Mobile Phone Signal (Fownhope)

Bill Wiggin Excerpts

Tuesday 6th January 2015 Commons Chamber

[Bill Wiggin (North Herefordshire) (Con)]

Today is the first day of the consumer electronics show in Las Vegas. Fifteen years ago, at the 2000 show, Bill Gates presented an early version of the tablet computer and Nokia presented a device that had an electronic diary and could make phone calls. Today, many colleagues find their tablet an indispensable tool in their parliamentary and constituency work, and we take it for granted that our mobile phones have in-built diary and note functions. We are living in a fast-paced world where technology is constantly developing and making great leaps forward.

I want my constituents in North Herefordshire to be able to benefit from the latest in innovative technology. However, as those in London start looking at 4G and possibly even faster mobile phone connections, my constituents are being left behind. Too many parts of North Herefordshire and other rural areas suffer from patchy or non-existent mobile phone reception. It is indeed telling that while I am holding this Adjournment debate, my hon. Friend the Member for Hereford and South Herefordshire (Jesse Norman) held an earlier debate in Westminster Hall on mobile phone signal and internet connections in Herefordshire. He and I think that more needs to be done to address the problem, particularly in rural areas such as the beautiful county of Herefordshire, which we are both proud to represent.

The Government are now keen to improve the situation and launched the mobile infrastructure project to help tackle not spots. Many will remember that the Prime Minister told a newspaper in an interview last summer that he had to return from his holiday in Cornwall in 2011 and 2013 because of poor signal; he was twice forced to return to London so that he could remain updated on the fall of the Libyan leader Muammar al-Gaddafi and on the Syrian conflict respectively. The Prime Minister at that point restated his desire to tackle not spots across the country. However, although the Prime Minister can return to London to keep updated, my constituents need a better signal where they are. The solution for the residents of North Herefordshire cannot and should not be to go to London.

It was also in the summer of 2014 that I learned that Fownhope, a village in North Herefordshire, had suffered a blow in its quest for improved mobile signal. Fownhope had been selected to have a new mobile phone mast as part of the mobile infrastructure project. Instead of that being good news for the village, it became clear over the summer that the proposed mast for Fownhope was not going to proceed. The mast had already been through pre-planning and the proposal was in the public domain. Not only was that a terrible blow to the prospects of improvements to mobile phone reception in the village, but thanks to prior publicity of the mast there was notable public disappointment for Fownhope residents, whose hopes had been dashed. In July I visited Fownhope and accepted a petition, signed by over 300 villagers, about the decision.

I was initially informed that Arqiva, the company running the project on behalf of the Department for Culture, Media and Sport, had found that some not spot areas that were originally targeted for the project had existing mobile coverage. I later discovered what had happened in the case of Fownhope after asking the Minister a number of written questions. It appears that not spot data are compiled and held by Ofcom, with information provided by the mobile network operators. The planning for the mobile infrastructure project was based on data originally provided in 2010. Since 2010 the operators have made changes to their networks, including consolidating and sharing sites, which had an impact on the locations of not spots. In March 2014 the mobile network operators submitted updated information on where they thought they had coverage, as predicted by desktop planning tools. The information was compiled by Ofcom and fed into Arqiva, which subsequently altered its plans accordingly. The updated information showed that coverage had improved in Fownhope since the inception of the mobile infrastructure project in 2010. That meant that Fownhope was no longer eligible for the project and the proposed phone mast was withdrawn.

In some areas where coverage was thought to be marginal or there was uncertainty about coverage, Department for Culture, Media and Sport officials commissioned on the ground drive testing to assess the level of coverage. On the ground drive testing did not happen at Fownhope. Instead, Ofcom chose to rely on the mobile phone operators’ maps to assess coverage and did not carry out the tests for all 34,000 not spots across the UK containing premises. Before removing Fownhope from the mobile infrastructure project, Arqiva did not assess the reception in Fownhope or visit the village. Instead, it relied on the data provided by the mobile operators to Ofcom.

In early September I met Arqiva representatives, who confirmed the process whereby the mobile network operators send Ofcom their maps, which are overlaid on top of one another to give an exact area where there is no signal. They said that if there is even a hint of a signal from one operator, even a poor signal, in an area previously deemed to be a not spot, that is sufficient under state aid rules for the phone mast to be withdrawn. I do not believe that this process is ideal because people pay the same amount for 2G as a person receiving 3G or even 4G, so there is an inbuilt incentive for phone operators to claim that their coverage is better than it really is. That should change, as my constituents in Fownhope and other areas are being grossly overcharged for a service that is unsatisfactory.

In October I formally met the Secretary of State about the mobile phone signal and the removal of the proposed mast for Fownhope. During the meeting I handed over to my right hon. Friend the petition that I had received about the mast, with more than 300 signatures. As a result of our meeting, he asked Ofcom specifically to go to Fownhope to check the strength of the mobile signal, rather than relying on data maps provided by the phone operators. Although this offer to test the signal did not necessarily mean that Fownhope would get its mast, it reassured me that the decision on whether or not to proceed would be based on accurate data—or at least, I hoped it would—instead of predictions made by the mobile network operators.

A recent report published earlier this year jointly by Which? and OpenSignal based on over 67 million data readings taken from over 39,000 users of the OpenSignal app showed that the coverage for users significantly differs from the coverage maps provided by the mobile companies.

Ofcom did visit Fownhope and came back to me with its results—extraordinarily—yesterday. What a lucky thing we had the debate timetabled for today, or we may never have known what the results were. It is far from clear from the results what Ofcom will decide. It has produced a picture of Herefordshire covered with little red dots and little green dots. The red dots indicate no signal; the green dots show an adequate signal. There is a little patch around Fownhope covered in orange dots. There are large numbers of red dots, the odd green one and huge numbers of orange dots. The report says, I believe, that Ofcom has not decided yet what an orange dot means. It is going away to think about it. But what it means is that people cannot make a mobile phone call from Fownhope, even if they are lucky. However, we will see what Ofcom tells the Minister in due course.

During our meeting with the Secretary of State, he mentioned his plans to introduce national roaming. At present someone from abroad holidaying in Herefordshire whose phone is set to roam will get a better mobile signal than a Herefordian. I agreed with the Secretary of State that this was not fair or satisfactory.

On 5 November the Government launched a consultation on improving mobile phone reception. I urged my constituents to respond to it. Many of them took part in it and many more told me about the problems they were having with mobile phone reception. One constituent told me that they have to go upstairs in their house and lean out of the window to get a decent signal, and another said that he can make mobile phone calls within his home only from one small corner of his kitchen.

[Nigel Adams (Selby and Ainsty) (Con)]

I place on the record my entry in the Register of Members’ Financial Interests as a director and shareholder of two telecoms companies. I, too, have to lean out of my window to get a mobile signal at home. Does my hon. Friend agree that the roll-out of certain technologies with wi-fi calling means that the rolling out of the mobile phone signal in bad areas goes hand in hand with the roll-out of broadband signal across the country?

[Bill Wiggin]

My hon. Friend is absolutely right. He cannot begin to imagine my delight when our new coalition Government chose Herefordshire to be one of the four pilot schemes for the roll-out of superfast broadband. The whole point of a pilot scheme is that one learns from one’s experiment—but oh no, so pleased were the Government with the pilot scheme that they decided roll it out everywhere, irrespective of how well it was working. At this point, people who had fallen into the pilot scheme areas for superfast broadband found that they were not at an advantage any more and very quickly became at a disadvantage. Instead of receiving superfast broadband by 2015, perfectly timed, with all the political intuition required of a Government, to coincide with the general election, we will not get our superfast broadband in Herefordshire until 2016.

That is of course a bitter disappointment to me, but more so to the people who live in places such as Fownhope who could have seen a better use of technology to piggy-back a better mobile phone signal from a superfast broadband link. This is particularly bizarre given the fantastic military infrastructure we have in Herefordshire, and the broadband delivery to all our schools. The superfast highway does exist. It is not a magic thing that needs to be created; it is there and we have not managed to exploit it in the way that we should have done. I extend my total sympathy to my hon. Friend for having to lean out of the window for a signal. In my house, an orange signal means that one has to lean out of the bathroom window, but luckily O₂ is more effective.

[Adam Afriyie (Windsor) (Con)]

I apologise for missing the first few moments of my hon. Friend’s remarks. I can bear testimony to the fact that in Fownhope in his constituency, which I visited very recently, one could not only not lean out of a window for a signal but not lean anywhere because there was no signal at all. I very much welcome this debate and value his contribution.

[Bill Wiggin]

I could not be more grateful to my hon. Friend, not only for visiting my constituency but for staying at the Greenman pub, a wonderful place in Fownhope, when he came to see me. He is absolutely right. Despite what everybody who has a vested interest says, the people who go to Fownhope or live there will find that they cannot use their mobile phones.

My constituents have told me that there are more problems in North Herefordshire with all four mobile operators. Although EE and Vodafone top the list of operators I have been contacted about, my constituents have problems with phone signals in Stretton Grandison, Much Cowarne, Lugwardine, Wellington, Kington, Kingsland, Lingen, Burghill, Much Marcle, Linton, Bromyard and Wigmore—from Withington to Bodenham, Almeley, Stretton Sugwas, Bartestree, Leintwardine, Orleton, Eardisley, Winforton, Ledbury and Colwall.

One constituent highlighted the problem that when they buy a phone there is no way of knowing whether it is going to work when they get it home, and said that they would like a trial period to be introduced for those living in rural areas. To be fair to my constituents, I tested this. If someone has seven days to test their phone before returning it, they will usually find that their SIM card arrives on the eighth day so they cannot possibly do so. They should be able to take their device home and ensure that they will have reception before they are committed to a purchase. That is a very helpful suggestion which I hope will be taken up commercially.

It may also be worth considering introducing reduced rate tariffs for those living in rural areas where it is known that there is a poor signal from the operator that the contract is held with. There is nothing like the power of the market to motivate these companies. Knowing that they will get a lower rate if they do not provide a decent signal to people’s addresses might be just the little whip that they need to spur them into action. It is clear to me that all four mobile network operators desperately need to invest and improve their infrastructure in North Herefordshire so that my constituents can make and receive calls and texts.

As I said, I am not satisfied by the process by which mobile reception is predicted across the country. Ofcom relies too much on the data maps that are provided by the phone operators, the accuracy of which is often questioned. Ofcom accepts that there will always be cases where there is no coverage where predicted and some coverage where none is predicted. Ofcom’s “Infrastructure Report 2014” states:

“The maps of mobile coverage produced by operators are based on theoretical models…that are broadly accurate overall but can never be absolutely accurate in predicting coverage at a specific location.”

