Commercial Financial Dispute Resolution Platform

Mark Williams Excerpts

Thursday 15th December 2016 Commons Chamber

[Mr Mark Williams (Ceredigion) (LD)]

It is a privilege to be able to speak to this motion. First, may I congratulate the hon. Member for East Lothian (George Kerevan) not only on initiating this debate on our behalf, but on his leadership of the all-party group for fair business banking, of which I am a vice-chair? I also wish to pay tribute to the former chair of the group, the hon. Member for Aberconwy (Guto Bebb), who helped us to set up the “bully banks” all-party group, as it was then, some years ago. Let me read out what he said when we debated these things earlier this year. He said that the FCA

“must work with integrity and be independent to deliver in the interests of a healthy financial marketplace.”—[Official Report, 1 February 2016; Vol. 605, c. 715.]

The sad reality for many of my constituents, in a constituency targeted for the selling of interest rate swaps—adverts were taken out in the local newspaper, and at one point we had more than 20 cases of mis-selling of hidden and embedded interest rate swap products—is that they lack confidence in the FCA, based on their experience; the respect and confidence that they should have have dissipated.

As we have heard, the ad-hoc scheme set up by the FCA for interest rate hedging product mis-selling has never had the authority or impartiality that it should have as a model for redress, as was acknowledged by Andrew Bailey in a very welcome admission before the Treasury Committee. The fact that he acknowledges this problem indicates—we hope—that he understands there needs to be reform, and we have heard positive comments from my hon. Friend the Member for East Lothian—he is my hon. Friend for these purposes—and from the hon. Member for Henley (John Howell).

The ad-hoc scheme was fundamentally flawed, not just because it was bank-centric and the FCA oversight was not rigorous enough, but because those SMEs that had embedded or hidden swaps were excluded from it. As has been said many times in this place, when the impact of an embedded swap is the same as the impact of a separate hedging product taken out with a loan, it is difficult to argue that the small businesses that were sold those products should be excluded from the scheme—but they were excluded from the scheme and they were denied justice.

Business and commercial banking is an unregulated activity in the UK, and those of us who have been following these matters know that businesses do not have the same level of protection as consumers do. That point was made by the right hon. Member for Delyn (Mr Hanson). Nor do they have recourse to a timely dispute resolution mechanism—the key word there is “timely”. As we have also heard, banks have deep pockets and recourse to civil litigation is unaffordable for most SMEs—certainly those I represent. Ceredigion has more small businesses per head of population than anywhere else in the UK. Those businesses and those people do not have those kinds of resources, so what do they do? First, when a business has a complaint against its bank, it has to rely on its lender’s internal complaints procedure. Time and time again, I have seen constituents deliberately hung out to dry by their banks, pushed into the long grass, in the hope that the issue would disappear or the constituents would give up. In all too many of those cases, businesses went under as a consequence of that prevarication.

Today, I want to raise the case of my constituent Mansel Beechey, a well-known publican in Aberystwyth and a customer of the Clydesdale bank, whose case regarding the mis-sale of an unregulated interest rate hedging product I have mentioned many times. We have had four or five of these debates over the past four years, and I have had to mention Mr Beechey’s case in every one, yet it remains unresolved. Mansel first formally complained to the Clydesdale bank in April 2012 through his solicitor and it took the bank six months to respond, which is clearly unacceptable. I wish to endorse the comment made by a Scottish National party Member about businesses that have been too frightened to pursue matters for fear of action being taken against them.

If an internal complaint fails—Mr Beechey had no confidence in the internal complaints mechanism—some SMEs can go to the Financial Ombudsman Service. Although the FOS is keen to explain that it will look at the facts, I am sad to say that I believe it has been selective in what it has looked at and has all too often examined evidence in isolation. I am sure it has done well in many disputes, such as those relating to payment protection insurance and payday lending, but my experience of the past four years has shown me that it has not had the expertise to deal with acutely complex cases.

For example, the ombudsman suggested that monthly payments under the redress scheme for my constituent would have been about £1,000 more than the actual fixed rate loan interest, which Mr Beechey says he could not afford. Yet the ombudsman insists that there was not a great difference between these payments, and his whole judgment hinges on this belief, which seems extraordinary. I am not a businessman—perhaps that is a good thing—but even I can grasp the fact that Mr Beechey’s pub business would need to take around eight times the amount of £1,000 through its till, which is about £ 96,000 per year or a third of the annual turnover of the pub. We need reassurance that those at the FOS are suitably qualified and experienced to understand how small businesses work.

Several constituents have cited timeliness as a problem with the FOS, which, sadly, seems to move at glacial speed. Some cases presented several years ago remain unresolved. What is very concerning is that when a final decision has eventually been reached in a case, it will never be overruled, even when that decision may be brought into question by new evidence or a change of approach in other comparable cases.

Another example to cite is the case of Mr Geraint Thomas of Bargoed farm in Llwyncelyn, a Lloyds bank customer of 53 years who was mis-sold a fixed-rate loan during the banking crisis. Mr Thomas was severely let down, with little understanding shown by his relationship manager at the bank of his financial situation, putting him and his business under great pressure. This started a long-standing complaint, which has required my intervention on several occasions, including phone calls to Lloyds officials. Eventually, a revised settlement offer was given by Lloyds, which Mr Thomas was under immense pressure to sign or he would lose out on it entirely; this came with the understanding that he would still be able to take his concerns to the FOS. However, since this period, the FOS has refused point-blank to look at the case, on the basis of the settlement he agreed with Lloyds bank, despite the fact that I had previously received assurance directly from Lloyds that his acceptance of the offer would not stand in the way of his complaint being taken to the FOS. It seems to have done exactly that.

We have heard about issues relating to subject access requests, a topic touched on a moment or two ago. Andy Keats of the Serious Banking Complaints Bureau has said:

“The bank relies on concealment of your central file, committee meeting reports and minutes, internal and external valuation of your property, loan documents and bank rules, etc.”

That is hardly a system of transparency to inspire confidence in the system. In the course of working for Mansel Beechey, we have made three subject access requests to both the Clydesdale bank and the FOS. He found that in simultaneous requests to both organisations, new information kept on coming. I have seen different transcripts of telephone conversations, three different credit reports and three different sets of credit figures. Things seem to have been changed by the stroke of a pen. Again, that is not a way to inspire my constituents’ confidence, and I seriously question the level of transparency and disclosure in his case and, no doubt, in others.

I could go on at length, Madam Deputy Speaker, but I am not allowed to. I apologise for the detail of some of what I have said, but it shows the practicalities of the cases we have taken on behalf of our constituents. Let me just end by making a plea for a level playing field. The system, whether we call it ad hoc or something else, seems to have been stacked firmly in favour of the banks. Our constituents—the small businesses of Ceredigion and elsewhere—deserve a fair chance. That is why I hope that some of the suggestions made by the all-party group will be taken forward, in the weeks and months—not years—ahead.

[Several hon. Members rose—]

Bank Branch Closures

Mark Williams Excerpts

Thursday 30th June 2016 Commons Chamber

[Mr Mark Williams (Ceredigion) (LD)]

I congratulate the hon. Member for City of Chester (Christian Matheson) on shepherding me and the hon. Member for Wells (James Heappey) to the Backbench Business Committee to secure the debate. I thank the Committee for allowing us the opportunity to have this debate, which is important. It is always a pleasure to follow the hon. Member for Ynys Môn (Albert Owen). We agree on most things rural; our constituencies are not dissimilar. I was touched when the hon. Member for Clwyd South (Susan Elan Jones) described that nonsensical hypothesis and the threshold of 15,000 people, and I instantly started to think about my constituency. No community there would reach that level, except the town of Aberystwyth and that would be seasonal—it would depend on a lot of students. I say that to illustrate the challenge of rurality.

The debate has been very good. We have heard about the cities and what I call semi-rural constituencies. I am going to talk about my constituency, which is particularly rural. It is 1,795 sq km, it has 147 villages and hamlets and 700 family farms—one large community. The hon. Member for Wells described Glastonbury, without the 200,000 visitors, as a smallish town with 10,000 people. A town of 10,000 people in my constituency would be a metropolis. The scenario is very different, but the people there have the same entitlements and same needs and they are still being let down by the attitude and practices of the commercial banks. That has been the message in almost every contribution that has been made.

In 2011 I spoke in a debate in this place about bank closures. The number of branches had halved, from 20,000 in 1988 to about 9,300 then, and that figure has dropped further since. We can have a debate about the reliability of statistics. That is perhaps something on which the banks themselves should reflect, but the University of Nottingham report—the right hon. Member for Tottenham (Mr Lammy) alluded to this—said that

“the rate of closure has slowed more recently”

and that seems to be the case only because of

“the much reduced stock of branches”.

Hardly a positive sign.

The decline is certainly not abating in rural areas. Over the past year, more than 600 bank branches have closed and now 1,200 communities have lost all their banks, putting our high streets and market towns in jeopardy. That is something the banks said would not happen—they said the last bank in the town would stay one way or another.

