Financial Services Bill

Debate between Tracey Crouch and Gareth Thomas

Monday 10th December 2012 Commons Chamber

[Mr Thomas]

My hon. Friend makes a very good point. The situation is particularly stark in rural communities, but it is increasingly stark in many urban areas. North Harrow, in my constituency, no longer has a bank, and businesses in that area are extremely disappointed by the lack of easy access to banking services and the inability to have a proper discussion with a local bank manager about their finance needs.

I hesitate to suggest that the Minister might enjoy and benefit from a foreign trip, but should he find time in his diary, he might like to go to Washington and spend a little time with the National Community Reinvestment Coalition. He would find a considerable amount of expertise there on the disclosure of lending data by banks to businesses and individual consumers. He might like to bring back to the House, and to his conversations with those in the financial services industry, the benefits of the US legislation, the most recent update of which has happened since 2010.

Let me return briefly to the definition of payday lenders. If I may say so, I thought the Minister quite skilfully used an intervention made by my hon. Friend the Member for Walthamstow (Stella Creasy) to avoid defining payday lenders. I gently encourage the Minister to look again, not necessarily in the context of this debate, but separately, at how payday lenders should be defined. Even with the power proposed by the Lords, the question of definition is still ducked. If there is to be the interest rate cap for which so many Members, led by my hon. Friend the Member for Walthamstow, have campaigned, we must have clearer definitions of which financial services businesses are included within the term “payday lenders” or the high-cost credit definition that was just mentioned, so that proper action can be taken.

I fear that many of the payday lenders who have looked at the amendment that the new archbishop has helped to force over the line, perhaps, in the House of Lords will recognise that there is no definition as yet, and so will not feel sufficiently worried to change their practices.

[Tracey Crouch (Chatham and Aylesford) (Con)]

I had not intended to speak in this debate, but I rise briefly to talk about Lords amendment 78. I want to speak partly so that I can place on the record my recognition of the hard work done by the hon. Member for Walthamstow (Stella Creasy) on this issue. She has been recognised already across the House in winning many awards for her campaigning. It is true to say that she has been tireless on this issue, on which she has achieved a huge success—at the early stages of what will no doubt be a long and distinguished career in the House.

I want to thank their Lordships for the work they did the week before last on this issue, and to congratulate the Government on listening to the concerns across the House. This issue concerns many of us on both sides of the House, even though there may be an urban myth that those of us who represent south-east Conservative seats do not face many of the concerns about deprivation and the impact that the high-cost credit industry is having on our constituents.

Chatham has two significantly deprived areas. One problem seen by the local citizens advice bureau is an increase in the number of people from the more affluent wards in the area coming in to talk to their debt advisers. In Medway we now have average personal debt levels of nearly £43,000, which I think is incredibly high. We in Medway have therefore joined up, across all the parties, to try to provide a solution to some of the problems. First and foremost, I joined the local citizens bureau to chair an inquiry to try to establish precisely what is driving people into increased personal debt. We have done so by, rather controversially, partnering with Wonga to do a proper survey across all the wards in the Medway authority, looking into what is causing people to increase their levels of debt. However, let there be no hesitation about the fact that, as I have already made clear, if it is payday loan companies that are driving people, particularly the more vulnerable members of society, towards debt, we shall make strong representations to ensure stricter regulation of these companies.

The hon. Member for Nottingham East (Chris Leslie) raised what I thought were interesting issues about the definition of high-cost credit lending. One of the organisations that has not yet been debated here is the pawnbroking industry. I recently saw an advert placed outside both a pawnbrokers and a payday loan company, inviting people to take out loans of up to £50,000. It turned out that this was for businesses. I have real concerns about businesses taking out payday loans where they are securing the entire company against such credit. I recognise an asset is being secured in pawnbroking, but entire businesses could suddenly be lost if they are unable to meet their repayments.

I have some concerns about whether this regulation will cover pawnbroking companies, as there is a bit of a loophole in the credit regulations when it comes to pawnbrokers. I would like to see us take a proper look at how pawnbroking companies are offering increasing amounts to help with short-term cash supply. Although there are some limitations and I do not think it is recommended that businesses take a loan of more than £25,000, the fact is that pawnbroker loans can go up to £100,000. It is incredibly irresponsible for companies to be lending that to businesses, particularly when it is unlikely that the businesses are going to be able to meet their repayment plans.

Co-operatives and Mutuality

Debate between Tracey Crouch and Gareth Thomas

Thursday 30th June 2011 Westminster Hall

[Tracey Crouch (Chatham and Aylesford) (Con)]

It is a pleasure to serve under your chairmanship, Mr Amess. I am grateful for the opportunity to speak in this important debate a few days into co-operatives fortnight. I congratulate the hon. Members for West Bromwich West (Mr Bailey) and for Islwyn (Chris Evans) on persuading the Backbench Business Committee to enable them to initiate this debate. I very much enjoyed the speech of the hon. Member for Islwyn. I loved the delicious irony of a boy from a mining community in the valleys who went to work for a bank that was bailed out by taxpayers crossing the picket line today to talk about co-operatives. I congratulate him enormously on that.

I am sure that many Opposition Members are surprised to see hon. Members on this side of the House taking a real and genuine interest in a debate on the co-operative movement. I hope that I can not only reassure hon. Members that we support co-ops and mutuals, but reclaim a bit of the movement back for the Conservative party. I was amused to read, in the Library debate pack, an opening line from Guardian journalist Tim Smedley, which read:

“Have you heard the one about the Conservative-led government encouraging public servants to form employee-owned mutuals?”

He went on to write that, “this is no joke.” I know that we are supposed to bristle at the Labour party’s missive to the media to call the coalition a Conservative-led Government. However, as a Conservative Back Bencher and member of the Conservative Co-operative Movement, if a left-wing paper wishes to highlight, even in a mocking tone, our support for co-operatives and mutuals, frankly, that is fine with me.

[Mr Gareth Thomas (Harrow West) (Lab/Co-op)]

Can the hon. Lady tell us how many members of the Conservative Co-operative Movement there are? The 37 alluded to by the hon. Member for Hereford and South Herefordshire (Jesse Norman) does not suggest that it is much of a movement.

[Tracey Crouch]

As the hon. Gentleman mentioned, my hon. Friend said that there are 37 members, but the movement has only just been launched. We are a small but perfectly-formed group. [Interruption.] I may also add, thanks to help from my hon. Friends from a sedentary position, that there are 37 members within Parliament.