Consumer Access: Financial Services

Jim Shannon Excerpts

Thursday 6th June 2019 Westminster Hall

[Nicky Morgan (Loughborough) (Con)]

I beg to move,

That this House has considered the Twenty-ninth Report of the Treasury Committee, Consumers’ access to financial services, HC 1642.

It is a pleasure to serve under your chairmanship, Mr Walker. The Treasury Committee’s report “Consumers’ access to financial services” was published last month, its conclusions having been agreed by the Committee unanimously. The inquiry was launched in November 2018 to assess whether certain groups of consumers were excluded from getting a basic level of service from financial services providers, whether the regulatory landscape provided sufficient enforcement to ensure that customers could access financial services, and, if not, which remedies were needed.

Our report covered a lot of ground, so I will focus on four of its main conclusions. First, financial exclusion or vulnerability can affect us all at some point in our lives. Secondly, the Post Office alone is not a solution to banks closing their branches. Thirdly, a legal duty of care for financial services providers towards their customers is needed if the Financial Conduct Authority cannot make firms act in their customers’ interests at all times. Fourthly, at present the Equalities and Human Rights Commission does not have the resources to enforce financial services firms’ compliance with the Equality Act 2010, and therefore the Financial Conduct Authority should be given the power to do so.

Before I go into more detail on those four main conclusions, I will give a brief outline of the inquiry’s scope. We received almost 80 written evidence submissions, and we held five oral evidence sessions and two outreach events with members of the public and local charities—one in Waterloo, London, and one in Newcastle. I put on record the Committee’s thanks to everybody who sent us evidence and took part in those events. When I was elected by the House as Chair of the Treasury Committee, I was determined that our inquiries would not just talk about things that affect the City of London and our large financial institutions, but would concentrate on issues that make a real difference to consumers’, and our constituents’, lives. I hope that we have been able to do that in this inquiry.

The oral evidence sessions were held with advice groups and charities representing different groups in society, Members of the House of Lords who had previously carried out work on financial exclusion, representatives from banks and the Post Office, and the regulators with the power to make the changes needed—the Financial Conduct Authority, the Equalities and Human Rights Commission, and the Equality Advisory Support Service, which offers support to individuals with a disability dispute.

It is worth stopping to think about why financial inclusion matters. It is something that many of us will take for granted, perhaps until a time in our lives when we are excluded or suffering, or until we come across a constituency case of somebody struggling. Eleanor Southwood, the chair of the Royal National Institute of Blind People, said in her evidence:

“People experience enormous frustration. But it is also about financial literacy. It is about financial independence. It is about not being more vulnerable to any kind of financial abuse, because you are entirely on top of and aware of your own financial arrangements and situations.”

She went on to say that it

“comes back to the fundamental issues about confidence, the loss of confidence, the loss of confidence in yourself to understand the information.”

I remember the oral evidence that I heard from one of the charities at our roundtable in Waterloo, not very far from here. In this Chamber, we probably take financial inclusion for granted, but an inability to be in charge of one’s finances is sometimes a precursor to an inability to participate fully in society. That is something that we should all be concerned about.

There are many different elements to how consumers access financial services and, as the Committee heard, there are many ways in which people can be excluded. We started by trying to establish which customers we were most concerned about, but the reality is that access to financial services or financial exclusion is not limited to those we might naturally associate with being vulnerable, because vulnerability can happen to any of us at any stage of our lives. The FCA told us that its definition of vulnerability as

“someone who, due to their personal circumstances, is especially susceptible to detriment, particularly when a firm is not acting with appropriate levels of care”

could include up to half the population at any one time.

[Jim Shannon (Strangford) (DUP)]

I commend the right hon. Lady, who came into this House at the same time as I did; indeed, she made her maiden speech just before I made mine, so we have had that relationship in Parliament for a long time. She is aware of my constituents the Armstrongs. I have written to her, the Minister and the Department about them. They ended up in company insolvency and then personal bankruptcy, despite repeatedly advising their bank and lawyers that Mr Armstrong was very unwell over a sustained period.

