15/12/2016

:00:00. > :00:00.said, I nevertheless would like to wish the Secretary of State and all

:00:00. > :00:00.colleagues are very Merry Christmas. The Secretary of State for

:00:07. > :00:19.Communities and Local Government. Apply to Michu Merry Christmas and

:00:20. > :00:24.am sorry to hear that the statement arrived late. I understand from my

:00:25. > :00:28.office that was 1115. That was not my intention that I apologise if the

:00:29. > :00:33.opposition received it late. Local Government accounts for almost one

:00:34. > :00:37.quarter of public spending and it is making a significant contribution to

:00:38. > :00:42.reducing Labour's record-breaking budget deficit. Councils have dealt

:00:43. > :00:47.with this admirably, public sector two satisfaction with local services

:00:48. > :00:50.has been maintained. -- public satisfaction that there is much that

:00:51. > :00:54.public sector can learn from councils across the country when it

:00:55. > :00:58.comes to delivering value for money. No one is disguising that more can

:00:59. > :01:04.be done to improve efficiency and further transform services. In last

:01:05. > :01:10.year's spending review we delivered a flat cash settlement for local

:01:11. > :01:14.Government that gives councils more than ?200 billion to spend on

:01:15. > :01:19.services over the course of this Parliament. In February we published

:01:20. > :01:23.an historic four-year offer for councils providing the certainty

:01:24. > :01:32.that they need to plan ahead. I'm pleased to say that 97% of councils

:01:33. > :01:37.have taken up the offer and met our expectations of reform by publishing

:01:38. > :01:42.a long-term efficiency plan. This means that almost every council in

:01:43. > :01:45.England is now working with local partners in the NHS and other areas

:01:46. > :01:52.to translate this greater certainty into improved services and

:01:53. > :01:55.efficiency savings. Today my department has published a

:01:56. > :01:59.consultation that confirms the second year of this four-year offer

:02:00. > :02:03.for councils. And core spending power figures have been made

:02:04. > :02:09.available in the library of both houses. The adage Cirstea provided

:02:10. > :02:13.by the four-year offer will increase stability for councils as we

:02:14. > :02:20.transition to a world where they maintain 100% of locally raised

:02:21. > :02:24.taxes to fund local services. -- the added certainty. By 2020 local

:02:25. > :02:30.councillors will decide how to fund local services using local money.

:02:31. > :02:33.True localism in action. Moeen welcome a stronger incentives to

:02:34. > :02:37.support local firms and local jobs may increase business rate revenue

:02:38. > :02:43.for local Government as businesses expand. In the New Year we will

:02:44. > :02:46.announce and introduce a bill to provide the framework for a new

:02:47. > :02:53.system with trials beginning later in the year. The March budget

:02:54. > :02:58.announced that in London and devolution deal areas of greater

:02:59. > :03:02.Manchester and Liverpool city region will have pilots of 100% business

:03:03. > :03:05.rate retention. I can confirm that these authorities averaged

:03:06. > :03:13.agreements to begin recruiting to pilots in 2017 - 18 and I'm pleased

:03:14. > :03:16.to say that these will be joined by authorities in the devolution deal

:03:17. > :03:25.areas of the West of England, Cornwall and the West Midlands. Mr

:03:26. > :03:30.Speaker, the new homes built as an important part of our commitment to

:03:31. > :03:34.reward committees and authorities that embrace ambitious

:03:35. > :03:37.house-building plans. It also vied to what income for councils seeking

:03:38. > :03:44.to grow their local economies which they can then go on to spend as they

:03:45. > :03:48.see fit. Since its introduction in 2011 over ?6 billion has been paid

:03:49. > :03:53.to reward housing supply and over 1.2 million homes have been

:03:54. > :03:59.delivered but for all its successes, the system can be improved. A year

:04:00. > :04:03.ago, we consulted on a number of possible reforms to the scheme.

:04:04. > :04:09.Having studied those results closely, I can confirm today that

:04:10. > :04:16.from next year we will introduce a national baseline for housing growth

:04:17. > :04:23.of 0.4%. Below this, the new homes bonus will not be paid. This will

:04:24. > :04:28.help ensure the money is used to reward additional housing rather

:04:29. > :04:33.than just normal work. From 2018-19 will consider withholding new homes

:04:34. > :04:37.bonus payments from local authorities that are not planning

:04:38. > :04:41.effectively by making positive decisions on planning applications

:04:42. > :04:45.and delivering housing growth. To encourage more effective planning we

:04:46. > :04:50.will also consider withholding payments for homes that are built

:04:51. > :04:55.following an appeal. A consultation on this will take place in due

:04:56. > :05:00.course. And we will also implement our preferred option in the

:05:01. > :05:05.consultation to reduce the number of years for which payments are made

:05:06. > :05:11.from six years to five in 2017-18 and to four years for 2018-19. This

:05:12. > :05:17.will release important funding for adult social care, recognising the

:05:18. > :05:22.demographic changes of an ageing population as well as a growing

:05:23. > :05:28.population. Mr Speaker, I'm sure that all members on both sides of

:05:29. > :05:31.this house agree on the need for action to meet the growing cost of

:05:32. > :05:36.caring for some of our most vulnerable citizens. Every year

:05:37. > :05:41.councils spend more than ?14 billion on adult social care, it is by far

:05:42. > :05:46.the biggest cost pressure facing local Government. The spending

:05:47. > :05:51.review put in place up to three and a half billion pounds of additional

:05:52. > :05:56.funding for adult social care by 2019-20. Allowing local Government

:05:57. > :06:01.to increase their spending on this service in real terms by the end of

:06:02. > :06:09.this Parliament. But more needs to be done. Over recent months we have

:06:10. > :06:12.listened to, heard and understood calls from across-the-board saying

:06:13. > :06:18.funding is needed sooner in order to meet short-term pressures. Today I

:06:19. > :06:22.can confirm that savings from the reforms to the new homes bonus will

:06:23. > :06:29.be retained in full by local Government to contribute towards

:06:30. > :06:34.adult social care costs. I can tell the house that we will use these

:06:35. > :06:41.funds to provide a new dedicated to hundred ?40 million adult social

:06:42. > :06:49.care support grant in 2017-18 to be distributed fairly according to

:06:50. > :06:51.relative need. I can also confirm the indicative allocations of the

:06:52. > :06:56.improved better care fund we published last year and at -- that

:06:57. > :06:59.the Department of Health will surely confirm allocations of the public

:07:00. > :07:07.health grant to councils for next year. Last year we agreed to the

:07:08. > :07:13.request by many leaders in local Government to introduce a social

:07:14. > :07:18.care Council tax precept of 2% a year, guaranteed to be spent on

:07:19. > :07:22.adult social care. The precept puts me raising powers into the hands of

:07:23. > :07:25.local leaders who best understand the needs of their community and are

:07:26. > :07:30.best placed to respond. In recognition of the immediate

:07:31. > :07:36.challenges that are the care market now allow local councils to raise

:07:37. > :07:39.this funding sooner if they wish. Councils will be granted the

:07:40. > :07:48.flexibility to raise the precept that up to 3% next year and the year

:07:49. > :07:56.after. This will provide a further ?208 million to spend on adult

:07:57. > :08:01.social care in 2017-18 and ?444 million in 2018-19. These measures,

:08:02. > :08:09.together with the changes we've made to the new homes bonus, will make

:08:10. > :08:19.almost ?900 million of additional funding for adult social care

:08:20. > :08:30.available over the next two years. However, we do not believe that more

:08:31. > :08:35.money is the only answer. There is a variation in performance across the

:08:36. > :08:40.country that cannot be explained by different levels of spending. Some

:08:41. > :08:44.areas have virtually no delay transfers of care from hospital. But

:08:45. > :08:51.there is a 20 fold difference between the best and the worst

:08:52. > :08:54.performing 10% of areas. It is vital therefore that we finish the job of

:08:55. > :09:01.integrating our health and social care systems. We know that this can

:09:02. > :09:05.improve outcomes and make funding goes further, helping people manage

:09:06. > :09:09.their own health and well-being and to live independently for as long as

:09:10. > :09:15.possible. The raw or register with examples of where this works. For

:09:16. > :09:18.Topal Gobert in Oxfordshire joined up working has seen delayed

:09:19. > :09:23.discharges plummet by over 40% in just six months. Meanwhile in

:09:24. > :09:31.Northumberland that area has saved ?5 million through joining up their

:09:32. > :09:35.local health care trust, reducing demand for residential care by car

:09:36. > :09:41.percent. The better care fund is already supporting this, with ?5.3

:09:42. > :09:44.billion of funding between councils and clinical commissioning groups

:09:45. > :09:46.last year but we also want to make sure that all local authorities

:09:47. > :09:52.learn from the best performers and best providers so we will soon

:09:53. > :09:56.publish on integration and better care fund policy framework to

:09:57. > :09:59.support this. In the long term we will need to develop the reforms

:10:00. > :10:07.that will provide a sustainable market that works for everyone who

:10:08. > :10:09.need social care. We also need to recognise that demographic pressures

:10:10. > :10:17.are affecting different areas in different ways. As in the changing

:10:18. > :10:20.costs of providing services. We were undertaking a fair funding review to

:10:21. > :10:25.thoroughly consider how to introduce a more up-to-date and transparent

:10:26. > :10:29.and fair in needs assessment formula. The review is looking at

:10:30. > :10:31.all the services that are provided by local Government and will

:10:32. > :10:37.determine the starting point for local authorities under the 100%

:10:38. > :10:43.business retention programme. This is an opportunity to be bold, for

:10:44. > :10:47.bottom-up change, we are working with representatives from local

:10:48. > :10:51.Government on the review and we will report on our progress to the house

:10:52. > :10:57.in the New Year. Council tax is a local decision. And local councils

:10:58. > :11:03.will need to justify social care precept rises to their taxpayers.

:11:04. > :11:08.The only to show how the additional income is spent to support people

:11:09. > :11:13.who need care in the area and how it improves adult social care services.

:11:14. > :11:17.However, it is worth noting the extra flexibility to raise funding

:11:18. > :11:23.for adult social care next year will add just ?1 a month the average

:11:24. > :11:27.council tax bill and the overall increase to the precept in the next

:11:28. > :11:34.three-year 's will remain at 6%, so bills will be no higher in 2019 -

:11:35. > :11:38.20. In our manifesto we made a commitment to keep council tax down,

:11:39. > :11:49.and that is exactly what has happened. Since 2010-11 council tax

:11:50. > :11:53.has fallen in real terms by 9% and by 2019-20 hard-working families

:11:54. > :12:03.will be paying less council tax in real terms than they were when we

:12:04. > :12:10.came to power. However, last year we saw a worrying 6.1% rise in precepts

:12:11. > :12:15.by town and parish councils. That is why earlier this year we consulted

:12:16. > :12:20.on extending council tax referendum principles to larger town and parish

:12:21. > :12:23.councils. These councils play an important role in our civic life and

:12:24. > :12:30.I understand the practical considerations of scale. We have

:12:31. > :12:33.decided we will defer our proposals this year while keeping the level of

:12:34. > :12:39.precepts set by town and parish councils under close review. I

:12:40. > :12:43.expect alternate parish councils to clearly demonstrate restraint well

:12:44. > :12:46.setting increases that are not a direct result of taking on

:12:47. > :12:49.additional responsibilities. I am also actively considering with the

:12:50. > :12:57.sector ways to make excessive increases more transparent to local

:12:58. > :13:00.taxpayers. This local Government finance settlement on is our

:13:01. > :13:03.commitment to a four-year funding certainty for councils that are

:13:04. > :13:08.committed to reform, it paves the way towards financial

:13:09. > :13:12.self-sufficiency for local Government and the full devolution

:13:13. > :13:17.of business rates. It recognises the cost of delivering adult social care

:13:18. > :13:21.and makes more funding available sooner and it puts local councillors

:13:22. > :13:26.in the driving seat and keep spills down -- keeps bills down for

:13:27. > :13:31.taxpayers, I commend it to the house. Mr Speaker, this is a

:13:32. > :13:35.settlement that will lead the people of England paying higher taxes as

:13:36. > :13:38.getting worse public services for their money. For some this

:13:39. > :13:40.settlement will still mean support they hoped would be there for an

:13:41. > :13:46.elderly or vulnerable relative still isn't available while for others

:13:47. > :13:51.visible public services like street cleaning and rubbish collection will

:13:52. > :13:55.be cut ever closer to the bone, and even more youth centres and

:13:56. > :13:59.libraries will close. But it would've been nice to have seen

:14:00. > :14:03.statement in good time, at least we can be great for the crisis in the

:14:04. > :14:06.party opposite over the price of a pair of trousers has abated enough

:14:07. > :14:11.to allow the chief of staff at number ten to what the Secretary of

:14:12. > :14:15.State can say today. Isn't the real truth about this statement that

:14:16. > :14:19.there is no new money for local authorities to tackle the social

:14:20. > :14:26.crisis now? Moving new homes bonus money around in a few years isn't

:14:27. > :14:29.going to tackle the crisis now. On the 18th of July, when the

:14:30. > :14:34.Association of directors of adult social services were already raising

:14:35. > :14:37.the alarm, the Secretary of State in this house said in response to my

:14:38. > :14:44.honourable friend the member for Easington of social care "I don't

:14:45. > :14:50.accept it is underfunded". Why has it taken so long for him to spot

:14:51. > :14:53.there might be a problem after all? This is a crisis that ministers

:14:54. > :14:58.still don't seem to grasp the severity of. ?4.6 billion axed from

:14:59. > :15:04.social care budgets as a result of their cuts since 2010. 1.2 million

:15:05. > :15:09.people according to aid UK not getting the care they need. There

:15:10. > :15:13.are even senior figures in the minister's on party with a closer

:15:14. > :15:15.grip on reality than the Secretary of State appears to have, such as

:15:16. > :15:19.Lord Porter, the chairman of the Local Government Association, who

:15:20. > :15:20.notes that services supporting our elderly and vulnerable are at

:15:21. > :15:31.breaking point now. Does he share our view that we did

:15:32. > :15:36.not need to be in this position. Does he remember how before the 2010

:15:37. > :15:39.general election, senior figures from his party choose to kill of

:15:40. > :15:45.serious cross-party talks on how to fund social care going forward. Once

:15:46. > :15:51.ministers finally began to realise there might be a bit of a problem,

:15:52. > :15:55.they reached for that old conservative favourite, blaming

:15:56. > :15:59.councils themselves. Ministers like to attack councils, but isn't it the

:16:00. > :16:02.truth that councillors and local authority staff up and down the

:16:03. > :16:06.country are doing their best to block the funding gap, to cope with

:16:07. > :16:12.huge rising demand for care and increasing costs. When will he

:16:13. > :16:16.address the worsening postcode lottery for social care? In the most

:16:17. > :16:23.deprived areas of the country, social care spending fell by ?65 per

:16:24. > :16:27.person, but rose by ?20 per person in the least deprived areas. Though

:16:28. > :16:32.he accept that the social care precept rising will only further

:16:33. > :16:38.entrench this inequality? I ask generally, is this really the best

:16:39. > :16:45.time to be choosing to cut corporation tax on Amazon Sports

:16:46. > :16:50.Direct and the big banks? Since Minister came to office, there has

:16:51. > :16:54.been much talk of help for those who are only just about managing their

:16:55. > :17:00.finances. That seems to have gone out of the window today, as the

:17:01. > :17:04.Prime Minister has decided to put up council tax in every part of

:17:05. > :17:09.England. To borrow from her, if you're from an ordinary

:17:10. > :17:15.working-class family, life is much harder than people in Downing Street

:17:16. > :17:18.realise. You worry about your area and services you rely on and you

:17:19. > :17:22.also worry if you can pay the tax bill at the end of the month. Today,

:17:23. > :17:26.the Prime Minister decided to make it just a bit harder for them to

:17:27. > :17:37.manage. On top of council tax rises this year, it's 3% in 2017 and more

:17:38. > :17:43.in 2018. By 2020, a 17% increase in council tax compared to 2015. All

:17:44. > :17:49.decided in Downing Street. Who would have thought it? The party opposite,

:17:50. > :17:52.who once claimed to be in favour of low taxes, putting up taxes every

:17:53. > :18:02.year until the next election. The truth is, social care is in crisis.

:18:03. > :18:10.This means worse public services. Isn't it the truth that the people

:18:11. > :18:16.of England deserve better? Allow me to respond to the Shadow Minister.

:18:17. > :18:21.First of all, he claims that, as a result of today's news, that there

:18:22. > :18:25.is no new money. Those were his words. No new money for adult social

:18:26. > :18:30.care. He could not be more wrong. But if he wants to imagine what a

:18:31. > :18:33.world would look like with no new money for adult social care, then

:18:34. > :18:38.that is what would've happened if the result of the last election had

:18:39. > :18:46.been different. Let's remember what the then Chancellor said. I called,

:18:47. > :18:53.there will be no additional funding for local government, and he went on

:18:54. > :19:00.to say, I called, a penny more for local government. The shadow

:19:01. > :19:06.minister also mentioned the NHS and the important role the NHS plays in

:19:07. > :19:10.providing adult social care and helping with adult social care.

:19:11. > :19:16.Let's also remember at the last general election, the Labour Party's

:19:17. > :19:29.plans were to cut NHS spending by 5.3 billion. Everyone wants to get

:19:30. > :19:35.in, but if you want to get in, let's hear the Secretary of State. Thank

:19:36. > :19:41.you. If the Labour Party had had its way, this year, NHS funding would

:19:42. > :19:46.have been ?1.3 billion lower than it is. What difference would that have

:19:47. > :19:51.made to people, especially the most vulnerable people, in our society?

:19:52. > :19:57.We should be grateful that the Labour Party are not in office.

:19:58. > :20:02.Because what we have seen under this government, when it comes to funding

:20:03. > :20:06.for adult social care, is first ball in the spending review, an

:20:07. > :20:12.allocation of an additional 3.5 by 20 20. And now, with today's

:20:13. > :20:17.announcement, let me focus precisely on his court, where he said, there

:20:18. > :20:22.is no new money. He is absolutely wrong. There is new money of ?240

:20:23. > :20:29.million that otherwise would have gone into new homes bonus. And we

:20:30. > :20:33.have responded to what local councils, many local authority

:20:34. > :20:42.leaders had asked for, and repurposed that money. And there is

:20:43. > :20:46.an additional ?654 million, additional money, because of the

:20:47. > :20:51.precept changes. If the shadow minister cannot work that out, then

:20:52. > :20:58.he needs to look again at his basic mathematics skills, because taking

:20:59. > :21:00.those numbers together, that's an additional ?900 million over and

:21:01. > :21:08.above the spending review settlement over the next two years, of

:21:09. > :21:14.approximately ?450 million of new money each year for the next two

:21:15. > :21:18.years. The shadow minister also referred to council tax bills. It

:21:19. > :21:25.does remind me of something that the shadow adult social care minister

:21:26. > :21:31.said recently. I quote. She said, asking taxpayers to pick up the bill

:21:32. > :21:37.is no substitute for a proper plan. Well, I think the shadow government

:21:38. > :21:41.needs to learn that there is no such thing as government money, it's all

:21:42. > :21:47.taxpayers' money, whether that is locally raised or nationally raised,

:21:48. > :21:49.it's all taxpayers' money. I know the Leader of the Opposition

:21:50. > :21:56.believes in a magic money tree, but I didn't know that you felt the same

:21:57. > :22:00.way. If we want properly funded services, there needs to be a

:22:01. > :22:05.balance between those who pay for it, the taxpayers, and those who

:22:06. > :22:09.actually use those services. That means making the right decisions to

:22:10. > :22:13.make sure they are properly funded, and at the same time, to make sure

:22:14. > :22:19.that tax bills don't rise by more than they have to. That's why I am

:22:20. > :22:23.proud that under this government, even taking into account these

:22:24. > :22:27.changes, the precept changes we have announced today, that by the end of

:22:28. > :22:33.this parliament in real terms, the average council tax bill will be

:22:34. > :22:43.lower than it was in 2010. I welcome the statement today, but can he tell

:22:44. > :22:48.us that 97% of local authorities have agreed a four-year deal, which

:22:49. > :22:57.allows them to plan for the future. That does mean that 3% of local

:22:58. > :23:01.authorities have not. Can he update the House on what the impact of the

:23:02. > :23:05.local authorities that appeal to agree to a long-term settlement,

:23:06. > :23:12.what that means for their council taxpayers and the future of their

:23:13. > :23:16.services? He makes a very good point and it's worth talking about this

:23:17. > :23:20.more. As he rightly said, the good news was that in terms of the

:23:21. > :23:26.four-year settlement, 97% of councils accepted it, which means

:23:27. > :23:29.ten councils did not. Unfortunately, his local council is one of those

:23:30. > :23:32.councils that did not accept the settlement. What it means in

:23:33. > :23:38.practice is that there are settlement will be an annual

:23:39. > :23:43.settlement and it will deny local people the certainty that they seek.

:23:44. > :23:46.It also means that that local council and the other ten councils

:23:47. > :23:51.have not put together an efficiency plan like the other councils. It's a

:23:52. > :23:57.shame those councils did accept it. It's up to them, but it does have

:23:58. > :24:03.consequences. Would he agree that the statement still leaves like very

:24:04. > :24:08.challenging indeed the most local authorities dealing with social care

:24:09. > :24:13.and the crisis it is in? Would he confirmed that the ?900 million on

:24:14. > :24:19.it was partly to the up ?3 billion gap, which we believe exists by the

:24:20. > :24:24.end of this spending review? In terms of the new homes bonus money,

:24:25. > :24:28.why they chose not to pay back through the care fund, where he

:24:29. > :24:35.could have targeted the money at the Buddhist authorities, who can raise

:24:36. > :24:38.the least through the precept? In terms of integration, we saw that

:24:39. > :24:41.Simon Stephens and Stephen Donald came to the select committee

:24:42. > :24:45.yesterday. They said integration between health and social care was

:24:46. > :24:50.desirable, but that it was not of itself going to solve the problems

:24:51. > :24:56.of social care in the longer term. Would he agree to a wider review,

:24:57. > :25:01.involving the Local Government Association and to try and get

:25:02. > :25:06.cross-party agreement towards a sustainable agreement for the longer

:25:07. > :25:12.term? I always take very serious with what the chair of the select

:25:13. > :25:15.committee has to say, I know he considers these things very

:25:16. > :25:21.carefully. To answer his questions. In terms of funding for adult social

:25:22. > :25:26.care, he may recall that, at the time of the spending review last

:25:27. > :25:35.year, the Local Government Association asked for extra funding.

:25:36. > :25:39.That spending review provided more at 3.5 billion. Today's

:25:40. > :25:43.announcements and another ?900 million on top of that 3.5 billion,

:25:44. > :25:50.so it is a significant increase, even more so when you look back at

:25:51. > :25:55.what the LGA was considering just last year. He also asked

:25:56. > :26:01.specifically about the 240 million, the money that otherwise would have

:26:02. > :26:08.gone into New Homes Bonus, and the allocation of that. He will know

:26:09. > :26:13.that the Improved Better Care Fund, which has 1.5 billion by the end of

:26:14. > :26:19.this Parliament, is allocated, taking into account the council tax

:26:20. > :26:22.raising powers of each area. The 240 million is allocated based on

:26:23. > :26:30.relative need. I think that the best way to do it. I agree with the

:26:31. > :26:33.government, we need more money and reform. My local authorities were

:26:34. > :26:38.short-changed in the past, which is a separate issue. On the general

:26:39. > :26:42.question, what can be done about the reverse incentive, where if it

:26:43. > :26:45.council doesn't come up with a primary care package, the person

:26:46. > :26:54.will stay for longer in a very expensive hospital bed, where they

:26:55. > :26:58.don't want to be? He highlights this vital issue of more and better

:26:59. > :27:04.integration between the health care system and adult social care. I

:27:05. > :27:09.refer him to my statement where we are seeing good practice. I

:27:10. > :27:11.mentioned Manchester and Northumberland, and many areas can

:27:12. > :27:17.learn from that, especially when you look at some of the factors, such as

:27:18. > :27:20.the deep blue transversal care. We want to see more of this, that's why

:27:21. > :27:26.my department, working with the Health Secretary will be working on

:27:27. > :27:30.a set of principles that we expect to see implemented as local

:27:31. > :27:35.authorities access this additional funding. The great city of

:27:36. > :27:40.Birmingham has been hit hard by the biggest cuts in local government

:27:41. > :27:45.hastily, ?800 million. With increasingly catastrophic

:27:46. > :27:49.consequences for public services, in the words of the chief executive on

:27:50. > :27:55.one hand, and in the words of the chief executive of the YMCA, leading

:27:56. > :28:01.to more young men and women dying, like the young man who frozen

:28:02. > :28:05.Birmingham Street in November. Can the Secretary of State begin to

:28:06. > :28:10.explain why nursery schools last week, schools yesterday and local

:28:11. > :28:15.government today, Birmingham is left fairly than the Prime Minister's own

:28:16. > :28:19.constituency of Maidenhead. It cannot be right to put the interests

:28:20. > :28:28.of the Tory party above the interests of the public. I do think

:28:29. > :28:35.he should re-examine the figures and make sure you get them right. I have

:28:36. > :28:41.them here, if it helps. He will know that Birmingham has significant

:28:42. > :28:48.failings, and that's why there is independent panel put in place by my

:28:49. > :28:52.predecessor. That failings were significant management areas. Today,

:28:53. > :28:58.what he is highlighting, he seems to suggest there is a funding issue

:28:59. > :29:02.with Birmingham. Let me give him the facts. Birmingham, amongst the

:29:03. > :29:17.Metropolitan districts, it receives currently, or by 2019, will receive

:29:18. > :29:22.a good amount per person. It is a well funded authority and it is

:29:23. > :29:26.incumbent on those who run it to run it better for the residents. In four

:29:27. > :29:40.years' time, Birmingham's money will be going up, but in Worthing, it

:29:41. > :29:55.would. I think he ought to pay attention to whether planning

:29:56. > :30:02.permission and is on -- granted on appeal should be looked at. I am

:30:03. > :30:16.glad he has taken away the referendum on parish council

:30:17. > :30:18.increases. friend, I know he be pleased by the third reading of the

:30:19. > :30:23.neighbourhood planning Bill because of the things it tried to address is

:30:24. > :30:27.to make those lands stronger and easier to get together for local

:30:28. > :30:31.communities and I know he supports me in that goal. The issue he raises

:30:32. > :30:41.on appeals and the new homes bonus, as I said, we are minded to deny it

:30:42. > :30:45.when planning is counted on appeal but your consultation on it and

:30:46. > :30:52.decide. The shrub but we will consult on it. Liverpool has high

:30:53. > :30:56.levels of poverty and a very innovative local authority that

:30:57. > :31:00.believes in value for money but Liverpool City Council has already

:31:01. > :31:05.lost 58% of central Government funding and yesterday in a reader

:31:06. > :31:14.should brush and of education funding it lost ?3.5 million more.

