Browse content similar to 13/05/2012. Check below for episodes and series from the same categories and more!
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Here in the East: The banks whose deals are costing | :01:41. | :01:44. | |
businesses thousands in interest. And the coalition relaunches in | :01:44. | :01:54. | |
:01:54. | :01:54. | ||
Apology for the loss of subtitles for 2004 seconds | :01:54. | :35:18. | |
Essex, but has the Queen's speech Hello and welcome to Sunday | :35:18. | :35:22. | |
Politics in the East, I'm Etholle George. Coming up: | :35:22. | :35:25. | |
The only way was Essex this week. All three party leaders headed for | :35:25. | :35:28. | |
the county in the wake of last week's local elections and before | :35:28. | :35:36. | |
the Queens speech, which aims to help business cut red tape. | :35:36. | :35:39. | |
But first let's meet our guests for this week - George Freeman, the | :35:39. | :35:42. | |
Conservative MP for Mid Norfolk, and Steve Morphew, the the former | :35:42. | :35:44. | |
Labour leader of Norwich City Council and current President of | :35:44. | :35:48. | |
the Norwich Labour Party. Let's begin with a quick word about | :35:48. | :35:51. | |
the day of action by public sector unions in protest at to changes to | :35:51. | :36:01. | |
:36:01. | :36:06. | ||
their pensions? D back this action? Yes, I do. I think if they're going | :36:06. | :36:10. | |
to fight their anything, that is what I would expect them to fight | :36:10. | :36:15. | |
for. What I was pleased to see is those people who were demonstrating | :36:15. | :36:20. | |
saying it wasn't public sector pensions that were the problem, it | :36:20. | :36:25. | |
was private sector. George, I used surprised there has not been more | :36:25. | :36:28. | |
action? If you look at the rest of Europe there has been many more | :36:28. | :36:34. | |
protests. I think the reason is the public do understand across the | :36:34. | :36:40. | |
board that we have inherited a real mess. It is disappointing that | :36:40. | :36:44. | |
Steve and the Labour Party are backing these strikes. A wave of | :36:44. | :36:48. | |
strikes and not what this country needs. We are being as fair as we | :36:48. | :36:55. | |
can about how we pay of these debts. Even the private sector will wonder | :36:55. | :36:58. | |
what the public sector are complaining about. Many in the | :36:58. | :37:04. | |
private sector a way below on pension provision and has -- have | :37:04. | :37:10. | |
pensions nowhere near as generous as the public sector. | :37:10. | :37:13. | |
In the week the Queen's speech has announced a banking reform bill, | :37:13. | :37:15. | |
concern is growing among the business community over interest | :37:15. | :37:17. | |
rate swaps. They are supposed to insulate companies against interest | :37:17. | :37:20. | |
rate hikes, but they also prevent them from getting loans on the | :37:20. | :37:24. | |
current lower rates. Some businesses say they are being | :37:24. | :37:27. | |
crippled by interest payments after being sold a product they say they | :37:27. | :37:30. | |
didn't need, leaving them hundreds of thousands of pounds worse off. | :37:30. | :37:36. | |
Our business correspondent Richard Bond reports. | :37:36. | :37:39. | |
On the face of it everything's fine at Colne Valley Golf Club in Essex. | :37:39. | :37:42. | |
The greens are lovely and, well, green - and membership is holding | :37:42. | :37:52. | |
:37:52. | :37:54. | ||
up well. But a dark cloud looms overhead. It's made it very | :37:54. | :37:58. | |
difficult to relax any time. You're always thinking I must get some | :37:58. | :38:03. | |
more money to pay the bank. dark cloud hanging over the club is | :38:03. | :38:05. | |
an interest rate swap. A complicated financial product | :38:05. | :38:09. | |
intended to provide protection from rising interest rates. But in this | :38:09. | :38:14. | |
case, the cause of much unhappiness. Five years ago, Jennifer Smith and | :38:14. | :38:17. | |
her son Tom borrowed more than a million pounds from Barclays | :38:17. | :38:20. | |
Capital to buy the freehold of the club. But though interest rates | :38:20. | :38:23. | |
have fallen to close to zero, the Smiths are stuck paying interest at | :38:23. | :38:32. | |
six per cent. It is costing us a fortune. �4,000 a month. It has not | :38:32. | :38:38. | |
helped us at all, we are not able to invest in people, in machinery. | :38:38. | :38:42. | |
