Browse content similar to 01/02/2016. Check below for episodes and series from the same categories and more!
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house can join me in committing the success of this particular programme | :00:00. | :00:00. | |
and how it has enabled people to get on the life and set up their own | :00:00. | :00:00. | |
businesses and become successful. Urgent question. To ask his | :00:07. | :00:19. | |
Secretary of State for house if you'll make a statement on what | :00:20. | :00:24. | |
steps are being taken to improve the financial situation of NHS trusts. | :00:25. | :00:33. | |
They you Mr Speaker, the house and know that the NHS as that of its | :00:34. | :00:38. | |
plans for the next five years. Because of our strong economy, this | :00:39. | :00:41. | |
government has built to honour that request and will be fun to get in | :00:42. | :00:45. | |
full, including a down payment of ?2 billion in this financial year. Next | :00:46. | :00:50. | |
year there'll be an increase of the 18 billion pounds and we will be | :00:51. | :00:58. | |
providing ?10 billion in five years. Within that context, there is are a | :00:59. | :01:02. | |
number of hospital trusts who are running a number of hospital trusts | :01:03. | :01:04. | |
who are running it has deficits. After what was learned in the | :01:05. | :01:09. | |
aftermath of these gentlemen amid staff. The best hospitals have begun | :01:10. | :01:15. | |
to transform along the lines of the review. Some have not. This is maybe | :01:16. | :01:20. | |
management of their finances all the more difficult. NHS improvement | :01:21. | :01:25. | |
expects that trusts will report an overall deficit of the financial | :01:26. | :01:31. | |
year 2016. Savings achieved in the rest of the NHS have ensured this | :01:32. | :01:38. | |
deficit will be offset. It were to finance the balance. Improved | :01:39. | :01:48. | |
financial position. The department had introduced the controls of the | :01:49. | :01:52. | |
cost of staff agencies, a staff on consultant contract. Improving | :01:53. | :02:08. | |
hospital fantasy. ... By 2020. The chief executive NHS improvement is | :02:09. | :02:14. | |
confident these measures was never hospital trusts can sustain a | :02:15. | :02:22. | |
financial position next year. Thank you Mr Speaker, I'm afraid the | :02:23. | :02:27. | |
Minister has been a state of denial. He claims the settlements secured by | :02:28. | :02:31. | |
the Department of Health in the review will sort the financial | :02:32. | :02:35. | |
pressures, hospitals are under. He either does not understand the scale | :02:36. | :02:40. | |
of the problem or he simply has his head in the sand. Mr Speaker, in the | :02:41. | :02:45. | |
last two weeks it has become him utterly clear that hospitals across | :02:46. | :02:48. | |
the country are buckling under the strain of providing health care | :02:49. | :02:53. | |
within an adequate budget. Four out of five hospitals are now predicting | :02:54. | :03:01. | |
the deficit. Monitor are accordingly a sibling tease Amanda Mitch | :03:02. | :03:09. | |
consultants. To dispatch a 25 trusts now we learn along the TDA because | :03:10. | :03:15. | |
every hospital asking them to take urgent steps to regain control of | :03:16. | :03:24. | |
their budgets, including, headcount rejections of the current plan. What | :03:25. | :03:30. | |
the Secretary of State aware that this letter had been sent as it | :03:31. | :03:38. | |
received approval. We had meetings to discuss headcount reductions, and | :03:39. | :03:42. | |
how many job cuts have been agreed as a result of these meetings? Mr | :03:43. | :03:47. | |
Speaker, when I have a situation where on the one hand the Care | :03:48. | :03:54. | |
Quality Commission is turning hospitals they are unsafe and on the | :03:55. | :03:58. | |
other hand monitor is selling them to cut staff. Which one is it? What | :03:59. | :04:04. | |
proportion of the so-called headcount reductions was involved | :04:05. | :04:10. | |
clinically trained staff. On Saturday the Kings fund said this, | :04:11. | :04:15. | |
three years on from the report of mid staffs which emphasizes same | :04:16. | :04:23. | |
staffing was key to make quality -- maintaining quality of care. The | :04:24. | :04:28. | |
financial meltdown is now saying the policy is being abandoned for | :04:29. | :04:31. | |
hospitals that have run out of money. Will the Minister not accept | :04:32. | :04:39. | |
