6.23 pm

Kit Malthouse (North West Hampshire) (Con): I draw the House’s attention to my entry in the Register of Members’ Financial Interests, as the proud founder and owner of a small business, which, miraculously, has now been going for 20 years.

I am thrilled to speak in support of my right hon. Friend the Minister for Small Business, Industry and Enterprise in her mission. She is one of our most effective performers at the Dispatch Box. I see that she has been joined on the Front Bench by another two, the Minister for Skills and the Under-Secretary of State for Life Sciences—I had to get that in—and now by a fourth, the Minister for Universities and Science. Like me, she is an ardent capitalist who knows that a well-tempered economy requires a gentle hand from the state, not hobnailed, Government-sized boots stomping all over it. On that basis, the Bill has much to commend it.

First, on the small business commissioner, all Conservatives should be on the side of the little platoons over the big battalions. Anything that gives strength to David’s arm as he takes on Goliath is to be welcomed, not least because the rise in county court costs is making it extremely difficult for small businesses to recover large sums from big businesses. The commissioner will help in that matter. I share the concerns of the hon. Member for Kilmarnock and Loudoun (Alan Brown) about the construction industry. I urge the Minister for Small Business, Industry and Enterprise to ask the commissioner to look at that sector, and at the food industry, about which many farmers in my constituency complain.

There is one other big bad beast in the jungle who is very bad at paying and to whom I urge the Minister to consider extending the commissioner’s remit, and that is the Government. Only last week, I had a couple of businessmen in complaining about how long it was taking to get their VAT reclaim, albeit with a supplement. It was causing them all sorts of problems. It would be a good discipline for HMRC if the remit were extended to it. Frankly, it should also be extended to the EU. Any rural Members who are here will have received complaints from farmers about delays in the payment of the single farm payment. It would be great if the EU was on the bandwagon too.

Secondly, apprenticeships are vital for our young people and our higher-skills economy. Given the new imperatives that were placed on the private sector in the autumn statement and the Budget, it is only right that the public sector should play its part. I am very proud of the work I did at City Hall as deputy mayor for business and enterprise to drive apprenticeships forward

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in London and to recruit many thousands of young people. Some of the difficulties that we saw in getting the public sector, not least Government Departments, to play ball will be solved by the Bill.

Thirdly, I have personal experience of insurance companies gaming the system, particularly in catastrophic situations. As my hon. Friend the Member for Charnwood (Edward Argar), who is not in his place, said, when a business is completely wiped out by an event, very often the insurance company will delay, hoping that the business will go bust before it has to pay, because that means that it will deal with a receiver or administrator who is more than willing to do a cheap deal on the claim. I have seen that again and again. The Bill will bring some discipline in that area.

Fourthly, the mysterious and exciting clause 28 on broadband, which is hidden away in the depths of the Bill, sounds very interesting to a Member like me who represents a constituency that is in the bottom 30% in the UK in terms of connectivity. Many businesses in North West Hampshire are literally screaming down the phone at me to get their connections put in, so the ability for the Minister and the Secretary of State to shower my constituency with grants and loans to dig up the drives and pathways up to the barns that have been converted into offices to put in high-speed broadband is fantastic.

Finally, I have a couple of disappointments. First, given the Minister’s hunger for capitalism and her pledges after the election on red tape, I had hoped to see a long list of repeal clauses in the Bill, but they do not seem to be there. If Members suggest regulations that could be repealed during the passage of the Bill, I ask her to accept amendments on those repeals later on. There is still a huge thicket of regulations for us to go at and I know that she wants us to help her in her task.

Secondly, I am with the hon. Member for Hartlepool (Mr Wright) in wanting the regulator’s regime to extend to HMRC. It is absolutely the case that the biggest brake on our economic growth is the sheer complexity of our tax system. It runs to 20,000 pages and comes in several volumes. As a chartered accountant, I have wrestled with it over the years and it is mind-boggling, even for me. I therefore urge the Minister to include the Revenue in her work.

6.28 pm

Seema Kennedy (South Ribble) (Con): I draw Members’ attention to my entry in the Register of Members’ Financial Interests.

To enable markets to function properly, businesses to thrive and jobs to be created, the Government have a regulatory role, but there is always a fine line between correcting market distortions and passing laws that stifle entrepreneurship. I believe that the Bill is on the right side of that line. It is wide-ranging, so I will limit my remarks to three of the proposals.

I very much welcome the appointment of the small business commissioner. I know from my own business the hours that are spent every week chasing late payments, and that is a medium-sized business with a bookkeeper. I can only imagine how acute the situation must be for those with no formal in-house accounting function and for sole traders. As many hon. Members have remarked, late payments have severe effects on a business’s cash

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flow and, consequently, on its ability to pay its staff and, more crucially, to invest. It is estimated—we have already heard this figure—that small businesses are, on average, waiting for about £32,000 in late payments.

I note what hon. Members have said about the small business commissioner not having statutory enforcement powers and echo others in saying that whoever is appointed should have experience and authority. Does the Minister intend to lay down any criteria for recruitment in statutory legislation or guidance? Will there be any immunity or privilege for the small business commissioner’s report, above the usual defences in law? I note that respondents have a right to make representations before publication, and I fear that that could be open season for defamation lawyers.

In my role as vice-chair of the all-party group for apprenticeships, I hear from schools, further education colleges and employers about their desire for the quality of apprenticeships to be paramount. They want to make apprenticeships a real alternative to degrees, and protecting the term will preserve and enhance that brand. We must encourage more of our constituents, of all ages and at different stages of their lives, to take up apprenticeships and to achieve the laudable aim of 3 million apprentices by 2020.

I am extremely happy with provisions in part 5 that deal with late payment of insurance claims and oblige insurance companies to pay within a reasonable time. A few weeks ago my right hon. Friend the Minister for Small Business, Industry and Enterprise visited Croston in my constituency, where businesses had been affected by the Boxing day floods. She and I talked to pub and restaurant owners about the need for prompt payment by insurers. Late payment can affect a business’s ability to start trading again, and I welcome the clauses that clear up previous anomalies. There is only one way to increase productivity and the wealth of our nation, and that is enterprise. The Bill is part of the Government’s pro-enterprise agenda, and I am happy to support it tonight.

6.31 pm

Lucy Frazer (South East Cambridgeshire) (Con): Small businesses are critical to our economy and make up 99% of businesses nationally, and the Bill is designed to assist them. I want to focus on the resolution of disputes and debt collection, and I refer to my entry in the Register of Members’ Financial Interests. As a barrister who specialises in business law, and insolvency in particular, I have seen at first hand the impact that uncollected debts can have on a company.

Sometimes the inability to collect debts can have a significant impact on a small company. The most obvious consequence is simply the customer’s failure to pay, which means that their supplier is out of pocket. We know from BACS that an average small business has overdue payments of almost £32,000. However, it is not just the lack of cash flow, it is also the cost of collecting debts, and we know that £10 billion is spent per year in trying to recover overdue payments. It is not just the expense; it is also about management time, and in the end many small businesses simply give up. Indeed, the consequences can be even greater than that—sometimes

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they mean a lack of survival. R3, the trade body for the insolvency profession, has said that late payment by customers for goods and services is often cited as a cause of insolvency.

Andrew Bridgen (North West Leicestershire) (Con): My hon. Friend is giving a great speech with her experience in insolvency. Does she agree that companies do not go bankrupt because they run out of profit; they go bankrupt because they run out of money, and late payment is part of that?

Lucy Frazer: That is absolutely right. Often, the cause is cash-flow insolvency, which is a test of insolvency, as well as the balance sheet.

The measures to introduce a small business commissioner to give free advice and information, and to operate a complaints scheme, are a welcome step in the right direction. Indeed, a similar scheme set up in Victoria Australia has had considerable success. The hon. Member for Wallasey (Ms Eagle) suggested that the Bill does not go far enough, but in 2014-15, with 704 mediation sessions, the Victoria scheme had an 80% success rate.

