Oral Answers to Questions

Kirsten Oswald Excerpts

Tuesday 6th February 2024 Commons Chamber

[Jeremy Hunt]

My hon. Friend is an assiduous supporter of the many pubs, restaurants and shops in Devon, and I commend him for that support. We will, of course, keep all those measures under review ahead of the Budget.

[Kirsten Oswald (East Renfrewshire) (SNP)]

Hair salons are a vital mainstay of our high streets, but many employers are worried about the sustainability of their businesses; a huge issue is their tax bills, with VAT a significant concern, making further business investment very difficult. Cutting VAT to 10% would make an important difference to local businesses, high streets and apprentice training. Will the Chancellor look at doing that to support all our local economies?

[Jeremy Hunt]

I will always look at anything that helps businesses to grow and expand. I set up and ran my own business for 14 years. Can I gently say to the hon. Lady that it is slightly incongruous to argue for lower taxes when the SNP has given Scotland the highest taxes in the United Kingdom?

Business Banking Resolution Service

Kirsten Oswald Excerpts

Tuesday 11th July 2023 Westminster Hall

[Mr Wragg]

The hon. Lady makes a valid, important and sensible point. I will touch on a suggestion towards the end of my remarks.

In the course of its inquiry, the Treasury Committee considered the long-standing and very large gap in provision of a financial dispute resolution service for SMEs, between those eligible to refer a complaint to the Financial Ombudsman Service and those with access to enough money, appropriate legal representation, and sufficient courage and time to be able to sue their bank. A similar shortfall was identified in the APPG’s “Fair Business Banking for All” report.

[Kirsten Oswald (East Renfrewshire) (SNP)]

We should not underestimate the hon. Member’s point about the unreasonableness of expecting those who find themselves in that situation to have huge amounts of courage. I want to make that point on behalf of my constituents who have huge amounts of patience, courage and grit to right what in their case has been a very significant wrong. They would absolutely like to see an independent tribunal service. They describe the current system as a shambles and I do not disagree with them. Their trust is completely shattered by any measure. All of the resolution processes have failed. Does the hon. Member agree that there are people all over the UK who deserve significantly better?

[Mr Wragg]

Absolutely so. The courage of those small and medium-sized business owners is not to be underestimated. I have dealt with constituents whose cases go back decades. They have had more than patience; they have had the utmost resilience. Many would have given up by now, but such is the injustice—the wrongs that we need to right—that we must, on their behalf, respond with similar courage.

The expansion of the remit of the Financial Ombudsman Service in 2019 to include more SMEs and increase the maximum award level narrowed the gap to some extent, but did not close it. Neither has the gap been plugged successfully by the ad hoc redress schemes established by banks in the years following the 2007 financial crisis for those impacted by scandals such as the interest rate hedging product mis-selling, the mistreatment of small business customers by the Royal Bank of Scotland Global Restructuring Group and the HBOS Reading fraud.

The schemes that have been set up have all been heavily criticised for, among other things, a lack of independence and overly restrictive eligibility criteria. It was against that backdrop that the BBRS was established as a voluntary initiative to the specifications of, and funded by, seven participating UK banks. It was intended to help rebuild trust among the SME community by resolving historical and contemporary disputes between banks and those businesses. It thereby filled a gap in dispute resolution and redress.

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[Kirsten Oswald]

My right hon. Friend is making a very helpful speech. The point he is making feeds into the wider point about the huge imbalance in power, influence and resources that exists between the banks and those seeking redress. On his point, the behaviour of some banks has been quite shameful—I am speaking from my own casework here—so whatever happens from here on in, it is imperative that new arrangements are fair, genuinely independent and transparent, so that businesses can be confident that they really are going to work.

[Stewart Hosie]

My hon. Friend is absolutely right, and that imbalance in power and resources was writ large in the BBRS executive’s unilateral decision in March to dissolve the SME liaison panel, after rejecting its numerous proposals to expand the eligibility criteria. It is a law unto itself. The liaison panel came forward with ideas to make things work better, but instead of them being taken on board and actioned—if they were appropriate—the panel was unilaterally shut down. The voice of SMEs to the panel has effectively disappeared, and that was after the SME liaison panel’s chair resigned because it was “difficult to make progress”.

That short list should be cause for concern enough for the Government, but let us take a look—I give great thanks to the all-party parliamentary group on fair business banking for this—at the list of headlines that this shambles has generated: “Business Banking Resolution Service a ‘real failure’”; “‘Cynical’ closure of bank redress adviser panel prompts anger”; “New £23m Business Banking Resolution Service has yet to pay any compensation”; “Bank redress scheme ‘is completely defective’”; “Lawyer Cat Maclean quits ‘completely defective’ banking compensation scheme”; “Business Banking Resolution Service ‘done on the cheap’”, with £40 million invested and it does not work; and “Banking redress chief earns £1m despite paying only five claims”—at that point.

If I were the Economic Secretary to the Treasury, I would be deeply concerned. The process has failed. Businesses are not getting the service or the redress that they need and deserve. The headlines are absolutely diabolical. It appears that few lessons have been learned from the financial crash, or if they have, they have been forgotten. I will ask the Minister two questions and then make one final brief observation. How will the Government ensure that we widen the criteria for businesses to be able to use the service, and what mechanisms will they put in place to allow SMEs to properly, fairly and quickly settle disputes with the banks?

My final observation goes back to the financial crash. We remember the actions of RBS, GRG and a variety of comparable outfits. Instead of restructuring those businesses to allow them to thrive, prosper, trade and grow again in the future, there was a perception—backed by some fact—that the banks were looking at asset-rich, cash-poor businesses to raid and pillage. From my time on the Treasury Committee, I am happy and confident to say that. The perception among the business community is that businesses were there to be raided by the banks, rather than helped. Trust between businesses, particularly small ones, and the mainstream banks broke down entirely. If I were the Government, I would be deeply concerned, looking at the headlines that have already been generated and the self-evident failure and lack of transparency within the BBRS, that it may not take an awful lot more for businesses to once again lose trust in the high street banks. I hope that the Minister will comment on that in his response.

