Amendment of the Law

Annette Brooke Excerpts

Thursday 19th March 2015 Commons Chamber

[Annette Brooke (Mid Dorset and North Poole) (LD)]

May I start by apologising for my absence during part of the debate? I am pleased to be here now to make a short contribution. I have been following Budgets for decades, because my former occupation was that of an economics teacher and I always liked to use real-world examples in my lessons. I remember the first time I sat in the House to listen to a Budget speech; it was absolutely awesome. It was such an honour and privilege to be right here listening to it after so many years of just following it on the television.

I was teaching economics on black Wednesday, 16 September 1992. In my role as a teacher, I found that day incredibly exciting, because it provided illustrations for many of the chapters of the economics textbooks. Members might remember that that was the day on which we fell out of the exchange rate mechanism in a big way and interest rates went up rapidly before our eyes, with the threat of their going up to 15% at one point. I can remember the mortgage interest rate that I had to pay in those days; it was at a staggeringly high level. My colleagues recall my being on top of the world on that day. I was terribly excited while they were all desperately worried about how they were going to manage their budgets and pay their mortgages.

This is relevant to the reason that the coalition was formed. I genuinely believed that we were on the edge of a precipice at that time, and that we faced a major decline in the financial markets. I felt that achieving financial stability was the most important thing to do. It is well known that I have had difficulties with many aspects of coalition policy, but I remain convinced that we did the right thing in this regard, and there are many aspects of this Budget that I am proud to stand up and defend. I shall touch on just a few of them.

People would probably expect a Liberal Democrat to start by commenting on the increase in the income tax allowances. That policy was on the front page of our manifesto, and I am pleased that we in the coalition have now gone beyond that amount and are proposing that the threshold should be raised even higher. It is important to take 26 million workers to the point at which they pay less tax, and to take 3 million people out of tax altogether. That clearly benefits lower earners. My hon. Friend the Member for North Dorset (Mr Walter) and I will probably benefit a little bit from the Budget as well, because pensioners will now be brought into the increased allowances. That will be really appreciated by the many constituents who have written to me to say how unfair it was that their income tax allowance was fixed.

I should also like to comment on the savings income allowance. This represents a really important and interesting principle. It might not initially make a lot of difference financially to people, but it is not a good principle to tax someone a second time when they have saved all their life and paid tax before putting their money into savings. That is a great disincentive to saving, and the change in the rules will be an important concept in the future.

I would also particularly like to comment on the increased expenditure proposed for children’s mental health services. I have drawn the House’s attention to the fact that in Dorset we have no intensive psychiatric care units whatsoever for young women and that they have to travel afar. We have enormously long waiting lists for children’s mental health services and I have argued many times in this House that when, for example, a child is suffering from abuse, it is vital that they can access treatment quickly. I have made many proposals in education and children’s Bills that there should be an absolute duty to provide mental health support in such circumstances. I have never managed to achieve that legislatively, although we now have a clear policy framework in which the Department of Health and the Department for Education work together. Delivering the service needs money, however, and that is very important for our young people.

I welcome the new proposals to tackle tax avoidance and would like to refer to the statement made by my right hon. Friend the Chief Secretary this morning. I thought that some important points were made while this House was less than attentive. Let me give two of them. First, for offshore evaders, following consultation we will introduce a new strict liability criminal offence so that people can no longer plead ignorance in an attempt to avoid criminal prosecution. Secondly, we will introduce a new offence of corporate failure to prevent tax evasion or the facilitation of tax evasion. They are very important and I personally find the idea of a tax dodging Bill very attractive for any future Government. It is important to appreciate that by raising billions in such a way we can help fight poverty in the UK and in developing countries.

In my maiden speech, I focused in particular on the underfunding of the two education authorities that I represent, Poole and Dorset, which are both in the 40 lowest-funded education authorities. I argued long and hard against the previous Government’s not tackling that and I was really pleased that this year we had some extra money to acknowledge that gross underfunding. The future Government must introduce a fair funding formula. It is all ready to run and I hope that the next Government will do that so that children in my constituency and across Dorset will get a fair deal.

My constituency is diverse. I have farmers who will benefit from yesterday's proposed change to tax. Businesses have been well supported by various measures that have been introduced. It is a constituency that, proportionately, has very little public sector employment and it is very strong in employment and business terms because it is a mixed economy. It has a sustainable future, but even so I welcome the contribution that the Dorset local enterprise partnership has made, with successful bids supporting new industries, such as the creative digital industries.

