Oral Answers to Questions

Daniel Kawczynski Excerpts

Tuesday 22nd May 2018 Commons Chamber

[Mr Speaker]

Order. The hon. Member for Shrewsbury and Atcham (Daniel Kawczynski) has question 21, which is not altogether dissimilar from the one with which we are dealing, but which will probably not be reached. If he wants to come in now, he can. If he does not, he need not do so. But he does, so he will.

[Daniel Kawczynski (Shrewsbury and Atcham) (Con)]

21. Thank you, Mr Speaker. With regard to important infrastructure projects such as the north-west relief road in Shrewsbury, will the Chancellor give me an assurance that when the land frees up housing capacity when the road is built, that will be taken into consideration when the schemes are apportioned funding?

[Mr Speaker]

Especially for the purposes of generating economic growth.

Equitable Life

Daniel Kawczynski Excerpts

Thursday 11th February 2016 Commons Chamber

[Gordon Henderson (Sittingbourne and Sheppey) (Con)]

Much of what I wanted to say has been mentioned already by other hon. Members, including my hon. Friend the Member for Harrow East (Bob Blackman), who has been a fierce and consistent champion for Equitable Life policyholders. I wish to make very clear my continued support for the Equitable Life policyholders in my constituency, and I believe the best way to do that would be to resurrect some comments I made in a speech in this House almost six years ago. That speech was one of my first after being elected in 2010, and it brings into sharp relief just how long some of us have been trying to get justice for those of our constituents affected by the collapse of Equitable Life, some of whom lost thousands of pounds.

I pointed out the following in that speech:

“Several hon. Members have suggested today that the Equitable Life scandal—and a scandal it was—is complicated, but for me it is actually quite simple. It is about fairness to a group of people who were badly let down by the regulatory failures of their Government. I went into the recent general election supporting a Conservative manifesto that made a promise to Equitable Life policyholders in my constituency. It said:

‘We must not let the mis-selling of financial products put people off saving. We will implement the Ombudsman’s recommendation to make fair and transparent payments to Equitable Life policy holders, through an independent payment scheme, for their relative loss as a consequence of regulatory failure.’”

[Daniel Kawczynski (Shrewsbury and Atcham) (Con)]

My hon. Friend refers to that manifesto commitment in 2010. May I tell him that in the previous Parliament I helped to set up the all-party group and that we interviewed the then shadow Ministers at that juncture and they promised they would do everything to help the people affected? My constituent, Mr Meinertzhagen has lost half his pension as a result of this terrible tragedy.

[Gordon Henderson]

I am grateful to my hon. Friend for bringing that to my attention.

I continued that speech by saying:

“I wish to take this opportunity to assure policyholders in my constituency that I for one do not intend to go back on that election pledge.

Most people accept that Equitable Life policyholders were the subject of Government maladministration, and that is certainly the view of the ombudsman, Ann Abraham. There is some dispute on all sides, however, about the level of compensation that should be paid to policyholders. Sir John Chadwick’s report established that the relative loss suffered by Equitable Life amounted to between £4 billion and £4.8 billion, and the Financial Secretary, in his statement to the House this July, supported that figure. However, Sir John then used a series of convoluted calculations and speculative assumptions that allowed him to suggest a cap on the total amount of compensation that should be paid. He then went on to reduce that cap figure to just 10% of the relative loss figure that he himself originally calculated.

One of Sir John’s most telling assumptions was that the majority of policyholders would have invested in Equitable Life irrespective of maladministration. That is a very big assumption that cannot be proved or disproved…

Like many Members, I have been in touch with many of those policyholders, and all they want is fairness, because they are fair-minded people. However, they are not stupid people, and they recognise that in these times of austerity even they must shoulder some of the burden needed to bring down the country’s massive debt mountain.”—[Official Report, 14 September 2010; Vol. 515, c. 834-35.]

That was my position in 2010 and that position has not changed.

The Government went some way towards compensating those who lost money in the Equitable Life scandal, but that compensation met only part of the loss, so the Equitable Life investors in my constituency received partial justice. In truth, partial justice is no justice at all, and I urge the Government to give people justice now.

--- Later in debate ---

[Crispin Blunt]

My hon. Friend makes an extremely pertinent point.

On being returned in 2010, I found myself a member of the Government and obliged, at one level, to support their decision to limit the compensation to £1.5 billion. At the time, as the Prisons Minister, and the prisons budget being rather less than the total compensation required, I could understand, in the circumstances, why they decided to limit the overall compensation. I resolved, however, to speak in this debate and to re-examine the letters I sent out defending the Government’s position, and to re-evaluate my position to see whether it was reasonable.

