Interest Rate Swap Derivatives

Debate between Kelvin Hopkins and Guto Bebb

Thursday 24th October 2013 Commons Chamber

[Guto Bebb]

I am grateful for that intervention. I will come to hidden swaps later—“embedded swaps” is the technical term; “hidden swaps” is a fairer way of describing them—because they are a big issue and we need to address them.

The setting up of the redress scheme was the reason why we called this debate. It has taken months to reach an agreement to ensure consistency across the 11 banks involved. Originally we were told that Christmas was the deadline for completion. However, at this point in time there are 30,000 businesses in the cohort—I think that that figure is an underestimate, because of embedded swaps, for example, and the way the sophistication test works—so frankly the Christmas target will not be met.

[Kelvin Hopkins (Luton North) (Lab)]

rose—

[Guto Bebb]

Before I take any further interventions, it is worth making this point. I was recently involved in a mediation meeting with one of the banks and one customer, whom I cannot name, even with parliamentary privilege, apparently. The bank in question made it clear that it could not promise a date for paying redress before 2015. As such, although the intention of achieving consistency is correct, we have to put pressure on the FCA to ensure that we move at a faster pace.

One of the big frustrations felt by the businesses affected and the APPG is that since the pilot scheme was completed, the banks involved have spent upwards of £300 million on the administration of the scheme and recruited up to 3,000 people to deal with it, yet by the end of September only 32 businesses had been offered redress, to the total value of £2 million. I understand the complexity of getting this right, but it is simply not good enough for the banks to be spending that much money and for the businesses that need redress not to be getting it.

Rail Investment

Debate between Kelvin Hopkins and Guto Bebb

Thursday 17th February 2011 Westminster Hall

[Kelvin Hopkins (Luton North) (Lab)]

It is a pleasure to speak under your chairmanship, Mr Owen. It is also a pleasure to follow the good speeches that we have heard so far, especially from my hon. Friend the Member for Liverpool, Riverside (Mrs Ellman), who is the Chair of the Transport Committee. I have been a member of the Committee for the past few months, and I have much enjoyed that time.

I am a passionate lover of, and believer in, railways. Even when they were unfashionable, I still believed that they would be the transport of the future. I suspect that they will outlive the internal combustion engine and possibly even air flight and that, however far ahead we look, there will still be railways. I have a real interest in passengers and freight, and I would like to think that I have some informed proposals to make.

I should declare some interests. I am the chair of the ASLEF group of Members of Parliament. I am also a member of the National Union of Rail, Maritime and Transport Workers group, and my constituency fund received RMT donations before the last election. However, the views I express today have nothing to do with anyone else—they are purely my own—and I would like to think that I have given them sufficient thought to make them worth while.

Like Eddington and others, I am somewhat sceptical about HS2. That is not because I would not, in the best of all possible worlds, want a superb high-speed line that went everywhere. However, ours is a relatively small, densely populated country, and given that funds are, inevitably, limited, there is, as Eddington suggested, a considerable opportunity cost involved in spending money on HS2 rather than other things. It would also be expensive.

I think I can also make the case that HS2 is not absolutely essential to provide the transport that we need. We need lots more investment in existing passenger routes. Improvements to existing routes could make an enormous difference to their capacity. There are a number of problems on the east coast main line. There are two tracks at Welwyn, and we need another viaduct so that we can have four. That bottleneck causes serious problems, and that would be the case particularly for high-speed trains, especially during peak hours of commuter traffic. We therefore need another viaduct at Welwyn.

Further north, we need a flyover where the Cambridge trains branch off at Hitchin. We need passing loops at Peterborough and a flyover at Newark. If we had those, we could have 140 mph non-stop working between King’s Cross and Edinburgh if we chose to. Indeed, in 1992, a trial run was undertaken between King’s Cross and Edinburgh, with a two-minute stop at Newcastle. The journey was done in three and a half hours based on a standard operating speed of 140 mph, so these things can be done. It is interesting that the proponents of HS2, looking into the future, came up with a time of three and a half hours for services between King’s Cross and Edinburgh—exactly the same time as was achieved in 1992.

We need new signalling and higher running frequencies. We can have much higher frequency running if we have modern signalling. One problem is that we have 50-year-old signalling systems. Geographical interlocking signal boxes were installed in the 1960s and they are now out of date and need replacing. With modern signalling, we can achieve higher frequencies and faster throughput.

[Guto Bebb]

As a Welsh Member, I would be fully in favour of electrifying the south Wales line. As far as the north Wales coast line is concerned, the hon. Gentleman is completely right that signalling improvements could make a huge difference to the frequency and speed of services, and that would be critical to the area’s economic success.

[Kelvin Hopkins]

Indeed, and that is true not just of north-south routes, but other routes, too.

Unfortunately, we have a lot of ancient equipment on the railways. It was worthy in British Rail’s time, but we have moved on. One problem with privatisation is that companies have no great incentive to improve investment in such things when they are trying to run as profitably as possible with existing equipment. Some people, including Eddington, suggest that capacity on main lines could be doubled with modern signalling and more frequent running. We could have trains every 180 seconds on those routes if we get the modern signalling.

We have heard a lot about extra rolling stock. In the short term, there are more than 100 unused carriages in Ireland. They are essentially Mark IIIs, and they could be immediately imported, re-bogied and used on main lines in Britain. Actually, they are more modern than our Mark IIIs because they have automatic doors, rather than slam doors. They could be bought cheaply now and installed quickly on our routes. That is a short-term fix—obviously, we want more investment and more rolling stock to be built, particularly by Bombardier—but we can make such changes.

On the west coast main line, the maximum operating speed will be 130 mph because there are tighter curves than on the east coast main line. However, 130 mph operation with modern signalling and high-frequency trains would still be sufficient, particularly if we got freight off the lines. That brings me to my next proposal, which is to get freight off the lines. Those who know me well will know that I have been proposing for a long time that we have a dedicated freight route from the channel tunnel to Glasgow, which would link all of Britain’s main conurbations. Why do we need a dedicated freight line? When it comes to existing freight routes, passengers and freight do not mix. They have different operating speeds and so on. Time and again, when there is a bit of a problem with a passenger train, the freight trains will be parked on one side while the passengers are given priority—people get much more upset than freight when they are delayed. Of course, freight operators get upset, but they have to suffer. However, if we have a dedicated freight line with no passengers, we would overcome those problems.