Financial Guidance and Claims Bill [HL] - Report (1st Day)

Part of the debate – in the House of Lords at 6:00 pm on 24th October 2017.

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Photo of Lord Stevenson of Balmacara Lord Stevenson of Balmacara Opposition Whip (Lords) 6:00 pm, 24th October 2017

My Lords, I will speak also to Amendment 10 in this group. We may repeat some of the ground that has just been covered. Perhaps we can move at the speed of a jet engine rather than that of a turbo prop to expedite things, if I can extend the metaphor a little, as this issue is broadly similar and was raised in Committee.

I make two points. When we raised what is now Amendment 9 in the form of the then Amendment 16A, which I think was in the names of the noble Earls, Lord Kinnoull and Lord Listowel, and the then Amendment 18, which was in the name of the noble Baroness, Lady Kramer, we thought that there was room to explore further the detail that we wanted to see in the wording of the Bill itself. However, we were reassured by many of the Ministers’ remarks in both these debates, so to that extent did not push it. It is interesting to reflect on what might be contained in the Government’s response to the report from the Lords Select Committee which deals with these two important issues. We are talking here not so much about the broader strategic and other issues but particularities about the way in which some of the detailed work that is expected of this body might take place. That work should include care leavers. We had a rich discussion about what care leavers needed in terms of financial strategy and support. The Minister picked that up in her response and we had a sense that there was a government push behind this in view of the recognition that people leaving care who had not been given proper financial support or financial education would need additional help. The hope was that the SFGB would be able to provide that in whatever form seemed appropriate.

As regards Amendment 10, there have been a number of discussions around the question of whether or not one can segment the people who need financial education into groups, perhaps by age or lifestyle. The noble Lord mentioned the report from the FCA on the lifestyles of those who experience difficulties with finance, which I read with great interest and found very interesting. It is a wonderful piece of work which tries to cover the whole United Kingdom. It examines how people live their lives, how difficult and chaotic those lives can be in some cases and how well planned and organised in others—not mine, I should say. It is interesting to reflect on some of the figures mentioned by my noble friend Lord McKenzie. We are talking about a lot of people—4 million people who regularly are at a point where their lives could collapse because of a small incident. That is a terrifying thought. If we cannot provide the education and support necessary for them, we fail as a society.

Amendment 10 attempts to move away from that slightly broad segmented picture to consider the various stages of people’s financial lives when they make major decisions on the purchase of houses, cars or whatever it is we do with our lives. We have learned from those who have spoken in these debates that the educational process that goes on in people’s minds is accelerated and assisted when it is either going through a period of stress or when a particular event is happening. For example, when you buy a house you have to know about mortgage rates, the issues that are going forward and the prospects you have for insuring it, reinsuring it, and all the stuff that goes with that. That tends to fall back once you have done it and you are not thinking of moving again but the point at which the education can take place is tied into an event, not to an age group or particular activity in life. These amendments try to get a sense from the Government of how the SFGB would operate.

The general response which we have already covered, was encapsulated in a previous debate where the noble Baroness said:

“We believe that it is unwise to give the new body a requirement to advise the Secretary of State on explicit issues, as worthy as those issues are. There are several topics that the body may wish to look into as part of its strategic function. Choosing a few could risk limiting the body’s ability to look widely at the sector and have regard to emerging issues in future.—[Official Report, 19/7/17; col. 1726.]

You can agree or disagree with that. I think there is a case for flagging up and embedding certain policies in the Bill. However, sufficient account may be taken of the comments made in the debates in Committee and on Report to allow that to flow naturally into the work that the SFGB will do.

The point about repositioning these amendments for discussion tonight is that time has moved on since July. The Bill itself has changed a bit and some of the thinking around it has benefited from the wider discussions which have taken place, not least the visit by the consumer affairs director at the FCA, who, as the noble Lord said, spoke at a meeting last week and made some very interesting remarks about what the work entailed and what approach would be taken to it. That will complement the knowledge and understanding we have about the SFGB when it comes forward. In that sense it is important that we revisit these areas not because they are important in themselves, although they are, but because of the way in which they tell us more about how the SFGB will operate. If some material on this emerges in the Government’s response to the Select Committee’s report, it would be helpful to take up the issue again at Third Reading, if it should prove necessary. I beg to move.