HBOS Reading: Independent Review
Debate between John Glen and Lord Vaizey of Didcot(6 years ago)
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The Economic Secretary to the Treasury (John Glen)
It is a pleasure to serve under your chairmanship, Sir Christopher. I acknowledge the work of my hon. Friend the Member for Thirsk and Malton (Kevin Hollinrake) in securing this debate and making an excellent speech, as he has done on several occasions this year in this place, and setting out a case that was well reasoned in many elements. I also pay tribute to the hon. Members for Strangford (Jim Shannon) and for East Lothian (Martin Whitfield), who made fine contributions to the debate.
As we have heard today and in previous debates this year, incidents of banking misconduct and fraud have had a severe impact on some small and medium-sized enterprises. It has been and remains a top priority of mine in office to face up to the issues that have been generated by the cases that have been raised. I am conscious that many of the eight Back-Bench Members who have taken part in this debate will have heard sad and unfortunate stories from their constituents about how the actions of banks have affected them and their businesses. That includes not only the events at HBOS Reading, but the actions of the RBS Global Restructuring Group and the mis-selling of interest rate hedging products.
I begin by reminding Members that we expect the highest standards of behaviour across the financial sector. That is why the Government have introduced a number of necessary changes to restore public trust in financial services, such as the senior managers and certification regime. Before I address the substance of today’s debate, it is important that we pause for a moment to recognise the contribution that banks make to both the UK economy and our society. As the hon. Member for Aberdeen North (Kirsty Blackman) rightly said, it is necessary for banks to lend to SMEs. Lloyds Banking Group has, for example, increased its net lending to SMEs by £3 billion since 2014 and plans to triple that by 2020. Lloyds is the market leader in providing basic bank accounts, which help vulnerable customers, and its “Helping Britain Prosper” plan sets out a number of commitments on behaviour, diversity and charitable support.
However, I recognise that there has been a great deal of justified anger, within Parliament and beyond, regarding the fraud that was perpetrated against small businesses through the actions of individuals at the HBOS Reading branch. It is important to remember that the events at HBOS Reading constituted criminal activity. As such, it was right that those responsible were brought to justice, as my hon. Friend the Member for Thirsk and Malton pointed out. The FCA continues to conduct an enforcement investigation into the events surrounding the discovery of misconduct at HBOS Reading, resuming an investigation placed on hold at the request of Thames Valley police. I will be keenly following the progress and outcome of the investigation.
In addition, Lloyds Banking Group has appointed Dame Linda Dobbs, a retired High Court judge, as an independent legal expert to consider whether issues relating to HBOS Reading were investigated and appropriately reported to authorities at the time by Lloyds Banking Group, following its acquisition of HBOS. It will consider issues raised by the Project Lord Turnbull report referred to by my hon. Friend. Dame Linda’s findings will then be shared with the FCA.
It is right that Lloyds set up a compensation scheme for businesses affected by the events at HBOS Reading, overseen by Professor Russel Griggs. That scheme has seen offers made to all customers within its scope, with 90% of customers accepting the offer. However, I acknowledge the concerns that Members have raised about the Griggs scheme. Those concerns have certainly been heard, and I am pleased to announce that Lloyds has agreed with the FCA that Lloyds will commission a post-completion review to quality-assure the methodology and process of the Griggs scheme. [Interruption.]
Overseen by an independent person, that review will go above and beyond a normal lessons-learned exercise. The independence of the person appointed to lead the review is vital. In particular, I would expect that person not to have been employed by Lloyds in any way, and to be able to demonstrate complete operational independence from Lloyds. I am pleased that Lloyds has committed to publishing the review once it has concluded, and I welcome Lloyds’ commitment to implementing any recommendations it produces. I have been consistently clear that it is vital that we get the right processes and procedures in place, to ensure that SMEs can obtain fair redress and resolve disputes with their banks.
Mr Vaizey
I know that my hon. Friend the Member for Thirsk and Malton (Kevin Hollinrake) will wind up the debate, so I feel a bit premature intervening on the Minister, who is a good friend. However, he will have heard the reaction in the Gallery to his announcement. It seems to me that it is just a re-wrapping of the current problem. Perhaps he will meet some of the Members in the Chamber, and some of the business owners affected, to hear and see what has actually been going on.
John Glen
I will happily meet my right hon. Friend—a distinguished former Minister who has been fighting on these matters for many years—and my hon. Friend the Member for Thirsk and Malton. Of course I acknowledge the cynicism and concern of those present about the independence of this mechanism, but, as I said, Lloyds has committed to publishing the independent review once it is concluded and implementing any recommendations that it produces. My officials have been working with the FCA to ensure that that comes to pass. I take the concerns about how it progresses very seriously, and will happily meet Members to discuss them.
In the recent Budget, the Chancellor stated the Government’s support for the FCA’s plans to expand eligibility to complain to the Financial Ombudsman Service to small businesses as well as micro-enterprises. Expanding the remit of the FOS will ensure that from 1 April 2019 well over 99% of all UK businesses will have access to fast, free and fair dispute resolution. I am aware that concerns have been raised about the capability of the FOS to adjudicate effectively in such cases, and I discussed those concerns with the Chair of the Treasury Committee just last week.