that his government's financial management of the NHS has been | :04:40. | :04:42. | |
impossible for some hospitals to provide safe patient care. Is it not | :04:43. | :04:46. | |
the case of this government has fundamentally lost control of NHS | :04:47. | :04:52. | |
finances, and it is that it's now clear that the only way ministers | :04:53. | :04:57. | |
are going to make their planned ?22 billion worth of efficiency savings | :04:58. | :05:02. | |
will be to cut staff to Marcotte paid, and closed services. I stated | :05:03. | :05:07. | |
minister is time to stop the NHS doublespeak and just come clean. | :05:08. | :05:17. | |
Again this is bigger. I think the for asking this urgent question. Had | :05:18. | :05:23. | |
she started off by claiming that the Secretary of State and I were in a | :05:24. | :05:27. | |
state of denial. Were she to look at the actual outcomes of the NHS this | :05:28. | :05:32. | |
year compared with the last year when her party was in power she | :05:33. | :05:36. | |
might consider that the performance of the NHS has and proved measure. | :05:37. | :05:48. | |
We have 1.9 million more tendencies. 1.3 million more operations. 7.8 | :05:49. | :05:51. | |
million more outpatient appointments. Four plus 7 million | :05:52. | :05:59. | |
more diagnostic tests. They're performing more procedures, helping | :06:00. | :06:03. | |
more patients, doing more for the people of this country than anytime | :06:04. | :06:09. | |
its foundation. I would suggest that the party any person who is in | :06:10. | :06:12. | |
denial is Tyrone and her own stand-in. In front of the service | :06:13. | :06:17. | |
working hard to try and deliver better patient care and what is a | :06:18. | :06:23. | |
challenging environment. She asked a number of subsequent questions about | :06:24. | :06:29. | |
staffing levels in about leathers sent home by NHS improvement. I'll | :06:30. | :06:35. | |
endeavour to ask each of them. She asked about the settlements of the | :06:36. | :06:40. | |
treasury has maybe the NHS I will point out to her that is precisely | :06:41. | :06:47. | |
the settlement VHS asked for. It is exactly that settlement with the | :06:48. | :06:51. | |
party opposite refused to endorse in the last election. Hear, hear! The | :06:52. | :06:59. | |
statement that she proposed that there are teams and management | :07:00. | :07:04. | |
consultants which allows me to remind her the number of consultants | :07:05. | :07:08. | |
has been cut considerably by previous governments. In contrast to | :07:09. | :07:12. | |
that of the party opposite who increased the number of management | :07:13. | :07:15. | |
in the 30 years that they were in power. We make no apology for the | :07:16. | :07:20. | |
fact that NHS improvement in these constituent bodies is working very | :07:21. | :07:26. | |
hard with the providers to address the issues of efficiency and quality | :07:27. | :07:30. | |
that they all have. Is she suggesting that they should not be | :07:31. | :07:34. | |
doing that? Should they not be going around to hospitals trying to help | :07:35. | :07:38. | |
those which are not able to control her own finances? Should they not be | :07:39. | :07:41. | |
doing what is needed to try and improve the quality of care that | :07:42. | :07:45. | |
they provide? If that is her suggestion is quite a remarkable one | :07:46. | :07:49. | |
and one that I think should be more widely shared with the people that | :07:50. | :07:53. | |
she seeks to represent. She talked about the letters sent out by NHS | :07:54. | :08:03. | |
improvement. We were aware of it. Addressing of quality to be seen | :08:04. | :08:09. | |
across the service. I know this is news to the members on the opposite | :08:10. | :08:13. | |
benches but there are not separate parts of the NHS issuing separate | :08:14. | :08:21. | |
dictums. The issues of the last two months have been cosigned by the | :08:22. | :08:28. | |
chief inspector of hospitals, by the director of safety, and the chief | :08:29. | :08:38. | |
executive for improvement. This is one system addressing the particular | :08:39. | :08:45. | |
problems which are evident in making sure they level up the best. If she | :08:46. | :08:50. | |
is not convince her that she should look at the co-signatures of this | :08:51. | :08:54. | |
letter is and how they correspond one with the other. She asked about | :08:55. | :08:59. | |