I was much taken with the comments from the hon. Member for West Bromwich West (Mr Bailey), the former Chairman of the Business, Innovation and Skills Committee. This is about confidence in the entire savings system. I can remember Labour’s first Budget in 1997 and the consequences—unreported from the Dispatch Box—of IR35, which saw £5 billion cheerfully lifted from investors in pension funds through a tax on dividends. If a £5 billion change can be made in a Budget, announced not in the House of Commons but by press release, we need to be aware that we are dealing with vast numbers when it comes to pension policy. I tell the Economic Secretary, who is replying to the debate, that I believe we are on the verge of a substantial—and, for me, very welcome—change in pension policy. As part of that, we need to acknowledge the point made by the hon. Member for West Bromwich West that this issue is about confidence in the system as well as fundamental fairness to our constituents.

I congratulate my hon. Friend the Member for Harrow East (Bob Blackman), who introduced the debate so effectively, on securing it. I also congratulate my hon. Friend the Member for Shrewsbury and Atcham (Daniel Kawczynski) on setting up the all-party group in 2006-07 to reinforce the efforts that were already under way. He attempted to corral those efforts, make them more effective and secure from the Conservatives and the Liberal Democrats an undertaking that the issue would be addressed in their manifestos leading into the 2010 election. It is important to highlight that as a simple issue of fairness we need to revisit the sum of £1.5 billion and decide whether or not we have discharged our duty.

[Daniel Kawczynski]

I just wanted to remind my hon. Friend of my constituent Mr Meinertzhagen, whose living standards are suffering. He is now worried about the consequences for his wife when he departs from this world. It is a real struggle for him, and I hope my hon. Friend will join me in urging the Economic Secretary to find money and set it aside to help these people in desperate situations.

[Crispin Blunt]

My hon. Friend is entirely right. This is why these artificial divisions—between 31 August 1992 and 1 September 1992—are so unfair on the people involved. My constituent Derek Burton estimates his losses at around £175,000 as a consequence of his having invested before the cut-off date in 1992. That shows the impact on him of the changes that were subsequently made. These are enormous sums of money that have destroyed the planned retirements of thousands of my constituents—an average of 2,000 of every Member’s constituents have been affected.

Frankly, we have to grasp this problem and address it. I hope it can be done through the Budget and through further substantial and welcome changes to pension policy, on which the Chancellor absolutely deserves our support. By those means, he can address this lingering unfairness so that people can be given the confidence to invest in pensions again. The lesson I took from my little episode with Equitable Life was that I was simply not going to undertake any extra investment in pension schemes thereafter.

On the figures, I do not know whether we will get an answer from the Minister on whether £2.7 billion remains the sum required to put this right. In trying to do the mathematics, that figure does not seem to work out precisely to me, given that about £1 billion went to 890,472 policyholders who received only 22.4%. Provision should now be made for us to address this issue.

Maladministration was recognised and a clear recommendation was eventually made by Ann Abraham in her report, after various other people had looked at the problem. I have a lingering sympathy for some of the Equitable Life administrators at the time. The original legal challenge to their policies always struck me as ludicrous. It lost at every conceivable stage until the last one, when there was no possible course of appeal. Provision had not been made, as it should have been, for the possibility that they might lose the action. That was how the maladministration came to be identified in all the reports.

If we—the system—have overseen people not doing their job properly and not protected people who were wholly innocent, including those who were investors before 31 August 1992, it is right that we do our duty —out of fairness to them and to restore confidence in the whole pension system. If people find that they have invested resources other than their house in the biggest single asset they are going to invest in, and encountered circumstances utterly beyond their control, or utterly beyond any reasonable duty of care they would have taken to find out about what they were investing in; and given that Equitable Life was the most reputable pension provider around at that time, we need to put things right. We are now able to afford to compensate these people, and we should be able to do so by continuing significant pension reform to put this right properly and fully.

Financial Conduct Authority

Daniel Kawczynski Excerpts

Monday 1st February 2016 Commons Chamber

[Guto Bebb]

My hon. Friend makes an important point about one of the failures of the redress scheme. Too often, the FCA has hidden behind the argument that 80% of the people involved in the redress scheme have accepted their outcome. What it is not willing to admit is that people have accepted the outcome under duress because they needed to keep ahead and get their lives back on track.

The other four areas that I will talk about are the Connaught Income Fund, the FCA’s involvement in the report on the failures of HBOS, the promised report on the global restructuring group and the decision not to move ahead with the review of banking culture, which was communicated on new year’s eve.

[Daniel Kawczynski (Shrewsbury and Atcham) (Con)]

My hon. Friend is aware of the case of my constituents, Mr and Mrs Bennett from Dorrington, which I have shared with him. They have been treated appallingly by RBS and there has been a complete lack of interest from the FCA. I am grateful to him for taking this matter on and urge him to continue the campaign most vigorously.

[Guto Bebb]

I am grateful to my hon. Friend for those comments. I will touch on RBS’s involvement in the redress scheme.

