I thank all noble Lords who have taken part in this extremely helpful debate. A number of issues have been raised about the scope of the term “vulnerability”. This is incredibly helpful to us and to our overall approach to the Bill. The noble Lord, Lord Stevenson, made reference to his hope that the report of our debate in Hansard will be seen and our words read by those who are charged with taking forward the delivery of this body. I assure the noble Lord that, thus far, everyone I have spoken to who is involved in this world, in the three current bodies, is very aware of our debates and I trust that they will be taking on board what is said.
Amendment 11, tabled by the noble Baronesses, Lady Finlay, Lady Coussins and Lady Hollins, and the noble Lord, Lord McKenzie, would add an element to the body’s strategic function, so it could include issues of access to financial services for vulnerable
people in the national strategy. I hope that noble Lords will forgive me for being a bit repetitive, following my noble friend’s remarks in previous debates, but it is important to have this on the record. As I mentioned in Committee, the Government take the issue of financial exclusion very seriously. As my noble friend Lord Young mentioned earlier, the Government are grateful for the important work of the Financial Exclusion Select Committee in highlighting this important issue and will aim to publish their response to the committee’s wide-reaching report ahead of Third Reading.
The Government’s response will address all the committee’s recommendations and bring forward new proposals on how to better co-ordinate across government, regulators and the wider sector to tackle the significant issue of financial exclusion. I see that my honourable friend from another place, Guy Opperman, the Minister for Financial Inclusion at the Department for Work and Pensions, is here. We have been working extremely closely on this Bill and on developing our response to the report.
My noble friend Lord Young earlier highlighted the difference between financial inclusion and capability and the Government’s intention that this body will be designed to build financial capability among the public. The Government have therefore deliberately omitted from the Bill references to financial inclusion and individuals’ access to financial services. An appropriate supply to people of useful and affordable financial services and products is very important, and the Government therefore work closely with the industry regulator, the Financial Conduct Authority, to ensure that appropriate action is taken when the market fails to supply services and products. The amendment would greatly expand the body’s statutory remit and we fear it is likely to create confusion over the roles of Her Majesty’s Treasury and the Financial Conduct Authority, both of which have the relevant responsibilities and powers to influence the supply of financial services products.
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When looking specifically at improving access to financial services and products for people who are vulnerable, the FCA—not the SFGB—is more appropriate to deliver that role. My noble friend Lord Young has referred in depth to the work that the FCA is doing on consumer vulnerability, and many noble Lords attended the useful meeting with the FCA last week. I hope that noble Lords will agree that this demonstrated its commitment to this issue. The FCA has done a lot of work in this area, publishing two pieces of in-depth research, carried out in 2015 and 2016, and having issues of access and vulnerability at the core of its mission and business plan. We are awaiting the FCA’s forthcoming work to develop a consumer strategy through its consumer approach paper, which will be published in the next few weeks. As my noble friend Lord Young has said, this will provide a means for it to measure outcomes for vulnerable consumers and ensure that it has captured their needs when finalising its business priorities.
The successful launches of the FCA’s TechSprint events have identified innovative solutions that can improve access for vulnerable groups. In March 2017,
with the Money and Mental Health Policy Institute, it brought together over 100 developers and experts from 31 firms to take part in a TechSprint event to explore solutions for those suffering from poor mental health. It has also carried out further work to explore the issues which those living with cancer can face in gaining affordable access, for example to travel insurance. In due course, it will publish a feedback statement with its findings and next steps in light of responses to its call for input.
More recently, in September 2017, the FCA published an occasional paper outlining findings of its ageing population project. The paper reviews the policy implications of an ageing population and the resulting impact on financial services. It highlights risks to older consumers, who are more likely to be vulnerable than other groups. To try and minimise harm, it has suggested areas for financial services firms to give greater consideration to, as part of how they treat older consumers.
Finally, last week, as noble Lords will know, the FCA published its inaugural annual financial lives survey: its largest tracking survey of consumers and their use of financial services. This was a huge undertaking and, as my noble friend mentioned, it showed that 50% of UK adults—25.6 million—display one or more characteristics that signal their potential vulnerability. That speaks to what a number of noble Lords have said this evening about the kinds of situations, circumstances and things that happen in people’s lives that can bring them within the scope of the term “vulnerability”. The FCA will use the results of the survey to prioritise its work.
As a result of the FCA’s work and its engagement with firms, there have been tangible developments from the industry in this area. This includes work led by the Financial Services Vulnerability Taskforce. In addition, the FCA has also seen increasing evidence that firms identify and improve outcomes for vulnerable consumers.
To reiterate, the clause outlining the body’s strategic function is designed to ensure that the new body helps consumers to manage their money well and to make the most of services and products made available by the industry. The current amendment would greatly expand that function and may cause confusion over the role of different public institutions.
However, we understand the point made by all noble Lords and the intention of the amendment, which is that the body needs to be clear about supporting vulnerable people. The body already has an objective to prioritise people most in need. In a sense, I am attracted to the term “vulnerable” as opposed to, in the previous amendment, having lists including those such as “care leavers”, which could, as suggested by the noble Baroness, Lady Finlay, lead to exclusion of certain individuals. As noble Lords have demonstrated through debate, it is very hard to encapsulate how one can identify people who might fit into that category; therefore, a more generic term, such as “vulnerable”, which encapsulates people with fluctuating or impaired capacity, might work. In a sense, it would be a whole-philosophy approach, as the noble Baroness, Lady Finlay, said.
The noble Baroness, Lady Kramer, referred to looking at how utilities manage that issue. As an ex-board member of a utility and water company, I know that a lot of emphasis is placed on utilities working in certain categories to ensure people are not beyond the possibility of being respected when they find themselves in a difficult situation. That situation may be one event in their life, not necessarily a condition, although it would include certain conditions as well.
This has been an extremely helpful debate. There is much to attract in what noble Lords have said. The noble Viscount, Lord Brookeborough, referred to bank branch closures, which are an important aspect of the debate. While the Government do not intervene in such decisions, as noble Lords will know, they want to ensure the industry responds to changes in the way we bank, while making sure it caters for customers who still need access to a bank branch. We believe the impact on communities must be understood by the financial services industry, and considered and mitigated where possible. As the noble Viscount said, “isolation” brings another meaning of the word “vulnerable” into the overall term.
I have listened to noble Lords but I want to review, because I do not believe in any event the wording is quite right, nor the way in which it has been placed in the Bill. The body already has an objective to prioritise people most in need. Let us take this issue away, and review and consider it further. On that basis, I very much hope the noble Baroness will feel able to withdraw her amendment.