European Union (Withdrawal) Bill

Debate between Helen Goodman and Chris Leslie

Committee: 6th sitting: House of Commons
Tuesday 12th December 2017 Commons Chamber

[Mr Leslie]

I am not sure whether such a provision exists. Perhaps members of the Procedure Committee will have a view on that. I certainly think that that would be unfortunate.

[Helen Goodman (Bishop Auckland) (Lab)]

We will look at the composition when we look at the Standing Orders. It is not covered in the contents of the amendments today, but people will have an opportunity to debate that issue on another occasion.

[Mr Leslie]

That is true, but it deserves to be debated today as well. If we are creating a committee, it is perfectly legitimate to argue that we need to know whether it will have teeth and exercise bite, or whether it will be reluctant to do so. The question that my hon. Friend the Member for Rhondda (Chris Bryant) asked about its composition is perfectly reasonable.

European Union (Withdrawal) Bill

Debate between Helen Goodman and Chris Leslie

Committee: 5th sitting: House of Commons
Wednesday 6th December 2017 Commons Chamber

[Helen Goodman (Bishop Auckland) (Lab)]

My hon. Friend is making a good case. There is a further cost that he is not taking into account, which is the cost to the public finances. We know that the Red Book takes no account of the £40 billion or £50 billion in the divorce bill, which means that the Government’s forecast—or the OBR’s forecast—for the public finances will be shot to pieces. That means interest rates will go up faster than anticipated and the cost of Government borrowing will go up. This is a major economic event and we need an assessment of that as well from the Government. Does my hon. Friend agree with me?

[Mr Leslie]

Yes. All hon. Members, not just the Government—there are such hon. Members even on the Labour Benches—will want to commit public resources to all sorts of things, and they need to recognise that if the cost is £60 billion, that is not something to be sniffed at. In a couple of years’ time the deficit is projected to be about £30 billion a year, so we are talking about the equivalent of two years of deficit to be added, presumably, to the national debt at that point in time. That is all notwithstanding what happens to our wider economic circumstances. These things should not just be dismissed.

We should be putting the House of Commons at the centre of this process and not treating it as a peripheral part of the Brexit arrangements. That is why this new clause is so important. Brexit is a costly exercise and Parliament needs to have the chance to properly reflect on it. A potential divorce bill of £1,000 for every man, woman and child in this country certainly should not just be brushed aside. When we ask ourselves what we are getting for this arrangement, we see that we are getting the chance to rip up the finest free trade agreement—a frictionless, tariff-free agreement—of anywhere in the world, for the chance to have something inferior. The current path we are on is not about taking back control; this is about losing control. The idea that Parliament should simply step to one side and agree to have control taken away from it is not acceptable to me and to very many hon. Members. This new clause would at least drag Brexit back into the sunlight and let the public hold those responsible to account.

European Union (Withdrawal) Bill

Debate between Helen Goodman and Chris Leslie

Committee: 1st sitting: House of Commons
Tuesday 14th November 2017 Commons Chamber

[Helen Goodman]

Does my hon. Friend share my astonishment at the answer to my question this afternoon about what the legal basis for the transition period would be? Does he agree that the Government have succeeded in minimising their room for negotiation by fixing the exit day and maximising legal uncertainty and that the one thing that business has been calling for is legal certainty before Christmas?

[Mr Leslie]

As my hon. Friend says, I am starting to wonder whether the Government will reverse ferret a little bit on the fixed date. We will wait and see—I think the vote will come up on day eight. It is obvious that it has not been as thought through as it should have been.

Future Government Spending

Debate between Helen Goodman and Chris Leslie

Wednesday 4th March 2015 Commons Chamber

[Chris Leslie]

The hon. Gentleman is misrepresenting the OBR’s views. It is clear, as the Institute for Fiscal Studies has said today, that the global banking crisis had a devastating effect not just on this country’s public finances, but across the world. Conspicuous by its absence from the hon. Gentleman’s comments was any evidence that he had said in the past that public expenditure plans were all wrong. The Chancellor of the Exchequer and the Prime Minister signed up to support all the previous Government’s proposals.

