have no savings whatever. People who have no savings will therefore receive no advice; nor will they have any inclination to look at products such as home contents insurance, pensions or anything else. That is the area
that the Government need to spend more time considering. My hon. Friend the Member for Fareham (Mr. Hoban) talked about the global credit squeeze, which affects all of us, particularly the vulnerable and those who want to start making mortgage payments.
One could argue that financial inclusion means a lack of access to a range of financial services. Financially excluded people typically exhibit such characteristics as not even having a bank account or relying on forms of credit from lenders, pawn brokers and loan sharks, as we have heard. That takes people down the wrong route entirely. The consequence is that they pay more to manage their money than those of us who can afford to have a bank account and access such facilities. People without bank accounts also find it tougher to plan for the future and are even more likely to get further into debt because of that.
We have heard some examples of that. I pay tribute to the hon. Member for Blaydon (Mr. Anderson), who talked about prepayment meters, which is a great example of how those on lower incomes pay more. Those who have to pay by a written cheque, for example, have to pay more than those who pay by credit or debit card. Those without bank accounts who want to have a mobile phone contract end up paying more as well. The very people who have less money end up paying more. That results in a vicious cycle, and they end up getting further and further into debt.
We need to focus on education in this regard, and I would like to know what emphasis schools are placing on encouraging people to get a bank account and on providing them with an understanding of financial services and money management, so that they do not get into debt in the first place. People need to be aware of what they can do with even a limited amount of money. They need to put in place good habits for the future. If that does not happen, they will end up with increasing financial difficulties, and they will pay far more for any advice that they need. Among the social consequences are unemployment, relationship breakdown and health problems. Early intervention is therefore crucial.
Progress has certainly been made, but much more needs to be done. In particular, access to advice needs to be expanded, and not only in schools. More investment is also needed, beyond the £76 million that the Economic Secretary mentioned. We need to see an improvement in the savings culture, and we must encourage better discipline in lending. We should toughen our stance on those who exploit the vulnerable by trying to get money out of people who have no money to give in the first place. Tackling personal debt and financial exclusion is an issue of social responsibility. It is the responsibility not only of the third sector and business, and of the individual, but, most importantly, of the Government.
Anne Snelgrove (South Swindon) (Lab):
I welcome this topical debate. I am going to speak of my experience of the collapsed hamper and voucher company, Farepak, which brought me into contact with families on low incomes who regarded themselves as savers. Farepak was not, in fact, an officially recognised savings scheme; it was a prepayment scheme. That is where the trouble
stemmed from, because the company was not covered by the strict financial regulations relating to financial services and savings schemes.
The savers in such families are mainly women who save for specific, short-term goals such as holidays, events such as Christmas, large items of furniture or white goods. Very few savings schemes within the financial services remit cover such goals and items. The schemes that are available are not as attractive to low-income savers as some of the schemes outside the regulatory framework. I hope that the Minister will address that point in her response, and in her work on these matters in future.
Those savers are suspicious of credit cards and bank accounts, because of the charges that have been mentioned and because of the temptation to get into debt. They are a difficult group to reach, mainly because they are a quiet group that did not come to the fore until Farepak collapsed. Their wariness of middle-class financial services has been underpinned this year by the collapse of Northern Rock and by their disillusionment with the Government. Present and past Governments have been unable and unwilling to tackle the problems of low-income savers, or the fact that they suffer when schemes such as Farepak collapse.
Prepayment schemes of that type have been examined by the former Department for Trade and Industry and the present Department for Business, Enterprise and Regulatory Reform over a period of 20 years, and the conclusion is that they are too tricky to regulate. The hon. Member for Fareham (Mr. Hoban) said that he would be reluctant to consider regulation. It is difficult to regulate prepayment schemes because they cover a range of concerns, including small businesses asking for a deposit for furniture making, for example. Such enterprises could be put out of business very easily by clumsy regulation.
In dealing with these low-income families over the past year, however, I have come to the conclusion that they will not have confidence in financial services unless we do something about prepayment schemes. They are the most attractive schemes to them, and they are going to continue to use them, and it is up to Parliament to legislate to ensure that those people can save safely in future.
I note with pleasure that the statement made on 10 December by the Department for Business, Enterprise and Regulatory Reform leaves the door open to reassessing the regulatory framework once the outcome of the investigation has been made available and the advice of other agencies has been taken into account. I hope that that will lead to some kind of regulation. It will be tricky to achieve, but we must do it. I thank the
Prime Minister for meeting the Farepak MPs earlier this month, and I particularly want to give credit to my hon. Friend the Member for North Ayrshire and Arran (Ms Clark) for the distinguished work that she has done on this issue. The Prime Minister promised us that he would look again at the question of regulation, and I hope that he does so. I also hope that Members on both sides of the House will support this move.