:31:15. > :31:18.What does this statement today to in concrete and specific terms to

:31:19. > :31:22.address the crisis in social care. Except ask poor people to pay more

:31:23. > :31:30.and even that will not address this growing crisis of people in need?

:31:31. > :31:32.The honourable lady, I was in Liverpool just a couple of weeks ago

:31:33. > :31:37.and met with local leaders including the Chief Executive and I want to

:31:38. > :31:40.understand directly some of the challenges Liverpool is going

:31:41. > :31:44.through. The changes we have announced today, some of those will

:31:45. > :31:48.help Liverpool and other places in that situation, she will know that

:31:49. > :31:53.better care fund is allocated by taking into account the council

:31:54. > :31:56.tax-raising power of a local area and that benefits places like

:31:57. > :32:04.Liverpool and she will also perhaps note today from the statement on the

:32:05. > :32:07.extra 249 pounds based on needs that will advantage Liverpool and she

:32:08. > :32:13.will be interested to know that Liverpool boss Matt Cassel tax

:32:14. > :32:21.spending power per dwelling is rising from 5922 in 17-18 to 2041,

:32:22. > :32:32.which is a much bigger increase than most other areas in that situation.

:32:33. > :32:35.-- 1900 mean 22. It is good that more people are living longer, there

:32:36. > :32:38.has been increased to the people living to make 85 and over and more

:32:39. > :32:43.than 1 billion 1 million people or you may Cairney is so was their

:32:44. > :32:48.welcomes of the money will be brought forward I don't feel we are

:32:49. > :32:51.going far enough in this house to address the scale of the increase in

:32:52. > :32:56.demand we will allow people to be cared for with dignity in their old

:32:57. > :32:59.age. Can I join the chair of the DC LG committee in asking the

:33:00. > :33:04.Government to start cross-party talks urgently to have a long-term,

:33:05. > :33:11.fair, sustainable settlement for both health and social care? I know

:33:12. > :33:15.freshly that my honourable friend speech with experience, I know she

:33:16. > :33:19.has spent a great degree of time looking into this issue, especially

:33:20. > :33:24.with the work she does on the health select committee and I do take what

:33:25. > :33:30.she has to say very seriously, one thing I would highlight, if I'm

:33:31. > :33:36.correct she used the words bring forward spending". It is more than

:33:37. > :33:43.just bringing it forward, this is a significant increase in spending of

:33:44. > :33:48.?900 million, just to be clear, this is ?900 million additional over the

:33:49. > :33:50.next two years where some of the biggest short-term pressures exist

:33:51. > :33:53.that otherwise would not have happened had the changes not been

:33:54. > :33:58.announced, this is a significantly new money, not just bringing forward

:33:59. > :34:05.and I know she would welcome that clarification and she also referred

:34:06. > :34:08.to speaking widely, including with members of the opposition and I

:34:09. > :34:12.would include local leaders in that, health professionals and social care

:34:13. > :34:17.professionals and that is what I intend to do over the coming months

:34:18. > :34:25.to make sure we can always keep this under review. This is surely a truly

:34:26. > :34:31.feeble response to a national crisis and the LGA would be entitled to

:34:32. > :34:37.reject this proposal and put the ball firmly back in the Government's

:34:38. > :34:40.court to think again. This is an unfair way to raise additional money

:34:41. > :34:44.which will increase inequalities between rich and poor areas. When

:34:45. > :34:49.will the Government come forward with plans to work genuinely across

:34:50. > :34:55.parties? They have been to suggestions already in this Q

:34:56. > :34:58.session, the Secretary of State hasn't answered either, when will he

:34:59. > :35:05.work with others to come up with a genuine solution for what is now a

:35:06. > :35:11.real national crisis? The honourable gentleman will know firstly any

:35:12. > :35:14.funding provided to a local authority is raised locally through

:35:15. > :35:22.taxes or through taxes nationally when it comes to finding through

:35:23. > :35:28.growing. He used the words unfair but he should be aware because he

:35:29. > :35:31.has experienced in this area, he should be aware that when we

:35:32. > :35:35.allocate the finding that billions from the better care fund is

:35:36. > :35:39.allocated taking into account the castle tax-raising power of each

:35:40. > :35:43.area, that is the bases used for that and I think that is the fairest

:35:44. > :35:48.way to do that but also giving councils flexibility through the

:35:49. > :35:53.precept which we have announced that flexibility today so they are in a

:35:54. > :35:58.better position to meet local needs is also a sensible and fair policy,

:35:59. > :36:03.where local councils see more demand for services locally they should be

:36:04. > :36:09.given the power to deal with that. I appreciate the appalling pressure

:36:10. > :36:12.the Secretary of State is feeling on adult social care but pressing on

:36:13. > :36:16.his new homes bonus, this is vital in industrial towns to promote

:36:17. > :36:23.difficult development but what worries me is if a council like West

:36:24. > :36:25.Lindsey doesn't meet the .4% target if it allows development going

:36:26. > :36:30.against committee plans and suburban villages where it is easy to develop

:36:31. > :36:34.their might lose their no new homes bonus and he said to encourage more

:36:35. > :36:38.effective global planning people also consider withholding payments

:36:39. > :36:41.for homes built following appeal, is essentialism and goes against

:36:42. > :36:44.localism and I am urging him to think again, councils should

:36:45. > :36:50.determine these appeals on their merit on the basis of central

:36:51. > :36:55.Government diktat. Firstly I would like to assure my honourable friend

:36:56. > :37:00.that the new homes bonus is staying in place, there are forms announced

:37:01. > :37:06.which were consulted on and that began in December 2015 and it was

:37:07. > :37:10.important to make sure that these incentives that remain for house

:37:11. > :37:14.building for local authorities to not least deal with some local

:37:15. > :37:22.pressures that come about through more homes in the area. He mentioned

:37:23. > :37:27.the baseline, committee .4% above the national baseline, he find it

:37:28. > :37:32.reassuring that is based on historic figures but I look at last year's

:37:33. > :37:36.figure for the country it was 0.94%, so most local authorities will also

:37:37. > :37:38.be able to benefit from the new homes bonus and I have listened

:37:39. > :37:45.carefully to what might honourable friend has said about the appeal,

:37:46. > :37:48.the possible changes, and we will consider that in the consultation. I

:37:49. > :37:54.wondered if the secretary of state could tell me quite how Hollies in a

:37:55. > :37:59.better position to meet local needs were his announcement, the 1%

:38:00. > :38:04.increase they can levy on the precept will bring into ?700,000,

:38:05. > :38:10.just 12% of what is actually needed for Hull to address social care

:38:11. > :38:14.budget after the massive cuts since 2010 and wealthy areas like the East

:38:15. > :38:19.riding can raise much more with their council tax base and have many

:38:20. > :38:23.more self funders, so how is that fair that the Government are not

:38:24. > :38:28.giving Hull what it needs to meet the needs of some of the most

:38:29. > :38:37.vulnerable people in one of the most disadvantaged areas in the country?

:38:38. > :38:42.The area that the lady mentions, it will benefit from these changes and

:38:43. > :38:51.she mentioned the precept, which is an important change because and I

:38:52. > :38:55.don't have the numbers exactly but it will help. I noticed the

:38:56. > :38:58.honourable lady did not mention the money that would have otherwise gone

:38:59. > :39:04.in the new homes bonus which is allocated on relative need and takes

:39:05. > :39:08.into account the ability for local areas to raise money through taxes

:39:09. > :39:15.and because it is based on relative need it will have a benefit for

:39:16. > :39:18.places like Hull. Thank you, I agree with my honourable friend, this is

:39:19. > :39:24.an opportunity to be bold and for bottom-up thinking and I welcome the

:39:25. > :39:28.fair funding review but would he not agree with me that until that fair

:39:29. > :39:32.funding review is completed, taking into account the demographic

:39:33. > :39:37.pressures of different areas of the country, there should be a

:39:38. > :39:41.moratorium on losing the committee hospital beds until we really have a

:39:42. > :39:44.fuller picture of what the local authority can afford and what

:39:45. > :39:51.central Government is per pair to provide? Of my honourable friend

:39:52. > :39:56.highlights is, I think, the need for this fair funding review and I hope

:39:57. > :40:01.he agrees with me that it is about time that we look carefully at the

:40:02. > :40:06.needs of every local area, including our more rural areas and make sure

:40:07. > :40:10.funding is distributed taking into account the challenges areas face,

:40:11. > :40:15.for example in rural areas sparsity creates more challenges and funding

:40:16. > :40:19.pressures. He will be aware of my predecessor, having listened to some

:40:20. > :40:25.of these changes, did take some action where he could with some

:40:26. > :40:28.limited flexibility with the 65 lead and makes it if I blame and rural

:40:29. > :40:34.services quite for 2018 bid what he rightly highlights is we must look

:40:35. > :40:40.carefully, as we have here, at the pressures, particularly in rural

:40:41. > :40:44.areas and act on them. We will take no lectures from this Government

:40:45. > :40:47.about the funding for social care. They walked away from the

:40:48. > :40:51.cross-party negotiations about funding for social care before the

:40:52. > :40:56.2010 elections purely for political gain. They then cut 4.6 billion out

:40:57. > :41:03.of it in the last parliament saw crisis we have now is created by the

:41:04. > :41:09.people sitting on those benches over there. 1% increase in the precept

:41:10. > :41:15.brings in ?670,000 in my local authority, we have a ?40 million

:41:16. > :41:20.deficit in our expenditure already, this is not going to touch the

:41:21. > :41:24.sides, as my local leader said. This is just not good enough! We have a

:41:25. > :41:28.gaping hole and the Secretary of State comes here with a sticking

:41:29. > :41:31.plaster and it is just not good enough! We need a cross-party

:41:32. > :41:37.agreement on how to deal with this crisis! It is worth reminding the

:41:38. > :41:46.honourable gentleman that at the last election he stood on a ticket

:41:47. > :41:50.that would have led to even less funding for his local authority,

:41:51. > :41:54.which I believe is Greenwich. And also it would have meant less

:41:55. > :41:58.funding for the NHS as well, so he should keep that in mind when he

:41:59. > :42:02.considers today's announcement and welcome the fact the Government not

:42:03. > :42:06.only made more available at the spending review but an additional

:42:07. > :42:10.?900 million announced today which, for example, just for the next year

:42:11. > :42:17.alone in his local authority, will mean an additional ?3.1 million

:42:18. > :42:22.minimum. Thank you. I think this is a rather sad statement because there

:42:23. > :42:27.is too much party political point scoring on what is a very important

:42:28. > :42:29.issue. I agree entirely with the excellent chairman of the select

:42:30. > :42:34.committee and the former care Minister who speaks for the Liberal

:42:35. > :42:39.Democrats. What we need here is genuine cross-party support. This is

:42:40. > :42:44.not a party issue, server, and I would just urge the secretary of

:42:45. > :42:49.state to explore the possibility whether there could be some

:42:50. > :42:57.cross-party working on this. I think my honourable friend is right to say

:42:58. > :43:02.the more we can all cooperate and put the party politics aside and

:43:03. > :43:05.deal with this issue properly for the long-term, there's significant

:43:06. > :43:11.long-term challenges in this sector, we will all be better off and our

:43:12. > :43:13.constituents would thank us for it. Keitel the secretary of state that

:43:14. > :43:22.the most crippling cuts are now being planned in the Walsall Burrell

:43:23. > :43:26.and the allocation from central Government has been nearly halved in

:43:27. > :43:30.recent years, doesn't the Secretary of State understand this is an area

:43:31. > :43:34.I'm talking about, my area, where there is so much deprivation and

:43:35. > :43:43.poverty and I want asking this question because the cuts next year

:43:44. > :43:47.will be even more than previously! Why is there this Tory onslaught on

:43:48. > :43:54.this borough? When is this war going to end? Firstly the honourable

:43:55. > :44:00.gentleman will no that all councils across the country without exception

:44:01. > :44:04.have been asked to find efficiencies and make savings, and many have done

:44:05. > :44:07.that through innovative and clever ways through shared services, for

:44:08. > :44:12.example, where they've maintained the level of services and at the

:44:13. > :44:19.same time provide a lower cost to taxpayers. He mentioned his borough

:44:20. > :44:23.of Walsall and notwithstanding just for Walsall and it is for many other

:44:24. > :44:30.areas, they still must do things better and deliver them in a better

:44:31. > :44:37.way where they can cut from six T- 17 by the end of this parliament

:44:38. > :44:41.will see the changes we've announced today in terms of the adult social

:44:42. > :44:48.care budgets that will also help is borough and changes to spending

:44:49. > :44:52.power. I would like to thank the Secretary of State for the money but

:44:53. > :44:56.I would also like to add my voice to those that are concerned about the

:44:57. > :45:01.long-term sustainability of social care. As the Prime Minister said,

:45:02. > :45:09.this is a short-term, medium-term and long-term. But he will know that

:45:10. > :45:13.Rulli we have the issues of sparsity and over delivery, so pretty sure me

:45:14. > :45:18.of two things: That he will not take is that of the gas in ensuring we

:45:19. > :45:23.find these long-term solutions and secondly that he will work across

:45:24. > :45:26.departments because it is also important that there is joined up

:45:27. > :45:32.Government as well as joint up opinions on this.

:45:33. > :45:38.First I can absolutely assure my honourable friend this will remain a

:45:39. > :45:43.priority. Adult social care, not just for me, not just that the help

:45:44. > :45:47.secretary who is here, but across government. This is an issue well

:45:48. > :45:50.understood by government. That's why we've been able to listen and take

:45:51. > :45:55.the action we've announced today. She's also right to say and to

:45:56. > :45:58.highlight this is meeting a short-term need, particular cash

:45:59. > :46:03.pressures which were rightly identified. We also need to think

:46:04. > :46:09.about the and longer term. As the Prime Minister mentioned

:46:10. > :46:14.yesterday Newcastle Council performed well on social care, but

:46:15. > :46:17.this is put at risk if the Government doesn't act responsibly

:46:18. > :46:25.to plug the ?15 million funding gap. This plan today relies upon local

:46:26. > :46:29.areas being able to build new homes and raise local taxes, to solve a

:46:30. > :46:35.funding and social care crisis. Can we not see this will entrench

:46:36. > :46:40.inequality across the country and is playing politics with vulnerable

:46:41. > :46:46.people's lives? The honourable lady... I know the

:46:47. > :46:49.statement has just been made but I'm sure when she has the time to look

:46:50. > :46:54.into a bit more closely, she will see it doesn't rely on building new

:46:55. > :46:58.homes to get more adult social care. Nothing of the sort. Let me be

:46:59. > :47:01.clear, perhaps it was unclear earlier and I'm glad she's raised

:47:02. > :47:06.it, because if she thought that others might be thinking the same.

:47:07. > :47:11.What I said, in terms of the 240 million, which is coming from the,

:47:12. > :47:16.what would have been a new homes bonus budget, money that will no

:47:17. > :47:19.longer be going into the new homes bonus budget and has been

:47:20. > :47:24.transferred to adult social care budgets across the country, on the

:47:25. > :47:28.basis of what's called a relative needs formula, and it will certainly

:47:29. > :47:33.benefit Newcastle upon Tyne and other areas.

:47:34. > :47:38.The Secretary of State is right to point out this is not wholly a

:47:39. > :47:41.question of money. He mentioned Oxfordshire in his speech. Would he

:47:42. > :47:48.accept in Oxfordshire the problems of delayed discharged care are being

:47:49. > :47:53.sold by greater home bids and it's more of that imaginative approach we

:47:54. > :47:56.need to see? My honourable friend is absolutely

:47:57. > :48:00.right and I am glad he is highlighting this point again. It's

:48:01. > :48:03.not just about money, of course resources play an important role and

:48:04. > :48:07.today's announcement helps with that, but it's about a better way to

:48:08. > :48:10.deliver these services. One of the key thing is required is more

:48:11. > :48:18.integration between health and social care. I think Oxfordshire is

:48:19. > :48:22.an excellent example of that. Since 2011-12 Nottingham City

:48:23. > :48:26.Council, which he knows serves a population with very high levels of

:48:27. > :48:30.deprivation, has seen its spending power reduced by 23%, while more

:48:31. > :48:38.prosperous areas have seen their budgets rise. The preset will

:48:39. > :48:45.further widen these inequalities. Nottingham recently won health

:48:46. > :48:49.service award but there partnership... The portfolio holder

:48:50. > :48:56.describes as being at breaking point. I listen carefully to his

:48:57. > :48:59.answer to the right honourable member for Wellingborough but will

:49:00. > :49:04.he confirm if he will take up the offer of a cross-party review, to

:49:05. > :49:10.tackle the crisis in social care funding? Yes or no?

:49:11. > :49:14.Mr Deputy Speaker, first of all, turning to Nottinghamshire... Where

:49:15. > :49:24.the honourable lady is right is the highlight, area that can raise more

:49:25. > :49:29.than even some neighbouring areas. That is why they're better care fund

:49:30. > :49:34.already in place takes account of those tax-raising powers available

:49:35. > :49:39.locally. Indeed, the other allocation beyond the 240 million

:49:40. > :49:43.fund, that is going to be based on needs and that will also relatively

:49:44. > :49:49.benefit Nottingham as well. She might be interested as well the

:49:50. > :49:52.precept is worth 12.5 million to Nottingham next year alone. In terms

:49:53. > :49:55.of talks, I think I've made it clear, I am happy to talk to

:49:56. > :50:00.everyone, this is such an important issue.

:50:01. > :50:04.The new homes bonus has become an important source of funding for

:50:05. > :50:08.councils with a positive attitude to developments such as rugby Borough

:50:09. > :50:12.Council. I welcome the additional incentive is the Secretary of State

:50:13. > :50:15.has provided today, especially in respect of where there is an

:50:16. > :50:21.up-to-date local plan. But can he reassure councils like Rugby they

:50:22. > :50:25.will be continued to generate funds from the new homes bonus to provide

:50:26. > :50:31.valuable infrastructure often needed to respond to local concerns about

:50:32. > :50:35.development? I am more than happy to provide that

:50:36. > :50:38.reassurance to my honourable friend, because he makes an important

:50:39. > :50:45.connection between the new homes bonus and the need to make sure that

:50:46. > :50:48.you have enough local services, especially infrastructure, to deal

:50:49. > :50:53.with more people living in your area. The new homes bonus helps with

:50:54. > :50:59.that. He might also be interested to note again the announcement of the

:51:00. > :51:05.Chancellor in the Autumn Statement of the ?2.3 billion fund, the home

:51:06. > :51:08.in structure -- infrastructure fund to help with those pressures and I

:51:09. > :51:13.look forward to discussing that with him.

:51:14. > :51:18.I think one of the cruellest things this government did was reneging on

:51:19. > :51:21.their manifesto commitment to cap care costs, forcing more families to

:51:22. > :51:25.continue to living the silent misery that is social care. Our Public

:51:26. > :51:30.Accounts Committee report last year said it was disappointing. That

:51:31. > :51:35.postponement, delivered over ?2 billion worth of savings. I've

:51:36. > :51:39.listened very carefully today and we are talking about 900 million

:51:40. > :51:43.commitment. I heard nothing about further implementation the care act

:51:44. > :51:48.or close working with the Department of Health to solve this problem. It

:51:49. > :51:54.would be helpful to understand what discussions have been had with the

:51:55. > :51:58.Department of care. This is not just a short-term crisis or a medium-term

:51:59. > :52:02.crisis but the long-term crisis, for which there is great willingness to

:52:03. > :52:06.resolve. The evidence is clear over many years and I would add my voice

:52:07. > :52:11.and urge the Government to consider this for the long term.

:52:12. > :52:16.I think the honourable lady is referring to the reforms

:52:17. > :52:20.recommended... I think she said they are not happening or they've been

:52:21. > :52:26.cancelled. The honourable lady will know that what we've said on those,

:52:27. > :52:30.that we are delaying them because we are listening, for example, to Local

:52:31. > :52:35.Authorities, many have them have asked for a delay because it is

:52:36. > :52:39.important. I know the honourable lady will agree with this, if you

:52:40. > :52:42.carry out a longer term reform its very important to get it right. The

:52:43. > :52:46.honourable lady also talked about the need for more integration, more

:52:47. > :52:50.cooperation with the Department of Health and others. She may have

:52:51. > :52:56.heard in my statement, again I refer to the fact my department and the

:52:57. > :53:00.Department of Health were already working closely together, but as

:53:01. > :53:03.this new flexibility is utilised by local councils we will also be

:53:04. > :53:06.assisting on a new framework that shows us, convinces us local

:53:07. > :53:12.councils are taking integration seriously.

:53:13. > :53:16.I welcome the Secretary of State's statement today on all the work the

:53:17. > :53:19.Government is doing to encourage the building of new homes. But when it

:53:20. > :53:25.comes to considering changes to the new homes bonus, can I ask him to

:53:26. > :53:28.carefully bear in mind, as I am sure he will, it's an important source of

:53:29. > :53:32.income for smaller Local Authorities like mine in North Devon. And

:53:33. > :53:38.secondly, the triggering of the new homes bonus is tied to the delivery

:53:39. > :53:42.of new homes, which is not always totally in the gift of that Local

:53:43. > :53:45.Authority, because of issues such as the availability of land at the

:53:46. > :53:49.willingness of developers to build out. Will you work with me in North

:53:50. > :53:52.Devon council to consider that carefully so we get the balance

:53:53. > :53:57.right? That is an important point by my

:53:58. > :54:00.honourable friend. First of all, I absolutely agree with him on the

:54:01. > :54:04.importance of the New Homes Bonus. He will know it is a bonus, it is

:54:05. > :54:07.something that the councils shouldn't rely on for day-to-day

:54:08. > :54:12.spending, that's why we don't include it in our core spending

:54:13. > :54:18.power calculations. But it is nevertheless important, not least

:54:19. > :54:22.with the added pressure of those times. My honourable friend also

:54:23. > :54:27.talked about how making sure there's incentives for working properly in

:54:28. > :54:31.Dublin and I would be happy to discuss that with him further. -- in

:54:32. > :54:36.Devon. Does he recognise additional precept

:54:37. > :54:39.in an area with council tax base raises drastically less than in

:54:40. > :54:44.areas more prosperous quest among the better care fund goes nowhere

:54:45. > :54:49.near plugging that gap. So he is there for the dying tens of older

:54:50. > :54:55.people of the home care and social care services they desperately need.

