Financial Conduct Authority Redress Scheme

Lord Bellingham Excerpts

Thursday 4th December 2014 Commons Chamber

[Mr Mark Williams (Ceredigion) (LD)]

I would say it is a pleasure to speak in this debate, Madam Deputy Speaker, but I wonder whether it really is. We have had three of these debates so far and, sadly, they have been enriched by the experiences right across the country of our long-suffering constituents. My contribution will be no different in bringing some of those experiences to the attention of the House, but I particularly wish to address the issue of fixed-rate loans—tailored business loans, as they are known in some quarters—how dangerous and toxic those products are, and how they remain excluded from the FCA review, an anomaly that should be addressed.

First, however, it would be remiss of me not to congratulate, again, my hon. Friend the Member for Aberconwy (Guto Bebb), the all-party group he founded and Bully-Banks. I shudder to think where we would be without him and those who were galvanised into founding Bully-Banks to push the agenda forward. It would be churlish if I did not at the start of my contribution acknowledge, as my hon. Friend did, the record of the redress scheme in so far as it is a redress scheme, but today’s motion clearly spells out our sense of disappointment. More than that, it highlights our feelings about the inertia, helplessness and heartbreak expressed by many of the small business owners who have been mis-sold these products in the cases we are all dealing with.

I have spoken in this Chamber before about one business in my Ceredigion constituency, and I will do so again. I can see at least two or three former Aberystwyth students here who will know the business in question. The asset-rich farms, hotels and pubs in my constituency, which is dependent on agriculture and tourism, were very clearly targeted by the banks. There was a time when the trickle of cases that came into my surgeries reached torrent proportions. There were many, many cases of people coming to see me. Clearly, the policies had a direct impact on the employment base of my constituency, reliant as it is on seasonal trade. If there is the prospect of three or four large hotels closing down in a constituency, it is a very serious matter.

I have mentioned the case of Mr Mansel Beechey, the licensee of the Hen Llew Du Public House in Bridge street, Aberystwyth, and I want to continue to use his example. The fact that it is an unresolved case speaks volumes. He made a complaint to the bank about the mis-sale of his tailored business loan, an unregulated product, back in April 2012. It took Clydesdale and Yorkshire Bank well over six months to respond to that formal written complaint and, despite the efforts of my office facilitating meetings with some of its most senior personnel, the matter remains unresolved. Dither, delay and prevarication are the watchwords of its game. Its most recent excuse was that matters could not be progressed because of staff leave. That was at the beginning of September. Let us not forget that I am talking about an iconic and once successful business—one that had a future—being put in jeopardy. The fear is that the bank seeks to put this matter into the long grass.

I refer now to the commendable work of the Treasury Committee, which conducted a brief inquiry into this matter. We heard evidence from Mr David Thorburn and Debbie Crosbie of the Clydesdale and Yorkshire Bank. The hon. Member for Dundee East (Stewart Hosie) raised the matter of the TBL sales process and asked Ms Crosbie:

“If a customer is able to identify that that process did not happen, that that warning was not explicit, that would count as a mis-sell would it, in terms of your review?”

Ms Crosbie replied in the affirmative. She said:

“We believe that once you examine that process, and find that it had not been carried out in accordance with what we had agreed is appropriate, we would absolutely redress a customer and we have done so on a number of occasions.”

Ms Crosbie also stated that

“the customer gets a fixed payment for a fixed period of time and that payment will never change as long as the customer does not want to terminate the agreement early.”

That is the mis-match between what we are told by managers, the experience of the Select Committee and the practice on the ground for Mr Beechey and his family.

Given the recent press coverage concerning the National Australia Bank, the parent bank, issuing a profit warning to Clydesdale and Yorkshire Bank and linking the bank to an imminent disposal, it is not surprising to learn that this bank drags its feet in addressing mis-selling issues with potentially dire consequences for some of our constituents. It serves its purpose to do so, often allowing the customers—my businesses in Ceredigion—to teeter on the brink in the hope that Her Majesty’s Revenue and Customs will then move in and finish them off.

I very much concur with what my hon. Friend the Member for Aberconwy said about the changing attitude to HMRC as the debate on consequentials has moved on. Sadly, the reality here is that virtually all of Clydesdale and Yorkshire’s lending was done via tailored business loans on fixed rates and, as those products fall outside the scope of the FCA review, the bank has thus far avoided any effective redress scenario.