As my hon. Friends the Members for Huntingdon (Mr Djanogly) and for South Ribble (Seema Kennedy) mentioned, we must ensure the success of this scheme, and to do that, we must ensure that the small business commissioner has good identity, good awareness, and is effective.

We need to ensure that the person appointed has the gravitas to command the respect of businesses big and small. We need to ensure there is public awareness of the role. There are already a number of mechanisms to resolve disputes—there is already a free small claims mediation telephone service—but such schemes are successful only if the public know about them and so can use them. Finally, the small business commissioner will have to take full advantage of his or her powers to ensure speed, efficiency and an effective service.

The measures set out in the Bill are extremely welcome. The Government do not create jobs; businesses—often small businesses—do. It is our job to create the right environment for them to thrive in. This is a significant part of that process.

6.35 pm

Kevin Brennan (Cardiff West) (Lab): We have had a very good debate, with 25 speakers from the Back Benches. I congratulate everybody on their contributions. I will not go through them all because of the time available, but I will say it has been a very interesting debate.

A lot of Members have tried to categorise or describe the Bill. My hon. Friend the Member for Wallasey (Ms Eagle) said at the outset that it is easier to say what the Bill is not than to say what it is. Clearly, yet confusingly, it is not what it is called: it is not really the enterprise Bill. It is not a well-thought-through coherent visionary piece of proposed legislation that sets out a clear strategic industrial strategy to use every lever at the Government’s disposal to promote British business and enterprise to ease the path for British exports—a real problem at the moment—and take on the underlying fundamental problems of the British economy.

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Instead, the Bill is, to use yet another description, a bit of a lucky dip: stick a hand into the bran tub and we will not be quite sure what will come out. Long-serving, modestly paid workers in the public sector—in some cases, as we have heard, even in the private sector where workers, including those at Magnox, have been privatised—might want to remove their watches and rings before they put their hand into the bran tub. The Government are not just after top earners with their exit payments cap; they are drawing on those who have worked loyally for many years on modest pay. They are, as the Secretary of State would say, fat cats. That is what he called them in his opening remarks. He said this provision would capture fat cats. What a disgraceful thing to say about loyal public and private sector workers who will be caught by the provisions. The Government will have to think again and look very carefully at the effects of the provisions. We will scrutinise these parts of the Bill extremely closely in Committee to see if the people the Secretary of State talked about really will be caught by the provisions. Every single one of those individuals will be insulted by what the Secretary of State said earlier on.

We now hear that the Government are adding another little surprise to the bran tub. They are introducing changes to Sunday trading hours, having abandoned previous attempts and having studiously avoided putting the proposal in the Bill when it was introduced in the other place. We now hear they intend to table amendments to the Bill tomorrow. They were not prepared to let us have them today by putting them in the Library, as we asked for. There are, of course, bishops in the House of Lords. I wonder whether the Government were afraid to mention Sunday trading when the Bill was going through the Lords. I wonder whether that had anything to do with it.

How very convenient for the Government that the result of their consultation on Sunday trading should be published the day after Second Reading in this House and not when the Bill was going through the House of Lords. How very unfortunate for the House of Commons that the Government, with all the resources at their disposal, could not manage to publish the consultation before today’s Second Reading, despite having had it for five months, or even manage to timetable the debate for a time after the consultation was ready to be published. How interesting that the Government are rushing into Committee next week, without leaving the customary two weekends between Second Reading and the Committee stage to allow this House enough time to prepare and table amendments. That was done without the usual indications when discussions were held. I will not go into what is said via the usual channels. It is enough to say that a whole new controversial proposal has been introduced into the Bill. That is typical of the Government’s modus operandi—governing from the shadows and treating the House and proper democratic accountability with utter contempt.

The Government have no mandate in their manifesto to change the laws on Sunday trading, no compelling case or evidence of significant economic benefit, and no justification for the late addition to a Bill already more than halfway through its parliamentary scrutiny. It has been through First Reading, Second Reading, Committee, Report and Third Reading in the Lords, and now Second Reading in the Commons, without our having

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seen the proposals. It is not in their manifesto or the Bill we are voting on tonight, and it is not even in the Library of the House of Commons, so extra time will have to be made available on Report to consider it. They will have to give way on that.

It is a lucky-dip Bill. We can pull out some nicely wrapped goodies, but, as so often with a lucky dip, on unwrapping and closer inspection, it might well leave us underwhelmed by our prize. We welcome the proposals for a small business commissioner, but the Government’s proposal is a pale imitation of what is needed. There are more than 5 million small businesses in this country, but the Government anticipate that the small business commissioner will deal with just 500 cases per year. We know about Australia’s experience, particularly of the small business commissioner in the state of Victoria, the splendidly named Mark Brennan—no relation as far as I know, so I do not have to declare an interest. We know from their experience, that for a small business commissioner to work, they must have the right roles and responsibilities. Our Labour colleagues in the other place have strengthened the small business commissioner proposal, but the Government’s model does not live up to the best practice shown in Australia, or to the Small Business Administration in the USA.

We welcome other bits in the bran tub of the Bill, such as the extension of the primary authority scheme—the local authority one-stop shop for business regulation, which the last Labour Government introduced—and the emphasis on apprenticeships. We also acknowledge that the Government want to build on the achievements of the last Labour Government in rescuing apprenticeships from near oblivion and expanding their numbers considerably, but we need to know about their quality and how the Government will pay for their plans, as my hon. Friend the Member for Wallasey rightly indicated. We also need to know how it will impact on the proposed apprenticeship levy and public services.

We welcome the amendment to the Industrial Development Act 1982 and the extension to digital, but that needs to be set in the context of a proper industrial strategy for the country, not an anti-European, laissez-faire free-for-all that will lead to a race to the bottom for jobs, wages and productivity.

The clauses on late payments and non-domestic rates are welcome, but I want to mention two new items in our lucky dip introduced in the other place. The first are the provisions on the pubs code, which has been mentioned already. I recall as a Minister in the Department, back in 2009-10, clearing all the necessaries before proceeding with the proposals for pub tenants. I went so far as to square them off with the Tory Opposition Front Benchers to ensure that they would proceed after the change of Government. Since then, the coalition and now this Government have had to be dragged reluctantly to do the right thing. As has been said, a market rent option at rent renewal was the minimum required for the Government to fulfil their commitments to tenants, so I welcome the Secretary of State’s acceptance of Labour’s amendments in the Lords. It is about time the Government stood up for local pubs, instead of just sucking up to the pubcos.

The other place introduced amendments relating to the UK Green Investment Bank. The proposed privatisation of the bank by the Government, deleting its statutory green purpose, has become even more pressing with

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the Chancellor’s announcement about Lloyds bank. Do the Government accept that their privatisation proposals are a mess? They said that they would remove the changes made in the House of Lords to the Green Investment Bank, but do they have a mechanism that will satisfy the Office for National Statistics—my hon. Friend the Member for Wallasey asked for that—and guarantee the bank’s green mission? If they do not satisfy the Office for National Statistics, how can they possibly proceed with the privatisation of the Green Investment Bank on those terms?

If it is the wrong time to sell Lloyds, why is it the right time to sell the GIB? Does the Minister agree with her colleague, the hon. Member for Waveney (Peter Aldous), about the privatisation of the GIB? At the Environmental Audit Committee on 26 November, he said to the Minister:

“Why now? The bank has just made £100K profit. Some people might accuse you of selling your turkey on August Bank Holiday and not Christmas Eve.”

The Minister answered:

“I think it is the right time to do it. The market is in a good place and clearly people are interested so let’s get on with it and do it.”

Christmas eve has come and gone, and the Chancellor tells us the market is far from in a good place, so what is the rush to truss up the GIB and sell it at this point? Would it not be prudent, if the Government want to sell it off, to fatten it up first and sell it later rather than now—if indeed it is possible to privatise it without it losing its green purpose? I put that to the Minister.

