Interest Rate Swap Derivatives

David Burrowes Excerpts

Thursday 24th October 2013 Commons Chamber

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

I had a very interesting meeting two weeks ago with senior regional managers of HSBC, who told me that the bank is transforming its culture by removing from individual managers any sales targets: no more pressure from on high and no more commission on individual products sold to a customer. If that is right, then that is significant news. That is how it was when I started my illustrious legal career in 1978: bank managers could be trusted and they were on our side.

Last night, a few colleagues and I met senior figures from the Royal Bank of Scotland in the west country, as well as the managing director of RBS corporate for the UK, Chris Sullivan. They were at pains to tell us how RBS is changing its culture, removing from managers the pressure to sell products to customers and instead offering a service to help customers succeed and grow.

[Mr David Burrowes (Enfield, Southgate) (Con)]

While progress is welcome, not least just before a parliamentary debate, does my hon. Friend recognise that people have been the victims of dishonest and probably fraudulent sales, and are now victims of a process that is characterised by delay and inaction by the Financial Conduct Authority? It is also far too dependent on parliamentary pressure. Can we look forward to reassurance from the Minister that there will be leadership and a timetabled delivery of compensation before it is too late?

[Mr Streeter]

I completely agree with my hon. Friend. I am expecting robust leadership from those on the Front Bench at the end of the debate, because our constituents have waited far too long.

The shift in culture is to be welcomed, but the point I made last night and make again today is that if the banks want to decontaminate their brand—that is what they are really talking about—it is not enough to change the way they do business today; they have to deal with the past. They have to put right the wrongs of the past and compensate those who have been hurt by wholesale mis-selling of products before 2009.

The realisation by the banks—or some of them—that they need to change their culture is fundamental to our debate today on interest rates swaps. The banks not doing what was right for customers and not being on their side—instead selling them products they did not request, could not understand and were not in their interest simply to rack up commission for the bank and its managers—is the cause of the problems we are discussing today. A shift in culture is welcome, but the banks must deal with the problems of the past.

That was certainly the case for my constituents, Mike and Di Hockin, erstwhile owners of London and Westcountry Estates Ltd, a company owning several business parks across the south-west, which is now, after a lifetime’s work and through no fault of their own, in administration. In July 2008, RBS insisted that if the company wished to have its borrowing facility renewed it must enter into a swap arrangement on the alleged imminent threat of rising interest rates. My constituents are experts in property, not finance. They were given no alternative by RBS, so they signed up to a three-year loan and a 10-year swap arrangement. How does that work? It turns out that they had been persuaded to enter into a swap arrangement for 10 years at a rate of 6.4%. Although they had been told that the deal contained a break clause after three years, it transpired that this would enable the bank only to withdraw, not the customer. They later learned that breaking the swap arrangement would incur a penalty that seemed to fluctuate on a daily basis, but would be millions of pounds. None of this was known to them at the time of signing the agreement. I submit that this is a clear case of mis-selling.

It got worse. The loan was bundled up with a number of other troubled loans and sold on by RBS to a new company, Isabel Assetco Ltd, which was 25% owned by a US venture capital company called Blackstone and 75% owned by RBS. This £1.36 billion deal was made at a 30% discount and funded with £550 million from RBS. A bank owned by the taxpayer transferred my constituents’ company’s debt at a discount to a third party company, lending it taxpayers’ money to do so, so the new company could set about dismantling the business that my taxpaying constituents had spent years building up. That is an absolute disgrace.

None of this would have happened but for the mis-sold swap. That the company was put into administration unnecessarily needs to be investigated. Several of my hon. Friends have talked about criminal sanctions for the bankers who make such decisions. I add my support to that call. The people who knowingly make such decisions deserve to be investigated and penalised. I have no doubt that RBS is liable in law to compensate my constituents for their losses. However, because of the administration involved, that will be a complex journey. I intend to help them to succeed, no matter how long it takes.

Talk from bank bosses is cheap. Anthony Jenkins, the new chief executive of Barclays, says that it has learnt its lesson and will put things right. However, in another constituency case, involving a company established in south Devon in 1925, the financial ombudsman determined seven weeks ago that Barclays had mis-sold a swap to the company and ordered it to put the company back in the same position it would have been in if the swap had never been sold. Imagine the disappointment on the part of my constituents when Barclays responded just yesterday by indicating that it accepts only a tiny part of the judgment and intends to fight the rest—so much for the fine words from the chief executive of Barclays. Has Barclays really listened, learned and changed? It does not seem so.

