HMRC Closures

Mark Williams Excerpts

Tuesday 26th March 2013 Westminster Hall

[Mr Andrew Turner (Isle of Wight) (Con)]

I thank the Exchequer Secretary to the Treasury for being present to respond to my debate.

Her Majesty’s Revenue and Customs recently changed its services: it is trying to become “leaner and more efficient”. Two weeks ago, we learned that HMRC has hatched a plan to close all 281 inquiry centres throughout the country. Last year, those offices gave advice to more than 2.5 million people, but HMRC is closing them because the number of visits has halved since 2006 and, it claims, closing them will save £13 million a year. Other Members would no doubt have their own tales to tell, were they here to speak, but I invite the Minister to consider the claims about usage and cost savings as they apply to the Isle of Wight, because he will find them completely spurious.

Let us look first at the number of people visiting the office. The old HMRC office was open from 9 o’clock to 5 o’clock, five days a week; now it is open only from 10 o’clock to 3.30 pm, three days a week. HMRC shares a building on the island, Broadlands house, with Jobcentre Plus, so people with tax problems can often see HMRC staff through the glass but are unable to speak to them, which is ludicrous. Furthermore, staff are discouraged from dealing with clients personally, face to face; instead, they must floor walk them to a free phone in the next office and get them to speak to someone in the contact centre on the mainland. People are not supposed simply to walk in and get advice: if a taxpayer turns up and insists on talking to a real live person, staff are supposed to make an appointment for another time, a rule which applies even if the office is open and staff are available. I am pleased that the staff on the Isle of Wight do their best to be helpful and tend to ignore that particular edict from on high. None the less, it is little wonder that figures show fewer personal calls being made to inquiry centres, because HMRC has done everything it can to make visiting in person difficult and inconvenient. I have estimates for the island for the past two years. In 2011-12, there were 4,925 visits to HMRC’s Newport office and the two outreach offices; in 2012-13, that figure dropped, but by fewer than 300, so that the total was 4,630. That is more than 4% of the island’s adult population visiting HMRC, which is hardly insignificant.

We should also consider the major changes to the tax and benefits system being introduced by my right hon. Friend the Secretary of State for Work and Pensions. Planned changes to child benefit are likely to lead to 1 million extra people filling in self-assessment forms. In addition, real-time information, as it is called, starts in two weeks. HMRC itself describes the changes as

“the biggest shakeup of the Pay As You Earn…system in nearly 70 years”.

It cannot be safely assumed that the number of people needing face-to-face help on the island or elsewhere will fall.

Let us look at the claimed savings on the Isle of Wight. The original HMRC office in Upper St James street was closed and 36 staff moved into the newly built Apex centre, although taxpayers needed to walk for 10 minutes from the bus stop or had to drive to reach it. The move was always planned to be temporary, and in May 2011 the HMRC office moved again, to Broadlands house. It was anticipated that some staff would relocate to other HMRC offices within what was described as reasonable daily travel distances, but that turned out to be a journey of an hour and a half each way. The majority of staff lost their jobs, and only nine people now work in the HMRC office on the island. Broadlands house is also home to the main Jobcentre Plus office, as I said, and to the valuation office. HMRC’s nine remaining staff moved into empty offices in the building, which seems an eminently sensible solution. The Government already pay for the upkeep of the entire building, so the costs are minimal, and it is hard to see what savings could be made on rent, rates or utility charges from closing the office. The only other opportunity for substantial savings, therefore, would be on staff.

In addition to being open to the public three days a week, the staff carry out what are called personal taxes operations, which is computerised work generated centrally. The work can be obtained by HMRC officers anywhere in the country and includes activities such as changes to tax codes, addresses and so on. The staff on the Isle of Wight are justifiably proud to be achieving 100% of their target. They should be proud: they are an efficient and experienced team—in fact, the nine staff have a combined total of 186 years’ experience, which may well be a record, but certainly represents a large investment by HMRC in training and development over the years. HMRC claims that it intends to deploy the staff affected by the proposed changes elsewhere, and such experienced officers must be a valuable asset, but there are no opportunities within reasonable daily travelling distance from the Isle of Wight. HMRC would therefore be willing to pay the costs for staff to relocate, not only paying the costs of removals, legal fees, stamp duty and so on for a new house, but perhaps even extending to cover the difference in house prices if staff move to a more expensive part of the country. HMRC could therefore incur significant costs for Isle of Wight staff to move elsewhere to undertake exactly the same work that they are doing now. The alleged £13 million savings appear to take into account neither that nor the costs of redundancy packages for staff who cannot be redeployed to another job or do not wish to move.

As part of the plans, HMRC is going to invest in a shiny new telephone system costing £34 million—to save £13 million a year. Looking at HMRC’s record, I would not put my trust in that working out too well. HMRC spends money, but that does not necessarily bring success. Despite HMRC spending £900 million on customer service, the Public Accounts Committee found it had “an abysmal record”. Last year, HMRC allowed 20 million telephone calls to go unanswered—a quarter of all the people who tried to call it. Even its new targets for call answering are described by our colleagues on the PAC as “woefully inadequate and unambitious”. For callers who do get through, there can be other problems.

I want to raise an issue brought to my attention by Jonathan Isaby, of that excellent organisation the Taxpayers Alliance. He received an e-mail from a customer adviser working in an HMRC call service. Apparently, advisers do not have targets based on how long a telephone call takes; instead, the focus is on what they call “wrap-up time”, which is the time after a call in which necessary administration is carried out, such as tax coding, sending e-mails, making referrals and updating customer records. Customer advisers are targeted to keep their wrap-up time to an absolute minimum. They do that by putting people on hold and keeping them on the phone unnecessarily, which increases the cost to the taxpayer and generates income from the telephone call for HMRC. That cannot be right and I urge the Minister to look carefully into that allegation. I know that Mr Isaby will do all he can to assist in getting to the bottom of it.

For those who still need face-to-face advice after the closures, the plan is to replace the current system with a mobile team. They will talk to taxpayers using community centres or local libraries, or, if called for, by making a home visit; but home visits by experts are expensive and inefficient. We do not usually call a lawyer or an accountant to visit us at home.

[Mr Mark Williams (Ceredigion) (LD)]

I am delighted that my hon. Friend has secured this debate. He makes an important point about efficiency savings and HMRC’s proposals. Rurality is a huge issue in itself. Mobile units going round to support small business people and farmers in my community across mid-west Wales would be a huge cost. One wonders how much that has been factored into the equation.