My hon. Friend the Member for Nuneaton (Mr Jones) and others have talked about our despondency—and the despondency of our constituents—over the role of the FCA. When the Financial Services Authority morphed into the FCA, we were assured that the new organisation would enforce rules and punish breaches and that it would focus on the behaviour of financial professionals. In short, we were promised that it would be a true watchdog. We have looked to the FCA to sort out this mess and to do so in a way that is both fair and timely, but that has not happened. As we have heard from other Members, the FCA has still not released comprehensive details of what constitutes a mis-sale. The agreement between the FCA and the major banks on which the review process is founded remains a secret agreement. Where is the transparency and fairness for these businesses that are so badly affected? Where is this protection for customers that is supposed to be at the heart of the FCA’s work?

[Mr Henry Bellingham (North West Norfolk) (Con)]

I have a business in my constituency that took out a fixed-rate tailored business loan, which had a hidden swap attached to it. The bank is trying to say that it is not regulated. Surely the key point is one of fairness and of putting all these people back in the position in which they would have been before.

[Mr Williams]

My hon. Friend is right. It is about fairness and the implications of these policies. Whether the policies were sold independently or hidden in a loan agreement, the implication has been the same. They were sold by the same people and so should be included in any future review.

The redress scheme has excluded a large number of people. Even before we drill down and thoroughly examine the scheme, it is hugely significant that a large number of businesses fall outside it. The scope of the scheme is too narrow and restrictive. It does not deal with the reality of what has gone on, which means that, as it stands, it will not change or reform bank behaviour or properly compensate people.

The scheme sets out that

the IRHP Review does not require customers to assess for themselves whether or not their sale was compliant.”

If, as the FCA insists, there is no requirement for disclosure, how can it ever be possible to tell whether the banks, in reaching a judgment, are relying on erroneous information, or, as I have frequently come across, deliberately not taking information into account?

If the review process is to be transparent and fair, why is the customer not given a chance to view the evidence that the bank puts forward in the review and, if they feel it to be necessary, to have the opportunity to comment on it? How does the FCA fail to see that there will always be suspicion and mistrust when the process is shrouded in secrecy, and customers are deprived of the opportunity to view the evidence submitted by the bank to the bank’s own review team?

We need to address the controversial matter of the offer of alternative products. As part of the redress, reviewers seem to be hellbent on suggesting that if my constituents had not taken out a particular type of hedging product, they would almost certainly have taken out something similar. Is it now really the case that providing customers with an alternative product as part of redress is actually a widely accepted or well-established principle?

Despite the brief and the impressive statistics, the FCA is still failing to address the issue of confidence; there remains a crisis of confidence in the banking industry. Many people, such as Mansel Beechey and my constituent in a related matter, David Grant of Llechryd, have deep misgivings about the industry, and this is not just a matter of justice; in communities such as mine, the small businesses that the Chancellor, the Deputy Prime Minister and the Prime Minister have said are so important to our economic recovery need action and assistance. If we do not act, we will fail many of our constituents, and it will be to the detriment of us all in terms of both justice and the economy.

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[Mark Garnier]

The hon. Lady is absolutely right, and I shall return to that as I progress through my speech.

My first point is that there is little consistency between the banks in how they tackle the problems they have created. One of the FCA’s frequently asked questions is:

“Are the offers consistent between banks?”

Interestingly, its response reads:

“The independent reviewers report regularly to the FCA, both on the judgements they are making and how the banks are performing, and will regularly bring all the independent reviewers together to ensure consistency of approach. The FCA also collects data on the offers being made by each bank and we carefully consider any variances to ensure that the standards are being applied consistently.”

That in itself demonstrates that there is a huge amount of useful information that we are not getting a chance to see. It goes on:

“We also regularly select individual case studies to follow up with banks”.

The FCA is trying to be consistent, but cannot say that it is being consistent. We have heard on many occasions this afternoon about its not being consistent.

My example concerns not one of my constituents but someone else who came to see me and involves how the banks treat businesses that have gone into insolvency. Clearly, any insolvent business will have an insolvency practitioner winding up that business. It is a tragic time, but somebody has to come in and do it. In the event of an insolvency, the banks are involved both as a creditor, as they have lent money to the business in the first place, and as a debtor, as they owe redress and in many cases consequential losses to the business. Some banks behave quite well. HSBC is a reasonably good example and recognises that the insolvency practitioner is duty bound fairly to distribute the assets of an insolvent business to a wide range of creditors. To that end, HSBC will pay what is owed under the redress and consequential loss scheme into the insolvency practitioner’s funds and then put in a bid for what it is owed from the original bank loan. The insolvency practitioner therefore makes a correct and fair assessment of who is owed what, and in some cases HSBC will get back not just less than it lent but less than it would have got back had it done what RBS does.