None of us can deny that there has been a shift in how many people access banking services. For many, that has led to more options and more flexibility from mobile and online banking. According to the British Bankers Association, mobile banking apps have become the No. 1 way that people bank, with 22 million downloads of banking apps, and that is forecast to increase hugely over the next few years. Like the hon. Member for Ynys Môn, I have a cheque book. I will keep it going as long as I can, or as long as the banks allow me.

Many businesses will bank either through call centres or distance banking relationship managers. I always think the description “relationship manager” is slightly inconsistent. The notion is that constituents of mine in west Wales will have a relationship manager in Swansea or Bristol—look at a map; it is a long way away. There is a disconnect between them and as a result local businesses suffer and sometimes the advice that is given can be problematic. The requirement is for local managers who understand the business in the area. That is hugely important and can make a huge difference to the small and medium-sized businesses that they are there to serve.

The issue of broadband and mobile coverage is hugely important. My constituency is in the bottom 10 in the UK in terms of broadband speeds and actual coverage. Next Wednesday, I have a debate in Westminster Hall, for those who are interested in that matter in a Welsh context. That is hugely significant for the debate we are having as is the issue of physical access to a bank. I live six miles from the great metropolis of Aberystwyth. I have the luxury of a car; I own one. I have the luxury of a train and a bus.

[Chris Evans (Islwyn) (Lab/Co-op)]

Stop bragging.

[Mr Williams]

I do not own the bus or the train, I hasten to add. I have that luxury, but most of my constituency does not.

Two weeks ago, HSBC notified me—it sent me a letter—rather than consulted me of the fact that the Aberaeron HSBC would be shutting in September. They did not ask my opinion beforehand when they came to see me and the local councillor, Elizabeth Evans, to discuss the branch closure. This is a significant community and a tourist community—not on the scale of Glastonbury, but a significant community on the west Wales coastline. Local businesses need the bank—it is essential—in order to cash their takings. The closure is simply another nail in the coffin for that vibrant community.

In respect of the protocol, this is an instance of putting the cart before the horse. We were told that arrangements would be put in place before the closures happened, but we left that meeting still very unsure about whether the town of Aberaeron would have any cashpoint provision. In case HSBC is listening, if it is still intent on moving the bank to a local store there is a challenge: the pressure is on to provide us with at least a cashpoint machine in the town.

There have been two cashpoints in Aberaeron in the past. The hon. Member for Clwyd South mentioned the railway in her community. People can arrive there anticipating their railway trip for the weekend and find that they have no money and no means of accessing money. That happened in Aberaeron when the two cashpoints dried up. Visitors as well as locals found that they had no access to money in that community, raising the spectre of a long drive elsewhere.

With the continuing loss of bank branches, the importance of post offices has grown substantially, with more post office branches now providing banking facilities. We are told that 99% of the population live within three miles of a post office branch, with over 11,500 branches nationwide. All of those branches handle automated transactions, offering “cash-in and cash-out” banking services. Although the services provided by the Post Office are welcome and the initiator of this great idea should be commended—it is important and is providing more than a stop-gap—by the Post Office’s own admission, post office branches

“cannot offer the high value, complex and regulated financial services previously offered to the bank’s customers.”

Where can a customer receive financial advice or take out a loan in an area that has no local bank branches and a post office branch is the only access to banking? These are things that neither post office branches nor internet banking services can provide in the way that I think is still required—in a personalised and focused manner.

One of the successes of the previous Government was that the post office network was retained after years of decline, with a commitment to keep 11,500 post offices. However, that has not necessarily stopped closure. What has happened is that the word “closure” has been replaced with the idea of “movement to somewhere else”. If high street bank branches close and post offices follow, rural communities will be hardest hit. With relatively limited public transport making it harder to travel far and with rural areas having the weakest broadband speeds, our rural population is being financially left behind. As we have heard, there are age and demographic issues because not all people are capable of accessing the internet even if it is available.

When banks move into post offices and post offices move into shops, we need to recognise that those places were not designed with bank transactions in mind. There is considerable concern about privacy and security, which will be particularly off-putting for local businesses and elderly residents who rely on face-to-face transactions. Another positive move was the access to banking protocol, but I can only concur with the eloquent and passionate remarks of the right hon. Member for Tottenham on that issue. The protocol was good as far as it went, but it did not go far enough. It has not been monitored and I think it has been breached. I look forward to the review when it happens. When the protocol was announced, my former colleague, Vince Cable, said that

“banks have a duty to ensure that all their users and especially vulnerable customers, small businesses and those in rural communities can continue to access over the counter banking services.”

That is extremely important, and we look to the Minister for reassurance that a renewed protocol to address those concerns will be robust and will be enacted.

As well as the Aberaeron branch, we have lost a number of others. The roll call is significant. We have lost banks in Llandysul, New Quay and Tregaron. Tregaron is a particularly notable example, because following the closure of the Barclays branch there, customers face a 22-mile round trip to the nearest branch in Lampeter. It is not good enough for a bank to put a poster in a window, or on a boarded-up window, telling people that their nearest branch is X miles away. That closure has hampered local businesses, and local residents have felt the loss of face-to-face services. New Quay/Cei Newydd, in my constituency, has lost its last branch, although the town has a huge population in the summer because of all the visitors.

I could go on, but I will not do so. Others want to speak, and we want to hear from the Front Benches, including, of course, the Minister. Let me end by saying that rural communities are going through very challenging times. There is a characterisation of the high street in a small market town, involving banks, post offices, shops and readily available public transport—buses that stop and take people to their destinations. I do not want to be a Luddite; I do not condemn the march towards a digital economy, with services that can be accessed online and business that can be conducted by means of a call centre rather than face to face; but there is a universality in that, which does not currently apply to all rural areas. Perhaps it will in the future, given technological advances. Perhaps we will all be content to sit in our homes, not talking to each other and playing on computers. But we are not there yet.

Rural areas are being left behind. Broadband, and broadband speeds, are not equitable across the country. A generation of people, and certain businesses, depend and rely on physical banking. I sincerely hope that, if the way forward is the access to banking protocol review, the realities of rurality—the reality of the 20% of us who live in rural areas—will be considered.

The hon. Member for Wells ended his speech by using the phrase “fair play”. In Welsh the phrase is “Chwarae Teg”, and we demand that too.

Budget Resolutions and Economic Situation

Mark Williams Excerpts

Wednesday 16th March 2016 Commons Chamber

[Tim Farron (Westmorland and Lonsdale) (LD)]

My party—the Liberal Democrats, or those of us who are left—still feels very proud of the part it played in getting this country this far. The Chancellor said he wanted to abolish the Liberal Democrats, and given that he has failed to meet every other Budget target, that is the best news I have heard in months. In his more generous moments—I am sure he has some—he will acknowledge that Britain is in a stronger economic position today because of the choices we made.

Britain is now at a crossroads. The structural deficit will be gone next year, so the Chancellor is choosing to make unnecessary cuts to meet an unnecessary target. It is his choice to remove support from people with disabilities. It is his choice to cut universal credit. It is his choice to stand by as child poverty increases. The Liberal Democrats got this country to the crossroads, with the Government now, but the Chancellor has chosen the path into the mire.

An awful lot of what the Chancellor said today we have heard before: big promises from the Dispatch Box that are never met—less long-term plan, more short-term scam. This is a microwave Budget reheated again. We have transport projects delayed and abandoned, and housing projects stalled and unfunded.

Not only are flood-hit communities such as mine left desperately holding out their hands for urgent support, but the Chancellor is asking flood victims to pay, through their premiums, for the defences he should have built in the first place. Actions speak louder than words.

The cost to Cumbria of the infrastructure destruction from the floods in December is £500 million—the Government have given £2 million. The main road that connects the whole Lake District is still closed. Never mind that it costs small businesses and big businesses across the Lake District £1 million every day the A591 is shut—this Government care little about the north. They will make grand announcements, but they will achieve nothing.

Not a penny of the £125 million in EU solidarity funding the Government were dragged kicking and screaming to apply for has been dedicated today to the north or to any of the communities that are reeling and recovering from the floods that hit us in December. There has been no mention at all of fully funding any of the flood relief projects mentioned in the Chancellor’s speech.

The Chancellor says that this is a Budget to help young people. He says he wants to increase the length of the school day, but what good is a longer school day when there is no one at the front to teach? Those of us who do not have tens of thousands of pounds to send our children to private schools have more sympathy for those working in the state sector—more sympathy for the teachers who teach our children. I do not want my children’s teachers to be put under ever greater pressure. I want more teachers. I want them to be paid a fair wage. I want them to have the time and the space to create, to inspire and to teach. If the Chancellor wants schools to lengthen the school day, he must give teachers the money they need to do that properly.

This is a repeat of the seven-day-a-week NHS. What the Health Secretary is doing to junior doctors, the Chancellor now wants to do to teachers—teachers who are underpaid, overworked and undervalued by the Government. Every school knows that there is a massive recruitment and retention crisis, which is absolutely and totally ignored by the Chancellor.

[Mr Mark Williams (Ceredigion) (LD)]

As a former teacher, I agree very much with what my hon. Friend says. How will the drive towards academies enhance teacher confidence and, indeed, standards in schools?