Indeed, Ofcom is currently looking into new methods by which it can predict mobile phone reception. It is planning to continue to refine and develop coverage and other performance statistics, with the aim of reflecting as closely as possible what consumers are actually experiencing.

Ofcom’s 2014 report suggests that partial not spots are of greater concern than full not spots, with 16% of UK premises being partial not spots for indoor coverage. Indeed, while 2G networks operated by EE, O₂ and Vodafone provide similar total levels of coverage of the UK, the three networks do not perfectly overlap, which leads to partial not spots. Ofcom’s data suggest that, although all three networks cover 90% of UK premises indoors, the imperfect overlap means that 16% of UK premises indoors are covered by only one operator.

I am pleased that a number of operators are now trying to utilise various technologies to bring a signal to rural communities. However, I do not want that to deter them from investing in and upgrading their networks in rural areas. In Cumbria, EE has connected all 129 house- holds in Sebergham by trialling a new micro-network technology. The new micro-network wirelessly connects small mobile antennas to a suitable nearby site, without the need for cabling, dramatically improving the economics of connecting hard-to-reach areas. I understand that micro-networks can connect communities of about 100 to 150 homes and businesses across an area of about 0.5 square miles with just three or four small antennas, which EE claims can be installed on any building in just a few hours without a requirement for planning applications. EE announced in December that by the end of 2017 it wants to connect more than 1,500 rural communities using that micro network technology.

Fownhope now looks set to benefit from similar work being done by a different mobile network operator. Following my meeting with the Secretary of State in October, I wrote to the residents of Fownhope to encourage them to consider applying for Vodafone’s rural open sure signal programme. Rural open sure signal works with a local broadband connection to create a 3G signal which a mobile phone can pick up as long as it is within range. Each open sure signal unit provides up to 500 metres of 3G coverage, with Vodafone usually installing four in each community.

Following my recommendation that residents apply to Vodafone, I am very pleased that Fownhope is now one of 100 communities that has been selected for the project. However, for rural open sure signal to work there needs to be a minimum internet connection of at least 4 megabits per second.

The broadband connection in Herefordshire is currently being improved by the Fastershire project, run by BT with Herefordshire and Gloucestershire county councils. Area 11 of the Fastershire plan, which includes Fownhope, has been surveyed and planned and the roll-out started ahead of the expected date of 30 June 2014. Fastershire expects the majority of work to finish by 30 June 2015, with further work expected to be completed by December 2016. Once the Fastershire work is complete, Fownhope should be able to access faster broadband with a minimum speed of 2 megabits per second.

EE checked its network in Fownhope and believes it provides good 2G and 3G signal outdoors. It will shortly launch wi-fi calling, which will enable any wi-fi to carry voice calls seamlessly from cellular coverage should the latter drop out. That will markedly improve any areas where there is poor indoor coverage.

The Government recently signed a deal with the four mobile network operators on improving mobile phone coverage and I think we will all be happy to talk through the specifics of that deal over the coming weeks. As part of that, the Government are looking at reforming the electronic communications code, which governs land access rights for building new masts and maintaining existing ones. That is essential to meeting higher coverage ambitions.

Overall, EE has privately invested £17 billion since 2000, building the UK’s biggest and fastest mobile network. EE could almost have written this speech itself! Its 2G voice coverage reaches more than 99% of the population, 3G coverage 98%, and superfast 4G coverage is on course for 98% by the end of this year.

We need the mobile network operators to invest in their networks. That is the only way reception will be improved significantly in rural areas such as my constituency. Vodafone is planning to invest £1 billion in its network this year, as part of a development plan to bring voice and mobile internet coverage to 98% of the UK population. I am very pleased that it plans to increase the number of households and businesses in north Herefordshire that can receive a good-quality outdoor voice and mobile internet signal from about 75% to 95%.

O₂ acknowledges that its service in Fownhope is currently not good, with its nearest mast more than 5 km away, but it claims it will invest in the area in 2016. O₂ says it is investing £1.5 million a day in its network to upgrade existing 2G and 3G networks, in addition to switching on 4G. In 2016, it intends to make improvements to the service in the Fownhope area so that 2G is available indoors. It also intends to make 3G available indoors and outdoors, and 4G available outdoors.

In its communications with me, Three has been unable to specify when it will improve its coverage in Fownhope. However, it has suggested that my constituents will benefit from its pledge to cover 98% of the UK population by the end of 2015.

After my meeting with the Secretary of State in October, I was hopeful that mobile reception in north Herefordshire would benefit from his plans to implement roaming. With roaming enabled, residents’ mobile phones would automatically switch between networks to find the best reception when they lost signal. That would allow someone with a phone on Three to pick up an O₂ or a Vodafone signal.

However, roaming was not to be. On 18 December, the Secretary of State announced that his plans for roaming had been dropped, and that he had instead signed

“a landmark, legally binding, deal with the UK’s mobile operators, securing £5bn of investment into infrastructure and committing each of them to 90 per cent geographic coverage of the UK by 2017.”

I understand the deal means that full mobile coverage—where every operator provides signal—will increase from its current level of 69% to 85% of geographical areas by 2017. As a result, the number of both partial and total not spots will be vastly reduced, improving consumer and business experience all around the country.

I have yet to see detailed plans on how that commitment will benefit my constituents and our great county, which has suffered from unacceptable mobile reception for too long. However, I join the Secretary of State in welcoming the fact that the mobile operators have committed to the agreement voluntarily. I am also pleased that, owing to the legally binding nature of the agreement, sanctions can be imposed if the operators do not undertake the work they have agreed to do.

I understand that the Secretary of State believes this deal will be better for the country than national roaming. The deal locks in guaranteed investment, and ensures that competitive pressure will still exist between operators. The Government believe the deal will ensure that the UK’s mobile coverage is among the best of any European nation, while making it easier for people to communicate and for business to compete and grow.

I look forward to seeing details in the coming weeks and months of how the agreement will improve signal in not just Herefordshire, but in Fownhope specifically. Its residents, who are good people, are paying the same, so they deserve the same. It could well be that 4G is the solution for the last 5% of broadband coverage that we all need. I urge the Minister to take this opportunity to do everything he can to put more pressure not only on mobile phone providers but on BT to provide the one thing we all want—in the 21st century, it is our right—and that is our ability to communicate.

[The Minister for Culture and the Digital Economy (Mr Edward Vaizey)]

What a welcome addition to this debate you are, Mr Speaker. The seamless transition from Mr Deputy Speaker to Mr Speaker perhaps reflects the growing importance of this debate.

May I congratulate my hon. Friend the Member for North Herefordshire (Bill Wiggin) on securing this debate. If the people who watch our debates in this House are sometimes sceptical about politicians and their commitment to their constituents, in the past half hour they will have seen a masterclass in how a constituency MP goes about pressing a case for his constituents. Concerned as he is about their broadband and mobile phone coverage, he has met the Secretary of State; he has met and communicated with all the mobile operators; he has met the regulator, Ofcom; and he has invited colleagues, such as my hon. Friend the Member for Windsor (Adam Afriyie), to visit his constituency to test the mobile signal for themselves. He has covered all the bases and listed for our benefit, and that of Hansard, the number of villages where coverage is poor. He is the definition of a constituency champion, and his constituents will recognise his hard work.

My hon. Friend is knocking at an open door as far as the Government are concerned, and he has already achieved one success—no doubt working with his constituency—because the village of Fownhope will now receive the rural open sure signal project. To be clear that I cannot pull any strings in my area as telecoms Minister, I encouraged villages in my constituency to apply to that project, but as yet I am unaware whether any have achieved success because Vodafone has not chosen to share that data with me.

I met Vodafone today and, to add to the range of ideas put forward by my hon. Friend, I stressed that in my experience as telecoms Minister a lot of rural communities are keen to help themselves. Were Vodafone to offer a tariff to rural communities such as parish councils to provide an open sure signal, at a cost, once its effectiveness has been tested—I understand that Vodafone will meet the costs for the 100 villages networking under the pilot programme—I am sure that a lot of parish councils would look keenly at effectively buying an upgrade for their mobile service on behalf of their parishioners. I have stressed that point to other mobile operators as well.

I am also keen to stress that Openreach should have a tariff—I have been pushing this point for many months—so that it can go to a community and say, “You’re not part of the programme. We have been open in saying that the programme does not yet have 100% coverage, but we will work with you and provide you with a tariff. Crucially, we will work with you physically so that you can undertake some of the infrastructure work.” Openreach is represented in rural communities with many keen farmers with their own equipment who could help, and that would make a huge difference.

[Bill Wiggin]

I should perhaps have mentioned this during my speech, but is the Minister aware that DEFRA has changed the rules for most farmers, so that all their single farm payments will now be made electronically online? Those people cannot always get a signal, so perhaps money could be made available from DEFRA to help with that project, which I welcome.

[Mr Vaizey]

I agree with my hon. Friend. DEFRA put up £10 million at the beginning of this Parliament, which DCMS matched, to help smaller rural and community broadband providers to provide broadband in areas that were not part of the national programme. DEFRA is and will continue to be an effective partner in our broadband roll-out programme, which is developing all the time. I do not want to give the impression that we are doing that on the back of an envelope, because we have a clear programme. It is right for my hon. Friend to highlight the difficulties faced by him, his constituents, and indeed the Prime Minister, but it is also worth stating —perhaps I can turn to the glass-half-full element of the debate—that we are making significant progress.

As my hon. Friend is aware, phase 1 of our rural broadband programme involved a £500 million fund from the Government matched by local authorities and Openreach, to enable up to 90% of premises nationwide to get superfast broadband speeds of at least 24 megabits a second. That programme has already gone out to more than 1.2 million homes. We expect soon to announce the milestone of 1.5 million homes, and we are on course to reach 4 million homes under that programme in good speed. Indeed, in many areas the project is ahead of schedule. As my hon. Friend is aware, in his area about £35 million went into phase 1 of the Hereford and Gloucestershire Fastershire project, covering some 113,000 premises. Latest figures suggest that the programme has already reached 35,000 homes. That figure will be higher by now. The vast majority of those 110,000 premises will be reached this year, although some will be reached in the year after.

My hon. Friend will also be aware of phase 2. We secured an additional fund of £250 million, which was again matched by Openreach and local authorities. In the Fastershire area of Herefordshire and Gloucestershire, that amounts to almost £20 million to target a further 33,000 premises; so, just under 150,000 premises all told in phase 1 and 2, reaching coverage of approximately 93% of all premises in Herefordshire and Gloucestershire.

