UK Acorn Finance (Mortgages)

Debate between Jim Shannon and Elfyn Llwyd

Tuesday 11th November 2014 Westminster Hall

[Mr Llwyd]

Yes, they did, and I want to say a brief word about that towards the conclusion of my remarks. At least 44 cases were reported to the Avon and Somerset police, who unfortunately, took very little interest in what was going on—the chief executive of Avon and Somerset police is an ex-partner of Burges Salmon, by the way, so that is another interesting piece of information. Peter Williams was at one time a partner in Burges Salmon, as was John Smith, the chief executive of Avon and Somerset police, who was appointed in 2009. Avon and Somerset police describe themselves on their website as long-standing clients of Burges Salmon. That article also appears on Burges Salmon’s website.

All known complaints to the police and those handling this matter remain unanswered, and I have to ask why. Interestingly enough, they said that they could not find any criminal behaviour, but a detective constable, Niki White, of Avon and Somerset police came up to attend the repossession hearing in the Williamses’ case. Why exactly I do not know. On the one hand she was pretending to give some succour or comfort to the Williamses that the police were doing something, but on the other hand a letter from the manager of the financial investigation and economic crime section of the police to the solicitors acting on behalf of the perpetrators says:

“In your letter dated 16^th August 2013, you have questioned DC White’s attendance at Court on the 7^th August 2013. Her attendance on that day was to ensure that the Court understood the extent of the Police involvement and were not misled into believing that a criminal investigation was already underway.”

That was despite the police at the same time telling the right hon. Member for North Somerset (Dr Fox) that an investigation was under way and that it was an in-depth investigation. But interestingly, a couple of months after that letter, they say that

“we have been in discussion with other regulatory agencies. The purpose of this was to look at whether there are…other opportunities to address the situation or to influence regulation of this kind of activity in the future.”

They say that unfortunately they have not been able to progress it further. So they have concerns both on the criminal side, it seems to me, and, as the hon. Member for Kilmarnock and Loudoun (Cathy Jamieson) says, on the regulatory side, which I am sure we all share.

However, Avon and Somerset police have consistently blamed the Serious Fraud Office for not opening an investigation. That is ironic, because the police themselves have refused to open an investigation, although they have said to at least one Member of Parliament that they have done so. They have also tried to block Dyfed Powys police in Wales from investigating. I believe that something is amiss in Avon and Somerset police. As I have said, John Smith, the chief executive, is now writing to complainants and making decisions, but not mentioning the fact that he used to be a partner in one of the firms that is, or should be, in the firing line.

Let me say a word about Mr Desmond Phillips. Again, this touches on the important point that the hon. Lady made about regulation. In 1975, at the age of 22, Mr Phillips was made bankrupt. In 1976, he was convicted of theft at Shepton Mallet magistrates court. In 1987, his timber and haulage business collapsed, leaving creditors with a loss of £300,000. In 1991, Phillips’s company brokering endowment policies collapsed. Many customers were farmers. Insurance companies claimed that they were owed £300,000 on commissions that had been paid out on policies that failed to materialise or were subsequently cancelled.

In 1992, Phillips underwent his second bankruptcy, owing £170,000. That was discharged in the late 1990s. In 1994, the BBC Radio 4 programme “Face the Facts” was the first programme on Phillips. In 2008, there was a judgment against Phillips at the High Court in Manchester for £250,000 and costs. That was subsequently paid, I believe. In 2010, there was an individual voluntary agreement in respect of all his debts. In 2011, Acorn subsidiary UK Country Capital collapsed, owing £17.3 million to Barclays bank. On 16 April 2014, “Face the Facts” described him as “The Country Rogue”.

Two bankruptcies, one IVA and 14 county court judgments have been recorded against Mr Phillips and, believe it or not, a couple of years ago his licence to lend was renewed by the regulatory authority. That is quite incredible. I have documentation with me to show that Clive Maxwell, chief executive of the Office of Fair Trading, said that he was a fit and proper person to be lending money. I find that utterly incredible and I am sure that the Minister, in due course, will want to consider that aspect. In fact, Phillips’s licence was renewed in May 2012, so that was after most of the bad things that had happened and certainly after what had happened in the case of the Williamses.

I have said that I cannot understand why Avon and Somerset police have not researched this matter properly. I have myself dealt with the Serious Fraud Office and the Attorney-General and have met His Honour Judge Geoffrey Rivlin, the senior adviser to the fraud office. I was told by the fraud office that it deals only with very large frauds. In my instance, it is for £1.5 million, but if we multiply that by anything between 30 and 50 constituents or Members of Parliament, it is a massive fraud. No one can deny that.

I have said that there is a dossier of 44 cases that alleges similar conduct in them all. An especially incriminating document was prepared by Mr Levy, a barrister who specialises in this area. It is entitled “Appointments under flawed security”. He questions why Acorn has persistently used the LPA receiver Mr Burd. The only possible explanation is that Lloyds bank was comfortable with the methods used, because it was lending on to Acorn, as we know, and it was turning a blind eye to all that was happening, in breach of any fiduciary understanding that I have ever come across anyway.