the line in one of the letters about reductions in headcount. I again | :09:00. | :09:06. | |
will point to her reductions in headcount in the traders that have | :09:07. | :09:10. | |
been achieved by the government of the previous five years. We have | :09:11. | :09:15. | |
managed to reduce by some 24,000 the number of administrators in the NHS | :09:16. | :09:20. | |
while said the same time greasing the number of positions by 16,000. | :09:21. | :09:26. | |
Witchy on the one hand while not promising money onto the NHS for the | :09:27. | :09:30. | |
NHS has asked for, acid to maintain the same level of demonstrators in | :09:31. | :09:35. | |
the years ahead, or which you back NHS improvement plan to find | :09:36. | :09:40. | |
efficiencies in the NHS precisely so the money is spent on administrators | :09:41. | :09:47. | |
be spent better on positions and decrease the number of resources to | :09:48. | :09:52. | |
the front line. I know the Honorable Lady is artist and what she says of | :09:53. | :09:55. | |
the NHS but I cannot believe that she is running out in defence of | :09:56. | :10:00. | |
increasing spending in the back office and expense of the plot line. | :10:01. | :10:05. | |
She asked about the safe staffing ratios and she made a number of | :10:06. | :10:10. | |
statements within the get retrospect might feel somewhat irresponsible. | :10:11. | :10:14. | |
The reason for that as of the letter issued in October last year on the | :10:15. | :10:17. | |
issues they staffing build on the advice given by... Was cosigned by | :10:18. | :10:26. | |
the cheesy sludge of hospitals and by NHS improvement in the twos | :10:27. | :10:30. | |
constituent bodies. It was a cosigned letter because the livery | :10:31. | :10:34. | |
of quality and efficiency are two sides of the same coin. Those | :10:35. | :10:38. | |
hospitals that are providing the highest quality of care in this | :10:39. | :10:42. | |
country tended to be those who are also in control of their finances. | :10:43. | :10:47. | |
Those were struggling with quality also are those who cannot control | :10:48. | :10:50. | |
her own finances. If you were to suggest that somehow there is a | :10:51. | :10:54. | |
binder suggested between the two, a choice to be made. I say to her she | :10:55. | :11:01. | |
is about a decade but I and all current thinking. It is about making | :11:02. | :11:05. | |
sure the quality and efficiency go hand-in-hand and that is why the | :11:06. | :11:09. | |
very best hospitals can do both. And all of this I would say to the | :11:10. | :11:13. | |
Honorable Lady that she should avoid falling into the trap that her | :11:14. | :11:18. | |
predecessors so often did. Of assuming there is some trade-off | :11:19. | :11:23. | |
between quality and efficiency and of attempting a pretty low-level | :11:24. | :11:28. | |
politicizing of the NHS, an approach that was so roundly edged rejected | :11:29. | :11:38. | |
the last election. At this point having one possibly the last | :11:39. | :11:42. | |
election, she would not have had the ?8 million to invest in the NHS that | :11:43. | :11:46. | |
we have managed to do. She would not be there for able to ensure the | :11:47. | :11:51. | |
public of continued improvements and a number of patients treated and | :11:52. | :11:55. | |
increase the number of operations, and number of GP's in excess of | :11:56. | :12:06. | |
5000. None of those she would have been able to promise, and that is | :12:07. | :12:11. | |
light on the side of the house we're proud to reaffirm that it is us who | :12:12. | :12:14. | |
are the true party of the NHS. Hear, hear! | :12:15. | :12:24. | |
We also want to congratulate the NHS alongside coping with rising demand. | :12:25. | :12:34. | |
Task the Minister added NHS improvement are tasking measure | :12:35. | :12:40. | |
consultants to come and advice trust to turn around financial problems | :12:41. | :12:46. | |
when he also asked them to look at the issues of social care and how | :12:47. | :12:49. | |
the interrelation between underfunding of social care impacts | :12:50. | :12:53. | |
on health economies look up trusts and also to look at improvement | :12:54. | :13:00. | |
prevention because both prevention and was also noted by someone. Donna | :13:01. | :13:11. | |
Liddy would be aware of the increase in funding that this government has | :13:12. | :13:17. | |
increased. This will deliver increases in social care. She will | :13:18. | :13:23. | |