One important point to make is that, when we have these debates, my hon. Friends and other hon. Members will, understandably, point to where things are not going as well as anticipated and where the problems are in order to highlight those problems. As I say to them again and again, however, we are on the same page. These funds have not come from nowhere. They have not been magicked out of the air in the past week. We recognised, in the very first weeks after the election, that rural coverage for broadband was a big problem. We were not prepared to accept the previous Government’s commitment to provide speeds of 2 megabits under a rural broadband programme. We recognised immediately that by the time the programme rolled out people would be demanding faster speeds. We set a target of 24 megabits, which is more than adequate. Most people nowadays would expect, if they think about how they use broadband—accessing iPlayer, or indeed receiving payments from the rural payments agency—speeds of about 7 megabits or 8 megabits to be more than adequate. We have recognised absolutely the need to provide broadband for rural areas. The programme is, despite some of the critiques that have been levelled at it, going extremely well. We will see even more of a step change this year than there was last year.

The other element of the equation is phase 3—I am still dealing here with fibre broadband, but as my hon. Friend pointed out that is very relevant for mobile broadband coverage—where we have set aside £10 million to test out different technologies. Critics of Openreach will be delighted to know that a number of smaller providers have secured those funds to test out new technologies to reach the very hardest-to-reach premises. When we talk about hard-to-reach premises, we are talking about perhaps a house at the end of a long track, where it would cost £20,000 to £25,000 to provide a superfast broadband connection. In terms of value for money, one could argue whether that is an effective use of taxpayers’ money. If we can find new technologies that would bring down that cost substantially, it is incumbent on us to examine them. Those programmes are under way. We will evaluate them and come up with a sum that we think is adequate to get to our often-stated target of reaching 100%. We have not been specific about when or how much money, but that is our ambition.

--- Later in debate ---

[Bill Wiggin]

The Minister is lucky to be able to make voice calls, and, indeed, to text. He would not be able to do that if he lived in Fownhope. The biggest robbery of the mobile phone industry resulted from the extortionate 2G and 3G licences that were levied under the last Government, which I believe led to the lack of investment with which we are miserably trying to deal by means of this debate.

[Mr Vaizey]

I hope that I do not become a hostage to fortune when I say that I concur with my hon. Friend. With hindsight, I think that £22 billion was an astonishing amount of money, and the last Government did not use it to invest in digital infrastructure. A much more realistic price was paid for the 4G spectrum that we auctioned recently.

Let me now deal with some of the specific points raised by my hon. Friend. He mentioned, in passing, the mobile infrastructure project. We invested £150 million as a first stab at recognising the problem of poor coverage and not spots. As I have said, both in Westminster Hall and during today’s debate, it has not been smooth running. This is the first time that the Government have been involved in a subsidised project with the mobile phone operators. As 4G was about to be rolled out, we made a 2G project into, effectively, a 4G project. As the case of Fownhope illustrates, another reason for the bumps in the road has been the difficulty of measuring mobile phone coverage objectively.

The aim of the project is to provide coverage for the small percentage of people—0.3% or 0.4%—who currently have none at all. Let me return to my definition of a complete not spot as a place where it is impossible to obtain a signal from any operator. In a partial not spot, coverage can be obtained from one operator, or perhaps two, but not from all of them. The first mast went up in Weaverthorpe, North Yorkshire, in 2013, and we have recently put one up in north Molton, in Devon. In order to assess the not spot data locations, we had to update our original radio plan so that MIP could target true not spot areas. Negotiations are taking place with landlords on 120 sites, and so planning applications have been submitted.

In Fownhope, however, there has been a problem. Ten sites in Herefordshire, four of them in my hon. Friend’s constituency, are at various stages of delivery, including the carrying out of site searches. The mobile infrastructure project had been intended to include the building of a mast to provide coverage for the area, and the delivery contractor, Arqiva, had begun discussions with the planning authority. As my hon. Friend explained, the revised data showed that coverage in Fownhope had improved, although it is not great. There is a handful of not spots on the outskirts of the area, but owing to the small number of premises in a total not spot, it does not qualify for inclusion in the MIP. I know that is disappointing news, as my hon. Friend has made clear, for residents in Fownhope. As I mentioned earlier, mobile phone coverage is a key issue for us. That is why I was so pleased that my right hon. Friend the Secretary of State for Culture, Media and Sport was able to negotiate the deal he negotiated with the operators just before Christmas. That will lead to some £5 billion of investment in mobile infrastructure. Mobile services will come to many areas in the UK for the first time. I also mentioned our planned reforms of the electronic infrastructure code.

Our most recent data estimate that about a quarter of Herefordshire is affected by partial not spots and only a small percentage has no coverage at all. We think that, as a result of that deal, complete not spots in Herefordshire will be eliminated all together, and only 5% will remain in partial not spots. Those improvements should happen over the next three years. Therefore, 95% of Herefordshire should have coverage from all four operators. I hope that my hon. Friend will agree that that is a significant improvement.

My hon. Friend mentioned in passing—he did not dwell on the point—that Ministry of Defence infrastructure exists in his constituency. That point was music to my ears. It reminded me of that well worn phrase “Great minds think alike.” For two or three years, I have been mildly obsessed with the fact that in this country a great deal of digital infrastructure is not joined up. I have finally persuaded the Government to put together a digital taskforce, chaired by my right hon. Friend the Minister for the Cabinet Office. Working with me and some very able officials, he has discovered about 23 different digital projects that the Government are nominally responsible for. We are already making significant savings for the taxpayer, running into hundreds of millions of pounds. More importantly, to address the point that my hon. Friend made, we are joining up those projects—I am not saying we can do this overnight or that the infrastructure in his constituency would be relevant—so that we can use existing infrastructure to upgrade the digital capability of an area. His point is therefore extremely well made and we are looking at the issue.

As for the trial period for mobile phones, it is a good point to make to mobile phone operators—they should give people the chance to try out a phone for a period. There may be commercial reasons why that proves difficult. It may be difficult, if people return a phone, to sell it to another customer. There may be an attrition rate for people who take a phone on a trial period and do not return it. There may be costs associated with trying to track down people who inadvertently do not return the phone.

[Bill Wiggin]

It is not necessarily essential that those people should try the phone. It is the signal that is key, so only a SIM card is required.

[Mr Vaizey]

I hear what my hon. Friend says. Often people underestimate the ingenuity and entrepreneurship that exist in the House. Perhaps we could together propose to mobile phone companies a SIM card that simply expires after seven days so that people could fit it in their phone to check whether it worked. It should be possible to go on a website provided by the relevant operator to at least have some assessment of whether the area receives coverage from that operator.

Speaking off the top of my head, having a lower tariff in areas with poor coverage strikes me as somewhat problematic. I would not want to be too cynical, but people might suddenly arrive as potential lodgers in rural areas to take advantage of the lower tariff and then merrily use their phone in London for extended periods, so that may be difficult. However, my hon. Friend has an answer to that point.

[Bill Wiggin]

The Minister has just created the most marvellous whip with which to beat the mobile phone operating companies so that people do not do that, because the signal will be just as good in the rural areas. I congratulate him on that brilliant suggestion.

[Mr Vaizey]

I am not sure that that would be the answer that the mobile phone operators wish to receive, but as a former Whip my hon. Friend is keen on whipping the mobile phone operators into shape. He has already done that most effectively with this timely Adjournment debate.

May I conclude by offering a metaphorical hand across the Chamber? I often find myself, both in this Chamber and Westminster Hall, hearing the concerns of both hon. Friends and other Members. My message to them again and again is that the Government have heard these concerns, and what we are debating is not the principle that rural areas deserve better broadband coverage and better mobile phone coverage, but the detail of the implementation. The spirit is always willing, but it is, I am afraid, sometimes the case that the flesh is weak.

Question put and agreed to.

Financial Conduct Authority Redress Scheme

Bill Wiggin Excerpts

Thursday 4th December 2014 Commons Chamber

[Guto Bebb (Aberconwy) (Con)]

I beg to move,

That this House has considered the Financial Conduct Authority’s redress scheme, adopted as a result of the mis-selling of complex interest rate derivatives to small and medium sized businesses, and has found the scheme’s implementation to be lacking in consistency and basic fairness; considers such failures to be unacceptable; is concerned about lack of transparency of arrangements between the regulator and the banks; is concerned about the longer than expected time scale for implementation; calls for a prompt resolution of these matters; and asks for the Government to consider appointing an independent inquiry to explore both these failings and to expedite compensation for victims.

This is the third debate that I have led on interest rate mis-selling. I wish to express my gratitude to the Backbench Business Committee for allowing further time to debate this important issue in the main Chamber of the House.

The fact that we have a third debate is a good thing and a bad thing. It is clearly a good thing because hon. Members are still taking an interest in the issue. It is a bad thing because three years after the first debate, hundreds, if not thousands of businesses still feel that they have not been dealt with fairly or adequately by the redress scheme that was put in place by the Financial Conduct Authority. It is therefore important to explore their concerns.

We are coming to the end of the redress scheme, so it is appropriate that we examine its successes and failures at this point. I am, in general, an individual who sees the world in a “glass half full” rather than a “glass half empty” manner—some of my colleagues would perhaps dispute that—and I think it important to highlight some of the successes. First, 91% of all the sales examined within the scheme have been found to be non-compliant. That fact alone justifies all the effort that has been put in by Members from across the Chamber in ensuring that this issue was addressed by the banking system. Similarly, 99% of all redress determinations have been communicated to customers. A total of 14,000 redress offers have been made to date, 10,500 of which have been accepted. Some £1.5 billion in redress has been paid out. Some £1 billion—perhaps even £1.1 billion—of cancelled swaps have been hugely beneficial to the businesses that were affected. Most importantly, as a result of the successes that I mentioned, businesses and individual lives have been put back on track. We should, as a House, acknowledge those successes. However, when this Chamber called for the establishment of a redress scheme, we wanted a scheme that would be fair and equitable to all the businesses affected.

[Bill Wiggin (North Herefordshire) (Con)]

I agree with my hon. Friend, but my constituent John Kidd has so far spent 74 weeks battling the FCA when ideally it should take 12 weeks. My hon. Friend must not be too kind to the FCA.

[Guto Bebb]

I agree entirely. The time scales of some of the redress offers have been completely unacceptable. Indeed, at the scheme’s outset there was a six-month delay in order to ensure a consistency of approach across the 11 banks that volunteered to be part of it. One of the concerns I wish to highlight is that that six-month delay has not resulted in the consistency demanded by the FCA, so I accept entirely my hon. Friend’s point.

I will summarise my concerns about the FCA scheme. There has been a lack of consistency in the scheme despite it being established with a view to having consistency. There has also been a tremendous lack of transparency, which I will deal with in detail.

