Oral Answers to Questions

Kevin Hollinrake Excerpts

Monday 13th December 2021 Commons Chamber

[Dr Coffey]

I forgot to welcome the former shadow Secretary of State for Health to his new position. The right hon. Gentleman should reflect on the fact that his party opposed extra funding for the NHS through the health and social care levy, which we voted for. The different elements of trying to get people into work are key to lifting many more children out of child poverty. We should also flag up the £1 billion of child maintenance we have collected in the last year; we will keep doubling down on that to ensure deadbeat dads pay for their kids and help to lift their children out of poverty.

[Kevin Hollinrake (Thirsk and Malton) (Con)]

T2. I was surprised to learn that child benefit ceases at the age of 16 for somebody starting an apprenticeship. That is clearly a disincentive for some parents to recommend that their children follow that route. Will my right hon. Friend look at this policy and consider making changes?

[The Parliamentary Under-Secretary of State for Work and Pensions (Mims Davies)]

I believe it may be more appropriate for Her Majesty’s Revenue and Customs and the Department for Education to respond to this question, but I will happily flag up to the DfE anything that deters young people from entering apprenticeships and the labour market, and being able to move into long-term work.

Compensation (London Capital & Finance plc and Fraud Compensation Fund) Bill

Kevin Hollinrake Excerpts

Report stage & 3rd reading
Wednesday 22nd September 2021 Commons Chamber

In previous stages, the Government have claimed that the exact details of London Capital & Finance’s mis-selling and ultimate collapse were unique, and that that is why there is a compensation scheme for its victims but not for the victims of other schemes.

[Kevin Hollinrake (Thirsk and Malton) (Con)]

The hon. Gentleman is making some good points and has been very vocal in this Chamber to draw attention to the bonds of a similar nature that were also mis-sold. However is not subsection (5)(a) of his amendment, which would require,

“an assessment of the regulatory failures”

already covered by the Gloster report? Is not that exactly what that does? Has the purpose of his amendment not already been achieved through that in-depth and welcome report?

--- Later in debate ---

[Peter Grant]

We have to remember that we are dealing with a large number of people. It is not just one company with 50 or 60 people who are victims; there are thousands of victims that we know of and probably many more than we do not know of, and the amounts of money that they have lost individually are life-changing for them. Someone who has worked for 20 years on a Member of Parliament’s salary probably has £20,000 or £30,000 they can afford to lose; these people did not. The amounts they have lost individually are significant; the amount that has been stolen collectively, as I said, is almost certainly over £1 billion. If people stole £1 billion out of a bank vault, law enforcement would not stop until every last one of them was behind bars for a very long time, and would, if need be, change the rules to make sure that it could not happen again. We should regard the theft of £1 billion out of people’s pension funds just as seriously as the theft of £1 billion of gold bullion out of the back of a Securicor van. All this amendment asks is that the Government recognise that as an issue and start to put answers in place as to how they can protect our constituents from falling victim to these scams in future.

[Kevin Hollinrake]

It is a pleasure to have the opportunity to debate these issues. The amendment tabled by the hon. Member for Glenrothes (Peter Grant) is interesting. Certainly I very much support the broad principle of greater scrutiny of the FCA, but I cannot support his amendment because I do not feel that it is effective, not least regarding the issues I raised earlier. Some of the issues in it have already been addressed. The regulatory failures were clearly identified in the excellent Gloster report. The report also—this was welcome—named individuals in the FCA who had failed and who tried to have their names redacted from it and exempted from any specific criticism. One of the cultural issues with the FCA is the lack of individual accountability either in the organisation itself or the organisations they regulate.

