Centenary of the Battle of the Somme

Kirsten Oswald Excerpts

Wednesday 29th June 2016 Commons Chamber

[Kirsten Oswald (East Renfrewshire) (SNP)]

I thank the hon. Members for South West Wiltshire (Dr Murrison) and for Barnsley Central (Dan Jarvis) for bringing this debate to the Chamber today. It is a pleasure to sum up for the SNP, and to commemorate all the men— so many of them—who lost their lives at the Somme. There have been excellent speeches throughout the debate. They have been informative and moving, for me none more so than that from the hon. and gallant Member for Beckenham (Bob Stewart).

The war of 1914 to 1918 was terrible and destructive. It tore the continent of Europe apart. Of all the terrible battles, even now, so many years later, the Somme is recognised as defining. More British Army troops died on the first day of the Somme than on any other single day in history. The description by the hon. Member for Stone (Sir William Cash) of war as terrible is quite right in that context. As we heard from the right hon. Member for Broadland (Mr Simpson), the Somme was the allied forces “big push” to break German lines, but they were met with fierce resistance from the well-prepared German forces, and the result was months of fighting and terrible loss of life for the British empire, French and German forces. That was in only this one battle, such was the terrible nature of the attrition that characterised the strategy—if that is a word we can use here—of this war.

After a week of heavy artillery bombardment, the British infantry advanced at breakfast time on 1 July 1916. They did so following a whistle blown, in some cases, by Robert Cameron. One hundred years on, to the minute, his nephew, Alan Cameron, chair of the Royal Army Service Corps, will blow the same whistle to mark the end of two minutes silence at the Scottish National War Memorial in Edinburgh castle, where an overnight vigil of remembrance is being held. The fighting at the Somme ultimately lasted from 1 July until 18 November. During that time, the conditions were indescribably horrific, and the battleground was fluid; it was not really clear, a lot of the time, what significant gains or losses were being made.

As we have heard from a number of Members, along with the troops from Britain and European countries British empire troops played a key role in the Great War. Among those involved at the Somme were two Indian regiments that took part in the first and only cavalry charge of the battle, between the High wood and the Delville wood areas, before they were forced to retreat under heavy fire. In common with many other potential advances, this joint Indian and British assault failed because of poor communications. British troops had captured a large amount of ground in the area, and it was planned that the cavalry would exploit this, but because orders came through so slowly, they had to wait around for a fortnight before they saw action, which gave the Germans time to regroup, with disastrous results. The terrible fighting was quite shocking to the Indian soldiers, with one writing home, “This is not war; it is the ending of the world.”

It was indeed the ending of the world for so many of the young men sent to the Somme. They are a lost generation of young men—the Harrys, Jameses and Georges described by the hon. Member for Weaver Vale (Graham Evans)—cut down before they had any chance of a life. Britain, like other countries, sent its young men in numbers, and in reality they were simply numbers, lost to the stalemates and hellish trench warfare of the Somme.

As the hon. Member for South West Wiltshire described so well, the first world war has an enduring association with poetry, with many plunged into hellish conditions reflecting their surroundings in writing and in poems. In his “Anthem for Doomed Youth”, Wilfred Owen described

“the monstrous anger of the guns.”

He reflected that war was not glorious, and, as the hon. Gentleman said, of course it is not. We can, and we should, remember those who fell. We should do so soberly, with respect and with honour. To describe their deaths as glorious, however, does nothing to acknowledge their terrible experience, nor the bravery that service personnel show today, standing for us in the most difficult of circumstances.

As well as the excellent work of charities, such as Poppy Scotland and the Royal British Legion, in commemorating the Battle of the Somme during the first world war, many groups and organisations, including the University of Glasgow, are remembering those lost at the Somme. Huge recruitment drives took place at the Glasgow University Union, a former haunt of both my hon. Friend the Member for East Dunbartonshire (John Nicolson) and mine.

In a project taking place near my home, knitted and crocheted squares are being made, each of which represents one of the men lost in the Glasgow Pals battalions we heard about earlier. Such battalions were formed as a result of the Government encouraging groups of young men who worked together or shared common interests to join up together, such as the Grimsby Chums that the hon. Member for Cleethorpes (Martin Vickers) told us about. It is fitting that these friends should be remembered together, and it is particularly fitting that the squares will be displayed on the rails of the People’s Palace in Glasgow so that the Pals of today can remember those groups of Pals, about whom the hon. Member for Solihull (Julian Knight) spoke in relation to his community.

The knitting project also acknowledges the role of women at home, who were encouraged to knit for the troops, but were keen to do so much more to help, as the hon. Member for Barnsley Central said. The hon. Member for Portsmouth South (Mrs Drummond) spoke powerfully about the role of women much nearer the battle. It was particularly moving to hear about the meeting of the grandparents of the hon. Member for Gloucester (Richard Graham).

