01/02/2016 House of Commons


01/02/2016

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house can join me in committing the success of this particular programme

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and how it has enabled people to get on the life and set up their own

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businesses and become successful. Urgent question. To ask his

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Secretary of State for house if you'll make a statement on what

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steps are being taken to improve the financial situation of NHS trusts.

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They you Mr Speaker, the house and know that the NHS as that of its

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plans for the next five years. Because of our strong economy, this

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government has built to honour that request and will be fun to get in

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full, including a down payment of ?2 billion in this financial year. Next

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year there'll be an increase of the 18 billion pounds and we will be

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providing ?10 billion in five years. Within that context, there is are a

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number of hospital trusts who are running a number of hospital trusts

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who are running it has deficits. After what was learned in the

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aftermath of these gentlemen amid staff. The best hospitals have begun

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to transform along the lines of the review. Some have not. This is maybe

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management of their finances all the more difficult. NHS improvement

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expects that trusts will report an overall deficit of the financial

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year 2016. Savings achieved in the rest of the NHS have ensured this

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deficit will be offset. It were to finance the balance. Improved

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financial position. The department had introduced the controls of the

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cost of staff agencies, a staff on consultant contract. Improving

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hospital fantasy. ... By 2020. The chief executive NHS improvement is

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confident these measures was never hospital trusts can sustain a

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financial position next year. Thank you Mr Speaker, I'm afraid the

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Minister has been a state of denial. He claims the settlements secured by

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the Department of Health in the review will sort the financial

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pressures, hospitals are under. He either does not understand the scale

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of the problem or he simply has his head in the sand. Mr Speaker, in the

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last two weeks it has become him utterly clear that hospitals across

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the country are buckling under the strain of providing health care

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within an adequate budget. Four out of five hospitals are now predicting

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the deficit. Monitor are accordingly a sibling tease Amanda Mitch

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consultants. To dispatch a 25 trusts now we learn along the TDA because

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every hospital asking them to take urgent steps to regain control of

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their budgets, including, headcount rejections of the current plan. What

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the Secretary of State aware that this letter had been sent as it

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received approval. We had meetings to discuss headcount reductions, and

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how many job cuts have been agreed as a result of these meetings? Mr

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Speaker, when I have a situation where on the one hand the Care

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Quality Commission is turning hospitals they are unsafe and on the

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other hand monitor is selling them to cut staff. Which one is it? What

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proportion of the so-called headcount reductions was involved

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clinically trained staff. On Saturday the Kings fund said this,

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three years on from the report of mid staffs which emphasizes same

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staffing was key to make quality -- maintaining quality of care. The

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financial meltdown is now saying the policy is being abandoned for

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hospitals that have run out of money. Will the Minister not accept

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that his government's financial management of the NHS has been

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impossible for some hospitals to provide safe patient care. Is it not

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the case of this government has fundamentally lost control of NHS

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finances, and it is that it's now clear that the only way ministers

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are going to make their planned ?22 billion worth of efficiency savings

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will be to cut staff to Marcotte paid, and closed services. I stated

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minister is time to stop the NHS doublespeak and just come clean.

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Again this is bigger. I think the for asking this urgent question. Had

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she started off by claiming that the Secretary of State and I were in a

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state of denial. Were she to look at the actual outcomes of the NHS this

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year compared with the last year when her party was in power she

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might consider that the performance of the NHS has and proved measure.

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We have 1.9 million more tendencies. 1.3 million more operations. 7.8

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million more outpatient appointments. Four plus 7 million

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more diagnostic tests. They're performing more procedures, helping

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more patients, doing more for the people of this country than anytime

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its foundation. I would suggest that the party any person who is in

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denial is Tyrone and her own stand-in. In front of the service

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working hard to try and deliver better patient care and what is a

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challenging environment. She asked a number of subsequent questions about

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staffing levels in about leathers sent home by NHS improvement. I'll

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endeavour to ask each of them. She asked about the settlements of the

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treasury has maybe the NHS I will point out to her that is precisely

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the settlement VHS asked for. It is exactly that settlement with the

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party opposite refused to endorse in the last election. Hear, hear! The

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statement that she proposed that there are teams and management

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consultants which allows me to remind her the number of consultants

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has been cut considerably by previous governments. In contrast to

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that of the party opposite who increased the number of management

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in the 30 years that they were in power. We make no apology for the

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fact that NHS improvement in these constituent bodies is working very

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hard with the providers to address the issues of efficiency and quality

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that they all have. Is she suggesting that they should not be

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doing that? Should they not be going around to hospitals trying to help

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those which are not able to control her own finances? Should they not be

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doing what is needed to try and improve the quality of care that

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they provide? If that is her suggestion is quite a remarkable one

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and one that I think should be more widely shared with the people that

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she seeks to represent. She talked about the letters sent out by NHS

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improvement. We were aware of it. Addressing of quality to be seen

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across the service. I know this is news to the members on the opposite

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benches but there are not separate parts of the NHS issuing separate

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dictums. The issues of the last two months have been cosigned by the

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chief inspector of hospitals, by the director of safety, and the chief

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executive for improvement. This is one system addressing the particular

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problems which are evident in making sure they level up the best. If she

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is not convince her that she should look at the co-signatures of this

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letter is and how they correspond one with the other. She asked about

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the line in one of the letters about reductions in headcount. I again

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will point to her reductions in headcount in the traders that have

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been achieved by the government of the previous five years. We have

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managed to reduce by some 24,000 the number of administrators in the NHS

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while said the same time greasing the number of positions by 16,000.

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Witchy on the one hand while not promising money onto the NHS for the

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NHS has asked for, acid to maintain the same level of demonstrators in

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the years ahead, or which you back NHS improvement plan to find

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efficiencies in the NHS precisely so the money is spent on administrators

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be spent better on positions and decrease the number of resources to

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the front line. I know the Honorable Lady is artist and what she says of

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the NHS but I cannot believe that she is running out in defence of

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increasing spending in the back office and expense of the plot line.

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She asked about the safe staffing ratios and she made a number of

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statements within the get retrospect might feel somewhat irresponsible.

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The reason for that as of the letter issued in October last year on the

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issues they staffing build on the advice given by... Was cosigned by

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the cheesy sludge of hospitals and by NHS improvement in the twos

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constituent bodies. It was a cosigned letter because the livery

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of quality and efficiency are two sides of the same coin. Those

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hospitals that are providing the highest quality of care in this

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country tended to be those who are also in control of their finances.

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Those were struggling with quality also are those who cannot control

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her own finances. If you were to suggest that somehow there is a

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binder suggested between the two, a choice to be made. I say to her she

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is about a decade but I and all current thinking. It is about making

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sure the quality and efficiency go hand-in-hand and that is why the

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very best hospitals can do both. And all of this I would say to the

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Honorable Lady that she should avoid falling into the trap that her

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predecessors so often did. Of assuming there is some trade-off

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between quality and efficiency and of attempting a pretty low-level

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politicizing of the NHS, an approach that was so roundly edged rejected

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the last election. At this point having one possibly the last

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election, she would not have had the ?8 million to invest in the NHS that

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we have managed to do. She would not be there for able to ensure the

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public of continued improvements and a number of patients treated and

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increase the number of operations, and number of GP's in excess of

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5000. None of those she would have been able to promise, and that is

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light on the side of the house we're proud to reaffirm that it is us who

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are the true party of the NHS. Hear, hear!

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We also want to congratulate the NHS alongside coping with rising demand.

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Task the Minister added NHS improvement are tasking measure

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consultants to come and advice trust to turn around financial problems

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when he also asked them to look at the issues of social care and how

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the interrelation between underfunding of social care impacts

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on health economies look up trusts and also to look at improvement

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prevention because both prevention and was also noted by someone. Donna

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Liddy would be aware of the increase in funding that this government has

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increased. This will deliver increases in social care. She will

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also be aware that the view is a holistic understanding of the health

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care in this country and includes transmission of the NHS and social

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care for that one. We are proud to be funding the five-year review

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which he has asked for, 31 ?8 billion next year, in next two years

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and was sure the challenge identifies around social care would

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be addressed in the years to come. I'm not sure with almost 80% of

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trusts running a deficit that we can just say it is failing hospitals

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that are having problems. While the government talks about giving 10

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billion upfront to point to that is already rated off any deficit.

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Normally budgets are described across the Department of Health

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public health and health education in England are losing money. It is

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described the 3 billion being clawed back from the areas that are not

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specifically NHS England bid -- a four and a half billion and not 8

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million you put in. The five-year identify public health and

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prevention as crucial. The government has a plan to recruit

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5000 extra doctors I'm not sure how that can be done. Isn't shown in

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evidence of impact on unnecessary deaths is a good strong ratio of

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nurses to patients. I think is important to look at that how that

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would be funded. They're not allowed immigrant measures, how they going

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to do that? Why you not we get nice way to finish the work on save

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nursing levels throughout hospitals? I think the Honorable Lady. She has

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about the deficits across the system. It is true that there chars

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writers for the heaviest deaths are committed. Because is a very

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challenging time. The demographics have gotten worse every year. Also

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because of the effect of charges of agencies have leveled after the

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increase in staffing levels in the wake of mid staffs. We seek to

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address that which is the cause of deficits,. Also very high salaries

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and consultancy spending, taken together that'll make a significant

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difference to hospital trust finances. She talked about public

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health and we have accepted is very important part of achieving it.

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We'll be investing ?60 million in public health across the England to

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make sure we can achieve the contrast that she seeks. We do have

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5000 additional GPs. We are trying to meet our target. I can. ... What

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became clear in the process of nice-looking at staffing hospitals

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as the chief nurse identified when look more broadly at teen staffing

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levels and not just individual positions within wards. That is why

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the chief nurse had been commissioned together and a safe

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setting guidance will show a broader and more complex understanding what

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has you appreciate from her time in the wards. To be very clear, that

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setting guidance only be signed off what has the approval of all the

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people who need to approve it. It will require that when it comes up.

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Mr Speaker there are experiences that feature is that it takes a

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medium to long-term plan to really pay tribute to the work of the

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staff... What he assured me that any measures put in place with a savage

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and across the country will take long-term view... A full five-year

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plan is vital at the very least stop I cannot agree more. It is important

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to you larger plan. So they they probably NHS. It is for the first

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time able to see five-year view. It means that it can begin to transform

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proper. Was able to do that. We're trying to bring a kind act was to

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hospitals crossing one. To make sure they provide the sustainable

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staffing levels is available but water levels. -- quality levels. We

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had a little government adjusting ten. It is now the worst deficit in

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England. Can you say anything about service in waiting times. Thank you

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for your cooperation and help to trying inform the future. This only

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worked as a cross party effort. We have particular problems in Devon,

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they're really very urgent. That action needs to be led by local

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traditions and I'm very glad that they're talking productively

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together. My job, as his is it to provide support. I want to give the

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Minister an example from my constituency. My local hospital and

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that downgrading the nursing banks to save money. And now has a big

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crisis in staff morale. The quality of care has fallen. Bartz has the

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largest public finance deal in the country. It is due to pay back ?7

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billion on a ?1 billion load. Half was interested. Then I ask the

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Minister very directly what is he doing to help trusts renegotiate

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these costs and tackle these legal loan sharks of public sector. It is

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a brave line of attack to go on something by the previous

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government. All I can say that I've held a number of meetings with her

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colleagues on Bartz. I can fully understand the difficult position

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she finds it often. Had a meeting this morning about it, and to last

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week, and next week. I'm very happy discuss this in greater detail with

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her and in the future. The government from additional money of

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the NSH. Should ticket out of hospitals and so could my Honorable

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friend assured me that the money will not go too hard to deficits but

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to change services to be delivered as needed. My Honorable friend space

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from experience. What ?1 billion was at the side of the transformation

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fund, but the principle behind the transportation fund will go to those

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trust of our beginning to show transmission. That is to the

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betterment of patients as a whole. We have to see transmission

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otherwise money will be wasted as it has done in years previously. What

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help and assistance can he get to the service in Leicester. Ten

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ambulances were parked outside the infirmary, ten out of 25 tried to

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hang of her patients will stop 836 occasions last year they had to be

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waiting between two and four hours to hand over those patients. All we

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need in Leicester is not more consultants but a better system of

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management. There are Honorable gentleman raises issues which have

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been severe in Leicester and I'm happy to have a separate meeting

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with him to discuss what is being done about it. Across the country

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resting a better performance this winter than last. That is because of

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the matter planning is been put in the NHS. The sure their precious

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what's happened during winter. I've been aware of this issue and I like

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to ensure him that it will be fixed in time for next year. I woke in a

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certain question because clinical and patient decision-making is being

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dictated by eight catastrophic deal signed in 1998 that will see us

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paying for Halifax hospital with cost ?64 million ?773 million. We've

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had to close the infirmary. You please watch and urgent review into

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these deals. I'll discuss this tomorrow afternoon. That review is

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already taking place in the Department of Health. They did go

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around the country at the time aiming to build new hospitals

:23:48.:23:50.

without telling people that all been put on a credit card, one that will

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be paid by future generations. It is a great shame as create a great deal

:23:57.:23:59.

of uncertainty. Under the specific issues and heart is filled with the

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address tomorrow. The demon is to be very clear whether he accepts the

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view of Simon Stevens that they're the funding gap in social care as is

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projected to be the case into the 20 and 24 that will simply increase the

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deficit of the NHS. Funding of social care remains unfinished

:24:25.:24:33.

business. Does he accept that case? I said the case. I called for ?1

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billion additionally to the NHS -- ?8 million. ... Hospital just then

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Charlie for a very long time between 1998 in 2010 at registered a

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different set of five at 12 years. In a struggling as well from backlog

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of maintenance. What more can be done to help hospital trusts the

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massive backlogs of ongoing maintenance. My Honorable friend is

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entirely right. I went to Oxford a few weeks ago and indeed buildings

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are in a poor state of repair. They do not enable clinicians to provide

:25:31.:25:34.

a high state of care in many cases it is difficult to do so. The trust

:25:35.:25:40.

acquires additional capital. Markets is to cousin to me earlier

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today. She was... That do not happen. This morning, I was told

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that there were no appointment available anywhere. And no idea

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where one would be available. My constituent is frantic. The Minister

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an earlier response mentioned the outcomes. This is the reality of the

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NHS in 2016 for my constituent and millions like her. There's no

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funding or staffing available. Not is for those appointments, but for

:26:25.:26:29.

urgent appointments related to cancer. One of the Minister going to

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do for my constituent and how quickly will you get a

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And it would take to the other but don't do that over the

:26:38.:26:41.

course of the last Parliament we have come from being one of the

:26:42.:26:46.

worst performance in cancer outcomes in Europe to victory to the table.

:26:47.:26:49.

We have done that the rapid improvements in the kind of forget

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we have been doing with people suffering cancer. That is a lot more

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to do. Money is flowing in. It provides to our outcomes are

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happening. I would look at them as I know might Honorable friend will do

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as well. And he would be happy to take it on as a personal case. Thank

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you Mr Speaker. The last decade under the previous Labour government

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the health care trusts so chronic deficits and services closed such as

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a any and maternity at Crawley hospitals. Services are now

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returning to that hospital. Can he confirm that this government is

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investing ten our NHS over the course of this Parliament? Can he

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also confirmed that the NHS has been cut in Wales when Labour is in

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control? I can confirm the amount of money available to the NHS will be

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-- will increase to ?1.6 billion. It is not just the case of money, it is

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about concentrating on quality and efficiency across services. Not only

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has money been cut, but there has not been that concentration on

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quality and efficiency. The hospital that serves my constituents and

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Cambridge, one of the chest with one of the most challenging deficits, it

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is urging people not to attend accident and emergency. They explain

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that. The Conservatives in Cambridgeshire. We have got a crisis

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and social care and health coming -- how funding. Full

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that that Dick Tate will be with John?

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I can't assure him that we will not stop to find efficiencies across the

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NHS because the important thing is to make sure that we are channeling

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money right to the front line, and that means in his hospital as it

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does others. Sometimes that will mean finding it -- and it fantasies

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and making sure that money is recovered it. Problems go further

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than AMD. It is a hospital with special measures. I am confident

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under the stewardship of the new chief executive but that will be

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managed. Can I ask my Honorable friend to thank the secretary of

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state for supporting the cause for investment and my hospital. The

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additional 15 million pounds will create a state of the art

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ophthalmology unit, and allow the hospital to socialise out patients.

:29:49.:29:55.

Following from a ?9 million urgent care centre, this is the earth --.

:29:56.:30:06.

The reality of the fact as my Honorable friend has recounted from

:30:07.:30:10.

his own constituency is that satisfaction in the NHS as I near

:30:11.:30:14.

record levels, and this satisfaction is at record lows. We rank number

:30:15.:30:20.

one and the Commonwealth rankings of Commonwealth and -- of rankings in

:30:21.:30:26.

the world. The fact is that people feel the NHS is getting better. That

:30:27.:30:32.

is why it is proof that it is safe in the hands of the conservative

:30:33.:30:35.

party and will continue to do so for the next five years. The health

:30:36.:30:41.

economy has Bencic yearly challenge for a number of years. When I meet

:30:42.:30:49.

with the stress, I get the impressions that they are trying to

:30:50.:30:54.

run up an escalator of finance. Like any government do to help in these

:30:55.:31:01.

circumstances? I recognise the problems identified by the Honorable

:31:02.:31:08.

member. There are particular problems there. I know that NHS

:31:09.:31:12.

improvement is looking in detail at the moment, and I hope that working

:31:13.:31:16.

with the existing trust management will be able to see improvement over

:31:17.:31:20.

the next year. That is the point of what NHS improvement is trying to

:31:21.:31:27.

do. To get him reassurance, if he is able to produce results, than his

:31:28.:31:30.

constituents will see a quality of NHS outcomes. I am afraid to say

:31:31.:31:39.

that I have the great displeasure of seeing first-hand the catastrophe

:31:40.:31:43.

that was NHS connecting for health under the previous Labour come to my

:31:44.:31:47.

current administration. I have to admit that. Would he admit to me

:31:48.:31:55.

that this government has put to me a strong regulatory regime and also

:31:56.:32:00.

investigations team NHS improvements CQC, will also prevent failures. I

:32:01.:32:07.

can give my Honorable friend that reassurance. He should know that

:32:08.:32:10.

every Monday when I meet with leading officials and the NHS the

:32:11.:32:16.

people and of the Care Quality Commission, and they make joint

:32:17.:32:19.

decisions. This system has to work as if you have different parties in

:32:20.:32:24.

different places we will provide the solutions that we need. That has

:32:25.:32:29.

been the place since the history of the NHS. We have a systemwide

:32:30.:32:33.

response to the challenges facing this health service. The CQC is

:32:34.:32:41.

downgrading trusts like the York teaching hospital due to the

:32:42.:32:44.

national NHS staffing crisis. In addition, this trust will have an

:32:45.:32:48.

?11 million deficit for the first time at the end of this year. Can I

:32:49.:32:52.

ask the Minister what was the marker risk assessment heats up around

:32:53.:32:57.

patient safety before it the government agreed to enforce NHS

:32:58.:33:02.

improvement letters advising trust to cut headcount? The CQC is not

:33:03.:33:08.

downgrading NHS. The CQC provides that important function of the NHS

:33:09.:33:12.

which gives open and transparent accounts of how good quality is an

:33:13.:33:16.

individual trust. The first time patients are able to see whether

:33:17.:33:21.

their trust is safe, well and effective. That means that we can

:33:22.:33:25.

have a proper and solid response where there are failings. Into many

:33:26.:33:30.

parts of the NHS, there is not the level of quality that other parts

:33:31.:33:35.

already deliver. CQ she's... -- signed a life. -- shines a light. My

:33:36.:33:47.

trust is predicting a deficit of 21.9 million by the end of the

:33:48.:33:51.

financial year. In light of the CQC reported a few years ago criticising

:33:52.:33:55.

staffing levels, I know it huge amount of effort is going to

:33:56.:33:59.

increasing those levels that are at Kos. Especially the premium that you

:34:00.:34:03.

have to pay for medical staff. I wonder if the Minister can be my

:34:04.:34:06.

constituents that we will not be returning to the staffing levels for

:34:07.:34:10.

the CQC criticised in the past having to do the deficit of nearly

:34:11.:34:15.

21.9 million. I can give that reassurance to the Honorable Lady.

:34:16.:34:20.

When I was in whole a few months ago there was a fantastic series of

:34:21.:34:26.

conversations with those leaving the hospital and is an different lines

:34:27.:34:35.

and warts. -- awards. It is about tailored response -- responses. I am

:34:36.:34:44.

committed to ensuring that she sees it. Thank you Mr Speaker. I would

:34:45.:34:51.

like to ask the Minister to join me in visiting the CQC cc she -- CCG.

:34:52.:35:02.

The reason I ask is that since my hospital has been rated good in

:35:03.:35:10.

care. The chief exec -- executive is now managing on the interim to try

:35:11.:35:17.

to help them. She has previously helped -- worked to help them out

:35:18.:35:22.

with a problem. We are not properly vetted chief executive. They are

:35:23.:35:30.

having to recruit nurses. We have a wonderful working relationship

:35:31.:35:33.

between the CCG, the hospitals, and the adult social care and health.

:35:34.:35:39.

Lots of pulling going on. Never the less, we are facing a 7 million

:35:40.:35:44.

deficit, and it is not a tariff that is is doing it. Would you please for

:35:45.:35:52.

it -- enjoy me for a constructive discussion to see what is happening?

:35:53.:36:02.

I think the Honorable Lady. I know that my Honorable friend was

:36:03.:36:08.

enlisted last year, and I plan to go back to Manchester in the next few

:36:09.:36:14.

weeks and the Northwest. I will go and do a regional tour so that I

:36:15.:36:22.

would very much like to meet her and talk to her chief executive. She

:36:23.:36:28.

raises an interesting point which is that the chief executives and many

:36:29.:36:33.

trust across the NHS have exceptional quality. It is easy to

:36:34.:36:38.

knock some of the managers and the NHS. There are some fantastic

:36:39.:36:42.

managers and I'm sure she has one and her constituency. He is aware of

:36:43.:36:49.

the upcoming tour. It sounds like a most exciting prospect. Can I ask

:36:50.:36:58.

the Minister to think very carefully about what is happened up and down

:36:59.:37:04.

the country where health trusts like my own and Huddersfield were very

:37:05.:37:09.

successful for many years, but only very recently and I think it's

:37:10.:37:14.

something to do with the destabilisation of the clinical

:37:15.:37:18.

commissioning groups, that so many problems have been entered into the

:37:19.:37:21.

general light of the hospital just to. We and Huddersfield do not want

:37:22.:37:27.

a closure of a and he and our hospital. We don't want the closure

:37:28.:37:33.

will of the main hospital and of a prisoner by a smaller one. Will he

:37:34.:37:36.

look carefully and forensically at what has happened and Huddersfield.

:37:37.:37:42.

And it's not just the whipping boy of the unfortunate independent

:37:43.:37:50.

financial arrangement that was made under John Major, but signed under

:37:51.:37:56.

Tony Blair. The Honorable gentleman is an experienced member of

:37:57.:38:00.

Parliament. He will know that there is a time when every organizations

:38:01.:38:04.

and changes in the structure of the NHS and the way the hospitals were

:38:05.:38:08.

disposed was decided in Whitehall. That has changed as a result of the

:38:09.:38:16.

2012 act. It is led by clinicians. Changes are led by local clinicians,

:38:17.:38:20.

and ultimately be sold secretary of state must defer to their opinion.

:38:21.:38:23.

There is an independent reconfiguration panel which

:38:24.:38:26.

stretches them and the secretary of state has also concluded that the

:38:27.:38:32.

local panel of clinicians have been correct. That is the right thing to

:38:33.:38:35.

do. In this case, I hope that we will do the same. I expect that we

:38:36.:38:40.

will. The look carefully at the individual concerns that he visits

:38:41.:38:43.

in the debate and mentor that I take them on board and really than to the

:38:44.:38:52.

CCG. The trust asserts my constituency, A constituencies are

:38:53.:38:59.

at a lack of -- a high. Stay away from A and mustered his life or

:39:00.:39:02.

death. The trust is predicting a deficit of ?29 million by the end of

:39:03.:39:07.

the financial year. By the staff work hard and difficult --

:39:08.:39:10.

circumstances, that the Minister believed that this is an example of

:39:11.:39:20.

a run NHS? There are many examples of success and the NHS. There are

:39:21.:39:28.

hospitals and CCG Z and community health organizations delivering

:39:29.:39:29.

exceptional care within the existing budgets. What we need to do is to

:39:30.:39:35.

make sure that the spread that practice and approach to care across

:39:36.:39:40.

the NHS. There are some parts that are not doing that, and it is in

:39:41.:39:48.

that ability to level up to universalize to ensure that everyone

:39:49.:39:51.

has the level of care that those in the best areas of the NHS already

:39:52.:40:01.

received. Last week my hospital trust reported a ?25 million

:40:02.:40:06.

deficit, and exact anon clinical regulatory freeze. This solution was

:40:07.:40:13.

to pay its chief executive 350 have been archived ?250,000. -- ?350,000.

:40:14.:40:31.

Given the honourable gentleman's record of statements given to his

:40:32.:40:35.

constituents I have to say I would prefer very much the clinicians

:40:36.:40:39.

running Imperial than I do his own comments about this. On the one

:40:40.:40:47.

hand, we had the secretary of state suggesting that he wants a seven day

:40:48.:40:53.

a week NHS which I presume is not an empty slogan, and on the other hand

:40:54.:40:58.

we hear that ministers are calling for headcount reductions. That

:40:59.:41:01.

suggests that we are asking for pure people in the NHS to work longer

:41:02.:41:06.

hours. That is a recipe for staff over shop -- stretch. If the

:41:07.:41:15.

Honorable gentleman that it mischaracterizes situation than he

:41:16.:41:20.

might then ask -- able to ask aboard coherent question. NHS improvement

:41:21.:41:31.

that was looking for state .gov -- savings. The number of clinicians

:41:32.:41:35.

under this party have increased by 16,000 since 20 time, and that is a

:41:36.:41:44.

record that we are proud of. Order! I am grateful to the Minister and

:41:45.:41:48.

colleagues. The click without proceed to of the day. Bank of

:41:49.:41:54.

England and financial services build board second reading. Thank you.

:41:55.:42:02.

Order! I must inform the House that I have selected the amendment in the

:42:03.:42:06.

name of the Leader of the Opposition. To move the second

:42:07.:42:11.

reading of the bill. I called the Minister. Hear, hear! I beg to move

:42:12.:42:23.

that this bill not regret a second time. Following the crisis the

:42:24.:42:31.

government reforms the UK system of financial regulation, replacing

:42:32.:42:38.

these failed tripartite system. We have also taken concerted action to

:42:39.:42:41.

improve conduct across the banking sector and deal with the abuses and

:42:42.:42:46.

unacceptable behaviour of the past. The Bank of England has rightly been

:42:47.:42:50.

put back in charge of financial stability, and the financial conduct

:42:51.:42:54.

and Authority is a watchdog protecting consumers from sharp

:42:55.:42:57.

practices and making sure that bankers comply with the rules. Quite

:42:58.:43:02.

rightly, the powers and governance of these important organizations are

:43:03.:43:05.

closely reviewed and this bill makes some modest changes to these. The

:43:06.:43:13.

bills has three main aims. The first is to further strengthen the

:43:14.:43:18.

government's transparency to put it in the best possible position to

:43:19.:43:24.

fulfil its vital role in delivering monetary and financial stability. It

:43:25.:43:27.

allows the National Audit Office into the bang for the first time in

:43:28.:43:31.

its centuries old history. The second aim is to build on a

:43:32.:43:35.

concerted action that the government has already taken to drive up

:43:36.:43:39.

standards and financial services by extending the senior managers and

:43:40.:43:43.

certification regime across the sector including a tough new duty of

:43:44.:43:47.

responsibility for senior managers. The third aim is to support a

:43:48.:43:52.

creation of a secondary market for annuities protecting consumers for

:43:53.:43:57.

extended agreement of the pension wife died in service at introducing

:43:58.:44:00.

a requirement which an effect and sure certain individuals who are

:44:01.:44:03.

seeking to sell their annuities have received appropriate financial

:44:04.:44:09.

advice. I will give way. Will the Honorable Lady agreed with me that

:44:10.:44:13.

one of the real problems in the culture of thinking that we all want

:44:14.:44:17.

to get right has been the role of the auditors? Auditors that should

:44:18.:44:24.

have been there and spotted the dangers, and should have blown the

:44:25.:44:28.

whistle, and they did not do that. Is it not the accountancy profession

:44:29.:44:32.

and auditors that at the moment is still not addressing. He is right to

:44:33.:44:40.

highlight the importance of auditors. I know there are other

:44:41.:44:43.

activities in this place which will be considering the roles of auditors

:44:44.:44:47.

and the crash, but I think that what he will welcome in this bill is the

:44:48.:44:51.

fact of the National Audit Office for the very first time will have

:44:52.:44:57.

the ability to devalue -- two studies within the bank of England.

:44:58.:45:03.

I gave way. I'd welcome the interviews for my Honorable friend.

:45:04.:45:09.

Audits are always employed by the managers of banks or companies and

:45:10.:45:14.

they should be representing shareholders. If they want their

:45:15.:45:19.

contracts renewed private auditors provide a soft option for the

:45:20.:45:26.

managers... Independent in the public sector. He has absolutely

:45:27.:45:33.

correct that this bill specifically focuses on the role of the National

:45:34.:45:38.

Audit Office. One independent arm of government. He is right that this

:45:39.:45:45.

bill is not particularly focused on the role of auditors and private

:45:46.:45:50.

companies, but I that there are other parts of parliament that would

:45:51.:45:55.

be considering that in this session. Going back to be Bank of England,

:45:56.:45:58.

but me turn first to the reforms of the bill remain to the bank of

:45:59.:46:03.

England. The bill brings port a set of evolution changes to the

:46:04.:46:06.

government transparency and accountability of the bank. To

:46:07.:46:09.

ensure that it is on the best possible footing to discharge its

:46:10.:46:14.

expanded responsibilities. These changes, but those taken by the bank

:46:15.:46:18.

itself as part of its one admission, one thing strategic plan. The PRA

:46:19.:46:24.

stops being a subsidiary of the bank and is run by a committee of the

:46:25.:46:29.

bank. Another deputy governor is able to join the court, and the

:46:30.:46:33.

Treasury will be able to see and a vehement letter to another

:46:34.:46:40.

committee. To strengthen the transparency we will give the

:46:41.:46:42.

National Audit Office the power to the deck value for body studies at

:46:43.:46:47.

the bank, and following debates and the other place and with the NAL in

:46:48.:46:52.

the bank we have made sure that this important change is implemented in a

:46:53.:46:54.

way that protects the independence of the bank policymaking and the

:46:55.:47:02.

independence of the NAL. If it is on this point. I welcome the fact that

:47:03.:47:10.

the NAO is going to be looking at the bank, but they will need extra

:47:11.:47:16.

resources. Will she guarantee that the picture people who are employed

:47:17.:47:22.

will be representing the shareholders and that they will not

:47:23.:47:30.

come from the banking exceptionally. He points out the importance of

:47:31.:47:34.

having the right resources and the NAO. I have not have any specific

:47:35.:47:38.

representations of this, but I'm sure that the NAO will have a way of

:47:39.:47:41.

making its feelings known shouldn't require those resources. We are also

:47:42.:47:46.

making some changes and this bill to the bank's governing body known as

:47:47.:47:52.

the court. With most strengthen the governance of the bank by

:47:53.:47:57.

transferring the court to oversee performance of the bank. Following

:47:58.:48:02.

discussions and the other place to help guard against good thing, we

:48:03.:48:07.

have amended the bill so that aim majority of nonexecutive directors

:48:08.:48:11.

on court will continue to be able to initiate reviews of the bank's

:48:12.:48:14.

performance without needing to secure the agreement of the court as

:48:15.:48:19.

a whole. We will integrate prudential regulation more fully

:48:20.:48:23.

into the bank by ending beeper Digital regulation Authority status

:48:24.:48:28.

as a subsidiary of the bank. The PRA board will be replaced by an new

:48:29.:48:31.

committee with soulless possibility of it in the bank for the PRA's

:48:32.:48:36.

budget. This is modelled on the monetary policy committee and the

:48:37.:48:40.

financial policy committee. These changes will be made while still

:48:41.:48:43.

protecting the PRA's operational independence for one darkroom

:48:44.:48:55.

in order to strengthen governance and make the structures of the

:48:56.:49:02.

government were consistent. The bill harmonizes the legislations which

:49:03.:49:04.

underpins the three policy committees of the bank. The MPC,

:49:05.:49:13.

SBC, and the proposed PRC. The film is the committee to at least eight

:49:14.:49:17.

meetings a year from encouraged 12, and updates requirements for the

:49:18.:49:22.

timing MPC publications implementing the remaining recommendations of the

:49:23.:49:27.

Walsh review. Transparency and the bank of England monetary policy

:49:28.:49:32.

committee which was published in 2014. Alongside these changes, the

:49:33.:49:36.

bill builds on the existing arrangements and a strong working of

:49:37.:49:42.

transiting the bank and the Treasury but updating a formal framework for

:49:43.:49:44.

how the bank and Treasury should engage with the judge at the macro

:49:45.:49:48.

each other on public funds and financial stability -- stability

:49:49.:49:55.

risks. While maintaining the existing clear and separable of the

:49:56.:49:59.

bank and the Treasury in the event of a crisis. I move now to the

:50:00.:50:03.

second element of the bill... On that point. There is only slight

:50:04.:50:15.

concern that we are moving towards less tension since the microsystem

:50:16.:50:22.

between any bank in the Treasury. That would worry me and other

:50:23.:50:27.

members of this house. Is that true? Is are still... I would have thought

:50:28.:50:34.

this was a healthy tension between the two. He is right to highlight

:50:35.:50:41.

the importance of the operational independence of the bank of England.

:50:42.:50:46.

That is something that Gordon Brown brought in and 1997 that was I think

:50:47.:50:53.

his greatest legacy to our country. He will note that the motion that

:50:54.:50:58.

his colleagues have put out on the order paper today actually gives a

:50:59.:51:05.

stronger role for Treasury in the parliament and less independence. I

:51:06.:51:13.

hope that he will not support his front bench in terms of the recent

:51:14.:51:18.

amendment that they put on the order paper today. If I a Mr Speaker, I

:51:19.:51:23.

would move now to the second element of the bill. Is this on the first

:51:24.:51:28.

element? Following the plan my honourable friend just made, more

:51:29.:51:31.

wary and would be if there was a close relationship between the NAO

:51:32.:51:36.

and the Treasury. The NAO should be resizable to this house. The

:51:37.:51:39.

Treasury should not be able to get its tentacles on the NAO. He is

:51:40.:51:46.

absolutely right to recognise that the NAO is completely independent of

:51:47.:51:49.

the Treasury. I have a nominal roll on the Public accounts committee

:51:50.:51:54.

that the NAO is accountable to Parliament. I now move... On this

:51:55.:52:04.

perception in. I welcome the move with the MPC and the FTC. Does she

:52:05.:52:13.

not have any anxiety about these FCA held on a limb with a different

:52:14.:52:20.

status to the other committees? He is absolutely right to highlight the

:52:21.:52:24.

fact that the FCA is set up completely differently. I want to

:52:25.:52:26.

stress the similarity is the operational independence. In terms

:52:27.:52:31.

of the FCA, the Treasury is obviously able to appoint the chief

:52:32.:52:37.

executive, but the operational decisions are for the FCA Board and

:52:38.:52:42.

as we has made that very clear in recent weeks. I move now to the

:52:43.:52:47.

second element of the bill which will make changes to the senior

:52:48.:52:51.

managers and certification regime. As honourable members will know, the

:52:52.:52:55.

government is committed to driving up standards of conduct across the

:52:56.:53:04.

financial sector. That is why the government is replacing the

:53:05.:53:06.

discredited approved person was seen with a much more group last system

:53:07.:53:13.

legislated for in the previous government. Mr Speaker, I find it

:53:14.:53:20.

quite extraordinary that in the amendment they tabled Honorable

:53:21.:53:24.

members opposite see fit to describe it as reducing regulation financial

:53:25.:53:29.

services. This bill is a vital opportunity to remove what the

:53:30.:53:38.

parliamentary committee described as a complex mess for 60,000 financial

:53:39.:53:44.

services firms. All insurers, FCA regulated investment firms, and

:53:45.:53:48.

consumer credit firms, and replace it with a more targeted and robust

:53:49.:53:52.

senior manager and certification regime. Let me set out the benefits

:53:53.:53:57.

of the new regime and maybe they will reconsider their position. The

:53:58.:54:01.

approved person regime is a relatively broad unfocused regime

:54:02.:54:05.

and which all individuals who were considered to hold significant

:54:06.:54:09.

influence functions in the firm or dealt with customers would be

:54:10.:54:11.

subject to the regulators preapproval at a tick box exercise.

:54:12.:54:20.

Clarity of the top of hers was inadequate. Firms could pass the

:54:21.:54:32.

buck. The senior managers and certification regime tackles these

:54:33.:54:38.

problems head on. Firstly, it focuses regulatory preapproval on

:54:39.:54:41.

senior managers the key decision-makers of the top of firms.

:54:42.:54:46.

It enhances the accountability of these individuals through statements

:54:47.:54:49.

of responsibilities, documents that give clarity on which a senior

:54:50.:54:53.

manager is responsible for each area of the firm's business. And through

:54:54.:54:59.

the proposed statutory duty which require senior managers to take

:55:00.:55:03.

reasonable steps to prevent breaches of regulations and their areas of

:55:04.:55:10.

response ability. I give way. I am grateful. Does the Minister agree

:55:11.:55:13.

with me that the senior managers regime now cuts through the

:55:14.:55:17.

accountability far more than the commission discovered. The

:55:18.:55:26.

regulatory regime at the time had the effect of enforcing senior

:55:27.:55:30.

managers to create ignorance on what is going on within their

:55:31.:55:33.

institutions. This act absolutely reverses that so that senior

:55:34.:55:37.

managers have to know what is going on but their institutions of a

:55:38.:55:43.

content responsibility. My honourable friend who was a

:55:44.:55:47.

distinguished member of the Parliamentary Commission on Banking

:55:48.:55:49.

is right to highlight that one of the issues that his committee --

:55:50.:55:56.

commission highlighted was a fax back the approved persons regime may

:55:57.:56:00.

be difficult to pin down besides ability. The purpose of this to

:56:01.:56:08.

regime with everything articulated that when managers are reported on

:56:09.:56:14.

an annual basis is a much stronger regime. It delivers more flexibility

:56:15.:56:20.

as well and the regulated infest the macro enforcement powers. Including

:56:21.:56:27.

those with whom they have not approved. In brief, this expansion

:56:28.:56:32.

of the new regime to all authorised financial services firms will

:56:33.:56:36.

enhance personal responsibility for senior managers as well as providing

:56:37.:56:41.

a more effective and proportionate means to raise standard of conduct

:56:42.:56:44.

for key staff are private. Given the imperative is that the regime with a

:56:45.:56:53.

statutory duty of response responsibility delivers, the reverse

:56:54.:56:59.

burden of proof is not necessary. Extending the new regime to all

:57:00.:57:03.

authorised financial services firms it is important to consider whether

:57:04.:57:07.

under these new circumstances the application of the reverse burden of

:57:08.:57:12.

proof to any or all friends as appropriate. The majority of the

:57:13.:57:15.

firms that the region will not apply to our small and it would not be

:57:16.:57:18.

proportionate to apply to these firms by retaining it for the

:57:19.:57:23.

banking sector alone Weavers raise serious

:57:24.:57:26.