In conclusion, my hon. Friend the Member for Wallasey commented on the smallness of this Bill’s vision in comparison with the hyperbole of the Government’s rhetoric. It lacks the ambition to set out a real strategy to meet the real challenges facing British business and industry. Some of its contents are helpful; some are likely to have unintended consequences and cause harm to the lower paid, pensioners and industrial relations. We will scrutinise it carefully in Committee and, if necessary, oppose the parts that are likely to cause harm. We shall not vote against Second Reading this evening, but there are issues in the Bill that we will undoubtedly have to divide on at a later stage. If this is a lucky dip Bill, it is one where the main prize—a proper strategy for UK enterprise and business—has been left out with the raffle.

6.47 pm

The Minister for Small Business, Industry and Enterprise (Anna Soubry): I congratulate everybody—and I mean everybody—who has contributed to what I believe has been a very good debate. I am going to look at the areas of contention and the particular topics in respect of which hon. Members have made good points and raised good concerns. I shall not go through all the clauses and topics in the Bill, but deal with it in the way I have suggested.

This may be a small Bill, but I think it is beautifully formed. Each part of it, each small piece, cog, wheel, nut and bolt is not perhaps in every instance beautifully and finely finished, but if we bring all of them together, it forms a wonderful small machine that is part of the

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bigger engine—the role of business in our economy. That is indeed what provides jobs and prosperity, and in turn the money that allows us then to provide services for everyone throughout our nation. It is an important Bill.

I pay tribute to my right hon. Friend the Member for Basingstoke (Mrs Miller), who rightly said that it is all about creating the right environment for business. I believe that the Bill is part of that. It is interesting that, with the exception of the hon. Member for Chesterfield (Toby Perkins)—others will correct me if I am wrong—it is only from Conservative Members, such as my hon. Friends the Members for Aldridge-Brownhills (Wendy Morton) and for North West Hampshire (Kit Malthouse), that we have heard the voice of business from those who have actually run businesses themselves and who, frankly, know what they are talking about.

Let me deal first with apprenticeships. We heard some good contributions, including from my hon. Friends the Members for South Ribble (Seema Kennedy) and for Warwick and Leamington (Chris White) and from the right hon. Member for Don Valley (Caroline Flint). I am afraid I had too many enterprising criminals when I was working as a criminal barrister, but I look forward to the contribution that she will undoubtedly make in Committee. I pay particular tribute—[Interruption.] There is a lot of chuntering going on.

Madam Deputy Speaker (Mrs Eleanor Laing): Order. The right hon. Lady is right: there is a lot of chuntering, and if it gets any louder, I will have to stop it.

Anna Soubry: Thank you very much, Madam Deputy Speaker. We do not like chuntering, do we?

I stopped speaking because I wanted to pay a big tribute to my hon. Friend the Member for Stratford-on-Avon (Nadhim Zahawi) and my hon. Friend the Minister for Skills for their outstanding work on the advancement of apprenticeships, which will help us to go forward and achieve our goal. We are seeing a golden age of apprenticeships—a revolution in apprenticeships—and people will now appreciate their full worth. That is what the Bill seeks to achieve by enshrining the true value of apprenticeships in law.

I can tell my hon. Friend the Member for Cannock Chase (Amanda Milling) that there will be a national advertising campaign to promote apprenticeships in the next few months. That is just a part of the great work that has been done by my hon. Friends the Member for Stratford-on-Avon and the Minister for Skills.

In relation to public bodies, I pay tribute to my own borough council under Labour: a record number of apprenticeships were created in the borough. The number rose to 20 over two years, and now, under a Conservative administration, the target is 20 each year. If we can do that in Broxtowe, other local authorities can do it.

I pay tribute to the work of my hon. Friend the Member for Burton (Andrew Griffiths), and, indeed, that of the hon. Members for Leeds North West (Greg Mulholland) and for Chesterfield, in relation to the pubs code. All three made important points today. We must get the balance right between allowing pub companies to invest in our great pubs and securing fairness for tenants. That is what I want us to do, and I believe that we are well on the way to doing it.

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Let me now deal with the issue of Sunday trading. I can tell the hon. Member for Strangford (Jim Shannon) —my friend—that we will introduce legislation to improve the terms and conditions of people who do not wish to work on Sundays. We think it important to protect those workers, so that will be part and parcel of our changes in Sunday trading laws. I must stress, however, that this is not mandatory. We want to give councils the power—a power that many Labour councils want—to make local decisions that are based on the needs of their own people and businesses. If a local authority does not consider such action suitable, it will not take it. As we heard from my hon. Friend the Member for Kensington (Victoria Borwick), an authority might want to extend the hours of a garden centre to suit that particular business. It is a question of fine-tuning.

Let me repeat to the hon. Member for Strangford that working on Sundays is not mandatory, any more than it is mandatory to go shopping. Sundays will still be special for those who want to keep them special.

Toby Perkins: Will the Minister give way?

Anna Soubry: I will give way briefly, but I will take no more interventions after that.

Toby Perkins: What the Minister is saying, and what she is setting out to do in regard to Sunday trading, is entirely wrong, but something even more important is happening here. For the first time ever, workers’ rights are being devolved, and will become different in different areas.

Anna Soubry: They will not be devolved. Let me make that absolutely clear. We will introduce legislation for all work that will affect any worker working on a Sunday—

Ms Angela Eagle: On a point of order, Madam Deputy Speaker. The Minister is spending time talking about provisions that no one but her has seen, because they are not in the Bill. How can that be in order?

Madam Deputy Speaker (Mrs Eleanor Laing): The Minister can choose what she wants to talk about as long as it is related to the Bill. When it is not related to the Bill, I will stop her.

Anna Soubry: Thank you, Madam Deputy Speaker. I specifically wanted to deal with those points, because I think that the hon. Member for Strangford made them better than anyone else.

In the six minutes that remain, I want to talk about the small business commissioner. We heard an excellent speech from my hon. Friend the Member for Huntingdon (Mr Djanogly) and contributions from the hon. Member for Livingston (Hannah Bardell), my right hon. Friend the Member for Basingstoke, my hon. Friends the Members for Bath (Ben Howlett), for Havant (Mr Mak), for Aldridge-Brownhills and for South Ribble, my hon. and learned Friend the Member for South East Cambridgeshire (Lucy Frazer), my hon. Friend the Member for Derby North (Amanda Solloway), the hon. Member for Chesterfield, the right hon. Member for Don Valley, the hon. Member for Hartlepool (Mr Wright) and others.

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I just want to say about the small business commissioner that many will say “Well, it sounds like a good idea, but he or she won’t have the teeth and the powers.” It is important to understand that the many businesses that rightly complain about late payment already have a contract with the other party, so the late payment is a breach of that contract’s terms and conditions and they do therefore have redress to law, as Members have outlined. However, the following good point was made: this is not just about the cost of going to litigation; it is also about the relationship between the smaller business and the other party and it not wanting to undermine that relationship. There is, therefore, a reluctance to go to court. Those people can go to the SBC to make their complaint, but it would be wrong to put that person in some quasi-judicial role given that there is an existing legal relationship between the two parties in that instance and they can go to law.

The other sort of case that we anticipate will interest the SBC is when a small business is in effect making a complaint before a contract has been signed about terms that are being put on them by the other party. They will be able to go to the SBC and raise that complaint.

What happens in Australia has been mentioned. I have spoken to the SBC in Australia and have learned a great deal from his wise words. He does not have any greater powers—[Interruption.] No, he doesn’t—not in relation to late payments. What he does do, however, and what he has achieved by virtue of the huge credibility he brings to the post and the huge respect he has, is change the culture, and that at its heart is what we seek to do. We want to change the culture so those bigger businesses understand that this is no longer acceptable, regardless of whether they put it into their Ts and Cs or just in practice do not pay small businesses in a reasonable length of time. This is about changing culture. That is what we seek to achieve, and I am confident we can do that.

