Financial Services Bill — House of Commons, 2021-04-26
Topic: Domestic Commerce
Alison Emily Thewliss (Scottish National Party, Centre-left): I very much support Lords amendment 1 on the duty of care. As the Minister will recall, we have raised this during the previous stages of the Bill, in Committee and on the Floor of the House. We think that a financial services duty of care has never been more needed than it is just now, given the difficulties that people have had in the past year with the impact of coronavirus and long covid. The Minister’s proposals are really for consultation, to kick the can down the road until August 2022, giving our constituents quite some time before they can get the duty of care that I think we would all agree they deserve In particular, the amendment would help those suffering not just from the effects of covid but from cancer, which is why it is supported by Macmillan Cancer Support. Four out of five people with cancer are affected financially, being on average £570 a month worse off as a result of their diagnosis. Without support to manage this financial impact, money worries can spiral out of control. Macmillan estimates that more than a third of people with cancer, 39%, are severely financially impacted by their diagnosis and of those almost one in three had to take a loan or go into credit card debt. Macmillan’s clear ambition is that every person affected by cancer can rely on their financial services provider to give the support they need to cope with the financial impact of a diagnosis At the moment, there is a clear gap in the service. Only 11% of people tell their bank about a diagnosis. Why is that? Is it because they do not think that they will get a fair hearing? Is it because they do not want to admit something like that to their bank because they fear some sort of negative consequence? That tells me that the rules as they stand are not working. It is a patchwork. Someone might have the good luck to have a financial services provider who is understanding, but that is not good guidance and it does not help everybody People support there being a duty of care. Research by the Financial Services Consumer Panel found that 92% of consumers, 99% of sole traders and 97% of small and micro businesses believe it is important that there is a duty of care in financial services. Health issues could have an impact on them, because they would affect their business and its viability going forward. The duty of care is also supported by Age UK, the Alzheimer’s Society, Fair by Design, the Money and Pensions Service, StepChange Debt Charity, Surviving Economic Abuse and The Money Charity. They believe in it because a duty of care can lead to the necessary change in culture and practice. Customers should be easily able to access forbearance from their provider, including flexibility on mortgage payments and interest freezes on credit cards or loans, without it damaging their credit files. If we put that in place, it would prevent long-term harm and financial exclusion There should be a clearer path to compensation when things go wrong because a provider has failed in its duty of care. That leads to a standard that people can expect and we can hold to account people who do not meet that standard. It would make a real difference were the Government to take this on, and it is hugely disappointing that they do not wish to do so today. I suppose there is still hope that the Government could change their mind right now and do this, but kicking the can around until 2022, when perhaps something will happen, does not help people here and now. I urge the Government to consider that and see whether there is any way they can bring it forward more quickly. Lots of the evidence on this issue already exists so we do not need to go into further consultation to prove the evidence that is clearly there In other areas the evidence is slightly more contentious and disputed, such as Lords amendment 8 on mortgage prisoners. The number of people affected seems to be part of the contention. The Minister said that he follows the facts and the evidence, but in reality he is disregarding some of the facts and evidence that do not suit his position. As the right hon. Member for Wolverhampton South East (Mr McFadden) said, the evidence is disputed. Although there may be up to 250,000 people stuck on that standard variable rate, many of them have also paid considerably over the odds in their mortgage payments There is also a degree of geographical impact. As a result of the location of Northern Rock, 14% of those affected are in the north-east, 16% in the north-west, 12% in Yorkshire and Humberside, and 11% in Scotland. That bears consideration, because this issue has a disproportionate impact on a large and significant group of people and their families, particularly in the context of covid and the challenges that many will be facing, which have deepened this year. It is incumbent on the Government to bring forward some kind of solution.