--- Later in debate ---

[Bill Wiggin (North Herefordshire) (Con)]

I shall not trouble the House for too long, but I must draw its attention to my entry in the Register of Members’ Financial Interests.

My constituents William and Frances May have brought the actions of UK Acorn Finance to my attention. I understand that the problems with UK Acorn Finance have been raised many times in the House over the past seven years and that at least 40 Members have Acorn victims among their constituents. My constituents tell me that the Financial Conduct Authority claims that it has an insufficient mandate to investigate, while the Financial Ombudsman Service compensation ceiling is inadequate for many commercial businesses impacted by UK Acorn Finance. My constituents would like to know what action the Government are taking to regulate and investigate effectively the actions of the company and whether it should even be allowed to continue trading.

The Connaught Income Fund will also be familiar to many colleagues. It was incredibly disappointing to learn last month that investors and all parties had failed to reach a negotiated settlement to address investor losses in the Connaught Series 1 fund by the FCA, the deadline being 31 October. Will the Government maintain the pressure on the FCA to ensure that it continues to work actively to sort out this mess?

Another of my constituents runs a company called Pixley Berries and claims that he is currently

“receiving the same treatment from HSBC as widely published with reference to RBS.”

My constituent has refused to go along with it and is in the process of transferring to another bank. Meanwhile, he has consequential losses of some £500,000, so he estimates that the interest rate hedging product he was mis-sold set back his business by £500,000. He has received £200,000 in redress, but in terms of well considered and evidenced consequential losses he has been offered £5,000 against a claim of £190,000. The reality for a business such as his is that there has been no change in conduct. Does the Minister agree not only that the FCA redress scheme needs to be improved, but that the banks need to change their behaviour fundamentally?

[Paul Farrelly]

Given that the hon. Gentleman has mentioned RBS, which is owned by the taxpayer, may I add to my previous remarks? DK Motorcycles was not only bounced into the global restructuring group at RBS, but bounced back and forth between Birmingham and Manchester several times. Is it not a duty of the Government to make sure not only that the stables are properly cleaned, but that the shark cage is emptied so that the activities of people in the bank are brought to book and we can have more confidence in RBS in the future?

[Bill Wiggin]

What is not to love in an intervention about motorcycles? I thank the hon. Gentleman for that. Obviously, the Minister is going to speak, so I will not take too much time. It is right that she should have the opportunity to explain the Government’s position, but the hon. Gentleman’s point about confidence is absolutely right.

The campaign group Bully-Banks has a number of suggestions—many colleagues have mentioned them—on how to improve the FCA redress scheme. One suggestion targets the fact that many small and medium-sized enterprises were excluded from the scheme because they were deemed to be “financially sophisticated” and therefore able to understand the interest rate hedging product sold to them.

The Government need to create an independent appeal tribunal to determine whether a company was in fact “financially sophisticated” and therefore able to understand what it was buying. One company that would benefit is allpay, which is in my constituency and with which I have worked. It was excluded from the redress scheme because it had more than 50 employees at the relevant time. That cannot be a qualification for understanding a complex financial instrument, so I urge the Government to consider the issue carefully. Apparently allpay falls outside the FCA’s unique version of what constitutes an SME, and that cannot be right. That company lost £2.25 million and it has spent the past five years paying it off.

I appreciate that an extension of the FCA redress scheme might open the floodgates to a wave of new claims against other banks and trigger a significant increase in their provisions for mis-selling liabilities. However, I want the Government to support all affected businesses, of whatever size, in this matter. As I have said, the campaign group Bully-Banks wants an independent tribunal to determine “financial sophistication”. It wants the redress scheme to be extended so that appeal tribunal decisions are based on what actually happened, not on the size of the company.

I will not detain the House a great deal longer. The FCA has a difficult job, but an important one, and I believe I am registered with the FCA in one of my roles. My plea is for it to focus its efforts on the people who have done the wrong thing, rather than increase the burden of regulation on people who are doing the right thing.

--- Later in debate ---

[Andrea Leadsom]

The FCA has considered whether reviewers are independent, and the instance cited by the hon. Gentleman probably demonstrates that it is actively taking part in that process. As I have said, however, if Members want to raise particular cases with me, I will look into them.

My hon. Friend the Member for Aberconwy referred to the allegation by a former independent reviewer from KPMG that the banks had applied undue pressure for a change in a redress determination. That is a very serious claim, and I know that the FCA has taken it very seriously. The regulator has given a reassurance that it has maintained close oversight of the relationship between banks and their independent reviewers throughout the review, and that it does not believe that that allegation is supported by the facts.

A number of Members raised the issue of embedded swaps. It is important to define that term. I understand it to refer to fixed-rate loans with an economic, or mark-to-market, break cost. As is standard practice with fixed-rate loans, a break cost is incurred by a borrower who pays off a loan early. The tradition in the United Kingdom has been that the terms and conditions of contracts between businesses, such as loans, are not generally prescribed by the Government, and we normally expect businesses to take positive action. First, they can complain to their banks if they are unhappy with their fixed-rate loans, and many customers have already taken that route. The FCA monitors banks’ complaint-handling processes, and takes action if it sees a problem. Secondly, smaller businesses can have recourse to the Financial Ombudsman Service.

What is vital—and the Treasury has ensured that this will happen in future—is that when a business enters into a fixed-term loan, the terms of the contract and, in particular, the way in which break costs are calculated are absolutely clear. We have secured a voluntary agreement, through the British Bankers Association, that banks will provide the same level of disclosure of features within fixed-rate loans— such as break costs—as applies to interest rate hedging products. Most important, the banks will ensure that break costs are fully explained, and that worked examples are provided.

A number of Members also voiced concerns about the number of businesses that have been assessed as sophisticated and therefore fall outside the scheme. The Government have made it clear that when a business lacks the necessary skills and knowledge fully to understand the risks posed by these products, it should receive appropriate redress. So far, about a third of businesses have been deemed to be sophisticated and to fall outside the scheme. There has been criticism of that: many have suggested that all businesses should be covered. The Government believe that there needs to be a defined cut off-point at which more sophisticated businesses take responsibility for understanding the products they are purchasing. Failure to introduce that cut-off point would weaken the incentives for businesses to act sensibly when purchasing financial instruments, and could open the floodgates to any businesses that had lost out as a result of a financial transaction.

However, the FCA has amended the way in which the sophistication test criterion can be applied, and information about that is available. Time does not permit me to give every detail of where we started and where we are now, but the aim has been to ensure that all businesses that are unsophisticated can fall within the scheme. There may well have been some incorrect reassessments, but there have been very few subsequent complaints.

[Bill Wiggin]

Will my hon. Friend give way?

[Paul Farrelly]

Will the Minister give way?

[Andrea Leadsom]

I will give way once more, but not, I am afraid to the hon. Member for Newcastle-under-Lyme (Paul Farrelly), because time is short.

[Bill Wiggin]

It is very generous of my hon. Friend to give way, and I am delighted by what she has said. Can she also reassure the House that the number of employees will not be a criterion for sophistication?

[Andrea Leadsom]

I can certainly tell my hon. Friend that the number of employees is a factor, but it is not necessarily the only factor, so the fact that a business has more than 50 employees may not necessarily make them a sophisticated investor.

Autumn Statement

Bill Wiggin Excerpts

Wednesday 3rd December 2014 Commons Chamber

[Mr Osborne]

Of course, we are waiting for it partly because under 13 years of the Labour Government, it never happened. We are looking at improving rail connections to Hull. I was there fairly recently and talked to Lord Haskins, the head of the local enterprise partnership. I go out of my way to say that Hull should be part of the northern powerhouse, and I have talked about the links between Liverpool, Manchester, Leeds and Hull across the east-west link of the north of England. I think there are real opportunities, alongside the flood defence programme in the Humber estuary that we have talked about. The investment in the enterprise zones there and the Siemens investment in Humberside are important. There are lots of great things happening in Hull, and the “Hook up Hull” campaign is yet another example of a great campaign that we are looking to support.

[Bill Wiggin (North Herefordshire) (Con)]

Can the Chancellor explain why he wants to introduce his stamp duty changes at midnight rather than a little further down the road?

[Mr Speaker]

Order. I am sure that the hon. Gentleman was here all along. He did not leave the Chamber—or did he?

[Bill Wiggin]

He might have done.

[Mr Speaker]

He might have left the Chamber? In that case, we cannot take his question.

--- Later in debate ---

[Mr Speaker]

I am glad that the hon. Member for North Herefordshire (Bill Wiggin) has received his answer, but I must say that to toddle out of the Chamber and then beetle back in and expect to take part, in defiance of the conventions of the House, renders the hon. Gentleman a cheeky little boy.

[Bill Wiggin]

There is nothing little about me, Mr Speaker.

[Mr Speaker]

I use the term with some poetic licence, it must be admitted.

Financial Services Authority and Connaught Income Fund

Bill Wiggin Excerpts

Wednesday 7th May 2014 Westminster Hall

[Alun Cairns]

I pay tribute to my hon. Friend for his support in investigating this matter. He raises an important point. There is a serious question about what Capita did and did not know, and what it should have communicated to the investors, to whom it had a responsibility.

[Bill Wiggin (North Herefordshire) (Con)]

I draw the House’s attention to my entry in the Register of Members’ Financial Interests. My constituent, Mr Sudworth, who is a victim of this fraud, asked me a question; I wonder whether my hon. Friend knows the answer. Does the Financial Conduct Authority outsource some of its work to Capita?

[Alun Cairns]

I am grateful for my hon. Friend’s question. I do not have the answer, but he points to a general defensive approach that has been taken by the FSA and the FCA. We are seeking greater transparency to get the answer to many such questions, so that we can identify where the responsibility lies.

Perhaps Mourant became aware of some of the issues that have now become apparent. Instead, Capita passed responsibility on to Blue Gate Capital Ltd, which agreed to the appointment in September 2009.

George Patellis was appointed chief executive of Tiuta in April 2010. He became concerned about the quality of the financial reporting at the company. In January 2011, a shortfall of at least £20 million was identified, suggesting insolvency. He also became aware that Tiuta had retained the proceeds when some loans had been redeemed, and of Land Registry DS1 inconsistencies.

Mr Patellis appointed BDO to investigate in January 2011, and it confirmed his initial concerns. He then resigned and alerted the FSA to the situation, to report financial irregularities at Tiuta. As a result, a case was opened by the FSA and supervisory engagement with Tiuta began. The FSA required Tiuta to engage investigative accountants to monitor its financial performance. That may relate to what my hon. Friend the Member for North Herefordshire (Bill Wiggin) mentioned. Tiuta was responsible for reporting to the FSA monthly. However, instead of undertaking independent investigations, BDO, which had secured the role, relied on information supplied by directors of Tiuta, which then produced a series of reports that persuaded the FSA that the firm should be allowed to continue to trade.

