:01:41. > :01:44.Here in the East: The banks whose deals are costing
:01:44. > :01:54.businesses thousands in interest. And the coalition relaunches in
:01:54. > :01:54.
:01:54. > :35:18.Apology for the loss of subtitles for 2004 seconds
:35:18. > :35:22.Essex, but has the Queen's speech Hello and welcome to Sunday
:35:22. > :35:25.Politics in the East, I'm Etholle George. Coming up:
:35:25. > :35:28.The only way was Essex this week. All three party leaders headed for
:35:28. > :35:36.the county in the wake of last week's local elections and before
:35:36. > :35:39.the Queens speech, which aims to help business cut red tape.
:35:39. > :35:42.But first let's meet our guests for this week - George Freeman, the
:35:42. > :35:44.Conservative MP for Mid Norfolk, and Steve Morphew, the the former
:35:44. > :35:48.Labour leader of Norwich City Council and current President of
:35:48. > :35:51.the Norwich Labour Party. Let's begin with a quick word about
:35:51. > :36:01.the day of action by public sector unions in protest at to changes to
:36:01. > :36:06.
:36:06. > :36:10.their pensions? D back this action? Yes, I do. I think if they're going
:36:10. > :36:15.to fight their anything, that is what I would expect them to fight
:36:15. > :36:20.for. What I was pleased to see is those people who were demonstrating
:36:20. > :36:25.saying it wasn't public sector pensions that were the problem, it
:36:25. > :36:28.was private sector. George, I used surprised there has not been more
:36:28. > :36:34.action? If you look at the rest of Europe there has been many more
:36:34. > :36:40.protests. I think the reason is the public do understand across the
:36:40. > :36:44.board that we have inherited a real mess. It is disappointing that
:36:44. > :36:48.Steve and the Labour Party are backing these strikes. A wave of
:36:48. > :36:55.strikes and not what this country needs. We are being as fair as we
:36:55. > :36:58.can about how we pay of these debts. Even the private sector will wonder
:36:58. > :37:04.what the public sector are complaining about. Many in the
:37:04. > :37:10.private sector a way below on pension provision and has -- have
:37:10. > :37:13.pensions nowhere near as generous as the public sector.
:37:13. > :37:15.In the week the Queen's speech has announced a banking reform bill,
:37:15. > :37:17.concern is growing among the business community over interest
:37:17. > :37:20.rate swaps. They are supposed to insulate companies against interest
:37:20. > :37:24.rate hikes, but they also prevent them from getting loans on the
:37:24. > :37:27.current lower rates. Some businesses say they are being
:37:27. > :37:30.crippled by interest payments after being sold a product they say they
:37:30. > :37:36.didn't need, leaving them hundreds of thousands of pounds worse off.
:37:36. > :37:39.Our business correspondent Richard Bond reports.
:37:39. > :37:42.On the face of it everything's fine at Colne Valley Golf Club in Essex.
:37:42. > :37:52.The greens are lovely and, well, green - and membership is holding
:37:52. > :37:54.
:37:54. > :37:58.up well. But a dark cloud looms overhead. It's made it very
:37:58. > :38:03.difficult to relax any time. You're always thinking I must get some
:38:03. > :38:05.more money to pay the bank. dark cloud hanging over the club is
:38:05. > :38:09.an interest rate swap. A complicated financial product
:38:09. > :38:14.intended to provide protection from rising interest rates. But in this
:38:14. > :38:17.case, the cause of much unhappiness. Five years ago, Jennifer Smith and
:38:17. > :38:20.her son Tom borrowed more than a million pounds from Barclays
:38:20. > :38:23.Capital to buy the freehold of the club. But though interest rates
:38:23. > :38:32.have fallen to close to zero, the Smiths are stuck paying interest at
:38:32. > :38:38.six per cent. It is costing us a fortune. �4,000 a month. It has not
:38:38. > :38:42.helped us at all, we are not able to invest in people, in machinery.