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[The Economic Secretary to the Treasury (Andrew Griffith)]

It is a pleasure to serve with you in the Chair, Mr Pritchard. I congratulate my hon. Friend the Member for Hazel Grove (Mr Wragg) on securing the debate on his behalf and that of the all-party parliamentary group on fair business banking. In my short time in this role, I have seen that the APPG does a significant job and gives a voice to our all-important small businesses.

We are a nation of small businesses. They employ a vast number of people in the economy and make a huge contribution and, as other speakers have said, it is vital that they secure access to the finance and capital that they need to grow, expand and do the wonderful things they do to help the UK economy. As part of that, it is critical when things go wrong—regrettably, they sometimes do—and businesses face issues with their bank, they can access efficient and unbiased dispute resolution. We all aspire to a quick, efficient and affordable process in that regard, which allows for unbiased outcomes for those businesses. Those are the higher-order objectives that we seek.

For context, it is not my role today to defend the BBRS. It is an independent body and is not a part of Government or the Treasury. I will share the same context about it being set up following a number of interventions by Parliament. We will not truthfully know whether the deficiency was in the overestimate of the number of cases or the effectiveness of the BBRS system. Given that we know that the BBRS is effectively headed for the exit in all circumstances, that is moot, although the question of how individuals and businesses get redress is not. That, I absolutely accept, is a responsibility of the Treasury; it is how we can ensure good order on this.

The more generous in spirit among us might accept that the BBRS was set up with good intentions, but as we have heard from Members here today, that has not perhaps been the experience. I understand that and have listened very closely to today’s debate, and perhaps my hon. Friend the Member for Hazel Grove would care to meet me to share his own particular constituent experience. I understand that is a long-standing piece of casework, and sometimes such specific examples illustrate the more general point that we have heard from Members today given that there are clearly a number of cases.

[Kirsten Oswald]

The Minister has offered to meet the hon. Member for Hazel Grove (Mr Wragg), who secured the debate, which I am sure is very welcome, but might he feel able to extend that offer to others of us who have long-standing cases in this field that are difficult to resolve?

[Andrew Griffith]

I want to be a listening Minister and am of course very happy to do that, but in so doing I do not want to hold out a false expectation. These matters are not directly the subject of ministerial interventions, so while I am very happy to meet the hon. Lady, and, again, use those examples to inform the wider policy area, in fairness it is important for people in the Public Gallery or who might be following the debate that I do not raise false expectations, because some of these matters have involved great trauma to individuals and have been going on for a long period of time. I would be grateful if the hon. Lady could frame things in that important context, but of course I would be happy to meet her and, lest I receive more interventions, that is a general point for Members of this House. It is right that I approach my responsibility diligently as we try to formulate policy.

As we go forward, whatever past decisions have been made in this respect, I am very keen to understand—the hon. Member for Hampstead and Kilburn (Tulip Siddiq) talked about this—the role of the Financial Ombudsman Service, which successfully deals with tens of thousands of complaints each year now, including SMEs up to the threshold of £6.5 million. The Financial Conduct Authority—whose decision it must be, but with the support of Ministers—has looked to extend that upper threshold, and it is consulting; perhaps Members have responded, like the APPG has.

I spoke to the chief executive of the FCA and gave him great encouragement that, the consultation having been closed in April of this year, we will shortly hear the response. I hope the House will await that, because it is my belief that one should look again at the merits of this versus a statutory tribunal, which I believe still has some of the disadvantages that the hon. Member for Hampstead and Kilburn outlined, particularly in terms of the need for primary legislation but also the non-material differences between an ombudsman service which exists, is seen to work generally in practice—although I am always open to representations—versus yet another novel intervention in the form of a new statutory tribunal.

High Street Bank Closures and Banking Hubs

Kirsten Oswald Excerpts

Thursday 11th May 2023 Westminster Hall

[Kirsten Oswald (East Renfrewshire) (SNP)]

It is a pleasure to serve under your chairship, Mr Davies. The right hon. Member for Aldridge-Brownhills (Wendy Morton) set out the case very well for why bank closures are a problem and why they cause such concern in our constituencies. It feels like I have stood here innumerable times deploring the loss of another local bank in one of the towns in East Renfrewshire. I really related to the comments of the hon. Member for Barnsley East (Stephanie Peacock): bank closures are highly frustrating and cause such difficulties and challenges for people in our communities.

Sometimes, the way the banks deal with closures adds to the frustration. Some have reduced the number of hours they are open to provide a service, and they tell us in all seriousness that the reason they are closing is that fewer people are attending the bank. Well, of course fewer people are attending the bank if there are fewer hours available for them to do so. The reduction in the availability of service is a challenge and a self-perpetuating issue.

The hon. Lady’s comments about rural areas were absolutely right. This is an issue for people in rural areas—some of my constituents feel that very strongly—but we also heard about issues in more suburban areas. The suburban communities of East Renfrewshire are scunnered; they are fed up to the back teeth of banks disappearing from their high streets and leaving behind big gaps in the local shopping areas. That is particularly an issue for groups in our communities such as disabled people and the elderly, and for local businesses. Our local high streets face not only the challenge of bringing in customers but the additional challenge of the closure. A bank is a destination in and of itself, but people who go to banks may then visit local businesses—that will not happen if the banks are not there. Bank closures leave a gaping hole behind, which is unattractive, and the service that local businesses may also wish to avail themselves of is no longer available, so this is not just a one-dimensional issue for our high streets. I do not think that the banks are paying due care and attention to that.