In May 2011, the FSA issued a consumer alert because marketing materials indicated that the fund was low risk, and that returns were guaranteed. The marketing material was amended for independent financial advisers, and Blue Gate was made aware of the issues with the security of the loans. In March 2012, Blue Gate notified the 1,200 investors that the fund had been suspended due to an inability to pay quarterly interest payments to investors. Tiuta was placed in administration in September 2012.

It is suggested that investors face losses of at least 70% of the £106 million that was invested. In addition, investors have to date lost up to £20 million in unpaid quarterly distributions. Since then, a number of MPs have written to the FSA—and now the Financial Conduct Authority—and the Treasury to establish whether there is a regulatory responsibility to investigate the fund, and whether there is any potential for compensating investors.

Having considered the background, I will make a number of points and ask a few questions of the Minister. Although I recognise that the Connaught fund was an unregulated investment scheme, various elements were regulated, as I mentioned at the outset. The advice process was regulated. I am not suggesting for a minute that advisers were responsible for the failings and misappropriation of funds. There is a need, however, to clarify where their responsibility ends.

In fairness to IFAs, they depend on the key financial documents, which were not accurate or adhered to, yet questions should be asked about why unregulated funds were recommended to investors in the first instance. The time for advice on such funds is clearly very limited. What did Capita know in August 2009 when it sought to pass on its responsibilities? What action did Capita take to ensure proper management of the fund at earlier stages? If Capita had doubts or questions, why was that not communicated to investors? Was Capita’s letter to investors misleading, or did Capita withhold information indicating there was unsecured and unauthorised lending from the fund?

amendment of the law

Bill Wiggin Excerpts

Monday 24th March 2014 Commons Chamber

[Sir Edward Garnier]

I fear that I am limited to one free hit, and the right hon. Gentleman may not have one. Perhaps he should see his financial adviser instead.

If those of us who are about to retire wish to invest our pension funds in property or in stocks and shares—or in buying an annuity—let us do it. Let us be allowed to make informed, adult decisions. Yes of course we must build protections into the system to prevent people from being mistreated or misled, as the Chancellor made clear in his Budget statement, but we must allow them to make their decisions from a position of knowledge. For goodness’ sake, let us not imagine that Mr Whitehall Man, or even Mr Labour Cabinet Minister, is better able than anyone else to decide how I should lead my life. I really object to that form of nanny state—

[Bill Wiggin (North Herefordshire) (Con)]

Quite right!

[Sir Edward Garnier]

I used that expression in order to encourage my hon. Friend. I do not like the kind of jargon that we are forced to use in these short, time-limited debates.

If there is one thing in the Budget that we ought to appreciate, it is the liberalisation of the pension and old-age retirement income. My private Member’s Bill was defeated by the then Government. I think that Ruth Kelly was the Treasury Minister who organised its destruction. I hope that, were she here in the House now, she would welcome the statement made by my right hon. Friend the Chancellor last week. I hope, too, that Opposition Members will come to realise that they need to catch up with public opinion and to acknowledge the desire of all people, whether they vote Labour or Conservative—I dare say one or two might even vote Liberal Democrat—to support their own independence and to make their own decisions. I congratulate the Chancellor and I wish him all good speed with this measure.

--- Later in debate ---

[Bill Wiggin (North Herefordshire) (Con)]

I am sorry to be following the hon. Member for City of Durham (Roberta Blackman-Woods) because there are good things in the Budget. She should encourage her constituents to enjoy—responsibly, of course—cider and beer.

Wednesday’s Budget was the latest in a series of announcements from which my constituents will directly benefit. I strongly welcome the Chancellor’s measures to assist the cider industry. I was delighted by the removal of the escalator and the freezing of duty on almost all ciders, which will provide much needed relief for an industry that represents a real success story for British business. Cider production is powered by British raw materials and British workers making a product for British consumers. The average pint will now be 3p lower than under Labour’s previous proposals.

I am glad that the Chancellor recognises that this has been a testing time for the 7,500 people employed by the cider industry. The impact of heavy flooding on this year’s crop of cider apples is yet to be seen, but I know that many fear the worst because prosperous growing areas were some of the worst hit by the floods. I hope that we will see continued support for this industry, which is one of the biggest employers in my constituency and an essential contributor to the pub sector.

North Herefordshire boasts 132 pubs and 11 breweries. The pub sector is a great supporter of local communities. It invests approximately £1.1 million locally and provides various employment opportunities, including 254 direct jobs for 16 to 24-year-olds.

The fact that pubs and many other businesses in North Herefordshire are taking on new employees is a clear indication that our long-term economic plan is working. Beer is 8p a pint cheaper than it would have been under the previous Labour Government’s plans. In February, the number of unemployed claimants in North Herefordshire was 862, which is 282 fewer than in February 2013. That means that 282 people are now working thanks to the Government’s measures.

A further testament to progress is the success that the apprenticeship scheme is achieving in rural businesses. The benefit brought to local businesses by new apprentices in North Herefordshire has been a boost of more than £1.7 million in the last year. The benefits from the scheme are twofold: each business that hires an apprentice experiences an average benefit of £2,207; and youth unemployment in North Herefordshire is down, with just 250 18 to 24-year-old jobseeker’s allowance claimants.

I also welcomed the news from the Chancellor of the doubling of the annual investment allowance, which will be warmly welcomed by the farming community. Farming is a highly intensive industry that requires expensive specialist gear. I hope that the announcement will provide an incentive for investment in equipment so that British farms can remain as efficient as our competitors.

Despite those improvements, I appreciate the frustration of farmers in my constituency who still feel that they face an uphill struggle for similar funding to that enjoyed by urban businesses. Their unincorporated businesses are not able to benefit from the Chancellor’s corporation tax reduction. I have previously voiced my concerns in the House about the raw deal that rural communities receive on Government funding. Sparsity of population makes it far more expensive to provide services in areas such as North Herefordshire, yet urban areas still receive 50% more funding per head. The Government need to recognise there that is still a disparity in the calculation of local government finance but, to give credit where it is due, I am delighted that the disparity in school funding has been addressed. The change to allocating funds on the basis of individual schools’ needs and character is a common-sense measure that is greatly to be welcomed. The previous Labour Government based funding only on historical levels of spending, and the fact that that mechanism was allowed to continue for so long was detrimental to thousands of pupils in my constituency. However, our schools will now receive £2.6 million more per school year, so I thank my colleagues who have campaigned hard on this, especially my hon. Friend the Member for Worcester (Mr Walker). Unfortunately, in several other ways, rural communities still require far more Government funding to provide essential services.

Road maintenance is a key concern for all rural constituencies and I know that such areas will be delighted with the extra £200 million that has been allocated to that in the Budget. Potholes are a menace and a danger, especially to those who live in isolated areas. The extent of the damage to roads in North Herefordshire is reflected by the fact that it received the highest allocation of repair funds in the west midlands. The damage has been aggravated this winter, but the overall standard of rural roads is very poor. I hope that the Government will maintain the new funding to address widespread pothole problems. I also look forward to the publication in the near future of the Government’s guidance on council applications for more highways funding.

I have set out just a snapshot of how the Government have made positive progress for my constituents, including the Exchequer Secretary’s mother-in-law. The Budget continues the already good progress that has been made to address the imbalance between rural and urban communities. I urge the Government to continue to bear in mind the specific needs of our hard-working rural communities when they allocate future funds. We cannot afford to allow our vital countryside communities to be ignored and underfunded purely because of their rural location.

Interest Rate Swap Derivatives

Bill Wiggin Excerpts

Thursday 24th October 2013 Commons Chamber

[Bill Wiggin (North Herefordshire) (Con)]

I draw the attention of the House to my declaration in the Register of Members’ Financial Interests.

We have a problem at the moment with the Financial Conduct Authority. It has been given the remit to act and the banks have set aside the money, but not enough has been done, or is being done, to ease the burden on British business. I have been contacted by many of my constituents about the FCA, the banks and the progress being made. Last night, that progress was slammed by none other than the chief executive of the FCA. Giving a speech at the Mansion House, Martin Wheatley said that

“the industry is deceiving itself if it imagines that a total of 32 offers accepted, totalling £2 million, is adequate progress.”

That is an admission, by the head of the FCA, that progress has been pathetic. With that quote, Mr Wheatley appears to be passing the burden squarely on to the shoulders of the banks. It is as if the FCA, and its predecessor the Financial Services Authority, had not been involved in the delays that have led to such inadequate progress. The FCA has the remit and the authority to speed up that progress. It is inextricably linked to that progress and the entire situation. As one of my constituents put it to me, it appears from the outside as if the

“FCA is unwilling to discuss anything with a bank customer, the British Bankers Association represents only the bankers, and the Financial Ombudsman Service remains buried in PPI cases.”

One mis-selling case in my constituency concerns a residential home. Thankfully, the business is still operating, but two of its owner’s other businesses have not been so lucky. The owner was mis-sold an interest rate swap agreement—in this case a “vanilla swap”—but the FCA scheme has been too slow in offering redress. Another constituent came to me today because he felt he was targeted by HSBC and sold an interest rate product that was wholly wrong for him and his business, but very profitable for HSBC.

The campaign group Bully-Banks, which I am sure has contacted many Members here today, highlights the precarious financial situation of the many businesses affected. People are up at night worrying about their bank and whether they will receive redress. As Mr Wheatley admitted, only 32 businesses have agreed redress out of the many thousands of businesses affected. That is not good enough. The country and the Government are focused on business for our economic recovery. We all know that more businesses mean more people in work, but with the FCA redress scheme operating at a snail’s pace, there are many thousands of businesses that will not be making those investments that we want them to; they will not be expanding or hiring more staff, until they receive redress and these matters are finally concluded.

The FCA’s chief executive contends that the banks are to blame for the speed at which redress is being offered to affected companies. According to several ongoing cases in my constituency, the banks are also to blame for a lot more. One business run by a constituent has already ended up in administration. It changed banks from HSBC to Lloyds TSB and was then badly advised. It seems that these two banks feature in practically all of my casework. My constituent was advised to set up a factoring account, which then disrupted his business, drove away his customers and caused problems with his cash flow. This was a high street bank once again showing a serious error of judgment. It poorly advised a business owner in my constituency, which led to that business being driven into administration. In this case, the Financial Ombudsman Service protected the bank after an investigation owing to a lack of documentation.

