Money Transfer Accounts

Kevin Brennan Excerpts

Wednesday 17th July 2013 Westminster Hall

[Kevin Brennan (Cardiff West) (Lab)]

Mr Bayley, I will endeavour to get through my speech as quickly as possible, given that request from the Minister.

I thank my hon. Friend the Member for Bethnal Green and Bow (Rushanara Ali) for the fantastic job she has done in leading the campaign on this issue. She has been a brilliant advocate on behalf of her constituents and those of many other Members in the room, and I thank her for that.

Last year, my hon. Friend visited my constituency, which is the neighbouring constituency to that of my hon. Friend the Member for Cardiff South and Penarth (Stephen Doughty), whom I am following in the debate. She met many of my constituents who use a business in Riverside called Trust Exchange UK Ltd, which is run by Anwar Ali. It is a model of what a small business in our local communities should be—goodness knows, we need more small businesses in Wales, in particular. It is the only business of its kind in Wales. It deals with many of my constituents, my hon. Friend’s constituents and others who want to transfer money to relatives, often overseas.

I will not go through the arguments other hon. Members have given for the importance of such transfers. However, my hon. Friend the Member for Bethnal Green and Bow pointed to the huge value of this business and its importance to developing countries, with remittances representing a far larger sum than international aid. That is not something we hear much about in the press, but I hope the debate will help to highlight it, as well as the importance of remittances to the countries involved and to our constituents.

My constituent Anwar Ali approached me some time ago about this matter. I was quite shocked when he told me that, effectively, he would be put out of business by the decision by Barclays bank. His business not only provides a valuable service to my constituents but has been involved in setting up charitable work, aid projects and so on, particularly in Bangladesh, reflecting Mr Anwar Ali’s ethnic origin. It provides a service to people of all sorts of ethnicities and from all sorts of communities.

The point has been made that it is not only Barclays that is involved, and that other banks involved in the business have withdrawn before. HSBC was found guilty by the US authorities of a “blatant failure” in relation to anti-money laundering legislation, and was required to pay a record $1.9 billion fine as a result. Perhaps understandably, it has become extremely risk-averse about the sort of business we are talking about, and businesses such as Barclays have taken notice.

It seems that the principle that applies for large banks is “innocent even if proved guilty”. Being found guilty of money-laundering activity and getting a huge fine means being permitted to carry on business. Western Union, which was mentioned before and which seems to be due to benefit greatly from what is happening, paid $94 million in February 2010 to settle civil and criminal investigations by the Arizona attorney-general’s office, in relation to having turned a blind eye to the movement of illegal funds by drug cartels in Mexico. In the light of that, would not it be ironic if Western Union were to benefit from the decision to withdraw services from the small companies that provide our constituents with financial services on a small scale, and which have done everything to obey the compliance regulations, and if those local businesses were to be put out of business?

The local businesses seem to be subject to the principle that they are guilty when nothing has been proved against them—when they have done all that is legally required to comply with regulations. Small is not beautiful in this case; small is vulnerable, and small businesses are being assumed to be guilty when they have done nothing wrong—even when big businesses have been proved to have acted illegally and have been fined. Is the Minister content that small businesses that have done everything possible to comply with the law and regulations will be put out of business by the decisions of large organisations, which, leaving aside the activities that nearly brought the country to economic ruin, have often been proved to have engaged in activities outwith regulation, and have been heavily fined? If he is not content, what will he do to ensure that the Government, and in particular the Treasury, take a more active role to save those small businesses at the eleventh hour, before they are put out of business?

We have heard about the Barclays letter, and I hope that the Minister will give a positive response from the Government to the proposal for an industry round table. I hope that he will speak up for small British businesses, which have done nothing wrong.

--- Later in debate ---

[Stephen Doughty]

rose—

[Kevin Brennan]

rose—

[Sajid Javid]

I will give way first to the hon. Member for Cardiff West (Kevin Brennan).

[Kevin Brennan]

I am sure that some very good initiatives are being developed, but will the Minister be able, in his remarks this afternoon, to give any direct comfort to the businesses that hon. Members here are concerned may go out of business in the next few weeks?

[Sajid Javid]

I will, but before I respond fully, I will give way to the hon. Member for Cardiff South and Penarth (Stephen Doughty) as well.