It is made it very difficult for us. Barclays said the Smiths had | :38:42. | :38:44. | |
complained to the Financial Ombudsman, who had found in favour | :38:44. | :38:47. | |
of Barclays. The bank was satisfied it had provided enough information | :38:47. | :38:57. | |
to the Smiths so they could make an informed commercial decision. As | :38:57. | :39:00. | |
many as 2000 small firms are thought to have bought interest | :39:00. | :39:03. | |
swaps in this region. Had they risen and not fallen, maybe the | :39:03. | :39:07. | |
issue would not have been in the headlines. But there is a growing | :39:07. | :39:13. | |
view that these products were Miss salt. James Ducker used to sell | :39:13. | :39:19. | |
swaps for high street banks. He became so disillusioned he left to | :39:19. | :39:22. | |
set up a business advising small firms about swaps. He runs it from | :39:22. | :39:29. | |
his home at Willingham. I do think there was widespread mis-selling | :39:29. | :39:33. | |
across the country from all the banks to all sectors of businesses. | :39:33. | :39:38. | |
It was a massive scale. In what way with Amis sold? A essentially it | :39:38. | :39:45. | |
comes down to a lack of explanation of risk. If they go down, how much | :39:45. | :39:49. | |
do you pay? And also the breakage cost of leaving these things. | :39:49. | :39:54. | |
Meetings are been held with MPs to raise the issue. Evidence is also | :39:54. | :40:01. | |
being gathered from firms who have complained. But Mr shied of coming | :40:01. | :40:06. | |
for the -- most are shy of coming forward. It's almost as if they are | :40:06. | :40:09. | |
ashamed of having done something wrong. They don't want to be | :40:09. | :40:13. | |
connected with it in any way. there are many more cases out | :40:14. | :40:19. | |
there? We are aware of some are run into hundreds of thousands of | :40:19. | :40:23. | |
pounds. The banks say swaps can in certain circumstances be good for | :40:23. | :40:26. | |
their clients. In the case of Colne Valley, Barclays says it is | :40:26. | :40:29. | |
continuing to work very closely with the Smiths. Many other firms | :40:29. | :40:32. | |
are locked in talks with their banks to get out of what's turned | :40:32. | :40:37. | |
out to be a financial nightmare. Well, joining us is Paul Adcock, | :40:37. | :40:40. | |
who runs Adcock's Electrical, a family store in Watton, in Norfolk, | :40:40. | :40:45. | |
which has suffered exactly the same difficulties. Mr Adcock, tell us in | :40:45. | :40:55. | |
general terms about how people like you have been affected? It's really | :40:55. | :40:58. | |
been extremely difficult. These things were sold on the basis they | :40:58. | :41:07. | |
would offer us protection. The business, all businesses, would | :41:07. | :41:14. | |
have invested a lot. In our case, having agreed the loan, our | :41:14. | :41:17. | |
business manager then approached us and informed us that the bases they | :41:17. | :41:20. | |
predicted the interest rate would rise, because we had taken the | :41:21. | :41:24. | |
Sloan, suggested we should consider some sort of interest-rate | :41:24. | :41:28. | |
protection. That seems to be generally the pattern that is used. | :41:28. | :41:35. | |
In our case, we won't necessarily that concerned about it at the time. | :41:35. | :41:44. | |
We are plant for that outgoing amount. With due respect, what is | :41:44. | :41:48. | |
the difference between your situation and her family was taken | :41:48. | :41:52. | |
at a fixed rate mortgage, gambling, in effect, that interest rates | :41:52. | :41:55. | |
would change in a different direction? The difference is the | :41:55. | :41:58. | |
you know where you off with a mortgage and you have agreed to | :41:58. | :42:03. | |
have accepted that level of payment. The difference with the project | :42:03. | :42:11. | |
that we ended up with was it was sold on the basis that it protects | :42:11. | :42:16. | |
you against rising interest rates. There was very little mention of | :42:16. | :42:20. | |
what would happen when interest rates went down. Kenya express what | :42:20. | :42:25. | |
do you think of these products? Probably not on television. | :42:25. | :42:29. | |
Effectively, we have been sold a timebomb. At the time, it was sold | :42:29. | :42:39. | |
:42:39. | :42:39. | ||
on the basis that there would be little cost attached and it wasn't | :42:39. | :42:45. | |
until later that the hidden costs have come to light. George, what do | :42:45. | :42:54. | |