I welcome the fact that there seems to be a cultural shift on the ground in some of our leading banks. This will eventually lead to public confidence being restored, which is very important. Dealing with customers differently today, however, is not enough. The banks have to deal with the past and only then can their reputations be fully restored, as we all want them to be. The UK needs a vibrant and trusted banking sector. Chris Sullivan, the RBS UK corporate managing director, insisted last night that this was his intention. He assured me that every case of mis-selling, including that of London and Westcountry Estates Ltd, is being investigated, and that if mis-selling is established it will compensate. I want to say on the record that I am prepared to take him at his word, but need to see the process speeded up.

As a taxpayer, I hope we will be able to sell off RBS one day, but I ask the Minister to make it clear to RBS that it cannot go forward with any flotation until it has compensated properly all the small and medium-sized enterprises it has dragged down through mis-selling. The message is clear: the banks have done wrong. Let them deal with the past and compensate their customers rapidly and fairly. Then, and only then, can we welcome a new dawn of helpful banking.

Finance Bill

David Burrowes Excerpts

Tuesday 2nd July 2013 Commons Chamber

[Tim Loughton]

And marriage was invented before bicycles, so why do we not support that, recognise it and value it, as we all do?

There are those who have come up with arguments against the figures, saying it is all about causation and effect. The millennium cohort research revealed that the poorest 20% of married couples are more stable than all but the richest 20% of cohabiting couples, so it is insulting to say that marriage is the preserve of the middle classes or better educated or better-off people.

This amendment alone will not solve all the problems that I have laid out. I am not naive enough to suggest that £150 or whatever the end result may be when this amendment becomes law in some form, as we hope, represents the difference between staying married or getting divorced, or getting married or cohabiting, but it does send a clear and strong message that we value families who take the decision to bring up their children within marriage. When I stood on our manifesto in 2010, and for many years before, my Front-Bench colleagues agreed with that. My amendment makes that a reality, beyond all doubt.

[Mr David Burrowes (Enfield, Southgate) (Con)]

Is it not also a matter of fairness and social justice, because the Institute for Fiscal Studies has shown that 70% of the benefit of a transferable tax allowance would go to those currently on the lower half of the income distribution scale?

[Tim Loughton]

My hon. Friend is absolutely right. I think that that dispels many of the myths being put around against the measure.

I hope that the Minister will take the new clause absolutely in the way it was intended. I do not intend to force it to a vote. I think that the Prime Minister has acknowledged the imperative of getting on with it now. I hope that, at last, our constituents can expect to benefit from the proceeds before the next election, both financially and with regard to our clear commitment to marriage, and that we can benefit from delivering on a popular, practical and achievable pledge, rather than the promise of jam in due course. If we can do that, it will be box ticked, job done.

Finance Bill

David Burrowes Excerpts

Monday 1st July 2013 Commons Chamber

[Chris Leslie]

It is the oft-trotted-out claim of the Liberal Democrats that they are there to temper the worst excesses of the Conservative party, and perhaps they do exercise such influence. We all know that the Conservatives are there to defend the wealth of the very wealthiest in society—that is a given—but we want to see whether the Liberal Democrats in the coalition have managed to bend that ideology a little more towards the centre ground of politics and towards the space in which most people would agree that those with the greatest assets and wealth should make a fairer contribution. That would be a good thing to do.

[Mr David Burrowes (Enfield, Southgate) (Con)]

Can the hon. Gentleman clarify, for any of my constituents who might inhabit one of those 55,000 properties, that the levy that would be imposed on them would be £36,000? Is that correct?

[Chris Leslie]

I do not think that it would necessarily be £36,000. Again, I suggest that the hon. Gentleman talks with the Liberal Democrats, who have done some careful workings on this. He will be interested to know that the Government have introduced about 90 clauses in the Bill that relate to ATED—annual tax on enveloped dwellings—which is basically code for a mansions tax on properties owned by companies. I recommend that he reads through the 90-odd clauses. Essentially, the Government are introducing a tax on properties worth more than £2 million, with a new annual fee, to be assessed in a very detailed way. He will see that there is a set of bands for the value of the property, from £2 million to £5 million and right up the scale. The Treasury has therefore been doing a lot of work on the issue, and I think that it should be commended, because it is very worth while. When we debated the matter in Committee, we asked what would happen if the annual tax on enveloped dwellings applied not only to properties owned by companies, but to all those worth more than £2 million. That information would allow us to work out properly what the rates would be.

[Mr Burrowes]

There is a real question of financial competence, particularly in relation to the hon. Gentleman’s boss, so can he substantiate his argument, because it is his new clause that we are discussing? He needs to give us answers. My maths is not so good, so can he tell me, if he wants to raise £2 billion, how much the levy would be for 55,000 properties?

