Bank Closures (Northern Lincolnshire)

Martin Vickers Excerpts

Wednesday 15th July 2015 Westminster Hall

[Martin Vickers (Cleethorpes) (Con)]

I beg to move,

That this House has considered bank closures in Northern Lincolnshire.

It is, as always, a pleasure to serve under your chairmanship, Mr Davies. I sought this debate because our high street banks are reducing the service that they give to my constituency and the neighbouring constituency of Gainsborough. My hon. Friend the Member for Gainsborough (Sir Edward Leigh) has asked for his name to be associated with my comments. Unfortunately, a diary clash prevented his being here.

It might be helpful if I give a brief outline of Barton-upon-Humber, which is the northernmost part of my constituency. That market town is being affected by two bank closures. Both HSBC and NatWest have announced that they are closing their local branch; the NatWest one will close on 20 August and the HSBC one in early September. Barton-upon-Humber is a long-established trading town, situated on the southern bank of the River Humber. It has held some significance from as long ago as Saxon times. It has developed into what I think it is fair to say is a typical market town. The banks have announced the closures at a time when the population is increasing and there is a real boost to the local economy, wrought in part by the reductions made by the coalition Government in the Humber bridge tolls, which have made journeys between the northern bank and the Barton area much more accessible.

When we talk of a high street, we have a vision of a cluster of small shops—butchers, bakers, newsagents and so on—but they are always supplemented by the local solicitor’s office, perhaps an insurance broker and, of course, our high street banks. They come together and provide the essential ingredients of a thriving local economy, not just in our provincial towns but—perhaps even more so—in our market towns.

Barton-upon-Humber is one such place. Three years ago, it suffered a major setback when the Kimberly-Clark factory closed. That resulted in more than 500 job losses but, thankfully, Wren Kitchens took over the factory and it is now a thriving commercial enterprise, employing almost as many people as when Kimberly-Clark had it and with the prospect of yet more jobs in the pipeline. As I mentioned, the reduction in the Humber bridge tolls has been a real boost to the local economy, but the offshore renewables sector, based around the ports of Immingham and Killingholme, has made Barton very much an expanding town. More residents equal more potential customers, whatever the business—or so people would think. That will not be so at our high street banks, NatWest and HSBC, which, as I said, have recently announced the closure of their branches.

Of course, we all recognise that banking has changed, particularly for the personal customer, and in that respect most of us are to varying degrees guilty. We want the bank or the bookshop there when it suits us, but for the rest of the time we are tempted by online banking, Amazon or whatever. However, that is no help to our local butcher, newsagent or other trader who wants to offload his takings for the day.

Let me focus on NatWest, as it was the first of the two banks to announce the closure of its branch. Like most high street banks, it occupies a major building in the marketplace in Barton. It has been there since 1913. The announcement came as a major disappointment to the community: private customers and, as I have mentioned, small businesses. Older residents in particular feel it as a blow. Once again, personal contact is being taken away from a commercial transaction. Local people, of course, are concerned that this might be the start of a trend. I am pleased to say that I met officials from Barclays earlier this week and they have given me an assurance that they are not planning any closures—for the moment; that is the big concern of local people.

I mentioned the neighbouring constituency of Gainsborough, where two towns, Caistor and Market Rasen, are affected. For Caistor, it is a particular blow because the NatWest is the last bank in town.

There are more ways than ever to bank. NatWest has provided me with a host of statistics. It says that branch transactions have fallen by 36% in the past five years and mobile transactions have increased by 300%. It states:

“Only 9% of our transactions were undertaken in our branches in 2014, compared to 25% in 2010”.

It goes on to state:

“We know the value of the High Street branch, we have the second largest branch network in the UK, and it will remain the cornerstone of our service to customers.”

How will it remain the cornerstone if it is closed?

Branches are important because, as I mentioned, they provide an opportunity for customers to interact with staff on what may be big life decisions, such as taking out a mortgage or starting a business. Both NatWest and HSBC are very keen to tell me that they are making alternative arrangements with the Post Office. That, of course, is in line with the protocol agreed between the British Bankers Association and the Government earlier this year, but local post offices do not constitute a vast network. As anyone who has queued up in the post office with loads of money from their takings will know—I used to work in Market Rasen and can tell my hon. Friend the Minister that even to go and buy a stamp was a half-hour job—the reality is that post offices are not an ideal alternative.

The British Bankers Association has provided me with a host of information about how banks go about assessing closures. As the Barclays representatives told me yesterday and, indeed, as the HSBC representative told me, this is customer-led—customer-led meaning, of course, that people are moving online or to mobile transactions. I hope that the Minister will be able to give some reassurance that the agreed protocol will be firmed up a little. As I am sure she will appreciate, people are rather cynical about consultation processes. They tend to think that the bank decides on closure and consults on how to go about the closure, not on whether the closure should take place. I hope that the review of the protocol, which is scheduled for a year after it comes into force, will result in its having a few more teeth than has been the case up to now.

The British Bankers Association protocol does go into a fair amount of detail, whereas the Government’s website is a bit thin on the ground when it comes to what should actually be provided. The previous Minister, who is now my hon. Friend the Minister of State at the Department of Energy and Climate Change, said at the time of the protocol’s introduction:

“I’ve received a lot of correspondence from consumers and businesses who are worried about bank closures and the trend in banking services moving online, and I think it is essential that banks continue to take into account the impact of their decisions on their customers.

