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The Economic Secretary to the Treasury (Ed Balls):
I congratulate the hon. Member for Truro and St. Austell (Matthew Taylor) on securing the debate, and thank him and his office for their courtesy in giving me advance notice of the issues that he intended to raise. He has raised important matters, and it is important that there is proper transparency and profile in those issues. I was pleased to be able to read, before
the debate, the comments that he made on The Westminster Hour. His appearance on that programme gave publicity to todays debate and gave some of these issues a wider profile. That information has enabled me to prepare to respond in detail to the points raised in his powerful speech.
As well as raising specific issues about bank charges, the hon. Gentleman makes a broad point with which I, and most people, agree. While banks play a fundamentally important role in the workings of our economy, and while it is important for the working of our economy to have a strong, healthy and profitable banking sector, banks also play an integral role in our society and lives. Banks are among our biggest companies, and like any companyperhaps more sothey have social obligations and responsibilities within society. Given their important role in the economy and society, they should be leaders in corporate social responsibility.
In recent years, we have worked closely with the banking industry and the British Bankers Association on a range of different policy issues that all pertain to that wider social role of the banking industry. A key Government priority in tackling financial inclusion has been to try to reduce the number of people in our society who have no bank account. When we established our financial inclusion taskforce, we calculated that 2.8 million people in our society have no bank account. The hon. Gentleman will know that not having a bank account can impose real costs, such as not being able to access affordable sources of credit or take advantage of discounted utility bills by using direct debits.
Our wider agenda is to tackle illegal lending and loan sharks. Our pilot schemes in Birmingham and Glasgow, which are about to be extended across the country, are all about trying to ensure that we tackle the problem of people being ripped off outside the mainstream banking industry. An important part of our broader work on financial inclusion has been encouraging the third sector credit unions to play a wider role in providing bank accounts for the lowest-income customers, and cracking down on illegal lending.
We have also worked closely with the banks to try to ensure that we tackle customers inability to access banking services in the poorest communities. Just before Christmas, my right hon. Friend the Member for West Dunbartonshire (John McFall), who is Chair of the Treasury Committee, and I announced an agreement with the banks to provide automatic teller machinesATMsin the poorest communities of our country, where it is often hard for people to access banking services.
We have been working hard on other areas. As part of the implementation of the Cruickshank review, the payments system task force was established in 2004 to try to speed up the provision of banking services for customers. The length of time that it has taken to clear cheques has been an important and characteristic feature of my ministerial postbagI am sure that the same applies in respect of the hon. Gentlemans postbag. We announced an agreement on those areas before Christmas.
I am aware that penalty charges in the mainstream banking system, particularly current account charges, such as overdraft fees, and the problems they can pose to those in financial difficulty have received significant attention. The Treasury Committee also raised that issue in its recent report on financial inclusion.
The hon. Gentleman noted that the Office of Fair Trading has been closely engaged in this area, and he will know that we established an independent regime for competition inquiriesthe OFT and the new Competition Commission. The banking industry often makes points to me that are directly opposed to the ones he has made about the scrutiny role that the OFT plays in its affairs, although I listened carefully to what he said.
The OFT carried out an investigation into penalty charges in the credit card sector and set a £12 administrative threshold for intervention by the competition authorities. As a result, credit card issuers have agreed to reduce their default charges, the majority agreeing to do so by almost half. That investigation was conducted under the principle of the Unfair Terms in Consumer Contracts Regulations 1999, which specify that financial service companies should recoup only the administrative costs of dealing with default. That was the basis upon which the OFT made that ruling, which was not popular in some circles in the industry but has been broadly welcomed.
The OFT recently said it believes that the same principles of fairness and transparency that it applied to credit card default charges are likely to be applicable to bank account default charges. Following the credit card investigation in which it acted, it has instigated an exercise to determine the facts in respect of the banking sector and then to decide what proportionate and appropriate action it should take.