:38:42. > :38:44.It is made it very difficult for us. Barclays said the Smiths had
:38:44. > :38:47.complained to the Financial Ombudsman, who had found in favour
:38:47. > :38:57.of Barclays. The bank was satisfied it had provided enough information
:38:57. > :39:00.to the Smiths so they could make an informed commercial decision. As
:39:00. > :39:03.many as 2000 small firms are thought to have bought interest
:39:03. > :39:07.swaps in this region. Had they risen and not fallen, maybe the
:39:07. > :39:13.issue would not have been in the headlines. But there is a growing
:39:13. > :39:19.view that these products were Miss salt. James Ducker used to sell
:39:19. > :39:22.swaps for high street banks. He became so disillusioned he left to
:39:22. > :39:29.set up a business advising small firms about swaps. He runs it from
:39:29. > :39:33.his home at Willingham. I do think there was widespread mis-selling
:39:33. > :39:38.across the country from all the banks to all sectors of businesses.
:39:38. > :39:45.It was a massive scale. In what way with Amis sold? A essentially it
:39:45. > :39:49.comes down to a lack of explanation of risk. If they go down, how much
:39:49. > :39:54.do you pay? And also the breakage cost of leaving these things.
:39:54. > :40:01.Meetings are been held with MPs to raise the issue. Evidence is also
:40:01. > :40:06.being gathered from firms who have complained. But Mr shied of coming
:40:06. > :40:09.for the -- most are shy of coming forward. It's almost as if they are
:40:09. > :40:13.ashamed of having done something wrong. They don't want to be
:40:14. > :40:19.connected with it in any way. there are many more cases out
:40:19. > :40:23.there? We are aware of some are run into hundreds of thousands of
:40:23. > :40:26.pounds. The banks say swaps can in certain circumstances be good for
:40:26. > :40:29.their clients. In the case of Colne Valley, Barclays says it is
:40:29. > :40:32.continuing to work very closely with the Smiths. Many other firms
:40:32. > :40:37.are locked in talks with their banks to get out of what's turned
:40:37. > :40:40.out to be a financial nightmare. Well, joining us is Paul Adcock,
:40:40. > :40:45.who runs Adcock's Electrical, a family store in Watton, in Norfolk,
:40:45. > :40:55.which has suffered exactly the same difficulties. Mr Adcock, tell us in
:40:55. > :40:58.general terms about how people like you have been affected? It's really
:40:58. > :41:07.been extremely difficult. These things were sold on the basis they
:41:07. > :41:14.would offer us protection. The business, all businesses, would
:41:14. > :41:17.have invested a lot. In our case, having agreed the loan, our
:41:17. > :41:20.business manager then approached us and informed us that the bases they
:41:21. > :41:24.predicted the interest rate would rise, because we had taken the
:41:24. > :41:28.Sloan, suggested we should consider some sort of interest-rate
:41:28. > :41:35.protection. That seems to be generally the pattern that is used.
:41:35. > :41:44.In our case, we won't necessarily that concerned about it at the time.
:41:44. > :41:48.We are plant for that outgoing amount. With due respect, what is
:41:48. > :41:52.the difference between your situation and her family was taken
:41:52. > :41:55.at a fixed rate mortgage, gambling, in effect, that interest rates
:41:55. > :41:58.would change in a different direction? The difference is the
:41:58. > :42:03.you know where you off with a mortgage and you have agreed to
:42:03. > :42:11.have accepted that level of payment. The difference with the project
:42:11. > :42:16.that we ended up with was it was sold on the basis that it protects
:42:16. > :42:20.you against rising interest rates. There was very little mention of
:42:20. > :42:25.what would happen when interest rates went down. Kenya express what
:42:25. > :42:29.do you think of these products? Probably not on television.
:42:29. > :42:39.Effectively, we have been sold a timebomb. At the time, it was sold
:42:39. > :42:39.