I therefore welcome the agreement announced today that banks will work more closely with their customers and local communities to minimise the impact of bank closures.”

In other words, it is an acceptance that bank closures will take place. My constituents look to me, and I look to the Government, to be on their side and the side of customers—not on the side of the banks, which are well positioned to take account of themselves.

If we look further at the details from the British Bankers Association, they go on to outline community engagement. Although it happened eventually, NatWest was seemingly somewhat reluctant to meet Barton Town Council. It has now done so, and has also met North Lincolnshire Council. The meeting was to discuss the impact of the closure on the community and customers, and to look at alternative provision. It was not—I repeat not—to discuss whether alternative arrangements could be made, such as mobile banking or reduced opening hours. I look to the Minister to give some reassurance that when the review takes place, she will seek to strengthen the protocol on behalf of my constituents.

Hon. Members across the political spectrum continually speak about the high street and how important it is to maintain a vibrant local economy and support our local shops. If we are to expand our market towns, however, shops need the services of our local banks. Banks, I am afraid, take a rather high-handed attitude. It is easy for us all to slip into the much-favoured habit of criticising bankers, and I accept that we are talking about high street bankers rather than those who have even less public appeal. The reality, however, is that customers, such as the local newsagent, who are looking for services from their bank will easily notice the large profits and the rather generous—to put it kindly—payments to senior directors. If just a little of that were to trickle down into the local branch network, perhaps we could sustain our market towns and small shops to a much greater extent than we have done in the past.

I go back to the Government’s website, which is, as I say, a bit basic when it comes to outlining the protocol. The website states:

“Today’s ground-breaking agreement will make sure customers still have banking services close at hand if a branch closes. Communities will be given fair notice of any closure and clarity about the alternative places and ways to bank. This includes the Post Office, which is an ideal shared service for customers who prefer to use counter services. The agreement will also make sure there is the right support to help customers use internet or mobile banking.”

I have to say that my constituents in Barton have not seen many examples of support for customers when it comes to greater involvement of online banking.

I conclude by appealing once again to the Government to be on the side not only of my constituents in Barton and those in the neighbouring constituency, in Caistor and Market Rasen, but of customers throughout the country who deserve and need a proper high street commercial banking network if high streets and the business community are to survive.

[The Economic Secretary to the Treasury (Harriett Baldwin)]

What a pleasure it is to serve under your chairmanship this afternoon, Mr Davies! I congratulate my hon. Friend the Member for Cleethorpes (Martin Vickers) on securing the debate. He has spoken eloquently on behalf of his constituents and communities. He is without a doubt the most diligent and effective Member for Cleethorpes I have ever known.

As my hon. Friend set out, bank branches play an important role in their communities—communities such as Barton-upon-Humber, Caistor and Market Rasen. They are valued by individual consumers and small businesses, and the services that they provide make a real difference to people’s lives. One of my key priorities as Economic Secretary is financial services that deliver for customers. I strongly believe that banks should be there to help and enable customers to achieve their aspirations at every stage of their lives, whether that is saving for their first home, taking out a mortgage, buying a car or saving and investing for the future.

As my hon. Friend mentioned, how we bank is going through a period of unprecedented change. New online and mobile technology means that customers are reducing their use of high street branches. As he mentioned, some banks had pledged not to close a branch if it was the last one in town, but since those pledges were made the volume of transactions in high street branches—including in the last branches in town in places such as Caistor—has continued to decline. Those changes mean that the banking industry, which has to modernise and improve its services to maintain profitability, often has to make tough decisions. They are commercial decisions for the individual institutions, but it is right for the Government to seek to ensure access to banking services for everyone, wherever they live.

We made strong progress on that agenda during the last Parliament. In March this year, the Government welcomed an industry-wide agreement known as the access to banking protocol. I am pleased to say that all the major high street banks agreed to that protocol, which came into effect in May this year. The protocol means that when a bank decides to close a branch, it must think carefully about the consequences of doing so; it must engage with its customers; it must consider the needs of its customers; and it must identify ways for its customers to continue banking after the branch has closed. The results of that engagement with the community and an impact assessment will be made public before the branch is closed. We have also made it easier for my hon. Friend’s constituents in north Lincolnshire to switch their bank accounts, with seven-day switching to one of the banks that remain open.

I appreciate my hon. Friend’s concern about the impact that branch closures will have on shops in local high streets. I assure everyone that the Government are committed to safeguarding high streets and town centres. For example, through the high streets innovation fund we have provided funding to the 100 towns that have the highest rates of empty property. Small business rate relief is also a valuable bonus for high street shops. In March 2015, the vacant share of retail outlets fell to 13%, which is the lowest vacancy rate since 2010.

As well as taking seriously the impact of branch closures on local communities, we must consider how customers will continue to access banking services. A range of alternative measures is in place, and I would like to talk in more detail about some of those measures. As my hon. Friend mentioned, at more than 11,500 of its branches in the UK, the Post Office allows customers to access their bank accounts, check their balances, withdraw money and deposit cash and cheques. Sixteen banks offer services to their personal customers and small businesses through the Post Office, including those that he mentioned. That is a huge network, which offers most customers a real opportunity to continue banking locally.

