Amendments made: 47, page 47, line 17, at end insert—
“‘the data protection legislation’ has the same meaning as in the Data
Protection Act 2018 (see section 3 of that Act);”
This amendment inserts a definition of “the data protection legislation”, which is a term now used in paragraph 19 of this Schedule (as amended by Amendment 48) to reflect the changes made by the Data Protection Bill.
Amendment 48, page 49, line 32, leave out “Data Protection Act 1998” and insert “data protection legislation”.—(John Glen.)
This amendment changes the reference to the Data Protection Act 1998 to a reference to the “data protection legislation” to reflect the changes to data protection legislation that are to be made by the Data Protection Bill.
Amendments made: 28, line 2 leave out “cold-calling and”.
This amendment, together with Amendment 29, amends the long title in consequence of NC3 and NC4.
Amendment 29, line 3 at end insert—
“to provide a power to make regulations prohibiting unsolicited direct marketing in relation to pensions and other consumer financial products and services;”.—(John Glen.)
See explanatory statement for amendment 28.
I will now suspend the House briefly in order to make a decision about certification. The Division bells will be rung two minutes before the House resumes.
I can now inform the House that I have completed certification of the Bill, as required by the Standing Order. Clauses 29 and 31 of, and schedule 4 to, the Bill, as amended, relate exclusively to England and Wales and are within legislative competence. Copies of the final certificate will be made available in the Vote Office and on the parliamentary website.
The House forthwith resolved itself into the Legislative Grand Committee (England and Wales) (
[Dame Rosie Winterton in the Chair]
I remind hon. Members that, if there is a Division, only Members representing constituencies in England and Wales may vote. As the knife has fallen, there can be no debate. I call the Minister to move the consent motion.
Motion made, and Question put forthwith (Programme Order,
That the Committee consents to the following certified clauses of, and schedules to, the Financial Guidance and Claims Bill [Lords]—
Clauses and schedules certified under
Question agreed to.
The occupant of the Chair left the Chair to report the decision of the Committee (
The Deputy Speaker resumed the Chair; decision reported.
On a point of order, Madam Deputy Speaker. I am grateful to you for all the onerous contributions that you had to make to provide certification, but what can be done to ensure that the huge numbers of English Members who wish to speak in the English Legislative Grand Committee get their opportunity to do so? This is Dave’s legacy, for goodness’ sake. English votes for English laws was supposed to be the most important issue possible. It seems that, once again, English Members have been totally denied their opportunity. Is not this just the greatest waste of time that this House has to endure?
I beg to move, That the Bill be now read the Third time.
This Bill is an important piece of legislation. When it started its journey in the other place in June last year, my noble colleague Baroness Buscombe told peers that it would create a framework that would ensure that people have access to the information and guidance they need to make the important and effective financial decisions that we all have to make at some point in our lives. It will also enable the transfer of claims management regulation from the Ministry of Justice to the Financial Conduct Authority, to ensure that there is a tougher regulatory framework and that people have access to high-quality claims handling services.
I do indeed. We need to have bodies that have teeth, that are able to do this and that we can have faith in. My hon. Friend makes a very good point.
The Bill has delivered on what we said it would, but it now does so much more. The inclusion of a ban on pensions cold-calling, the commitment to introduce a debt respite scheme and the ban on claims management companies cold-calling, as well as the amendment on pensions guidance, all strengthen the Bill. I welcome and appreciate the collaborative spirit that the Bill has engendered across both Houses and the hard work that officials have done. There has been a broad consensus. That is positive, and it has helped so many people in so many different ways.
