Mortgage Prisoners

Debate between Joanna Cherry and Charlie Elphicke

Thursday 6th June 2019 Commons Chamber

[Charlie Elphicke]

I thank the hon. Lady for that powerful point. Like me, she is a member the Treasury Select Committee and has been pressing for us to explore this matter on the Committee in greater depth. She has been a true champion on behalf of mortgage prisoners. As the House can see, it is a subject that has crossed the political partisan divide to become an issue on which we need to work together collaboratively to provide a solution and resolution.

[Joanna Cherry (Edinburgh South West) (SNP)]

I congratulate the hon. Gentleman on securing this important debate. We do not always agree on issues, but we certainly agree on this one. He mentioned Cerberus. Constituents of mine, Mr and Mrs Neave, were subject to pretty appalling treatment at the hands of the Clydesdale Bank, which converted their loan into a totally inappropriate overdraft facility without their agreement or signing off on any papers. Then the Clydesdale Bank flogged it off to a Cerberus subsidiary, which has effectively bankrupted my constituents. Does he agree that when banks package up these debts without any permission from the debtors and then flog them off to vulture funds, they are effectively packaging up people’s lives and flogging them off, as they have done to my constituents, Mr and Mrs Neave?

[Charlie Elphicke]

The hon. and learned Lady makes a powerful point, and a slightly separate point, if I understand her correctly. I have been talking so far about mortgage prisoners. I think she is referencing small business borrowers, which is a separate issue on which I shall also be touching in this debate. It is a very important issue, because they, too, are vulnerable customers, in many cases, and need very similar protections to mortgage prisoners.

There has been some change on the matter of mortgage prisoners. The FCA launched a consultation in March and proposed changing the mortgage affordability rules for customers who are up to date with payments, but there is a shortcoming. Its proposals only give lenders the option to apply the modified assessment. It does not propose to introduce an obligation.

It is also welcome that in July last year UK Finance, the banks’ trade association, launched a voluntary agreement under which lenders committed to supporting existing mortgage prisoners to switch to an alternative product with their present lender, but that does not help people to switch from the vulture funds, and it does not seem to help Mr and Mrs Adams escape TSB’s Whistletree fund, even though they are with the same lender. I hope that the FCA consultation will address and enforce that and make sure that people are not left in that difficult position.

How can we free the mortgage prisoners? These mortgages were taken out many years ago, back in 2007—some even before that—well before the post-crash rules came in. These borrowers have proven their ability to pay for over a decade in making their payments. Why do we have a computer-driven affordability test that ignores the reality of the real world? We have to move beyond “computer says no” to “reality says yes”. These borrowers should be treated as grandfathered as regards the regulatory rules that came in later. Banks should be obliged by the FCA to take people on and treat them as grandfathered, be they existing customers or not, and the new mortgages should be permitted without any regulatory penalty for the bank they move to.

The Treasury needs to take responsibility too. The Treasury’s UK asset resolution division has been selling off Northern Rock’s loan book to funds such as Cerberus. The instruction seems to have been to get the highest price at any price. Indeed, the head of UKAR, who is paid more than £650,000, recently boasted in The Times about how much it had managed to get for its loan books. His pay will rise to £823,000 next year if he completes the loan book sell-off. He is incentivised to achieve value for money not to consider the wider circumstances and necessary protections. I hope the Minister will address that in his remarks. There is real concern that the Government could be facilitating the creation of more mortgage prisoners.

When selling these books, the Treasury should be making sure there are the proper protections so that borrowers do not unfairly lose out. It claimed it did that in the case of Cerberus, but that turned out to have certain shortcomings—something I think the Treasury Select Committee should look into. It is wrong for the Treasury to pursue the highest amount of cash at the expense of vulnerable borrowers who have been placed in a worse position than otherwise would have been the case.