I believe that working within the coalition we have achieved a strong economy, but for me the future must be about tackling the fairness side of things. I therefore welcome the fact that the Liberal Democrats have a different approach for the future. Finally, I want to thank all the staff of the House who have been so supportive in the time that I have been here.

Fiscal Responsibility and Fairness

Annette Brooke Excerpts

Thursday 19th March 2015 Commons Chamber

[Annette Brooke (Mid Dorset and North Poole) (LD)]

I thank my right hon. Friend for his statement. Will he comment briefly on its implications for the future funding of our nurseries, our schools and our colleges—something very important to us on the Liberal Democrat side?

[Danny Alexander]

My right hon. Friend makes an important point. I believe that in the next Parliament, we should protect the budgets in real terms not just of schools, but of early-years education and 16-to-19 education as well. Saying simply that cash per pupil should be provided on a frozen basis across the Parliament amounts to real-terms cuts for education. That is what people will get from one party of this coalition, but from our part of it people will get real-terms growth and expenditure in all parts of the education system. I think that is vital, given the role of those institutions in fostering opportunity for all in our society.

Equitable Life

Annette Brooke Excerpts

Thursday 26th February 2015 Commons Chamber

[Mr Robert Syms (Poole) (Con)]

I congratulate hon. Members on bringing this debate to the Floor of the House. Since my entry to the House in 1997, this matter has come up repeatedly. I look forward to the day when we no longer have to debate Equitable Life. In 2004, I was one of the more than 100 Members who wrote to the parliamentary ombudsman urging her take up the case, following earlier failed attempts. We finally got a report and we finally got action, but unfortunately it took a long time, and in the meantime many constituents in their 70s and 80s have seen their prospects of a comfortable retirement disappear with this sorry saga.

In 2010, I argued that we needed to get a compensation scheme up and running to get money out as quickly as possible and that the question of how much was an argument for another day. I thought that if we got hung up on an argument about how many billions, it would probably delay the whole process again. As it was, the Government acted quickly in 2010: the scheme started operating in 2011, £1.5 billion having been allocated, and by the end of January 896,367 people had received some compensation. Given the complexity of these issues and the difficulties of tracing people, on the whole I think the Government have done a good job delivering those funds.

Nevertheless, 22.4% will have been a disappointment to many constituents. I do not want to get into an argument about the appropriate level of compensation, but like many Members I think the Government should contribute more as the public finances improve.

[Annette Brooke (Mid Dorset and North Poole) (LD)]

The last Government’s lack of action was described as “shabby”, and it would be a tragedy if this Government, having taken that brave decision in 2010, were to be regarded as shabby too, but unfortunately 22% sounds a bit shabby.

[Mr Syms]

I agree. For many of us, it is a start rather than the finish.

The constituents I see in my surgeries have a quiet dignity about them but still feel aggrieved and think that the Government ought to move some more. My main plea today is for the Treasury to consider the issue. The public finances are still a challenge and will be a challenge for the next Government, but I think that as things improve, the Government should be able to provide further funds.

Oral Answers to Questions

Annette Brooke Excerpts

Tuesday 2nd September 2014 Commons Chamber

[Mr Speaker]

Order. It is a pretty considerable distance from Milton Keynes to Brighton, and indeed, for that matter, to Bolsover. The question was narrowly constrained, so we will move on.

[Annette Brooke (Mid Dorset and North Poole) (LD)]

12. What fiscal steps he has taken to reduce the cost of living for those on the lowest incomes.

[The Chief Secretary to the Treasury (Danny Alexander)]

As I said earlier, the coalition Government have taken decisive action to support families on low incomes, particularly by increasing the personal allowance next year to £10,500—a key Liberal Democrat manifesto commitment. I also mention the hugely successful introduction today of universal free school meals for infant school pupils, which, as well as enhancing educational performance, is worth £400 per child in terms of the costs of paying for those meals.

[Annette Brooke]

I thank the Chief Secretary for his answer. Does he agree that the Liberal Democrats have been a driving force in this Government for helping people on low incomes through the increase in personal tax allowance, and that the implementation of the universal free school meals for infant schools this week is further evidence of the Liberal Democrats really helping hard-working people on low incomes?