:54:56. > :55:01.Mr Deputy Speaker, I'm afraid I have do disagree with the honourable

:55:02. > :55:06.gentleman. The care fund goes a long way to plugging the gap. If I

:55:07. > :55:11.reminding of the numbers. In the spending review it was 3.5 billion

:55:12. > :55:15.of new spending by 2020, two billion of which would come from precept and

:55:16. > :55:21.1.5 billion a year from the better care fund by 2020. It was designed

:55:22. > :55:26.precisely to plug that gap. Hopefully he also recognises in

:55:27. > :55:35.today's announcement it not all through precepts. The 240 million

:55:36. > :55:39.fund is also to recognise that gap. Thank you Mr Deputy Speaker. Despite

:55:40. > :55:45.council tax bills doubling under the last Labour government there was no

:55:46. > :55:48.long-term solution to the problem of funding adult social care. Does my

:55:49. > :55:54.right honourable friend agree with me that if we are ever to make real

:55:55. > :55:58.progress we need a long-term solution, based on the conservative

:55:59. > :56:05.principle of self-reliance and encourage people as far as possible

:56:06. > :56:09.to provide for themselves? I agree absolutely with my

:56:10. > :56:13.honourable friend. What he does for the House and kindly reminds us of

:56:14. > :56:19.Labour's track record on this. He reminds us how taxes increased,

:56:20. > :56:23.council taxes doubled under the last Labour government in 13 years. He

:56:24. > :56:27.might also know in those 13 years they had a manifesto commitment to

:56:28. > :56:32.deal with adult social care. They had a commission in 1999, two Green

:56:33. > :56:37.papers in 0509 and 09 and comprehensive spending review, all

:56:38. > :56:44.of this they said was going to solve the adult social care challenges and

:56:45. > :56:52.all they did was make it much worse. I'd like to just firstly say the 1%

:56:53. > :56:58.rise will raise just ?5,000 in Cleveland which is meaningless in

:56:59. > :57:01.relation to the rising demand. There are two questions I would like to

:57:02. > :57:05.ask the Secretary of State not clear from his rather rushed speech. The

:57:06. > :57:09.first is about the new homes bonus and the key word being the savings

:57:10. > :57:13.from the reform, not the New Homes Bonus itself. Just savings from the

:57:14. > :57:17.reforms is not an awful lot of money, so I hope you can clarify

:57:18. > :57:21.that point. Secondly, it is an Local Authorities themselves will be

:57:22. > :57:25.keeping what they make of the New Homes Bonus or will it be

:57:26. > :57:30.distributed nationwide from one part on a needs basis? If so he is

:57:31. > :57:34.reinforcing the inequality because that New Homes Bonus is based on

:57:35. > :57:38.council tax rates already, so he is reinforcing the inequality that

:57:39. > :57:42.already exists in this country. What I can tell the honourable lady

:57:43. > :57:49.is that for her local council redcurrant Cleveland, the precept

:57:50. > :57:55.next year could raise 2.2 million. -- Redcar and Cleveland. The numbers

:57:56. > :58:01.perhaps considerably higher than what she may think at the moment. In

:58:02. > :58:08.terms of her questions regarding the New Homes Bonus. The New Homes Bonus

:58:09. > :58:15.is being reformed, it is staying in place. The bonus which currently is

:58:16. > :58:19.for the equivalent of six years of band D council tax will fall

:58:20. > :58:23.gradually from five years to four years but the essential principles

:58:24. > :58:33.remain the same. The savings that are generated from that change from

:58:34. > :58:37.six to four, the 400 ?240 million pot will be distributed among those

:58:38. > :58:44.authorities that provide social care services that will be done on needs

:58:45. > :58:49.formula. East Northamptonshire Council are

:58:50. > :58:52.firmly engaging with the Government's housing growth agenda.

:58:53. > :58:58.Will he undertake to consult fully with them on any proposed changes to

:58:59. > :59:02.the New Homes Bonus? It is essential that infrastructure and services

:59:03. > :59:05.keep up with the pace of housing growth. I particularly say that

:59:06. > :59:15.because the level of development is so significant in our area and it

:59:16. > :59:20.has high costs associated with that. Again, my honourable friend

:59:21. > :59:24.highlights the importance of new homes bonus to meet some of those

:59:25. > :59:27.additional pressures, and that's why by having some of this reform we

:59:28. > :59:31.make sure we've kept the principle that can help with those authorities

:59:32. > :59:34.that are doing the right thing and building those times. My honourable

:59:35. > :59:40.friend asked me specifically about consulting on the changes. I should

:59:41. > :59:44.point out we started that conversation, it started in December

:59:45. > :59:47.2015 and is now complete, however I think what he might be thinking

:59:48. > :59:51.about is that I did say there was one other potential new change which

:59:52. > :59:55.is about whether new homes bonus should be available if homes,

:59:56. > :00:04.planning permission is granted an appeal.

:00:05. > :00:12.Javid this morning the children in Birmingham wake up to a ?20 million

:00:13. > :00:22.cut in the school funding. My son pulse at school already has 30

:00:23. > :00:30.children in his class and he has SPN provision that will be taken away.

:00:31. > :00:34.I'm here to tell him that the social care funding disparity that exists

:00:35. > :00:41.across this country deserves exactly the same redistribution and in his

:00:42. > :00:46.constituency of Bromsgrove, the older adult weekly rate in care

:00:47. > :00:54.homes is ?100 less than in the Secretary of State's constituency in

:00:55. > :00:59.Surrey. Does the Secretary of State stand in front of me and tell me

:01:00. > :01:05.that it's OK that his constituents already get ?100 a week less than

:01:06. > :01:15.those of his from bench colleagues who live in leafy areas? Mr Deputy

:01:16. > :01:23.Speaker, first of all, the Honourable Lady in referring to her

:01:24. > :01:27.local area Birmingham, rightly so. She mentioned my constituency of

:01:28. > :01:32.Bromsgrove which is next door. I think she was trying to demonstrate

:01:33. > :01:39.that Bromsgrove gets more per head on average. No, no. I'm comparing

:01:40. > :01:45.Bromsgrove to Birmingham and it gets on average a lot less than

:01:46. > :01:58.Birmingham per head and that is noticed locally. The Honourable Lady

:01:59. > :02:06., I get wider point was about the distribution of funding. Whether our

:02:07. > :02:10.areas where less money can be raised locally because of the precepts of

:02:11. > :02:17.the council tax base, that is why we have introduced the care fund. With

:02:18. > :02:22.today's announcement it will help Birmingham significantly to the

:02:23. > :02:30.precept, but Birmingham will benefit from the further ?240 million which

:02:31. > :02:34.is allocated based on needs. May I welcome the announcement about the

:02:35. > :02:38.fair funding review which might Honourable friend has been pushing

:02:39. > :02:43.forward for a long time and may I welcome the additional funding that

:02:44. > :02:47.is being provided to date, but can I add my voice to those who call for a

:02:48. > :02:53.proper cross-party solution to this extremely important issue. Can I

:02:54. > :02:58.also asked my right honourable friend whether he has discussed with

:02:59. > :03:02.the member from Nuneaton and the issue in Staffordshire where the

:03:03. > :03:06.problems with the better care fund are leading to substantial

:03:07. > :03:08.reductions in, for instance, drug and alcohol services which

:03:09. > :03:18.inevitably will place greater burdens on adult social care and the

:03:19. > :03:23.NHS. My honourable friend highlights the importance of this the funding

:03:24. > :03:28.review, being thorough and looking at all of the issues carefully and I

:03:29. > :03:32.wholeheartedly agree with that. He also echoed the desire of the

:03:33. > :03:35.Chamber today, which I welcome for parties to work together on adult

:03:36. > :03:49.social care, given the importance to all about constituents. -- all of

:03:50. > :03:54.our constituents. The situation in Staffordshire, the local minister is

:03:55. > :04:05.looking at it and I am discussing it with him. I had a letter from one of

:04:06. > :04:14.my constituents. He said that the councils can't collect money until

:04:15. > :04:21.after winter, so what action will be taken to tackle the winter crisis?

:04:22. > :04:23.First of all the changes we've announced today, although the

:04:24. > :04:30.Honourable Lady is absolutely right that it is for the next tax year

:04:31. > :04:35.which begins in April, it is something I know is usually welcomed

:04:36. > :04:38.by many local authorities. It allows them to plan because those were the

:04:39. > :04:44.two particular years where they felt they had the biggest gap because the

:04:45. > :04:47.way the better fund was profiled, the full amount doesn't kick in

:04:48. > :04:58.until the end of this Parliament. So it is something that planning can be

:04:59. > :05:11.done and the certainty it will provide will allay some concerns. In

:05:12. > :05:14.her constituency, forbid years 2017-18, a significant amount of

:05:15. > :05:24.money will be raised that will make a difference. When considering the

:05:25. > :05:26.financial settlement, but the secretary of State agree that

:05:27. > :05:32.improving efficiency should be a priority? And how will he encourage

:05:33. > :05:42.local authorities to move from a two tier structure to a unified one? His

:05:43. > :05:45.general point about efficiencies is absolutely correct and that is why

:05:46. > :05:51.today I have praise those local authorities that have shown they can

:05:52. > :05:55.spend less money and in many cases improve public services. I've also

:05:56. > :05:58.talked about the work that my department and the health Department

:05:59. > :06:03.are doing together to work on the integration of adult social care and

:06:04. > :06:07.to try to promote that more locally. He has asked me specifically about

:06:08. > :06:10.the structure of local authorities and this is something government is

:06:11. > :06:17.responsive to. We will listen to local authorities. A number of them

:06:18. > :06:22.have come forward with plans and we will look at them closely. Today as

:06:23. > :06:29.every day over 300 people will present at Addenbrooke's A that

:06:30. > :06:34.serves Cambridge. That is 50% more than just a few years ago.

:06:35. > :06:38.Shamefully at least 60 of them will not be seen within four hours. It's

:06:39. > :06:42.almost one o'clock now so they will be seen until five o'clock this

:06:43. > :06:49.afternoon. And that is because of the problem with delayed transfers

:06:50. > :06:53.of care. That is a problem because Cambridge county council chose not

:06:54. > :06:56.to use the precept this year. In county council election the next

:06:57. > :06:59.year it is highly likely that will occur in lots of other places which

:07:00. > :07:08.means the money won't be available in lots of places. Can I heard each

:07:09. > :07:11.-- and I urge you not to pass the buck to local government but to

:07:12. > :07:16.listen to members from across the house. He has expressed some warm

:07:17. > :07:23.words, but can I pin him down and asking what is he going to do about

:07:24. > :07:30.this? I think it is important, if the Honourable gentleman agrees with

:07:31. > :07:41.me, if he believes in the power of localism, it is a job of local

:07:42. > :07:47.government. Regarding the precept, the decision should be made at the

:07:48. > :07:52.local level. Cambridgeshire and Peter Shah have reached a devolution

:07:53. > :08:09.deal. By May next year they will have a directly elected mayor. I

:08:10. > :08:15.think they are in a good position to look a devolution powers and see how

:08:16. > :08:27.they can improve local services including adult social care. I think

:08:28. > :08:35.there are the same number of people here as the world when I first

:08:36. > :08:39.started bobbing. In my constituency town of Bexhill I was told we have

:08:40. > :08:47.more over 85 than in any town in Western Europe. Many would have

:08:48. > :08:49.moved to Aesop six and as a result council tax increases are a

:08:50. > :09:03.challenge not just of them but for the rest of those in East Sussex.

:09:04. > :09:14.Can I ask the Secretary of State that dealer-macro whether a National

:09:15. > :09:19.Front will -- whether a national fund will alleviate the problem?

:09:20. > :09:23.There needs to be the right balance between national funding and adult

:09:24. > :09:33.social care and local funding through council tax. The increased

:09:34. > :09:37.flexibility on the precept will help East Sussex, his local authority,

:09:38. > :09:42.but also the change in the grant through the extra 240 million, that

:09:43. > :09:47.will help East Sussex. He is right to say, and I think this is what he

:09:48. > :09:52.has implied, this is welcome short-term news, but there was a

:09:53. > :09:59.much longer-term issue and that is exactly something the government

:10:00. > :10:13.will be concentrating on. We have two points of order. The art exactly

:10:14. > :10:28.the same, more or less. Let's start with Christian. Mr Deputy Speaker,

:10:29. > :10:36.you will be aware that there is a proposal to close half of the job

:10:37. > :10:43.centres in Glasgow. Yesterday was day seven and the information at all

:10:44. > :10:49.on the DW website refers to this matter. Today is day eight there is

:10:50. > :10:53.no information on DWP website in relation to the public consultation

:10:54. > :10:58.on the proposed closure of half the job centres in our city. That is a

:10:59. > :11:03.great concern because we are now entering the Christmas and New Year

:11:04. > :11:09.period where public consultation would be cut already. This

:11:10. > :11:13.consultation is a moral as. It is showing contempt for not only

:11:14. > :11:18.Honourable members of this house, but the general public at large.

:11:19. > :11:23.Could a minister come before the house today to outline the processes

:11:24. > :11:29.of public consultation on the intended job centre closures in

:11:30. > :11:37.Glasgow? My understanding is that this was dealt with by a the Deputy

:11:38. > :11:41.Speaker yesterday. I understand the importance of the matter and I think

:11:42. > :11:45.you are aware there is a debate on Tuesday in Westminster Hall at

:11:46. > :11:55.4:30pm, which would be the right avenue to pursue it. If I now come

:11:56. > :11:59.to Stuart Malcolm. When this issue was raised by myself I think the

:12:00. > :12:02.leader of the house inadvertently misled members when he claimed that

:12:03. > :12:08.the dispatch box that the DWP was actively consulting on the issue.

:12:09. > :12:12.This is forced. There is no consultation. I can't find the

:12:13. > :12:16.consultation because it doesn't exist, so can you perhaps try and

:12:17. > :12:19.find an opportunity sometime this afternoon for the deputy leader to

:12:20. > :12:24.come back and correct the record from the dispatch box? It's not for

:12:25. > :12:29.a matter for the job to correct the record, but if there was an

:12:30. > :12:33.inaccuracy in the statement, you have put the point of view to say it

:12:34. > :12:37.was not correct what was said. It is a matter for the leader of the house

:12:38. > :12:41.and I'm sure if he feels it is wrong, it will be up to the leader

:12:42. > :12:46.to correct that, but at least, if nothing else, this Chamber is aware

:12:47. > :12:51.of it, I am aware of it, and as I said just before, there is a debate

:12:52. > :12:54.next Tuesday, which I'm sure that this would have gone away and you

:12:55. > :13:05.will be able to bring that point forward once again. Thank you Mr

:13:06. > :13:17.Deputy Speaker. I need to bring to the house is a troubling matter. One

:13:18. > :13:24.of the issues that has been corporate lobbying that has cast a

:13:25. > :13:31.dark shadow over the political process. A brief was circulated on

:13:32. > :13:38.the 13th of December by a representative of the large pub

:13:39. > :13:41.companies who wish to be allowed for their members to convert pounds into

:13:42. > :13:46.supermarkets without needing planning permission. They circulated

:13:47. > :13:51.a briefing to some MPs that made a forced claim that was then repeated

:13:52. > :13:53.by a minister at the dispatch box for a reason for not accepting

:13:54. > :13:59.amendments. Something that Honourable members were influenced

:14:00. > :14:03.by in the way they voted. The minister said on Tuesday, and I

:14:04. > :14:06.quote, a briefing note from the British beer and Pub Association

:14:07. > :14:09.makes the point that removing permitted development would not only

:14:10. > :14:14.stop the conversion of pubs into supermarkets and whatever else they

:14:15. > :14:18.will want to stop, but might prevent pubs from doing improvement works to

:14:19. > :14:22.the premises which we would not want. I challenge the minister who

:14:23. > :14:27.then said he is aware of what they are, but I tend to make the approach

:14:28. > :14:30.that when I see briefings, I look at the points they make. If they make a

:14:31. > :14:50.sensible point, they are worth looking at. The BB PA made a false

:14:51. > :14:54.claim. It's troubling that... Order! They are meant to be short points.

:14:55. > :15:00.Do you want to reply or shall we move on? Can I just say to members,

:15:01. > :15:04.please, try and bring it briefly and quickly to the attention of the

:15:05. > :15:09.house. If there is significantly something wrong in what the Minister

:15:10. > :15:18.of State said for planning and London, I'm sure that the Honourable

:15:19. > :15:22.member will want to put the record straight. You have brought it to the

:15:23. > :15:26.attention of the house, it's on the record now and it is not a matter

:15:27. > :15:31.for the chair, as you well know when you raise that point of order, but

:15:32. > :15:35.we have allowed it to be done. It's on the record, it is up to the

:15:36. > :15:40.Minister to reflect on what you have set. I'm not going to continue the

:15:41. > :15:47.debate. I know -- I'm now going to move on.

:15:48. > :15:53.Can I merely ask your advice, with this corruption of the legislative

:15:54. > :15:58.process which was inadvertent on the part of the minister... What can he

:15:59. > :16:02.advise that we do to make the British beer and Pub Association

:16:03. > :16:07.apologise, to stop this kind of corruption of our legislative

:16:08. > :16:11.process in the future? I can't do that, I'm the chair, I can't decide

:16:12. > :16:15.if it was correct or incorrect. You put it on the record, it is

:16:16. > :16:18.therefore all to see all to recognise and I know the Minister

:16:19. > :16:22.well and if the minister was significantly wrong, I'm sure he

:16:23. > :16:27.will want to put that right. I can't do more than that. I am not

:16:28. > :16:31.responsible for the accuracies and inaccuracies, I can only help on how

:16:32. > :16:35.we can move that one. I don't think you can do more than you have done

:16:36. > :16:40.today. I don't think he will give up today either on this matter, that's

:16:41. > :16:44.one thing I am assured on. Thank you, and I'm sorry I haven't

:16:45. > :16:50.given you notice of the point of order but it occurred today during

:16:51. > :16:53.questions. We had two very important departments, the culture, media and

:16:54. > :17:00.sport Department and the international trade Department. We

:17:01. > :17:04.tried to cram in in an hour two departments, the topical questions

:17:05. > :17:08.only lasting for seven minutes. It clearly didn't work. I'm pleased the

:17:09. > :17:13.leader of the houses in his place. There were many members that were

:17:14. > :17:18.left disappointed on one able to scrutinise the Department date

:17:19. > :17:23.coming to do. I don't know if this is something, Mr Deputy Speaker, you

:17:24. > :17:27.control or some other organisation, but it would seem sensible if we

:17:28. > :17:30.could go back to having an hour for culture, media and sport and an hour

:17:31. > :17:34.for international trade. As you know it's not a matter for

:17:35. > :17:38.us, but a matter for the normal channels to have a discussion. I'm

:17:39. > :17:42.sure that can be reflected on with the Leader of the House, I know what

:17:43. > :17:44.a great man he is a manner that will be looked into as a matter of and

:17:45. > :17:54.duty. OK. The Leader of the House is now

:17:55. > :18:00.present, I wonder if you would let him correct the record from my point

:18:01. > :18:07.earlier. If the lady of the willing to say so I'm always willing, but if

:18:08. > :18:14.not I've got a very... Sorry. It's up to the Leader of the House as

:18:15. > :18:19.much as me. I've also got a very, very patient, and whose patience is

:18:20. > :18:22.running thin at the moment, wants to make his presentation. He's going to

:18:23. > :18:31.wear the carpet out, he's been going up and down the carpet waiting to

:18:32. > :18:37.present his Bill. Mr Keith Vaz. Diabetes inpatient care Bill. Second

:18:38. > :18:45.reading what day? 24th of February, 2017. 24th of February, 2017, thank

:18:46. > :18:50.you. We now come to the backbench moment

:18:51. > :18:58.on the creation of the financial dispute resolution platform.

:18:59. > :19:03.Thank you, Mr Deputy Speaker. I rise to move the motion in my name and

:19:04. > :19:08.that I other honourable members, and in time-honoured fashion can I thank

:19:09. > :19:14.the backbench committee for allowing us to bring this motion to the main

:19:15. > :19:18.chamber. I expect that many honourable friends and members will

:19:19. > :19:26.wish to raise constituency matters and many of you have constituents

:19:27. > :19:31.who have had mis-selling and loan dealings with the banks, and we are

:19:32. > :19:35.trying today to move beyond those individual cases, serious as they

:19:36. > :19:41.are, to trying to find some broad, permanent resolution system.

:19:42. > :19:51.Can I also thank, while I'm here, the honourable member for Berkshire,

:19:52. > :20:00.my predecessor as chair of the AP GG. The AP GG rules out of the whole

:20:01. > :20:06.issue of interest rate hedging product mis-selling. We can lay this

:20:07. > :20:14.that the Dorrans many different banks, Clydesdale, RBS, HBOS, HSBC

:20:15. > :20:20.and so on. But what I really want to try and direct to the Minister today

:20:21. > :20:25.is that after eight years of dealing with this problem, we need to look

:20:26. > :20:31.to the future and some more permanent resolution, because what

:20:32. > :20:35.is being affected is not just individuals, I suspect many

:20:36. > :20:38.honourable members will have cases where, as I have, where the

:20:39. > :20:42.individuals who were affected, it's not just their business. It's not

:20:43. > :20:48.just that the money was lost, it is the fact of the impact on mental

:20:49. > :20:55.health, which is very serious. I am very grateful to the honourable

:20:56. > :20:59.member for giving way and thank him for raising this important issue.

:21:00. > :21:02.Will he also agree along with all those people who suffered horrendous

:21:03. > :21:06.loss of their business on their livelihoods, we also need to think

:21:07. > :21:10.about whistle-blowers, who are often incredibly brave people who risk

:21:11. > :21:14.everything to expose wrongdoing, they need to be properly treated as

:21:15. > :21:20.well? I think the honourable member makes

:21:21. > :21:25.a very fair point. In fact, often, from my experience, those who have

:21:26. > :21:28.suffered most in terms of mental stress have been those very

:21:29. > :21:32.whistle-blowers, who started off trying to present justice to the

:21:33. > :21:37.community and the banking world and small businesses and ended up losing

:21:38. > :21:42.jobs, losing family, losing partnerships and are still suffering

:21:43. > :21:47.to this day. But the issue, let me say, is also an economic one. I will

:21:48. > :21:53.say this to the Minister. We have eight years where though there has

:21:54. > :21:57.been economic growth, levels of productivity have been poor if not

:21:58. > :22:02.flat-lining. I think you could lay a lot of that at the underperformance

:22:03. > :22:07.of the small business sector. It was not just individual businesses that

:22:08. > :22:11.had been affected by mis-selling and lack of resolution, that has carried

:22:12. > :22:17.on to a lack of investment in new businesses. It added to important

:22:18. > :22:21.entrepreneurs withdrawing from businesses. Unless we find some

:22:22. > :22:24.permanent resolution, we will not be able to create the economic growth

:22:25. > :22:28.that I know all of us in this house would like to see. I will give way

:22:29. > :22:30.first my friend here. I thank my honourable friend for

:22:31. > :22:37.giving way. He's right that a number of us have constituency cases. He

:22:38. > :22:40.will be aware of my constituent Neil Mitchell whose business was forced

:22:41. > :22:46.into administration and finds himself almost trying to take

:22:47. > :22:58.private legal action. Does he share my disappointment at the lack of

:22:59. > :23:01.willingness for RBS to enter mediation and hope that these

:23:02. > :23:05.motions can be taken forward from his proposal?

:23:06. > :23:11.I take my honourable friend's point. We have so many of these individual

:23:12. > :23:17.cases, and it goes beyond, it cuts across all the nations of the United

:23:18. > :23:20.Kingdom. All members and all parties have these cases unknowingly

:23:21. > :23:25.desperately to find some permanent resolution.

:23:26. > :23:29.I thank my honourable friend for giving way. My honourable friend

:23:30. > :23:32.made a very good point about small business and encouraging small

:23:33. > :23:37.business. It's very important we get a fair deal for small business. He

:23:38. > :23:42.will be aware of the case in my constituent, who was looking to

:23:43. > :23:46.refinance at a preferential rate but was faced with high exit fees and

:23:47. > :23:50.termination clauses that had not been made clear in the terms and

:23:51. > :23:53.conditions. That's something that is crucial for small business and my

:23:54. > :23:59.constituent. Indeed. I think that comes to the

:24:00. > :24:06.nub of the issue, the imbalance in power between an individual small

:24:07. > :24:10.business and the bank. I thank my honourable friend for

:24:11. > :24:15.giving way it, I also have a constituent in a similar situation.

:24:16. > :24:19.He rightly talks about the imbalance, because his business was

:24:20. > :24:25.put under by the Royal Bank of Scotland, but he found time to take

:24:26. > :24:28.-- trying to take legal action was almost impossible because the Royal

:24:29. > :24:31.Bank of Scotland, is bailed out by the taxpayer, within a stronger

:24:32. > :24:36.financial position than he was to do that. An alternative mechanism at

:24:37. > :24:40.least gives a real chance to these businesses are taking on these

:24:41. > :24:43.massive banks which the public have bailed out.

:24:44. > :24:48.Indeed. What is clear in Scotland on that point, and it may be true for

:24:49. > :24:54.other parts of the United Kingdom, is the major banks have indeed

:24:55. > :24:58.signed up many solicitors practices, which makes it almost impossible to

:24:59. > :25:03.find a lawyer to represent you, even if you wanted to take action against

:25:04. > :25:10.a bang, difficult though that would be given their financial ability.

:25:11. > :25:15.I am very grateful, he's being extremely reasonable and allowing

:25:16. > :25:18.interventions. Would he agree the absence of a clear dispute

:25:19. > :25:24.resolution process actually incentivises bad behaviour and

:25:25. > :25:27.practice, if the banks know there is no proper mechanism to challenge

:25:28. > :25:36.wrongdoing, then it's thing courage in that bad behaviour?

:25:37. > :25:43.Usually up to 15 minutes to speak, I have a bit of flexibility, but just

:25:44. > :25:49.to warn members I'm going to make sure of one has a fair shout.

:25:50. > :25:52.I thank you. For that reason, having been reasonably accommodating I will

:25:53. > :25:56.try to press on and get to the nub of my argument. I think in terms of

:25:57. > :26:04.permanent resolution of the problem we need three different mechanisms.

:26:05. > :26:07.We need some kind of shift in the legal onus on banks to provide a

:26:08. > :26:12.duty of care or good faith in the way they deal particularly with

:26:13. > :26:16.business customers. I know that is a broad debate, and I know over the

:26:17. > :26:22.years the banks have been unwilling to accept a narrow duty of care.

:26:23. > :26:26.It's open for debate but I do think that we need to redress the balance

:26:27. > :26:31.between major banks and small business clients, by providing some

:26:32. > :26:35.kind of mechanism within the legal onus on how banks behave. I would

:26:36. > :26:40.even accept initially of the banks were prepared to come forward

:26:41. > :26:47.themselves with some solution on this. But I think when it look that.