Local residents are also aggravated by the correspondence they receive from banks that are going to close. Without asking in advance what they think about it, the closure is presented as a fait accompli—whether the community likes it or not, and regardless of its views, the local bank is closing, and people are unable to scrutinise the facts and figures. The bank also tells them not to worry because they can go to another bank that is 5 miles away. Well, it might be 5 miles away for a crow, but that is entirely irrelevant for a human being who has to catch two buses, with a half-hour wait between the two, to get from A to B, or if people do not have time to make the journey because they have other commitments. Such messaging from banks is profoundly unhelpful and insults the intelligence of their customers. The banks seem to be assuming that everybody is standing outside the closing bank, ready to make the journey, but some of the people affected may live in a town that has already lost its bank, which means that they will have to travel even further. It is understandable that people feel vexed.

The right hon. Member for Aldridge-Brownhills pointed out that when a bank is gone, it is gone—it is not coming back—and that is one of the reasons why people are so concerned. There are many other reasons why in-person banking is valuable, including the opportunity it gives people to have a conversation about their money. We all value such conversations, which can advise us on how to stop fraud attempts, particularly those targeted at elderly and vulnerable people. Obviously, if there is no bank branch, such discussions cannot take place.

The ability to access cash is a huge issue in my community and others. If there are fewer free-to-use ATMs and fewer banks, we are taking away the opportunity for people to choose how they transact things in their day-to-day lives. Again, that is a bigger problem for those who have the least cash and for those who are most marginalised in our communities.

The hon. Member for Carshalton and Wallington (Elliot Colburn) is right to worry that banks might just be disappearing from our high streets altogether. Technology is great—I absolutely accept that a lot of the banking technology is really helpful—but it is not always what is necessary. We need to appreciate that both approaches are necessary. Technology and the ability to access it are valuable, but face-to-face services also need to be made available, whether for reasons of accessibility or because the relevant technology is not available. Such services also help us put criminal elements in perspective. The fewer the number of bank branches, the more opportunities for online and digital frauds. I have spent a lot of time recently looking at push payment frauds, and it seems to me that there would be fewer of them if people had access to someone they could speak to about their banking on a day-to-day basis.

Are banks doing what we need them to do? I am not sure that they are doing so. There is a very unfortunate assumption that communities will just cope with banks disappearing from their high streets. When I moved to the home I have now lived in for about 15 years, there were numerous bank branches on my local high street, but that is not the case any more. People in towns all over East Renfrewshire will feel the same way. The banks have just disappeared—they have walked off the pitch. The promises we heard about never closing the last bank in town are laughable. My constituents would think that that was ludicrous, which is a shame, because they and our town centres need bank services.

Our post offices do a brilliant job. I have stood here before and waxed lyrical about the brilliant post offices in East Renfrewshire. They are fantastic. I know it is a strange thing to suggest, but people should come to our local post offices. They are great, but they have their own job to do. They have a long and varied list of things they can do, but they are not banks, so although they are doing a great job, there are still gaps. The banking hub in Cambuslang is certainly a model to look at, and I am encouraged by others following that. But whatever the model, people on our local high streets and communities, particularly those who are most marginalised, must be able to access cash and banking services. I do not think that it is an unreasonable expectation that we should have that in our local communities, and I very much look forward to hearing what others have to say today.

This conversation will become all the more pressing in the next couple of years, as banks continue to close apace and people begin to really wonder what the banks are for, who they are providing a service to, and how we ensure that we have access to cash and banking facilities, which is what people need.

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[Marion Fellows]

I absolutely agree with the right hon. Member. If someone is poor, they cannot afford to run up bank charges. They cannot afford to be overdrawn. I am old enough to remember my mother having pots of money—some was used for this, and some was used for that, but if it was not there, we could not spend it. It is a better way to keep oneself in the black altogether.

Before 2021, about six branches a month were closing in Scotland, but since 2021 that has increased to about eight a month. Post offices are also now closing: between 2011 and 2021, we lost 112 post offices to closure in Scotland alone.

[Kirsten Oswald]

My hon. Friend is making a really important point about both banks and post offices potentially being lost to communities. Does she agree that when banks close and abdicate their responsibility, their suggestion that post offices will simply take over their services is unfortunate and unacceptable? It is as if the banks think they are not at all accountable. That is not how we should address this.

[Marion Fellows]

Absolutely. Banks are allowed to say, “Well, it is okay if we close, because there is a post office nearby.” That will not always be the case, as more and more sub-postmasters struggle. I will come on to that later.

The head of policy at Age Concern Scotland has noted:

“These closures often hit older customers hardest, leaving them cut off from vital services and making it harder for them to manage their money...As we battle through this cost of living crisis it is more important than ever that older people can access their money as cash, for free, and use it whenever they need to.”

The number of cash machines that are closing is disgraceful. For example, in my local area in Lanarkshire we have lost nearly 100 cash machines in four years. In July 2018, Lanarkshire had 650 cash machines but that had fallen to 561 by last February. And the really important point is that the number of free-to-use ATMs in my area had dropped by 555 to 426. That means that the only ATMs that people can access are ones that charge them for taking out their own money; they are paying a poverty premium. That is ludicrous and it is really affecting people on a daily basis.

As I have said, for years banks have said, “It’s okay if we close our local banks, because there will always be post offices nearby.” However, as I have also already said, post office closures have picked away at their number, too. What will the Department do to protect network and community services that are run through post offices, especially in relation to people who cannot get to banks?

Given the different ways of running post offices, it is really difficult to tell how many sub-postmasters who have taken on banking to a great degree are now struggling. I do not know whether folk here are aware of this, but 70% of the members of the National Federation of SubPostmasters are only earning the national minimum wage, despite the good work that they do in providing post office services and now banking services. That figure came out before the cost of living crisis, so the situation will be even worse now.

It is also very difficult for Post Office Ltd to encourage people to take on post offices or sub-post offices because of the Horizon scandal. The other thing is that the Post Office lozenge—the sign that we are all very familiar with—goes outside a building and says, “Post Office”, but inside that particular building there might only be a drop and collect service for parcels. So, people think that there is a post office where there is not one.