The speeches by the hon. Members for Strangford (Jim Shannon) and for South Antrim (Danny Kinahan) and the right hon. Member for Lagan Valley (Sir Jeffrey M. Donaldson) made clear the scale of the contribution made by soldiers from Northern Ireland. The Scots also played a very significant role at the Somme, with the involvement of 51 Scottish battalions. The Irish and Scottish Brigades of the 34th Division suffered terrible losses, as did the Pals battalions in general. The Glasgow and Edinburgh Pals battalions lost over 1,000 men in the opening days of the offensive. In total, 7,000 men of the 34th Division lost their lives.

Famous among those who fell were the men of the McCrae’s battalion of the Royal Scots. As my hon. Friend the Member for Edinburgh North and Leith (Deidre Brock) told us, the battalion was raised in Edinburgh and was made up of football players and supporters, not unlike the Pompey Pals the hon. Member for Portsmouth South told us about. In the opening days of the offensive, the McCrae’s battalion alone lost 12 officers and 573 men, which was three quarters of its attacking strength.

All these men and many more are commemorated at the Scottish National War Memorial in Edinburgh castle. I would echo the words of the right hon. Member for Basingstoke (Mrs Miller) and encourage people to visit such memorials. A statue has been placed above the exit door so that it is the final thing that people see before they leave the memorial. The bright golden figure, the only colourful thing in the whole memorial, is a representation of peace—a figure with a broken sword and the sun rising behind her. That is the sentiment with which we should remember the men who fell at the Somme, as we aspire to maintain peace today.

As the right hon. Member for Broadland so eloquently described, 100 years ago Europe was in turmoil. Europe is in a different kind of turmoil today. The path of European relations, either before or after the first world war, has never been entirely smooth, but it is undeniable that we have been at peace in our area of Europe for 70 years and that earlier times of peace were inextricably linked to the hard work done to maintain good relations and co-operation between sovereign states. While we remember, let us—particularly those in this House—always aim to learn from the past and to work together, and always aspire to peace, because that is truly the only way properly to respect and remember the terrible tragedy of all those young men who went to the Somme and never came home.

Battle of Jutland Centenary

Kirsten Oswald Excerpts

Wednesday 25th May 2016 Commons Chamber

[Mr Evennett]

Unfortunately, I really do not have much time.

I am really pleased that around 800 guests will attend the events in Orkney. I look forward to being present myself next Tuesday, as one of the 300 descendants attending. My grandfather, Clyde Turner, served on HMS Malaya during the battle, and I have a strong personal association with the commemoration. He often spoke about his experiences as a stoker and subsequently as a chief petty officer. He was a career naval man and a real influence on me in my early years. I shall, of course, be thinking of him and remembering the time spent with him. In his memory, my son Tom and my grandson George were given the name Clyde as one of their Christian names. I am pleased, therefore, to be the Minister responsible for the first world war centenary at this time, and I look forward to meeting other descendants at the commemoration next week.

[Kirsten Oswald (East Renfrewshire) (SNP)]

As the granddaughter of a chief petty officer who served at the same time, I commend the Minister’s words. Will he join me in commending Glasgow University professor of naval architecture, Sir John Harvard Biles, on his contribution to the design of the Dreadnought class of warship, which was so vital in the battle of Jutland?

Commonwealth War Graves Commission

Kirsten Oswald Excerpts

Tuesday 10th May 2016 Westminster Hall

[Kirsten Oswald (East Renfrewshire) (SNP)]

It is a pleasure to serve under your chairmanship, Mr Streeter. I commend the right hon. Member for Broadland (Mr Simpson) for securing this important debate and for his interesting opening speech. It is timely, given that so many of us are focusing on the events of a century ago and on the immense sacrifices made by so many around the world in the two great wars of the last century, among other conflicts that have secured the freedoms that we take so much for granted today. It has been interesting to hear about the personal links that remain. Like the right hon. Gentleman, I have a grandfather, Ed Oswald, who made a contribution in the Royal Navy during the second world war. Such circumstances make this matter very personal for many of us.

We in the Scottish National party believe firmly that the Government should continue their support for the commission so it can continue to meet its important obligations and objectives. We fully support and commend the commission’s work. As my hon. Friend the Member for Stirling (Steven Paterson) said, it is only right that people who died while serving in our armed forces are commemorated properly, and that there is a lasting historical legacy as well as a memorial for the generations coming after. The work of the commission is also important in highlighting to those who choose to serve today that we recognise and understand the dangers inherent in the job that they sign up to do.