I just want to finish off by dealing with exit payments. I want to say a few words to the hon. Member for Ynys Môn (Albert Owen) and my hon. Friend the Member for Charnwood (Edward Argar). I say to the hon. Gentleman that Wales will get the benefit of the extra powers we intend to put in. I pay credit to him for the work he and the Secretary of State are going to do to make sure we extend superfast broadband throughout the whole of the UK—and to make sure everybody can get a proper mobile phone signal, too. That is absolutely critical.

On public sector exit payments, I want to say the following. On Magnox workers, I am more than happy to meet any Members to discuss this important issue in relation to them. On NHS workers, I specifically asked for that work to be done and my officials tell me that no NHS employee on £47,000 will be affected—[Interruption.] Opposition Members say that is not true; I do not know whether they have done the work on it, but my officials have. I am absolutely determined that we will look at these figures when we go into Committee. We will get that evidence and we will make sure that the figures are put to everybody so that we all know the real situation. What we do know is that there is a very small number of workers in the public sector on about £25,000 who could be caught by this—[Hon. Members: “Ah!”] But those are extremely rare conditions. We will do this in Committee. I urge everybody to vote for the Bill.

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Question put, That the Bill be now read a Second time.

The House divided:

Ayes 300, Noes 62.

Division No. 181]


6.59 pm


Adams, Nigel

Afriyie, Adam

Aldous, Peter

Allan, Lucy

Allen, Heidi

Andrew, Stuart

Ansell, Caroline

Argar, Edward

Atkins, Victoria

Bacon, Mr Richard

Baker, Mr Steve

Baldwin, Harriett

Baron, Mr John

Barwell, Gavin

Bebb, Guto

Bellingham, Sir Henry

Beresford, Sir Paul

Berry, Jake

Berry, James

Bingham, Andrew

Blunt, Crispin

Boles, Nick

Bone, Mr Peter

Borwick, Victoria

Bottomley, Sir Peter

Bradley, Karen

Brady, Mr Graham

Brake, rh Tom

Brazier, Mr Julian

Bridgen, Andrew

Brine, Steve

Brokenshire, rh James

Bruce, Fiona

Buckland, Robert

Burns, Conor

Burns, rh Sir Simon

Burrowes, Mr David

Burt, rh Alistair

Cairns, Alun

Carmichael, rh Mr Alistair

Carmichael, Neil

Carswell, Mr Douglas

Cartlidge, James

Cash, Sir William

Caulfield, Maria

Chalk, Alex

Chishti, Rehman

Chope, Mr Christopher

Churchill, Jo

Clark, rh Greg

Cleverly, James

Coffey, Dr Thérèse

Collins, Damian

Colvile, Oliver

Costa, Alberto

Cox, Mr Geoffrey

Crabb, rh Stephen

Davies, Byron

Davies, Chris

Davies, David T. C.

