Financial Inclusion — House of Commons, 2017-12-07
Topic: Domestic Commerce
Guy Thomas Opperman (Conservative, Centre-right): It is interesting that my hon. Friend raises that point, because it was specifically addressed by their lordships in some detail. He will be aware that the new financial guidance body will simplify the existing public financial guidance landscape, making it easier for all people to access information and guidance Let me briefly address the statutory objectives and functions, because I think that that will reassure my hon. Friend on the point about those in society who are vulnerable. The single financial guidance body will have a number of statutory objectives: to improve the ability of people to make informed financial decisions; to support the provision of information, money and pensions guidance and debt advice in areas where it is specifically lacking; to ensure that information, guidance and debt advice is clear, cost-effective and not duplicated elsewhere; to ensure that information, guidance and debt advice is available to those most in need, particularly people in vulnerable circumstances; and to work with devolved authorities I stress that the chief executives of the three organisations—Michelle Cracknell, Jamey Johnson and Charles Counsell—all agree that bringing these organisations together and harnessing the product of the whole will enable specific opportunities to address this point. That is particularly appropriate given that one of the functions of the body is not only the protection of individuals as consumers but a strategic approach to ensure that this guidance is there. I hope that my hon. Friend is reassured that that is something that we massively support My hon. Friend raised financial education. The strategy behind the creation of the guidance body is to develop evidence that clearly shows which projects are successful and which are not. The Government want the body to prove what helps people to make better financial decisions throughout their lives, and then to deploy that understanding actively in its efforts in the area and share the knowledge as part of best practice The Government want the body to maximise the positive impact of financial education for children and young people, so that they are better prepared. We definitely see the guidance body taking forward the issue that my hon. Friend raises, to ensure that children are better prepared for financial challenges at any age. That strategic function is underpinned by the premise that, although Government bodies, industries, charitable functions and the voluntary sector are already doing excellent work, if they work together the impact will be that much greater I want to take the opportunity to celebrate the LifeSavers project, which I am pleased to say exists in my constituency. The organisation provides at primary level exactly the sort of thing that my hon. Friend described. The community bank of which I was a part is the provider of six LifeSavers programmes, which are supported by the Church of England and Virgin Money. There is literally a bank in the school, educating children about the importance of finance, loans, deposits and long-term saving, which is the way ahead A large number of schools are part of that project, and we are evaluating its impact. It is Treasury-supported to a limited degree. I have visited participating schools, such as Hexham East First School in my constituency, and the difference that the programme makes is off the charts. My hon. Friend will be aware that my right hon. Friend the Chancellor has provided a great deal more money for maths education, more maths teachers and support across the curriculum to ensure that that key point is addressed on an ongoing basis Briefly, I will mention other areas of the Bill that address some of the points that my hon. Friend raised. I believe that we all accept that problem debt is an issue for too many people. The Conservative party manifesto set out the commitment that the Government would adopt a breathing space scheme, to allow someone in serious problem debt to apply for legal protection from further interest charges and enforcement action for a period of up to six weeks. The Financial Guidance and Claims Bill will enable the Government to introduce such a scheme The breathing space scheme builds on the local work of organisations such as those that my hon. Friend mentioned in Horsham. It sounds as though they are approaching the matter in an interesting way. The Bill will build on the existing work of the Financial Conduct Authority, which has instituted rules. Also relevant is the fact that in October, the Treasury published a call for evidence on breathing space, and evidence is still being taken on the best and most appropriate way forward. My hon. Friend the Economic Secretary to the Treasury, officials and I have met the people behind the operation of the scheme in Scotland, which has already introduced a debt respite scheme and breathing space scheme The key to inclusion is access to engagement with savings and pensions. Surely, the game-changer on that over the past five years is the development of auto-enrolment, as part of a cross-party approach down many years. It is one of the unseen success stories of successive Governments, and it has engaged individual consumers and members of the public to an astonishing degree and reversed generations of decline in savings and pensions. The statistics bear some contemplation. We are about to approach the point at which 9 million people are auto-enrolled in a workplace pension. Hundreds of thousands of individual employers have signed up to the scheme, and it has not only totally stopped the rot in relation to pensions but reversed a long-term decline We are conducting an auto-enrolment review to assess where we are with the programme, and we will be considering a number of key areas. Those include the existing coverage, how to achieve the right balance between enabling as many people as possible to save and ensuring that it makes economic sense for them to be included, how we can improve engagement and how to strengthen the evidence base around contributions to support future decisions on contribution rates. I will report the findings to Parliament before the end of the year. We hope that the review will provide a clear sense of direction as part of the ongoing conversation. I want briefly to talk about the pensions dashboard, which is an important part of the conversation about how we can better use technology. Just as the private sector has reformed the travel industry, insurance and so many other business, such that we now go online to access information, so we believe that the same will bring pensions into the digital age. The dashboard is an opportunity to give people access to their pensions data in a clear and simple form by bringing together savings information in one place online. It is an opportunity to give more people a sense of ownership and control over their pensions. This is a complex process, but I look forward to a massive meeting of stakeholders on Monday, to which hon. Members are most definitely invited. The good news is that the Department for Work and Pensions is taking this forward. We are utterly committed to the ongoing feasibility study and believe that by placing consumers at the heart of our approach, the Government, working closely of course with industry, regulators and other interested parties—notably, consumer organisations —can achieve the goal of such accessibility I want to make a brief final point about the mid-life MOT. It has struck me in this job that although we address individual issues, in relation to our health and our ongoing status quo as human beings—my GP regularly, and rightly, contacts me with ways to improve my health—we do not address our finances in a similar way. The concept of the mid-life MOT, as pioneered by John Cridland in his outstanding state pension review, published earlier this year, could enable us to better encourage and support people in preparing for later life and retirement in a holistic way. I encourage all private sector companies, through their human resources departments, to conduct mid-life MOTs— organisations such as Aviva are leading the way—and I certainly hope that the public sector will address those points as well. We believe that it is unquestionably a promising idea worth detailed scrutiny. Individual workers or employers could be provided with holistic advice and guidance to prepare for the gradual transition to retirement—whether at 45, 47 or 50—and it is something that the Government should be progressing It is often asked what brings us into politics. Social justice and financial inclusion are among the things that brought me into politics. When talk about the achievements of this Government and the coalition since my hon. Friend and my colleagues at my side—my hon. Friends the Members for Calder Valley (Craig Whittaker) and for North Devon (Peter Heaton-Jones)—first entered the House of Commons, and when we talk about extending free childcare, improving schools results, introducing the national living wage, creating 3 million jobs, reducing income inequality and record high household incomes, we should remember that they are not just statistics, but steps towards tackling injustice and spreading opportunity. I believe passionately that the Bill will enable us to tackle financial inclusion. I welcome the work of those who have taken us this far on the journey, but I also welcome the opportunity to report to the House on the progress we have made and the opportunities that lie ahead to tackle this fundamental issue of social justice Question put and agreed to.