I think the Minister for giving -- taking the point. The sheets

:57:27.:57:34.

labelled as happened in the two and a half years since the 2013 act was

:57:35.:57:41.

passed by her government to change to reverse the burden of proof what

:57:42.:57:48.

this change this to have years? The original measures are due to come in

:57:49.:57:56.

as he knows on the 7th of March 2016. What is becoming increasingly

:57:57.:57:59.

clear in terms of the reversed burden of proof is that, I think

:58:00.:58:04.

we've got some quotes here from Andrew Bailey, from the committee

:58:05.:58:11.

which the honourable gentleman sets, where he said and I quote, I support

:58:12.:58:17.

the change because what the change does is turn the process around

:58:18.:58:23.

empathy boxes on us, the regulator. I'd rather us have that. With legal

:58:24.:58:29.

questions around it over human rights. I do not want to come back

:58:30.:58:32.

or have one of my successes come back to you in the future and have

:58:33.:58:36.

to say I am sorry, we cannot use this regime in the way it would was

:58:37.:58:41.

intended. Because is always doubtful we can make it stick. I do not think

:58:42.:58:47.

this has the sufficient probability of being effective. I could read up

:58:48.:58:52.

rather quotes from other members of Parliament. I have to make some

:58:53.:58:59.

fairly rapid progress at this point. I would give when that point. It is

:59:00.:59:08.

the case, it surprised a good number of us on the treasury committee that

:59:09.:59:16.

both the PRA and the MCA -- SCA cable for us and supported the

:59:17.:59:25.

reversal of the burden of proof. -- at CA. She has made great emphasis

:59:26.:59:36.

on the need of the certification resume. Can she say whether she is

:59:37.:59:45.

asked for a report on a blessing those. And put in the public domain.

:59:46.:59:57.

Progress is inaccurate. -- United inadequate. In terms of

:59:58.:00:03.

implementation it is due to come into force on the 7th of March 2016

:00:04.:00:10.

that is pretty soon. In terms of rolling out, is going to photos of a

:00:11.:00:16.

larger organizations first. He is aptly writes that his committee, and

:00:17.:00:20.

I'm sure the treasury as well will want to see the regime rolled out as

:00:21.:00:27.

particularly two the systemic fans. For the 7th of March. Madam Deputy

:00:28.:00:35.

Speaker I'm going to turn out to the third topic of the bill, which is

:00:36.:00:41.

the extension of the important new freedoms this government is giving

:00:42.:00:43.

to allow people to take control of their retirement savings. It will

:00:44.:00:49.

help to make sure that those consumers who are able to a cell

:00:50.:00:53.

annuity income from the second market are supported. There are two

:00:54.:00:57.

key measures here, the first will extend the page and white service

:00:58.:01:02.

from those two April 2017 will be eligible to sell their annuity

:01:03.:01:05.

income to the secondary market and annuities. This whole include the

:01:06.:01:10.

offer of guidance to those of the income to the annuity. Bad Bennett

:01:11.:01:17.

varies -- beneficiaries as was the primary annuity holder.

:01:18.:01:27.

On the 19th of January at the Chancellor set out the

:01:28.:01:38.

governments... I would like to take this opportunity to announce this

:01:39.:01:41.

new duty will be introduced as a government amendment of this bill.

:01:42.:01:51.

I'm going to try and make some progress very quickly. The concern

:01:52.:02:06.

many had was advice required from modest annuities. Can she have a

:02:07.:02:09.

guarantee that what have been offered is actually advice and not

:02:10.:02:20.

merely guidance? He is right to highlight this distinction. His

:02:21.:02:23.

content to my constituents want help. They do not know whether

:02:24.:02:26.

they're asking for regulated advice or guidance. He will also be aware

:02:27.:02:32.

that we have done consultation market review. What closed in

:02:33.:02:39.

December. We are currently studying the responses to that consultation.

:02:40.:02:43.

With a view to seeing whether or not the current staging is appropriate

:02:44.:02:51.

and indeed legally. He would hear more this topic in due course. I

:02:52.:02:56.

need to make rapid progress now because I know there are many people

:02:57.:03:00.

want to contribute. The bill makes a number of changes. We are giving the

:03:01.:03:07.

secretary the power to make regulate. Those would be nonbinding

:03:08.:03:23.

Bremen letters. I'm more competitive framework for insurance businesses.

:03:24.:03:27.

Something that will help... Following debates and the other a

:03:28.:03:34.

change support our ambitions for a diverse financial sector financial

:03:35.:03:37.

sector by putting consideration of mutuality and other business

:03:38.:03:40.

organizations into both regulators guiding principles and there are

:03:41.:03:46.

also changes within existing banking groups... Pain of Scotland and

:03:47.:03:54.

Northern Ireland. Illegal moneylenders prey on vulnerable

:03:55.:04:00.

people in society. We will act now and is built to ensure that illegal

:04:01.:04:04.

money when the teams will have the funding they need to protect

:04:05.:04:09.

consumers and prosecute loan sharks. We will introduce an amendment in

:04:10.:04:15.

committee to give the treasury the power to protect people. The

:04:16.:04:22.

inimitable also to the power that the SCA would like a lady to fund

:04:23.:04:28.

their financial assistance. Madam Deputy Speaker in conclusion the

:04:29.:04:31.

measures that I've outlined today by the previous performance of

:04:32.:04:35.

financial regulations. The government has a commitment to

:04:36.:04:38.

delivering a settlement for financial services. By indicating I

:04:39.:04:40.

see now that the right honourable member is now on the opposition

:04:41.:04:45.

front bench by indicating he does not support this bill deposition

:04:46.:04:48.

have put themselves on the wrong side the argument. Hear, hear! By

:04:49.:05:06.

voting against this bill... They'll be voting against extending the

:05:07.:05:18.

benefits... By voting as the builder will be voting is making sure that

:05:19.:05:21.

those consumers who will be able to sell their annuity income through

:05:22.:05:25.

the new secondary market had access to pension white guidance and where

:05:26.:05:29.

appropriate take financial advice to support the decision. As well as

:05:30.:05:34.

that there'll be voting against proposals to put the new duty on the

:05:35.:05:39.

SCA to cap early exit charges for those of to access the pension

:05:40.:05:43.

freedoms. And ensure that illegal moneylending teams have the funding

:05:44.:05:47.

they need to protect consumers and prosecute loan sharks. Madam Deputy

:05:48.:05:55.

Speaker Labour Party was wrong then on financial services and it is

:05:56.:06:01.

wrong again today. The question is that the bill now be read as second

:06:02.:06:10.

time. They demanded that the Speaker. I date to remove the recent

:06:11.:06:15.

amendments on the order paper. Financial services have been

:06:16.:06:18.

discussed at length and let's upon in this house since the financial

:06:19.:06:25.

crash. The financial services act in just 12 and the reform in 2013 have

:06:26.:06:31.

been passed. The bank in England idol services bill now being brought

:06:32.:06:35.

to the south. This bill is made up of two parts. Firstly amendment and

:06:36.:06:39.

the charges of the Bank of England and family financial services. We

:06:40.:06:45.

believe the bickering led to carry out its work in the most efficient

:06:46.:06:52.

way possible with transparency and accountability in its

:06:53.:06:54.

decision-making. Serving it as of the people whose it is here to

:06:55.:06:57.

represent them. We also believe that the new bankers and the financial

:06:58.:07:17.

sector... And to... DeBakey crisis of historic proportions is thousand

:07:18.:07:22.

eight. Is it not the case that it was Labour who rescued banks in

:07:23.:07:28.

2008. It is now conservatives who are selling the shares of taxpayers?

:07:29.:07:37.

I think my Honorable friend for intervention, he she is quite

:07:38.:07:47.

correct. I think he is showing as well as his ablation in his numerous

:07:48.:07:51.

meetings and their outcome with Google. Effect of a revelation and

:07:52.:08:02.

services industry the sector serve the interest of the economy does not

:08:03.:08:06.

hurt people with small or medium-size businesses. Our country

:08:07.:08:13.

needs for long-term growth. Getting the balance of the Galatian right is

:08:14.:08:16.

an important task for any government. As a task which

:08:17.:08:21.

governments the world fail to fulfil the last decade. A task which has

:08:22.:08:26.

been attempted since the bankers crisis of 2008, but however it is a

:08:27.:08:35.

task that which today the government threatens to send back. The context

:08:36.:08:42.

of this bill is vital. To understand our concerns on the side of the

:08:43.:08:45.

house and the very reasonable concerns of the demands of the

:08:46.:08:50.

public, we are not eight years off and economic crises. The brought the

:08:51.:08:57.

financial services sector and the country to its knees. Saw banks to

:08:58.:09:05.

begin failed build up by the state. What has he learned about the

:09:06.:09:14.

mistakes but it is made under Labour we saw the successes he is not

:09:15.:09:19.

talking about? I think the Honorable member for his intervention.

:09:20.:09:31.

Concerned members at the time... This bill shows that the banking

:09:32.:09:37.

crisis have not been learned on this side of the house. So eight years

:09:38.:09:44.

later because behaviour and bankers bonuses remain in the news. It's

:09:45.:09:49.

additional fines continue with hundreds of millions of pounds

:09:50.:09:53.

issued and finds but still only one person in prison despite all the

:09:54.:10:03.

damage done and despite a series of commissions. We should all know the

:10:04.:10:11.

public remain angry about what a number of top bankers did to our

:10:12.:10:15.

economy and to our society I would give way to my Honorable friend.

:10:16.:10:20.

Thank you. You make an excellent speech. It was astonishing double

:10:21.:10:26.

for 2008 the bringing sector did not appear to spot the crisis that was

:10:27.:10:31.

coming because it was to busy making money for themselves. They demanded

:10:32.:10:37.

that these bigger and I think my Honorable friend who has extensive

:10:38.:10:42.

experience in these matters. It is rather troubling the same people who

:10:43.:10:46.

now say there is no risk of financial trite crisis ever again

:10:47.:10:49.

with the very same people in the very same sector that were saying

:10:50.:10:52.

before the government agent that everything was fine. There was no

:10:53.:10:56.

risk of disaster at the time. How wrong they were. Despite the

:10:57.:11:04.

entirely justified anger about what the bankers did to our economy and

:11:05.:11:11.

to our society, the Chancellor has turned the beggars crisis into a

:11:12.:11:14.

crisis of public spending. With the policy of sending cards which there

:11:15.:11:23.

seems to be no end in sight. Looking at this bill it appears the

:11:24.:11:26.

Chancellor believes he can now turn back the clock in the banking and

:11:27.:11:32.

financial sector. Under this Chancellor things are going in the

:11:33.:11:38.

wrong direction. He is old enough shares with a very significant loss

:11:39.:11:47.

of the taxpayer. He appointed Angela Knight and defended the top bankers

:11:48.:11:54.

of the tax crisis. And decided he could do without the continue

:11:55.:11:57.

services of the respected chief executive of the Financial Conduct

:11:58.:12:06.

Authority, margin weekly. We've been told that his successor planned sure

:12:07.:12:13.

the Chancellor is finally being appointed its fine with the reverse

:12:14.:12:18.

burden of proof. I wonder if it's prematurely departed predecessor

:12:19.:12:24.

would have said the same was back the SCA's public review assets that

:12:25.:12:30.

other counsel in its investigation of the promotion of tax evasion by

:12:31.:12:33.

HSBC has been brought to a premature conclusion. I know that we will be

:12:34.:12:38.

hearing more about the SCA any debate in this house this evening.

:12:39.:12:48.

The government presents the services bill. To make changes to the Bank of

:12:49.:12:56.

England's structure however this is a key concern added this bill is a

:12:57.:12:59.

major change the regulation of senior bankers. In order to attempt

:13:00.:13:11.

to change senior bankers conduct and deliver treasure in the and

:13:12.:13:14.

accountability in decision-making. I'm talking of the presumption of

:13:15.:13:21.

response ability. An so-called reverse burden of proof. Firstly I

:13:22.:13:27.

wish to say we welcome the extension of the senior manager regime to

:13:28.:13:31.

senior managers of all regulators financial firms. We do not accept

:13:32.:13:37.

the governments case for ending the presumption of responsibility the

:13:38.:13:42.

top managers in baking. The presumption of responsibility has

:13:43.:13:47.

currently set out a place managers. While there has been a regular later

:13:48.:13:54.

contravention responsible. In order to be found if you missed out

:13:55.:14:02.

misconduct in. This bill removes that own this on senior bankers. The

:14:03.:14:10.

onus is entirely reasonable and entirely proportionate. This

:14:11.:14:17.

experience tells the reddish people it is entirely necessary. Misconduct

:14:18.:14:20.

and misdemeanors and financial services are not merely a till from

:14:21.:14:27.

history, and 2015 the FCA had to find firms over ?900 million. There

:14:28.:14:37.

were the scandal, and finds I will give way. The minister indicated

:14:38.:14:46.

that voting against this bill members would be put in members of

:14:47.:14:53.

the public at risk from further abuses. Voting against this bill and

:14:54.:14:59.

getting a change so that the reverse burden of risk is put back in place

:15:00.:15:03.

that we are actually safeguarding against the abuses of the past. They

:15:04.:15:11.

demanded that the Speaker, I think my Honorable friend for playing this

:15:12.:15:15.

that's a point. People outside this place will be shocked to hear that

:15:16.:15:20.

as a result of his bill senior bankers in the top firms will have

:15:21.:15:24.

less guards on a personal response ability. I will give way. I think

:15:25.:15:32.

the honourable gentleman for giving way. The measures he objects to our

:15:33.:15:41.

clause 22 of this bill. Why is the voting against these measures? They

:15:42.:15:50.

demanded that these bigger, maybe others to to her that derailed parts

:15:51.:15:56.

of the wrist of that amendment of the circuits as it is the right

:15:57.:16:00.

thing to do. It is so reasonable and necessary in fact the policy was

:16:01.:16:03.

introduced with Kosovo supports that she had forgotten and was really

:16:04.:16:11.

proposed by the punditry of any standards led by the party opposite

:16:12.:16:20.

of the Labour Party. And with the Democrats new debates of the new

:16:21.:16:25.

minister who moved into law. I have to echo a point BBC made by the

:16:26.:16:31.

Honorable member sitting in the front bench that was passed as

:16:32.:16:38.

recently as December 2000 13. The resumption of responsibility has yet

:16:39.:16:44.

to come into effect. It into effect in March this year. And remains

:16:45.:16:47.

untested. The muster member this is a safeguard brought in by the very

:16:48.:16:51.

same Chancellor who is now seeking to scrap it. The results of

:16:52.:17:02.

responsibility has now gone. Ashley has the result of responsibility has

:17:03.:17:10.

everyone... Some of these banks have been affected by this are actually

:17:11.:17:19.

interestingly what has been interesting that the reverse burden

:17:20.:17:23.

of proof is now been reversed. That man is to be take box operation and

:17:24.:17:29.

now although they've got is a much more responsibility for management

:17:30.:17:33.

than they ever had before. As a far stronger measure... Thank you. Every

:17:34.:17:49.

time we have received correspondence from bankers those matter, every

:17:50.:17:53.

time we have been listening to bankers in this matter, they seem

:17:54.:17:56.

desperate for the reverse burden of proof to be scrapped. They were

:17:57.:18:00.

saying how dreadful it would be and how it is totally unjustified in

:18:01.:18:04.

their view. This regime is fine and we can just return the things and

:18:05.:18:08.

there's no of repeat of the financial crisis a thousand eight

:18:09.:18:11.

interview. Virtually I do believe they were wrong. We need to remember

:18:12.:18:17.

that this presumption of responsibility of the reverse burden

:18:18.:18:20.

of proof with a safeguard brought in by the very same Chancellor who is

:18:21.:18:24.

now seeking to scrap it. In 2013 the Chancellor said that he had called

:18:25.:18:30.

for a thorough and intense investigation into how to improve

:18:31.:18:36.

standards the banking system and how the Parliament has delivered. The

:18:37.:18:41.

Chancellor has announced that he was pleased. Of course as many

:18:42.:18:48.

recognitions was this promote -- presumption of response ability. The

:18:49.:19:01.

Chancellor was not alone. Indeed the Honorable member for the party

:19:02.:19:06.

opposite Day and financial secretary, explained he was

:19:07.:19:08.

introducing new rules to promote higher standards of all bank staff.

:19:09.:19:13.

He said his government was reversing the burden of proof to the senior

:19:14.:19:18.

staff are held accountable regulatory breaches. Will the

:19:19.:19:27.

Honorable member from a party opposite who was briefly on the

:19:28.:19:32.

treasury, said it is critical to bringing about the individual

:19:33.:19:38.

accounts ability that members want to see across our financial sector

:19:39.:19:42.

that you want to see across the regime reversing the burden of

:19:43.:19:50.

proof. Although steps are vital. His party colleague, the Honorable

:19:51.:19:54.

member from Northeast Cambridge said that there cannot be any doubts

:19:55.:19:57.

about the rep -- merits of reversing the burden of proof. They reversed

:19:58.:20:01.

the burden of proof is assuming welcome. I could go one further.

:20:02.:20:07.

Instead I'll ask a question that deputy speaker, what has changed?

:20:08.:20:13.

What or who has so dramatic a change there mind of the Chancellor that

:20:14.:20:20.

the treasury committee in October the Honorable member with the

:20:21.:20:23.

question many of us are thinking when he asked the Chancellor whether

:20:24.:20:28.

they proposed scrapping the other prisoners of responsibility was in

:20:29.:20:32.

his words, largely a result of long grain by the banks which has the

:20:33.:20:37.

flavour of getting stronger. I will do. I interesting argument that he's

:20:38.:20:46.

making, and a very powerful speech. We agree with me in the Chancellor

:20:47.:20:49.

has said that he had not met with the banks in the lead up to the

:20:50.:20:54.

general election. He met with bankers on five separate occasions.

:20:55.:20:58.

Does the general election presumably to discuss this bill. The Chancellor

:20:59.:21:08.

is a victim of Stockholm syndrome. Thank you. Of course it is correct

:21:09.:21:16.

that Chancellor meets with senior bankers. What does concern me and

:21:17.:21:23.

concerns many people as it is late, is that the Chancellor appeared to

:21:24.:21:33.

be acting in their interests. Following the comments by the

:21:34.:21:38.

Honorable member for Newark who told the media of the Begu it is in their

:21:39.:21:45.

political masters were captured by banking leaders in the run-up to the

:21:46.:21:50.

meltdown, it is my Honorable friend that concerned that's... Thank you.

:21:51.:22:02.

He hits upon a very important point, the role of the city minister. The

:22:03.:22:09.

role of a shadow city minister, and the role of the government is not to

:22:10.:22:13.

represent the interests of the city to population, but it is to bill

:22:14.:22:19.

their Democratic function. The government is not there to take the

:22:20.:22:23.

orders of the City of London. Guess you must listen to the City of

:22:24.:22:27.

London and value their contribution. But they're not the public. --

:22:28.:22:33.

representative on earth. I will continue my reflections on a change

:22:34.:22:37.

of mind or cut -- Chancellor has had. He asked his Chancellor and

:22:38.:22:45.

very logical sensible risible question. He asked why did you not

:22:46.:22:51.

wait for the regime to come divorce. To enable assessment of it. How it

:22:52.:22:57.

works. Before admitting this for the change. It is a change based upon no

:22:58.:23:03.

evidence. That is the worst kind of change possible. That was a very

:23:04.:23:09.

serious question posed, indeed. Of course banks are having to put

:23:10.:23:16.

significant effort to meet requirements of the 2013 bill. When

:23:17.:23:22.

that bill was supported on a cross party basis in parliament, this was

:23:23.:23:31.

already abundantly clear. Now the concern has a medical U-turns and

:23:32.:23:34.

decided to test the procedures that supported in the first place. It is

:23:35.:23:39.

rare indeed for a poor measure to be abolished before it even been

:23:40.:23:43.

introduced. How the public feel when they learn the Chancellor is

:23:44.:23:48.

strapping a duty on senior managers in banks, a duty that was welcomed

:23:49.:23:54.

as necessary across party basis before it even been admitted. The

:23:55.:23:59.

public's D concern of the behaviour of senior bankers should extend it

:24:00.:24:05.

to the Chancellor who it appears are doing the bankers bidding. Doesn't

:24:06.:24:12.

that Chancellor and does this government understand the widespread

:24:13.:24:15.

anger and distrust amongst the public when it comes to the banking

:24:16.:24:19.

system. The public are quite right to remember that because of the

:24:20.:24:27.

bankers behaviour people lost their homes. Because of the bankers

:24:28.:24:33.

behaviour people lost their jobs. We should not ever forget that was the

:24:34.:24:37.

bankers crisis that caused the deficit which this government has

:24:38.:24:41.

relied upon as justification for the political choice to go public

:24:42.:24:48.

services, to come public funding, to the incomes of working people, and

:24:49.:24:51.

to cut support of the most vulnerable people and our

:24:52.:24:54.

communities. I will give way. Thank you. In 2005 there was a ?43 billion

:24:55.:25:03.

budget deficit. Number for the banking crisis, there was a struggle

:25:04.:25:08.

deficit to the breaking prices brought out. Thank you. He makes a

:25:09.:25:21.

point that does not bear too much political scrutiny. It was the case

:25:22.:25:27.

the global financial crash caused the huge increase in the deficit and

:25:28.:25:37.

also stalled and halted the economy. It also gave the government the

:25:38.:25:42.

opportunity to have a reason to carry out its ideological desire to

:25:43.:25:50.

cut the way of the states and to cut public services. This bill comes to

:25:51.:26:00.

us from the other place but has been considered an debate from every

:26:01.:26:08.

state. The bill has changed. In our recent amendments recognise that

:26:09.:26:15.

changes are indeed welcome. The bill has not changed significantly

:26:16.:26:18.

enough. The bill is into parts and with regard to the first part of

:26:19.:26:22.

bill we do recognise some positive movements. That was insufficient.

:26:23.:26:35.

Any powers of oversight of new modes. -- movements. The government

:26:36.:26:42.

has moved on his proposed power of veto. On a national audit of

:26:43.:26:51.

investigations. It remains under negotiation and remains unpublished.

:26:52.:26:58.

With the other assets of the House of Lords that was not under

:26:59.:27:01.

agreements. Average the Chancellor asking for the memo of referendum be

:27:02.:27:05.

presented to this house while this bill is making its passage through

:27:06.:27:09.

Parliament. The minister has responded explaining that the

:27:10.:27:14.

memorandum of understanding is not complete. The discussions... The

:27:15.:27:21.

Minister has explained that she will write the government of the Bank of

:27:22.:27:30.

England to see if they will be a position to share the passage of the

:27:31.:27:40.

bill. In a case of this, it can only be right of this house job site to

:27:41.:27:45.

understand any question that transpires would be a cause of

:27:46.:27:51.

concern. The bill replaces the authority with a new relation

:27:52.:27:55.

committee and appears of all sides including those in the government's

:27:56.:28:03.

side had expressed concern... Have I have arguments that link met Deputy

:28:04.:28:09.

Speaker the bill also replaces the results of responsibility for the

:28:10.:28:11.

duty of responsibility and the opposition peers challenge this at

:28:12.:28:19.

report stage there was the government on the script through on

:28:20.:28:30.

this measure. It would be that the scrapping of the responsibility is

:28:31.:28:35.

it highly controversial and entirely reasonable. A Slade is not the case.

:28:36.:28:40.

Is any wider context of the Chancellor new financial services do

:28:41.:28:43.

this in particular gives us real cause for concern. Madam Deputy

:28:44.:28:49.

Speaker, we believe we need healthy and effective banking sector that is

:28:50.:28:53.

appropriately regulated and serve the interest of the whole economy,

:28:54.:28:58.

does I hurt ordinary people, and though this vital needs for

:28:59.:29:05.

long-term growth. We believe the conservative government climbs down

:29:06.:29:10.

from responsibility that previously supported will hinder, not help the

:29:11.:29:15.

film its. Personal responsibility is vital for the operation of our

:29:16.:29:22.

regulatory system. This policy by the Chancellor reduces the personal

:29:23.:29:29.

responsibility which the prominent commission recommended in its 500

:29:30.:29:38.

major sport -- page report. It does not make any sense unless of course

:29:39.:29:41.

the Chancellor is just following bankers orders. The startling and

:29:42.:29:48.

precipitous scrapping of a widely welcome measure show that there is a

:29:49.:29:51.

very real risk of failing to learn the lessons of the bankers crisis.

:29:52.:29:58.

That concern of our parts is very much wider than the presumption of

:29:59.:30:02.

responsibility but also to the role of the government and the work of

:30:03.:30:06.

the SCA in the programme of selling off for example RBS shares at a loss

:30:07.:30:14.

to the taxpayer. It says let's get back to business as usual. Is the

:30:15.:30:19.

bankers business as usual that brought Britain to the brink. And

:30:20.:30:22.

with the bankers business as usual that caused the deficits, and

:30:23.:30:29.

returning to business as usual will make another financial crisis with

:30:30.:30:32.

disastrous consequences for those we to represent in this place even more

:30:33.:30:38.

likely. And that's in order to clear up any confusion, as why we are

:30:39.:30:41.

asking government to date for our recent That is remind that the 12

:30:42.:30:50.

children people wishing to speak in this debate. It's important debate

:30:51.:30:55.

to follow. So everyone restricts himself to ten minutes including

:30:56.:30:59.

interventions, everyone will get in and will have plenty of time for the

:31:00.:31:03.

backbench debate. And to set an example the chairman of the banking

:31:04.:31:09.

I feel I may disappoint you slightly but I will do my very best. LAUGHTER

:31:10.:31:16.

. I just want to fine a point of agreement. I strongly agree that

:31:17.:31:21.

there is widespread mistrust of the banks still and a great deal of

:31:22.:31:24.

damage has been done. I think it is agreed that there is a lot more work

:31:25.:31:27.

to do to sort it out. There is a lot more work to do from the banks as

:31:28.:31:34.

well. To demonstrate that they are worthy of trust, the recent kind of

:31:35.:31:37.

scandals and the IT failures are just too examples of how much

:31:38.:31:41.

further we have to go. Rather than talking in great detail about the

:31:42.:31:45.

Clause of this bill, I think it might be helpful to take advantage

:31:46.:31:49.

of the second reading debate to say something more generally about the

:31:50.:31:51.

progress we have met with regulation. The last time that a

:31:52.:31:57.

banking bill was brought before parliament into thousand 12, on

:31:58.:32:01.

behalf of the Treasury committee, asked the government to think again,

:32:02.:32:06.

and described the bill as defective. And that parts of the bill are

:32:07.:32:10.

virtually useless. They listened to what the Treasury commission had

:32:11.:32:17.

said and they change the bill. Electrification, adequate

:32:18.:32:19.

electrification of the rink is now part of legislation. This time I

:32:20.:32:23.

don't think there is need for fundamental rethinking. This bill is

:32:24.:32:27.

very much in the right direction. It brings the bank more up-to-date as

:32:28.:32:32.

an institution and in doing so it should greatly improve the scope for

:32:33.:32:35.

making the bank accountable to follow and the public. Into thousand

:32:36.:32:41.

11, the committee published a report Anaheim's proportion of the

:32:42.:32:45.

proposals in this bill originate or have reached in that report. This is

:32:46.:32:50.

the sixth piece of legislation in the House that the House is been

:32:51.:32:53.

asked to look at in response to the financial crisis. As I said a moment

:32:54.:32:58.

ago, before examining the specific measures, it is helpful to keep all

:32:59.:33:03.

this in perspective. Banking supervision has been rethought and

:33:04.:33:06.

fundamentally reconstructed three times in the past 30 years. That is

:33:07.:33:11.

a heck of a lot in historical perspective. The bank of England

:33:12.:33:15.

initially resisted most of these changes. First they resisted the

:33:16.:33:21.

creation of the vacancies supervision, that in 1998 the bank

:33:22.:33:25.

complained it had not been consulted about the new supervisory body of

:33:26.:33:29.

the FSA. On that occasion of course maybe they were right. Gordon

:33:30.:33:34.

Brown's creation of the FSA separated banking supervision from

:33:35.:33:37.

central banking and it brought a new light touch approach to supervision

:33:38.:33:44.

in body principle, that will make some clear rules. If you'll comply

:33:45.:33:49.

with them, we went into fear. This left far too much scope for

:33:50.:33:53.

responsible buccaneers to pursue reckless business strategies,

:33:54.:33:59.

sometimes by myopic shareholders. At the same time the bank decided to

:34:00.:34:03.

define his role much more narrowly and concentrate on his new

:34:04.:34:07.

responsibilities. In doing so they were seduced by the benign economic

:34:08.:34:13.

conditions at the time, which recall the great moderation and just as bad

:34:14.:34:17.

was reassured by the audited, but nevertheless misleading and in some

:34:18.:34:21.

cases useless accounts of the Big Bang. The Treasury committee is

:34:22.:34:25.

trying to do something about inadequate auditing right now. The

:34:26.:34:31.

bank neglected its stability responsibilities right through the

:34:32.:34:35.

period up to thousand seven. It felt to rise to the challenge, what

:34:36.:34:40.

liquidity seized out into thousand seven. Perhaps worst of all, the

:34:41.:34:44.

statutory responsibilities of the FSA and the banks created a large

:34:45.:34:49.

supervisory gap. Nobody paid enough attention to the banking systems as

:34:50.:34:53.

a whole. Even when it was known for example that the banks were becoming

:34:54.:34:59.

excessively reliant on wholesale deposits for funding. In principle

:35:00.:35:03.

it was to be filled by the circle tripod hide. That money in value.

:35:04.:35:08.

This is very relevant to the NL you that is being referred to. In

:35:09.:35:12.

practice it was considered as an irrelevant backing to the

:35:13.:35:16.

tripartite, by all three of the parties at the time. Its principles,

:35:17.:35:22.

we later learned, never met prior to the crisis. Parliament was largely

:35:23.:35:28.

asleep on the job. We were all looking through a glass darkly. Some

:35:29.:35:37.

raise is of concern. For what it's worth I argue that the tripartite

:35:38.:35:45.

was an accident waiting to happen. The government was neglecting

:35:46.:35:48.

systemic risk. Those were all partial warnings. There was no

:35:49.:35:52.

particularly comprehensive picture. The multiple failures up to thousand

:35:53.:35:56.

seven were certainly not just a result of bad supervisory

:35:57.:36:01.

arrangements. These were aggravated by complacent government and the

:36:02.:36:08.

city Parliament. -- sleeping public. To some degree but still feel

:36:09.:36:15.

failing. Shareholder discipline in particular was and is still lacking.

:36:16.:36:20.

Limited liability brings a limited sense of responsibility. It implies

:36:21.:36:25.

an unlimited possibility on taxpayers. The bailouts have added

:36:26.:36:30.

to moral hazard. They have made it essential that the objectives and

:36:31.:36:35.

organizations of banking supervision of the fundamentally rethought.

:36:36.:36:40.

Hence we got to where we are now, Twin Peaks. Crudely supervision is

:36:41.:36:46.

lacking. Thanks and the SCA is it possible for conduct. This is an

:36:47.:36:56.

amazing experiment. Its parents need particular care. That means a

:36:57.:36:59.

particular responsibility for Parliament to keep an eye out. The

:37:00.:37:05.

number of issues have already presented themselves for attention,

:37:06.:37:09.

for example it is becoming clear that the progenitor risk management

:37:10.:37:13.

is not just about adequate capital, but proper conduct of business. The

:37:14.:37:19.

shocking treatment that we have seen, meeting out to customers has

:37:20.:37:23.

triggered massive fine. UK banks have paid about ?30 billion in fines

:37:24.:37:28.

since to thousand nine. In theory does fines should be enough to wake

:37:29.:37:34.

up even the sleepiest shareholders. But so far they have not. Certainly

:37:35.:37:41.

not enough. The systemic implications of conduct risk also

:37:42.:37:44.

make it essential that the Bank of England and the FCA be better

:37:45.:37:47.

coordinated than they were in the days of the calamitous tripartite.

:37:48.:37:51.

Parliament needs to keep a close eye on that. But important of all, the

:37:52.:37:59.

bank has huge new parts, some which are enhanced in this bill. Our runs

:38:00.:38:03.

itself can no longer be left to the bank. It is a matter of considerable

:38:04.:38:08.

public importance. That is why the Treasury committee has been present

:38:09.:38:12.

for years. The bank should abandon the style of government with a

:38:13.:38:19.

failing are not as a court of. They need a modern system. One fit for

:38:20.:38:27.

the. That is where this bill comes in. It does a good of the statutory

:38:28.:38:32.

heavy lifting to enable a modern board to be created. The bill

:38:33.:38:36.

rationalizes the demarcation. This is the main effect of the bill. The

:38:37.:38:41.

bill but rationalizes the debarkation of the backcourt and the

:38:42.:38:45.

executives of the bank, which previously contained some curious

:38:46.:38:47.

anomalies created after after to thousand seven, by underground

:38:48.:38:54.

policymaking. The PRA will no longer be a subsidiary of the bank. There

:38:55.:39:00.

will be a part of the bank. PS PC will no longer be a subcommittee of

:39:01.:39:04.

court. The oversight of the executives will be a responsibility

:39:05.:39:07.

of the courts itself, rather than the subcommittee. The bill also

:39:08.:39:16.

provides for the appointment of another deputy governor. Perhaps in

:39:17.:39:20.

passing I say over the 300 years that the banks have been around.

:39:21.:39:24.

They have managed to rub along quite well with one governor. In 1998 it

:39:25.:39:31.

acquired a second one. Then the financial services act into thousand

:39:32.:39:33.

Aitken financial services. Now we told it needs a fourth. I wonder how

:39:34.:39:41.

many we really need. Maddow deputy Speaker, it is great to the credit

:39:42.:39:44.

of the current government that they grasp the importance of being

:39:45.:39:48.

required to explain themselves before Parliament in greater depth.

:39:49.:39:52.

The bank initial resistance to the Treasury committee, have largely

:39:53.:39:59.

evaporated. With accountability they have graphs and can come greater in

:40:00.:40:07.

a greater enhanced authority. Scrutiny, far from weakening the

:40:08.:40:12.

banks effectiveness can enhance. The bill also provides for the

:40:13.:40:15.

Comptroller and auditor General to have for the first time in a role in

:40:16.:40:18.

the audit of the bank accounts. That sounds sensible at first, but that

:40:19.:40:24.

was an easy win for the chips are budgeted. But Madam Deputy Speaker,

:40:25.:40:29.

I think it's flatters to deceive. We certainly should not expect too much

:40:30.:40:35.

of it. The NAL lacks the expertise to do this kind of work. They are

:40:36.:40:40.

already trying to rectify that by hiring some people. There are extra

:40:41.:40:45.

cost involved. There is a bigger risk. I'm sure they can learn the

:40:46.:40:49.

skills. It is essential that the controller should not be induced

:40:50.:40:54.

whether by accident or by design. They should not bring pressure on

:40:55.:40:57.

the bang in a way that had the first leak -- adversely affect. All the

:40:58.:41:06.

funding. This is not an idle concern Madam Deputy Speaker. After 1997, I

:41:07.:41:11.

am told the bank was encouraged with all the changes that were being

:41:12.:41:15.

made, with supervision going to the FSA to save money. The bank cut back

:41:16.:41:23.

about -- amount they were spending on financial stability and lost some

:41:24.:41:29.

of its institutional experience of financial crashes, high-quality

:41:30.:41:32.

people as a result. What might have looked like a good value for money

:41:33.:41:36.

ideally, with time turnout in retrospect to be a big mistake. Sign

:41:37.:41:44.

up at the end AO treads carefully. Strong value for money might I add.

:41:45.:41:49.

Then there is the risk that the over mighty government problem is now

:41:50.:41:54.

reinforced by the removal of the PRA subsidiary status. The independence

:41:55.:42:01.

of the PRA or PRC as it will now be its essential. A singles point of

:42:02.:42:06.

systemic risk in the government exist. Parliament will need to keep

:42:07.:42:11.

alert to protect the PRA for independence. On that score, I think

:42:12.:42:16.

more transparent to good health. I have a proposal of my own. The PRA

:42:17.:42:25.

could itself consider making more of its rulings, not just to the

:42:26.:42:33.

managers but also to shareholders. That is the people supposed to be

:42:34.:42:36.

responsible for these companies. It would also cost me, making the

:42:37.:42:43.

information public. At the same time, a rebuilt and provide

:42:44.:42:47.

opportunity for challenge to the PRA as reasons for its rulings. Said

:42:48.:42:52.

this should be considered. I think there's a lot more to think through

:42:53.:42:56.

before it can be done. In the meantime, the PRA appears to be

:42:57.:43:01.

accepting and relating and more modest proposal of the Treasury

:43:02.:43:05.

committees. That relates to banking and competition. It is well-known

:43:06.:43:09.

that the challenge of banks knew in the market can be impeded by orders

:43:10.:43:14.

capital requirements. A few weeks ago, I wrote to the chief executive

:43:15.:43:18.

of the PRA to suggest that the average of capital requirements

:43:19.:43:20.

established be published, together the average -- average of challenges

:43:21.:43:25.

so a comparison could be made between the too. I am pleased to say

:43:26.:43:30.

the PRA are now looking into that. Madam Deputy Speaker, right at the

:43:31.:43:33.

heart of the bill is a strengthening of the court. A strong support is

:43:34.:43:36.

needed to ensure the policy committees are doing what they

:43:37.:43:41.

should be doing and they will need to be forthcoming when the Treasury

:43:42.:43:43.

committee asked them for technical and other support. When we need

:43:44.:43:51.

information and reports, occasionally for investigations, we

:43:52.:43:54.

will expect the court to be cooperative. Before I sum up, just

:43:55.:44:04.

one relatively minor point I'll request has not been renamed the

:44:05.:44:08.

board of the Bank of England. That is a mistake. What's in a named? I'm

:44:09.:44:14.

a strong supporter of most traditions except when they get in

:44:15.:44:18.

the neck -- a way of good out come. This one is on the cusp at best.

:44:19.:44:27.

Perhaps the Chancellor has been slipped -- to slipped up in

:44:28.:44:30.

18th-century court. I think it's time it went. Now with six

:44:31.:44:37.

relatively new pieces of legislation called sometime should pass now to

:44:38.:44:40.

establish their effectiveness. That will mean a lot of lead work to buy

:44:41.:44:45.

supervisors and regulators to implement. A couple of quick

:44:46.:44:48.

examples will suffice and that I will sum up. First, regulators have

:44:49.:44:54.

not reached the point where they can allow a bag to fail. They have told

:44:55.:44:59.

us this. What does that mean? That means that the taxpayer could still

:45:00.:45:05.

be at risk. Secondly, several banks still seemed to be to manage, posing

:45:06.:45:12.

a threat to financial stability and increasing the risk of misconduct.

:45:13.:45:17.

The proposals of the banking could -- commission will address that

:45:18.:45:21.

direct. Detailed invitation toward certification and particularly has

:45:22.:45:24.

been produced under so far. I was concerned that the Minister is not

:45:25.:45:29.

pressing more vigorously to make sure that certification of the FSA

:45:30.:45:36.

model will be fully implemented. I would like to end with just one part

:45:37.:45:41.

observation. With all the legislation, we are making some huge

:45:42.:45:46.

demands on both the bank and the SCA. It may be that we are close to

:45:47.:45:49.

the point of revelatory and supervisory overload. By that I mean

:45:50.:45:55.

the government and parliament could be raising expectations of what they

:45:56.:45:59.

can achieve and to appoint where they will never be perceived to have

:46:00.:46:06.

succeeded. We need to ask just how much national regulation can achieve

:46:07.:46:10.

in an open financial world. The truth is, perhaps not that much.

:46:11.:46:17.

Certainly less than we think. We probably can't stop the next

:46:18.:46:21.

financial crisis. The best we can hope for is to delay it, to reduce

:46:22.:46:28.

its impact by developing somewhat stronger institutions, including

:46:29.:46:31.

financial institutions, and to give us a better prospect from regulators

:46:32.:46:34.

who are a bit more alert and prepared than they were into

:46:35.:46:37.

thousand seven and to thousand eight. In the long one, competition

:46:38.:46:43.

must take more of the regulatory strength. In markets for most

:46:44.:46:47.

products and services, customers can go with their feet. Barriers to

:46:48.:46:53.

market entry are tolerably low. Businesses with weak balance sheets

:46:54.:46:58.

or poor standards they go to the wolves. But neither of those are the

:46:59.:47:02.

case in banking. We are a long way from that point, where competition

:47:03.:47:07.

can be a full substitute even for conduct regulation. The contagious

:47:08.:47:11.

risks inherent in the banking system would make supervisory withdrawal in

:47:12.:47:16.

the market even more hazardous. So until competition is much stronger,

:47:17.:47:21.

and marketed disciplines warmer straight, there'll be no substitute

:47:22.:47:26.

for strong and interventions Bank of England as an effective condo

:47:27.:47:31.

regulatory. Therefore overruled and with some weaknesses, and this bill

:47:32.:47:35.

takes a step in the right direction. It takes a step in the direction of

:47:36.:47:42.

supporting that direction. Hear, hear!. We have about ten minutes.