The right hon. Lady referred to vulnerability, and paragraph 179 of the Treasury Committee’s report refers to it very clearly, stating:

“We therefore support the FCA’s intention to do so through a more balanced definition of ‘vulnerability’”.

Will that new recommendation ensure that we have the chance to protect people such as those I mentioned, whom she is aware of through her position as Chair of the Committee? Also, does she agree that not only the UK financial services industry but regulators at the FCA and the Financial Ombudsman Service must be part of any future work—

--- Later in debate ---

[Nicky Morgan]

I thank the hon. Gentleman. He is a legend for speaking in so many debates in this House, and I would feel rather excluded if he were not here today. I am grateful to him for raising those issues. He is a passionate advocate for his constituents, and has raised a number of cases with me as Chair of the Treasury Committee. He is right that a broad definition of vulnerability is important. People will be vulnerable at different times of their lives. He knows that in a separate inquiry we have been looking at the finances of small and medium-sized enterprises, many of which are almost no bigger than retail customers, and may be exposed to the same vulnerabilities.

My understanding on the definition is that the FCA has published its consultation and is asking about vulnerability. In the inquiry, we wanted to ensure that when we talk about vulnerability, we are not limited to a narrow definition, and that when those working in financial services think about vulnerability, they do so in the broadest possible sense, realising that people come in and out of being vulnerable.

In the case of the hon. Gentleman’s constituents, it is worth re-asking the question about how customers appear to those who advise them. We must also recognise that some people will not identify themselves as vulnerable. That is another thing that we heard during the roundtable. People do not want to tell their bank that they are vulnerable because they are concerned that it might lead to higher charges, or even losing an account or not being offered insurance.

[Jim Shannon]

With your permission, Mr Walker—

[Mr Charles Walker (in the Chair)]

You can make as many interventions as you like, Mr Shannon—make 10 —but brevity is the key. The Floor is yours.

[Jim Shannon]

This intervention will be brief, unlike the last one—apologies for that. Regulators at the FCA and the FOS need to do more to ensure that the most vulnerable in our society are afforded the appropriate response and interactions. Does the right hon. Lady agree that those regulators must do better?

[Nicky Morgan]

I do. I think the FCA is very aware of that, and wants to do better. That is why it has published the consultation on the definition of vulnerability. The hon. Gentleman and I have had previous conversations about the Financial Ombudsman Service, and I have had correspondence with other Members of this House. We all know that the FOS can sometimes struggle to offer the remedies and the speedy service that people are looking for. The FOS performs an important function, and its new leadership is very aware of the challenges. In particular, more and more of us are aware of the ability to go to the Financial Ombudsman Service, which puts pressure on it. However, the basic conclusion of our report is that everybody involved in financial services could do more.

Financial exclusion is a broad issue that can and does affect us all in many different ways. The key areas that the Committee chose to look at were why financial inclusion matters, which I hope I have already captured in my earlier remarks; the many issues that vulnerable consumers face, such as being able to understand their bank statements and communicate with their service providers in the way that they want to; and the closure of local bank branches and the use of post offices as a replacement.

Mortgage Prisoners

Jim Shannon Excerpts

Thursday 6th June 2019 Commons Chamber

[Jim Shannon (Strangford) (DUP)]

It is always a pleasure to speak in these debates on the banks, and I have spoken in every one. I am sure that my constituents are more than glad to know that, on banking issues, I am here to bring their cases to the attention of Ministers. The Minister has always been responsive to my queries and questions on behalf of my constituents, and I look forward to his response not just to me but to everyone else. That is why we are here.

I congratulate the hon. Members for Dover (Charlie Elphicke) and for East Lothian (Martin Whitfield) on securing this debate. They have been engaging on this subject, and they and the Treasury Committee are to be congratulated on sustaining their interest and effort here. We all appreciate their considerable efforts on behalf of all our constituents across the whole United Kingdom of Great Britain and Northern Ireland. I believe that the solution requires a collective and collaborative effort by the regulators, Parliament and the Government. As others have, I call on the Government and the regulators to hold an urgent inquiry into the sale of debt to unregulated entities.

