Oral Answers to Questions

Debate between Mark Hoban and Bob Blackman

Monday 5th November 2012 Commons Chamber

[Mr Hoban]

A number of young people have been helped by various aspects of the youth contract. Twenty young people in the hon. Lady’s constituency have had work experience as a consequence of it, and another group has been helped into work as a result of the sector-based work academies. I hope that she is doing all she can in her constituency to champion the youth contract and to get more young people into work.

[Bob Blackman (Harrow East) (Con)]

23. What assessment he has made of results of the housing benefit demonstration projects.

Eurozone Crisis

Debate between Mark Hoban and Bob Blackman

Thursday 3rd November 2011 Commons Chamber

[Mr Hoban]

My hon. Friend hits the nail on the head. It is because we took that tough action and are tackling our deficit, and have a credible plan for putting our public spending back on a firm footing, that we have lower interest rates than countries with a lower deficit than ours.

[Bob Blackman (Harrow East) (Con)]

This week we have witnessed the spectacle of the Greek Prime Minister being summoned, like a naughty schoolboy, to President Sarkozy’s study for having the temerity to call a referendum in order to get the support of his people for the proposed austerity measures. Given that our deficit and debt levels are higher than Greece’s, what does my hon. Friend think would be happening if we had adopted the policies of the Opposition?

[Mr Hoban]

I think we would find that our credit rating would be under pressure, as Standard & Poor’s suggested in its report last month, and we know that when credit ratings are downgraded, the natural consequence is higher interest rates, which hits families and businesses and makes recovery harder to achieve.

Regulatory and Banking Reform

Debate between Mark Hoban and Bob Blackman

Thursday 16th June 2011 Commons Chamber

[Mr Hoban]

My hon. Friend makes an absolutely vital point. The failure of the financial regulatory system put in place by the Labour party when in government was hard-wired into the system. It was destined to fail because of the failure to identify a clear match between the people who had the power and those who had the responsibilities for managing financial stability. My hon. Friend is absolutely right. The previous system was destined to fail. We have learned the lessons from that crisis; I am not sure that the Labour party has.

[Bob Blackman (Harrow East) (Con)]

I welcome the statement and the announcements today. However, will my hon. Friend elucidate on the expected time frame for the setting up of the new regulatory bodies? There must be at least a risk that one or more bodies that are being abolished will take their eye off the ball while they are doing their work, and there will be a time frame before the new bodies are set up.

[Mr Hoban]

My hon. Friend makes an important point. We hope that the pre-legislative scrutiny of the Bill will start shortly. It is programmed to take 12 sitting weeks. We want to make sure that the legislation progresses through this House and the other place as quickly as possible and that it is properly scrutinised. We need to make sure that we do not make mistakes in haste that we repent of at leisure. It is also important to recognise that the FSA is starting to adopt the new style of supervision that we would like to see it exercise, and that should give us some comfort that the lessons have been learned and are now being put into practice.

European Summit

Debate between Mark Hoban and Bob Blackman

Thursday 24th March 2011 Commons Chamber

[Bob Blackman (Harrow East) (Con)]

When Ireland was in trouble, we helped out. Ministers brought forward a proposal to give a loan to Ireland to help sort out their finances. I appreciate that at the moment there is no proposal to do the same for Portugal, but will the Minister give an assurance that we as a House will be given the opportunity to debate any such proposal that comes forward?

[Mr Hoban]

As I said before, I do not think that it is helpful to engage in unnecessary speculation. However, I would point out to my hon. Friend that this Government have sought to ensure that we keep the House informed on all matters of importance.

Equitable Life (Payments) Bill

Debate between Mark Hoban and Bob Blackman

Wednesday 10th November 2010 Commons Chamber

[Bob Blackman]

I thank my hon. Friend for her intervention. The issues are complex, and the more one reads about and understands the scandal, the more difficult it becomes to resolve it. The Government in their wisdom have set out a compensation scheme that will continue for many years. The £1.5 billion is not a one-off payment that will go into a fund this year and end the matter. It will be spread over many years, and it will extend into the next Parliament.