:47:43.:47:54.

LAUGHTER. It is always a great pleasure to follow the member who

:47:55.:48:00.

chairs the Treasury committee. 99 times out of a hundred I would bow

:48:01.:48:06.

to his wife words indeed. His father Terry of knowledge also leads me to

:48:07.:48:10.

think that he should be one of the regulatory rather than sitting on

:48:11.:48:14.

the back bench in Palma. However in this instance I cannot follow him

:48:15.:48:18.

and I cannot follow the Honorable member. It pains me. I have to try

:48:19.:48:25.

and get the Honorable member to understand why it was on the side of

:48:26.:48:29.

the House, and those of us cannot accept the bill. It is to do

:48:30.:48:35.

fundamentally to do with the shift away from the reversed burden of

:48:36.:48:41.

proof. To do that now, given the backlog of distrust of the banking

:48:42.:48:47.

system. To do it after the reversed burden of proof was put into

:48:48.:48:51.

legislation and just as it was about to come into operation, would only

:48:52.:48:57.

make the public less accepting of what is going on. It will make the

:48:58.:49:01.

public sphere that yet again and the banks have let themselves off the

:49:02.:49:09.

hook. It would be better to let the legislation went out for a few years

:49:10.:49:15.

and see how it works in practice. The madams gave us very good reason

:49:16.:49:18.

to say after so much legislation, maybe it is now a time to pause and

:49:19.:49:22.

see how the legislation works in practice. We are changing

:49:23.:49:26.

legislation at the last moment, having passed it to years ago, and

:49:27.:49:31.

not having implemented it. We should do that. We should see how the

:49:32.:49:35.

burden of proof works first. That is why I will be supporting my

:49:36.:49:42.

Honorable friend. I'm supporting him in pause in the bill as it stands.

:49:43.:49:50.

Would he accept that some of the evidence that would have been in

:49:51.:49:54.

effect on the excesses of the bank, the fact of the banking cells were

:49:55.:49:59.

not keen on it and therefore they knew it would be ineffective? I am

:50:00.:50:09.

trying to avoid pointing the finger and making inferences. What I will

:50:10.:50:14.

do is that I will quote the Honorable member. " After the Labour

:50:15.:50:21.

scandal emerged into thousand 14, subsequent to the banking commission

:50:22.:50:28.

said the following "As Time passes the pressure for reform will weaken.

:50:29.:50:35.

Is it not?. The old system failed. Maintaining part of the stealth

:50:36.:50:42.

system or for the convenience of realtors, must not be allowed to

:50:43.:50:47.

happen." I think we are getting both. I think we are getting banged

:50:48.:50:52.

loudly but we're also getting the I think, one in the quiet time. Member

:50:53.:51:06.

Maguire made a reasonable point. He said the bill will actually place

:51:07.:51:12.

the duty of responsibility, a very detailed duty of responsibility and

:51:13.:51:15.

Law for senior bankers to take all reasonable steps to prevent

:51:16.:51:19.

wrongdoing. But at the same time it places the onus on proving that that

:51:20.:51:24.

responsibility was discharged, on the regular tours. This suddenly

:51:25.:51:32.

gives the regulators a job. From a sedentary position absolutely. But

:51:33.:51:38.

as the member pointed out time after time after time, the regulators have

:51:39.:51:45.

been implicated. So I don't want a situation where it is then up to the

:51:46.:51:48.

regulators to prove that something went wrong in the new regulatory

:51:49.:51:55.

regime. Meanwhile they were probably responsible for it. I wanted honest

:51:56.:51:59.

upon the bankers themselves. I think it is worth that some of the reasons

:52:00.:52:08.

against the presumption of the reversed burden of proof. One thing

:52:09.:52:14.

that has been put forth by Andrew Bailey is that senior bankers, when

:52:15.:52:22.

the next prices, long, will rush off to the European courts and claim

:52:23.:52:29.

that there are having their human rights taken away. That is rubbish.

:52:30.:52:36.

I think possibly the parliamentary commission was a little bit unwise

:52:37.:52:42.

to use the phrase reversed the burden of proof. But in fact we are

:52:43.:52:50.

not talking about a criminal law, where you are guilty until proven

:52:51.:53:00.

innocent. We are talking about when an infraction occurs in banking, the

:53:01.:53:13.

responsibility the infraction is there under the present government.

:53:14.:53:17.

The infraction is being responsible for an activity in which wrongdoing

:53:18.:53:20.

has taken place not for the wrongdoing itself. I will give the

:53:21.:53:27.

slip an example. It is a criminal in fence -- a fence to be in charge of

:53:28.:53:35.

the boathouse. They have to prove that you were in charge of the House

:53:36.:53:41.

that does not have to prove that she will argue anything. LAUGHTER What

:53:42.:53:51.

the regime offers us is placing managers and responsibility for

:53:52.:53:54.

their banks, for activities of their banks, and when disaster takes

:53:55.:53:57.

place, they have to prove why they failed. They have to prove why they

:53:58.:54:02.

failed from stopping it from happening. Then everyone hides

:54:03.:54:12.

behind. The other arguments for Mr Bailey, I think he is making angst

:54:13.:54:23.

extraordinarily intelligent speech. I think he does hit on the point. It

:54:24.:54:28.

is possible for bankers to be able to provide a tick box operation in

:54:29.:54:34.

order to prove that they have undertaken every measure they

:54:35.:54:38.

possibly can to prevent that action from taking place. Therefore it is

:54:39.:54:41.

very easy for them to get around this. Under the reversed burden of

:54:42.:54:45.

proof rulings and legislation they can get around this. The point

:54:46.:54:52.

behind reversing this, is that actually you can't have a tick box

:54:53.:54:55.

operation to say that you are trying to make sure that you comply with

:54:56.:55:00.

this, because it is a much more esoteric way of writing a bank. It

:55:01.:55:04.

is a lot for it difficult for the bankers to escape from the rules if

:55:05.:55:11.

something does go wrong. I respect the logic of the Member for his

:55:12.:55:17.

argument. Sadly we will never get a chance to put into practice. Seven

:55:18.:55:21.

we will never get a chance to see the legislation which he voted for

:55:22.:55:25.

in the last Parliament put into practice and want to fulfil. I do

:55:26.:55:31.

look forward to the Honorable member and I will hurry up. I would like to

:55:32.:55:37.

find out why he changed his mind. I'm interested briefly in Mr

:55:38.:55:41.

Bailey's other arguments. This was the tick box. In the sense that if

:55:42.:55:50.

you reversed the burden of proof yet again, will happen is that senior

:55:51.:55:55.

bank officials will hold in the seminars, with their trading for, is

:55:56.:56:00.

planning to them why doing this sort of thing that happened in the

:56:01.:56:09.

scandal are wrong. They will come when an inevitable crisis happens

:56:10.:56:13.

with a list of who these folks are, and that they told the traitors that

:56:14.:56:16.

this should not happen and they did. Well this is not enough to actually

:56:17.:56:22.

fundamentally have lots of meetings. You have to change the culture of

:56:23.:56:27.

the banks. It is important I think to remember and I hope the Minister

:56:28.:56:34.

remembers this, the type of the parliamentary commissions report on

:56:35.:56:38.

banking standards. The title was changing banking for good. The

:56:39.:56:44.

problem is this bill. There's a lot of good things in this pool. It does

:56:45.:56:50.

not change in banking for good. I'm afraid another half loaf will lead

:56:51.:56:53.

us more quickly to get another banking crisis, with nobody being

:56:54.:56:58.

responsible. Responsibility is what we have to have. So the choice

:56:59.:57:03.

between us. I will finish on this point. We are being offered the duty

:57:04.:57:10.

of responsibility a presumption of responsibility. Once upon a time,

:57:11.:57:15.

there was a convention, when the ship sank the Captain went down with

:57:16.:57:20.

the ship. He went down with the ship weather was his fault not. Dad was

:57:21.:57:26.

presumed it was his fault no matter what happened. He was in charge of

:57:27.:57:32.

the ship. What happens these days is that the ship goes down and the

:57:33.:57:35.

Captain gets out and gets into the first laughable. Then says it wasn't

:57:36.:57:43.

me I did my best. LAUGHTER I think that once upon a time ministers also

:57:44.:57:50.

resigned. I bet we have to go back to a situation where if there is a

:57:51.:57:53.

banking crisis, the Captain goes down with the ship and we assume he

:57:54.:57:58.

goes down with the ship whether it is his fault or not because he or

:57:59.:58:02.

she leading the bank, is the one in charge. If we don't change that

:58:03.:58:07.

culture, that will go a banking crisis is. Hear, hear!

:58:08.:58:15.

He made some very important points. Not least about the fact before

:58:16.:58:24.

2008, banking was one of the most highly regulated industries. While I

:58:25.:58:37.

agree with his view, it is also worth reflecting one of the reasons

:58:38.:58:41.

that we have not had the great challenge of banks is that at least

:58:42.:58:48.

in the retail banking, the banking world is insufficiently profitable

:58:49.:58:51.

to make it worthwhile for such competitors to come through. One of

:58:52.:58:55.

the reasons is because the regulation and ever more compliance

:58:56.:58:58.

in the retail world itself. Therefore it is critical --

:58:59.:59:06.

predictable have and concentrate upon the parole and the

:59:07.:59:09.

institutional architecture of the financial authority and in the

:59:10.:59:15.

changes that have been referred to about the government's original

:59:16.:59:17.

proposals on the singular managers raging. At the City of London MP,

:59:18.:59:26.

I've had my ear to the ground over 15 years as governments, labor,

:59:27.:59:29.

Coalition, and now conservative have not grappled with five fights a

:59:30.:59:34.

framework of regulation. -- have not grappled.

:59:35.:59:38.

At that all except this is easy work. It is important that we do not

:59:39.:59:48.

undermine our global competitive advantage in financial services. As

:59:49.:59:55.

my friend put out earlier, the most effective regulatory framework is

:59:56.:00:02.

going to be one that will be a international major. The fact is we

:00:03.:00:11.

be much poorer if regulation is designed to punish and bankers. By

:00:12.:00:16.

the same token, I do accept that sensible voices from the City of

:00:17.:00:22.

London, there are more than might be appreciated, but sensible voices

:00:23.:00:26.

rapidly recognise that the bridges public to need to see the risk

:00:27.:00:31.

future bailouts is kept to a minimum. For all the talk of

:00:32.:00:35.

maintaining free markets and global capital flows, the sheer importance

:00:36.:00:38.

of the financial system to the economy of the whole means there

:00:39.:00:43.

will be continued to be some guarantees from taxpayers in the

:00:44.:00:48.

event of a future financial crash. The price to be exacted by the

:00:49.:00:52.

public for that guarantee this rigorous regulation and compliance.

:00:53.:00:59.

Also at another price is the ongoing banking levy which is to introduce

:01:00.:01:03.

and will probably stay. At the Minister will recall, I have

:01:04.:01:08.

consistently argued eight gets the reversal of the burden of proof that

:01:09.:01:13.

have been proposed as a key element. I am pleased that we have not

:01:14.:01:19.

implemented well going to come into place for the 7th of March onwards.

:01:20.:01:23.

I therefore sure badly paid some tribute to the treasury. Likewise,

:01:24.:01:36.

I'm pleased that the government have fiercely resisted attempts to the

:01:37.:01:42.

other place to resist this. There is already plentiful evidence that

:01:43.:01:45.

senior executives of global banks were thinking twice about

:01:46.:01:48.

relocating, or continuing to be based here in the UK. The notion of

:01:49.:01:56.

criminal liability being added upon them perhaps working even in another

:01:57.:02:00.

jurisdiction in such liability be regarded to the court system as a

:02:01.:02:05.

strict risk, I think living to an exodus of senior management from

:02:06.:02:12.

London. Have my understanding that the SMR as originally proposed with

:02:13.:02:16.

the single biggest consideration in the ongoing considerations by HSBC

:02:17.:02:19.

and Barclays that they might headquarter outside the UK. Oil

:02:20.:02:24.

portrait of concerns in a bank levy, on scabs, -- were concerned.

:02:25.:02:32.

Probably the Chancellor has been correct... He is essentially saying

:02:33.:02:38.

from his knowledge of the treasury with blackmail to changing the

:02:39.:02:44.

legislation the? Viktor of legislation that is effective and

:02:45.:02:50.

enforceable. -- we need to make a legislation. If you're going to try

:02:51.:03:03.

to encourage the banking industry, we need to ensure that we're not it

:03:04.:03:09.

under a burdensome regulations that apply here in the UK and all applied

:03:10.:03:15.

across the globe. I also agree with what the Chancellor has done in

:03:16.:03:20.

relation to his denial is little of the contract for the first CD of.

:03:21.:03:26.

The concern went well beyond the well-publicized league of previous

:03:27.:03:31.

policy. Three big account being wiped off insurance company shares.

:03:32.:03:41.

-- ?3 billion. I suspect again that some on the other side of the house

:03:42.:03:46.

will go on as a badge of honour, but at four an industry regulated to let

:03:47.:03:50.

it be known that he regarded those working in the services as

:03:51.:03:53.

dishonest, is not the way to win hearts and minds. To be called up as

:03:54.:03:56.

he was, he would shoot first and ask questions later and chapping

:03:57.:04:00.

customers against the banking fraternity have played to the

:04:01.:04:01.

gallery. I'm also convinced that this

:04:02.:04:10.

approach originally benefited customers.

:04:11.:04:14.

... I have concerns who is awaiting for address of the Masonic products

:04:15.:04:35.

in 2007, when I find themselves at a time under the six-year rule to

:04:36.:04:40.

start legal proceedings because the Financial Services Authority advised

:04:41.:04:44.

him to live and set up on its own processes and the SCA has failed to

:04:45.:04:48.

devise a satisfactory structure for compensation. I'll personally was

:04:49.:04:53.

pleased to see the respected head of the regulation authority upon as a

:04:54.:05:00.

successor. I know with my own dealings with him he is no soft

:05:01.:05:03.

touch and I trust that his experience, at the Bank of England

:05:04.:05:09.

font size reputation for fairness restore credibility to this vital

:05:10.:05:16.

part of the infrastructure. His experience should hopefully ensure

:05:17.:05:18.

that he is able to take a comprehensive view of the financial

:05:19.:05:23.

system that avoids some of the mistakes of the discredited

:05:24.:05:27.

tripartite system. Going forward, I believe that city regulators and

:05:28.:05:32.

central bank governors would do well to give careful consideration to the

:05:33.:05:36.

famous Tobias by giving the wet soffits. Why say one word, when none

:05:37.:05:41.

will do. I fully endorse the caught closet of this bill that

:05:42.:05:45.

recalibrated duties at the SCA, how the government is now to a sceptical

:05:46.:05:52.

public and where financial community in this new iteration, the SCA will

:05:53.:05:56.

achieve more of what was intended when it was set up. Follow the

:05:57.:06:04.

spirit of the gentleman to point out there have been changes in other

:06:05.:06:10.

places, I'm not sure it goes quite far enough. I still think there's a

:06:11.:06:16.

risk of power is given to the government of the Bank of England to

:06:17.:06:20.

appoint over move deputy governors. Such appointments and dismissals

:06:21.:06:25.

will start a procedure in this house, but such a process... Why,

:06:26.:06:36.

should be tolerated here? And this is not an academic concern, we are

:06:37.:06:41.

enabling a governor of the central bank to attack his ball with people

:06:42.:06:47.

having to do his bidding. He have and those of the bank's independent

:06:48.:06:51.

directors. As he begins his second term, we've also seen in the past

:06:52.:06:59.

week, as the president of the European Central Bank. The skull of

:07:00.:07:04.

the bank is nothing new, goes back to the 1920s. When we saw the

:07:05.:07:11.

aftermath of World War I with the central banks and had great control.

:07:12.:07:19.

I have long been sceptical of the practicality or desirability of a

:07:20.:07:23.

fully fledged bank being independent alone. Some strategic economic

:07:24.:07:28.

decision-making light with elected politicians within financially

:07:29.:07:33.

responsible ministry. The coming Wednesday another the -- the Bank of

:07:34.:07:41.

England, a plaything of any governor. And supporting this bill,

:07:42.:07:46.

I system and there will give some thought to the general domains do

:07:47.:07:51.

you concerns at bill makes its way through the house. -- genuine

:07:52.:07:57.

concern. I should stick to your request. Hope to catch your eye in

:07:58.:08:05.

the second debate and therefore I will not speak about the SCA in the

:08:06.:08:13.

context of this debate. Though it would be relevant. By reiterating.

:08:14.:08:22.

If the ship goes down, should be Captain and go down with the ship?

:08:23.:08:31.

My constituent last night sent me a link to the footage at the treasury

:08:32.:08:41.

committee of 2009, and no hearing at anytime can ever calculate the

:08:42.:08:48.

question more profoundly than that hearing and their performance and to

:08:49.:08:56.

escape from real responsibility for their failures and office. This

:08:57.:09:07.

reverse burden of proof changes the culture review dropping in the SCA

:09:08.:09:12.

-- FCA there are two sides of the same point. The same Chancellor,

:09:13.:09:17.

what he is doing is consistent with what he has done and said in the

:09:18.:09:24.

past. Let the house remember that this Chancellor, I'm regulation and

:09:25.:09:32.

2007, cited Ireland as an example of why they should be less regulation,

:09:33.:09:39.

more deregulation, a precisely the authorities that we are talking

:09:40.:09:46.

about now. A gear before the crisis, and we can see what would have

:09:47.:09:48.

happened if we had followed his advice, because we saw what happened

:09:49.:09:55.

in Ireland and a much bigger economy would have been far worse for our

:09:56.:10:01.

people. History is not repeating itself, ideology is repeating

:10:02.:10:11.

itself. In this bill, there are some interesting causes. The reduction of

:10:12.:10:18.

number of policy from 12 to eight, to disagree that happened over a

:10:19.:10:23.

10th of the last decision to change anything. Therefore one could be

:10:24.:10:31.

into question whether this body needs to put quite as much effort in

:10:32.:10:36.

and whether we should be putting out as much effort as we do and to

:10:37.:10:42.

scrutinising month in and month out, their inability and unwillingness,

:10:43.:10:47.

or correctness to make no decision at all, month after month, year

:10:48.:10:53.

after year. It shows how we are rather missing the point. The bigger

:10:54.:10:59.

issues, the big things I had this bill, transparency, and transparency

:11:00.:11:05.

is missing within this bill. There is no transparency when it comes to

:11:06.:11:13.

it, minor improvements proposed, but the work angst of the Bank of

:11:14.:11:17.

England and the financial sector and its regulation remain in great

:11:18.:11:23.

secrecy. That is a fundamental problem. I have proposed in the

:11:24.:11:32.

past, particularly in retail banking, differential rates. A be

:11:33.:11:39.

allowed to speculate an Icelandic bank, the bookies or anybody else to

:11:40.:11:43.

be allowed to speculate my money away. Should expect the taxpayers to

:11:44.:11:52.

pick up the tab if things go wrong. -- should not. We have the principal

:11:53.:11:58.

with Premier Bond, but we have not expanded that. It should be an

:11:59.:12:05.

alluring -- a lower interest rates to anything else. That should be

:12:06.:12:10.

absolute guarantees, and we have failed to look at differentiating

:12:11.:12:15.

the risk for the consumers and that will come back to had this in the

:12:16.:12:20.

future. With that as well, competition. It is lip service and

:12:21.:12:26.

the bill. With the Chancellor and treasury want to dominate the SCA --

:12:27.:12:33.

FCA in new clause 18 in this bill. To tell the FCA what it should be

:12:34.:12:40.

doing. What is missing in the big picture, as competition. There is

:12:41.:12:47.

competition objectives, but to sell all bags to off worse, not just the

:12:48.:12:51.

same openness, because the building society section has largely

:12:52.:12:57.

disappeared. Under the retail sector compared to where it was 10-30 years

:12:58.:13:02.

ago. Many of my constituents, I am certain, ... If it was resurrected,

:13:03.:13:13.

to have the money there as I did my whole life. As many people in the

:13:14.:13:20.

North it. Hope I wonder whether he'll be able to answer my point,

:13:21.:13:23.

essentially if you have a more rigorous regulation, and a more

:13:24.:13:29.

onerous compliance, it he said the new chalice of banks had to pay

:13:30.:13:34.

large amounts of bank levy, does that not be a massive this to the

:13:35.:13:37.

competition that many will want to see to the bank? We all want

:13:38.:13:43.

competition. But how they going to happen in the banking sector it is

:13:44.:13:47.

so heavily regulated now and the future? I have made many times in

:13:48.:13:55.

the past for this versatile in the risk for retail banking. That's

:13:56.:14:00.

differential. We know what is going on here. The Chancellor has a

:14:01.:14:07.

problem, has accounts do not add up. He is not going to meet the

:14:08.:14:12.

surpluses, and well find that out in the report. -- we will. Therefore,

:14:13.:14:20.

he is desperate to sell off the shares, and that is what is going

:14:21.:14:24.

on. That is why all of this is happening, that is why he wants a

:14:25.:14:30.

new settlement with the banks. It is in order that he can maximise the

:14:31.:14:38.

price, in order to create this are blessed that he has created in his

:14:39.:14:43.

head and his budget for all of us. That is what is going on

:14:44.:14:52.

politically, and I should and on the bait for others. Of the bank

:14:53.:15:01.

profits. We've heard about Google in the last week. We haven't heard

:15:02.:15:05.

about the bank take, because we have been told that the banks are the

:15:06.:15:10.

engines of the British economy. They're certainly not the engine of

:15:11.:15:16.

tax receipts, because most of the element am I not paying tax. We have

:15:17.:15:22.

seen therefore ten of the biggest investments and commercial banks,

:15:23.:15:29.

zero taxa. We have seen loans, zero taxa Corporation tax. Zero UK

:15:30.:15:41.

Corporation tax. Credit rates, zero. HTC, a.

:15:42.:15:46.

That is all detected happening. -- the tax. We see Goldman Sachs, who

:15:47.:15:59.

generated two billion and UK profits last year. What is that tax paid on

:16:00.:16:08.

that? It is less pay to the individual partners. Less to the

:16:09.:16:16.

state, and the exchequer, and the defence of the brown and the health

:16:17.:16:20.

service, and the bribery Brenet infrastructure, and the education

:16:21.:16:25.

and welfare state. Less to one individual. A measly 27 million. Not

:16:26.:16:32.

good enough. That is what this bill is missing. I look forward to

:16:33.:16:39.

contravening further. -- contributing. Also was to catch the

:16:40.:16:46.

eye of the chair and the following debate. I'm very pleased to support

:16:47.:16:53.

the government on this bill. I do think he's our revelatory system in

:16:54.:16:56.

the right direction, but I want to focus of some of the other parts of

:16:57.:17:00.

the bill. This bill does not just there with the Bank of England, but

:17:01.:17:04.

that has causes and other related finance matters. I met last week

:17:05.:17:08.

with my colleagues on the cross party management working group to

:17:09.:17:12.

discuss the growing issue of problem consumer debt. It currently stand at

:17:13.:17:17.

either 42% of overall household income. I believe this bills to

:17:18.:17:21.

provide an opportunity to affect will be as mild legislative tweak to

:17:22.:17:26.

bring about an urgent change in that sector. -- 100 42%. The shift began

:17:27.:17:35.

along the sidelines of talking about taking more action on behalf of

:17:36.:17:38.

consumers but we'll see what happens a committee. That management is

:17:39.:17:43.

becoming an increasingly inefficient industry, and consumers are more

:17:44.:17:47.

frequently getting a bad deal. Some debt schemes, while others are

:17:48.:17:52.

pretended that are charged to creditors. The quality of service

:17:53.:17:56.

offered by debt device providers greatly add to the cost. Most

:17:57.:18:03.

people, when they reached a point of desperation and would like to have a

:18:04.:18:08.

problem, they do not see that every search the sector and desk for 24

:18:09.:18:15.

hours. They come across and choose the first providers may find

:18:16.:18:19.

attempted to connect to the first helper that will come across the

:18:20.:18:24.

past. It is a fraud or appetite, but it's often because they know that

:18:25.:18:27.

free help is available. Free debt management plans by not be the

:18:28.:18:36.

solution for everybody, but their availability to those who can and

:18:37.:18:42.

want to be paid their debts is important to become accredited.

:18:43.:18:47.

Fischer operators -- fair share, that allow services to be provided

:18:48.:18:56.

to consumers without charge. Fischer revenue -- fair share, has reduced

:18:57.:19:01.

as a consequence of consumer average disposable income falling

:19:02.:19:05.

constructing the capacity to take on more economically viable cases.

:19:06.:19:09.

These operators will have to restrict the new cases they are able

:19:10.:19:14.

to take on as funding becomes increasingly unsustainable. Unless

:19:15.:19:19.

we move to correct this, consumers who get themselves into difficulties

:19:20.:19:21.

was an absolute need to increase debt use of providers who charge

:19:22.:19:26.

high fees for the same service. It can be up to half of the debt

:19:27.:19:30.

repayments. If you plan provide for you to repay ?70 a month off your

:19:31.:19:37.

debt, you may have to take on top of that at ?35,000 a month -- ?35 a

:19:38.:19:40.

month to the plan company which goes a course to them rather than

:19:41.:19:46.

reducing the debt. It increases the time and cost of recovering from

:19:47.:19:49.

their problem. One solution is to put in place a new system, and this

:19:50.:19:55.

is what I like to minister to consider. She is aware at a spot

:19:56.:19:58.

member that have been put forward that could be considered at the

:19:59.:20:03.

stage. All operators of that advice must operate at low cost, but

:20:04.:20:06.

sustainable debt management plan that is free to the consumers and

:20:07.:20:10.

funded by creditors at a lower cost than now. Absolutely vital that we

:20:11.:20:20.

do tackle the debt advice industry and the lending industry. We haven't

:20:21.:20:26.

outstanding body and Sheffield. -- would have a outstanding. The semi

:20:27.:20:30.

concerned that they'll be hired and admitted that the Chancellor budget

:20:31.:20:35.

last would increase by ?40 billion by 2020? How much personal lending

:20:36.:20:43.

increases, the important thing is that the helpless there for those

:20:44.:20:46.

who get themselves into difficulties. I think we are facing

:20:47.:20:51.

an uplift in those difficulties that we haven't answered straight rise to

:20:52.:20:56.

her stint at the end of the year. Another will cause pain to a lot of

:20:57.:20:59.

people out there, so it is important that we get the system right. With

:21:00.:21:05.

the support and see a friend were in rate, a memo to the bill before it

:21:06.:21:09.

could affect a fee structure activate the provision of free debt

:21:10.:21:14.

management plans by authorised arms. -- Michael one. All my colleagues

:21:15.:21:18.

agreed that action is it assumed that this bill represents a time

:21:19.:21:21.

pinnacle for making necessary change. Oblivious to be a cross

:21:22.:21:28.

party issue. I believe the bill before us need to be amended in

:21:29.:21:31.

order to get people and that more security and access to free

:21:32.:21:35.

high-quality plans that have soon to merge their finances. If interest

:21:36.:21:41.

rates do go of some, it may be the debt management sector will be

:21:42.:21:44.

called upon to give even more support than now, this will be a

:21:45.:21:52.

good time to strengthen the system. Also concentrate on four main

:21:53.:21:59.

things. Firstly, was backed up. Accountability of the Bank of Wells

:22:00.:22:02.

and to the people. The name of the bank. And when it comes to setting

:22:03.:22:08.

interest rates. On the first issue, the bill for some possibility in

:22:09.:22:12.

terms of who can issue banknotes and and Northern Ireland. Issued by

:22:13.:22:16.

banks and Scotland are legal, active queues across the whole of the UK.

:22:17.:22:21.

Among the many historic anomaly full-size West nations is the fact

:22:22.:22:26.

that wealth from the only nation that is prohibited from producing

:22:27.:22:32.

its own best think bank does. There are specific one, so no major

:22:33.:22:36.

principal in relation to the proposal. Well find other parts of

:22:37.:22:41.

the UK was once banks that have a small geographical areas to issue

:22:42.:22:46.

their own backbones. The bank charter act of 1844 Barack Obama to

:22:47.:22:54.

welsh banknotes. -- Brian into wells. Formation bricks and three

:22:55.:22:58.

and Scotland had the authority to issue their own bagels provided they

:22:59.:23:01.

are backed back by the Bank of England. That's banknotes. The

:23:02.:23:12.

Lloyds banking group, should be given the right to issue well take

:23:13.:23:16.

notes in the same way that has permitted for the acts of Scotland

:23:17.:23:20.

and before you Northern Ireland. I believe such an outcome would come

:23:21.:23:23.

at the much welcome boost to welsh national character. And Northern

:23:24.:23:31.

Ireland, the Bank of Ireland does get back, I knows the recognition of

:23:32.:23:37.

individuals such as Dave... Are celebrating architecture is

:23:38.:23:47.

funded such as Belfast City Hall. And Scotland, the Bank of Scotland

:23:48.:23:53.

are entitled to issue bank notes. They pay tribute to their fantastic

:23:54.:23:56.

bridges of the country and recognise the contributions of notable people.

:23:57.:24:02.

The question that advises the American I bring up is why can't we

:24:03.:24:14.

issue bank notes and wealth... And historic race denigrates... Or David

:24:15.:24:20.

Lloyd George. Would also accept that the downside

:24:21.:24:37.

of having our own banknotes printed in Northern Ireland is tied to pass

:24:38.:24:42.

them on an England, it looked as some kind of con man? I'm always

:24:43.:24:51.

grateful for intervention. A man who speaks with great knowledge of

:24:52.:24:56.

financial matters. There are legal tender, legal currency sc, so I

:24:57.:24:58.

think we need to move forward with that. The reality is that banknotes

:24:59.:25:04.

and Scotland and Northern Ireland are legal to be used anywhere. I was

:25:05.:25:14.

making the case of some people might be on banknotes in the case could be

:25:15.:25:16.

made about the most famous was painting a wall. -- of all. His

:25:17.:25:33.

paintings, it is a national icon. Current notes and Wells include

:25:34.:25:35.

recognition for others. When Shakespeare, George Stephenson,

:25:36.:25:53.

Sir Christopher Wren. All great people, but not to my knowledge when

:25:54.:25:57.

it directly to my country. Many pounds of many welsh people over

:25:58.:26:03.

managers have contributed the UK. -- pounds. Id. Inappropriate that Wells

:26:04.:26:07.

raises conservationist tenant within the starlit zone and is recognised.

:26:08.:26:14.

I patiently to the work of my colleague on this issue. I look

:26:15.:26:20.

forward to seeing him take his place in the National Assembly after the

:26:21.:26:22.

elections. Secondly, on the issue of accountability to my country my put

:26:23.:26:27.

forward proposals in a spirit of the so-called party of bagels. -- party

:26:28.:26:34.

of equals. The British that is rapidly changing. As power and

:26:35.:26:39.

responsibility flow from Westminster to the devolved countries. Perhaps

:26:40.:26:44.

the place isn't as quick as someone like myself would want. It is

:26:45.:26:47.

undeniable that the UK is not vastly different place than what it was 20

:26:48.:26:53.

years ago. Recent developments have an increasing devolution to Wales

:26:54.:26:56.

and Ireland. The letter Scotland actually devolved income tax and

:26:57.:26:58.

contacts in Northern Ireland has recently been awarded full powers

:26:59.:27:02.

over corporation tax. Wells as always is in the slow lane, but even

:27:03.:27:07.

we will soon have a welcome tax sharing arrangement if the draft

:27:08.:27:12.

Wells build bridges these. There are major economic this levers that are

:27:13.:27:16.

flown from the treasury devolved countries. It increases the

:27:17.:27:19.

blue-collar accountability of the devolved governments to the

:27:20.:27:24.

respective and critically incentivizes those government to

:27:25.:27:27.

boost economic performance and order to invest in public services.

:27:28.:27:31.

Coronation of fiscal policy is vital and an economic policy. While

:27:32.:27:37.

understanding the bank is an independent, it is obvious that

:27:38.:27:41.

coronation between the treasury and central bank, similar likes me to be

:27:42.:27:46.

developed will do welsh, the Scottish Exchequer. The national

:27:47.:27:49.

parliament helps to nominate a member to the committee to ensure

:27:50.:27:53.

that the clinical decision-making process has a understanding of the

:27:54.:27:56.

economic conditions and wells, Scotland, Northern Ireland. All

:27:57.:28:01.

anti-Sikh members currently are out of bank staff or nominated by the

:28:02.:28:06.

treasury. The centre applied to the financial committee and assumed to

:28:07.:28:09.

be implemented which is part of the bill. Political scrutiny of a policy

:28:10.:28:15.

remains to preserve of Westminster, despite increasing decision-making

:28:16.:28:20.

at the bald levels. Not being privy to the ministers and government, and

:28:21.:28:25.

she attained, we can safely assume there are for committing. In terms

:28:26.:28:28.

of scrutiny, the governor and his team missed the Treasury Select

:28:29.:28:30.

Committee here at Westminster at least five times a year. Considering

:28:31.:28:35.

the powers that failed when the process, had hoped that the central

:28:36.:28:39.

bank would agree that it is in their interest to strengthen relations

:28:40.:28:42.

with devolved governments and parliaments. I'm not aware of any

:28:43.:28:45.

formal structures of meetings between the governor and ministers

:28:46.:28:49.

of the ball governments, and interest and mutual respect needs to

:28:50.:28:53.

be formalized. Critically I strongly believe the governor should want

:28:54.:28:55.

again attend a meeting of the relevant economic community of the

:28:56.:29:01.

devolved parliaments. To the bottle and parties with devolved

:29:02.:29:04.

demonstrations to formulate their own fiscal policies and would

:29:05.:29:07.

recognise the realities of fiscal and economic policy is no longer the

:29:08.:29:12.

sole preserve or a Westminster and comes to Wales, Scotland, Northern

:29:13.:29:16.

Ireland. The issue of the central bank. That's the name. It is an

:29:17.:29:23.

issue as a proud watchman that the central bank event at the end of the

:29:24.:29:27.

country. The Bank of England was created in 1694, before the current

:29:28.:29:36.

British was constructed. Wales 19... Arnon and 810 01. A central bank was

:29:37.:29:41.

there for them to serve a critical density that only existed up Wales

:29:42.:29:46.

and England. If a British as a partnership of equals, then all

:29:47.:29:49.

institutions must reflect that reality. Perhaps it is most

:29:50.:29:52.

important in terms of underpinning its financial system. It is helpful

:29:53.:29:58.

for the Minister, I do have a suggestion. My suggestion would be

:29:59.:30:02.

to rename the bank of England, the central star fact. This would

:30:03.:30:05.

reflect the fiscal reality that we live in. -- central startling bank.

:30:06.:30:13.

To close, I am very interested in the emerging debate in relation to

:30:14.:30:17.

changing the code to setting when interest rates. The MPC is charged

:30:18.:30:23.

with keeping inflation of 2%. Other central banks such as the US Federal

:30:24.:30:27.

Bank has a pool mandate which go beyond price stability. In 1977,

:30:28.:30:32.

Congress amended the 1913 Federal Reserve act, meant the central bank

:30:33.:30:35.

to achieving long-term moderate interest rates and critically

:30:36.:30:40.

maximizing employment in addition to bringing inflation targets. At the

:30:41.:30:43.

bill progresses, I hope to return to these. In relation to the memos, put

:30:44.:30:48.

forward by the SNP and Labour I am pleased to speak in support of

:30:49.:31:00.

this important bill which delivers a new settlement for the financial

:31:01.:31:04.

services sector and our country. A vital factor in the economy by

:31:05.:31:09.

strengthening the Bank of England and the regulatory regime. Madam

:31:10.:31:13.

Deputy Speaker, in particular the bills are of support because they

:31:14.:31:17.

put the Bank of England and give them new powers and more responsible

:31:18.:31:22.

use and better procedures. This transcends the accountability of the

:31:23.:31:25.

government and the bill increases the accountability of staff working

:31:26.:31:30.

in the financials services factor. When the idea of a bank of England

:31:31.:31:34.

first emerged as the William and Mary came to the firm and 1688, the

:31:35.:31:39.

public finances were in disarray. Monetary credits were weak and the

:31:40.:31:43.

financial markets were on the verge of collapse. Things were not much

:31:44.:31:49.

better under Labour. The banking system became very concentrated and

:31:50.:31:53.

took too many risks and were acting against taxpayer interests. It was

:31:54.:31:56.

under that system that people like Fred Goodwin were able to merge and

:31:57.:32:00.

receive huge businesses by running the bank into the ground. It

:32:01.:32:05.

requires up-to-date model effective government in which this bill

:32:06.:32:11.

proposes. According to the UK trade body, the sector includes two thirds

:32:12.:32:18.

outside of London. It is right that this bill supports a growing

:32:19.:32:24.

financial services sector. I support clause one, which makes the deputy

:32:25.:32:29.

government for markets and baking a member of the banks clause. A new

:32:30.:32:36.

and forth deputy government for markets and banking was reported

:32:37.:32:41.

with a methodically for reshaping. It is an important role. Clause one

:32:42.:32:50.

of that situation and ensure equal status and fully forth deputy

:32:51.:32:55.

governments. The government also has the necessary flexibility for the

:32:56.:33:01.

member of the court, this ensures flexibility for future need and also

:33:02.:33:05.

ensures that the court is fit for purpose. With the Bank opened for

:33:06.:33:09.

business and 1694 as the Honorable member said, it had a staff of 17

:33:10.:33:18.

clocks and to date keepers. The person out as much water and the

:33:19.:33:23.

bank of England has welcome to the reforms and cause one of the bill.

:33:24.:33:29.

It updates the powers of the court and also increase its flexibility to

:33:30.:33:33.

ensure new expertise at when necessary, these are practical and

:33:34.:33:36.

deserve the support of the entire house. I also welcome the reforms of

:33:37.:33:45.

the oversight committee. My right honourable friend the Member for

:33:46.:33:48.

Chichester who was no longer had in his plays are outlined. One of the

:33:49.:34:00.

changes is the change to the PRA, as Honorable members will know, the PRA

:34:01.:34:05.

is responsible for the supervision of about 1700 banks, building,

:34:06.:34:09.

societies, credit unions, and investment firms. It will ensure

:34:10.:34:21.

that it is fully integrated. This is a bill that deserves the support of

:34:22.:34:25.

the house including the members opposite on the front bench, this

:34:26.:34:29.

will continue the process of building a unified institution which

:34:30.:34:33.

allows the new authority to focus more closely on policy work, rather

:34:34.:34:38.

than thinking about back office issues like IT procurement. I'm sure

:34:39.:34:41.

the Honorable to them and will agree with me that the changes proposed in

:34:42.:34:45.

this bill support the government is one mission bank strategy which

:34:46.:34:48.

means that supervision is conducted in a more effective and efficient

:34:49.:34:53.

way and befits a modern global economy. It also comes with

:34:54.:34:58.

important safeguards, for example the strategy objectives are

:34:59.:35:00.

undiminished and the name of the bride will not become change in the

:35:01.:35:09.

regulation will be undimmed. As the Minister mentioned in the opening

:35:10.:35:15.

remarks, what attracts the financial crisis is that nobody at the

:35:16.:35:18.

insistence involved face any punishment. There appeared to be no

:35:19.:35:25.

link between the axis of those of the top face of the institutions

:35:26.:35:31.

that they lead. The FCA said that individual accountability was

:35:32.:35:35.

unclear and confused. This bill clarifies that strengthens the

:35:36.:35:41.

individual clarity of those working in these sectors. I also hope that

:35:42.:35:44.

these reforms were actually change the culture. Not just reshaping the

:35:45.:35:52.

legal and regulatory framework. Before I enter this house, I had the

:35:53.:35:56.

privilege of working with the city UK, the member of the others working

:35:57.:36:02.

in the next generation vision financial services which the

:36:03.:36:07.

financial services sector was a part of society and not apart from it.

:36:08.:36:12.

I'm pleased that the reforms that I want this bill will help our sector

:36:13.:36:17.

get closer to division and we articulate it. I particularly

:36:18.:36:22.

welcome the exodus of senior managers and certification regimes.

:36:23.:36:26.