In subsection (5)(e) the hon. Gentleman talks about why we are compensating only 80% of the losses of individuals who lost money in London Capital & Finance. That speaks to a broad principle. Many of the investments people make have to be subject to the principle of caveat emptor. Especially with a relatively high-risk investment, it is incumbent on any investor to look at it and judge the risk for themselves. Some form of protection from the regulator is also required, but the regulator cannot be all things to all people and cannot be in all places at once. I had a constituent come to me who had lost a significant amount of money in London Capital & Finance investments, and they were quite clear that they understood that as they were getting an 8% return, whereas in a bank they would probably get 0.5% maximum in interest, there was a risk involved in such investment. It is quite obvious to most people that that is the case, whether they are sophisticated or unsophisticated investors. The broad principle of an investor having to look at the investment and judge for themselves is very important.

[Sammy Wilson (East Antrim) (DUP)]

I accept the point that the hon. Gentleman is making, but does he also accept that many small investors were actually misled—the Gloster report shows this—by the advice they were given by people in the FCA who indicated that the company was covered by the FCA and therefore they were guaranteed to get £5,000 if the firm went bust? That information was wrong, so some people made an informed investment decision on the wrong information supplied by the regulatory agency.

[Kevin Hollinrake]

Anybody reading the report will be appalled by the regulator’s performance in this case, given not just the number of complaints about LCF but the lack of joined-up thinking within the FCA. This was some years down the line; it happened after Andrew Bailey had taken over at the FCA. He knew there were problems right at the start, but there was no joining of the dots and there were the clear allegations of inappropriate conduct within LCF. The independent financial adviser who drew attention to it was a very competent person; he was not simply raising the issue saying, “I don’t like this company.”

The IFA was called Neil Liversidge. He wrote to the FCA setting out exactly what was going wrong with the designation of unsophisticated investors as sophisticated, the encouragement to class themselves as sophisticated, and where some of the investments were going. It was pretty clear what the problem was at LCF, and the FCA failed to act. That is simply unacceptable. That is why I welcome the compensation. However, it still has to be down to investors to make an educated decision. Certainly my constituent and others I have seen could see that this was not a Government gilt they were investing in; there were obviously some risks attached.

[Rehman Chishti]

My hon. Friend says that he welcomes the compensation that is being made. Of course, so do I and so does everybody else here, but linked to the question of compensation is justice and the delay in bringing the perpetrators to account through the investigation by the Serious Fraud Office. I would be grateful if the Minister or my hon. Friend could say why there is such a delay in to bringing those perpetrators to account, because people want compensation but they also want justice and to have the perpetrators brought to account.

[Kevin Hollinrake]

I could not agree more. The UK has a pretty poor record in terms of bringing forward fraud prosecutions. There are a number of things we need to do that are not really within the scope of this Bill. Not the least of them —the Government are committed to this—is bringing forward an offence of a failure to prevent an economic crime. That would make it far easier for the SFO to bring forward prosecutions. I would welcome my hon. Friend’s joining my campaign to bring that legislation forward, because it would make a huge difference to the SFO’s ability to bring forward speedy prosecutions.

[Rehman Chishti]

I am very happy to support my hon. Friend’s campaign to ensure that justice is done in this case.

[Kevin Hollinrake]

That is very welcome.

The key point in the amendment is about oversight. I am concerned that the FCA is not as accountable as it could be to this House. With repatriation, a number of regulations and regulatory oversight of the FCA have now passed back to us domestically whereas before there was accountability through the EU institutions. I am concerned that we have proper oversight of what the FCA does. The hon. Member for Glenrothes and the hon. Member for Harrow West (Gareth Thomas) are quite right: the jury is still out on the FCA. It has made some bold claims that it is reforming and becoming more effective. I welcome the fact that only a couple of weeks ago it set out some clear targets for a reduction in the number of investors investing in high-risk investment and being subject to scams. There are some specific criteria that the House can now hold it to account for; I am just not clear how we do so. I can see how the Treasury does so, but it is important that the House can, too.

In the work that I have done on the all-party parliamentary group on fair business banking, we have seen numerous cases in which the FCA has not been proactive or used the mechanisms at its disposal to sanction the people responsible. That is simply unacceptable. The FCA must be a much more proactive organisation and, for it to be held account for such proactivity, we need a clear line of responsibility between it and the House and its Members. The amendment is a good attempt, but not one that I can support.