[Mr Hoban]

May I clarify the fact that those who receive compensation and are not with-profits policyholders will receive a one-off payment during this Parliament? Only with-profits annuitants will have their payments spread over the rest of their lives.

[Bob Blackman]

I thank the Minister for his intervention. I was going to refer to that while I was responding to the intervention from my hon. Friend the Member for Devizes (Claire Perry). The clear issue now is justice for the people in the worst possible position—the trapped annuitants. I applaud the Government for honouring the pledge that 37,000 people who have been trapped as a result of the scandal will receive 100% compensation. I strongly support and endorse that.

We have a problem, however, and amendment 1 attempts to address it. The amendment has cross-party support; we must be seen to be acting not just as a party but as parliamentarians overseeing the Executive. The problem is that if someone took out a policy on a particular day, they would receive no compensation at all, even though the maladministration was taking place at the time; whereas someone who took out a policy on the following day would get 100% compensation. There are always difficulties when arbitrary dates are set, but that is neither fair nor reasonable.

I believe that we should set aside the date and review all the trapped annuitants to ensure that they get fair and proper compensation. The Chadwick report has been rubbished by EMAG, and by Members on both sides of the House, but even Chadwick proposed a scheme that would have compensated those trapped annuitants whose policies were taken out before the cut-off date.

--- Later in debate ---

[Mr Hoban]

Let me continue.

We are excluding that group of people because they took out policies before any maladministration could have affected their investment decision. Therefore, to echo my hon. Friend the Member for Cardiff North, they suffered no relative loss.

[Bob Blackman]

But will the Minister answer the moral issue? At the time when people were making investment decisions, and taking out these policies, the regulatory failure was going on. As they became victims of that regulatory failure, surely we have a moral duty to compensate them.

[Mr Hoban]

When people made the decision on the information available to them, the relevant information was not in the public domain, and would not have affected their investment decision until September 1992. That is a clear, logical, sensible starting point, based on principles and on the ombudsman’s findings, for the maladministration, and that is the point from which we should calculate relative loss for policyholders.

--- Later in debate ---

[Mr Hoban]

There is no requirement in the Bill to lay the scheme as a statutory instrument, but I shall ensure that when the scheme design is produced, it is laid before the House and there is an opportunity to scrutinise it.

The hon. Gentleman asked a question about the cost of administration and the cost of the appeals mechanism, and he was right to recollect that I said previously that the cost of administration would be separate from the compensation pot. That is still the case, and it goes without saying that the cost of the appeals mechanism will also be separate from the compensation pot. We want the money that is set aside for compensation to be used for compensation.

[Bob Blackman]

I am grateful to the Minister for outlining the appeals process, which, in this complex and complicated arrangement, will be important. Will he elucidate further on the effect of the time frame of the appeals process? What would happen if, for example, an individual policyholder or set of policyholders, who felt that they had been wronged and not received the compensation that they were due, went through the process and that led to a breach of the cap? If they were suddenly compensated with a lot more money than had already been allocated, how would that be dealt with?

[Mr Hoban]

In that situation, there would be two aspects: first, the design that the payment scheme had applied; and secondly, the data that were available to the policyholder. The scheme will be designed in such a way that it does not breach the cap, so it would be possible to appeal only if the data were incorrect. The data that will be used to calculate the compensation will come from a database supplied by Equitable Life, and I hope that its data are of a high standard, so that those situations do not occur.

From the details given today, the Government have been considering very carefully the design of the appeals procedure, and we will publish details of the procedure, along with other aspects of the scheme, ahead of the time that amendment 4 proposes. So in light of that we believe that the amendment is not necessary.

Let me turn to amendment 6, which is in my name. The delivery of the Equitable Life payments scheme is an important matter, and since we took office we have made huge strides towards finding a resolution to the Equitable Life issue. However, we are aware that, for many policyholders, the issue will continue until they finally receive the money. As such, it is important that we find the right delivery partner to help us do that. Having given the matter careful consideration and looked at a range of options, our preferred option is to use NS&I, to deliver the scheme.

Officials have held many meetings with NS&I to find out not only whether it is capable of carrying out that important task, but the processes by which delivery could be carried out. There are many factors that make NS&I an appropriate delivery partner for the scheme. One of the most obvious and important is capability. As part of its everyday functions, NS&I makes millions of payments to customers every month. It has processes and infrastructure in place and experience of carrying out the functions that the scheme will require.