Kitty Ussher: I am aware that time is short. I am grateful to hon. Members on both sides of the House for their contributions. I shall be unable to respond to all of them, owing to the lack of time, but I can give the House an assurance that all the points that have been raised will certainly be properly considered.
I welcome the conversion of the hon. Member for Fareham (Mr. Hoban) to the credit union cause. It is a pity that he was not clear whether they paid interest or dividends. At this time, they pay only dividends, but we shall be looking at that issue. It has been raised in the context of the co-op and credit union consultation. He explained very fairly the costs that are incurred by legitimate doorstep lenders. What he described might well be the case, but I remain of the view that it is far better to give low-income consumers access to affordable credit so that they do not have to rely on high-interest credit providers, even if these are operating within the law according to commercial business practice.
The hon. Gentleman asked about the number of people involved in tackling loan sharks. I do not have a precise figure, but I shall be happy to provide it when it becomes available. The important thing is that we are rolling out teams in every region to address the issue, and we shall have periodic reviews of their effectiveness.
I thank my hon. Friend the Member for Edinburgh, North and Leith (Mark Lazarowicz) for his kind remarks. I congratulate him, and other hon. Members, on the work of his all-party parliamentary group. I completely accept the need to keep up the pressure on basic bank accounts. We are making progress in that regard, and we will continue to do so. In my role as Economic Secretary, I meet representatives of the retail banks regularly, and I continue to make those points.
I do not have time to respond to all the points raised by yesterdays report from Citizens Advice, but I want to pay tribute to it for the work that it has done. We shall look at the report in detail
(1) The Secretary of State shall publish all relevant details as to the monies used to fund the construction and maintenance of Crossrail, beyond those monies as already provided by Parliament and set out in section 65(1).
(2) The Mayor of London shall, not less than 12 months after the granting of Royal Assent to this Act, publish and make available to all who are eligible and registered to vote in the London Mayoral or Greater London Authority elections, a statement indicating
(3) The Secretary of State, after consultation with the Mayor of London and the Transport Commissioner for London, shall publish an annual statement setting out which bodies shall bear responsibility and liability for any costs associated with the building of Crossrail separately indicating the
The Bill was given considerable scrutiny in Committee and there were some consistent themes to it. The Government consistently referred to the Channel Tunnel Rail Link (Supplementary Provisions) Bill as the template, exemplar and the precedent for the Crossrail Bill and for many of its powers. The Minister told us frequently that the exceptional powers granted to the Government and the Secretary of State in this Bill were in many cases identical to those contained in that Bill.
We accept that many of the exceptional powers are necessary, but we also believe that many of them require and will continue to require scrutiny. We tabled a number of amendments designed to define those powers, to ensure accountability in respect of them and to ensure proper consultation on their use. They were heard many times in Committee already, but I suspect that we will hear the words relevant and appropriate bodies many times again this afternoon. We also sought to ensure that compensation was available and payable to those prejudiced by the extraordinary powers being granted in the Bill, particularly with regard to compulsory purchase orders, to which I will return later.
Mrs. Theresa May (Maidenhead) (Con): I am very grateful to my hon. Friend for giving way at such an early stage in his speech. He has mentioned the exceptional powers granted in the Bill. Will he confirm my understanding that an extension of Crossrail further west to Readingso that it did not stop at Maidenhead would be possible without having to go through the same processes provided for in the Bill, because it could be done under the Transport and Works Act 1992 provisions? Does my hon. Friend share that understanding, and is he confident that the Government are right to say that that would be possible?
Mr. Hammond: The short answer is that that is my understanding of the Governments position, but I am not at all confident that it would not be subject to legal tests. Indeed, the possibility of providing legal advice has already been mentioned, which suggests that that may not be the case. It could be that any extension to the route would require that portion of it to go back into hybrid Bill mode so that petitioners in that area would be afforded exactly the same rights as those who were heard by a Select Committee in respect of the original route. I have to tell my right hon. Friend that it is far from clear that it will be possible to extend the route simply under the Transport and Works Act 1992, as it is likely to be subject to a great deal of legal scrutiny. I am grateful to my right hon. Friend for raising that issue; the Minister may wish to respond to it later.
In Committee, we tabled some 75 amendments in order to ensure proper scrutiny. The Minister asked me to withdraw five on the basis that he wanted to reconsider the Governments position. He is bringing back one of them this afternoon in the form of Government amendment No. 1, which we will certainly support. If he had been slightly more far-sighted and tabled other Government amendments in the same way, we could have supported them, too.