RBS is a frequent flyer in this debate, so I shall have a go at it, too. I am told that RBS will offset what it owes by way of redress and consequential loss against what it is owed by way of repayment of the loan. Therefore, although it is still owed money by the bankrupt business, it is owed less than it otherwise would have been, and when RBS seeks to limit its losses at the expense of other creditors’ owed money, those creditors will lose money as a result of RBS’s mis-selling. That is just plain wrong.

It is also wrong that some loans have been left outside the redress scheme. Those who took on tailored business loans, otherwise known as hidden or embedded swaps, have had exactly the same financial problem but for a technical reason are outside the regulated arena. Under article 85 of the Financial Services and Markets Act 2000 (Regulated Activities) Order 2001, due to some pretty technical reasoning, if a loan looks like a duck, swims like a duck and quacks, it is in fact a donkey. Some pretty smart lawyers have looked at that and the inescapable fact is that the legislation was written in a way that allowed many businesses to be mis-sold swaps in an area that is unregulated.

The FCA’s frequently asked questions talk about these so-called commercial loans, stating:

“Commercial loans generally fall outside the regulatory remit of the FCA and we therefore cannot direct the banks to set up a review of these products”.

That might possibly be so, but is not the act of an FCA member’s selling any product to an unsophisticated customer a regulated activity that therefore falls under the FCA’s remit?

[Mr Bellingham]

I agree entirely with my hon. Friend. Many of these businesses are not large concerns—some are SMEs and some are micro-businesses—and one could not describe some of the proprietors as highly sophisticated business people. As far as they were concerned, they were mis-sold these fixed-rate tailored business loans with the hidden swaps attached to them. Some have been dealt with very quickly by the banks, but others have not and the banks have just ignored them completely.

[Mark Garnier]

My hon. Friend makes an incredibly important point. The point of the regulator, the FCA, is to protect unsophisticated consumers, but it has manifestly let down the consumers who subscribed.

The paragraph in the FCA briefing note continues:

“The FCA has received legal advice supporting this view”—

about article 85. It goes on to say that the Treasury Committee has carried out scrutiny of that advice. I am a member of the Treasury Committee and I think it is worth putting on the record just what that constitutes.

The Treasury Committee asked the regulator on many occasions for sight of the legal advice on these embedded swaps and on many occasions it said no. We asked whether we could send our legal advisers around to have a look at the advice on our behalf, but it continued to say no. We had a public evidence session with the chief executive officer and chairman recently and questioned them about the issue again. The answer they gave was that they were not prepared to let us see the advice as it was confidential. We pressed them on whether we could send our legal team to have a look at it and they answered that they needed space from Parliament to conduct their activities.

The regulator is answerable to Parliament. Although I am sympathetic to the submission that the regulator cannot have every confidential document shown to all hon. Members, who may well then tell the press, the CEO and chairman simply cannot say that they need to be excused one of their most fundamental duties—that of answering to us here in this place. In the end, we pressured them to relent and our legal adviser looked at the advice they had been given, and in fact they were right. But this is a sorry story of the regulator not understanding its duties and its constitutional place as answerable to Parliament.

In any sort of resolution scheme, it is inevitable that some people will feel well treated and others hard done by. One of my constituents was entitled to redress but felt that he did not need it, because he had bought exactly the product that he wanted and expected and he thinks it unfair on other people that he should seek redress when he took what he thinks was a fair deal. But he is unusual. I have constituents who have been completely and totally rolled over by the banks. Consequential loss offers are derisory for businesses that have taken a lifetime to establish and just a few telephone calls by mis-incentivised relationship managers to destroy. There are no consequential loss payments for reputations destroyed, or for goodwill wasted and track records smashed.

I was a member of the Parliamentary Commission on Banking Standards. We looked hard at how the regulator could drive better standards in the banking industry. There should be incentives for better behaviour, and banks are working on making their staff perform to higher ethical standards, but for every carrot there must be some sort of stick. If it is possible for banks to be fined for fixing LIBOR and forex benchmarks and for mis-selling insurance products, why have those banks who have destroyed so many businesses been allowed to choose their own form of redress with no further financial penalty?

I am baffled why the regulator has set up a redress scheme that is voluntary, has just one opportunity for appeal and is not being reviewed or assessed. Surely, it is right that people who are unsatisfied can have an independent appeal assessed by the Financial Ombudsman Service. A special unit could easily be set up at the FOS, funded by the banks, to give one last chance of appeal to those small businesses that fall outside the FOS’s remit but inside the redress scheme. I am also baffled why the regulator will not publish the terms of reference and the agreements between the regulator and the banks on how the scheme is managed and run and what is expected of it all. That lack of transparency can only lead to mistrust in the system and the regulator. I am also concerned that the regulator is so reluctant to share with agents of the Treasury Committee legal advice on whether embedded swaps are regulated.