There are concerns about the way in which the interest rate redress scheme was put together. It was a voluntary agreement. One of my first questions, which I still have, was about the arbitrary way in which 10,000 businesses were excluded from the scheme for no apparent reason. Because of an arbitrary decision by the FCA, those businesses were excluded from any means of support under the redress scheme. That decision still is not fully understood. I have raised that issue before and would be more than happy to hear the Minister’s comments on it.

Of more concern is the fact that, throughout the process, there has been a lack of willingness from the FCA to explain what they are doing. For two years, the redress scheme was in existence, but the FCA did not share the rules of the scheme. Businesses that had been declined redress within the scheme were appealing the decisions without knowing what the rules were.

--- Later in debate ---

[Marion Fellows (Motherwell and Wishaw) (SNP)]

My reason for speaking in this debate leads on from my Adjournment debate last Monday on the mis-selling of pensions, in advance of which I came up against the FCA for the first time. As a not very qualified and not very long-standing MP, and as someone who has never really had to deal with any of the regulatory bodies, I went to the Library for some background. I asked what turned out to be a very silly question. I asked for a list, going back to the 1990s, of regulators and what they were responsible for, only to be informed by the relevant expert in the Library that it was a huge piece of work and that he could not get it to me in time for this debate. I now perfectly understand that.

My point in telling everyone that and showing my complete ignorance is that normal, everyday people are in exactly the same boat. They do not always understand where to go to get redress. We are debating the motion today, on the FCA, but that does not mean much to people in the street. They do understand, however, that they do not seem to be getting a very good deal. When I listen to more erudite and learned Members—I do not mean that in the legal sense—I understand even better how my normal, everyday constituents feel. This whole mess of regulation and responsibilities and the attempts to fix it by bringing forward other regulators dealing with yet something else has to stop.

[Daniel Kawczynski]

For some of my constituents—I have mentioned Mr and Mrs Bennett from Dorrington—the litigation costs are absolutely exorbitant, which prevents many constituents from pursuing that line. I echo the hon. Lady’s sentiments that people have nowhere to go and no one to turn to in order to explain the appalling things that have happened to them.

[Marion Fellows]

I thank the hon. Gentleman for that intervention, which absolutely confirms what I think and what I said here last week. People cannot afford to go to litigation. Even when they do go, they do not get the satisfaction that they should get because of the mish-mash of regulators and mish-mash of regulations.

I shall sit down at this stage because I believe I have made my point quite clearly. Something needs to be done to take everything back to the stage where people trust regulators, trust banks and trust financial products.

--- Later in debate ---

[Mr Gary Streeter (South West Devon) (Con)]

I congratulate my hon. Friend the Member for Aberconwy (Guto Bebb) on securing this debate and on his tenacity in pursuing this issue. I fully support the motion. I am not at all happy with the FCA’s performance in resolving the swap issue. I have had experience of several constituency cases that have revealed a very slow process with insufficient redress, and the independent review process appears to be anything but independent. So I have no confidence at all in this FCA scheme.

This interest rate swap mis-selling scandal is one of the greatest scandals in recent decades, but because it is complicated and because it primarily affects businesses and not consumers, it has received insufficient attention from the Government and from the media. At the same time as this has been in play, the Government have been more concerned about the survival of the banking system in its entirety and about getting the nationalised banks ready for re-privatisation as quickly as possible. I can understand that, but it is perhaps for those reasons that they have not been robust enough with the FCA, whose oversight of this mis-selling has been weak, toothless and anaemic from the very beginning. This has been mis-selling on an industrial scale and we have hardly got to grips with it at all.

Several of our constituents have lost their livelihoods and businesses as a direct result of bank wrongdoing. I believe that many of the senior banking executives who were behind this scandal should now be doing time in prison, but sadly that is not the case. One of the major shortcomings of the FCA scheme is the exclusion of so-called sophisticated borrowers, based on the size of lending and the size of the company. That was always nonsense. The swaps became so complicated that even the people inflicting them on their customers did not understand them. A former colleague at my old law firm, Clifford Chance, confided in me a few years ago that these arrangements were so complicated that even the lawyers drafting them did not always understand them. Setting up a system that assumed that companies over a certain size, which were perhaps good at making and selling widgets or at providing commercial premises, could get their minds around some of these swaps is nonsense, especially as many swaps were sold with no paperwork at the time and were simply done over the phone or in meetings, and often under tremendous pressure.

As I mentioned to the House when we first discussed these issues, a company called London and Westcountry Estates Limited in my constituency was the victim of a swap mis-selling by the Royal Bank of Scotland, one of the worst perpetrators of this scandal. Matters went from bad to worse, as the company’s debt was sold off by RBS to a third party company, Isobel, which then promptly placed the company into administration. I intend to raise that sorry saga with the House on a separate occasion; it goes beyond the scope of this debate, but, inch by inch, detail by detail, that story needs to be told, and it was all done with taxpayers’ money.