[Gareth Thomas]

I am sympathetic to the broad thrust of the amendment tabled by the hon. Member for Glenrothes (Peter Grant) and his concern, which I alluded to in my intervention, that the Government, and certainly the FCA, appear to be saying, “Don’t worry—we’ve had a change of leadership and everything is going to be all right now. You don’t need to worry about the quality of the regulation of investment firms going forward, or the implementation and enforcement of consumer financial regulation, whether in this case or more generally.” I have some sympathy with the point of the hon. Member for Thirsk and Malton (Kevin Hollinrake) that we should be sceptical about such a claim. It is good that Treasury Ministers will be having a more regular dialogue with the FCA, partly as a result of this scandal.

As the House knows, I have taken a particular interest in the demutualisation of Liverpool Victoria. That is very different from the case of LCF, so it would not be appropriate for me to go into the particular details, but there are parallels in the treatment of Liverpool Victoria consumers and those of LCF products. Some of those parallels relate to the culture that appears to exist within the FCA. The all-party parliamentary group for mutuals received a letter from the FCA and one from the PRA, and they reveal that there have been almost 60 meetings between the regulators and the board of Liverpool Victoria, but not one meeting with its consumer-owners on its demutualisation. I wonder whether there is not a frog in hot water-type problem here, with the FCA so close to the Liverpool Victoria board in this case—and potentially to other financial firms—that it fails, perhaps accidently, to do its job on behalf of consumers with sufficient robustness.

I welcome the Dame Elizabeth Gloster report, which was excoriating in its findings. To pick out some key concerns, it said that there were “unclear” policy documents for use by FCA staff, a

“flawed approach to the Perimeter”

and a “failure to consider” the behaviour of particular businesses holistically. It also said that there was insufficient training of staff and pointed to confusion between Her Majesty’s Revenue and Customs and the FCA—our regulators—over the handling of particular issues.

I appreciate that the FCA has not only had a change of personnel but brought forward proposals for a consumer duty to try to rebuild some confidence. However, my problem with the duty, which it consulted on until the end of July, is that there is no sense of understanding the difference between consumers who also own a business—a mutual in this case—and consumers per se, or a willingness to take additional actions for consumers who are also owners. I worry about whether that additional duty will be robust enough.

--- Later in debate ---

[Gareth Thomas]

I am not sure I need to respond other than to thank the hon. Member for his intervention.

[Kevin Hollinrake]

I am sure that many other people in the House often get frustrated, as I do, at unaccountable independent bodies or arm’s length bodies, and I might mention not least the FCA, possibly the Environment Agency and perhaps the NHS as well. Would it not be better for the FCA to have a direct line of accountability to those who are elected by the people of this country and for the body the hon. Member recommends to be made up of parliamentarians from either House?

--- Later in debate ---

[Kevin Hollinrake]

The Treasury deserves great credit for introducing this compensation scheme in the first place. It is a pity that the Minister responsible—my hon. Friend the Economic Secretary—is not on duty today, because he deserves personal credit for that, but the Under-Secretary of State for Work and Pensions, my hon. Friend the Member for Hexham (Guy Opperman) is an excellent stand-in.

Warren Buffett once said that what we learn from history is that we do not learn from history. The key lesson that we have to learn from this sorry episode—a damning assessment of the Financial Conduct Authority’s capability as a regulator at the time—is the need for scrutiny of the regulator. As many Members know, I do quite a lot of work trying to hold banks to account in the all-party parliamentary group on fair business banking, but I still do not know how this place holds the regulator to account. I know that the Treasury has some direct influence, and the Treasury Committee can write reports and conduct inquiries, but I still do not know of a direct mechanism that can be used by this House to address regulation and regulations.