With so many people left destitute and impoverished by what has happened, it is wrong that no one has been brought to account over this. Until such time as fines are levied and front-line staff guilty of mis-selling brought to book, confidence in the banking sector and the regulator will struggle to improve and standards may languish at an unacceptable level.

The last sentence of the motion before us calls respectfully for the Government to consider a review of this whole process and the conduct of the regulator. I urge my hon. Friend the Economic Secretary to the Treasury to look carefully at whether to hold an independent review of this whole regrettable scheme.

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[Andrea Leadsom]

I will certainly write to the FCA about all the cases raised in the Chamber today—and I will expect a reply.

[Mr Bellingham]

The key point is that some of the commercial loans—fixed-rate tailored business loans with hidden swaps—are not taken seriously by some banks. Indeed, some people in the FCA are saying that those loans are not regulated, so it would be very helpful if she looked at that point with the FCA.

[Andrea Leadsom]

Tailored business swaps were provided by largely Yorkshire and Clydesdale bank, which has voluntarily agreed to look at redress in a similar way to that in which the interest rate swap redress scheme works.

I want to move on because there is another debate to follow. Let me address some of the questions raised by my hon. Friend the Member for Aberconwy. He asked why some banks are not splitting the original loss and the consequential losses, and he pointed out that the amount of redress paid is inconsistent between banks. He mentioned the fact that a particular whistleblower says that banks have pressurised independent reviewers to serve the banks’ interests rather than those of the SME, and argued that the FCA is not showing the bank-by-bank redress numbers. He asked whether we should set up an appeals process for reviewers to look at each other’s banks’ reviews, and spoke about the lack of payment of consequential losses beyond the 8% that is normally provided. He addressed the issue of HMRC’s tax treatment of redress and of whether embedded swaps should be included. I want to run through those issues very quickly.

I can assure my hon. Friend and all Members that the FCA has been determined throughout the process to get to the bottom of this. Occasionally, Members might think that the FCA is not interested or not keen to resolve the matter, but that could not be further from the case. In particular, the FCA carefully considers any variance in redress offers to make sure that standards are applied consistently. It selects individual cases for review based on feedback from customers, campaign groups and MPs to ensure these have been dealt with fairly. Independent reviewers report regularly to the FCA, both on the judgments they are making and on how the banks are performing, and independent reviewers regularly meet each other to ensure a consistent approach to assessing claims.

My hon. Friend referred to the agreement between the FCA and the participating banks. As I understand it, this agreement sets out the principles of how the review should have been undertaken. I understand, too, that the FCA is prohibited from releasing these agreements by confidentiality restrictions. I can assure Members, however, that I will write to the FCA and ask for clarification, bearing in mind Members’ desire to have that made public if possible.

Oral Answers to Questions

Lord Bellingham Excerpts

Tuesday 2nd September 2014 Commons Chamber

[The Financial Secretary to the Treasury (Mr David Gauke)]

I am grateful for that question, and we all sympathise with some of the difficulties that people have faced. It is fair to say that this Government are closing the loopholes in that area, dealing with intermediaries, and reforming the construction industry scheme to ensure that people who are employed have the full employment rights that they deserve.

[Mr Henry Bellingham (North West Norfolk) (Con)]

T7. Is the Chancellor aware that unemployment in my constituency has fallen by nearly 700 since July last year, thus giving new hope to many families? Will he tell the House how the UK’s job creation record compares with other G20 countries?

[Mr Osborne]

The answer is that it compares very well. There has been a much faster rate of job creation in the United Kingdom than in the rest of Europe, for example, which I suggest is because we have instilled confidence in our ability to pay our way in the world through our difficult but necessary deficit reduction plan. We have helped businesses to employ extra people through the employment allowance and other tax changes, and we have created a more entrepreneurial economy, so that people who were out of work when this Government came to office got a chance of being in work, with all the security and opportunity that brings.

The Economy and Living Standards

Lord Bellingham Excerpts

Thursday 12th June 2014 Commons Chamber

[Ed Balls]

I will give way in one second.

My greatest concern on the agenda of how we can deliver more good jobs for the future is the Chancellor’s commitment to delivering a balanced economic recovery.



If we look at what is actually happening, it is true that the economy is growing, but within the G7, it is still only the UK and Italy that have not recovered to their pre-crisis peaks in output. With the rise in the population, it will take a full 10 years for income per head to recover to where it was in 2007. Worse than that is the level of business investment.