Not just to deposit takers but to expand the regime for all financial

:36:27.:36:31.

services and all staff and will enhance the responsibility for our

:36:32.:36:37.

managers. Hopefully increase the accountability for staff working in

:36:38.:36:39.

the financial services sector. It also ensures that as the sector

:36:40.:36:48.

expands, it is matched and increases the size of the industry. From

:36:49.:36:54.

investment firms and beyond it is involved in the shadow banking

:36:55.:36:57.

sector and it can pose a threat to financial stability sector. In

:36:58.:37:03.

conclusion, the growth of financial services sector in terms of its size

:37:04.:37:07.

and complexity, the globalisation of the economy and the labor's

:37:08.:37:11.

financial crisis means of the government functions and powers of

:37:12.:37:13.

the Bank of England needs to be updated. This bill achieves both

:37:14.:37:22.

gold and ensures that the Bank of England is fit for purpose and

:37:23.:37:26.

effective central bank and a growing 21st-century economy sitting at the

:37:27.:37:29.

heart of the worlds most successful industry. This bill deserves support

:37:30.:37:36.

of the whole house. I am pleased to be able to contribute to this

:37:37.:37:41.

debate. I'm pleased to follow the Honorable member who if I might say

:37:42.:37:49.

so gave a very Panglossian view of the city. When I first read the bill

:37:50.:37:52.

I thought it was very disappointing but the more carefully I looked, the

:37:53.:37:58.

worse I thought it became. Of course there are some good steps in it, but

:37:59.:38:03.

I think one of the things that we see here is the Tory government

:38:04.:38:06.

circling their wagons, to protect their friends in the city. It gives

:38:07.:38:15.

us no hope of an seducing the separation between retail and

:38:16.:38:19.

investment banking, which we so obviously need after the crash.

:38:20.:38:26.

Which many including Professor of Oxford University and others and the

:38:27.:38:29.

former Tory chancellor are still calling for. The main flaws in the

:38:30.:38:36.

bill are among transparency and the bank and the responsibility of the

:38:37.:38:42.

near managers across the sector. In the treasury select committee I

:38:43.:38:45.

question both the Chancellor and the governor about the original draft of

:38:46.:38:49.

the bill which allowed the court on a ad hoc basis to this term in these

:38:50.:38:57.

scope of it to the general. We are pleased to see the redrafting of

:38:58.:39:01.

clause 11 of which clarifies what the policy will be. However, I

:39:02.:39:07.

believe this is not enough. First, we were promised a memorandum of

:39:08.:39:10.

understanding agreed between the and AG and the bank of England. Where is

:39:11.:39:15.

it? This house must see the memorandum before we pass this

:39:16.:39:21.

legislation. The government is treating the house with the same

:39:22.:39:26.

disdain as they do when they put substantial measures and to status

:39:27.:39:29.

hearing instruments and don't share those with the house either. And why

:39:30.:39:34.

has the Government brought the bill back to this house before the

:39:35.:39:38.

memorandum of understanding has been drafted? Is absolutely obvious, it

:39:39.:39:43.

is because the senior managers regime comes into force in March,

:39:44.:39:47.

they'd are desperate to get wireless and before that happens. -- Royal

:39:48.:39:56.

assent. I am not sure that the access will be enough. The bank of

:39:57.:40:01.

England is independent and its existing judgements with respect to

:40:02.:40:04.

monetary, financial and credit matters. That is how it should be.

:40:05.:40:11.

It is also democratically accountable and I believe for will

:40:12.:40:13.

only be able to exercise their democratic right if we make the bank

:40:14.:40:19.

subject to the freedom of information act. This is why. When

:40:20.:40:25.

the ministers announced the sale last summer, they waved about a

:40:26.:40:29.

letter from the governor endorsing the sale. Writing this letter was

:40:30.:40:34.

not part of the governments role on the monetary financial or credential

:40:35.:40:38.

policy. It was an intervention and government policy at the chances

:40:39.:40:42.

request on the issue of a share snow. I asked the government if he

:40:43.:40:46.

considered this to be policy. He said that it was. I asked them also,

:40:47.:40:52.

if he would share the analysis was underlay the letter. He refused,

:40:53.:40:58.

point blank. This is what he said, "It is a policy judgement, I was

:40:59.:41:03.

asked by the Chancellor with respect to the potential, and the terms of

:41:04.:41:10.

the questions are outlined. I was asked as governor, it was not a

:41:11.:41:14.

question of the FTC or NDP are a board, it was not a question in

:41:15.:41:19.

terms of safety, but in terms of the overall impact. I consulted with the

:41:20.:41:26.

death of the governor, -- I consulted with the governor. The

:41:27.:41:34.

analysis rested on the supervisory judgement and the input the

:41:35.:41:40.

perspective of the Insta Snow had been stabilised. The overlap that we

:41:41.:41:46.

have obtained as part of the discharge of our supervisory

:41:47.:41:50.

responsibilities and the analytic is perfect." It is very far from

:41:51.:41:56.

perfect. It is a raggedy hodgepodge. The letter that the Chancellor wrote

:41:57.:42:02.

went far beyond these matters. It said that it is and the public

:42:03.:42:05.

interest for the government to begin now, to return private ownership, a

:42:06.:42:12.

safe return of private ownership would promote financial stability

:42:13.:42:16.

and a more competitive banking sector and the interest of a wider

:42:17.:42:21.

economy. No information has been shared with any of us as to how or

:42:22.:42:25.

in what way this sale promotes a more competitive banking sector

:42:26.:42:29.

because it does not. But what the benefits will be for the wider

:42:30.:42:33.

economy. I still live in the hope that when the Stiaan AG undertakes

:42:34.:42:38.

his order of the sale, he was the this analysis which I believe we

:42:39.:42:44.

need a structural reform and an application for freedom of

:42:45.:42:47.

information act to the Bank of England. I believe this bill should

:42:48.:42:52.

be the vehicle for that chance. Let me now turn to the issue of personal

:42:53.:42:57.

responsibility and the catastrophic capitulation of the ministers to

:42:58.:43:04.

their friends and families. The expansion of the new senior managers

:43:05.:43:10.

regime for banks and building societies, to all authorised persons

:43:11.:43:13.

and the financial institutions is a good thing. Unfortunately, the quick

:43:14.:43:19.

throw Crow is the significant weakening in the way this will

:43:20.:43:26.

operate. They will have to sell they took reasonable steps to prevent

:43:27.:43:32.

breaches as recommended by the parliamentary commission by banking

:43:33.:43:36.

standards. The burden will be on the regulator to show that the senior

:43:37.:43:40.

manager failed to do this. In another place, it will be pointed

:43:41.:43:48.

out that the only reason put forward by ministers for this change, is

:43:49.:43:52.

that it places what they have described as an excessive regulatory

:43:53.:44:03.

burden. As noble Lord said, the bill will result as less documentation

:44:04.:44:07.

and less awareness by the bank as of their responsibility and less

:44:08.:44:10.

examination of the relationship between the risk that they take and

:44:11.:44:14.

the responsibilities that they have. This government continues to believe

:44:15.:44:18.

that it is acceptable for banks to privatise their profits and

:44:19.:44:25.

socialise their losses. Let us never forget the cost to all of us for the

:44:26.:44:31.

British taxpayer, the ?133 billion wish we had to stump up to save the

:44:32.:44:38.

banks. The banks continue to benefit from the implicit taxpayer subsidy,

:44:39.:44:42.

including to there with the investment activities undertaking as

:44:43.:44:47.

Lord Lawson said, just for themselves. But they continue also

:44:48.:44:54.

about the cost of documentation that would fall. It was also worth noting

:44:55.:45:01.

that the ministers should take note of the fact that this regime where

:45:02.:45:07.

the managers must show that they have taken reasonable steps is what

:45:08.:45:12.

applies in traffic legislation, health and safety at work, the

:45:13.:45:16.

bribery act, the Terrorism Act, the misuse of drugs act, the trademark

:45:17.:45:22.

act, the criminal justice act and the official secrets act. What they

:45:23.:45:28.

want to know is what is so special about the bankers. Another argument

:45:29.:45:36.

put forward is that this is unfair and out with the positions of

:45:37.:45:40.

English law. The noble Lord said that the regime requires some

:45:41.:45:48.

justification, the regime as put forward by the parliament very wide

:45:49.:45:54.

but not by banking standards require strong justification. What is the

:45:55.:45:57.

justification? I don't understand it. A part of from the ?133 billion

:45:58.:46:08.

bill, there is quite a lot to be said. Perhaps, if members of the

:46:09.:46:15.

other players have constituents, they would understand that the

:46:16.:46:20.

appalling prosperity not being freaked on our constituents

:46:21.:46:22.

particular disabled people is something to which some of us must

:46:23.:46:31.

respond never again. If the 133 billion to British taxpayers what

:46:32.:46:37.

about the fact that none of the senior bankers have taken

:46:38.:46:41.

responsibility or been punished for their criminally selfish and

:46:42.:46:48.

irresponsible behaviour. In other words, what we see is yet another

:46:49.:46:54.

decision by this Chancellor of the Exchequer and this government

:46:55.:47:00.

putting party interested for the national interest. After hours of

:47:01.:47:05.

hearings and work in the last Parliament, the piece by the

:47:06.:47:08.

parliamentary commission on banking standards, the Chancellor was

:47:09.:47:12.

lobbied by his friends and funders in the city and has let them off of

:47:13.:47:22.

the hook again. I think it is a bit of rich of the parties opposite to

:47:23.:47:29.

be going on about this as if it is something like a party political

:47:30.:47:36.

issue. Every body, and I what excites you why, every body,

:47:37.:47:39.

everybody shares the frustration at what happened in the lead up to the

:47:40.:47:48.

banking crisis. You cannot get away from the fact that the Labour Party

:47:49.:47:54.

had a large part to play in that. Even though the regulation was

:47:55.:47:59.

there, and the actual powers were there, these regulations were not

:48:00.:48:06.

pursued, these practices were not pursued assiduously enough, and the

:48:07.:48:11.

financial stability was raised as a result. Then stability is the

:48:12.:48:15.

absolute crucial thing. It is not for the about bankers bonuses, it is

:48:16.:48:19.

about the fact that ordinary people suffer the most when the finance

:48:20.:48:26.

failed. I have to say that I have some sympathy with the Member for

:48:27.:48:33.

Bishop which he raised the issue of investment banking and retail

:48:34.:48:37.

banking. When I started off from University I joined the training

:48:38.:48:43.

course and beaver giving a lecture by a very wise old man, called Lord

:48:44.:48:48.

Rove. He was in the other place obviously. He knew about all the

:48:49.:48:54.

things that had gone wrong throughout the 1930s and etc. What

:48:55.:49:02.

he said to us was that any time you see the separation of retail banking

:49:03.:49:05.

and investment banking, weekend, that is going to cause a problem.

:49:06.:49:13.

That has really stuck with me. So, I personally think that we should be

:49:14.:49:18.

looking at ways to introduce more petition and to put that separation

:49:19.:49:23.

back there, so that there is not such a burden on regulators to use

:49:24.:49:28.

those powers and to really use them with these. This is a useful step

:49:29.:49:37.

for the time being. I want to deal with the bill before us and two

:49:38.:49:42.

pieces. The first is the piece about regulation and the second is the

:49:43.:49:46.

piece about governance. The senior managers regime that is being

:49:47.:49:51.

proposed, I actually think it is a very good thing. I don't agree with

:49:52.:49:55.

members opposite who said that this is a reduction in the power of the

:49:56.:50:02.

regulations. The thing about working at financial services is that it is

:50:03.:50:07.

an ongoing thing. You don't just have a duty to your clients and to

:50:08.:50:14.

the system generally. When things go wrong, you have a duty all the way

:50:15.:50:17.

along. The beauty of what is proposed now, is that that duty of

:50:18.:50:24.

responsibility is a thing that each manager will half to prove, all of

:50:25.:50:30.

the time effectively to their regulators, and if it there is any

:50:31.:50:35.

breach, that is a very important point. What was proposed previously

:50:36.:50:41.

is that there should effectively be a two tier system set up. So that

:50:42.:50:50.

those firms with a potential Prudential impact would have to

:50:51.:50:54.

comply with this legislation but effectively, both with the

:50:55.:50:58.

investment world and the investment fund, what not. That is incredibly

:50:59.:51:03.

important especially in the modern world which we see now, especially

:51:04.:51:08.

in a way since the financial crisis. Banks have been less willing to land

:51:09.:51:11.

and have had to build up their capital. A large burden of the

:51:12.:51:17.

lending and the credit business has fallen onto investment funds. As the

:51:18.:51:24.

old legislation would have proposed, those aspects would not be covered.

:51:25.:51:31.

I am a bit concerned actually, at the moment as I have stated in the

:51:32.:51:34.

financial markets, the prudential regulation Authority and the PRC as

:51:35.:51:40.

it becomes does not regulate some of these investment firms which I

:51:41.:51:48.

believe do have a potential systemic impact on the market. I would

:51:49.:51:51.

preferred that they took a much more active to look at those.

:51:52.:51:57.

Particularly the derivative funds quite often they operate with a

:51:58.:52:02.

large degree of leverage, and what we are raising at the moment at some

:52:03.:52:06.

parts of the credit market because of the volatility oil prices we have

:52:07.:52:16.

seen some of the lower grade and oil really suffering and yields have

:52:17.:52:23.

really been blown out. The regular Wings in America are saying to the

:52:24.:52:27.

banks don't mark these two market because they don't want to highlight

:52:28.:52:33.

a problem. Now, I'm afraid at the moment we won have some firms in

:52:34.:52:37.

London who have been getting involved in similar business, and I

:52:38.:52:42.

would like the Minister to look at that particular issue because I do

:52:43.:52:46.

think that it is a risk for us as we go forward. In terms of the PRA

:52:47.:52:54.

coming in house, I think that it is a good thing. When the retail

:52:55.:53:00.

investment banks are together as they are now, we really need that

:53:01.:53:06.

PRA, for the PRC as it becomes to have the sharpest teeth that it

:53:07.:53:10.

could possibly have and the best people working in it that it could

:53:11.:53:13.

possibly have. That means that the less time that they have to focus on

:53:14.:53:19.

the corporate governance of a separate company or institution, the

:53:20.:53:23.

better. Also coming in house, the people who work there, and let's

:53:24.:53:31.

face it, most of these jobs and regulations do not pay as much as in

:53:32.:53:35.

the financial markets that they have to regulate, they actually can be a

:53:36.:53:39.

bit of a revolving door. But she wanted the best brains there. And

:53:40.:53:44.

those with the most application, and they have to see a way to having

:53:45.:53:51.

bells in a bank of England which will be a great success and will be

:53:52.:53:54.

lucrative. But is much better done from within the bank and outside of

:53:55.:54:01.

it. In my view. I think otherwise and the government front, the

:54:02.:54:07.

development are useful. I think that particularly, the oversight of the

:54:08.:54:12.

MPC and trying to type than that of a bit, I think it is very useful. I

:54:13.:54:17.

actually have a lot of sympathy with what the Member for the city of

:54:18.:54:22.

London said. We do and this place needs to have an active role in

:54:23.:54:26.

looking at what the Bank of England does and does not do. That is

:54:27.:54:29.

especially true at the moment when we are looking at the sheets around

:54:30.:54:35.

the world and dramatically expanded in a very experimental way. We have

:54:36.:54:42.

seen recently the ECB and the Bank of Japan both going full tilt at the

:54:43.:54:52.

windmills trying to create inflation. The jury is out on that.

:54:53.:55:02.

We must not forget, that our own MPC made a terrible mistake back in

:55:03.:55:07.

2005. They cut interest rates at exactly the wrong time sending

:55:08.:55:10.

exactly the wrong signal to the markets to the housing market, to

:55:11.:55:15.

the bank. Money was racing away in terms of its creation, we really

:55:16.:55:23.

need to be all over this and this place both on the regulatory front

:55:24.:55:29.

and guide looking at what happened in the monetary policy decisions.

:55:30.:55:30.

But I commend the first One of the disadvantages of being

:55:31.:55:41.

called in a debate is always find myself completely rewriting what I

:55:42.:55:46.

thought it was an excellent speech. I felt I had to reflect on some of

:55:47.:55:51.

the earlier contributions. I noted the ministers in her opening remarks

:55:52.:55:58.

mentioned she got the FCA foot deal with things such as sharp practices.

:55:59.:56:02.

She talked about the importance of doing with the. The Honorable member

:56:03.:56:07.

talk about the importance of reestablishing trust of the proper

:56:08.:56:14.

conduct of business. On the sole member of the lead she talked with

:56:15.:56:20.

his concerns of the public do of the behaviour of banks. -- leads east.

:56:21.:56:24.

This makes the case for the fundamental importance we are trying

:56:25.:56:28.

to address, it is a issue of culture. Culture is not something

:56:29.:56:37.

that can be satisfied the changes of structure or regulation alone. I was

:56:38.:56:46.

intrigued to hear a friend, with an answer, which I think there is some

:56:47.:56:53.

repetition and my part. That is getting people who people the great

:56:54.:56:57.

institutions, things like after the Bishop. What was it that

:56:58.:57:02.

characterised them? They took responsibility. They acted with high

:57:03.:57:10.

standards. They work with -- were equipped to lead and accept the

:57:11.:57:14.

highest of standards. And we could reinstitute that with many of our

:57:15.:57:18.

institutions today, it would be much less demand for some of the details

:57:19.:57:23.

regulation and structures that we find ourselves having to deal with.

:57:24.:57:29.

I look a few minutes to deal with some of the issues of culture. Some

:57:30.:57:36.

lead matters have been rehearsed in the debate so far. I also have been

:57:37.:57:44.

concerned about the willingness of the government to remove the reverse

:57:45.:57:49.

burden of proof for senior managers before it has even been tested.

:57:50.:57:58.

Without it, we could perpetuate a culture of failing to accept

:57:59.:58:02.

responsibility under the cloak of a form of collective responsibility

:58:03.:58:07.

that favours the consensus of the guilty, over this good in the of

:58:08.:58:12.

behaviour. Culture is fundamentally important to understand the crash of

:58:13.:58:19.

2008. Would do I mean by culture? To me it is about the groups of people

:58:20.:58:23.

solve problems and recognised dilemma. It involves the conscious

:58:24.:58:29.

taking for granted beliefs. Their thoughts and feelings that forced

:58:30.:58:34.

the values and behaviours within their organisations. It is has been

:58:35.:58:40.

argued by many researchers that somewhere in the region of 70% of

:58:41.:58:44.

all major organisation prices, they are a function of culture. That is

:58:45.:58:51.

why hydration but the for the Minister, haven't to do with

:58:52.:58:56.

something that is a cultural figure to mere regulation and changes to

:58:57.:59:02.

organisation alone. -- cultural failure. Failures of culture

:59:03.:59:11.

orphanages of Enron, Lehman Brothers, RBS,... In these cases,

:59:12.:59:20.

they face precisely the cultural problem the Minister mentioned in

:59:21.:59:24.

her opening remarks. And that was the problem of groupthink at the

:59:25.:59:31.

highest levels. One aspect of groupthink is when groups are

:59:32.:59:33.

unwilling to listen to critical voices. Preferring the easy comfort

:59:34.:59:40.

of a blind consensus on born of common bonds. A classic example was

:59:41.:59:47.

a sponsor. It is widely recognised that the risk manager was sacked for

:59:48.:59:56.

bringing concerns regarding the company's strategy. He told the

:59:57.:00:00.

Treasury Select Committee in 2008 how they predicted the banks of

:00:01.:00:05.

practices could lead to disaster. Here aboard the banks concern but

:00:06.:00:12.

was sacked. The banks former chief executive. -- by the banks's. It has

:00:13.:00:22.

a lock that somebody who acted in such ways should have reached

:00:23.:00:29.

heights. In his evidence, he told MPs anybody whose eyes were not

:00:30.:00:35.

blinded by money, power, or pride, whatever lies problems will be

:00:36.:00:38.

mounted for Xbox and the other high street banks. Since his dismissal,

:00:39.:00:46.

he has been shunned by the financial community to their shame. After ...

:00:47.:00:55.

Management know what is happening. And even know what to do to select a

:00:56.:01:03.

catastrophe but a too emotionally paralysed act. It is often because

:01:04.:01:06.

the boss does not want to hear bad news. Perhaps it has been most

:01:07.:01:13.

eloquently summed up by the humble member for Huddersfield. It has been

:01:14.:01:23.

quoted saying indirect review, the rottenness and deceit and corruption

:01:24.:01:26.

of the maligned game that took over us official illnesses this will

:01:27.:01:31.

bring us back into with the world in a few short years. This bank has

:01:32.:01:34.

never been properly held to account or been brought to justice. --

:01:35.:01:43.

again. And he has diamonds, said it for his sacrifice. The lack of being

:01:44.:01:47.

held to account, the lack of effective XM is good in the and to

:01:48.:01:51.

this day, and lack of a fundamental inquiry into the culture the

:01:52.:01:56.

goings-on in these major institutions. Eight NFL gear upon

:01:57.:02:05.

which -- it is a failure. There have been other cultural felons also. Too

:02:06.:02:12.

many to recite. -- felons. Sacrificing the analysis programme

:02:13.:02:17.

properly. Making decisions as a book that any critic. Dealing with

:02:18.:02:21.

complex decisions and overly intuitive matter with their

:02:22.:02:26.

prejudice in favour of an easy consensus. And willingness to the

:02:27.:02:35.

late... -1 of the fundamental concerns that everybody has alluded

:02:36.:02:42.

to, but still remain to grapple with is how and when I'm going to fully

:02:43.:02:45.

understand the nature of the cultural crisis that afflicted our

:02:46.:02:51.

institutions. That is something we wait to address. As a pleasure to

:02:52.:03:01.

speak in this region. -- it is. I was reminded this weekend in my

:03:02.:03:06.

constituency, that Mike is situated from the work was one of the first

:03:07.:03:12.

provincial Baker, founder the first bank outside London and Nottingham

:03:13.:03:17.

in 1658, called Smith's bank. That letter expanded to a branch in

:03:18.:03:22.

Newark and one in Bradford is his constituency of my neighbour.

:03:23.:03:29.

Several of his illustrious ancestors became governors of the Bank of

:03:30.:03:33.

England. Both of us who follow such geeky facts, it thought it was

:03:34.:03:39.

fitting that mark on if you choose to make his first speech as governor

:03:40.:03:43.

has the Bank of England and Nottingham, and to declare our city

:03:44.:03:47.

and county as he dealt with it for the British economy. In that speech

:03:48.:03:56.

in 2013, he committed us all refusing to tools that are available

:03:57.:04:02.

to the bank to secure a sustainable economy for all parts of the

:04:03.:04:06.

country. Particular the regions of the UK. This bill, is reasonable and

:04:07.:04:14.

modest ways, helps us to redefine and improve the tool box that is at

:04:15.:04:19.

the hands of the government of the Bank of England. Knowing a few

:04:20.:04:23.

people who have worked at the Bank of England and recent years, some

:04:24.:04:29.

postal worker today, but I would say it is a good institution at which we

:04:30.:04:34.

should all be proud as members of the United Kingdom, it would be fair

:04:35.:04:37.

to say that it had been a somewhat inward looking institutions. For

:04:38.:04:42.

being critical, and one was say it's culture has been stuffy and over

:04:43.:04:48.

theoretical. Animals are slowly, to say the least. -- and it moves quite

:04:49.:04:55.

slowly. That is not always a bad thing. As a Young been governor, he

:04:56.:05:01.

has made an impact on tackling these concerns where they were

:05:02.:05:06.

appropriate. But, any suggestions, -- if I can make anything. It is to

:05:07.:05:14.

continue to do as he has tried, which is to recruit more people the

:05:15.:05:19.

practical experiences of life in the financial service sector and in the

:05:20.:05:23.

corporate world. Those who have worked in banks and law firms, or

:05:24.:05:26.

elsewhere, who can provide the essentials counterbalance to those

:05:27.:05:31.

who are overly theoretical and not always so practical. With a proper

:05:32.:05:42.

core government body aboard, this larger and more powerful

:05:43.:05:47.

organisation enhanced by the structure changed to this bill, can

:05:48.:05:50.

operate in a much more modern and dynamic way than its predecessor.

:05:51.:05:55.

Please enter that into Billy had been appointed to the FCA -- I was

:05:56.:06:05.

pleased that Andrew Bailey. When he came to Parliament last week to

:06:06.:06:09.

address the AP PG on governments of which I'm an officer, I found him to

:06:10.:06:15.

be clever, practical, down-to-earth, affable but willing to speak frankly

:06:16.:06:18.

when necessary to clearly possessing a deep and broad knowledge of the

:06:19.:06:23.

financial services sector. It also has to meet this has the making and

:06:24.:06:28.

a good appointment. He should have done a good job at taking over and I

:06:29.:06:34.

would ensure regulation at the PRA. Having worked at a commercial

:06:35.:06:39.

lawyer, dealing with the old FCA, that organisation and some of his

:06:40.:06:42.

person that was in a very poor state before these moves them around a

:06:43.:06:48.

particular was extremely low. It is still a struggle to recruit and

:06:49.:06:54.

retain the best talents. When the rewards I do sleep less than those

:06:55.:07:01.

who are on the front lines. Are usually less. It is essential that

:07:02.:07:07.

we give all the tools necessary to Andrew Bailey and others to enable

:07:08.:07:10.

them to recruit more talented individuals. It was same and why

:07:11.:07:16.

step in that direction to bring the PRA under the guise of the Bank of

:07:17.:07:20.

England, because it is a more attractive institution to work for

:07:21.:07:25.

and be part of and have find your seat beat than any other lesser

:07:26.:07:35.

regulator. -- your CPU. Does the continues the burgomaster shares of

:07:36.:07:38.

what seems to be very sensible steps. Some have argued that today

:07:39.:07:42.

and elsewhere and depressed that we should go much further and changing

:07:43.:07:47.

the Bank of England, or reimagining people of a central bank and the

:07:48.:07:52.

21st-century. I'll caution that the bank has been subject to a great

:07:53.:07:55.

deal of change in recent years. I don't have the exact figures, but I

:07:56.:08:02.

would imagine for example that a staff of around 2000 has already

:08:03.:08:08.

increased to around 3500 or thereabouts. The challenge of

:08:09.:08:12.

integration, a building a large organisation and assuring quality,

:08:13.:08:16.

because quality and standards at the end of the day is all that matters

:08:17.:08:19.

here is very great. We have to be careful that we do not give our

:08:20.:08:24.

regulators too much to contend with. The formalisation of the PRA pot by

:08:25.:08:28.

petition as part of the banks therefore seems sensible and always

:08:29.:08:32.

seemed rather strange that it was merely a subsidiary of the bank. I

:08:33.:08:39.

did note that it makes sense that what previous legislation had kept a

:08:40.:08:45.

supervisory role cup, then exercised by the FCA separate from the

:08:46.:08:49.

resolution vote, the new landscape brings them together. In other

:08:50.:08:52.

words, it gives to be believed by the sector that is what appropriate

:08:53.:08:58.

that the organisation supervising a bank should be different from that

:08:59.:09:02.

task with resolving whatever problems or mess got itself into,

:09:03.:09:07.

facility the view that this is no longer necessary. The bank is

:09:08.:09:12.

capable of handling both sides. The proposal to provide a treasure it

:09:13.:09:15.

with more information within the bill seems logical to me. It was the

:09:16.:09:20.

Bank of England provides temporary liquidity, and supports a bank

:09:21.:09:25.

crisis, it is the treasury and the taxpayer ultimately step in and pick

:09:26.:09:29.

up the cap. These measures are all part of the Governor's efforts to

:09:30.:09:35.

assure the banks are properly supervised to every extent possible

:09:36.:09:39.

to fail. The value for money component, which many members have

:09:40.:09:43.

mentioned is very welcome. At the bank to and larger, -- after that,

:09:44.:09:49.

it is appropriate it is open to greater scrutiny and of the

:09:50.:09:54.

questions and freedom of information will rise at the banks Powers

:09:55.:10:01.

continue to increase. Perhaps it is me that the Bank of England prospect

:10:02.:10:05.

accounts attesting to be difficult to understand. It always seems to

:10:06.:10:09.

the make a profit. Abortion suspicious of that. -- I have always

:10:10.:10:18.

been suspicious. The wider question of openness, I would like to see

:10:19.:10:22.

greater governance of the bag down from the regions of the UK. The

:10:23.:10:33.

written, -- not for superficial reasons. So that their art

:10:34.:10:37.

experience forces at the heart of our central bank with direct

:10:38.:10:43.

knowledge of the regional economy. -- experience forces. Finally, on

:10:44.:10:53.

the senior managing Regine, Greta adhered -- racing. Has been said

:10:54.:10:58.

here. The position to me seems fair. When that puts the pressure on

:10:59.:11:02.

senior managers to be named to take direct responsibility, but one that

:11:03.:11:07.

is also workable. I'm not interested in grandstanding. I'm looking for

:11:08.:11:11.

what will have the greatest effect on our financial services sector.

:11:12.:11:14.

The vast majority of my constituents, have all the hurt of

:11:15.:11:23.

this regime I would say. That never heard of this. To assure financial

:11:24.:11:28.

sector, which are stable and secure and resilient. I believe this is the

:11:29.:11:34.

best way to deliver it. And back one final point -- if I can. That is to

:11:35.:11:41.

welcome the additional chains that is brought into this bill, which is

:11:42.:11:47.

the regime regarding pensions. But this has been barely touched upon

:11:48.:11:56.

today. The pension service can be more widely applied to those looking

:11:57.:11:59.

to take advantage of the great opportunity that with the last

:12:00.:12:04.

parliament a bank able to use your annuities and whatever weight you

:12:05.:12:07.

want. It is a concern to meet that would not allow one of the great

:12:08.:12:15.

developments and pension reform to be sullied by miss selling. One can

:12:16.:12:19.

imagine mistakes make made by constituents who are not always

:12:20.:12:26.

financial literate as they wish. I can imagine this could be the next

:12:27.:12:33.

great miss selling scandal. While the citizens advice Bureau were

:12:34.:12:39.

given the difficult task of providing support for members of the

:12:40.:12:43.

public on the pensions, as a prime organisation. -- a superb. And cents

:12:44.:12:51.

additional support we can give to pension wise to assure our

:12:52.:12:53.

constituents make the right decisions for them at this crucial

:12:54.:12:56.

juncture in their financial lives must be welcome. In closing, this

:12:57.:13:03.

bill contains a printer was seen to be modest and reasonable proposals

:13:04.:13:08.

to further the government's and to provide a secure and reptilian

:13:09.:13:11.

financial services sector to secure a successful economy for the UK. I

:13:12.:13:16.

cannot imagine why the members of this house would vote against it

:13:17.:13:25.

tonight. Also try to compensate for some of the earlier speeches. -- I

:13:26.:13:27.

saw tried to. It has now been over seven years

:13:28.:13:36.

since the most devastating financial crash of our lifetime. Since the

:13:37.:13:43.

crash, regulations have been updated by the Chancellor and treasury

:13:44.:13:50.

ministers. Debit responsibility and accountability at the heart of the

:13:51.:13:56.

UK's financial system. Because the government's economic plan, thinking

:13:57.:14:03.

in the UK is now far more robust, but it is clearly not invincible. I

:14:04.:14:08.

shall be supporting the bill this evening, so that we can build upon

:14:09.:14:12.

the progress, continuing with all the valuable work that treasury has

:14:13.:14:19.

done so far. And to improve on the status quo we find. Certainly the

:14:20.:14:24.

way the Bank of England is governed, increasing accountability in the

:14:25.:14:28.

financial services sector. An extending the role of the pension

:14:29.:14:31.

wise to buy service, which I know is that I gave accused by many of my

:14:32.:14:36.

constituents. The Bank of England has been the cornerstone of global

:14:37.:14:42.

finance says 1694. It structures that governments must adapt to the

:14:43.:14:48.

needs of the 21st century. So that it can continue as such. Some of the

:14:49.:14:53.

banks historic practices have not been in line with current

:14:54.:14:56.

international standards. This bill helps to address the balance.

:14:57.:15:02.

Strengthening the role of the Bank of England's court of directors will

:15:03.:15:07.

enable the bank to function as an effective and modern unitary board.

:15:08.:15:12.

And more effective structure to allow the bank to deliver on his

:15:13.:15:19.

final regulatory policy roles. Most of our constituents, the people of

:15:20.:15:23.

the Bank of England other than perhaps issuing banknotes in

:15:24.:15:27.

England, is to set interest rates. The monetary policy committee

:15:28.:15:34.

currently meets 12 times a gear. But as we have already heard, as cynical

:15:35.:15:37.

but it's really long enough to properly review and consider a

:15:38.:15:47.

change in assessment. So moving the MPC to 18 meetings per year it would

:15:48.:15:51.

have desirable outcomes. Policymaking at this level does

:15:52.:15:57.

require time for reflection. A greater period between meetings

:15:58.:16:02.

would allow this. Such a sensible change will really bring the Bank of

:16:03.:16:06.

England and line with other central banks. Such as the Federal Reserve,

:16:07.:16:12.

and the ECB. And along for the results of votes, and resuming to be

:16:13.:16:17.

published alongside decisions over interest rates will open up this

:16:18.:16:22.

Opec process, granting access to the thinking of the MPC. The crash of

:16:23.:16:30.

2007-8 highlight a irresponsible behaviour of some individuals

:16:31.:16:36.

industry. Thankfully, the days to industry. Thankfully, the days to

:16:37.:16:41.

which my friend preferred with a party, said allowed people to take

:16:42.:16:47.

you bonuses while on the banks to free are behind us. The new senior

:16:48.:16:55.

management certification regime legislative for by the Coalition

:16:56.:17:00.

will come with a force in March, but under the existing legislation,

:17:01.:17:03.

while it would apply to banks, building site is, credit unions, and

:17:04.:17:08.

a regulated investment firms, it will not extend to other financial

:17:09.:17:16.

services. Expanding the scope of the figure management and certification

:17:17.:17:21.

regime will help to create a fairer, more consistent, more effective, and

:17:22.:17:27.

more rigorous regime brought the man for all. The government has already

:17:28.:17:33.

made a change to improve and support the pension system. Allow

:17:34.:17:41.

constituents to access the pensions and annuities without being

:17:42.:17:43.

penalised for doing so has given more flexibility, people being given

:17:44.:17:48.

more choice over how they spend their own money. It is because of

:17:49.:17:53.

this that the changes that the pension wise scheme was introduced

:17:54.:17:59.

following the 2014 budgets. Expanding the scope of the service

:18:00.:18:04.

means that more people overseas impartial, and high-quality

:18:05.:18:08.

financial advice and guidance which will allow them to discuss the new

:18:09.:18:13.

options. I encourage all members to join me this evening and voting in

:18:14.:18:16.

support of this bill, a bill that will bring the Bank of England and

:18:17.:18:23.

financial services up into the 21st-century. A bill for

:18:24.:18:26.

transparency, and accountability to bring in financial sector. -- reined

:18:27.:18:40.

in. It is a pleasure to follow him. We welcome the improvements made to

:18:41.:18:44.

this bill and the other place and we welcome the government's

:18:45.:18:46.

preparedness to listen. There are some good things in this bill and I

:18:47.:18:53.

will be brief. A partial welcome for the chant of the National Audit

:18:54.:18:57.

Office being able to do bag for money investigation. There'll not be

:18:58.:19:04.

allowed to look at the goals of the Bank of Becca into what they

:19:05.:19:10.

achieved, but what the locals were achieved should be part of this. We

:19:11.:19:14.

welcome the extension of the scope of the senior managers and

:19:15.:19:19.

certification regime. We probably welcome the changes of a possibility

:19:20.:19:27.

of credit agreements, and the revelation of transformer vehicles,

:19:28.:19:30.

which are devices for risk mitigation. We welcome the extension

:19:31.:19:37.

of the pension wise guidance service and increase duty of the Bank of

:19:38.:19:43.

England to provide information to the treasury is welcome. We welcome

:19:44.:19:52.

banks bring authorised to the a back operation hand out notes and island

:19:53.:19:59.

and Welsh. -- Scotland. -- Ireland. When he also welcome -- would he

:20:00.:20:08.

also, that doesn't afford as a goat that BBCi, the six largest private

:20:09.:20:12.

bank of the world close, and the report was commissioned. It was the

:20:13.:20:16.

way in which we live that the supervision of the Bank of England

:20:17.:20:20.

and its powers, that was one part that has not been published over the

:20:21.:20:25.

last 24 gears. That is the confidential part two, dusty pink it

:20:26.:20:32.

should now be published? I agree with him. Many of his constituents

:20:33.:20:39.

were affected by the collapse. Unless we publish this material,

:20:40.:20:41.

will not learn. There were considerable problems.

:20:42.:20:58.

She said the crisis of standards and testing back in and is a crisis, it

:20:59.:21:06.

is so the necessary remedy. Board for negligence and a system of

:21:07.:21:09.

regulation was found wanting the first time it was tested. He was

:21:10.:21:15.

right, and sadly it is still the situation now. There have been too

:21:16.:21:19.

few prosecutions, and it amuses me at them or why the authorities

:21:20.:21:24.

cannot use section 15 of the theft act. There have been a dilemma has

:21:25.:21:36.

been a series of posts 2008 crash infractions, by banking institutions

:21:37.:21:41.

and sentenced to death of 13, the new financial kind of authority...

:21:42.:21:54.

That includes a big fines to Barclays, Lloyds, HSBC, and banks

:21:55.:21:57.

like standard charter had been paying fines and the states. This is

:21:58.:22:02.

for wrongdoing which took place after the crash and 2008. Some of

:22:03.:22:07.

these people simply do not learn. Today, we learned a Barclays and

:22:08.:22:16.

Credit Suisse have been totalled find hundred 54 million US dollars

:22:17.:22:22.

by US regulators for the American Bible trading operations, which may

:22:23.:22:25.

have been done before 2008 by continued their brand. -- 100 54

:22:26.:22:31.

million. These people do not learn. There are problems with this bill.

:22:32.:22:36.

The test of the regulations should be whether it will lead to better or

:22:37.:22:42.

worse compliance. The debate today has been about reverse predator

:22:43.:22:48.

proof, but we actually want compliance and measures with a

:22:49.:22:55.

strict regime. -- reverse burden of proof. That is not going to happen

:22:56.:22:59.

with getting rid of the reverse burden of proof. The question is

:23:00.:23:05.

whether it will this change may prosecutions easier or harder. It

:23:06.:23:08.

will make him harder. Will this change may compliance harder for

:23:09.:23:13.

likely? My hunch is that it'll make compliance less likely it the

:23:14.:23:16.

reverse burden of proof be abolished, but we do not know

:23:17.:23:19.

because the government is rushing to get this change made before the SMC

:23:20.:23:29.

archives and seven to March. It is a good afternoon, the senior managers

:23:30.:23:37.

and certification regime,. We have some level of an decision by the

:23:38.:23:46.

Chancellor have a it over the years, because back in July 2013, on the

:23:47.:23:58.

government website, the government's response was cultural reform in the

:23:59.:24:01.

banking sector margin except in the government's plan to move the whole

:24:02.:24:05.

sector from rescue to recovery and assure that you can't thanks

:24:06.:24:08.

demonstrate the high standards and are able to see what businesses and

:24:09.:24:13.

drive economic growth. This bill if passed, will take us backward. We

:24:14.:24:17.

look at what the FCA is going and it appears to have pressure put on it.

:24:18.:24:23.

In the business plan 2015-16 for this very year, the chair said, and

:24:24.:24:32.

I Rotella, we identified the books most important forward-looking areas

:24:33.:24:37.

of focus and a few. He went to save poor culture and controls continue

:24:38.:24:42.

to concern us, that's one on to say. And one to look at culture and the

:24:43.:24:48.

banking sector. That now appears to have gone out of the window. In

:24:49.:24:53.

terms of the reverse printable, I say with all due respect. -- reverse

:24:54.:25:01.

predator proof. As far as I know, Doctor Bailey is not a lawyer, but

:25:02.:25:04.

he is pronouncing upon legal matters. He said in a letter, the

:25:05.:25:18.

introduction of the duty of response ability and place of a presence and

:25:19.:25:21.

makes little difference to the substance of the new regime. Once

:25:22.:25:25.

introduced, it will be for the regulators rather than distinct

:25:26.:25:29.

advantages to bridges were not taken. This changes when our

:25:30.:25:37.

process, not substance. I had this say to him, as a lawyer, I disagree.

:25:38.:25:43.