Now that we have repatriated the oversight function from the European Union, various different suggestions have been made as to how that might happen in this House. One of the most interesting proposals is for something along the lines of the Public Accounts Committee—a regulatory accounts committee, supported by a version of the National Audit Office, so that professionals would sit behind a parliamentary committee made up of elected parliamentarians. Whoever holds the regulator to account should be accountable to the public; they should not be an independent body of appointees. There must be a mechanism to make sure that the regulator does the right thing, makes good on its future commitments and ensures that episodes like this do not happen again.

The Gloster report, which led to the compensation scheme that we are putting in place today, made very damning criticisms of the then governor of the FCA, Andrew Bailey, who is now the Governor of the Bank of England. I have experience of dealing with the FCA and Andrew Bailey—I asked him four times whether he had followed the FCA’s own whistleblowing procedures when handling the case of Sally Masterton’s whistleblower complaint with HBOS Reading and Lloyds. He refused to answer that question, which I find horrendous. Both the FCA and the whistleblowing legislation were established by statute, yet we as parliamentarians cannot hold the regulator—which we put in place—to account. We need a better system of regulatory oversight.

[Sally-Ann Hart (Hastings and Rye) (Con)]

Residents in Hastings and Rye have been victims of London Capital & Finance. Does my hon. Friend agree that if people do something in good faith, get the right advice and the right system is in place, there should be measures in place to ensure that they do not end up on the back foot?

[Kevin Hollinrake]

As I said on Report, it is incumbent on investors to check out investments. If something is paying out 8% when they can get 0.5% from their bank, they must say, “Well, this is more risky than simply putting it in the bank.” We cannot lose sight of that principle. However, the least we can expect is a regulator that is proactive. In 2015, a number of people were raising concerns about LC&F, including an independent financial adviser who wrote in detail to the FCA to say what was happening at LC&F, but the FCA did nothing for four years, which is totally unacceptable. People deserve a higher standard of regulation.

On the Online Safety Bill, London Capital & Finance spent £20 million on Google advertising. It is clear that platforms are playing a role in this. This was not even seen as a scam. We can argue that it was a scam, but it was to some extent regulated by the FCA. UK Finance has released a report today saying that online scams are now a national security risk. We must take seriously its calls for more action to be taken. The Online Safety Bill must be the right place to legislate to require the platforms to at least establish whether the investment companies—the people who are advertising investments—are bona fide organisations, and not simply people impersonating them.

With that, I will conclude. I am keen to hear the Minister’s words in his summing up.

Compensation (London Capital & Finance plc and Fraud Compensation Fund) Bill

Kevin Hollinrake Excerpts

2nd reading
Tuesday 8th June 2021 Commons Chamber

[Guy Opperman]

Yes, I believe that is the case. The Treasury and the FCA are working together. The FCA is under new management, as the hon. Gentleman will be aware, and there is an acceptance by the FCA of all the findings in Dame Elizabeth Gloster’s report. More particularly there is fresh thinking, one hopes, that will be applied going forward.

[Kevin Hollinrake (Thirsk and Malton) (Con)]

Will the Minister give way on that point?

[Guy Opperman]

For the last time, and very briefly.

[Kevin Hollinrake]

Powers are one thing, willingness is another. The FCA has shown a remarkable reluctance to hold people to account for incompetence or bad actors, as the Minister said. Will not those failings simply continue unless the FCA starts identifying individuals, within its own ranks or within the banks, for those failings, and holds them to account?

Supporting Disadvantaged Families

Kevin Hollinrake Excerpts

Monday 9th November 2020 Commons Chamber

[Dr Coffey]

If somebody comes to make a universal credit claim, they can get money pretty quickly—within about three or four days. Yes, that is an advance but there is an earlier payment of the sum that would generally be available over the year. Instead of getting 12 payments, a recipient will get 13. It is important that if people need help, they get it, but then the payment will be spread over the rest of the year.