[Mr Turner]

I am not able to say how much it has been factored in, but I can say that doing this over two weeks once a year, which is what I do in the summer when I visit people locally, takes a lot of time. I can only judge that the same business will be included.

It is clear that HMRC does not intend home visits to be the norm. That is a most important point. I feel certain that only a very few people who currently use the face-to-face system will be offered a home visit. It is hard to see the financial sense of somebody coming across from the mainland to visit a small business man or an elderly pensioner on the island, but island staff have been told categorically that the mobile team covering the island will be based on the mainland and that they cannot be part of that team.

What is the poor taxpayer to do if he cannot work out the answer to his question online, cannot get through on the telephone and cannot persuade the chap from the mainland to visit him at home? He could go along to meet an adviser in a community centre or library, which is exactly what happens now on the Isle of Wight. Local staff have introduced an outreach service in Ryde and Freshwater on the days that the Newport office is closed. So what this decision means is that islanders will not be able to visit a tax office to talk to local advisers, but HMRC staff from the mainland will travel over at huge expense to provide a service that is already being provided by qualified, experienced people, and those people will have been paid to move away or made redundant. I understand the mobile teams may even hold sessions in tax offices. They could use the empty office in Broadlands house, which would no longer be open to the pesky public. You could not make it up, Mr Benton. It is the Isle of Wight version of “Yes Minister”. I can picture Sir Humphrey’s self-satisfied smile now—he will be in his element.

The Minister must be aware that a face-to-face session can achieve things that cannot be achieved over the phone. An experienced adviser can quickly spot that a figure has been put in the wrong box, and a taxpayer who does not understand what information should go where can show the relevant paperwork to somebody who understands it. That simply does not happen online or over the phone, and vulnerable groups may find it particularly difficult to engage by those means. Most people deal with HMRC not because they want to, but because they have to. Those 2.5 million people did not go to their tax office because they wanted a jolly day out. If they felt that they could have dealt with the issue online or by telephone, presumably the vast majority would have done so.

HMRC is running a pilot in the north to see how the new telephone advice service will work. It follows a previous trial undertaken last year when taxpayers were telephoned to try to sort out queries. I understand that of 1,354 calls made, only 259—less than 20%—resulted in the query being sorted out over the phone; the other 80% of cases still needed a face-to-face appointment. Yet HMRC still intends to close all 281 inquiry centres next year, come what may, and issue telephone advice from Bradford and Peterlee. I wonder why considerations of job shortages never seem to apply to places such as the Isle of Wight.

All of us in this House and the other place understand the need to make savings, but our tax system is fiendishly complicated. I know that the Government are trying to sort that out, but in the meantime we must make sure that those who need advice can get it. We must make sure that the claimed savings are not based on flawed research or shoddy decision making. Only yesterday, the Home Affairs Select Committee highlighted the “catastrophic leadership failure” of Lin Homer, the current chief executive of HMRC, when she ran the UK Border Agency. Previously, as chief executive of Birmingham city council, she was criticised by an election judge for having

“thrown the rule book out of the window”

during the 2004 postal vote fraud. Such a record hardly fills us with confidence. As for the Isle of Wight, it is obvious that closing the only accessible tax office will not benefit my constituents, or achieve the cost savings that HMRC is claiming for the closure.

I suspect that we are not unique. If the issues facing the Isle of Wight are not exceptional, I hope that the Minister, who is an eminently sensible gentleman, will intervene. He needs to make sure that HMRC looks again at this decision. On the other hand, HMRC could argue that the circumstances I have outlined this afternoon are unique: the island’s physical separation from the mainland makes us different. If so, HMRC must look again at the decision to close the office on the Isle of Wight and come up with a unique plan. An appropriate decision must be made, and it must be made soon, before HMRC pays to get rid of further staff or pays for them to move to the mainland, and, even more significant, before islanders lose access to the expert advice they need.

[Catherine McKinnell (Newcastle upon Tyne North) (Lab)]

It is a pleasure to serve under your chairmanship, Mr Benton. I commend the hon. Member for Isle of Wight (Mr Turner) on securing this afternoon’s extremely timely and important debate. His record of assiduously standing up for his constituents and their interests is well known to the House. The issue of HMRC closures is clearly of particular importance to the people living on the Isle of Wight, given its geographical isolation from the mainland. He set out clearly and carefully the potential impact of HMRC’s proposals on his constituents. I look forward to hearing the Minister’s reply and how he intends to ensure that such problems and issues are mitigated and addressed.

The debate is timely: we heard only two weeks ago about HMRC’s proposals to change the way in which it supports customers who need extra help. I use the word “customers”, because that is the language deployed by HMRC and, no doubt, the Minister will use it in his reply, but as the Public Accounts Committee has frequently articulated, those who come into contact with HMRC have little choice about whether they do so. Many of those people—an estimated 1.5 million—find dealing with HMRC difficult because they have a disability or a mental health condition; they have low literacy or numeracy skills; they do not speak or read English; they do not have the confidence or capacity to deal with what can be a very complex situation; or because of a combination of any or all of the above. Ensuring that such people have access to the best possible support and advice in their dealings with HMRC is, of course, something that we all wish for, and we on the Opposition side of the House have regularly advocated that.

[Mr Mark Williams]

I want to add something to the mix of problems that the hon. Lady identified. In my constituency, we have a problem with broadband: 20% of my constituency is not broadband-enabled. The assertion is made that a lot more of the transactions and discussions can take place over the internet, but that simply is not available for many of my constituents. The Government are doing some sterling work to change that, but a solution for my constituents is some way off.

[Catherine McKinnell]

I thank the hon. Gentleman for raising that issue, which is very important, not only for areas without access to good broadband that allowed online dealings with HMRC not to end in utter frustration —even when people have broadband, it may not be sufficiently fast—but for constituents who do not even have computers or have access to them. I will mention later a concern in my constituency, which is that many public services, such as libraries and community centres, are struggling, and some are set to close, but many provide the only access that some people have to a computer. Although we would love to live in a digital age, we are not there yet.

We heard from the hon. Member for Isle of Wight, in his excellent contribution, about the 10-week consultation that was launched on 14 March, and the proposal to close every one of the 281 inquiry centres that provide face-to-face advice for customers. The centres are apparently to be replaced by “more accessible”, “targeted” and “tailored” services for people who need extra help in engaging with HMRC, either all the time, or in response to a particular life event, such as a bereavement. It is proposed that the new service will include specialist expert help over the telephone by a new team, and face-to-face support delivered by a mobile team of advisers, who can meet customers at suitably convenient locations in the community, or in their home.