[Danny Alexander]

It will come as no surprise to the House that I wholeheartedly agree with my right hon. Friend. She is absolutely right to say that certain measures would not have happened without the role played by the Liberal Democrats in this Government. The lifting of the income tax personal allowance and the introduction of free school meals for infant pupils are just two of many ways in which our party has contributed to this Government to ensure that we are helping and that this country has a stronger economy and a fairer society where everyone can get on in life. That must be the right objective.

amendment of the law

Annette Brooke Excerpts

Monday 24th March 2014 Commons Chamber

[Annette Brooke (Mid Dorset and North Poole) (LD)]

I shall aim to achieve a balance between despair and euphoria in my contribution.

There is a great deal to commend in this Budget, against a background of rising employment, falling inflation and rising economic growth, which is now expected to be 2.7% in 2014 according to the Office for Budget Responsibility. The OECD forecasts that the UK will grow faster than any other G7 economy in the first half of this year, and further forecasts show that real wages are set to rise over the years ahead. Of course, that has been accomplished with some tough decision making, which has had an impact on many people, and there is still much to do to ensure that we have both a sustained stronger economy and a fairer society.

I am particularly pleased about the increase in the income tax threshold, a key Liberal Democrat manifesto pledge. A £700 tax cut for more than 20 million people has been delivered by April 2014, with the 2.7 million lowest-paid people taken out of tax altogether. Now the threshold is set to rise to £10,500, benefiting working families, along with the increased support for child care.

I welcome greatly the measures to help pensioners—I am not sure whether I should declare an interest. I am proud to be part of a Government who will be remembered for having done so much to reform pensions—single-tier pensions, the triple lock, auto-enrolment and now the change in the Budget. The help for savers is to be welcomed, as are more measures to clamp down on tax avoidance.

I also welcome the Government’s adding to the measures that have previously been announced to support business, such as increasing tax incentives to invest in new equipment and carry out research and development, and increasing the level of financial support for exporters. As other Members have mentioned, ensuring that business has skilled labour is all-important. Some 1.5 million apprenticeships have already been created, and now there is new money to create even more.

Local government clearly has an important role to play in supporting businesses to grow and create jobs, which of course are also related to tackling our housing crisis. Many council leaders of all political colours fear that by 2015, the successive cuts to local government expenditure might result in a cliff edge, with serious further cuts to the local services that they can provide. There are also likely to be more increases in regressive charges, despite the innovative and transformative work that is taking place and the extra money that has been pledged for the integration of health and social care services.

The proposed changes to councillors’ pensions are deeply unpopular. I simply do not understand why, for example, council leaders of working age should be seen as volunteers, when in today’s world they are working full time and using many professional skills. I understand that local social fund money has been transferred from the Department for Work and Pensions to the Department for Communities and Local Government, and that it may be removed from council budgets in 2015. That would cause me great concern, as it is a vital safety net.

We are faced with a deep housing crisis, and there are heartbreaking situations, typified in my constituency mailbag, involving families in unsuitable accommodation. Although I welcome the measures to address the crisis announced in the Budget and previously, and although I acknowledge the Government’s record on building houses, particularly social houses, I have two main questions. First, will the measures be sufficient? Secondly, although I appreciate that we must have both demand and supply measures to increase the number of homes delivered each year, what monitoring will there be of the Help to Buy scheme, given the fears that it might result in undue upward pressure on house prices, particularly in London and the south-east?

I welcome the moves to allow garden cities—or perhaps towns, if we are talking about 15,000 homes—to be developed with a local trigger, providing much-needed housing and offering an alternative to filling in every space in existing urban areas. I welcome any moves to bring forward publicly owned land for development, and I wonder what progress there has been on community land auctions. We have heard further calls for “brownfield first” today, and I am sure that there is much publicly owned land that would meet that criterion. I welcome the pilot study on development benefits. The new town option provides the opportunity to capture community benefit to provide long-term facilities and infrastructure for a settlement and its surroundings, and potentially to provide affected individuals with a share in any benefits.

With any development it makes sense to include self-build and building by smaller and medium-sized companies. That introduces competition and, I hope, will stimulate good design—something much needed, as a previous speaker said. I note further measures to support social housing—again, so much is needed—and I believe that neighbourhood plans are really important, although they need more resources. Planning should be bottom up; we should be working with our communities to help tackle our housing crisis, allocating sites within our local community, and delivering when we truly understand our local community’s housing needs. Finally, I welcome the announcement of the extra money on potholes, which I believe will deliver real change very quickly.