In the other place, we listened carefully to the thoughtful of views of those who engaged in the debates. We appreciate, in particular, the input of Lord Stevenson, Lord McKenzie, Lord Sharkey, Baroness Drake, Baroness Kramer and others who have helped us to craft the clauses on debt respite, cold-calling, pensions guidance and consumer protection. There were some very constructive and helpful debates on other issues that helped us to ensure that the FCA will have regard to the needs of consumers when setting the single financial guidance body’s standards, to strengthen offences on impersonating the new body, to extend the claims management provisions to Scotland and—thanks to the tireless work of Baroness Meacher—to introduce an interim fee cap in respect of PPI claims. To quote Lord McKenzie on Third Reading:
“These changes have come about because, broadly, we have had a shared analysis of what the Bill could achieve”.—[Official Report, House of Lords,
There have been many positive contributions in this House as well. We heard some excellent speeches on Second Reading from Members on both sides of the House. I remember, for example, the powerful speech by my hon. Friend Michelle Donelan about debt arguably being one of the biggest challenges to social mobility and, as Conservative Members particularly support social mobility, how important it is to be able to give this financial support. I still recall the very strong contributions from Yvonne Fovargue on the proposed debt respite scheme and from my hon. Friend Mrs Latham, who recounted the hardships faced by her constituents.
We have listened to what hon. Members said in respect of pensions cold-calling and default pensions guidance. I would like to put on record again our thanks to the Work and Pensions Committee for its report highlighting some of these issues. I thank the Select Committee, peers and hon. Members in this House for the way in which all sides have worked collaboratively and constructively on these issues. We have been able to accept a number of the Committee’s recommendations. I am sure that all hon. Members will agree that, with its help, we have made huge progress in these areas. I look forward to continuing co-operation when we bring forward regulations on these matters later this year.
We have also listened to what was said in respect of cold-calling from claims management companies. In Committee, we tabled amendments to ban cold-calling in relation to claims management services unless prior consent has been given. This honours a commitment that we made in the other place. We believe that these changes—along with our commitment to keep under review, and potentially ban, other areas of unsolicited direct marketing in relation to consumer financial products —demonstrate our commitment to tackling unsolicited marketing calls. The Information Commissioner’s Office, which enforces restrictions on unsolicited electronic direct mailing, has the power to fine offenders up to £500,000. In 2017, the ICO issued 29 civil monetary penalties totalling £2.83 million.
In Committee, we also tabled amendments to the claims management clauses. We are now placing a duty on the Law Society of England and Wales to cap fees in relation to financial services claims management activity, as well as introducing a power for the Law Society of Scotland to restrict fee charges for this activity, to ensure that consumers are protected no matter which type of claims management service provider they use, whether it is regulated by the legal service regulators or by the FCA.
This Bill deals with important and fundamental issues not just to this House but to the many hundreds of thousands of people who will benefit from the services of a new single financial guidance body—particularly those who are struggling with debt.
I am pleased to be able to confirm again today for Luciana Berger, Norman Lamb and my hon. Friend Johnny Mercer that the Government recognise the importance of providing a suitable mechanism to access breathing space for people experiencing a mental health crisis. We understand that people in the midst of a mental health crisis are likely to be too unwell to access the breathing space scheme through a regulated debt advice provider. We commit to ensure that people receiving NHS treatment for a mental health crisis, in either a psychiatric in-patient setting or the community, are provided with a suitable alternative mechanism to access the breathing space scheme and benefit from the protections it will provide. That provision will be developed concurrently with the main breathing space scheme.
In respect of claims management companies, the Bill sends out a clear message that we are on the side of the public, providing a stronger framework to ensure that individuals are accountable for the actions of their businesses. While recognising that many claims management companies do good work to support people to claim compensation, we have sent a clear message that we will tackle malpractice where it exists, such as nuisance calls and the encouragement of fraudulent claims. I commend the Bill to the House.
Why does this Bill matter? It matters because of that Port Talbot shift supervisor who said he would never, ever forgive himself, having made a mistake and been conned into being sold short on his pension, with all 20 on his shift following his lead. It matters for the single mum in my constituency who had been a victim of domestic violence and had continuously to borrow to pay off her debt. As she said to me, “I borrowed to pay the debt because I borrowed to pay the debt because I borrowed to pay the debt.” It matters to Christine, who was first diagnosed with cancer in 2009 but is still feeling the financial effects today—in debt, pursued constantly for it and her bank oblivious to her condition.
The Bill will help to end scams. It will help to ensure that rogues who are exploiting in particular the vulnerable and undercutting the reputable have no place in the market in future. This is a good Bill. It was strengthened in the other place and then in Committee. It establishes the single financial guidance body, which is a strong step in the right direction.