Scotland, the UK and nations around the world suffered devastating losses of life in the world wars. I spent many hours as an undergraduate studying those particular wars, but no matter how dispassionately and academically one tried to look at what happened, it was and remains impossible to be anything other than devastated by those young lives lost and wasted by the thousand upon thousand. The only thing that we can do now is remember those who were lost and learn the lessons from the conflicts in which they perished. The Commonwealth War Graves Commission plays a vital role in allowing us to do so.

I was interested to read on the Commonwealth War Graves Commission website—I echo hon. Members’ comments about its excellence—significant reference to the Scottish national war memorial. Although the memorial is not owned by the commission, it is clear that there are strong links and a unity of purpose between those organisations that the names of each person killed in each specific locality during the first world war should be remembered forever.

I was fortunate to visit the Scottish national war memorial recently and see the care taken to remember each individual person and commemorate their life. People are named individually, and it is a peaceful, beautiful and fitting memorial. On the way out, there is a statue titled “Reveille” commemorating the end of war and symbolically looking forward to a new peaceful dawn. I was struck by that beautiful representation of the importance of looking forward peacefully as a means of remembering the fallen. I have a picture of it in my office. It sends a powerful message of remembrance.

I join the hon. Member for North Durham (Mr Jones) in commending the dedication of the founder of the Commonwealth War Graves Commission, Fabian Ware. A century has passed since the commission’s inception. Clearly, the 1,300 staff of the commission have cared tirelessly for the cemeteries and memorials of those who died in the two world wars. It bears repeating that the commission is working in a staggering 23,000 locations, in no fewer than 154 countries, to commemorate all those men and women of the Commonwealth forces who died. The scale of that work really is immense and the work involved in managing it must be recognised.

As the right hon. Member for Broadland noted, under its royal charter obligations, the commission is responsible not only for the care and commemoration of the graves and memorials of the members of the Commonwealth armed forces who died, but for the protection of their remains in perpetuity, where their final resting place is known. The commission commemorates those with no known grave on stand-alone memorials, such as screen walls erected in burial grounds and elsewhere. Casualties interred in common graves may not always have a headstone marking the grave, but in that case they will be commemorated appropriately, away from the burial location.

The commission continues to develop and progress its work in remembering those who have fallen, with appeals still going out today using the latest social media and web technology, as opposed to the very immediate personal appeals made at the time. I know that, because the commission office, which is not far from my own constituency, at Gartmore parish church, is still looking for the relatives of soldiers who perished a century ago, including Private James Cameron of the King’s Own Scottish Borderers, who died in June 1917, and Private James Graham of the Gordon Highlanders, who died in June 1918. That kind of dedication to remembering those who lost their lives is clear; it is what the commission is all about.

It is heartening that the commission is embracing technology. It is using apps and its excellent website very effectively to engage with schools and community groups to encourage them to visit the memorials, so as to bring this particular aspect of history much closer to people individually.

We have heard that legislation allows the commission to ensure that war graves and memorials are protected as far as possible. The commission clearly spends significant time inspecting and maintaining war graves via its own maintenance teams. It is a huge undertaking. There are over 100,000 war memorials in the UK. The commission currently cares for approximately 21,000 graves and memorials in more than 1,200 sites across Scotland, whether they are local cemeteries, churchyards, dedicated military cemeteries, or single graves in burial grounds.

I would be surprised if anyone here has not seen graves cared for by the commission. I remember as a child visiting Shanwell cemetery in Carnoustie and looking at the beautifully kept Commonwealth war graves. In my travels around my constituency, I see that there are Commonwealth war graves in cemeteries in Barrhead, Eaglesham and Newton Mearns, marking the sacrifice of young men and young women—and there are graves of young women, among those of the young men, who were also cut down in their prime.

Last year, it was an honour to attend many memorial services around East Renfrewshire. As well as attending the opening of an outstanding community-funded war memorial at Neilston, I was privileged to march with the Jewish veterans in Newton Mearns and to meet a veteran in Barrhead, of whom I have spoken in this House before, and who cycled to Clydebank from Barrhead during the blitz to put out the fires there. That is the kind of sacrifice that people were prepared to make and that we should commemorate.

As the hon. Member for Strangford (Jim Shannon) noted, the commission’s current Living Memory initiative, to encourage people to visit the sites in their local areas and learn more about the stories of those who are buried there, will undoubtedly lead to greater knowledge and understanding of those who died and the circumstances of their deaths. These graves and memorials can help people to connect with those who were involved in past conflicts, as well as giving us a local connection, a real human connection with history, and, as my hon. Friend the Member for Stirling said, a desire to learn very important lessons from the past.

