It is a pleasure to reply to the debate on behalf of the Government. I thank the hon. Member for Birmingham, Erdington (Jack Dromey) for his kind comments. It is true that I set up a credit union and a community bank in Northumberland, which I am exceptionally proud of. As my hon. Friend the Member for Redditch (Rachel Maclean) and the hon. Member for Harrow West (Gareth Thomas) outlined, credit unions are a vital part of the financial makeup, and they will be covered by the single financial guidance body, as they are already by the Money Advice Service. There was a broad consensus in the other place, as there is in this place, that the Bill will address many of the issues that concern our constituents most deeply.
I have been delighted to listen to 21 speeches today, and to be invited to answer, by my counting, 119 separate questions, and to do so all in 10 minutes, so I will write to hon. Members if I do not manage to answer their questions this evening. I will of course write to the shadow Secretary of State on the individual matters she raised, and to the Scottish National party spokesman, the hon. Member for Airdrie and Shotts (Neil Gray). I make the fair point that the merger was sought by all three organisations concerned, and that funding to the devolved Administrations will most definitely not decrease; at the very least it will stay the same, but potentially it will go up.
I welcome all the speeches we heard today. It is hard to cherry-pick individual speeches, but my hon. Friend the Member for Chippenham (Michelle Donelan) made an outstanding contribution, showing her commitment to addressing problem debt. I can assure her that we will be proactive in this process. As she will be aware, the Bill was one of the first introduced by the new Government, having started its passage in the House of Lords. There was broad consensus in the other place that a single
body is the best way forward, ensuring that people can easily access the free and impartial financial guidance they need to make effective decisions about pensions and money and to seek advice on debt.
The Government are genuinely passionate about the need to address financial exclusion. I am delighted that, as the Minister responsible for pensions and financial inclusion, I am taking the Bill forward, working hand in glove with my hon. Friend the Economic Secretary to the Treasury—we are very much co-ordinating a cross-Government approach to these issues. The Government are committed to providing people with access to the individual tools and services they need to plan their lives so that they feel included in society and avoid the unnecessary costs of financial exclusion.
I have had many dealings with the hon. Member for Makerfield (Yvonne Fovargue) on this issue, and I am delighted to be working with her on the Bill. I suspect that she will be on the Bill Committee, holding the Government to account but also taking forward these matters, which concern all of us on a cross-party basis. I utterly endorse her approach that the new body should have a laser-like focus on commissioning.
I was moved by the outstanding speech of my hon. Friend the Member for Mid Derbyshire (Mrs Latham), who offered a graphic illustration of the difficulties experienced by her constituent, Jacci. I endorse her comments. Having had cancer and recovered from it, I very much accept the points raised by Macmillan. However, there are provisions within existing legislation, and within the capabilities of the FCA—between the FCA’s principles of business and the work of Santander, which she rightly identified—that address these points and which really address the point about the duty of care.
We want people to be able to access the right guidance as a first step towards taking control of their finances. Part 1 of the Bill, which sets out the new body, will give people the opportunity to move in the right direction. It will continue to fund debt advice as well as to fund and evaluate financial capability programmes, including financial initiatives aimed at children. In this way, it will help people of all ages and backgrounds to manage their money better and make the most of the financial services and products available.
Part 2 of the Bill is equally important. It will enable the transfer of claims management regulations from the Ministry of Justice to the FCA, and it ensures that we have the transfer of complaints handling responsibility to the financial ombudsman and the introduction of new fee restrictions, with the 20% interim fee cap that many have outlined as the right way forward. We believe that these measures will genuinely tackle a range of conduct issues within the market, ensuring a tougher regulatory framework and increasing individual accountability.
My hon. Friend the Member for East Renfrewshire (Paul Masterton), in an outstanding speech—he keeps doing that—brought his professional, specialist knowledge to the debate, and I pay tribute to him for all the work he has done. Let me address the point that he and others have raised about the Work and Pensions Committee. We are certainly considering the Committee’s report in relation to clauses 4 and 5.
We support the need for default guidance for people wishing to take advantage of pensions freedoms. That is why the new body is specifically required to meet the
Government’s guarantee to make free and impartial guidance available to those considering accessing their pension pots. The existing signposting regime already provides individuals with important information and encouragement to take advantage of guidance and advice before accessing a pension pot. However, the Government accept that there is merit in providing for people to receive a further nudge, and that this is the right direction of travel. To this end, my officials are reviewing the proposals put forward by the Select Committee, and we will respond to the House and to the Bill Committee in due course. On the pensions dashboard, we will respond to this House before the end of March. It is absolutely the case that we wish to take this forward.
The only discordant note in the entire debate was the speech by the hon. Member for Bristol North West (Darren Jones), who attacked my right hon. Friend the Secretary of State and sought to find out the current situation on debt. Households’ financial positions can be assessed by a number of criteria. However, the ratio of net wealth to income is at a record high, while debt interest as a proportion of income is at a record low—at 4.2% in quarter 3 of 2017 compared with 10% in quarter 1 of 2008. Total household debt as a proportion of income is down by 14 percentage points, comparing quarter 3 of 2017 and 2010, and further down compared with quarter 1 of 2008.
On breathing space, there is an endorsement from all parties that this is the right way forward. I entirely accept that there is still work to be done. However, I remind the House that there is also a statutory repayment plan, which was also in our manifesto. This Government made clear our support for breathing space in our manifesto and in the House of Lords.
With regard to the outstanding matters, a variety of points were brought before the House, and I will address them by writing to individual Members before the Committee sits.
We believe that this Bill is a sustainable legislative framework for public financial guidance. It will help to tackle a range of conduct issues within the claims management sector by ensuring a tougher regulatory framework that enhances consumer protection and professionalism. I thank all hon. Members for their contributions and look forward to the opportunity of further discussion as the Bill progresses. I commend the Bill to the House.
Question put and agreed to.
Bill accordingly read a Second time.