The family behind that constituency company were brilliant at buying old commercial premises and converting them into small units to let on flexible terms to small businesses—the very thing we want to encourage in our economy—but they had no understanding of complex financial instruments. When they first asked me to help some years ago, it took me, with my brilliant first-class degree in law—I knew I should say that, as nobody else would—and 15 years’ experience as a corporate lawyer, days to get my head around the swap they had been sold, which was completely inappropriate for their business. How on earth were they supposed to understand it? But because they were, ludicrously, deemed “sophisticated borrowers”, they were excluded from the FCA scheme and are having to resort to litigation to get justice. I believe they will win and win heavily, but it should not be necessary and it sickens me that RBS is defending this litigation with taxpayers’ money—that just does not seem right at all. I also believe that the RBS executives responsible for selling these swaps and for placing the company into administration, even though it never missed a monthly or quarterly debt repayment, should be prosecuted under criminal law and face whatever charge the criminal law throws at them. I intend to pursue that when the outcome of the court case is known next year and the full facts are exposed.

It is well known that I am a loyal supporter of this Government, as are you, Mr Deputy Speaker, I know. Who could not be?

[Daniel Kawczynski]

Does my hon. Friend agree that the swaps—the derivatives—were deliberately made to be so complicated that our constituents would have no opportunity to understand them?

[Mr Streeter]

I suspect that that is the case—

European Union Referendum Bill

Daniel Kawczynski Excerpts

Tuesday 16th June 2015 Commons Chamber

[Peter Grant]

I have always been of the view that people’s nationality should be defined by where they want to go, rather than where they came from, but that definition is not widely accepted.

[Daniel Kawczynski (Shrewsbury and Atcham) (Con)]

Will the hon. Gentleman give way?

[Peter Grant]

I will take one more intervention, but I will then have to move on.

--- Later in debate ---

[Daniel Kawczynski]

I am very grateful to the hon. Gentleman for raising the concerns of those in the eastern European diaspora in this country. Being of Polish origin, I have engaged with many of them. It is true that many such communities are concerned about the referendum and its ramifications for them. I very much hope that he will join me in saying to the eastern European diaspora that this is not about them, but about our position in Europe.

[Peter Grant]

I am delighted to do so. I am pleased to confirm, as would all my hon. Friends, that from speaking to people from eastern Europe and other people from beyond the shores of the United Kingdom during the Scottish independence referendum, I know that they not only welcomed the fact they were allowed to take part, but felt more Scots—more British, if hon. Members like—as a result of being allowed to take part. However they eventually voted, the fact that they were allowed to partake in such a massive event for our nation meant that they identified even more strongly with our nation afterwards than they had before.

To conclude, now that it very much looks as though the referendum will happen, we must make sure that we get it right. It has got to be fair and seen to be fair. That means that the funding of the different sides must be fair; it does not necessarily have to be equal, but it has to be fair, open and transparent. We have to know who is paying in the money, and therefore who is pulling the strings of the different campaigns. The referendum must be conducted in such as way that everyone who resides in these islands—even those who, it appears, are likely to be denied a vote—feels that they are still entitled to stay here and can accept the result. The only thing that would be worse than holding a referendum would be to hold one that was seen to be rigged or unfair.

Amendment of the Law

Daniel Kawczynski Excerpts

Thursday 19th March 2015 Commons Chamber

[Vince Cable]

If the hon. Lady read the document that the Chief Secretary introduced this morning, she would get a very clear picture. I have explained the 55% to 45% split, which is quite explicit, and I am very happy to defend it.

[Daniel Kawczynski (Shrewsbury and Atcham) (Con)]

I am very pleased by the announcement in the Budget of additional support for British businesses exporting to China, but will my right hon. Friend continue to press the case for ever-greater investment in UK Trade & Investment, and for its reform, so that we can start to help small and medium-sized enterprises to export to important emerging countries, such as Brazil, Argentina and India?

[Vince Cable]

The hon. Gentleman is absolutely right. Indeed, UKTI’s work these days concentrates on supporting SMEs. As a country, we underperform on the contribution of the SME sector to exports, compared with countries such as Germany, and that is the focus of UKTI’s work. I would also emphasise his other point on the need to build up our relationship with China. We have worked very hard on that, and the Prime Minister and the Chancellor have led from the front on our relations with China, which are good. The establishment of the new financial institution, in which Britain is a co-investor, is a signal of the importance we attach to our relations with China, and that will continue.

Oral Answers to Questions

Daniel Kawczynski Excerpts

Tuesday 27th January 2015 Commons Chamber

[Danny Alexander]

I do not accept the hon. Gentleman’s characterisation, because we see strong economic growth in London and the south-east and in Scotland, and the economy of the north-west of England has been growing well, particularly in employment. We are seeing a more balanced pattern of growth and job creation than in previous economic recoveries.