you think about these? Well, I think this is a real problem. I am | :42:54. | :42:58. | |
working with a group of people in Parliament who are raising this and | :42:58. | :43:05. | |
we want the FSA to looking to it. In every case, Miss selling is a | :43:05. | :43:10. | |
serious accusation. But in general terms? I think the problem is this. | :43:10. | :43:16. | |
The banks over the last few years have become far too focused on the | :43:16. | :43:20. | |
billion dollar business, they have neglected and local high-street | :43:20. | :43:24. | |
businesses. That is a symptom of what is going on. We see it in | :43:24. | :43:27. | |
local branches closing. If we're going to support local businesses | :43:28. | :43:32. | |
growing, we need banks where that is their core business. Banks have | :43:32. | :43:36. | |
got relationship managers who are good people doing their best, but | :43:36. | :43:42. | |
the culture of banks is becoming too big and remote. Steve, isn't it | :43:42. | :43:44. | |
up to businesses to be more or where of projects that they are | :43:44. | :43:49. | |
being sold? Is in not their responsibility? There is certainly | :43:49. | :43:53. | |
a responsibility but the banks are supposed to be there to grow their | :43:53. | :43:57. | |
business. And if they are compensating -- concentrating on | :43:57. | :44:04. | |
making profits of dodgy deals, then they ought to be an investigation. | :44:05. | :44:08. | |
If businesses cannot rely on bankers, then the trust | :44:08. | :44:11. | |
relationship, which is essential that any sort of successful | :44:11. | :44:15. | |
business, just disappears. George, we heard about the banking reform | :44:15. | :44:19. | |
bills separating the retail arm with the domestic calm in the | :44:19. | :44:23. | |
Queen's Speech. Will that help? that is important. Investment | :44:24. | :44:28. | |
Banking, which is the derivative trading and investment products | :44:28. | :44:33. | |
business, and high-street banking have been emerged -- merged in | :44:33. | :44:39. | |
these banks. So we want barracks whose heartbeat is back on the High | :44:39. | :44:43. | |
Street. In America, they have 20,000 banks. We have five or six. | :44:43. | :44:47. | |
This reform bill begins the process of separating these banks. I been | :44:47. | :44:52. | |
we may well have to go further. Paul Adcock, what would you like to | :44:52. | :45:00. | |
see happen now? I want to understand the FAC -- the F as a | :45:00. | :45:06. | |
really getting their teeth into it. Lots More Business as I felt brave | :45:06. | :45:14. | |
enough to come forward now that it is in the media. -- many more | :45:14. | :45:23. | |
businesses. There are a growing number of people like ourselves, so | :45:23. | :45:27. | |
there is not a voice and in meeting has been organised for affected | :45:27. | :45:36. | |
people in Oxford next weekend. So the profile has been raised | :45:36. | :45:39. | |
significantly and the legal backing for the claims has increased as | :45:39. | :45:45. | |
well. Thank you for joining us. Following last week's devastating | :45:45. | :45:48. | |
result at the polls, where should the Prime Minister and his Deputy | :45:48. | :45:51. | |
pitch up to renew their vows, but Essex? Labour's leader also got in | :45:51. | :45:55. | |
on the act. All this in preparation for the highpoint of the week, the | :45:55. | :45:58. | |
Queen's speech, when David Cameron said he would keep his focus on the | :45:58. | :46:02. | |
economy. But has the government really done enough to silence its | :46:02. | :46:08. | |
critics? Here's Andrew Sinclair. This was the week that the | :46:08. | :46:11. | |
Government reconfirmed that the economy is still the most important | :46:11. | :46:14. | |
thing. David Cameron and Nick Clegg chose Britain's last tractor | :46:14. | :46:24. | |
:46:24. | :46:25. | ||
factory in Basildon to renew their coalition vows. I'm afraid we | :46:25. | :46:29. | |
cannot let up on the difficult decisions we made to cut public | :46:29. | :46:33. | |
spending and get our deficit and debt under control. I know it's | :46:33. | :46:37. | |
hard, I know it's difficult, but when you have a debt problem, the | :46:37. | :46:42. | |
one thing you mustn't do is keep adding endlessly to that debt. | :46:42. | :46:45. | |
then, 24 hours later, the pomp of the state opening of parliament - | :46:45. | :46:48. | |
there are 15 new bills but by common consent the most important | :46:48. | :46:53. | |