[Chris Leslie]

That is precisely why we think the proposal needs the Treasury’s support—to ensure that we can see what the levy would be. To return to our new clause, we think that the Liberal Democrats make a reasonable point that £2 billion could be raised on properties worth more than £2 million. We have not included those figures in our new clause; we have simply said that the Exchequer Secretary should study the issue and consider a 10p income tax rate band, to be funded by the proceeds of a mansion tax. That obviously depends on how wide the 10p band would be, so it is obviously moveable and that would flow through into the figures on the mansions tax.

Spending Review

David Burrowes Excerpts

Wednesday 26th June 2013 Commons Chamber

[Mr Osborne]

First, we are committing to public investment as well as seeking to secure private investment. The first of the right hon. Gentleman’s ideas is about printing money to spend it on things. That has been tried by a number of countries but it does not always have a happy ending. Secondly, he has this plan to take over full control of the banks and run the banking system as a nationalised banking system. I do not think that would be a sensible approach; it would make the problems in our banking system worse rather than better.

Thirdly, the right hon. Gentleman talks about taxes. I recall, as I was an MP on the Opposition Benches at the time, that he was a Minister when his Government had a 40% tax rate, whereas we have a 45% rate. I do not remember him getting up at this Dispatch Box and complaining all the time that his Government were not increasing taxes on the rich. I seem to remember his good friend Peter Mandelson saying that they were all

“intensely relaxed about people getting filthy rich”.

Under this Government—I hope the right hon. Gentleman would support this—the richest are paying a greater percentage of our tax than under his Government.

[Mr David Burrowes (Enfield, Southgate) (Con)]

My constituents will welcome a fair review of welfare, schools and health. Will the Chancellor take the opportunity to renew his and our party’s vow to recognise marriage in the tax system and ensure that it is implemented as soon as possible within this Parliament?

[Mr Osborne]

I can give my hon. Friend the absolutely clear commitment that we will bring forward the proposals to recognise marriage in the tax system—the proposals we set out in our manifesto that are provided for in the coalition agreement—in due course.

Cyprus

David Burrowes Excerpts

Monday 18th March 2013 Commons Chamber

[Greg Clark]

The hon. Lady will know that these matters have been discussed in the House. The Prime Minister has made a speech in which he said that if he is re-elected there will be such a referendum. As to whether the legislation should come before the House before the general election, that is for others.

[Mr David Burrowes (Enfield, Southgate) (Con)]

The Minister will no doubt sympathise with a new Government picking up an appalling financial legacy and having to make tough decisions, but the raid on deposits was extraordinary and unprecedented. Will he provide assurance to my constituents that not only are the Laiki bank branches and the Bank of Cyprus, the headquarters of which is in my constituency, open for business, but the deposits are guaranteed, and that that deposit guarantee scheme applies and will continue to apply whatever the decision of the Cypriot Parliament?

[Greg Clark]

I applaud the work that my hon. Friend does as chairman of the all-party group on Cyprus. The proposal that has been made would certainly protect his constituents who have deposits in those banks, and the final terms are being discussed in the Cypriot Parliament. Certainly, those banks that have subsidiaries in the UK are governed by the UK regulators and subject to the UK financial compensation scheme.

Transferable Tax Allowances

David Burrowes Excerpts

Wednesday 28th November 2012 Westminster Hall

[Mr Stewart Jackson (Peterborough) (Con)]

It is a pleasure, Mr Turner, to speak under your chairmanship for the first time, and it is a great honour to have the opportunity to put these important issues before the Chamber.

One of the key policy focuses in the run-up to the general election, and one of our key election manifesto commitments, was the introduction of a transferable allowance to recognise marriage in the tax system. The commitment to introduce the necessary legislation was included in the coalition agreement—for the avoidance of doubt it was on page 30—with provision also made for the Liberal Democrats to abstain.

The transferable allowance proposal was the main headline-grabbing recommendation among many other recommendations arising from the Conservative party’s social justice policy group and its two reports “Breakdown” and “Breakdown Britain”. Both reports highlighted the centrality of family breakdown to many of the social problems facing Britain today, which are a real issue, as I see in my constituency and as my hon. Friends will see in theirs. The reports recognised that the lack of policy support for marriage—the relationship at the heart of a stable family life—was not helping.

Britain is unusual in having a tax system that does not include any spousal allowance or credit. The group was very clear that addressing that shortcoming and recognising marriage in the tax system through a transferable tax allowance would help to bring us back into line with international best practice, and define the best way forward.