[Helen Goodman (Bishop Auckland) (Lab)]

Does my hon. Friend agree that Government Members should be reminded of chart 1.1 of the OBR report, which shows that total managed expenditure rose from 36% to 40% of GDP between 1998 and 2008, and then from 40% to 46% by 2009? In other words, the biggest part came from the banking crisis.

[Chris Leslie]

If we had a Government who understood that a connection exists between living standards, the health of our economy and the health of our public finances, perhaps we could make some progress on deficit reduction and tackle some of those issues. Instead, recent figures show that the gap between what the Government spend and their income is perpetuating at a very high level. I think it came down from £80 billion in the first nine months of last year to £74 billion in the first nine months of this year. The deficit reduction strategy is a thing of the past for this Government, because they do not realise how stagnant wages have pulled the rug from underneath it.

Financial Services Bill

Debate between Helen Goodman and Chris Leslie

Monday 10th December 2012 Commons Chamber

[Chris Leslie]

That is correct. The Minister ought to be meeting the FCA regularly, and clearly those are the questions the House expects Treasury Ministers to put to the new regulators.

Lords amendment 78 was another concession that had to be dragged from the Government at great effort. I do not expect too much sympathy from you, Madam Deputy Speaker, but it is quite difficult for the Opposition to win votes in this House. Occasionally we have the odd success, such as on the EU budget—I do not want to talk about these things too much, as I know the Minister is a bit raw on that point—but by and large we try our best, we make our suggestions and we do not get very far. However, on this issue the Government were faced not just with the weight of argument by many hon. Members—including, of course, my hon. Friend the Member for Walthamstow (Stella Creasy)—but with the spiritual hand of assistance from the new Archbishop of Canterbury-designate in the other place, the Cross-Bench Bishop of Durham, as is. The Government had no choice but to make that historic concession when faced with the overwhelming moral and political case and the breadth of cross-party agreement.

The Commercial Secretary to the Treasury admitted that amendment 78 would not be a silver bullet for the problem of high-cost credit—payday lending or however we characterise these things. Although we are slightly disappointed that the new expanded Lords amendment 78 does not refer to “consumer detriment”, we hope that some of the provisions will open the door to enabling the Financial Conduct Authority to take urgent action to clamp down on some of the high costs involved, as well as the duration and rolling over of some payday loans or high-cost credit arrangements again and again, getting people into a spiral of dependency with massive credit costs, which are severely damaging to very many people.

My questions for the Minister are these. If the legislation no longer contains the “consumer detriment” litmus test, what will trigger intervention by the regulator? What will be the test? We are keen on many of the ideas in the amendment. The power to recover funds for consumers, the power to strike down enforcement action by an unreasonable lender and the power to insist on compensation for customers are all good, but we need the Minister to explain in slightly more detail how the Financial Conduct Authority will trigger those powers. Will individual complainants ring up the FCA hotline? Will litigation or a set of class-action cases be needed to get the FCA to take note, or might it send mystery shoppers around the country to undertake proactive investigations and say, “This is not good enough; we will see action”?

We are glad that Lords amendment 78 also makes changes on unlawful communications. That is welcome. Hon. Members will be looking at the clock and thinking, “Well, usually about now”—some time between 7.30 pm and 8 o’clock—“we get text messages from companies trying to convince us that all our debts can be written off in a voluntary arrangement under new Government legislation.” We might get spam or a cold caller saying, “Did you realise you’ve got £2,500 overdue, if only you put in your PPI claim before Christmas?” It is around this time in the evening that people will be getting these sorts of automated calls. There are all sorts of advertising, text and cold-call arrangements proliferating across the country.

Many of our constituents are totally baffled about what is being done and what can be done by the relevant authorities to stop such exploitative behaviour. Apparently, some of the companies trying to exploit vulnerable individuals use mechanised arrangement to poll thousands and thousands of people, and even if only 1% pick up the phone and say, “Oh well, I’d like more information”, the volume of calls means that they can make significant profits. A lot of these automated telephone arrangements are routed through foreign jurisdictions—often not even in the European Union—as a way of skating around advertising regulations.