I know that more can be done, however. The range of services offered by the Post Office may be more limited than those offered in a traditional bank branch, and my hon. Friend has mentioned how popular they are. Service provision may vary by bank and by the capacity of each post office. That is why the Government are supporting measures to improve the banking services that the Post Office offers and to make those services more consistent for customers.

Late last year, the British Bankers Association and the Post Office began negotiations to agree a standard set of services, such as withdrawals, deposits and balance checking. The agreed services will be made available to bank customers at post office counters across the country. The negotiations are ongoing, but I make it clear that the Government consider completion of that work to be a priority. The protocol includes a measure for an independent review after one year, which I hope will indicate whether it has been effective—I will take a close interest in that matter.

We also expect to see concrete progress on publicising the services that are already available. As I have made clear, banks should be there to help their customers achieve their aspirations at every stage of life. We should also recognise that the modernisation of banking services is leading to new opportunities for customers, and we should all be excited about that. Since April 2014, for example, customers have been able to transfer money instantly to another bank account using only their mobile phone number; from 31 July 2016, customers will be able to use their smartphone to photograph cheques for payment into their bank account, helping to make life easier for customers in remote areas. Banks are taking action to ensure that customers are able to use such new and exciting technologies with confidence.

Those innovations also apply to the UK’s ATM network, which can play a more important role in addressing some of the concerns voiced by consumers when their local branch closes. Steady progress is being made in extending the ATM network across the UK, and the number of free-to-use ATMs is at an all-time high. In fact, 97% of withdrawals are now made free of charge. Isolated, disadvantaged and rural communities often have the worst access to free-to-use ATMs, however, so the Government are working closely with the Link network’s financial inclusion programme to subsidise free-to-use cashpoints in more than 1,400 remote and deprived areas across the UK. Importantly, members of the public in my hon. Friend’s constituency can nominate their area for inclusion in that programme.

This debate has focused on branch closures, but it is also important to recognise that many banks are choosing to prioritise their branch network and are opening new high street bank branches, with TSB and Metro bank being good examples. Metro bank is planning to open 150 branches by 2020, and its branches are open seven days a week.

[Martin Vickers]

I thank the Minister for the information she has provided. My constituents, and people across the country, would appreciate more opportunities for face-to-face contact. Can she give an assurance that the Government will do all they can to influence the banks to make provision for people who want personal contact? It is one thing for people who are applying for a car loan of a few thousand pounds not to have face-to-face contact, but people who are committing to a mortgage for 25 or 30 years need detailed, experienced advice. It is much easier to provide such advice on a one-to-one basis.

[Harriett Baldwin]

I agree. My hon. Friend will be glad to know that 58% of people agree with both of us that face-to-face contact and having a local branch are important when choosing where to bank and engaging in major transactions. Some banking organisations take the view that they will gain market share by opening new branches. I have mentioned Metro bank, and TSB currently has 630 branches serving 4.5 million customers, which makes it the eighth-largest branch network with 6% of all UK branches. The Government are keen to encourage such healthy competition between different brands, some of which offer a face-to-face banking model.

The Government’s ambition is for 15 new banks to enter the market over the life of this Parliament. If we achieve that, it will give customers far more choice of whom to bank with and encourage banks to compete more effectively with one another. Competition will also continue to drive innovation in the delivery of banking services, such as contactless payment and payment by mobile phone. Atom bank, which recently received its banking licence, is a good example of innovation. It plans to be an online-only organisation and has ambitions to offer a range of innovative services to customers, which could include face-to-face contact through technology, as well as between individuals in the same location.

One often suggested solution is the sharing of bank branches, which would allow banks to lower overheads and maintain local provision when they may otherwise have to close their branches. Of course, each bank must specialise and differentiate itself from its competitors, but that should not prevent the industry from thinking creatively about how premises and services could be shared. The British Bankers Association is currently considering that issue in consultation with its members. In particular, it is exploring where local circumstances may mean that sharing a branch is the best solution.

I understand the concern of communities in northern Lincolnshire about local bank branch closures—my hon. Friend mentioned Barton-upon-Humber, Caistor and Market Rasen—and many communities across the UK, including the one I represent, are experiencing a similar situation. Changes in the banking industry reflect changes to customers’ needs and habits. Banks and building societies need to balance customer interests, market competition and other commercial factors when considering their strategy. It is right that the Government do not intervene in such commercial decisions, but we are clear that banks and building societies should support access to banking services for everyone.

Once again, I congratulate my hon. Friend on raising these important issues today.

Question put and agreed to.

Budget Resolutions and Economic Situation

Martin Vickers Excerpts

Monday 13th July 2015 Commons Chamber

[Martin Vickers (Cleethorpes) (Con)]

Before I start my comments, may I respond to the points made by the hon. Member for Workington (Sue Hayman)? Towards the end of her speech, she referred to a more positive outlook for younger people. That outlook is something that I hear about from young people who are training for apprenticeships, or who are attending the local further education colleges. They have a much more positive view. They can see the opportunities that have been created in my part of the world, which is, to a great extent, thanks to the investment in the offshore renewables sector. These young people have a vision of the future and can see the opportunities, and we should do all we can to support them. Of course, in our constituency work, we come across those who face challenges and significant problems. There will always be those people in our communities and we should do everything possible to help them. Certainly, the policies that I have picked out from the Budget do exactly that.