The commission also tends a number of architectural structures, from the imposing India Gate in Delhi to tiny cemeteries containing just a handful of graves. It does that work around the globe, ensuring that the sacrifices of the very brave servicemen and women from countries all around the world are noted and remembered. I was very pleased to see a feature on the commission website highlighting service personnel from Canada, South Africa and India, among other countries. I am very pleased to hear of the ongoing work of the commission in relation to Indian families who may have connections to our service personnel in the past.

From the trenches of the western front to the deserts of Mesopotamia, over 1.1 million Indian soldiers served in the first world war. By November 1918, over 60,000 men from the subcontinent—who were diverse in culture, language and faith—had given their lives. In death, these men were treated according to their respective religions. As the right hon. Member for Broadland indicated, while Muslim soldiers were buried and their graves marked by headstones, the remains of Sikh and Hindu soldiers were cremated, with their ashes being scattered and their names engraved on cremation memorials around the globe.

In Eritrea, nearly 1,000 Commonwealth war dead from the second world war are buried or commemorated. The hon. Member for North Durham spoke of the astonishing range of locations all over the world. As we have heard, the member Governments that make up the commission reflect that kind of geographical diversity and the truly global nature of the conflicts that the commission commemorates. Those Governments contribute proportionately to the commission.

Clearly, there are ongoing discussions about whether to transfer the responsibility for the maintenance of war graves of military personnel who have been buried in the UK since 1948 from the commission to the Ministry of Defence. The key point is that these graves must be maintained and looked after properly, and that there is a clear responsibility for doing so. It is important that the Government continue their support of the commission and that discussions are facilitated in order that these obligations and objectives can be met.

Like the right hon. Member for Broadland, we on the Scottish National party Benches pay tribute to the very hard work undertaken by the commission’s staff in the UK and across the globe, who maintain the commission’s reputation for providing such a high standard of maintenance. He also made valuable points about the contribution of so many countries, where so many of these graves lie, and I agree with that.

[Mr Gary Streeter (in the Chair)]

Order. The hon. Lady has had her 10 minutes.

Oral Answers to Questions

Kirsten Oswald Excerpts

Tuesday 1st March 2016 Commons Chamber

[Greg Hands]

I do not accept that. We accept that productivity is a problem, but productivity output per hour is now 0.7% higher than its pre-crisis peak. Productivity is improving at the moment. Clearly, we need to do more, which is why we have laid out a national productivity plan with a set of key targets in key areas such as research infrastructure by creating the National Infrastructure Commission, cutting corporation tax and doing a lot more besides.

[Kirsten Oswald (East Renfrewshire) (SNP)]

T1. If he will make a statement on his departmental responsibilities.

[The First Secretary of State and Chancellor of the Exchequer (Mr George Osborne)]

The core purpose of the Treasury is to ensure that the economy is stable and prosperous.

[Kirsten Oswald]

Has the Chancellor had a chance to read last week’s National Audit Office report on financial services mis-selling? Does he agree that it draws attention to a missed opportunity to deliver a financial advice sector that protects small-scale investors when things go wrong, as they did in the case of the Connaught fund, with devastating results for a number of my constituents?

[Mr Osborne]

We have sought to increase consumer protection by introducing a powerful new consumer protection agency in the form of the Financial Conduct Authority, and we have sought to give more financial advice to individuals through, for instance, the Money Advice Service and Pension Wise. However, if the hon. Lady has any specific further ideas that we can consider, I shall be happy to do that.

Financial Conduct Authority

Kirsten Oswald Excerpts

Monday 1st February 2016 Commons Chamber

[Kirsten Oswald (East Renfrewshire) (SNP)]

I, too, congratulate the hon. Member for Aberconwy (Guto Bebb) on securing the debate and on the work he has done on this subject over a lengthy period.

Hon. Members have come to this place with a range of concerns. My engagement with this issue was prompted by the lack of protection and compensation available to investors in the Connaught Income Fund, including some in my constituency. The Connaught case demonstrates how dysfunctional the regulation of investment services in the UK still is. The FCA line appears to be, “We’ve closed the loophole exposed by Connaught. These things can’t happen again,” but that misses the point: the rewards available from financial services will simply make people look for another loophole.

Members will be familiar with what might be termed the Ronseal test. What happens if we apply that test to the situation faced by ordinary investors—those who are neither high net worth individuals nor sophisticated investors under the Financial Services and Markets Act 2000—caught out by the next loophole?

The Treasury paper on access to financial services describes the Government’s aim as

“to ensure the financial system enables people to access and manage their financial products with confidence and ease.”