I know the burden of proof is, I know what is it, cases. I know the

:25:44.:25:50.

cost of a strict liability is and I know what the reverse burden of

:25:51.:25:54.

proof is. It's not as bad a strict liability. We do have strict

:25:55.:26:01.

liability on things like health and safety act. We want the government

:26:02.:26:11.

to be tightening the race name, not loosening it. That is what this bill

:26:12.:26:15.

will do if passed unaltered. -- regime. Some of the proponents of

:26:16.:26:25.

the bill seem to think that regulation of banking was to type

:26:26.:26:33.

before the crash in 2008. -- type. Though there published in March 2005

:26:34.:26:42.

by the centre of policy studies, called the Leviathan is still at

:26:43.:26:47.

large. In that report, called amongst other things for an industry

:26:48.:26:53.

with responsible senior management to ensure that consumers protection

:26:54.:26:58.

is provided through market forces and competitive brands are jealous

:26:59.:27:01.

of the reputation and where risk-taking is not viewed as

:27:02.:27:07.

dangerous but as commendable. It also recommended an industry where

:27:08.:27:10.

competition abroad and competitiveness at home are not

:27:11.:27:13.

hampered by the cost and burdens of being regulated. Bye-bye the cost

:27:14.:27:19.

and conflicts of educating consumers, or policing or

:27:20.:27:21.

prosecuting money laundering, and financial crime. Before I can to the

:27:22.:27:33.

house, I looked up the definition of the reverse ferret. A reverse

:27:34.:27:40.

barriers initiative reversal an organisation's policy and instead

:27:41.:27:42.

issued generally involving no acknowledgment of the previous

:27:43.:27:50.

position. Tonight, we have a double reverse ferret. It is a double

:27:51.:28:01.

reverse because that report, the luck is still at large, 2005. It had

:28:02.:28:12.

ten authors. -- Leviathan. Two of those authors, I shudder at

:28:13.:28:15.

ministers tonight. They were not MPs at the time. That is a double

:28:16.:28:28.

reverse ferret. Before 2005, they were saying Labour has regulation to

:28:29.:28:34.

tie. Many of us were saying they were too loose. To my great sadness,

:28:35.:28:40.

I was right in my government was wrong. This government is making it

:28:41.:28:44.

worse. They tighten up with the reverse burden of proof in 2013, to

:28:45.:28:51.

get later -- two years later and has to be done away with.

:28:52.:29:01.

With a leave of the house I would like to speak a second time, and

:29:02.:29:08.

command that this evening we have had a range of speeches, 12 from the

:29:09.:29:13.

back benches and I was pleased to say that almost all over the country

:29:14.:29:18.

we have heard from the Member for Chichester, the Member for East

:29:19.:29:23.

Lothian, the cities for London and Westminster, the Member for

:29:24.:29:24.

Southwest Dublin, and other places. I will address some of the questions

:29:25.:29:44.

that they've wrote and asked later on. I want to start by saying that I

:29:45.:29:50.

think that this has been a very revealing debate, because we just

:29:51.:29:54.

heard from the honourable gentleman that he is not satisfied with

:29:55.:30:00.

creating the system of regulation that was rightly criticised in 2005

:30:01.:30:04.

and resulted in the financial crash on their watch. But the Labour Party

:30:05.:30:11.

by declining to to give this bill a second reading tonight, are now

:30:12.:30:14.

showing once again that they would be a risk to the likelihood of

:30:15.:30:18.

everyone, most especially the poorest and the oldest estate were

:30:19.:30:23.

to ever returned to power. How is the case, because their shadow

:30:24.:30:27.

chancellor opposed to giving its second reading to this entirely

:30:28.:30:31.

sensible bill because he opposes the independence of the Bank of England.

:30:32.:30:36.

Gordon Brown's best position, his recent amendment on the order paper

:30:37.:30:41.

tonight says that this bill fails to increase oversight and

:30:42.:30:44.

accountability of the work of and I doubt it might be interesting to see

:30:45.:30:50.

exactly what he means by that. And 2012, the shadow chancellor said,

:30:51.:30:55.

"In the first week of a Labour government, democratic control of

:30:56.:31:00.

the major economic positions would be restored, by ending the bank of

:31:01.:31:05.

England's control over interest rates, and bringing the nationalised

:31:06.:31:10.

and subsidize banks under direct control" that's what he is implying

:31:11.:31:16.

here tonight. And setting up his review of policy, the shadow

:31:17.:31:21.

Chancellor said, "Perhaps we should be even bolder creating a national

:31:22.:31:25.

investment Bank and using newly printed money to fund it. " He does

:31:26.:31:32.

not need me to criticise that as a terrible idea that would cause

:31:33.:31:36.

inflation, he should look no further than his predecessor as shadow

:31:37.:31:40.

Chancellor, the Member for Nottingham East who said," printing

:31:41.:31:46.

money and ending Bank of England independence would push up inflation

:31:47.:31:50.

and push up lending rates, and squeeze out money for schools and

:31:51.:31:54.

hospitals and means bending more on debt servicing, higher inflation and

:31:55.:31:59.

a higher cost of living would hit those on the lowest incomes, the

:32:00.:32:04.

poorest people who cannot afford those goods and services" that is

:32:05.:32:13.

the reality of the policy as regard to the Bank of England. Inflation is

:32:14.:32:17.

an attack on the poorest, does she agree with that policy? Surely the

:32:18.:32:24.

Honorable Lady knows, that it is this Chancellor who has printed a

:32:25.:32:30.

hundred and ?75 billion of money, and in doing so, the top 5% in this

:32:31.:32:43.

country welcomed by ?185,000 each. I do worry about the honourable lady

:32:44.:32:48.

sometimes because I think she is a greater criticising the decisions of

:32:49.:32:52.

the independent bank of England. That is before we get to their other

:32:53.:32:59.

economic policies by bringing back secondary picketing and banning

:33:00.:33:02.

dividends and nationalizing businesses without compensation,

:33:03.:33:07.

even then he glanced lower the head of the Independent review, the

:33:08.:33:16.

shadow Chancellor, has set him up to look at the bank of England and that

:33:17.:33:22.

in a recent article for the new statesman, we are in search of good

:33:23.:33:30.

ideas. The new Labour Party still does not have many economic policies

:33:31.:33:36.

to speak of. The new labor leaders are not economists, and they are

:33:37.:33:42.

going to have to learn fast. Tonight nights debate shows that they have

:33:43.:33:48.

not learned anything. While the SMP reason for the second reading so

:33:49.:33:52.

that there is some common ground Labour Party, they are at the other

:33:53.:33:56.

end of the spectrum and I think the bill fails to provide sufficient

:33:57.:34:00.

independence for the Bank of England. They cannot both be right,

:34:01.:34:07.

indeed they are both wrong, the bill strikes the right bylines on

:34:08.:34:10.

operational independence at the Bank of England, and the SCA and scrutiny

:34:11.:34:14.

by the people in the form of the treasury select committee and the

:34:15.:34:20.

elected government. I want to address some of the points that were

:34:21.:34:24.

raised in the debates, and in the opening speech the member did not

:34:25.:34:29.

point out that we have the toughest rules on bankers play in any major

:34:30.:34:34.

financial centre. He did not mention that we brought in new criminal

:34:35.:34:39.

offences in terms of financial crisis. And he did not mention that

:34:40.:34:43.

we are widening the duty of responsibility to the whole of the

:34:44.:34:47.

financial services sector. He did ask one reasonable question which is

:34:48.:34:50.

about the member and for understanding against the... I have

:34:51.:34:58.

written to the governor and the accountant, and they will try to

:34:59.:35:04.

publish that memorandum during the course of this bill in the house.

:35:05.:35:10.

The member for Chichester who made a superb sweeping master class of a

:35:11.:35:15.

speech on the history of financial regulation also came up with some

:35:16.:35:20.

interesting suggestions about making the PRC rulings public. I think

:35:21.:35:24.

there are would be some rulings Leroy Sane issues to stare around

:35:25.:35:28.

the sensitivity of things that they deal with. He wanted to rename the

:35:29.:35:36.

border of England. Not least and the fact that the government continues

:35:37.:35:39.

to own large chunks of banking systems. He mentioned about the time

:35:40.:35:46.

tables and emphasise competition which is important. The member for

:35:47.:35:53.

East Lothian pointed out that responsibility is what we need. We

:35:54.:36:00.

believe we are delivering that. He points out the importance of

:36:01.:36:05.

changing culture. I like his analogy of the captain of the ship. We

:36:06.:36:08.

believe that setting out the responsibilities for senior managers

:36:09.:36:13.

achieve that balance. The member for the Cities of London and Westminster

:36:14.:36:17.

spoke of for his constituency, he mentioned a problem with interest

:36:18.:36:21.

rates and running out of time which I would like to take up with him

:36:22.:36:26.

separately if I may. I want to clarify that the government power to

:36:27.:36:30.

appoint deputy governors is not his alone, it is the government of the

:36:31.:36:34.

Queen was to consent of the Chancellor. The honourable member

:36:35.:36:38.

for Bath in law who I don't see in his plays wanted to have more

:36:39.:36:43.

transparency and I point out to him gently, perhaps when he breathed it

:36:44.:36:50.

is the buildings inside her sector that has welcomed the effect that

:36:51.:36:55.

the proof is no longer in this bill. The honourable member of Southwest

:36:56.:36:58.

dev and made a great point about debt management and I share his

:36:59.:37:05.

enthusiasm for free debt advice and for the organizations he mentions

:37:06.:37:10.

like pay plan, Christians against poverty and others. I would be very

:37:11.:37:18.

keen to hear more from him in terms of what we could do to make sure

:37:19.:37:23.

that as the SCA takes on responsibility for debt management

:37:24.:37:26.

that the fee structure works well for consumers. The honourable member

:37:27.:37:30.

for Kamara been eased mention about most banknotes which is a very

:37:31.:37:37.

interesting idea. He will be aware that it was the north and South

:37:38.:37:46.

Wales Bank Bush lost the ability to issue bank notes. The honourable

:37:47.:37:58.

lady she and I will never see eye to eye on this. In terms of the sale,

:37:59.:38:03.

how could she not think that it is not in the wider interest of the

:38:04.:38:07.

economy to have the ownership away from government. She is the one that

:38:08.:38:12.

is complaining about socialising losses. I think she should be

:38:13.:38:14.

congratulated the government for having started on the sale last

:38:15.:38:21.

August. The honourable member made a great speech about competition and

:38:22.:38:26.

systemic risk. He is right that the investment firms and their systemic

:38:27.:38:32.

risk must be addressed. So far, eight investment firms have been

:38:33.:38:39.

identified, they made a very good speech on the importance of culture

:38:40.:38:43.

and we would agree with him on that. The honourable member for Newark

:38:44.:38:47.

made a great Nottinghamshire based beach. Vast speech. It will continue

:38:48.:39:00.

to be separate under different deputy governors on the Bank of

:39:01.:39:04.

England. I also want to endorse his point about the regions, he will be

:39:05.:39:10.

pleased to know that Mr Andrew Bailey is from Leicester. The

:39:11.:39:20.

honourable member for a deadly South said how popular pension wise is in

:39:21.:39:32.

his area. -- Dudley. Mr Deputy Speaker, in conclusion, this bill

:39:33.:39:35.

brings the national office and to scrutiny for the Bank of England for

:39:36.:39:38.

the first time. It protects independence for the first time. It

:39:39.:39:44.

extends the responsibility for the senior managers, to change the

:39:45.:39:48.

culture of financial services firms, it brings extra help for consumers

:39:49.:39:55.

and the market and in capping exit charges and ensures that the most

:39:56.:39:59.

affordable and society are protected from a legal loan sharks. These acts

:40:00.:40:04.

measures will be lost if the opposition has its way and opposes a

:40:05.:40:09.

second reading tonight. We cannot take irresponsible risk with

:40:10.:40:14.

financial regulation at the Labour Party once. This is a good and

:40:15.:40:19.

sensible bill and I urged honourable and right Honorable members to back

:40:20.:40:25.

the second reading tonight. Of the question is that the amendment be

:40:26.:40:28.

made. As many as of the opinions they Ayes. On the contrary the noes.

:40:29.:40:34.

The vision, clear the lobby! The question is that the amendment

:40:35.:41:23.

be made, as many as of the opinions they Ayes, on the contrary is a

:41:24.:41:27.

noes. Tell us for the eyes, and tell us for the noes. -- Ayes.

:41:28.:48:41.

Order! Order! The eyes to the right, the noes -- ayes to the right 252,

:48:42.:53:43.

the noes to the left, 289. The ayes to the right, 252. The noes to the

:53:44.:53:50.

left 289. The noes habit, the have it! Unlock! . The question is now

:53:51.:54:01.

the bill be read a second time. As any of that say accurate to. As many

:54:02.:54:08.

as to the opposite say No. Clear the lobby!

:54:09.:55:18.

The question is that the bill be read a second time. As many of that

:55:19.:55:25.

opinion say Aye. To the contrary say No.

:55:26.:04:54.

Order! Order! The ayes to the right, 292, the noes to the left 257. The

:04:55.:05:17.

eyes to the right to under 92, the noes to the right 257. The ayes have

:05:18.:05:29.

it, the ayes have it. Unlock! We know, to the motion to move. The

:05:30.:05:38.

question is on the order paper, as many of the opinion say Aye. To the

:05:39.:05:46.

contrary No. The ayes have it. The question as is on the order paper,

:05:47.:05:50.

as many of the opinion say Aye. To the contrary No. The ayes have it.

:05:51.:05:59.

The question is as on the order paper, as many of the opinion say

:06:00.:06:08.

Aye. We come to the backbench debate on the future of Financial Conduct

:06:09.:06:15.

Authority. Back to move, 15 minutes. I beg to move the motion as stands

:06:16.:06:24.

on the paper. It is four years since I first raised the issue of interest

:06:25.:06:29.

rates in this chamber. Six then I have had three backbench business

:06:30.:06:35.

debates on the issue. This is another a symbol of financial miss

:06:36.:06:38.

selling. I would like to debate on the global restructuring group, and

:06:39.:06:44.

I would like to have a debate on the future of the Royal Bank of

:06:45.:06:49.

Scotland. I think it is clear I have attempted to utilise this house in

:06:50.:06:52.

order to bring to attention the House and the wider public the issue

:06:53.:06:58.

of financial mismanagement, and also financial regulation within the

:06:59.:07:01.

marketplace. I think that some people have argued that this debate

:07:02.:07:05.

and this motion is premature. I would argue that in terms of the

:07:06.:07:09.

evidence that I will present that this motion is actually a long

:07:10.:07:14.

overdue. You have to remember that the FCA has a specific mission

:07:15.:07:18.

statement. At missing statement is very clear. The aim to make sure

:07:19.:07:22.

that the financial markets work well so that consumers get a fair deal.

:07:23.:07:28.

This means that that will be insured, because the financial

:07:29.:07:31.

industry is run with integrity, firms will have appropriate products

:07:32.:07:37.

and services, and print wrote consumers will know that they have

:07:38.:07:41.

their best interests at heart. I have the five examples that I will

:07:42.:07:48.

give as part of my opening speech. The Financial Conduct Authority are

:07:49.:07:53.

going. I want to highlight five areas. I would like to touch upon

:07:54.:07:57.

the voluntary regressive scheme for the miss selling of interest rate

:07:58.:08:03.

products. When it is positive, I think it is half full, but most of

:08:04.:08:06.

the time I believe it is a glass half empty. Because of this, after

:08:07.:08:14.

four years, I take it personally. I thank him, I wonder if you would

:08:15.:08:18.

agree with me that the glass half full is OK for some constituents,

:08:19.:08:24.

but for those who have looking for consequential action, it is

:08:25.:08:27.

absolutely empty. She makes a good point. One of the failures of the

:08:28.:08:35.

skiing. It is too often that the case that the FCA are not willing to

:08:36.:08:43.

admit is that people have accepted that outcome under duress, because

:08:44.:08:49.

they need to get their lives back on track. That is an important point. I

:08:50.:08:53.

will take an intervention by will highlight the for allegedly

:08:54.:09:01.

I want to talk about the FCA involvement of the failure of age

:09:02.:09:10.

boss. I also want to touch upon the decision made. I'd decided on New

:09:11.:09:22.

Year's Eve. Is he aware of the case that I have shared with him the

:09:23.:09:27.

appoint waited to have been treated by RBS. Also the complete lack of

:09:28.:09:33.

interest by the FCA. I am grateful he is taking this on, and I urge

:09:34.:09:39.

them to continue this campaign. I am grateful to my honourable friend for

:09:40.:09:43.

making those comments, and the issue of RBS involvement within the

:09:44.:09:47.

redress scheme is something I will touch upon. There are cards earns

:09:48.:09:50.

about the way in which the interest rate redress scheme was put into

:09:51.:10:02.

action. I have concerns about the arbitrary way which businesses were

:10:03.:10:07.

excluded from that scheme. The suit were excluded from any supported me

:10:08.:10:12.

redress scheme, and I think of that decision has not been fully

:10:13.:10:15.

understood. That is an issue I have previously raised and I would be

:10:16.:10:20.

more than happy to have the Mr's statement on that. Of more concern

:10:21.:10:25.

is the fact that we have, throughout this process, a lack of willingness

:10:26.:10:29.

from the FCA to explain what they were doing, and to communicate about

:10:30.:10:32.

what they were doing. One of the real concerns I have is that for two

:10:33.:10:38.

years we have a redress scheme in existence, and for two years the FCA

:10:39.:10:42.

did not share the rules of the scheme. Businesses that had been

:10:43.:10:46.

declined to read just within the scheme were making efforts to appeal

:10:47.:10:49.

those decisions without knowing what the rules were. I am grateful, does

:10:50.:10:58.

he accept the frustration of constituents like my own, who have

:10:59.:11:04.

found the whole process so long and drawn out that it is almost as if he

:11:05.:11:08.

is hitting his head against a brick wall to try to get justice, because

:11:09.:11:13.

of the way it has become. I sympathise fully. I suspect they

:11:14.:11:22.

will be a year, and four years later I am having a debate. I surely

:11:23.:11:27.

concern about knocking the head against the wall. The Treasury

:11:28.:11:31.

select committee intervened on this issue, and the ST a published their

:11:32.:11:41.

rules in February of 2015. Two years, decisions were being made

:11:42.:11:47.

without knowing the rules. Upon looking at the rules, it became

:11:48.:11:51.

apparent that the way in which consumers or customers of RBS were

:11:52.:11:54.

being treated within the redress scheme was significantly deferred

:11:55.:11:58.

from the customers of other banks were being treated within the

:11:59.:12:03.

schema. We did a significant piece of analysis on cases to the scheme.

:12:04.:12:07.

That showed that the chances of being given a swap for swap if you

:12:08.:12:14.

are in RBS customer is much stronger at your customer of another bank.

:12:15.:12:20.

The redress you would be entitled to is significantly less otherwise. The

:12:21.:12:25.

reason for this is the RBS appeared to be relying on a generic condition

:12:26.:12:31.

of lending, a Clause within the lending practices. That generic

:12:32.:12:35.

condition of lending was not deemed appropriate or significant enough by

:12:36.:12:39.

some of the banks. For some reason, for RBS, it was deemed to be

:12:40.:12:44.

significant and sufficient to swap outcome. We met with RBS, myself and

:12:45.:12:50.

other members in order to highlight the discrepancies. We were told that

:12:51.:12:54.

the rules about the Treasury select committee were not rules, they were

:12:55.:13:00.

principals. Although they were principals established for this

:13:01.:13:04.

scheme, apparently there were 11 different methodologies agreed upon

:13:05.:13:08.

by different banks. We have a situation in which it is arguable

:13:09.:13:12.

that the Treasury select committee were misled on this issue, because

:13:13.:13:16.

when we asked for the rules we got principals. In terms of the

:13:17.:13:19.

methodology I would ask again, if you are a business and you do not

:13:20.:13:24.

have an adequate level of settlements, how can you challenge

:13:25.:13:29.

that decision? If you don't know what the methodology is? I have met

:13:30.:13:34.

with the FCA because RBS were perfectly happy about this issue.

:13:35.:13:39.

They sent a methodology that they agreed with the FCA, and they are

:13:40.:13:43.

delivering upon it. When I met with the FCA the confirmed on a different

:13:44.:13:47.

ideologies within the scheme. He did not share that with me. If you are

:13:48.:13:51.

in RBS customer unhappy with an outcome, it would appear to me that

:13:52.:13:54.

you are in a difficult situation to argue your case, because you are not

:13:55.:13:57.

being provided information that you need to argue that case. Does he

:13:58.:14:04.

agree with me that what the FCA ought to be looking at is

:14:05.:14:11.

transparency, one, speed number and fairness. It seems to me that the

:14:12.:14:16.

FCA take no regard at all toward the fact that many of our constituencies

:14:17.:14:19.

are probably running into hundreds of thousands throughout the country,

:14:20.:14:24.

are actually the losers of tens of thousands of pounds, and in many

:14:25.:14:28.

cases these are people who are elderly and relying on that money

:14:29.:14:34.

into their old age. I would endorse those comments. Our situation is

:14:35.:14:44.

that swap for swap are likely to be an RBS customer. Noncompliant sales,

:14:45.:14:47.

which do not result in a cherub of the agreement within RBS has gone

:14:48.:14:51.

from about 40% to about 60% of all cases. It is not a line with the

:14:52.:14:57.

example. I would argue that this voluntary scheme that the FCA put

:14:58.:15:01.

together is not delivering, and indeed it is not being monitored. I

:15:02.:15:11.

have spoken at length about this, I have made my concerns known time and

:15:12.:15:15.

time again, but I need to touch upon the issue of consequential losses.

:15:16.:15:21.

When the redress scheme was announced, we thought that the

:15:22.:15:23.

inclusion of consequential losses was a pleasant surprise. I'm afraid

:15:24.:15:29.

that we were being overly optimistic, because the analysis

:15:30.:15:33.

that we have taken of the redress scheme shows that of the 2000 cases

:15:34.:15:40.

that we have looked at, 50% have received absolutely no consequential

:15:41.:15:45.

losses. 85% of cases have her received consequential losses of

:15:46.:15:50.

less than ?10,000. I have personally seen dozens of cases where a well

:15:51.:15:54.

argued case has been made, and yet the banks within the region click

:15:55.:15:59.

macro redress scheme can reject the changes without giving an

:16:00.:16:02.

explanation. What is worse is that the as this is made one appeal

:16:03.:16:06.

against the decision, without knowing the basis upon which the

:16:07.:16:10.

appeal has been rejected, and yet they have one opportunity in order

:16:11.:16:15.

to challenge. Invariably, that fails. In consequential losses, I'm

:16:16.:16:20.

afraid again that we are failing businesses. The final point that we

:16:21.:16:24.

should take great point to note is that time and time again we are

:16:25.:16:27.

seeing cases that go to court, and are often settled outside of court

:16:28.:16:32.

where the consequences will be a better settlement than what was

:16:33.:16:35.

being offered within the redress scheme. It should be a cause of

:16:36.:16:39.

concern. What should be of even more concern to this house is that the

:16:40.:16:44.

fact that time and time again we are having orders placed on those

:16:45.:16:49.

settlements, placed by a taxpayer-funded bank. I find that

:16:50.:16:55.

utterly unacceptable. I want to move on to income stream. The conduct

:16:56.:17:01.

income stream is something that creates a real problem about

:17:02.:17:04.

regulation within this country. What we have is a situation in which the

:17:05.:17:09.

regulator was informed of mismanagement, but of fraudulent

:17:10.:17:13.

behaviour. Yet it took the regulator for months before putting a notice

:17:14.:17:17.

up on their website highlighting their concern, saying that the

:17:18.:17:21.

funding was not as safe as a bank account. It took a further year

:17:22.:17:26.

before that fund was fond of. Any meantime, between the

:17:27.:17:32.

whistle-blowing informing of the issue, and the winding up of the

:17:33.:17:36.

scheme, more than half of the total investments in the conduct and

:17:37.:17:43.

scheme was referred. I will take an intervention. A doctor, one of my

:17:44.:17:52.

many constituents who have made significant losses under the

:17:53.:17:58.

investment scheme are not just frustrated by the inordinate length

:17:59.:18:03.

of time that the FCA is taking to investigate this, and to decide what

:18:04.:18:07.

concession might be payable, but they are still unclear as to whether

:18:08.:18:12.

that compensation, when it has been decided, will be paid directly to

:18:13.:18:17.

the investors, or will it be put into the spending funds? She makes

:18:18.:18:23.

an important point, and on this issue there is a lack of clarity.

:18:24.:18:27.

Only last week the FCA published on their website the fact that there

:18:28.:18:32.

has been settlements between the liquidators. The interesting thing

:18:33.:18:38.

is that that decision to publish on their website the fact that there

:18:39.:18:42.

has been a settlement reaches the confidential agreement that was in

:18:43.:18:48.

place. We have regulators agreeing on a settlement, but the party of

:18:49.:18:51.

the settlement cannot offer any advice, because there is

:18:52.:18:55.

confidentiality. In relation to publishing issues about public delay

:18:56.:18:58.

confidentiality agreements, we have a track record of the FCA abusing

:18:59.:19:03.

confidentiality. To publish the fact that they are taking a degree of

:19:04.:19:08.

responsibility for the outcome, I find utterly unacceptable in view of

:19:09.:19:12.

the fact that the liquidators are stating categorically that they are

:19:13.:19:15.

not associated themselves in any way shape or form, that they do not

:19:16.:19:21.

agree with aspects of the statement, and they are stating categorically

:19:22.:19:24.

that the only reason that they had a settlement is because the mediation,

:19:25.:19:28.

which the conduct authority had to try to arrange that was not

:19:29.:19:34.

successful. The decision to finish the mediation was made without

:19:35.:19:37.

consultation. To have the regulator make a statement on their website am

:19:38.:19:42.

a categorically denied by the parties to the agreement is a matter

:19:43.:19:47.

of concern. Will he agreed that within this inquiry the FCA has been

:19:48.:19:53.

too slow, and has not been transparent enough with investors? I

:19:54.:19:59.

of course agree. I will quickly run to my point. There are questions to

:20:00.:20:02.

be asked of the radiator on this issue. Will the settlements result

:20:03.:20:08.

in full compensation for settlements of the investors? Probably not is

:20:09.:20:16.

the answer. Is it correct to say that the FCA were involved, or is

:20:17.:20:20.

this because the mitigator is wearing a situation where the

:20:21.:20:24.

failure mediate the decision and going down the rue of an

:20:25.:20:26.

investigation was done without any consultation? There is a question

:20:27.:20:32.

whether this settlement is better than what was agreed with the FCA

:20:33.:20:36.

mediation process. Why are we 18 months down the line in a situation

:20:37.:20:40.

where investors have waited longer to have a settlement? He has done a

:20:41.:20:48.

lot of work on this. The fact that we are still here and we're still

:20:49.:20:52.

going on with the FCA blundering around in the dark. We are talking

:20:53.:20:56.

about money and investment of people. I have a constituents who

:20:57.:21:01.

are out of pocket to a large amount of money. The FCA, frankly, our

:21:02.:21:07.

plane around in not doing anything about or doing what they are

:21:08.:21:10.

supposed to do in first place. It is clear what the role of the houses. I

:21:11.:21:17.

am afraid that the regulator has not responded. I am aware and conscious

:21:18.:21:21.

of time will stop I promised to touch upon the three areas, but I

:21:22.:21:27.

will do a quickly. There is a real? And really lays into concerns

:21:28.:21:31.

raised. Why the decision to cancel the review of banking culture was

:21:32.:21:35.

taken? At short notice with announcements made on New Year's

:21:36.:21:40.

Eve? That was a surprising, but what is more surprising is that the

:21:41.:21:45.

decision was made by the FCA executive branch, executives without

:21:46.:21:49.

consultation by the FCA Board. That raises the question that the fact

:21:50.:21:53.

that the FCA are questioning the governments in the organisation. If

:21:54.:21:56.

a decision of that importance is made without consultation with the

:21:57.:22:00.

board, and that governance is an important question. Furthermore, it

:22:01.:22:03.

is worth pointing out that this banking culture was part and parcel

:22:04.:22:10.

of the business plan for the FCA. Suddenly, he disappears. Even more

:22:11.:22:15.

importantly, in a public meeting on the 22nd of July, the FCA stated

:22:16.:22:18.

categorically that this was an essential part of their new

:22:19.:22:22.

management of the banking sector. Though the 22nd of July. When this

:22:23.:22:26.

was pointed out to the FCA when they announced their decision to curtail

:22:27.:22:30.

this inquiry, the ST eight denied it had been said at a public meeting.

:22:31.:22:37.

Yet, that was very clear. We have the regulator stating an untruth to

:22:38.:22:44.

our number one financial paper. That is not a situation that gives me any

:22:45.:22:48.

confidence in the regulator. Two other points as to why we need this

:22:49.:22:52.

banking review. BH boss reports in a review of the reports commission

:22:53.:22:57.

highlighted careless and selective use, factual inaccuracies out of

:22:58.:23:05.

context, express and implied involvement of individuals not

:23:06.:23:08.

substantiated by fax. Undue reliance on individuals. We have to ask the

:23:09.:23:19.

question if we will ever see the report? Many members have come upon

:23:20.:23:26.

the global restructuring group. As yet, even though that was ordered in

:23:27.:23:31.

2014, we are yet to see any evidence of that, even though the acting

:23:32.:23:37.

chief executive stated on the 21st of January it was in the pipeline.

:23:38.:23:41.

Should we have any confidence, because less than six months ago the

:23:42.:23:44.

review of banking culture was in the pipeline? I have a concern about

:23:45.:23:48.

global restructuring group as well, as to whether we will ever see this

:23:49.:23:54.

report. To close, and I am Russian because of time, to close I think

:23:55.:23:59.

that all of these issues raises significant questions. Does the

:24:00.:24:03.

regulator have a deal with RBS? I think that is a reasonable question,

:24:04.:24:07.

a serious and reasonable questions to ask. Looking at the way that the

:24:08.:24:13.

redress scheme has been operating, there is a question mark as to

:24:14.:24:15.

whether they have been treated differently? Has the FCA let off the

:24:16.:24:22.

banks as into the issue? Is the regulator acting in a timely

:24:23.:24:26.

fashion? Those are all questions that need to be responded to, and I

:24:27.:24:30.

would argue that there are real doubts in terms of all of those

:24:31.:24:35.

questions. The regulator needs to work with integrity, it needs to be

:24:36.:24:38.

independent in order to deliver in the interest of a healthy financial

:24:39.:24:42.

market, and it needs to make sure that we have a system that reaches

:24:43.:24:46.

customers fairly. To do that, the regulator needs both the confidence

:24:47.:24:52.

and the respect of the stakeholders. I say that that respect, that

:24:53.:24:56.

confidence has been lost. It has been lost in the outside world,

:24:57.:25:00.

whether it has been lost in this chamber remains to be seen. I think

:25:01.:25:05.

when a regulator's integrity has been questioned to this extent,

:25:06.:25:09.

there are questions to be answered by the regulator, and by the

:25:10.:25:12.

Treasury who are responsible for the regulator. I think the chamber for

:25:13.:25:17.

this time, and I hope that other members will raise other important

:25:18.:25:20.

issues in terms of the way the FCA is operating.

:25:21.:25:31.

I cite the case of my constituents Stephen Jones as a successful

:25:32.:25:38.

entrepreneur in my area who was provided advice and sold a interest

:25:39.:25:46.

hedge rate I RBS in 2009. RBS's own investigation was said the swapped

:25:47.:25:52.

dot-coms of these mop was never mentioned. There are e-mails that

:25:53.:25:55.

showed that that section was desperately keen to see such

:25:56.:26:00.

products sold. The evidence of miss selling is provided by RBS and it

:26:01.:26:05.

has done so without ambiguity. For the FCA system allows RBS and other

:26:06.:26:14.

banks to run their own systems under address. That means that Mr Jones

:26:15.:26:18.

who has lost a significant amount of money through no fault of his own

:26:19.:26:22.

because he was nestled and misled on the product and the RBS document

:26:23.:26:27.

explicitly annotated from inside showed that that was the case that

:26:28.:26:31.

it was never advised is left with only the choice of going to court

:26:32.:26:37.

against a government owned major bank. Something which in itself is

:26:38.:26:46.

financially extreme. It highlights and strengthens the case that the

:26:47.:26:48.

honourable gentleman has made. There are many people, individuals,

:26:49.:26:54.

entrepreneurs, not being dealt with properly because of the rules of the

:26:55.:27:00.

FCA have been brought in. Let me highlight a second case. An entirely

:27:01.:27:08.

new area brought to me by a man. When people buy a property abroad,

:27:09.:27:13.

payment will be needed in the national currency where the purchase

:27:14.:27:16.

is taking place. It means people will need to access for ex-markets

:27:17.:27:23.

which is something that people cannot do generally and need to use

:27:24.:27:27.

other means. This is a market that is estimated to be ?60 billion a

:27:28.:27:32.

year. Some of the biggest specialist brokers and methodically misleading

:27:33.:27:38.

consumers with currency comforters in that adverts and on their

:27:39.:27:43.

websites which supply a rate that will not actually be offered. This

:27:44.:27:52.

complaint is taken by Mr Scott to the FCA and they refused to act.

:27:53.:27:58.

This is also taken the case to the standing authority who have judged

:27:59.:28:03.

in her favour on the 17th of September. That this action is

:28:04.:28:08.

noncompliant with the consumer protection from unfair trading

:28:09.:28:13.

regulations of 2008. Precisely the regulations given to this sector in

:28:14.:28:22.

September 20 12. This means that the companies are noncompliant with the

:28:23.:28:27.

commitment advertising practice and code of advertising and by

:28:28.:28:30.

definition therefore it is a condition of authorisation by the

:28:31.:28:36.

FCA under the payment of services directed, 2009. Game set and match.

:28:37.:28:46.

You would think. However, the FCA provided the evidence that under

:28:47.:28:49.

their rules, these companies are in breach, proven by standards and

:28:50.:28:55.

authority, given all the evidence, advise they must act by the NSA,

:28:56.:29:00.

says nothing whatsoever to do with those. They have knowingly failed

:29:01.:29:10.

Miss Scott and others who have been unfairly kept out of business and

:29:11.:29:16.

the consumer who is going for the rate advertised in a misleading

:29:17.:29:22.

fashion that they will never get. A lack of consumer choice, a lack of

:29:23.:29:27.

entrepreneurial expansion to those businesses who can be competitive

:29:28.:29:31.

and the regulator and this is in the last three months that has refuse to

:29:32.:29:40.

even look at the case. This is more than a passing problem. The FCA

:29:41.:29:47.

ought to be strengthened at the moment. It would appear that it has

:29:48.:29:51.

been weakened with its culture review dissipated and destroyed, it

:29:52.:29:59.

is being neutered. The former chief executive, to Treasury officials and

:30:00.:30:04.

to Treasury appointees were the people who decided who the new chief

:30:05.:30:11.

executive should be. Everything is becoming credential risk under the

:30:12.:30:16.

bank of England and the Treasury. So much so that the head of prudential

:30:17.:30:22.

risk has been appointed the head of the financial conduct authority. The

:30:23.:30:28.

consumer champions within the FCA have been systematically removed

:30:29.:30:33.

over the last four months, leaving none of them. Therefore one can only

:30:34.:30:42.

conclude the rights of the individual, the rights of the

:30:43.:30:46.

entrepreneur, the rights of the consumer are being subsumed to the

:30:47.:30:53.

big brother of the Bank of England and the Treasury. It begs the

:30:54.:30:59.

question, looking at the members of the House on the government benches.

:31:00.:31:04.

Are these people here listening to the debate really going to be on the

:31:05.:31:12.

side of big brother doing down the entrepreneur, doing down the

:31:13.:31:17.

individual, the consumer. Or are they going to be on the consumer's

:31:18.:31:22.

side because big Brother is taking over and those two examples I gave

:31:23.:31:30.

highlight the depth of the problem. Entrepreneurs seeking to make money

:31:31.:31:35.

legitimately by a widening competition, wanting to give

:31:36.:31:39.

consumer choice, wishing to borrow money to expand his business in my

:31:40.:31:45.

constituency. On the other case, wishing to allow people wanting to

:31:46.:31:50.

buy property or other purchases abroad the ability to have a

:31:51.:31:55.

competitive rate of exchange. That ought to be what we in a competitive

:31:56.:32:01.

economy and those on the government side of the House are cherishing and

:32:02.:32:08.

nourishing, are enthusiastically endorsing. And yet we have a

:32:09.:32:14.

chancellor with his Treasury big brothers around him, forcing forcing

:32:15.:32:24.

the conduct authority, like the old lady, the uncle who is hidden away

:32:25.:32:33.

other than at parties and family events, like them. That is how they

:32:34.:32:38.

are treating the Financial Conduct Authority, consumer rights have been

:32:39.:32:43.

ripped away. This house should be standing up for the individual. This

:32:44.:32:48.

house should be standing up for competition, this house should be

:32:49.:32:51.

standing up against big Brother. This house should be standing on the

:32:52.:32:54.

side of the entrepreneur. That is what this debate is about, I salute

:32:55.:33:02.

the honourable gentleman for bringing it, I hope the House will

:33:03.:33:06.

endorse what he, I, and others are saying. It is always a great

:33:07.:33:12.

pleasure to follow on from these honourable members, some of my most

:33:13.:33:16.

entertaining afternoons on the Treasury select committee have been

:33:17.:33:19.

following him when he has been committing about a number of things

:33:20.:33:22.

and who can forget that wonderful moment when he asked the Chancellor

:33:23.:33:29.

visiting a bakery only to start off on the budget. He works very hard.

:33:30.:33:35.

Can I say, it is far more importantly a pleasure to speak in

:33:36.:33:40.

this debate. He has been a truly extraordinary campaigner on this and

:33:41.:33:44.

I think without a shadow of a doubt what he has said is deserving of

:33:45.:33:51.

Welsh member of Parliament of the year. He has devoted a huge amount

:33:52.:33:57.

of forensic energy looking into this area and I have enjoyed the

:33:58.:34:03.

privilege of working with him on this area of changing product in

:34:04.:34:08.

terms of trying to hold a regular at her to account. Without his forensic

:34:09.:34:12.

help, we would have had some dull Treasury select committee meetings.

:34:13.:34:18.

It is him that got hold of the smoking gun if you like about how

:34:19.:34:21.

the regulator could possibly turn its attention or focus to being more

:34:22.:34:27.

supportive of the banks and consumer. I think when we look at

:34:28.:34:34.

what people have said in this debate, it is fair to say that the

:34:35.:34:38.

evidence being presented to us illustrates that the regulator is

:34:39.:34:42.

not necessarily always being entirely fair to the consumer. The

:34:43.:34:52.

evidence that is being shown supports... We have heard about. If

:34:53.:35:00.

you wonder what a long debate report looks like, look at that. We have

:35:01.:35:05.

seen claims coming in the not so distant future. The reverse burden

:35:06.:35:08.

of proof, spent a lot time debating that. We have seen the cancellation

:35:09.:35:19.

of the review of the change of terms of thematic review. I argue that

:35:20.:35:22.

this is a wasted opportunity where we could have an opportunity to see

:35:23.:35:26.

how the banks were looking into changing their culture. This is all

:35:27.:35:31.

grey evidence and I agree that this shows evidence of how the regulator

:35:32.:35:35.

is not standing up to the consumer but I also, when we look at emotion

:35:36.:35:40.

like this and one of no confidence in our regulator, I think it is fair

:35:41.:35:43.

that we have a look at this more rounded view. Is this, are we being

:35:44.:35:50.

guilty of what a sports commentator could be billing guilty of which is

:35:51.:35:57.

where you see some poor goalkeeper who manages to save any number...

:35:58.:36:06.

Sorry. Who could have been a poor goalkeeper, he did not want to miss

:36:07.:36:10.

this particular point. A goalkeeper who struggles to unsuccessfully save

:36:11.:36:15.

many goals but then when he looks in that one crucial goal, he is

:36:16.:36:19.

criticised by everybody for not being up to the job. I share his

:36:20.:36:29.

concern that we may tend to hold only on the bad news but I think it

:36:30.:36:34.

is comfort to many of our constituents who face these

:36:35.:36:36.

difficult problems and as he grew with me that the concert of my

:36:37.:36:39.

constituents and his family to earn a small wine glass business to have

:36:40.:36:44.

been assaulted interest rate product by HSBC and oh thousands of pounds

:36:45.:36:49.

because the difference improvement, this is a perfect example of how the

:36:50.:36:52.