Moreover, if the Treasury is willing to sell mortgage books to vulture funds, what is to stop the likes of Tesco, Metro Bank and many others following that example? That is why we need to consider a wholesale ban on selling these mortgages to unregulated firms—full stop. The best way to achieve that is through the regulation of the whole industry. Regulating mortgages—all mortgages—will ensure that all customers are treated more fairly by mandating best practice in each and every case. That might mean that when books are sold off a little less is achieved because they cannot enjoy the fruits of regulatory arbitrage, but it will mean that vulnerable people get better protections and are more safely and carefully looked after.

There needs to be a better deal for business borrowers as well. The hon. and learned Member for Edinburgh South West (Joanna Cherry) rightly mentioned that issue just now. Business loans above £25,000 are unregulated. Time and again, we have seen the results of this—the Royal Bank of Scotland’s Global Restructuring Group, the Lloyds business support unit, and others. Small businesses are the lifeblood of our economy. We must treat them fairly so that they can focus on what they do best, which is creating jobs and making our country more successful.

EU Exit Preparations: Ferry Contracts

Debate between Joanna Cherry and Charlie Elphicke

Tuesday 5th March 2019 Commons Chamber

[Charlie Elphicke]

I thank my hon. Friend for making exactly the point that I am coming to. I set out how we needed to invest to be ready on day one, deal or no deal; as I argued at the time, to get the best negotiation, we needed to be able to get up and walk away from the table. I also set out detailed legal reasons why we did not owe any of the divorce bill—another point that was important to our negotiation.

The Government as a whole—the Cabinet—decided not to spend money at that time. The Cabinet decided not to invest at that time. The Cabinet decided not to take forward contingency planning at a substantial level until after the Chequers discussions. To visit that on the Secretary of State would not be fair, right or proper.

[Joanna Cherry]

rose—

--- Later in debate ---

[Joanna Cherry]

It may have been a nice try, but I am not going to leave this one alone. I want to know how much of that £33 million will be repaid in the event of there being a deal. I think I know the answer: it will be nil. I want to know whether there was any legal agreement that any amount of that £33 million was to be spent on improved security, and if so, to what extent. I will not be leaving those issues alone either today or in the future.

I was the first person, to my knowledge, to raise this issue on the Floor of the House or in Committee earlier this year. When I got hold of a copy of the contract with Seaborne Freight, which was readily available on the internet, I, like any lawyer worth their salt, looked up the public contracts regulations and realised that it looked very much as though the Government had avoided the competitive tendering process that they are bound to carry out under law.

That is why I raised this issue with the Secretary of State for Exiting the European Union in the Chamber on 7 January. I am going to go through the chronology because I want to make the point that I have raised at least half a dozen times the question of what was the urgent or unforeseeable event that justified there not being a competitive tender, and that on no occasion have I received the answer that has been given today by the Secretary of State for Transport that it was to do with a decision taken collectively by the Government last autumn to improve the supply of medicines in the event of a no-deal Brexit. The very first time I heard such an explanation was on the television at the weekend, when the Secretary of State for Health used it, and he of course used it again yesterday. However, it is very odd—again, this informs my puzzlement and frustration earlier this afternoon—that we have never heard that explanation before.

Let me go through the chronology. On 7 January in this Chamber, I asked the Secretary of State for Exiting the European Union why the contract with Seaborne Freight had proceeded under the negotiated procurement procedure without prior publication—that is to say, not competitively—because it seems to me that it must have been foreseeable for quite a long time that there might be a no-deal situation and it was therefore hard to say that no deal had come out of the blue and was urgent or unforeseeable. I received the usual non-answer from the Secretary of State. I will not bore hon. Members with the contents of the answer—they can look it up in Hansard—but there is nothing about a requirement to prepare for the urgent supply of medicine and, indeed, no kind of explanation at all.

The following day, 8 January, I raised the same point with the Secretary of State for Transport on the Floor of the House. I said I was concerned about the legality of the procurement process, that I had a copy of the contract notice and that, as my hon. Friend the Member for Kilmarnock and Loudoun (Alan Brown) reminded the House earlier that day, no deal has always been a possibility because the Prime Minister said right at the beginning that no deal is better than a bad deal. I asked the Secretary of State what the urgency was and whether the Government had set aside any funds in the event of legal action. I got a non-answer, other than to say it was a “matter of extreme urgency”, and there was no reference to the supply of medicine.