I am pleased that there are finally signs that business investment is starting to pick up, but as of now, we have the fourth lowest level of business investment in the European Union. Only Cyprus, Greece and Ireland are lower than the United Kingdom. Our export growth is sixth in the G7, 16th in the G20 and 22nd in the EU since 2010. Our research and development expenditure is the lowest in the G7. Lending to business is still falling. There has been a 12% fall in infrastructure output since 2010. Public investment is being cut next year. Those are not figures about which we can be complacent.

[Mr Henry Bellingham (North West Norfolk) (Con)]

The right hon. Gentleman is talking about investment, but he is being quite selective. In respect of foreign direct investment, is he aware that the UK secured nearly 800 new projects last year—the highest ever—and that we have 20% of all FDI in the EU? Is that not a very good sign indeed?

[Ed Balls]

Of course that is good news. For decades, we have been an open, global trading nation that attracts investment from around the world, and I want to keep it that way. However, complacency is not the way to make that happen. We have to face up to the reality that living standards are falling because, as the International Monetary Fund said in its report last week, our recovery is characterised by woefully low productivity growth. That is why living standards and wages are still falling, even as growth returns. Unless we face up to that challenge, we will have substantial problems.

--- Later in debate ---

[Mr Osborne]

I will give way to my hon. Friend the Member for North West Norfolk (Mr Bellingham) and then make some progress.

[Mr Bellingham]

Earlier my right hon. Friend mentioned Charles Clarke, who knows quite a lot about what is happening in Norfolk and will be aware that unemployment in my constituency has fallen by 660 over the last year. That is 660 families with jobs, a wage packet and hope for the future. Is my right hon. Friend aware that the vast majority of those jobs are either full time or in self-employment?

[Mr Osborne]

My hon. Friend is absolutely right: there has been a remarkable jobs story in Norfolk as well, supported by the economic investment we are putting into new roads in the county. I have spoken to the chamber of commerce there and seen its ideas for attracting more investment into King’s Lynn and other key centres, and I congratulate my hon. Friend on all he is doing to back business there.

--- Later in debate ---

[Sir Gerald Howarth]

Thank you, Mr Deputy Speaker.

Let me be the first Government Member to congratulate my right hon. Friend the Chancellor on sticking to his guns, and on the long-term economic programme, which has unquestionably benefited the United Kingdom—not least my constituents in Aldershot, where unemployment has now fallen to 1.8%. We have done fantastically well, and, in my view, that was undoubtedly a factor in the Newark by-election success, on which I congratulate my right hon. and hon. Friends. There is no doubt that the sheer weight of Conservative effort helped, as, indeed, did the contribution made by Patrick Mercer, who was very popular in the constituency, and had done good work over 13 years.

However, as the shadow Chancellor pointed out, we should not be lulled into a false sense of security. One of the key reasons for UKIP’s success is that it has homed in on the public’s rising concern about immigration. That concern is not new; it has existed since the 1960s. What is new is that while there was an understandable reluctance to vote for the British National party, no such inihibitions apply to UKIP.

For 50 years, those of us who have expressed concern about the impact of mass immigration on our country have been reviled and denounced as racist. All argument was effectively closed down, as perfectly decent people expressing perfectly reasonable fears were intimidated into remaining publicly silent.

Things have now changed, however. People feel that at last they can break free from the shackles of political correctness in which they have been chained. It is no longer racist to want to preserve our British way of life, our religion and our culture; it is not racist to express pride in our nation’s history and, indeed, in our imperial past.

It is not just the Conservative party that has been affected by the public’s concerns, as the shadow Chancellor’s comments again made clear. Labour has seen white working-class support desert to UKIP. Furthermore, many of those who have arrived from abroad and have integrated in our society are also concerned about the continuing flows of migration.

The main parties have to recognise the effect that this unprecedented tidal wave of migration has had on the UK, including our economy. Of course migration has not been without its benefits, some of which are only too evident on the Benches around us here, and companies such as Tata have made, and continue to make, a very valuable contribution. However, this week’s Ofsted report on Birmingham schools has revealed the extent to which people newly arrived here not only reject our values and customs, but want to impose their own on the rest of us. I have a very clear message for them: this is a Christian country, a tolerant country, we speak English, we shake hands with ladies, and open facial recognition is a key part of our culture. If they find that offensive, they should please feel free to leave and move to a country that is more to their liking—for there are plenty of repressive regimes around the world that clearly are more to the liking of people like that. As the T-shirt worn by a young man whom I saw on the underground earlier this week said: “Speak in English; Think in English; Dream in English”. I thought that was rather good advice to a lot of people in our country.

What we all need to understand is that it is numbers that are the issue. As that excellent organisation MigrationWatch has pointed out, between 1951 and 1991 the population born overseas grew by less than 2 million, yet after the election of the Labour Government in 1997 the scale of immigration increased to a level without historical precedent. Between 1991 and 2011, the foreign-born population more than doubled, increasing by 4 million. Much of this was deliberately encouraged by the Blair Government, partly, as we were helpfully told by a Labour speechwriter, Mr Andrew Neather, to rub the noses of the right in diversity.