In case anyone thinks that I am just a conspiracy theorist, the following Members of Parliament, to my certain knowledge—I am sure that there plenty of others—are also involved in trying to deal with the matter: my hon. Friend the Member for Carmarthen East and Dinefwr, the hon. Members for Vale of Clwyd (Chris Ruane), for Brecon and Radnorshire, for North Cornwall (Dan Rogerson), for Brigg and Goole (Andrew Percy), for North East Somerset (Jacob Rees-Mogg), for Pendle (Andrew Stephenson), for Penrith and The Border (Rory Stewart) and for Thirsk and Malton (Miss McIntosh), the right hon. Members for South East Cambridgeshire (Sir James Paice) and for Preseli Pembrokeshire (Stephen Crabb), the hon. Members for Caerphilly (Wayne David), for Wantage (Mr Vaizey), for Folkestone and Hythe (Damian Collins), for North Devon (Sir Nick Harvey) and for Selby and Ainsty (Nigel Adams), the right hon. Member for Bexhill and Battle (Gregory Barker) and the hon. Member for Somerton and Frome (Mr Heath). There is also a Member of the other place who is actively involved in trying to assist people whom he knows.

As I said, I have been in contact with Avon and Somerset police, North Wales police, the Attorney-General, the Serious Fraud Office, the regulators and His Honour Judge Geoffrey Rivlin, the chief adviser to the SFO. So far, very little has been achieved, and it is to my huge regret that that should be so.

The conclusion that I draw from this terribly unhappy affair is that even if the modus operandi of UK Acorn and the allied companies is not fraudulent—I believe that it is—they of course have been in flagrant breach of their fiduciary duties to the borrowers. What that means may be obvious, but I will explain it. There is a fiduciary duty on a lender to ensure that the borrower can sustain the payments under the mortgage; otherwise, it is a straightforward taking of his property. That is an obvious point, but in this case there have been instances in which there has been overvaluation of properties in order to make an advance that would not be sustainable on the business case. That is clear in virtually every case that I am aware of. I think there are elements that are criminal, and I hope that we will be able to shine a light on this behaviour, but even if I am wrong, there have been serious, repeated and consistent breaches of fiduciary duty.

I put to the Government the following points. I know that the Minister is in the Treasury, not the Home Office, but will she please pass some of this information on to her colleagues in the Home Office? I am sure that she will. I ask the Avon and Somerset police to come clean as to why they are not properly investigating or, alternatively, to say that they will now investigate thoroughly these very, very serious complaints. They are complaints that have ruined the lives of, to my knowledge, 44 or 45 families. I am sure that Members of Parliament will know of many other people who were affected, and there will be others who have not complained. There is even a woman who has completely lost her mind and is in prison as a direct result of the situation. I could name her, but I do not want to embarrass her. She is contact with me, and she is still in prison.

There are others who have lost absolutely everything. They have the shirt on their back, and that is about it. In the meantime, Desmond Phillips is still lending money recklessly and making huge amounts of money against the assets of innocent people whom he has duped. I would ask also that the Avon and Somerset police fully assist the Serious Fraud Office to undertake its work. I believe that we are talking about a massive fraud, in which the SFO, if it has any purpose at all, should be involved. I have been trying to persuade Sir David Green to get involved, and I do not know whether the problem is one of resource, or what it is. To my way of thinking, if we send the SFO one file that shows underhand behaviour, the SFO should consider it. We have sent 36 files to the SFO, all of which show similar, if not identical, MOs, which suggests to me that something is really amiss.

[Jim Shannon (Strangford) (DUP)]

I apologise for not being here at the start of the debate. I had some constituents to see and I could not get down in time. I know of a number of families who had difficulties financially and who were referred to UK Acorn Finance Ltd for help. The company took advantage of their circumstances. Does the right hon. Gentleman now feel that it is time for Government to regulate the company? The regulation of loan companies is in the news today, and that company must be regulated as well.

[Mr Llwyd]

Absolutely, and the hon. Member for Kilmarnock and Loudoun made that point earlier. The hon. Member for Strangford (Jim Shannon) made that point well, and I am sure that the Minister heard it. I did not know that the hon. Gentleman also had constituents who were affected, but the case is evidently familiar to even more Members than the large number whose names I read out. I am sure that the Minister will have listened carefully to what the hon. Gentleman had to say.

There is a need, in my view, immediately to withdraw Mr Phillips’s licence to work in the financial industry and, crucially, to consider whether the regulatory authorities have done their job well, or at all. There is an obvious rhetorical answer to that question. I would also like to see the investigation and urgent consideration of serious and deep breaches of fiduciary duty. I believe that we owe it to our constituents, many of whom have lost everything they had—their income, their livelihood, their homes, their heirlooms, their livestock and the roof above their heads. My constituents Mr and Mrs Williams believed, perhaps naively, that Phillips and UK Acorn Finance Ltd were on their side. They were clearly wrong, and they have paid an extremely heavy price. To deny them redress is wrong and, in my view, totally unacceptable.