[Kevin Hollinrake (Thirsk and Malton) (Con)]

As co-chair of the all-party group on poverty, may I welcome my right hon. Friend’s statement? Despite protestations from the Opposition, I do not remember any similar package of support being available in 2008-09, when millions of people faced similar hardship. It is important to take a strategic approach, so will my right hon. Friend outline how this strategy will dovetail with the national food strategy, which was commissioned by this Government in 2019 and has made similar recommendations?

[Dr Coffey]

My hon. Friend is right to point out that the Government continue to try to support people through this challenging time. They have put their money where their mouth is to get that direct support to families, as well as to businesses and communities more generally. On the national food strategy, Henry Dimbleby has produced his initial review, and once we get phase 2 of his work and suggestions, the Government will develop a food strategy. We are united in ensuring, particularly through Healthy Start vouchers, that the food that young children and expectant mothers have is nutritious, because that is important for the development of our young children.

Oral Answers to Questions

Kevin Hollinrake Excerpts

Monday 27th January 2020 Commons Chamber

[Justin Tomlinson]

As I have set out in previous answers, we are now spending an additional £6 billion through personal independence payments to support some of the most vulnerable people in society. Under the work capability assessment, we have 92% satisfaction, and under PIP it is 82%. We are ambitious for more and will continue to work with claimants, stakeholders and charities to improve the experience.

[Kevin Hollinrake (Thirsk and Malton) (Con)]

16. What steps she is taking to provide support for people who require additional help transitioning to universal credit.

[Andy Carter (Warrington South) (Con)]

20. What steps she is taking to provide support for people who require additional help transitioning to universal credit.

[The Parliamentary Under-Secretary of State for Work and Pensions (Will Quince)]

The Department is working with a range of organisations to support claimants transitioning to universal credit, building on the success of the Help to Claim scheme, which is delivered by Citizens Advice and has helped more than 180,000 people. From April 2020, a new £10 million transitional fund will provide extra help to the most vulnerable, improving access to welfare and labour market opportunities.

[Kevin Hollinrake]

If someone is on a four-weekly payment cycle, they will be paid twice in one month every year. That cocks up their universal credit claim as well as their cash flow. Until we fix the system, would a simple solution not be to give an interest-free loan to tide them over that period?

[Will Quince]

I am getting a strong steer that Members would like me to take a good look at this policy area, and I thank my hon. Friend for his suggestion. As he knows, we are always looking at ways to improve the UC system. The amount of UC paid to claimants reflects as closely as possible the actual circumstances of a household during each monthly assessment period, and those periods align to the way that the majority of employees are paid. I am of course willing to look into the issue, though, and am happy to meet my hon. Friend in due course.

Oral Answers to Questions

Kevin Hollinrake Excerpts

Monday 7th October 2019 Commons Chamber

[Guy Opperman]

If the individual case is sent to the Minister with responsibility for UC, they will take that up and respond accordingly.

[Kevin Hollinrake (Thirsk and Malton) (Con)]

If people are paid on a four-week cycle, once a year they get paid twice in the same month, which disrupts the UC payment for two months. Will the Minister meet me to see what we can do to prevent these cash flow issues?

[Guy Opperman]

I take the point that my hon. Friend makes, in his usual astute way, and I know that the Minister concerned will be happy to have a meeting with him.

Department for Work and Pensions

Kevin Hollinrake Excerpts

Tuesday 2nd July 2019 Commons Chamber

[Alison McGovern]

I thank my hon. Friend for his intervention. The Conservative leadership election feels like the reversal of politics as I had come to know it. I had always expected that Labour would be on the defensive when it came to public spending. I thought that my party would always have to prove that we were the ones who would deal responsibly with the economy, that we would always be on the defensive and the Tories would always be on the attack. But those competing in the Conservative leadership election seem to want to reverse that principle. They seem to want to be accused of splashing the cash. Given that one of the candidates found nearly £10 billion to be spent on tax cuts, I suggest that the debate should never again be about whether austerity was necessary, but should instead be a simple question of political priorities.