On banking transactions, many Members have already said that many local businesses now use local sub-post offices to pay in takings in cash. That is important, because it keeps money in the local area and it really keeps some high streets going. However, last year new regulations to combat money laundering were introduced by the Financial Conduct Authority—actually, I have found it difficult to find out if it was entirely the fault of the FCA or UK Finance. Recently, it has been very difficult for local businesses. There are no banks, so they take their money to the post office, but a limit was imposed on how much each business could deposit.

I am very pleased to say that last month the FCA noticed that a more tailored approach should be taken by banks for cash deposits by business customers, on the basis of expected business customer activity. However, that also links back to the problem that sub-postmasters have, because they were losing money as customers could not deposit all of their takings and many customers then had to travel many miles to be able to deposit their money safely. I am hopeful that, when this issue is properly sorted out, a tailored approach will allow local business owners to go back in and carry out their business the way they did before.

Real clarity is needed on banking hubs. I have visited the banking hub in Cambuslang, and one is to be opened quite near my constituency in Carluke, hopefully reasonably soon. The building in Cambuslang was fantastic. The way it works is that each bank that has signed up sends a representative to the banking hub once a week to give business advice. As many Members have pointed out, people go to banks not just to take out money; they need advice, help with filling in forms, and other things like that. Those things were being done in the hub. I spoke to many customers that day, and they were very happy with the service given. It was a pilot programme, and it is still unclear what effect it had on the local post office branch, so we have to bear that in mind. The NFSP is concerned about the fact that there is no third-party oversight of the banking hub recruitment process. It is not known how those who gained the right to run the banking hubs were selected. I have already written to LINK about that, and I am awaiting a response.

Consumers are able to access cash at a post office only if their bank has signed up to the banking framework agreement. Which? has raised concerns about the long-term viability of the agreement, as it is voluntary and there is a time limit on it—I think the last one to which banks signed up was for three years. Barclays bank originally did not sign up, which was quite a loss for its local customers. I am calling for access to cash at a post office to be placed on a firmer and more sustainable footing in areas where local cash needs are unmet. Can the Minister comment on that, and update us on where we are going?

Returning to the post office argument, if banking hubs have an impact on local post offices, then that is something that we have to be very careful about. Part of the difficulty is that the Treasury and the Department for Business and Trade are both involved, and there is not a great deal of communication between them. I know it is getting sightly better, but this Government have for many years almost had a silo mentality, in which one Department did not really know what the other was doing. That is to the detriment of people who have to use banks and post offices—if they are still there. I would really welcome the Minister’s comments on that.

I again thank the right hon. Member for Aldridge-Brownhills and all the other Members who have spoken. This is a real ongoing problem, and like my hon. Friend the Member for East Renfrewshire (Kirsten Oswald), I have stood here to speak on the subject innumerable times. I have come at this problem from different angles, and have tried to say something different each time, but hat is proving harder and harder. It is time that the Government got a real handle on the issue, and started to protect consumers more, as well as those who cannot use digital banking. That is not just older people, though many older people struggle with either bad broadband or the inability to handle new technology. We need a joined-up approach from the Government to ensure that people can still access banks, post offices and cash.

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[Gareth Davies]

My right hon. Friend makes a good point. I will have the Economic Secretary to the Treasury write to her with any figures that we have on the pauses that have taken place as a result of FCA guidance. LINK carries out reviews in order to suggest and recommend the services that can be put in place. If there are no bank branches left in a community, a banking hub can be suggested. However, if my right hon. Friend will allow me, I will ask my colleague to write to her with more detail on that point.

The industry is innovating and finding new ways to respond to customers who want and need to access in-person services. I am pleased that we have heard a lot of discussion today about post offices, because they play a vital part in this issue. It is right to point out the statistics, which I was quite shocked to learn when preparing for this debate. Some 99% of personal banking customers, and 95% of business banking customers, can do their everyday banking—can do such things as withdraw cash or check their balance—at one of 11,500 post office branches across the country. I was also shocked to learn that 93% of people in this country live within just 1 mile of a post office, so almost everyone can access their everyday banking services locally.

[Kirsten Oswald]

Does the Minister appreciate that that will be cold comfort to people who no longer have a post office, or who have an on-and-off post office, which is not a very reliable way of doing business, or who do not live in the heavily populated areas that presumably make up that 99%? That is probably an unhelpful comment, in their opinion.

[Gareth Davies]

I accept the challenge, of course. The hon. Member for Motherwell and Wishaw (Marion Fellows) also asked me to comment on what support the Government are providing to post offices. I can respond to both points.

In the 2021 spending review, some £227 million was secured in Government investment between ’22 and ’25, including a subsidy of £50 million to protect access to post office services in commercially challenging locations. That later increased to £335 million, including a £150 million subsidy to those in commercially challenging locations. I therefore accept what the hon. Member for East Renfrewshire (Kirsten Oswald) says, but the reality for the 93% who live within 1 mile of a post office cannot be ignored. For those who are not within that catchment area, the Government have stepped in with subsidy and significant funding to ensure access to a post office.

Oral Answers to Questions

Kirsten Oswald Excerpts

Tuesday 9th May 2023 Commons Chamber

[Andrew Griffith]

My right hon. Friend is absolutely right. Resilience is a strong word, and thanks to the actions that this Government have taken over the past six months, the Office for Budget Responsibility has confirmed that the UK is now expected to avoid a recession this year.

[Kirsten Oswald (East Renfrewshire) (SNP)]

12. What recent assessment his Department has made of the potential impact of the UK’s withdrawal from the EU on the economy.

[Patrick Grady (Glasgow North) (SNP)]

17. What recent assessment his Department has made of the potential impact of the UK’s withdrawal from the EU on the economy.