FCA is failing to investigate these products and how this one issue is

:36:53.:36:56.

of huge personal significance to them? She stands up very well and

:36:57.:37:03.

should take as much time as she possibly can to make that point. I

:37:04.:37:11.

think why we have your attention, I am not mentioning football as I

:37:12.:37:21.

watched it too much,. She absolutely makes a good point, there are huge

:37:22.:37:25.

numbers of people who have been very bad and have... I am a football

:37:26.:37:36.

supporter and I have to say that we have been very patient with Tim

:37:37.:37:38.

Howard but it is not the fact that he made one a mistake and made one

:37:39.:37:44.

goal, the Ghilas happy goals a season. It is not the one to mistake

:37:45.:37:50.

we are unhappy about. It is the behaviour. The point is this. What

:37:51.:38:00.

we have to do is be able to look across the whole regulator and be

:38:01.:38:06.

able to, it was a debate that had undoubtedly I believe got it

:38:07.:38:09.

completely wrong in many cases on interest-rate hedging projects and

:38:10.:38:12.

other things. It is the right thing to do for us in Parliament to hold

:38:13.:38:17.

to account, I am carrying on if I may. And also to hold them to

:38:18.:38:24.

account to organizations like the Treasury select committee and from

:38:25.:38:27.

my point I find that being on the committee I see some different

:38:28.:38:31.

points of view. For me I do not have the frustrations of having to have

:38:32.:38:35.

debates like this or get a point across which are not about the

:38:36.:38:43.

regulator. I can go on with members of the Treasury committee and that

:38:44.:38:46.

is the way to do it. I think it is important that we also look at some

:38:47.:38:49.

of the successes that we have seen. We have seen that they managed to

:38:50.:38:54.

bring such substantial things like foreign exchange review, libel

:38:55.:38:57.

rigging, they managed to bring a case to the front office which

:38:58.:39:02.

resulted in no convictions sadly, that's a legend foreign traders who

:39:03.:39:10.

were trying to fiddle the fixings. They were acquitted but none the

:39:11.:39:13.

less, getting it to court was a success. We saw the regulator

:39:14.:39:18.

bringing in the debt management from the UFT. We have seen them

:39:19.:39:23.

protecting consumers by banning retail sales of convertibles with

:39:24.:39:27.

technical things to do with the failing banks. We have seen a paper

:39:28.:39:31.

published on the vulnerable can simmers in February, these provide

:39:32.:39:36.

helpful firms that look after consumers. In terms of seeing

:39:37.:39:40.

competition coming through, in the banking industry, the regulator has

:39:41.:39:48.

created a bank unit in January with the PRA to challenge and provide the

:39:49.:39:53.

best relation you can, in competition with the banking market.

:39:54.:39:59.

They helped with new entrants into the financial sector, the

:40:00.:40:04.

authorisation process, specifically with the Benteke area. There are

:40:05.:40:08.

number of areas that they are trying to do. We need to be careful that we

:40:09.:40:14.

do not throw the baby out with the bath water on this. There are a

:40:15.:40:18.

number of issues which people worry about. A big question about whether

:40:19.:40:23.

the government is interfering with the regulator, have they interfered

:40:24.:40:27.

directly, specifically, are they taking it easy on the banks. When

:40:28.:40:33.

people look at the thematic review, and the cancel spending, but the

:40:34.:40:37.

thematic review being cancelled. When you talk to most banks, you see

:40:38.:40:42.

an 8% increase in their corporate tax rate, they would say that the

:40:43.:40:45.

government is not interfering, they are letting them do what they do

:40:46.:40:48.

which is helping to repay the taxpayers with all that money that

:40:49.:40:52.

was used to bail them out in the past. We also see fencing being

:40:53.:40:56.

implemented, the reverse burden of truth, we're still going through

:40:57.:41:01.

with implementing ring friends fencing which would be fantastic

:41:02.:41:05.

cost of the banks of several billion pounds in order to make sure that we

:41:06.:41:09.

have the next financial crisis and there will be another financial

:41:10.:41:12.

crisis definitely, what will not happen is that those banks will

:41:13.:41:15.

collapse and take down other banks with them. Go on then. My honourable

:41:16.:41:23.

friend is making a strong case for the role of the FCA in terms of

:41:24.:41:27.

systemic regulation. High level regulation. Does he think it is fit

:41:28.:41:32.

for purpose and protecting the consumer, the individuals who from

:41:33.:41:36.

that very high level may not look so important? The whole debate is about

:41:37.:41:45.

that. The overall answer is yes but I think the regulator gets it wrong

:41:46.:41:48.

on occasion. That is why we have the Treasury committee and why we have

:41:49.:41:52.

debates like that, to hold their feet to the fire on specific issues

:41:53.:41:55.

such as been raised by the honourable member. I think it is

:41:56.:42:01.

important that we remember that this is a convict regulator for global

:42:02.:42:04.

businesses worth bearing in mind that to million people work in this

:42:05.:42:10.

industry. It represents about 12% of our GDP and generates ?65 billion a

:42:11.:42:14.

year in tax receipts. This industry that we are talking about is a

:42:15.:42:16.

global industry and I think we have to be careful in this place if are

:42:17.:42:23.

to criticise it quite busy mentally with a motion of confidence. We have

:42:24.:42:27.

to ask ourselves what message that is sending to the rest of the world

:42:28.:42:32.

about our ability to regulate huge amounts of international capital,

:42:33.:42:35.

running to the trillions of pounds, it becomes a safe haven here in the

:42:36.:42:39.

UK where they can trust the regulator. We say they are not fit

:42:40.:42:43.

for purpose, that actually sends a profound message to quite

:42:44.:42:47.

significant part of our economy. I think going forward we need to cast

:42:48.:42:53.

an eye to the new chief executive Andrew Bailey who is the front of

:42:54.:42:58.

the Treasury select committee on many occasions. I for one have found

:42:59.:43:03.

no reason to think he is not an extremely attentive and pragmatic

:43:04.:43:08.

regulator. Time will tell. We'll see how he gets on when he gets to the

:43:09.:43:13.

FCA but it is important that we start him on his career at the FCA

:43:14.:43:17.

with goodwill rather than a problem to deal with. But I think there's a

:43:18.:43:21.

big question which in the last two seconds I want to confront. That is

:43:22.:43:26.

the possible interference of the Treasury on the regulator. I cannot

:43:27.:43:33.

find no many how many times I ask people, explicitly or vitamin drink

:43:34.:43:36.

and try to get them drunk, I cannot find evidence that there is any

:43:37.:43:40.

interference with the Treasury on the regulator. But there is a

:43:41.:43:44.

possibly implied interference. That is why I think the solution to this

:43:45.:43:50.

could be that a power veto over the powering of the next cheese of

:43:51.:43:52.

executive is given to the select committee. Thank you. My apologies

:43:53.:44:06.

Mr Deputy Speaker I am afraid that I am not hearing or steering terribly

:44:07.:44:10.

well this afternoon. The reason I want to speak in this debate leading

:44:11.:44:15.

up for my debate last Monday when I got bored pensions and came up

:44:16.:44:24.

against the F S a for the first time. For the -- as I say I am not a

:44:25.:44:30.

qualified and long-standing MP, someone who has never had to deal

:44:31.:44:34.

with any of the regulator Torry bodies, I went to the library to get

:44:35.:44:40.

some background and what turned out to be a silly question, I wanted a

:44:41.:44:45.

list of regulators and what a were responsible for going back to the

:44:46.:44:49.

1990s. Only to be informed by the relevant expert in the library that

:44:50.:44:54.

I was a huge piece of work and that he could not give it to me in time

:44:55.:44:59.

for this debate which I now perfectly understand. My point in

:45:00.:45:02.

telling everybody this and showing my ignorance if you like is to show

:45:03.:45:09.

that normal everyday people are in the exact same boat. They do not

:45:10.:45:13.

understand. They do not understand what the significance of what they

:45:14.:45:16.

are doing is and they do not understand where to go to get

:45:17.:45:24.

redress. And with this particular motion on the Financial Conduct

:45:25.:45:28.

Authority, that does not mean much to people in the street. What they

:45:29.:45:34.

do understand is they do not seem to be getting a very good deal and when

:45:35.:45:40.

I listen to more learned members, but learned in the legal sense I do

:45:41.:45:46.

not mean, I understand even more how my normal everyday constituents

:45:47.:45:52.

feel. This whole mess of regulation and who is responsible and always

:45:53.:45:56.

trying to fix it by bringing forward another regulator who is dealing

:45:57.:46:01.

with yet something else has to stop. Certainly. I am grateful to the

:46:02.:46:08.

honourable Lady for giving way, can I also say to her that some of my

:46:09.:46:13.

constituents have mentioned the litigation costs and how absorbent

:46:14.:46:19.

and they are. This prevents many constituents from pursuing that

:46:20.:46:24.

line. I would echoed her sentiments that people have nowhere to go and

:46:25.:46:29.

nobody to turn to to listen to the appalling things that have happened

:46:30.:46:35.

to them. I thank the honourable member for his intervention and

:46:36.:46:38.

confirms what I think and what I said last week. People cannot afford

:46:39.:46:44.

to go to litigation and even now when they are going there they are

:46:45.:46:47.

not getting the satisfaction that they should be getting because of

:46:48.:46:51.

the mishmash of regulators and regulations. I think at this stage I

:46:52.:46:58.

am going to sit down because I think I have made my point quite clearly.

:46:59.:47:04.

Something now needs to be done to take everything back to the stage

:47:05.:47:09.

where people trust regulators, trust banks, and trust financial products.

:47:10.:47:17.

Thank you Mr Deputy Speaker for giving me the opportunity to speak

:47:18.:47:20.

in this debate and congratulate my honourable friend from securing it.

:47:21.:47:26.

I have to declare an interest in this subject, in my previous life

:47:27.:47:33.

before coming to this house, I ran my own brokerage for nearly 20

:47:34.:47:37.

years. Following the footsteps of parents who run their own financial

:47:38.:47:43.

advice business for 45 years. It is fair to say I have seen the

:47:44.:47:46.

evolution and revolution of the industry over a period of time. I am

:47:47.:47:54.

the only one standing in support of a particular sector of the industry.

:47:55.:48:00.

For my contribution and there are many areas that I could talk about,

:48:01.:48:04.

but I wanted to use my understanding in this area to focus on the impact

:48:05.:48:10.

of regulation on the insurance industry, specifically the insurance

:48:11.:48:15.

brokering sector. In starting, I would say that there is an

:48:16.:48:20.

understanding of the need for and acceptance of their regulation by

:48:21.:48:23.

the insurance industry as a whole. But as a forefront of these

:48:24.:48:29.

measures, the principal should be to protect the consumer, not just from

:48:30.:48:32.

financial risk but from professional negligence. In order to achieve

:48:33.:48:37.

this, a regulator should work in partnership with a profession so as

:48:38.:48:41.

to understand the service it provides and create an effective

:48:42.:48:46.

model which targets the key areas of concern. This regulatory solutions

:48:47.:48:50.

to be delivered in a cost-effective and proportional way that does not

:48:51.:48:53.

unjustly burden businesses of differing sizes and incomes.

:48:54.:48:58.

Unfortunately it is not my experience that the case is this

:48:59.:49:09.

with the FCA. Insurance brokers contribute 1% to the UK economy. A

:49:10.:49:15.

range of 54% of all general insurers and 78% of all commercial and

:49:16.:49:21.

service businesses. In 2013, the D insurance brokers Association can

:49:22.:49:27.

smash it -- commissioned research which found that the UK brokering

:49:28.:49:31.

market is the most expensive in the world market and cost of regulation.

:49:32.:49:38.

The UK's cost is double than the next competitor, Singapore, and Mort

:49:39.:49:44.

-- four times more than those who are supposed to be on a level

:49:45.:49:47.

playing field with us. The efforts to Gold plating have seen the UK to

:49:48.:49:53.

be in the butt of European jokes with a recent head of insurance

:49:54.:49:57.

referring to UK gold plating by the FCA. The FCA recently... By a .4%.

:49:58.:50:11.

The largest UK broker privately indicating that they paid comparably

:50:12.:50:16.

over ?1 million per year in fees to the regulator. Worryingly, and their

:50:17.:50:23.

response following the rise, the FCA indicated that if the increase was

:50:24.:50:27.

in line with the annual funding requirement, the rise could have

:50:28.:50:31.

been even greater. 46% over four years. The FCA have recently doubled

:50:32.:50:39.

breakdown of the and system which showed four point... This is used

:50:40.:50:46.

for supervision. However, 75% of members, small firms with fewer than

:50:47.:50:52.

ten members of staff would not be subject to regular visits or

:50:53.:51:01.

in-depth inspections. This system used for supervision is distorted

:51:02.:51:09.

and says that UK dividers... Furthermore, at 1.8 million or 6.3%

:51:10.:51:15.

is used to pay for markets. Principally the UK listing

:51:16.:51:18.

Authority. This is not an area of regulation that the general

:51:19.:51:21.

insurance broker would face which further suggests that they are cross

:51:22.:51:28.

subsidizing with regulation. In addition to the direct cost of

:51:29.:51:32.

regulation, there are also substantial indirect costs which

:51:33.:51:36.

include the need to employ either in-house staff or consultants to

:51:37.:51:41.

ensure that numerous regulations, thematic reviews, market studies,

:51:42.:51:45.

consultation papers and request for information are managed. To put this

:51:46.:51:53.

into some context... I wonder whether there has been a reduction

:51:54.:51:57.

in small companies because heavy regulation altered and figures

:51:58.:52:01.

larger or chides Asians and cuts the entrepreneurial business and a

:52:02.:52:04.

market town in my constituency and in fact favours the large companies

:52:05.:52:08.

who then doubts the public for higher fees. Is that something he

:52:09.:52:14.

would share? I thank my honourable friend for that and that is the

:52:15.:52:17.

point. That is my experience and the point I was going on. I will come to

:52:18.:52:23.

how many firms have reduced since regulars and has been introduced. To

:52:24.:52:27.

put it into context for my own experience, and my final years as a

:52:28.:52:31.

broker, 80% of my time was working on compliance rather than being

:52:32.:52:36.

productive in my business. As a small brokerage provider, a valuable

:52:37.:52:41.

service to people who needed access to someone they knew and trusted.

:52:42.:52:47.

There is a clear case to be made to firms and that they should not be

:52:48.:52:51.

the ones who pay for misbehaviors in increased regulation caused by other

:52:52.:52:56.

firms. In another area which requires review is a financial

:52:57.:53:01.

service composition scheme which provides the compensation for last

:53:02.:53:06.

resort customers who or otherwise financial firms and protects people

:53:07.:53:11.

who have ceased trading. Currently, insurance brokers are included in

:53:12.:53:18.

the sink funding pot as others to missile PPI cover. Several who have

:53:19.:53:22.

failed and resulted in claims on the FCS as. This has led to the...

:53:23.:53:30.

Insurance brokers contributing 72% of these particular funding pot but

:53:31.:53:35.

have made only 2% of the claims made upon it. The gross distortion that

:53:36.:53:38.

the industry feels is both and difficult to budget for due to its

:53:39.:53:46.

volatile nature. I appreciate that the FCA is currently regaining the

:53:47.:53:49.

funding structure of the FCS but I asked that his is looked into and

:53:50.:53:53.

how it can be fair and manage rural to the recurring sector. It is

:53:54.:53:59.

prudent to know that insurance brokers do not pose the same risks

:54:00.:54:04.

as banks or insurers due to the fact they do not owe clients money and

:54:05.:54:09.

have a mistress for agreements in place. With better understanding and

:54:10.:54:12.

working relationship with the profession, especially with smaller

:54:13.:54:16.

firms, I believe the FCA would conclude that insurance brokering

:54:17.:54:21.

sector is low risk and be compelled to regulated as such. Leaving its

:54:22.:54:25.

own resources free to let those financial services which pose the

:54:26.:54:28.

greatest threat to the consumers in the UK economy. So to conclude, the

:54:29.:54:35.

insurance industry as a whole is a vital part of our economy which is

:54:36.:54:39.

proud of its long-standing tradition of being the best in the world but

:54:40.:54:45.

it currently is being put in jeopardy. I do not think it is a

:54:46.:54:50.

coincidence that the brokers registered with the FCA fell by 32%

:54:51.:54:57.

between 2006 and 2014. The knock on effect of this is a great danger of

:54:58.:54:59.

limiting the choice of our consumers. Those consumers which the

:55:00.:55:06.

FS eight set out to protect and in a time when access to good independent

:55:07.:55:10.

financial advice is needed more than ever. As I said at the outset, the

:55:11.:55:18.

insurance industry is not afraid of her portion for regulations and I

:55:19.:55:22.

appreciate that has come a long way from its predecessor, the FCA. But

:55:23.:55:27.

there is more it can do and still promote the thriving insurance

:55:28.:55:28.

industry by concentrating its resources effectively and protecting

:55:29.:55:33.

the consumer, enhancing the reputation of the industry home and

:55:34.:55:38.

overseas, while securing the long-term crucial and positive

:55:39.:55:42.

impact of the brokering sector on the UK economy.

:55:43.:55:48.

I want to pay tribute to the honourable member for his

:55:49.:55:57.

persistence and pursuance of this Court. I counted three debates, and

:55:58.:55:58.

now it is forceful stop click macro. They have been denied many, notably

:55:59.:56:24.

those who sold tailored business loans and been denied any severance

:56:25.:56:31.

of justice. I am compelled again to mention a case of my constituent of

:56:32.:56:37.

a public house, knowing very well. The honourable number in his student

:56:38.:56:44.

days indeed. An excellent establishment in the heart of my

:56:45.:56:48.

constituency, who first made a complaint on the sale of his TBL

:56:49.:56:54.

shamefully and unregulated product back in 2012. It took Yorkshire six

:56:55.:57:01.

months to respond to the formal complaint, and still even now it

:57:02.:57:06.

remains unresolved. They would suggest that there is an

:57:07.:57:08.

expectation, or a hope that the matter will be kicked into the grass

:57:09.:57:16.

and disappear. The reality is that lending has been done by tibialis,

:57:17.:57:20.

fallen outside of the reviews, and fallen outside of the reviews, and

:57:21.:57:31.

the redress has been avoided. When did he never told us of those

:57:32.:57:36.

involved in the group, a voluntary review was forthcoming. Yes, there

:57:37.:57:40.

was an an acknowledgment that the glass was half full, and an

:57:41.:57:46.

expectation in my full up. There's a whole of the proverbial spotlight

:57:47.:57:50.

would be shot. The reality now with hindsight and the bitter experience

:57:51.:57:56.

of our constituents is that process, transparency, was neither robust

:57:57.:57:59.

were effective, it was significantly skewed in favour of the -- we look

:58:00.:58:09.

to the FCA to sort out when the FSA morphed into the FCA. We were

:58:10.:58:13.

assured that it was a new organisation that would enforce

:58:14.:58:19.

rules and punish breaches, punish behaviour by professional investors.

:58:20.:58:24.

That is why the huge disappointment in the decision stakeout around New

:58:25.:58:30.

Year's Eve budget to undertake and review the banking culture. My main

:58:31.:58:36.

concern is that the redress scheme, brokered by the FCA, excluded a huge

:58:37.:58:39.

number of people. Even before drilling down and examining the

:58:40.:58:43.

inadequacies of the voluntary scheme. The scheme, excluded many by

:58:44.:58:54.

its definition of sophistication, a scheme that allowed commercial

:58:55.:58:58.

lending to remain unregulated, a redress scheme that by being so

:58:59.:59:03.

narrow and restrictive did not deal with the reality of what went on. As

:59:04.:59:07.

a stands it will not change or reform banking behaviour of properly

:59:08.:59:15.

compensating people. If the FCA's review process was transparent and

:59:16.:59:19.

fair, why is the customer not given the chance to view the evidence

:59:20.:59:24.

which the banks go forward to the review? And if necessary, given the

:59:25.:59:31.

chance to comment on it? Why has the FCA failed to see that there will

:59:32.:59:34.

always the suspicion and mistrusts when the process is shrouded in

:59:35.:59:38.

mystery and customers are denied the opportunity to view the evidence of

:59:39.:59:43.

controversial issue of the controversial issue of the

:59:44.:59:48.

alternative products as part of the redress scheme been addressed?

:59:49.:59:53.

Reviewers seem intent on suggesting that if my constituents hadn't taken

:59:54.:59:57.

out a particular product, they would have almost definitely, almost

:59:58.:00:03.

certainly taken something similar. That is currently the position of my

:00:04.:00:10.

constituents. They have been offered derisory compensation in identical

:00:11.:00:17.

product. Is it the case that providing customers with an

:00:18.:00:20.

alternative product as part of her redress is a widely established and

:00:21.:00:26.

accepted printable? Until the scheme is rectified or remedied, to the FCA

:00:27.:00:33.

can address these issues and critically fix them, I am of monies

:00:34.:00:38.

to support my honourable members motion. We need a forensic

:00:39.:00:47.

examination and comparison, an example of historic IR HP sales

:00:48.:00:51.

across all banks. All product types and the range of customer profiles

:00:52.:00:56.

will be re-examined not just by the bank records, but also on customer

:00:57.:01:00.

testimony and a full review of documentary evidence. In the

:01:01.:01:06.

meantime, I look to the landscape of my constituency which was quite

:01:07.:01:11.

clearly targeted by TBL Silliman. At one point my office was working on

:01:12.:01:20.

30 cases. Businesses of that type, at one time we took an advertisement

:01:21.:01:26.

to take on more cases, and they were forthcoming. The reality is that

:01:27.:01:29.

they were businesses, many of the time gone, some of our hanging on

:01:30.:01:34.

but cannot grow to their full potential. Constituents have no

:01:35.:01:39.

frozen the bank. Now trust in the FCA. They regard with disdain the

:01:40.:01:47.

abandonment in the new year of a review into banking culture, though

:01:48.:01:50.

perhaps given their experiences that wasn't altogether surprising. This

:01:51.:01:57.

was a pattern that was repeated in every constituency in this country,

:01:58.:02:00.

and every one of the debates that we and every one of the debates that we

:02:01.:02:05.

have had has had a huge range of experiences from members across the

:02:06.:02:09.

country. Businesses targeted by banks. We all know that in this

:02:10.:02:15.

house, but is acknowledged sufficiently by the regulator?

:02:16.:02:21.

Display in emerging pattern of complaint, I think there isn't

:02:22.:02:26.

obligation when there is a pattern to investigate further. To continue

:02:27.:02:32.

to do nothing over a several years, many businesses have not had

:02:33.:02:39.

redress. Response to selling, including FCA and SES has focused on

:02:40.:02:46.

their interest instead of why banks are trying to sell their interest

:02:47.:02:51.

rates at all? Instead, focus was on what a business had done had they

:02:52.:02:55.

not picked the product that they were offered. There product not

:02:56.:03:03.

included in the SCA review despite fixed-rate loans to all intents and

:03:04.:03:08.

purposes on all products. The FCA continues to maintain that those

:03:09.:03:16.

products remain under regulation and protection. No compensation. Part of

:03:17.:03:24.

the review, in their review that offered the suggestion that they

:03:25.:03:28.

would have most definitely taken an alternative product, and the product

:03:29.:03:32.

they would have taken was two months short than what they signed up to.

:03:33.:03:34.

At a Bay race click macro Bay race. Mr Deputy Speaker, that is

:03:35.:03:56.

unacceptable. I congratulate my friend on securing this debate and

:03:57.:04:01.

on his tenacity in pursuing this issue. I fully support the motion. I

:04:02.:04:06.

am not happy with the FCA's performance on resolving the swap

:04:07.:04:09.

issue. I have several constituency issue. I have several constituency

:04:10.:04:14.

cases with slow processes and other address that we have just heard. The

:04:15.:04:18.

Independent review it seems to be anything but dependent click macro

:04:19.:04:22.

independent. I have no confidence in the scheme. The interest rate swap

:04:23.:04:27.

-- this scandal has been one of the -- this scandal has been one of the

:04:28.:04:31.

greatest in recent decades, but because it is, get it and affect

:04:32.:04:36.

businesses and stock into click macro consumers, it has received

:04:37.:04:41.

insufficient attention from the media and government. The government

:04:42.:04:46.

has been more concerned about the survival of the banking system in

:04:47.:04:50.

its entirety, and getting nationalised banks as quickly as

:04:51.:04:58.

ready for -- and has not been robust enough for the FCA, whose oversight

:04:59.:05:02.

of this reselling scheme has been weak, toothless, and an anaemic from

:05:03.:05:07.

the beginning. This has been missed selling on an industrial scale, and

:05:08.:05:12.

we have hardly got to grips with it at all. Several constituents have

:05:13.:05:16.

lost livelihoods and businesses as a direct result of the bank's

:05:17.:05:20.

wrongdoing. I believe many senior banking executives who were behind

:05:21.:05:24.

the scandal should be doing time in prison, but sadly that is not the

:05:25.:05:29.

of the FCA scheme is the exclusion of the FCA scheme is the exclusion

:05:30.:05:33.

of sophisticated borrowers. Based upon the size of lending, because of

:05:34.:05:39.

the company. This was always nonsense. Salas became so coveted

:05:40.:05:43.

that even the people interacting them do not understand them. A

:05:44.:05:49.

former colleague confided in me that even the lawyers drafting the

:05:50.:05:52.

arrangements did not always understand them, they were so

:05:53.:05:56.

complicated. To set up a system that assumed that companies all over a

:05:57.:06:03.

certain size, good at providing commercial premises could get their

:06:04.:06:07.

mind around the swaps is nonsense. Many of them were sold with no

:06:08.:06:11.

paperwork at a time, simply over the telephone or over meetings, often

:06:12.:06:16.

under tremendous pressure. When I mentioned to the house there is a

:06:17.:06:29.

business and my constituent. In the case of this company it went from

:06:30.:06:34.

bad to worse as there that was hustled off to a third-party company

:06:35.:06:40.

instead of properly facing the company into administration. A

:06:41.:06:45.

separate occasion goes beyond the scope of this debate, but inspire

:06:46.:06:49.

and, detail by detail, that story needs to be told. The family behind

:06:50.:06:58.

that constituency company were really at buying commercial present

:06:59.:07:01.

to the macro premises and reselling them with flexible terms to small

:07:02.:07:06.

businesses. That is a thing we want to encourage within our economy, but

:07:07.:07:10.

they had no understanding of financial instruments. When they

:07:11.:07:16.

first asked for help with my degree in law, I should say that because no

:07:17.:07:23.

one else would. 15 years experience, it took me days to get my head

:07:24.:07:27.

around the swap, and it was completely inappropriate for their

:07:28.:07:31.

business. How on earth were they supposed to understand the? Because

:07:32.:07:37.

they were deemed Sigg click macro sophisticated borrowers, they were

:07:38.:07:41.

excluded from the FTA scheme and had to resort to litigation to be

:07:42.:07:44.

justice. I believe that they will justice. I believe that they will

:07:45.:07:46.

win heavily, but it should not be necessary. It sickens me that the

:07:47.:07:52.

RBS are defending litigation with taxpayer's money. It does not seem

:07:53.:07:57.

right at all. I also believe that the executives responsible for

:07:58.:08:01.

selling these swaps and placing the companies into administration when

:08:02.:08:06.

they never missed a debt repayment ever, those people should be

:08:07.:08:09.

prosecuted under criminal law, and face whatever bought the criminal

:08:10.:08:18.

court wrote throws at them. It is well-known that I am a loyal

:08:19.:08:21.

supporter of this government, as are you, I know. I am a loyal supporter,

:08:22.:08:31.

who couldn't be? Two with my honourable friend agree with me --

:08:32.:08:37.

Luuk which he agreed with me constituents have no possibility of

:08:38.:08:44.

understanding them? It is perfectly possible that swaps

:08:45.:09:01.

were designed in a way to be so complicated that they could not be

:09:02.:09:04.

understood. Primarily, they were designed in a way to make the

:09:05.:09:14.

selling bank sums of commission. This will be under that. Although I

:09:15.:09:19.

am a loyal supporter of this government, we have got an FCA

:09:20.:09:24.

condensation scheme that is pitiful. As a result, we are in danger of

:09:25.:09:27.

letting our constituents down. It is not too late for the government, who

:09:28.:09:32.

I say I'm a strong supporter of, it is not too late you a grip and sort

:09:33.:09:44.

this matter out. I want to thank the Member for securing this important

:09:45.:09:47.

debate on the future of the Financial Conduct Authority,

:09:48.:09:52.

especially in the light of recent failings. Also, for the work that he

:09:53.:09:59.

has done on the TGG, which has done so much good work. Sadly, not yet

:10:00.:10:04.

resolved. It is because of the failings of the FCA that I am

:10:05.:10:09.

speaking today. Firstly, on the issue of the failure to act on the

:10:10.:10:14.

warning signs in the income funds hearings one, they lead to the

:10:15.:10:20.

scandal that cost investors millions. An unacceptable loss of a

:10:21.:10:27.

supposedly low risk investment. In 2011, a whistle-blower went to the

:10:28.:10:31.

FSA, as it was then, and one would think that with such risky

:10:32.:10:38.

investments, the FCA, or FSA then, would act swiftly to prevent further

:10:39.:10:42.

sums of money to be invested under misleading terms. It took five

:10:43.:10:48.

months for the FCA to act, and even then it did very little. The FCA

:10:49.:10:55.

warning that the fund material was misleading was simply not good

:10:56.:11:00.

enough. The fund continued to deceive investors, until it was

:11:01.:11:06.

suspended in 2012, by which time 70 million times of investment had

:11:07.:11:14.

occurred. What we saw was a regulatory firm failing, and not

:11:15.:11:18.

using its appropriate powers. The scandal did not stop there.

:11:19.:11:22.

Following the collapse of the scheme under the stewardship of the

:11:23.:11:27.

honourable member, PA PPG works with the FCA for eight months or so,

:11:28.:11:32.

seemingly positively. Then, the FC pulled out of talks without warning,

:11:33.:11:44.

with the "Best interest of investors." The FCA has since been

:11:45.:11:50.

been unwilling to engage with parliamentarians, and has insisted

:11:51.:11:52.

on carrying out their own investigation, leaving us to wonder

:11:53.:11:58.

what's on, as our constituents have been affected? Secondly, I am

:11:59.:12:04.

speaking to represent the interests of my constituents who has been

:12:05.:12:09.

unable to seek redress, despite being what the FCA, or the FSA as it

:12:10.:12:18.

was then it would deem as an unsophisticated partner. They were

:12:19.:12:26.

executives of the company and borrowed. Embedded was a hedging

:12:27.:12:31.

product, and RHP which was supposed to protect him against adverse

:12:32.:12:35.

interest-rate changes. This was common between 2006 and 2008. All

:12:36.:12:42.

major banks did it. In reality, the IRAs be exposed my constituents to a

:12:43.:12:46.

huge amount of risk, incurring fees to the bank. None of it was

:12:47.:12:52.

explained, even though they were in the technical jargon, deemed

:12:53.:12:56.

unsophisticated customers. There was a Clause in the agreement, but the

:12:57.:13:01.

British cross was rudeness, and in some cases these fees amounted to up

:13:02.:13:06.

to half of the value of the loan. By fees were not agree beforehand. It

:13:07.:13:12.

was only when the customer wanted to change the terms that these fees

:13:13.:13:18.

emerged. After the crash in 2008, interest rates went up to zero and

:13:19.:13:21.

have been low ever since. Constituents were stuck paying fixed

:13:22.:13:28.

rates with no chance of restructuring due to break fees. The

:13:29.:13:35.

banks have since admitted that the I RHP his work miss sold, and there is

:13:36.:13:39.

a scheme that was negotiated between individual banks and the FCA. The

:13:40.:13:50.

FSA and the FCA. Three point ?1 billion was set aside, but far less

:13:51.:13:59.

has been paid out. There are two types of IRA age these, embedded and

:14:00.:14:02.

stand-alone. One amount accounts for interest on

:14:03.:14:11.

the loan. It places outside of the remit of the FCA apparently, because

:14:12.:14:18.

it was lost as a commercial loan. Many of these loans were sold to as

:14:19.:14:24.

MPs, like my constituents, who had no understanding of the hedging

:14:25.:14:33.

products as any average consumer. There is an investigation, because

:14:34.:14:45.

our consumers do not. The inability of the FCA to act in this case has

:14:46.:14:50.

resulted in real problems, and in this case for my constituent, who is

:14:51.:14:55.

stuck on a fixed rate loan in a zero interest economy with no ability to

:14:56.:15:00.

restructure their loans. I understand that the majority of what

:15:01.:15:03.

I have covered involves thinking jargon, but the bottom line is

:15:04.:15:08.

clear. The FCA is currently not operating in the full interest of

:15:09.:15:13.

consumers, and its conduct in the fund fiasco and the miss sold

:15:14.:15:21.

products are just examples of many. Many members across the house, I

:15:22.:15:26.

expect the FCA as regulatory body to do its job, to regulate, and to

:15:27.:15:32.

protect consumers. I support the motion tonight, as I believe the FCA

:15:33.:15:37.

in its current form is not fit for purpose, and I for one have no

:15:38.:15:41.

confidence in its existing structure of procedures. If the government of

:15:42.:15:46.

this country want the country to have faith in the banking system,

:15:47.:15:52.

can I respectfully suggest that the government acts to address the

:15:53.:15:59.

sentiment of the motion tonight. We have to drop to seven minutes. Is a

:16:00.:16:07.

pleasure to speak in this debate. I, like other colleagues record my

:16:08.:16:12.

thanks to the honourable member in his tenacity and in the work that he

:16:13.:16:17.

does in securing the debate this evening. I'm pleased to speak,

:16:18.:16:23.

because it allows me to raise for a second time a case in my

:16:24.:16:27.

constituency involving the FCA, which I fear it may be common with

:16:28.:16:32.

colleagues across the house. The last time I mentioned this was on

:16:33.:16:43.

the 5th of November last year. Some of my points were responded to in

:16:44.:16:50.

writing, and that want to place my thanks and writing. For the members

:16:51.:16:54.

of the house were who were not present in November, I would like to

:16:55.:17:00.

highlight the case of the FCA. It relates to a business in my

:17:01.:17:06.

constituency which was owned by a constituent Eirik topping. It was a

:17:07.:17:12.

medium sized construction firm who engaged in contracts with clients in

:17:13.:17:19.

private and public sectors, and were well regarded. In 1998, he fell

:17:20.:17:26.

victim to actions and behaviours from the Royal Bank of Scotland, the

:17:27.:17:33.

bank that he had held his account with for many years. Specifically,

:17:34.:17:36.

it turned around division of restructuring. It is alleged that

:17:37.:17:43.

they found themselves in circumstances in which the bank

:17:44.:17:46.

unnecessarily engineered edible to move the deep business out of local

:17:47.:17:50.

management and into turnaround divisions in order to generate

:17:51.:17:57.

revenue for fees, increase margins. The company was forcefully moved

:17:58.:18:00.

into global restructuring group after the bank claimed the company

:18:01.:18:05.

owed it a debt in excess of ?700,000. The constituent admits

:18:06.:18:12.

there was some debt, but it was perfectly capable of managing it.

:18:13.:18:15.

although the else she at the time although the else she at the time

:18:16.:18:21.

showed net assets of over ?1 million, and after being run through

:18:22.:18:24.

the process of the restructuring group, RBS placed the value of the

:18:25.:18:31.

company at a -1.1 million, a discrepancy of ?2 million. There is

:18:32.:18:36.

a debate over this to this day. The upshot was that this led to forced

:18:37.:18:42.

liquidation, costing jobs of all of the employees and forcing them to

:18:43.:18:46.

sell his home. I thank him, and I would like to thanks for this

:18:47.:18:54.

discussion. Would he agree that this is the real tragedy of the scenarios

:18:55.:18:59.

in constituency across the country? Is not simply businesses and

:19:00.:19:05.

individuals, it is employees whose jobs have been liquidated? She is

:19:06.:19:09.

absolutely right to raise that point. There are those employees who

:19:10.:19:19.

it applies to, and the economy of this country is affected. Mr Deputy

:19:20.:19:26.

Speaker, this is an issue about people's businesses, jobs, homes,

:19:27.:19:31.

and lives. While organizations deal with regulation and supervision of

:19:32.:19:34.

complex financial institutions and products, subjects most people

:19:35.:19:40.

ordinarily considered dry and dull. These matters have a human cost as

:19:41.:19:45.

she alluded to, rather than numbers on a balance sheet. Colleagues will

:19:46.:19:49.

be aware of the report by the businessmen or wrote Lawrence

:19:50.:19:56.

Thompson. Tomlinson received evidence about spelling's practices,

:19:57.:20:04.

including business customers. "Very Concerning practices of behaviour

:20:05.:20:08.

that led to destruction of good and viable businesses all of the tobacco

:20:09.:20:14.

for the sake of profit at RBS." I am sure that many hundreds of cases

:20:15.:20:20.

across the country are unresolved. The Tomlinson report suggests that

:20:21.:20:25.

this is widespread and systematic which applied to many RBS customers.

:20:26.:20:31.

Once placed in this division of the bank, these businesses were trapped

:20:32.:20:35.

with no ability or opportunity to trade after that position. Good and

:20:36.:20:40.

honest and successful business people were forced to stand by and

:20:41.:20:43.

watch as they were sunk by the decisions of the bank. The bank

:20:44.:20:47.

would extract maximum revenue from the business beyond that which could

:20:48.:20:50.

be considered reasonable, and to such an extent it was a contributing

:20:51.:20:54.

factor to their businesses financial deterioration. The practices of the

:20:55.:21:01.

restructuring group, if accurate, where on a generous term

:21:02.:21:08.

questionable for the macro. It may be said to be unethical and

:21:09.:21:15.

scandalous. It is proper that the government, following the

:21:16.:21:17.

publication of the Tomlinson report in 2013, voted the FCA to discuss

:21:18.:21:26.

the alleged actions. The FCA have been established by Parliament to

:21:27.:21:33.

investigate the situation. I am aware of two firms that have been

:21:34.:21:36.

appointed to carry out a skilled personal review of the allegations

:21:37.:21:40.

against the Bank of Scotland. However, more than two years on, we

:21:41.:21:45.

are still waiting for the FCA to present its findings. In the

:21:46.:21:48.

meantime, my constituent and I'm afraid hundreds like him are unable

:21:49.:21:52.

to move on with their lives to get closure on the matter. They would

:21:53.:21:57.

seek commendation or sick all an apology. He is making in his stream

:21:58.:22:08.

the compelling case. I have a constituent who is in the same

:22:09.:22:12.

position, and his fear is that this report is delayed as a tactic by RBS

:22:13.:22:18.

to delay litigation to reach a more favourable position. Does he agree

:22:19.:22:21.

that this house should use this debate to call on the FCA to publish

:22:22.:22:25.

that report as soon as possible, so that the litigation can have a fair

:22:26.:22:31.

hearing? I thank him for that timely intervention, and I would agree with

:22:32.:22:35.

him to the extent that the voice of this house is heard loud and clear

:22:36.:22:40.

this evening, and it will be perceived with alacrity, which they

:22:41.:22:51.

have not shown. I've been thrown off course, and I will use a football

:22:52.:22:56.

analogy, I promise. The ST a review is ongoing, and it is promised at

:22:57.:23:02.

the end of the year, and now we are told it will be as soon as possible.

:23:03.:23:07.

For those who have suffered by this malpractice, malpractice by the FCA

:23:08.:23:11.

has been charged of investigating and putting a stop to, we owe them

:23:12.:23:15.

better than that. I am sure that the FCA and investigators who were

:23:16.:23:20.

mentioned are conducting a thorough review, and they will do about the

:23:21.:23:23.

many filing cabinets full of evidence through which to sit. Two

:23:24.:23:30.

years should be long enough to present at least some findings. This

:23:31.:23:36.

two year wait is compounded by the fact that forced liquidation and

:23:37.:23:39.

destruction of viable businesses were historic, and often a decade

:23:40.:23:42.

old. That is a long time to wait for old. That is a long time to wait for

:23:43.:23:46.

justice or closure, particularly for individuals who have had their

:23:47.:23:51.

livelihoods destroyed. The FCA and also the government should be aware

:23:52.:23:52.

of the negative impact this is of the negative impact this is

:23:53.:23:56.

having directly on those individuals involved, and also on the image and

:23:57.:24:01.

reputation of the FCA. I ask, can the government give insurance today

:24:02.:24:06.

about when the FCA will wrote conclude this review, and what steps

:24:07.:24:10.

it is taking to make sure it is delivered probably? In my closing

:24:11.:24:18.

remarks, I want to return it to the FCA's rule widely. Notwithstanding

:24:19.:24:22.

the issue I have discussed, I do not readily engage in the increasingly

:24:23.:24:30.

popular pastime of banking bashing. We should be supportive of our

:24:31.:24:34.

financial sector, and the regional financial clubs, and of course

:24:35.:24:38.