Holiday Pricing

Annette Brooke Excerpts

Monday 24th February 2014 Westminster Hall

[Natascha Engel]

Absolutely, and the case is ongoing. I was citing it as an example of using a massive hammer to crack a nut. Everything is with good intentions. We all want the best education for our children. We all know that the less time a child spends at school, the worse its outcomes will be, and there are lots of different reasons for that. There are children from chaotic families and children who truant, but we are talking about looking at an individual child and the family’s circumstances and seeing whether it would be possible, not to have a week a year taken out of school time, but to have a week occasionally to make sure that that family can spend some quality time together. I am so glad that we are having this debate, and I am looking forward to hearing about other individual cases from constituencies, because they will highlight the fact that we do need to revisit the matter.

Obviously, we cannot force holiday companies not to raise their prices during school holiday times, but we do need to have a far more sensible and pragmatic approach. We need to give schools greater discretion to allow families to have holidays together.

[Annette Brooke (Mid Dorset and North Poole) (LD)]

I agree with many of the points the hon. Lady is making, but I have a concern about putting the onus on to head teachers without very good guidelines. Head teachers would find it difficult with parent against parent, and there would be inconsistencies across areas and across the country, so I think we need to dig into the criteria and guidelines that are issued.

[Natascha Engel]

That is an excellent point. I know the hon. Lady has a background in education, and she is absolutely right. All I am asking for is that we allow greater discretion. At the moment, there is not enough discretion, and that is why the issues are being raised with us as constituency MPs.

--- Later in debate ---

[Damian Hinds]

Yes, it is my fault. I worked mostly in the hotel business, but the same principle applies to airlines and most of the travel business’s wide range of products—basically anything with high fixed-cost assets, a perishable product and fixed or semi-fixed capacity. Hotels are also suppliers to holiday companies. Package operators buy in capacity from airlines, hotels, bus companies and so on. It is also worth bearing in mind that there is an international market, especially in foreign travel. Packagers are to some extent price takers. No one in this country decides the market rate of a hotel room in Spain in the high season. Even if we believed that British companies set the prices for holidays, no one would suggest that Spanish hoteliers are within the control of Her Majesty’s Government. Resort-based travel is international in nature. People have already mentioned the timing of German and French holidays, which are already factored into the price. If people from different countries are going to a resort, the demand is an amalgam of all the incoming traffic.

I come here as a sinner, but I have not come here to confess. I do not anticipate a popularity boost from my appearance in Westminster Hall this afternoon, but the simple fact is that to a large extent we are talking about the laws of economics. There is no single year-round market clearing price in holiday resorts.

[Annette Brooke]

I want to draw on the hon. Gentleman’s expertise. I accept that there is supply and demand and that, if we attempt to interfere too much, there will be touting and so on, but does his analysis include the reasons for the steep rises on particular days, which seem to coincide with school holidays?

Oral Answers to Questions

Annette Brooke Excerpts

Tuesday 10th December 2013 Commons Chamber

[Danny Alexander]

After the shadow Chancellor’s performance last week, “Labour can’t win here” is a good description of the Chamber of the House of Commons.

Any Member of this House can submit statistics to the UK Statistics Authority, but I think that those statistics present an accurate picture of the level of overall infrastructure investment in this country. I welcome the strong interest that the right hon. Gentleman has shown in infrastructure and the commitment that he has made to taking these proposals forward. I wish that other members of his party showed a similarly constructive attitude.

[Annette Brooke (Mid Dorset and North Poole) (LD)]

5. How many of the lowest paid workers have been taken out of income tax since 2010.

[The Chief Secretary to the Treasury (Danny Alexander)]

This year 2.4 million low earners have been taken out of income tax since 2010. The number will increase further to 2.7 million next April, once the personal allowance reaches the £10,000 goal that we set in our election manifesto. By next year, the Government’s increases to the personal allowance will have reduced income tax bills by up to £705 a year for 26 million working people in this country.

[Annette Brooke]

The policy is important for a fairer society, and it incentivises work. Does my right hon. Friend share my aspiration to raise the tax threshold to £10,500 and achieve equality up to the age of 74, and, in due course, further increase the threshold for all age groups to incentivise both work and savings for lower and middle-income groups?

[Danny Alexander]

I very much share my hon. Friend’s ambition for this policy. We should consider a threshold of at least £10,500 in this Parliament, and that will be an objective of my Liberal Democrat party. It would be right for the age-related threshold and the main threshold, once they are aligned, to rise in tandem thereafter.