Let me deal with new clause 1, which has been tabled very much in the spirit of what we said in Committeethat at this stage we would revisit only matters that were particularly important to us. Clause 66 provides that
any expenditure incurred by the Secretary of State in consequence of this Act
any increase attributable to this Act
to sums already provided for by previous enactments should be provided for by Parliament. That is all very straightforward and correct. As the Minister has said previously, the Government are subject to commercial confidentiality, but are keen to be transparent in providing details of the Crossrail funding package where they can. In that spirit, I want to thank the Minister for the package and some of the briefings he gave to the Committee. That generosity was appreciated.
Howeverthere is always a howeveralthough the Bill explains the moneys provided by Parliament, there are also other moneys provided by other bodies. Also, the Bill does not provide for an ongoing update to be delivered to Parliament on the subject of funding and costing. That is exactly what my new clause proposes to add to the Bill. Although I appreciate and accept the Ministers generosity of spirit in his
disclosures so far, we as the Oppositionand who knows who may be in opposition when the Bill comes into forceneed to ensure adequate and appropriate protection and scrutiny of the fundings and costings on which the Bill is built.
My new clause thus makes four provisions. First, it provides that the Secretary of State must make details of the funding arrangements available to Parliament. Secondly, the Mayor of London, whoever that may be, will commit Londoners to high extra expenditure and potential liability, so the new clause makes the Mayor provide Londoners with a statement of the financial consequences of his funding decisions. Thirdly, it provides that the Secretary of State shall, after consultation, provide an annual statement of costs and liability. Finally, it provides that the Secretary of State shall provide an annual statement of the destination of funds raised as a result of the sale of surplus land and property.
There is clearly a justification for all that, and it is very simple. It follows a line of reasoning that has been consistent in all our amendments. It will allow the various elements of the funding package to be scrutinised continually throughout the Bills stages; it will allow the scrutiny to begin before the start and at the conclusion of that process; it will allow Members to give appropriate consideration to the risk to the package; it will allow scrutiny of the financial probity of the providers; and it will allow the House to assess the likelihood of financial projections being met.
Throughout the Bills stages we have said that we support the principle, subject to our ability to scrutinise the funding. We continue to support Crossrail in principle. There is a funding package in place, but we need to see its design, its extent and its underwriters.
available to all who are eligible and registered to vote in the London Mayoral or Greater London Authority elections.
Why should the information not also be made available to all residents of the United Kingdom and to the House of Commons? I do not understand why the new clause is so narrow, given that it concerns a project of national importance. I speak as a London Member of Parliament, but surely, in view of the importance of Crossrail to the whole country, all the information that the hon. Gentleman is requesting should be made available to all members of the public.
Subsection 2 relates to the fact that all councils currently provide statements of what they spend, and the Mayor of London tells people what the precept is. As London taxpayers and ratepayers, we are likelyand the constituents of London Members of Parliament such as me are likelyto bear the brunt of any cost overrun. I therefore think it only appropriate for the Mayor to be as transparent as possible with Londoners.
The other issues raised by the hon. Gentleman are already tackled by the new clause. If he wishes to persuade his hon. Friend the Minister that he should write a letter to every resident of the United Kingdom every year about the cost of Crossrail, that is his prerogative. What concerns me is that the House should be able to scrutinise the costings and funding, and that is what the new clause enables it to do.
Mr. Lee Scott (Ilford, North) (Con): A few years ago the Mayorthe current incumbent, Ken Livingstonesaid that the excess would be paid by the London business rate payer. Does the new clause not cover that as well, by providing for businesses to see what is expected of them?
Stephen Hammond: That is a good point. It is apparent from the details of the funding package generously provided by the Minister that there is a supplementary business rate to be charged. What is not clear as yet is whether, in the event of a cost overrunwhich we hope will not happenthere will be an additional cost for the London business rate payer.
Subsection (2) requires councils to do exactly what they already have to do, which is to provide an annual statement of how they spend and deliver services and how those services are paid for. It makes no greater requirement of the Mayor than that, now and in the future. Because he has committed Londoners to liability as co-sponsors, it requires him to exercise transparency for London taxpayers in regard to how he is spending their money. Frankly, it would be difficult for Members to argue against this, given that the Mayor has already written to the Secretary of State, so clearly the Mayor will have set out in that correspondence how he proposes to meet his current liabilities. If he is prepared to write to the Secretary of State to set out how he proposes to meet his funding liabilities, presumably he is equally happy to tell all Londoners how he intends to meet them.
Subsection (3) of the new clause provides for an annual update. As we embark on the building and maintenance of Crossrail, we do not need just a snapshot; we need dynamics. We need to be able to see that if there are any problems in terms of cost overspendor, indeed, underspendor of delay, Parliament should be advised. The new clause provides for exactly what the hon. Member for Ilford, South (Mike Gapes) wanted.
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