That issue is particularly pertinent to me, not only in my capacity as shadow Exchequer Secretary, responding to the debate, but because I represent the esteemed people of Newcastle upon Tyne North, and HMRC proposes to trial or pilot the new idea on them. From 3 June to 31 October, the pilot will run throughout my region of the north-east, and 13 inquiry centres will be closed in the process. For the record, those centres comprise Alnwick, Bishop Auckland, Hexham, Darlington, Durham, Middlesbrough, Morpeth, Newcastle, Stockton, Sunderland and—although I, and many proud Yorkshiremen and women, might quibble over the Minister’s geographical knowledge of the north-east—Bridlington, Scarborough and York. Apparently, depending on the outcome of the consultation and the pilot, HMRC states that it will look to introduce the new service across the UK in February 2014, resulting in the closure of the remaining inquiry centres between March and May next year—including the one in the Jobcentre Plus in Newport, on the Isle of Wight.

The proposal will clearly also have a direct impact on the 1,300 HMRC staff employed in inquiry centres across the country, although I understand the intention is that many of them will be redeployed either within HMRC or to other parts of the civil service, and that is to be welcomed. As I stated earlier, I fully support the notion of providing a better service to the most vulnerable people with whom HMRC comes into contact. I welcome the fact that HMRC has said that it is working with TaxAid, Tax Help for Older People, the Low Incomes Tax Reform Group, Citizens Advice, Gingerbread, the Child Poverty Action Group and Age UK as part of the consultation on what additional support may be required and how it might be delivered. However, I want to probe the Minister on exactly how he thinks that HMRC will be able to improve its performance in that area, given the context in which the Department is operating.





I have previously told the Minister—indeed, only last month in this Chamber—that serious concerns remain about the customer service provided by HMRC. The National Audit Office report on HMRC’s customer service performance, published in December, revealed genuinely troubling findings about the way in which HMRC treats some of its customers. To remind hon. Members, 20 million telephone calls went unanswered by HMRC last year, costing customers £33 million in call charges; that is in addition to the estimated £103 million cost of customers’ wasted time. As I have stated previously, that is particularly worrying for people on low incomes who cannot afford to sit waiting on the telephone, and for small businesses that could be making much better and more profitable use of their time, which is particularly important in the current economic climate.

The Public Accounts Committee report on HMRC customer service published earlier this month was equally scathing, describing the Department as having an “abysmal record” in this area. Those concerns have been echoed by eminent professional bodies, such as the Chartered Institute of Taxation and the Institute of Chartered Accountants in England and Wales, whose members’ surveys have found significant concerns regarding the customer service performance of HMRC, which often fails to meet its basic responsibilities.

I acknowledge that there appears to have been some recent improvement in HMRC’s handling of post, but I would be grateful if the Minister could clarify the current position on its call-handling performance. According to the answer to a parliamentary question I received from the Minister only last month, the percentage of calls not handled—in other words, unanswered—by HMRC had gone up from 25.6% last year to 28.6% in this financial year to date. Given that we are now only days away from the end of the financial year, will the Minister confirm whether that fall in performance has continued, and if it has, what specific measures he has put in place to ensure that it does not fall further?

That point is, of course, pertinent to this debate, not only because of the concerns raised by the hon. Member for Isle of Wight, but given the recent words of the Chair of the Public Accounts Committee, my right hon. Friend the Member for Barking (Margaret Hodge):

“Just how the department is going to improve standards of customer service, given the prospect of its having fewer staff and receiving a higher volume of calls, is open to question. HMRC plans to cut the number of customer-facing staff by a third by 2015. At the same time, the stresses associated with introducing the Real Time Information System, Universal Credit and changes to child benefit are likely to drive up the number of phone calls to the department…Since our hearing it has also been announced that HMRC is to close all of its 281 enquiry centres which give face-to-face advice to customers. This will undoubtedly put even more pressure on phone lines.”

That is also relevant because HMRC’s consultation document appears to suggest that anyone who requires a face-to-face appointment with HMRC staff under the new system can obtain one only once they have spoken to at least two helpline advisers— and then a face-to-face appointment will be offered at the discretion of HMRC staff.

National Assembly for Wales

Mark Williams Excerpts

Wednesday 6th February 2013 Commons Chamber

[Geraint Davies]

I will be mild in my criticism, but I thought it was completely disgraceful. It showed a great lack of respect for the blossoming new democracy that we have in the nation of Wales, with a Welsh Government doing very good things and the road of devolution moving forwards. Where important decisions can be made locally by the people they affect most, that is what should happen. It was very unfortunate, to put it mildly, that the Prime Minister showed such disrespect to the leader of the Welsh Assembly Government.

The other propositions in the Green Paper include the idea of a five-year cycle for the National Assembly for Wales detached by a year from Westminster’s five-year cycle. That might be quite sensible on the grounds that it would be unfortunate to have both elections on the same day because there could be confusion in Wales as a result of the media carrying more about UK policies of the Labour party and other parties that may differ from those in Wales. It is important in the interests of effective democracy, and effectively communicating democracy, that the elections do not occur in the same year, and I am therefore minded to support the idea of moving to a five-year cycle displaced by a year.

[Mr Mark Williams (Ceredigion) (LD)]

I congratulate the hon. Gentleman on securing this debate. Would he not argue that extending the Assembly’s term—I agree with what he said about the longer-term prognosis for that—so that the elections did not clash was an example of the respect agenda in practice? I have some sympathy with what he said earlier, but in this instance we saw the respect agenda in practice.

[Geraint Davies]

It is a good idea, but that does not mean that it is about the respect agenda. I think that perhaps the idea came from this place without proper consultation and it just so happened that the Welsh Assembly Government agreed with it. Will the Minister tell us whether there was consultation on that part of the Green Paper. My understanding is that there was no consultation on any of it. Was there, in any sense, an element of the respect agenda, or was it just a blind coincidence of view?

There is also a move towards the resurgence of dual candidacy whereby somebody can stand in a first-past-the-post election and, should they fail, reappear like a vampire figure through the list mechanism and find themselves transposed into the National Assembly without a mandate, having failed to win in the first place. In other words, losers will be winners; I will be talking about Bob Dylan later.

Inward Investment (Wales)

Mark Williams Excerpts

Thursday 29th November 2012 Westminster Hall

On resuming

[Mr Mark Williams (Ceredigion) (LD)]

It is a pleasure to serve under your chairmanship in this rather intimate and select gathering, Mr Rosindell. There are important issues to be raised, but I will resist the temptation to talk about future inquiries and previous inquiries. I do not seek to emulate the lengthy contribution that we heard earlier in any way.