Bradford & Bingley plc

Annette Brooke Excerpts

Wednesday 27th November 2013 Westminster Hall

[Philip Davies]

My hon. Friend is absolutely right, and I know that he has been particularly helpful to the Bradford & Bingley shareholder action group. I thank him for all the help and support he has given to the many shareholders.

Surely the public interest demands full disclosure of the facts to secure the truth. How can the refusal even to release whether the nationalisation of Bradford & Bingley was ratified by the Cabinet ever be in the public interest in a democracy? Surely voters are entitled to know, let alone shareholders, bondholders and employees.

How do we know that the Cabinet Office’s original statement was untrue? I am probably one of the few people—I am sure you are another, Mr Betts—who has read the relevant part of “Beyond the Crash” by the right hon. Member for Kirkcaldy and Cowdenbeath, in which he admitted his part in the sorry mess. The shareholders would otherwise still be in total ignorance of the nationalisation process.

[Annette Brooke (Mid Dorset and North Poole) (LD)]

I congratulate my hon. Friend on securing this debate. I have had a vast amount of correspondence from just one constituent. I concur with him that the situation is bad enough, but the lack of openness for savers and investors means that they remain frustrated. It is vital that we make the information public.

[Philip Davies]

I am grateful for the hon. Lady’s support. I am sure her constituent, who is a shareholder who lost everything, is also grateful for her support. Her point on the lack of transparency is absolutely right.

The full picture of how the banking crisis developed probably goes back to 2003-04, when there were small changes in accounting standards, but the main catalyst was the introduction of the international financial reporting standards, including international accounting standard 39, by the then Government in 2005. IAS 39 proved to be a catastrophically defective standard that may even contravene UK law.

The Local Authority Pension Fund Forum, the universities superannuation scheme, Threadneedle Asset Management and other investor groups sought the opinion of leading counsel George Bompas QC. His opinion suggests that company directors must override the international reporting standards to comply with company law and may need to ignore the advice obtained by the Financial Reporting Council. The opinion also states that the defective financial outcomes of the standards, which are still in place, should be overridden by invoking the true and fair view requirement of the law. Those problems remain, as highlighted by the failure of the Co-operative bank and Britannia building society, both of which were audited by KPMG.

The concerns on accounting standards are widely held. In November 2012, the then Governor of the Bank of England, Sir Mervyn King—now Lord King—argued for a £35 billion capital raising by British banks. He is on record as saying:

“Bank accounts are dishonest because Britain’s accounting rules are faulty. Reckless lending, inflated profits, irresponsible bonuses have all been possible, not just because of greedy bankers, but because of the rules themselves—and a failure of regulators and politicians to recognise the problems.”

The banks used IFRS and IAS 39 from 2005 onwards, and it appears that the then Government were content to receive corporation tax from the inflated profits rather than exercise a duty of care towards savers and investors. People have blamed the lack of regulation for the excesses of the banks, which led to their demise. That is too simplistic. It was not the lack of regulation—banks had mountains of regulations to meet—but the lack of regulation on important things that was the problem.

I will now address the sequence of events prior to the nationalisation. The Bradford & Bingley 2007 accounts were published in April 2008. The auditors passed Bradford & Bingley as a going concern and a dividend was paid. In August 2008, a rights issue was completed at a price of 55p less than eight weeks before the nationalisation. The auditors KPMG completed extensive audit work on the rights issue, and the interim results announced on 29 August 2008 supported a solvent, well capitalised bank. With net assets of £1 a share and a tier 1 capital ratio of 9.1%, shareholders were entitled to believe that Bradford & Bingley was a going concern when the reality was that it was “going, going, gone” just one month later.

Within days of the nationalisation, the Government provided more than £60 billion of support to the two Scottish banks. Bradford & Bingley had a far stronger balance sheet than those banks, as shown in the banking crisis post mortem published by the Local Authority Pension Fund Forum. Furthermore, the public statements of the board emphasised the balance sheet strength of Bradford & Bingley on 29 August and 25 September 2008, a day before the nationalisation decision. That strength was again confirmed by Messrs Kent and Pym, the chairman and chief executive respectively, at a Treasury Committee hearing on 18 November 2008. Their statements conflict directly with the justification of the nationalisation decision by both the Government and the tripartite regulatory authorities. So who was telling the truth?