The Government’s approach is to encourage people to prepare for their retirement and to manage their own finances, just as my constituent George Devon did. When looking for a secure investment for his funds, Mr Devon did as the Government suggest and approached an independent financial adviser for advice on investments that reflected his need to obtain an income with a low capacity for risk. He was advised to invest in the Connaught Income Fund, which was described as

“The Guaranteed Low Risk Income Fund”.

Helpfully, the information memorandum defined the risk level clearly. It also said that the document itself was not aimed at people such as Mr Devon, but at experienced or professional investors or at intermediaries such as Mr Devon’s adviser, who should have been able to provide sound advice on the investment’s suitability. However, in common with approximately 1,500 other investors, Mr Devon saw his funds disappear.

[James Berry (Kingston and Surbiton) (Con)]

One of my constituents, who is a financial adviser, and a number of his clients have lost significant amounts from investing in the Connaught Income Fund. Is the hon. Lady aware that an investigation has not even been commenced into one of the main parties, even though key information was provided to the FCA as long ago as 2011?

[Kirsten Oswald]

The hon. Gentleman makes a valid point. The delays inherent in this case are making it difficult for people in all kinds of situations to have justice and clarity.

[Joanna Cherry (Edinburgh South West) (SNP)]

The hon. Member for Kingston and Surbiton (James Berry) raised the case of an independent financial adviser. Does my hon. Friend share my concern that independent financial advisers, many of whom were also investors in the fund, risk continuing to be blamed for losses relating to it because of the FCA’s continuing failure to investigate within a reasonable timescale?

[Kirsten Oswald]

I agree with my hon. and learned Friend. The system regulated by the FCA, which the Chancellor wants people to rely on, continues to fail to provide all these investors with compensation, or even an explanation, for their loss.

Mr Devon and many others have been, and are being, misled. Even if an ordinary investor approaches the UK’s financial services sector through an independent financial adviser and asks for a secure, low-risk investment, their money can disappear, and their financial plans and their life can be turned upside down, while agencies that cost millions of pounds to run fail to deliver.

Mr Devon’s investment was in an unregulated collective investment scheme. That might sound highly technical, but it may not be so complicated. In workplaces all across the country, one or two people voluntarily run savings groups, or ménages, where colleagues regularly save money and take turns to receive a lump sum. Depending on the size of the workplace, the sums involved can be significant. That is such a simple operation that the phrase “couldn’t run a ménage” is a common description for someone who is a serial failure at even basic tasks.

Surely, in relation to the Connaught fund, a group such as Capita must be able to do a better job of running a collective financial operation than workmates who have run workplace ménages for years. On the contrary, Connaught became a warning that when players in the UK financial services sector go rogue, the systems for regulation, enforcement and restitution fail to protect our investors. When problems with Connaught emerged, Capita turned tail and ran. It has been allowed to continue evading its responsibility to investors through years of regulatory inertia and confusion.

The financial services sector in the UK has run foul of the law and lost millions—indeed, billions—of pounds too many times. The phrase “couldn't run a ménage” seems an apt description of too many of the organisations and individuals who provide the sector with its leadership. Just like the regulators that oversaw the crash of 2008, the FCA, Financial Ombudsman Service and the Financial Services Compensation Scheme seem to be part of the problem, rather than part of the solution. Even fighting a case all the way through the system may well leave an investor significantly out of pocket. This is definitely a system that does not do what it says on the tin.

I was not shocked to find that the Treasury grabs the regulatory fines, but should they really be grabbed from an industry where the cost of regulation, enforcement and compensation are borne by those in the industry and its customers? We need to look seriously at how we provide more effective regulation, enforcement and compensation, and we should also review the levies and fines. One of the gaps could be filled by giving the FOS a role in enforcing payment of compensation, removing the need for an additional set of fees and ensuring more consistency in investors’ ability to secure the compensation awarded. I have particular concerns about the operation of professional indemnity insurance in the IFA sector. When insurers exempt schemes known to be causing concerns, that undermines the reality of IFA protection and causes significant problems for them. The FCA needs to look at making significant changes to the insurance rules. It could perhaps examine the operation of the Scottish solicitors’ “master policy” and the highly successful Association of British Travel Agents and ATOL—air travel organisers’ licence—industry-wide indemnity schemes.

