Well, my Lords, what is in a name? I start by declaring my interests: I am a former chairman of StepChange, the debt charity, and I am currently on the Financial Inclusion Commission, which is a group of all-party interests and experts that tries to lobby for increased financial inclusion and less financial exclusion. I mention StepChange for two reasons: first, because I have to declare it as an interest and, secondly, because it recently went through a change of name, which may bear on some of the points made in this debate. When I took over as chair, it was as chair of an organisation called the Consumer Credit Counselling Service—I could not say it without spitting out most of my teeth and I got very confused about the terminology.
As a matter of interest, at the time that I took over, the organisation was seeing over 500,000 people a year—so a lot of people—but we did not believe that the people whom we saw were “consumers” of our services in that classic sense. We did not deal with credit, because we were talking about people who were in debt. Now, obviously, debts and credits are simply optical illusions, one against the other, but people recognise them differently and, therefore, our name did not really say what we did. We did not do counselling —I am sorry to disappoint the noble Baroness opposite—and we were a service, but it was not just a service of advice. Our intention going into any engagement with anybody who rang us or contacted us through the web—I am sure this is also true of the Money Advice Trust, the Citizens Advice service and others working in this area—was that we wanted them to become debt free. In other words, it was a case not just of simply holding their hands and telling them what the options were but of working with them until they got to the point that they were debt free. I do not know where that fits in the catalogue of names with which the noble Baroness is enticing us, but I do not think that her amendment gets to the reality of the issue facing us.
The noble Baroness, Lady Kramer, is right to remind us above all that where we are trying to go with this organisation is to get to a place which will add value to those who approach it by providing impartial and independent advice which will get them to where they want to get to. There are real difficulties in trying to combine in one body the different bodies, organisations and ideas. The pensions work, the financial guidance work and the debt space are all very different. They are not operated at the same level but are regulated differently, and the information that is provided, the guidance, the counselling—all the other words that we are using—will change considerably.
Where I think the noble Baroness is right is that it would be entirely against the best interests of the people we are talking about if the body were set up in a way that did not create an opportunity to resolve the issues that were brought before it. The examples she gave were all relevant. I add one which we picked up in earlier discussions—I think it was raised on Second Reading—namely, that, at least initially, although I hope that it will change, it will not be possible for the new body, however named, to answer direct questions about individuals’ state pensions. That seems to me a completely useless start for a body that is trying to
deal holistically with people’s issues for all the reasons the noble Baroness gave about the increasing importance that pension draw-down will have for any of these solutions.
At present, StepChange is regulated to give debt advice and debt solutions but not to give pensions advice. It could apply to be a pension adviser and give advice on pensions, but it has not done so. It was the present management’s decision to do that. However, the issue stems from the initial problem about whether or not it is reasonable to have all those different types of expertise in one place or whether you need more expertise than would be available in a general advice system.
It is easy to describe this as a mess and a problem, and it is very hard to see how we will make progress. I look forward to the noble Baroness’s response to this debate. The noble Baroness, Lady Kramer, is right that we need to rethink this. However, I have a slightly different approach to it which I would like to try out with the noble Baroness. As she will have picked up, our Amendment 38 in this group replicates what she said to the House on Second Reading. In terms which I think are not unreasonable, it defines “guidance” and it defines “advice” in terms of what the FCA considers it to be. That may be the current state of the art for this discussion and it may need to be looked at again. However, I do not think it is helpful to try to analyse the best word we can select to describe all the things that this body should do. We need to go back to what the noble Baroness, Lady Kramer, suggested and ask what this is about. We need to ask what this body is trying to achieve.
It seems to me that the two fixed points on which we can agree are, first, the functions that are currently carried out by these bodies, or could be considered to be added to the existing functions to achieve the aim that we are going to set for this body, and, secondly, the regulatory structure. I do not think there is much room for manoeuvre on either of those two things. We have a pretty good appreciation of what people want and we have a pretty good regulator that is capable of regulating these things. The names seem to me to fall back a bit in our consideration of that. If we get the infrastructure right, we will also get the processes which support it right. What is this body set up to do? What aims and responsibilities will it require to achieve that? What functions are required to achieve that? What are the regulatory constraints and what will they be called? That seems to me the right way to approach this. I hope that, when the noble Baroness responds, she will pick up at least some of those points.