In the week after the nationalisation, the savings book and retail branch network were sold—arguably at a fire-sale price—destroying the company as an ongoing business. What shareholders, bondholders, employees and my local community want to know is why Bradford & Bingley was singled out in that way, in stark contrast to the treatment of other banks.

Every other bank bailed out at the time is still a going concern—even Northern Rock. Shareholders in some of the bigger banks at the time, such as HBOS, still have shares that have value. Why was Bradford & Bingley, uniquely, closed down, especially given that its financial situation was certainly no worse—indeed, all the evidence suggests it was better—than that of the others? Does the Minister not believe that people are entitled to know the answer to that simple question?

Whereas other banks were considered too big to fail, was Bradford & Bingley seen as too small to save? With constant speculation in the media at the time, was it felt that, if Bradford & Bingley was taken out, the speculation about the health of the banking sector would subside? Whatever the reason, and however little we like it, I hope the Minister agrees that we are entitled to know it.

The Treasury appointed Peter Clokey of PricewaterhouseCoopers as independent valuer for the purposes established under the Bradford & Bingley plc Compensation Scheme Order 2008. His nil valuation was published in July 2010, two months after the general election. Like the shareholder action group, I believe that his terms of reference were far too narrow and that the Labour Government concealed the fact that the bank had received funding support before the nationalisation, pretending for many months that the valuation would be fair and independent, when they knew it would not be, because the in-administration approach of the order ensured a nil valuation and prejudiced legal claims and submissions to the independent valuer and the upper tribunal review body.

Many shareholders—the former owners of the company —believe the valuation exercise was a cynical attempt to dampen media, press and public interest, thus kicking the matter into the long grass. I know that David Blundell has a high regard for Peter Clokey and his colleague James Worsnip. He respects their integrity and appreciates the assistance they provided, within the limits of their remit. In his view, their behaviour may be compared favourably with that of certain Ministers, the Treasury, the Financial Conduct Authority and the Cabinet Office. I met Peter Clokey at the time, and I felt he was sympathetic to the plight of shareholders, but the terms of reference the Labour Government gave him left him no alternative but to give a nil valuation.

The Government’s position on the valuation was that Bank of England support through the special liquidity scheme was not ordinary market assistance, despite more than 30 banks having, and some continuing to have, the use of that facility. That interpretation was a key factor in the nil valuation. However, the European Commissioner’s statement giving clearance to state aid following a request from the UK Government in the early part of the financial crisis in banking markets included the following:

“The UK authorities accept that the recapitalisation scheme and guarantee scheme contain State aid elements. In their view the extension of the SLS”—

the special liquidity scheme—

“is part of the essential role of the Bank of England and therefore not a state aid. In the event that the Commission concludes that the Liquidity Measures do contain aid elements, the UK Government submits that they form part of a wider package to remedy a serious disturbance in the economy of the United Kingdom which is compatible with the common market.”

Therefore, the UK Government argued to the EU that the special liquidity scheme was part of the normal workings of the Bank of England, but they specified the exact opposite in respect of the Bradford & Bingley valuation. Is that a further example of the double standards that have applied in this nationalisation process?

Since the 2008 nationalisation, there have been hundreds of freedom of information requests to Ministers, the Cabinet Office, the Treasury, the FCA, the Department for Business, Innovation and Skills and the Bank of England, but the shareholders still do not know how and why their company was expropriated. The treatment to which they have been subjected has been at best incompetent and at worst mendacious.

Leaving aside the Cabinet Office’s original untrue statement, the shareholders have been subjected to refusals on the grounds of cost and public interest, which, combined with further untrue statements and failures to reply to requests, have made a mockery of the Freedom of Information Act. The action group has made requests to the Cabinet Office and the Treasury for internal reviews in respect of their failure to provide the information requested, and it has appealed to the Information Commissioner’s Office in respect of the FCA’s failure to provide the records we all know it had.

The latter point is of particular interest, as David Blundell has a DVD recording of a telephone conversation in which a Financial Services Authority officer reassures a shareholder of the company’s financial strength just six days before the nationalisation. To date, the FCA has denied knowledge of any such records, which is rather incredible, as the DVD was sent to the shareholder by the FCA.