[Tim Farron]

My hon. Friend makes an excellent point, based on real, first-hand experience. We know that the drive to compulsorily move all schools to academies is about centralisation, not localisation; it is about rearranging the deckchairs, making life harder for headteachers and teachers, and listening to special advisers, rather than teachers. It is hugely damaging for our educational system and our children.

The fundamental problem in schools across the country at the moment is the recruitment and retention crisis, and the Government are today choosing to put teachers under extra pressure. Instead, the Chancellor should pay our teachers more.

Perhaps the Chancellor knows young people who have the ability to save £4,000 a year, but I do not, so let me enlighten him: the lack of an ISA scheme is not the reason young people are not saving; it is the debt and soaring house prices that he is heaping on them.

This Chancellor’s ambition is not to devolve power but to devolve debt. His decision on business rates is a good one for business and one that we have been calling for, but he refuses to pay for the devolution of business rates, and that will be disastrous for the communities in which these businesses are located. He is moving his tough decisions on to local government. Social care, local transport and rubbish collections will all be under much greater threat. With his changes to public sector pensions, our schools and hospitals face a further bill of £2 billion. That is a stealth tax on education and health—not a headline for the Chancellor but a massive headache for headteachers, doctors, and nurses.

This is the Chancellor’s sweet and sour Budget. He makes bold claims that never materialise, masking real pain. There is no serious immediate investment in transport, broadband, housing or green energy, just far-off plans that exist only on a Whitehall spreadsheet—plans written by political advisers no doubt high-fiving each other in the boardroom over grand announcements that will never actually materialise, ignorant of their impact on real people.

The Chancellor talks about fixing the roof when the sun is shining. There are 0% interest rates. The sun is shining yet he chooses to knock holes in the roof. This would be the moment to be ambitious and to invest in the infrastructure for the long-term economic future of our country. On the one side, we have a Government choosing to attack the very fabric of our communities, and sadly, on the other, an Opposition too focused on themselves to be able to stand up for the real people in this country. We owe our constituents, and we owe Britain, better than this. It is time that we had a Government who showed a little more respect to the people in this country who care for us, who teach our children, and who keep us safe. Britain deserves better.

EU Referendum: Timing

Mark Williams Excerpts

Tuesday 9th February 2016 Commons Chamber

[Mr Nigel Dodds (Belfast North) (DUP)]

I beg to move,

That this House notes and regrets that the Government appears set to rush to a referendum on the UK’s membership of the European Union in June 2016; believes that no case has been made for holding a referendum at such an early stage, and that further, any such needlessly premature date risks contaminating the result; believes that a subject as fundamental as EU membership should be decisively settled after a full and comprehensive debate; notes the recommendations of the Electoral Commission on best practice for referendums; further notes that there are elections happening in Northern Ireland, Scotland, Wales, London and some local authorities in May 2016 and that the First Ministers of each of the devolved administrations have all expressed opposition to a June referendum date; and urges the Government to set the date for the referendum having respect for the May elections as distinct electoral choices.

The referendum on EU membership is one of the biggest decisions that the people of this country will be asked to make in our lifetime. I, for one, am glad that we have been afforded the opportunity to have our say. The Democratic Unionist party campaigned long and hard, when the two major parties were against a referendum, for the people of the United Kingdom to have their say. I commend the Government very much for introducing legislation to allow the referendum to take place during this Parliament.

Today’s debate is about the timing of the referendum and the date on which the vote is held. Some Members who support our motion hold different views on EU membership and, indeed, on whether we should have a referendum at all. However, whatever side of the argument we are ultimately on, we agree that, when the referendum is finally held, there must be the fullest, most comprehensive debate possible, which does not overlap with, or otherwise become enmeshed in, the election campaigns in May for the Scottish Parliament, the Northern Ireland and Welsh Assemblies, and indeed for that matter, for the London Mayor, and other local elections.

[Mr Mark Williams (Ceredigion) (LD)]

I am grateful to the right hon. Gentleman for taking an early intervention. Does he take comfort from the fact that the view that he has just expressed has been endorsed by all the party leaders in the National Assembly for Wales—not just the First Minister but the Liberal Democrat leader, the Plaid Cymru leader, the Labour leader and, critically, the Conservative leader?

[Mr Dodds]

The hon. Gentleman makes an extremely important point, which I shall come to, about the cross-party nature of the sentiments behind the motion. It is not motivated by one side or the other on the EU referendum debate, or by a party political consideration, and it has the support of a diverse range of parties on both sides of the argument. The issue needs to be taken very seriously by the Government, and cannot be dismissed lightly or set aside easily, given the breadth of support that it attracts from all parties, including the major parties mentioned by the hon. Gentleman: the Conservative and Labour parties in Wales, and the Labour First Minister in Wales. It would be interesting to know the position of the main parties in Scotland.

Financial Conduct Authority

Mark Williams Excerpts

Monday 1st February 2016 Commons Chamber

[Mr Mark Williams (Ceredigion) (LD)]

I pay tribute to the hon. Member for Aberconwy (Guto Bebb) for his persistence in pursuing this cause. I counted three debates that he had initiated with the support of the Backbench Business Committee, but he reminded us that there have now been four. I spoke in the first three, and I now speak again on behalf of my constituents who have been affected specifically by the mis-selling of interest rate swap products. Many of them have been denied justice, notably those who were sold tailored business loans or hidden swaps, largely by Clydesdale and Yorkshire bank, and who have been denied any semblance of justice.

I am compelled again to mention the case of my constituent Mr Mansel Beechey of the Hen Lew Du public house, which was well known to the hon. Member for Aberconwy in his student days. That excellent establishment is in the heart of my constituency. Mr Beechey first complained about the sale of his tailored business loan—shamefully, an unregulated product—back in 2012. It took Clydesdale and Yorkshire six months to respond to that formal complaint, and even now the matter remains unresolved. Cynics would suggest that there is an expectation, or rather a hope, that it will be kicked into the long grass and disappear. The reality is that much of the bank’s lending is done through TBLs, which fell outside the remit of the FCA review, with the result that sufficient redress has been avoided.

I remember when the hon. Member for Aberconwy first told those of us who were involved in his “bully banks” all-party group—the all-party parliamentary group on interest rate mis-selling—that a voluntary review was forthcoming. There was an acknowledgement that the glass was half-full, there was an expectation that it might well fill up, and there was a hope that the proverbial spotlight would be shone. With hindsight, however, and given the bitter experience of many of our constituents, we see that the process lacked transparency and rigour, was neither robust nor effective, and was significantly skewed in favour of lending institutions.

We looked to the FCA to sort that out. When the FSA morphed into the FCA, we were assured that the new organisation would enforce rules, punish breaches, and focus on the behaviour of financial professionals. That is why there was such huge disappointment in the decision, sneaked out around new year’s eve, not to undertake a review of banking culture.

What concerns me most is that the redress scheme brokered by the FCA excluded a huge number of people, even before the process of drilling down and examining the inadequacies of the scheme. As the hon. Member for Aberconwy said in his opening remarks, it excluded many people through its definition of “sophistication”. It also allowed some commercial lending to remain unregulated. As it was so narrow and restricted, it did not deal with the reality of what went on. As it stands, it will not change or reform banking behaviour or compensate people properly.

If the FCA’s review process was transparent and fair, why were customers not given a chance to view the evidence that the banks presented to the review panel, and, if necessary, given a chance to comment on it? Why does the FCA fail to see that there will always be suspicion and mistrust while the process is shrouded in secrecy, and customers are denied an opportunity to view the evidence of the banks’ own review team? Why is the controversial issue of the offer of alternative products as part of the redress scheme not being addressed? Reviewers seem intent on suggesting that if my constituents had not take out a particular type of hedging product, they would almost certainly have taken out something very similar. That is currently the position of my constituents Mr and Mrs Collier of Aberaeron, who were offered derisory compensation and another almost identical product. Is it really the case that providing customers with an alternative product as part of the redress is a widely established and accepted principle?

Until the faults of the current scheme are rectified or remedied, and until the FCA addresses these issues— including, critically, TBLs—I am minded to support the motion. We need a truly independent, comprehensive, forensic examination, and a comparison of a sample of sales of historic interest rate hedging products involving all banks, all product types, and a range of customer profiles. We need a re-examination that relies not just on banks’ records, but on customer testimony and a full review of documentary evidence.

In the meantime, I look at the landscape of my constituency, which has clearly been targeted by tailored business loan salesmen. At one point, my constituency office was working on 30 cases across Ceredigion involving asset-rich businesses, hoteliers and farmers. We even took out an advertisement in the local newspaper to glean whether there were more cases, and they were forthcoming. Many of those businesses have now gone; some are hanging on but have been unable to grow to their full potential. Those constituents have no trust in the banks and no trust in the FCA. We regard with disdain the abandonment over the new year of the review into banking culture, although perhaps it was not altogether surprising to my constituents, given their experiences. What an indictment of the FCA!