It is a pleasure to follow the hon. Member for Sutton and Cheam (Paul Scully). He makes a valuable contribution to every debate he speaks in, but his contribution to this debate is especially valuable. It is always a special privilege to follow him. A number of Members have spoken on behalf of the mortgage prisoners, and I add my and my party’s support to the House’s calls for Her Majesty’s Treasury and the FCA to redouble their efforts to address this serious subject properly.

I will mostly speak about the sale of debt by banks, through private equity investors, to third-party funds such as those described as vulture funds. Put simply, these banks generally made judgments to lend and then decided to change their business strategy—every Member who has spoken has given such examples—away from these customers whom they had previously regarded as credit-worthy, often for 10 to 15-year loans. They were often happy to make supernormal profits or bonuses, and then abandon their customers through a form of grooming process, turning these long-term loans into on-demand overdraft facilities; they were basically screwing these people as much as they could. It seems obvious that private equity can make the returns they want only through buying or collecting the debt through substantive write-downs of debt and/or at the expense of those customers who trusted their bank—and they do trust their banks, or at least they used to. They do not trust them any longer. From what I have seen, these former customers are the real losers. The hon. Member for East Lothian estimated that there are some 400 of these customers per constituency, and I know some of the ones in my constituency and am well aware of the problems they have had in trying to get beyond where the banks and the companies that took on their overdrafts and mortgages were.

From the Minister’s response to an urgent question in March 2019 about the hunger striker in Scotland, it seems that some lending bank standards are now in place. However, the evidence we have looked at suggests that the banks have little or no control in respect of, or interest in, those customers once there has been a sale to a third party; it seems that they are impotent, or unable or unwilling to help. As the House and the Minister know, we in the Democratic Unionist party have taken an active interest in pressing for the banks to bring forward a dispute resolution scheme—DRS—for historical banking cases. We are keen to have those matters addressed. To my knowledge, none of the seven participating banks in the current UK finance scheme believes that cases sold on to third party vulture funds are eligible for the past or future DRS. What is the Minister’s understanding about this specific area in relation to, first, eligibility and, secondly, any retroactivity in relation to the lending standards he mentioned in March?

After the Minister’s remarks then, I wrote to Richard Donnan, head of Ulster bank, which is RBS in Northern Ireland and our state-owned bank, saying:

“Secondly I enclose a part of the Urgent Question information from Hansard in relation to a moratorium for current cases from Cerberus whilst the DRS scheme comes in to effect.

Can I have your confirmation that the Ulster (and indeed RBS) are ensuring that Cerberus are staying all legal proceedings (such as those within project Aran?) as set in that exchange with the EST. ”

I left my office on Monday night to come here, but on Tuesday my constituency office received a call from Mr Donnan’s office in response to my original letter to him back in March/April. I look forward to his written reply, especially as the bank is largely owned by us as taxpayers. It is always good to remind the banks that the taxpayers—we in this House and everyone else across the nation—are ultimately the people they should be responsive to.

In particular, we have been watching and involved in how the Clydesdale and Yorkshire bank, which was formerly owned by National Australia Bank—it also owned the Northern bank in Northern Ireland, now Danske, until 2004—has been addressing the mediation/remediation efforts on a number of cases involving Cerberus. From my most recent briefing, it seems that those mediation efforts in working with the victims group CYBGCSG, and CYBG top management on 14 cases have been futile, as there appears to have been no active follow-up process. We have asked for the process and it seems that they have not got off their backsides—it is disgraceful that they have not done so. I understand that our involvement in those informal mediation efforts will lapse imminently, as I have learned that in addition to the legal claim filed by RGL Management last month, an additional legal group claim will be filed for an initial 50-plus cases centred on the CYBGCSG victims group this month. It is unfortunate that no resolution was found to any of those 14 cases, with further peaceful yellow vest protests and potentially hunger strikes across the country now seemingly inevitable.

