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Creditworthiness Assessment Bill [HL]

Volume 787: debated on Friday 24 November 2017

Second Reading

Moved by

It is a great honour to be talking about poverty again in the House. Whenever I get to the House, I would love to jump up and say that we are not doing enough for the poor; we are not creating the escape ladders for people in poverty. If you look at the work that I have been doing over the last 26 years, it has nearly always been aimed at how we can dismantle poverty in the lives of the neediest. One escape route is obviously around education and housing and the opportunities that you get through work—but another thing, which is hidden, is how expensive it is to be poor. It is incredibly expensive. If you are poor, you pay more for your electricity, gas and credit. That is why this Bill is based on the work that the Big Issue has done over the last seven years, when we have been working with a credit agency called Experian. We have worked to find the records of 1.5 million social tenants and to look at ways we can reduce the cost of their credit and, we hope, move them incrementally towards democracy and justice. As we know, the poorer your life is, the less likely it is that you will be able to participate in democracy. Democracy is about choice and the poorer you are, the less choice you have.

The work that we have been doing with the Rental Exchange looks into the ways in which people’s rent can be used when they go forward to get themselves a credit rating. Interestingly, if you are a mortgage holder, and if you pay your mortgage on time and do not miss it too often, you will automatically have a higher credit rating, because the credit agencies will look at you and say that you are a jolly good chap, woman, student or whoever. But you might have been living in social housing, or in another form of rented accommodation, for one year, five years, or 10 years. There are the boxes to be ticked at the bottom of the form saying, “Are you a tenant?” or “Are you a householder?” and, if you are a householder, that box is ticked. If you are a tenant, the paper is normally thrown away, not even considered, or you will be given a very low credit rating, because they do not take into account the fact that you are paying your rent. You could be an incredibly good tenant, paying regularly for many years—or you could be a lousy mortgage holder.

There is this injustice, and the Creditworthiness Assessment Bill is an attempt to change the way the credit agencies look at this social morass, this social gap, this representation almost of a class line that is drawn between those who are in luck and those who are not in luck—the people we want to address. The Big Issue has done this work and is proposing to carry on with it. I am proposing that we change the legislation so that the credit service providers have to take into account the fact that people have paid their rent. There are, however, a number of problems, because some people’s credit score could go up, while others’ could go down. We need to make sure that those people whose credit is poor and will stay poor, or even get worse, are helped. What happens now is that nobody’s credit is taken into account if they are a renting tenant. We therefore do not know how we can put our arms around those people who need to be supported in credit and who do not have a credit record. These are some of the considerations that need to be made. We have to be very careful that we do not help only the low-hanging fruit, so to speak. We need to also socialise and engage with those people in need of support.

The other thing about having a credit record is that it means you also have a digital identity, which means that you exist. There are so many occasions in this world, and they will increase, where people do not have a digital profile. Without a digital profile, the real problem is that not only will you not be able to get credit, but there will be all sorts of other knock-on effects. The poorest among us often do not have a digital profile, and we need to address that as well.

I will not go on, because there are some very good speakers following me who can do all the numbers and so on. I am very pleased that we have a tidy little bunch of people. The Government have in some ways gone towards some of the things that we need to do. In the Budget the other day, there was a suggestion that there will be a £2 million competition to support fintech firms—which I think means finance technology firms—to look at a financial or technological solution to collecting this data. I should like to think that this is not a torpedo but an attempt to carefully negotiate our way through the body of knowledge that the Big Issue, Experian and others have built up, bearing in mind that we do not want to leave people behind. One of the worst problems with having a bad credit record is, if you are buried in it, that it closes down the whole of your life and stops you living. We need to address that. I beg to move.

My Lords, I am aware that this Bill, conceived by the Big Issue and the noble Lord, Lord Bird, has been a long time in gestation, and I congratulate the noble Lord on bringing it to the House. As we all know, it is an important rite of passage for a noble Lord to introduce their own Private Member’s Bill, and I identify with the passion, ownership and protectiveness that come with it. In this case, I share them with the noble Lord and am very keen to offer my support to his timely and important piece of legislation.

