Banking Misconduct and the FCA

Jim Shannon Excerpts

Thursday 10th May 2018 Commons Chamber

[Jim Shannon (Strangford) (DUP)]

First, I congratulate the hon. Member for East Lothian (Martin Whitfield) on securing the debate. In my last speech on this matter in this House, I referred to a farm in the constituency of my hon. Friend the Member for East Londonderry (Mr Campbell); the family live in my constituency. I remind the House that they paid back half a million pounds in capital and £535,000 in interest, including £62,000 just to leave the bank they were with and go to another bank. The bank had the audacity to charge £6 for a transfer fee on the £1.25 million balance. What bank was this? It was the bank I am with—the Danske bank in Northern Ireland, the most profitable company in Northern Ireland, with profits of £117 million in 2016 and of £145 million in 2017. Its chief executive has said:

“We are absolutely delighted to have retained top spot in the Belfast Telegraph’s listing of the Top 100 companies in Northern Ireland”.

Would it not have been better had it been in the top 100 for customer care and looking after its customers? That is what we should have had, instead of it trying to make more dividends for its shareholders.

In the time I have available, I shall be speaking about Hubert and Marjorie Armstrong, who have also had a nightmare situation with Danske bank in relation to their property development business, Moorcroft Estates Ltd, which has sites at Glenburn Manor of some 44 units and Fashoda Street in east Belfast, with a plan to build some 47 apartments. On 7 May 2007, Danske advanced the company £1.25 million, which was matched by the business, which had been successfully trading for a decade. Danske subsequently took an additional charge of £300,000 on their family home.

This story is dreadful, and, as happens all too often, it involves health issues. The company was finally insolvent in May 2010. On the preliminary reading, Mr and Mrs Armstrong’s personal efforts to pursue the matter with the FCA are interesting and resonate with much of what I have heard from right hon. and hon. Members in this Chamber today. Mr Armstrong’s is a classic case of where the Financial Ombudsman Service should not be involved now or in the future. It shows why we believe the tribunal is the correct complementary solution, to run alongside the right expanded remit of the FOS. Those of us in the all-party group on the Connaught Income Fund have come across many episodes and examples of where the FCA has failed in its duty as a regulator. We have read of the actions, or indeed the inactions, of the Financial Services Authority and FCA, and the FCA board should hang their heads in shame. Past victims have been ignored.

I am conscious of the time and I am trying to race through this. I hope I am not talking too fast, Madam Deputy Speaker. If I am, I apologise to the Hansard people, who are probably writing furiously at this moment in time and trying to decipher my Ulster Scots. I wish to draw the attention of Members to early-day motion 1162, which we tabled to give Members the chance to record their concerns about how the cases of past victims have been looked at. The FCA board has asked:

“Do you agree that the changes introducing small businesses as eligible complainants should come into effect on 1 December 2018 and that they should apply only to complaints made to a firm regarding acts or omissions of the firm which occur from 1 December 2018?”

That approach is wrong. Let us get it right. I do believe in the tribunal system—I think this should be done—and I wish to conclude by mentioning an article by Richard Samuel on 5 February 2018 headed “Banking disputes: time for a tribunal”. In our view, he sets out compelling and convincing logic for why we should have both the FOS and tribunals. I urge the Minister to look towards that. As I always do, I look to him for a positive and helpful response. Hand on heart, I ask him to help our constituents.