are the ones that reduce the burdens on business: cutting red | :46:53. | :46:56. | |
tape, less use of employment tribunals and making it easier to | :46:56. | :47:06. | |
:47:06. | :47:10. | ||
get investment. The most important priority is getting the economy | :47:10. | :47:14. | |
moving. Dealing with the deficit, creating jobs and creating | :47:14. | :47:20. | |
prosperity. So helping businesses to hire people, making it easier | :47:20. | :47:25. | |
for people you to hire people is positive for the economy and good | :47:25. | :47:29. | |
for people who are unemployed and searching for jobs. On Friday, the | :47:29. | :47:32. | |
the man who is partly responsible for abolishing red tape was | :47:32. | :47:35. | |
speaking to business leaders in Norfolk. Just about everyone in the | :47:35. | :47:42. | |
room complained that bureacracy was holding them back. It doesn't come | :47:42. | :47:46. | |
out in normal human language, does it? You have to employ people of a | :47:46. | :47:50. | |
legal nature to actually understand it. It is about finding what you | :47:50. | :47:55. | |
need to do, which is really quite difficult at times, and then the | :47:55. | :48:01. | |
amount of forms you need to fill in. There is no panacea by just | :48:01. | :48:04. | |
scrapping regulation. We don't suddenly see a great growth in the | :48:04. | :48:10. | |
economy. But the burden of red tape has certainly gone too far, whether | :48:10. | :48:14. | |
it is on employment or any other aspect of running a business. | :48:14. | :48:17. | |
notable things in the Queen's speech: the energy bill, which | :48:17. | :48:19. | |
makes the development of another sizewell more likely. And the | :48:19. | :48:22. | |
groceries bill will give farmers a better deal when selling to | :48:22. | :48:24. | |
supermarkets - but many at westminster were left disappointed | :48:24. | :48:32. | |
by this speech. I would have liked to see more about tackling growth, | :48:32. | :48:37. | |
helping families and lowering taxation, reducing petrol prices. | :48:37. | :48:43. | |
The issues in my constituency that people have come to teach -- talk | :48:43. | :48:48. | |
to me about. Energy bills, water bills, the cost of transport across | :48:48. | :48:53. | |
the East, and petrol as well. the last two years, the Government | :48:53. | :48:56. | |
has kept insisting that fixing the economy is its main priority. That | :48:56. | :49:03. | |
remains the case. Some Tories have said they are still frustrated by | :49:03. | :49:09. | |
the lack of reform. Some blame the Lib Dems, others the slope | :49:09. | :49:12. | |
machinery of Westminster. But they hope that the poll ratings will | :49:12. | :49:20. | |
improve. George, the local election results were pretty disastrous. | :49:20. | :49:25. | |
That performance in Basildon was a show of unity, but there was no new | :49:25. | :49:30. | |
substance to it, was there? disagree. I agree the election | :49:30. | :49:34. | |
results were bad, it was a classic mid-term drubbing from an angry | :49:34. | :49:39. | |
population. We have heard that phrase time and again, I'm not sure | :49:39. | :49:43. | |
where it's come from, but it was more than that, more than an mid- | :49:43. | :49:48. | |
term drubbing. No, I think it was a classic mid-term drubbing, the | :49:49. | :49:52. | |
electorate saying to the government, don't forget that we are in pain | :49:52. | :49:56. | |
and we need due to be on our side and wishing to help those of us out | :49:56. | :50:00. | |
here feeling the pain. I think it is important that Nick Clegg and | :50:00. | :50:03. | |
David Cameron went back and reminded people that its coalition | :50:04. | :50:07. | |
was put together to straighten the economy and deal with the debt | :50:07. | :50:13. | |
crisis we inherited, and to put the economy first. But in your heart of | :50:13. | :50:16. | |
hearts were you disappointed there was nothing new coming from | :50:16. | :50:21. | |
Basildon, from that show? No, not from that speech. The Queen's | :50:21. | :50:25. | |
Speech was the importance speech, and there are some important | :50:26. | :50:28. | |
measures in there. The titles are clunky and don't really tell the | :50:29. | :50:33. | |
full story. The banking reform bill is really important, to separate | :50:34. | :50:37. | |
investment banking from retell. There are some really important | :50:37. | :50:42. | |
stuff in there and business deregulation is really important. | :50:42. | :50:47. | |