In yet another case of a bank not operating as it should, constituents of mine, attempting to grow their free-range egg and cider business, in the face of weak product prices and rising expenditure, received a support loan from their bank, Lloyds. Despite my constituents’ winning several high-profile contracts, however, Lloyds started to put what has been labelled as “unrelenting pressure” on the business. The bank gave my constituents a deadline to repay their loan and advised them to find an alternative bank. It then refused to release the ownership documents that would have allowed my constituents to sell a parcel of land, which would have repaid their debt to Lloyds and allowed them to move banks.

The Connaught Income Fund might be familiar to the House. I know that a number of parliamentary colleagues are involved in this matter. It is yet another case where the FCA and its predecessor, the FSA, have failed to take appropriate action. The fund was originally promoted, based on an information memorandum, as being of low risk. That memorandum now appears fraudulent, but was the FSA negligent to allow the fund to continue to operate, particularly when it became apparent that the memorandum was fraudulent? Several investors in the fund have gone even further, claiming that the FSA deliberately withheld information from the police and downplayed the serious nature of the fraud.

I am sure that the Minister will want to send a clear message from the Government to the FCA. We need the FCA actively to work to sort out these messes and to speed up its efforts. We need it to listen to the complaints and take serious action backed by meaningful compensation or fines. If this is not possible, perhaps he will confirm what changes in the law are needed to make it so. Finance is complicated, but the FCA is supposed to be sufficiently expert to appreciate what is going on and then have the teeth and nerve to act. Any bank must prefer to follow the FCA instructions—

[Madam Deputy Speaker (Dawn Primarolo)]

Order. I apologise to the hon. Gentleman. I am listening so intently to every Member’s contribution that I forgot to look at the clock.

[Caroline Nokes (Romsey and Southampton North) (Con)]

I congratulate my hon. Friend the Member for Aberconwy (Guto Bebb) on his tireless work to bring this matter to our attention, on having secured this second debate and ensuring that so many colleagues are here today, and on his enormous hard work as chair of the all-party group on interest rate swap mis-selling.

The last time we debated this subject, I was aware of only three constituents affected by interest rate swap agreements and described it then as a niche problem. Since then, however, the number of constituents affected—that I am aware of—has doubled to six. While the problem affects only a small number of constituents, the figures involved are eye watering—for two of my constituents, the sums run into several million pounds—but what has struck me is the features they all have in common: they are all small business people working hard to build up and expand their businesses. Whether in student lets, the leisure industry or farm diversification, they have all sought, ostensibly with the help of their banks, to grow their business, provide more employment and greater opportunity in the local area and, of course, help our economy. Some have quite impressive premises; others are literally run out of a garden shed or a room above the garage, but until they were unwittingly sold a product quite unsuitable for their circumstances, they had all enjoyed good relationships with their banks—those frankly are now in tatters.

Over the last few days, undoubtedly like other Members, I have suddenly started receiving updates from the banks about the progress they are making, setting out how they are compensating customers mis-sold these products and in my view trying to gloss over what have to date been quite unacceptable delays. I cannot repeat what the managing director of the Landish Group, which operates in my constituency and the constituencies of other hon. Members, said to me about the update I forwarded him from his own bank. The language was quite unparliamentary, so I will not repeat his words, but I can understand his frustration.

As we have heard, the banks have collectively spent more than £500 million on their own administrative costs, but in nearly 16 months they have delivered only a handful of decisions; and only 32 businesses have received any payments at all. It strikes me that a number of key issues must be addressed. First, on the speed of redress, I would like to reiterate what my hon. Friend the Member for North Herefordshire (Bill Wiggin) said about the snail’s pace of payments. It is painfully slow, but it was notable that as this debate drew close, there was a flurry of updates and self-congratulatory crowing from some of the banks about how they had made contact with 96% of their customers. Well done! How about paying back some of the money?

Secondly, we need to separate direct and consequential losses. One of my constituents had his decision from Barclays on 8 July. The bank admitted that he had been mis-sold and said that the swap would be torn up and exchanged for a simple cap at a cost of £29,000 and that, allowing for the cost of the cap, his direct costs—£1.35 million—would be returned, but four months on, he has seen no sign of that money. He placed a consequential loss claim at the beginning of August, which has not yet been accepted, declined or even discussed, and Barclays will not return the £1.35 million that it acknowledges it owes him until it has agreed the consequential losses, which it will not even talk about. I entirely endorse the call from my hon. Friend the Member for Aberconwy for the direct and consequential losses to be separated, so that the banks can crack on and refund some of the money owed, allowing businesses to invest, employ people and carry out redevelopment that might best take place at this time of year.

Thirdly, there is the thorny problem of what constitutes a sophisticated customer. Two of my constituents were judged to be sophisticated and so, along with 10,000 others, were excluded from the FCA redress scheme. One was deemed to be sophisticated despite his having no finance director; having never heard of a swap before he was sold one; doing his own accounts on a spreadsheet; having no in-house accountant; not being a limited company or even registered for VAT; and literally running his business out of a garden shed. I do not think it could get much less sophisticated if it tried.

[Bill Wiggin]

I am most grateful to my hon. Friend for giving way. I hope she needs the extra minute. Does she agree that an arbitrary limit on the number of employees is no way to determine sophistication in relation to financial products?

[Caroline Nokes]

I certainly agree with my hon. Friend about that.

All my constituent is asking for is the chance for what happened to his business to be reviewed, because of the situation he now faces—owing to the swap product, the fees, the charges and the circumstances of the product, an initial £3 million loan has spiralled to a massive debt of £9 million in just five years. The product far exceeds the term of the loan, time-wise. He has found himself having to work to the limit every day, seven days a week, just to make sure that he can make the repayments on the loan.

I was somewhat relieved today that my constituent did not turn up wearing a snail suit, which he was threatening to do—sadly, it was unavailable—but I am conscious that Bully-Banks is organising some sort of snail racing today. I have no idea whether it has taken place yet, but I can well understand why the snail has become the emblem of the campaign. I sincerely hope that the Financial Secretary will act to help these small businesses—which are, after all, the lifeblood of our economy, but have found themselves caught up in this nightmare—and make sure they are given swift and fair redress after all this time.

Financial Products (Mis-selling)

Bill Wiggin Excerpts

Wednesday 12th June 2013 Westminster Hall

[Bill Wiggin (North Herefordshire) (Con)]

I thank you, Ms Dorries; as always, I refer the House to my entry in the Register of Members’ Financial Interests.

I want to discuss the limitations set by the Financial Services Authority, now called the Financial Conduct Authority or the FCA, in respect of its June 2012 review of the mis-selling of financial products to companies by UK banks in 2005 and 2006, which I shall refer to hereafter as “the FSA review”.

The FCA now holds the compensation fund contributed to by the banks that were guilty of such practices. The fund was set up to provide recompense to small and medium-sized enterprises—SMEs—that were mis-sold certain financial instruments. I seek the Government’s support in challenging the FCA’s definition of a SME as contained in the limitations of the FCA review, so that all businesses and not just the smaller ones may be permitted support and assistance from the FCA in claiming compensation for being mis-sold financial products.

I also wish to challenge the limitation placed on the types of financial products that were part of the FSA review. In 2007, the FSA implemented new conduct of business rules, which derived from the EU’s 2007 markets in financial instruments directive. Under those rules, customers are afforded different levels of protection according to the category into which they fit.

The three categories are retail, which includes private individuals and smaller businesses not regulated by the FSA; professional, which includes larger firms, some of which are regulated by the FSA; and eligible counterparties, which includes financial institutions such as investment banks and stockbrokers.

Before 2007, the boundaries between retail and professional customers were significantly lower than they are now. Today, as a direct result of the 2007 rule changes, the banks are prohibited from selling many products they used to sell to their customers. Recognising, however, that we had insufficient legislation and protection for our businesses against the banks’ mis-selling of financial products back in 2005-06, I question why the FSA review protected only some and not all of those affected.

I suggest that the limitations set by the FSA fly in the face of logic and reason, and wrongly exclude a number of organisations from deserved recompense. I therefore ask the Minister to require that the FCA increase the scope of the compensation fund. We should afford protection to all affected companies, regardless of their size and of which financial products they were mis-sold. Quite simply, if they were mis-sold anything, they should be entitled to the protection of the FSA review, and compensated accordingly by the FCA.

In June 2012, the FSA issued a statement regarding the banks’ mis-selling of financial products. The statement reads as follows:

“The FSA has today announced that it has found serious failings in the sale of interest rate hedging products to some small and medium sized businesses (SMEs). We believe that this has resulted in a severe impact on a large number of these businesses. In order to provide as swift a solution to this problem as possible we have today confirmed that we have reached agreement with Barclays, HSBC, Lloyds and RBS to provide appropriate redress where mis-selling has occurred.

The banks will move to provide redress directly for those customers that bought the most complex products. They have also agreed to stop marketing interest rate structured collars to retail customers.

Interest rate hedging products can protect bank customers against the risk of interest rate movements and can be an appropriate product when properly sold in the right circumstances. During the period 2001 to date, banks sold around 28,000 interest rate protection products to customers.

These products range in complexity from comparatively simple ‘caps’ that fixed an upper limit to the interest rate on a loan, through to the more complex derivatives such as ‘structured collars’ which fixed interest rates within a band but introduced a degree of interest rate speculation.

Over the past two months the FSA has conducted a review of these sales. We have reviewed a significant amount of documentation from the firms (including sales files, customer complaints and taped conversations). We have also talked to over 100 customers who have come forward.”

In its investigations, the FSA found a number of poor sales practices by the banks, including poor disclosure of exit costs; failure to ascertain customers’ understanding of risk; non-advised sales straying into advice; over-hedging, which is where the amounts or the duration did not match the underlying loans; and rewards and incentives being a driver of the practices.

In its statement, the FSA concluded that

“not all businesses will be owed redress”,

which means that only SMEs, and only those SMEs that were sold interest rate hedging products, were entitled to redress. Those conditions left certain businesses, simply because of the number of employees they had or the amount of turnover they generated, being declared by the FSA as “sophisticated investors”, and not entitled to redress via the FSA, or the FCA in its new form.

For the FCA, a sophisticated investor is an organisation that is bigger than an SME, but I suggest that the term must surely apply to a person, firm or organisation that has a degree of sophisticated knowledge or understanding of financial products, and that the level of sophistication cannot be determined merely by size.

From information provided to me by a constituent, the FCA’s definition of an SME—a “non-sophisticated investor”—which has been agreed with the banks, is that it is an organisation with an annual turnover of less than £6.5 million, a head count of fewer than 50 and protected assets of less than £3.26 million. If a company cannot satisfy two or more of those criteria, it is considered outside the FCA’s scope for the compensation fund.