The need for value for money in the delivery of the scheme is also important. We are all aware that, in a climate where we have had to make difficult decisions about where to make cuts, the Government must look for ways of making the cost of delivering the scheme reasonable. Using NS&I will allow us to draw upon existing Government relationships and contracts, and I am satisfied that NS&I can provide a good delivery mechanism by which we can start making payments in line with our stated ambition of the middle of next year.

Equitable Life

Debate between Mark Hoban and Bob Blackman

Tuesday 20th July 2010 Westminster Hall

[Mr Hoban]

I am keen that the commission should work as quickly as possible. In many respects, the process would have been shorter without the commission, but it is an important guarantee of transparency and openness, and it is right that it be given a remit to do this work. Equally, I am mindful of the fact that we need to give it a tight timetable, so that it has time to think about the issues but is not seen as delaying the process of making payments to policyholders.

[Bob Blackman (Harrow East) (Con)]

One of the concerns is that, sadly, many policyholders have died or are dying. Can the Minister give some comfort on the issue of giving interim payments once the decision has been taken, so that people can receive payments before the commission has completed its work?

[Mr Hoban]

I am conscious of the fact that many policyholders are elderly, but there is a challenge: we need to ensure that the scheme is designed transparently and fairly, and that there is fairness between groups of policyholders as well as between policyholders and taxpayers. The commission should look at where priority payments should be made, but I am wary of the question of how we can make interim payments to people on a sound basis that will not lead to further problems later. I take on board my hon. Friend’s point, but there are some challenges in taking the idea forward.

A key issue for many policyholders and Members of Parliament is how much the scheme will cost. As the ombudsman said, it is appropriate to think about that, and we will consider the potential impact on the public purse of any scheme, and what is affordable, before we decide how much we can allocate to the scheme. We will ensure that fairness is at the forefront of our thinking when making those difficult decisions.

I would like to take a moment to mention the excellent work of EMAG, which has campaigned for many years for a fair resolution to the matter. In opposition and now in government, I have met members of the EMAG board, who have relayed to me their concerns about the Chadwick process. I will say to hon. Members what I said to them: Sir John is only a building block in our approach, and I am willing to listen to EMAG and other interested parties who can give useful and productive insight into this complex issue.

I remind hon. Members that no final decisions have yet been made on many of the important issues associated with the scheme. I want the decisions to be in the best interests of policyholders and taxpayers, and I encourage EMAG and others to be involved so that we can move the process on and find a resolution, for which policyholders have waited for many years.

I will give more details on our approach and the next steps in the process when Sir John Chadwick’s final report is published, but I can confidently say that we are moving towards our objective of resolving the issue. We are now reaching a crucial stage in the story of the Equitable Life payment scheme. What happens in the coming months will be decisive in laying out how the scheme operates and the quantum of payments that will be made to policyholders. I encourage all MPs to engage in the debate. This is certainly an issue that we must get right.

Banking Reform

Debate between Mark Hoban and Bob Blackman

Thursday 17th June 2010 Commons Chamber

[Mr Hoban]

There is an issue about pay levels, which we will need to look at. I am intrigued by the hon. Gentleman’s suggestion that there should be a greater variable element in relation to performance, given that a critique of many is that an excessive bonus culture in the City contributed to the financial crisis.

[Bob Blackman (Harrow East) (Con)]

Will the Minister please explain how today’s announcements will end the confusion in the markets and make sure that there is proper focus on regulation to end that confusion?

[Mr Hoban]

The package that we have set out today, which was greeted with a great deal of support last night when the Chancellor outlined it to the City, ends any uncertainty. The transition process that we have outlined today in relation to legislation, and the team led by Hector Sants, the current chief executive officer of the FSA, will reassure the City about the direction of travel on regulatory reform. The new settlement, which takes into account macro-prudential supervision, micro-prudential supervision and effective consumer supervision, will ensure that we have the right package of regulatory structures in future to safeguard the economy and to give confidence to consumers and others in the markets.