I will, however, provide some potentially good news, as it is always good to give a bit of good news in a debate that can save us from a bit of doom and gloom. The Minister may recall that I first raised the Danske bank case of the Armstrongs a year ago. He knows about this because I have written to him about it, and he has seen the case paper with the all-party group on fair business banking and finance analysis. I understand that following their yellow vest protests from December 2018 to April 2019 at Danske banks in Northern Ireland and at Danske bank Northern Ireland-sponsored events, and with the upcoming DRS, the bank solicitors have now asked to engage with them. It has taken a long time, but hallelujah for that! At least they are answering and some correspondence is now taking place. I hope and pray that this proves to be a useful process with a positive conclusion, and that my constituents, the Armstrongs, do not feel that they need to resume their peaceful “yellow vest” protest from July, with the attendant publicity, at a time when Danske bank just happens to have won the top award in Northern Ireland this week, as a responsible company.

Following correspondence, I am aware that other banks, such as Santander, have agreed to look into some cases prior to the DRS process for SME Alliance members, and that is to be commended. As a party, in the past year we have raised in the House two other cases in which Danske opposed the Financial Ombudsman Service’s considering the complaints on a time-bar basis. Danske can quite easily allow the FOS to consider those complaints now, as I understand that those customers are willing to have their complaints considered by the new FOS team, which was effective from April 2019.

I hope that Danske and the other participating banks will collectively allow those 396 and 447 complaints from 2008 to November 2018, from across the United Kingdom of Great Britain and Northern Ireland, to be considered by the FOS, as part of the overall recognition of the need to deal with historical complaints, which it is important we do, and that the Minister will today add his support for their inclusion in the FOS or DRS processes, as a matter of fairness and equality across the historical scheme from January 2000. I understand that both the DRS chair, Lewis Shand Smith, and Mr Andrew Bailey at the FCA believe that to be appropriate, and I know that the matter was raised earlier this week with UK Finance, so there is endorsement and support from very responsible people. Hopefully, a positive response is imminent from all the stakeholders and participating banks.

Finally, the subject of third-party debt is not solely a UK matter; in our neighbouring jurisdiction, the Republic of Ireland, there was a debate on a private Member’s Bill on vulture funds in the Dáil on 28 May, and the Republic of Ireland Parliament also took useful evidence on accounting and auditing in a Select Committee in the same week. Perhaps the Minister can look into what happened there.

I finish by supporting the motion, and call on Her Majesty’s Treasury and the FCA to follow up with a proper inquiry on debt transfer to third parties and to actively consider changes to the law and regulation in this crucial policy area. Most mortgage prisoners and SMEs deserve better from us all. I thank every Member for their contribution and look forward to the Minister’s response.

Funeral Plans: Regulation

Jim Shannon Excerpts

Wednesday 5th June 2019 Commons Chamber

[Neil Gray (Airdrie and Shotts) (SNP)]

I am grateful to you, Mr Deputy Speaker, and to Mr Speaker for granting me this opportunity to raise the important issue of funeral plan regulation again in the House. Much has changed since the last time I brought a debate on funeral plan regulation to the Chamber. I will go into more detail regarding what has happened in the industry shortly, but first I want to explain why this is such an important issue and why action is so important.

Pre-paid funeral plans allow consumers to save for a funeral. If they are sold and handled appropriately, they are a good thing. They allow people to purchase a funeral and secure it at today’s prices. They can avoid the double-whammy shock of losing a loved one and dealing with the financial consequences of a funeral at the same time. Alongside appropriate regulation of the funeral industry itself and the wider anti-poverty work that is required, funeral plans are the best route to avoiding funeral poverty.

I proposed a ten-minute rule Bill in December 2016, as I want to see better regulation of this market. The debate in 2016 followed a report from Citizens Advice Scotland that same year, commissioned by the Scottish Government, on funeral poverty. It made a series of recommendations regarding the action required to stop funeral poverty. Many of them were devolved responsibilities that are now being pursued by the Scottish Government, but some were issues reserved to Westminster, including this one of the regulation of funeral plans. That report, with its case studies of people being mis-sold funeral plans, and representations made to me by constituents prompted me to ask this Government whether they should be doing more. According to UK Government figures, about 200,000 funeral plans are sold each year, and I expect that figure to continue to rise.