This pattern was repeated in every constituency in this country. Every one of the hon. Member for Aberconwy’s debates on this subject has revealed a huge range of experiences. I think that we in this House all know that businesses have been targeted by the banks, but has that been acknowledged sufficiently by the regulator? It did nothing when the mis-selling was going on, despite an emerging pattern of complaints. There should be an obligation to investigate further when such a pattern emerges. Nevertheless, it continued to do nothing for seven years, and a decade on many businesses have still had no redress.

The regulatory response to mis-selling, from the FCA and the Financial Ombudsman Service, has focused on the wrong question. Instead of asking why the banks were trying to sell interest rate products at all—the culture question—the focus has been on what businesses would have done had they not picked the product they were offered. Let us take the example of Mansel and Sandra Beechey. Their product was not included in the FCA review despite the fact that fixed-rate loans were to all intents and purposes the same as a stand-alone product. The FCA continues to maintain, as have Ministers, that those products remain outside regulatory protection. There has been no compensation. Richard and Lee Collier’s case was part of a review. They suggested that they would most definitely have taken an alternative product. That alternative product was two months shorter than the one they signed up to and with a base rate that was 0.12% lower. That is unacceptable. Huw and Jackie Roberts were denied the 8% interest on over £30,000 for their business. That too is unacceptable.

Tourism Industry and VAT

Mark Williams Excerpts

Tuesday 17th March 2015 Westminster Hall

[Nadine Dorries (in the Chair)]

No time limit has been allocated to speeches in this debate. I have seven Members down to speak, but there are a lot more than that in the Chamber, so if you wish to speak, you will have to catch my eye. With interventions considered, if Mr Williams takes only 10 minutes to introduce the debate, Members will have 10 minutes each, but there may be less time than that, so some brevity would be appreciated.

[Mr Mark Williams (Ceredigion) (LD)]

I am grateful for the opportunity to have this debate and it is a pleasure to serve under your chairmanship, Ms Dorries. In the midst of Wales tourism week and on the eve of the Budget, I would like to make the case for a reduction in the VAT rate for the tourism industry from 20% to 5% specifically, and importantly, for visitor attractions and accommodation, to bring our country into line with competitor destinations in the European Union.

The Minister has been well lobbied on this issue and perhaps he gets tired of hearing the arguments that some of us advance for that cause, but I would like to draw his attention to research published recently on behalf of the Cut Tourism VAT campaign. I am aware that the campaign recently met Treasury officials. The research further strengthens the case for making a change in our VAT regime. That case is borne out by the number of Members here for the debate representing constituencies across the United Kingdom.

[Mr Angus Brendan MacNeil (Na h-Eileanan an Iar) (SNP)]

As the hon. Gentleman is mentioning the diverse, wide range of constituencies, this is an opportune moment to say that I have had correspondence from Shonnie MacRitchie from the County hotel in Stornoway, who points out that the UK is the 138th most competitive of 140 for VAT in tourism. Indeed, there are only two other countries in the EU that have not reduced that VAT rate. That could be done now without any derogation from Europe, so does he agree that it should be done?

[Mr Williams]

I am mindful of your stipulations, Ms Dorries, but I very much concur with that intervention. The debate is about making all component parts of the United Kingdom competitive across the board with our friends and colleagues in Europe. There are few constituencies—in fact, I cannot think of any—that would not benefit from a reduced rate of VAT, whether through accommodation or visitor attractions.

[Mr Adrian Sanders (Torbay) (LD)]

On that point, my constituency would benefit by about £10.5 million as a result of such a change. This is about not just the tourist resorts, but the inner cities, which will benefit even more. It is a question of how we get the support of MPs from areas not known for tourism—particularly those from London—which will benefit enormously.

[Mr Williams]

I am grateful for that intervention. My hon. Friend is right: the name “English riviera” speaks for itself about the importance of the tourism sector to his constituency. He is right that more generally it would benefit just about all component parts of the UK: cities and rural areas alike. That is the spirit in which the debate and the Cut Tourism VAT campaign’s call has been made.

[Anne Marie Morris (Newton Abbot) (Con)]

Does the hon. Gentleman agree that there is perhaps a particular challenge in those parts of the country that are overly dependent on tourism? In the south-west, tourism is a substantial part of our economy.

[Mr Williams]

My hon. Friend is right that the debate has a strong, important regional dimension. That is borne out by the representatives here today.

Such is the nature of the debate, with it being a few weeks before Dissolution, that it could be something of a damp squib. However, I would rather raise this matter with the Minister before the Budget than after it. In many ways this is an opportune moment to remind ourselves of the importance of the tourism sector. In Wales, we are celebrating Wales tourism week in which thousands of our local hoteliers and attraction owners will be showcasing what Wales has to offer. What better way is there not just to celebrate what is happening in the industry at the moment, but to promote its opportunities for growth? That is what the debate is all about.

The tourism sector currently contributes £3.1 billion to Wales’s GDP, which is 6% of its total. It also accounts for 8% of jobs in Wales—a huge number. When we add in those supporting businesses down the supply chain, we see that the sector contributes about £7 billion to Wales’s GDP, which accounts for 14% of the Welsh economy and 15% of jobs.

Quite rightly, the promotion of the Welsh tourism sector is a devolved responsibility. Visit Wales does a lot of excellent work in promoting the Principality, but on VAT it is the Treasury and this place that has primacy and that is why we are asking for action. The debate is about sustaining the tourism sector, but, critically, it is also about growing it. I believe that this could give the industry the financial jolt that it needs.

[Mr Mike Hancock (Portsmouth South) (Ind)]

The hon. Gentleman is coming on to sustainability. We are looking not only to make jobs, but to sustain those already there. Many people in the industry are finding it difficult to keep going, but if a VAT cut were to be implemented, that would go an enormous way towards retaining those jobs.

[Mr Williams]

The hon. Gentleman is right. It is also about sustaining and building on the quality of jobs in the industry. That is important. Traditionally, the level of wages in the tourism sector has been low. However, I am confident that any VAT cut would feed its way through to wage increases as well.

[Caroline Lucas (Brighton, Pavilion) (Green)]

Will the hon. Gentleman give way on that point?

[Mr Williams]

Yes, and then I really am going to proceed.

[Caroline Lucas]

I am grateful to the hon. Gentleman for giving way and congratulate him on the debate. When it comes to jobs, does he agree that lots of young people find jobs in tourism, so the benefits of increasing tourism will go disproportionately to them, which would be good from a social perspective?

[Mr Williams]

The hon. Lady is right that it is about developing for a social perspective and building a skills base for the future. Many parts of the tourism sector are ideal way for doing just that.

I will proceed and not take any more interventions. The Cut Tourism VAT campaign commissioned a report by Nevin Associates Ltd, which suggests that a change in VAT would give the UK a £4 billion economic boost, with £166.5 million coming to Wales. There would be 6,000 more jobs in Wales and 120,000 across the UK. In my constituency, with its vibrant local tourism sector, that could amount to a £5 million injection into our economy.

My hon. Friend the Member for Torbay (Mr Sanders) talked about a £10.5 million impact in his constituency, but £5 million would be very important to Ceredigion’s economy. That could create 166 jobs directly and many more indirectly.

Let us look at the arguments borne out of the research a little more closely. First, we need to talk about the increased tax revenue for HM Treasury. Research indicates that, yes, there would be a net revenue loss to the Treasury for the first two years, but after five years such a move would generate a positive net value of £668 million and over 10 years that value could reach £4 billion. Those are significant figures.

Where does that money come from? The research indicates six key areas. First, there will be lower prices, which will create greater demand and much higher turnover in the sector. Secondly, the Treasury will receive increased income tax and national insurance payments generated by the new jobs that we have talked about and, critically, by higher wages in the sector. Thirdly, there will be savings in social security payments as a consequence of lower unemployment, with some of the new jobs created in the sector taken up by those who were previously unemployed. Fourthly, there will be increased corporation tax payments as a result of the higher turnover and growth in those businesses that we all aspire to. Fifthly, there will be an increase in income taxes paid on dividends to shareholders, which would be generated by the accommodation and attraction sectors. Sixthly, there will be the multiplier effect of the additional taxes generated down the supply chain from the accommodation and attraction industries.

I think back to debates and the petitions presented at the time of the VAT measure on static caravans, which stemmed from an unfortunate Budget. I am sure that tomorrow’s Budget will be vastly more successful than that. I remember talking to operatives in my constituency about that very narrow thing, the sale of static caravans in west Wales, and the knock-on effect of the reduction on VAT was immense. The highly integrated nature of the tourist economy was clear in that debate, so the knock-on effects of this change could be hugely significant for the rest of the economy. As I said to my hon. Friend the Member for Newton Abbot (Anne Marie Morris), it would be a real boost for regional economies and tourism-dependent areas such as mine. In my local economy, if we take out the big employers, such as the national health service, the local authority and two universities, a cross-section of small businesses is left, largely involved in farming and tourism, and we need to grow those businesses.