The definition hardly covers all SMEs, especially when we consider that they are differently defined by the Companies Act 2006. Under that Act, a medium-sized company is defined as having fewer than 250 employees—considerably more than 50—and a turnover of less than £12.9 million.

Furthermore, under European Commission guidelines adopted on 1 January 2005 with a view to harmonising the Europe-wide definition of an SME, there is a third definition whereby a medium-sized company is defined as having fewer than 250 employees and an annual turnover of less than €50 million, which is the equivalent of £42.5 million and therefore considerably larger than the figure in the FSA’s definition.

The FSA created its own definition of an SME with no public consultation and no logic or reason behind it, and in a way that seems to contradict legislation and EU guidelines. Perhaps it was influenced by the banks—perhaps not.

[Tessa Munt (Wells) (LD)]

We are talking about the very sector that has been hit hardest by the mis-selling of interest rate swap agreements. All we seek is growth, most of which will come from small and medium-sized businesses, so does the hon. Gentleman not agree that that group of companies and organisations should be given the best assistance possible, so that they can get out of these appalling agreements and carry on with their businesses?

[Bill Wiggin]

I partly agree, but I would like to see justice for all companies, irrespective of their number of employees or the size of their turnover. As a former banker, I know that the degree of sophistication needed to understand these complex products is extremely high. If companies were not properly educated into the deals they were doing, why should the FSA pick one particular group to protect? I agree with the emphasis on SMEs as a very important sector, but they are not the only sector.

We know that many businesses were mis-sold different types of financial product. In many cases, they were mis-sold products that were even more complicated than the interest rate hedging products covered by the review, but because they were mis-sold a different and more complex type of product, they, too, are not entitled to redress via the FCA compensation fund. Could it be that companies outside the FCA’s definition of an SME, such as my constituent, that were mis-sold complex financial products have suffered even greater financial losses than those that have redress available to them?

In the FSA statement of last June, Martin Wheatley, managing director of the conduct business unit, said:

“For many small businesses this has been a difficult and distressing experience with many people's livelihoods affected. Our work has focused on ensuring a swift outcome for these businesses that form such an important port of the economy.”

That was rather what my hon. Friend the Member for Wells (Tessa Munt) said.

Surely all businesses, large and small, form an important part of our economy. For my particular constituent, whose case I will cover in detail, the effects of the banks’ negligent malpractices were unquantifiable. It is almost impossible to predict how the company might have grown, how many more people it might have employed and how its development might have impacted on the local economy of Herefordshire had it not lost in excess of £2.25 million over just a few months, which it spent five years paying off. Because it had more than 50 employees at the relevant time and was doing well in turnover during the relevant period, it did not get access to the justice to which others were entitled from the compensation fund.

Despite my constituent’s company being clearly recognisable as a medium-sized enterprise under the Companies Act definition, it falls outside the FCA’s unique version of what constitutes an SME. I suggest that it is not alone, and that it is time that the floodgates were opened to provide redress to all organisations that have been the victim of bank malpractice, regardless of their size and of what they were mis-sold.

I think that we would all agree that the FSA review was necessary to bring order to the banks, to create accountability for past negligence and malpractices and to provide deserved recompense for those that had been misled and badly advised by the banks. However, it is now time to do more.

My constituent’s is a privately-owned, limited company, called allpay Ltd. Entrepreneur-led and owned, the company rapidly evolved from a groundbreaking idea in the 1990s—the owner re-mortgaged his house to get the business off the ground—and has now become one of Herefordshire’s biggest success stories. It was the first company to use magnetic swipe cards to collect payments for Departments, local authorities and registered social landlords cheaply, efficiently and safely. It now offers several bill payment solutions, and processes nearly £5 billion of central and local authority and RSL payments every year. The business deserves recognition and reward for its services to the public sector, its innovation and its creation of hundreds of jobs in the most rural county in England. The company is still growing.

In 2005-06, allpay was the victim of mis-selling by its bank, HSBC. Originally, allpay asked HSBC to advise it on the very type of product that was covered by the FSA review, but it was ultimately mis-sold something significantly more complex: three multi-callable range accrual interest rate swaps—products that, although speculative in nature, were sold as hedging by the bank.

The company had banked with HSBC for many years and felt that it could trust the bank to recognise its needs and understand which products were suitable. It was required to sign HSBC’s private customer terms and conditions, which confirmed that it did not rely on advice from the bank, but fully understood the risks as it was a sophisticated customer. The word “sophisticated” was not defined.

There is no evidence that allpay was made aware of the risks, yet HSBC continued to present more complex products for sale. The beauty of the bank’s sales pitch was to offer differing products—some suitable, but with a price attached, and some unsuitable, with a slight additional return and a purchase price of zero. The bank relied on an unsophisticated customer not to spot the unlimited risk associated with the free products should there be an adverse rate movement.

Under the terms of the agreement, allpay initially received from HSBC the difference between the interest rate that was first set and LIBOR on a notional sum, provided that LIBOR remained below 5.5%. We are all aware of the LIBOR manipulation scandal, and it is impossible to suggest that my constituent’s company was not one of its indirect victims.

The agreement was for five years. HSBC, not allpay, had an option to terminate the agreements at the end of each quarter; allpay had no documented exit route. It did not realise that at the time, because in no way was it ever a sophisticated investor with any degree of sophisticated financial knowledge about its entering into something akin to betting on a horse—in essence, gambling on LIBOR rates staying at a certain level. At the time, my constituent’s company entirely misunderstood the risks. Furthermore, even when it explicitly asked HSBC, allpay never received an explanation about the level of compensation that the company would have to pay if the bet was lost.

To go back to the FSA’s investigation of bank behaviour, there were several findings. It found poor disclosure of exit costs, and my constituent told me that allpay had no contractual right to exit and that no exit costs were stated. It found that there was a failure to ascertain customers’ understanding of risk, and I know that HSBC failed to explain the risks to allpay. It found that non-advised sales strayed into advice, and allpay told me that it asked for advice on hedging products but was ultimately sold something more risky. It found that rewards and incentives were a driver of such practices, and in this case the rewards for the employees who carried out the sale were significant. Therefore, despite ticking all the boxes looked into by the FSA review, my constituent still has no form of redress.

Ultimately, the horse did not win: my constituent’s company lost more than £2.25 million and overnight, with a change in the LIBOR rate, found itself haemorrhaging almost £5,000 a day—£35,000 a week or £455,000 a quarter—in interest. That was completely unsustainable, and would be for most businesses for any period. Worse still, those figures were the least amounts payable: if interest rates moved further from the agreed price, they could easily double, treble or more.

My constituent’s company was left in a very difficult position—completely over a barrel—facing certain insolvency and the probable loss of hundreds of jobs. The managing director attempted everything that he could: he threatened, begged, cajoled and applied to exit out of an agreement that had no exit clause. It cost the company dearly, not just in the interest payments made, but in additional costs of £1.5 million to cover the bank’s lost income. Ironically, HSBC provided the loan for the exit payment that it agreed to take.

My constituent’s company was advised to sue the bank for negligence, but by that time it did not have the resources to take on HSBC in expensive and lengthy High Court litigation. It asked the FSA to consider allpay in its review, but the request was refused due to its size at the relevant time and the type of product it was mis-sold.

The company asked HSBC for recompense. Appallingly, HSBC ignored it and responded to its correspondence only when I stepped in to offer my support. HSBC’s in-house lawyer finally engaged with my constituent’s company and entered into some dialogue, eventually inviting my constituent from Hereford to its offices in Canary Wharf on a “without prejudice” basis to discuss a settlement. The meeting was a waste of time: it lasted no more than 30 minutes, and it appears that HSBC dragged my constituent to London essentially to be told to get lost. The bank made it clear that it will discuss the matter further only if it is compelled to do so by the FCA, and if the case is brought within the review.

In March, the hon. Member for Dundee West (Jim McGovern) queried why other products were excluded from the FSA review. A constituent of his was mis-sold a fixed-rate tailored business loan and was excluded from the review. I understand that my right hon. Friend the Secretary of State for Business, Innovation and Skills is ready to press the FCA to extend the review’s remit, which I wholeheartedly support. An extension of the scope of the original FSA review is necessary.

The decision to limit the scope of the FSA review was perverse, because it did not take into account the categories into which companies fitted and what definition they met, nor the fact that companies, through no fault of their own but entirely due to a banking institution, were mis-sold a financial product and suffered significant financial loss. There is no logical explanation for the exclusion from redress of companies due to their size or to the type of product that they were mis-sold.

I appreciate that an extension might open the floodgates to a wave of new claims against other banks and trigger a significant increase in their provisions for mis-selling liabilities, which have already more than doubled to £2 billion, but the banks might just learn a lesson. I hope that the Government will support all affected businesses of whatever size, ensure that the banks are called on by the FCA to provide compensation for their malpractices and that the FCA is compelled to extend the scope of the review.

[The Economic Secretary to the Treasury (Sajid Javid)]

This is the first opportunity that I have had to serve under your chairmanship, Ms Dorries, and it is a real pleasure. I congratulate my hon. Friend the Member for North Herefordshire (Bill Wiggin) on securing this important debate. I acknowledge the strength of his feeling on this particular subject. He has put forward a considered and eloquent argument to the Chamber, and made a strong representation on behalf of his constituent.

I am sure that everyone present is keen to see a speedy conclusion to the Financial Conduct Authority review of the mis-selling of financial products. It is only right that businesses that have been mis-sold products are compensated accordingly.

The Government have been clear from the start that such practices are unacceptable. We take extremely seriously the abuse that has taken place, and we are determined that any wrongs that have been inflicted on businesses should be put right. My hon. Friend shared with us the example of allpay Ltd, which is a company in his constituency that was sold a hedging product but is not eligible for the FCA review. I am sure that my hon. Friend will understand if I do not go into the specifics of that particular case right now, but I am happy to look into any case, including the one that he has raised, in further detail.

I want to take this opportunity to address the key points that my hon. Friend has raised. First, he challenged the definition of an SME as used by the FCA in its review. He has argued instead that all businesses, not just the smaller ones, should be given support and assistance from the FCA in claiming compensation.

The FCA used the criteria for non-sophisticated customers, as set out in the UK Companies Act 2006, in its objective test. That is because those criteria are used for classifying companies that are subject to the small companies regime, and that have lighter reporting requirements. They are therefore the companies that are less likely to have staff or advisers with appropriate knowledge and skills to advise directors on the purchasing of financial instruments.