Offender Rehabilitation Bill [Lords]

Debate between Jim Shannon and Elfyn Llwyd

Monday 11th November 2013 Commons Chamber

[Mr Elfyn Llwyd (Dwyfor Meirionnydd) (PC)]

Last month, the National Association of Probation Officers held one of the biggest ever rallies in Parliament and called on the Government to rethink their proposals to privatise probation. Two large Committee Rooms overflowed with members of the association, but what struck me was that their main concern was public safety. Even their own jobs came third or fourth in the list, which illustrated the fact that their concerns were genuine and heartfelt.

When the Bill reached its Report stage in the other place, the Government were defeated by a cross-party amendment that now stands as clause 1. The clause states that no reform of the structure of the probation service may be made by the Government

“unless the proposals have been laid before, and approved by resolution of, both Houses of Parliament.”

Before he left the Chamber today, the Secretary of State said that he would reverse that provision in Committee. He wants to do that because it challenges the Government’s intention, which is to bring about wholesale change to probation without proper parliamentary scrutiny. The Government are planning to do that in spite of a tremendous public outcry and fierce opposition from the probation sector itself and the criminal justice system more widely.

On Thursday last, I attended a conference in London with representatives of the police forces, Her Majesty’s inspectorate of constabulary, the fire service, local authorities, housing associations and police and crime commissioners all coming together. These were practitioners who know how these plans will affect community safety and crime levels on our streets. During a discussion on plans to reform probation, not a single person spoke up in favour of the Government’s proposals.

I understand that the Government intend to use the Offender Management Act 2007 as the vehicle through which to abolish probation trusts and to create new community rehabilitation companies and the national probation service. The 2007 Act, of course, enabled probation trusts to work with third sector voluntary organisations and possibly the private sector to ensure that services could be carried out locally.

[Jim Shannon (Strangford) (DUP)]

On that subject, I understand that voluntary organisations have expressed some concern that providers should not be able to park these offenders who have complex and expensive cases. Does the right hon. Gentleman feel that this legislation does not address that properly?

Legal Aid

Debate between Jim Shannon and Elfyn Llwyd

Wednesday 11th May 2011 Westminster Hall

[Mr Llwyd]

Yes, that is absolutely right. That is partly because of judges’ time, but it is also to do with the Children and Family Court Advisory and Support Service and various other things. I should add that if a person seeking legal aid to protect their relationship with their child is denied legal aid, they will not walk down the road and say, “Tough. That’s it. I’m not going to have anything done about this. I’ll walk away.” That person will go into court, very often without the expertise, knowledge and learning to do the job properly, and they may even do themselves down.

When he gave evidence to the Committee, Sir Nicholas Wall said that people do not give up easily in matters involving a child, and nor should they. As he and others have also said, the courts will be flooded out with litigants in person, and any conceivable saving that the Government are looking at will be swallowed up in dealing with that issue, let alone anything else. As we know, there is the “no order” principle in the Children Act 1989, and it will drive people to go to court to ensure that they have contact with their children.

I urge the Minister, by the way, to look at section 64 of the Family Law Act 1996 as some kind of backstop. That provision, for which I was responsible, would give the children independent representation. Nobody in this Chamber or anywhere else would want the children to suffer, because they are what this process is all about. When parents break up, they might throw things at each other and do whatever they want, but ultimately the damage is done to the young person or persons in the middle. I do not want to stand idly by and see that sector of society not being looked after properly; anything short of that is downright uncivilised.

[Jim Shannon (Strangford) (DUP)]

Will the right hon. Gentleman give way?

[Mr Llwyd]

Very briefly, because others wish to speak.

[Jim Shannon]

In my experience over the past 30 years as a councillor and so on, I have found that those who need legal aid most are those who come looking for it. Does the right hon. Gentleman agree that if we are not careful, the changes that the Government are proposing will lead to a two-tier system—one for those who can afford it and one for those who cannot?

[Mr Llwyd]

I am sorry to say that that is exactly it. We are rapidly reaching that point, and one might argue that we are already there. Some people will get access and others will not, and that is abhorrent. We are all equal before the law, and are all entitled to equal access to the law and its procedures. It appears that these measures will definitely limit that scope. There will be law for some and not for others. I urge the Government again to look once more at the issue.

I will not go beyond the changes in family law today, for obvious reasons. The National Association of Guardians Ad Litem and Reporting Officers—if it does not know what it is talking about, nobody does—says that the changes are premature, that they have no sound evidence base and that children have not been considered as stakeholders for the purposes of the impact assessment.

In conclusion, I merely refer to page 71 of the Justice Committee’s report, the main part of which the hon. Member for South Swindon mentioned, about domestic violence as a criterion. In fairness to the Minister, he said when he came before the Committee that he would look at the issue again. With respect, he has had time to look at it again. Will he tell us today whether he has a better definition that will not work against the best interests of the children we are here to protect?