I move on to the impact that this change would have on the UK’s balance of trade. New research published in this area has provided information that was not considered before; the research shows that a significant boost would be provided to the UK’s exports. That is important, given the internationally competitive nature of the sector and concerns about the UK balance of trade deficit. In 2013, tourism expenditure by overseas visitors to the UK was £21 billion, which accounted for 3.8% of the UK’s total exports of £550 billion. Over a 10-year period, the research by Nevin Associates Ltd indicates that the total improvement in the UK’s balance of trade in response to a VAT cut would be £20 billion, which is a huge potential contribution.

The other area of growth is the number of businesses paying VAT. We all know that the UK tourism industry is populated by a very large number of very small firms that may or may not choose to expand or invest in order to keep below the VAT threshold. If my hon. Friend the Member for Aberconwy (Guto Bebb) is called to speak, he may want to talk specifically about the issue of VAT thresholds. Lower VAT would encourage these companies to register for VAT and develop their businesses.

[Dr William McCrea (South Antrim) (DUP)]

Will the hon. Gentleman give way?

[Mr Williams]

I will take one last intervention.

[Dr McCrea]

I congratulate the hon. Gentleman on securing the debate. He has been emphasising all the pluses and why we should be acting to reduce VAT, but has he made an assessment of the likely effects on the economy from failing to act on reducing the rate of VAT to accommodation, restaurants and visitor attractions?

[Mr Williams]

Well, I am specifically talking about visitor attractions and accommodation. In this House we are all united by one thing: we want to see our economy growing and thriving. My contention is—I think it is the contention of most people in the Chamber today—that reducing VAT is a strong way of boosting our economy. Lower VAT would encourage these companies to register for VAT and develop their businesses. In France, the amount of businesses falling outside the tax regime has been cut by an estimated €720 million a year, following hospitality VAT reductions.

As the Minister is aware—this is the root of this debate—differential rates of VAT can be introduced due to EU legislation, and all but three countries in the EU have a reduced rate of VAT on the tourism sector. Only the UK, Denmark—which has no reduced rates for goods or services—and Slovakia have not reduced rates. Lithuania used to have no reduced rate, but in January, they lowered their rate of VAT on hotel accommodation to 9%.

Looking at the Irish experience—perhaps pre-empting comments from friends from Northern Ireland today—according to the review of the policy in Eire by the Irish Government, who cut tourism VAT in 2011, they have seen employment increase by 20,000 people directly in the tourism sector. Operators have passed VAT reductions down to customers and as a result, we have seen a sustained growth in tourists and earnings, meaning that what was a temporary measure is now to become a permanent one.

The Minister will also be aware of the work of Professor Blake and the evidence session of the Select Committee on Culture, Media and Sport in which he spoke in January. He concluded—he is a former Treasury adviser—that reducing tourism VAT was a very efficient tax reduction for two reasons. First, he said that VAT on tourism was not an efficient way of creating revenue, as tourism was an elastic product, meaning that demand would go up as well as down. Secondly, he said that tourism VAT was a tax on domestic goods while foreign goods were being left untaxed. Therefore, that made the VAT highly inefficient, as customers will buy foreign goods over domestic ones. Those of us who are trying to promote growth in the domestic sector want people to have holiday weekends in Aberystwyth and Aberaeron, not over in Barcelona and Torremolinos. That is the nature of the competition that we face.

As part of the recent Select Committee on Welsh Affairs report, it was agreed to look at this issue. The Select Committee agreed and included in its recommendations to the UK Government that

“the UK Government review its policy on the VAT rate for…tourism…with the ultimate aim of reducing the current 20% rate.”

The Government rejected that. I am not expecting a miraculous change overnight on the basis of this debate, although that is what I wish for. However, I hope that at the very least, this debate will promote continued reflection on the matter by the Treasury. There is a message there for the Labour party as well, because sadly, to date, the messages we have had on this issue from Labour have not been particularly robust either. However, what I can say is that the Cut Tourism VAT campaign will continue to push the case as robustly as we can.

Finally, the global recession may well have been the main reason, between 2006 and 2012, for falling numbers of visitors to these islands. However, since 2013, we have experienced—Wales included—an upward trajectory, which we all celebrate. The Government, through VisitBritain, have put funds into promoting tourism to good effect, as have our Assembly Government in Cardiff. However, our contention is that there is a vast potential for growth. As the economy continues to grow, as deficit reduction yields results and as public finances are managed, the Government—whatever their political complexion—need to address this issue.

I detect a huge enthusiasm in large parts of this country for developing the tourism sector. There is a great deal of innovation and some really impressive personalities out there developing their businesses. Reducing VAT in this selective way—on accommodation and on visitor attractions—would be the biggest boost imaginable for our very important tourism sector.

Equitable Life

Mark Williams Excerpts

Thursday 26th February 2015 Commons Chamber

[Mr Syms]

I agree. For many of us, it is a start rather than the finish.

The constituents I see in my surgeries have a quiet dignity about them but still feel aggrieved and think that the Government ought to move some more. My main plea today is for the Treasury to consider the issue. The public finances are still a challenge and will be a challenge for the next Government, but I think that as things improve, the Government should be able to provide further funds.

[Mr Mark Williams (Ceredigion) (LD)]

Will the hon. Gentleman give way?

[Mr Syms]

I will in a moment; I just want to make a few more points.

The reality is that most of those affected do not have the ability to earn money or to improve their particular circumstances. They made decisions predicated on certain estimates, and they have been badly let down. I am glad that the coalition Government have moved as they have. We have a good story to tell so far, but it could be an even better story if they listened to the concerns of Members on both sides of the House and made further movement.

The fact remains that £1.5 billion has been allocated, and we have heard that £1 billion has already been paid out to 896,367 policyholders, but that 140,000 have been untraced. On the assumption that many will inevitably remain untraced, it must leave a balance in the fund of £500 million. At what point, then, does the scheme conclude that it will not trace some of these people? At that point, will some of the £500 million be available for further distribution to the 896,000 or so who have already received some money? We can argue about whether there should be more money, but if £1.5 billion has been allocated and not all of it has been sent out, that provides quite a strong argument for making a decision at some point to allocate more of the money available in the Treasury to help these people. I hope that the Government will address that issue first.

The second issue is whether we could top up the £1.5 billion in due course to provide a much more satisfactory conclusion. Like many colleagues, I have retired constituents in my constituency—Poole—who are prudent and sensible people. Most of them made provision for their retirement in the best way they could. They did not go on gambling cruises and they did not go to Las Vegas: because they were responsible, they decided to invest. This provides a very strong case for a Government who believe in the ethics of people acting responsibly to stand by those people when they have been let down.

--- Later in debate ---

[Stephen Lloyd (Eastbourne) (LD)]

I apologise for being a few minutes late at the beginning of the debate. It is a pleasure to co-sponsor it with my hon. Friend the Member for Harrow East (Bob Blackman) and the hon. Member for Leeds North East (Fabian Hamilton). I would like to compliment the latter on being as active during the last Government as he has been during this Government to fight the Equitable Life pensions corner. I pay tribute to him for that.

Many have spoken today, and this issue has been going on throughout the term of this Parliament and for many years before that. I am keen not to repeat what others have said. Let me make it clear what we are asking for through this debate, which is for

“the Government to make a commitment to provide full compensation during the lifetime of the next Parliament as the economy and public finances continue to recover.”

That wording was deliberate. We recognised, as we always recognised on the all-party parliamentary group, that we inherited a catastrophic economic situation so that providing the full amount of money would cause real problems. I believe that we have been reasonable and sensible all the way through. We understand the challenges faced by the Government, and the motion, as I have clarified, recognises that. We are fully aware of the challenges with our own economy and the global economy, so we are not asking for everything appropriate to be paid immediately. Rather, we advocate achieving doing that over the next few years as the economy recovers, which is fair and reasonable.

Ann Abraham was the parliamentary ombudsman all those years ago, producing the final report in 2008. She said:

“The central story of this report is that this robust system of regulation was not, in respect of the Society, implemented appropriately—that is, consistently, fairly, and with proper regard to the interests of those directly affected”.

All of us who are present today, as well as the 200 or so members of the all-party parliamentary group, recognise that the ombudsman herself saw that the regulatory framework had failed, and we understand the financial challenges. However, the reason we are here, and the reason the all-party parliamentary group, with the support of EMAG, has not stopped lobbying and campaigning throughout the current Parliament—I was privileged to become its secretary literally within weeks of being elected in 2010—is that this is a matter of not just probity, but honour. The regulator failed, and this was Government regulation.

[Mr Mark Williams]

My hon. Friend is right to say that it is a matter of honour, but it is also a matter of urgency. He is making his case in a very modest way. May I invite him to endorse what was said earlier about the urgent need to settle individual claims—I think that the figure we heard was £115 million—and to address the issue of elderly people whose cases may well not be settled before they die unless we act now?

[Stephen Lloyd]

My hon. Friend is absolutely right. A number of people are now reaching an age when something needs to be done extremely quickly. A constituent of mine, Billy Murphy, a variety artist for 70 years, had been lobbying me patiently, and I had been supporting him, until he sadly passed away in January. He had been making contributions for many years, and he was a very good example of the people to whom my hon. Friend and many others have referred: decent, hard-working people who were prudent and put money aside. Those people have lost out, not because of their own inadequacy —not because they took a punt, or played the stock market—but because they invested in a well-established and respected pensions company that was regulated by the Government. It was regulated by the Government: that is the whole point, and that is why we as a nation, whichever Government are in power, have a real responsibility to do what is right.