[Kevin Hollinrake (Thirsk and Malton) (Con)]

The hon. Lady is making some powerful points, many of which I agree with, and I am also concerned by some of the pledges in the leadership contest about the spending of taxpayers’ money. What does she think about Labour’s election manifesto pledges of £1 trillion of spending?

[Alison McGovern]

The hon. Gentleman asks about the 2017 manifesto. I simply remind him that before the publication of the manifestos in that election most people expected the Conservative party to get a stonking great majority so that it could push through its version of Brexit based on the quality of their manifesto as opposed to ours. I point the hon. Gentleman to the historical facts, as it did not turn out at all like that.

Universal Credit

Kevin Hollinrake Excerpts

Monday 14th January 2019 Commons Chamber

[Alok Sharma]

I am sorry that the hon. Lady feels unable to welcome the changes. The previous two Budgets have included additional support and, as I just said in answer to my hon. Friend the Member for Mid Worcestershire (Nigel Huddleston), we will see what more we can do where that is appropriate.

[Kevin Hollinrake (Thirsk and Malton) (Con)]

Universal credit was rolled out in my constituency almost two years ago. The roll-out was largely successful, but there are issues, particularly with payment frequency. Will my hon. Friend commit to continue to listen, learn and make adaptations where necessary?

[Alok Sharma]

My hon. Friend makes an important point, because several of the other issues announced by the Secretary of State relate to looking at more frequent direct payments to private landlords and at alternative payment arrangements, including offering them proactively.

Oral Answers to Questions

Kevin Hollinrake Excerpts

Monday 7th January 2019 Commons Chamber

[Amber Rudd]

I am afraid the right hon. Gentleman is a little ahead in his fulsome praise for me, which I always appreciate. As I said to him in the Select Committee before Christmas, I will want to consider carefully when I bring to the House the vote for the 3 million managed migration, which is scheduled for 2020. I am still considering when to do that. I can reassure him that there will be a vote on that before it takes place. The 10,000-person pilot, which was announced some time ago, will, as always, inform us how we do that.

[Kevin Hollinrake (Thirsk and Malton) (Con)]

21. In Thirsk and Malton, some of my constituents get paid on four-weekly cycles. That means they can get paid twice in a month and can appear to be earning more than they actually do. What more can we do to ensure universal credit responds to such situations, so that people receive the right level of support at the right time?

[Amber Rudd]

I thank my hon. Friend for his question. He has raised this issue with us before. He is right that we need to ensure that universal credit delivers on what it intends to do, which is to give real time financial support based on an actual month’s assessment. We have recently updated the guidance for universal credit so that work coaches can adjust to ensure that where the situation he describes occurs, appropriate adjustments are made.

Oral Answers to Questions

Kevin Hollinrake Excerpts

Monday 15th October 2018 Commons Chamber

[Mr Speaker]

We now come to topical questions. Brevity is of the essence.

[Kevin Hollinrake (Thirsk and Malton) (Con)]

T1. If she will make a statement on her departmental responsibilities.

[The Secretary of State for Work and Pensions (Ms Esther McVey)]

When we were here last, Members in all parts of the House were asking whether Citizens Advice could be more involved with universal credit. I am pleased to inform them today that I went away and secured that agreement, and that Citizens Advice, as an independent organisation, will be giving universal support and assisting claimants with universal credit.

[Kevin Hollinrake]

Universal credit was introduced in my constituency early in 2017. Although there were initial problems following the changes made by the Government at the end of last year, Citizens Advice has reported a significant reduction in the number of difficulties. Jobcentre Plus staff also report a very positive effect in getting people back to work. Does that endorse the principle that we should seek not to reject universal credit, but to reform it?

[Ms McVey]

My hon. Friend is right. Work coaches are saying that this is the best system that they have ever had. It has been helping 1,000 people into work each and every day since 2010. My hon. Friend is also right to say that when we see that things need to be improved and adapted, we listen, we learn, and we change it as it goes.