Davies, Glyn

Davies, Dr James

Davies, Mims

Davies, Philip

Davis, rh Mr David

Dinenage, Caroline

Djanogly, Mr Jonathan

Donelan, Michelle

Dorries, Nadine

Double, Steve

Dowden, Oliver

Doyle-Price, Jackie

Drax, Richard

Drummond, Mrs Flick

Duddridge, James

Duncan Smith, rh Mr Iain

Dunne, Mr Philip

Elliott, Tom

Ellis, Michael

Ellison, Jane

Elphicke, Charlie

Eustice, George

Evans, Graham

Evans, Mr Nigel

Evennett, rh Mr David

Fabricant, Michael

Fallon, rh Michael

Farron, Tim

Fernandes, Suella

Field, rh Mark

Foster, Kevin

Fox, rh Dr Liam

Frazer, Lucy

Freeman, George

Freer, Mike

Fuller, Richard

Fysh, Marcus

Gale, Sir Roger

Garnier, rh Sir Edward

Garnier, Mark

Gauke, Mr David

Ghani, Nusrat

Gibb, Mr Nick

Gillan, rh Mrs Cheryl

Goodwill, Mr Robert

Gove, rh Michael

Graham, Richard

Grant, Mrs Helen

Grayling, rh Chris

Green, Chris

Green, rh Damian

Greening, rh Justine

Grieve, rh Mr Dominic

Griffiths, Andrew

Gummer, Ben

Gyimah, Mr Sam

Halfon, rh Robert

Hall, Luke

Hammond, Stephen

Hancock, rh Matthew

Hands, rh Greg

Harper, rh Mr Mark

Harrington, Richard

Hart, Simon

Haselhurst, rh Sir Alan

Hayes, rh Mr John

Heald, Sir Oliver

Heappey, James

Heaton-Harris, Chris

Heaton-Jones, Peter

Henderson, Gordon

Herbert, rh Nick

Hinds, Damian

Hoare, Simon

Hollingbery, George

Hollobone, Mr Philip

Holloway, Mr Adam

Hopkins, Kris

Howarth, Sir Gerald

Howell, John

Howlett, Ben

Huddleston, Nigel

Hunt, rh Mr Jeremy

Hurd, Mr Nick

James, Margot

Javid, rh Sajid

Jayawardena, Mr Ranil

Jenkin, Mr Bernard

Jenkyns, Andrea

Johnson, Gareth

Johnson, Joseph

Jones, Andrew

Jones, rh Mr David

Jones, Mr Marcus

Kawczynski, Daniel

Kennedy, Seema

Kirby, Simon

Knight, rh Sir Greg

Knight, Julian

Kwarteng, Kwasi

Lancaster, Mark

Latham, Pauline

Leadsom, Andrea

Lefroy, Jeremy

Leigh, Sir Edward

Leslie, Charlotte

Letwin, rh Mr Oliver

Lewis, Brandon

Lewis, rh Dr Julian

Liddell-Grainger, Mr Ian

Lidington, rh Mr David

Lilley, rh Mr Peter

Lopresti, Jack

Lord, Jonathan

Loughton, Tim

Lumley, Karen

Mackinlay, Craig

Mackintosh, David

Main, Mrs Anne

Mak, Mr Alan

Malthouse, Kit

Mann, Scott

Mathias, Dr Tania

Maynard, Paul

McCartney, Jason

McCartney, Karl

McLoughlin, rh Mr Patrick

McPartland, Stephen

Menzies, Mark

Mercer, Johnny

Merriman, Huw

Metcalfe, Stephen

Miller, rh Mrs Maria

Milling, Amanda

Mills, Nigel

Milton, rh Anne

Mitchell, rh Mr Andrew

Mordaunt, Penny

Morgan, rh Nicky

Morris, Anne Marie

Morris, David

Morris, James

Morton, Wendy

Mowat, David

Murray, Mrs Sheryll

Murrison, Dr Andrew

Neill, Robert

Nokes, Caroline

Norman, Jesse

Nuttall, Mr David

Offord, Dr Matthew

Opperman, Guy

Parish, Neil

Pawsey, Mark

Penning, rh Mike

Penrose, John

Percy, Andrew

Perry, Claire

Philp, Chris

Pickles, rh Sir Eric

Pincher, Christopher

Prentis, Victoria

Prisk, Mr Mark

Pritchard, Mark

Pugh, John

Pursglove, Tom

Quin, Jeremy

Quince, Will

Raab, Mr Dominic

Redwood, rh John

Rees-Mogg, Mr Jacob

Robertson, Mr Laurence

Robinson, Mary

Rosindell, Andrew

Rudd, rh Amber

Rutley, David

Sandbach, Antoinette

Scully, Paul

Selous, Andrew

Shapps, rh Grant

Sharma, Alok

Shelbrooke, Alec

Skidmore, Chris

Smith, Chloe

Smith, Henry

Smith, Julian

Smith, Royston

Soames, rh Sir Nicholas

Solloway, Amanda

Soubry, rh Anna

Spelman, rh Mrs Caroline

Spencer, Mark

Stephenson, Andrew

Stevenson, John

Stewart, Bob

Stewart, Iain

Streeter, Mr Gary

Stride, Mel

Stuart, Graham

Sturdy, Julian

Sunak, Rishi

Swayne, rh Mr Desmond

Swire, rh Mr Hugo

Syms, Mr Robert

Thomas, Derek

Throup, Maggie

Timpson, Edward

Tolhurst, Kelly

Tomlinson, Justin

Tomlinson, Michael

Tracey, Craig

Trevelyan, Mrs Anne-Marie

Truss, rh Elizabeth

Tugendhat, Tom

Turner, Mr Andrew

Tyrie, rh Mr Andrew

Vaizey, Mr Edward

Vara, Mr Shailesh

Vickers, Martin

Villiers, rh Mrs Theresa

Walker, Mr Charles

Walker, Mr Robin

Wallace, Mr Ben

Warburton, David

Warman, Matt

Watkinson, Dame Angela

Wharton, James

Whately, Helen

Wheeler, Heather

White, Chris

Whittaker, Craig

Whittingdale, rh Mr John

Wiggin, Bill

Williamson, rh Gavin

Wilson, Mr Rob

Wollaston, Dr Sarah

Wood, Mike

Wragg, William

Wright, rh Jeremy

Zahawi, Nadhim

Tellers for the Ayes:

Sarah Newton


Stephen Barclay


Ahmed-Sheikh, Ms Tasmina

Arkless, Richard

Bardell, Hannah

Black, Mhairi

Blackford, Ian

Blackman, Kirsty

Boswell, Philip

Brock, Deidre

Brown, Alan

Cameron, Dr Lisa

Chapman, Douglas

Cherry, Joanna

Cowan, Ronnie

Crawley, Angela

Day, Martyn

Docherty, Martin John

Donaldson, rh Mr Jeffrey M.

Durkan, Mark

Edwards, Jonathan

Ferrier, Margaret

Gethins, Stephen

Gibson, Patricia

Grady, Patrick

Grant, Peter

Gray, Neil

Hendry, Drew

Hermon, Lady

Hosie, Stewart

Kerevan, George

Kerr, Calum

Law, Chris

Mc Nally, John

McCaig, Callum

McDonald, Stewart Malcolm

McDonald, Stuart C.

McDonnell, Dr Alasdair

McGarry, Natalie

McLaughlin, Anne

Monaghan, Carol

Monaghan, Dr Paul

Mullin, Roger

Newlands, Gavin

Nicolson, John

O'Hara, Brendan

Oswald, Kirsten

Paisley, Ian

Paterson, Steven

Ritchie, Ms Margaret

Robertson, rh Angus

Robinson, Gavin

Saville Roberts, Liz

Shannon, Jim

Sheppard, Tommy

Simpson, David

Skinner, Mr Dennis

Stephens, Chris

Thewliss, Alison

Weir, Mike

Whiteford, Dr Eilidh

Williams, Hywel

Wilson, Corri

Wishart, Pete

Tellers for the Noes:

Marion Fellows


Owen Thompson

Question accordingly agreed to.

2 Feb 2016 : Column 888

2 Feb 2016 : Column 889

Bill read a Second time.

Enterprise Bill [Lords] (Programme)

Motion made, and Question put forthwith (Standing Order No. 83A(7)),

That the following provisions shall apply to the Enterprise Bill [Lords]:


(1) The Bill shall be committed to a Public Bill Committee.

Proceedings in Public Bill Committee

(2) Proceedings in the Public Bill Committee shall (so far as not previously concluded) be brought to a conclusion on Thursday 25 February 2016.

(3) The Public Bill Committee shall have leave to sit twice on the first day on which it meets.

2 Feb 2016 : Column 890

Proceedings on Consideration and up to and including Third Reading

(4) Proceedings on Consideration and proceedings in legislative grand committee shall (so far as not previously concluded) be brought to a conclusion one hour before the moment of interruption on the day on which those proceedings are commenced.

(5) Proceedings on Third Reading shall (so far as not previously concluded) be brought to a conclusion at the moment of interruption on that day.

(6) Standing Order No. 83B (Programming committees) shall not apply to proceedings on Consideration and up to and including Third Reading.

Other proceedings

(7) Any other proceedings on the Bill (including any proceedings on consideration of any message from the Lords) may be programmed.—(Kris Hopkins.)

Question agreed to.

Enterprise Bill [Lords] (Money)

Queen’s recommendation signified.

Motion made, and Question put forthwith (Standing Order No. 52(1)(a)),

That, for the purposes of any Act resulting from the Enterprise Bill, it is expedient to authorise:

(1) the payment out of money provided by Parliament of:

(a) any expenditure incurred under or by virtue of the Act by the Treasury, any other Minister of the Crown or the Commissioners for Her Majesty’s Revenue and Customs;

(b) any increase attributable to the Act in the sums payable under any other Act out of money so provided; and

(2) the payment of sums into the Consolidated Fund.—(Kris Hopkins.)

Question agreed to.

Lady Hermon (North Down) (Ind): On a point of order, Madam Deputy Speaker—[Interruption.]

Madam Deputy Speaker (Mrs Eleanor Laing): Order. The House must be quiet, as I am trying to hear a point of order.

Lady Hermon: I am most grateful to you, Madam Deputy Speaker, for accepting this important point of order. I think that this is the first time that this has arisen. I am in no way challenging the certification by the Speaker of provisions in this Bill as exclusively English or English and Welsh only. The guidance I seek relates to the Order Paper published for today’s business, which on page 6, under the title “Enterprise Bill [Lords]: Second Reading”, gives a note of Mr Speaker’s certification. At the very end, it states:

“The Northern Ireland Assembly decided not to approve a Legislative Consent Motion in respect of this Bill.”

That unfortunately gives the impression that the Northern Ireland Assembly has considered the whole Bill. Since we are in a three-month trial period, I wonder whether I might have some guidance.

I will stand corrected if this is wrong, but it is my understanding that as of this evening the only provision of the Bill that the Assembly actually considered was considered on 7 December 2015. In a letter dated 9 December, the Clerk to the Assembly wrote:

“I am writing to notify you”—

that is, the Clerk of the House of Commons—

2 Feb 2016 : Column 891

“that…the Northern Ireland Assembly did not consent to the provisions dealing with public sector exit payments contained in the Enterprise Bill”.

To the best of my knowledge, the Assembly has not yet fixed a date to consider whether to pass a legislative consent motion on the rest of the Bill. I am simply looking for guidance on the notes that appear in the Order Paper.

Madam Deputy Speaker: I am grateful to the hon. Lady for drawing her concerns to the attention of the House and to my attention, and I will, of course, pass that on to Mr Speaker.

The hon. Lady is correct about the wording of page 6 of today’s Order Paper, and I appreciate what she says about what has actually occurred in the Northern Ireland Assembly, about which I have no information, but I will take it that the hon. Lady’s description is correct, in which case there might be a discrepancy between what has occurred in one place and what has occurred through this Order Paper in this place.

As the hon. Lady rightly said, we are still in the experimental stages of this type of consideration of legislation—[Interruption.] Order. The House must be quiet when I am dealing with a point of order. As I said, the hon. Lady is aware that we are still in an experimental period, and the point which the hon. Lady has made is one that ought to be taken into consideration, and it will be taken into consideration, first, I am sure, by Mr Speaker—I will draw his attention to it—and also, I am sure, by the Procedure Committee, when it looks at how this new procedure is working. I am grateful to the hon. Lady for drawing this matter to the attention of the House.