[Jim Shannon (Strangford) (DUP)]

Will the hon. Gentleman give way?

[Neil Gray]

By all means. [Interruption.]

[Jim Shannon]

Mr Deputy Speaker, I did seek the hon. Gentleman’s permission beforehand, so I have done this the right way.

I congratulate the hon. Gentleman, who so often brings to an Adjournment debate many important political issues that we are all involved in and which I am aware of as well. I know of many people who immediately began a funeral payment policy when they retired, yet this has proved to be a negative move for many families. Does the hon. Gentleman agree that, while it is admirable that 95% of funeral plan providers are signed up to regulation by the Funeral Planning Authority, the fact that this is completely self-regulated takes some of the sting out of the tail? I believe there is also a role for the Government to play, perhaps in stronger legislation to protect the elderly and the vulnerable from being taken advantage of as they come towards the end of their life.

[Neil Gray]

I thank the hon. Gentleman for his intervention, and it would not be an Adjournment debate without his intervening.

The hon. Gentleman raises an important issue, which is the current status of the Funeral Planning Authority, which I will come on to discuss in greater detail in my speech. He is right that it is a voluntary body at the moment, and there has been much debate about whether the best route of regulating this market is through putting the FPA on a statutory footing or through Financial Conduct Authority regulation. The Government appear to be looking at FCA regulation, which I am happy enough with, although I do have some concerns about the direction of travel, which I will ask the Minister to look at. The hon. Gentleman is right. At the moment, the FPA perhaps does not have the teeth to regulate the market properly. It would acknowledge that although it has done a great deal of work in this area since my ten-minute rule Bill was introduced, if it were to have a full suite of powers to regulate the market properly, that would require it to become a statutory body.

--- Later in debate ---

[Jim Shannon]

The hon. Member for Airdrie and Shotts (Neil Gray) referred to compensation. I want to ask Minister about this because it was discussed at the working group today. If someone pays for a funeral plan and the firm that takes the money goes bust or ceases to operate, will there be a method whereby people can get their money back?

[John Glen]

That would be resolved by the process in which we are currently engaged—the consultation process, and the proposals for legislation in the autumn—and my expectation is that that is what we shall be aiming for.

We should set the framework for a market that functions more fairly and in the interests of consumers. The future regulatory framework for funeral plans was set out, in detail, in a consultation that I launched on Sunday. The consultation will run for 12 weeks, and it will give stakeholders an opportunity to comment on the proposed legislative framework before the Government consider the responses and finalise their proposed approach.

The hon. Member for Airdrie and Shotts asked an important question about what would happen during the gap between now and the introduction of the full new regulations. Whatever regulatory route is chosen, a transition will be necessary. FCA regulation can be carried out via secondary legislation and will therefore be quickest. The membership of the existing regulatory authority—the self-defining one—clearly has some reputational benefits in the interim, and I would encourage consumers to use the FPA-regulated providers during that period. I recognise that there is a dispute about the most appropriate way forward. That is what the consultation will be about, and the Government will reflect carefully before presenting proposals.

I hope that I have responded adequately to the points that have been raised. I thank colleagues on both sides of the House for their contributions to the debate. This is a very important issue involving real human misery, and as the hon. Gentleman has said, what was happening was an outrage. I am determined that we will get this right for our constituents across the country and leave the market in a far better state.

Question put and agreed to.

Oral Answers to Questions

Jim Shannon Excerpts

Tuesday 21st May 2019 Commons Chamber

[Mr Speaker]

On Mr Brake’s question—oh, very well. We do not want unwelcome contributors. The hon. Lady can choose her own destiny, and we are grateful to her.

[Jim Shannon (Strangford) (DUP)]

Last Friday, I met members of the Chamber of Trade at Newtownards. Of three small shops in the town of Ards, one started off employing 10 and now employs 60, one started off employing six and now employs 30, and one started off employing 20 and now employs almost 100. Would the Chancellor consider rates reduction for those high street shops that increase employment?

[Mr Hammond]

As far as I am aware, rates is a devolved matter in Northern Ireland; it is a matter for the Northern Ireland Executive, which I very much hope will be back in operation very soon.