I am pleased that the Select Committee undertook its inquiry, and I congratulate its Chair, my hon. Friend the Member for Monmouth (David T. C. Davies), on the way in which he introduced this topic, as well as, of course, his chairing of our Select Committee. He has a knack for choosing the issues of the moment.

Inward investment is critical because the circumstances in which Wales finds itself are different from those of the glory days of inward investment that we saw in the 1980s and early 1990s. On the global stage, the background of the Select Committee’s inquiry is that, since the 1980s, world trade in goods and services has increased more than sevenfold, while the emerging economies have seen their share of trade quadruple and there has been a fourfold increase in the effective supply of global labour. That is a continuing trend for China and India, which are expected to add more than 30 million workers to the world’s labour pool by 2030.

As the Committee’s inquiry identified, Wales can no longer assume that overseas companies will be tempted to invest by the traditional inducements of grants and low labour costs. We have to adapt continually to challenging and consistently changing domestic and global conditions to attract new inward investment, which means working smarter and more flexibly to find more innovative ways to encourage inward investment into our country.

I will focus specifically on two issues that we investigated in the inquiry: the importance of higher education; and infrastructure. First, let me address the importance of the knowledge economy. As emerging economies move up the value chain to compete with Western companies in the manufacture of high-tech products and attracting research and development investment, the OECD has stated:

“If developed countries are to remain competitive in the global economy, they will have to rely more on knowledge, technology and intangible assets.”

In practice, that means that today’s students and graduates will have to provide cutting-edge research—not just research for research’s sake, but research that has a commercial edge—that will ensure our nation’s prosperity.

Our inquiry shows that there needs to be far greater partnership working between the higher and further education sectors, and industry, as well as closer engagement with business. In that spirit, I welcome one of the things that the hon. Member for Swansea West (Geraint Davies) said in his long speech: the developments in Swansea bay and Swansea university’s second campus. The university’s vice chancellor has met many Members of Parliament to celebrate the work he hopes to achieve at the second campus. I hesitate to say this, but in the new budget agreement between the Labour party and Plaid Cymru in the Assembly, there was a commitment of some £10 million for a science park. That will largely be in Bangor, but I hope there will be significant rub-off on Aberystwyth university, too, because that is also important.

At Aberystwyth university in my constituency, there has been meaningful partnership for a long time with the commercial sector and developing economies in other parts of the world. For a medium-sized university, it punches well above its weight. There is investment in research that seeks solutions to many global issues, and over the next five years, the university’s world-leading research will address the major challenges faced across the world. I have repeatedly talked about the Institute of Biological, Environmental and Rural Sciences over the past seven years, for which I make no apology, because excellent, world-leading research is being undertaken in fights against famine, climate change, loss of biodiversity and disease. Collaboration between researchers in Aberystwyth, Africa and India is already leading to breakthroughs in the fight against famine with the development of climate-resistant crops. Such excellent research, which is often talked about, is happening, so the challenge is to market it overseas more effectively and rigorously.

Recently, to commercialise its intellectual property, Aberystwyth university has been developing cutting-edge smartphone technology—that is not unique to Swansea; it is happening in mid-Wales, too—and it is leading the way in developing mobile apps. In recognition of the university’s innovative approach to exploiting its intellectual property and expertise through smartphone platforms, it was awarded funding for those developments by the UK Intellectual Property Office.

The good work that is happening across higher education not only benefits my local economy in Ceredigion and those places where partnerships have been formed, but encourages students to identify and develop commercial ideas, which is a key role. In other words, that is exactly the sort of creative entrepreneurial activity that needs to be encouraged and supported in the HE sector.

Our report highlighted research funding. We also noted that in a report on inward investment during the previous Parliament, but Wales has not been successful at securing its fair share of research funding, which remains a problem, so that battle needs to be waged.

One idea we heard in evidence was for business angels to come in and help to develop products more quickly and get them to market. That is the sort of idea that could be picked up by a local firm, academics or students, and spun out into a company. For a company to develop in those early stages, it needs the right facilities, and that might be a role for the emerging science park that the Administration in Cardiff are pursuing.

We are some way off facilitating such ideas at any great size. We need more joined-up thinking from the Welsh Assembly Government to offer support to such facilitators of enterprise. Support needs to be tailored to skills and the innovation that is happening at any one time, rather than divided into prescriptive sectoral targets, as the Assembly Government have done. There was a debate about whether those sectoral targets are right and what additional targets should be added. For example, the absence of tourism is a key issue affecting my area, and it was subsequently added. That was welcome, but it took some time for the Assembly Government to reach that conclusion.

We have heard about reinforcing the Welsh brand, and it makes sense that Welsh Government overseas offices should be co-located with UK Trade and Investment offices so that the Welsh Government can efficiently utilise the strength and capabilities of UKTI. Wales does not have sufficient resources to work alone in attracting inward investment to Wales, and we must make every penny count. I concur with the hon. Member for Carmarthen East and Dinefwr (Jonathan Edwards), whom I welcome back from Cape Verde, on the welcome addition of a UKTI official in Wales. The partnership between those two groups, which was not always evident in the discussions and inquiries we had, both in Germany and here, needs to mean something practical if things are to be achieved.

Finally, on connectivity, we asked UKTI about its checklist of motivators to attract people to invest in Wales. The hon. Member for Swansea West was constant in pushing for the recognition of the quality of life in Wales, and we can all empathise with the life experience of living in Wales. The list of motivators also included the transport network and broadband. I welcome the announcement on electrification for south Wales, and I applaud what the Wales Office and my hon. Friend the Member for Aberconwy (Guto Bebb) have been doing to highlight electrification for north Wales. I am not yet going to launch a campaign for electrification for mid-Wales, but I will reiterate—despite the lack of an audience, because of events elsewhere in the Palace—the case for an hourly service on the Cambrian line between Aberystwyth and Shrewsbury. The hon. Member for Newport West (Paul Flynn), who is no longer in the Chamber, might not appreciate that, and this is technically a devolved matter, but it impinges on my area’s capacity to develop economically.

