My Lords, I, too, thank the noble Baroness, Lady Tyler, and her committee for this excellent report, and add my thanks to those members of staff who supported it. It was a timely decision of the House to set up the committee. It is doubtful whether the Financial Guidance and Claims Bill would have got to the stage it has, preparing the way as it does for a new DWP Minister for financial inclusion, without the evidence and arguments presented in the report. A job well done—or was it?
Many noble Lords have commented on the length of time that it has taken the Government to respond to the report. It was clear that the work of the House on the Financial Guidance and Claims Bill would have been materially improved if the government response have been made available earlier in the Bill’s proceedings. Nevertheless, it is gratifying to learn that, of the 22 recommendations of the committee, four have already been implemented, with a further five partially implemented.
However, in my time today, I shall concentrate on the recommendations which the Government’s response indicates that they will not implement. Recommendations 3 and 12 concern annual reports on key indicators of financial inclusion. I wonder whether the Government have got this right. Why be so defensive about something which they are, at least in part, sorting out and making progress on? This is despite the fact that we have a new ministerial portfolio in an area that is of demonstrable interest to the wider public.
Recommendations 4 and 5 concern placing a duty of care on the FCA and financial inclusion being a key FCA objective. The question of duty of care has been debated time and again, and I would have thought that the Government would have made a better fist of it than they have in their current response. The FCA should have a duty of care to its consumers at the heart of its mission. It is simply not possible to achieve a good deal for consumers and protect those affected by financial exclusion by relying on a fair markets approach. In the case of payday lending, the FCA could operate only to reduce the number of companies making excessive profits and to cap the charges. What was required was a consumer detriment approach, which would have been to ban the usurious—very high —rates of interest that those companies were charging.
Recommendation 6 states that financial education should be added to the primary school curriculum. The case made in the report for a rethink about how we educate our children in the financial workings of our world is powerful and convincing, but it has been turned down flat. Frankly, there could be no better way of introducing children to mathematics, and particularly numeracy, than money. Can the Minister explain what discussions and negotiations have been carried out on this recommendation and fill out for us the reasons why DfE colleagues were unconvinced? It was good of the noble Viscount, Lord Brookeborough, to speak on this point, and I thought that his description of the Government’s response as “wishy-washy” was very much to the point.
Recommendation 10 concerns reasonable adjustment practices for disabled customers. The FCA’s Our Future Approach to Consumers document from November 2017 contains a good deal of discussion on the issue of vulnerability. However, the document makes very little reference to the particular problems experienced by disabled people. The Minister will be aware of the changes that have been put into the Financial Guidance and Claims Bill on the issue of services to vulnerable people. Does he think that the response to this recommendation meets the high standards that should apply?
Recommendation 11 concerns promoting basic bank accounts appropriately and effectively. Can the Minister explain why the Government are willing the ends of this policy but not the means? Is this not a simple regulatory issue? If not, what is the real problem? The noble Lord, Lord Northbrook, spoke on this matter and illustrated that Barclays—surprise, surprise—had miserably failed yet again in its duties. I was delighted to hear the noble Lord commending more regulation and controls. He joins my club on that matter.
Recommendation 14 concerns ensuring that non-digital access to social security benefits and other services remains possible. The response does not engage with issues such as universal credit phone lines not being free and the strong discouragement against applying for benefits offline.
Recommendation 21 is that tenants in receipt of universal credit should be allowed to decide for themselves whether their housing costs should be paid to them or direct to their landlord. The response notes that it is to be made quicker for registered social landlords to apply for a managed payment. However, there is no movement on the issue of empowering claimants. Indeed, the Government make it clear that they do not see managed payments to landlords as a permanent solution for any claimant if possible.
Recommendation 22 concerns a detailed, comprehensive cumulative impact study of how changes in social security policy resulting from the Welfare Reform Act 2012 might have adversely affected financial well-being and inclusion. The Government decline to begin any single comprehensive study of the impact of all welfare reform measures on financial well-being. My noble friend Lord McKenzie and others have made very strong representations in this debate about the lack of positive responses to their well-evidenced and well-argued concerns about the universal credit programme. Some movement was achieved in the Budget but it is clearly not enough. We look forward to the Minister’s response to these disappointing responses to the recommendations of the committee.
Finally, recommendations 17 and 18 concern widening credit union products and deepening financial support for them. The Government have said that they do not intend to provide revenue support to credit unions. They go on to say that they will consider grant funding only in relation to specific outcomes. Credit unions are one of the few places where financially stretched consumers can get access to credit without having to go to payday lenders or worse. In Ireland, virtually every village or town has a number of credit unions, which provide the bulk of necessary unsecured lending on a sustainable basis. Why are we not able to get this movement onto a sustainable basis and get it to grow to its potential? Why is no direct engagement with the arguments put forward in the report?
To paraphrase the curate, the Government’s response is good in parts. But let us go back to the basics—a point made by the noble Baroness, Lady Tyler, right at the beginning of this debate. This is about the poor and about how the poor are made to pay more. In his speech the noble Lord, Lord Patten, made the point —perhaps the only point I agreed with—that the recommendations in this report would cost very little money. Why cannot the Government, who have done so much to make the poor poorer, do more, as this report recommends, to help the poor, the old, the unconnected and the disabled to pay less? Please, Government, will you do more to help the poor to pay less?