2 Feb 2016 : Column 892

House of Commons Commission (External Members)

7.18 pm

The Deputy Leader of the House of Commons (Dr Thérèse Coffey): I beg to move,

That the following appointments be made to the House of Commons Commission in pursuance of section 1(4) of the House of Commons Commission Act 2015 -

(1) Dame Janet Gaymer DBE QC (Hon.), until 30 September 2018; and

(2) Jane McCall, for a period of three years.

Towards the end of the last Parliament, the House of Commons Commission Act 2015 gave statutory effect to recommendations made by the Committee on Governance of the House of Commons, including that there should be two external members of the Commission. The Act said that those members should be appointed by resolution of the House and that a motion for a resolution appointing an external member may be made only with the agreement of the Commission. I am pleased to report that the Commission has agreed the terms of the motion tabled today.

The motion identifies two appointments, and I will briefly outline the two people identified and the process they went through. Dame Janet Gaymer was formerly an external member of the House of Commons Management Board. She has attended the Commission as an acting external member since January 2015. In September 2015, the Commission decided that she should be invited to continue to serve until September 2018, in line with best practice relating to the maximum terms of non-executive board members.

Jane McCall was recruited following a fair and open competition, including attendance at an interview panel comprising Mr Speaker, other hon. Members, the Clerk of the House and an external panel member, Joanna Place, in December 2015. The motion would have the effect of appointing Jane McCall for three years, the Commission having agreed that the term limit for external members should be a period of three years, with the possibility of two further extensions of one year each. The Commission agreed that both would make a valuable contribution to its work. Further biographical details and an explanation of the process, written by the Clerk of the House, have been made available to all Members by means of an explanatory memorandum accompanying the motion. I am sure that the whole House will want to welcome them both to their appointments, and we look forward to their making a contribution to the work of the House in future. I therefore commend this motion to the House.

7.19 pm

Chris Bryant (Rhondda) (Lab): I do not intend to delay the House for very long either. I think the Deputy Leader of the House has got a bit of a cold and has been in bed all day, so we are very grateful to her for managing to struggle in this evening. The phrase in Wales is that she has been “bad in bed”—though not, I think, under the doctors in this case.

As a member of the Commission myself, I have obviously met the two members who are joining it. Dame Janet Gaymer is an eminent employment lawyer

2 Feb 2016 : Column 893

who has already brought a great deal of her experience and intelligence to many of our discussions about employment in this House, particularly that of staff of the House rather than staff of Members. She has been with us in all the time I have been on the Commission—which is not very long. Jane McCall is the deputy chief executive of Trafford Housing Trust, and she too brings a great deal of experience from a different world from that which most of us would necessarily know. So far, they have not shown any signs of going native in terms of their contributions to discussions. I think they are excellent appointments.

I would just make one other tiny point, which is that all six Members of the House of Commons who are members of the Commission are men, so it is quite a delight to have two women joining us as well. With that, I fully support the motion.

7.21 pm

Pete Wishart (Perth and North Perthshire) (SNP): I will be even briefer than the Deputy Leader of the House and the shadow Leader of the House in welcoming, on behalf of those on the SNP Benches, both these appointments—Dame Janet Gaymer, who has become a full-time member of the Commission, and Jane McCall. I am told by my hon. Friend the Member for Dundee East (Stewart Hosie), who is of course a distinguished member of the House of Commons Commission, that they will bring invaluable external expertise to its work, and this House will appreciate and respect that. I have to say that I was not familiar with these individuals, but having examined their CVs in great detail in the 10 minutes since I was notified of the fact that they were going to be appointed, I can say that the House has made a brave and courageous, but correct, decision in appointing them.

I echo the shadow Leader of the House in saying that it is welcome that we have two women on the Commission and acknowledging the fact that the elected members are all male. These two appointments will make a substantial contribution to the work of the Commission. I add my party’s support for this motion.

Question put and agreed to.

Business without Debate

Madam Deputy Speaker (Mrs Eleanor Laing): With the leave of the House, we shall take motions 6 and 7 together.

2 Feb 2016 : Column 894

Delegated Legislation

Motion made, and Question put forthwith (Standing Order No. 118(6)),

Safeguarding and Clergy Discipline Measure

That the Safeguarding and Clergy Discipline Measure (HC 722), passed by the General Synod of the Church of England, be presented to Her Majesty for her Royal Assent in the form in which it was laid before Parliament.

Diocesan Stipends Fund (Amendment) Measure

That the Diocesan Stipends Fund (Amendment) Measure (HC 723), passed by the General Synod of the Church of England, be presented to Her Majesty for her Royal Assent in the form in which it was laid before Parliament.—(Second Church Estates Commissioner.)

Question agreed to.

European Union Documents

Motion made, and Question put forthwith (Standing Order No. 119(11)),

Common Foreign and Security Policy, including Common Security and Defence Policy

That this House takes note of European Union Document No. 11083/15, Main aspects and basic choices of the CFSP (part II, point E, paragraph 25 of the Interinstitutional Agreement of 2 December 2013)–2014: Draft Annual Report from the High Representative of the European Union for Foreign Affairs and Security Policy to the European Parliament; and welcomes the constructive coordination between EU Member States and Institutions to achieve a range of positive foreign policy outcomes.—(Kris Hopkins.)

Question agreed to.

Business of the House


That, at the sitting on Monday 8 February, the provisions of Standing Orders No. 16 (Proceedings under an Act or on European Union documents) and No. 41A (Deferred divisions) shall not apply to the Motion in the name of Justin Tomlinson relating to the draft Social Security Benefits Up-rating Order 2016 and the Motion in the name of Mr Shailesh Vara relating to the draft State Pension (Amendment) Regulations 2016; the Speaker shall put the Questions necessary to dispose of those Motions not later than three hours after the commencement of proceedings on the first of those Motions; and proceedings on those Motions may continue, though opposed, after the moment of interruption.—(Kris Hopkins.)

2 Feb 2016 : Column 895

Real-time Credit Scoring

Motion made, and Question proposed, That this House do now adjourn.—(Kris Hopkins.)

7.23 pm

Chris Evans (Islwyn) (Lab/Co-op): Thank you for calling me to speak, Madam Deputy Speaker; it is a pleasure. I have been in this House for six years in May, and this is the first time I have ever been granted an end-of-day Adjournment debate.

I am delighted to have the opportunity to debate the topic of real-time credit scoring. For me, this is a very important issue, especially in the wake of several financial scandals over the years. The financial crash of 2008 proved one thing—that banking needs reform.

Whenever I think of banking, I think of the need for reform. Most people who use banks will want to borrow money and, unfortunately, personal lending and personal loans are the last area to be considered for reform by the Government.

Real-time credit scoring makes complete sense. The term describes the sharing of data from the credit reference agencies in real time or as close to real time as possible. This requires sufficiently up-to-date and complete relevant data from all the banks and financial institutions. People expect choice in any walk of life. It is what our system is based on. In the market for personal loans, the choice is too narrow and too clearly focused on the banks. Real-time credit scoring would shake up the market and bring about real change for consumers and banks.

The Financial Conduct Authority is looking at the issue. The case for regulation to enable data sharing to happen safely and effectively is compelling. If consumers could ask their banks to share real-time data about their account with a prospective lender, lenders could assess affordability more accurately, meaning that they could make more capital available to consumers with lower risk, thereby driving down cost.

Julian Knight (Solihull) (Con): I congratulate the hon. Gentleman on securing this debate on a very important topic. I support his call for real-time credit scoring, which needs to be explored further. In my previous occupation as a financial journalist, I dealt with a lady who got into £107,000 of debt in three days, following a relationship breakdown. If real-time credit scoring had been in place on the high street, she would not have got into such enormous debt, which caused further mental health issues. Perhaps the hon. Gentleman will reflect on that.

Chris Evans: I will develop that argument further. The hon. Gentleman identifies the nub of the problem—the delay in credit scoring needs to be addressed. That is common sense and I hope the Government will grasp the nettle.