:26:48. > :26:52.Secondly, given that many banks, given many small companies end up in

:26:53. > :26:56.insolvency, we need to look at a more balanced insolvency practice,

:26:57. > :27:02.in order to remove the possibility banks all lenders are tempted to

:27:03. > :27:08.force them into unnecessary or premature insolvency. And we knew

:27:09. > :27:12.and permanent redress system for banks and small businesses that are

:27:13. > :27:18.in dispute. In effect, putting those three together we are changing bank

:27:19. > :27:23.culture. In order to build some common ground with the Minister, I

:27:24. > :27:26.hope, I think the Government has already moved some way in

:27:27. > :27:33.recognising this issue. If you look at the impact assessment statement

:27:34. > :27:37.the Government provided for proposing the establishment of a

:27:38. > :27:41.small business Commissioner, let me quote from the impact statement from

:27:42. > :27:45.the Government. It says "the Government is concerned that this

:27:46. > :27:49.small firms negotiating a contract with the larger business can be

:27:50. > :27:55.challenging. The Government has been told that small businesses often

:27:56. > :27:59.feel intimidated and rather than walking away from a proposed

:28:00. > :28:04.contract or refusing to agree a change. There is concern larger

:28:05. > :28:12.firms, for that Reid Banks, sometimes use their market power to

:28:13. > :28:17.impose on favourable terms. " That I think the whole issue of the hedging

:28:18. > :28:24.products, sold to small businesses during the economic boom in 2006 -

:28:25. > :28:29.08. The Government has recognised the general problem. It's a matter

:28:30. > :28:33.of how we resolve it. I quote again, just to show I think there is a

:28:34. > :28:40.broader political agreement on this, right and left. Can I quote from

:28:41. > :28:48.that a member of the Government benches, the member for Camborne

:28:49. > :28:53.Redruth who wrote a piece for the free enterprise group three years

:28:54. > :28:58.ago. Let me quote. His pieces defending the rights of those who

:28:59. > :29:03.take risks. He says "Over the years the banks have contracted very

:29:04. > :29:09.extended their rights through their standard terms and conditions to

:29:10. > :29:19.give LPA receivers general powers of sale, to set aside the limit on the

:29:20. > :29:23.fees they charge and cut costs on the borrower. They've moved to grant

:29:24. > :29:27.themselves the right to peacefully re-enter properties of which they

:29:28. > :29:33.can take charge. They contract very extend the power taken by the banks

:29:34. > :29:39.which goes well beyond what was reasonably envisaged in the property

:29:40. > :29:42.act 1985." In other words the banks have gradually extended their powers

:29:43. > :29:45.of receivership and that has made it increasingly difficult for small

:29:46. > :29:58.companies in financial difficulties to get re-dress. I think that's led

:29:59. > :30:06.to the whole issue behind the RBS GRG that's come back into the domain

:30:07. > :30:10.with the report from the FCA. The Minister I think will tell us that

:30:11. > :30:14.ultimately if there is to be a change in the re-dress process, it

:30:15. > :30:24.has to come from the Financial Conduct Authority. To that end, the

:30:25. > :30:30.APPG has been consulting with them and I raised the matter with Mr

:30:31. > :30:32.Andrew Bailey, the new chief executive of the FCA when he

:30:33. > :30:38.appeared before the Treasury Select Committee. I asked him to draw any

:30:39. > :30:43.relevant conclusions from the experienced the FCA has had with the

:30:44. > :30:46.banks in drawing up ad hoc processes of re-dress for the various

:30:47. > :30:52.mis-selling schemes that have taken place. I asked general conclusions

:30:53. > :30:58.he drew. He said the problem goes back to the beginning, which is

:30:59. > :31:01.where there is an outside, where the banks are outside the regulatory

:31:02. > :31:09.perimeter, as much of this mis-selling was conducted. These

:31:10. > :31:14.schemes outside the regulatory perimeter... We've learned from the

:31:15. > :31:17.experience, coming late to it, that businesses feel they have not had

:31:18. > :31:23.their say in court. Now they do not want to have a little day in court

:31:24. > :31:27.because it's very expensive. But what I conclude from this is that

:31:28. > :31:33.it's not satisfactory from the point of view of the FCA, the ad hoc

:31:34. > :31:37.procedures we've heard today, not satisfactory because the FCA has

:31:38. > :31:41.been involved in creating a lot of these bespoke processes. We have

:31:42. > :31:44.discussed this on the board of the FCA a number of times. Were there to

:31:45. > :31:51.be a mechanism that could substitute for these ad hoc procedures, rather

:31:52. > :31:53.like the ombudsman, but for more complex cases, because corporate

:31:54. > :31:59.cases are often more complex, this would be a big step forward. From

:32:00. > :32:03.the point of view of these things, we are creating a lot of work for

:32:04. > :32:07.ourselves, the FCA, however I am very sympathetic to Mr Bailey to the

:32:08. > :32:14.people involved. So we have to do it. If there were to be a process

:32:15. > :32:15.that could substitute for the ad hoc processes... They would be happy to

:32:16. > :32:29.look at that. Were there to be a mechanism that

:32:30. > :32:32.could substitute rather than like the ombudsman for more complex

:32:33. > :32:39.cases, that is what they would support. We are bringing forward the

:32:40. > :32:43.idea of a tribunal. At this stage it is a generic proposal. There are

:32:44. > :32:51.issues to be discussed. It also crosses the boundaries of the

:32:52. > :32:55.devolved administrations. If we went down this road, they might have to

:32:56. > :33:01.be different procedures in Scotland. The aisle financial issues. My own

:33:02. > :33:04.view is that since we are dealing with ree dress with the SCA has

:33:05. > :33:11.designated win in the bank has been involved in the selling, we are

:33:12. > :33:17.already in the territory where a bank is going to pay and any

:33:18. > :33:24.permanent tribunal system will be funded by the bank in that

:33:25. > :33:29.circumstance. We are open into a general discussion with government

:33:30. > :33:33.on how to proceed with this, but the backing in general terms with the

:33:34. > :33:38.SCA is there, so it's a matter of the detail. Why is this important?

:33:39. > :33:46.Because the issue has not gone away. We are now in a situation where the

:33:47. > :33:51.Giorgi situation from RBS is going to come back in the public domain.

:33:52. > :33:58.The Royal Bank of Scotland subsequently has now put forward a

:33:59. > :34:03.new ad hoc siege for dealing with those who are submitting complaints.

:34:04. > :34:16.Those small businesses who were put into GR G. We have a report, not yet

:34:17. > :34:20.finalised by the SCA where they have taken technical advice. The SCA has

:34:21. > :34:25.found there was a conflict of interest involved in how RBS handled

:34:26. > :34:31.the cases of companies put into GRG, in that that part of the bank that

:34:32. > :34:36.was taking over the property from solvent companies and the selling

:34:37. > :34:42.was part of the GRG group. The bank, in effect, was putting companies

:34:43. > :34:47.into southern sea, taking the property, handing it over to another

:34:48. > :34:50.part of the bank and generating cash there. Given this issue has

:34:51. > :34:55.reappeared and there is a public debate over the nature of the

:34:56. > :35:00.redress system, then we are not looking at legacy items now, we're

:35:01. > :35:08.looking at a future situation with the Bank of Scotland, the Royal Bank

:35:09. > :35:13.of Scotland is creating an ad hoc redress system which we need to

:35:14. > :35:17.ensure is the correct one. The bottom line for the minister is

:35:18. > :35:22.there is now an ongoing process of debate. There was a general

:35:23. > :35:33.consensus we need a permanent resolution system. You can go beyond

:35:34. > :35:36.that and look at insolvency law. It's the government to join with us

:35:37. > :35:51.to make sure that resolution process is provided. We will have up to

:35:52. > :35:59.eight, if there's more, will have to impose limit. I'd like to speak as

:36:00. > :36:20.the chairman of the alternative dispute resolution. We are about to

:36:21. > :36:25.embark with his British Beer and Pub -- with his APPG. The bit of his

:36:26. > :36:33.motion that I wish to concentrate on is the bit that refers to the

:36:34. > :36:36.creation not of ad hoc compensation schemes, but a long-term effective

:36:37. > :36:42.and timely dispute resolution mechanism that can be used to help

:36:43. > :36:49.solve these sorts of issues. The reason for doing that, I think he

:36:50. > :36:54.has set out very admirably, but I think what I will say to him is that

:36:55. > :37:02.actually, that dispute mechanism is actually already the and it is there

:37:03. > :37:08.in the form of the alternative dispute resolution regime. Come on

:37:09. > :37:16.to say something about that in just a second. Businesses including S M

:37:17. > :37:20.es are left with no option except prohibitively expensive appearances

:37:21. > :37:25.in court and one of the great advantages that the alternative

:37:26. > :37:30.dispute resolution system brings is the potential to reduce the costs

:37:31. > :37:38.that are involved in doing this. Now, this is not something that is

:37:39. > :37:41.strange to the financial services sector. There are a whole number of

:37:42. > :37:45.commercial sectors that automatically include alternative

:37:46. > :37:51.dispute resolution clause is within the commercial contracts and we

:37:52. > :38:02.indeed APPG held a meeting on this quite recently where we looked at

:38:03. > :38:06.how ADR could be incorporated within the system, how it could be used

:38:07. > :38:09.more often. We looked at the commercial area in quite substantial

:38:10. > :38:15.detail. One of the great things we were able to do with the APPG was to

:38:16. > :38:20.bring together what is quite disparate body of people who operate

:38:21. > :38:24.in the ADR feel to see if there were any common threads between them in

:38:25. > :38:30.approaching disputes like the one has mentioned in taking it forward.

:38:31. > :38:35.The good news that there was quite a lot of agreement about what we were

:38:36. > :38:45.aiming for, even though some of the methods of getting there was

:38:46. > :38:48.slightly different. For us, ADR includes arbitration, mediation,

:38:49. > :38:55.adjudication, expert determination, dispute boards and online dispute

:38:56. > :39:01.resolution. We also looked at the examples of how they could be

:39:02. > :39:07.incorporated in how they work being incorporated by financial services

:39:08. > :39:11.sectors in their contracts. The good news from his point of view is that

:39:12. > :39:15.they were being incorporated already into the contracts on what we needed

:39:16. > :39:21.to do was put pressure on them to include them as a matter of course

:39:22. > :39:28.in the contracts because it helps to solve these disputes. Of course.

:39:29. > :39:35.Could he clarify which sectors of the financial services sector work

:39:36. > :39:38.incorporated? Was it retail business to business that were incorporating

:39:39. > :39:46.ADR? I haven't seen many commercial contracts with ADR clauses from the

:39:47. > :39:50.banks. From memory, it was business to business that primarily included

:39:51. > :39:57.that, but there is no reason it can't include the business to retail

:39:58. > :40:04.sector as well because it holds open a great deal of ability for

:40:05. > :40:07.individuals to bring cases that are quite complex, but in a way that

:40:08. > :40:17.doesn't involve going to be courts, which I will explain in just a

:40:18. > :40:24.second. In fact, let me move on to that as we are running out of time

:40:25. > :40:31.for this. We all know that trying to bring a case to the court is a very

:40:32. > :40:37.expensive business. It requires extremely expensive lawyers and what

:40:38. > :40:45.the arbitration process or the mediation process holds out is the

:40:46. > :40:49.ability for an individual to sit in arbitration and mediation in order

:40:50. > :40:56.to bring the dispute to a much early resolution. Now you can say that

:40:57. > :41:02.this doesn't take away the need for the involvement of the court and

:41:03. > :41:06.that is absolutely true. The awards of the arbitration panel or of the

:41:07. > :41:10.mediator do have to be enforced by the courts and the courts do have

:41:11. > :41:22.that role there, but that is a long stop for the ADR process and it is

:41:23. > :41:26.one I think we will see more infrequently being brought into

:41:27. > :41:30.play. Lord Justice Briggs has commented that he would prefer to

:41:31. > :41:35.seek alternative dispute resolution is not called alternative dispute

:41:36. > :41:39.resolutions, that the alternative is taken out of them and it's just

:41:40. > :41:44.called dispute resolutions, which I think fits well with our own view of

:41:45. > :41:55.things. The other side of this is the issue of time and stress

:41:56. > :42:00.involved in taking forward cases within this sort of framework. It is

:42:01. > :42:03.absolutely true that the arbitration and mediation process does take away

:42:04. > :42:08.a lot of the stress of appearing in court and does allow for these sorts

:42:09. > :42:20.of issues to be settled in a much more friendly way. So I look forward

:42:21. > :42:24.to the work that our two APPG groups will be doing. I think the framework

:42:25. > :42:29.is already there. I think we need to encourage banks to include clauses

:42:30. > :42:35.within the commercial contracts in order that we can get back to ADR is

:42:36. > :42:39.becoming the standard mechanism for resolving disputes rather than just

:42:40. > :42:44.using the internal complaints procedures of the companies as the

:42:45. > :42:52.starting point and ending point of much of the discussion that taking

:42:53. > :42:58.place, and on that note I'm very happy to pass on to somebody else.

:42:59. > :43:09.Thank you, Mr Deputy Speaker. It is a follow-up to -- it is a pleasure

:43:10. > :43:14.to follow the honourable member. Can I welcome the motion tabled in the

:43:15. > :43:18.name of the Honourable member for East Lothian to which I've been

:43:19. > :43:21.pleased to add my name as a Labour member of Parliament to support the

:43:22. > :43:26.objective on a cross-party basis. The issue is one of great importance

:43:27. > :43:30.and the Minister has, I hope, a duty to this house to respond in a

:43:31. > :43:34.positive way to the very straightforward demands that are

:43:35. > :43:38.being made by the members today. Those very straightforward demands

:43:39. > :43:43.are that we establish a mechanism which is universal, which allows

:43:44. > :43:48.businesses and other people in non-regulated sectors to have an

:43:49. > :43:53.appeals mechanism for an independent review of the situation. That's an

:43:54. > :43:58.important motion and one which I support today. The demands are clear

:43:59. > :44:03.and the demands have not just come out of the blue, Mr the city

:44:04. > :44:07.Speaker. The motion itself refers clearly to the statements of Andrew

:44:08. > :44:11.Bailey of the FCA and the Treasury committee on the 20th of July 2016

:44:12. > :44:16.where his statement was that we needed to look at the fact that the

:44:17. > :44:20.ad hoc creation of compensation schemes within the SCA had not

:44:21. > :44:23.worked. That there was not a mechanism in place for many of the

:44:24. > :44:30.businesses that no doubt members will speak about today to find

:44:31. > :44:36.resolution. -- SPCA. These are businesses which are small

:44:37. > :44:41.businesses facing big banks that have time, money and expertise and

:44:42. > :44:45.have very often the patience to try to seek out the complaints that are

:44:46. > :44:52.being made. So I think that the motion today calling for an

:44:53. > :44:57.effective sustainable platform for commercial financial disputes is

:44:58. > :45:02.absolutely right and of its time. Although many financial firms may be

:45:03. > :45:12.regulated, businesses in commercial business is an and regulated

:45:13. > :45:20.business. Businesses do not have the same rights as consumers do. They

:45:21. > :45:24.have to rely on the ombudsman services which may not be equipped

:45:25. > :45:30.to deal with these problems. Businesses have to look at the

:45:31. > :45:34.potential of long protracted activity through the courts. All of

:45:35. > :45:40.this mitigates against what is effectively fairness when

:45:41. > :45:45.opportunities have been denied or when ROMs have been given. If we

:45:46. > :45:49.look particularly, Mr Deputy Speaker, in the time that we have at

:45:50. > :45:53.the areas I'm concerned about which is relating to the Royal Bank of

:45:54. > :45:58.Scotland, then we will remember before the minister response to it,

:45:59. > :46:01.this remains a bank in public ownership. It remains us as tax

:46:02. > :46:06.payers endorsing and acting on behalf of the bank. The Minister has

:46:07. > :46:14.a look at not just the complaints procedure that is being proposed by

:46:15. > :46:18.the member of East Lothian on behalf of the banking group, but also on

:46:19. > :46:21.behalf of the government and taxpayer for the services provided

:46:22. > :46:28.now and attitudes in response is taken by a bank that remains owned

:46:29. > :46:40.by me and every member of this house. Why does this matter? If we

:46:41. > :46:44.look at the fact that 12,000 companies have been pushed into the

:46:45. > :46:48.turnaround position which is called global restructuring, whether real

:46:49. > :46:54.pressures affecting businesses where the bank has acted unfairly and has

:46:55. > :46:58.recognised it has acted unfairly by providing a compensation scheme of

:46:59. > :47:07.its own, with no independent scrutiny of the scheme. No

:47:08. > :47:09.independent endorsement yet because as my honourable friend has said it

:47:10. > :47:18.has not yet been finalised. The Royal Bank of Scotland has a

:47:19. > :47:22.major commitment to those 12,000 businesses. Why does it matter?

:47:23. > :47:27.Because I want a detailed the case of my own constituent, Clive may of

:47:28. > :47:32.moulded North Wales. He has experienced at first hand the

:47:33. > :47:36.actions of the Royal Bank of Scotland, in relation to a

:47:37. > :47:40.government-sponsored scheme, the enterprise Finance guarantee scheme.

:47:41. > :47:43.He was the owner of a successful business, employing 100 people in

:47:44. > :47:54.North Wales at a construction company building houses, buildings

:47:55. > :47:59.and factories. He was approached by RBS and asked to take on board the

:48:00. > :48:02.enterprise Finance guarantee scheme, designed by the then Labour

:48:03. > :48:05.government to support the growth of businesses, not the closing down of

:48:06. > :48:14.businesses, through the difficult times of the recession in the early

:48:15. > :48:21.sorry, late part of 2008, 2009, period. The schema for Mr Mayweather

:48:22. > :48:27.is designed to support the expansion of his business. He believed. He was

:48:28. > :48:37.informed his overdraft, which he had always met, was not access was to be

:48:38. > :48:42.taken over by the Finance guarantee scheme and his business would now

:48:43. > :48:46.protect and develop his cash flow. That was a false owed by the Royal

:48:47. > :48:51.Bank of Scotland, because the moment he took the enterprise Finance

:48:52. > :48:58.guarantee scheme, the Royal Bank of Scotland placed the company into the

:48:59. > :49:01.distressed apartment at RBS and cut his overdraft immediately...

:49:02. > :49:05.I'm very grateful to the honourable member for giving way and it has

:49:06. > :49:10.been a pleasure to work on this with him, what I regard to be a scandal.

:49:11. > :49:13.What he's saying is an incredibly serious allegation. Not only as an

:49:14. > :49:18.individual destroyed but there is misuse of public in doing so.

:49:19. > :49:23.Absolutely. And I make that allegation here today for RBS. I

:49:24. > :49:32.think they have acted appallingly, Madam Deputy Speaker, regarding the

:49:33. > :49:36.treatment of my constituent. They were in the process of taking on new

:49:37. > :49:40.contracts, excellent cash flow and in over the overdraft limit. The

:49:41. > :49:44.moment Finance guarantee scheme was issued, the RBS took from the

:49:45. > :49:53.Government and money underpinnings that over draft, closed it down and

:49:54. > :50:00.ruined his business. The question of why that is important, in the short

:50:01. > :50:05.time I've got, is because Mr May exemplifies the little business, the

:50:06. > :50:09.small business that faces the big banks. He and his wife have spent

:50:10. > :50:14.two years, three years, four years arguing this case, with me as a

:50:15. > :50:19.member of Parliament, having meetings with RBS, looking at court

:50:20. > :50:23.cases, looking now at criminal activity, which has been reported to

:50:24. > :50:27.North Wales Police, because that are allegations of fraud, and which is

:50:28. > :50:31.being looked at by the CPS is currently reviewing the case, on

:50:32. > :50:36.behalf of concerns about how that bank has acted. There is no

:50:37. > :50:41.mechanism apart from his personal self determination and will to drag

:50:42. > :50:45.this case forward, and to hold RBS to account, for him to undertake

:50:46. > :50:49.that holding of RBS to account because the FSA cannot do that. He

:50:50. > :50:53.has to have that will himself, with the support of his family, and I

:50:54. > :50:58.hope his member of Parliament. That is not acceptable. That's why I

:50:59. > :51:02.support the honourable gentleman from East Lothian and that's why I

:51:03. > :51:05.think Mr May and businesses like him need that mechanism to make sure

:51:06. > :51:11.they get fairness when they face banks such as RBS, that treat those

:51:12. > :51:15.businesses with disdain. Madam Deputy Speaker on very glad to

:51:16. > :51:19.rise in this debate to support the motion and congratulate the

:51:20. > :51:23.honourable gentleman with whom I serve on the Treasury committee the

:51:24. > :51:27.East Lothian. It's not just in securing this debate but the

:51:28. > :51:32.excellent work is done in bringing forward the APPG. I'm grateful for

:51:33. > :51:35.the invitation. I'm want to make three points. The first about

:51:36. > :51:41.incentives, the second about the cost and accessibility of courts and

:51:42. > :51:44.the third about complexity. On the centres for bad behaviour,

:51:45. > :51:50.it's a matter I've touched on previously in the House,

:51:51. > :51:53.particularly in relation to liability. It is particularly

:51:54. > :51:56.appropriate that the House today is so well packed with members of the

:51:57. > :52:01.Scottish National party, because I know at least one member opposite

:52:02. > :52:05.will be glad if I say I recently attended the Adam Smith Institute,

:52:06. > :52:10.where I helped launch a book by Tyler Brett Goode speed, an American

:52:11. > :52:18.economist working in the UK, who wrote the book legislating and

:52:19. > :52:21.stability of 1772, which may seem irrelevant but it goes very much to

:52:22. > :52:28.the heart of what is wrong today, because what that book shows is that

:52:29. > :52:31.the Scottish banking system, as it was characterised by unlimited

:52:32. > :52:38.strict liability among the partners, had a very good, strong incentives

:52:39. > :52:41.for the owners of banks and staff of banks to behave well. I'm grateful

:52:42. > :52:46.to honourable members who are nodding in agreement. We have, very

:52:47. > :52:53.long way since of course, and not about to go back to free banking,

:52:54. > :52:56.but I would use a quote from an actor who I don't wish to name on

:52:57. > :53:00.this occasion. He's talked about his work and what he found. He said to

:53:01. > :53:06.me, I've examined around 100 individual cases, all of which had

:53:07. > :53:07.the same negative qualities. It's a case of bank salesmen deliberately

:53:08. > :53:11.withholding key information about withholding key information about

:53:12. > :53:17.the risks embedded in the hedging products they sell. The term hedging

:53:18. > :53:21.itself is misleading. Overall, the process is disgusting. Bank sold

:53:22. > :53:25.derivative products on top of loans to their clients, which those banks

:53:26. > :53:29.knew would render them less credit worthy at the point of sale, and

:53:30. > :53:35.therefore rendered the business more likely to fail. How this could be

:53:36. > :53:38.described as hedging by any financial organisation with a scrap

:53:39. > :53:44.of integrity is beyond me, he said, and I'm inclined to agree. He went

:53:45. > :53:49.on, this misleading use of language unfortunately, maintained by some of

:53:50. > :53:54.the experts who charge large fees to take the case to court, they miss

:53:55. > :53:58.out on key risks, the cases become far weaker, possibly to the point

:53:59. > :54:02.the case fails. At best the bargaining power of victims is a

:54:03. > :54:06.much reduced. It's that experience I want to pick up on. Because the

:54:07. > :54:09.second point is about the cost and accessibility of the court system,

:54:10. > :54:18.which I think points to why this debate is so important. We've both

:54:19. > :54:21.heard evidence, not only in our own constituencies, but from the

:54:22. > :54:25.authorities which have shown that the system that was set up was not

:54:26. > :54:30.adequate to the task at hand, and I'm sure many members of this house

:54:31. > :54:33.will have constituents whose businesses have been in great

:54:34. > :54:36.difficulty and whose lives have been affected, and found that system

:54:37. > :54:39.failed them. So however well-intentioned the authorities

:54:40. > :54:44.were in setting up the system, it has not worked well. We need to find

:54:45. > :54:49.some middle ground between the courts which are too expensive and

:54:50. > :54:53.complex, and which require expert evidence, which is often not

:54:54. > :54:56.available or too expensive to purchase equality, and the

:54:57. > :55:00.semiformal system which we found to have failed. I just would observe

:55:01. > :55:02.that looking at the courts and therein adequate seas and the

:55:03. > :55:09.necessity of avoiding them, it's an old problem. I think the Government

:55:10. > :55:14.will have quite some task ahead of it if they are going to deal with

:55:15. > :55:18.it. The final point is this issue of complexity. I'm sure even those of

:55:19. > :55:22.us on the Treasury Select Committee who are tasked by the House, elected

:55:23. > :55:26.by the House to deal with these issues, have found these particular

:55:27. > :55:31.issues of derivatives very complex and difficult to follow. If that is

:55:32. > :55:34.true of us charged with the expertise to deal with them, it's no

:55:35. > :55:37.doubt also true of the small business people who buy the

:55:38. > :55:41.products. I think that raises the issue the Government might wish to

:55:42. > :55:45.consider, of whether small businesses all to be treated for

:55:46. > :55:49.regulatory purchases as consumers and what size of business, to make

:55:50. > :55:53.sure some of these problems do not arise again. I'm very glad we've

:55:54. > :55:59.said that we are interested in a tribunal system funded by the banks,

:56:00. > :56:02.that were open-minded. And I am very grateful that my honourable friend

:56:03. > :56:07.for Henley is going to be working the APPG to take this forward.

:56:08. > :56:09.Finally I congratulate the honourable gentleman for East

:56:10. > :56:11.Lothian and look forward to taking this forward on to hearing what my

:56:12. > :56:19.honourable friend in government has to say.

