Gareth Thomas
MP for Harrow West · Labour (Co-op) · United Kingdom
“Local councils such as Harrow need to invest more in youth facilities that divert young people away from crime. Some of the CCTV projects in my constituency that Harrow council has turned down—in Wealdstone, south Harrow and central Harrow—should get funding.”
“I congratulate my hon. Friend the Member for Pendle and Clitheroe (Jonathan Hinder) on securing the debate and on the way in which he approached the subject. I join him and my hon.”
“I also want to suggest that the Metropolitan police does not get recognition across the whole of the UK for its hugely important work in tackling national and international crime, and that perhaps more recognition of that is required in the funding formula.”
“In particular, in Harrow, we recently saw enforcement teams contracted out to an organisation called Kingdom. The responsibility for that contract was with Harrow council. There was widespread criticism of the way some of the staff employed by Kingdom tried to levy fines on a number of young people in south Harrow, in my constituency.”
“One way we can further support the Metropolitan police is by allowing it to keep more of the proceeds from successful operations, such as recovering stolen funds hidden in bitcoin assets. I congratulate my hon.”
“Mayor of London Sadiq Khan has done a huge amount to try to redirect funding from other parts of his budget to minimise the impact of that cut.”
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“How these businesses are constructed means that the introduction of external capital without additional safeguards, such as limits on voting rights and distributions, would water down the mutual purpose of the organisation. The International Co-operative Alliance said that co-operative capital needs to offer “a financial proposition which provides a return, but without destroying co-operative identity; and which enables people to access their funds when they need them. It also means exploring wider options for access to capital outside traditional membership, but without compromising on member control”. Consolidation between mutual businesses has been the short-term response to pressure in the past. That has created a small number of firms of critical size that are better able to compete in their markets.”
“In summary, the benefits offered provide evidence that Government support for such a Bill would create a viable new opportunity for mutuals to attract new capital and deliver positive outcomes for mutuals and consumers. Currently, co-operatives largely have to generate capital for growth internally. They have no shares to sell and hence no access to equity markets. Ongoing capital in co-operatives consists of retained earnings and bank borrowing, with some smaller co-ops also raising withdrawable share capital. The lack of access to reliable capital can be a serious limiting factor on the growth and development of consumer mutuals.”
“Mutual shares would present an opportunity for small mutuals to raise funds that they may not be able to raise otherwise, and for larger co-operatives to raise funds that subordinated debt does not provide. Additional capital helps in a number of ways. It could be used in tactical acquisitions, which would help businesses’ competitiveness. They could also look at local infrastructure development potential. There are a number of examples overseas of similar co-operative share offerings. Examples from Canada, the Netherlands and across the European Union show how mutuals can enlist their members in raising capital through the issue of new deferred shares.”
“Without new capital, many co-operatives could be driven into inappropriate corporate forms through demutualisation. Many of us in the co-operative movement can think of many examples where that has already happened. If co-operatives convert to other corporate forms, consumer choice in our economy is reduced and large numbers of consumers would no longer have non-listed, member-owned options in the marketplace. That reduces competitive pressure from the operation of different business models in the same market and adds to systemic risk to the economy. There is inevitably a limit to the amount of debt that can or should be raised by any business.”
“My hon. Friend raises a good example of the difficulties that co-operatives face. I pay tribute to his work championing the co-operative he mentioned. He also underlined my point about the good work that Co-ops UK has done in championing community shares. His fundamental point is absolutely spot on: there is a limit to the amount of capital that co-operatives can raise because they do not have the instruments available to them that are available to many of the non-co-operative businesses that operate in our economy. Like all businesses, co-operatives need to be able to benefit from the economies of scale that are often available only by growing their businesses. They need to gather sufficient capital to serve their members well, to extend services to new members and to expand their services.”
“An independent study by the Education Policy Institute said that Labour-run Harrow was the most improved education authority in the country and that the progress that pupils make in Harrow is greater than anywhere else in the UK when they start at secondary school. Therefore, I wonder whether the hon. Gentleman would follow the example of other Conservatives who have blessed us with their presence for campaigning purposes in Harrow and perhaps bring with him the Schools Minister to see what works so well in Harrow. If he does, I warn him that he will hear stories from headteachers, parents and governors starved of resources at Harrow schools and worried about whether they will be able to maintain the high standards that they have achieved because of real-terms cuts in funding.”