The following day, 9 January, I raised the matter in some detail with the Under-Secretary of State for Exiting the European Union, the hon. Member for Daventry (Chris Heaton-Harris), at a question and answer session before the Exiting the European Union Committee. I am proud to say that the segment where I questioned him went viral on the internet. I asked him a number of times to tell the Committee what the urgent and unforeseeable event was that justified these contracts not going out to competitive tender, and he was unable to tell me.

If the explanation that it had been a collective decision by the UK Government to put these contracts out non-competitively to secure the supply of medicines, I would have expected the Minister in charge of no-deal planning at the Department for Exiting the European Union to know that. The fact that he did not know and, under sustained questioning, did not mention it does raise a suspicion in my mind that it is an explanation that has been invented after the fact, rather than an explanation that has always been the case.

[Charlie Elphicke]

Will the hon. and learned Lady give way?

[Joanna Cherry]

I will finish the chronology, and then I will give way.

That was on 9 January. Later, I put in a written question:

“To ask the Secretary of State for Transport, what unforeseeable events led his Department to award contracts for additional shipping freight capacity under Regulation 32 of The Public Contracts Regulations 2015.”

I received the reply:

“A negotiated procurement procedure without prior publication was concluded…to ensure that capacity can be in place in time for a No Deal exit whilst at the same time securing value for money for the taxpayer.”

There was no mention of the need to secure the urgent supply of medicines in the event of no deal, but there was a mention of value for money for taxpayers. Do the Government still think they have provided value for money for taxpayers, given what we have heard this afternoon? I very much doubt it.

On 31 January, I asked the Attorney General about this matter. I asked him whether he was concerned that the Government could face legal action in respect of their failure to put these contracts out to competitive tender, whether he had been asked to advise on the matter and whether any money had been put aside for the contingency of such court action. He fell back on the Law Officers’ convention not to answer that question, but he certainly did not mention that the reason why these contracts had been awarded as a matter of urgency and non-competitively was the need to secure the supply of medicines.

On 11 February, I raised this matter with the Secretary of State for Transport. I asked:

“Will he state clearly for the record, as I have asked this question of him and other Ministers five times now: what were the reasons of extreme urgency and the unforeseeable events that justified his Department proceeding without competitive tendering”?

He said it was

“a change to the assumptions on the levels and length of disruption that might arise in a no-deal Brexit scenario.”—[Official Report, 11 February 2019; Vol. 654, c. 624.]

Perhaps the junior Minister could take a note that I want to know from the Secretary of State for Transport why he said on 11 February that the explanation was a change to the assumptions on the levels and length of disruption that might arise, and why he is now saying that it was a decision back in the autumn to secure the supply of medicines in the event of no deal.

[Charlie Elphicke]

Will the hon. and learned Lady give way?

[Joanna Cherry]

I will finish the chronology, and then I will give way.

Finally, I raised the point again on 14 February with the Secretary of State for Transport, asking him what he meant by a “change in the assumptions”. I asked:

“Would he care to elaborate on exactly what he meant by that? Does he think that that defence will stand up in court?”

Those were my exact words. He said:

“I recall explaining on Monday precisely what the circumstances were, and I do not want to detain the House any longer by repeating an answer that I gave to the hon. and learned Lady three days ago.”—[Official Report, 14 February 2019; Vol. 654, c. 1038.]

Again, he had an opportunity to say that the explanation was a requirement to secure the urgent supply of medicines in the event of a no-deal Brexit, but he did not. In fact, he told me that he had already told me precisely what the circumstances were, three days before, when he referred to a change in assumptions and said nothing about medicine.