Before going into a more detailed presentation of the rationale for the transferable allowance policy, it is important to be clear from the outset about its importance to my party, as is reflected by the Prime Minister’s frequent references to it. When speaking as the Leader of the Opposition in response to the publication of “Broken Britain” in 2007, he said:

“I welcome this report’s emphasis on the family, and on marriage, as the basis for the social progress we all want to see…Britain is almost the only country in Europe that doesn’t recognise marriage in the tax system”.

He continued:

“Our support for families and for marriage puts us on the side of the mainstream majority, on the side of a progressive politics, on the side of change that says we can stop social decline, we can fix our broken society, we can and will make this a better place to live for everyone.”

In July 2008, in Glasgow, the Prime Minister continued to affirm that stance by saying that

“when it comes to perhaps the most important area of all, families, we will take action not just to support marriage and family stability”.

He told parents:

“your responsibility and your commitment matters, so we will give a tax break for marriage and end the couple penalty.”

Furthermore, in 2010, during the run-up to the general election, during a speech in Doncaster, my right hon. Friend seemed to become even more vociferous in his support for marriage, saying:

“I absolutely feel at my very core that recognising that relationships matter, that commitment matters and, yes, that marriage matters is something we should not say quietly but something we should say loudly and proudly.”

He continued:

“What is so backward looking in a country where we have social breakdown and social problems of saying that committed relationships, encouraging people to come together and stay together is a bad thing? Of course it isn’t, it’s not outdated”—

I hope that the Deputy Prime Minister is listening—

“if you look around the European Union, if you look around the OECD, we’re almost alone in not recognising marriage in the tax system. And why do we…think that with our appalling record of family breakdown that somehow we are in the right position and everyone else is in the wrong position; we’re not, they’ve got it right and we have got it wrong.”

[Mr David Burrowes (Enfield, Southgate) (Con)]

The Conservative party is standing up for marriage in the House. With the exception of the representative from the Democratic Unionist party, the hon. Member for Strangford (Jim Shannon), 14 Conservative Members account for all the Back Benchers in the Chamber, so we are clearly showing that the only party on the side of marriage is the Conservative party.

[Mr Jackson]

As usual, my hon. Friend makes an excellent point. It will be noted that family policy is low on the agenda for Her Majesty’s Loyal Opposition.

The Prime Minister has said during Prime Minister’s questions:

“I believe that we should bring forward proposals to recognise marriage in the tax system. Those in our happy coalition will have the right to abstain on them, I am happy to say, but I support marriage. We support so many other things in the tax system, including Christmas parties and parking bicycles at work, so why do we not recognise marriage?”—[Official Report, 2 June 2010; Vol. 510, c. 428.]

That was a seasonal reference. I could go on, but I hope that I have made the point that delivering transferable allowances, about which we have talked so much, is now of central importance if we are to be deemed to be reliable and trustworthy.

--- Later in debate ---

[Mr David Burrowes (Enfield, Southgate) (Con)]

I congratulate my hon. Friend the Member for Peterborough (Mr Jackson) on securing this important and timely debate as we lead up to the 2013 Budget. It is timely in the sense that the clock is ticking in terms of our fulfilling our clear promise on this issue, which was made both in our manifesto and in the coalition agreement.

I am proud to champion marriage, as we all are. In addition, I am proud of the fact that the Prime Minister has also been a clear champion of marriage—consistently so—both before the election and as Prime Minister. His words in the run-up to the 2010 election were very clear. He said:

“I absolutely feel at my very core that recognising that…marriage matters is something we should not say quietly but something we should say loudly and proudly.”

What my hon. Friends have said loudly and clearly today is that marriage matters and that we need to show in the tax system that it matters. It matters not only because we say so but because it is a social institution that provides many benefits to the whole of society, although today we are particularly focusing on the poorest, who we consider will benefit from marriage being supported by the state.

Given the commitment in our manifesto and, indeed, in the coalition agreement, I recognise that I do not need to convince my hon. Friend the Minister of the principle of recognising marriage in the tax system. We will leave it to the Opposition—indeed, to the hon. Member for Newcastle upon Tyne North (Catherine McKinnell), who is the lone Opposition Member here today and whom we will hear from shortly—to try to justify why we should continue where the previous Government left off, which is not only failing to recognise marriage but discriminating against married couples in the tax system. The issue facing the Government today is not “if” but “when and how”.