Two specific aspects of the Budget benefit my constituency. First, the coastal communities fund is being topped up. I was at an event on Friday evening with Amanda Austin, a businesswoman who manages the major shopping centre in Grimsby, next door to my constituency. She had already downloaded the application forms for the coastal communities fund. She had a scheme in mind and she could see how we could take advantage of that in the Cleethorpes area.

Secondly, the extension to the enterprise zones is particularly welcome. The largest enterprise zone in the country is a cross-Humber one, which partly takes in my constituency. We have attracted considerable businesses. Able UK, which is investing hundreds of millions of pounds in my constituency with the Humber marine energy park, has just signed a deal with Dong Energy, which is already a significant investor in the area. It is anticipated that 1,000 jobs will result from this deal. It involves manufacturing, which we want to expand in our economy.

[Fiona Bruce]

I thank my hon. Friend for referring to the speech of the hon. Member for Workington (Sue Hayman). Does he agree that she seems to have forgotten that under her party’s Government there were over 1 million young people who were not in education, employment or training, and that this Government have radically improved that, to the benefit of young people in this country?

--- Later in debate ---

[Martin Vickers]

My hon. Friend makes an important point. In my constituency I can see the reduction in the number of NEETs and the increase in the number of apprenticeships. Opportunities for younger people are increasing all the time.

Coming as I do from a working-class background, I am keen to see the initiatives in the Budget that boost working-class people—blue collar Conservatives, as we tend to call them. Opposition Members are in total confusion about whether to accept the welfare cuts. No one can say that they were not flagged up during the election campaign, and the people of the United Kingdom voted overwhelmingly for a Government who would implement them, make the welfare system fairer and allow—[Interruption.] I take the point from the Scottish National party Benches, but we are still a United Kingdom, thankfully. Even the Scottish people voted in favour of that. The Budget must be judged as a package. Yes, there are those who will be hit by the changes to tax credits, but that is offset to a considerable extent by, for example, the changes to personal allowances.

On devolution, I have for many years been an advocate of elected mayors, and I am pleased to see that, as things go full circle, the Government are promoting that idea. An elected mayor is a figurehead, another ambassador for our areas, someone who can go out there and sell our constituencies. I would prefer a much more radical devolution and settlement for local government, but the Government have outlined a clear policy. I was at a cross-party meeting last Friday with the Humber MPs, and we can see a consensus emerging among Members. I hope that will be copied—

[George Kerevan]

Will the hon. Gentleman give way?

[Martin Vickers]

I am running short of time so I will not, if the hon. Gentleman does not mind.

The way that local authorities are beginning to come together and recognise the advantages of what is on offer from the Government suggests that they will move towards a system of combined authorities. Personally, I would prefer to see unitary authorities rather than combined authorities and economic authorities, but at least it is a step in the right direction.

I have some reservations—for example, in relation to planning. As we all know, planning is very controversial. It is an issue on which we must take our communities with us. If, as in the case of most of my constituency, which falls in a local authority area where there is no local plan and it is years before we will have one, the people, through the democratic process, must have some sort of opportunity to put their case.

[Mark Pawsey]

Does my hon. Friend agree that when a local authority has been incredibly slow to bring forward a local plan, having had many years’ notice that it needs to be done, it is entirely right for the Government to say, “Look, if you don’t do it, we will”?

[Martin Vickers]

I entirely agree, and I am glad to see the Government being much more proactive in that regard. Equally, whether it is the Government or the local authority, they must take communities with them. For many years I have advocated giving those who object to planning developments a right of appeal in certain limited circumstances. One such circumstance should be when no local plan exists, because that means the democratic process has let those people down.

The other thing that I have reservations about is Sunday trading. Personally, I do not want to see Sunday trading extended. It is an uneasy compromise that we have at the moment. I do not want to turn the clock back to the Sundays of my childhood, when the most exciting thing to happen was “Two-Way Family Favourites” followed by “The Navy Lark”, but the rush to allow superstores unlimited opening is detrimental. Our lives have a certain rhythm, as does the week, the month and the year. I think that we are losing something from family life, and from the support that we have given to small traders.

[John Mc Nally]

Will the hon. Gentleman give way?

[Martin Vickers]

I will, but for a 10-second intervention.

[John Mc Nally]

We are trying to encourage small companies, in particular, to create more apprenticeships and jobs. Does the hon. Gentleman agree that legislation needs to be tightened to get bigger companies, instead of delaying payments, to make payments quicker so that small companies can trade in a better position?

[Martin Vickers]

The hon. Gentleman makes a valid point, but I have only 48 seconds left and so will race through the other points I wanted to make.

Members across the House support our high streets, or at least they pay lip service to the idea of supporting our high streets. Many small shops, such as convenience stores, rely upon the extra cash they get in the till on a Sunday, which is thanks to supermarkets being limited to six-hour opening. I know that the Government will say that it is up to local authorities, but I would like to see that proposal removed.

[Several hon. Members]

rose—

Oral Answers to Questions

Martin Vickers Excerpts

Tuesday 16th June 2015 Commons Chamber

[Mr Osborne]

I met local authority leaders from Coventry, Birmingham and the surrounding local authorities only a couple of weeks ago, and I made it clear that it is up to them to come together in a combination that suits them and reflects local identities, and that my door is open for any discussions they want to have.