None the less, the hon. Gentleman is right to say that there are significant problems of unemployment in Northern Ireland. That is why we have put in place a range of policies to help support the Northern Ireland economy, some of which we will be debating this afternoon.

[Daniel Kawczynski (Shrewsbury and Atcham) (Con)]

11. What progress he has made on his fiscal consolidation plans.

[The Financial Secretary to the Treasury (Mr David Gauke)]

The Government inherited the largest deficit since the second world war. Since then, we have made substantial progress on reducing the deficit. Borrowing has already fallen by more than a third since 2009-10 and is forecast to have fallen by half this year as a share of GDP. The Government’s consolidation plans have been central to the reduction of the deficit.

[Daniel Kawczynski]

I thank my hon. Friend for that answer. Given the eye-watering amount of British taxpayers’ money that is spent on paying the interest on our national debt, I am pleased that the Government have already reduced the annual structural deficit by half. Does he agree that it is vital to continue with the policy of reducing the annual structural deficit in order to tackle our national debt?

[Mr Gauke]

I completely agree with my hon. Friend, who is right to make that point. We need to go on and run an overall surplus, to ensure that our public finances are sustainable over the longer term.

Financial Conduct Authority Redress Scheme

Daniel Kawczynski Excerpts

Thursday 4th December 2014 Commons Chamber

[Mr Marcus Jones (Nuneaton) (Con)]

I thank my hon. Friend the Member for Aberconwy (Guto Bebb) for the work and effort he has put into this issue not just on behalf of his constituents but on behalf of people who have been wronged by the banks up and down the country. He has done a fabulous job and we should all congratulate him on that.

I recall the initial debate in this Chamber on this important subject. I spoke about a business in my constituency that had been badly disadvantaged as a result of an interest-rate hedging product. The product in question was not just mis-sold by their bank; it was almost forced on my constituents by their bank. I was therefore extremely pleased when following that initial debate the FCA announced the redress scheme. The aims of the redress scheme suggested it would tick the boxes for my constituents—do the job and put my constituents back in the position they were in before the swap product was mis-sold to them.

It is important that we look at what the FCA scheme says in this regard. It states that the scheme provides for “fair and reasonable” redress, which

“means putting the customer back into the position they would have been in had the regulatory failings not occurred, including any consequential loss.”

So the FCA had in fact set a very high test, which in principle was the right and proper thing to do. It was a test that, if properly applied, would surely lead to a fair outcome for my constituents and many people similarly affected. In practice the FCA scheme has worked up to a point, but it has not gone anywhere near satisfying its original aims.

I shall deal with the issue of simple damages, which, on the whole, I believe has worked well. Most of the banks have agreed to pay simple damages and deal with the issue of consequential loss separately. There are two exceptions, however. One of those two banks is my constituent’s bank, Barclays, which has refused to do that. It has refused to deal with consequential loss separately. I will go into more detail in a moment about why that decision to link simple damages and consequential loss is so unfair, but first I would just like to touch on the mechanism that has been put in place for businesses to challenge the decisions of their banks regarding consequential loss. Again, I quote the relevant passage from the FCA scheme:

“All customers who receive a basic redress offer have the opportunity to make a claim for consequential loss…To facilitate this, banks are offering support for customers, for example, by providing guidance to help customers put their claims together.

Banks are also being pragmatic and customer-centric when customers ask for more time to put together their claims and will consider reasonable requests for extensions on a case by case basis…All claims are being assessed by independent reviewers. If claims are rejected, banks are providing constructive feedback so that…customers may be able to provide additional information to support their claims.”

My constituents, taking the FCA at its word, contacted their bank, Barclays, for information to help them ascertain their consequential loss. This information took the form of requesting a schedule to show what additional loan repayments and charges they had paid by taking the swap rather than staying on their original product. Initially there were positive noises from the bank, but the information never materialised, despite repeated requests for it. My constituents then decided that the best way to deal with this would be to have their case independently reviewed, as per the scheme. They were not told by Barclays that their case had already been reviewed, and to their dismay their review had been closed by Barclays. In essence, they were told by Barclays, “Take the simple redress, take the 8% or go to law.” I am not sure whether the review was independent—several right hon. and hon. Members have mentioned that issue. There was no report, no detail of who the review was carried out by and no detail of why my constituents were incorrect in their assertions. There was no transparency in this process whatsoever. I questioned this with the FCA, which did no more than back up the actions of Barclays—the whole arrangement between Barclays and the FCA seemed very cosy. At best I would say the FCA scheme was inadequate, but at worst I would say it was completely toothless.

