Money Transfer Accounts and Remittance Sector

Debate between Lord Brennan of Canton and Mike Gapes

Wednesday 22nd January 2014 Westminster Hall

[Kevin Brennan]

My hon. Friend is absolutely right, and I am sure that that was why the International Development Secretary acknowledged, at least in words, the importance of the matter. Today we are seeking to poke the Government into quicker action than we have seen so far.

[Mike Gapes (Ilford South) (Lab/Co-op)]

In my constituency I have a large Somali community whose members send remittances to different parts of the world, as do other people. I want to supplement what my hon. Friend the Member for Sheffield Central (Paul Blomfield) said. Remittances do not just add to international development assistance because, globally, they are of greater value. If we cut them off, we will do serious damage to a number of countries and some of the poorest people in the world.

[Kevin Brennan]

If I keep taking interventions, I fear that my comments will become less fresh and novel to listeners because my hon. Friends, with their expertise on this matter, are anticipating many of my points. Nevertheless, I thank my hon. Friend for what he said.

Sadly, following the withdrawal of banking services by Barclays, my constituent, Mr Anwar Ali, had to run down his business severely, and I understand that if he is unable to find a solution to this banking problem, the business may have to close. It is one thing for large banks to refuse to lend to small businesses—we all know about that—but it is another to deny to legitimate, law-abiding small businesses the basic service of a bank account. The banks casually say that they are making a commercial decision, but to small businesses it is a commercial death sentence. Let me remind hon. Members of the importance of such remittances, especially to developing countries.

According to a United Nations Conference on Trade and Development report in 2012, in 48 of the least developed countries, remittance receipts climbed from £3.5 billion in 1990 to more than £27 billion in 2011—that figure might be much higher. In Somalia alone, the authorities said in 2012 that around one third of the country’s GDP—$2 billion—came through small money transfer agencies, and that 40% of people in Somalia depended on remittance flows.

A major multinational bank, which in recent years was heavily fined for wrongdoing, is operating in a market dominated by a small number of players of its kind and has withdrawn, mainly from small businesses, a service vital to their existence and crucial to some of the most vulnerable people in the world. It is difficult to get to the bottom of exactly why that has happened, because it has not made its reasons clear. Are they commercial reasons, as it blithely says, or are they fears about terrorism and money laundering? There is a lack of clarity about the reasons.

Anthony Jenkins, the chief executive officer of Barclays, said that it was stopping offering bank services to such business because they

“don't have the proper checks in place to spot criminal activity and could unwittingly be facilitating money laundering and finance terrorism”.

In a letter to Dahabshiil, which is one of the larger payment firms and is located, I believe, in the constituency of my hon. Friend the Member for Bethnal Green and Bow, Barclays said that the decision was

“not a negative reflection of your anti-money laundering standards, nor a belief that your business has unwittingly been a conduit for financial crime. It is, however, a commercial decision that we have taken due to the risks of the sector”.

Perhaps the Minister can explain—I know he talks to these big banks—what he thinks is behind the fact that every single major UK bank refuses to provide banking services to the sector, effectively financially excluding the firms, without considering each of them on its merits. Does he believe that that is purely commercial coincidence, or is it—[Interruption.] I wonder whether those in the civil service Box would stop talking while I am addressing the Chamber.

Does the Minister believe that that situation is a commercial coincidence, or is it another aspect of the overall lack of competition in the banking sector that the Government are failing to address? What can he tell us about the role of the National Crime Agency in this matter? In effect, the uncompetitive major banks have erected a complete barrier to the financial sector for some of its smallest members. Does the Minister think that is acceptable?

Dahabshiil was able to win an injunction against Barclays in the courts in October, so its account remains open for the time being, at least. Unfortunately, however, many other firms, including the one in my constituency, have not benefited from the development, because their accounts have already been closed by Barclays. Does the Minister believe that Barclays should offer to reopen the accounts that it closed before the court’s decision so that the account holders are able to carry on their business until the case is finally settled? Does he agree that that would be an entirely reasonable thing to do? It would allow businesses such as the one in my constituency to get on with the business that they were doing perfectly legitimately and legally beforehand so that money transfers could take place. Will he call on Barclays to reopen those accounts until the court decision is made? I understand that so far Barclays has refused to reopen those accounts, so I hope that the Minister will condemn that.

I pointed out in the 2013 debate that there seems to be a different set of rules for large banks and financial institutions, such as Barclays and Western Union, which stand to benefit from the situation. It has been proved that Western Union helped to facilitate money laundering in Mexico—it paid a fine to the Arizona state authorities in relation to that—yet it stands to inherit a lot of the business of small firms against which nothing has been proved. In recent years, almost all the large banks and institutions have been found guilty, in one way or another, of financial misdemeanours, and they have sometimes been fined—[Interruption.] I wonder whether I could ask you, Mr Owen, to appeal that those in the civil service Box do not interrupt the debate.

European Union (Referendum) Bill

Debate between Lord Brennan of Canton and Mike Gapes

Friday 22nd November 2013 Commons Chamber

[Mike Gapes (Ilford South) (Lab/Co-op)]

I welcome the opportunity to speak to a number of amendments in this group standing in my name. [Interruption.] Given that you ruled on this matter previously, Mr Speaker, I should also make it clear to the Under-Secretary of State for Defence, the hon. Member for Broxtowe (Anna Soubry), who is shouting at me from a sedentary position, that these are not frivolous amendments. They are serious amendments. Some are intended to probe the Government’s position; some are amendments that I will wish to put to a vote. In the last few days I have also added my name to two other amendments—amendment 77, in the name of my right hon. Friend the Member for Neath (Mr Hain) and amendment 3, in the name of the hon. Member for Windsor (Adam Afriyie)—because it is important that the House should make clear its views about those matters as well as the others.

I have tabled a number of the amendments in this group: amendments 9 to 13, 21 to 33, and 58 and 59. They cover different aspects of this important debate about the timing of the referendum—if it is to be held—as well as related matters, such as the number of days on which the referendum would be held. The Minister—who I assume was speaking for the Conservative party and not the Government—made it clear previously that he believes there are problems with holding a referendum in 2014. One of his arguments is that the choice should simply be between a hypothetical and at this stage undefined renegotiated position and total withdrawal. However, we do not yet know what that renegotiated position will be.

I have received representations, including from people who disagree with my pro-European approach, arguing that the choice should be between the status quo and complete withdrawal. Rather than buying a pig in a poke, we would at least know what the status quo was. That would mean that those who are hostile to the European Union can vote to leave, while those who support it as it is, but with a commitment to work to change it—there are always changes; it is not constant—will know that what they are voting for is something like what we have today.

[Kevin Brennan (Cardiff West) (Lab)]

I have studied my hon. Friend’s amendments, in particularly amendment 21, which calls for the referendum to be called on 7 May 2015. Would it not be a major error to confuse a European referendum with a general election?

--- Later in debate ---

[Kevin Brennan]

I understand the point my hon. Friend is making, but in practice would it not be confusing for hon. Members to be campaigning on behalf of their political parties one moment, but in another moment having to form alliances with colleagues from other political parties on the issue of Europe? Is that not a proposition that would simply not work in practice?

[Mike Gapes]

I understand my hon. Friend’s sympathy for those Conservative Members of Parliament who might find themselves having to campaign alongside UKIP, but we know that many Conservative MPs are already trying to reach local arrangements with UKIP so that they will be unopposed at the next general election. My proposal would be a fulfilment, in practice and openly, of what is already happening under the radar.