Given the opt-out for the Liberal Democrats under the coalition agreement, the Deputy Prime Minister—as he has always been referred to—last year decided freely to express his opposition to supporting marriage in the tax system. He is free to do so. We are a coalition. I am not sure that we would describe ourselves as a “marriage”, or a cohabitation. It is a relationship that certainly was not formed on the basis of love but on the basis of fiscal reasons, to tackle the huge deficit and the legacy left by the previous Government.

[Mr Stewart Jackson]

The sad thing is that we are heading for divorce. [Laughter.]

[Mr Burrowes]

I am grateful to my hon. Friend for that intervention. It is a time-limited contract, unlike other marriages, but the issue is that there are also good fiscal reasons why this partnership, or relationship, should seek to have as a priority the implementation of this promise, despite the differing views in the coalition.

We need to tackle the Deputy Prime Minister’s argument; he freely expressed his views in one way, so we are free to express our views in another. As has already been mentioned, he said in December 2011:

“we should not take a particular version of the family institution, such as the 1950s model of suit-wearing, breadwinning dad and aproned, homemaking mother, and try and preserve it in aspic.”

It is important for us to make the point very clearly and to emphasise, as hon. Friends do, that the Deputy Prime Minister and others, such as the Opposition, are wrong about the two-parent family and wrong about the motives of others. Indeed, their arguments are old and very much out of touch with the British public, and they are themselves increasingly preserved in aspic. We are not harking back to the outdated 1950s model, and it is very condescending to caricature not only our views in that way but the married people up and down the country and those who want very much to support marriage. Marriage is a popular institution—increasingly so—and it is one that the public welcome.

We simply believe that marriage is best for children and for society, and the evidence supports us. A review by the Institute for Fiscal Studies of the research in this area, which has already been mentioned, shows unequivocally that

“children raised by two happily and continuously married parents have the best chance of developing into competent and successful adults.”

The evidence provides clear support for implementing policies that encourage couples to stay together, and shows that married couples with children are far more likely to stay together than their unmarried counterparts.

It has already been quoted, but it is important to keep repeating the evidence of the “Breakthrough Britain” report, which was published by the Centre for Social Justice. It demonstrated that children born to unmarried parents have a nearly one in two chance of seeing their parents split up by the age of five, whereas for children whose parents are married the figure is only one in 12. That is a huge difference that the state cannot ignore; indeed, the state needs to recognise it properly.

We all recognise that stability clearly matters. Most single parents undoubtedly do a fantastic job raising their children in difficult circumstances. We are not here to judge or to make moral judgments on people’s relationships, but the evidence is very clear that on every significant measure children who are brought up in married families do better on average than those brought up in other relationships.

[Andrew Selous]

Does my hon. Friend agree that this is particularly an issue of social justice for poorer people? Wealthier people—if they are able to do so—can of course transfer their unearned income to their spouse in the form of dividends, rents, interest and income, and make use of a transferable allowance, whereas poor people cannot. This is therefore about doing the right thing by poor people, because wealthier people can already take advantage of what we want for everyone.

[Mr Burrowes]

I agree, and it is very important that we recognise the clear data that make that point. The Centre for Social Justice has said that the difference in family breakdown risk between married and cohabiting couples is such that even the poorest 20% of married couples are more stable than all but the richest 20% of cohabiting couples. It is very important to recognise that this issue is one of social justice.

We recognise that most of the serious social problems that face us have their roots in the breakdown of the family. It is important for Conservatives to recognise and to make the point clearly that we support marriage. Far from making the case for the 1950s model of supporting marriage that I referred to earlier, we want a thoroughly modern and progressive measure that is underpinned by social justice.

As my hon. Friends have said, we are out of step with the majority of other developed countries. Most of the individuals living in OECD countries who are in a system that does not recognise spousal obligations are in either the United Kingdom or Mexico—and that cannot be right. Among highly developed economies, the UK is on its own in operating a tax system that ignores spousal obligations.

As my hon. Friends and I have said, this is an issue of social justice. The Institute for Fiscal Studies and others have made it very clear that, if a transferable allowance were implemented, 70% of the benefit accrued would go to those who are currently in the lower half of the income distribution level. The introduction of a transferable allowance would also reduce the number of children living in households below 60% of the median income, and that is where we want to be.

It is important that we properly urge the Chancellor—my hon. Friends and I have clearly done that this morning—to make good our collective promise and introduce a transferable allowance for married couples with young children. That is where the focus is. We recognise that it is not adequate simply—in a minimalist way—to have a partial transferable allowance that would be worth—what?—£150 a year, or £3 a week. That would also open us up to some criticism. We need to focus on and target married couples with young children.