“I gently suggest to any Conservative MPs wanting to campaign in local elections in Harrow that they are extremely welcome; I would happily facilitate meetings with headteachers in my constituency, so that they can hear from the horse’s mouth—from those at the coalface of education in Harrow—about the challenges that they face in managing shrinking budgets. There is second issue around capital, which I will come to in a minute.”
“I gently say to Conservative Members that there is certainly a case for schools in rural areas to receive more funding. I do not dispute that. But there is also a strong argument that schools in urban areas, such as my own, should also be receiving additional funding. I gently chide the Conservative Members who I have had the chance to listen to this afternoon for not acknowledging the challenges that headteachers and teachers in urban areas such as mine face in managing budgets that are shrinking in real terms. For example, most primary schools in my constituency have lost teaching assistants in the last 12 months.”
“I am grateful for the opportunity to make a brief speech in this debate. I had attempted to intervene on the hon. Member for Lewes (Maria Caulfield), who it is a pleasure to follow. I will take this opportunity to praise the work of all the teachers across the country, particularly—if the House will forgive me—those at Harrow schools. I commend the governors of Harrow schools for their leadership, but some credit is also due to local authorities, particularly to a local authority that has been recognised by the independent analysis of the Education Policy Institute as offering the best education in the country. It is a Labour council facing huge cutbacks as a result of the Government’s austerity policies. More than £100 million has been lost, yet it still provides as good a service as it is able to for our schools.”
“I will take back to my constituents the fact that a Conservative MP is saying that schools in Harrow should be cut to fund schools in his area. Had he asked whether I would join him in calling for more funding to be invested in education, I would have been happy to consider that. I repeat to him the offer that I made to his Conservative colleagues: if he wants to come and campaign in my constituency and help to achieve an even bigger Labour majority on Harrow Council, he would be very welcome to do so. I would happily facilitate for him a meeting with the headteachers of a couple of the primary schools who had to axe teaching assistant positions just in the past 12 months alone.”
“It is for exactly that reason that I was resisting the very agreeable temptation, in other circumstances, to allow the hon. Member for Shrewsbury and Atcham (Daniel Kawczynski) to intervene a second time. My last point is about capital funding. It would be good to hear from the Schools Minister that he might be sympathetic to further requests from Harrow schools for the additional capital they need to tackle asbestos hazards and which are not fit for purpose as a result, or from schools that need further investment as a result of an increase in population in Harrow. We have been starved, as other areas have, of the capital that is needed to invest in our schools. I hope that that issue will be addressed, if not now, then at a future Budget.”
“At the very least, I hope he will be willing to join me in meeting national groups operating in this field to hear their concerns about the data, and perhaps he might be willing to use his leverage to get at least small improvements in that area. In the United States, the Community Reinvestment Act means that banks and other lenders have to report what they are lending, where to and at what rate. The disclosure requirements are critical as they enable independent, informed assessments of what the banks are doing. Crucially, they keep the banks honest. Before the CRA, access to credit was scarce in deprived areas, and that lack of access contributed to and prolonged the decline and deprivation in such communities.”
“Some details of loan applications and credit providers’ registers are not released either, so a full picture of the level of lending at a postcode level has not yet been able to emerge. At the moment, the data is released voluntarily. Legal underpinning is needed so that more statutory bodies working in this field can more easily negotiate improvements in data. Specifically in this context, for example, the single financial guidance body should be able better to negotiate the release of the data that it needs. I say this gently to the Economic Secretary, who will be very helpful to me tomorrow, but efforts to re-engage the Treasury in getting UK Finance to improve the usefulness of the data its members release have not had much success recently.”