I want to conclude by commenting on the relationship between the Government and the FCA. It is interesting that in the week before this debate the FCA announced the appointment of a new chief executive, Andrew Bailey. It is widely reported that Mr Bailey was hand-picked for the post from the Bank of England by the Chancellor of the Exchequer. I find this surprising in the light of an exchange I had with the Economic Secretary during a recent debate on the Connaught fund. When I queried the fact that neither the Chancellor nor any other Treasury Minister held a single bilateral meeting with the FCA over a two-year period, she did not contradict me, and I have heard nothing to suggest that it is incorrect. I understand that the absence of such meetings may be intended to give an appearance that the FCA acts as an independent agency, but if the chief executive is hand-picked by the Chancellor, having not even applied for the post, what does that say about the FCA’s independence? Of course there is regular correspondence and interaction between the Government and the FCA, so during a time of such pressure on the financial services sector, why was there not a single bilateral ministerial engagement with the FCA over such a long period? The absence of such meetings perhaps has more to do with protecting Ministers than protecting the independence of a body whose principal officers are headhunted at the Chancellor’s bidding.

As someone steeped in the issues of banking governance and the recovery of the banking sector from the low points of recent years, Mr Bailey could demonstrate his independence very easily by signalling his desire to have the FCA reinstate the inquiry into banking culture. Failure to do so may be interpreted as the inquiry having been ditched to clear the way for him taking up his post. If that is the case, his tenure will not get off to a positive start, and questions over the independence and integrity of the FCA will continue to grow.

--- Later in debate ---

[The Economic Secretary to the Treasury (Harriett Baldwin)]

I am left with very little time to cover such a wide-ranging debate. I congratulate the Backbench Business Committee and my hon. Friend the Member for Aberconwy (Guto Bebb) on securing this debate.

I think we can all agree that it is important that in the Financial Conduct Authority we have an organisation to keep financial markets honest for our constituents and for markets, which play a crucial role in our economy. We all want financial services to be on the side of our constituents—the people who want to work hard, do the right thing and get on in life. It is therefore vital that financial services display and uphold the highest standards of behaviour and treat their customers fairly.

The House will no doubt be aware that most small business lending is not regulated. Obviously, when an independent regulator is involved, we need to ensure that the right people are doing the job. Last week the Chancellor announced a number of new appointments to the FCA board, including an excellent new chief executive. As the Chancellor said, Andrew Bailey was the outstanding candidate to be the next chief executive. He brings with him a wealth of experience of financial services regulation in the United Kingdom. He is simply the most respected, most experienced and most qualified person in the world to do the job. However, I want to put on record the Government’s gratitude to Tracey McDermott, the acting chief executive, for all her hard work over the past four months.

Last week we also appointed four new non-executive directors: Bradley Fried, Baroness Hogg, Ruth Kelly and Tom Wright. The new directors provide a balanced mix, on the gender front and in terms of their public and private sector experience and their experience of politics, as well as a wealth of knowledge of consumer issues and the financial services sector more generally, adding an invaluable independent challenge to the board. We believe that the new appointments will strengthen the organisation, and, by ensuring that it has the best possible leadership, will help the FCA to remain a strong, tough regulator that protects consumers and ensures that financial markets work for the benefit of the whole economy.

There are clearly still challenges ahead for the FCA, but it is worth remembering the positive steps that it has already taken. It is in the process of implementing the new senior managers and certification regime, which includes applying enforceable conduct rules to anyone who is involved in the financial services activity of a bank. It has introduced improved whistleblowing requirements, and a new remuneration code that will ensure that individuals are not rewarded for taking excessive risks. It has taken action to protect consumers, such as the regulation of consumer credit, which has included capping the cost of payday lending to protect consumers from unfair costs.

FCA regulation is already having a dramatic impact on the payday market. Indeed, the FCA found that the volume of payday loans had fallen by 35% in the first six months since it took over regulation in April 2014. There has been a new focus on competition in banking and other markets, such as excellent work on Fintech and the innovation hub. Last year the Treasury and the FCA jointly launched a financial advice market review, which is designed to make financial help more accessible and affordable for all our constituents. It is also worth highlighting the role of the Financial Ombudsman Service, to which Members may wish to refer their constituents when they have problems with financial services firms.

The Government are as keen as those who are present tonight to resolve the matters that have been raised by a range of Members. We heard from not only my hon. Friend the Member for Aberconwy, but from the hon. Member for Bassetlaw (John Mann), my hon. Friend the Member for Wyre Forest (Mark Garnier), the hon. Member for Motherwell and Wishaw (Marion Fellows), my hon. Friend the Member for North Warwickshire (Craig Tracey), the hon. Member for Ceredigion (Mr Williams), my hon. Friend the Member for South West Devon (Mr Streeter), the hon. Member for Brentford and Isleworth (Ruth Cadbury), my hon. Friend the Member for Hazel Grove (William Wragg), the hon. Member for East Renfrewshire (Kirsten Oswald), my hon. Friend the Member for North East Somerset (Mr Rees-Mogg), the hon. Member for Edinburgh West (Michelle Thomson), my hon. Friend the Member for South Suffolk (James Cartlidge) and the hon. Member for Ross, Skye and Lochaber (Ian Blackford), as well as the hon. Member for Salford and Eccles (Rebecca Long Bailey).