Financial Exclusion: Access to Cash

Jim Shannon Excerpts

Tuesday 21st May 2019 Westminster Hall

[Jim Shannon (Strangford) (DUP)]

I, too, congratulate the hon. Member for Feltham and Heston (Seema Malhotra) on introducing the debate and setting the scene. Building a relationship with staff enables trust to be built, and with that comes a better working relationship. Although I am obviously of an older generation, I understand that it is a lot simpler for my staff to log on to online banking on their lunch and pay their credit card bill than to spend their entire lunch in the queue at the bank. That leads to better working relationships between employer and employees.

Notably, the bank is still busy: it is not failing or empty. There are always queues in my local branch, because its presence is necessary. There is a need for the ease that online provides, but there is an equal need for a bank on the high street to service people. That is the argument for retaining cash in our society. Technology is great for those who do not want to use cash, but not so great for those who cannot use that technology, as hon. Members have mentioned.

An estimated 17% of the UK population—more than 8 million adults—would struggle to cope in a cashless society. A decade ago, six out of 10 transactions were cash; now it is three in 10. On a number of occasions in my constituency there has been a glitch in the car parking payment system. Such glitches mean that issues with a 30p payment can lead to a £45 fine in the post that is impossible to query, as other payments are supposedly logged as successful. There is a fear among an older generation that if they cannot see or touch something, they cannot really have it.

I have also heard from several shop workers who have had to chase customers after their card payment did not go through due to connection errors. Those are things that happen every day, and are real issues with cashless options. They show that we are nowhere close to being able to do away with money. People want it all. For me, that does not mean that we should do away with cash; we should embrace all payment methods. I hear the banks crowing about how online banking is thriving, but sometimes signs tell us that we cannot lift money in a bank unless the cash machine is broken, or that there is a charge for paying a bill in the bank that can be paid for free online. Many such things annoy people, pushing them away from frontline banking and cash.

Hailing from a mixed urban and rural constituency, I fear that we are leaving behind too many isolated people, who cannot rely on technology and an internet connection. Some 60 bank branches and 250 ATMs across the UK close per month. The Countryside Alliance has suggested that the regulator take action to stop further closures of ATMs, that an access to banking protocol be introduced so that when a branch moves, customers are made aware of the banking services at the nearest post office, and that the Post Office and banks standardise the banking services over the post office counter.

The move towards a cashless society risks creating vulnerable customers and exacerbating financial exclusion among those who cannot access those services. We have a duty to ensure that both forms of payment and transaction are available. If that means Government intervention, I believe that that is what we must do.

Billy McNeill MBE

Jim Shannon Excerpts

Monday 20th May 2019 Commons Chamber

[Brendan O’Hara (Argyll and Bute) (SNP)]

Thank you, Mr Deputy Speaker, for giving the House the opportunity to pay tribute to, and mark the passing of, the great Billy McNeill, who died last month at the age of 79. We have plenty of time this evening and I will be as generous as the House requires in taking interventions. I am sure many will want to contribute. Billy McNeill is rightly considered one of the finest footballers of his generation. It is safe to say that what he achieved in his glittering, trophy-laden career will never be matched.

At the outset, I should declare a personal interest. First, my great, great grandfather, John O’Hara, was one of the founding fathers of Celtic football club back in 1888. Secondly, I am a very—I should stress the word very—minor shareholder in the club. Most importantly, like thousands of other wee boys growing up in Glasgow in the 1960s and 1970s, Billy McNeill was my hero. Who better was there for a wee boy to model himself on, or to aspire to become, than this tall, handsome, athletic, intelligent, articulate man, who was doing what every one of us dreamed of doing: playing for and captaining the football team that we loved?

[Jim Shannon (Strangford) (DUP)]

Will the hon. Gentleman give way?

[Brendan O’Hara]

I will. It would not be an Adjournment debate if the hon. Gentleman did not intervene.

[Mr Deputy Speaker (Sir Lindsay Hoyle)]

I want to know how he’s going to sell this in Northern Ireland!