This situation has, unfortunately, left my constituents having to pay the up-front cost to employ an expert to calculate consequential loss. They have also had no choice but to incur the up-front costs involved in considering whether litigation was economical or not. Now, 12 months from the initial offer made by Barclays, they are left with a choice: take on a David and Goliath fight with Barclays, without even the simple damages to help them facilitate it, or capitulate, taking the simple damages and the 8% for consequential loss and suffering the ongoing losses because they have not been put back into the position they were in originally. To a small business, such as the one I am talking about, that is Hobson’s choice: they have no choice whatsoever. Given what I have heard from right hon. and hon. colleagues, I am sure that this case is not unique; this is happening up and down the country, not just with Barclays, but with other banks.

[Daniel Kawczynski (Shrewsbury and Atcham) (Con)]

I have two companies in my constituency that I am particularly concerned about, Regal Fayre and Bennett Holdings. I very much hope that my hon. Friend will agree that Members of Parliament have come to take part in this debate, so the Minister and her team should take a specific interest in each of the cases.

[Mr Jones]

I thank my hon. Friend for his invention, and I will address that issue in a moment. I know that my hon. Friend the Economic Secretary takes a considerable interest in this and I am sure she will take that interest further as a result of what she has heard today. People such as his constituents and mine need action. One way in which they could get the redress would be if these people were properly protected under the umbrella of the ombudsman. My constituents qualify for the criteria of the ombudsman scheme, but the maximum award of damages the ombudsman can offer is completely inadequate. I have spoken to the Minister on a number of occasions and at some length about that. Many people are going to the ombudsman and finding that it is recommending damages above and beyond what it can impose. I am aware that some banks are willing to honour that, but I am also aware that in many situations banks are not willing to honour what the ombudsman is saying. That brings us back to the point about inconsistency raised right at the start of this debate by my hon. Friend the Member for Aberconwy.

At the moment, I would probably give the FCA five out of 10—some people may think I am being generous—in achieving its aims under the scheme. If the FCA and the Government want to get 10 out of 10 in the eyes of my constituents, the FCA needs to have more teeth—if it does not have the power to deal with these issues. They need to make sure that a number of things happen. First, they need to make sure that all banks decouple the payment of simple damages from the matter of consequential loss. They also need to compel banks properly to assist their customers to assess their loss.

Holiday Pricing

Daniel Kawczynski Excerpts

Monday 24th February 2014 Westminster Hall

[John Hemming]

My hon. Friend may be right, but that has been changed anyway.

There is also the issue of the new regulations, which we discussed with the Backbench Business Committee. A group called Parents Want a Say was established following the introduction of the new regulations, and it has a website. A number of e-petitions relate to the issue of school holidays. E-petition 49640 is entitled “Reverse the changes to school term time family holiday rules”.

E-petition 53002 states that it is

“calling on the government to help British families manage the ‘Parent Trap’ of inflated holiday prices in summer by suspending or reducing the rate of Air Passenger Duty (APD) for the annual school summer-holiday period of July and August.”

E-petition 45247 states:

“Relax the strict rules on term time holidays for school children.

Give parents the right to take their child on holiday in term time if the holiday would benefit the child.

Respect the rights of the child and bring term time holiday regulations in line with UNCRC (specifically article 3,4,5 and 31).

Standardise the criteria for term time holiday approval to prevent inconsistencies.”

E-petition 46455 states:

“Family time is so much more essential in the current working world, but so many people cannot afford holidays in school holidays. A break at home is not the same as getting away from it all where there isn't any house work or DIY to get done, instead focus is on family. Its time to stop the holiday companies cashing in on school holidays and let parents have some guilt free family time! Enforce action that caps the percentage increase on holiday prices in school holidays.”

There are also e-petitions 55426, 51533, 42884 and 23709, which I am not going to read out. This debate is a very good example of how effective an e-petition can be in getting an issue of considerable concern to many constituents across the country raised and debated in Parliament. It looks to me like an example of the success of the e-petition system.

[Daniel Kawczynski (Shrewsbury and Atcham) (Con)]

I apologise for not being able to stay for the entire debate, but I wanted to support my hon. Friend. I have received a lot of letters on this issue from my constituents in Shrewsbury. They feel strongly that the Government must show innovative thinking to resolve the situation for hard-working families who, on rare occasions, need to pull their children out of school for a holiday.

[John Hemming]

I thank my hon. Friend for that comment. As I talk about specific examples, we will see that different families have different circumstances, and a one-size-fits-all approach is not necessarily the best solution.

It is interesting that the tensions that have arisen beyond the initial problem of high prices during the holidays are the result of the new regulations, passed in statutory instrument 2013 No. 756. For those interested in procedural issues, as I am, I should say that the regulations went through Parliament under a negative resolution—that is, they would pass as long as Parliament did not vote against them. Parliament would have had an opportunity to discuss the regulations had anyone tabled an early-day motion praying against them, but no one did. There was no discussion.