We want amendment 78 to get a grip on some of those questions. I know that financial services companies are not always the ones directly involved—it could be what are known as claims management companies. There are also organisations peddling debt management plans that have high fees associated with them. People are sold a product by a company that says, “Let’s consolidate all your expensive loans and we’ll take a single payment instead.” People think, “That sounds rather good,” and they start making payments. Perhaps months go by, during which they pay, thinking that they are defraying their debts, but when the company goes bust, they find that they have paid down absolutely none of their debts. All they have been doing is paying for the profits taken by a fee-charging DMP provider. Those are the sorts of services we want the Financial Conduct Authority to tackle.

We have had a lot of shilly-shallying on these issues. Quite frankly, it should not have taken nine months of hard effort to extract this concession from the Government since we first tabled an equivalent amendment in Committee back in March. We are glad for small mercies—this is a step in the right direction—but it is now for the Minister to explain how Lords amendments 25 and 78 will bite and how they will help people in their daily lives. I look forward to hearing his response.

[Helen Goodman]

I want to speak to Lords amendment 25. The Minister was not terribly clear in his opening remarks about whether it concerned consumers as individuals or whether it would be interpreted more widely, to address the branch networks that the main clearing banks operate. When he winds up, I urge him to say something about the significance of having a nationwide branch network to ensure that all communities can be financially included.

This issue came to my attention in July, when I received a letter from HSBC, which wanted to close its branch in Shildon in my constituency. Shildon is a town of slightly more than 10,000 people, many of whom have been banking with HSBC for a long time. Many local businesses—600 of them—bank at the Shildon branch. It is much cheaper for everybody to have a local branch than to get on the bus, go down to Bishop Auckland, put money into the bank or take it out, and then come back again. The round trip on the bus costs £4. It is absolutely ridiculous that people should face such barriers. We mounted a great campaign and a huge petition, but of course HSBC has paid no attention whatever to the needs of the people of Shildon. I happened to come across a man at the Labour party conference who revelled in the title of “Director for wealth management”, and who was apparently the person responsible for the branch network. It is true that there is not a lot of wealth to manage in Shildon; none the less, people in Shildon need a proper banking service, just like those in other parts of the country.

As well as thinking about that need, we need to think about the impact on the rest of us. Let us suppose that somebody who lives in a perfectly well-banked part of Durham wishes to make payments in Shildon, belong to an organisation there or make transactions with people there. It is far easier and better for everybody if they know that there is a proper national network of bank branches. I urge the Minister to comment on the branch network in his closing speech.

I remind the Minister that over the last four years taxpayers have given the major banks a considerable amount of support through subsidies and guarantees, yet although they are too big to fail, they are not too big to fail their customers, which is exactly what they are doing. HSBC claims in its slogan to be “the world’s local bank”, but it is not very local in my constituency.

Interest Rate Swap Products

Debate between Helen Goodman and Chris Leslie

Thursday 21st June 2012 Commons Chamber

[Helen Goodman (Bishop Auckland) (Lab)]

I do not know who my hon. Friend met, but I wonder whether the stories he heard were like that of my constituent Mr Les Wood. He borrowed £9,000 from HSBC and has since repaid £133,000 to HSBC—a totally disproportionate sum.

[Chris Leslie]

That story has been repeated time and again. For those of us who might have come across the problems in anecdotes related to us in our surgeries, today’s debate has revealed that they were not one-off cases; there was a pattern.

Let us remind ourselves of what the banks have been doing. They saw an opportunity in new firms ambitious to succeed and to grow, and in firms in need of loans to invest in new plant and processes. The banks sought to attach complex hedging products to the loans, allegedly giving the impression that that was a requirement of the loan—we have heard how many times businesses were told it was part of the package deal—and that credit could not be obtained otherwise. Small firms were told that the products were just insurance policies: the upside protections were emphasised, but the downside risks were hardly mentioned. Then, when the course of the economy took a turn—we will not go into that today—leading to interest rates plummeting over the past couple of years, the firms were forced to pick up the punitive costs of the downside risks of the hedges. The banks have profited significantly at the expense of small firms.