:56:20. > :56:23.Thank you. I would like to thank my honourable friend from East Lothian

:56:24. > :56:27.for bringing forward this important debate, as others have quite rightly

:56:28. > :56:31.pointed out, those most negatively affected by the absence of a

:56:32. > :56:36.financial dispute resolution platform are mostly small and

:56:37. > :56:39.medium-sized enterprises. The importance of small and medium-size

:56:40. > :56:42.businesses on our economic well-being can be emphasised enough.

:56:43. > :56:47.67% of workers in the UK are employed by SMEs, that are not

:56:48. > :56:56.detected by the financial ombudsman service. This amounts to 17 million

:56:57. > :57:04.employees, over half of the walk first -- workforce in the UK. It is

:57:05. > :57:07.not just those who own the businesses who are at risk, it is

:57:08. > :57:11.also those employees of the businesses, their families who feel

:57:12. > :57:15.the knock-on effects. These vital small businesses are faced with

:57:16. > :57:20.numerous structural challenges, not faced by larger businesses, have far

:57:21. > :57:23.fewer resources, not just in terms of financial resources but also in

:57:24. > :57:27.regard of time, labour and information. In addition they often

:57:28. > :57:31.have far less experience to draw upon than larger, more established

:57:32. > :57:35.businesses. The structural challenges mean there is a

:57:36. > :57:39.substantial imbalance when small or medium-sized businesses coming to

:57:40. > :57:43.financial dispute with large businesses or in fact large banking

:57:44. > :57:47.institutions. The larger party involved in these disputes is

:57:48. > :57:51.inherently at an advantage, both in the context of the dispute

:57:52. > :57:56.resolution with legal system as well as within the court system itself.

:57:57. > :58:00.For those small businesses who come into dispute with a financial

:58:01. > :58:04.institution, the first step is to submit a complaint to the

:58:05. > :58:12.institution's internal complaints procedure. Many SMEs are fearful to

:58:13. > :58:15.even take this first step. The SMEs feels sufficiently intimidated by

:58:16. > :58:19.financial institutions do not submit a complaint when they feel they have

:58:20. > :58:23.been unfairly treated is unfortunately unsurprising.

:58:24. > :58:26.According to statistics from the Bank of England, the total lending

:58:27. > :58:32.from UK banks to other banks has more than quadrupled since 1990.

:58:33. > :58:40.However, lending from UK banks to businesses involved in production

:58:41. > :58:44.has remained stagnant. In addition, regulations and used in the wake of

:58:45. > :58:50.the financial crisis has made lending to SMEs more expensive,

:58:51. > :58:53.incentivising banks to lend to other banks instead of SMEs. Last week I

:58:54. > :58:59.was approached by a small business based in my constituency. They

:59:00. > :59:03.developed innovative new technology which recycles waste, creating clean

:59:04. > :59:07.energy whilst minimising emissions. They reached out to me as they have

:59:08. > :59:10.struggled to maintain sufficient funding to move forward with their

:59:11. > :59:16.project, despite having already built a test model. This is one

:59:17. > :59:22.example, but demonstrates the degree to which small businesses struggle

:59:23. > :59:26.to a quiet finance and credit. It's no wonder many saw businesses do not

:59:27. > :59:29.want to submit a complaint to a financial institution, with so

:59:30. > :59:34.little credit available to SMEs is more than understandable they want

:59:35. > :59:36.to protect their access to an available, limited available line of

:59:37. > :59:41.credit, even if it means being treated unfairly.

:59:42. > :59:46.I am extremely grateful to my honourable friend for giving way for

:59:47. > :59:49.the important point is making. Essentially highlighting the highly

:59:50. > :59:53.centralised model we have in the UK is a broker model. As well as

:59:54. > :59:58.looking at dispute resolution models we need to be looking at an

:59:59. > :00:00.alternative banking structure based on community banks, where banks are

:00:01. > :00:04.ingrained in communities and know their local businesses.

:00:05. > :00:09.My honourable friend makes an excellent point and I agree with him

:00:10. > :00:13.wholeheartedly. As mentioned in the motion being greeted today, the

:00:14. > :00:18.Financial Conduct Authority has set up several ad hoc schemes to address

:00:19. > :00:21.systematic misconduct by financial institutions. These schemes have

:00:22. > :00:26.been widely criticised and as others have mentioned, even Andrew Bailey,

:00:27. > :00:30.the new chief executive of the FCA, has said these ad hoc systems have

:00:31. > :00:33.left those affected by misconduct not feeling as if they've been

:00:34. > :00:40.treated fairly. The recent review into the mis-selling of interest

:00:41. > :00:43.rate hedging products demonstrates the shortfall of these ad hoc

:00:44. > :00:47.compensation schemes and their inability to reach fair outcomes for

:00:48. > :00:50.customers. Last year, just before Christmas, I was approached by a

:00:51. > :00:57.constituent who had been mis-sold an interest rate hedging product. In

:00:58. > :00:59.2001 my constituent and several coinvestors used their retirement

:01:00. > :01:04.savings to create a small business which would purchase commercial

:01:05. > :01:08.property in Glasgow. However, they did not have sufficient capital to

:01:09. > :01:13.purchase their first property outright and as such slaughter and

:01:14. > :01:16.from the bank. Despite the bank's involvement in the selling of these

:01:17. > :01:21.products, showing customers were under no pressure to purchase these

:01:22. > :01:24.products, my constituents that he could not find a single banker who

:01:25. > :01:25.would lend the business money without including the interest rate

:01:26. > :01:41.hedging product. Having no other choice, my

:01:42. > :01:48.constituent's business took out a loan. Interest rates fell during the

:01:49. > :02:04.financial crisis. The interest on the loan resulted was ?30,000 every

:02:05. > :02:08.quarter. When it became apparent to my constituent that his business was

:02:09. > :02:13.being mis-sold this product, he began the complaints process in the

:02:14. > :02:17.hopes of receiving some sort of compensation. However the bank with

:02:18. > :02:19.which he took out the loan continually refuse to provide him

:02:20. > :02:22.with the relevant paperwork surrounding the loan which made it

:02:23. > :02:30.difficult for my constituent to continue the process timelessly. The

:02:31. > :02:36.delay and avoidance tactics used by the bank combined with the SCA's an

:02:37. > :02:44.indication to not take action... I would happily give way. Would he

:02:45. > :02:51.agree that with the current ad hoc system it doesn't allow the claimant

:02:52. > :03:00.access to the information they need and a tribunal will put the claimant

:03:01. > :03:04.and bank on and equal footing. I agree that this practice is not

:03:05. > :03:15.befitting of any bank, particularly one in public ownership. The delay

:03:16. > :03:18.tactics used meant my constituent's case surpassed the six-year

:03:19. > :03:25.time-limit to take court action. His business did not receive any

:03:26. > :03:32.compensation as a result of the ad hoc scheme. My constituent's problem

:03:33. > :03:41.is far from rare. The compensation schemes that the SCA oversaw was

:03:42. > :03:45.bank centric and lacked oversight. The review was set up in conjunction

:03:46. > :03:52.with the banks and allowed them to make offers that did not reflect a

:03:53. > :03:55.fair outcome. The case of my own constituent as well as the

:03:56. > :04:10.experience of others has been treated unfairly. In conclusion,

:04:11. > :04:14.Madam Deputy Speaker, hearing the experience of constituents across

:04:15. > :04:23.the UK shared by members today it is apparent that ad hoc scheme set up

:04:24. > :04:27.by the FCA have lacked clarity. The creation of a financial disputes

:04:28. > :04:35.resolution platform is necessary and I am happy to support the motion put

:04:36. > :04:41.forward by the Honourable member for East Lothian. Can I congratulate

:04:42. > :04:45.firstly the Honourable member for East Lothian for not only in

:04:46. > :04:49.initiating this debate on our behalf but his leadership of the all-party

:04:50. > :04:57.group on the business banking, of which I'm vice-chair. I also want to

:04:58. > :05:06.pay tribute to the former chair, the Honourable member for Aberconwy.

:05:07. > :05:12.When this was debated earlier this year, the Honourable member said the

:05:13. > :05:17.FCA must work with integrity and deliver in the interests of a

:05:18. > :05:22.healthy marketplace. The sad reality for some constituents from a

:05:23. > :05:28.constituency that was targeted in terms of the selling of interest

:05:29. > :05:41.rates. They took out adverts in the news paper and we had at 1.20 cases

:05:42. > :05:52.of mis-selling. Many of my constituents lacked confidence in

:05:53. > :05:56.the FCA. The ad hoc scheme set up by the FCA for the interest rate

:05:57. > :06:03.hedging product has not had the impartiality it should have had.

:06:04. > :06:06.It's a model for redress moving forward, as would the welcome

:06:07. > :06:09.admission from Andrew Bailey as we heard that the Treasury Select

:06:10. > :06:20.Committee. The fact he acknowledges the problem indicates there should

:06:21. > :06:25.be reformed. That ad hoc scheme was fundamentally flawed. Not just

:06:26. > :06:29.because it was bank centric of the SCA oversight wasn't rigorous

:06:30. > :06:45.enough, but those there were excluded from it. As has been said,

:06:46. > :06:49.when the impact is the same as that taken out with a loan, small

:06:50. > :06:52.businesses should not have been excluded, but they were and were

:06:53. > :07:02.denied justice. Business and commercial banking is unregulated.

:07:03. > :07:08.Businesses don't have the same protection as consumers. Nor do they

:07:09. > :07:16.have recourse to a timely, the key word being timely dispute resolution

:07:17. > :07:28.mechanism. Banks have deep pockets and litigation is unaffordable for

:07:29. > :07:33.many businesses. People don't have those resources, so what do they do?

:07:34. > :07:38.When a business has a complaint against the bank they have to rely

:07:39. > :07:43.on the internal procedure. Time and time I saw my constituents being

:07:44. > :07:48.hung out to dry, pushed into the long grass and there was hope that

:07:49. > :07:53.the constituents would give up. In all too many cases businesses went

:07:54. > :08:00.under because of that prevarication. I want to raise the issue of my

:08:01. > :08:13.constituent Mansell Beeching, a well-known public. We have had four

:08:14. > :08:20.or five of these debates and on every occasion I have had to mention

:08:21. > :08:28.him, yet his complaint is unresolved. Heat complains in 2012

:08:29. > :08:34.originally and it at the back six months to respond. There have been

:08:35. > :08:41.businesses too frightened to complaints affair of the action

:08:42. > :08:53.taken them. If the internal complaint system failed, then it's

:08:54. > :09:00.me to the ombudsman service. I believe that the FCA have been

:09:01. > :09:03.selective in what they look at. I don't deviate from the fact that I'm

:09:04. > :09:09.sure they've done well in many disputes, but in my experience of

:09:10. > :09:15.the last four years they have not had the expertise to deal with acute

:09:16. > :09:19.B complex cases. For example, the ombudsman suggested that monthly

:09:20. > :09:22.payments under the bridge rescue for my constituent would've been about

:09:23. > :09:28.?1000 more the actual fixed-rate loan interest which Mr Beachy said

:09:29. > :09:31.he could not afford, yet the ombudsman insisted there was not a

:09:32. > :09:36.great difference between these payments. His whole judgment hinged

:09:37. > :09:40.on the belief that is extraordinary. I'm not the businessman and perhaps

:09:41. > :09:49.that's a good thing, but even I can grasp the fact that Mr Beachy's pub

:09:50. > :09:59.business would take ?90,000 a year, a third of the annual turnover of

:10:00. > :10:07.the pub. The FCA needs to understand how small businesses work. Many of

:10:08. > :10:12.my constituents have cited timeliness is an issue. Some cases

:10:13. > :10:21.presented years ago remain unresolved. What is concerning is

:10:22. > :10:26.that when a final decision has been made, it will never be over rules,

:10:27. > :10:30.even if the decision is brought into question by new evidence or a change

:10:31. > :10:41.of approach in other comparable cases. Mr Thomas, another

:10:42. > :10:49.constituent, a Lloyds bank customer for 50 years. He was mis-sold a

:10:50. > :10:54.product and he was let down by the bank and him and his business will

:10:55. > :10:57.put under pressure. This started a long-standing complaint required

:10:58. > :11:05.intervention by myself on several occasions, including phone calls to

:11:06. > :11:14.Lloyds officials. The revised offer was given, but Mr Thomas was under

:11:15. > :11:20.pressure to sign. He was told he could still go to the FO West, but

:11:21. > :11:25.they have refused to look at it now. This is despite the fact that I had

:11:26. > :11:31.received assurance from Lloyds that his acceptance of the offer would

:11:32. > :11:48.not stand in his way of taking his complaint to the FO S, but it's done

:11:49. > :12:00.that. Andy keeps Serbs the bank relies on your central file. There

:12:01. > :12:03.is be a system of transparency to inspire confidence in the system. In

:12:04. > :12:09.the course of working for Mansell Beachy we have made three subject

:12:10. > :12:18.access requests to Clydesdale bank and the ombudsman service. The

:12:19. > :12:21.simultaneous requests meant new information kept coming. I've seen

:12:22. > :12:28.three different credit reports and credit figures, things have been

:12:29. > :12:32.changed at the stroke of a pen. Not a way to inspire confidence from my

:12:33. > :12:38.constituents and I question the level of transparency and

:12:39. > :12:45.disclosure. I could go on at length, but I'm not allowed to. I apologise

:12:46. > :12:51.for the detail of some of that but this is the practicality of the

:12:52. > :12:54.cases we have taken on our behalf of our constituents. I make a plea for

:12:55. > :13:00.a level playing field. The system, ad hoc, whatever we describe it as

:13:01. > :13:06.has been stabbed in the favour of the banks. Small businesses deserve

:13:07. > :13:09.a fair chance and that is why I hope some of the suggestions made by the

:13:10. > :13:18.all-party group will be taken forward in the weeks and months, not

:13:19. > :13:21.years, ahead. If everyone who wishes to speak takes the minutes then

:13:22. > :13:30.everyone will have a chance. If not some people might not get to speak

:13:31. > :13:33.and that wouldn't be fair. It's a pleasure to follow the honourable

:13:34. > :13:38.gentleman. He made an article at case, both on behalf of his

:13:39. > :13:42.constituent, but the exposed articulately be vacuum that is at

:13:43. > :13:45.the heart of the regulatory framework to support small

:13:46. > :13:49.businesses. I appreciated everything he had to say. I would like to

:13:50. > :13:53.congratulate all the members who secured this debate today. It's

:13:54. > :13:57.important and timely and has real resonance in the life experiences of

:13:58. > :14:00.our constituents and that is why I'm very happy to support this notion

:14:01. > :14:05.here today and I want to say something on behalf of one of my

:14:06. > :14:10.constituency was affected by this. I'd like to firstly play credit to

:14:11. > :14:14.the work that has been done to give the issue the prominence it

:14:15. > :14:17.deserves. I do not rise to speak on the minutiae of financial

:14:18. > :14:20.regulation, I'm sure you'll be delighted to hear, but I asked the

:14:21. > :14:24.house to consider the human stories of those who have been denied a fair

:14:25. > :14:29.outcome in the financial disputes and those who have had to accept the

:14:30. > :14:34.lacklustre compensation airy measures. It's about the consumer

:14:35. > :14:38.and the customer and the right to mean a full redress when things go

:14:39. > :14:43.wrong. It's right the house takes an interest, just as it is right that

:14:44. > :14:47.the FCA was established by an act of Parliament. The house has an

:14:48. > :14:52.obligation to regulate the financial environment to make sure our

:14:53. > :14:58.citizens are protected when they bank, save and spend. My constituent

:14:59. > :15:02.knows that devastating effect that bad financial regulation can have.

:15:03. > :15:06.He was mis-sold an interest rate hedging product which has left his

:15:07. > :15:12.business in financial difficulty the product was sold to him deceptively

:15:13. > :15:18.by HSBC and included a base rate swap two but his business from

:15:19. > :15:24.rising interest rates, without any knowledge, if rates fell, his

:15:25. > :15:30.business would not benefit. He was let down by HSBC who miss ultimate

:15:31. > :15:32.product any was let down by the financial ombudsman service who

:15:33. > :15:37.rejected his complaint twice until they decided that the SWAT product

:15:38. > :15:42.had been mis-sold. But he was also let down by the FCA and the redress

:15:43. > :15:47.system which did not deliver the financial compensation that

:15:48. > :15:53.Mr Liliana 's family have endured sleepless nights, stress and both he

:15:54. > :15:58.and his wife had had heart attacks in recent years and racked over the

:15:59. > :16:03.future of their business. They feel powerless and that the bank has told

:16:04. > :16:07.of their lives. When HSBC admitted they mis-sold the product it said

:16:08. > :16:12.they made a mistake and it should have been five years, instead it was

:16:13. > :16:16.ten. The bank said he could have the difference returned to him if he

:16:17. > :16:21.accepts the cap at five years. It's very difficult for me to see how

:16:22. > :16:24.this can be right. How, after clear negligence, the bank can continue to

:16:25. > :16:30.hold all the cards and the customer none? My constituent put stronger

:16:31. > :16:34.words to me, he said the proposal amounted to theft. This story is

:16:35. > :16:37.repeated all over the country. We have heard some examples here in the

:16:38. > :16:43.debate today. Everyone in this house will have who have suffered similar

:16:44. > :16:46.circumstances, people who want to do the right thing, who have poured all

:16:47. > :16:49.their spare money into their businesses and people who look to

:16:50. > :16:52.them bank to secure a financial plan for their business. When things went

:16:53. > :16:57.wrong in the bank, the regulator and the ombudsman or let them down. The

:16:58. > :17:01.best way we can serve our constituents and ensure cases like

:17:02. > :17:05.this do not happen again is to support the motion of this debate

:17:06. > :17:10.and I welcome it. Madam Deputy Speaker, the people who need a

:17:11. > :17:14.proper platform for the dispute resolution of these matter are

:17:15. > :17:17.ordinary individuals, small and medium-sized businesses, exactly

:17:18. > :17:20.those the Government says it is determined to support. This house

:17:21. > :17:25.has a proud history of acting to protect the well-being of citizens

:17:26. > :17:33.of this country, of which the healthy -- health and safety act at

:17:34. > :17:38.work shows. Persons not in their play money may be affected by their

:17:39. > :17:42.activities are not exposed to risks from health and safety. I do not

:17:43. > :17:47.need to outline the devastating physical and mental effects that

:17:48. > :17:51.chronic anxiety and worry this can bring. The impact on the health and

:17:52. > :17:54.well-being of my constituent and his family up there. Our financial

:17:55. > :18:01.regulatory system has a moral duty to regulate as much as a moral one

:18:02. > :18:04.and it's a test that there should be measures against. That's why I'm

:18:05. > :18:07.proud today to support the creation of a proper authority to solve these

:18:08. > :18:13.disputes and why I happily support this motion.

:18:14. > :18:19.Norman Lamb. Thank you. I am very pleased to

:18:20. > :18:21.support this motion and I congratulate the honourable member

:18:22. > :18:27.for East Lothian in bringing this really vital issue to the attention

:18:28. > :18:34.of Parliament. It seems to me there is a very clear gap in the framework

:18:35. > :18:38.of protection which needs to be addressed first I think this amounts

:18:39. > :18:43.to a significant injustice for very many people, and it would be

:18:44. > :18:49.intolerable if this injustice was allowed to go unmet. There is a

:18:50. > :18:53.need, clearly, for an effective and timely dispute mechanism and as the

:18:54. > :18:57.honourable member for East Lothian said, central to any process of

:18:58. > :19:02.delivering justice must be full disclosure. Unless you have access

:19:03. > :19:06.to all the information, you cannot properly bring your case and achieve

:19:07. > :19:12.justice. It must be a mechanism that is there for both regulated and

:19:13. > :19:19.unregulated financial contract. There is this abuse of a proper

:19:20. > :19:21.process, it seems to me to incentivise bad behaviour. If the

:19:22. > :19:29.banks know there is no proper mechanism to achieve justice, then

:19:30. > :19:34.they are encouraged to behave badly and engage in sharp practice. At the

:19:35. > :19:43.heart of the current concerns is geology, the global restructuring

:19:44. > :19:47.group, set up by RBS. -- is GRG. The stated intention was to put

:19:48. > :19:51.companies into intensive care, to turn them around, that was the

:19:52. > :19:56.stated intention, and to restructure their debts if necessary, but many

:19:57. > :20:00.small firms accused the bank of deliberately forcing companies into

:20:01. > :20:08.distress as the honourable member made clear, so that RBS could strip

:20:09. > :20:15.their assets and profit from their failure. That in itself is akin to

:20:16. > :20:18.theft, the allegation. But on top of that there is this really serious

:20:19. > :20:24.allegation that there was misuse of public money, through the

:20:25. > :20:28.Government's enterprise Finance guarantee scheme. Lawrence

:20:29. > :20:34.Tomlinson, the formal adviser to the biggest apartment said, my

:20:35. > :20:41.fundamental concern is what businesses were told before being

:20:42. > :20:45.brought into GRG and if this reflected the true purpose of the

:20:46. > :20:51.division. Many businesses believed they were in GRG to be helped, when

:20:52. > :20:55.in fact it appears to have been an exercise in restructuring the bank's

:20:56. > :20:59.balance sheet, often in conflict with the best interests of that

:21:00. > :21:04.business. This is really serious. He also said

:21:05. > :21:08.to the Treasury Select Committee, he referred to unnecessarily

:21:09. > :21:11.engineering of businesses into default, in order to move the

:21:12. > :21:17.business from local business relationship manager to turn around

:21:18. > :21:22.division such as GRG. He alleged the purpose was to generate revenue

:21:23. > :21:29.through fees, increased margins and devalued assets. This is scandalous,

:21:30. > :21:34.Madam Deputy Speaker. Incredibly serious allegations which must be

:21:35. > :21:38.properly addressed by the Financial Conduct Authority. It seems to me

:21:39. > :21:43.that it is blindingly obvious that there must be an effective process

:21:44. > :21:48.for delivering justice. But I wanted to touch, Madam Deputy Speaker, on

:21:49. > :21:52.the human cost of this. We've heard about owners of small businesses who

:21:53. > :21:57.have lost everything that they've worked for. They are in exactly the

:21:58. > :22:01.same position as any private consumer who has a recourse to

:22:02. > :22:07.justice, but these people don't. I'm just imagine what it is like when

:22:08. > :22:13.you have lost everything due to the sharp practice of a bank. And you

:22:14. > :22:17.cannot achieve any justice, and it destroys people. It is impossible

:22:18. > :22:23.for these people to move on, and it is incumbent upon this house and

:22:24. > :22:28.government to ensure this matter is rapidly addressed. I also want to

:22:29. > :22:33.address the well-being of whistle-blowers. I have a

:22:34. > :22:39.constituent who wishes to remain nameless, who was a highly

:22:40. > :22:43.successful format employee of IBS. -- former employee. Who raised

:22:44. > :22:49.concerns repeatedly over a sustained period of time about improper

:22:50. > :22:55.practice within RBS. It destroyed his health, Madam Deputy Speaker. He

:22:56. > :22:59.ended up leaving an agreed terms, simply to end the nightmare that he

:23:00. > :23:05.was going through. But his concerns were not diminished in any way. The

:23:06. > :23:11.whole saga has destroyed this man's life. He cannot move on, but he's

:23:12. > :23:18.been met by an absolute brick wall. I have written on his behalf to RBS

:23:19. > :23:23.and I have on five occasions asked for meetings. I've written to

:23:24. > :23:31.Stephen Hester, I've Ross McGowan, Tesak Aled Davies, and on every

:23:32. > :23:36.occasion my reasonable request the meetings have been turned down. They

:23:37. > :23:39.hide behind the compromise agreement reached with this man to say they

:23:40. > :23:44.are not prepared to engage with him at all any further. It seems to me

:23:45. > :23:49.to be an arrogant and cavalier way to treat a former highly successful

:23:50. > :23:55.employee. A total disregard for the impact on this man's health. The

:23:56. > :23:59.constituent's conclusion is it's not safe to whistle-blower. We should be

:24:00. > :24:02.celebrating whistle-blowers. They risk everything to expose

:24:03. > :24:09.wrongdoing. They expose awful things that happen in our major financial

:24:10. > :24:14.institutions, and they should be protected. I'm horrified by the

:24:15. > :24:19.shameful treatment of this man. I will give way.

:24:20. > :24:26.I would like to put this on the record that RBS have told me that

:24:27. > :24:31.the adjudicator in the new redraft systems they are setting up, Sir

:24:32. > :24:36.William Blackburn, will have unfettered access to all the bank

:24:37. > :24:41.records in the cases that are brought up. He might use that in his

:24:42. > :24:47.future dealings with the bank. I am very grateful to my honourable

:24:48. > :24:54.friend for offering that suggestion. The need for the FCA to take

:24:55. > :25:00.decisive action to provide justice to business owners who lost

:25:01. > :25:05.everything, and to establish an ongoing mechanism which is there for

:25:06. > :25:09.future cases of misconduct, and to provide protection for

:25:10. > :25:13.whistle-blowers destroyed by arrogant, dismissive behaviour by a

:25:14. > :25:19.bank owned by the taxpayer. That's the scandal of this. The need for

:25:20. > :25:23.justice is overwhelming, and it's incumbent upon the Government

:25:24. > :25:29.respond properly to this call. Michelle Thompson.

:25:30. > :25:34.Thank you Madam Deputy Speaker. I made a speech on the 1st of February

:25:35. > :25:41.2016 on the FCA compensation scheme. I argued then that that scheme was

:25:42. > :25:45.ill thought and provided no redraft the businesses made insolvent. I was

:25:46. > :25:52.tempted to be read my previous speech, because here we are again,

:25:53. > :26:01.substituting new numbers. 10% of the complainants were insolvent and in

:26:02. > :26:06.the case of RBS, 75%. Some estimates as high as 94% and yet fundamentally

:26:07. > :26:09.nothing has changed, because RBS has already confirmed it won't deal with

:26:10. > :26:12.the business owners who have lost their livelihood. This too little

:26:13. > :26:20.too late apology from the chief executive of RBS is not good enough.