Yvonne Fovargue (Makerfield) (Lab): I congratulate my hon. Friend on obtaining this debate. Does he agree that it is not just consumers who would benefit, but new entrants to the market who are lending for the medium term would be able to come in without having to buy two databases: the payday loan database, which operates

2 Feb 2016 : Column 896

in real time, and the other database that operates for banks and other financial institutions, which is at least a month behind?

Chris Evans: My hon. Friend speaks with some expertise. I pay tribute to the amount of work she has done on payday lending and raising the issues associated with it. She is right. The real problem is that the banks have a stranglehold on lending. They jealously guard their data and they are suspicious of the Data Protection Act. They therefore keep out of the market major competitors who could bring down interest rates, which is what we all want to see.

Jim Shannon (Strangford) (DUP): The hon. Gentleman is very gracious and I thank him for giving way. Credit risk is one of the top issues in financial services and there is a need for services to be automated. Is there a possibility through real-time credit scoring to provide new, exciting jobs in a well-paid high-end market? That would be a plus, if it was done in the right way.

Chris Evans: The hon. Gentleman is right. The more competitors there are in the market, the more jobs and the more specialised jobs there will be. I pay tribute to the hon. Gentleman, who speaks on every single topic. We have often joked privately that Westminster Hall is his lounge in the morning, as he speaks there so often. Coming from Northern Ireland and Wales, which have great similarities—both are heavily reliant on public sector jobs—the hon. Gentleman and I know that real-time data sharing and more competitors in the market would bring the private sector jobs that areas such as mine, his and the north-east are crying out for.

Currently, consumers pay the high costs in two ways. Consumers who can afford credit pay more than they should, and consumers to whom lenders ought not to lend are able to access credit even when it is not affordable. Better data would reduce both these problems, to the benefit of all concerned. So who would be the big losers if the Financial Conduct Authority acts? The banks and the incumbent lenders, but I do not think they would be losers. They would have to up their game and offer innovative products such as those that the hon. Gentleman mentioned. The FCA should also be ready to act in the teeth of resistance and entrenched interests, to further the interests of the consumer and our constituents.

I want to provide some background information to data sharing in consumer credit markets. An important interaction in the consumer credit market is the way in which lenders, particularly unsecured lenders—or, as we know them, high-cost, short-term credit lenders—assess a prospective borrower’s creditworthiness before agreeing whether to lend to them and setting the terms on which the loan is made. Lenders rely on information about a borrower’s creditworthiness from a range of services, including information supplied directly by the potential borrower as part of their loan application and information obtained from credit reference agencies.

Credit reference agencies aggregate information about the individual borrower’s personal information, past credit history and current credit commitments, and they supply that information to lenders on commercial terms. The three main credit reference agencies in the UK are Experian, Equifax and Callcredit. The way in which credit reference agencies aggregate and supply information

2 Feb 2016 : Column 897

is not regulated by the FCA, but operates on an industry-wide reciprocal basis. There is no requirement on individual lenders to share information, and although banks, which hold the most critical current account information, have the most detailed overview of a customer’s financial position, they do not in general supply data to credit reference agencies—of course not, because the data give them a leg up into the market and an advantage over other providers.

Veritec states that payday lenders have, as we all know, consistently failed to act in the best interests of consumers. Previous efforts to allow the UK payday lending industry to self-regulate have not succeeded, and tragic cases have come to light whereby individuals have become trapped in a downward spiral of debt through multiple, simultaneous loans. The actions of payday loan companies should be monitored by the FCA, and a database with real-time information on existing loans is required.

I do not want anyone to think that I want short-term lending to be banned. It is a massive industry that creates jobs for people. There is obviously a need for it, otherwise there would not be so much money in the market, but I believe that tools have to be made available so that decisions can be made about creditworthiness.

Crucially, not all lenders report data to more than one credit reference agency, and a reliance on credit reference agencies has played a key role in the downfall of the implementation of FCA rules and consumer protection. It is disappointing that the FCA will not consult on real-time data sharing requirements at this time.

Only a database with real-time information on existing loans will protect consumers from potential harm. A system should be considered real time only if every inquiry and every lending decision is updated instantaneously across 100% of the market. That would allow for lenders to know immediately if a consumer is eligible for a loan under the FCA’s responsible lending rules. However, the reciprocal principles that underpin data sharing require that lenders provide data to credit reference agencies “on a regular basis”, usually a minimum of once a month. Even where data are provided monthly, they can be as much as 60 days old by the time they are made available to other lenders.

The fact that lenders may routinely not have access to the most recent 60 days of a consumer’s credit history creates serious consequences for competition and, above all, consumer welfare, with the potential for unaffordable levels of debt. The question as to which lenders share information is an entirely commercial decision, and it is left to lenders to assess whether it is in their interests. They do not have to take into account any other information, such as the wider benefits to consumers.

Rather than just talking about affordability, it is very important to take a customer’s lifestyle into consideration, as happens when people take out mortgages. If we had real-time data sharing, that practice could be spread right across the board in personal lending.

Incumbent lenders, such as bankers, have no incentive to share data. Banks hold the most critical current account information, and the marginal benefit of sharing information and receiving reciprocal information is very small compared with the much larger marginal benefit to smaller lenders, such as unsecured lenders, or high-cost,

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short-term credit lenders. That creates a very important market failure. Having unrivalled access to credit data puts the banks in a unique position in considering whether to lend to consumers, and it allows them to lend at the most competitive rate. As a result, smaller lenders and new entrants are placed at a significant competitive disadvantage. That not only restricts competition, but distorts it in favour of one sub-market over another.

In addition, that risks cutting off some consumers from access to credit altogether. If they are unable to obtain a bank loan, such consumers must either rely on other forms of credit, such as unsecured lending or high-cost, short-term credit, or make do without a loan. Lenders want to lend to such under-served customers, but for lenders to be able to offer loans at reasonable interest rates, it is essential that they can minimise the risk of default. That means conducting rigorous affordability assessments, for which they require access to complete and up-to-date credit data.

The Competition and Markets Authority considered real-time data sharing in its payday lending market investigation. In its final report, it stated that it saw significant benefits to implementing real-time data sharing, but:

“We consider that further development of RTDS, specifically the frequency of updates, would benefit borrowers and lenders and that our recommendation is not redundant”.

In response to the report, the FCA was asked to consult on a range of issues, including real-time data sharing, in the high-cost, short-term credit market. In its consultation paper, the FCA stated:

“Although we see clear benefits to real-time data sharing, we do not propose to consult on introducing real-time data sharing requirements at this time.”

The FCA’s proposed approach is, in effect, to do nothing and assume that the issues associated with real-time data sharing will work themselves out through a combination of time and commercial pressures. It is true that entrepreneurial new companies are developing systems and services that use existing arrangements that are already available to consumers, such as online banking, to offer something approaching real-time credit data. Although there is scope for technology to make sharing faster and easier, unless real-time data sharing is supported by regulatory requirements from the FCA, it is likely to be opposed as a result of commercial pressures by large incumbent lenders to prevent more effective competition.

New technological solutions show that there are few material costs to implementing real-time data sharing. IT systems are already geared to real-time data sharing, and it is clear that financial institutions can mobilise their account information to support real-time data sharing for their own purposes without any difficulty. I have also been informed of the benefits of a regulatory database. A database would allow instant monitoring of loans and of the whole high-cost, short-term credit market, which can be simplified into a traffic light system for lenders and alerts when loans are made outside regulatory rules. If all applications were processed using the database, regulators would have certainty that the rules were being followed at point of sale in store or online. In addition, because the data are not shared among creditors and are used only by the regulator, commercially sensitive information and customer data are not bought and sold.

2 Feb 2016 : Column 899

The Financial Conduct Authority should ensure that any real-time data are used to ensure compliance at every step of the lending process. That can be achieved only if all lenders of short-term, high-cost credit report data into a real-time FCA database. The payday loan market operates best, and consumers are best protected, when a database is in place. Alongside that, high-level scrutiny and enforcement activity are required to limit and prohibit illegal lending.