The OFT is independent of Government; we do not direct it in or set the pace of its inquiries. In many cases, it is for the OFT to propose and implement remedies. The fact that those individual, case-by-case decisions are being made at arms length from Ministers is one of the strengths in terms of protecting consumers. In my experience of contact with the banking industry, the OFT inquiry is very seriousit is certainly being taken seriously by the banks. The OFT has collected the information and it has an established track record of acting when it believes that actions are being taken that are potentially outside the law. It would be wrong for me to comment on this particular case, because it is a matter for the OFT. If I were to second-guess an inquirythe inquiry of an independent competition agencywhen it is being conducted, it would be an error on my part. I would like to express my strong support, and that of the Government, for the principles of fairness and transparency, which the OFT applies in general. It applied such principles to credit cards and is now planning to apply them to banks.
The hon. Gentleman also mentioned that some customers are challenging default charges in the courts. It is up to individuals whether they challenge the decisions of a private institution in the courts. The OFT is holding a more general inquiry into the particular kind of cases that he mentioned. It would not be appropriate for me to comment on the particulars of those legal cases, especially while the
OFT inquiry is ongoing. As I said, we are very supportive of the general principles that the OFT is seeking to apply.
The penalty charges that result from late payments by Government agencies and cause people to go overdrawn through no fault of their own have been mentioned. In 2006, the Department for Work and Pensions made more than 680 million payments, of which fewer than 21,000or 0.0003 per cent.were reported as late or missing by recipients. In the negligible minority of cases where payments are late because of an error on the part of the Department, the Governments policy is to refund any penalty charges that might arise to the individual concerned.
Matthew Taylor: I want to press the Minister a little further, because, as he will know, the intentions of Parliament can be interpreted partly by the comments that are made in it. While he cannot comment on specific legal cases, it is evident that banks are avoiding court cases, presumably because they feel that they would lose them. Will he confirm that the intention behind the regulations was, as the OFT has stated, the same as the principle that applies to credit cards: only the administrative costs should be charged?
Ed Balls: I am happy to confirm, as the hon. Gentleman says, that the principles that apply to credit cards apply equally to the banking industry. It is for the OFT to get the facts and to judge whether it thinks those principles and the law require it to act. It is not for me to do so. It is clear that the principles that applied to credit cards also apply to the banking industry.
I have a short amount of time left, so I should like to make one further point to the hon. Gentleman. As a result of the Cruickshank report, there is now a regular review of the banking codethe voluntary, good
practice code for UK financial institutions, to which all the major banks signed up and which was first established in 1991.
Mike Young, a former senior Bank of England official, is conducting the triennial review of the banking code this year. As part of that, he has written to stakeholders to seek views on possible changes to the code. He has asked stakeholders to consider the following:
Are the requirements about how lenders deal with people who get into financial difficulties clear enough?
He is examining whether or not the banking code requirements, to which banks sign up voluntarily, are sufficiently clear and onerous to ensure proper protection for some of the people the hon. Gentleman mentioned.
The Treasury will make a submission to the review, as it always has done on such matters, part of which will address those issues. I encourage the hon. Gentleman, and all other hon. Members who have concerns, to make a contribution to that ongoing review of the banking code. I am sure that Mike Young would be happy to meet the hon. Gentleman as part of his independent review. I would be happy to write to Mr. Young about this debate and to send him a copy of Hansard.
Whether we are talking about the work of the OFT, our response to the Treasury Committee, the work of the payments task force or the review of the banking code, we are determined to ensure a fair deal for customers, particularly those who are potentially most disadvantaged by financial exclusion and the problems of late payment, which the hon. Gentleman has raised today. The OFT is examining charging, so I cannot comment further on that, but I am grateful to him for having raised this debate and for bringing transparency to these issues.
Mrs. Siân C. James (Swansea, East) (Lab): I am grateful for the opportunity to raise matters of concern about automated or unstaffed coin-operated tanning salons. My interest arises from my work with childrenin a previous life, I worked for Save the Childrenand childrens issues are close to my heart.