:26:21. > :26:28.Thanks to the excellent investigated journalism for the BBC, the

:26:29. > :26:30.so-called access the cash demonstrate a system well ordered

:26:31. > :26:36.and well structured in which the winner takes all. The so-called

:26:37. > :26:40.victory e-mails sent to teams in GRG when they acquired an asset at a

:26:41. > :26:45.disgrace. This is quite telling, because where there is a Victor,

:26:46. > :26:53.there's always a loser. I'm grateful to risk management employee who

:26:54. > :26:58.talks about the Komodo dragon. The Komodo dragon lies awake at a

:26:59. > :27:03.watering hole, the prey escapes, apparently not seriously harm but

:27:04. > :27:08.the bite is toxic and the dragon as its target will eventually weaken

:27:09. > :27:15.and die. So it is, with RBS swaps and GRG, the swap salesman lands a

:27:16. > :27:21.toxic byte and they get to tear the client pieces. So I concurred with

:27:22. > :27:24.the previous members who have spoken up about what it means that these

:27:25. > :27:27.people and we can never forget that people are at the heart of what

:27:28. > :27:32.we're trying to do here. Remember what they may lost. Their family

:27:33. > :27:34.home, their businesses, their livelihood, their future livelihood

:27:35. > :27:39.if they plan for their children to go into the business. Their dignity,

:27:40. > :27:47.their pride, and often they're very self-definition. We know wider

:27:48. > :27:53.society loses when the wider community... The wider supply chain

:27:54. > :27:58.who rely on them, creditors, HMRC, Local Authorities. It's been pointed

:27:59. > :28:00.out by my honourable friend for East Lothian the emotional impact

:28:01. > :28:05.potentially on individuals, they have to dig over years deep for

:28:06. > :28:09.resilience and strength are often end up with mental health issues or

:28:10. > :28:14.develop physical illnesses. And let us never ever forget that people

:28:15. > :28:21.have committed suicide as a result of the actions of some of our banks.

:28:22. > :28:28.So I have to ask again, when did we sign up to this? When did we sign up

:28:29. > :28:32.to a taxpayer owned bank, pillaging the assets of our SMEs? The

:28:33. > :28:36.so-called lifeblood of our economy. Creating a system where victory

:28:37. > :28:40.e-mails sent when another department of the same bank asset strips. We

:28:41. > :28:45.have to ask if abuses like those at RBS could have taken place if we a

:28:46. > :28:49.system where a business owner could simply be heard. I concur again with

:28:50. > :28:53.my honourable friend from East Lothian, where we have this contract

:28:54. > :29:00.fundamentally where somebody who has been declared insolvent cannot take

:29:01. > :29:06.on a bank. I would finally point out that we need to change... Yes, of

:29:07. > :29:12.course. The honourable lady use the word

:29:13. > :29:19.pillaged. I entirely agree with her that it is wholly inappropriate to

:29:20. > :29:23.describe -- it is wholly appropriate to describe this as pillaging. Thank

:29:24. > :29:27.you to the honourable member opposite for that comment. I was

:29:28. > :29:33.going to move on just to address quickly culture, if I could. We need

:29:34. > :29:36.to recall it is the underlying culture of institutions that enables

:29:37. > :29:43.this to happen. We know we have come from an absolute driven bottom-line

:29:44. > :29:46.culture but we need to make our banking system, our whole financial

:29:47. > :29:52.system, work for us and our society. I feel we have really lost sight of

:29:53. > :29:55.that in recent years. We need both a tribunal, but we also need an

:29:56. > :30:03.effective process. We need that effective process so President can

:30:04. > :30:05.be set, that that can be learned from and fundamentally changing

:30:06. > :30:12.behaviours so it doesn't happen again. -- so a precedent can be set.

:30:13. > :30:18.I have to thank the APPG for their support in driving this and Andrew

:30:19. > :30:19.Bailey of the FSA who endorse the idea and frankly, it's time to get

:30:20. > :30:32.started. I'd like to congratulate the member

:30:33. > :30:36.for East Lothian. The key issue we need to address is how we end the

:30:37. > :30:42.conveyor belt of companies that generate these disputes. Far too

:30:43. > :30:50.often the perpetrators are left to continue before the lee-macro as

:30:51. > :30:57.before. I'm pleased that the debate was sparked by Andrew Bailey. I hope

:30:58. > :31:02.he will follow through with the interest he has expressed. From the

:31:03. > :31:08.cases I've encountered it's clear the ad hoc approach is not working.

:31:09. > :31:11.Why should those who blow the whistle on wrongdoing lose out, not

:31:12. > :31:18.just with the actions of their peers, but also to the actions or

:31:19. > :31:25.inaction of the regulator. From my surgery caseload I'm aware of the

:31:26. > :31:32.actions of RBS and other lenders. I'm concerned about banks forcing

:31:33. > :31:35.customers to lose their homes to underpin commercial loans in order

:31:36. > :31:48.to avoid being pushed into Administration. I want to highlight

:31:49. > :31:52.two cases of concern. The young constituent Callum Cheshire had a

:31:53. > :31:56.bank account with RBS and has had it since he was 12 years old. As a

:31:57. > :32:01.student he worked to build up funds. He was shot in July 20 15th when his

:32:02. > :32:09.bank statement had told him someone withdrew 550 pounds from a branch in

:32:10. > :32:19.the east of Scotland when he was at home in the West of Scotland. Mr

:32:20. > :32:27.Cheshire has been let down. Not only have the bank accused the customer

:32:28. > :32:33.of frauds, but according to the defence the usual way to commit

:32:34. > :32:40.fraud is to walk into a bank you have not used and presents identity

:32:41. > :32:46.that does not include your bank card and then clear the account. That was

:32:47. > :32:58.the basis they used not to return his money. Despite vast sums spent,

:32:59. > :33:01.Mr Cheshire is. You resort to the Small Claims Court to secure the

:33:02. > :33:08.redress that has been denied him to date. I issue a challenge, don't

:33:09. > :33:16.throw an expensive city lawyer at this case and price it out of Mr

:33:17. > :33:20.Cheshire's each. There's also the quality of decision-making. If we

:33:21. > :33:28.are to keep cases out of court, then let's abandon some of the complexity

:33:29. > :33:32.of laws and procedures, but don't abandon the requirement to use those

:33:33. > :33:36.fairly and use the fullest evidence. I suggest we look at the role of the

:33:37. > :33:44.complaints commission when it comes to commercial disputes. This office

:33:45. > :33:50.receives little attention. I'm privileged to chair the all-party

:33:51. > :33:55.group on the Connacht income fund. Members may recall the collapse of

:33:56. > :34:01.that funds or the disappearance of over ?100 million. Each investor

:34:02. > :34:07.contributed on average ?70,000. Many were making provision for the

:34:08. > :34:16.pension and were attracted by a good rates of return and limited risk.

:34:17. > :34:27.The collapse of the Connacht fund is similar to that of RBS. The initial

:34:28. > :34:30.operator of the farmed holds major contracts with central and local

:34:31. > :34:38.government across the UK and was regulated by the FSA and is today by

:34:39. > :34:42.the FCA. The Connacht fund collapsed in 2012 yet nearly five years later

:34:43. > :34:45.investors are waiting to hear what happened to the cache, who walked

:34:46. > :34:57.away with it and why were they allowed to do so. You do not expect

:34:58. > :35:03.your funds to just disappear. In the absence of answers from the FCA

:35:04. > :35:09.those affected are turning to the complaints commission of answers. He

:35:10. > :35:18.released recent findings about the complaint. In 2011 as the chief

:35:19. > :35:27.Executive making investments on behalf of the Connacht fund he

:35:28. > :35:34.reported to the FCA constant defrauding. The response from the

:35:35. > :35:39.terror-macro should worry all members of this house and the

:35:40. > :35:43.Treasury. The finding describes the response as uncle and fermented and

:35:44. > :35:47.condense it is failing to prevent continuing detriment to investors. I

:35:48. > :35:51.have the opportunity to discuss this when I met recently with Andrew

:35:52. > :35:56.Bailey and highlighted my concern that there was a danger that the FCA

:35:57. > :36:04.would be damaged by the handling of legacy cases. I was disappointed to

:36:05. > :36:09.see the response of the FCA to the findings. The Commissioner

:36:10. > :36:17.recommended that a public apology was given. Instead, the FCA issued a

:36:18. > :36:23.private record of apology. It's beyond disappointing and highlights

:36:24. > :36:28.the failure of regulation since the whistle was first blown on what he

:36:29. > :36:43.strongly believed was a process of fraud and misappropriation of funds.

:36:44. > :36:54.The complaints Commissioner referred to... I would welcome a reassurance

:36:55. > :37:03.that information has been shared. Whether we're looking at the of

:37:04. > :37:07.financial services or, shall lenders, we must expect integrity.

:37:08. > :37:17.It is not clear that the FCA is upholding that statement now than

:37:18. > :37:21.when it did under the FSA scheme, so comprehensively criticised by the

:37:22. > :37:33.Commissioner. Our challenge is to make sure the integrity is delivered

:37:34. > :37:41.upon. Can I congratulate the honourable member on his choice of

:37:42. > :37:50.Thai and securing this debate. I'm not sure if that says more about him

:37:51. > :37:55.or me. What will look back at some of the truly appalling practices

:37:56. > :38:00.that have taken place on behalf of banks, but the other aspects we need

:38:01. > :38:04.to come back to is the forward-looking aspect of making

:38:05. > :38:07.sure these mistakes are never repeated. I do not believe that the

:38:08. > :38:14.solutions that have been put forward will do that adequately. Banking

:38:15. > :38:18.clearly is a cornerstone of our economy and that relationship and

:38:19. > :38:25.that central point that it plays is one that has been built on trust.

:38:26. > :38:31.Trust that businesses have that the bank will deal with them

:38:32. > :38:33.responsibly, but I also trust that the government and financial system

:38:34. > :38:39.will protect them if that relationship breaks down. That

:38:40. > :38:44.system may work if you are a large conglomerate, a major employer with

:38:45. > :38:51.the ability to go toe for toe with the banks in terms of litigation and

:38:52. > :38:55.affording lawyers, etc, etc. But if you are a small or medium enterprise

:38:56. > :39:02.and that relationship is skewed and you stand to lose out because you

:39:03. > :39:05.cannot meet the might of the banks, and just put into perspective and

:39:06. > :39:11.I'm sure these numbers when, as a surprise to anyone, but in terms of

:39:12. > :39:17.turnover, small and medium enterprises account for 47% of

:39:18. > :39:22.turnover and 60% of employment in the private sector. It's a huge part

:39:23. > :39:26.of our economy and one we should be cognisant of and provide deep

:39:27. > :39:31.protection it requires. How do we go about rebuilding that trust that has

:39:32. > :39:36.been lost? And we have heard that it is across the length and breadth of

:39:37. > :39:43.the country. It is different banks and it is different sectors that

:39:44. > :39:47.have been affected by malpractice. So will ad hoc arrangements

:39:48. > :39:50.addressed the problem? I don't believe they will because the

:39:51. > :39:58.problem is not ad hoc. The problem in a part is systemic and you do not

:39:59. > :40:02.solve systemic problems with ad hoc fixes. There is a tent Asian in this

:40:03. > :40:06.place and in all walks of life to find the simplest solution possible.

:40:07. > :40:13.In this case that will not cut the mustard. We need a proper solution

:40:14. > :40:18.and might honourable friend product suggestion of a commercial financial

:40:19. > :40:23.dispute resolution, is tribunal or whatever form, is a key part of

:40:24. > :40:31.doing that. Like other honourable members I've had constituent issues,

:40:32. > :40:34.particularly with RBS and the global restructuring group. While sitting

:40:35. > :40:42.in this Chamber I've had constituent who I don't feel comfortable naming,

:40:43. > :40:48.they've asked me not to name them, messaging me and one of the issues

:40:49. > :40:55.they said is that the dealings his lawyer has had with RBS, the lawyers

:40:56. > :41:02.said it is water off a ducks back and a little bit of bad publicity

:41:03. > :41:07.will not change anything. Even when we have ad hoc resolutions in place,

:41:08. > :41:13.they are not solving the ad hoc problems. That adds to the

:41:14. > :41:20.compulsion last to find a solution. I will give way. Perhaps I could

:41:21. > :41:25.name one of my constituents who has given me permission. I have fought

:41:26. > :41:30.on Archie's response for over six months, waiting for a response from

:41:31. > :41:34.RBS. Does he agree with me that the only way we can solve these problems

:41:35. > :41:37.and grow our economy is making sure our businesses are protected from

:41:38. > :41:45.programmes such as these perceived by the banks? The importance of

:41:46. > :41:50.economic growth is tied into that. There are individual consequences

:41:51. > :41:55.but there are whole levels of problems that come from issues like

:41:56. > :42:05.this. I'm pleased to same that in the relations I've had with banks

:42:06. > :42:09.and Aberdeen is going through a difficult economic time as we speak,

:42:10. > :42:16.but they have not been the problems that were associated with the

:42:17. > :42:21.previous financial downturn specific to Aberdeen. That may be that we are

:42:22. > :42:25.beneficial, there is no systemic solution. So just because we don't

:42:26. > :42:32.have a problem now does not mean that the future and because that is

:42:33. > :42:36.a localised economic problem that we had in Aberdeen, I think if this

:42:37. > :42:40.were to be repeated on a national level then the mistakes of the past

:42:41. > :42:46.could well creep back in. As the UK moves towards leaving the European

:42:47. > :42:51.Union, there is a risk we have greater stress on our financial and

:42:52. > :42:59.business systems that temptation may come back to use these opportunities

:43:00. > :43:05.to make themselves money. That is incredibly pressing that we get this

:43:06. > :43:10.right. The benefits of this will be manyfold. Rather than coming to the

:43:11. > :43:14.huge scale crises that we need to solve, you have the intervention.

:43:15. > :43:19.You have the ability of parity between business and companies to

:43:20. > :43:24.solve problems early, to identify them at that early case and to solve

:43:25. > :43:31.them without the need for massive scale recompense has been the case.

:43:32. > :43:36.Reflections on today. We've heard from many honourable members. The

:43:37. > :43:44.ability to put a figure on the cost to business is very difficult. The

:43:45. > :43:51.ability to put a price on the cost of lost growth is even more

:43:52. > :43:54.difficult to calculate. Let's come back to the human cost of this and a

:43:55. > :44:00.number of members have mentioned this. The human cost of this, the

:44:01. > :44:04.hours of grief and anguish and in certain cases as the member for

:44:05. > :44:10.Edinburgh West mentioned, the lives that have been lost as a result of

:44:11. > :44:13.this, that is the problem. We can do something about that problem. We can

:44:14. > :44:18.protect our businesses. We can ensure best practice and above all

:44:19. > :44:32.we can ensure the mistakes of the past are never repeated. I shall be

:44:33. > :44:39.massively brief. Perhaps! I'm afraid I have a slight throat infection so

:44:40. > :44:43.I'm forced into brevity against my better judgment. I would like to

:44:44. > :44:50.address simply one area and that is the area of culture and we've had

:44:51. > :44:54.many speakers today that have been outstanding. They've gone into

:44:55. > :44:59.detail in the way people have been crucified by the banks by

:45:00. > :45:03.mis-selling products that were entirely unsuitable, that were not

:45:04. > :45:07.transparent and that were very simply at the end of the day to

:45:08. > :45:15.allow people to asset strip perfectly good businesses in

:45:16. > :45:19.society. I've got a number of constituents who have been affected.

:45:20. > :45:22.I will go into great details of the more because like my honourable

:45:23. > :45:27.friend said, they don't want to be named and if I give too many details

:45:28. > :45:36.others might find out who they are. One, however, has been the victim of

:45:37. > :45:43.Clydesdale bank, then the any B and then the utterly appalling cell

:45:44. > :45:47.company. They have stolen effectively his assets and putting

:45:48. > :45:51.completely out of business. And it was a family business and it's

:45:52. > :46:01.created Robbins for his entire family. As another business and put

:46:02. > :46:03.it to me about Clydesdale bank, they have destroyed a business that the

:46:04. > :46:14.Mafia couldn't have bettered in Or another business close to the

:46:15. > :46:19.boundary in my constituency that was promised in statements by Ross

:46:20. > :46:27.McEwan of RBS there would be proper mechanisms put in place, proper

:46:28. > :46:30.resolution, that were going to get these back that were unsustainable

:46:31. > :46:36.and quite ridiculous, and then found it was not stated by RBS, they were

:46:37. > :46:41.surrounding this with such difficult conditions that this medium-sized

:46:42. > :46:50.business in central Scotland is unable to get a penny of ?1.8

:46:51. > :46:58.million in fees that RBS are imposing upon it. This, to me,

:46:59. > :47:07.strikes at what we have at heart here, a cultural problem of the -- a

:47:08. > :47:11.particular sort, about a complete lack of ethics in the banking

:47:12. > :47:15.sector, in relation to businesses and small businesses. Very broadly

:47:16. > :47:21.speaking there are two major ways in which you can look at Essex. One is

:47:22. > :47:24.from what is called as the ontological approach, in other

:47:25. > :47:31.words, looking at the processes along the way, were they properly

:47:32. > :47:37.transparent? Was the information properly provided? So along the

:47:38. > :47:46.route, before you see an outcome that can be expected, that banks

:47:47. > :47:50.operate ethically. They have quite demonstrably, by these measures,

:47:51. > :47:56.failed. They failed the test from an ontological point of view of

:47:57. > :48:01.operating ethically. Of more interest to me, from an ethical

:48:02. > :48:06.standpoint, is what called the consequentialist thought. Looking at

:48:07. > :48:09.the outcomes of their behaviour, and judged by the outcomes of their

:48:10. > :48:19.behaviour, they have demonstrably completely failed this community,

:48:20. > :48:24.the businesses, the small and medium businesses in this country, and

:48:25. > :48:29.failed society as a whole. If you are looking at this from the point

:48:30. > :48:38.of view of medical ethics, they have got a saying that you should operate

:48:39. > :48:43.a principle of non-maleficent is, basically saying you should operate

:48:44. > :48:48.in such a way that you have an obligation not to inflict harm

:48:49. > :48:57.intentionally. If ever there was a case of banks operating to inflict

:48:58. > :49:02.harm and intentionally, so that they could gain from the destruction of

:49:03. > :49:09.businesses, it is the way in which many of these banks have been

:49:10. > :49:12.operating. We need to take action. I support this resolution, but I think

:49:13. > :49:18.there are two things additionally that I would like to see. One is, I

:49:19. > :49:24.think there should be imposed on the entire banking sector a proper and

:49:25. > :49:31.regular at duty of care towards their customers. Unless we get a

:49:32. > :49:38.duty of care, they are going to continue to have an easy path

:49:39. > :49:42.towards ignoring the rights of individuals, ignoring the rights of

:49:43. > :49:48.businesses, and potentially continuing to destroy them for their

:49:49. > :49:53.own gain. And the second thing that I would like to see done is far

:49:54. > :49:57.greater strengthening of support for whistle-blowers in the banking

:49:58. > :50:06.community. I think the Government should contemplate putting in such

:50:07. > :50:09.severe penalties against financial institutions if they start

:50:10. > :50:20.blackmailing and harassing people who are doing society a favour, to

:50:21. > :50:24.deter them, as often is the whistle-blower who suffers rather

:50:25. > :50:31.than the person who perpetrated the crime.

:50:32. > :50:34.I would like to add my calls in thanks to the honourable member of

:50:35. > :50:39.East Lothian for securing a very important debate, and one that has

:50:40. > :50:46.led a number of members to be contacted by those who own small

:50:47. > :50:50.businesses who are mis-sold the most inappropriate hedging products,

:50:51. > :50:54.which has led to economic disaster and also mental health problems, and

:50:55. > :50:58.an effect on health and well-being. I think the member of East Lothian

:50:59. > :51:01.made an excellent speech as always and started the tone of the great

:51:02. > :51:05.perfectly by saying it's time to move beyond these individual cases.

:51:06. > :51:09.Clearly we all have these individual cases, but I think the point was

:51:10. > :51:13.being made we need to look beyond discussing this and see if we can

:51:14. > :51:16.come to some sort of permanent solution...

:51:17. > :51:21.Yes, of course. I thank my honourable friend the giving way.

:51:22. > :51:25.Can I commend the members on these benches for turning up in numbers.

:51:26. > :51:34.I'm sure everyone across the House has constituents deeply impacted by

:51:35. > :51:38.this, and it's deeply disappointing with it being Christmas it's poorly

:51:39. > :51:45.attended today. Back in May when we first looked at this idea a parallel

:51:46. > :51:51.was drawn and I want to commend my honourable friend for bringing

:51:52. > :51:55.forward proactive suggestions for how we improve things. Yes, we rage

:51:56. > :52:00.against the system but we are trying to be proactive, to improve the

:52:01. > :52:08.world for small businesses. I entirely agree. We look for

:52:09. > :52:13.solutions now. Time for moaning to stop and time for solutions and

:52:14. > :52:16.things to be found. I think my honourable friend for East Lothian

:52:17. > :52:21.made an incredibly important point about the link between low

:52:22. > :52:25.productivity levels in the UK and the threat and pressure that small

:52:26. > :52:30.and medium-sized enterprises have been under, particularly from 2007-

:52:31. > :52:34.08. There is no smoke without fire and I am convinced, having listened

:52:35. > :52:41.to the cause and link between these two. I was particularly struck by

:52:42. > :52:49.arrangements between solicitors practices and large banks. I declare

:52:50. > :52:53.an interest in sorts, I was a practising solicitor who was

:52:54. > :52:57.seconded to a large financial services organisation. How it works

:52:58. > :53:02.is very, very peculiar. I was given to the bank for free by my firm.

:53:03. > :53:08.That meant that the bank created what's called a value account, and

:53:09. > :53:12.salary was sent to this value account, and this value account

:53:13. > :53:16.triggered work for my firm. You can see the problem SMEs have got in

:53:17. > :53:19.trying to find highly reputable, highly skilled corporate lawyers who

:53:20. > :53:24.are all working for the firms that have these links with the banks.

:53:25. > :53:29.These firms don't bite the hand that feeds them. It's another

:53:30. > :53:34.manifestation of the complete inequality when it comes to SMEs

:53:35. > :53:38.against large financial services organisations. I think he was also

:53:39. > :53:43.very right to say that banks' terms and conditions, the terms of the

:53:44. > :53:47.contracts have evolved over the year, further exacerbating this

:53:48. > :53:52.inequality. An honourable friend on the Justice committee made a very

:53:53. > :53:57.important point and I was grateful for him to take an intervention,

:53:58. > :54:02.about ADR clauses in contracts. Of course, while I would welcome ADR

:54:03. > :54:04.clauses in all of these types of commercial contracts I'm slightly

:54:05. > :54:10.confused, because I have never seen them when it comes to these hedging

:54:11. > :54:14.products. If the principle is we ask banks voluntarily to incorporate

:54:15. > :54:18.these, it stands to reason the commercial risk will drive whether

:54:19. > :54:22.or not they are included and with risky derivatives, have we ever seen

:54:23. > :54:26.ADR clauses in hedging contracts? If we haven't, I have no idea how we

:54:27. > :54:33.could voluntarily persuade the banks to incorporate, given the risk.

:54:34. > :54:39.Thank you for giving way. I think the point I was trying to make in

:54:40. > :54:44.this was that it's not just the commercial circumstances of it that

:54:45. > :54:51.will force the inclusion of ADR clauses. It will also be the way in

:54:52. > :54:55.which we make ADR known as a group of activities that can help in this

:54:56. > :54:59.situation. In that sense I completely agree and

:55:00. > :55:02.you are right to make the point ADR as a concept does exist. It has

:55:03. > :55:08.existed and we're not asking for a new piece to be created here, we are

:55:09. > :55:12.asking for a forum that is ADR to be specifically looked at these types

:55:13. > :55:16.of contracts. URI, it does exist. I'm still very cynical as to the

:55:17. > :55:20.motivation of banks to put these clauses in particularly particularly

:55:21. > :55:27.risky contracts. -- you are right, it does exist. The member made a

:55:28. > :55:30.very powerful speech and drove home on the perverse nature of the

:55:31. > :55:34.particular banks we are talking about being in public ownership. The

:55:35. > :55:42.use of public funds to essentially push businesses against the world,

:55:43. > :55:47.asset strip them, and it's very hard to accept that this is funded by our

:55:48. > :55:49.taxpayers money and I think you made that point extremely well. The

:55:50. > :55:57.honourable member for Wycombe touched on quite a stark irony,

:55:58. > :56:02.going back to the old banking system in Scotland and then across the rest

:56:03. > :56:07.of the UK when we had this concept, and incentivised good culture and

:56:08. > :56:10.good practice and I totally agree. The pendulum has swung the entirety

:56:11. > :56:14.of the other direction. I will come in a moment to talk about what I

:56:15. > :56:19.believe is the crux of this issue, the banking culture, but I think

:56:20. > :56:24.that point was made very, very well. I thank my honourable friend for

:56:25. > :56:26.giving way. On the matter of culture, my experience of my

:56:27. > :56:30.constituent was he had a number of different people that dealt with him

:56:31. > :56:35.over many, many months, and he felt the culture being driven in the bank

:56:36. > :56:39.was not for the majority and that... We want to believe most people that

:56:40. > :56:44.work in the banking sector are good people, but the culture being driven

:56:45. > :56:47.by the top of these organisations mean staff end up moving and are

:56:48. > :56:53.deeply dissatisfied and not able to serve customers properly.