Today we have heard revelation after revelation of breathtaking abuse of the small firms that have been caught out—firms up and down the country, from chip shops to child care centres, builders to bed and breakfasts. I pay tribute to The Daily Telegraph business section, which has pursued this issue tenaciously. It highlighted the case of Adcock and Sons, a Norfolk electrical retailer that took out an interest rate swap on a £970,000 loan. The product, known as an asymmetric leverage collar, cost the business £2 for every £1 of benefit it offered. As The Daily Telegraph reported, what really rubbed salt into the wound was that the arrangement resulted in Barclays Capital profiting by £100,000.

This is not just a story of product asymmetry; it has many other facets. For example, as we have heard today, agreements are too often not made in parallel with the line of credit, but extend way beyond the end of the loan. Guardian Care Homes has been mentioned: it had two swaps whose term exceeded the loan by 10 and 15 years respectively—totally ridiculous. We have also heard about the punitive costs of servicing the swaps, and the back-breaking breakage fees—sometimes 50% of the total loan cost, averaging, we are told, about £1 million just to reverse out of the agreements.

Questions have been asked today about the competence of those selling these specialist products and the commissions that skewed their judgment. Banks were, at best, taking advantage of what we in the trade know as “information asymmetry”—in other words, unsuspecting customers and cunning banks—but at worst their behaviour was extortionate. Court action to try to obtain a remedy has not been easy: we have heard about gagging clauses in out-of-court settlements, where they have been made. Those problems are compounded by the fact that the clock is ticking on people’s right to complain and pursue redress.

In recent months, Opposition Members have done their best to raise these issues. In the Financial Services Public Bill Committee, we tabled amendments that would have given small firms better access via the FSA to the super-complaints power and stronger collective proceedings powers. The Financial Secretary, who is not here today—I think he is at a conference in Turkey—rejected the amendments, saying that he did not want to comment directly on interest rate hedges issues as they were a “matter for the FSA”. That response was not substantive, and I hope that the Economic Secretary can rise to the occasion today and respond seriously to the heartfelt concerns that have been raised in the debate.

The Government rejected other amendments we tabled to the Financial Services Bill on the need for a fiduciary duty of care for customers, both individuals and SMEs, when they are taking out these products. The Chancellor has rejected Vickers’ advice—it appears that the banking reform Bill will have nothing to improve customer protection. Vickers, of course, highlighted that in the ring-fenced retail arrangements we should be very careful about interest rate swaps, hedging and derivative products moving into what might be called the normal vanilla nature of banking. That is something all hon. Members might want to spend a little time considering when scrutinising the proposals set out in the White Paper that the Treasury has just produced.

I met FSA representatives yesterday and we talked about its supervisory investigation. I am told that it has been looking at a random sample of 50 or so cases in each of the banks. They have been listening to the tapes of some of the sales calls that took place and looking back at them. I am told that its target is to announce some action by the end of this month, which I sincerely hope it will do. Having listened to the debate and heard the strength of feeling on these questions, it occurs to me that any small businesses that have not yet complained or raised these issues with the FSA must do so as soon as possible. The FSA’s hotline number is 0845 606 1234. I hope that those firms will ring and let the FSA know, because it is our best hope at this juncture.

I am looking for four particular assurances from the Minister today at the very least. First, she and the regulators need to extract from the banks an assurance that no customer who complains will be treated adversely because of the complaint. There is potential for a sense of victimisation, and we need absolutely to get out of that space. Secondly, we should have a moratorium on foreclosures while the complaints of the customer concerned are being considered and their case is under review, because firms are going under and going into liquidation and bankruptcy every single day. We have to ensure that some backstop is put on the process.

Thirdly, we need agreement by the banks that customers who were sold hedges for longer than the term of the loan should have the right to cancel and move out of the breakage fee arrangement. Those are the minimum criteria we need. Also, banks should extend the statute of limitations, the sense that complaints have to be investigated within a particular time scale. The banks should show more grace in these circumstances.