All this has had an impact on our country. The Prime Minister has been at the forefront of the campaign to denounce the growth of Islamic fundamentalism in the UK, but there are practical challenges, too. My right hon. Friend the Chancellor mentioned the housing issue. We need to build a new home every seven minutes just to accommodate new migrants to this country. England is already the most crowded country in Europe, yet unless tougher action is taken the population will grow by 7 million in the next 15 years, 5 million of which will be attributable to immigration, which is the equivalent of the towns and cities of Birmingham, Leeds, Glasgow and Manchester.

[Mr Bellingham]

Does my hon. Friend agree that this Government have made very significant progress in reducing migration to the UK from outside the EU? Indeed, there have been a number of big successes in that regard. However, does he also agree that the time has now come for the Governments of all countries in the EU to look again at the absolute free movement of people for jobs across the EU? The only way we can solve this problem and bring migration into some form of balance is by looking at migration from the EU as well.

[Sir Gerald Howarth]

My hon. Friend, with whom I have the privilege of sharing adjoining offices in Portcullis house, is entirely right. This Government have set about trying to tackle migration, not least by dealing with the legacy left by the previous Government, and we have tackled non-EU migration. My hon. Friend is right to alert the House to the extent to which our membership of the EU is inhibiting our ability to do something about that other aspect of migration, however, and I have a proposal, which I will make in winding up my contribution.

Labour’s failure to apologise for inflicting this policy on the nation, together with its failure to apologise for the destruction of the public finances, which I mentioned earlier, means it is wholly unfit to return to office. That brings me to the topic of the next Queen’s Speech. I hope with all my heart that that will be prepared by my right hon. Friend the Member for Witney (Mr Cameron) as leader of the Conservative party, elected with a clear working majority in this place. This country absolutely needs that. We cannot afford to go back to the policies of tax and spend, and running up yet more debt, as my right hon. Friend the Chancellor has reminded us again today. We have to keep reminding the British people that that is what Labour did in office and it has not yet recanted. We therefore must do our duty to the British people, which is to be returned with a clear working majority.

To get to that happy position, however, we need to convince the public that we will build on the existing measures we have put in place to contain inward migration, particularly from less affluent EU countries. We must act now. The Government should accept the unanimous recommendation of the European Scrutiny Committee to disapply the European Communities Act 1972 in relation to specific EU legislation, not least so that this Parliament can once again become sovereign and take swift action to recover control of our borders and reduce the level of burdensome regulation being imposed on us externally. If the European Court of Justice does not like that, then tough; the British people certainly will.

Finance (No. 2) Bill

Lord Bellingham Excerpts

Wednesday 9th April 2014 Commons Chamber

[Catherine McKinnell]

Today, we are discussing the merits of this Government proposal in this Bill. We think it is a dud of a policy, and the Chancellor and the Chief Secretary seem to think so, too. I will set out all the reasons why it is a dud, but talking about whether the previous Labour Government considered this policy does not address the issues we are debating today—this policy and our amendment to it. If Government Members are so keen for there to be genuine support for families, for children and for marriage, they should welcome our amendment proposing a proper review on the impact of the tax relief that the Government are suggesting as part of this Bill and exploring alternative tax reliefs that could benefit a greater number of families and, potentially, a greater number of married couples, given the Government’s proposition’s clear deficiencies in recognising most marriages.

[Mr Henry Bellingham (North West Norfolk) (Con)]

Does the hon. Lady agree with the principle that there should never be a financial disincentive for people to be married and remain in a marriage?

[Catherine McKinnell]

The proposal under consideration only gives any sort of tax benefit, small though it is, to a third of married couples. I am surprised that Government Members are not more keen to explore the potential alternatives to this dud policy.

Pub Companies

Lord Bellingham Excerpts

Tuesday 21st January 2014 Commons Chamber

[Vince Cable]

As I will say later—we have covered the matter in earlier debates—we did try to encourage self-regulation. We drew the conclusion that the action had not been adequate, which is why we moved on to proposals for statutory regulation on which we are now consulting. We have been down that road; we have tried that.

[Mr Henry Bellingham (North West Norfolk) (Con)]

I agree with the Secretary of State that it is important that we get this right. I must impress on him that there is a degree of urgency now with the forthcoming Queen’s Speech. Does he agree that we should recognise the fantastic job that local organisations, such as the Campaign for Real Ale group, are doing? In my area, CAMRA has pioneered a number of pub salvations, working with the community to ensure that the King’s Arms at Shouldham and the Dabbling Duck at Great Massingham were able to survive.

