Oral Answers to Questions

Debate between Gary Streeter and David Burrowes

Thursday 18th June 2015 Commons Chamber

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

5. What assessment the Electoral Commission has made of the proposals in the European Union Referendum Bill relating to disapplication of purdah.

[Mr Gary Streeter (South West Devon)]

The Electoral Commission has set out in its briefings on the European Union Referendum Bill why it does not agree with the disapplication of section 125 of the Political Parties, Elections and Referendums Act 2000, as proposed in the legislation being considered by this House. The commission’s briefing papers on the legislation are circulated to hon. Members and published on its website.

[Mr Burrowes]

Does my hon. Friend expect the Government formally to respond to the helpfully clear advice that

“there is a risk that the use of significant amounts of public money for promotional activity could give an unfair advantage to one side of the argument”?

If so, can it be published?

[Mr Streeter]

I am not aware of any legal duty for the Government to respond to any recommendations made by the Electoral Commission, but I was pleased to hear earlier this week that the Government appear to be moving in the direction of the advice given by the commission. I am sure that my hon. Friend, who is a tenacious warrior on this issue, will welcome that.

Oral Answers to Questions

Debate between Gary Streeter and David Burrowes

Thursday 27th March 2014 Commons Chamber

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

1. What assessment the Electoral Commission has made of the recent data-matching exercise in the movement towards individual voter registration.

[Mr Gary Streeter (South West Devon)]

The dry-run exercise to prepare for the introduction of individual elector registration involved matching all entries on the electoral registers against the database of the Department for Work and Pensions. The Commission’s report on progress stated that, although there was still a great deal of work to be done, sufficient progress had been made for us to press ahead with the historic change to IER, which will take place in June 2014. It will enhance individual voter responsibility and the security of, and confidence in, the electoral registration system, and—this is extremely important—it means that for the first time those who are eligible to join the electoral register will be able to do so online.

[Mr Burrowes]

What my constituents want is reassurance that the introduction of IER will bring about that greater security when a person enters the register, and that it will bring down electoral fraud and bring up confidence in the electoral system.

[Mr Streeter]

I think I can give my hon. Friend that assurance. IER will certainly increase the robustness of our democratic system, because a national insurance number and date of birth must be given before anyone can enter the register. For many people it will be easier to get on to our register because it can be done online. Particularly for younger people, who are a hard-to-reach group, the ability to enter the register online, with the necessary information, is a very good thing.

Interest Rate Swap Derivatives

Debate between Gary Streeter and David Burrowes

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.