Small businesses are the lifeblood of the British economy. They account for 48% of private sector turnover, employ 14 million people, have a turnover of £1.5 trillion, and of course they make up 99% of UK enterprises. They deserve to be treated better by our banks and to be supported more effectively by the Government. They certainly deserve the full backing of both sides of the House for an urgent solution to this serious problem.

Finance Bill

Debate between Helen Goodman and Chris Leslie

Tuesday 28th June 2011 Commons Chamber

[Chris Leslie]

Absolutely. Of course that is the case. It is so obvious that it is surprising that Conservative Members cannot see it. What is worse is that the new clause that they have moved—or rather, that one of them has moved—would cost more than £4 billion. It would cost £4.1 billion to create a personal allowance transferable between all couples, married and unmarried. That would be the price tag of new clause 5. That is the equivalent of a penny on income tax, a penny on employee national insurance rates, a 1% increase in VAT or putting VAT on fuel and power, as we know the Government sometimes like to do. If Conservative Members advocate spending that amount of money, surely it would be better to target it on the basis of need and where it would have the best and most direct benefit to society.

There is a long history of the transferability of personal allowances, and I will not go through it.

[Helen Goodman]

Oh, go on!

[Chris Leslie]

I know that many of my hon. Friends would like to me to elucidate some of that history, but we have already been through various centuries in this evening’s debate. Suffice it to say that it was a Conservative Government who eventually phased out the married couple’s allowance, and indeed the current Lord Chancellor who said:

“Now that husbands and wives are taxed independently—one of the best taxation reforms in recent years—the married couple’s allowance is a bit of an anomaly.”—[Official Report, 30 November 1993; Vol. 233, c. 935.]

My hon. Friend the Member for Stretford and Urmston was absolutely right when she highlighted Labour’s policy shift towards helping the children and families in greatest need, particularly through the tax credit system. That was one of the greatest changes made by the previous Labour Government, and one that we should be proudest of.

Finance (No. 3) Bill

Debate between Helen Goodman and Chris Leslie

Tuesday 3rd May 2011 Commons Chamber

[Chris Leslie]

Far be it from me to defend the poor banks in their compliance with the provisions, but obviously the more the compliance costs go up, the higher the likelihood that customers will end up footing the bill of taking on accountants to address the complexity of what should be a simple banking levy. Whether there are two rates or 10, however, all the rates in the bank levy are far too generous and far too low.

[Helen Goodman (Bishop Auckland) (Lab)]

I do not know whether Ministers have published the change to HMRC staffing needed to deal with these complex provisions. One would think that more staff will be needed, but my understanding is that staffing at the Revenue is being reduced.

[Chris Leslie]

Staffing at HM Revenue and Customs is under incredible pressures. Indeed, there have been a number of redundancies and posts lost. It has not been explained where the extra resources will come from to ensure that the bank levy, in all its complexity, can be enforced adequately. Again, the Minister needs to say what extra capacity HMRC will have to implement this increasingly complex bank levy.

--- Later in debate ---

[Chris Leslie]

Absolutely; but, quite apart from the obscenity of the scale of some of those bonuses, there is a hard-headed economic rationale for more transparency. If shareholders cannot see what senior executives in the banking sector are being paid, that indicates a dysfunction in the corporate governance of the banks, and if the bonus pots of certain executives are being swelled by their behaviour—by the choices that they make and the risks that they are taking—perhaps those were some of the antecedents of the credit crunch. We need transparency to prevent us from repeating the problems that occurred in 2008.

[Helen Goodman]

Surely, in the case of banks in which the Government were a major shareholder, they had an opportunity to deal with the situation as shareholders.

[Chris Leslie]

It is the inactivity of the Government, as the shareholder, that perplexes me. Ministers laugh with scorn at the idea that they, with the stewardship of the taxpayer’s share, should take any action in regard to the current activity of the banks. If the Minister wishes to intervene on the specific issue of his inactivity as a shareholder I shall be more than happy to give way to him, but he clearly does not wish to say anything at this stage.