I share the noble Lord’s motivation behind the Bill, which is to address the shoddy deal that people who rent, people on low incomes, those trying to turn their lives around and possibly the homeless get from our banks, credit agencies, loan sharks and businesses such as BrightHouse. As the noble Lord said, the ones who can least afford it are being ripped off.

It is no surprise to me that BrightHouse was ordered to repay £14.8 million to a quarter of a million of its customers after the Financial Conduct Authority found that it had not been a “responsible lender”. The regulator said that in many cases BrightHouse had not properly assessed its customers’ ability to repay and they would now be compensated. Indeed, I am very pleased that there are alternatives to BrightHouse, with fair and ethical lenders such as Fair for You, a not-for-profit credit provider. There are not enough of them and they are not as able as BrightHouse to market themselves.

I declare an interest as a senior fellow of the Young Foundation, which carried out research a year or so ago into the experience of those on low incomes with high-cost credit. Its report pointed out that access to credit is an important part of 21st-century living, as the noble Lord said, with many people relying on it to purchase everything from a new home to a mobile phone.

For some people, credit is also an important element in simply managing their day-to-day living. It can help people to deal with economic shocks, manage the consequences of an irregular income and spread the cost of high-price items. However, access to affordable credit can be a major challenge for many households, typically classified as “sub-prime”, who then turn to higher-cost options such as home credit, payday loans, rent-to-own, and pawnbrokers. Some lenders estimate that 12 million people in the UK are using the alternative, high-cost credit market because they lack access to mainstream credit. So the noble Lord is quite right to point out that there is a gross inequality in our society when it comes to access to the credit that everybody needs.

Following its research, the Young Foundation is next week launching an online campaign to raise awareness about making rent count—if anybody cares to look for it, it can be found on #rentcounts—and about how it costs more to be poor. It is doing this in partnership with the Big Issue and in support of the Bill.

The fact is that millions of people are excluded from affordable credit because they do not have a credit history. The financially excluded are in a Catch-22 situation. Without a credit score, applicants are declined by mainstream providers and considered riskier customers, but the only way to build a credit score is to have a form of credit, such as a mortgage or credit card, in the first place. Most people on low incomes manage their limited money very carefully, yet banks, utility companies and other retailers can discriminate against them, and indeed they do so. An estimated 2 million people, many of whom are social housing tenants, take out high-cost loans because they cannot access more affordable credit. That is unjust. As the noble Lord pointed out, it is a division in our society.

Individual credit providers—mortgage lenders, for example—are already able to use information such as rental history if it is available. The intention of the noble Lord’s Bill is to ensure that a customer’s rental and council tax payment histories are explicitly taken into account as part of this process, by giving the FCA the power to make a new rule to this effect. As the noble Lord said, the Big Issue has been working with the consumer credit reporting agency Experian to develop the Rental Exchange. That is an important project, which I accept has led to the Bill coming to this House. It has shown two things. The first is that the project is too complex and not well-known enough to be used as you would want it to be used. Secondly, it shows that market solutions are not necessarily the answer; it shows that one of the answers to the problems of credit rating and creditworthiness is a regulatory one.

I was pleased to receive a briefing from the RLA suggesting that, according to a survey of 3,000 of its members, 60% of landlords are in favour of the proposal. It says that the proposal is good both for landlords and for tenants. I agree and I thank the RLA for its briefing.

It seems to me that this is a good idea. The Government have indicated at certain times that they recognise that it is right to take account of the payment of rent to assess creditworthiness. As the noble Lord, Lord Bird, said, the Bill is about equity and fairness. Why should people who manage their money and pay their rent not have their diligence recognised in their credit rating? This is discrimination against renters and people on low income, so I hope that the Government will back the intention and the idea that is contained in this excellent proposal.

You have paid your rent all your life, in full, on time. You go online to buy a washing machine. You fill in your credit details. Because you are renting in social housing, that washing machine will cost you somewhere between £300 and almost £1,000 more than it would cost someone with a mortgage. How on earth can that be fair—the poorest paying the most?