Aberystwyth might well be perceived by many to be at the end of the line—and not only in the physical sense—but we have the highest proportion of small businesses per head anywhere in the United Kingdom. Aberystwyth is also a strategically important university town with a large skills base in a county whose huge tourist opportunities have been recognised by the Wales Tourism Alliance. That is one reason why we will be looking to mid-Wales, rather than taking up the captivating invitation to join the city region in Swansea bay—it is pushing it a bit for us in Aberystwyth to join the hon. Member for Swansea West down there. Aberystwyth is a strategic town of significance—that is our focus, and it has been recognised by the National Assembly—and we want that recognised in our transport infrastructure as well.

In his evidence to us, Professor Stuart Cole said this is not about the headcount on the train between Aberystwyth and London, but much more about interconnectivity. There are few peripheral areas of the United Kingdom where people cannot get a direct service to London. As a student, 27 years ago, I could get the seven o’clock inter-city train from Aberystwyth to London, and freight came into Aberystwyth as well, but that has long since gone and we do not even have an hourly service. Having such a service is important, because it could re-energise parts of mid-Wales, from Welshpool, through Newtown, Machynlleth and Caersws, and along the infamous route to Aberystwyth.

[Geraint Davies]

Having been on holiday every year of my life to Aberystwyth, I would concur that there is a great opportunity for cultural, environmental and all sorts of other tourism.

[Mr Williams]

I am grateful for that endorsement. Of course, there are Dylan Thomas connections, as well, if we go a bit further down the coast to New Quay—Cei Newydd—in my constituency. I thank the hon. Gentleman for that intervention.

I was disappointed when the Select Committee went by train to Aberystwyth a couple of weeks ago. I was grateful that the Chair encouraged the Committee to go, but when the Welsh Government Transport Minister, Carl Sargeant, came to see us, he confirmed that we would not see the hourly service until 2015, despite the fact that we had been promised it for 2014, and despite the fact that all the infrastructure has been done.

On broadband, I very much welcome the £425 million agreement between the Welsh Government and BT to deliver next-generation broadband to 96% of Welsh homes and businesses by 2015. I am glad that my hon. Friend the Member for Monmouth mentioned that rurality is important. This is not just about the M4 corridor or the A55. There is a bigger picture, which some of us will not stop talking about. There is real potential across Wales to attract businesses, but the proof of the pudding is in the eating. We need hard, imaginative, bold targets, but we also need to see the reality.

Finally, the inquiry clearly identified that the Welsh Government need a dedicated trade promotion agency. The evidence shows that, since 2004, investment opportunities have been missed because of this omission, and Wales branding has taken a knock since the days of the Welsh Development Agency and the loss of the Wales Tourist Board. Branding Wales is hugely important; it is tough out there, but we have a strong product that makes Wales stand out from the crowd. I am thinking particularly of culture, outdoor pursuits, tourism, the creative industries, and the potential jobs and wealth created by holding events such as the Ryder cup. There are huge opportunities for us and, in that context, the Select Committee report was highly valuable. In particular, the sections on infrastructure and higher education resonate strongly in terms of the future development of my area.

[Andrew Rosindell (in the Chair)]

I invite Jonathan Edwards to resume his speech, which was interrupted by the Division.

Interest Rate Swap Products

Mark Williams Excerpts

Thursday 21st June 2012 Commons Chamber

[Mr Mark Williams (Ceredigion) (LD)]

I congratulate, as everybody else has, my hon. Friend the Member for Aberconwy (Guto Bebb) on securing this debate through the Backbench Business Committee and on the way in which he has led the campaign in this House and outside.

Two of my constituents who have been affected by this issue have said that when they got involved in the Bully-Banks campaign they took some comfort from the fact that many others were in the same position. As I have sat listening to the debate, what I have found most striking is that whatever part of the country or countries in the United Kingdom we come from, there has been an alarming commonality in the message we have presented to the House.

It would be dishonest of me to say that I understand every aspect of these products or the conduct of the banks. I have sat in constituents’ houses as they have poured out the details of what has happened to them, but that in itself has become an issue. If I, as a humble Back-Bench constituency MP, have struggled, why on earth should they be put in that position, especially when the people selling the products seem to have as confused a picture? The scale of the problem is alarming. I think we have seen only the tip of the iceberg and that, as this debate galvanises public opinion, we will hear about many more cases.

I want to reflect, as others have, on a constituency case. One business affected in my constituency is involved in refurbishing flats and letting properties out to students in the tourist and student town of Aberystwyth. My constituents secured a loan from the local bank, the agreement for which specified interest rate protection for a minimum of £800,000. However, at no point was that term clarified—at least, not until after the money had been borrowed. My constituents described to me how a Barclays Capital salesman was introduced to them as a “colleague” by their relationship manager at the bank, with whom they had built up a trusted relationship. We have heard about such cases repeatedly. My constituents already trusted their bank manager to do nothing detrimental to their business, but they did not realise, at the point of initiation, that they were getting involved in a sales process, and at no point was it presented to them as such.

[Mr Cox]

The hon. Gentleman is reciting experiences that are exactly replicated by those of constituents of mine. Indeed, more concerning is the fact that some of my constituents were invited to hotel receptions, for potentially hundreds of businesses to attend, where they received a sales approach like that of a timeshare salesman. My constituents were never told that the salesmen were earning profits from what they were selling and they were never given appropriate advice. Does he agree that the whole flavour of what is coming out of this debate is such that the Minister must now tell the House what prompt and immediate action and inquiry will be undertaken into what is increasingly a very grave scandal?

[Mr Williams]

I completely agree with my hon. and learned Friend: it is indeed a grave scandal. My constituents were not invited to hotels, but they had three meetings in their home. They also had several phone calls and were presented with the choice—if it could be called that—of three essentially similar complex derivative products, which, by their own admission, they struggled to understand and the risks of which were never explained. On many occasions my constituents asked whether they could get out before the end of the term, as they expected that they would need to sell property—an integral part of their business. They were advised to go for a longer term, as Barclays Capital would probably pay them to exit. Having borrowed the money and being unable to pay it all back at short notice if the bank decided to call in the loan, my constituents were presented with no options and felt as though they had no choice but to enter into the swap agreement, involving a rate swap for £750,000 over a 10-year period, at a rate of 5.67%.

The product was finally sold to my constituents in a trade call, although at no point were they told that a trade call had even commenced, and they certainly did not realise that it was legally binding. Understandably, they envisaged that, at some point, they would sign a contract to agree to an interest rate swap, but because they had already signed a customer agreement for private customers, the bank apparently had permission to sell the product to them in that way. Following the phone call, there was a faxed unofficial confirmation, which stated that legal papers would follow, but they did not arrive for two months.