[Vince Cable]

My hon. Friend is right to remind us that this is not simply a top-down campaign. It involves not just Parliament, but an enormous grass-roots campaign. I am talking about community organisations, and I will go on to develop that point in a moment.

--- Later in debate ---

[Vince Cable]

That is a truly awful case. I hope to see the details of that example, because although we have a lot of cases, it seems to be a particularly bad one. I guess that would be one of the factors that led the Government to conclude that the voluntary code approach was not satisfactory, as presumably it has already been used.

The voluntary approach did have some positive outcomes, such as the Pubs Independent Conciliation and Arbitration Service and the framework code, but the conclusion we came to at the beginning of last year was that the changes had not gone far enough and that problems persisted. To us, the essential point is best captured in the work done by CAMRA that suggests that 57% of tied tenants earn less than £10,000 a year. If we apply that to 35-hour week, 48 weeks a year, we are talking about less than £6 an hour, which means that people are working for considerably less than the minimum wage. Since many work much longer hours, that means that this is a very low-paid industry. Many publicans are struggling. In contrast, only 25% of those who are free of tie are on at the same income level. There is a striking disparity, which is at the heart of the question.

[Mr Bellingham]

The Secretary of State is being very generous in giving way. Does he agree that many of these disputes need to go to adjudication? Does he share my view and that of many colleagues that getting an adjudication system in place as soon as possible is essential?

[Vince Cable]

Indeed. That was the objective of the consultation. Let me briefly reveal the history, as we have been talking about it implicitly throughout these exchanges. We announced last January that it was time for the Government to step in and the consultation was launched along the lines envisaged by the Select Committee on a statutory code of practice and an independent adjudicator. That was the framework of the Government recommendation. We included an open question on the mandatory free-of-tie option with open rent review and we tried to underpin a specific intervention with a framework, a philosophy, a set of principles, the overarching fair-dealing provision and the core principle that a tied tenant should be no worse off than a free-of-tie tenant.

Mix 96 (Digital Radio Switchover)

Lord Bellingham Excerpts

Thursday 28th November 2013 Commons Chamber

[Mrs Cheryl Gillan (Chesham and Amersham) (Con)]

I am grateful, Mr Speaker, for the opportunity to raise the subject of what is in fact our local radio station, Mix 96, and the digital switchover. As a Bucks Member of Parliament it is good to have the opportunity to raise with a colleague such as you an issue that is not HS2, but concerns a successful local business that provides news and information, supports local charities, promotes local businesses, advertises job vacancies, and even lists school closures during the winter—oh, and before I forget, it also plays great music.

Mix 96 approached me because it is concerned about the switchover. We all know that small local stations, whether licensed by Ofcom as commercial or community stations, lie at the heart of communities up and down the country and hold a special place in the hearts of millions of consumers. However, local radio cannot stand apart from consumer trends. It is worth remembering that, although levels of music listening have never been greater, a large proportion of the listening done by those consumers who are most attractive to advertisers is not done through radio—whether BBC, commercial, analogue or digital— but is instead selected from thousands of people’s own MP3 tracks, or from an even bigger library ready to stream courtesy of programmes such as Spotify.

There is no doubt that the market is changing, and although radio still plays a central role in that, and indeed remains the most personal of media, in some cases people are moving from analogue to digital—whether or not to digital audio broadcasting—to listening online or through smartphone apps. Understandably, that has left small local stations such as Mix 96 feeling worried.

[Mr Henry Bellingham (North West Norfolk) (Con)]

I am delighted that my right hon. Friend has secured this debate. Is she aware of the local radio station, KLFM, in my constituency that has been doing a phenomenal job? It is the local radio station to listen to across my constituency in factories and places of work. Does she agree that these changes should be consumer-led, and that there should be an independent analysis of the cost?

[Mrs Gillan]

My hon. Friend makes a pertinent point, and I will come to that later in my speech. I am glad to welcome the Minister for Europe, my right hon. Friend the Member for Aylesbury (Mr Lidington) to the Front Bench. His constituency is within the footprint of Mix 96 and he is keen to support this debate.

For a national station, the cost of broadcasting in DAB need not be very different from broadcasting in analogue. For a small local station, however, with a single FM transmitter, the cost of broadcasting on a local DAB multiplex with half a dozen transmitters could well be unaffordable, especially while it is still also paying to broadcast on FM. If small stations made that leap to DAB, they would invariably find that they were paying for coverage far greater than they had on FM, whether they wanted it or not. DAB is fundamentally the wrong platform for genuinely local radio stations such as Mix 96, which is a hugely popular and commercially successful station. The geographical areas that DAB multiplexes cover are significantly greater—often two to 10 times greater—than those areas covered by many local FM-operated stations.