There is also strong evidence of a substantial level of communication between John Kingman at the Treasury and Robert Peston of the BBC, whose coverage of Bradford & Bingley caused a run on the shares and deposits. The Treasury stated it did not have such information and that Mr Kingman’s records had been cleared. In the interests of balance, I should make it clear that Mr Kingman denies being responsible for leaking any information to Robert Peston, although, as Mandy Rice-Davies said, “He would, wouldn’t he?”

Mr Kingman believes that the sole reason for the allegation is that he worked with Robert Peston at the Financial Times in the 1990s. An FOI request to the BBC was refused on the grounds that Mr Peston’s records were for journalistic purposes. The fact of the matter remains that someone at the Treasury leaked the situation to Robert Peston and to the Telegraph, precipitating a run on the bank from which it did not recover. The suspicion is that that was done deliberately to clear Bradford & Bingley from the decks so that the Treasury could focus on saving the bigger banks.

Recent letters to the then Chancellor, the then Prime Minister and the current Prime Minister have asked whether the decision to nationalise was correct and consistent with the treatment of other financial institutions at the time. The right hon. Member for Edinburgh South West suggested writing to a local MP—a particularly inadequate reply, as he was party to the nationalisation decision. The current Prime Minister passed the request to the Treasury, which responded with the usual stale excuses, similar to those of the past five years. The previous Prime Minister, the right hon. Member for Kirkcaldy and Cowdenbeath, has not replied at all. It would appear that the spirit of Sir Humphrey is alive and well in Whitehall and Westminster.

Three key questions remain unanswered. First, what was the exact reason for the expropriation of the company? Secondly, should the rights issue have been permitted to proceed, and were shareholders wrongly induced to subscribe to it? Indeed, many employees paid their hard-earned money into the rights issue to prop up their company. Many of them lost not only their jobs, but their savings. The Government of the time were encouraging other financial institutions to support the rights issue, only to ensure that they then lost everything as a result of the way the banks were nationalised and a nil valuation was guaranteed. No wonder people do not like dealing with Governments. Thirdly, were the comments from the directors, the investor relations department and the FSA concerning the strength of the company only days before nationalisation true?

The shareholders of Bradford & Bingley believe the nationalisation of their company was a flawed decision made in haste and inconsistent with the treatment of other banks. When the Government confiscate the property of their citizens without reason, explanation or compensation, particularly when they may be seen as at fault in their duty of care to savers and investors for not adequately regulating the companies involved in the banking crisis, all concepts of democracy and equity are laid aside. I submit that that has damaged the Government’s reputation.

I would like the Minister to tell us what the future holds for UK Asset Resolution and the staff at the headquarters in Crossflatts, in my constituency. The mortgage book is being gradually wound down, but what happens then? Many people still rely on UKAR for their jobs, and there is vast experience and expertise there that should not be lost to the banking sector. The Government state they wish to see more competition among the banks, so will the Minister commit to look at whether a new bank—a modern-day Bradford & Bingley—could be born from UKAR and be seen on high streets, bringing much-needed competition to the banking sector and protecting the remaining jobs in my constituency?

In conclusion, an independent inquiry into the nationalisation of Bradford & Bingley is long overdue. The Bradford & Bingley shareholders, bondholders and employees, and the local community, are entitled to know the truth. The Prime Minister has claimed, many times, that he is committed to open and transparent government, and he has opened an inquiry into the Co-op bank failure. I believe it is not too late for the Government to do the same—open an independent inquiry—with respect to the Bradford & Bingley nationalisation. That was, arguably, the best example of what went wrong in the banking crisis, particularly in relation to the flawed accounting standards that are still in place. Justice and the British sense of fair play demand such action, and I hope that the Minister, who is a good man, will do the right thing and agree to it.

The Government rightly claim to be on the side of hard-working people. Hard-working people were the shareholders, bondholders and employees of Bradford & Bingley who all lost out. By agreeing to an independent inquiry and making all the relevant Government papers available to it, the Government can show that they will, indeed, stand up for hard-working people.

Interest Rate Swap Derivatives

Annette Brooke Excerpts

Thursday 24th October 2013 Commons Chamber

[Mr Williams]

That is a particular problem. The hon. Lady does not need to be reminded how perilous the farming industry is these days; some businesses barely have the capacity to survive.

People who have been sold tailored business loans have no protection because of a mere technicality. They have no guarantee of fair treatment from the banks. Most of my constituents who have been affected by hedge mis-selling have been sold TBLs, although I hesitate to say that they were sold them, because some of them were not aware that they were being sold them. Most of my constituents who are affected are out in the cold, so I return to the question that I have asked Treasury Ministers and the FCA, although I have received inadequate responses. I question how the FCA decides to interpret its principle-based regulation. I am talking specifically about TBLs from the Clydesdale and Yorkshire banks.