[The Financial Secretary to the Treasury (Victoria Atkins)]

The UK has grown faster than France and at a similar rate to Germany since leaving the single market. It remains challenging to separate the effects of Brexit and wider global trends on the UK economy, such as the invasion of Ukraine by Russia, adding pressures to trade, prices and the wider economy. We continue to support businesses trading with the EU and help them to seize new opportunities with fast-growing economies around the world, including through our free trade agreement negotiations.

[Kirsten Oswald]

Happy Europe Day, Mr Speaker. In recent months, we have seen tech companies attack Brexit. The world-leading chip company Arm opted to float stock only in the US because of how bad a place the UK is to do business, so we have culture, tourism, the NHS and now tech all suffering because of Brexit. How grateful does the Minister feel that the Leader of the Opposition has dropped his and his party’s principles and are supporting this costly Brexit?

[Victoria Atkins]

Crikey, I am going to leave it to the Leader of the Opposition to flip-flop his way through that particular policy. What I can tell the hon. Lady is that we are the best place in Europe to invest in tech. We are only the third economy in the world with a $1 trillion tech sector; we are ranked as the world’s fourth most innovative economy; and we have created more unicorns than France and Germany combined.

Authorised Push Payment Fraud

Kirsten Oswald Excerpts

Wednesday 1st March 2023 Westminster Hall

[Peter Dowd (in the Chair)]

I will call Kirsten Oswald to move the motion and then the Minister to respond. As is conventional in 30-minute debates, there will not be an opportunity for the Member in charge of the debate to wind up.

[Kirsten Oswald (East Renfrewshire) (SNP)]

I beg to move,

That this House has considered authorised push payment fraud.

It is a pleasure to serve under your chairship, Mr Dowd. I am pleased to bring forward this debate, because I have had protracted discussions with a business in my constituency that has been targeted by fraudsters, resulting in some of its clients losing thousands of pounds through authorised push payment scams. Those scams deceive an individual into unknowingly transferring funds to a criminal. They now represent the largest type of payment fraud in the UK, both in the number of scams and value of losses.

[Jim Shannon (Strangford) (DUP)]

I do not normally intervene this early, but this issue is critical for my constituents in Strangford—and indeed for everyone, I suspect. I congratulate the hon. Lady on bringing forward this debate. The latest figures are astounding: £249.1 million was lost to APP scams in the first half of 2022. That indicates how prevalent these scams are. Messaging about these scams is not as effective as it should be. Does she agree that more steps need to be taken to safeguard vulnerable people who are losing money? They are not great at tech, and have been taken advantage of.

[Kirsten Oswald]

I share the hon. Gentleman’s concerns. In 2021, losses to this type of fraud totalled £583.2 million. That represents a 38% increase on the previous year. It is worth noting that a lot of cases of authorised push payment fraud go unreported, so those figures are likely to underestimate the true amount lost to these scams. As he suggested, the impact of fraud can be devastating. Victims can lose substantial sums of money. The impact on their health and wellbeing cannot be over-stated. Research from Which? showed that 71% of fraud victims felt that their experience had a detrimental impact on their stress levels; 63% said it was harmful to their mental health, and 39% said it affected their physical health.

[Stuart C. McDonald (Cumbernauld, Kilsyth and Kirkintilloch East) (SNP)]

I too am very grateful to my hon. Friend for bringing this subject before the House. She is right to mention the huge damage this fraud can cause to individuals and families, including in my constituency. I have two constituents who were caught up in the episode that she described. Does she agree that progress in making compulsory both full reimbursement and the code has been slower than we would like? It is crucial that we make fast progress on ensuring that full reimbursement and full compliance with the code are in place by the end of this year.

[Kirsten Oswald]

I am grateful to my hon. Friend. He is absolutely right, both about the people we are discussing who are directly affected, and about the framework generally. Progress is needed now. I will come back to both those points.

My constituent owns a successful business. Despite proper security controls, its email server was unfortunately infiltrated by sophisticated fraudsters, who then sent emails to business clients. The emails sent by the scammers looked just like genuine emails that would be sent from the business. That allowed the fraudsters to cloak their identity. I have heard of other cases of this, too. It is worth stressing that the emails were sent to clients who were due to make payments, which made the fraudulent emails seem entirely credible. This type of fraud is highly sophisticated. In fact, it is a huge and growing industry, which should be of deep concern to us all. I hope to hear the Government’s reaction to it from the Minister. Little wonder that many people unknowingly end up transferring funds to fraudsters when the scams are so sophisticated and complex.

My constituent’s case was only one type of APP scam, namely that of impersonation. There are other types. For example, there are purchase scams, in which a victim is tricked into buying goods or services that are never received. They are regularly found on Facebook and Instagram, and victims are lured in by the promise of cut-price goods. Quite commonly, it will be something like a reduced-price games console, which the victim pays for online but does not receive. Another type of APP fraud is the investment scam: victims are tricked into handing over money for bogus investment schemes that never materialise. Romance scams are obviously less common, but are deeply distressing; people are persuaded to make a payment to a person online with whom they believe they are in a relationship, but who they have never met.

The need to prevent all those types of fraud is paramount. An individual can take steps, particularly in cases such as the one I outlined, to ensure that their money is transferred to the correct bank account. For instance, a straightforward step is to never hesitate to question a payment request robustly. Ideally, an individual should make contact via means other than the ones through which the payment request was made. They should not just reply to an email or click a link, but find another way of contacting the business. We are essentially asking consumers to be responsible for working out where a sophisticated and complex crime is being committed. We need to strike the right balance, and recognise that those actually responsible for this terrible crime are the criminals.

A client of my constituent’s business was asked by their own bank to confirm with the business that it had requested a payment before the bank proceeded with the transfer. At that point, the business became aware that there had been an intrusion into its systems, and it took proactive steps to prevent customers from making any further payments. I welcome the way the business has dealt with the issue throughout.

