The Lord Bishop of Manchester

My Lords, I have sympathy with all the amendments in the group, but I will focus my comments on Amendment 11 in the name of the noble Baroness, Lady Kramer, to which I added my name. As we have heard, this would require the FCA to establish a framework assessing banks’ and building societies’ provision of affordable credit. Credit is a lifeline for families facing debt and financial hardship. According to a recent report, 60% of the clients of Christians Against Poverty—CAP—an organisation that is very active in my diocese, find that they have to borrow money to pay for household essentials and bills. They are not borrowing for luxuries: when credit is unavailable, they are left to delay essential spending and go without meeting their most basic needs. Sometimes, spending a little now will save you spending a lot more down the line. I am extremely grateful for the remarks made by the noble Lord, Lord Holmes of Richmond. Credit inaccessibility has real consequences for those who are struggling the most. According to CAP, 47% of UK adults who currently have debt that they are struggling to manage have been unable to access their preferred credit option in the past two years. This kind of financial exclusion means that we are locking vulnerable families into a cycle of poverty. We are depriving them of the tools they need to climb their way out. Unable to look beyond the pressing need to put dinner on the table, it is those with the most desperate need who are forced to sacrifice the most to get by. Left with limited choices, they are the ones most likely to enter riskier credit deals and to pay the greatest poverty premium. I have worked as a vicar in parishes where loans were enforced by men with baseball bats. Since Committee, we have had the report of the Commons Treasury Committee on the Government’s financial inclusion strategy. The report highlights the need for “proportionate firm-level financial inclusion metrics. These should focus on the largest providers and on markets where exclusion causes the greatest consumer harm”. That specifically includes “affordable credit”. The report proposes that metrics “should be designed to identify whether progress is being delivered consistently across firms and sectors”. The committee also concluded: “Voluntary action and pilots … cannot be the main driver of a national financial inclusion strategy unless there are clear routes to scale and clear consequences if voluntary action fails”. What is proposed in this amendment clearly has much wider parliamentary backing than simply from the noble Baroness, Lady Kramer, and me. Indeed, several major lenders indicated to the Treasury Committee that they would be entirely happy to provide financial inclusion data as part of a statutory system. This Bill, and this amendment to it, provide a sensible and practical solution to implement what the Treasury Committee advocated. Importantly, it will place responsibility for access to affordable credit on the lender, and introduce a clear framework by which banks and building societies can be assessed on how effectively they are meeting the financial needs of underserved communities. The new requirement for this framework to be kept constantly under review will ensure that those requirements remain open to scrutiny and adaptable to ever changing patterns of financial exclusion—patterns that could become more dynamic and entrenched as society rapidly changes. This amendment is an important step towards ensuring that our financial services meet the needs and uphold the dignity of real people, rather than expecting individuals to adapt to systems that too often exclude them from full participation in economic and community life. The only people who will not like it are the dodgy lenders who harass people in my diocese. I pray that we all support this amendment.