also be aware that the view is a holistic understanding of the health | :13:24. | :13:26. | |
care in this country and includes transmission of the NHS and social | :13:27. | :13:30. | |
care for that one. We are proud to be funding the five-year review | :13:31. | :13:37. | |
which he has asked for, 31 ?8 billion next year, in next two years | :13:38. | :13:44. | |
and was sure the challenge identifies around social care would | :13:45. | :13:51. | |
be addressed in the years to come. I'm not sure with almost 80% of | :13:52. | :13:56. | |
trusts running a deficit that we can just say it is failing hospitals | :13:57. | :14:01. | |
that are having problems. While the government talks about giving 10 | :14:02. | :14:06. | |
billion upfront to point to that is already rated off any deficit. | :14:07. | :14:10. | |
Normally budgets are described across the Department of Health | :14:11. | :14:14. | |
public health and health education in England are losing money. It is | :14:15. | :14:20. | |
described the 3 billion being clawed back from the areas that are not | :14:21. | :14:24. | |
specifically NHS England bid -- a four and a half billion and not 8 | :14:25. | :14:29. | |
million you put in. The five-year identify public health and | :14:30. | :14:33. | |
prevention as crucial. The government has a plan to recruit | :14:34. | :14:37. | |
5000 extra doctors I'm not sure how that can be done. Isn't shown in | :14:38. | :14:47. | |
evidence of impact on unnecessary deaths is a good strong ratio of | :14:48. | :14:50. | |
nurses to patients. I think is important to look at that how that | :14:51. | :14:56. | |
would be funded. They're not allowed immigrant measures, how they going | :14:57. | :15:01. | |
to do that? Why you not we get nice way to finish the work on save | :15:02. | :15:09. | |
nursing levels throughout hospitals? I think the Honorable Lady. She has | :15:10. | :15:15. | |
about the deficits across the system. It is true that there chars | :15:16. | :15:22. | |
writers for the heaviest deaths are committed. Because is a very | :15:23. | :15:29. | |
challenging time. The demographics have gotten worse every year. Also | :15:30. | :15:38. | |
because of the effect of charges of agencies have leveled after the | :15:39. | :15:41. | |
increase in staffing levels in the wake of mid staffs. We seek to | :15:42. | :15:48. | |
address that which is the cause of deficits,. Also very high salaries | :15:49. | :15:55. | |
and consultancy spending, taken together that'll make a significant | :15:56. | :15:58. | |
difference to hospital trust finances. She talked about public | :15:59. | :16:02. | |
health and we have accepted is very important part of achieving it. | :16:03. | :16:07. | |
We'll be investing ?60 million in public health across the England to | :16:08. | :16:17. | |
make sure we can achieve the contrast that she seeks. We do have | :16:18. | :16:28. | |
5000 additional GPs. We are trying to meet our target. I can. ... What | :16:29. | :16:40. | |
became clear in the process of nice-looking at staffing hospitals | :16:41. | :16:43. | |
as the chief nurse identified when look more broadly at teen staffing | :16:44. | :16:48. | |
levels and not just individual positions within wards. That is why | :16:49. | :16:56. | |
the chief nurse had been commissioned together and a safe | :16:57. | :17:03. | |
setting guidance will show a broader and more complex understanding what | :17:04. | :17:10. | |
has you appreciate from her time in the wards. To be very clear, that | :17:11. | :17:15. | |
setting guidance only be signed off what has the approval of all the | :17:16. | :17:21. | |
people who need to approve it. It will require that when it comes up. | :17:22. | :17:30. | |
Mr Speaker there are experiences that feature is that it takes a | :17:31. | :17:35. | |
medium to long-term plan to really pay tribute to the work of the | :17:36. | :17:42. | |
staff... What he assured me that any measures put in place with a savage | :17:43. | :17:47. | |
and across the country will take long-term view... A full five-year | :17:48. | :17:58. | |
plan is vital at the very least stop I cannot agree more. It is important | :17:59. | :18:05. | |
to you larger plan. So they they probably NHS. It is for the first | :18:06. | :18:12. | |
time able to see five-year view. It means that it can begin to transform | :18:13. | :18:23. | |
proper. Was able to do that. We're trying to bring a kind act was to | :18:24. | :18:27. | |