I am going to give way to the hon. Member for Dover (Charlie Elphicke) in a moment, but the point I am making is that this is just an example of the number of times that I have pursued this question. I know that other hon. Members have done so, too, particularly my hon. Friends the Members for Kilmarnock and Loudoun and for Glasgow North West (Carol Monaghan). They have pursued in some detail their concerns about the supply of medicines after a no-deal Brexit, and never has anyone said to them, “Don’t worry, we so are concerned about this that we have risked breaking the law on competitive tendering to sort it all out.” That is why I am highly sceptical.

[Charlie Elphicke]

I thank the hon. and learned Lady for giving way, and I have been listening carefully to her submissions. The question of purpose is dealt with in the National Audit Office report, which states that the decision was meant

“to prioritise the flow of critical goods into the UK”.

Specifically, the report says that in September and October 2018, the intention was to

“‘ensure that capacity and flexibility exists for government to prioritise the flow’ of certain…goods”.

In November 2018, the Department’s business case was

“to ensure that capacity and flexibility exist for government to enable the prioritisation of…certain goods”.

It seems to me that critical goods were always in the mind of the Department, so I am not sure that her submissions to the House are borne out.

[Joanna Cherry]

I am grateful to the hon. Gentleman for that, because he actually reinforces the point that I sought to make. The National Audit Office has that information, and the House of Commons has had it today and yesterday, but my point is that on repeated occasions when I asked a number of Ministers from different Departments what the explanation was for this urgent need to tender non-competitively, not once did any of them mention what we are told was a collective decision to do it for a particular purpose. I therefore question whether that explanation has been invented after the fact.

European Union (Notification of Withdrawal) Bill

Debate between Joanna Cherry and Charlie Elphicke

3rd reading: House of Commons & Committee: 3rd sitting: House of Commons & Report stage: House of Commons
Wednesday 8th February 2017 Commons Chamber

[Joanna Cherry]

Indeed. We made it clear in this document that we felt it would be to the advantage of the whole United Kingdom to remain in the single market. Unfortunately, the Prime Minister, in what my right hon. Friend the Member for Gordon has described as a very foolish negotiating tactic, has ruled that out from the outset.

[Charlie Elphicke (Dover) (Con)]

rose—

[Joanna Cherry]

I am going to make a bit of progress because I am conscious that a lot of other people are wishing to speak, and, as I said, I want to move on to deal with our amendments on the topic of Gibraltar.

As the hon. Member for Ilford South pointed out, Gibraltar was covered by the European Union Referendum Act 2015. Section 12(1) of the Act extended to the United Kingdom and Gibraltar. There was an over-whelming vote in Gibraltar to remain. When Fabian Picardo, the Chief Minister of Gibraltar, gave evidence to the Committee on Exiting the European Union, he explained that Gibraltar already has a differential agreement whereby it is in the EU but not in the customs union. This has been working well for the people of Gibraltar. They would like to be involved in a Brexit deal that guaranteed continued access to the single market. They do not want to be forgotten. In the letter I quoted earlier, the Gibraltarian Government support these amendments to get Gibraltar brought within the ambit of the Bill so that Gibraltar’s interests can be taken into account in the triggering of article 50.

Will the Minister tell us why Gibraltar was omitted from the Bill? Was it, God forbid, an oversight—if so, the Government now have the opportunity to correct that, with the assistance of the SNP—or was it a deliberate omission of Gibraltar from the ambit of the Bill? If it was a deliberate omission, how does that sit with assurances that the British Government have been giving to Gibraltar that its interests will be protected?

The hon. Member for Ilford South will speak with greater knowledge than I can about Gibraltar. The purpose of the amendments is to ensure that Gibraltar is not forgotten. We feel that there may have been an oversight, so we are attempting to provide assistance. However, if there has not been an oversight and the omission is deliberate, we need to know why and hon. Members need to consider whether it is appropriate to rectify the situation.