:42:39. > :42:45.on the basis that there would be little cost attached and it wasn't
:42:45. > :42:54.until later that the hidden costs have come to light. George, what do
:42:54. > :42:58.you think about these? Well, I think this is a real problem. I am
:42:58. > :43:05.working with a group of people in Parliament who are raising this and
:43:05. > :43:10.we want the FSA to looking to it. In every case, Miss selling is a
:43:10. > :43:16.serious accusation. But in general terms? I think the problem is this.
:43:16. > :43:20.The banks over the last few years have become far too focused on the
:43:20. > :43:24.billion dollar business, they have neglected and local high-street
:43:24. > :43:27.businesses. That is a symptom of what is going on. We see it in
:43:28. > :43:32.local branches closing. If we're going to support local businesses
:43:32. > :43:36.growing, we need banks where that is their core business. Banks have
:43:36. > :43:42.got relationship managers who are good people doing their best, but
:43:42. > :43:44.the culture of banks is becoming too big and remote. Steve, isn't it
:43:44. > :43:49.up to businesses to be more or where of projects that they are
:43:49. > :43:53.being sold? Is in not their responsibility? There is certainly
:43:53. > :43:57.a responsibility but the banks are supposed to be there to grow their
:43:57. > :44:04.business. And if they are compensating -- concentrating on
:44:05. > :44:08.making profits of dodgy deals, then they ought to be an investigation.
:44:08. > :44:11.If businesses cannot rely on bankers, then the trust
:44:11. > :44:15.relationship, which is essential that any sort of successful
:44:15. > :44:19.business, just disappears. George, we heard about the banking reform
:44:19. > :44:23.bills separating the retail arm with the domestic calm in the
:44:24. > :44:28.Queen's Speech. Will that help? that is important. Investment
:44:28. > :44:33.Banking, which is the derivative trading and investment products
:44:33. > :44:39.business, and high-street banking have been emerged -- merged in
:44:39. > :44:43.these banks. So we want barracks whose heartbeat is back on the High
:44:43. > :44:47.Street. In America, they have 20,000 banks. We have five or six.
:44:47. > :44:52.This reform bill begins the process of separating these banks. I been
:44:52. > :45:00.we may well have to go further. Paul Adcock, what would you like to
:45:00. > :45:06.see happen now? I want to understand the FAC -- the F as a
:45:06. > :45:14.really getting their teeth into it. Lots More Business as I felt brave
:45:14. > :45:23.enough to come forward now that it is in the media. -- many more
:45:23. > :45:27.businesses. There are a growing number of people like ourselves, so
:45:27. > :45:36.there is not a voice and in meeting has been organised for affected
:45:36. > :45:39.people in Oxford next weekend. So the profile has been raised
:45:39. > :45:45.significantly and the legal backing for the claims has increased as
:45:45. > :45:48.well. Thank you for joining us. Following last week's devastating
:45:48. > :45:51.result at the polls, where should the Prime Minister and his Deputy
:45:51. > :45:55.pitch up to renew their vows, but Essex? Labour's leader also got in
:45:55. > :45:58.on the act. All this in preparation for the highpoint of the week, the
:45:58. > :46:02.Queen's speech, when David Cameron said he would keep his focus on the
:46:02. > :46:08.economy. But has the government really done enough to silence its
:46:08. > :46:11.critics? Here's Andrew Sinclair. This was the week that the
:46:11. > :46:14.Government reconfirmed that the economy is still the most important
:46:14. > :46:24.thing. David Cameron and Nick Clegg chose Britain's last tractor
:46:24. > :46:25.
:46:25. > :46:29.factory in Basildon to renew their coalition vows. I'm afraid we
:46:29. > :46:33.cannot let up on the difficult decisions we made to cut public
:46:33. > :46:37.spending and get our deficit and debt under control. I know it's
:46:37. > :46:42.hard, I know it's difficult, but when you have a debt problem, the
:46:42. > :46:45.one thing you mustn't do is keep adding endlessly to that debt.
:46:45. > :46:48.then, 24 hours later, the pomp of the state opening of parliament -
:46:48. > :46:53.there are 15 new bills but by common consent the most important
:46:53. > :46:56.are the ones that reduce the burdens on business: cutting red
:46:56. > :47:06.tape, less use of employment tribunals and making it easier to
:47:06. > :47:10.