hospitals crossing one. To make sure they provide the sustainable | :18:28. | :18:31. | |
staffing levels is available but water levels. -- quality levels. We | :18:32. | :18:44. | |
had a little government adjusting ten. It is now the worst deficit in | :18:45. | :18:53. | |
England. Can you say anything about service in waiting times. Thank you | :18:54. | :19:03. | |
for your cooperation and help to trying inform the future. This only | :19:04. | :19:08. | |
worked as a cross party effort. We have particular problems in Devon, | :19:09. | :19:16. | |
they're really very urgent. That action needs to be led by local | :19:17. | :19:21. | |
traditions and I'm very glad that they're talking productively | :19:22. | :19:25. | |
together. My job, as his is it to provide support. I want to give the | :19:26. | :19:35. | |
Minister an example from my constituency. My local hospital and | :19:36. | :19:43. | |
that downgrading the nursing banks to save money. And now has a big | :19:44. | :19:51. | |
crisis in staff morale. The quality of care has fallen. Bartz has the | :19:52. | :20:00. | |
largest public finance deal in the country. It is due to pay back ?7 | :20:01. | :20:12. | |
billion on a ?1 billion load. Half was interested. Then I ask the | :20:13. | :20:17. | |
Minister very directly what is he doing to help trusts renegotiate | :20:18. | :20:19. | |
these costs and tackle these legal loan sharks of public sector. It is | :20:20. | :20:28. | |
a brave line of attack to go on something by the previous | :20:29. | :20:32. | |
government. All I can say that I've held a number of meetings with her | :20:33. | :20:38. | |
colleagues on Bartz. I can fully understand the difficult position | :20:39. | :20:43. | |
she finds it often. Had a meeting this morning about it, and to last | :20:44. | :20:52. | |
week, and next week. I'm very happy discuss this in greater detail with | :20:53. | :21:02. | |
her and in the future. The government from additional money of | :21:03. | :21:10. | |
the NSH. Should ticket out of hospitals and so could my Honorable | :21:11. | :21:14. | |
friend assured me that the money will not go too hard to deficits but | :21:15. | :21:19. | |
to change services to be delivered as needed. My Honorable friend space | :21:20. | :21:28. | |
from experience. What ?1 billion was at the side of the transformation | :21:29. | :21:31. | |
fund, but the principle behind the transportation fund will go to those | :21:32. | :21:36. | |
trust of our beginning to show transmission. That is to the | :21:37. | :21:43. | |
betterment of patients as a whole. We have to see transmission | :21:44. | :21:46. | |
otherwise money will be wasted as it has done in years previously. What | :21:47. | :21:52. | |
help and assistance can he get to the service in Leicester. Ten | :21:53. | :22:02. | |
ambulances were parked outside the infirmary, ten out of 25 tried to | :22:03. | :22:10. | |
hang of her patients will stop 836 occasions last year they had to be | :22:11. | :22:15. | |
waiting between two and four hours to hand over those patients. All we | :22:16. | :22:19. | |
need in Leicester is not more consultants but a better system of | :22:20. | :22:26. | |
management. There are Honorable gentleman raises issues which have | :22:27. | :22:32. | |
been severe in Leicester and I'm happy to have a separate meeting | :22:33. | :22:34. | |
with him to discuss what is being done about it. Across the country | :22:35. | :22:38. | |
resting a better performance this winter than last. That is because of | :22:39. | :22:44. | |
the matter planning is been put in the NHS. The sure their precious | :22:45. | :22:48. | |
what's happened during winter. I've been aware of this issue and I like | :22:49. | :22:54. | |
to ensure him that it will be fixed in time for next year. I woke in a | :22:55. | :22:59. | |
certain question because clinical and patient decision-making is being | :23:00. | :23:08. | |
dictated by eight catastrophic deal signed in 1998 that will see us | :23:09. | :23:16. | |
paying for Halifax hospital with cost ?64 million ?773 million. We've | :23:17. | :23:24. | |
had to close the infirmary. You please watch and urgent review into | :23:25. | :23:32. | |
these deals. I'll discuss this tomorrow afternoon. That review is | :23:33. | :23:39. | |
already taking place in the Department of Health. They did go | :23:40. | :23:47. | |
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 | :23:51. | :23:56. | |