[Martin Vickers (Cleethorpes) (Con)]

Further to my right hon. Friend’s reply to our hon. Friend the Member for Brigg and Goole (Andrew Percy), both my hon. Friend and I are big supporters of further devolution to northern Lincolnshire so that the economy can expand at an even faster rate. Can the Chancellor assure me that he will support any proposals that come forward from the leadership of our local authorities?

[Mr Osborne]

I can absolutely give my hon. Friend that assurance. Because of his campaigning, and that of our hon. Friend the Member for Brigg and Goole (Andrew Percy), we have made sure that northern Lincolnshire is part of the northern powerhouse concept and that it is not left behind or neglected, as it was under the Labour Government.

Oral Answers to Questions

Martin Vickers Excerpts

Tuesday 10th March 2015 Commons Chamber

[Danny Alexander]

If the hon. Lady has specific issues in mind, I would gladly engage in further discussion with her, but the steps this Government have taken—including the establishment of enterprise zones in many areas where there are fabrication yards, and measures such as electricity market reform to get offshore wind and other such production going in the UK—all support the objective that she describes and which I share. If she has further ideas on how we can pursue that, I would gladly hear them.

[Martin Vickers (Cleethorpes) (Con)]

T4. The Chancellor recently highlighted the major part that my Cleethorpes constituency and the Humber estuary will play in the growing northern economy. However, much depends on continued investment in transport infrastructure. Will the Minister assure me and my constituents that that will continue as a high priority?

[Danny Alexander]

I certainly can. In the final Treasury questions of this Parliament it is worth reflecting on the fact that, despite the tough economic decisions we have had to make, this country is making the largest investment in our rail network since Victorian times and the largest investment in our road network since the 1970s, and we have a programme to roll out superfast broadband across the entire country. Those things will leave our economy with a stronger long-term growth potential, as well as having given us the best growth rates in the European Union at the moment.

Oral Answers to Questions

Martin Vickers Excerpts

Tuesday 9th December 2014 Commons Chamber

[Martin Vickers (Cleethorpes) (Con)]

23. Although I welcome the announcements in the autumn statement and the northern powerhouse initiative, too often in northern Lincolnshire in the Humber region we feel somewhat remote from the northern powerhouse. Will my right hon. Friend assure me that further initiatives will link the north-western part of the northern powerhouse to the Yorkshire and the Humber region?

[Danny Alexander]

Under this Government, there have been a number of initiatives in the Humber area that have helped to grow the economy, not the least of which is the enormous effort that Ministers in several Departments made in attracting the Siemens investment to Hull, which is an incredibly important part both of creating jobs in that area and of delivering our ambitions for renewable energy.

Autumn Statement

Martin Vickers Excerpts

Wednesday 3rd December 2014 Commons Chamber

[Mr Osborne]

I know the hon. Gentleman represents a constituency named after a river, but he has not been fair about our flood defence policy. Did we set out the money last year? Yes, we did. We then said, “Let’s have a plan for how to spend that money”, and this week we have announced all the different schemes that show how it can best be used. That is an increase on the capital funding that the previous Labour Government provided. Flood defence schemes have always involved a contribution from businesses, and today I announced—the hon. Gentleman did not mention this—that we are expanding the tax relief available for those contributions.

[Martin Vickers (Cleethorpes) (Con)]

Unlike the hon. Member for Brent North (Barry Gardiner), my constituents welcome the Chancellor’s announcement on flood defences, particularly this week which marks the first anniversary of the tidal surge that flooded so many homes and businesses in my constituency. Cleethorpes has enormous potential for growth, as the Chancellor and Government have recognised, and to maximise that growth and support the rail franchises that my right hon. Friend referred to—particularly the south trans-Pennine route—it is essential to maintain coast-to-coast, east-to-west connections. Will the Chancellor do all he can to ensure that?

[Mr Osborne]

I certainly give my hon. Friend that assurance. He is a doughty champion for Cleethorpes and its strong road and rail links. He has raised train services with me and I am looking at that, as is the Transport Secretary. We are determined to provide a great service to the people he represents, and ensure that they travel in comfort. Today’s announcement about replacing outdated Pacer trains with new, modern trains will be welcomed across the north of England.

Oral Answers to Questions

Martin Vickers Excerpts

Thursday 1st May 2014 Commons Chamber

[Mr Vaizey]

I know that the hon. Gentleman met Ofcom this week, and that he has raised this subject in the House and led a debate on it. The BBC Trust will make the final decision on whether the BBC Three channel should go to an online service, but I understand that Digital UK will allocate the channel in the normal way, taking account of the due prominence rules in the public service broadcasting guidelines. However, I have noted the hon. Gentleman’s point, and will follow it up.

[Martin Vickers (Cleethorpes) (Con)]

It is two years since Digital UK completed the changeover from analogue and a large number of households were persuaded to buy Freeview boxes. There have been reports that Freeview is now under threat. Given that many households in my constituency rely on it rather than on cable and satellite, which are more expensive, can the Minister assure them that Freeview will continue?

[Mr Vaizey]

I was pleased to visit my hon. Friend’s constituency and see how well local television is doing in his part of the world. I can assure him that Freeview and free-to-air television is very important, and the Government will continue to support it.