[Jim Shannon]

If you listen, you’ll find out.

First, may I congratulate the hon. Gentleman on securing the debate? Billy McNeill had a long association with Celtic spanning more than 60 years as a player, manager and club ambassador. As a player and a manager he won 31 major trophies with Celtic. As a lifelong Rangers football club supporter, I appreciate very much the contribution he made to Scottish football and to Old Firm games. Does he not agree that Billy McNeill will be greatly missed by those who love the beautiful game across all the football teams in Scotland, Europe and the rest of the world?

[Brendan O’Hara]

I genuinely and sincerely thank the hon. Gentleman—my hon. Friend—for that contribution. He is absolutely right, I will touch on that later in my speech. Billy McNeill did bring together the very best in people and the very best in football.

Discrimination in Football

Jim Shannon Excerpts

Thursday 11th April 2019 Commons Chamber

[Mims Davies]

As my hon. Friend says, it is important to get this issue right at all levels of the game, and one reason I called for a summit against racism was that I felt that there was no co-ordinated approach across the game. If we do not get this issue right at grassroots level, how can we expect to get it right at national level? I continue to work to hold football authorities to account, but I think that they know they have a problem and must be at the table at every level.

[Jim Shannon (Strangford) (DUP)]

I thank the Minister for her statement. She will know that Northern Ireland supporters were voted the best supporters at the 2016 European championships by supporters from all the other countries involved. That happened for a number of reasons, including because the Irish Football Association and the Northern Ireland supporters clubs have worked together, with a 10-year plan, to defeat terrorism and stop it on the terraces at Windsor Park and elsewhere. Has the Minister had the opportunity to speak to the Irish Football Association and the Northern Ireland supporters clubs to gauge some of the things that they have done to take sectarianism away from the terraces and make football a pleasurable experience for both Protestants and Roman Catholics across Northern Ireland?

[Mims Davies]

I have spoken about sporting issues with inter-ministerial groups, including officials from Northern Ireland, and I will soon be visiting Portrush, which I am greatly looking forward to, particularly in the week of the Masters. It is right to get into community clubs, which are working so well in Northern Ireland, and to listen, learn and share best practice.

British Steel Pension Scheme: Transfers

Jim Shannon Excerpts

Wednesday 10th April 2019 Westminster Hall

[Nick Smith]

I agree. I think that the FCA has the right teeth but is not using them and that the police need to intervene much earlier.

[Jim Shannon (Strangford) (DUP)]

I, too, congratulate the hon. Gentleman on initiating the debate. I do not have any people with steel pensions in my constituency, but I am here to support the hon. Gentleman and to do so on the record. He mentioned that 4,000-plus people a week were trying to get details and advice on how to move forward. Is not the onus on the FCA and, ultimately, the Government to ensure that the necessary advice is there and available? The volume of contacts being made clearly indicates that the system is unable to respond in the way it should.

[Nick Smith]

The advice is there. The difficulty is that for many people it is too technical and complicated; working through it is really very hard.

Transfers were talked up, and pension sharks soon began circling around the key steelworking sites across south Wales and the rest of the UK. They were often facilitated by unregulated introducers, through word of mouth. For example, constituents of mine were approached by a rogue financial adviser at their caravan while they were on a family holiday. Wider possibilities were common currency: a place in the sun, a conservatory and a deposit for a son’s or daughter’s new home were all said to be within reach.

The pension changes meant that it was easier to transfer from a stable fund into investments that were far riskier, on the promise of better returns. Unfortunately, it meant that a safe bet could turn into a bad bet, and a high fee was often part of the deal too. It was the case that 7,800 steelworkers transferred out altogether, of whom 872 had transfers arranged by firms that were eventually ordered—ordered—to stop advising by the FCA. One steelworker lost £200,000. Many others lost tens of thousands of pounds. Many suffered incredible stress and anxiety. I heard yesterday that £1.8 million has been paid out in compensation to steelworkers so far. I emphasise the words “so far”. Because that might not grasp the full scale of the issue, the FCA has now reviewed the files of 2% of the nearly 8,000 steelworkers who transferred out. It found that 58% of the advice was not suitable, which means that the tally of those who lost out could run to several thousands. To deal with that possibility, the FCA now needs to set out a clear programme of how it will identify the steelworkers affected, how it will let them know and what practical support it will provide to help to get them through this process.