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 | :24:00. | :24:09. | |
address tomorrow. The demon is to be very clear whether he accepts the | :24:10. | :24:12. | |
view of Simon Stevens that they're the funding gap in social care as is | :24:13. | :24:18. | |
projected to be the case into the 20 and 24 that will simply increase the | :24:19. | :24:24. | |
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 | :24:34. | :24:46. | |
billion additionally to the NHS -- ?8 million. ... Hospital just then | :24:47. | :25:02. | |
Charlie for a very long time between 1998 in 2010 at registered a | :25:03. | :25:07. | |
different set of five at 12 years. In a struggling as well from backlog | :25:08. | :25:15. | |
of maintenance. What more can be done to help hospital trusts the | :25:16. | :25:19. | |
massive backlogs of ongoing maintenance. My Honorable friend is | :25:20. | :25:25. | |
entirely right. I went to Oxford a few weeks ago and indeed buildings | :25:26. | :25:30. | |
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 | :25:41. | :26:00. | |
today. She was... That do not happen. This morning, I was told | :26:01. | :26:04. | |
that there were no appointment available anywhere. And no idea | :26:05. | :26:09. | |
where one would be available. My constituent is frantic. The Minister | :26:10. | :26:15. | |
an earlier response mentioned the outcomes. This is the reality of the | :26:16. | :26:19. | |
NHS in 2016 for my constituent and millions like her. There's no | :26:20. | :26:24. | |
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 | :26:30. | :26:32. | |
do for my constituent and how quickly will you get a | :26:33. | :26:37. | |
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 | :26:50. | :26:52. | |
we have been doing with people suffering cancer. That is a lot more | :26:53. | :26:57. | |
to do. Money is flowing in. It provides to our outcomes are | :26:58. | :27:01. | |
happening. I would look at them as I know might Honorable friend will do | :27:02. | :27:06. | |
as well. And he would be happy to take it on as a personal case. Thank | :27:07. | :27:12. | |
you Mr Speaker. The last decade under the previous Labour government | :27:13. | :27:21. | |
the health care trusts so chronic deficits and services closed such as | :27:22. | :27:28. | |
a any and maternity at Crawley hospitals. Services are now | :27:29. | :27:33. | |
returning to that hospital. Can he confirm that this government is | :27:34. | :27:37. | |
investing ten our NHS over the course of this Parliament? Can he | :27:38. | :27:43. | |
also confirmed that the NHS has been cut in Wales when Labour is in | :27:44. | :27:50. | |
control? I can confirm the amount of money available to the NHS will be | :27:51. | :27:56. | |
-- will increase to ?1.6 billion. It is not just the case of money, it is | :27:57. | :28:01. | |
about concentrating on quality and efficiency across services. Not only | :28:02. | :28:04. | |
has money been cut, but there has not been that concentration on | :28:05. | :28:14. | |
quality and efficiency. The hospital that serves my constituents and | :28:15. | :28:19. | |
Cambridge, one of the chest with one of the most challenging deficits, it | :28:20. | :28:24. | |
is urging people not to attend accident and emergency. They explain | :28:25. | :28:33. | |
that. The Conservatives in Cambridgeshire. We have got a crisis | :28:34. | :28:38. | |
and social care and health coming -- how funding. Full | :28:39. | :28:48. | |
that that Dick Tate will be with John? | :28:49. | :28:53. | |
I can't assure him that we will not stop to find efficiencies across the | :28:54. | :29:01. | |
NHS because the important thing is to make sure that we are channeling | :29:02. | :29:05. | |
money right to the front line, and that means in his hospital as it | :29:06. | :29:09. | |
does others. Sometimes that will mean finding it -- and it fantasies | :29:10. | :29:13. | |
and making sure that money is recovered it. Problems go further | :29:14. | :29:22. | |
than AMD. It is a hospital with special measures. I am confident | :29:23. | :29:25. | |
under the stewardship of the new chief executive but that will be | :29:26. | :29:34. | |
managed. Can I ask my Honorable friend to thank the secretary of | :29:35. | :29:39. | |
state for supporting the cause for investment and my hospital. The | :29:40. | :29:45. | |
additional 15 million pounds will create a state of the art | :29:46. | :29:48. | |
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. |