I welcome the efforts made by several banks to introduce confirmation of payee services. They check the account name and details to ensure that the payment arrives at the correct destination, providing an additional layer of security. However, only some banks have set up such services. TSB Bank believes that all payment service providers should be required to introduce confirmation of payee services, because it seems that organised criminal gangs have shifted to using banks that do not have those checks enabled. It is noticeable, certainly to me, that there is not a unified view in the banking sector on how best to prevent this kind of scam, or on the issue of mandatory reimbursement. The UK Government could do more to take the lead on bringing the banking and payment sectors together to solve these issues. I would welcome the Minister’s thoughts on that.

I thank Lloyds Banking Group, which took the time to meet me this week, ahead of the debate, to discuss these issues and some of the cases I am raising. I hope that a satisfactory conclusion can be reached. My hon. Friend the Member for Cumbernauld, Kilsyth and Kirkintilloch East (Stuart C. McDonald) very clearly laid out the distress caused to the people who are caught up in these situations. I encourage Lloyds to look further at this particular case, but I am grateful for its positive discussions with me about fraud prevention.

In total, four clients of my constituent’s business were targeted by fraudsters. As my hon. Friend the Member for Cumbernauld, Kilsyth and Kirkintilloch East suggested, the first case involved a couple unknowingly transferring £40,000 to an HSBC-held bank account. They have been reimbursed over £19,000 by their bank, which is the Bank of Scotland. The second case involved an individual who, again unknowingly, sent £12,500 to an HSBC-held bank account. In the third and fourth cases, clients received emails asking them to transfer money to fraudulent HSBC-held accounts, but thankfully they did not do so.

The contingent reimbursement model is a voluntary code that 10 firms covering 21 banking brands have signed up for. That code aims to reduce the occurrence and the impact of authorised push payment scams. It was designed to give people confidence that if they fell victim to that kind of scam, they would be reimbursed if they had acted properly. The responsibility for reimbursement, according to the contingent reimbursement model code, lies solely with the sending bank.

With that in mind, I return to the case that I outlined, where only half the funds have been returned. I wonder how that can be. The couple has been reimbursed £19,555 by the Bank of Scotland—the sending bank, if you like. Now, the Bank of Scotland has signed up to the contingent reimbursement mechanism, so I would have expected it to reimburse its client to the tune of the full £40,000. However, it did not do that and instead suggested that HSBC should refund the other half of the £40,000 because it was the bank with whom the fraudulent account was held. The individual who mistakenly sent £12,500 to an HSBC-held account has in fact received no reimbursement at all.

Both those cases are now with the Financial Ombudsman Service. I hope—although I am not sure this will be borne out in reality—that there will be a sensible resolution to the situation, because none of these people deserves to be impacted in the way that they have been. It is important to stress that terms such as “blame” and “fault” are used too often in these conversations, in a way that is both unhelpful and unfair, given the sophistication of these scams. The only people to blame for authorised push payment scams are the criminals who create these fraudulent ventures, not the people who fall victim to what are designed to be highly convincing criminal efforts to part them from their money.

With that in mind, I would like to make several points to the Minister. First, the banking sector must improve its internal mechanisms for identifying accounts engaged in fraudulent activity. During my correspondence with HSBC regarding the situation I have set out it stated:

“HSBC undertakes robust due diligence as part of our account opening process, and has payment screening in place to identify fraud.”

I have no doubt that HSBC has internal mechanisms to detect potential fraudsters, and I do not seek to suggest otherwise, but my constituent’s clients were targeted by fraudsters with four different accounts, all of which were held by HSBC. We should remember that this particular case of fraud was stopped at an early stage, so I cannot say how many potential frauds the fraudsters may have wanted to carry out or how those would have related to particular banks. However, all the cases I am aware of involved HSBC, so HSBC—and every other bank—can and must do more to identify and shut down accounts engaged in fraud.

Secondly, I welcome the move towards making the contingent reimbursement model a mandatory code covering all banking firms. I note that clause 62 of the Financial Services and Markets Bill, which is currently in Committee in the other place, enhances protections for victims of authorised push payment scams by putting a duty on the Payment Systems Regulator to take regulatory action on APP scam reimbursement, ultimately giving it the power to make reimbursement mandatory across the faster payments service.

The introduction of a voluntary contingent reimburse-ment model code has resulted in the rate of victim reimbursement rising from 19% in the first half of 2019 to 41% in 2020. With a mandatory CRM, I am sure that that number will rise further, meaning that more and more victims of this type of fraud should receive reimbursement. Some banks, such as TSB, offer an authorised push payment scam refund guarantee, fully reimbursing all authorised push payment scam victims up to £1 million, unless the customer has been grossly negligent. Some 97% of fraud claims with TSB have been refunded since the refund guarantee was introduced, which is well above the industry average and should give food for thought to others.

Last November, the Payment Systems Regulator consulted on a package of measures to combat authorised push payment scams, including mandating reimbursement for victims. The regulator is now consulting on specific proposals that would put that mandatory reimbursement in place for all online and mobile payments. In line with protections for other payments and financial services, reimbursement would be on all payments over £100, and a time limit of no less than 13 months would be set for claims. A mandatory reimbursement code would ensure that, regardless of what bank or building society individuals choose as their provider, they would be protected from massive financial loss due to these scams.

To come back to the situation I am dealing with, two clients of my constituent’s business have lost £20,000 and £12,500 each. These are significant sums of money. Who could possibly afford to lose them? I welcome all legislative changes that will help to bring about a mandatory reimbursement code, but what steps will the UK Government take to ensure that people who have been affected before the code comes into place are reimbursed, particularly where their payment service provider signed up to the voluntary code but failed to carry through on its commitment, as the sending bank, to reimburse?

I would also like to hear the Minister’s views on social media firms and tech giants taking fraud more seriously and on what action they can take to stop fraudsters using their platforms to target people. It is also incumbent on them to take steps to clamp down on bad actors but, at the moment, they have no financial incentive to remove fraudsters from their platforms, because banks are ultimately held responsible for refunding lost money. That is a conversation that needs to take place with Government.