The absence of real-time data sharing is important for two principal reasons. First, it is a partial cause of unaffordable personal debt. Consumers may be granted loans which they cannot truly afford, because providers do not have up-to-date information about their most recent liabilities and missed payments. Secondly, it is a critical factor that limits the degree and effectiveness of competition within many overlapping consumer credit markets, because it discourages providers from entering the market and limits their ability to compete fairly if they do enter. The FCA must revise its proposed strategy and develop long-term, future-proof regulatory solutions that promote real-time data sharing and enable the innovative use of new technology.

In our society, many people, whatever their political persuasion, believe that the Government are no longer on their side. Real-time data sharing, to me, is absolute common sense, and it can be adopted with a few simple steps. It is time, through this simple measure, for the Government to show that they can stand up to large corporations and organisations that are quite clearly trying to rig the market in their favour.

7.39 pm

The Economic Secretary to the Treasury (Harriett Baldwin): I congratulate the hon. Member for Islwyn (Chris Evans) on securing this very interesting debate. I want to assure him that my key priority as Economic Secretary is to ensure that financial services are on the side of people who work hard and who want to do the right thing and get on in life. Financial services should help people to achieve their aspirations at every stage of their lives, whether they are saving for their first home, taking out a mortgage, buying a car or saving and investing for their retirement.

This Government have fundamentally reformed the regulation of the consumer credit market to deliver our vision of one that is well functioning and sustainable and, vitally, can meet consumers’ needs. That is why we created a more robust regulatory system and transferred regulatory responsibility for consumer credit from the Office of Fair Trading to the Financial Conduct Authority in April 2014. The regime was designed to strike the right balance between proportionality and consumer protection. The FCA thoroughly assesses every single consumer credit firm’s fitness to trade as part of the authorisation process, and it has put in place binding standards. It proactively monitors the consumer credit market, focusing on the areas most likely to cause consumers harm. This Government have ensured that the FCA has robust powers to protect consumers.

It is very important that lenders act responsibly when deciding whether to grant credit and how much to give. The FCA makes it clear that a firm should lend responsibly, and that it should take reasonable steps to assess the

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customer’s ability to meet repayments in a sustainable manner, without having to borrow further. The hon. Gentleman is right that, ultimately, credit should only be extended to a consumer if they can afford it. Improving creditworthiness assessments will help to deliver a lower risk and a more affordable credit market.

When the responsibility for regulating consumer credit was transferred, the FCA turned key elements of the OFT’s “Irresponsible lending” guidance into binding rules. The rules set out that a firm should assess the customer’s creditworthiness with regard to the potential for the commitments to impact adversely on the consumer’s financial situation, and the consumer’s ability to make payments as they fall due. Although the FCA requires firms to undertake a creditworthiness assessment, including on the affordability of credit, it does not require firms to share or use all available credit data, whether real-time or otherwise, as the hon. Gentleman pointed out.

Providing lenders with a broad spread of information on which to base their lending decisions facilitates better decisions. The UK has a competitive credit information market that delivers this function. Credit data are shared by lenders through private credit reference agencies—the hon. Gentleman mentioned the three main ones—and lenders of all types provide credit reference agencies with information, including about traditional and non-traditional lenders. Providers of non-credit services, such as utilities, share data with credit reference agencies.

There are no specific FCA rules regarding the sharing of credit data in real time and there is no standard definition of what constitutes real-time data sharing, but the general principles that lenders follow when sharing data are set out in the “Principles of Reciprocity”, as drawn up by the credit industry in collaboration with the Information Commissioner. The principles mean that lenders can access only the same type of data that they share with other lenders. For real-time data sharing, they would need to report data in real time to each other if they wanted to access such data to inform creditworthiness assessments from other firms. Nothing currently prevents them from doing so. The Government have made it clear to lenders that appropriate real-time credit data sharing can greatly assist in making more accurate affordability assessments. Real-time credit data sharing allows firms to see whether an individual has credit agreements with other providers, and gives them a much better understanding of their burdens.

As I am sure the hon. Gentleman would agree—he mentioned this a few times—these issues are particularly salient in the high-cost, short-term credit market. Owing to the nature of that market, the availability of accurate and up-to-date data is all the more important. The FCA has said that there has been substantial recent progress by the industry in real-time credit data sharing for high-cost, short-term lenders. In fact, over 90% of high-cost, short-term lenders by market share currently meet the FCA’s expectations to share data in real time. The FCA expects the proportion of high-cost, short-term credit firms using real-time data sharing to increase further by the time the authorisation process is complete for most high-cost, short-term credit firms. However, it will continue to press for further improvements to ensure that up-to-date information is available to enable lenders to make more accurate affordability assessments that deliver better outcomes for consumers.

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That reflects the Government’s general approach to regulation, which focuses on the areas that are most likely to cause harm. There is obviously a particular risk in the payday market, which is why we capped the total cost of payday loans and why the FCA has placed expectations for real-time data sharing on this market.

It is worth noting that real-time data sharing is not a panacea. While credit reference agencies are a key part of the consumer credit market and are regulated by the FCA, the information record does not necessarily provide a complete picture of the consumer’s financial situation. Therefore, improving the depth and breadth of the data, rather than the timing, is more important to the affordability of credit.

The decentralised nature of the UK’s system of credit referencing means that credit reference agencies are well placed to respond to this challenge. Unlike some other markets that are highly centralised, credit reference agencies in the UK compete on the extent and timeliness of their data coverage. As such, it is in their interest to provide as much relevant data about consumers in the most timely manner possible in order to assist lenders in making the most accurate affordability assessments possible. One credit reference agency recently launched an initiative that will enable the use of social rent, as well as utilities data. That could assist consumers with thin credit files to access more affordable credit.

The FCA will continue to challenge payday lenders, as part of its ongoing authorisation process, about the robustness of their affordability assessments and their use of real-time data. It is currently considering the responses to a consultation that includes its approach to real-time data sharing. More widely, the FCA is looking into how firms assess creditworthiness and affordability, including how consumers may be protected from taking on unmanageable debt.

The Government are committed to developing the FinTech sector so that this country becomes the global hub for financial innovation, giving consumers greater choice and access to credit in the process. The hon. Member for Islwyn mentioned the potential for jobs and economic activity, as did the hon. Member for

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Strangford (Jim Shannon) when he was here. The FinTech industry will be crucial in meeting these objectives, particularly in fostering a climate that encourages data sharing and gives consumers greater choice in the process.

I assure the hon. Member for Islwyn that our FinTech industry is a world leader. In 2014, it contributed £20 billion to GDP and employed 135,000 people. Its development has kept our financial services sector at the cutting edge of innovation, increased competition and choice for consumers, and helped businesses to get better services. I see the developments that we are discussing very much within that context. The Government have taken a range of actions to support alternative lenders and the digital currency sector. We have appointed Britain’s first special envoy for FinTech, Eileen Burbidge, to support our engagement with the sector. We have worked with the FCA to create the right regulatory environment for the sector to flourish, while protecting consumers.

The Government are working with industry to deliver a framework for the open application programming interface. In plain English, that will mean that the banks’ data and computer languages are much more accessible to other computers and FinTech firms. That will deliver greater competition and innovation, particularly in the personal and business current account sectors, by enabling innovative third-party firms, such as FinTechs, to make use of bank data in the interests of customers. Within this innovative space, there is scope for FinTechs to shape the consumer credit market positively and to do more on real-time credit information. For example, the FCA is considering opening access to consumers’ credit card usage data to other market participants.

I thank the hon. Member for Islwyn and congratulate him once again on raising a very interesting subject for debate this evening. I stress that the Government and the FCA understand the importance of this matter to his constituents and to the country.

Question put and agreed to.

7.49 pm

House adjourned.