That is why I am absolutely delighted, on behalf of the Liberal Democrats, to support the excellent Creditworthiness Assessment Bill of the noble Lord, Lord Bird. Social mobility and fairness were close to our hearts during the coalition Government. Some battles on that we clearly lost, but one of our biggest wins, in my view, was raising the tax threshold so that today those on the lowest incomes pay over £1,000 less tax—something that David Cameron clearly said in 2010 that he would not deliver.

Indeed, this Bill overlaps with some of the key themes in our recent manifesto, where we pledged to implement the recommendations of the Lords Committee on Financial Exclusion, which highlighted the need to address lack of access to bank accounts and low levels of savings, proposed making financial inclusion a statutory objective of the FCA and called for financial literacy to be incorporated into a curriculum for life in state-funded schools in England. Fairness for those who rent was the reason for my Renters’ Rights Bill last year, which focused in particular on banning tenancy fees. I am delighted that this is now a Government Bill and look forward to welcoming it in this place.

By 2021, nearly one in four people will be renters, a quarter of whom will be families with children. More than 4.3 million will be social tenants. The majority of those social housing tenants—78%—pay their rent on time, but an estimated 2 million of those mostly social tenants take out high-cost loans and are trapped in what is called the poverty premium, paying an additional £1,300 on average for the basics, such as energy, phones, white goods and furniture. Those same tenants who pay their rent—78%—are often managing bills, juggling finances and paying a far higher proportion on their housing than many who are owner-occupiers, especially in London. Imagine if all the rent that they had paid was looked on as an equity. It would be a different situation altogether when they applied for credit. As the report by the House of Lords Financial Exclusion Committee put it,

“a sizeable number of UK citizens lack access to even the most basic financial services, while still more are forced to rely on high-cost and sub-optimal products which can prove damaging to their long-term financial health. The ‘poverty premium’, whereby the poor pay more, serves to exacerbate the effects of financial exclusion, reinforcing a vicious circle”.

So how can we ensure greater fairness for these tenants? Big Issue Invest’s Rental Exchange is a good example of how the Bill can work. Since my days at the charity Shelter, the Big Issue, under the leadership of the noble Lord, Lord Bird, has been recognised as a great force for social change. Its Rental Exchange scheme with Experian is no exception. Since launching in 2010, more than 1.5 million tenants across the UK have been represented by the scheme, with an option to opt out so far taken up by only 1% of tenants. It has been a great success. By using rent data, this brilliant project has transformed credit freedoms. In more than 80% of cases, tenants gain an improved credit score when their rent data is shared, and the evidence also shows a jump from 39% to 84% in their digital identity where rent data is included in credit files.

Anyone who has worked with or met people who are homeless is familiar with the vicious circle. You do not have an address, so you cannot get work. Nowadays, as the noble Lord, Lord Bird, described, if you do not have a digital address or digital credit rating, the same issue and problem applies. But these tenants deserve to be part of the mainstream of consumers in the UK. As the Financial Inclusion Commission report published in September said,

“lower cost lenders could be willing to lower their income thresholds for loans if they had access to additional information on household income and earnings. Lowering the threshold from £15,000 to £12,000 per annum could make an additional 4.8m consumers more attractive to mainstream and lower cost lenders”.

That is the 4.8 million consumers who currently struggle to access normal levels of credit for no logical reason.

As the report of the House of Lords Committee on Financial Exclusion put it,

“We recommend that the Government provide all necessary assistance, including legislation where needed, to further combat financial exclusion caused or exacerbated by high-cost credit”.

The Bill does just that.

