Commercial Financial Dispute Resolution Platform

Anna Turley Excerpts

Thursday 15th December 2016 Commons Chamber

[Anna Turley (Redcar) (Lab/Co-op)]

It is a pleasure to follow the hon. Member for Ceredigion (Mr Williams), who not only made a very articulate case on behalf of his constituents, but exposed the vacuum at the heart of the regulatory framework to support small businesses. I appreciated everything he had to say. I also congratulate all hon. Members who secured this important and timely debate, which, as we have heard, has real resonance in the life experiences of our constituents. That is why I am very happy to support the motion, and I wish to say something on behalf of one of my constituents who has been affected by this. I also give credit to the work that the Treasury Committee and the all-party group on fair business banking have done to give this issue the prominence it deserves.

I do not rise to speak on the minutiae of financial regulation, as I am sure you will be delighted to hear, Madam Deputy Speaker. Instead, I ask the House to consider the human stories of those denied fair outcomes in their financial disputes and those who have had to accept the current lacklustre compensatory measures. This debate is about the consumer and the customer and their right to meaningful redress when things go wrong. It is right that this House takes an interest in these matters, just as it is right that the FCA was established by an Act of Parliament. This House has an obligation to monitor the regulatory environment to ensure that our constituents are adequately protected when they bank, save, borrow and spend.

My constituent, Stephen Lilley, who runs his own business knows the devastating personal and economic effect that bad financial regulation can have. He was mis-sold an interest rate hedging product, which has left his business in considerable financial difficulty. The product was sold to him deceptively by HSBC, and included a base rate swap that was put in place to protect his business from rising interest rates, but without any explanation that should rates fall—and they certainly did—his business would not benefit. The result has left his business in a perilous state. He was let down by HSBC, which mis-sold him the product. He was initially let down by the Financial Ombudsman Service, which rejected his complaint twice until it decided that the swap product had indeed been mis-sold. He was also let down by the FCA and the flawed redress scheme for mis-sold IRHPs, which did not deliver the sort of financial compensation that would get his business back on track.

Mr Lilley and his family have endured sleepless nights and stress. Both he and his wife have had heart attacks in recent years, and have been wracked with worry over the future of their business. They feel powerless and that the bank has a hold over their lives. When HSBC admitted that it had mis-sold a product to Mr Lilley, it said that it had made a mistake in the length of the interest rate cap it had in place. It should have been five years, but instead it was 10. The bank said that Mr Lilley could have the difference returned to him if he accepted a cap at five years. It is very difficult for me to see how that can be right. How is it that, after clear negligence, the bank can continue to hold all the cards, and the customer none? Mr Lilley put it in stronger words to me: he said that the proposal amounted to theft.

This story is repeated all over the country, and we have heard some examples in the debate. Everyone in this House today will have constituents who have suffered similar circumstances—people who want to do the right thing, who have poured every spare penny they have into their businesses, and who have looked to their bank to secure a financial plan for that business. When things went wrong, the bank, the regulator and the ombudsman let them down. The best way that we can serve our constituents and ensure that cases such as Mr Lilley’s do not happen again is to support the motion, which I welcome.

The people who need a proper platform for the resolution of disputes of this nature are ordinary individuals and small and medium-sized businesses—exactly those whom the Government say they are determined to support. This House also has a proud history of acting to protect the wellbeing of citizens of this country, of which the Health and Safety at Work etc. Act 1974 is a case in point. That Act outlines the duties of employers to take measures, where reasonable, to ensure that persons not in their employment who may be affected by their activities are not exposed to risks to their health and safety.

I do not need to outline the devastating physical and mental health effects that are brought about by chronic worry and anxiety about a business that someone has spent their life building up. The impact on the health and wellbeing of my constituent and his family are clear. Our financial regulatory system has a moral duty to regulate as much as an economic one, and it is the lives of our constituents, and the worry that they bear, which is the test against which it should be measured. That is why I am proud today to support the creation of a proper authority to solve these disputes and why I am happy to support this motion.