[Fiona Bruce]

Perhaps I could mention that some polling from the Centre for Social Justice has found that more than 80% of adults agree that more should be done to help parents who wish to stay at home to bring up their children in the early years. Does my hon. Friend agree that support for child care does not always mean that child care needs to be outsourced, and that some of the best support can be to help parents to stay at home to bring up their own children?

[Mr Burrowes]

I heartily agree with my hon. Friend. We need to look in the round at the benefits of child care—the social and economic benefits. Many of us know the value of well-supported care at home, which we sometimes do not properly quantify. That is a message that we need to amplify.

In conclusion, we are on the side of some of the poorest families in Britain, and we can help them by fulfilling the promise in our manifesto and in our coalition agreement. An unimplemented promise would not be a promise kept. We need to implement our promise properly and fully in the Budget of 2013.

LIBOR (FSA Investigation)

David Burrowes Excerpts

Thursday 28th June 2012 Commons Chamber

[Mr David Burrowes (Enfield, Southgate) (Con)]

It is right that the focus of attention should not be just on the greedy bankers drinking Bollinger and the like, but on constituents—victims who have had their businesses and homes trashed as a result of this scandal. As they are the victims of gross irresponsibility, is it not time for some basic responsibility, with the chief executive of Barclays stepping down and the shadow Chancellor saying sorry?

[Mr Osborne]

As I say, the chief executive of Barclays needs to account for his actions, and the Treasury Committee provides the platform where he can do that, and as I said, the shadow Chancellor needs to account for his actions too.

Interest Rate Swap Products

David Burrowes Excerpts

Thursday 21st June 2012 Commons Chamber

[Heather Wheeler]

Absolutely; that scandal has emerged from today’s debate.

In January 2012, my constituent was informed that, because his debt to RBS included the fee for breaking the IRSA agreement, the cost of the loan had increased further to a mind-boggling 23.8% of the loan—approximately £215,000. He was also informed that, even if he sold his property to repay the loan in full, the IRSA would still exist, because it was a separate product from the original loan, and that the agreement would last for 10 years. That clearly was not fully explained to my constituent, who runs a small business with a healthy turnover of £2.5 million and employing 30 people. He is not a financial expert; he trusted his banks, both NatWest and RBS, to provide him with advice on a flexible fixed rate product, as he requested.

[Mr David Burrowes (Enfield, Southgate) (Con)]

My hon. Friend mentions trust. In everything we have heard today, has there not been a complete absence of trust? I think, not least, of a constituent of mine and their RBS relationship manager. Our relationships are based on trust and clear communication, but there was none of that. A simple loan developed into 20 swaps, which led to his losing £5 million, and this once-proud business man has now lost his business, which has broken him. He is a broken man, because of the unaccountable lack of trust in banks such as RBS.

[Heather Wheeler]

That is a salutary lesson The banks have lost the trust of the country, and, having listened to all the stories today, we now understand why. I feel great compassion for my hon. Friend’s constituent.

The matter was not explained to my constituent, who feels strongly that if the IRSA had been explained properly, he would have understood the true cost of breaking the agreement, and instead would have opted for a variable rate or approached an alternative lender. Where was the bank’s duty of care?

It is not only a lack of clarity that makes these agreements so concerning. For another constituent of mine, the complaint is who is selling these products. Back in 2006, he wanted a loan to develop a garden business. He approached his bank manager and was advised to take out an IRSA to guard against rising interest rates to protect his business. His bank manager admitted, however, that he did not fully understand them himself, so arranged for a specialist to come from NatWest to advise my constituent.

Finance Bill

David Burrowes Excerpts

Tuesday 28th June 2011 Commons Chamber

[Fiona Bruce]

No, because I took interventions from Opposition Members earlier.

The direct costs of family breakdown are variously calculated at between £24 billion and £41.6 billion per annum—a huge amount of money that cannot be ignored, especially in times such as these. When faced with such enormous figures, a provision such as the transferable tax allowance to support marriage, and in turn to support stable families, who in turn form an important element of promoting the stable communities that we all want and that are so very much needed today, is surely worth considering.

I am aware of the argument that the principal cause for those different life outcomes is not marriage but family income, but that analysis is too simplistic. No one is trying to argue that family income is not relevant—it is—but in my view, insufficient recognition has been given in recent years to the importance of family stability in promoting the health and well-being of children.

[Mr David Burrowes (Enfield, Southgate) (Con)]

In my hon. Friend’s careful preparation for her speech, did she analyse whether other countries have given similar recognition to marriage?

[Fiona Bruce]

I did indeed, and I shall refer to that before I close my speech.