Finally, I have some words of comfort for the noble Lord, Lord Bird, whatever the Minister now says. A year ago, I stood on this very spot and asked that lettings agency fees be banned for tenants. The arguments by the Minister against were lengthy, but no great surprise—that it would impose significant operational costs. I am sure that we will hear that argument today. We might even indulge ourselves on this Friday afternoon in a bit of ministerial answer bingo. The Minister might suggest that “a market solution is best”, which is another one to expect or that “transparency already covers this area” and that “the empowered consumer is already there”. All those arguments were deployed against my Bill only a year ago, but they were all arguments that the Government sensibly changed their mind on. I hope, for the sake of those tenants whom we have talked about today, who deserve nothing short of fairness and a level playing field, that once again, the Government will see sense, change their mind and adopt this Bill in full.

My Lords, I am grateful to be allowed to speak in the gap because it gives me an opportunity to say that I am now back in the consumer world, having just taken on once again the presidency of the National Consumer Federation. Some 10 years on, I am listening to very similar things.

It has been marvellous to see the noble Lord, Lord Bird, stand up and speak in words that he would say are not very clear or clever, or that no one knows quite what he is talking about, but we all do know what it is that the noble Lord speaks for. The noble Baronesses, Lady Thornton and Lady Grender, have also spoken in the debate. They do not sit on my side of the table, but I have great respect for both of them because they know what they are talking about and we have been there before.

What I am happy about is the fact that we can get people to talk about their debt issues in public. We never got to the position of the French and Germans where you could borrow money only if you actually had money—the only way to get money was to go into the black market. One thing that we have managed to do, in all the various ways this country has been run, is to allow people to stand up and say, “I am in trouble”.

I like to think that my noble friend Lord Bates, whom I have known for a fair time, will give us a very good answer. Having listened to the debate, after all these years it seems to me that it is the same story: those who can will get it and those who cannot do not. It is important that people in difficulties must be seen so that we can get to them in order to help. I hope that the Minister will do that today.

My Lords, I too congratulate the noble Lord, Lord Bird, on his Bill and on his speech introducing it. Of course he has great experience of people who have difficulty coping with debt. We all know that an unacceptably large percentage of our population are daily facing challenges which can often be quite extreme. I suppose that the Government and the Prime Minister would say that they fall into the category a little below those who are referred to as “just about managing”. The worry is how large those two groups are. My belief is that they will come to haunt the Government as they seek to cope with the declining economy.

The problem has been identified clearly by the noble Lord, Lord Bird, and other speakers in the debate, who have reflected a strong consensus in favour of the Bill: society stacks the cards against poor people. An anxiety that we have expressed for many years now and which still leads to terrible deficiencies in our society is the absence of any real financial understanding of how household budgets should be handled. I know that attempts have been made in recent years to increase the provision of financial education, and under considerable pressure some progress has been made, but it is still easy to meet people who have no concept at all of some of the most basic aspects of household finance. That is why this problem is so acute. More than 1 million of our people do not have a bank account, which is indicative of the limitations they face.

Of course, as has been described on both sides of the House, the more limited your financial health, the more costly it becomes to tide over in difficult circumstances when debts are incurred. Credit companies inevitably favour safe investments and discount heavily against those with limited assets. We recognise this because it is an aspect of the market, and indeed we may hear a little more about the operation of the market before the debate concludes. However, there are very good reasons why those with limited resources should be anxious about market forces because they can be cruelly affected by how they work.

We know about those forces in relation to housing costs, and we know also that one of the fundamental problems in our society at present is the generational difference between those who were able to purchase their homes at prices within their means, given that their mortgages took up only a limited amount of their wages, and the situation today. Now, the decline in the economy and the extraordinary increase in house prices—attached to the wage freezes and impoverishment of our people—means that, for the generation coming on stream now, the issue has become a crisis.

The Government may be making some moves. In the Budget, we had indications that at least the housing crisis will be addressed, but we all know that the Budget projections on how the housing need will be met mean that it will be a decade or so before we start to see any real substantial matching of supply to demand. Housing costs, which after all relate to the question of having a roof over one’s head, will continue to burden so much of our population.

