Economic Growth

Yvonne Fovargue Excerpts

Wednesday 15th May 2013 Commons Chamber

[Yvonne Fovargue (Makerfield) (Lab)]

There may have been concentration today on a certain topic in the Queen’s Speech, but in Makerfield it is the economy, the cost of living and jobs that concern my constituents the most. Without confidence in the economy and job security, they will not spend, and without spending the economy will not thrive. I stress that there need to be real jobs with real opportunities. When I last checked the universal jobmatch site, 45 of the 67 sales jobs that were advertised within 10 miles of Wigan were self-employed catalogue distribution jobs, many of which demand an up-front fee.

I welcome the consumer Bill of Rights, which has been proposed to simplify and consolidate consumer law. If people are to spend, it is important that they are free from misleading and aggressive practices and have access to proper redress if they have been ripped off. They should not have to go through tortuous legal processes because of grey areas. Last year, Citizens Advice found that three quarters of consumers had had a problem that was covered by existing consumer rights, and 94% of them had complained but only 10% were successful. Improvements are needed, and I hope that the consumer rights Bill will be amended so that consumers understand their rights, are clear about what to expect and are given a time scale within which they can expect redress.

One notable omission from the consumer rights Bill, and from the Financial Services (Banking Reform) Bill, is action on lead generators and the marketing texts that people receive. Some companies, particularly in the high-cost credit sector, for example Cash Lady, do not provide the service themselves but simply gather details and pass them on to lenders. The consumer is often not aware who their lender is until they get the paperwork. They do not know whether the company from which they are buying is in a trade association or has a code of practice that they can use if there is a problem. They think they are taking out a loan with one company when they are actually taking it out with another.

The consumer Bill of Rights aims to provide transparency, which I would like to see extended to all products and services. Particularly in the high-cost credit sector, consumers do not always know the full implications of their agreement. How many, for example, would agree to a continuous payment authority if they knew that it gave the lender unlimited powers to dip into their bank account at any time and for any amount? Such a power also militates against the rigorous affordability checks required.

Another area contributes hugely to the strength of our economy but is often overlooked: the humble bus. A excellent report was launched this week by Pteg entitled “The case for the urban bus”, and it describes the contribution that buses make to the economy. Bus networks generate more than £2.5 billion in economic benefits, about £1.3 billion of which reflects user benefits from access to jobs, training, shopping and leisure opportunities. The remaining £1.2 billion of benefits accrues to other transport users and society at large through decongestion, reduced pollution, lower accident rates and productivity. The overall economic benefits are around five times higher than the amount of public funding going to the bus networks, and the bus industry has a turnover in excess of £5 billion, much of which is ploughed back into regional economies through the supply chain and consumption expenditure by staff.

Public expenditure on bus networks is therefore likely to have a large and direct impact on regional economic growth. It helps the economy by contributing to flexible labour markets and by increasing the number and range of jobs accessible to workers, in particular less-skilled workers who are likely to have less access to a car. However, the bus service operators grant has been cut, and there are fears that it might be under threat in the next spending review. Instead of salami slicing the BSOG—an easy target—I urge Treasury Ministers to read the report and recognise the contribution that the bus makes to the economy. It might be the Cinderella of the transport service, but it is used by the highest numbers of our constituents—more than any other mode of transport—and we must look at the benefits that the service accrues, instead of cutting it willy-nilly.