To ask Her Majesty’s Government what steps they are taking to ensure that where tenants share payment of rent their individual payment histories will be taken into account by credit service providers.

My Lords, the Government believe it is right that a history of paying rent should be recognised in tenants’ credit scores, including where tenants share payment of their rent. At the Autumn Budget in 2017 we announced the Rent Recognition Challenge, a £2 million competition seeking technological solutions to enable tenants to record and share their rental data.

My Lords, I thank the noble Lord for that Answer. The real problem is not so much gathering the information—although it is very good that we are getting a move on towards doing that—but getting the credit service providers to use it. Are the Government doing anything in particular to make sure that all this information helps to put an end to the divide between the people who have a mortgage and can get a high credit rating and those who get a low credit rating simply because they are paying rent?

First, I pay tribute to the work that the noble Lord has consistently done in raising this issue up the agenda. It is indeed something that the Government are taking seriously and they are working with the Financial Conduct Authority and the regulators to see how this can be done. The noble Lord will have noticed the welcome announcement last week that Experian intends to take into account rental contributions as part of credit scoring. That will make a significant difference along the lines that we want—that is, getting the major credit reference agencies to use this data in ensuring that lenders have an accurate reflection of an applicant’s ability to service a loan.

My Lords, does the Minister agree that, if a quarter of all households will be renting as of 2021, there must be an end to the bias against people who pay rent rather than a mortgage? With that in mind, will he commit to ensuring that the larger retailers such as Dixons and Argos are included in any initiative that comes out of the Rent Recognition Challenge? Without their participation in addition to that of mortgage lender companies, the poorest renters will continue to be driven into the arms of some of the worst possible lenders just to buy, for instance, white goods.

That is why the consultation is being extended, and it is open to all those parties to feed into it. I gave the example of Experian. By categorising the rental contributions of people in social housing, it was possible for 80% of the 1.2 million people included in the survey to increase their credit rating, meaning that they would have access to lower-cost credit. That is very much what we want, and we believe that, after a long time and a lot of pressure, we are beginning to head in the right direction.

My Lords, first, we too congratulate the noble Lord, Lord Bird, on the progress that he has made on this issue and on the progress of his Bill. Her Majesty’s Opposition will of course be supporting the Bill in the Commons, as we did here. Will the Government? Secondly, if the Minister is committed to ensuring that advances are made on the basis of legislation such as this, has he or any other Minister participated in meetings with credit service providers to discuss how to use the data which is now being compiled and which ought to be used as rapidly as possible to the benefit of ordinary citizens?

A review of high-cost credit was undertaken by the Financial Conduct Authority, which took evidence from a wide range of people. On the specific point about the Bill, the noble Lord will recall that when we discussed it, while being sympathetic with its ambitions, we chose to go another route and to introduce the Rent Recognition Challenge to see whether fintech companies could come up with a solution. We believe that that is beginning to bear fruit. The announcement made by Experian last week is evidence of that.