Bradford & Bingley plc

Martin Vickers Excerpts

Wednesday 27th November 2013 Westminster Hall

[The Financial Secretary to the Treasury (Sajid Javid)]

I welcome you to the Chair, Mr Betts. It is a pleasure to serve under your chairmanship.

I thank my hon. Friend the Member for Shipley (Philip Davies) for securing the debate and for his continued commitment and effort in tirelessly pursuing the issue on behalf of his constituents. I have not been long in Parliament, but one thing I noted right from the start, which has been reaffirmed today, is that few colleagues so assiduously pursue their constituents’ causes as my hon. Friend. He is an example to us all. I also thank my hon. Friend the Member for Calder Valley (Craig Whittaker) for his tireless work on behalf of his constituents, as we have seen today.

Before I get into the specifics of Bradford & Bingley, I will give some context on the time, the policies that we have heard reference to today, which contributed to the banking crisis, and this Government’s response, which hon. Members have spoken about during the debate.

The nationalisation of Bradford & Bingley was one of the key outcomes of the financial crisis. The crisis was the biggest failure of economic management and banking regulation in this country’s history. Let me remind hon. Members of the events preceding the crisis. Over the decade before the crash, Britain experienced the biggest increase in debt of any major economy in the world. The total of household, corporate, financial and public sector debt reached a staggering 500% of GDP. UK banks became the most leveraged in the world.

None of that, however, caused concern or invited intervention under the failed tripartite system of regulation created 16 years ago. The Bank of England was stripped of its historical responsibility for regulating the banking system, which was given to a new Financial Services Authority. Let me quote a warning from 16 years ago by the then shadow Chancellor, my right hon. Friend the Member for Hitchin and Harpenden (Mr Lilley). During the passage of the Bank of England Act 1998, which created the failed tripartite system, he said:

“The process of setting up the FSA may cause regulators to take their eye off the ball, while spivs and crooks have a field day.”—[Official Report, 11 November 1997; Vol. 300, c. 732.]

Sixteen years later, the consensus is clear. There were fundamental flaws in the tripartite system right from the start, which are today painfully apparent to the whole world.

I respect the comments of the shadow Treasury Minister, the hon. Member for Kilmarnock and Loudoun (Cathy Jamieson), and I accept that she was not responsible for the actions of the previous Government. However, she was close to some of the key decision makers at the time, and I hoped that we would hear an apology from her on behalf of the previous Government—that was wishful thinking.

The situation that I have described is why this Government have embarked upon a fundamental reform of our system of financial regulation. We have introduced domestic legislation to increase the resilience of financial institutions to shocks. The Financial Services Act 2012 fundamentally reformed the previous, failed tripartite system by giving the Bank of England clear responsibility for maintaining financial stability; establishing the Financial Policy Committee within the Bank as a strong and expert macro-prudential authority; creating the Prudential Regulation Authority, a new micro-prudential regulator, as a subsidiary of the Bank of England; and creating a new independent conduct of business regulator, the Financial Conduct Authority.

[Martin Vickers (Cleethorpes) (Con)]

The Minister is outlining a tightening up of the regulatory regime, which I am sure all our constituents would welcome. However, does he recognise that those who have been let down by the Bradford & Bingley scandal and other financial scandals feel that regulators go native, stand back and, instead of being on the side of consumers, are too close to the people they are supposed to be regulating?

[Sajid Javid]

My hon. Friend makes a good point that has been brought up by many hon. Members. With the reforms we have implemented, and some that we are still in the process of implementing, the Government have created a stronger, more rigorous system, with regulators with a lot more teeth and a greater degree of independence.

The Government have also set up the Independent Commission on Banking, or ICB, to recommend further reforms to enhance financial stability. The Government accepted the recommendations of the ICB and are putting them into law this year through the Financial Services (Banking Reform) Bill. The Government also supported Parliament in setting up the Parliamentary Commission on Banking Standards and have accepted that commission’s main recommendations.

I turn now specifically to Bradford & Bingley. Following the difficulties Bradford & Bingley experienced in 2008, the previous Government transferred its retail deposit taking business and branch network to Abbey National after a competitive process; its mortgage business was brought into public ownership. At the time of the nationalisation of Bradford & Bingley, the UK was in the grip of a rapidly evolving crisis, as we have heard today. I cannot speak for the actions that the previous Government took to deal with the crisis, as I was not privy to the relevant discussions; nor, rightly, have I seen the papers that relate to the previous Administration, although I understand that the Treasury is handling all freedom of information requests in the proper manner.

Extensive information is already in the public domain: events leading up to the nationalisation have been looked at by both the National Audit Office and the Treasury Committee. But on the matter of information, I have to agree with the comments made by my hon. Friend the Member for Shipley, and, in particular, with the request made by my hon. Friend the Member for Chippenham (Duncan Hames), who asked the shadow Minister to use her good offices to speak to the former Prime Minister, the former Chancellor and others who were Ministers under the previous Government and closely involved in events at that time. That is a reasonable request; I hope she will act on it and get back to my hon. Friend about it. It could lead to further information that many stakeholders would find useful.

Following the transfer of Bradford & Bingley into public ownership, the previous Government made the Bradford & Bingley plc Compensation Scheme Order 2008, which was debated and approved by each House. The order provided for a mechanism through which compensation for former shareholders would be assessed by an independent valuer. As we have heard, after conducting a robust and rigorous process the independent valuer determined that no compensation was payable.