Housing Need (Treasury Assistance)

Mark Williams Excerpts

Wednesday 17th December 2014 Westminster Hall

[Andrew George (St Ives) (LD)]

It is a great pleasure to serve under your chairmanship, Mr Sanders. I am delighted to have secured this opportunity to introduce a debate on assistance from Her Majesty’s Treasury for people in housing need, because without question the most pressing and chronic problem in areas such as mine is the lack of affordable homes for the thousands of local families who are inadequately housed or housed in properties with extortionate rental charges.

My area and others are characterised by a very significant mismatch between earnings levels and house prices. There is a large and growing market for second homes, investment homes and retirement homes. Of course, over the years there has not just been the 50% council tax discount for second home owners, which was introduced in the early 1990s; other incentives are available that encourage, that are a further stimulus for, the purchase of second homes especially and investment properties in areas such as mine. For example, people can take massive advantage of small business rate relief if they are letting their properties in the local holiday market, while also of course using them for their own use; and by shifting from council tax to business rates, they can end up paying absolutely nothing in terms of their contribution. That is a further and often hidden stimulus for the purchase of second homes.

I have undertaken surveys of estate agents across my constituency on three occasions, and we have found that over time it has become the case that somewhere between four and six times as many properties are sold to second home buyers as to first-time buyers. That is a very significant and quite shocking statistic. It shows what is going on in markets such as mine. I am not saying that that is happening in the rest of the country, but it is certainly happening in constituencies such as mine, which are very attractive for second home purchases.

There is a rather macho obsession with building homes as the sole, two-dimensional solution to our housing problems, but that does not work. Cornwall has been one of the fastest growing places in the United Kingdom in the past 40 to 50 years, so we have done exactly what successive Governments have encouraged us to do; we are certainly not nimbys. However, although the housing stock has significantly more than doubled in that period, the housing problems of local people have become significantly worse, so we know that simply building thousands of houses is not in itself the answer. We need to do something a little smarter to target those who are in particular housing need in areas such as mine.

I want to address myself to the need to find constructive solutions that would work in areas such as mine. First, I acknowledge and congratulate the Government on some of the things that they are doing. Since 2010, whether there has been new money or a replication of old money or a continuation of programmes that the previous Government had engaged in, we have seen various things happen. We have seen the affordable homes programme, the affordable homes guarantees programme, the trial of direct Government provision—a new delivery model—the affordable rent to buy scheme, which was introduced in 2013, and the new homes bonus, on which an announcement was made yesterday about the latest tranche of money going to local authorities. Of course, that is not just to build houses, but for other economic purposes. However, it certainly provides a stimulus to encourage planning permissions for developments. We have seen the growing places fund, the Get Britain Building fund, the builders finance fund, the estate regeneration fund, the single local growth fund and public land schemes, which have been announced over the years.

In terms of home ownership initiatives, the Government first tried, in 2011, the First Buy scheme, which was closed in March 2013. That was overtaken by the Help to Buy scheme, a very welcome initiative. It replaced the First Buy scheme and is widening the criteria for eligibility by increasing the maximum home value up to £600,000, so it is not just for first-time buyers, but for those looking to move up the ladder. There is the NewBuy Guarantee scheme and the Help to Buy: mortgage guarantee scheme. There is the right to buy and, in a moment, I will come on to shared ownership.

In the private rented sector, there is the Build to Rent fund and the private rented sector guarantee scheme. Then there are other schemes, such as real estate investment trust schemes and self-build and custom-build schemes; and two elements of the recent autumn statement were on the subject of shared ownership.

Obviously, all those schemes and all the things that will provide a stimulus and assistance, which might be targeted at the groups that I am talking about, are welcome, but whether they are sufficient and will help in areas such as mine, only time will tell. I will be making a suggestion today about what we need to do in areas such as mine. I am not saying that this needs to happen across the country, but it certainly needs to in areas with a significant mismatch between earnings levels and house prices and extortionate private rents, and that are characterised by a social rented sector that is significantly smaller than that in many urban areas. Less than 10% of the stock in my area is social rented accommodation.

We need to construct a new lower rung on the housing ladder. The lowest rung on the housing ladder is out of reach for the vast majority of people, who, in other circumstances—perhaps decades ago or in other parts of the country—would consider it reasonable for them to expect to be able to move into home ownership by the time they leave their parental home. I am talking about teachers and nurses—people in stable professions who simply cannot get into the housing market. It is those people whom I particularly want to help—those who have an expectation, a reasonable aspiration, of moving into home ownership, but who simply cannot and are then locked into the extortionate private rented market.

[Mr Mark Williams (Ceredigion) (LD)]

I apologise for missing the start of my hon. Friend’s speech. He mentions key workers. I represent a rural area, albeit in Wales. I suspect that it is out of the ambit of much of what he is saying, but one problem that we are having now is the difficulty of keeping key workers in west Wales—I am thinking of the health service and teachers—for exactly the reasons that he has identified. Does he agree? Is that a concern in west Cornwall, too?

[Andrew George]

That is absolutely right. As I said, this issue is not unique to west Cornwall and the Isles of Scilly. The Isles of Scilly has a particular market that is different from that in other areas: it is more like a London market than a rural market. Nevertheless, as my hon. Friend rightly says, this issue is so significant in many parts of the country. It is without question the most significant social challenge that we face. The Government can and should do more, and I hope to encourage them to do so.

I said that we need to construct a new lower rung on the housing ladder. There are problems with shared ownership accommodation. First, there is not enough of it; there is not an effective market. There are only two lenders lending to those purchasing shared ownership accommodation—Nationwide and Halifax—and those lenders are extremely circumspect and apprehensive. They look at these schemes on a case-by-case basis and are extremely cautious, particularly at the point of resale, which is often a significant discouragement to the development of the shared ownership market—that new lower rung on the housing ladder.

Also, occupants tell me that they have to pay near market rents on the remainder, the share of the property that they do not own, and they feel that they are not rewarded for maintaining the property or for any improvements and investments. The cost and burden of maintaining or improving the capital value of the property is not shared with the housing association or registered social landlord that owns the other part of the property. The home owner’s share of the property is often less affordable by the time of sale, and the sale process is often over-long and legally complex.

I note that in the autumn statement the Chancellor announced that the Government would extend the stamp duty land tax multiple dwelling relief to include lease and lease-back arrangements with housing associations on shared ownership properties, with a view to increasing investment in shared ownership. The National Housing Federation has welcomed the measure as something that may be of assistance. Lowering the stamp duty land tax on multiple purchases of property from 4% to 1% may get institutional investors into the market. That can only be welcomed, and it must be kept under review. In addition, I note that the Government intend to work with housing associations, lenders and the regulator to identify and lift barriers to extending shared ownership, which will include consultation on options for streamlining the process for selling on shared ownership properties. I welcome that initiative to work with those associations and others to find a way forward.

I think I have described reasonably well some of the current problems with the development of the shared ownership market. However, the National Housing Federation welcomes the Government’s proposals. I hope that the dialogue will be constructive and that the Government will keep an open mind about the kinds of tools that could be brought into play to enable a significant scaling up of activity in the sector.

When it comes to solutions, my constructive proposal is to ask the Government to act not necessarily as a funder but as a guarantor. The Government—brilliantly, in my view—established the green investment bank. In the same way, I suggest that rather than spending money that they cannot recoup, they should establish an affordable homes fund or intermediate housing fund. Such funding could be revolved to provide the necessary liquidity and confidence among lenders to enable shared ownership schemes to get off the ground, and to facilitate the resale process for such properties. I strongly encourage the Government to look seriously at that proposal.

I am looking forward to hearing from the Minister in a moment, and I have sent her a proposal for the establishment of an intermediate housing fund, on which I have worked with the National Housing Federation. I am not precious about the details of that proposal, but I hope that this Government, the next Government or some other Government—I do not think that this is a party political issue; surely, people across all parties can see the logic and the common sense in this—will consider the concept of such a fund, which would not only benefit the kind of people whom I described earlier, but would be facilitated and enabled by registered social landlords and community land trusts.

Under my proposal, the intermediate housing fund would be administered by the Homes and Communities Agency, although it does not necessarily need to be. It could be an independent body similar to the green investment bank. It would encourage a lending environment that would enable the liquidity necessary to take schemes forward. I believe that it would be a real game changer in the sector and that it would enable progress to be made. I have asked housing associations why they do not engage and buy back properties when people find it really difficult to sell them on, and the housing associations have told me that to do so would count against their contingent liability and restrict their ability to develop new schemes. For various reasons, it would be far better to set up an intermediate housing fund to facilitate such a solution.

The Minister will not be surprised to hear that my question to her is a simple one. Taking into account all that I have described, including the problems and my congratulations to the Government on their work so far, I believe that my proposal is the most significant way of taking the matter forward. Therefore, will the Government look carefully at extending the tools available to develop and scale up shared ownership and other intermediate housing products as an essential solution in areas, such as my constituency, which have high house prices and low wages?