The worry, as we have heard, is that such cases are being replicated across the country. My constituents understandably feel aggrieved that they were sold a product that was completely inappropriate for their business, in that it restricts them from selling property, despite the fact that flexibility to sell property within a few years is a main requirement for their business. They feel aggrieved because the arrangement ties them to a longer-term debt on which they cannot afford to make full capital payments, and because the risks were not property explained. They also feel aggrieved at the enormous breakage costs and at the fact that no explanation was offered of how those costs were calculated. The value of the swap is too high, and since capital payments began to be taken prematurely it has created severe cash flow problems for the business.

I have been in touch with the Federation of Small Businesses about this, although I did not need to do so, as it was already aware of the numbers of alarming cases elsewhere, many of which we have heard about in the debate. My constituents inform me that, in the years following the sales of swaps, banks have been guilty of compounding the problems of the SMEs that have them—alarmingly, in some cases particularly of those that have had the bravery to complain. That is acutely worrying.

There are many further points that need consideration, not least the issue of redress. The most powerful message that we can send out today is that the Financial Services Authority should speedily produce its report into the extent of the practices involved. At that point, I am sure that the House will wish to take the matter further. I think it was the hon. Member for Ayr, Carrick and Cumnock (Sandra Osborne) who mentioned the need for urgency, especially in the light of the six-year time constraint. My constituents face the prospect of having to take action by February next year. Theirs is a functioning business, and this House is supposed to support functioning businesses in these dire economic times. There is a phrase in Welsh, chwarae teg, which means “fair play”, and that is what is now needed.

First-time Buyers

Mark Williams Excerpts

Wednesday 14th March 2012 Westminster Hall

[Steve Brine]

Yes. My hon. Friend tempts me. The turnout in debates in the House and Westminster Hall is a matter of fact and public record, not my judgment; that is for others. However, I thank my hon. Friend for pointing that out.

I mentioned aspiration and I shall say the word again—as, I am sure, will many of my hon. Friends. That is the starting point for me. The Government should exist to help people to realise their aspirations: not through a handout—although, yes, sometimes—but often through a hand up. The debate is unapologetically, for me, about our values. Politicians do not talk enough these days about what they believe in. It is as if ideology has become a bad word, and it is suddenly a crime to say what drives us. Of course policy making and implementation is about the head, but it must also be in equal measure about the heart. Why do we want to be in this place? Why did my party, and many hon. Members who fought seats for longer than I did to get here, work so hard to return our party to government and run the country, if not to pursue our mission? Part of that mission and why I wanted to come here was to help people to own their home. I do not accept that that is somehow to let people aim higher than they should be allowed to by the state. I know that Conservative Members utterly reject that.

[Mr Mark Williams (Ceredigion) (LD)]

Will the hon. Gentleman give way?

[Steve Brine]

Yes. Good timing.

[Mr Williams]

I congratulate the hon. Gentleman on securing the debate. Does he also accept that the question goes deeper than simply owning a house? The ramifications of denying first-time buyers the opportunity to buy property affect the community as a whole. Where I come from in west Wales the issue is that young people are moving away from our communities; they cannot educate their children in local schools, and there are other community aspects.

[Steve Brine]

Absolutely. We have often debated the future of sub-post offices, pubs and primary schools where falling rolls lead to changes and school reconfiguration. There is a need for new people to enter communities, to regenerate them. I ask hon. Members who are home owners to remember when they first walked into the first house they owned, and the excitement of that. We may remember how exciting it was as a child to play house; but that was playing house for real. I remember how exciting it was, and I want other people to experience that excitement. That is what the debate is about, which brings me back again to that word “values”.

I want to outline the scale of the current challenges to the UK housing market, and the difficulties that young families and first-time buyers experience in taking their first tentative step on to the property ladder. It is a daunting challenge. Since 2008, the number of first-time buyers has declined from a long-term average of about 500,000 a year to just 200,000. One of the key factors accounting for that is, of course, the astonishing rise in average house prices relative to earnings in the past 20 years —even taking into account the slight decline in prices in more recent years. I emphasise the word “slightly” because the situation in the part of the world that I represent may be different from that in some other constituencies.

--- Later in debate ---

[Steve Brine]

Absolutely. Affordability is the key word. One of the key lessons that must be learned from what happened in 2007 is that affordability must be at the heart of mortgage lending. That is why I am so pleased that the Council of Mortgage Lenders is backing this scheme. Obviously, through its lenders, responsible lending will be the watchword, but affordability is critical.

NewBuy is most welcome. I have taken great care to inform many of my constituents about it already and I understand that the website NewBuy.org.uk has, unsurprisingly, been very busy in its first 48 hours. Although I welcome it, I will just make this point to the Minister. Many first-time buyers will welcome any home, and a new build ticks many boxes, but I urge her to work with colleagues at the Treasury and in the Department for Communities and Local Government to explore ways in which we can extend NewBuy to not-so-new-buys because not all mature properties are thatched cottages worth a couple of million pounds, and sometimes first-time buyers do not want to choose a new build. There is much housing stock out there that could come on to the market, especially as we change the rules on assured tenancies.

[Mr Mark Williams]

Does the hon. Gentleman welcome the initiatives taken by some local authorities to develop their own local authority mortgage schemes? My local authority, Ceredigion, is pursuing that, and it is also being pursued in Conwy—I say that to add a slightly Welsh dimension to this debate.

[Steve Brine]

I see absolutely no reason why such initiatives should not be developed; I suggest that they are a key part of localism. Perhaps I will rather unfairly pass the hon. Gentleman’s question on to the Minister, because I see no reason why a responsible local authority setting up an accredited scheme such as that could not be part of the NewBuy scheme. I thank the hon. Gentleman very much for making that point.

I turn to right to buy, which, as we know, has been relaunched this week, with all the passion and enthusiasm of its creator, the former Member for Finchley. To this day, I meet people every time that I knock on doors on the big estates of Winchester who were given the chance to join the property-owning democracy by that lady and her policy when it was introduced the first time around. I am extremely proud that my party made that possible. The subject even comes up in conversation from time to time—started and prompted by me. I am extremely proud of that policy and we should never stop saying that we are proud of it.