:47:10. > :47:14.get investment. The most important priority is getting the economy
:47:14. > :47:20.moving. Dealing with the deficit, creating jobs and creating
:47:20. > :47:25.prosperity. So helping businesses to hire people, making it easier
:47:25. > :47:29.for people you to hire people is positive for the economy and good
:47:29. > :47:32.for people who are unemployed and searching for jobs. On Friday, the
:47:32. > :47:35.the man who is partly responsible for abolishing red tape was
:47:35. > :47:42.speaking to business leaders in Norfolk. Just about everyone in the
:47:42. > :47:46.room complained that bureacracy was holding them back. It doesn't come
:47:46. > :47:50.out in normal human language, does it? You have to employ people of a
:47:50. > :47:55.legal nature to actually understand it. It is about finding what you
:47:55. > :48:01.need to do, which is really quite difficult at times, and then the
:48:01. > :48:04.amount of forms you need to fill in. There is no panacea by just
:48:04. > :48:10.scrapping regulation. We don't suddenly see a great growth in the
:48:10. > :48:14.economy. But the burden of red tape has certainly gone too far, whether
:48:14. > :48:17.it is on employment or any other aspect of running a business.
:48:17. > :48:19.notable things in the Queen's speech: the energy bill, which
:48:19. > :48:22.makes the development of another sizewell more likely. And the
:48:22. > :48:24.groceries bill will give farmers a better deal when selling to
:48:24. > :48:32.supermarkets - but many at westminster were left disappointed
:48:32. > :48:37.by this speech. I would have liked to see more about tackling growth,
:48:37. > :48:43.helping families and lowering taxation, reducing petrol prices.
:48:43. > :48:48.The issues in my constituency that people have come to teach -- talk
:48:48. > :48:53.to me about. Energy bills, water bills, the cost of transport across
:48:53. > :48:56.the East, and petrol as well. the last two years, the Government
:48:56. > :49:03.has kept insisting that fixing the economy is its main priority. That
:49:03. > :49:09.remains the case. Some Tories have said they are still frustrated by
:49:09. > :49:12.the lack of reform. Some blame the Lib Dems, others the slope
:49:12. > :49:20.machinery of Westminster. But they hope that the poll ratings will
:49:20. > :49:25.improve. George, the local election results were pretty disastrous.
:49:25. > :49:30.That performance in Basildon was a show of unity, but there was no new
:49:30. > :49:34.substance to it, was there? disagree. I agree the election
:49:34. > :49:39.results were bad, it was a classic mid-term drubbing from an angry
:49:39. > :49:43.population. We have heard that phrase time and again, I'm not sure
:49:43. > :49:48.where it's come from, but it was more than that, more than an mid-
:49:49. > :49:52.term drubbing. No, I think it was a classic mid-term drubbing, the
:49:52. > :49:56.electorate saying to the government, don't forget that we are in pain
:49:56. > :50:00.and we need due to be on our side and wishing to help those of us out
:50:00. > :50:03.here feeling the pain. I think it is important that Nick Clegg and
:50:04. > :50:07.David Cameron went back and reminded people that its coalition
:50:07. > :50:13.was put together to straighten the economy and deal with the debt
:50:13. > :50:16.crisis we inherited, and to put the economy first. But in your heart of
:50:16. > :50:21.hearts were you disappointed there was nothing new coming from
:50:21. > :50:25.Basildon, from that show? No, not from that speech. The Queen's
:50:26. > :50:28.Speech was the importance speech, and there are some important
:50:29. > :50:33.measures in there. The titles are clunky and don't really tell the
:50:34. > :50:37.full story. The banking reform bill is really important, to separate
:50:37. > :50:42.investment banking from retell. There are some really important
:50:42. > :50:47.stuff in there and business deregulation is really important.