The CSJ report “Fractured Families” demonstrates significant differences in family stability between married and unmarried couples in the early years of parenthood, after discounting other factors such as age, income, education and race. Even the least well-off 20% of married couples are more stable than all but the richest 20% of cohabiting couples.

It is appreciated that we do not need to preach or moralise, but if we are to be truly family-friendly we must ensure that choosing to marry is no more difficult in this country than it is in any other developed country.

--- Later in debate ---

[Jim Shannon]

I thank my hon. Friend for his intervention and for the passion in his voice.

Mindful of those points, it is a minimal responsibility of policy makers to remove all obstacles to marriage resulting from fiscal policy. Indeed, there is a good case for considering what steps could be taken to support marriage. I believe that the proposal before us is one suggestion that we should be considering. In the light of that, I am delighted by what the Prime Minister has said. Some people in this Chamber would say, “If the Prime Minister supports it, we don’t,” but if the Prime Minister says something good, let us support it, whether he is the Prime Minister or not—and if one of my colleagues says that something is good, then that is good as well.

[Mr Burrowes]

The hon. Gentleman is making the case on behalf of his constituents and presenting his own personal view, but does he also recognise that a strong case has been made in those countries that recognise marriage in a way that this country does not?

--- Later in debate ---

[Kate Green]

I cannot question the hon. Gentleman’s evidence about Northern Ireland, but I can say that the position across the United Kingdom as a whole is that a higher rate of marriage correlates with people in higher socio-economic groups. We were helpfully reminded by the hon. Member for North Cornwall (Dan Rogerson) of an important question, which relates to the second point about the evidence: even if we could do something to spread the advantages of marriage across wider society, would a tax break do this? I have seen and heard no evidence, either this evening or during the many years that I have studied this subject, to show that a tax break persuades people to get married or to stay married. In that sense, particularly in these constrained fiscal circumstances, it seems extraordinary to spend public money on a mechanism that has no evidence to prove that it works effectively. There are real issues to address in respect of what the evidence shows us. Saying that does not devalue, in any way, the importance of marriage; I merely say that when we spend money, we need to know what outcome we expect it to achieve.

[Mr Burrowes]

I, too, recognise the hon. Lady’s expertise. It is difficult in these debates to unite on what we are for. She opened her contribution by discussing children’s well-being, and surely she would agree that there is evidence to suggest a correlation between children’s well-being and marriage. This issue should not just be the preserve of the few and the privileged; it should be an issue of social justice and extending it to the poorest, who can benefit from incentives and support in relation to marriage. That is what we are about, so surely we should unite in this House on that issue.

--- Later in debate ---

[Mr Jackson]

Not at the moment; I may do so later. If a reasonable person from any other European country stumbled into the Chamber tonight, they would wonder why we were debating the issue. It is an existential issue of what we believe as public servants—as politicians—about the institution of marriage. That is not to traduce or do down the massive contribution that those who are, for a variety of reasons, single parents make to their family. They love their children and care about their family, and they are a part of the community. However, it is incumbent on us to say what we think is right. I commend the courage and dedication of my hon. Friend the Member for Gainsborough (Mr Leigh), who is willing to be unfashionable sometimes and speak out on what he believes is right.

This is a totemic issue, because my party put it in its election manifesto. It recapitulated that point in the coalition agreement and has argued for this specific policy, so it is not one that we can lightly cast aside as irrelevant now that we are in a coalition in which there must be give and take. Many of us have always believed that it is vital to take poorer working people out of tax. We heard about a cornucopia of so-called Tory errors, going back to the minimum wage. Let me remind Opposition Members that the gap between the richest and poorest 10% widened under the Labour Government. A former very senior Government member professed that he was

“intensely relaxed about people getting filthy rich”;

that is a fact. No one has a monopoly on care and compassion for people.

It cannot be wrong to look at examples in other European countries, see that their fiscal policy decisions work, and decide to look at a similar policy. I like, respect and trust the Exchequer Secretary to the Treasury; he is a decent man of his word. He will have heard the strength of views and the passion on the Conservative Benches. He will also have heard the filibustering by the hon. Member for North Durham (Mr Jones), which reached a nadir when he effectively said in his final remarks that people were essentially too thick to fill in their tax forms. I know that filibustering is an art form, and he has perfected it, but that is gilding the lily and taking things to a ludicrous length. This is not a subject for knockabout politics; it is about real changes to support people.

[Mr Burrowes]

My hon. Friend makes a good and important case. Many people quite properly raise concerns about the gap between the rich and the poor growing over the years, but why do the same people not also raise concerns about the position of one-earner married couples on an average wage with two children? Their tax burden has increased over the years, too. Why are people not rising up and expressing concern about that discrimination, which will lead to real child poverty if we do not deal with it?