Financial Conduct Authority Redress Scheme

Mark Williams Excerpts

Thursday 4th December 2014 Commons Chamber

[Mr Mark Williams (Ceredigion) (LD)]

I would say it is a pleasure to speak in this debate, Madam Deputy Speaker, but I wonder whether it really is. We have had three of these debates so far and, sadly, they have been enriched by the experiences right across the country of our long-suffering constituents. My contribution will be no different in bringing some of those experiences to the attention of the House, but I particularly wish to address the issue of fixed-rate loans—tailored business loans, as they are known in some quarters—how dangerous and toxic those products are, and how they remain excluded from the FCA review, an anomaly that should be addressed.

First, however, it would be remiss of me not to congratulate, again, my hon. Friend the Member for Aberconwy (Guto Bebb), the all-party group he founded and Bully-Banks. I shudder to think where we would be without him and those who were galvanised into founding Bully-Banks to push the agenda forward. It would be churlish if I did not at the start of my contribution acknowledge, as my hon. Friend did, the record of the redress scheme in so far as it is a redress scheme, but today’s motion clearly spells out our sense of disappointment. More than that, it highlights our feelings about the inertia, helplessness and heartbreak expressed by many of the small business owners who have been mis-sold these products in the cases we are all dealing with.

I have spoken in this Chamber before about one business in my Ceredigion constituency, and I will do so again. I can see at least two or three former Aberystwyth students here who will know the business in question. The asset-rich farms, hotels and pubs in my constituency, which is dependent on agriculture and tourism, were very clearly targeted by the banks. There was a time when the trickle of cases that came into my surgeries reached torrent proportions. There were many, many cases of people coming to see me. Clearly, the policies had a direct impact on the employment base of my constituency, reliant as it is on seasonal trade. If there is the prospect of three or four large hotels closing down in a constituency, it is a very serious matter.

I have mentioned the case of Mr Mansel Beechey, the licensee of the Hen Llew Du Public House in Bridge street, Aberystwyth, and I want to continue to use his example. The fact that it is an unresolved case speaks volumes. He made a complaint to the bank about the mis-sale of his tailored business loan, an unregulated product, back in April 2012. It took Clydesdale and Yorkshire Bank well over six months to respond to that formal written complaint and, despite the efforts of my office facilitating meetings with some of its most senior personnel, the matter remains unresolved. Dither, delay and prevarication are the watchwords of its game. Its most recent excuse was that matters could not be progressed because of staff leave. That was at the beginning of September. Let us not forget that I am talking about an iconic and once successful business—one that had a future—being put in jeopardy. The fear is that the bank seeks to put this matter into the long grass.

I refer now to the commendable work of the Treasury Committee, which conducted a brief inquiry into this matter. We heard evidence from Mr David Thorburn and Debbie Crosbie of the Clydesdale and Yorkshire Bank. The hon. Member for Dundee East (Stewart Hosie) raised the matter of the TBL sales process and asked Ms Crosbie:

“If a customer is able to identify that that process did not happen, that that warning was not explicit, that would count as a mis-sell would it, in terms of your review?”

Ms Crosbie replied in the affirmative. She said:

“We believe that once you examine that process, and find that it had not been carried out in accordance with what we had agreed is appropriate, we would absolutely redress a customer and we have done so on a number of occasions.”

Ms Crosbie also stated that

“the customer gets a fixed payment for a fixed period of time and that payment will never change as long as the customer does not want to terminate the agreement early.”

That is the mis-match between what we are told by managers, the experience of the Select Committee and the practice on the ground for Mr Beechey and his family.

Given the recent press coverage concerning the National Australia Bank, the parent bank, issuing a profit warning to Clydesdale and Yorkshire Bank and linking the bank to an imminent disposal, it is not surprising to learn that this bank drags its feet in addressing mis-selling issues with potentially dire consequences for some of our constituents. It serves its purpose to do so, often allowing the customers—my businesses in Ceredigion—to teeter on the brink in the hope that Her Majesty’s Revenue and Customs will then move in and finish them off.

I very much concur with what my hon. Friend the Member for Aberconwy said about the changing attitude to HMRC as the debate on consequentials has moved on. Sadly, the reality here is that virtually all of Clydesdale and Yorkshire’s lending was done via tailored business loans on fixed rates and, as those products fall outside the scope of the FCA review, the bank has thus far avoided any effective redress scenario.

My hon. Friend the Member for Nuneaton (Mr Jones) and others have talked about our despondency—and the despondency of our constituents—over the role of the FCA. When the Financial Services Authority morphed into the FCA, we were assured that the new organisation would enforce rules and punish breaches and that it would focus on the behaviour of financial professionals. In short, we were promised that it would be a true watchdog. We have looked to the FCA to sort out this mess and to do so in a way that is both fair and timely, but that has not happened. As we have heard from other Members, the FCA has still not released comprehensive details of what constitutes a mis-sale. The agreement between the FCA and the major banks on which the review process is founded remains a secret agreement. Where is the transparency and fairness for these businesses that are so badly affected? Where is this protection for customers that is supposed to be at the heart of the FCA’s work?

[Mr Henry Bellingham (North West Norfolk) (Con)]

I have a business in my constituency that took out a fixed-rate tailored business loan, which had a hidden swap attached to it. The bank is trying to say that it is not regulated. Surely the key point is one of fairness and of putting all these people back in the position in which they would have been before.

[Mr Williams]

My hon. Friend is right. It is about fairness and the implications of these policies. Whether the policies were sold independently or hidden in a loan agreement, the implication has been the same. They were sold by the same people and so should be included in any future review.

The redress scheme has excluded a large number of people. Even before we drill down and thoroughly examine the scheme, it is hugely significant that a large number of businesses fall outside it. The scope of the scheme is too narrow and restrictive. It does not deal with the reality of what has gone on, which means that, as it stands, it will not change or reform bank behaviour or properly compensate people.

The scheme sets out that

the IRHP Review does not require customers to assess for themselves whether or not their sale was compliant.”

If, as the FCA insists, there is no requirement for disclosure, how can it ever be possible to tell whether the banks, in reaching a judgment, are relying on erroneous information, or, as I have frequently come across, deliberately not taking information into account?

If the review process is to be transparent and fair, why is the customer not given a chance to view the evidence that the bank puts forward in the review and, if they feel it to be necessary, to have the opportunity to comment on it? How does the FCA fail to see that there will always be suspicion and mistrust when the process is shrouded in secrecy, and customers are deprived of the opportunity to view the evidence submitted by the bank to the bank’s own review team?

We need to address the controversial matter of the offer of alternative products. As part of the redress, reviewers seem to be hellbent on suggesting that if my constituents had not taken out a particular type of hedging product, they would almost certainly have taken out something similar. Is it now really the case that providing customers with an alternative product as part of redress is actually a widely accepted or well-established principle?

Despite the brief and the impressive statistics, the FCA is still failing to address the issue of confidence; there remains a crisis of confidence in the banking industry. Many people, such as Mansel Beechey and my constituent in a related matter, David Grant of Llechryd, have deep misgivings about the industry, and this is not just a matter of justice; in communities such as mine, the small businesses that the Chancellor, the Deputy Prime Minister and the Prime Minister have said are so important to our economic recovery need action and assistance. If we do not act, we will fail many of our constituents, and it will be to the detriment of us all in terms of both justice and the economy.

Wales Bill

Mark Williams Excerpts

Tuesday 24th June 2014 Commons Chamber

[Nia Griffith (Llanelli) (Lab)]

The new clause calls on the Secretary of State to issue a report on the further legislative steps needed to move to a model of reserved powers for the National Assembly for Wales. It seeks to prepare the way for Wales to enjoy the reserved model of powers, so that legislation should set out the areas that are reserved for the UK Parliament, rather than trying to define all the areas that Wales can legislate on.

The current situation is that the model of devolution in operation for Wales is the conferred powers model. Following the referendum in March 2011, the National Assembly for Wales was empowered to make primary legislation in the 20 broad policy areas. Therefore, the areas where the National Assembly can legislate are conferred upon it and listed in the statute. However, Scotland and Northern Ireland enjoy the reserved powers model, which means that the legislation sets out the areas where the devolved legislature cannot legislate—areas that are reserved to the UK Parliament.

[Mr Mark Williams (Ceredigion) (LD)]

At least three parties in the House support the reserved powers model, but can the hon. Lady explain what is meant by subsection (2) of the new clause? The hon. Member for Arfon (Hywel Williams) made this point. It says:

“Part 2, except the referendum-related provisions and sections 19 and 20 shall not come into force until the report has been laid in accordance with subsection (1).”

What is that caveat? What is the hold up in moving towards a reserved powers model in the new clause?

[Nia Griffith]

That provision is to ensure that the report is actually laid. That is the point of it. It says, “Let us make sure that this is a genuine part of what happens during the passage of the Bill, rather than the issue being kicked into the long grass.” Otherwise, the danger is that the new clause, which asks for further progress on reserved powers, would just be kicked into the long grass. That would be the problem. It is integrally linked now with the progress of the Bill.