My hon. Friend the Member for Shipley asked whether it was right that the valuer should have been asked to work on the basis that there was no Government support. I believe that it cannot be right, or in the best interests of the taxpayer, that the valuer should have been asked to compensate for value that existed only by virtue of support that taxpayers themselves were providing.

Following the determination, all affected parties had the opportunity to submit requests for the valuer to reconsider his decision. The valuer considered all requests before concluding that no compensation was payable. That decision was further upheld in the upper tribunal review.

I believe that due process has been followed at every stage. Transparent and independent arrangements for compensation have been put in place and there has been a proper process in the courts. As I mentioned, there have also been investigations by the NAO and the Treasury Committee. I have to say to my hon. Friend that I have looked at the matter closely using the limited information available to me, and from what I have seen I am not persuaded that there is a case for a further investigation or inquiry.

Before I conclude, I want to respond specifically to a number of my hon. Friend’s questions. He talked about the rights issue that took place just before nationalisation. From the information I have seen, I can tell him that the Treasury had no involvement in that rights issue at all; as we have heard, the rights issue was conducted in the summer of 2008, prior to nationalisation, and was a matter solely for Bradford & Bingley’s board and senior management. Like many banks and building societies at that time or thereabouts, Bradford & Bingley was required to meet FSA regulatory capital requirements in order to continue with those regulated activities.

My hon. Friend also raised the issue of accounting standards, and in particular IAS 39, which he said was problematic and could perhaps take some blame for the financial crisis. He is right to raise accounting standards and the contribution they could have made to the crisis. The issue has been looked at extensively by authorities around the world, including the International Accounting Standards Board. The board has proposed a series of changes to IAS 39 and other, similar accounting practices. Those changes essentially mean that, in future, banks will have to hold more capital or take losses earlier on problematic loans.

My hon. Friend also rightly expressed his concerns about the future of a number of his constituents who were transferred to UKAR during nationalisation and are currently UKAR employees. He was absolutely right to say that those people have considerable expertise and experience in an important sector. My understanding is that currently over 2,000 staff are still employed in managing the closed mortgage books of both Bradford & Bingley and Northern Rock, and are doing an excellent job.

My hon. Friend may take some comfort from knowing that those people’s skills are such that it seems they will face growing demand for them: the Council of Mortgage Lenders recently said that mortgage lending in the third quarter of this year was at its highest level since 2007 and is growing strongly thanks to the Government’s policies and the economic growth we are experiencing. I am sure that the value of the skills they hold will give some comfort to the constituents he mentioned.

Interest Rate Swap Derivatives

Martin Vickers Excerpts

Thursday 24th October 2013 Commons Chamber

[Martin Vickers (Cleethorpes) (Con)]

I, too, praise my hon. Friend the Member for Aberconwy (Guto Bebb) for securing this debate and leading the campaign, and like the previous speaker, my hon. Friend the Member for Bury North (Mr Nuttall), I wish to highlight one or two particular cases that constituents have brought to my attention. So often in this place we discuss issues that are difficult for individuals to relate to, but on this occasion I—like many other Members—have constituents in the Gallery whose businesses have been practically destroyed by the actions of the banks they trusted.

I have received only three complaints from individual constituents about this scandal, but it is fair to assume that since there are tens of thousands of such cases across the country, many are perhaps suffering in silence. I suspect that just as in the cases brought to my attention, people trusted their banks and regarded them as one of their financial advisers, who would advise on the best course of action for their business. People were not so naive as to assume that the bank was not benefiting in some way, but it is fair to say that they assumed that, irrespective of any commissions paid, they were at least being sold a product that would be advantageous to their business.

I will quote from the statement of one specific case:

“We are just two working class families…we trusted our bank, and thought they were looking after our business interests. We, like other small SMEs were misled and lied to by the bank. The bank basically cornered us into taking out swaps, we didn’t have a choice, and as we trusted them, we took the products. The swaps were not properly explained to us, we were not told how they fully worked and were not told about the huge exit costs….We should never have been sold these products, they were not appropriate to our business...Financially this has crippled our business, and the knock on effect is we can’t employ…people like we used to...Several times we tried to talk to the bank about these products, but each time they shut the door in our face…We are in the redress scheme, but…the banks are playing a game and dragging their heels.”

That certainly seems to be the story we are hearing from other colleagues in the debate.

My constituents go on to say that they moved banks because the bank

“wanted to sell us their life policy cover (at £550 per person, per month), which we insisted we did not need…We were confident now that we had a great knowledgeable team working with us”.

They are referring to their solicitor, accountant and banker, whom they trusted as they assumed that the bank had the best interests of their business at heart. The statement continued:

“Our banking relationship manager…discussed with us a hedging product that the bank said we needed…We trusted the bank, and decided we had no choice but to continue and enter into hedging arrangements. We were not looking for any different type of lending, we have always borrowed money on standard terms…The only reason we entered into the swaps was because our bank manager said it was a condition to any future lending, that we must have these swaps…We do feel betrayed by the Bank, we had trusted them and worked with them for a number of years…We have kept our commitments…the bank does not realise what we have had to do to honour our payments. It’s been very, very tough….We just need the bank to do the right thing now.”