--- Later in debate ---

[Michael Connarty]

Not yet.

It is not just a matter of putting a marriage partnership or a firm partnership ahead of any other. My hon. Friend the Member for Stretford and Urmston (Kate Green) spoke strongly and has worked hard on single parenthood, but I happen to believe, in most cases but not all, that a partnership provides a much stronger place for children to grow up in than that provided by any single person—male or female—who has to go it alone. Therefore, our society has a lot of value when we can encourage partnerships.

We still have the oddest situation in Europe—and among many other countries outside Europe—because we do not recognise de facto partnerships. De facto partnerships are not civil marriages but agreements by people without either a civil or Church marriage to remain in a relationship and to commit to themselves and to any offspring.

My son lives in Australia, and he shared a de facto partnership for a number of years, recognising that if he or his partner had died their pension would have transferred to the other. In this country I have friends who, like me and my spouse, have been together for 41 years. They have had to get married because they might be coming to the end of their lives—not for a long time, I hope—and their pensions would have died with them.

That was a moral judgment which the previous Labour Government made, and it was shameful, because we should have had civil partnerships for all who wished to have them, and we should have recognised de facto partnerships as much as same-gender partnerships. That is how we should have looked at things, but we should not give cash incentives, as the new clause seeks. Indeed, that was the contradiction in the contribution from the hon. Member for Strangford (Jim Shannon), because he said that he was not about incentivising partnerships through finances and then spoke on behalf of the new clause—which would incentivise partnerships.

[Mr Burrowes]

Will the hon. Gentleman give way?

[Michael Connarty]

I have a call from my hon. Friend the Member for Denton and Reddish (Andrew Gwynne) first.

That is what is wrong with the new clause. It is about spouses, it is backward looking and moralistic and it will not help children at all. It is sad that one in five marriages breaks down and that civil partnerships break down, so we must encourage people through the way we finance them and help them to keep their relationships together, because finances as much as personal fall-outs break down relationships.

[Michael Connarty]

My hon. Friend has made that point before, and he puts it better than I could.

My mother, who now has sadly passed away, was soured by the Labour Government very early on when we took away the additional money for single parents. From then on, every time I went to her house on a Sunday, she would start by saying, “Welcome,” and then she would say, “You and your Tony Blair,” and for the rest of my visit berate me for what we had not got right. She was a great touchstone, however, because she saw that the defence of children and the future of children were important, not the rest.

The new clause is a backwards step, but I am hopeful that the Minister will not support it and that such legislation will never get through. It states that only marriage—not any other relationship—is good enough or as good as we would wish.

[Mr Burrowes]

The hon. Gentleman is experienced in European affairs, given his chairmanship of the European Scrutiny Committee and his general interest in European matters, so I have a question. Why do France, Germany and Italy all recognise marriage in the taxation system? Indeed, let us widen that question. Why do only 24% of OECD citizens live in countries that do not recognise marriage in the taxation system? Has he ever asked why our European neighbours recognise marriage but we do not?

[Michael Connarty]

People must ask those Governments, but many recognise de facto partnerships as well, and their recognition is based on not just the marriage to which the new clause refers with “spouses”. That is the point. This is about one small group that we in this country used to see as a backward thing. We have moved beyond that now, and it is time we put it behind us. Perhaps others will catch up with us soon enough when they realise that it is partnerships that matter, not specifically spouses in a formal marriage.

Equitable Life (Payments) Bill

David Burrowes Excerpts

Tuesday 14th September 2010 Commons Chamber

[Mr David Burrowes (Enfield, Southgate) (Con)]

For the benefit of my constituents, I want to establish where the Opposition sit on this matter. I understand that one of their critiques of the Government is that they have not responded more quickly to the Chadwick report. Is it right to say that had the Opposition been in government they would, within two weeks, have accepted the Chadwick report and proceeded on the “unsafe and unsound basis” that the ombudsman criticises? Which side of the fence does the right hon. Gentleman think that policyholders would sit? Would they wish to proceed with the Opposition—within two weeks on the Chadwick proposal—or to take account, as the Government are doing, not simply of Chadwick but of wider views?

[Stephen Timms]

The hon. Gentleman’s difficulty is that a very large number of EMAG members feel that, under the basis that is emerging compared with the one that they were concerned about in the past, they are going to end up in an extremely similar position; they do not see that any progress has been made. That is why they are so angry about having been sold down the river, after so many people signed their pledge.