The Treasury Select Committee (TSC) has published the findings from its inquiry into the Financial Inclusion Strategy. The Committee’s verdict echoes our own, this is “a welcome first step, but not yet a complete plan.” 

We were really pleased to see several of the Committee’s recommendations to strengthen accountability for delivering the Strategy, including that: 

  • HM Treasury must publish, within six months, an implementation and accountability framework for the Strategy, with baselines, measurable targets, named delivery owners, and annual reporting to Parliament. 
  • HM Treasury and the FCA should develop firm-level financial inclusion metrics, focused on the markets where exclusion causes the most harm, including contents insurance, affordable credit and access to basic banking. 
  • Governance of the Financial Inclusion Committee should be strengthened, with published terms of reference and a guaranteed, recorded voice for consumer groups and people with lived experience of financial exclusion. 

This is real progress, and we hope Government acts on it. 

But the gaps matter 

The Strategy, and now the TSC’s inquiry, still fail to treat the poverty premium as the cross-cutting issue it is. An acknowledgement of this, and that tackling the poverty premium is central to delivering real financial inclusion, remains missing.  

Motor insurance, in particular, barely features, despite the scale of harm it causes and the failure of the Strategy to properly address this poverty premium. Our latest data shows what’s at stake. People in the most deprived areas pay £153 more for car insurance than wealthier drivers, based on postcode rather than driving record. Paying monthly for car insurance through premium finance, rather than annually, costs an average of £71 more a year. 

Nor is there any mention of a Fair Banking Act, which would give millions of excluded consumers to affordable credit 

Rebecca Deegan, Director of Fair By Design said:

“The Treasury Committee’s report recognises that the Financial Inclusion Strategy lacks ambition and accountability. It’s clear that more must be done to close the deepest divides. Without a Fair Banking Act, and without serious action on motor insurance, the poverty premium will keep penalising people on low incomes. We’re already seeing that more political will is needed to achieve what’s in the Strategy. Taking onboard the Committee’s recommendations will help the Government to show it is serious about financial inclusion.”