[Annette Brooke (Mid Dorset and North Poole) (LD)]

My hon. Friend is making a powerful case and I concur with what he says about tailored business loans. One of my constituents, who is here in the Gallery, has been affected on a large scale and is paying £33,000 per month as a consequence of swaps. He needs to be brought into the scheme. In addition, he has a tailored business loan, and I concur that those need to be brought into the framework urgently.

[Mr Williams]

I concur with my hon. Friend. Many of us have cases like the one that she raises that suggest that TBLs need to be brought into this review or another review of some kind.

The FSA famously stated in “Interest Rate Hedging Products—Pilot Findings” that

“poor disclosure of break costs”

was one of

“the most significant issues in assessing the compliance of a sale”.

How is it possible that poor disclosure of break costs can constitute a mis-sale when the customer is buying a stand-alone product, with all that that implies, and yet there is no mis-sale if the bank buys the interest rate swap allowance, conceals it from the customer and then holds the customer liable for its terms and conditions? That is unjust nonsense. If a feature is worthy of regulation when it is contained in one product, why is it not worthy of regulation when it is contained and concealed in another product?

amendment of the law

Annette Brooke Excerpts

Monday 25th March 2013 Commons Chamber

[Annette Brooke (Mid Dorset and North Poole) (LD)]

Overall, I think the Budget contains some helpful measures to help families with the cost of living, and it invests in the future of our economy within a responsible framework. As a Liberal Democrat, I am naturally proud of the rise in the personal allowance to £10,000 from April 2014—one year earlier than planned—which will give 24.5 million people a tax reduction of £700. I was also pleased at the introduction of the employment allowance, particularly for small and medium-sized enterprises. My constituents will certainly be pleased with the freeze in fuel duty, the scrapping of the beer duty escalator and the cut in duty on beer.

I wish to concentrate in my short speech on the overall £5.4 billion boost to housing, but I will make a slight digression to talk about child trust funds— I should declare that I am a grandparent with a granddaughter who has a child trust fund. I have received a number of representations on those funds recently, and I have been sent details from a campaign by Money Mail under the headline:

“The £34,000 curse of child trust funds: Six million children are barred from best savings deals”.

One could interpret that as stating that the next generation of young people might be deprived of a deposit for a house, and at the other end of the scale, for lower income people, there are clearly children with trust funds who are not receiving the levels of interest that they should in terms of equity. I wanted to raise that issue with my right hon. Friend the Chief Secretary to the Treasury who is sitting on the Front Bench.

The housing package is part of building a stronger economy and a fairer society, and includes a number of measures to support home ownership, new development and affordable housing. Over the past year or so, there has been agreement across the House that stimulating the construction sector is key to stimulating growth. It is a win-win situation with more jobs and more money created for our economy, without particularly sucking in imports. It is estimated that each extra home built each year creates jobs for three to four construction workers and those in associated industries, thereby improving business confidence.

During previous debates we have identified issues on the demand and supply sides of the housing market, and many have argued that the problem is not with planning as such. On the demand side, measures in the Budget have the potential to extend the supply of new houses, perhaps converting some of the hundreds of thousands of non-implemented planning applications into homes. Meeting the needs of those willing and able to buy, and the aspirations of those wishing to be home owners, is important, and will give this generation the same opportunities as my generation. At times tonight I have wondered whether the Labour party actually believes in encouraging home ownership.

Of course, home ownership is not the whole solution to our housing problem. I represent an area—Purbeck—that has a very high house-price-to-wages ratio and a high proportion of second homes. Although I am keen on the two schemes to stimulate mortgages, I am not keen on them subsidising second homes as that would make the situation in Purbeck and Dorset even worse. I like both schemes, however, because they involve first-time buyers and second steppers, and I think that we must put a shock through the whole market.

But—and there is a but—I think we have to do a lot more. I like the buy to rent stimulus, but we need to increase the supply of affordable housing over and above what we want to do and have done already. In the next phase we ought to look at the capacity of councils to borrow money for building housing, at direct building by councils, and at supporting arm’s length management organisations, which is incredibly important. An ALMO in my constituency is ready to start building but cannot get the borrowing capacity.