:56:54. > :56:57.I completely agree. My experience, whilst there are many, many good

:56:58. > :57:01.people that work within banks, and not all should be tarred by the same

:57:02. > :57:07.brush we would inevitably be tempted to do. Banksy businesses and

:57:08. > :57:12.individuals in the retail sector as units to extract revenue from. Ann

:57:13. > :57:16.Leslie go back to an ethical type of banking, we won't make that cultural

:57:17. > :57:23.change which I think is vital to sort this issue. My honourable

:57:24. > :57:27.friend, I was particularly struck by him describing the reluctance to

:57:28. > :57:32.complain before a contention has even been raised. Bank feels the

:57:33. > :57:36.inequality of arms before we get to a court system or a dispute

:57:37. > :57:40.resolution system. I think that is a circumstance of the public

:57:41. > :57:44.perception of inequality and that is just one of the effects. Some kind

:57:45. > :57:53.of alternative ADR system would go a long way to reducing that fear

:57:54. > :57:57.factor among SMEs. That fear was collaborated in the point made about

:57:58. > :58:03.the financial ombudsman service and retail banking issues. At my time at

:58:04. > :58:06.that large bank I had many dealings with the financial ombudsman service

:58:07. > :58:09.and you could put two cases with exactly the same facts and

:58:10. > :58:15.circumstances and you could get two completely different results. The

:58:16. > :58:25.member from North Norfolk made an excellent, powerful case, and two

:58:26. > :58:29.points out about of it was the effect on mental health and

:58:30. > :58:34.well-being and also about the whistle-blowing point, picked up by

:58:35. > :58:40.the honourable member next to me. He will be pleased to hear that we will

:58:41. > :58:43.be proposing two amendments that might interest into the criminal

:58:44. > :58:48.finance Bill. One for the protection of whistle-blowers and three banking

:58:49. > :58:54.culture review. I would be pleased if he could consider those. My

:58:55. > :58:58.honourable friend who wowed this chamber last week, and I think that

:58:59. > :59:04.deserves a mention, my colleague from Edinburgh West, I did think any

:59:05. > :59:12.of us could failed to have been moved by the reference to the Komodo

:59:13. > :59:15.dragon, how predatory banks can sometimes be. My honourable friend

:59:16. > :59:24.for his Redland gave a case of an ordinary

:59:25. > :59:28.individual who the banker trying to accuse of going to another bank with

:59:29. > :59:33.identification and withdrawing that money. Surely the complaints process

:59:34. > :59:37.would have a look at the CCTV? Surely the financial ombudsman

:59:38. > :59:40.service would get a little more inquisitive when it comes to

:59:41. > :59:44.assessing the case. I hope that message will go up. It's perhaps

:59:45. > :59:49.worth mentioning that when I worked for that particular bank, at the

:59:50. > :59:53.point where a retail customer threatened to take the bank to the

:59:54. > :59:57.financial ombudsman service as we were told very quickly that that

:59:58. > :00:01.incurs a cost for the bank. I forget the exact figure but somewhere

:00:02. > :00:05.between 400- ?600. So when it looks at that it does a quick calculation.

:00:06. > :00:10.If you can settle the case at less than ?600, you did it and didn't

:00:11. > :00:13.drag the bank to the financial ombudsman service. It demonstrates

:00:14. > :00:19.we are units to extract revenue from and nothing more.

:00:20. > :00:27.The member for Aberdeen South was the first person to say and I agree

:00:28. > :00:32.that in itself this ADR system won't fix the entire problem and he's

:00:33. > :00:39.right. The phrase he was told about RBS's approach was it being water

:00:40. > :00:45.off of a dark's back is true. Calculations are made and it's

:00:46. > :00:54.between liability and potential course. That will conclude my

:00:55. > :00:58.summary. If I have missed some colleagues, I do apologise, but the

:00:59. > :01:07.point I wish to make, whilst I agree that it would be a good idea to ease

:01:08. > :01:12.access to justice for people who have had problems with large banks,

:01:13. > :01:15.it would make it cheaper and it would help to equalise the

:01:16. > :01:21.inequality of arms, but the point needs to be made that whether you're

:01:22. > :01:26.considering a case in financial ombudsman services, the fast track

:01:27. > :01:27.court, the Court of Appeal or an ADR, it will be the same case

:01:28. > :01:42.that gets considered from courts are called. The same contract with the

:01:43. > :01:47.same terms of conditions. Although it will be a welcome step, we need

:01:48. > :01:49.to the beyond that and look at the reasons why these organisations were

:01:50. > :01:54.sold these products in the first place and that is the culture

:01:55. > :02:03.perpetuating to the banks. If we can fix that culture then we went end up

:02:04. > :02:05.in this situation where we need an alternative dispute resolution.

:02:06. > :02:17.Whilst I welcome this, we need to change the culture to make a rule

:02:18. > :02:20.change. The member for Dumfries and Galloway has summarise most of the

:02:21. > :02:25.things I would've referred to, but I'd like to thank the honourable

:02:26. > :02:30.member for East Lothian for bringing this before us today. I want to

:02:31. > :02:34.touch on to other points made by the honourable member for Wycombe and

:02:35. > :02:39.the Austrian school, I recall, the system he set up isn't adequate to

:02:40. > :02:47.deal with the task in relation to the resolution of complaints. My

:02:48. > :02:50.colleague was very passionate in his exposition of his concerns for his

:02:51. > :03:10.constituents. I'm pleased that this issue is before us today. It's been

:03:11. > :03:15.an issue of cross-party engagement. RBS's use a global restructuring is

:03:16. > :03:21.the glaring example I suspect of our poor corporate governance and weak

:03:22. > :03:23.regulation can produce dreadful outcomes for individuals and

:03:24. > :03:28.businesses. Many of the small business owners have not just lost

:03:29. > :03:34.their businesses, they have also lost their health. Under the current

:03:35. > :03:38.financial regular tree system there is a huge imbalance of power between

:03:39. > :03:43.small businesses and the financial service providers. Many members have

:03:44. > :03:47.touched on that particular point today and that imbalance needs to be

:03:48. > :03:54.be addressed. When problems arise between businesses and the bank, as

:03:55. > :04:01.has happened with RBS and the CIG, the current dispute resolution

:04:02. > :04:06.options open were inadequate. RBS in November and it was establishing a

:04:07. > :04:11.new complaints review, but any ad hoc disputes resolution mechanism

:04:12. > :04:23.based on the internal mechanisms of the bank are clearly insufficient.

:04:24. > :04:30.The actions at RBS were not just a few rogue employees, it was the

:04:31. > :04:41.explicit policy and they've were instructed to push small businesses

:04:42. > :04:44.into taking on the products. Small businesses were effectively turned

:04:45. > :04:48.over for every penny that could be found. There was no great secret in

:04:49. > :05:00.the bank about what was taking place, ostensibly as has been

:05:01. > :05:06.responded referred to today. Even celebrated with the phrase dash for

:05:07. > :05:14.cash. The intentions could not be more obvious. What the motion

:05:15. > :05:20.highlights is we can't say this was a problem of one bank. It was beyond

:05:21. > :05:23.one bank. The issue was systemic and we can point to other failings of

:05:24. > :05:29.the banking sector that C. The catastrophic failure of the system

:05:30. > :05:35.in 2008 made it clear. Or regulation, excessive borrowing,

:05:36. > :05:41.incentives within banks. And of course the cost to the taxpayer was

:05:42. > :05:48.immense. On the IMF estimate the UK bailout cost ?1.2 trillion. The

:05:49. > :05:54.lessons that should have been learnt were clear. Banks have to be

:05:55. > :05:59.regulated well in the public interest and the interest of the

:06:00. > :06:02.taxpayer. Madam Deputy Speaker, a laissez faire approach is

:06:03. > :06:06.inappropriate for a sector of the economy as uniquely privileged as

:06:07. > :06:12.banking. Since 2008 British banks have placed themselves a more solid

:06:13. > :06:15.foundation, building reserves, regular stress tests and closer

:06:16. > :06:22.monitoring has been adopted which is quite right. Historically RBS's

:06:23. > :06:26.novel approach to small businesses shows graphically how things can go

:06:27. > :06:32.wrong. Poor management, avarice and hubris are at the top -- at the top

:06:33. > :06:40.of the bank took place and it took the place of prudent management.

:06:41. > :06:48.Using other people's money improperly on the basis of hubris.

:06:49. > :06:51.It was about pushing up the balance sheets through any means necessary

:06:52. > :07:03.and mechanisms need to be in place to stop this happening. Consensus

:07:04. > :07:07.have gone up regarding regulators driving the cash. They have been

:07:08. > :07:11.troubling signs in the election last year that the government may be

:07:12. > :07:16.going a bit cold on the necessary work that needs to be done. The

:07:17. > :07:27.proposals of the Blix commission has largely been ignored. The enquiry

:07:28. > :07:30.into banking culture was scrapped. I loathe the minister is in listening

:07:31. > :07:34.mode and I hope he listens today. There are challenges ahead and we

:07:35. > :07:39.must have mechanisms in place to deal with those challenges. Leaving

:07:40. > :07:42.small businesses without the protection afforded to consumers is

:07:43. > :07:46.to leave them vulnerable and we all know what happens to small

:07:47. > :07:50.businesses when they are left in a vulnerable position. I don't want to

:07:51. > :07:55.harp on about the issue over banking failure, but let's not going into

:07:56. > :07:59.amnesiac mode to save a view brushes. It's absolutely vital that

:08:00. > :08:05.we get the proper processes and mechanisms in place. So when there

:08:06. > :08:09.are disputes it's essential that they can be resolved speedily and

:08:10. > :08:15.effectively and ad hoc dispute mechanisms go only so far. So that

:08:16. > :08:19.is why we have to have not just ad hoc arrangements, we have to have

:08:20. > :08:27.arrangements that are systematic. As a result of previous cases, small

:08:28. > :08:30.businesses were having to rely on expensive and inaccessible court

:08:31. > :08:36.procedures to obtain redress and that really isn't appropriate. But

:08:37. > :08:39.it's not enough as the motion says to establish compensation schemes

:08:40. > :08:45.after the event. They lacked the authority to be able to secure

:08:46. > :08:48.public confidence in themselves. It has to go beyond that. It's much

:08:49. > :08:51.better to have the appropriate procedures in place before the

:08:52. > :08:56.event, before things begin to go wrong. So the motion today, it

:08:57. > :09:03.rightly insist the government follows the advice of the Treasury

:09:04. > :09:05.Select Committee and moves to establishing a dispute resolution

:09:06. > :09:09.mechanism for financial services. I'll bring my comments to a

:09:10. > :09:18.conclusion. It's essential the malpractice we saw at the RBS is not

:09:19. > :09:22.allowed to happen again. Taxpayers have a 73% share in the bank and the

:09:23. > :09:27.Office for Budget Responsibility now believes on Treasury advice I

:09:28. > :09:31.understand that the state may never be sold, not for a considerable

:09:32. > :09:37.period of time. It's absolutely right that we expect banks to treat

:09:38. > :09:40.its customers fairly. The failures at RBS and the treatment of its

:09:41. > :09:46.customers would be unacceptable at any other institution, so there is a

:09:47. > :09:53.wider case to establish wider effective mechanisms, not just that,

:09:54. > :09:58.but to change the structure of our banking system or at least consider

:09:59. > :10:03.it. Now it is pretty clear that RBS isn't going to be sold for the

:10:04. > :10:08.foreseeable future, as I alluded to, so perhaps it's time to conduct a

:10:09. > :10:12.full review of all the options for the RBS future, including whether

:10:13. > :10:16.there are alternatives that could deliver better value for money for

:10:17. > :10:24.business and the economy. But the key issue today is the need to have

:10:25. > :10:34.a robust systematic resolution platform. Thank you. Minister. Mr

:10:35. > :10:38.Simon Kirby. Madam Deputy Speaker, let me start by thanking the

:10:39. > :10:44.honourable member for East Lothian for tabling this debate and to be

:10:45. > :10:50.fair, he's very thoughtful and measured contribution. We certainly

:10:51. > :10:56.at the importance of the issues that have been raised here today and as a

:10:57. > :11:02.former businessman myself, I have a great deal of sympathy for all

:11:03. > :11:08.businesses mentioned today and indeed all other businesses who have

:11:09. > :11:12.been treated unfairly because what we all care about, and this has

:11:13. > :11:16.certainly been shown very clearly in the contributions we've heard here

:11:17. > :11:23.today, are the businesses that form the backbone of our economy. We

:11:24. > :11:30.should never forget businesses are more than just numbers, they are

:11:31. > :11:33.people, families, employees, customers, the local community. This

:11:34. > :11:38.government has a very strong record of supporting companies, large and

:11:39. > :11:45.small, whether that's through our competitive tax regime or investment

:11:46. > :11:49.in skills, research and infrastructure. And clearly an

:11:50. > :11:55.important way in which many businesses are also able to grow and

:11:56. > :12:00.develop is through the access to finance. So what we all need to see

:12:01. > :12:07.is financial services providing lending to our businesses and acting

:12:08. > :12:13.in the strictest accordance with the FCA's rules. And, of course, were

:12:14. > :12:19.ever this isn't the case, any business affected should be

:12:20. > :12:22.compensated where appropriate. There are already in existence a range of

:12:23. > :12:38.avenues. We've heard about some of them earlier. From the financial

:12:39. > :12:41.ombudsman service to other services requesting complaint resolution.

:12:42. > :12:46.It's right that we look at the impact small businesses have with

:12:47. > :12:52.financial services providers to make sure the dealings of the an

:12:53. > :12:58.effective. That is what the FCA is already doing. It launched a

:12:59. > :13:06.discussion paper on SMEs last year and this looks amongst other things

:13:07. > :13:08.at the remit of the SOS in providing fast and expensive re-dress for

:13:09. > :13:15.consumers of our smallest businesses. The FCA is currently

:13:16. > :13:20.analysing responses to this. Madam Deputy Speaker, when the findings of

:13:21. > :13:27.published, we will consider them very closely indeed, and to be

:13:28. > :13:30.clear, if that includes reviewing the support in place for businesses

:13:31. > :13:36.resolving financial disputes, that is something we will look at it. I

:13:37. > :13:39.think it's important for me to reflect on some of the specific

:13:40. > :13:43.comments we've heard here today and they have been quite a few and I

:13:44. > :13:51.would do my very best to cover most of them. The Honourable member for

:13:52. > :13:56.East Lothian asked about reforming insolvency law. He might be pleased

:13:57. > :13:59.to hear that the government keeps insolvency law under regular review

:14:00. > :14:04.and is currently considering responses to its recent review of

:14:05. > :14:11.the corporate insolvency framework. He also mentioned Andrew Bailey. As

:14:12. > :14:17.Andrew Bailey made clear in his letter yesterday to the Honourable

:14:18. > :14:23.member, the FCA is considering the treatment of small and medium-sized

:14:24. > :14:26.enterprises and users of financial services. The FCA has yet to publish

:14:27. > :14:35.the findings from this work and if the findings includes the resolution

:14:36. > :14:41.of financial disputes, we will look at it. You mention RBS. I fully

:14:42. > :14:45.recognise his views about RBS. The global restructuring group and its

:14:46. > :14:50.treatment of small businesses. I share these concerns and I'm keen to

:14:51. > :15:01.discuss with RBS bid detail of the re-dress screen. -- redress scheme

:15:02. > :15:06.that hit has just announced. -- it. The Honourable member for Henley, I

:15:07. > :15:17.think him for his support for alternative dispute resolution. The

:15:18. > :15:25.Honourable member for Delyn raise concerns about the quality of our

:15:26. > :15:32.IHV review. The Treasury committee has recommended that the ADR should

:15:33. > :15:36.learn lessons. They will do so once legal proceedings are at an end. He

:15:37. > :15:44.also mention access to financial ombudsman. The FCA says 97% have

:15:45. > :15:55.access to the SOS from the government believes that the SOS

:15:56. > :16:02.He also asked about the Finance guarantee scheme, an important

:16:03. > :16:07.question. At the instigation of the British businessman, RBS conducted

:16:08. > :16:14.an in-depth internal investigation of its administration of the EF

:16:15. > :16:23.chief. And they put in place plans to deal with the issue. -- EF G. I

:16:24. > :16:26.went give way, perhaps we may speak afterwards. I have an awful lot of

:16:27. > :16:34.things I need to address. The honourable member for Wycombe asked

:16:35. > :16:39.about incentives to discourage misconduct. I can tell him that the

:16:40. > :16:43.government and regulators have acted to embed personal responsibility in

:16:44. > :16:48.banking through the senior managers and certification regime. He also

:16:49. > :17:01.stated that small businesses should be treated as consumers. If I may,

:17:02. > :17:04.very quickly? I'm not sure I stated it, I would say to my honourable

:17:05. > :17:11.friend, I asked if the government would consider it the appropriate if

:17:12. > :17:14.I'd requested that. I thank him for that clarification. I apologise to

:17:15. > :17:23.the member opposite for being inconsistent. The partnerships under

:17:24. > :17:33.the regular three walls the consumer credit regime and the SCA is asking

:17:34. > :17:40.how all SMEs are treated as customers of financial services. --

:17:41. > :17:47.F C a. The member for Croke Bridge, Christ in and Bellshill mentioned

:17:48. > :17:54.the RHP scheme. The scheme was not designed to replicate the core

:17:55. > :17:58.system because that system can be lengthy and expensive as members

:17:59. > :18:05.have acknowledged. -- court system. Independent reviewers were put in

:18:06. > :18:09.place to look at individual cases. Another member asked about

:18:10. > :18:17.timeliness of the ombudsman. I agree with him that ombudsman decisions

:18:18. > :18:20.should be quick. I am assured that decisions are faster than court and

:18:21. > :18:28.also free for complainants. However, inevitably complex cases will take

:18:29. > :18:31.some time to resolve. He also asked about disclosure of information. I

:18:32. > :18:36.can say where the on button and considers it appropriate to accept

:18:37. > :18:43.confidential information and edited versions would be disclosed to the

:18:44. > :18:48.other party. I agree that it is right we pay tribute to the work of

:18:49. > :18:54.the member for other Conway in keeping this issue very much on the

:18:55. > :19:01.agenda. The Right Honourable member for North Norfolk asked about

:19:02. > :19:06.whistle-blowers. I understand the FCA have invited the member for East

:19:07. > :19:10.Lothian to discuss it with them and I am sure he would be welcome to

:19:11. > :19:17.join in that meeting. For the government to be clear, they

:19:18. > :19:20.recognise the huge service that whistle-blowers provide and the

:19:21. > :19:27.information they provide. I went give way, I am so sorry. He

:19:28. > :19:29.mentioned RBS and DRG. The government recognises the

:19:30. > :19:36.seriousness of the allegations against RBS. -- geology. They are

:19:37. > :19:40.considering the skills person report and other material. The SCA is

:19:41. > :19:49.discussing what else may be necessary. The honourable lady from

:19:50. > :19:53.Redcar mentioned a constituent of hers, I have a great deal of

:19:54. > :19:58.sympathy with that situation. That her constituent finds himself in.

:19:59. > :20:03.The government is committed to supporting small businesses through

:20:04. > :20:14.the tax system and a regular tree regime -- regulatory. The honourable

:20:15. > :20:22.member for Edinburgh West asked about G R G, a government owned

:20:23. > :20:28.bank, HMG shareholding has managed at arms length from the government

:20:29. > :20:36.on a commercial basis. And they did not have knowledge of G R G's

:20:37. > :20:41.actions. They are not informed of internal business decisions, that is

:20:42. > :20:46.an important point. The member for East Renfrewshire asked about

:20:47. > :20:52.Connaught, I recognise the difficult situation of many Connaught

:20:53. > :20:56.investors. We will look into this particular case and I understand an

:20:57. > :21:04.investigation into the collapse of the fund are ongoing. The honourable

:21:05. > :21:15.mother for Kirkaldy and Cowdenbeath talked about duty of care, I said --

:21:16. > :21:21.I agree that culture is vital. The consumer panel has asked the FCA to

:21:22. > :21:28.look at a duty of care. I am happy to tell the House today that I will

:21:29. > :21:33.write to them to ask for an update on the thinking and put a letter of

:21:34. > :21:39.reply in the library. Madam Speaker, let me thank everybody here who has

:21:40. > :21:43.contributed to the debate and if I may summarise the government

:21:44. > :21:48.position briefly. While we certainly do know many of the issues raised in

:21:49. > :21:53.the motion and raised by honourable members in the course of the debate,

:21:54. > :22:00.we have also heard that our existing avenues to businesses seeking

:22:01. > :22:07.resolution for financial dispute. There is the financial ombudsman

:22:08. > :22:12.service, the SCA has powers to take specific measures to ensure redress

:22:13. > :22:21.and the usual legal process open to businesses. However, the FCA has

:22:22. > :22:25.worked ongoing to look at the relationship between them and

:22:26. > :22:30.service providers and we look forward to seeing the next steps in

:22:31. > :22:36.this work. I can assure the House this afternoon that we will then

:22:37. > :22:45.consider the need for future steps in this area within that context.

:22:46. > :22:50.Briefly Madam Deputy Speaker, I will thank all the members for taking

:22:51. > :22:54.part in the debate. It is a good debate and I feel we have progressed

:22:55. > :22:58.matters. I will take the Minister's reply as saying the door is still

:22:59. > :23:02.open and we will certainly want to come through that door. Can I thank

:23:03. > :23:05.members for taking part and particularly Heather Buchanan and

:23:06. > :23:10.Fiona Sheriff, who are the real brains and hard work and deserve to

:23:11. > :23:14.have their names on the record. Can I finish by saying that the next

:23:15. > :23:23.stage is to have an enquiry that will be conducted jointly by the APG

:23:24. > :23:27.G and the group for dispute resolution and with the support of

:23:28. > :23:33.the Federation of Small Businesses. I do hope the Minister will come

:23:34. > :23:46.along and give evidence at that enquiry. The question is as on the

:23:47. > :24:00.order paper, as many of that opinion say I. On the contrary, no, the ayes

:24:01. > :24:12.have it. We now come to the debate on broadband universal situation.

:24:13. > :24:15.Today is not the first time at the House has discussed broadband and I

:24:16. > :24:20.suspect it went be the last. All members in this House know from

:24:21. > :24:27.their postbag is that there are constituents who have imperfect

:24:28. > :24:33.connections to the Internet that is changing all their lives. And those

:24:34. > :24:35.who suspect they don't have any constituents have imperfect

:24:36. > :24:42.connections are in fact reticent in constituents where the -- in fact

:24:43. > :24:47.living in constituencies where the service is so bad. It is a huge step

:24:48. > :24:51.forward for those constituents, largely but not wholly by any means

:24:52. > :24:55.in urban areas. Swear superfast and ultrafast speeds are possible,

:24:56. > :24:59.shopping is cheaper, government is more accessible and culture is on

:25:00. > :25:03.tap and the NHS can be more efficient. For those wet 10 megabits

:25:04. > :25:10.per second, which is the USO obligation as it stands, that is a

:25:11. > :25:13.distant dream, this USO could be a lifeline thrown to them by this

:25:14. > :25:19.government that will help to make sure they are able to take a full

:25:20. > :25:24.part in the modern world from drone deliveries to drive cars. There is a

:25:25. > :25:34.risk. That is why it -- driver less cars. I hope that through the method

:25:35. > :25:39.of this debate, we sent from this has a message that the universal in

:25:40. > :25:45.USO should mean it is genuinely available to all, either businesses

:25:46. > :25:50.or consumers. Even if that turns out to be via satellite connection but

:25:51. > :25:56.preferably in due course a five G connection. The S in service means

:25:57. > :25:59.the connection keeps pace with the quickening Webb requirements of the

:26:00. > :26:05.modern era. Not just in terms of downloads but uploads and latency.