The purpose of this debate is to make a case for further regulation of the sunbed industry, particularly unstaffed salons which raise a wide variety of public health concerns. I want to concentrate my remarks on the misuse of unstaffed tanning salons by children, often girls in their teens.
Shortly after my election to Parliament, concerned parents in the constituency informed me about the availability of sunbeds to under-16s. There was an unstaffed automated tanning salon a short distance from my former constituency office on the High street in Swansea. Parents were aware that their teenage daughters had been using the salon, so I asked a member of my staff to monitor the situation at lunch times, and they saw schoolchildren using the facility. After some research, I discovered that while advice was available on the use of sunbeds by under-16s, it was not backed up by regulation. I have spoken to many children in Swansea, East who said: Miss, its cool to have a tan. They said they want to emulate celebrities and their sporting idols who have tans.
Mrs. Linda Riordan (Halifax) (Lab/Co-op): I congratulate my hon. Friend on securing this important debate. Does she agree that the media have a responsibility in the matter because young people who see pictures of celebrities in newspapers may try to imitate them without perhaps understanding the risks?
Mrs. James: I agree with my hon. Friend. Young people find it difficult to distinguish between fake tan and the tan obtained from using a sunbed, but they want to emulate stars who should explain how they get their tans. We must work with young people to eradicate the idea that it is healthy to have a tan. One of my major concerns is that young people equate health with having a tan. They aspire to be fashionable, but they may, in pursuit of a tan, lie to their parents, use facilities that they should not use and claim that they are using fake tan when they are not. Hon. Members know that no one under the age of 16 should use a sunbed. However, in towns and cities throughout the United Kingdom it is easy for them to do so. I believe it is morally wrong that children are gaining access to such equipment.
Let me make a distinction. When I refer to coin-operated salons, I mean companies that accept cash or card payment in a box mounted on the wall and tend not to have staff to assist and provide advice about safe tanning techniques. They are not regulated by the Sunbed Association, which is a self-regulatory body in the UK. I met the association to discuss shared concerns, and it informed me that it has more than 1,200 members and refuses membership to unstaffed salon companies as they do not meet the associations code of practice. Staffing is fundamental to membership of the organisation.
The unstaffed side of the industry is growing. People like the convenience of no appointments and pay-as-you-go. I agree that they are convenient, but they raise public health concerns that must be addressed. A qualified member of staff can do more than just be there and take money. They can advise on skin type, length of tanning session, how to tan safely and, importantly, the wearing of goggles. They are also a reassuring presence in case of emergency. Anyonechildren, people with health problems and even people who are intoxicatedcan gain easy access to salons, ignore guidelines and damage their health. It is wrong if no trained staff are available to provide information on safe tanning, to be available in an emergency, such as an assault on a customer, or to prevent inappropriate use. Unaccompanied women should not be encouraged to enter unstaffed premises where they could be vulnerable to attack or sexual assault. Such salons are cheap to use. One unstaffed company in south Wales has been offering deals of 25p per minute and others have offered January sales. Such prices are cheaper than that of smoking, and children can easily afford sessions for the price of their school lunch. They can cover the cost of a sunbed session during their lunch break, and that is wrong.
I have tabled a number of questions on the issue and the Minister has been receptive to my concerns. I am grateful to her and her officials for meeting me to discuss them. I have also met a number of cancer charities, particularly Cancer Research UK, which is supportive of my campaign. The matter was discussed at its sunbed symposium in September 2006, which I attended.
I have been lobbied from both sides of the argument, and I have not ignored representations from people who disagree with me. I tried to find common ground, even when that was difficult. I met Consol Suncentres, the largest unstaffed tanning company in the UK. I welcomed the opportunity to meet it and hear its views. There are many opinions on the safety of sunbeds, but we all agreed that it is wrong for children under the age of 16 to have access to sunbeds, whether staffed or unstaffed. What Consol and I cannot agree on is how to prevent under-16s from gaining access to sunbeds. I have advised it that I am keen to have further regulation, but it does not recognise the problem.