:50:47. > :50:52.Steve, we cannot spend what we don't have, can we? We have to get
:50:52. > :50:56.the deficit down. We do, but we can do that in two ways, either by
:50:56. > :50:59.turning the heating down and freezing to death, or we can invest
:50:59. > :51:03.in installation and keep the place warm and he's the temperature down
:51:03. > :51:06.while we pay for the Investment. What we're doing at the moment is
:51:06. > :51:11.freezing to death rather than looking at how to make this work
:51:11. > :51:15.for the future. Let's talk about specifics, these plans to talk --
:51:15. > :51:19.to cut red tape, they are stuck in the right direction? I haven't
:51:19. > :51:23.actually had anything of substance yet. I have heard that they will
:51:23. > :51:29.cut red tape on a number of occasions. What I have heard in do
:51:29. > :51:33.know about his around employment tribunals, and I think they are
:51:33. > :51:37.frankly misleading. George, was there enough and the Queen's
:51:37. > :51:47.Speech? I could not disagree more. We haven't seen the built yet. I
:51:47. > :51:52.
:51:52. > :51:58.used to go back man ran up a small business. -- I used to run a small
:51:58. > :52:03.business. What we need is a charter. We know what is happening. In this
:52:03. > :52:08.Queen's Speech, George, was there enough? There was nothing to
:52:08. > :52:11.promote growth, was there? there enough - you can never have
:52:11. > :52:17.enough to promote growth and the Queen's Speech is only a list of
:52:17. > :52:20.Bills. Business deregulation is really important. If you talk to
:52:20. > :52:23.businesses, big businesses will tell you they are getting the
:52:23. > :52:31.message, they know the government is serious on the deficit. You have
:52:31. > :52:35.seen some big announcements recently about investing in big
:52:35. > :52:40.projects. So now we must focus on small businesses, particularly
:52:40. > :52:50.employment legislation. We have to leave it there.
:52:50. > :52:51.
:52:51. > :53:01.Now, it's time for our weekly Could the election of a new
:53:01. > :53:07.President in France affect nuclear plans at Sizewell? It's in the
:53:07. > :53:10.interest to not only power brands but make returns in other countries.
:53:10. > :53:16.That's a no then. Could the misery of travelling by train in East
:53:16. > :53:20.Anglia be alleviated by improvements at Ely junction?
:53:20. > :53:22.Growth is being held back because we don't have the capacity we need.
:53:22. > :53:24.Well, maybe. Will this weeks' strike action over
:53:24. > :53:28.public sector workers' pensions be the last?
:53:28. > :53:35.And why the only way was Essex for not only the coalition, but for Ed
:53:35. > :53:38.Miliband too, who came to thank Harlow for voting Labour. We are
:53:38. > :53:41.determined to get the economy moving and to get the government to
:53:41. > :53:44.stand up for the hard-working people of Harlow.
:53:44. > :53:51.And as for whether all this rain has helped end the drought, well,
:53:51. > :53:54.don't get your hopes up. It will take a summer of wet weather, and
:53:54. > :54:02.preferably in autumn and winter of wet-weather, to get us back to
:54:02. > :54:08.where we need to be. George, I know you are campaigning on the you
:54:08. > :54:12.junction. What is the long-term plan? We are taking a big message
:54:12. > :54:17.to government. If you want to grow the economy, East Anglia can give
:54:17. > :54:27.the sustainable growth, but we can't run a 21st century economy on
:54:27. > :54:32.19th century infrastructure. It's in our interests to enable people
:54:32. > :54:36.living in those areas to live sustainably. Steve, I'm hoping we
:54:36. > :54:41.can end up on a note of harmony. Would you welcome this Investment?
:54:41. > :54:45.Absolutely, and even more between Norwich and London. The economic
:54:45. > :54:49.case is overwhelming. We need to put the investment in. It's no use
:54:49. > :54:56.just talking about cutting spending. There are some things we do have to
:54:56. > :55:01.spend on, and that is infrastructure and growth.
:55:01. > :55:04.That's all for now. You can keep in touch via our website, where you