The Bill has also seen progress today. Progress was previously made on issues of immense importance, in particular pensions cold-calling. It is deeply welcome that the Government have listened to the strong representations made across the House on breathing space and recognise the particular problems of those suffering from mental ill health. The new body will promote greater understanding and help people to plan their finances and retirement.
There is still further progress to be made. We will engage with the Government following our earlier exchanges, because of our very strong view that the time has come to stop all cold-calling for commercial purposes by claims management companies. There is very important progress yet to be made.
The Government have constructively engaged and sent some welcome signals. They have talked about the next stage of the process. The sooner we can get there, the better. I would like to thank a number of people. While there were rather robust exchanges over GKN earlier on in the Chamber, I have to praise both the Under-Secretary of State for Work and Pensions, Guy Opperman, and the Economic Secretary to the Treasury for their helpful, constructive and collaborative approach.
I would like to thank the Work and Pensions Committee for its characteristically first-class intervention and advice, and in particular its Chair, my right hon. Friend Frank Field. The Committee can take particular credit for the progress made on the ban on pensions cold-calling.
I would like to thank all colleagues in this place who tabled amendments and contributed to the various debates that took place.
I thank the Members of the other place for the contributions that they made, again across party—particularly, but not exclusively, Lords Sharkey, Altmann, McKenzie of Luton and Drake. I thank also the Commons Clerks and other staff who worked so hard with us to shape the Bill and to take it through Parliament. All those parties and organisations have contributed to the passage of the Bill with their wisdom and many topics of interest.
I thank those organisations and individuals who passed on their research or sometimes heartbreaking stories, which brought home to us the Bill’s importance. I often say that I believe we need a story to tell the stories, and we have heard so many stories—sometimes tragic ones—throughout the Bill’s passage. It is for people like them that we are all here, and I hope that the Bill will help them in the next stages, and as we move forward, making further progress, ensuring that it benefits all, but especially the most vulnerable in our society.
In conclusion, I have something to say to that steel shift supervisor who wept uncontrollably about the consequences of what he had done and the effect on others who followed his lead. We say to him and all those whose stories were told throughout the Bill’s passage that sometimes nothing can be done to put right the wrong that they suffered in the past, but in their own way, by telling their stories, making their contribution, they have helped to bring into being a very important body—the single financial guidance body—that will ensure that never, ever again are others treated as they were.
I echo the compliments that Jack Dromey, the shadow Minister paid to the Work and Pensions Committee and its Chair and to the two Ministers who have done most of the legwork on the Bill. The Under-Secretary of State for Work and Pensions, my hon. Friend Guy Opperman, and my hon. Friend the Economic Secretary to the Treasury have been exemplary in their handling of the Bill, as appears to be universally recognised. I would say to the shadow Minister that this is an immensely important Bill. It is very important for all the people we represent, building on the huge change that we made in giving people freedom around their pensions, and therefore there is a need to ensure that it is underpinned by proper advice and guidance.
I represent a number of financial firms in my constituency. I used to represent Legal & General, which was the biggest employer in my constituency, but it has had the impertinence to move out of Kingswood and go elsewhere. It is one of its rivals whose interests I defend. The pension freedoms that we announced in the Budget some time ago were a major challenge to two companies in my constituency—Just Retirement and Partnership. As one of my friends who worked at one of those companies said, “We have just a slight problem now, as the Government are not mandating that everybody must buy our product as an annuity. They now have options over their future.”
Those two companies were insurgents in the financial services market. Just Retirement specialises in the issue of equity release, which I addressed in the debate on the first group of amendments, trying to ensure that there is proper access to advice on people’s property as part of their asset structure in planning for retirement. Partnership specialised in identifying groups of annuitants with a shorter life expectancy, who therefore would be able to get a greater rate of return out of their pension investment. As people who had been saving with the big boys, such as Legal & General, moved into taking their pensions, they needed proper advice and guidance about the products that were available in the market.