I welcome some of the progress that has been made and the action by banks, Government and other organisations but, although mandatory reimbursement is desirable, some are still concerned about how it will be enforced. The Treasury Committee recently published a report entitled “Scam reimbursement: pushing for a better solution”, which highlighted some of these concerns. That report supported the principle of mandatory reimbursement but noted concerns about how the plans would be implemented. The Payment Systems Regulator proposes that Pay.UK will make, maintain and enforce reimbursement rules. That is problematic for several reasons set out in the report. Pay.UK is not independent; it is an industry body and guaranteed by the very banks and other service providers it would be asking to reimburse fraud victims. More worryingly, it is not a regulator and lacks the powers necessary to enforce its rules, so there could be foot-dragging and other challenges.

[Stuart C. McDonald]

The other reason the Treasury Committee gave for not liking that solution was the potential for further delay and kicking the can down the road. Given the earlier point that this has been ongoing for a few years, the last thing we need is more delay.

[Kirsten Oswald]

It is almost as if my hon. Friend had read the end of my speech. He is absolutely right; that is it in a nutshell. We want to prevent fraud, punish fraudsters and ensure that victims are reimbursed. That is the way to reduce the harm that these scams cause. Surely, we should all support those principles. I ask the Minister to give serious consideration to the credibility of the Payment Systems Regulator’s current suggestions, to look closely at how social media interacts with these systems and to commit to listening to victims such as those I have talked about today.

To conclude, I ask that the banks involved in the cases I have outlined give serious consideration to their part in the challenges that people are facing through no fault of their own. They should look to ensure both that people are reimbursed and that they clamp down on fraudsters using their services.

[The Financial Secretary to the Treasury (Victoria Atkins)]

It is a pleasure to serve under your chairmanship, Mr Dowd. I commend the hon. Member for East Renfrewshire (Kirsten Oswald) for securing this debate, which addresses an issue that she clearly cares about deeply. I know from my own constituency and from conversations with colleagues across the House that it is, sadly, one that we see across the country, which is why the Government also care deeply about it. It is a growing issue and demands urgent intervention.

As the hon. Lady set out articulately, authorised push payment scams are becoming increasingly sophisticated and often target the most vulnerable in our society. Because they are so sophisticated, they are also able to target professionals, businesses and so on—people who would otherwise consider themselves to be alive to these sorts of risks. It is a very clever form of fraud.

Under the European regulatory system that we have inherited, there is no statutory or regulatory requirement for banks to reimburse the victims of these scams. Although the creation of a voluntary reimbursement code has improved matters, reimbursement for victims has, as the hon. Lady set out, been inconsistent across banks and for victims, and only about half the stolen money is reimbursed. As a result, many victims are left facing significant losses; in the worst cases, they can lose their life savings. From the hon. Lady’s descriptions, we know the impacts that that can have on people and businesses. We are acutely aware of the impact of this type of fraud, so we are determined to help victims and to crack down on these scams and the impact that these fraudsters have on people and businesses.

Front and centre of those efforts is our action on victim reimbursement. As part of the Financial Services and Markets Bill, we are introducing world-leading legislation to protect people as a matter of urgency. Once passed, the Bill will remove legal barriers in retained EU law that currently prevent regulatory action on reimbursement by the Payment Systems Regulator. That will enable the regulator to mandate reimbursement for any payment system under its supervision. However, the legislation goes even further: it will also place a specific duty on the regulator to implement a reimbursement mandate for the faster payments system within six months. I hope that the hon. Lady and other hon. Members will be assured that there will be swift regulatory action once the Bill receives Royal Assent.

This issue does not just require timely action; it also demands effective action. We are confident that the regulator has the appropriate objectives, expertise and powers to design the details of mandatory reimbursement in a way that ensures strong and consistent protections for victims. In its recent consultation on the matter, it stated its intention to require firms to fully reimburse victims of all APP fraud occurring through faster payments, with very limited exceptions. That would ensure that victims are reimbursed in the vast majority of cases and at far higher rates than under the existing voluntary reimbursement codes.

[Kirsten Oswald]

I hear what the Minister says. What does she think about the people I described in my contribution, who will not be covered by the measures she outlined?

[Victoria Atkins]

I was going to attempt to answer the question posed by the hon. Lady later, but I will answer it now. Regarding current victims, the legislation is not retrospective—she will know that it is very rare for this place to pass retrospective legislation—but we expect banks to honour past voluntary commitments. That may well be something that the Economic Secretary to the Treasury, who has primary responsibility for this area, has put his mind to. I will ask him to write to her with his thoughts on it.

Given that the hon. Lady has intervened on me, I will respond to the interesting points she raised about social media and tech companies. I will do the same as on the previous point, and ask the Economic Secretary to the Treasury to write to her. From my own portfolio, I know some of the challenges with the use of social media when it comes, for example, to repayment agents who are not behaving as they should. As the hon. Lady says, the ability of fraudsters to present themselves as legitimate, by stealing people’s business logos or details, is highly sophisticated. It requires a joined-up reaction from across Government, law enforcement and so on.

That brings me to what we are doing across Government. Although this is an insidious form of fraud, it is not the only one our constituents face. We will therefore shortly publish a new, broad-based fraud strategy, which will detail how we will prevent fraud, so that people do not lose their life savings and money in the way the hon. Lady set out and we can crack down on these gangs.

In the meantime, the Treasury has worked diligently with the Financial Conduct Authority and the Payment Systems Regulator on the roll-out of fraud prevention measures such as confirmation of payee, which the hon. Lady referred to, which can help and has been designed to stop some forms of APP fraud and accidentally misdirected payments. I know that the hon. Lady and other hon. Members will welcome the regulator’s action to mandate that service for the vast majority of faster payments transactions, and I highlight its intention to achieve near-universal coverage in the near future.