A number of points have been raised, and I shall deal with them in turn. The issue of the banking culture review was raised by the hon. Member for Salford and Eccles, my hon. Friend the Member for Aberconwy, and the hon. Member for Bassetlaw. The first time I personally heard about the FCA’s decision to discontinue the review was when the story broke in the media on new year’s eve. We have made it abundantly clear to the House that no Treasury Minister or official was involved in the FCA’s decision, and the FCA has made it clear that it did not inform the Treasury before the decision was made public.

[Kirsten Oswald]

Will the Minister give way?

[Harriett Baldwin]

I would love to, but I do not have time.

Connaught Income Fund

Kirsten Oswald Excerpts

Tuesday 12th January 2016 Commons Chamber

[Guto Bebb]

My hon. Friend has summarised my speech in a pithy intervention.

It is important to highlight that when the transfer of operator happened, the subsequent information memorandum issued by Blue Gate was virtually identical to the original information memorandum issued by Capita, and for a further 10 months, more or less, investors’ funds going into Connaught were still managed by Capita IRG Trustees Ltd, which handled investors’ money while Blue Gate waited to receive authority from the FSA to handle client funds.

The whole issue becomes even more concerning because in January 2011 a whistleblower—none other than the chief executive of Tiuta, George Patellis—contacted the FSA to make a principle 11 notification in relation to the misuse of fund moneys by Tiuta. In March 2011 George Patellis met Ian Conway from the FSA to highlight evidence of mismanagement and the fraudulent use of investor funds. He provided ample evidence to support his claims.

[Kirsten Oswald (East Renfrewshire) (SNP)]

Does the hon. Gentleman share my concern that, after five years, the regulatory authorities appear to have made little progress on securing justice for the 1,500 investors, including my constituent George Devon, who lost money in what should have been a secure investment fund? They have made even less progress on working out who to hold to account for the disappearance of more than £100 million. Will he join me in calling for a comprehensive review of the regulatory framework, which is supposed to protect small-scale investors but fails to do so?

[Guto Bebb]

I will join the hon. Lady in that call, and I agree entirely with her comments.

On 26 May 2011, three months after the whistleblower provided evidence of wrongdoing, the FSA finally published a note on its website stating that the fund should not be compared to a bank or building society account. That was remarkable, considering it had been provided with evidence of wrongdoing. In the light of that evidence, it is difficult not to argue that a stronger warning should have been provided to investors by the FSA.

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[The Economic Secretary to the Treasury (Harriett Baldwin)]

I congratulate my hon. Friend the Member for Aberconwy (Guto Bebb) on securing this debate, chairing the all-party group and raising the serious issues concerning the Connaught Income Fund. His constituents and, clearly, those of many other colleagues have been seriously affected by this event and have written to me many times.

Many investors have lost substantial sums and, indeed, sometimes their life savings as a result of the events involving the Connaught funds. I am very much aware that that has caused real hardship for people across the country. It is important that the FCA and the all-party group get to the bottom of this matter and try to secure the best outcome for investors in these funds. Those who are responsible should face justice for their actions. It is equally important that steps are taken to ensure that this situation does not arise again in the future.

I reassure my hon. Friend and all other Members that the Financial Conduct Authority takes this matter extremely seriously.

[Kirsten Oswald]

rose—

[Harriett Baldwin]

Given the lack of time, I will make a bit of progress. If I have time, I will come back to the hon. Lady.

The FCA also knows that what happened with the Connaught funds has caused serious distress to many investors and continues to work closely on this case to secure the best possible outcome. As my hon. Friend the Member for Aberconwy said, the Connaught funds comprised three separate funds, income series 1, series 2 and series 3. In total, approximately £147 million was invested in the funds, which, as we know, were unregulated collective investment schemes. By definition, such schemes are not subject to direct regulation by the FCA or, previously, by the Financial Services Authority.

In the case of Connaught investment funds, many of the usual protections and safeguards that protect investors in regulated funds were absent, owing to the unregulated nature of some of the entities involved. On this point, I want to touch on two main issues. The first concerns the actions taken by the FCA to try to protect consumers, despite most of the entities involved being unregulated. That includes the ongoing work to secure a fair and proper outcome for investors. The second involves the steps that can be taken to ensure that this sort of situation does not happen again.