I am delighted that the Government are ploughing ahead with their task of reinvigorating the right-to-buy scheme, by raising the maximum discount available from the current limit of between £16,000 and £38,000 to £75,000. Every home that is sold under the scheme will be replaced by an affordable home for rent. I am sure that the Minister will want to elaborate on the fine details, but I can report to her good news from the Queen’s own land of Winchester, where the Conservative-led Winchester city council has recently confirmed plans to build the first new council homes in the district since the 1980s. Those plans have been met with great excitement by local people. With 4,500 people on the city council’s waiting list, the plans are great news and, as the city’s MP, I could not welcome them more. I pay great tribute to the work that the Treasury has done with the Department for Communities and Local Government. I believe that it is a £19 billion deal to allow authorities such as Winchester to get themselves out of the housing revenue account—the so-called “tax on tenants”. That deal is making the new policy possible.

We often hear that the Government are taking us back to the 1980s, and dare I say that that is not said in favourable terms by some Members? As a child of that decade, I can see no problem with a return to music that people can really dance to. Seriously, however, if that kind of time travel gives us back the right to buy, as well as new council homes in Winchester and across this country, I say, “Bring it on.”

Let me refer again to the new homes bonus, whereby local authorities will be financially rewarded for delivering new housing, with matched funding based on new council tax receipts. For the first time, a premium for affordable homes will be included and the next sets of allocations have already been announced. Winchester is due to receive more than £1 million in allocated funding, which I am sure will be welcomed by city councillors of all colours. May they use it wisely and to maximum effect; that would be my message to them from Westminster Hall today.

I would like to probe the Minister a little on one issue in particular before I close. In 10 days’ time, the stamp duty holiday for first-time buyers will end, so any first-time buyer who buys a home worth between £125,000 and £250,000 must pay the 1% stamp duty tax. Evidence given to me—I must say that it is from Charters estate agents in Winchester—suggests that first-time buyers are moving quickly to avoid the tax. The head of mortgages at HSBC has reported that HSBC has seen a 20% increase in approvals for first-time buyer loans in the first six weeks of the year, as first-time buyers rush to take advantage of the stamp duty holiday.

I mentioned Radian Housing earlier. It operates the HomesinHants website and it told me yesterday that that website was receiving some 78,000 hits per day in January and February of this year compared with just 67,000 hits per day in the same two months of last year. It also says that many of the inquiries that it has received are from first-time buyers, who have been encouraged to get a move on by the stamp duty holiday.

I realise that there is a view in the Government that this stamp duty holiday has not been a huge success everywhere, but I ask the Minister in her reply to the debate to expand on that issue some more. It seems logical to me, and constituents have reported as much to me as their local MP, that in some areas and in some markets, this holiday can provide a nudge to the market and free up cash for those who take the plunge to spend that extra money elsewhere in the economy. In saying that, I appreciate that the Winchester housing market is different from some other areas of the country, to put it mildly. Nevertheless, I look forward to hearing the Minister’s response.

I will make one final point that seems odd to raise in a debate about Government help for first-time buyers—about interest-free loans to help employees with the cost of a rail season ticket. To say the least, the amount available has not kept pace with fare rises on the service from Winchester and Southampton to Waterloo, for instance, and for many of my constituents this outgoing is now one of the largest that they face each month. I believe that the Government need to look urgently at the interest-free loan figure; I have tabled questions to that effect. I would welcome the Minister’s comments on that, which will probably come in writing after the debate.

In conclusion, giving people the chance to own their own home is one of the best things that a Government can do for their people. My parents’ generation saw owning a home as a rite of passage, but it is more complicated than that these days, for many of the reasons that I have outlined this morning. In my opinion, young people have every right to believe that, if they work hard, do the right thing and save, they have a Government on their side and they can get on the property ladder. I welcome the steps that the Government are taking to reinforce and, yes, to lower the bottom rung of that ladder. I look forward to hearing from my hon. Friends in the debate ahead and, of course, to the Minister’s reply in due course.

Financial Services (Rural Communities)

Mark Williams Excerpts

Tuesday 29th March 2011 Westminster Hall

[Mr Mark Williams (Ceredigion) (LD)]

It is a pleasure to serve under your chairmanship once again, Mr Caton. I pay tribute to my hon. Friend the Member for Brecon and Radnorshire (Roger Williams) on securing this important debate. He may not be rewarded by a mass turnout this morning, but he knows that this is an important issue for those of us who serve rural communities, not least in north and mid-Wales.

Much concern has rightly been expressed today about the total number of rural bank branch closures. There has been a 43% net reduction in branches since 1990 and an 18% net reduction since 2000. Figures from the Campaign for Community Banking Services show that the UK has significantly fewer branches than other comparable European states. There are 170 branches per million inhabitants in the UK, compared with 440 in France, 570 in Italy, 480 in Germany and 1,010 in Spain. I do not know what the trend is in those countries, but I suspect that some of their communities have been better served by the banks than ours.

There are obvious reasons why banks choose to close less-well-used branches. They operate in a very competitive environment, but, none the less, access to banking services is essential in any community, and we have to find ways to ensure that that presence remains throughout the country. The CCBS has talked of the need for flexible format-shared branching, whereby third party providers provide services through a variety of channels, such as post offices, village shops or even community shops. I emphasise that the services provided are essential. The anecdotal evidence that we have heard from Arfon and from Brecon and Radnorshire makes that point strongly. I concur with what has been said about duty of care. Anger is felt in communities such as Rhayader over the billions of pounds that the banks currently earn.

In 2009, a report by the Commission for Rural Communities, “Rural Money Matters”, considered the difficulties associated with rural financial inclusion in England, but much of what it says also resonates throughout the rest of the UK, including rural Wales. The report points out the consequences of the lack of access to financial services. For example, the fact that most employers require wages to be paid into a bank—many do not—limits the employment opportunities for those without a bank account. Many will miss out on the discounts available for direct debit and online payment, and even the ability to shop around for credit could force those in rural areas to pay more.

Another impressive organisation, Consumer Focus Wales, published a report, “The Cost of Cash”, in November 2009. It recommended several steps, including face-to-face support for those opening a bank account for the first time; explaining how direct debit works; and exploring alternative arrangements for electronic payments, such as setting up sub-accounts solely for bill payments, to alleviate some of the fears associated with direct debit payments. The infrastructure needs to be in place, however, if many of those suggestions are to become a reality.

The number of free ATMs has increased, but, in smaller communities and the more rural areas, many of our villages are five miles or more from a cash point, which is a concern, particularly when we also see deficiencies in public transport. My bank for the past 27 years has been Lloyds in Aberystwyth, and I live six miles away from that town. My community is still served by some modest public transport and I own a car, but many people in my constituency do not have that luxury and live considerably more than six miles away from their nearest bank.