The regulations were laid before Parliament on 4 April 2013. There was no request to debate them on the Floor of the House of Lords either. That House differs from the House of Commons in that it has a Secondary Legislation Scrutiny Committee, which looked at the regulations and decided not to comment on them. However, we have heard from our constituents that there are considerable problems across the country. That shows the strength of the e-petitioning process. Something went through Parliament on the nod, but constituents had a mechanism to express concerns. The issue has been raised and now everyone present is here to debate it.

I must disagree with the point made by my hon. Friend the Member for Suffolk Coastal (Dr Coffey). The Department for Education website states that the regulations were changed from allowing up to 10 school days—not 10 school sessions—per year for holidays to allowing children to leave school only in exceptional circumstances. As I said, I will come to specific examples. Although there was some form of consultation on changes to the regulations, that did not get across to people and Parliament was not aware of constituents’ concerns when the changes were made. However, that has now changed.

How do we deal with the issue? Obviously, many of our constituents face a serious problem; that is evidenced by the number of people in the Chamber. Concerns have been expressed about the extent to which companies can be forced to charge the same price throughout the year. I do not think that that is a practical solution, particularly given that the market includes people visiting this country—we could end up with holiday touts and all sorts of things.

There are two solutions for dealing with demand. First, we could have flexibility in holiday periods: we could stagger holidays. Secondly, we could have more flexibility—moving back towards how things were previously, although not necessarily all the way—and allow people to take their children out of school in term time, in the right circumstances. I think that would be reasonable in some circumstances.

Looking further at how the issue is regulated, we already have Ofcom, Ofwat and Ofgem; I do not think we can have Offonholiday—that would not work. A reduction in air passenger duty has been proposed, but there would be problems with that. First, it would not benefit UK holidaymakers. Paul Cookson, who I referred to earlier, was worried about the doubling of prices at Center Parcs. As Center Parcs is in the UK, a reduction in air passenger duty would not have an effect on people going there. If the APD proposal reached the Treasury, it would go into a nosedive; we would find that it was not a flyer—[Interruption.] Sorry about that. I will give up on the jokes now.

We come to the question of what will happen as far as flexibility for holidays is concerned. I have found an interesting copy of Travel Trade Gazette from 1963, which reports:

“It was in the House of Commons on February 12, 1960, that approval was first given to the setting up of a committee to examine the question of extending the U.K. holiday season.

The subject was introduced by Mr. Robert Mathew, M.P. for Honiton, in a motion which read:

‘That this House, recognising the need to extend and adjust the holiday period so as to relieve congestion at the peak period, asks Her Majesty’s Government to set up a committee to examine this question urgently with special reference to the educational, tourist trade and transport interests concerned, and the problem of summer time, with the power to recommend early action.’ ”

We are now a good few years on; we did not have the early action. That was in 1963. In 1964, the heads of Germany’s regional governments, which are responsible for state education, were called together to stagger the summer holidays in such a way as to prevent all the region’s leisure seekers from leaving for and returning from their holidays at the same time, with the corresponding detrimental effect on traffic and demand for accommodation in tourist areas. They divided the country into five roughly equal population blocks, which were all to have different holiday periods that moved around. It is interesting that Germany managed to do something. In fact, I understand that the Republic of Ireland, the Netherlands, Sweden, Norway, Finland and France also have such a facility.

Interestingly, schedule 14 to the Deregulation Bill, currently being discussed, allows head teachers to decide when holidays are. The general secretary of the National Association of Head Teachers, Russell Hobby, said recently that the NAHT has been saying for some time that there is an argument for more flexibility over term times, to relieve the pressures that drive up holiday costs. However, it is important for schools to co-ordinate timings across a town or region; parents with children at different schools would not welcome the inconvenience and child care costs of different term dates. That is obviously sensible. We must also think of the teachers; those with children would not like their children’s holidays to be at a different time from theirs.

Staggering holiday dates can definitely be done, but it will need co-ordination; it will not be something to wash our hands of. It may be for the Select Committee on Education to consider, in conjunction with other people, how we might stagger holidays across the country so that we do not end up with everyone trying to go on holiday at the same time and prices rocketing.

That is one question. The more difficult question is when people should be allowed out of school during term time and what exemptions should apply. Again, I will quote from what people have said to me. One person says:

“This coming Tuesday is my uncle’s funeral in Folkestone…Our three children were quite close to him. We enquired of their schools (primary and secondary) whether they would be prepared to grant exceptional circumstance leave for one day only and in both cases they said they felt unable to do so under the new rules.”

There we have a specific example of children being refused permission to go to the funeral of their great-uncle. Personally, I think that is wrong.