“Its last significant report was back in March 2016, and it set out estimates of the number of over-indebted households down to local authority level, not postcode level, which is what we need. The Money Advice Service data are estimates based on survey work, not actual individuals who take out loans. I should be clear that some lending data is already released. The coalition Government, to their credit, required the British Bankers Association, which is now UK Finance, and the Council of Mortgage Lenders voluntarily to publish some data by postcode, primarily to try to tackle the challenges that small businesses were facing when accessing credit. There are problems with the data. For example, it does not include high-cost, short-term credit—payday lenders. Additionally, it does not disclose lending levels or rates at postcode level.”
“The Office for National Statistics and the Bank of England publish data on lending, but only at UK level—the data is not broken down by constituency or by area. StepChange, too, publishes some data on lending, as does the Money Advice Service, but the Minister might not be aware that it publishes only estimates of the number of people who are over-indebted. I would not dream of criticising the Money Advice Service, but its data on lending does not go anywhere like far enough to meet the recommendations of the Financial Inclusion Commission. The Money Advice Service does not routinely collect information about the extent of debt problems at the most local level.”
“It said specifically: “If lenders were required to disclose data by postcode on credit applications and rejections, policymakers would be better able to understand the scale and shape of the low income credit gap.” Since the financial crisis, banks and other lenders have withdrawn from higher-risk lending and raised the threshold for accessing mainstream credit. In turn, this has restricted the credit available to those with low credit scores, leaving them at the mercy of higher-cost lenders to bridge their income gap. Surely part of the long-term solution to the household debt crisis is to make it easier for low-cost credit providers and other alternatives. It is true, as Ministers have previously suggested in Committee and in a letter to me, that there are other sources of data on debt.”
“The combination of a lack of access to cash machines and to mainstream bank branches could create the space for a much bigger increase in the activities of high-cost credit companies, doorstep or payday lenders or, worst of all, illegal loan sharks, as a response to the needs of people in such communities for short-term loans. We need to know where the other Thamesmeads are across the country so that charities, community banks and credit unions can be supported by the financial guidance body and other statutory bodies to target financial exclusion in such areas by signposting people to responsible financial providers. In 2015, when considering this specific problem, the Financial Inclusion Commission, which was set up by the Government, argued for a much wider level of data disclosure to develop a greater understanding of the problem.”
“Fair access to financial goods and services is a basic requirement for full engagement in modern society, but Thamesmead, an estate of 55,000 people in south-east London, has not been home to a mainstream bank branch for a long while. Charities report anecdotally that high-cost credit lenders such as doorstep or payday lenders are very active. More and more bank branches are being closed by the big banks, which is leaving whole communities, some in the poorest areas of our country, without a single mainstream bank branch. Thamesmead is not an isolated example. At the same time, rumours persist that the big banks want to pull the plug on free cash machines. Which? has reported that over 200 communities in Britain already have poor ATM provision or no cash machines at all.”
“My amendments 1 and 2 would allow the single financial guidance body to facilitate the release of that information by lenders in an anonymised form so that we could know where debt is concentrated and what types of credit are used in different areas. That would allow for better, more strategic responses to the household debt crisis with which the House is familiar. The data would help to inform where to target the debt advice funding that the SFGB will dispense, encourage more engagement between mainstream lenders, and allow the community finance sector to scale up the provision of affordable credit in areas where there are specific problems. Indeed, such data would reveal market gaps and the communities excluded from mainstream credit.”
“There is no requirement on banks, payday lenders and other financial services providers to be fully transparent about the services in each of our constituencies—specifically where they lend, what rate they lend at, and the types of loan that they offer. Were that data available to public bodies, it would allow for the accurate mapping of who is lending and what is being loaned. Banks and other lenders do hold such data down to postcode level, and such data are released in the United States. Many British lenders that are active in the US are used to releasing that information, which allows public bodies to map the activities of banks and other lenders.”
“I rise to speak to the three amendments in my name. According to a recent Bank of England survey, the average level of household debt, excluding mortgages, is £8,000. While everybody should be able to access basic debt advice, people on low incomes with much higher levels of debt, at higher rates of interest, clearly need significant support. Unlike in the United States, it is difficult to work out with any certainty where such people are living in the UK, beyond relying on an individual to approach their local citizens advice bureau or another advice service. At present, the new financial guidance body will not have access to data to allow for a detailed mapping of debt at a local level. Indeed, it will not have access to a full picture of the activity of banks and other lenders in our communities.”