[Mr Williams]

Is there any link with the point made by the hon. Member for Arfon about the financial provisions of the Bill?

[Nia Griffith]

The whole point is that this is what we want to see. We are committed to a reserved powers model and that is what we would like to see progress on. It seems a missed opportunity not to have that in the Bill, so we want to put it in.

--- Later in debate ---

[Mr Williams]

I share the passion for the reserved powers model. The point the hon. Lady is making about the contrast with Scotland and Northern Ireland is an admirable one. My party leader has said that. So has Plaid Cymru and elements of her party, but why do we need subsection (2) of the new clause? I do not understand. Why can we not proceed with the reserved powers model anyway?

[Nia Griffith]

The important thing is that we are firmly committed to the reserved powers model and we wanted to find a way to put that in the Bill. We have put it in the new clause in this way because that is what we have been advised.

The Silk commission part 2 makes the recommendation that Wales would be better served by the reserved powers model, and it therefore seems to us that the Bill provides an ideal opportunity to pave the way for that change. Not to do so would be a missed opportunity, which is why we are proposing the new clause. The model is already there for Scotland and Northern Ireland.

My right hon. Friend the Leader of the Opposition confirmed our commitment to a reserved powers model when he announced at Welsh Labour conference that Labour has a manifesto commitment for next year’s general election to introduce a

“new Government of Wales Act, with powers assumed as devolved to Wales, unless specifically reserved. Bringing Wales into line with Scotland—modernising and advancing the devolution settlement for generations to come.”

Labour is the party that brought devolution to Wales and Scotland. It remains the only party that is committed to and can deliver devolution in the UK and get the best deal for Wales. Therefore, let us look at why we believe that the reserved powers model would serve Wales better than the current model.

As the Welsh Government told the Silk commission:

“The reservation model is a technically superior method of devolving legislative competence on a devolved legislature. In our view, the conferral model is incapable of prescribing with any degree of certainty exactly what the Assembly can legislate about…The Welsh model therefore lacks…clarity and certainty, and much time is spent addressing potential arguments about whether provisions of a Bill relate to such undefined subject-matter.”

Indeed, the submission from the Hywel Dda institute of the Swansea university school of law also concluded that

“the reserved powers model is, in principle, superior in terms of accessibility, clarity, stability, sustainability, effectiveness and consistency with the principle of subsidiarity”.

--- Later in debate ---

As we know, subsidence plagues the south Wales valleys, and there is inevitably a relationship between it and the plight of many houses in valley communities. That prompts the question: is housing that is affected by subsidence within the scope of potential legislation? The answer is yes, but a strict reading of the 2006 Act as it stands does not make that very clear, because of the different ways in which the various exceptions are listed. I believe that a reserved powers model would make such instances much more intelligible, and much less fraught with difficulties of, in particular, a legal nature.

[Mr Mark Williams]

Some parts of the Act contain even more obvious problems. No doubt the hon. Gentleman will be as alarmed as I was to read in the Western Mail about a survey that suggested that 40% of people thought that the national health service in Wales was directly administered from this place. There is an issue about the clarity of our democracy and our systems, even when it comes to core issues such as that.

--- Later in debate ---

[Mr Mark Williams]

It is a privilege to say a few words in support of the Bill on its Third Reading.

The Silk commission made a serious attempt to tackle the deficiencies in the devolution settlement, notably the lack of responsibility and accountability at Cardiff Bay. Those principles have been carried forward in the Bill. In assessing the funding system, Silk properly identified what was required—not just accountability but economic incentivisation, empowerment, efficiency, equity and, above all, responsibility.

I applaud the Bill and thank my right hon. Friend the Secretary of State and his team in the Wales Office.

[Roger Williams (Brecon and Radnorshire) (LD)]

Many tributes have been paid to my constituent, Mr Paul Silk. It is extraordinary that because of the quality of the work that he and his fellow commissioners did, the Bill has gone through relatively easily, even with a few minor amendments.

[Mr Mark Williams]

I very much agree with my hon. Friend. Paul Silk has done the politics of consensus a great service. The commissioners, from all four parties, sometimes had to make compromises but arrived at an agreed report on two occasions. That is a mark of Paul Silk’s chairmanship and the quality of those commissioners.

Of course, my right hon. Friend is a Conservative Secretary of State—

[Bob Stewart]

A very good one.

[Mr Mark Williams]

Indeed—he is a very good Secretary of State on many issues.

I remind my hon. Friend the Member for Montgomeryshire (Glyn Davies) that this is a coalition Government and it is a Liberal Democrat achievement that we have got this far with this Bill. Last week I was at a book launch, as was the right hon. Member for Dwyfor Meirionnydd (Mr Llwyd), to celebrate the life of the late Emlyn Hooson—one of my hon. Friend’s illustrious predecessors—who on St David’s day in 1968 put forward a Parliament for Wales Bill that did not get very far. It is a mark of his work and that of many others from other political parties that we have reached this point today, albeit crystallised by my right hon. Friend the Secretary of State.

[Mr Llwyd]

Is it possible that the hon. Member for Montgomeryshire (Glyn Davies) is being churlish?

[Mr Mark Williams]

I could not possibly comment, but I will give way to him.

[Glyn Davies]

I would just like to say that the late, great Baron Hooson was a wonderful Member of Parliament who served Montgomeryshire and Wales with distinction for many, many decades; I do not want to be accused of being churlish.

[Mr Mark Williams]

My hon. Friend says that with great sincerity, and I know him to be a sincere man. I just wish to place on the record the fact that the process of devolution has been an achievement of politicians of all parties—Liberals, Conservatives, and friends from the nationalists and from the Labour party—over the years. That process of consensus has to continue if the process of devolution marches on.

[Susan Elan Jones (Clwyd South) (Lab)]

I would not wish the hon. Gentleman to continue without mentioning one of his predecessors, Lord Elystan-Morgan, who made an interesting point in his autobiography, saying that when he started his political career—many of us know that he did not spend his life in just one political party—he would not have dreamt that the process of self-government and devolution would have gone on to the extent that it has.

--- Later in debate ---

[Mr Mark Williams]

I thank the hon. Lady for that intervention, and I agree with that. I can promise her, very much in the spirit of what the right hon. Member for Torfaen (Paul Murphy) said, that Lord Elystan-Morgan and others of our respective Welsh teams will be working very hard on this Bill to make necessary amendments to make it all the more workable and successful.

I wish to talk about one regret I have about this Bill, which is the lockstep, an ideal that, as a devolutionist, still confounds me. I agree with my hon. Friend the Member for Montgomeryshire on that matter. I recently read a military definition of the lockstep—I am alarmed that the hon. Member for Beckenham (Bob Stewart) is here, because he may correct me on this—which talked about how, when marching, all the marchers’ legs should be moving in the same way at the same time. Of course the Silk commission suggested something different, recommending that income tax rates should be capable of variation independently to create better economic conditions in Wales.

We have heard from the Secretary of State and from the Opposition about giving the Assembly Government the tools to do the job, and that is what I want this Bill to do. We should, however, be mindful of what Paul Silk said in his report, which was that the availability of capacity borrowing powers is contingent on the level of income tax devolution available to the Welsh Government following a successful referendum. He said that the lockstep model is less attractive and would therefore discourage the Welsh Government from pursuing devolution and the additional capital borrowing powers that would accompany it. He was right, and I regret the fact that he had to say that. I regret the response of the Labour party to the Bill and what Paul Silk said. I am clear that we have not heard the last of this, and I encourage Conservative Members to examine what their colleagues in Scotland have said about the lockstep and act accordingly, because those tax-varying powers really would enhance the tools available to Government.

I agree with Professor Dylan Jones-Evans who said that the important thing is to give the Government, of whichever colour, the powers to do the job. That is about grown-up government, and about respecting other Governments and other jurisdictions’ capacity to do the job; it is not about “nanny knows best”. Our friends from Plaid Cymru will agree with that characteristic, as much as Liberals and Conservatives will. That is a principle behind the Bill and I hope we can take it further. Welsh Liberal Democrats want to see flexibility of income tax powers without the Scottish lockstep model. Nevertheless, the Bill represents a huge step forward—although it does not provide the strides that some of us would have hoped for.

That brings me to the reserved powers model for the future, which I support. I could not support the Labour amendment on Report, as it struck me as a fudge, although outside the Chamber I was assured by the shadow Secretary of State that it was anything but. I wish to reiterate what Liberal Democrats, including the Deputy Prime Minister, have said, which is that we support the reserved powers model. The challenge Paul Silk set was for every party in this House to sign up to the reserved powers model at next year’s general election. The debate about devolution and the progress made have been a journey of stops and starts, but I believe the reserved powers model is the way forward and I endorse what Paul Silk has said.

Finally, there is an old adage that time and tide wait for no man. I believe that the tide of devolution in Wales is flowing fast and no Government, including this one and, indeed, future ones should be left behind.

Question put and agreed to.

Bill accordingly read the Third time and passed.