I listened very carefully to the exchange between the Chair of the Select Committee and the Minister around the issue of the independence and impartiality of the advice that people will have access to. This will be the test that I apply to the Bill: people who are saving with a big player such as Legal & General must not be captured, in a sense, by simply not being exercised enough to seek independent advice in order properly to understand what options are available to them, and suborned as it were into continuing with the existing provider without understanding the options available to them. That is why the independence and impartiality, and the encouragement that people will get to seek that advice, is the test that needs to be set for whether this legislation will do the job, making them savvier about their pensions and the options available to them in retirement.
These matters are incredibly important to almost everyone in the course of their lives, when they come to make the big decisions about financial provision in retirement. I will be looking at this legislation, and at the undertakings that have been given, so that if it does not deliver what we hope it will, we can revisit it and ensure that people can access advice.
The Bill builds on the huge opportunities that we have given people to spend their own money in pursuit of their own priorities, while of course ensuring that they make sensible provision for their retirement, on the basis of advice and as informed consumers. That will take them away from being comfortable simply to be prisoners of their own big provider, without understanding the options available to them. We have given people their freedom and I hope that the Bill will ensure that they can use it in an informed way. That is a huge change, and one that I warmly support.
It is a pleasure to follow Crispin Blunt and I wish to echo much of what he has said. Much of what the Bill does is try to protect consumers from some of the unintended consequences of pension freedoms. We welcome the Bill.
I want to use the few minutes available to me to echo some of the thanks that have been offered by the Minister and the shadow Minister to all those involved, including the Clerks and the House staff. I thank my hon. Friend Mhairi Black, who served on the Public Bill Committee, and Emily Cunningham, who diligently provided support as part of the Scottish National party’s research team. I thank the Under-Secretary of State for Work and Pensions, Guy Opperman, and the Economic Secretary to the Treasury, John Glen, for their dialogue—we got there in the end. There were some issues along the way, not least the delays in getting to this point, but we are where we are. I thank the Work and Pensions Committee and its Chair, Frank Field, for their diligence in bringing issues to the fore. I also thank the stakeholders who provided expert advice and briefings throughout our deliberations.
We on the SNP Benches remain concerned about some aspects of the Bill, and we have all articulated that—the hon. Member for Reigate has just done so. We remain concerned about the opt-out from pension guidance and about cold calling. We will watch closely for the developments that the Government have promised as the Bill is signed into law.
I will not detain the House for long. In a long afternoon of debate on financial guidance and cold calling since the ten-minute rule Bill introduced by Stephen Kerr, we have heard how important it is that so many people receive support and proper independent financial guidance. I welcome the work that has been done on both sides of the House, by Front Benchers and Back Benchers. As a member of the Work and Pensions Committee, I am glad that we have been able to contribute to the work that has gone into the Bill. I hope that Ministers will continue to listen to the arguments as they develop the Bill further when it returns to the other place.
We have heard in recent hours about people suffering from mental health problems. They are more vulnerable to people seeking to take their money, whether through cold calling and doorstep selling. As we have heard, mental health problems can be exacerbated by debt. I hope that the Government will consider widening the definitions of debt and of mental health crisis. I have constituents in High Peak who, unfortunately, even at a time of crisis and having attempted suicide, are unable to access mental health crisis support—in-bed support is not available, and there is even a waiting list for support in the community. I therefore hope that the Government will have as wide a definition as possible of people either receiving crisis care or on the waiting list to receive crisis care—I am sorry to say that there are waiting lists for crisis care. The definition should be extended to all debt.
Recently, I asked some parliamentary questions about the level of debt being recovered under universal credit and was sorry to hear that about 6% of current full-service claimants are paying 40% of their universal credit payments to cover third-party debts, leaving them with just 60% of a universal credit payment, which is already lower for many recipients than legacy benefits. Those people have already seen cuts and this is leaving them with even less to pay their debts.
As we heard from my hon. Friend Stella Creasy, companies that provide consumer credit can be ruthless in hounding their customers and often contribute to mental health difficulties. In this era of rising household debt, we have nearly £200 million of consumer credit. Independent financial guidance and support are needed more than ever. I urge the Government to ensure that as many people as possible can access it.
Question put and agreed to.
Bill accordingly read the Third time and passed, with amendments.