The FOS has announced its plans to create a ring-fenced, specialist unit to take on the additional cases, and for that unit to be supported by a panel of external SME experts. I welcome those plans, and I will visit the FOS early in the new year to check on how they are progressing. The FCA has also committed to reviewing the expansion of the FOS remit within two years of its coming into force, in addition to its usual oversight processes. I trust that that will reassure some hon. Members who have voiced concerns about the capability of the FOS.
I have also been clear that banks need to work hard to restore businesses’ trust in their institutions. That is why I welcome the banking industry’s recent commitment to establishing two independent voluntary ombudsman schemes, in response to Simon Walker’s review of dispute resolution for SMEs. One of those schemes will address complaints from SMEs with a turnover of £6.5 million to £10 million. The other will address unresolved historical complaints from SMEs that have not already been through a formal process.
I am pleased that the banking industry has set out the key principles for the operation of the scheme to address unresolved historical complaints. Independence, expertise, transparency and the right to an appeal are all hallmarks of a fair and robust process, and it is right that they underpin any approach to dispute resolution. I welcome the banking industry’s commitment to having those schemes up and running by September 2019. I look forward to seeing progress on establishing the implementation steering group very soon, and I am pleased that representatives from the all-party parliamentary group will have a role in that process.
The benefits of an ombudsman-style approach are clear, but I recognise that some hon. Members have advocated again today for the establishment of a tribunal to resolve disputes between banks and SMEs. An ombudsman-style approach can deliver fast, free and fair dispute resolution for SMEs, making decisions based on what is fair and reasonable. I believe that a tribunal, on the other hand, would need the regulation of SME lending, potentially restricting SMEs’ access to credit. It would still require SMEs to pay for expensive legal expertise, and it could make decisions only on a strict legal basis. That is why I believe that an expanded FOS remit, alongside the establishment of further independent ombudsman schemes as announced by UK Finance, will ensure the best outcomes for SMEs.
I highlight again that the Government, financial regulators and industry have done considerable work to tackle bad practice and to ensure that SMEs have access to appropriate dispute resolution and redress mechanisms. The all-party group on fair business banking and finance has been a key part of that work, and I sincerely commend its determination in the work that it has undertaken to ensure that SMEs are fairly treated.
The events at HBOS Reading constituted criminal activity. As such, it was right that those responsible were brought to justice. However, more clearly needs to be done to restore SMEs’ trust in the financial services industry. From the numerous meetings that I have had this year with a wide range of stakeholders, it is clear that we are all determined to deliver the best outcomes for SMEs.
I will closely follow the review of the Griggs scheme. I understand the concerns, but it is a significant step forward that that review will take place, and I will monitor the implementation of both the expanded FOS remit and the industry’s independent voluntary ombudsman schemes. I am confident that we have the right regulatory regime and dispute resolution mechanisms in place for the future. Events similar to those at HBOS Reading should not occur again, and I will do everything in my power in office to ensure that we learn the lessons from those appalling incidents years ago.
Mobile Infrastructure Project
Debate between John Glen and Lord Vaizey of Didcot(8 years, 10 months ago)
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Mr Vaizey
At the moment, no. To meet my hon. Friends halfway, I suggest that if we had a series of proposals whereby a community was genuinely willing to have a mast and the council was onside, it would be incumbent on the Government to consider those proposals. To refer back to my earlier remarks, we need to look at the particular sites that concern my hon. Friends, then see whether they fit within the emergency services programme and consider the potential way forward. I suggest that if my hon. Friend the Member for Salisbury convenes a group of colleagues who wish to come and see me with definitive statements of masts that they would like to see progressed, I will happily hold that meeting after the February recess.
John Glen
Notwithstanding the reticence of the operators to engage in the project, there is a real imperative for the Government to force them to deal with this issue. I hope that the Minister recognises the widespread interest in the matter across the House and across our constituencies, where many people feel let down. However, I am grateful for what he has said and for the hope that he has given so many people who have contacted me in recent months.
Oral Answers to Questions
Debate between John Glen and Lord Vaizey of Didcot(9 years, 5 months ago)
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Mr Vaizey
I absolutely agree that we should support pupils wherever they live. That is why we have, for example, the museum and schools programme to help young people visit regional and national museums, and the heritage schools programme, which has been a huge success. I take the hon. Gentleman’s point, but we are working on it.
John Glen (Salisbury) (Con)
6. What steps he is taking to protect and promote national heritage in Salisbury constituency.
Oral Answers to Questions
Debate between John Glen and Lord Vaizey of Didcot(10 years ago)
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John Glen (Salisbury) (Con)
8. What recent assessment he has made of the adequacy of mobile phone coverage in rural areas.
The Minister for Culture and the Digital Economy (Mr Edward Vaizey)
Mobile coverage at 2G reaches 99% of premises, but my hon. Friend is well aware of the issues that we have with not spots and partial not spots, which is why we have in place the mobile infrastructure programme and why we are currently consulting on roaming.