Steve, we cannot spend what we don't have, can we? We have to get | :50:47. | :50:52. | |
the deficit down. We do, but we can do that in two ways, either by | :50:52. | :50:56. | |
turning the heating down and freezing to death, or we can invest | :50:56. | :50:59. | |
in installation and keep the place warm and he's the temperature down | :50:59. | :51:03. | |
while we pay for the Investment. What we're doing at the moment is | :51:03. | :51:06. | |
freezing to death rather than looking at how to make this work | :51:06. | :51:11. | |
for the future. Let's talk about specifics, these plans to talk -- | :51:11. | :51:15. | |
to cut red tape, they are stuck in the right direction? I haven't | :51:15. | :51:19. | |
actually had anything of substance yet. I have heard that they will | :51:19. | :51:23. | |
cut red tape on a number of occasions. What I have heard in do | :51:23. | :51:29. | |
know about his around employment tribunals, and I think they are | :51:29. | :51:33. | |
frankly misleading. George, was there enough and the Queen's | :51:33. | :51:37. | |
Speech? I could not disagree more. We haven't seen the built yet. I | :51:37. | :51:47. | |
:51:47. | :51:52. | ||
used to go back man ran up a small business. -- I used to run a small | :51:52. | :51:58. | |
business. What we need is a charter. We know what is happening. In this | :51:58. | :52:03. | |
Queen's Speech, George, was there enough? There was nothing to | :52:03. | :52:08. | |
promote growth, was there? there enough - you can never have | :52:08. | :52:11. | |
enough to promote growth and the Queen's Speech is only a list of | :52:11. | :52:17. | |
Bills. Business deregulation is really important. If you talk to | :52:17. | :52:20. | |
businesses, big businesses will tell you they are getting the | :52:20. | :52:23. | |
message, they know the government is serious on the deficit. You have | :52:23. | :52:31. | |
seen some big announcements recently about investing in big | :52:31. | :52:35. | |
projects. So now we must focus on small businesses, particularly | :52:35. | :52:40. | |
employment legislation. We have to leave it there. | :52:40. | :52:50. | |
:52:50. | :52:51. | ||
Now, it's time for our weekly Could the election of a new | :52:51. | :53:01. | |
President in France affect nuclear plans at Sizewell? It's in the | :53:01. | :53:07. | |
interest to not only power brands but make returns in other countries. | :53:07. | :53:10. | |
That's a no then. Could the misery of travelling by train in East | :53:10. | :53:16. | |
Anglia be alleviated by improvements at Ely junction? | :53:16. | :53:20. | |
Growth is being held back because we don't have the capacity we need. | :53:20. | :53:22. | |
Well, maybe. Will this weeks' strike action over | :53:22. | :53:24. | |
public sector workers' pensions be the last? | :53:24. | :53:28. | |
And why the only way was Essex for not only the coalition, but for Ed | :53:28. | :53:35. | |
Miliband too, who came to thank Harlow for voting Labour. We are | :53:35. | :53:38. | |
determined to get the economy moving and to get the government to | :53:38. | :53:41. | |
stand up for the hard-working people of Harlow. | :53:41. | :53:44. | |
And as for whether all this rain has helped end the drought, well, | :53:44. | :53:51. | |
don't get your hopes up. It will take a summer of wet weather, and | :53:51. | :53:54. | |
preferably in autumn and winter of wet-weather, to get us back to | :53:54. | :54:02. | |
where we need to be. George, I know you are campaigning on the you | :54:02. | :54:08. | |
junction. What is the long-term plan? We are taking a big message | :54:08. | :54:12. | |
to government. If you want to grow the economy, East Anglia can give | :54:12. | :54:17. | |
the sustainable growth, but we can't run a 21st century economy on | :54:17. | :54:27. | |
19th century infrastructure. It's in our interests to enable people | :54:27. | :54:32. | |
living in those areas to live sustainably. Steve, I'm hoping we | :54:32. | :54:36. | |
can end up on a note of harmony. Would you welcome this Investment? | :54:36. | :54:41. | |
Absolutely, and even more between Norwich and London. The economic | :54:41. | :54:45. | |
case is overwhelming. We need to put the investment in. It's no use | :54:45. | :54:49. | |
just talking about cutting spending. There are some things we do have to | :54:49. | :54:56. | |
spend on, and that is infrastructure and growth. | :54:56. | :55:01. | |
That's all for now. You can keep in touch via our website, where you | :55:01. | :55:04. |