Last evening, when I was thinking about the Bill and about indicating my complete support for it, as well as that of my party both here and in the other place—my party has expressed strong commendation of the Bill—I thought I would be addressing a House with a substantial consensus of opinion. However, Governments are always good at busting consensus if it does not meet their particular rubric. As a result of communications received by the noble Lord, Lord Bird, only a day or so ago, I know that the Minister must indicate today that the Government do not think that the Bill is the appropriate solution to the problem. For the Government to change the terms of the debate 48 hours or so before we are due to debate the Bill is pretty poor conduct on their part. I excuse both noble Lords opposite—they have both been in the Commons and therefore seen, from time to time, exercises of which no one could approve. I have no doubt that neither of them was involved in this exercise, but I ask the Minister to pay due regard to what we on this side of the House regard as a somewhat unfair operation on a Private Member’s Bill at such a late stage.

I have no doubt that the Minister will say that is because the Government have a better idea and that the better idea is market orientated. Of course, in certain philosophies, of which the Conservative Party is the clearest exponent, just to use the word “market” means commendation immediately. I am not sure that the Government are bent upon improving the Bill, but they are bent upon trying to take credit for the enormously successful campaign of the noble Lord, Lord Bird, which, through the Big Issue and his experience he has operated over a considerable period of time. I think the Government are seeking to snatch a modicum of credit for the fact that they are responding to this development of public pressure. I have no doubt that they will get away with it; after all, they have a majority in the House of Commons, I am told, although it seems to have a certain process of erosion attached to it. Today, on the basis of a very limited mandate, the Government are setting out to indicate that they intend to stop this Bill in its tracks, because although the Minister will persist with his usual commitment and present the opportunity for future arguments, I have no doubt that the Government will be working toward their own agenda, which does not include the passage of this Bill.

I am sorry to have brought a slightly discordant note to proceedings, but it is on the basis of what I think is one of the latest incursions upon a Private Member’s Bill. Remember that we as parliamentarians value Private Members’ time and the ability to get Bills through. They should not be wrecked by the Government unless there is a very good cause. The cause in this case seems not to be an improved position over the Bill but the Government seeking to take credit when in fact credit is due to the noble Lord, Lord Bird, and all those people who have supported him throughout the whole of this campaign.

I am sorry to rise on such a discordant note from the noble Lord. I have a slight memory of being a Back-Bencher in this place on the Opposition Benches when there was a certain very distinguished Deputy Chief Whip by the name of Lord Davies of Oldham. He knew how to deal with Private Members’ legislation when it did not quite fit with the Government’s approach at the time. I assure the noble Lord that that is not the approach we are taking towards the Bill. The announcement, which I will come to shortly, was not rushed out 48 hours before. It happened to be part of a Budget Statement that had as its main theme helping people into the housing market, which is at the heart of what the noble Lord, Lord Bird, said.

I have to place an interest on the record. The noble Lord, Lord Bird, was a hero of mine long before he arrived in this place. He has done more to help the poor of this country than virtually anybody else I know. It is fantastic that he is here and it is wonderful that he continues to be an advocate—a voice for the voiceless—in our society.

The Creditworthiness Assessment Bill is about Britain’s rental tenants having restrictions placed on them in the availability of credit. They are fortunate indeed to have such a powerful champion in the House of Lords as the noble Lord. The issue at hand concerns the ability of lenders and credit reference agencies to accurately assess the creditworthiness of prospective borrowers. Currently, a history of meeting rent payments is not routinely recognised in people’s credit scores and is not commonly taken into account when banks conduct mortgage affordability assessments. For those without a long history of borrowing on a credit card, this raises the cost of borrowing. The noble Baroness, Lady Grender, articulated that point. This leads to a state of affairs where the poorest pay the most, as the noble Baroness, Lady Thornton, mentioned in her remarks. This problem is commonly described as the “poverty premium”. Those words were used in the debate. It also creates a significant barrier to getting on to the housing ladder because it raises the costs of getting a mortgage.

I recognise that banks must take into account other factors when assessing mortgage applications, including the multiple additional costs that come with home ownership. None the less, rental payments are usually an individual’s largest monthly outgoings and are therefore a significant indicator of one’s creditworthiness. For this reason—I underscore this sentence—it is right that a history of successfully paying rent should be recorded and recognised.