“They simply do not have the megabucks of a major bank or a payday lender’s marketing department, so many of those who most need the support that credit unions can offer are often unaware of the services they provide. Surely another challenge for the House is to work out how we help credit unions to make more information available about the products on offer. I know that Ministers are sympathetic to efforts to expand the credit union sector, so I ask them to give specific attention to thinking about what further steps can be taken to help the credit union movement to expand and to support the SFGB in achieving that aim.”
“Banks and other lenders record this data, and although a little work would be needed so that the information could be released in a useful format, a similar system works particularly well in the United States. In turn, the disclosure of lending details could help the single financial guidance body to make more effective choices. I shall deal briefly with amendment 31. One key challenge for the single financial guidance body will be, as we all know, to help those who need loans, for whatever reason, to access the cheapest products—those offered by credit unions fall into that category. Surely the SFGB should be mapping where credit unions exist and what further action can be taken to promote the take-up of their services by those who are most in need. Credit unions have very low administration costs.”
“Last October, Santander announced an $11 billion, five-year settlement on lending and community development in eastern parts of the United States, which is the market in which it operates. That represented a 50% increase in its Community Reinvestment Act-related activity. No such equivalent increase has been announced here in the UK. The Community Reinvestment Act has cross-party support in the US, being backed by Republicans and Democrats alike, including for its data disclosure requirements. If Ministers are not prepared to accept my amendments, I would wish, with your permission, Madam Deputy Speaker, to press amendment 1 to a Division. These amendments are not onerous.”
“My hon. Friend makes a good point. In the United States, federal banking regulators regularly assess how banks are meeting local credit needs. Their assessments affect the way in which the banks are allowed to expand, merge, do acquisitions and so on. Banks can get credits towards their assessments if they invest in community banks or credit unions. Not surprisingly, both the community banking movement and the credit union movement are in even better health in the US than they are here. Santander, HSBC and Barclays all operate in the United States, where they release far more data on lending, down to postcode level, than they do here. So surely the questions for this House are: why are they not willing to do that here, too; and, as I believe, should they be forced to do so?”
“I agree with that point, which is why it has been encouraging over the past 10 to 15 years to see Departments beginning to do their bit to encourage the workplace take-up of credit unions. I hope the Economic Secretary may be able to tell me that Her Majesty’s Revenue and Customs will follow this trend soon, but the point about trying to increase professionalism is well made. Again, it would be good to hear commitments from Ministers that some of the problems that credit unions face due to poor regulation by the Financial Conduct Authority will be dealt with.”
“My hon. Friend amplifies the point I was making. One last point to make is that there is a need for legislative change to allow credit unions, in particular, to offer loans for cars and—”
“I have the great privilege of being the neighbour of my hon. Friend the Member for Ealing North. The situation in his constituency that he so ably describes also affects mine. Does my hon. Friend the Member for Great Grimsby believe that the Minister’s reply to my hon. Friend the Member for Ealing North would have been improved had she said that her Department was willing to support local authorities that want to go down the path of addressing that with additional resources? That would certainly speed up the introduction of such schemes.”
“In his comments on the wider fiscal position, the Secretary of State has failed to mention the former Chancellor of the Exchequer, who was sacked by the Prime Minister for gross incompetence—a decision with which the Secretary of State presumably agrees. The Secretary of State for Health and Social Care and the Secretary of State for Defence have run very public campaigns for more funding for their Departments. When will the Secretary of State for Housing, Communities and Local Government develop some cojones and do the same for local government?”
“On a point of order, Madam Deputy Speaker. The hon. Member for Sutton and Cheam (Paul Scully) referred to my local authority and omitted to mention that Hillingdon Borough Council gets double the funding of Harrow Borough Council. How can I get that appropriately reflected in the record?”