Manchester where many of my constituents work. -- hubs. Our

:24:39.:24:45.

financial services should also, in leading the world as they do in

:24:46.:24:49.

success and efficiency, they should also lead their world in their

:24:50.:24:54.

ability to regulate, fairness, and propriety. We need more competition

:24:55.:24:59.

to remove incentives of short-term in favour of bank profit, rather

:25:00.:25:05.

than long-term customer relations. The Tomlinson report makes it clear

:25:06.:25:10.

that institutional attitude is one of the core reasons why RBS's

:25:11.:25:15.

restructuring group acted as he did, and that needs to change. The

:25:16.:25:19.

Financial Conduct Authority is responsible for ensuring that top

:25:20.:25:24.

management of banks can instill the right culture in their institutions,

:25:25.:25:30.

and that this remains a priority. The FCA faces a difficult task in

:25:31.:25:34.

this regard, a task I do not envy. I urge it to show its mettle.

:25:35.:25:44.

I also congratulate the honourable member for securing this debate and

:25:45.:25:48.

for the work he has done on the subject. It is clear the honourable

:25:49.:25:54.

members come to this place with a range of concerns. My own engagement

:25:55.:25:58.

was prompted by the lack of protection and compensation

:25:59.:26:01.

available to investors in the Cornwall income fund including some

:26:02.:26:05.

of my constituency. He cased displays how dysfunctional the

:26:06.:26:08.

investment services in the UK still is. The line appears to be that we

:26:09.:26:15.

have exponent... It can happen again which I think misses the point. The

:26:16.:26:17.

warrants available from financial services will attract through

:26:18.:26:22.

another loophole. Members will be familiar with what... What happens

:26:23.:26:28.

when we apply that test to the situation faced by an ordinary

:26:29.:26:34.

investor. By ordinary investors I mean people who are neither bind

:26:35.:26:37.

individuals or sophisticated investors on the 2000 act. The

:26:38.:26:44.

Treasury people with access to the services and... To access and manage

:26:45.:26:51.

their financial product with ease. The government is to... Precisely as

:26:52.:27:00.

my constituent did. When looking for secure investment for his funds, he

:27:01.:27:07.

did as the government suggested and approached an independent advisor

:27:08.:27:10.

for investments ever flooded his need to obtain an income and low

:27:11.:27:15.

capacity risk. He was advised in the income fund described as the

:27:16.:27:20.

guaranteed low risk income fund. With information defining this

:27:21.:27:26.

clearly. That document was not aimed at Mr Devon, but intended for

:27:27.:27:33.

experienced investors or intermediaries like his advisor who

:27:34.:27:40.

should've been given advice. With approximately 1500 investors, Mr

:27:41.:27:46.

Devon's funds disappeared. One of my constituency was a financial advisor

:27:47.:27:49.

and a number of his clients have lost significant amounts of money

:27:50.:27:54.

from investing in the coral income fund, is the honourable Lady aware

:27:55.:28:00.

that the main parties has not even, an investigation has not commenced

:28:01.:28:03.

in the main parties even though key information provided as early as

:28:04.:28:12.

2011. I think he makes a valid point that the case is difficult for

:28:13.:28:17.

people in all situations to see justice and clarity. I am grateful.

:28:18.:28:24.

The honourable gentleman raised the issue of independent financial

:28:25.:28:28.

adviser. Does my honourable friend share my concern that independent

:28:29.:28:31.

financial advisers, many of whom were also investors in the fund risk

:28:32.:28:36.

continuing to be blamed for losses related to the income fund due to

:28:37.:28:41.

the continuing failings of the FCA to investigate this matter within a

:28:42.:28:47.

reasonable time? I agree with you, the system which is regulated by the

:28:48.:28:52.

FCA with the Chancellor wants me to rely on continues to fail to provide

:28:53.:28:55.

all of these kinds of investors compensation or explanation for

:28:56.:29:00.

their loss. Mr Devon and others are being misled. Even if an ordinary

:29:01.:29:07.

investor approach is the sector, if they ask for it to care low risk

:29:08.:29:11.

investment, their money can disappear, their financial plans in

:29:12.:29:14.

life can be turned upside down, because millions of pounds to run a

:29:15.:29:23.

business that fails to deliver. My constituent runs a business and this

:29:24.:29:26.

might sound technical but it may not be back on to get it. As this is all

:29:27.:29:30.

across the country, people run savings groups where colleagues

:29:31.:29:35.

regularly receive money and take turns to receive a lump sum.

:29:36.:29:38.

Depending on the size of the workplace, the sums involved can be

:29:39.:29:41.

significant. It is a simple operation that the phrase

:29:42.:29:45.

couldn't... Is a common description for someone who is failing at basic

:29:46.:29:56.

tasks. Surely Agut and relate... Then the work place... On the

:29:57.:30:05.

contrary, Cornel became a warning, the financial services sector when

:30:06.:30:08.

it was written, the systems for regulation enforcement and

:30:09.:30:12.

investment failed to protect investors. T and tail and ran and

:30:13.:30:21.

would have been allowed to continue, evading the responsibility.

:30:22.:30:25.

Financial services sector in the UK has run throughout the law, lost

:30:26.:30:28.

millions or billions of pounds too many times, phrase seems an apt

:30:29.:30:35.

description of too many of the organizations and individuals who

:30:36.:30:37.

provide the section with its leadership. Just like the regulators

:30:38.:30:43.

who oversaw the crash of 2008, now the FCA and others seem to be part

:30:44.:30:47.

of the problem rather than part of the solution. Even on fighting the

:30:48.:30:53.

case through the system, an investor may well find themselves

:30:54.:30:55.

significantly out of product. This is a system that does not do what it

:30:56.:31:02.

says. I was not shocked to find that the Treasury grabs the fines but

:31:03.:31:08.

should be drafted where the cost of regular sugar and compensation are

:31:09.:31:12.

burned by those in the industry and its customers. We need to look

:31:13.:31:17.

seriously at how we provide more effective regulation enforcement and

:31:18.:31:20.

compensation and we should also review the levees and fines. One of

:31:21.:31:26.

the gaps to be filled to enforce payment of compensation, removing

:31:27.:31:31.

the need for a set of fees and more consistency for the ability to

:31:32.:31:35.

ensure the compensation awarded. I have concerns about the operation of

:31:36.:31:40.

professional businesses in the sector. Exemption schemes causing

:31:41.:31:46.

concerns undermines the reality and causes problems for them. The FCA

:31:47.:31:50.

needs to look at significant changes to ensure its rules. It could

:31:51.:31:56.

examine the operation of the Scottish solicitors policy and the

:31:57.:32:00.

highly successful industry wide indemnity. I want to end by

:32:01.:32:06.

commenting on the residents are between the government and FCA. It

:32:07.:32:10.

is interesting that the week before this debate, the FCA announced the

:32:11.:32:14.

appointment of a new chief executive and it is widely reported that Mr

:32:15.:32:17.

Bailey was hand-picked from the babe of England by the Chancellor. I find

:32:18.:32:22.

this surprising. As in light of an exchange with diet... And the reason

:32:23.:32:31.

debate. I queried by the fact that neither the Chancellor for anyone

:32:32.:32:35.

else held a meeting with FCA over a two-year period. The member did not

:32:36.:32:40.

contradict me and I have heard nothing to say this is incorrect. I

:32:41.:32:43.

understand the absence of such meetings may be intended to give the

:32:44.:32:48.

appearance that the FCA acts as an independent agency. If the chief

:32:49.:32:51.

executive is hand-picked by the Chancellor and had not even applied

:32:52.:32:54.

for the post, what does that say about their independence of the FCA.

:32:55.:32:59.

Of course there is regular correspondents and interaction

:33:00.:33:01.

between the government and FCA, during a period of such pressure on

:33:02.:33:08.

the sector, why was there not a single bilateral engagement with the

:33:09.:33:13.

FCA over such a long period? The absence of such meetings perhaps has

:33:14.:33:16.

more to do with protecting ministers than protecting independence of a

:33:17.:33:21.

body whose principal officers are pointed at the Chancellor is

:33:22.:33:26.

bidding. As some steam and issues of the banking sector from the low

:33:27.:33:29.

points of recent years, Mr Bailey could demonstrate his independence

:33:30.:33:34.

very easily by signalling his desire to have the FCA reinstate the

:33:35.:33:38.

inquiry into banking culture. Failure to do so may be interpreted

:33:39.:33:42.

as the inquiry having been ditched to clear way for him taking post. If

:33:43.:33:47.

that is the case, his tenure were not happy also a good start and

:33:48.:33:50.

questions about the independence and integrity the FCA will be continued.

:33:51.:33:56.

It is a pleasure to follow the honourable lady. And to learn the

:33:57.:34:04.

phrase cannot run a walk store which I thought was difficult anyway, so I

:34:05.:34:10.

think it would be a better term. I congratulate my honourable friend

:34:11.:34:14.

for breeding for this debate and for his amazing achievement in getting

:34:15.:34:21.

some grievance over not his constituents as... As well as many

:34:22.:34:23.

of our other constituents, mine included. The banking corporation

:34:24.:34:30.

behaved quite disgracefully to my constituents, sold a interest-rate

:34:31.:34:35.

swap which was larger than the loan outstanding. It was a condition

:34:36.:34:42.

persistent and been taken out and when interest rates fell, they

:34:43.:34:44.

revalue the loan to say that his loan deal value is the need the

:34:45.:34:49.

required level and put in special measures and started imposing penal

:34:50.:34:52.

interest rates and when I got in touch they said that they could not

:34:53.:34:56.

talk to me. The whole story was quite disgraceful. Not one would

:34:57.:35:01.

expect of a major banking Corporation. I think we are all very

:35:02.:35:07.

grateful to what has been done to get some redressed for this. As I

:35:08.:35:15.

speak I must refer to my interests, I am actually regulated by the FCA.

:35:16.:35:19.

I have been for many years, I was regulated by its predecessor body

:35:20.:35:27.

and before that going back to the middle 1990s. I do not think I have

:35:28.:35:30.

Stockholm syndrome when I have to tell the House that I cannot support

:35:31.:35:34.

my honourable friend's motion. The reason for this is not that I do not

:35:35.:35:37.

think there have been errors of regulation. There have. We know

:35:38.:35:44.

there are system of regulation prior to the crash of 2008 was a failure.

:35:45.:35:50.

But nobody knew who was in charge of what aspect of regulation and how it

:35:51.:35:55.

was to be managed and in the end nobody was doing it at all. But, the

:35:56.:36:02.

FCA only itself comes in 2013. The problems the honourable members have

:36:03.:36:06.

been referring to have predated the creation of the FCA. We in this

:36:07.:36:11.

house in the last session of Parliament legislated to try and

:36:12.:36:16.

deal with the problem and I think now we are bringing for this notion

:36:17.:36:21.

much too early without the FCA having a chance to prove it is

:36:22.:36:27.

different to the FSA. The FSA failed and that is why the House in Boston.

:36:28.:36:35.

I do appreciate the points he is making they are reasonable. The

:36:36.:36:39.

differences in the FCA in the FSA is overemphasized. When the swap was

:36:40.:36:45.

established, the authors that came from the FSA were the same offices

:36:46.:36:48.

back into the first many after the FCA was established so the degree of

:36:49.:36:57.

change is overstated possibly. I do not agree with my honourable friend.

:36:58.:37:02.

Some employees remain, yes, it would have been extraordinary of all the

:37:03.:37:06.

regulators in the FSA were fired and sent off to the great regulatory

:37:07.:37:12.

house in the sky. But the powers and responsibilities of the FCA were

:37:13.:37:17.

changed and the FCA has been carried out an investigation. Here we have

:37:18.:37:23.

as a house to be judicious. The FCA has to bear in mind that some people

:37:24.:37:28.

took out swabs knowing full well what they were doing. Not every swap

:37:29.:37:36.

sold was missile. This is very important because actually

:37:37.:37:39.

interest-rate swaps are very important safeguards for people who

:37:40.:37:42.

are uncertain of the direction of interest rates. When interest rates

:37:43.:37:46.

are at Lowe's, many people feel that it is prudent to protect themselves

:37:47.:37:50.

by taking out an interest-rate swap. Would be wrong to over tighten

:37:51.:37:56.

regulation or to be so sensitive to what happened in the past to make

:37:57.:38:01.

beneficial financial instruments unavailable because of historic miss

:38:02.:38:05.

selling. Each case needs to be looked at on its merits, I know for

:38:06.:38:09.

my own experience when I first took out a mortgage, I took it out at a

:38:10.:38:13.

fixed rate because I knew I could afford to pay the interest rate that

:38:14.:38:16.

was uncertain as to whether I could pay a higher rate. This is a prudent

:38:17.:38:20.

and sensible thing for people to do when engaging with the financial

:38:21.:38:25.

sector. The FCA had a big job of work to do in... It could not

:38:26.:38:33.

arbitrarily decide that all cases were misspellings and therefore they

:38:34.:38:38.

all had to be compensated for. This house as well needs to be judicial.

:38:39.:38:44.

The motion on the paper is a really serious one. It is saying we have no

:38:45.:38:50.

confidence in an armed's length regulator. An arm's length regulator

:38:51.:38:54.

that this house established just three years ago. If we really mean

:38:55.:38:59.

that, we ought to be legislating to create a new one. We should not be

:39:00.:39:03.

simply passing a motion but we need to say this body has failed, it is

:39:04.:39:07.

abolished as of the 1st of April and we will have a new one coming in.

:39:08.:39:12.

This is an intermediate step where the House faces one of two risks.

:39:13.:39:19.

One is that this house is passing this motion. Like many other back

:39:20.:39:22.

bench motions, nothing follows from it. And then this house looks

:39:23.:39:27.

foolish. It looks like whatever we say it makes no difference and we

:39:28.:39:30.

will have no future power when things may be more serious to bring

:39:31.:39:36.

our authority to bear on independent regulators. That is one of the

:39:37.:39:40.

options. The other option is that the chairman of the FCA feels he has

:39:41.:39:45.

to resign, take responsibility, because there is no chief executive

:39:46.:39:48.

at the moment which makes it a very strange time to be holding this

:39:49.:39:55.

debate. The chairman calls on his sword and what have we achieved? We

:39:56.:39:59.

have one person gone but the organisation remains intact even

:40:00.:40:03.

when not legislated to do it. I think this house should be proud of

:40:04.:40:07.

its constitutional standing, should recognise the extraordinary power

:40:08.:40:12.

that it has. That we can summon people to the bar of the House if we

:40:13.:40:16.

are sufficiently annoyed by the way they conduct themselves. We can make

:40:17.:40:20.

them answer to select committees and indeed we do. What if we use that

:40:21.:40:24.

power without due consideration, without being certain, without

:40:25.:40:29.

having every fact at our fingertips that this body, not its criticisms

:40:30.:40:33.

was the one we have no confidence in. Then we undermine the standing

:40:34.:40:38.

of the House of Commons and its ability to do this in future where

:40:39.:40:45.

our case may be better founded. He is making a powerful speech

:40:46.:40:49.

typically, and I agree with what he is arguing but does he accept that

:40:50.:40:54.

primarily we represent our constituents. The reason members are

:40:55.:41:00.

upset with the FCA is that we have not seen things being addressed and

:41:01.:41:05.

the time it is taking us to put pressure on returns. White I am

:41:06.:41:07.

grateful to my honourable friend for that intervention. I ink it is

:41:08.:41:12.

difficulty with time being reference to the report which took a long time

:41:13.:41:17.

to come forward. Again that started under the FSA, that was the failure

:41:18.:41:23.

of the FSA not the FCA. I think in this time span, a body that has only

:41:24.:41:27.

been going for three years is perhaps not that unreasonable when

:41:28.:41:32.

two years of that have been making some particular investigation. We

:41:33.:41:35.

have made huge progress thanks to my honourable friend in achieving

:41:36.:41:40.

redress of grievance. That has been enormously important and right to do

:41:41.:41:45.

that. A vote of no-confidence though, is the nuclear weapon a

:41:46.:41:50.

power of the parliament. It is something that brings governments

:41:51.:41:54.

down. If we pass it, it should lead to fundamental change of the FCA and

:41:55.:41:58.

its notions. But I have a fear that we are trying to fire this guy

:41:59.:42:03.

before we have -- fire this guy before we have loaded it. Therefore

:42:04.:42:07.

it will misfire. In that respect I hope that my honourable friend will

:42:08.:42:12.

withdraw his motion because I think it is had its effect through the

:42:13.:42:17.

debate. We are now down to five minutes. Thank you. I'd also like to

:42:18.:42:29.

add my thanks to the honourable member, not just the work you have

:42:30.:42:34.

done to the APPG but people who have in previous lives to this place are

:42:35.:42:39.

appreciative of what you have done. I would like to address my remarks

:42:40.:42:44.

at how the FCA course of redress did not work for the businesses for into

:42:45.:42:51.

insolvency as a result of this hedging project. The concept of

:42:52.:42:53.

hedging is well understood to mitigate against risk but these

:42:54.:42:57.

products are structured to be a heads I win, tails you lose for the

:42:58.:43:02.

banks. As many of the chamber in this that that is the cause of many

:43:03.:43:07.

unnecessary solvency is across the country with simply devastating

:43:08.:43:10.

consequences to individuals and their families. The administration,

:43:11.:43:18.

some have called all their assets sold and often with the banks still

:43:19.:43:22.

pursuing after personal guarantees and family homes after that. In

:43:23.:43:29.

England and Wales the process under unregulated has been similar with

:43:30.:43:34.

many being virtually bankrupt as a direct result. The situation should

:43:35.:43:37.

not have occurred in the first place. Unfortunately, the review

:43:38.:43:43.

process instigated by the FCA is of little use to the individuals on our

:43:44.:43:48.

constituents who lost their businesses, homes, and lights work

:43:49.:43:52.

to the scandal. The process fundamentally does not address or

:43:53.:43:55.

provide a solution for solving businesses who have suffered from

:43:56.:43:59.

this conduct. The former business secretary stated in May 2013 after

:44:00.:44:03.

the FCA scheme had been launched that they are still and I quote

:44:04.:44:10.

"Unresolved issues surrounding the scandal including how businesses who

:44:11.:44:14.

have been forced to close because of product's banks sold in the first

:44:15.:44:20.

place. This includes deciphering who would help the businesses and

:44:21.:44:23.

administration whether assets have been taken away from them, who have

:44:24.:44:26.

been charged of finding a solution for them? And quote it is clear from

:44:27.:44:31.

the statement that we have acknowledged the fatal flaw in the

:44:32.:44:34.

FCA review system right from its very inception. When a business is

:44:35.:44:40.

balls to... The business owner loses control over the process. Even if

:44:41.:44:46.

the insolvency practitioner decides to fight against it, the redress

:44:47.:44:50.

goes to the bank. You could not make it out. This is how the redress

:44:51.:44:56.

process as a minister, there has been a lack of transparency and

:44:57.:45:04.

details between the FCA and banks. And how each deal varied from bank

:45:05.:45:08.

to bank. How could fairness be guaranteed or trusted when different

:45:09.:45:12.

rules apply to different banks, none of which are transparent where

:45:13.:45:17.

guiding orders are commonplace. How can fair treatment be ensured for

:45:18.:45:22.

the 3000 people who won compensation from the banking review but received

:45:23.:45:25.

no benefit as they were already out of business? As it stands, the FCA

:45:26.:45:30.

review allows the banks to successively sidestep all

:45:31.:45:35.

responsibility for its actions, manipulating the system and using

:45:36.:45:39.

the process of insolvency to disregard the principle of the

:45:40.:45:42.

review. Rather than businesspeople receiving redress for their loss, we

:45:43.:45:47.

can quite happily, the banks have admitted, they pay the redress and

:45:48.:45:51.

insolvency practices. They choose not to do with the scenario. Their

:45:52.:45:58.

primary... It to the creditors, the lion share of the redress going back

:45:59.:46:02.

to the bank. Directors, shareholders, unsecured creditors

:46:03.:46:07.

including HMRC local councils bear the brunt. It is a paper exercise in

:46:08.:46:14.

which the only benefactors are the insolvency practitioners who make a

:46:15.:46:17.

tidy sum of fees from the bank and they are allowed to pay itself back

:46:18.:46:21.

from its conduct. Some would argue that perhaps banks would have been

:46:22.:46:28.

in this area and perhaps for some this is true. The cash flow as we

:46:29.:46:32.

know is the lifeblood of any business and sustained extensive

:46:33.:46:37.

pressure over time to make high interest payments over several years

:46:38.:46:42.

is without a doubt a major and sole contributing factor to the success

:46:43.:46:47.

or failure. To dismiss this otherwise is not only misleading but

:46:48.:46:51.

also insulting to the thousands of business owners who have lost their

:46:52.:46:56.

life's work to the scandal. Despite constant change and dialogue,

:46:57.:47:00.

businesses that have lost everything, they are said

:47:01.:47:08.

consistently ignored. Fundamentally this is not just about regulation or

:47:09.:47:11.

government, it is actually about people. The banks have admitted miss

:47:12.:47:15.

selling, the businesspeople have been exonerated but they still find

:47:16.:47:19.

themselves in a position of powerlessness and total frustration.

:47:20.:47:25.

And still the difficulties go on. HMRC now treating owners differently

:47:26.:47:28.

as they know the consequential losses are not being paid out. These

:47:29.:47:32.

are systematic issues that need to be addressed. Those who have lost so

:47:33.:47:38.

much are often left with nothing more than energy drive and

:47:39.:47:43.

determination to fight this. Unfortunately, neither the regulator

:47:44.:47:45.

ignored the law gives them the tools or the voice to fight. Their voices

:47:46.:47:54.

are not being heard. Would it not be more constructive to give a fair

:47:55.:47:58.

deal in terms of compensation so that the businesspeople who have

:47:59.:48:01.

lost everything to use their drive to rebuild. Thereby doing their bit

:48:02.:48:07.

to contribute to the economic recovery. To do this, they need our

:48:08.:48:11.

support and support of the lawmakers and regulators, the banks are not

:48:12.:48:17.

simply doing the right thing. Neither would seem is the FCA with

:48:18.:48:22.

its decision to drop the inquiry into banking culture. Issue three

:48:23.:48:27.

concerns the ability of individuals and can only be private individuals

:48:28.:48:31.

to take action. Although the bank may have reached its regulatory

:48:32.:48:34.

duties under the FCA regulations, it can only be sued for breach of

:48:35.:48:37.

contract, not for revelatory breaches. As I have two add my

:48:38.:48:48.

congratulations as well, he is a fighter for justice, not just for

:48:49.:48:52.

her constituents but for all about us and we owe him a great deal for

:48:53.:48:56.

that. Just like my honourable friend said, I wish to declare an interest

:48:57.:49:01.

that I am the director of a small business that is regulated by the

:49:02.:49:10.

FCA like him, I was also regulated by FSA. I want to come to the points

:49:11.:49:18.

he made because as most of us have focused on constituents cases, I

:49:19.:49:23.

think we really would push the debate wider about the overall

:49:24.:49:26.

quality of the FCA and I have the time I will come to that but I want

:49:27.:49:31.

to start by raising constituent's cases. The case of Terrance and Jean

:49:32.:49:37.

of Albrecht in South Suffolk. They lost their ?50,000 invested in

:49:38.:49:46.

something as walls the interest invested in a Cornwall series fund.

:49:47.:49:51.

They are now in their 70s and had saved throughout their lives and had

:49:52.:49:54.

planned to live off their retirement, money they fear they

:49:55.:49:59.

will never see again. Their primary concern is that the FCA is unable to

:50:00.:50:03.

provide a time frame for when their investigations will be concluded and

:50:04.:50:06.

I think these are points made by other people and I hope the Minister

:50:07.:50:11.

who be speaking soon will be able to give us some kind of update on the

:50:12.:50:14.

timescale they face. I received correspondence not just from

:50:15.:50:19.

consumers but from firms and in particular from Stephen in my

:50:20.:50:29.

constituency who runs a business, a financial planning business. His

:50:30.:50:36.

concern is that our DR, regulation of commission and charging of

:50:37.:50:42.

investments. I think it encapsulates the anger that many small businesses

:50:43.:50:46.

feel about these regulator, he blames those rules from the loss of

:50:47.:50:51.

about 13 and a half thousand independent advisors. He says, "My

:50:52.:50:58.

opinion of the RTR is an assault on the employee rights and tax paying

:50:59.:51:04.

private citizens of the FCA bureaucrat. It is a disgrace in this

:51:05.:51:15.

society... ", perhaps a tad harsh but I come to this. I started a

:51:16.:51:21.

mortgage or courage and 2004 and of course that was the FCA. In my

:51:22.:51:27.

experience it was so bureaucratic all the time, the FSA was about box

:51:28.:51:32.

ticking, rather than looking at potential problems and doing

:51:33.:51:36.

something about them. There are many examples like to give, every six

:51:37.:51:41.

months we had to submit what was called a capital return, despite

:51:42.:51:44.

being a small business. We had this famous document about mortgage

:51:45.:51:49.

regulation, the size of a doorstep, which make no sense to anybody. I

:51:50.:51:54.

think the whole assumption of the regulator was that small

:51:55.:51:56.

practitioners have armies of compliance officers, just like the

:51:57.:52:03.

banks do. Were you intervening? She raised a hand. The assumption is we

:52:04.:52:09.

also have large numbers of compliance officers but we do not.

:52:10.:52:13.

The example I would give, the most extreme one cannot have the FSA

:52:14.:52:17.

found them focus on bureaucracy rather than dealing with problems in

:52:18.:52:21.

the industry was that in 2010, this was at the height of the euro crisis

:52:22.:52:27.

when many people doubted whether it would survive, on a day when I think

:52:28.:52:31.

the euro survival was the top item on the news, I received an e-mail

:52:32.:52:37.

for directors of regulatory firms, I was expecting advice about the

:52:38.:52:41.

possible calamity we were facing. In fact though, I found it was a

:52:42.:52:45.

diversity survey. Extraordinary Diversey survey which wanted to know

:52:46.:52:49.

across all levels of management in my business, which very small

:52:50.:52:53.

businesses employ a handful of businesses, how many of my staff,

:52:54.:52:57.

what percentage of my staff, not just that the city by what

:52:58.:53:01.

percentage of my staff were transsexual, and even intersexual. A

:53:02.:53:04.

word I had never even heard of before. The regulator on this day of

:53:05.:53:10.

financial crisis wanted to know how many of my staff were intersexual, I

:53:11.:53:15.

think it is a new word to many people. Even today. It was to me at

:53:16.:53:19.

the time but I say that to illustrate the idea that the FSA was

:53:20.:53:23.

a tick box regulator, that is why despite that work, and never noticed

:53:24.:53:26.

the basic thing which is our financial system was heading for an

:53:27.:53:31.

almighty crash and crisis. What we can say for the FCA, we have not had

:53:32.:53:35.

the credit crunch, that is something very much in its favour, we have had

:53:36.:53:39.

the successes that my friend talked about. I think one of particular I

:53:40.:53:43.

want to finish on, I think what the FCA has done on mortgage rules and

:53:44.:53:47.

property market has been for the good. We do need potential

:53:48.:53:54.

borrowing, and I think we are far too reckless in this build up to the

:53:55.:53:58.

crunch. But if we want fairness, I think asking first-time buyers to be

:53:59.:54:04.

so heavily regulated while applying for a mortgage faces that regulation

:54:05.:54:07.

and can take out an interest-only mortgage rate huge amount of money

:54:08.:54:10.

without any key fax administration or one that has to be advised,

:54:11.:54:14.

regulated, all these things is deeply unfair. I would say in

:54:15.:54:19.

conclusion, I think it is too early, I agree with my friend to pass

:54:20.:54:25.

judgement on the work of the FCA but we all feel we need to see greater

:54:26.:54:32.

work from then on the basic just just -- justice for our

:54:33.:54:35.

constituents. And hopefully we will have news on we conceived these

:54:36.:54:45.

cases be looked at. Thank you Mr Deputy Speaker, I would like to add

:54:46.:54:49.

my congratulations to the Member for bringing this debate. He has been

:54:50.:54:59.

careful in bringing this to the House over the last couple of years.

:55:00.:55:03.

His constituents have suffered and he should be commended for the group

:55:04.:55:12.

issues he raised. And of course the issue of banking culture which in

:55:13.:55:15.

many ways sparked a debate that we are having today. The honourable

:55:16.:55:23.

member gave a speech at about the importance of consumer protection.

:55:24.:55:27.

That has to be commended. We have moved on to the member who gave an

:55:28.:55:35.

interesting speech on the FCA and its duties and the subject of

:55:36.:55:38.

football which has been much discussed this evening. I cannot

:55:39.:55:41.

help but take the opportunity as for the ball has come up, the first

:55:42.:55:45.

opportunity I have had to do this, but the symbol final of the league

:55:46.:55:52.

cup, I would glad to say that... They have managed to get through a

:55:53.:55:59.

final on the 13th of March but as a member of Parliament, I am happy

:56:00.:56:03.

that it gives me a small problem because the team we will be facing

:56:04.:56:09.

will be Ross County. The team from Highland who had done well in the

:56:10.:56:13.

Premier league over the her last few years and in some respects, I... My

:56:14.:56:25.

honourable friend, I think he raised an important point about the

:56:26.:56:28.

complexities that are with financial regulation and the difficulties that

:56:29.:56:33.

people have been her consistency and all of our constituency about

:56:34.:56:36.

consumer protection and how it should work with the FCA and I think

:56:37.:56:39.

it is something we should be thinking about. The honourable

:56:40.:56:45.

member gave a very good address and the experience is that he had

:56:46.:56:50.

running a business. It has come through a number of members. The

:56:51.:56:55.

frustration they have with FCA regulation that affect many small

:56:56.:56:56.

businesses. ... Talked about banking culture,

:56:57.:57:09.

and his can tensions lack of conduct -- trust. It is something we should

:57:10.:57:13.

take seriously, and we should take seriously, because many people feel

:57:14.:57:19.

that the FC is not discharging its obligations effectively. The

:57:20.:57:22.

Honorable member talked about the swap position again, and it is

:57:23.:57:25.

important to many people, and again the issue of lack of confidence in

:57:26.:57:30.

the SCA. I will not go through everything, because I think the

:57:31.:57:34.

teams are the same, we did talk to Honorable members, about the issue

:57:35.:57:38.

of RBS, and the Giorgi, and I think that is important, because we should

:57:39.:57:45.

reflect on the fact that RBS... At a time that we as taxpayers, one that

:57:46.:57:51.

institution to behave in a way that they did to many companies. It is a

:57:52.:57:56.

pleasure to listen to my old friend from North East Somerset, and I will

:57:57.:58:03.

also declare... He was a client of mine, and I also share in the past,

:58:04.:58:10.

and I cannot quite help reflecting on the fact that it has been

:58:11.:58:13.

regulated at some of his colleagues was more regulated than this

:58:14.:58:20.

chair... LAUGHTER I think some very important points

:58:21.:58:26.

are made by my Honorable friend out west about the issues of redress,

:58:27.:58:29.

for companies to be pushed into sovereignty, and we finished off

:58:30.:58:32.

with the 13th of last week from assault Sabah, and I think in some

:58:33.:58:36.

respects the most important comment that have been made all night about

:58:37.:58:40.

the fact that the regulators, the Bank of England, were asleep at the

:58:41.:58:44.

wheel, when we have the financial crisis in 2007, and 2008, and I

:58:45.:58:51.

think Mr Speaker, it is worth reflecting on that, because what we

:58:52.:58:54.

should be doing in this house is making sure that we have got the

:58:55.:58:58.

architecture that stops us after revisiting the kind of things that

:58:59.:59:07.

we face in 2007 and 2008. That, with consumer protection. This should be

:59:08.:59:10.

no room for complacency or hesitation when it comes to

:59:11.:59:14.

performing this. The SCA must replace this long awaited inquiry.

:59:15.:59:23.

We have a story emerging today of a fine for a British prank, this time

:59:24.:59:30.

in North America. Bartlett had been fined ?70 million for their trading

:59:31.:59:37.

operations. Mr Speaker, to keep the price is private. Barclays has

:59:38.:59:43.

admitted the writings -- violating security law. In New York

:59:44.:59:49.

Attorney-General and FCC have both addressed this misconduct. These

:59:50.:59:57.

find our message, not a punishment, and the levels of insignificant

:59:58.:00:00.

profits in this line of business. Regulators are telling the banks to

:00:01.:00:03.

close the vulnerabilities, something the banks have been reluctant to do,

:00:04.:00:08.

because answers, and high operational price tags. Mr Speaker,

:00:09.:00:11.

here is a clear expression of the banks being -- not getting it.

:00:12.:00:20.

Remember, we are propped up here for the full-scale malpractice of what

:00:21.:00:23.

is going on. That is why the decision not to proceed with the

:00:24.:00:29.

review is so wrong. It sends completely the wrong signal. I am

:00:30.:00:36.

concerned that the FC is moved... And will have a detrimental impact

:00:37.:00:43.

on levels of consumer trust. The SCA must be -- reinstate its long and

:00:44.:00:50.

stated -- long-awaited re-inquiry. The amount of time, but just taking

:00:51.:00:55.

for the Chilcott inquiry, but we have not had a fundamental review of

:00:56.:01:01.

the banking crisis and behaviour. We all remember the defending impact of

:01:02.:01:08.

the financial crisis. In some sense, it still remains. That is why the

:01:09.:01:12.

removal of the banking culture is wrong, and we have to seriously

:01:13.:01:15.

question the judgement and leadership of the SCA, and pursuing

:01:16.:01:21.

this. Much is said about the change to the enhancement of capital

:01:22.:01:24.

issues. It would be my contention that we did not just review culture

:01:25.:01:28.

in a vacuum, but we do further analysis and stress testing to

:01:29.:01:32.

critical -- critically examining what kind of leadership is

:01:33.:01:35.

appropriate to make sure that any financial crisis, and any kind of

:01:36.:01:38.

significant fall in asset values, that we have the country are never

:01:39.:01:42.

exposed to again, to banking failure. It is in this context, Mr

:01:43.:01:45.

Speaker, the banking culture must be seen. We are still in the situation

:01:46.:01:51.

today that there's a perception and this kind of banking failure and the

:01:52.:01:59.

state will intervene. It means that the upside potential is up for them,

:02:00.:02:02.

and the downside per Texan is all for us. There needs to be in

:02:03.:02:08.

alignment with societies's interest, and we still have too much of the

:02:09.:02:12.

fixation with property assets and not enough with real assets. That

:02:13.:02:16.

can enhance our ability to deliver sustainable economic growth. These

:02:17.:02:19.

are all matters that are related to banking culture. I have concerns...

:02:20.:02:28.

Surrounding UK's banking sector, will have a detrimental effect on

:02:29.:02:34.

consumer trust. Restoring consumer confidence and integrity is

:02:35.:02:36.

imperative in the aftermath of the financial crisis. Statistics show

:02:37.:02:44.

that some of the bad practices used in a crash once again being adopted

:02:45.:02:49.

in the banking sector. A recent study by the banking staff trade

:02:50.:02:54.

union affinity surveyed the banking and it revealed that 55% believe

:02:55.:02:59.

that banks are reverting back to the old sales management techniques. 63%

:03:00.:03:03.

stated that the bank was more interested in the results we got,

:03:04.:03:08.

and the objectives of how we do our jobs, and 53 believed that the

:03:09.:03:11.

performance of TSP was just about sales. That is the staff of those

:03:12.:03:16.

banks, and these statistics should be very worrying for all of us.

:03:17.:03:20.

These statistics demonstrate a need for review. A study conducted also

:03:21.:03:29.

showed that between 2011, and 2014, Britain's Bank handed over 60% of

:03:30.:03:37.

their profits for a total of ?38.7 billion. These figures suggest that

:03:38.:03:40.

there should be no room for complacency or hesitation when it

:03:41.:03:44.

comes to performing this. Only over the last two days a landmark legal

:03:45.:03:49.

pursuit has... For the inappropriate loss. The could have consequences

:03:50.:03:57.

for over... That found themselves in the midst of this scandal. The

:03:58.:04:01.

appointment of Andrew Bailey as chief executive of the SCA raises

:04:02.:04:07.

legitimate questions about the SCA's... Full and proper

:04:08.:04:15.

confirmation here. Prior to his appointment with the SCA, heat...

:04:16.:04:25.

Supervised by the Bank of England. As a conduct regulator, the SCA's

:04:26.:04:32.

role was... Therefore raises questions about the SCA's

:04:33.:04:37.

independence from the PRA, and its dedication to consumer protection at

:04:38.:04:40.

the heart of its aims and values. As I conclude, I spoke in mansion House

:04:41.:04:48.

on June 15, and they launched a new settlement, which was widely

:04:49.:04:50.

interpreted as a move away from the tougher measures put in place for

:04:51.:04:54.

the banks, under new leadership. The Chancellor has suppressed the

:04:55.:04:59.

department approved, and slashed the bank levy. As on the wrong side of

:05:00.:05:07.

the new settlement. That is why the new chief executive of the SCA must

:05:08.:05:11.

be subject to confirmation hearing, so his plans and details must be

:05:12.:05:16.

scrutinised in detail. I am concerned that the SCA's move

:05:17.:05:21.

surrounding the UK banking sector, will have a detrimental effect on

:05:22.:05:27.

consumer trust. The F SCA must reinstate its long awaited inquiry

:05:28.:05:31.

into banking culture, and finally, the employment that Andrew Bailey as

:05:32.:05:34.

chief executive raises legitimate questions about the independence of

:05:35.:05:39.

the SCA, and it must be addressed, and it must be subject to full and

:05:40.:05:46.

proper confirmation. Thank you Mr Speaker. Can I begin by

:05:47.:05:49.

congratulating the Honorable member from another place, and the IBEC

:05:50.:05:55.

members from other places for securing this debate on such an

:05:56.:05:58.

important and topical issue, and I would also like to thank them for

:05:59.:06:02.

the excellent contributions today. It is a delight to be debating

:06:03.:06:06.

opposite the Minister today, in this, our very first debate

:06:07.:06:09.

together. We have had some fantastic contributions from Honorable members

:06:10.:06:15.

today, and this seems to be a key theme of transparency, running

:06:16.:06:17.

through it. There were numerous references made by member servers

:06:18.:06:24.

and interest rates. And there is an very interesting case study provided

:06:25.:06:27.

by the Honorable member for North Warwickshire, who explained his own

:06:28.:06:31.

expenses of running as an insurance firm, and private regulation

:06:32.:06:34.

affected his business. We have contributions from the Honorable

:06:35.:06:38.

member who highlighted the positive things that the FSA are doing, for

:06:39.:06:43.

example, and supporting innovation. There are failings that do need to

:06:44.:06:47.

be addressed, it is important not to throw the baby out with the bath

:06:48.:06:54.

water. Mr Speaker, operators in the finance sector commentators,

:06:55.:06:56.

Honorable members of this house, and members of the other place have all

:06:57.:07:01.

recently expressed concerns over the FSA's ability to carry out its

:07:02.:07:04.

operational objective, mainly consumer protection, integrity, and

:07:05.:07:12.

competition. These concerns are overshadowed by -- overshadowing

:07:13.:07:15.

some of the fantastic work the FSA has carried out today in the finance

:07:16.:07:21.

sector. Last year, the Chancellor's mansion House speech said that the

:07:22.:07:27.