Money Transfer Accounts

Lord Bellingham Excerpts

Wednesday 17th July 2013 Westminster Hall

[Mr Henry Bellingham (North West Norfolk) (Con)]

I congratulate the hon. Member for Bethnal Green and Bow (Rushanara Ali) on securing this important debate and on all her work on the matter. I declare an interest, which is in the Register of Members’ Financial Interests, as a non-executive director of a global consultancy, Developing Markets Associates, which is an expert on this subject.

During my time as a Foreign and Commonwealth Office Minister for Africa and the Caribbean, I received many briefings on the importance of remittances and the role that they play. As the hon. Lady pointed out, they complement the aid and development programme of many countries, including Britain, France and America. Very often, those remittances get through to areas such as small businesses, self-employed people and small non-governmental organisations and charities that aid money can never get to. Furthermore, they bypass any infrastructure of bureaucracy or middlemen and go direct to communities, where they can make a real difference.

I think that everyone agrees that those remittances are vital not just to the communities that receive the money in developing countries, but to the developed countries from where the money comes. As the hon. Lady said with her intimate knowledge of her own community, which was reinforced by the hon. Member for Rochdale (Simon Danczuk), communities here that we welcome as part of this country often feel a moral responsibility to help family members back in the countries where they came from. The agenda is incredibly important.

I know, from having visited Somalia on a couple of occasions, the importance of that country, which is coming out of conflict. It has been through the most appalling time. At long last, there is stability in Somaliland, and there has been for some time. There is now a Government in Mogadishu who can control much more of the country, and certainly the big cities of Kismayo, Beledweyne, Berbera are now under the Government’s control. It seems that normality is resuming in some of those areas, but there is still a long way to go before a normal banking system can be set up to support businesses and communities in the way that banks do, or should do. The more recently that a country has come out of conflict, the more crucial that is to its economy.

I want to touch briefly on one or two points concerning recipient countries and then on the current crisis that has been caused by the action of some banks. In recipient countries, the danger in the past has been that a lot of remittance money has simply gone under the bed. Many people have not had enough of an incentive to use money responsibly through a bank account or to invest in a business. The tendency has been to put money under the bed for a rainy day and to use it on an ad hoc basis.

Perhaps our own Department for International Development and aid departments in other countries should explore how money can be made available for investment in small businesses, self-employed projects and other areas. At the moment, there is certainly a considerable lack of understanding of how that money is spent. It reaches the communities in different ways and often the charges when transferring it and sometimes when receiving it can be excessive.

What work can the Treasury and the Department for International Development do to understand better what is happening in some of those countries, how that remittance money can be better harnessed for the benefit of the communities and whether there is a role for telephone banking, which is taking off in many developing countries? I understand that the UK has signed up to the five times five commitment to halve remittance prices by 2014. Perhaps the Minister will tell us what progress has been made on that commitment.

As the hon. Member for Bethnal Green and Bow pointed out, the UK has 60% of the total number of authorised payments institutions and single payment institutions in Europe. That is a huge figure, so any action taken by the banks in the UK in closing accounts of money transfer agents will have a disproportionate effect on the UK. We are facing a serious problem. I do not want to underline too heavily any criticism of Barclays and HSBC. It has not been said so far that Barclays was fined $300 million in the United States earlier this year and HSBC was fined a larger amount for allegations of money laundering that were not proved in court but were settled out of court. Our high street retail banks are wary of any dealings with America, but their action is precipitate.

Will the Minister have urgent discussions with the US Treasury Department and the US State Department because US regulators are setting the agenda, which is having the damaging impact that hon. Members have referred to and that will lead to job losses and many people being put out on a limb? They will have to take whatever action they can and may have to look at illegal routes. More money will go to cash couriers and there will be huge disruption, so I urge the Minister to have urgent discussions with his US counterparts, having listened carefully to what has been said in this debate.

Perhaps the Minister could also have discussions with the Financial Conduct Authority, because we are talking about a regulated sector. The irony is that it is regulated, but it is respected, does a good job and fills an incredibly important niche. It employs a significant number of people, but it could be forced underground and people would have to pay much higher rates. Furthermore, consolidation may be sensible in some industries, but we would see many small businesses put out of business with higher charges and a worse service. I urge the Minister to take this agenda seriously.

It would be helpful if the Minister told us what discussions he has had with the Department for International Development on this important matter and whether the Treasury and DFID will work together on what is happening not just here in the UK, but in receiving countries, which badly need help, involvement and engagement.