“My constituents, some of whom have been on the wrong end of aggressive behaviour by Persimmon, are concerned to know that since Help to Buy was introduced, the biggest private house builders have increased house prices by up to 10%, with almost all of that banked as profit and much of it paid out in senior managers’ enormous bonus payments. Should not the Secretary of State and his ministerial colleagues be doing more to tame the aggressive behaviour of developers such as Persimmon, rather than subsidising them through Help to Buy?”
“The Conservative-run Northamptonshire County Council has recently gone bust. Was that due to a lack of Government funding or local incompetence?”
“I wonder whether the draft regulations provide a way out of that conundrum. We are at risk of losing vital local bus and transport services provided in our constituencies simply because of the greed of a few larger bus and coach operators, which appear to have successfully persuaded the Department to ignore the needs of the much smaller but crucial community transport providers.”
“It looks as though Government changes, allegedly provoked in part by EU legislation, and certainly at the behest of a small number of larger coach and bus operators, are likely to stop community transport being able to bid almost exclusively for local authority and CCG contracts. Those changes will potentially put those community transport providers out of business, or require them to ensure that the drivers who work for them have much greater training and acquire licences that are much more costly, in both time and financial resources. I am thinking of Harrow Community Transport, which serves my constituency, which has made it clear to me that it is extremely worried by changes that the Department is currently proposing. Many of its drivers do not want the new licence, which is much more costly, with regard to training and resources.”
“I am grateful, Mr Rosindell, for the opportunity to comment very briefly on the regulations and to ask the Minister a couple of questions. As a Co-op Member, I have a big interest in community transport, and in the social enterprises and small community businesses that operate in most of our constituencies, often surviving only through the contracts they win from local authorities and local clinical commissioning groups. They use some of the economies of scale that they are able to deliver in order to provide, at no cost, other transport services for elderly and vulnerable people in our communities. I am interested in how the regulations will affect community transport and, in particular, whether they provide a neat way out of the terrible situation facing many community transport providers at the moment.”
“I am grateful to the Minister for that clarification. Nevertheless, will she recognise the depth of concern across the House about the future of community transport, given what her ministerial colleagues appear to be proposing in response to pressure from a small group of bus and coach operators?”
“Will the Minister be willing to commit herself—or, more appropriately, her colleague, the Minister with responsibility for community transport—to meeting a group of Members from both sides of the House who are concerned about the future of community transport and the Government’s proposals for changes to licensing?”
“Is not the problem with the Bill the fact that it locks the stable door after the horse has bolted? Energy companies have jacked up their prices ever since whispers of an energy cap surfaced, such that there is a nice cushion that they can continue to benefit from enormously over the coming months.”
“The hon. Member for Middlesbrough South and East Cleveland (Mr Clarke) deliberately misinterprets our policy. The shadow Chancellor has committed the Labour party to supporting a doubling of the co-operative sector. Energy co-operatives do not mean nationalisation, but they do amount to democratic public ownership. Will my hon. Friend re-endorse the commitment to see more energy co-operatives in the market?”
“I am grateful to my hon. Friend for giving way a second time. Is it not a problem—and deeply ironic—that Conservative Members should defend an energy system in which foreign nationalised companies have more control and earn more income and wealth from the distribution and supply of British energy than the British citizenry?”
“Six years ago, a very impressive ten-minute rule Bill was brought forward by the hon. Member for Harrow West, which I commend to the House, proposing that customers should be given the right to own the grid in their area, and that more people should be given the right to help control who benefits from the energy market. In effect, it proposed the sort of democratic public ownership that at the time was less fashionable on the Labour Benches, but which has become a bit more fashionable of late. I very much welcome that.”
“Many mergers and acquisitions later, all we have seen in practice is that centralised unaccountable decision making has shifted from a series of Government Departments to six privately owned companies that control pretty much the whole chain from power station to customer. At the time, we were promised that unleashing competition would bring considerable benefits: prices would be driven down alongside an increase in innovation and efficiency. It is difficult to see exactly where those benefits are. Dissatisfaction with the energy market is so great that it is ranked bottom of all UK industries by the Institute of Customer Service. Part of the reason why people do not switch from one supplier to another is that they do not think they will get much benefit from switching, given the time and hassle it takes.”