The Treasury continues to assess industry proposals for legislation to enable further delay to high-risk payments. The hon. Lady asked me about internal banking processes, and that is one way that we have looked to address that form of fraud.

The regulator has consulted on further measures to prevent payment fraud, including enhanced information sharing between payment providers so that scammers can be identified and shut down quickly. That is in addition to mandating confirmation of payee, which I have already described. That will enable payers to check that they are, in fact, sending payments to the right person.

In short, we very much understand why the hon. Member for East Renfrewshire has raised this important issue. We share her determination to tackle it, and look forward to working with law enforcement agencies, banks, the regulators and colleagues across the House to ensure that our constituents are protected from this invidious form of fraud, which I know we all want to see stopped.

Question put and agreed to.

Autumn Statement

Kirsten Oswald Excerpts

Thursday 17th November 2022 Commons Chamber

[Kirsten Oswald (East Renfrewshire) (SNP)]

People watching the Chancellor’s statement will be very vexed by the fact that he seems to be pretending that the Tories’ disastrous mini-Budget and their race-to-the-bottom Brexit have absolutely nothing to do with the problems that people face. That is simply not the case. As we have heard, the OBR forecasts that real household disposable income will fall by more than 7% over the next two years. People are facing a very difficult time, so why is the Chancellor not taking the kind of action that the Scottish Government are to protect families in this difficult situation? Why is he not making the choice to introduce something like the Scottish child payment, which will make such a difference? And why are his political choices so focused on those who least need them?

[Jeremy Hunt]

My political choices are focused on helping Scottish schools and Scottish hospitals, with £1.5 billion more to support them. I think they need that money, so that is where we have a difference of opinion.

Economic Update

Kirsten Oswald Excerpts

Monday 17th October 2022 Commons Chamber

[Madam Deputy Speaker (Dame Eleanor Laing)]

I call Brendan O’Hara. [Interruption.] The hon. Gentleman disappeared before my very eyes. I call Ronnie Cowan. [Hon. Members: “He is not here either.”] Fine—they are falling like ninepins. Goodness me, we had better try something different. I call Kirsten Oswald.

[Kirsten Oswald (East Renfrewshire) (SNP)]

Thank you, Madam Deputy Speaker. It has been reported that No. 10 was briefing that the Chancellor’s statement was due to unspecified global headwinds, rather than the mini-Budget, but the former deputy governor of the Bank of England, Charles Bean, disagreed and said that the Prime Minister’s insistence that the UK’s economic turmoil was part of a global phenomenon was “disingenuous”. To be clear, what does the Chancellor believe has happened? Who does he agree with? Who does he think is responsible for the terrible financial thumping that now affects my constituents?

[Jeremy Hunt]

I do not think I could have been clearer in my statement. I said that the turmoil we have had is the result of international and domestic factors.

Oral Answers to Questions

Kirsten Oswald Excerpts

Tuesday 11th October 2022 Commons Chamber

[The Economic Secretary to the Treasury (Richard Fuller)]

Eastbourne is indeed beautiful, as are North East Bedfordshire and many other parts of the country. My hon. Friend is right to talk about the importance of VAT to the hospitality industry, particularly as we moved through the period of covid recovery. As we now move towards the growth plan, we need to look at the level of taxes on small businesses in general. That is a key part of the work I will be looking at as part of the tax simplification plan.

[Kirsten Oswald (East Renfrewshire) (SNP)]

T2. Push payment fraud losses increased by 71% in the first half of 2021, surpassing card fraud losses for the first time. What steps is the Chancellor taking to tackle this huge surge in fraud, and importantly, to ensure that victims, including my constituents, are reimbursed for their losses, instead of being unfairly penalised for falling victim to these increasingly sophisticated scams?

[The Financial Secretary to the Treasury (Andrew Griffith)]

Push payment fraud is a growing problem, which the Government take very seriously. That is why we will be taking powers in the Financial Services and Markets Bill that will mandate reimbursement to consumers.

The Growth Plan

Kirsten Oswald Excerpts

Friday 23rd September 2022 Commons Chamber

[Kwasi Kwarteng]

Absolutely—100%.

[Kirsten Oswald (East Renfrewshire) (SNP)]

This statement seems completely divorced from the realities of most people’s lives. The Chancellor has made the choice deliberately to remove the cap from bankers’ bonuses while deliberately ignoring the needs of people who are already struggling to make ends meet. What is his message to the people who are not going to benefit from his love-in with the super-rich? How does he think people are going to manage? Does the Chancellor just not care?

[Kwasi Kwarteng]

We absolutely care, which is why have the energy intervention that we announced last week and that we have mentioned today. We have eco schemes, such as the warm home discount, and a reduction of council tax for bands A to D. We have already done a huge amount of intervention and we will always protect the most vulnerable.

Economy Update

Kirsten Oswald Excerpts

Thursday 26th May 2022 Commons Chamber

[Rishi Sunak]

My hon. Friend is a champion for the industry and is right to be so. I am happy to come and meet him and representatives from the sector, because I share his view that the industry is an important part of our economy and of our future. As he said, it helps us transition to net zero and improve our energy supply.

[Kirsten Oswald (East Renfrewshire) (SNP)]

The SNP supports action—at last—on a windfall tax. As my hon. Friend the Member for Aberdeen North (Kirsty Blackman) pointed out, we first called for that in 2020. Energy companies, which are disproportionately based in Scotland, are not the only businesses to make excess profits during the pandemic and the crisis period. Did the Chancellor not give any consideration to expanding the tax to other companies that are unfairly benefiting from significantly higher business, such as Serco or Amazon, to make sure that Scotland does not carry a disproportionate burden of funding a UK-wide response?

[Rishi Sunak]

No, we are not giving consideration to that. As I said, we are giving consideration to excess energy profits being made in other parts of the sector, on the generation side. As I said, we will examine the scale of that challenge and the right steps to address it.