Oral Answers to Questions

Jim Shannon Excerpts

Tuesday 9th April 2019 Commons Chamber

[Mr Hammond]

Never a Treasury questions goes by without my right hon. Friend raising the dualling of the A120. Of course we have a very large fund available, with £25.3 billion for strategic roads, and I am sure my right hon. Friend the Secretary of State for Transport is well aware of the compelling arguments in favour of dualling the A120.

[Jim Shannon (Strangford) (DUP)]

What tax breaks is the Chancellor putting in place so that hauliers are able to continue through the uncertainty on contracts during the transition period as we leave Europe?

[Mr Hammond]

As I have already mentioned, hauliers have benefited very significantly from the freeze in fuel duty, but the hon. Gentleman asks a wider question. If we were to find ourselves leaving the European Union without a deal—a situation that I sincerely hope will not arise—we have a full range of tools available to us, including all the usual tools of fiscal policy. I have headroom within the fiscal rules of just under £27 billion, as I set out at the spring statement, and the Government will work closely with the Bank of England in those circumstances to ensure that fiscal and monetary policy are used to support the UK economy.

IR35 Tax Reforms

Jim Shannon Excerpts

Thursday 4th April 2019 Westminster Hall

[The Economic Secretary to the Treasury (John Glen)]

It is a pleasure to serve under your chairmanship, Sir David, in this very dry Chamber. I acknowledge the six excellent speeches that I have listened to carefully. I hope I will be able to respond to the whole range of concerns that have been raised, and specifically on the way in which IR35 has been implemented, as well as on the implications of the Taylor review.

First, I congratulate the hon. Member for Rutherglen and Hamilton West (Ged Killen) on securing this debate, and I thank everyone who has contributed. The Financial Secretary wanted to be here today—I suppose he could now come over and see how we are getting on—but the debate on disguised remuneration and the loan charge in the main Chamber meant he was unable to attend, so I am here in his place. I am conscious that disguised remuneration and the loan charge were mentioned by the hon. Member for Inverness, Nairn, Badenoch and Strathspey (Drew Hendry), and I will come to that issue shortly.

The Government have a responsibility to ensure that everyone pays their fair share of tax—I am sure that feeling is shared across the House. We want to help people to pay the correct taxes on time by ensuring the system works as it is meant to. Some serious points have been made about the effectiveness of the system, which I will get to.

[Jim Shannon (Strangford) (DUP)]

If the leak in the House had happened yesterday at 5 o’clock, there would have been conspiracy theories, but that is by the way. For small businesses and the self-employed who pay tax, we need a tax system that is simple to follow. Will there be changes in the tax system to make it simple to follow for small and medium businesses and the self-employed?

[John Glen]

I certainly agree with the hon. Gentleman’s instinct that tax simplification is how all Governments should seek to develop tax reforms. I will make some observations about that later.

As we have heard, the Government have set about extending the reform of the rules that govern off-payroll working. Those rules, known as IR35, were introduced in 2000—in fact, in the previous year’s Budget—to ensure that people working through their own company, who but for the existence of that company would be taxed as employees, pay broadly the same tax and national insurance as other employees. The rules do not affect the genuinely self-employed, and the Government recognise the massive contribution that contractors make to business and public services across the country. Our aim is simply to ensure that contractors who work through their own company pay the right tax.

However, evidence suggests that the rules have frequently been misapplied, meaning that contractors acting as employees were incorrectly paying less tax than if they had been employed in the usual manner. In April 2017, the Government introduced reforms for public sector organisations that take on contractors through their own companies. The reforms mean that public sector organisations are now responsible for deciding whether the contractor is acting as an employee and is therefore within the rules, as well as for ensuring that the right amount of tax is paid.

HMRC estimates that the reform has raised an additional £550 million in income tax and national insurance contributions over the first 12 months.