Royal Institution of Chartered Surveyors: Property Act Receiverships

Adrian Bailey Excerpts

Tuesday 18th April 2017 Westminster Hall

[Mr Adrian Bailey (West Bromwich West) (Lab/Co-op)]

May I say what a pleasure it is to serve under your chairmanship, Mr Hollobone? I will do my very best to keep within the time limit you have outlined.

I congratulate my hon. Friend the Member for Cardiff Central (Jo Stevens) on her doggedness and determination in continually bringing this issue to Parliament and on the lucid and forensic way in which she outlined the issues. I would find it difficult to elaborate in any way on the details of the cases that she has brought to the notice of Members in this and the previous debate.

I also compliment Mr Shabir and—although he is not mentioned in this debate—Mr Richards from the Ogmore constituency, who suffered a similar situation, for their doggedness and resilience in ensuring that this has been brought to the notice of parliamentarians and that the issues are examined in public. Their experience would have defeated lesser people and they deserve commendation for the way that they have campaigned.

As my hon. Friend said, the issues arising from the evidence were examined by the former Select Committee on Business, Innovation and Skills. Unfortunately, the hearing was just before the 2015 general election. Although we took the evidence, we never had the chance to make recommendations. However, the answers that my hon. Friend has referred to from that meeting quite clearly illustrate the vast gap between the public rhetoric of these bodies and the private reality of how they operate. Anybody hearing the particular case studies can only be astounded that a professional body, and representatives of that body, could have acted in such a way, and that there does not appear to have been any legal redress for the way in which they acted, or compensation for the victims of their actions. The wide consensus of opinion about the awfulness of the actions and the terribleness of the experience that the individuals have gone through—let us be clear: it is reflected by many other small businessmen and women up and down the country—raises matters of huge concern.

I would like to highlight one or two issues that the Government must address, the first of which is the gap that seems to exist in the Serious Fraud Office’s threshold for investigation of fraudulent activity. I will not repeat the words of the Solicitor General in the previous debate, but he basically said that investigation was reserved for high-profile and serious cases of fraud and was limited to companies such as GlaxoSmithKline, Tesco and Rolls-Royce. It would appear that we have a Government body that is prepared to act on behalf of big business but not small business.

The Solicitor General went on to say that ActionFraud had been established to ensure reporting. I have looked at ActionFraud; it reminds me a bit of the ill-fated cones hotline that existed in the 1990s, because someone can report something, but absolutely nothing will happen. If anything can happen, that is not made clear to anyone who makes a report.

[Kevin Brennan]

“Inaction Fraud”.

[Mr Bailey]

Absolutely.

In conclusion, the issues are of such seriousness, and the way in which the professional organisation has responded to them so inadequate, that the Government must look at some sort of intermediate implementation of action against fraud, to help small as well as big businesses.

--- Later in debate ---

[Bill Esterson (Sefton Central) (Lab)]

It is a pleasure to serve under your chairmanship, Mr Hollobone. My hon. Friends have set out examples of how their constituents have been badly treated over a number of years, first by the banks that distressed their thriving and successful businesses and then by the failure to secure justice after a long struggle, often with the support of my hon. Friends and their predecessors.

This is not just about one bank. It has been about Lloyds, HBOS and Royal Bank of Scotland. A constituent of mine came to see me just last week about NatWest, his business having been run down in a similar way to those of my hon. Friends’ constituents’. Businesses that were successful, that paid their interest on time and that were in a position to continue making their payments were run into the ground, in order to realise the maximum possible amounts for the banks and not in the interests of the customer. That is the reality of what has happened over many years and I am afraid that it could still be happening today, given the system that still exists.

The Tomlinson inquiry found at RBS a lack of competition and conflicts of interest, as well as the need for a proper retail banking sector, and yet we are in a situation today where those issues are still to be addressed. RBS may well have its own compensation scheme being set up, but no money has been paid out and at this stage it is being handled by RBS itself. It is still not independent of RBS. At the heart of this debate is that lack of independence and whether there are conflicts of interest in the LPA system.

[Mr Bailey]

Often, banks will say that the poor levels of business lending are because businesses will not come to banks for that lending. Does my hon. Friend agree that it is cases such as those mentioned today that have deterred many small businesses from going to their local banks and that, by default, inhibit our ability to invest in our economy for the future?