:26:06. > :26:14.And the oh is an obligation in that it is providing a road map for each

:26:15. > :26:19.premise. I give way to my honourable friend. You mentioned five G, I

:26:20. > :26:25.happen to find myself in a remote West Oxfordshire village recently

:26:26. > :26:28.where I found 62 megabits per second of 4G a viable, 50% faster than my

:26:29. > :26:31.beady infinity at home, will he agree with me that it would be

:26:32. > :26:36.appropriate to have 4G everywhere, not least everywhere in my right

:26:37. > :26:43.honourable friend's constituency of Whitney. He highlights the

:26:44. > :26:50.patchiness of the network with which we have. I know my honourable friend

:26:51. > :26:54.could not be more deserving of that excellent speed but I think we are

:26:55. > :27:00.all in this has equally deserving of those speeds. That in a sense is the

:27:01. > :27:07.point of this debate. None of the positions I have debated, I give way

:27:08. > :27:14.to my honourable friend for Witney first. I am grateful for the hit him

:27:15. > :27:19.to give way. To point out, while I'm glad the honourable friend had a

:27:20. > :27:24.good 4G reception in West Oxfordshire, we suffer from very

:27:25. > :27:31.patchy and in some cases nonexistent broadband coverage. In areas from

:27:32. > :27:37.Stanley in the South to lead well in the North, there is very much need

:27:38. > :27:39.and that is something we should be rolling out, not just bought West

:27:40. > :27:46.Oxfordshire but throughout the country. I absolutely agree. I think

:27:47. > :27:50.across this has, there are calls for exactly that. What I would add is

:27:51. > :27:55.that when it comes to the USO, for me it doesn't matter whether it is a

:27:56. > :28:00.broadband connection in the sense of fibre or 4G or five G, the point is

:28:01. > :28:11.the collectivity that the constituent receives at the end of

:28:12. > :28:13.the day. I understand the House has important focus on the words and

:28:14. > :28:19.consent of minorities but perhaps there might be, should he not

:28:20. > :28:23.acknowledge before concentrating on their woes, the incredible success

:28:24. > :28:27.of the rural broadband roll-out programme which by the end of 20s

:28:28. > :28:33.and team will hit its target of bringing superfast broadband access

:28:34. > :28:34.to 95% of the country. Would be the most successful infrastructure

:28:35. > :28:43.programme that any government has run in many years. I gather it is

:28:44. > :28:46.not quite correct to invite interventions but the name of the

:28:47. > :28:55.Minister responsible for that programme temporarily escapes me. My

:28:56. > :28:59.honourable friend is completely right, this has been an

:29:00. > :29:04.infrastructure problem that has been -- programme that has been delivered

:29:05. > :29:09.in world leading speed and a world leading extent. It is small comfort

:29:10. > :29:13.to the people who have not yet got it. There is no infrastructure

:29:14. > :29:18.projects that this government is involved in that is more important

:29:19. > :29:22.than broadband. As I said, the speed of delivery in some places has been

:29:23. > :29:30.world leading at in some places at has followed far short of the

:29:31. > :29:34.standards are constituents expect. I am grateful to him for giving way

:29:35. > :29:38.and I take on board the point made by my right on about friend for

:29:39. > :29:43.Wantage, the success of the programme has had its own issues. In

:29:44. > :29:46.areas we have good broadband but if you are a kid at school at in one of

:29:47. > :29:50.the surrounding villages and you can't get access and the curriculum

:29:51. > :29:54.is based around usage of the Internet, that creates significant

:29:55. > :29:59.problems for those particular Jourdren. He underlines the

:30:00. > :30:04.ubiquitous importance, whatever area of life we are now talking about

:30:05. > :30:07.where broadband has got to make sure that it is available not only to

:30:08. > :30:12.homes and businesses but to schools and the health service and that. In

:30:13. > :30:17.that sense, the announcement that everywhere will get 10 megabits from

:30:18. > :30:24.2020 is one of the most welcome that I think the government has made.

:30:25. > :30:33.It is met with hollow laughter from those who have nothing and sceptical

:30:34. > :30:43.excitement from those who think ten may allow them to use the iPlayer. I

:30:44. > :30:50.would like to take this opportunity to invite my honourable friend for

:30:51. > :30:56.Wantage to visit Wycombe, where he is very welcome to address my

:30:57. > :31:03.constituents, particularly in one area where they will find they will

:31:04. > :31:12.be grateful if they had 4G, never mind fixed broadband. He is right.

:31:13. > :31:15.I'm sure... May I accept that invitation. I will come to the

:31:16. > :31:25.honourable gentleman's constituency and talk about the success of

:31:26. > :31:33.broadband and the perils of Brexit! I'm delighted in manner of, not sure

:31:34. > :31:39.what it is in manner of, but I would pass on that message. Oh, for

:31:40. > :31:46.heaven's sake! I'm grateful for my honourable friend giving way. Does

:31:47. > :31:51.he agree there are a number of innovative firms who are rolling out

:31:52. > :31:56.wireless technology that is allowing some communities to band together

:31:57. > :32:06.and fill the gaps where the current programme has not reached? I agree,

:32:07. > :32:16.I will come on to this, it is the ability to take on those solutions

:32:17. > :32:25.that the US O has to enable, otherwise it will not fulfil the

:32:26. > :32:31.ambitions. In any constituency, with the less well funded police force

:32:32. > :32:40.and a rural network and it is in fact broadband that is the single

:32:41. > :32:46.biggest issue in my own postbag. My connection figures are still 6%

:32:47. > :32:52.below the national average. That is why all of Lincolnshire's MPs know

:32:53. > :32:59.from their constituents how important this issue is, even though

:33:00. > :33:05.our own county council has delivered its projects ahead of schedule and

:33:06. > :33:10.under budget. So this is an opportunity to narrow the gap

:33:11. > :33:14.between the urban and rural economy and reform services... A pleasure.

:33:15. > :33:25.Would the honourable gentleman agree that it is a disgrace that Which has

:33:26. > :33:37.found Scots only have access to 4G signal 54% of the time. Wherever we

:33:38. > :33:41.have not, 4G has not been delivered to the extent operators claim, we

:33:42. > :33:45.have a problem. The honourable lady is right I think to point out in the

:33:46. > :33:49.particularly rural areas to which she referred that it is where it

:33:50. > :33:52.could make the most difference to have this kind of service available

:33:53. > :33:58.N that sense, we are are clearly not doing as well as our constudents

:33:59. > :34:04.would -- constituents would demand. It is not just rural Scotland that

:34:05. > :34:15.is suffering, most of my constituency has only a 2G signal.

:34:16. > :34:24.We don't even have 3-G and offcome have an app that will feed data to

:34:25. > :34:29.Ofcom and I would encourage anybody who suffers from poor signals to do

:34:30. > :34:36.that, so Ofcom has information on some of the appalling quality of

:34:37. > :34:44.service that people are getting. I will come on to the importance of

:34:45. > :34:50.data in a moment as well. Ofcom has not yet defined either the UDS or

:34:51. > :34:54.the o' bit for the US O. We must acknowledge there will be areas

:34:55. > :35:00.where it is not economical to connect just as we do with water, or

:35:01. > :35:14.with electricity. But that underlines the importance of a US O

:35:15. > :35:26.that is technology neutral and has a fibre spine. By the time that 5G

:35:27. > :35:34.connection is around, the US O must have risen with digital inflation.

:35:35. > :35:39.Ten megabits a second is not good enough in perpetuity. Ofcom should

:35:40. > :35:46.make recommendation each year to see the US O rise and the Government

:35:47. > :35:49.might occasionally make a point of surpassing the recommendations, has

:35:50. > :35:56.it has with the Low Pay Commission. Assuming this US O is like those in

:35:57. > :36:06.other industries that allocate a reasonable budget per connection, it

:36:07. > :36:11.is vital that communities can pool their funding to attract private

:36:12. > :36:21.companies such as those that she mentioned to take innovative parts

:36:22. > :36:26.and it creates a voucher scheme that the minister referred to. The that

:36:27. > :36:30.would be, that is an avenue that is certainly important to explore. So

:36:31. > :36:34.that communities can club together. Rather than be left with individual

:36:35. > :36:42.spending for themselves. Connecting the final few per cent of the UK

:36:43. > :36:48.will require a host of diverse of solution from satellite broadband to

:36:49. > :36:52.full fibre. One size will not fit all, however marvellous the

:36:53. > :36:57.individual companies are. A single company may not necessarily be the

:36:58. > :37:04.right approach to provide a backstop for a universal service on dpags

:37:05. > :37:09.Gages. -- obligation. While many will express views on BT, even that

:37:10. > :37:13.one company will not be providing every part of the solution. I'm

:37:14. > :37:20.grateful to my honourable friend for giving way. He mentions the one big

:37:21. > :37:26.family that is BT. In my constituency there are excellent

:37:27. > :37:32.companies that provide data solutions across the entirety of

:37:33. > :37:37.West Oxfordshire and London and I wonder whether he agrees there may

:37:38. > :37:46.be ways companies can be involved in provision of 100% broadband

:37:47. > :37:51.solution? Yes. Government indications have BP in the hardest

:37:52. > :37:57.areas to reach connections will be provided on request, rather than by

:37:58. > :38:02.default on a pragmatic economic response and communities should be

:38:03. > :38:07.incentivised to go further. I would caveat this approach that we should

:38:08. > :38:13.allow this to be demand-led and say the US O should be extended tulle

:38:14. > :38:17.major roads, not simply to motorways, to railway lines and

:38:18. > :38:21.stations as soon as possible and the department of tripts working on this

:38:22. > :38:29.-- transport of is working on this. But build being it into the US O

:38:30. > :38:36.would be progress. I am grateful. I tried in the responsibilities I

:38:37. > :38:40.spent on the HS2 committee to insist the line should have broadband

:38:41. > :38:45.provision so the communities affected should have access to that.

:38:46. > :38:51.I think we should have every development over 20 houses, we

:38:52. > :38:59.should insist the developer er puts in a superer fast scheme. Yes, the

:39:00. > :39:05.idea that we are not fibring up every new housing development by

:39:06. > :39:09.defaults short sighted. We know good broadband connections add value to

:39:10. > :39:14.the houses that they are connected to. There is virtue on both sides.

:39:15. > :39:20.But in that sense, like my honourable friend, I would go

:39:21. > :39:25.further than Lord Adonis's natural infrastructure committee did and say

:39:26. > :39:29.we should look more, be more creative in how we identify where

:39:30. > :39:36.the areas we should build stuff to by default should be. Crucial to

:39:37. > :39:41.this however is the issue of data. There is a real risk of

:39:42. > :39:45.Cherry-picking if we were simply publish a bulk set of every

:39:46. > :39:50.connection and how fast it is. Because that might provoke an

:39:51. > :40:03.anticompetitive behaviour that none of us would like to see. But public

:40:04. > :40:08.casing will -- publication will provide something to allow

:40:09. > :40:13.purchasers of a house to see what speed they might get, but it will

:40:14. > :40:18.also I hope allow communities to pool their own data so that they can

:40:19. > :40:24.identify whether they should be going out to other companies to try

:40:25. > :40:29.and attract investment, or whether they might be able to wait a little

:40:30. > :40:36.while, because they know a solution is coming. I give way again. I'm

:40:37. > :40:42.grateful for my honourable friend giving way. Does he agree that

:40:43. > :40:47.actual experience provides free software that can be down loaded on

:40:48. > :40:52.to people's computers at home that again feeds into Ofcom and gives

:40:53. > :41:01.real time data and again I'm trying to encourage those communities in my

:41:02. > :41:07.constituency who don't have access to megabits a second to use that

:41:08. > :41:10.software so we have greater and more effective data on this. My

:41:11. > :41:16.honourable friend is right and experience who have worked with

:41:17. > :41:21.Ofcom themselves the provide an invaluable and often free service

:41:22. > :41:25.that all our constituents could benefit from and that data allows

:41:26. > :41:32.communities to join themselves together to work out whether they

:41:33. > :41:39.are able to go to companies and point out they're an attractive

:41:40. > :41:45.place to invest. It is a useful thing. I am grateful, would the

:41:46. > :41:51.honourable gentleman not agree that the issue at the heart of this isn't

:41:52. > :41:55.that Ofcom don't know where the gaps are, it is just that the provision

:41:56. > :41:59.in rural areas is challenging and it is a challenge that people are

:42:00. > :42:05.finding, companies are finding not conducive to take up and what we

:42:06. > :42:11.have is social exclusion as a result. I agree that communities

:42:12. > :42:17.that are not connected are not connected to the modern world, that

:42:18. > :42:21.is why we need to make sure that a universal service obligation is

:42:22. > :42:27.genuinely universal. But I would add that the idea that those communities

:42:28. > :42:35.are not, that data will not help those communities is not one that I

:42:36. > :42:40.agree with. The more data we have the more we can go to companies and

:42:41. > :42:48.ask what they can do. It is a two-way street. In the end, it will

:42:49. > :42:52.be communities themselves I believe that drive the universal service

:42:53. > :43:01.obligation. As BT and others have pushed the roll out of existing

:43:02. > :43:08.broadband further and faster than predicted, the howls of protest from

:43:09. > :43:13.those left behind have grown louder and without US O the digital divide

:43:14. > :43:19.will become too big to bridge. But with it it will be the foundation of

:43:20. > :43:23.a truly digital nation and enabling that is enabling a new industrial

:43:24. > :43:29.revolution that is a prize we would all, whatever our party, agree is

:43:30. > :43:35.one that is worth fighting for. I hope this debate will enable the

:43:36. > :43:40.minister and others in the industry to gain a wider perspective of what

:43:41. > :43:44.the views of this House is so we can build the best possible universal

:43:45. > :43:49.service obligation for all of our constituents and with that I commend

:43:50. > :43:55.this motion to the House. The question is that the House has

:43:56. > :44:03.considered the broadband universal service obligation. Mr Ian Lucas.

:44:04. > :44:09.Thank you. Can I congratulate the honourable gentleman on securing

:44:10. > :44:14.this debate and I welcome the opportunity to discuss this and

:44:15. > :44:20.welcome in particular the conversion of the party opposite, after a very

:44:21. > :44:27.long time, seven years on so, to support a policy of universal

:44:28. > :44:30.broadband provision. Access to broadband is absolutely crucial in

:44:31. > :44:36.society today. It has been crucial for the last seven years. Thises

:44:37. > :44:40.true not just for business -- this is true not is just for businesses,

:44:41. > :44:45.but for individuals and for government it is insisting that

:44:46. > :44:50.citizens have access to services through the medium of broadband. So

:44:51. > :44:57.it is therefore essential that we have a universal service. It is

:44:58. > :45:02.extraordinary that that concept, which the honourable gentleman for

:45:03. > :45:09.Boston and Skegness has talked about for the last 20 minutes or so, was

:45:10. > :45:16.rejected by the party opposite. The concept of universality is crucial.

:45:17. > :45:20.And it was rejected by the coalition Government in 2010, because for in

:45:21. > :45:27.the 2010 general election the Labour Party had a policy of introducing a

:45:28. > :45:34.universal broadband provision at the speed of 2 megabits by 2012. When

:45:35. > :45:44.the coalition came into power, it insisted on a policy and I remember

:45:45. > :45:49.the member for Wantage using, I can remember the words, I have heard so

:45:50. > :45:50.it many times the, they were going to deliver the best superfast

:45:51. > :46:09.broadband in Europe by 2015. I watch MPs complaining about lack

:46:10. > :46:15.of broadband provision. The reason they are complaining is because we

:46:16. > :46:18.all know from our constituents and individuals and for consumers that

:46:19. > :46:27.that provision is not being delivered to our constituents. So

:46:28. > :46:32.the result has been disastrous. Especially for communities away from

:46:33. > :46:42.the south-east of England and away from the richest parts of the UK. I

:46:43. > :46:46.will give way to both. I will give way to the honourable gentleman

:46:47. > :46:52.first. I completely agree with him in the point he is making in terms

:46:53. > :46:56.of universality. Can I draw attention to an award-winning

:46:57. > :47:00.business in my constituency which has won a range of accolades and has

:47:01. > :47:06.a five star rating on trip advisor but the only negative comments are

:47:07. > :47:11.about that broadband provision, so it has an impact on business. He

:47:12. > :47:15.makes an excellent point, one that has been made to me and other

:47:16. > :47:20.members of the House. Particularly in areas of great tourism

:47:21. > :47:27.businesses. Broadband provision is important for those kind of

:47:28. > :47:30.businesses nowadays. It goes to an axis of worldwide market. They have

:47:31. > :47:37.to be able to provide those services. I am grateful to him for

:47:38. > :47:43.giving way and he makes a powerful case. He will know that Wales and my

:47:44. > :47:49.constituency has some of the most rural communities in the UK. Despite

:47:50. > :47:56.superfast Roger, we're still no higher than England in terms of

:47:57. > :48:03.take-up. Should the government underwrite the additional ?20

:48:04. > :48:06.million needed to get the job done? It is essential that we put an

:48:07. > :48:10.infrastructure in place that will deliver to the whole of the United

:48:11. > :48:19.Kingdom. That is the thrust of my speech. I represent Wrexham and we

:48:20. > :48:25.have heard reference already to rural communities that have no

:48:26. > :48:30.access to broadband, I have an exporting constituency which has

:48:31. > :48:34.many world leading businesses. Many modern technology parks around it.

:48:35. > :48:39.Many of those businesses have been saying to me that over the past few

:48:40. > :48:42.years, they have not been able to access the type of broadband

:48:43. > :48:51.services that are essential for a modern business to compete. I am

:48:52. > :48:58.very grateful for him giving way but the superfast Camry Project is a

:48:59. > :49:05.project led by the Labour run Welsh government in Cardiff. Therefore, if

:49:06. > :49:10.those businesses are struggling, I suggest that he speaks to the Welsh

:49:11. > :49:20.government in Cardiff that is rolling out that programme. I regret

:49:21. > :49:24.the honourable lady never misses an opportunity to be partisan in what

:49:25. > :49:29.she says. What she should know and if she did understand and knew about

:49:30. > :49:34.this subject, she would know the infrastructure and the basis on

:49:35. > :49:37.which broadband services are delivered are actually manufactured

:49:38. > :49:43.and constructed by the UK Government. It has been their

:49:44. > :49:51.responsibility to deliver the policy of spreading broadband across the

:49:52. > :49:59.UK. It demeans the party opposite to seek records to petty political

:50:00. > :50:06.point scoring. That is what I fully expect from her. It is an important

:50:07. > :50:09.subject, I believe in the United Kingdom and I believe in the whole

:50:10. > :50:13.of the United Kingdom in supporting areas across the country. So that we

:50:14. > :50:19.don't just support the richest areas of the UK. Which is really the

:50:20. > :50:25.policy of the party opposite. That is why, when everybody looks at the

:50:26. > :50:29.figures through from we have a situation where the richest parts of

:50:30. > :50:34.the country have the highest level of provision of broadband services.

:50:35. > :50:42.This is something that acts against the interests of the nations and

:50:43. > :50:45.regions of the UK. It is the role of government and the UK Government in

:50:46. > :50:51.particular to correct the deficiencies of the market. I'm

:50:52. > :50:55.afraid that since 2010, the Conservative government has failed

:50:56. > :51:04.to do that, that is why we have heard so many complaints from MPs

:51:05. > :51:09.since 2010 about the weakness of broadband provision and broadband

:51:10. > :51:16.services. I accept that there has been progress. Demand has not stood

:51:17. > :51:28.still since 2010, I know the honourable gentleman from Wantage

:51:29. > :51:36.the right honourable gentleman. One always secures rewards. Labour's

:51:37. > :51:40.commitment to two megabits would have established the universal

:51:41. > :51:42.provision so the whole of the United Kingdom would benefit from the

:51:43. > :51:47.expansion of broadband services. What has happened is that the

:51:48. > :51:52.richest areas have benefited most. We always accepted that two megabits

:51:53. > :51:57.was going to be a starting point. This would not have been enough but

:51:58. > :52:00.the important issue was the commitment to universal service, it

:52:01. > :52:08.was jettisoning that principle that was disastrous. It is about

:52:09. > :52:12.appreciating the central nature of broadband in today's economy and

:52:13. > :52:18.society. It accelerated still further, the regional imbalances in

:52:19. > :52:27.the UK which means that this country is the most marked in regional

:52:28. > :52:35.difference in income of all those who do countries. The UK Government

:52:36. > :52:40.must act to make sure we have a superfast broadband service. I

:52:41. > :52:46.welcome the conversion to a universal service. Isn't it a shame

:52:47. > :52:50.that it didn't happen in 2010 and that commitment to universal service

:52:51. > :52:59.had not been in place for the last six years. BT has achieved much in

:53:00. > :53:08.the provision of broadband. It has extended its provision 2010. But of

:53:09. > :53:13.course we essentially have a monopoly provision of infrastructure

:53:14. > :53:18.from BT in many areas of the country. And it is my firm view that

:53:19. > :53:25.80 alone doesn't have the capacity to meet the demand required. In many

:53:26. > :53:31.areas of the country it enjoys a monopoly provision. But is not able

:53:32. > :53:36.to meet the demand required. There are delays in consumer provision

:53:37. > :53:44.reminisces on the pre-privatisation era of the 1980s. Many have to wait

:53:45. > :53:48.months for broadband connection when they move House. I will not give way

:53:49. > :53:52.to the honourable lady because she makes cheap political points. In

:53:53. > :53:58.addition, many areas do not have the broadband infrastructure. In

:53:59. > :54:05.Wrexham, until very recently, there was one broadband system. That

:54:06. > :54:10.system has been unable to meet the demand that is made from local

:54:11. > :54:13.businesses and local individuals. Government and the UK Government,

:54:14. > :54:17.which has been responsible for devising this system, should have

:54:18. > :54:21.put in place the government system that either created the necessary

:54:22. > :54:27.infrastructure through an Offaly provider or alternatively, created a

:54:28. > :54:32.competitive market where providers competed to build infrastructure.

:54:33. > :54:37.Its failure is that since 2010, this government has done neither. I am

:54:38. > :54:41.very pleased to say that in Wrexham, in the last two months, virgin media

:54:42. > :54:46.have begun to build their own infrastructure system, the first in

:54:47. > :54:50.North Wales as part of the project lightning programme. I want to thank

:54:51. > :54:56.them for responding to the pressure I have put them under consistently

:54:57. > :55:02.to introduce that system. But if we're going to have a universal

:55:03. > :55:04.system right across the UK, it is incumbent on government and

:55:05. > :55:10.regulators to create the system necessary right across the UK. That

:55:11. > :55:15.they have not done so already is a failure on the part of government

:55:16. > :55:23.and regulators. I will give way to the honourable gentleman. Right

:55:24. > :55:27.honourable gentleman. I just wanted to improve the quality of the debate

:55:28. > :55:30.by bringing a couple of facts to bear. The honourable member is

:55:31. > :55:36.making a highly politicised and partisan speech. It is worth the

:55:37. > :55:41.House knowing that in Wrexham, a town that I know well, 95% of

:55:42. > :55:48.premises have access to superfast broadband and by next summer, it

:55:49. > :55:52.will be 98%. If everyone is going to get equal time, can I say up to ten

:55:53. > :55:55.minutes or other people will be squeezed. If you want to make

:55:56. > :56:03.interventions, make them short and sweet, the people giving way,

:56:04. > :56:09.Marseille ten minutes, I know you need the ending. I am very aware,

:56:10. > :56:13.everyday I have people complaining about lack of provision, including

:56:14. > :56:17.businesses. I can give the gentleman and I will send him a list of the

:56:18. > :56:22.complaints I received. I accept the position but this is an important

:56:23. > :56:25.matter. I am not inventing these cases, they are cases that have come

:56:26. > :56:30.to me. BT are under a lot of pressure and I fought hard to get

:56:31. > :56:36.virgin media to come to Wrexham to provide competition for BT which

:56:37. > :56:41.will improve the system. I do think BT should be excluded in the future,

:56:42. > :56:44.the idea of a quick fix where open reaches in the spit from BT is not

:56:45. > :56:51.the simple answer to the solution. One of the problems of the broadband

:56:52. > :56:54.market has been that a lot of the businesses and companies involved in

:56:55. > :56:58.the broadband sector have spent far too much time arguing with each

:56:59. > :57:03.other about provision in the last few years. I want to make a

:57:04. > :57:08.constructive proposal relating to the broadband sector. One that is

:57:09. > :57:14.based upon my experience as a minister. I regret I am not right

:57:15. > :57:18.honourable because I don't have the right connections at the present

:57:19. > :57:23.time. I was a minister and and a Labour government, we had a council

:57:24. > :57:28.and the aerospace growth partnership and then the defence group

:57:29. > :57:32.partnership were put together to get businesses to work together for the

:57:33. > :57:38.benefit of the UK as a whole to devise an effective system of

:57:39. > :57:42.resources in individual sectors working together. I would like to

:57:43. > :57:46.see that in the broadband sector. I would like the government, in

:57:47. > :57:50.pursuit of a universal obligation, to construct a communications

:57:51. > :57:56.counsel to have businesses working with each other and with Ofcom to

:57:57. > :58:02.devise a proper and appropriate approach to pursuing the universal

:58:03. > :58:06.obligation. It is not just a massive challenge for us to provide

:58:07. > :58:10.broadband. It is also a massive opportunity. The scale of the job is

:58:11. > :58:15.that it provides training and skills potential for years to come. This

:58:16. > :58:20.should be a central task for the communications industry. Government

:58:21. > :58:27.should be working to ensure that investment in infrastructure should

:58:28. > :58:37.lead to a parallel upscaling of the workforce across the UK. The council

:58:38. > :58:40.should be tasked with this and take the objective forward. Universal

:58:41. > :58:44.broadband is something that should have been done years ago. I welcome

:58:45. > :58:48.the fact the government has finally reached the conclusion that it

:58:49. > :58:52.should be introduced. It needs to work with industry to look at the

:58:53. > :58:56.best way forward. To work with Ofcom to secure the way forward and make

:58:57. > :59:02.sure the investment that is taken forward is used for the benefit of

:59:03. > :59:06.upscaling our young people and for providing the type of service across

:59:07. > :59:13.the UK that all businesses in today's world need to have. I would

:59:14. > :59:20.just remind people, up to ten minutes, no more. I am grateful for

:59:21. > :59:23.this opportunity to interview to this important debate. I had to make

:59:24. > :59:27.two or three recommendations that I hope will be useful to my right

:59:28. > :59:29.honourable friend the Minister responsible for this area. I don't

:59:30. > :59:34.particular you want to do well on the past but after the previous

:59:35. > :59:39.speech, it is a bubbly worth putting some of the points that have been

:59:40. > :59:44.made in context. In terms of the Labour Party's promised to deliver

:59:45. > :59:48.two megabits by 2012, we don't know whether that would have been

:59:49. > :59:50.fulfilled. It was based on a highly questionable telephone tax which

:59:51. > :59:59.would have seen a revolt from consumers. Winner have coverage at