In addition to the noble Lord’s Bill, my colleague Paul Scully in the House of Commons brought a petition by 147,000 people who wanted their rental payments considered in their mortgage application. Their views are echoed by many hundreds of letters sent to Members of the House of Commons and received by the Treasury each month. This is clearly an idea whose time has come.

The Bill states that all firms carrying on credit-related regulated activities, including mortgage lending and providing credit scores, should be required to,

“take into account rental payment history and council tax payment history when assessing a borrower’s creditworthiness”.

I share the Bill’s objectives. We have a clear unity of purpose in seeking to help rental tenants get a fair assessment when they use financial services. Our concerns are ones only of means, not ends.

I am trying at this point not to get drawn into rehearsals of speeches that may have been given in the letting fees abolition efforts of the noble Baroness, Lady Grender, but I believe that the solution to this issue should avoid imposing further regulatory requirements on lenders, landlords or credit reference agencies. Additional regulatory requirements could generate a significant burden for these businesses. For example, given that mortgage lenders currently lack easy access to rent payment data, this approach would force them to go out and acquire it before making each new loan, which represents a significant logistical and technological challenge. This would not be in keeping with our aim to make Britain the best place in the world to do business.

Furthermore, anything that places a burden on lenders could negatively impact the availability of credit in the future: if we make it harder for lenders to offer mortgages to rental tenants, they may decide to offer fewer of them. That would of course be counterproductive to the objectives of the Bill. At minimum, additional operation costs would be likely to be passed on to consumers in the form of higher prices. Both those outcomes would be counterproductive, in our view. My noble friend Lady Wilcox has been a formidable champion of consumer rights over many years, and it was wonderful to have her contribution.

We share a common ambition in seeking to help as many hard-working families as possible get access to credit, ensuring that tenants get due recognition for a history of meeting rent payments on time, but we must endeavour to find a market-based solution rather than a top-down imposition—a solution that works for both consumers and businesses. That is why I am pleased to inform the House that, in the Autumn Budget Statement, the Government announced the rent recognition challenge, a £2 million competition, open to all, challenging the UK’s world-leading technological firms to develop new applications to enable rental tenants to record and collect their own rental payment data and share it with lenders in mortgage affordability assessments and credit scores. Furthermore, these apps could be used in a revolutionary new way, given that open banking technology comes into force in January 2018.

When a tenant pays rent out of their current account, this transaction is encrypted and secured, meaning banks have no easy way of accessing or verifying the information. However, with open banking, individuals will be able to use innovative new solutions to share this current account data through secure channels in a way that they were unable to do previously. Creating this competition allows the Government to serve not as a disrupter of the free function of markets but rather as a catalyst; to promote action, drive innovation, and harness the ingenuity of the private sector. Rather than placing the burden on businesses, this approach aims to empower consumers by giving them the necessary tools to collect, control and share their own data. The challenge will open to applications in January 2018: I encourage all firms with an interest in this important policy area to apply.

The noble Lord, Lord Bird, in his excellent introduction to this debate, asked how it benefits social housing tenants. The challenge is designed to produce solutions applicable to both the social and private rented sectors. We also support the rental exchange scheme, which does important and effective work. The noble Baroness, Lady Thornton, asked about the cost of credit. It is too high for people on low incomes. The Financial Conduct Authority proposes to clarify that firms should consider not just whether a consumer can repay, but whether they can pay without causing financial distress.

The Government’s introduction of a cap on the cost of payday loans was widely welcomed. We have introduced the concept of fee-free banking for many families, to encourage them to have a digital presence and therefore increase their ability to access credit. A key part of that is to ensure that we have people in work and, through measures such as the national minimum wage, to ensure that they can afford it. The noble Baroness, Lady Grender, mentioned raising the tax threshold, which has made a significant difference, taking 4 million people out of paying tax altogether.