Moreover, I understand that the FCA review also changed the sophistication test in January to ensure that certain customers who were classified as sophisticated under the Companies Act test are instead classified as non-sophisticated and therefore brought into the scope of the review. I am sure that my hon. Friend will welcome that move, particularly as his constituency in Herefordshire, like mine in Bromsgrove, has many farmers. Had the change not happened, many farmers who typically have larger work forces and balance sheets than other SMEs could have been excluded.

The Government have been clear that where a business lacks the necessary skills and knowledge to understand fully the risks of such products, it should receive the appropriate redress. However, we do not agree that all businesses should have access to the FCA review. Instead, there needs to be a defined cut-off point where more sophisticated businesses are able to take responsibility for understanding the products or services they are entering into. There will be organisations that took one of these product with a full understanding of the risks involved if interest rates changed, and it is not for the Government to perform due diligence for such large, sophisticated organisations. Any such action would weaken incentives for businesses to act sensibly when purchasing financial instruments, and would potentially open the floodgates—a word my hon. Friend also used—to any businesses that have lost out from a financial transaction. I am therefore confident that the FCA has found the right balance to ensure that all non-sophisticated businesses fall inside the scheme.

My hon. Friend also mentioned the limitation placed on the type of financial products that are part of the FCA review. Given the widespread sale of the particular products included in the review to small businesses, it is reasonable that the FCA has established the parameters of its review on that basis. The FCA did that based on a full review of what products were sold to which businesses and by whom, and the full review includes all those products that were widely sold to small and unsophisticated businesses.

The FCA must also consider how to allocate its resources economically and efficiently, and it therefore seems reasonable that the review is focused on the products where the bulk of sales took place.

In closing, I reiterate that the Government take extremely seriously the abuse that has taken place in very many cases.

[Bill Wiggin]

I am most grateful to the Minister for taking the trouble to reply to this debate. He is right that there are some things in there, but will he agree to think about how a regulator such as the FCA should proceed in the future so that we get regulation across the board, and not just for specific groups of companies? It strikes me that it does not matter how many employees a company has or how big its balance sheet is, it should be behaving responsibly. In the case of larger companies, more jobs are put at risk if financial mis-selling takes place, and we rely on the FCA to be a regulator. I would be grateful if he bore that in mind.

Beer Duty Escalator

Bill Wiggin Excerpts

Thursday 1st November 2012 Commons Chamber

[Andrew Griffiths]

I congratulate my hon. Friend not only on supporting breweries but on managing to get both his local brewers into Hansard in one attempt, which is absolutely fantastic.

[Bill Wiggin (North Herefordshire) (Con)]

I am grateful to my hon. Friend for his generosity in giving way. He will be aware that we need it, as he is one of the few Members whose speech does not have a time limit.

Will my hon. Friend use his excellent speech and the sense of unity in the House today to ensure that people paying duty on beer do not fight with people paying duty on cider? We must stay united, otherwise the Treasury will win.

[Andrew Griffiths]

I completely understand what my hon. Friend is saying. Nobody wants one industry to fight against the other, but we are seeing a reduction in the brewing industry simply because it is being treated unfairly. All that we are calling for is fairness. He talks about cider, and he will know that there is a 50p difference between the duty paid on a pint of cider and on a pint of beer. How can it make sense to the Treasury that every time somebody buys a pint of cider instead of a pint of bitter, it not only disadvantages brewers but costs the Treasury 50p?

Summer Adjournment

Bill Wiggin Excerpts

Tuesday 19th July 2011 Commons Chamber

[Bill Wiggin (North Herefordshire) (Con)]

I was privileged to be here earlier, and I congratulate the hon. Member for Inverclyde (Mr McKenzie) on his maiden speech.

I am sorry that the hon. Member for North West Durham (Pat Glass), who was due to speak, has not managed to get here, which is a great shame.

I shall deal with the speeches in the order in which they appear on the Order Paper—

[Madam Deputy Speaker (Dawn Primarolo)]

Order. I should inform the hon. Gentleman that the hon. Member for North West Durham (Pat Glass) withdrew and is not required to explain why.

--- Later in debate ---

[Bill Wiggin]

It is a great shame none the less, but thank you, Madam Deputy Speaker.

My hon. Friend the Member for Gloucester (Richard Graham) spoke about the National Audit Office report on FiReControl and the lessons learned from that disastrous project. I can assure him that the Government will not repeat the mistakes of the previous Administration—mistakes that led, as he rightly pointed out, to £469 million of taxpayers’ money being wasted on an over-complex, centrally imposed solution that was not proportionate to the risks faced and failed to engage with the fire and rescue services. When it was clear that the main contractor, Cassidian, could not deliver the IT system within an acceptable time frame, we had no option but to close the project down last December. We were not going to commit any more resources with no certainty of delivery.

Following the closure we made it clear immediately that we would not impose a central solution. There would be no large-scale national IT systems with such a long lead-in time that the pace of change overtook the promised advantages. Last week the Department for Communities and Local Government launched a new £83 million scheme that builds on locally determined solutions and encourages collaboration and innovation. Every fire and rescue authority can apply—for up to £1.8 million, as a guide—to improve the efficiency of its fire and rescue control services. This will cover the installation of Firelink interfaces to give enhanced voice and data services, which is the priority for most in the sector, according to the Department’s recent consultation.

Through sharing these interfaces, fire and rescue authorities can use the funding for further enhancements that improve the service that they provide for their communities and for firefighters. In addition, we have put aside a further £1.8 million for sector-led initiatives that will deliver benefits to all fire and rescue services. For example, in the recent consultation many responses from the sector emphasised the need for common standards. These would underpin collaboration and interoperability between fire and rescue services, facilitating improved overload and fall-back arrangements. The Chief Fire Officers Association has already indicated its intention to apply.

That brings me to another lesson learned. We have taken careful account of the consultation responses and we are working closely on both the political and the operational sides of the fire and rescue sector. The Department is grateful to the Chief Fire Officers Association and the Local Government Group for their help in developing the new scheme and agreeing to be part of the oversight measures.

My hon. Friend the Member for Pendle (Andrew Stephenson) spoke about the effect of property regulation on holiday lettings. This Government are committed to being the greenest Government ever and improving energy performance by encouraging energy performance certificates, like those that one sees on white goods, showing an A to G range, depending on how energy-efficient they are. We want that process to take place for every building; in this case an EPC is required for the construction, sale or rent of a building. The EPC shows how energy-efficient the property is and includes recommendations about how to improve energy efficiency.

The Government recognise that this issue is important to holiday home owners and creates a problem for that industry. We do not want to impose unnecessary burdens on the industry or to gold-plate this directive, and we are seeking to establish why it has been interpreted in the way it has. We are also prepared to seek further legal advice to ensure that we are not going beyond the minimum requirements imposed by the directive. I have investigated this and it seems to be a classic case of gold-plating. We have made inquiries to establish the position in other European Union countries and it seems that, as my hon. Friend said, EPCs are not required for holiday lets in a number of other member states, including Germany, Sweden and Denmark—he also mentioned France and Scotland. It gives me great pleasure to tell the House that we should have a clearly defined position on this within the next few weeks.

On the issue raised by the hon. Member for Cambridge (Dr Huppert), I think we all agree that there is tremendous value in having a prosperous and diverse high street for all the community. Mill road is undoubtedly an area of local importance and value, and reads extremely well on the internet. Town centres are key to sustainable growth and local prosperity and are at the heart of our neighbourhoods, giving communities easier access to shops and services. The Government gave a clear commitment in the debates on the Localism Bill, most recently on 12 July, and as part of the Budget, that we will put town centres first for new retail development. We will set out planning policies on retail to support competitive town centres through the new national planning policy framework and we are determined to give local communities greater power to shape their areas and to be clear about the balance of uses they want in town centres. We are legislating to introduce new local level neighbourhood plans to give local people greater control over the future of places that are important to them.

Neighbourhood plans are a positive planning tool that will have real weight in the planning process, but we must be clear about what planning can and cannot do. Planning policy on town centres is not pro or anti-supermarkets and it cannot seek to restrict lawful competition between retailers. It is and always has been blind to the issue of who the operator of a retail proposal would be—whether a supermarket or an independent. We want the right scale and type of development in the right location to meet people’s shopping needs. That is what planning policy can support local councils in achieving in a more practical manner than by legislation. Local neighbourhood plans and low rates for small businesses should help in encouraging new shops and businesses so that we do not lack variety—the hon. Member for Cambridge referred to clone towns—in our high streets.

The hon. Member for Chippenham (Duncan Hames) also raised this issue. The Government believe that planning is most effective when local residents, businesses and civic leaders are in the driving seat of planning for their areas and when they can deliver the development they want to see. Neighbourhood planning is a radical new right being introduced by the Localism Bill. It enables communities to shape their local areas in a manner that can respond to local needs and ambitions and is part of our reforms to ensure that the planning system delivers sustainable economic growth and should be used to shape, rather than prevent, development.

Neighbourhood plans and orders are prepared by the local community and can be used in a flexible manner to suit local circumstances. They will result in better, more effective and more locally responsive decisions that will deliver an overall increase in sustainable growth and will change people’s attitudes to development. They will become an important part of the planning toolbox, while existing planning tools will remain entirely open to communities and local authorities working in partnership. The hon. Member for Chippenham asked who will decide. Local councils will have an important role in helping communities to produce plans or orders through a duty to support, and an independent qualified person and the local planning authority will check plans and orders to make sure that they are legally compliant and take account of wider policy considerations.

I shall touch briefly on the national planning policy framework, which will consolidate more than 1,000 pages of planning policy documents into a single, streamlined document. The framework will be strong where it needs to be, and it will include policies that support the Government’s priorities for economic growth and infrastructure. It will also set out the Government’s priorities for environmentally and socially sustainable development. The policies will provide local communities with the tools that they need to protect the environmental and cultural landscapes that people value so much. It will make a presumption in favour of sustainable development, and a working draft was released in June. We have made a commitment to publishing the framework for full public consideration and consultation in July. It is a privilege to answer hon. Members’ questions, and I am sure that the whole House will join me in wanting to wish Daphne Neill a speedy recovery.

Department for Environment, Food and Rural Affairs

Savings Accounts and Health in Pregnancy Grant Bill

Bill Wiggin Excerpts

Monday 22nd November 2010 Commons Chamber

The evidence that we took in Committee from those responsible for administering the scheme and for looking at its effectiveness indicated that they had no reason whatever to believe that in the event of a change of Government, which I accept and acknowledge has happened—

[Bill Wiggin (North Herefordshire) (Con)]

That is big of you.