UK was returning to business as usual. In outlining his new

:07:28.:07:31.

settlement for the finance industry, the Chancellor stated that we must

:07:32.:07:34.

become the best place for European and global age to use. It was widely

:07:35.:07:40.

interpreted by many in the financial industry that there would be a

:07:41.:07:45.

softening of the FSA's approach to banks, in fact, an ode to the prime

:07:46.:07:51.

minister's... I suggest that many felt that the Chancellor was not

:07:52.:07:58.

interviewing his own banking period. The banker's Chancellor had finally

:07:59.:08:02.

got his mojo back, and what Mojo was, a string of concessions were

:08:03.:08:06.

handed to the banks, changes to the bank levy, which significantly

:08:07.:08:10.

benefit large international banks, watered-down proposals for

:08:11.:08:14.

implementing the ring thanks thing, and imposing a time limit on claims

:08:15.:08:18.

relating to the misspelling of PPI, and confirmation that banks will not

:08:19.:08:23.

be asked to hold significantly more capital. However, in January, and a

:08:24.:08:29.

complete U-turn from his Autumn Statement, he warned us of the risks

:08:30.:08:34.

to the UK from the shaky, global economy, setting a dangerous

:08:35.:08:40.

cocktail of new threats, and a highlight of the dangers of

:08:41.:08:44.

complacency. He failed, however, to address is creeping return to

:08:45.:08:48.

business as usual in our finance sector, and indeed, the FSA's role

:08:49.:08:52.

in dealing with the same. Now I believe that there are a number of

:08:53.:08:55.

factors which are brought us to the place which we are now, and Dublin

:08:56.:08:59.

dressed each in turn. The first is the feeling that the... Somewhat

:09:00.:09:05.

compromised that agenda is being set by political pressure from the

:09:06.:09:08.

government opposite, and such independence was called into

:09:09.:09:10.

question by a recent external review that said the FSA's boards powers,

:09:11.:09:16.

with respect to making independent decisions are limited, and external

:09:17.:09:19.

interventions can happen -- have dramatic effect on the organization.

:09:20.:09:23.

This coincides with stores in the media that banking was directly

:09:24.:09:27.

involved in the highly criticised decision by the FSA, to that the

:09:28.:09:32.

review into culture, son of the UK's biggest banks. And then, there's the

:09:33.:09:37.

Chancellor's influence over appointing chief executives to the

:09:38.:09:48.

FSA. -- SCA. -- SCA. He was removed and replaced by Andrew Bailey, and

:09:49.:09:52.

many are concerned that the Chancellor's new appointment, and

:09:53.:09:56.

was seen as more of a proprietary,... I have got no doubt

:09:57.:10:02.

that the new appointment seeks to be completely impervious to the

:10:03.:10:05.

Chancellor's tribes, however, there is much as re-committee stated

:10:06.:10:11.

recently that there is a subliminal desire to please the Masters by

:10:12.:10:16.

taking some of these decisions, where the instances being,

:10:17.:10:18.

potentially, if you do not play ball, you'll lose your job. I move

:10:19.:10:23.

now onto the issue of transparency, and seek to highlight to the

:10:24.:10:26.

Minister's attention, a few of examples where achieving this has

:10:27.:10:29.

been somewhat of a struggle. The conclusion of the SCA's work on tax

:10:30.:10:35.

evasion, and the decision not to take action, led many FSA critics to

:10:36.:10:43.

ponder had this... Given the bizarre coincidence that at the same time,

:10:44.:10:46.

it was considering whether it should relocate its headquarters outside of

:10:47.:10:51.

London, and little detail was provided regarding the rationale for

:10:52.:10:56.

this decision, and the F C a simply stated that tax investigation such

:10:57.:11:03.

as this were a matter for age MRC. First, transparency, and secondly,

:11:04.:11:07.

the sharpness of the SCA's teeth as a regulator. These issues aside, I

:11:08.:11:11.

would welcome the Minister's assurances that at the Royal

:11:12.:11:13.

investigation will be carried out, as a matter of urgency, and HSBC

:11:14.:11:19.

will pay the appropriate tax to the Treasury, and we will not see a

:11:20.:11:25.

repeat performance of last week's Google tax debacle. Perhaps, the

:11:26.:11:28.

incident will also precipitate the Minister into considering a U-turn

:11:29.:11:32.

on the government's proposed quotes to age MRC. Then shortly, the

:11:33.:11:41.

government must ensure that age MRC is adequately resold. I address

:11:42.:11:47.

however, on a similar lack of transparency, who must refer to the

:11:48.:11:50.

industry scandal surrounding in the selling of interest-rate hedging

:11:51.:11:53.

products, as outlined by the Honorable member today. The SCA

:11:54.:11:58.

quite rightly launched the publishing a new set of rules. What

:11:59.:12:02.

is concerning is that the SCA have to be pushed by the Treasury select

:12:03.:12:06.

committee to publish the rules at all, and even now, we still await

:12:07.:12:11.

details of the methodology agreed at each bank so that we can be

:12:12.:12:15.

satisfied that our banks are in fact complying. Similar calls from more

:12:16.:12:19.

SCA transparency to surrender the review of the collapsed, as has been

:12:20.:12:27.

highlighted by the Honorable member today. Here, they faced criticism

:12:28.:12:32.

from the Honorable member who setup the old party Parliamentary group

:12:33.:12:36.

into the call question, and he cited a generally defensive approach from

:12:37.:12:41.

the SCA, and lack of transparency. And then, there is the highly

:12:42.:12:46.

criticised review into banking culture. The Treasury select

:12:47.:12:51.

committee recently found that there was no FCA Board consultation on

:12:52.:12:55.

this issue, even the chairman was not privy to this decision. It is

:12:56.:13:00.

also important to know that no public statement was made regarding

:13:01.:13:05.

this decision, it was simply linked. When pushed, the SCA commented that

:13:06.:13:10.

we decided that at the medical review would not help us achieve our

:13:11.:13:13.

desired outcomes, and we would therefore take forward our work on

:13:14.:13:19.

culture. It hardly explains the position at all, but essentially

:13:20.:13:22.

these are the root server to self-regulation, underpinned by the

:13:23.:13:30.

SCA's new conduct rules, centring around the rules that are

:13:31.:13:33.

reasonable. As we have heard from the earlier debate, the removal of

:13:34.:13:39.

the reverse burden of proof further diminishes any legal recalls that

:13:40.:13:44.

could be pursued. The Treasury select committee has warned that

:13:45.:13:49.

much of the responsibility for implementation is left to balance.

:13:50.:13:52.

He stated that the spell it -- spirit is willing but the flesh is

:13:53.:13:58.

weak. Compared may change in culture, but not enough happens

:13:59.:14:02.

lower down. The SCA's new direction on this issue doesn't deserve new

:14:03.:14:08.

examination. The point is, such a radical step change away from what

:14:09.:14:13.

the public believed would be a root and branch banking culture review

:14:14.:14:18.

should arguably not have happened without at the very least Board

:14:19.:14:22.

approval and transparent consultation. Mr Speaker, in

:14:23.:14:27.

conclusion, whilst I applaud the SCA's work, the issues raised today

:14:28.:14:35.

bring some very alarm bells. I do hope that the Minister realises that

:14:36.:14:38.

the British public are still paying the price for a financial crisis

:14:39.:14:43.

that they did not cause, and they require an FCA that truly holds the

:14:44.:14:48.

banking system to account. And SCA that ensures that financial

:14:49.:14:51.

productivity does not, with an immoral price tag, which ignores the

:14:52.:14:55.

principles of fairness and fair play, in which British society is

:14:56.:15:00.

built. I do look forward to the Minister's comments, and I hope that

:15:01.:15:04.

you can confirm them I considered to be addressed, otherwise, I'm afraid

:15:05.:15:08.

that the so-called Chancellor is letting down the British public who

:15:09.:15:11.

they'll be banks out, and he is setting out a clear signal that it

:15:12.:15:18.

is returned to business as usual. I'm looking to the Honorable member.

:15:19.:15:26.

I'm left with very little time to cover what has been a very wide

:15:27.:15:29.

ranging debate, but I would like to add my congratulations to the back

:15:30.:15:33.

benches business committee, and the Honorable member for securing this

:15:34.:15:38.

debate. I think we can all agree that it is important that we have

:15:39.:15:43.

any financial authority and organization to keep financial

:15:44.:15:47.

markets honest for our constituents, and for markets. It is an act salute

:15:48.:15:50.

the crucial role that markets play in our economy. We all bought

:15:51.:15:54.

financial services to be on the side of our constituents, the people who

:15:55.:15:57.

want to work hard, do the right thing, and get on in life. It is

:15:58.:16:01.

vital that financial services displayed up to be highest standards

:16:02.:16:06.

of behaviour, and treat their customers fairly. The House will now

:16:07.:16:12.

be aware that the majority of small business lending is not regulated.

:16:13.:16:17.

As an independent regulator, it is absolutely clear that we need to

:16:18.:16:22.

ensure that we have the right people doing the job. Last week, the

:16:23.:16:26.

Chancellor announced a number of new appointments to the FCA Board,

:16:27.:16:31.

including a excellent new chief executive, and as the Chancellor set

:16:32.:16:34.

out, Andrew Bailey was the outstanding candidate to be the next

:16:35.:16:37.

chief executive of the FCA, he brings with him a wealth of

:16:38.:16:40.

experience in financial services, regulation in the UK, is simply the

:16:41.:16:47.

most experienced person in the world to do the job. I would also like to

:16:48.:16:53.

put on record government's gratitude to Tracy McDermott, the acting chief

:16:54.:16:56.

executive for all of her hard work, over the last four months. We also

:16:57.:17:01.

appointed last week for new nonexecutive directors to the FCA,

:17:02.:17:08.

Ruth Kelly, and Tom Wright, the news directors provide a balanced mix

:17:09.:17:13.

both on the agenda front, in terms of the public sector spirit, and

:17:14.:17:17.

private sector experience, and politics, as well as a wealth of

:17:18.:17:23.

knowledge, both of consumer issues and the financial services sector,

:17:24.:17:26.

more generally. Two added valuable independent challenge to the FCA

:17:27.:17:31.

Board. We believe these new appointments will strengthen the

:17:32.:17:33.

organization, and by ensuring that it has the best possible leadership,

:17:34.:17:40.

help the SCA remain a strong top regulator, that protects consumers,

:17:41.:17:42.

and ensures that the financial markets work for the benefit of the

:17:43.:17:46.

whole economy. However, there are clearly challenges ahead, for the

:17:47.:17:52.

FCA and it is worth remembering that the positive steps they have already

:17:53.:18:01.

taken... Including applying forcible conduct rules to anyone involved in

:18:02.:18:05.

financial services activity, and the bank, they brought an improved

:18:06.:18:09.

whistle-blowing requirements, and a new code has been introduced that

:18:10.:18:13.

ensures individuals are not rewarded for taking excessive risks. The FCA

:18:14.:18:17.

has taken action to protect consumers, including the regulation

:18:18.:18:20.

of consumer credit, which is included capping the cost of payday

:18:21.:18:25.

lending, to protect consumers from unfair costs, and FCA regulation is

:18:26.:18:30.

already having a dramatic impact on the payday market, and indeed, the

:18:31.:18:33.

SCA found that the volume of payday loans had fallen by 35%, in the

:18:34.:18:38.

first six months, since it took in April 2014. A new focus on

:18:39.:18:42.

competition in banking, and other markets, such as the excellent work

:18:43.:18:52.

on the innovation hub. The jointly launched a financial advice market

:18:53.:18:55.

review, which is designed to make financial help more accessible and

:18:56.:18:58.

more affordable for all of our constituents. I also thought it

:18:59.:19:02.

would be worth highlighting Mr Speaker, that the ombudsman service,

:19:03.:19:08.

to whom Honorable members might prefer their constituents, but may

:19:09.:19:12.

have problems with financial services, speaking for the

:19:13.:19:16.

government, there is also keen Honorable members here tonight to

:19:17.:19:18.

resolve the matters that have been raised by a range of colleagues. We

:19:19.:19:25.

have heard from the member from various

:19:26.:19:37.

locations, and the number 17 raised during the debate tonight, and I

:19:38.:19:44.

would like to take time to address those in turn. On the issue of the

:19:45.:19:47.

banking culture review, which was raised both by the Honorable Lady

:19:48.:19:55.

and the member, to be clear, my personally heard about the SCA's

:19:56.:19:59.

decision to continue the review into banking culture, was when the story

:20:00.:20:02.

broke on the media on New Year's Eve. We have made abundantly clear

:20:03.:20:07.

to this house that no Treasury minister or official was involved in

:20:08.:20:10.

the SCA's decision. The SCA has medically or that it did not inform

:20:11.:20:13.

the Treasury before the decision was made public, I would love to, but I

:20:14.:20:18.

do not have time. I do not have time. No, because you are one member

:20:19.:20:25.

was not even in here for the debate. A number of members, also mentioned

:20:26.:20:37.

interest-rate hedging products, and businesses which are suffering, as a

:20:38.:20:41.

result of the lower interest rates that expected... The government has

:20:42.:20:46.

been clear from the beginning that the selling of financial product is

:20:47.:20:50.

unacceptable, and those businesses affected should be compensated. The

:20:51.:20:54.

SCA have established a redress team for small business seems, to ensure

:20:55.:21:00.

eligible businesses are compensated. This scheme has so far paid out on

:21:01.:21:05.

18,000 cases, and over ?2 billion has been paid in redress, including

:21:06.:21:11.

?464 million, to deal with consequential losses. There are

:21:12.:21:14.

still some outstanding cases, as we have for tonight, and these include

:21:15.:21:19.

700 cases, work refunds offered have yet to be accepted. With businesses

:21:20.:21:28.

that are not covered by the redress scheme, considered larger and more

:21:29.:21:32.

sophisticated, they can't take advantage of the first-class brains,

:21:33.:21:37.

and our legal profession. The FCA considers a review of how the this

:21:38.:21:45.

scheme has worked. On the question of cardboard which was raised by

:21:46.:21:53.

Honorable member, but the government and the FCA understand the serious

:21:54.:21:56.

financial difficulty and distress at that this is caused to many

:21:57.:21:59.

investors. As Honorable members may be aware, the FCA this week

:22:00.:22:06.

published an update on this. This update highlights that a settlement

:22:07.:22:09.

agreement has been reached between the liquidators of the fund, and L

:22:10.:22:15.

financial managers Limited. They have asked the liquidators of the

:22:16.:22:18.

fund to distribute the sum to investors as soon as possible, and

:22:19.:22:22.

the investigation that the SCA are pursuing will continue independently

:22:23.:22:29.

of the settlement. On the topic of the DRG, which was mentioned by the

:22:30.:22:36.

horrible member, let me reassure the House that the conclusions of the

:22:37.:22:40.

SCA's investigation into this matter are expected by me in the first

:22:41.:22:44.

quarter of the year. On the point made by the Honorable member, the

:22:45.:22:55.

scrutiny of the FCA appointments, we have agreed that the Treasury will

:22:56.:23:00.

be able to carry out a pre-commencement hearing, before the

:23:01.:23:06.

new CEO starts at the FCA. On the question of FCA independence, there

:23:07.:23:09.

have been a number of questions raised about that, and the FCA is of

:23:10.:23:15.

course operationally independent of government, and we appoint the chief

:23:16.:23:19.

executive, we appoint the board, and we sat the objectives and duties in

:23:20.:23:25.

the last Parliament. I firmly believe in the independence of the

:23:26.:23:29.

FCA, and I think it is vitally important that consumers know that

:23:30.:23:32.

regulated decisions are being taken in an objective and impartial way.

:23:33.:23:38.

Contrary to what the Honorable Lady from each temperature seems to

:23:39.:23:41.

think, I have met with the acting chief executive of the FCA, and her

:23:42.:23:45.

predecessor from time to time, so I regret that the Honorable Lady has

:23:46.:23:50.

formed a different impression. On the operational matters that the

:23:51.:23:56.

lady from Salford raised, I'm afraid you cannot have this both ways. If

:23:57.:24:02.

she wants the Treasury to interfere in operational decisions of the FCA,

:24:03.:24:07.

then she is asking for something completely contradictory, to the

:24:08.:24:10.

spirit of independent regulation that I have supported here this

:24:11.:24:15.

evening. Mr Speaker, no one is denying that the FCA has a tough job

:24:16.:24:18.

ahead, and that is why it is essential that they are

:24:19.:24:20.

well-prepared, well staffed, and well equipped to do it. And have the

:24:21.:24:25.

best leadership possible. I'm confident that the FCA has the right

:24:26.:24:29.

mandate and team like the Honorable member from North East Somerset,

:24:30.:24:34.

today's notion is not well-founded, but the new chief big -- executive

:24:35.:24:39.

in place, I strongly urge Honorable members to withdraw or ignore the

:24:40.:24:50.

motion put before us today. May I say, I think we were, the purpose of

:24:51.:24:59.

having this debate on the floor of the House was to highlight the very

:25:00.:25:02.

real concerns of Honorable members, of all parties, about parts of the

:25:03.:25:08.

United Kingdom, is to break they are performing their duties in relation

:25:09.:25:18.

to far too many issues. There are the decision not to move ahead with

:25:19.:25:22.

the banking, which I think was part of the issue of dealing with the

:25:23.:25:27.

culture within banks. There is a real concern, and I think by

:25:28.:25:30.

bringing this debate to the chamber, we have certainly made it very clear

:25:31.:25:34.

that the FCA is on board. The Honorable member for North East

:25:35.:25:36.

Somerset said that this is premature. I think that is

:25:37.:25:40.

potentially correct. However, I did that help if we bring that debate in

:25:41.:25:43.

the future, the Honorable member will be in of bringing further

:25:44.:25:47.

action. On the point he made in relation to the danger of passing a

:25:48.:25:51.

motion which was then ignored by the government, I think there is a real

:25:52.:25:56.

concern there which relates to the way we deal with that. It is a shame

:25:57.:26:01.

that passing a motion might result in this house not being taken

:26:02.:26:08.

seriously. I think the House should reflect on the fact that with the 13

:26:09.:26:16.

backbench speakers, and I think that is an important message in our

:26:17.:26:20.

point, and the fact that the FCA does need to reform, and I think

:26:21.:26:24.

that whilst we all hope that the new chief executive will be a new fresh

:26:25.:26:30.

face within the FCA, he is a lot of work to do, in order to rebuild

:26:31.:26:32.

confidence in the regulated steps. Motion number six on courts of

:26:33.:26:44.

England and Wales. The question is say Ie. On the contrary know, the

:26:45.:26:52.

Aye's have it. I propose to take motion seven 212 together. The

:26:53.:27:03.

proposition to be moved by no less a figure who should not be walked past

:27:04.:27:07.

as he undertakes his official business. And the chairman of the

:27:08.:27:16.

committee of selection. Hear, hear! Merely rising he thinks suffices.

:27:17.:27:23.

The question is as on the order paper, in respect of motions seven

:27:24.:27:31.

two 12 together. As many have its say Aye's, on the contrary know, the

:27:32.:27:40.

Aye's have it. I like to move this house to now adjourn. The question

:27:41.:27:43.

is that this house do know that my now adjourn. A Sunday Times

:27:44.:27:53.

journalist killed in Syria in 2012 while reporting from the siege,

:27:54.:27:58.

through her work, she passionately believed that she could be the voice

:27:59.:28:01.

of all those experiencing conflict from whatever perspective, during

:28:02.:28:07.

the latter part of her life, her determination to be that voice had a

:28:08.:28:11.

physical manifestation in the form of an eye patch. The result of

:28:12.:28:15.

injuries sustained in Sri Lanka where she was hit by sharp as she

:28:16.:28:20.

tried to cross front line. Following her death, the columnist wrote,

:28:21.:28:25.

Society urgently requires men and women with courage, passion and

:28:26.:28:30.

integrity to discover the facts that those in authority wants to

:28:31.:28:36.

suppress. She herself said in an age of 24/7 the rolling news blogs and

:28:37.:28:43.

Twitter, we are on constant call wherever we are. But while important

:28:44.:28:46.

essentially the same. Someone has to go there and see what is happening.

:28:47.:28:50.

You cannot get that information without going to places where people

:28:51.:28:55.

are being shot at and others are shooting at you. Mr Speaker, the

:28:56.:29:00.

relationship between members of this house and the force state our

:29:01.:29:05.

friends up in the press gallery is a contradicted one. But why most of

:29:06.:29:09.

modern-day politics could be described as a conflict zone, we do

:29:10.:29:13.

not put our lives on the line in place of our work. Mr Speaker, when

:29:14.:29:19.

a member of Armed Forces is killed in a comfort zone. The Prime

:29:20.:29:23.

Minister rightly takes a moment at the beginning of Prime Minister's

:29:24.:29:26.

Questions to remind the nation of the sacrifice that brave serviceman

:29:27.:29:32.

or woman have made. With a notable exception of people like Murray who

:29:33.:29:37.

do not have anywhere near as much about the sacrifices made by a large

:29:38.:29:42.

number of professional and citizen journalists every year in the name

:29:43.:29:46.

of news-gathering. The committee to protect journalists who I want to

:29:47.:29:50.

thank on the record for their assistance in preparation for this

:29:51.:29:53.

debate has reported that 98 journalists were killed last year.

:29:54.:29:59.

Of those 98, it has been definitively reported that 71 were

:30:00.:30:04.

murdered in direct reprisal of their work were killed in crossfire during

:30:05.:30:10.

combat situations, killed while carrying out a dangerous assignment

:30:11.:30:13.

for coverage of a street protest. I give way. I seek permission last

:30:14.:30:25.

week to do so, 2002 journalists and media professionals were killed in

:30:26.:30:28.

the last quarter of a century. The number is enormous, the freedom of

:30:29.:30:33.

speech is being taken for granted in this country, the United Kingdom and

:30:34.:30:37.

a number of democracies should be promoting free speech to the media

:30:38.:30:43.

and the journalism. Hear, hear!. The Honorable member makes a good point,

:30:44.:30:48.

the that, the numbers are fast if we take them over the last 50 years or

:30:49.:30:52.

so. I'll ask you to do so as well towards the end of my speech. Thank

:30:53.:30:58.

you, the international Federation of journalists pulled the numbers even

:30:59.:31:01.

higher than 98, 112 for killed just last year. Mr Speaker, professional

:31:02.:31:06.

journalists in conflict zones such as those working for the BBC and

:31:07.:31:11.

sky. To me about their procedures are fortunate to have extensive

:31:12.:31:16.

support from their employers. Employees of these organizations

:31:17.:31:19.

undergo hostile environment training in preparation for travelling to

:31:20.:31:23.

conflict zones to check that there are adequately prepared for dangers

:31:24.:31:26.

they will face. For example, recently a member of staff for a

:31:27.:31:30.

major British media outlet in the Middle East was approached by a man

:31:31.:31:35.

who verbally abused the individual, accusing him of being a traitor and

:31:36.:31:40.

a collaborator. His companions intervened, but another ate arrived

:31:41.:31:44.

on the scene carrying batons and nights, the generalists ran away and

:31:45.:31:48.

took refuge in a nearby shop. However, two of his companions were

:31:49.:31:51.

heavily beaten up and received hospital treatment from injuries

:31:52.:31:54.

sustained. The incident was reported by the staff member to the team who

:31:55.:31:59.

subsequently for the security adviser to conduct a security review

:32:00.:32:04.

for that individual. And put additional security measures in

:32:05.:32:10.

place to support them. But, increasingly our news comes not just

:32:11.:32:14.

from professional journalists whose names, faces, and employers you

:32:15.:32:19.

would recognise but from citizen journalists. Fingers are unattached

:32:20.:32:22.

freelance journalists, and citizen journalists are members of the

:32:23.:32:27.

public just independent voices. The ability of a citizen journalist to

:32:28.:32:32.

share stories has an effect on professional journalists, the

:32:33.:32:34.

pressure to go deeper into conflict zones is greater, one of the

:32:35.:32:39.

defining features of a war reporter these days is that they are embedded

:32:40.:32:43.

in the conflict. Today, they are on the front line or in any territory.

:32:44.:32:49.

Mr Speaker, we increasingly understand that many of you will's

:32:50.:32:52.

Contex today are conflicts of narrative. -- wants to control what

:32:53.:32:59.

the conflict looks like, he wants a monopoly of the stories and images.

:33:00.:33:03.

The narrative is war than ever, what people are fighting over. Daesh

:33:04.:33:06.

wants to recruit images and the reality of disseminating, challenges

:33:07.:33:13.

that propaganda. Any citizen journalists can break the propaganda

:33:14.:33:16.

machine, anyone with a phone is an opponent. Daesh these generalists as

:33:17.:33:22.

spies, it sees them as Western actors who seek to disrupt the Daesh

:33:23.:33:26.

narrative reporting on its weaknesses and failures which makes

:33:27.:33:33.

them a target. The philosopher Walter Benjamin said "History is

:33:34.:33:37.

written by the victors." That remains true, the pictures and the

:33:38.:33:40.

course of the five are now a consequence of what is written even

:33:41.:33:44.

more so than in Benjamin's time. Which makes it even more important

:33:45.:33:49.

that we protect and honour those journalists whether professional or

:33:50.:33:53.

citizen. The BBC's Visa said last year, we often say that journalists

:33:54.:33:57.

are no longer on the front line. But, we are the front line. We are

:33:58.:34:01.

targeted in a way we have never been before. Now generalists are seen as

:34:02.:34:04.

bouncy and as having public and Ogando value. Generalists in config

:34:05.:34:08.

zones are not ordinary members of the public, they tell the story that

:34:09.:34:13.

allow us to understand what is truly going on in the confusion of

:34:14.:34:18.

propaganda of warfare and they carry out a vital public service. Will my

:34:19.:34:24.

Honorable friend give way? I thank my Honorable friend for giving way.

:34:25.:34:28.

Congratulate her on securing this debate, on a very important subject.

:34:29.:34:33.

But she agreed that the pace of news in the modern age means that we can

:34:34.:34:38.

no longer wait for dispatches to be informed about what is going on in

:34:39.:34:41.

conflict zones? Journalists are best positioned to give us the real-time

:34:42.:34:45.

accurate information of what is really going on. Therefore, the best

:34:46.:34:49.

position to do this. I absolutely agree. Conflict is changing

:34:50.:34:56.

incredibly quickly, there are lots of chaotic terrorism acts happening

:34:57.:34:59.

all over the world, quite often we rely on journalists of being the

:35:00.:35:04.

eyes and ears on the ground. This is bigger, my discussion of the

:35:05.:35:07.

journalists and their position in recent days have highlighted what I

:35:08.:35:10.

consider to be a gap in the service provided by the Foreign Office to

:35:11.:35:14.

those taking risks to bring people to account. Can ask the Minister of

:35:15.:35:18.

the Foreign Office would consider making it the policy of British

:35:19.:35:23.

embassies and consulates brought to hold journalists working in conflict

:35:24.:35:26.

zones within the realm of the country at any one time. At the

:35:27.:35:31.

moment, this process is very ad hoc. Upon registration, the embassy would

:35:32.:35:35.

and should provide a security briefing on the situation in that

:35:36.:35:41.

country or the neighbouring country increasing the journalist's ability

:35:42.:35:45.

to protect themselves and their employer's ability to ensure that

:35:46.:35:50.

the acting according to advice. Secondly, the role of foreign

:35:51.:35:53.

governments in the protection of journalists is an important one.

:35:54.:35:57.

Could the Minister outlined what expectations if Foreign Office

:35:58.:36:00.

currently has a foreign governments to do everything they can to protect

:36:01.:36:03.

journalists who are British or working for British-based media

:36:04.:36:07.

outlets and challenge them to extend that protection to their own local

:36:08.:36:12.

journalists. Would you consider making it a requirement for

:36:13.:36:15.

negotiations with foreign governments, especially when

:36:16.:36:17.

embarking on domestic relations within emerging democracies, that

:36:18.:36:21.

protection of journalists is an issue on the table. The British

:36:22.:36:26.

Government has rightly identified Bangladesh and Pakistan as critical

:36:27.:36:30.

countries in the region. We partner with them as a result, yet in

:36:31.:36:35.

Bangladesh for example journalists are killed by others because of what

:36:36.:36:41.

the right, last year over 40% of journalists killed in Bangladesh

:36:42.:36:43.

were killed by Islamic extremists because they just disagreed with the

:36:44.:36:49.

words that were written. In Pakistan in 2006, it was documented that the

:36:50.:36:53.

government prepared a list of 53 columnists, writers and reporters in

:36:54.:36:58.

print media and try to neutralise the negativism of these reporters

:36:59.:37:04.

and writers by making them soft and friendly. One could interpret it as

:37:05.:37:08.

quite a bit beyond a friend the chat. I do have more up-to-date

:37:09.:37:12.

testimonies of generalists reluctant for me to race on the House today.

:37:13.:37:16.

With the Foreign Office consider making it a requirement for

:37:17.:37:18.

countries that we partner with to show a clear intent to protect the

:37:19.:37:23.

rights of generalists both professional and citizen. We must

:37:24.:37:27.

not range from exploiting our proud British values of expression. I will

:37:28.:37:34.

finish by talking about a citizen journalist in Syria who used her

:37:35.:37:39.

Facebook page to describe the atrocities of daily life in Raqqa

:37:40.:37:44.

and last year in July, it was reported that her last words were "I

:37:45.:37:51.

am in Raqqa, and I received death threats and when Isis arrest me and

:37:52.:37:54.

tells me it is OK because they will cut my head and I have dignity. It

:37:55.:37:58.

is better than living in humiliation with Isis. " It has been speculated

:37:59.:38:05.

that her Facebook page has been kept open for months to let other

:38:06.:38:07.

journalists could be lured into the to in turn could be silenced.

:38:08.:38:13.

858-year-old actor who for the website Raqqa is been that

:38:14.:38:18.

slaughtered suddenly was also being murdered late last year following

:38:19.:38:24.

his final word, it exposed human rights abuses in the city, his

:38:25.:38:29.

murderers disagreed with him that anyone who hears about these

:38:30.:38:32.

violations, he's the fourth person from Raqqa who was been silently

:38:33.:38:38.

murdered so far. Individuals such as these are part of the conflict, and

:38:39.:38:41.

through overconsumption of news they through overconsumption of news they

:38:42.:38:44.

are complicit in their participation that, but they take the risks. We

:38:45.:38:49.

must honour the bravery and pride in what they were and still are doing

:38:50.:38:53.

by highlighting the contribution of our understanding of what is going

:38:54.:38:58.

on in conflict zones but also their contribution to end the conflict by

:38:59.:39:01.

shedding light on it. We must do all we can to defend their right to do

:39:02.:39:05.

what they do and protect them as they go about it. Thank you Mr

:39:06.:39:15.

Speaker. I am grateful to my Honorable friend, the Member for

:39:16.:39:20.

highlighting the dangers faced by journalists. She brings a great rest

:39:21.:39:26.

of experience as a campaigner on health and education issues from her

:39:27.:39:30.

time working in conflict zones and I think the House as has been

:39:31.:39:33.

demonstrated today is richer because of that knowledge that she brings to

:39:34.:39:38.

this place. Mr Speaker, we often disagree about what journalists say

:39:39.:39:44.

about us but we am sure you would agree must defend their freedom to

:39:45.:39:47.

say it. Without journalists in conflict zones and indeed

:39:48.:39:52.

domestically, the risks deterioration of our very society.

:39:53.:39:58.

among these things that hold among these things that hold

:39:59.:40:03.

societies and democracies together. I want to begin by reflecting on the

:40:04.:40:07.

specific issues raised by my Honorable friend in relation to the

:40:08.:40:11.

deaths of journalists in conflict zones. And also, thank journalists

:40:12.:40:16.

such as Marie who the Honorable member mentioned who is a fine

:40:17.:40:22.

example who chooses to put themselves in harms way to reveal

:40:23.:40:27.

and report the truth. This is essential both for the work of

:40:28.:40:33.

journalism and also I congratulate Marie on her advocacy for other

:40:34.:40:39.

journalists. It is of course true that journalists have often

:40:40.:40:42.

displayed exceptional bravery and reporting from war zones. All too

:40:43.:40:47.

often, frequently paying for their vacation with their lives. However,

:40:48.:40:51.

I believe my Honorable friend is right to highlight a new and

:40:52.:40:57.

increasing trend which is quite chilling as journalists being seen

:40:58.:41:01.

as the enemy. Being as she put it, on the front line. This is nowhere

:41:02.:41:09.

more evident than under the barbaric oppression of Daesh and other

:41:10.:41:12.

extremist groups. 20 journalists last year were killed by these

:41:13.:41:18.

groups. As execution has become almost inevitable consequence of

:41:19.:41:21.

capture, journalists have been increasingly constrained as to where

:41:22.:41:25.

they can stay safely. Yet, the reality of Daesh has continued to

:41:26.:41:30.

get out, the citizen journalist halves filled the space with their

:41:31.:41:34.

own reports of repression and depravity. Now, the citizen

:41:35.:41:40.

journalists, like the professional reporters who went before them are

:41:41.:41:43.

being seen as the enemy. And the cycle goes on. According to

:41:44.:41:49.

reporters without Borders, 110 journalists were killed last year,

:41:50.:41:53.

many more injured, captured or imprisoned. It is right that this

:41:54.:41:59.

government and members of this House put on our record our admiration for

:42:00.:42:05.

those that are willing to risk everything in pursuit of reporting

:42:06.:42:11.

the truth. The Honorable member urges me to pick a number as to

:42:12.:42:17.

those affected, I am going to resist the temptation, there are many

:42:18.:42:22.

numbers I have seen from the UN, the organisation for security

:42:23.:42:25.

cooperation in Europe, the porters without Borders, but they cover

:42:26.:42:29.

different regions over different periods will stop gradually report

:42:30.:42:32.

deaths rather than those injured and affected, and one death is one too

:42:33.:42:37.

many. So, rather than putting an exact number on it I think we should

:42:38.:42:41.

just say just that, one is too many and it's certainly a lot larger

:42:42.:42:45.

number than that and certainly it is an increasing problem but a

:42:46.:42:50.

diminishing problem. My Honorable friend has spoken eloquently about

:42:51.:42:53.

the importance of the free press and has highlighted that in many parts

:42:54.:42:57.

of the world, the media is restricted in its ability to

:42:58.:43:00.

challenge authority or indeed to promote new ways of thinking and

:43:01.:43:04.

root out corruption. Media freedom is absolutely vital, it is

:43:05.:43:11.

absolutely vital. Without free press, corruption goes unchecked,

:43:12.:43:15.

individuals cannot flourish, economies are constrained, and this

:43:16.:43:19.

government makes that point to all international partners regardless of

:43:20.:43:24.

where there are around the world. I applaud the work that many

:43:25.:43:28.

organizations dedicated to promoting freedom and the supporting and

:43:29.:43:32.

protecting journalists, the organisation for security and

:43:33.:43:34.

cooperation in Europe which I mentioned earlier does by the

:43:35.:43:41.

courageous work. Including the work promoting free media

:43:42.:43:48.

internationally, I particularly pay tribute for her remarkable work on

:43:49.:43:52.

press freedom. In the UK is working closely with the organisation to

:43:53.:43:57.

find a suitable successor. We must find someone of equal in stature,

:43:58.:44:02.

given the dangers and pressures faced by journalists. Pressures we

:44:03.:44:08.

know sadly will increase. Last year, this government worked with the

:44:09.:44:10.

United Nations Security Council partners to put this issue further

:44:11.:44:17.

into the international spotlight. Resolution 22 sets out very clearly

:44:18.:44:22.

the obligations of Member States to protect journalists, punish those

:44:23.:44:27.

that threaten them or indeed kill them. And during that debate our

:44:28.:44:34.

representative Matthew Rycroft at the UN highlighted the risks that

:44:35.:44:37.

journalists base and indeed in his remarks he recognised as the

:44:38.:44:41.

Honorable member has recognised the changing shape of journalism in a

:44:42.:44:46.

digital age on a role played by citizen journalists and bloggers.

:44:47.:44:50.

That debate was another opportunity to draw attention to the appalling

:44:51.:44:56.

impunity that accompanies crimes against journalists. The UN reported

:44:57.:45:01.

worldwide that over 90% of killings of journalists go unpunished. That

:45:02.:45:08.

is indeed a shocking statistic. Governments have primary

:45:09.:45:11.

responsibility to protect journalists, but when other

:45:12.:45:14.

governments fail to live up to this responsibility, the UK will continue

:45:15.:45:20.

to make our concerns known to them to our normal dialogue and regular

:45:21.:45:24.

bilateral ration ships. Raising these issues of her highest level of

:45:25.:45:28.

government bilaterally and through multilateral fora. We are also

:45:29.:45:33.

prepared to raise them in countries that we have got good relationships,

:45:34.:45:38.

for example I would use as recently raising this issue with a

:45:39.:45:40.

co-development partner in Rwanda that has a troubled relationship

:45:41.:45:46.

with the media and in this open relationship that we would hope to

:45:47.:45:49.

see. Last week I was in South Sudan where I made a point of speaking at

:45:50.:45:55.

some length on local radio which reached over 70 -- 75% of South

:45:56.:46:04.

Sudan and where newspapers would not reach and would be more constrained

:46:05.:46:10.

in their reporting. We are frequently reminded that journalists

:46:11.:46:15.

have to be in a conflict zone or oppressive state to be in danger.

:46:16.:46:19.

The Honorable member for a while then mentioned Bangladesh which is

:46:20.:46:25.

seen a struggle for rights to freedom in Bangladesh as we have

:46:26.:46:28.

seen in conflict zones. In the past two years, five bloggers have been

:46:29.:46:32.

murdered for openly stating their atheist views. Islamic extremists

:46:33.:46:36.

have drawn up a list and incited violence and murder in addition to

:46:37.:46:42.

targeted killings such actions created chilling effects making it

:46:43.:46:46.

harder for anyone to express their personal views. The Honorable member

:46:47.:46:51.

for will then talked of what we could do more within embassies and

:46:52.:46:55.

high commissions, and certainly as part of the daily routine, one would

:46:56.:47:00.

expect High Commissioners and their staff to be engaging with

:47:01.:47:04.

journalists. I was quite surprised to find out that the last Labour

:47:05.:47:09.

government did institute a more comprehensive basis for registering

:47:10.:47:12.

British citizens in country and intuitively thought it would be very

:47:13.:47:16.

successful relying heavily on the Internet that would be easy to

:47:17.:47:20.

register. Actually, the evidence was that that was not particularly

:47:21.:47:24.

successful, I do not think there is a good formula for registering

:47:25.:47:28.

everybody in country whether they are journalists or and not

:47:29.:47:30.

journalists. In many ways I think journalists are better to our

:47:31.:47:36.

embassies for obvious reasons than other people passing through the

:47:37.:47:40.

country. I am more than happy to speak to the Honorable member if she

:47:41.:47:45.

has some ideas as to how we can act more effectively. Mr Speaker, just

:47:46.:47:52.

over a year ago a journalist from Chardy have the were murdered in

:47:53.:47:55.

their offices in central Paris. In an attack which claimed four lives,

:47:56.:48:03.

it was a start and horrific reminder of the risks that journalists face

:48:04.:48:06.

in a normal course of their jobs. Yet, the public response in Paris as

:48:07.:48:11.

a many parts of the world were testament to the importance that

:48:12.:48:15.

citizens around the world give the media freedoms. In protecting

:48:16.:48:20.

journalists, we are not seeking to defend what they say, but crucially

:48:21.:48:26.

their right to say it. Freedom of expression should be protected,

:48:27.:48:31.

respected, and cherished. It is fundamental to a healthy democracy

:48:32.:48:36.

to encourage debate, and promote free and innovative thinking. As

:48:37.:48:43.

opinion formers, information sources, and challenges to receive

:48:44.:48:47.

wisdom, journalists play a crucial role, whether they are bringing in

:48:48.:48:51.

news from war zones are elsewhere, this government will stand up to

:48:52.:48:54.

journalists write to operate freely and safely and I am sure both sides

:48:55.:49:00.

of this house would agree with this sentiment and thank them from the

:49:01.:49:03.

bottom of our hearts for their continued good works. Hear, hear!

:49:04.:49:10.

The question is that this house do now adjourn, as many say Aye's, on

:49:11.:49:14.

the contrary No's, the Aye's have it. Order!

:49:15.:50:12.

No one can deny politicians are pretty important people as they are

:50:13.:50:17.

the first to remind us, it is up to them to make the laws which govern

:50:18.:50:21.

our lives. You and I might call them big leagues, the origin of this can

:50:22.:50:24.

be found in Parliament judicial heritage. With Mr Hall and the

:50:25.:50:31.

Houses of Parliament with the meeting place for the law courts

:50:32.:50:33.

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