“In the circumstances, and given the scale of overpayment by consumers, an energy price cap is hardly going to fundamentally change the dynamics of the energy market. Therein lies the problem with the Bill. It does not address the issues of ownership and the lack of accountability of those who currently own and distribute our energy. I therefore suspect that it will be of limited benefit to customers. When the energy market was privatised, the country was promised the chance to have a stake in the new market. There was the famous “Tell Sid” campaign, which offered everybody a chance to own a stake in the energy market.”
“I fear that Ministers’ reluctant acceptance that a wider price cap is needed confirms the failure of regulation as it stands, and specifically confirms concerns about the powers and practices of Ofgem and its ability to keep the big six energy companies honest, along with National Grid and the distribution companies. The Competition and Markets Authority, in its landmark investigation of the industry some four years ago, said that customers had essentially been ripped off to the tune of £1.4 billion—and that was since 2012. The only reason the Government referred the energy market to the CMA for investigation was the pressure from shadow Ministers and the then Leader of the Opposition.”
“Members have said, while the Bill is good in that it will finally introduce an energy cap, it does not address the full scale of concerns across the House about how the energy market operates. E.ON put up prices last week on the coldest day of the year. Experts are increasingly concerned that the lights will go off at some point in the future. Gas capacity is another fear, and the energy ombudsman is unable or unwilling to enforce rulings in favour of consumers. Those are just some of the concerns about how the energy market works. It would have been good to have a far more comprehensive energy market reform Bill, of which the energy price cap was only part.”
“I agree with the right hon. Member for West Dorset (Sir Oliver Letwin) that we collectively owe praise to the hon. Member for Weston-super-Mare (John Penrose) and my right hon. Friend the Member for Don Valley (Caroline Flint) for bullying the Government into bringing the Bill before the House. Nor do I completely reject the right hon. Gentleman’s final assertion about the importance of having an effective regulator to regulate the market. What he missed, however, was the need to shake up significantly the way in which the market operates at the moment, to fundamentally challenge the power of the big six and the way in which regulation works between the transmission provider—National Grid—and the various distributor companies, given the impact that that has on bills. As other hon.”
“I finish by gently saying to Government Members that I understand why they are tempted, for political reasons, to attack Opposition Members for looking again at public ownership, but when so many of the energy businesses in this country are owned, or part-owned, by state-owned companies from other countries, it prompts the question why public ownership by the British Government, or by the people of this country, could not be given a bit more encouragement by Ministers.”
“Fundamentally, however, I would like to make the argument for more co-operative, community-owned not-for-profit energy companies. They would own and supply energy, help to decarbonise our existing energy supply, be properly regulated, and, crucially, help to keep in the local community some of the wealth that is generated by energy, which I gently suggest should be strongly encouraged and allowed to emerge. Robin Hood Energy in Nottingham is a great example of that, as are Bristol Energy and Westmill Solar Co-operative.”
“My hon. Friend makes a very good point. If I may, I commend to him and the whole House the Co-operative party report on the reform of the energy market, which contains several proposals. One suggestion is that Welsh Water and the energy distribution model of similar mutuals in New Zealand might be the model for future of energy distribution in this country. I do not hold the dogmatic view that public ownership through nationalisation might be a sensible way forward. I can see that there might be a case for some of the transmission network to be publicly owned, and I can see the argument for some public ownership of crucial, strategically important power stations to keep the lights on while a broader transition process is taking place.”
“As the hon. Member for Brigg and Goole (Andrew Percy) rightly said when he intervened on my hon. Friend the Member for Kingston upon Hull North (Diana Johnson), who so ably introduced this debate, the community transport sector faces a devastating impact as a result of the Government’s proposed changes. I am lucky enough to chair the Co-operative party, which has long campaigned under its people’s bus campaign for an expansion of the not-for-profit or social enterprise bus sector. The Co-op party believes that community transport and commercial bus routes should be able to be designated as community assets and should be subject to the same protections that community assets are afforded by the Localism Act 2011.”