I thank all Members who participated in the debate and particularly the noble Lord, Lord Bird, for bringing the matter to the House’s attention. I also thank him for the work that he, the Big Issue and Experian have done over a period of seven years in this role. I encourage them to recognise that their efforts are not in vain. They are making progress and this issue is being raised up the agenda, a fact which was recognised in the announcement that my right honourable friends the Chancellor and the Economic Secretary made in relation to the Budget.

In the aftermath of the damage incurred by the global financial crisis, reforming the financial services sector to work better for consumers has long been among the Government’s top priorities. The rent recognition challenge is the next step in this effort. Creating new and innovative solutions to allow tenants to record and share their rental history would make the credit assessment process fairer, provide a helping hand to aspiring home owners and help to build a better Britain for rental tenants, which is the end that we all seek.

I thank your Lordships very much for that interesting discussion about what we all agree is an irregularity that happens when you live in poverty. It is one of the many irregularities there. What I found quite interesting about the Minister’s response is that when it comes to a market-based solution, which the Conservative Government would obviously love to promote, there is a bar on operating in the market healthily. People say, “I have a mortgage, therefore I am much more reliable and bankable than if I am a tenant who pays rent”. What is so interesting is that there are probably millions of such people who the lenders would love to lend to, but they do not have the information. They do not have the key to the door. If it was a true market-based solution, it would be a matter of turning to tenants and saying, “Show us how reliable you are by showing us the data you’ve collected over the years by paying your rent”.

The Bill opens up the possibility of enfranchising a whole group of people who are disfranchised now. Fintech goes towards the idea that you can gather your own data and share it with a third party, which may or may not choose to lend you the money. There are ways towards a solution and the fintech will come along, irrespective of whether we see it in, but there is this entrenched idea. The work of the Big Issue has proved that the evidence is there that millions of people are being disfranchised, and that it is affecting the health of the market. If we really want to find a market-based solution let us look at a true one that includes those people, who are not able to participate in the market.

The Bill is also a bit broader in its base; it is not exclusively about people getting mortgages. I think there was a kind of wrong-footing—not intentional, because I trust the Government to be noble in all things—that we are talking about mortgaging and housing. We are actually talking about, for instance, people moving into social housing. When you go into the apartment, what have you got? You might have a gas oven or an electric oven, but where are the white goods? You move in, you are on universal credit and you have to wait until you can buy the goods that enable you to feed your family. What happens? You then have to turn to BrightHouse. You have to turn to BrightHouse because you are desperate to feed your children and therefore you have to go to a very narrow sector of the credit market, and that sector knows that you are hoist by your own petard when it comes to your poverty and it is going to charge you through the nose. That is a disreputable thing masquerading as a part of democracy. You take it or leave it. We need to recognise that somebody’s credit score should begin to liberate them and enable them to begin the process of their own reconstruction. It is about people reconstructing themselves, irrespective of how hard and tirelessly we work to extend the franchise that we need to extend around credit.

I thank noble Lords for taking part in this debate, which I enjoyed very much. I very much enjoyed the comments made by the noble Lord, Lord Davies. I can see he is not a pusillanimous man. He upped the game. I enjoyed the contributions of the noble Baronesses, Lady Thornton, Lady Grender and—unfortunately I did not get her name.

God bless you. I am only a new boy. When, or if, we get this Bill through the House, it will benefit all political persuasions in the House because we will all be able to do our job around poverty a little better, but we will also have to make sure that in the detail, where we know the devil is, we do an awful lot of work for people who are left out and whose credit is damaged.

I was out last night talking to some homeless people. A big problem is that they have no credit references. One of them, a young woman, had been driven out because of problems around credit and her ability to respond to it. When you see those things, you know that we have an emergency on our hands and we need to do something very desperate. One of the ways we can do that is by helping people with their credit while making sure that people who are not the low-hanging fruit do not get left behind. We have to ensure that there are all the safeguards so that people can opt out and not be punished in the process. I thank all noble Lords.

Bill read a second time and committed to a Committee of the Whole House.

House adjourned at 3.43 pm.