Business Banking Fraud

Jim Shannon Excerpts

Tuesday 9th October 2018 Westminster Hall

[Jim Shannon (Strangford) (DUP)]

I, too, congratulate the hon. Member for Hazel Grove (Mr Wragg) on securing the debate. He is right that we have discussed the subject many times, as the hon. Member for Thirsk and Malton (Kevin Hollinrake) also mentioned. We look to the Minister, who understands the issues that we bring forward very well, for a substantial response. I am grateful to other right hon. and hon. Members for their contributions to the debate about the mis-selling of interest rate hedging products since 2001.

It is important to say, as the hon. Member for Thirsk and Malton did, that my relationship with the banks has been good. My mother and father’s relationship with the banks was also good, because in those days banks were easier to get on with. The borrowing of money was probably very simple. To be fair, the sums involved then were not the large sums that are involved today. Nevertheless, as elected representatives, issues and complaints come forward to us, and in the Gallery behind us there are many constituents who have been wronged, abused and disenfranchised by the banks, and we are here to put their cases forward.

Some of my constituents have been appallingly and despicably treated. I will mention a couple of them, without giving too much detail, just to put their cases on the record. As Members will know, the Democratic Unionist party has consistently said that there is a role for a financial services tribunal and a competent ombudsman service for banking complaints, which would follow the parliamentary intent that such cases should be treated fairly and reasonably, and with timeliness.

In Northern Ireland, we use the terminology of “keeping people’s feet to the fire”; we do not want them to get burnt, but we want people to feel the heat of what we are saying in this Chamber. So I look to the Minister to ensure that the people involved feel the heat, and will thereby respond and look after the people in the Gallery today, as well as my constituents who have been disenfranchised despicably.

The small and medium-sized enterprises are the ones feeling the pain. I will name two in particular in my constituency: the Armstrongs and the Semples. Their cases have been recorded in Hansard before and in the short time that I have today I could not do either of them justice, but Hansard will record the fact that I have put their cases in the main Chamber on two occasions in the past.

The Semples are large dairy farmers who had borrowed a lot of money. They were then squeezed to the point where they had to pay back almost a million pounds. The Armstrongs had made some land acquisitions, but the banks involved squeezed them. They offered them the money and then squeezed them to a considerable extent. The effect on these people’s health, their families and their relationships has been absolutely enormous—we cannot begin to understand that. Without mentioning the person specifically, one of the people I have referred to has serious health issues. Family relationships become strained or break down; they do at the best of times.

Very quickly, I just want to say that we believe that in the discussions about this issue a broad consensus has emerged, similar to that concerning the Financial Conduct Authority consultation.

I will refer to the issue of compensation, because it is very important that the Minister takes it on board. An upper level of £600,000 is appropriate where the complainant is still trading and has a choice of which route they wish to pursue. Latterly, a few people sought the view of the DUP and that of a few other parties on the idea that there should be lower and upper limits of compensation. After much research and reflection, we now believe that Her Majesty’s Government should consider that claims of less than £25,000 should only be eligible for an ombudsman-type service and that the upper limit should be £600,000, which is the figure I mentioned earlier. For those affected businesses that are still trading, the lower limit for a financial services tribunal should be £25,000 and the upper limit should be £5 million. Those are the changes we ask the Minister for in respect of compensation.

For those businesses that are now insolvent as a result of alleged bank conduct and behaviour, the upper claim limit should be £10 million and of course such cases can only be dealt with by a financial services tribunal. In all cases where there are claims above that sum, it should be a matter for the commercial courts.

We have met the Minister who is here today, and tomorrow the hon. Member for Thirsk and Malton will meet the Chair of the Treasury Committee. I met a former Chair of the Treasury Committee some time back, and we have met the FCA and the Financial Ombudsman Service as well. We have done all the door-knocking that we can possibly do and what we need, with respect to all those people we have met, is not to hear words; we need to see action and that action has to come from the Minister who is here today.

Once again, I will just reiterate our view in the DUP that all legacy complaints should be the subject of a voluntary review in the first instance by the bank concerned, with priority given to those complaints that Members of Parliament have already brought to the attention of the House—every Member in this Chamber today has done just that—or to the attention of the FCA or the FOS, as set out in early-day motion 1162 in April 2017.

We need accountability in this process; we need those who have been guilty of criminal acts, as has been alleged, to feel the punishment for their wrongdoings; and I believe that the responsibility that I have as the Member of Parliament for Strangford is to speak up for the Armstrongs, the Semples and for many others in my constituency. There are at least half a dozen others who I cannot mention because they are embarrassed; they are in business and they do not want to have their names mentioned. People should be sure that when we mention names, it is like an iceberg, with nine tenths of the people affected not being mentioned, and they are not being mentioned because of the embarrassment. The enormity of this issue must not be underestimated. However, I have already spoken for too long, Mr Robertson.