A number of other amendments would ameliorate the Bill. The hon. Member for Sheffield Central (Paul Blomfield) spoke ably from the Front Bench about new clause 2 and other amendments. I find new clause 2 to be slightly disappointing, because it does not enumerate the interests of Scotland as a particular consideration to be taken into account. We are not going to push new clause 145 to a vote, because we are hopeful that today’s Joint Ministerial Committee might have a fruitful outcome.

Rights of EU Nationals

Debate between Joanna Cherry and Charlie Elphicke

Wednesday 19th October 2016 Commons Chamber

[Joanna Cherry]

I will make some progress. Those of us who have actually been to Calais, met some of these child refugees—some of them are young men, but they are still children—and seen them separated from their families and in tears found the comments to which my hon. Friend referred deeply distasteful.

[Charlie Elphicke (Dover) (Con)]

Will the hon. and learned Lady give way?

[Joanna Cherry]

I am going to make some progress.

Tomorrow, the Prime Minister will attend her first European Union summit in Brussels. I very much hope that it will not be her last. Britain’s position on EU migrants will be a central issue. Now is the opportunity for the UK Government to do the right thing, so the Scottish National party calls on this House today to recognise the contribution that EU nationals have made to the UK. We also call on the Government to ensure that all EU nationals who have made this country their home retain their current rights, including the rights to live and work in this country, should the UK exit the European Union.

--- Later in debate ---

[Joanna Cherry]

I will just finish responding on that point.

There is absolutely no question that the First Minister, Nicola Sturgeon, or her distinguished predecessor, my right hon. Friend the Member for Gordon (Alex Salmond), ever threatened EU nationals with not being part of Scottish society. Our policy has been clear for many, many years: we want an independent Scotland in the European Union, with equal rights for all living in Scotland. We are quite clear on that. This debate is about making the UK Government be clear about having equal rights for all across the United Kingdom.

[Charlie Elphicke]

I have listened to the hon. and learned Lady’s speech with care. She has been pressed time and again to say whether she would defend the rights of citizens of this nation who are living abroad, and time and again she has refused to do so. I will give her one more opportunity. Would she stand up for Britain and British citizens and their rights around the globe?

[Joanna Cherry]

Yes, of course I would, but I am not going to be sidetracked on an issue that is not the subject of this debate. If the hon. Gentleman and his colleagues were so agitated about this aspect of the argument, they were free to table an amendment, as my hon. Friend the Member for Angus (Mike Weir) said. I am delighted to hear that they are so concerned about the welfare of British citizens in Europe, which has been put at risk by the Brexit vote, but I would like them to extend the same concern to EU nationals living in the United Kingdom. That is what the motion is about, and no amount of obfuscation from Government Members is going to sidetrack me.

--- Later in debate ---

[Joanna Cherry]

The hon. Gentleman and I are privileged to have students and academics from three very fine universities spread across our adjoining constituencies. I am sure that, like me, he spent the summer meeting those academics and students. Shortly after the EU referendum I was informed by the principal of Edinburgh Napier University that within days of the referendum she had been advised of potential staff members from other EU countries withdrawing from job offers at universities across Scotland. When I met her academic staff and those from Heriot-Watt University over the summer, they expressed similar concerns about how the quality of their teaching and research could be undermined if the position of EU migrants in Scotland were not guaranteed. I have no doubt that that is the same across England, Wales and Northern Ireland.

[Charlie Elphicke]

How EU citizens feel about remaining in the UK is a really important point. I have not heard a single Member on the Government Benches say that they want anyone to leave at all. The issue is being raised only by the SNP and the Labour party. I very gently say to the hon. and learned Lady that she should be aware, when she makes such cases for political reasons, of the concern that she sows—concern that should not be felt by any EU citizen in this nation.

[Joanna Cherry]

I cannot speak for the hon. Gentleman’s constituents or the mail that he receives, but SNP Members are all receiving a considerable weight of mail and emails from concerned EU citizens. I am sure that Members on the Opposition Benches will speak to the same later in the debate. This is not fearmongering—and believe you me, Madam Deputy Speaker, we in the SNP are experts on fearmongering having been on the receiving end of it during the 2014 referendum.