John Glen
I thank the Minister for that answer. Although I welcome the recent consultation on partial not spots, many areas in rural Wiltshire, such as Bishopstone, remain without any coverage at all. Vodafone’s decision to introduce open sure signal technology in Broad Chalke, as it has recently done in Winterslow, will be revolutionary. What more can be done to incentivise companies such as Vodafone systematically to roll out those solutions before the outcome of the consultation?
Oral Answers to Questions
Debate between John Glen and Lord Vaizey of Didcot(11 years, 1 month ago)
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John Glen (Salisbury) (Con)
2. What progress her Department has made in rolling out rural broadband.
The Parliamentary Under-Secretary of State for Culture, Media and Sport (Mr Edward Vaizey)
Forty two local broadband projects have now agreed contracts and are in implementation, and we are now passing approximately 10,000 premises every week. We have made a huge amount of progress.
John Glen
I thank the Minister for that answer, but what do I say to the local authority and residents in villages such as Pitton who believe they are in the percentage that will not qualify for the imminent roll-out through the BT deal? They want to be free to develop new community-based solutions with alternative providers, as they anticipate they will not get anything from BT for a long time.
Oral Answers to Questions
Debate between John Glen and Lord Vaizey of Didcot(11 years, 10 months ago)
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John Glen (Salisbury) (Con)
14. What steps her Department is taking to improve mobile telephone coverage across the UK.
The Parliamentary Under-Secretary of State for Culture, Media and Sport (Mr Edward Vaizey)
Only 0.3% of the UK population is not served by any mobile network operators. The mobile infrastructure project is addressing up to 60,000 premises in total, including not spots and the 10 roads announced in the 2012 Budget. When 4G services come on stream they should go to at least 98% of homes.
John Glen
I thank the Minister for that response. Mobile 4G will be increasingly important in rural communities such as those around Salisbury. Will the Minister clarify the Government’s latest thinking on securing better access to BT networks by mobile operators, as that will be vital to the cost and speed of 4G mobile internet connection experienced across the UK, particularly in rural communities?
Mr Vaizey
We look across the piece at ensuring that we remove any regulatory obstacles to the roll-out of mobile phone infrastructure. As my hon. Friend points out, getting backhaul for mobile phone masts is incredibly important, and I would be happy to hear his concerns. We do, of course, work constructively with Ofcom and BT to ensure that that is effective.
John Glen (Salisbury) (Con)
T7. The Minister will be aware of the work of the Magna Carta cities of Salisbury and Lincoln to celebrate the 800th anniversary of the sealing of the Magna Carta. Will he meet Salisbury’s Magna Carta project team, including my distinguished predecessor Robert Key, to discuss the role of the British Library and UNESCO in planning for these important events?
Mr Vaizey
I would be delighted to meet my hon. Friend. The anniversary of Magna Carta is extremely important. May I also use this opportunity to recall with great fondness my visit to one of the libraries in my hon. Friend’s constituency? I am so pleased that Wiltshire’s libraries are thriving.
Oral Answers to Questions
Debate between John Glen and Lord Vaizey of Didcot(11 years, 11 months ago)
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John Glen (Salisbury) (Con)
5. What progress her Department has made in rolling out rural broadband.
The Parliamentary Under-Secretary of State for Culture, Media and Sport (Mr Edward Vaizey)
We are making very good progress. Nine local projects have agreed contracts, and I switched on the first street cabinet supported by the rural broadband programme at Ainderby Steeple in North Yorkshire on 13 December.
John Glen
I thank the Minister for that answer. It is excellent news that Wiltshire council is now able to roll out superfast broadband. However, the Minister has to agree that a small percentage of households—typically 2% to 3%—will not be affected by the roll-out. What does he have to say about the small number of rural communities that will not take advantage of the roll-out of broadband across the county and across England?
Mr Vaizey
Our ambition is to get 90% of premises connected to superfast broadband, but to get all premises connected to broadband speeds of 2 megabits per second. There should be a broadband service for almost all households and that will be technologically neutral, so it should be the right technology solution for them.
Oral Answers to Questions
Debate between John Glen and Lord Vaizey of Didcot(12 years, 3 months ago)
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John Glen (Salisbury) (Con)
11. What assessment she has made of Ofcom’s decision to allow Everything Everywhere to use the 4G spectrum from September 2012.
The Parliamentary Under-Secretary of State for Culture, Olympics, Media and Sport (Mr Edward Vaizey)
I have made no assessment of Ofcom’s decision. The decision to allow the variation to Everything Everywhere’s licence to allow 4G services in its spectrum at 1,800 MHz is for Ofcom to make as the independent regulator.
John Glen
I thank the Minister for his reply, but would he not agree that in an era when consumers are taking out 18-month contracts, it is essential that Ofcom moves quickly to ensure that monopoly power does not become entrenched and consumers can benefit from genuine competition in the 4G spectrum?
Mr Vaizey
My hon. Friend is right about the importance of competition. Not only is EE, as we must learn to call it, about to roll out 4G services, but we are working with Ofcom to ensure that we can proceed with our auction as quickly as possible and bring 4G services to all mobile operators.