First, despite the schemes being unregulated, the FCA has taken a number of significant steps to try to protect customers right from when the first problems arose. In May 2011, the FCA, which was at the time the FSA, altered Tiuta’s permissions on issuing new regulated mortgage lending. Shortly thereafter, it wrote to investors who might have been mis-sold the fund and all financial advisers who sold the fund, asking them to review the sales and to contact customers where there may have been the risk of unsuitable advice. The FCA has continued to provide updates on the situation via its website. Once the funds were suspended and steps were taken to wind them down, the FCA announced on 16 July 2014 that it would support a negotiated settlement to address investor losses.

As hon. Members may know, the FCA initially supported the negotiations between the parties involved, as it believed that doing so was in the best interests of investors. However, having extended the negotiations more than once, in March 2015 the FCA announced its decision to withdraw from them. The FCA decided that a further extension to the negotiation period was not in the best interests of investors. I am sure my hon. Friend will understand that as the negotiations were voluntary and confidential, the FCA cannot provide specific details on what happened during the negotiations.

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[Harriett Baldwin]

I shall give way to the hon. Member for East Renfrewshire (Kirsten Oswald) first.

[Kirsten Oswald]

I am grateful to the hon. Lady for giving way. In response to a written question I was referred to the record of ministerial meetings to find out when a Treasury Minister last met representatives of the FCA. Does the Minister understand my astonishment at finding not a single bilateral meeting between the Treasury at ministerial level and the FCA in the two years from October 2013 to September 2015? Does she appreciate that her Government seem to be asleep at the wheel as the FCA fails to clean up the financial services sector?

[Harriett Baldwin]

The hon. Lady has been assiduous in tabling a number of parliamentary questions. I think I am right in saying that they have been put on the record in the Library. I encourage other hon. Members to have a look and see the record that she has managed to get from the FCA in writing.

I am sure that other hon. Members who have constituents who have suffered losses in the Connaught Income Fund will welcome the reassurance that the FCA is doing its utmost to secure the best possible outcome for investors, and that they will support the FCA in its current investigations.

Oral Answers to Questions

Kirsten Oswald Excerpts

Tuesday 27th October 2015 Commons Chamber

[Mrs Emma Lewell-Buck (South Shields) (Lab)]

1. What assessment he has made of the potential effect of proposed changes to tax credits on child poverty.

[Kirsten Oswald (East Renfrewshire) (SNP)]

2. What estimate he has made of the administrative cost of proposed reforms to tax credits announced in the summer Budget 2015.

[Wes Streeting (Ilford North) (Lab)]

3. Whether he plans to make changes to the Government's proposals to reform tax credits.

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[Mr Osborne]

We will give the hon. Lady’s constituents, and indeed the constituents we all represent in this House, support by continuing to deliver economic security in this country—economic security that has seen unemployment fall in her constituency by 44% since 2010. One of the ways we deliver economic security is by controlling our welfare bill and making sure this country lives within its means. That is what we will continue to do.

[Kirsten Oswald]

The Chancellor has singularly failed to listen to the SNP and to this House when we have said that he needs to think again about tax credits. He sounds like he is keener on dealing with peers than on listening to them, so how about he listens to the people and just drops these tax credit plans once and for all?

[Mr Osborne]

This House of Commons voted three times for the changes that were rejected by the House of Lords. I am sure that we look forward to the support of the Scottish National party on that constitutional question. I would make this point to the hon. Lady’s constituents: we need to have a welfare system that works. We need to move to a lower welfare, higher wage economy. We do that by introducing the national living wage and having a welfare bill that the country can afford. That is the best thing we can do for the security of the people she represents.

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[Mr Osborne]

My hon. Friend is right to say that we have taken significant steps to encourage saving, not least by giving pensioners control over their pension pots in retirement and by trusting those who have saved all their lives with the money that they have earned and put aside. He is an expert in these matters, and he will know that we are open to consultation on the pensions taxation system at the moment. It is a completely open consultation and a genuine Green Paper, and we are receiving a lot of interesting suggestions on potential reform. We will respond to that consultation fully in the Budget.

[Kirsten Oswald (East Renfrewshire) (SNP)]

T9. Will the Chancellor confirm that there is nothing in the passing of the charter for budget responsibility that will restrict the Scottish Government’s ability to borrow, which is already enshrined in statute under the Scotland Act 2012?

[Mr Osborne]

I am happy to confirm that the deal we struck with the Scottish Government on capital borrowing remains intact. Indeed, we want to strike a new agreement with them involving a new fiscal framework, and we are having a good discussion around capital borrowing powers, resource borrowing powers and the mechanism to ensure that Scotland genuinely sees the benefits and bears the costs of any decisions taken by the Scottish Government. That represents the true nature of devolution, which I am sure the Scottish National party wants to see, so let us make sure we get that agreement.