I welcome recent initiatives by the company to prevent under-age use of its facilities, but I was disappointed when it informed me at a meeting in June that it was the responsibility of parents to stop children accessing such facilities. That is an irresponsible attitude. Until the whole industry agrees that protecting the health of young people is the highest priority, its attitude will remain a major stumbling block.
The need to introduce more responsible sunbed use in coin-operated, unstaffed salons was the basis of my early-day motion, which received cross-party support and was signed by 155 hon. Members. I was pleased to hear about the parliamentary seminar, which was hosted by my hon. Friend the Member for Norwich, North (Dr. Gibson), to discuss sunbed-related issues, and I was disappointed that I could not attend because of Select Committee business overseas. I was informed of the discussion and I am sure that it was helpful to the ongoing debate. I thank my hon. Friend the
Member for Rhondda (Chris Bryant) for speaking in support of my work at the seminar.
Following the success of my early-day motion, I hope that the Minister recognises the strength of feeling about the matter. The law protects children from buying alcohol and cigarettes, and from gambling. The same protection should apply to the use of sunbeds.
Rosie Cooper (West Lancashire) (Lab): I agree with my hon. Friend. A young, 15-year-old girl in Merseyside was addicted to sunbeds, and the story was on TV. The health dangers were explained to her over and again; her parents told her that it was dangerous and wrong to use them, but she continued to do so. Unless we act and provide protection, those young people will not listen and will endanger their lives.
Mrs. James: I thank my hon. Friend for her comments. It is true that it is our duty to protect young people. If society does not look after them, they may not realise the long-term dangers. It is up to us to educate them and provide information.
I would welcome further work between the Minister and other Departments to consider introducing a licensing scheme for sunbed outlets throughout the country. Such a scheme exists in some cities, but a consistent approach is needed, led by the Government.
Back in 1995 when the health and safety guidelines were drawn up, the automated, unstaffed sunbed centre did not exist on our high streets, but there has since been an explosion of them, which is why we must look again at the issue. Regulations have not kept up with developments in the industry, and public health is suffering. Unstaffed, coin-operated salons should not be worried about a licensing system, and I call on them to work with me on this campaign.
I have been accused of trying to prevent choice and to stop people using sunbeds, and wanting to ban them all. That is not so. I do not wish to stop adults over 16 accessing sunbeds, but perhaps with the recent change in the age restriction on the sale of tobacco we should consider 18. I wish only to prevent children from being able to walk into unstaffed salons and use them unchallenged. There has been a public outcry about young people accessing gambling machines in amusement arcades. Sunbed abuse is just as damaging and as harmful to young peoples long-term well-being.
I have heard arguments that under-16 year olds will continue to access the salons despite the introduction of an age ban, but that was said about cigarettes and alcohol. The success of the Think 21 campaign demonstrates clearly that an effective voluntary system can challenge any under-age young person attempting to purchase alcohol or tobacco. The same should be true of the sunbed industry. It is imperative that a member of staff is present to challenge any under-age young person attempting to access the premises.
We do not accept responsibility for people under the age of 16 on these premises.
It is an example of shoddy practice that must be exposed. In other words, the notice is saying, It is not our fault; blame someone else. Companies must take
responsibility for their services. If they offer a service to the public, they should have a minimum set of standards, which is why licensing is needed.
Consol says that the education of children is the responsibility of parents, but if parents discover their children using unstaffed salons, or if a passer-by notices a child in an unstaffed salon and reports it, nothing is done. There is no complaint mechanism to deal with such circumstances, and nobody is prosecuted or fined. Action is taken only if there is a fault with the equipment or if an incident occurs. That is unacceptable.
In conclusion, there is a strong case for regulation, probably in the form of licensing. It is unacceptable in this day and age for unstaffed operators to pretend that there is no problem with under-16s accessing their salons. There is growing public awareness about the health and well-being of our young people. It does not make sense that we can protect them from alcohol, cigarettes, pornography and gambling, but that we cannot recognise the dangers to their long-term health from sunbed abuse.
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