Other parents do not have a choice as to when they have holiday. A lady who returned from maternity leave to her post as a staff nurse in a bone marrow transplant unit at a hospital put in an early request for annual leave during the Easter or summer half-term break. Her requests were not granted, as too many other nurses were off during those periods and the unit must remain adequately staffed. In addition, her husband has been unable to secure annual leave during the summer. They have always made their best efforts to book holiday time during school breaks, but the only week that they could secure together this year was in June, when there is no school holiday. That lady spends her time saving lives. She is committed to that, so she does not have flexibility in her holidays, and the new rules say that she cannot go on holiday with her children. I think that is wrong, too.

Finance (No. 2) Bill

Daniel Kawczynski Excerpts

Thursday 18th April 2013 Commons Chamber

[Daniel Kawczynski (Shrewsbury and Atcham) (Con)]

What about a Miliband?

[Mr MacNeil]

Mr Miliband will not be there long—do not worry about him.

Surely the SNP and Plaid Cymru will not be the only champions of economic growth and the travelling public, and particularly the less wealthy travelling public of Scotland, Wales, Northern Ireland and England. The travelling public seem to have no champions other than the SNP and Plaid Cymru for their businesses and holidays. I encourage other hon. Members to support the cut of the poll tax on our skies: businesses want it, hard-working families want it, and economic growth needs it.

Finance (No. 2) Bill

Daniel Kawczynski Excerpts

Wednesday 17th April 2013 Commons Chamber

[Stephen Williams]

The mansion tax, as the name suggests, is a tax on mansions. If a farmhouse on agricultural land was of mansion proportions and, whether it was in Carmarthen or elsewhere, was valued at more than £2 million, it would fall within the scope of a mansion tax, but the agricultural land itself—whether it is in the curtilage of the house or in the wider area of the farm—would not fall within the remit of a mansion tax. However, my party is currently reviewing all its tax policies, including the taxation of land. I do not want to be diverted too far down this route, although it is an issue on which my party has campaigned since the days of Lloyd George, who, as I am sure hon. Members will agree, was probably the most significant Prime Minister of the 20th century. I will say no more on that on this particular day.

I will do my best to help the Labour party with some of the other details of how the Liberal Democrats think that the mansion tax should work. A criticism that is made of the mansion tax is what happens if a pensioner or someone on a low income is living in a house valued at more than £2 million—the so-called asset rich, but income poor. Our answer is straightforward. Someone in those circumstances would defer payment of the tax until the property was sold or their income rose to a level at which they were able to pay it. The most likely scenario is that when the property was sold, the deferred, rolled-up tax liabilities would crystallise and be met out of the proceeds of sale. That is the answer to the asset rich, income poor conundrum.

Another major principle, which might help the Labour party, is that we see the mansion tax as a national tax. There is a debate to be had about what we do with our only existing property tax—the council tax—such as introducing higher bands, but that is a debate for another day. In any event, the council tax is a local tax and we are clear that the mansion tax, as the Liberal Democrats propose it, should be a national tax and form part of the rebalancing of the tax system away from taxes on work and enterprise and on to income from wealth speculation and pollution.

Our principles on the mansion tax are well thought through. Unfortunately, they are not currently shared by enough of our Conservative coalition colleagues. Some share our enthusiasm for a mansion tax, but a majority—certainly ministerial colleagues—do not.

[Daniel Kawczynski (Shrewsbury and Atcham) (Con)]

rose—

[Stephen Williams]

Maybe the hon. Gentleman is about to reveal something.

[Daniel Kawczynski]

The point made by the hon. Member for Carmarthen East and Dinefwr (Jonathan Edwards) is important, and I was worried that the hon. Member for Bristol West (Stephen Williams) could not answer it as clearly as I would like. Farming is an essential part of many estates in Shropshire, and the land and agricultural buildings could tip them over the limit. Shropshire farmers are struggling already with prices from supermarkets, and I am very concerned that, if this tax were introduced under those circumstances, they would be adversely affected.

[Stephen Williams]

The hon. Gentleman is essentially asking me a variant of the question asked by the hon. Member for Carmarthen East and Dinefwr (Jonathan Edwards). He mentions agricultural buildings. Clearly, a mansion tax is a residential property tax: a tax on the building that the landowner—the farmer, the rich individual or whoever—lives in. It would not include barns, pigsties and the other agricultural buildings to which he referred, even if they have a high value. This would simply be a tax on residential property occupied by a person, not farm animals or anyone else: only the farmhouse itself, or the estate house, would fall into the ambit of a mansion tax.

Coming directly to the problem with new clause 5, the poor clever people in the Treasury simply do not have enough detail to go on to produce this study within six months of the passage of the Bill. This is the opportunity for Labour Front Benchers to answer these questions. They can intervene as many times as they like. [Interruption.] If they are listening, of course. This is an opportunity for them to tell us how the Treasury is going to conduct this study. It really does need some more detail. Is Labour’s variant on the mansion tax a tax on the whole of the £2 million, or is it a tax on the excess of the £2 million? That is completely unclear from any of the speeches made by shadow Ministers, or from the motion. What is the base of the tax?