I hope that when the Minister sums up he is able to give some assurance to my constituents that he will do everything possible to ensure that the redress scheme is dealt with and pays out as quickly as possible. Understandably, people are writing to me and to other Members to ask how much longer they will have to wait. We hear many stories of banks crippling and ruining companies, and we cannot go on like this. We have regulators, yet we have another scandal that should have been prevented. Were the regulators asleep on the job? Those caught up in this and other scandals trusted their banks. Trust in the relationship between banks and their customers is a prerequisite. Clearly, there has been no trust in this case. Many constituents have been let down and we must not let it happen again.

Taxation (Living Wage)

Martin Vickers Excerpts

Tuesday 22nd January 2013 Westminster Hall

[Martin Vickers (Cleethorpes) (Con)]

I hope not to be as challenging for the Hansard reporters as my Welsh colleague, my hon. Friend the Member for Aberconwy (Guto Bebb).

It is a pleasure to serve under your chairmanship, Mr Robertson. I congratulate my hon. Friend the Member for Harlow (Robert Halfon) on securing the debate. He is a worthy champion of such issues and I hope to give him my support.

Although my Cleethorpes constituency is best known as the premier resort of the east coast, it is a highly industrial area that takes in a large section of the Humber bank. Although there are highly skilled and well-paid jobs in some of the factories, my constituency, and indeed the region, is an area in which pay is considerably below the national average.

Seaside resorts are heavily reliant on part-time, often seasonal work. In some cases, that is not necessarily what people would like, but it is what is available. For other people, the work fits perfectly with their family responsibilities and is a useful supplement to the family income. The Conservative party has traditionally been the low-tax party, and so it should and must remain, but it must be low tax for all, with the emphasis on the low-paid. The coalition Government have done an awful lot in that respect, most notably through the massive increase in personal allowances. However, as my hon. Friend the Member for Harlow pointed out, we risk jeopardising much of the political benefit if we allow our opponents to paint us wrongly as the party of the rich and privileged.

[Mr Andrew Smith]

The hon. Gentleman refers—rightly, I am sure—to the importance of part-time, often low-paid workers in his constituency, but does he accept that the coalition’s withdrawal of working tax credit from part-time workers has hit those workers very hard and represented a disincentive to work, which is contrary to his argument?

--- Later in debate ---

[Martin Vickers]

I acknowledge that that has not been welcomed by many of my constituents, but what is important is the balance the Government have achieved to support and supplement the incomes of the lower-paid.

My hon. Friend the Member for Harlow is to be congratulated on keeping this issue high on the political agenda. Indeed, it has been a theme of Conservative thinking for decades and, in recent years, it was taken up by my noble Friend Lord Forsyth, who argued strongly in favour of simplification in the tax reform commission’s report. Paragraph 6.1 of that report states:

“The personal tax system should be characterised by low tax rates and simplicity. Allowances, reliefs and loopholes should be cut where possible and compliance costs reduced. The least well-off in society should be taken out of tax altogether. Many of the lowest paid pay tax while receiving benefits and tax credits. This recycling of money is a waste of resources. It is a waste of time for the individuals and the government. It should be reduced and eliminated where possible. Personal tax rates are also too high.”

The abolition of the 10p tax rate by the previous Government in 2008 represented a tax rise of £232 for working people. For someone earning today’s minimum wage, the reintroduction of that rate would be the equivalent of a tax cut of some £250 a year.

Reducing the rate of tax is the most effective way in which the Government could contribute to achieving the living wage without forcing employers to pay more or creating further barriers to employment. It would also ensure that working people would keep more of their money in their pockets. When considered alongside the universal credit, a 10p tax rate would enable more people to escape their reliance on benefits. Of course, I recognise that achieving the 10p tax rate would have a significant cost—£6 billion, I understand—and I appreciate that Treasury Ministers must balance that cost against the potential boost to the economy derived from any tax cut, but a commitment to movement in that direction would be most welcome.

Today, in an excellent article on the “ConservativeHome” website—I am sure that Opposition Members have read it—my right hon. Friend the Financial Secretary to the Treasury, who, like many Government Members, has impeccable working-class credentials, says:

“We must be the party of ordinary working people. The party of people who want a decent job to support themselves and their families; the security of a home of their own where they can be stable and settled; reliable back-up from well-run, caring public services; and enough money left in their pay packets to afford a car, a holiday, savings for a rainy day and a reasonable pension in retirement.

These are not the demands of those who think the world owes them a living. It is an attitude to life distinguished by quiet responsibility, mutual reliance and family loyalties. That which is asked of government is…to provide a shield from risk and turbulence—instead of adding to life’s uncertainties.”

I would say that they are very Tory views, and I echo them 100%.

My parents were proud to describe themselves as working-class Tories. They came from the generation that had seen the war and the post-war years of austerity. It was a generation of self-reliance, and my parents took great pride in the fact that they were self-reliant. Whatever label we use—working-class Tories, blue-collar Conservatives or whatever—the policy advocated by my hon. Friend the Member for Harlow is a rallying cry that we can all welcome.

A commitment to a 10p tax rate would send the clear message that we are indeed all in it together. It would further cement in the minds of voters that Conservatives now, as always, represent all members of our communities, and it would also emphasise the damage done—if I may misquote Harold Wilson—by 13 years of Labour misrule. Such a commitment would send a clear message to my constituents in Cleethorpes and people elsewhere that in the future, as in the past, it is the Conservatives who can best help working people.