We also need to look at the impact—this is a fundamental point—on the local economy. It is very difficult for small businesses to operate in rural areas without immediate access. My hon. Friend mentioned the proprietor of the newsagent in Rhayader taking her cash in. I can guarantee that, at 4.30 pm on any day of the week, local businesses are queuing at Lloyds bank in Aberystwyth to pay cash over the counter. In Ceredigion, we have the largest proportion of people employed by small businesses anywhere in the UK, and those businesses are vital to our community. I think we could multiply a thousand times the anecdotal evidence that my hon. Friend has given from Rhayader. It is a big issue for our small businesses.

One of the additional barriers that we face to accessible financial services is the lack of digital inclusion. Those of us with rural constituencies will be familiar with the figure that is bandied around of 99% of exchanges being broadband enabled, but the picture is very different on the ground. Even those who are able nominally to receive broadband often find that their service is slower and less reliable. The Government have indicated welcome investment in superfast broadband, but it is also key that they tackle existing not-spots as a priority, so that those who currently do not have access to broadband, who are often also likely to be those without access to physical services, are able to access things such as online banking. I pay tribute, in a cross-party way, to some of the initiatives undertaken by the National Assembly. Certain communities in Ceredigion have certainly benefited from remedial action by the Assembly Government.

Another broadband-related issue that we face in rural areas is that, as well as generally receiving a slower line speed and a more patchy service, people have had to pay rather more for it. In areas where BT is the sole wholesale provider, internet service providers have been charged line rental, which has then been passed on to the customer, meaning that many of the cheap deals advertised by ISPs are out of reach for many living in rural areas. In January, Ofcom proposed that BT reduce those charges, and it would be helpful if the Minister or one of his colleagues could update us on that.

The lack of bank branches and, indeed, other financial services means that there is a need to use the facilities that we have, most obviously post offices. The Government have announced plans to make post offices what they call a front office for Government. Those of us who have been arguing against the retreat of Government from our post offices would certainly welcome that in order to make services accessible and to safeguard the remaining post office network. There was disappointment that the Government did not advance the suggestion of a post office bank, but they have reached an agreement with banks, whereby 80% of current accounts will be accessible at post offices. I think that that will have a significant impact where those post offices exist for those communities. It would be helpful if the Minister could outline what steps have been taken to ensure that the aspiration to provide Government services through the Post Office is realised, and that the network can benefit from additional revenue streams.

Another crucial issue—I shall broaden the definition of financial services slightly—is the availability of financial advice and help for people with debt problems. I very much support the efforts of hon. Members, such as the hon. Member for North Swindon (Justin Tomlinson) in talking about compulsory financial education in schools. That would be of great benefit in establishing financial literacy from a young age. It remains the case that when people have debt problems, financial advice is harder to access. In some rural communities, it is physically harder to access that advice. In Ceredigion, we have two excellent citizens advice bureaux—one in Cardigan and one in Aberystwyth. My wife is the trustee of one. We are lucky because, this Thursday, they will merge to make a county-wide CAB service. However, that still presents a difficult journey for people who live outside towns—although the CAB has undertaken good outreach work in some scattered communities. I welcome the Government’s extension of the financial inclusion fund but, particularly in these difficult economic times, there is still an issue with people accessing such financial advice.

Both my colleagues have expressed concern about the demise of the cheque. I echo the difficulties that that presents for many, especially the elderly. I appreciate that that matter is the responsibility of the Payments Council and not the Government, but it would be helpful if the Minister could assure us that the Government are committed to ensuring that any decision on cheques will not be taken without considering the impact on those who still use them, particularly the elderly. I include myself in that.

In rural areas, we often have debates—both my colleagues have participated in debates for many more years than me—about the importance of retaining services in our communities and the principles of rural entitlement. We have heard both the current and previous Governments talk about how difficult it is to justify the costs of retaining services because of the increased reliance on online methods. However, it is often more difficult to access services online in rural communities. Hon. Members should be in no doubt that rural communities will disappear unless we protect those services. I congratulate the Government on their early pronouncements on the Post Office and the investment—necessarily limited as it is—in superfast broadband. However, much more can and needs to be done.

When we consider community and services, I take a slightly holistic view. Let us reflect on why young families might want to move into the kind of community that I represent. When we consider the specifics of why young families move into a community, there are certain essential ingredients. First, there is an implicit need for a job. Secondly, people might consider the presence of a village school, certain retail outlets, a public transport system, a post office and access to financial services. Those factors are all part of the mix that means we can still have vibrant communities in rural areas. That is why this debate is so important and why we look forward to hearing what the Minister and his shadow, the hon. Member for Nottingham East (Chris Leslie), have to say on the matter.

--- Later in debate ---

[Chris Leslie]

Absolutely; the hon. Gentleman makes an incredibly important point. The pay-day lending industry has tried to fill the gap where the mainstream financial services sector has pulled back. In rural communities—this certainly happens in urban communities, such as my constituency of Nottingham East—people have had difficulty accessing mainstream financial services, so those less desirable players have moved in to fill the void. The gap available is being filled not only by high-interest legal players, but the illegal loan-sharking sector. That is a real and growing problem. In recent years, surveys have demonstrated that financial service deserts have grown up across different parts of the country. It is therefore incredibly important that when the Independent Commission on Banking reports this summer, we take the opportunity to step back, take stock and say, “What should good, responsible, social banking involve?” That is not a party political point; we are talking about something that communities need and deserve.

I am concerned about the points made about branch closures in some of the mainstream banks, as they start to retreat from rural communities. Hon. Members have already referred to the Campaign for Community Banking Services and its survey about the number of bank branches that are closing, particularly where a bank is the last one in a town. That leaves those towns or villages without any banking cover at all. I shall mention briefly some of the places affected. Barclays is closing the last bank in town in Kelvedon and Southminster in Essex, and Bedfont in Middlesex. Lloyds is closing the last bank in town in Potton in Bedfordshire, Wainfleet in Lincolnshire, Bilton in Rugby, Barton-under-Needwood in Staffordshire, Netley Abbey and Stockbridge in Hampshire, and Yarmouth. HSBC is closing the last bank in town in Whitburn in Tyne and Wear, Stamford Bridge in Yorkshire and Hoylake in Cheshire.

In addition, although it is not exactly a rural area, we had a debate the other night about the Nationwide closing a number of branches in south-east London. A number of big financial players could be criticised for diminishing the services to long-standing and loyal customers who really appreciate access to a branch.

The hon. Member for Brecon and Radnorshire made a point about access to online banking and the requirement for broadband. High-speed internet is very important, particularly in rural areas, but it is not always available. The hon. Member for Ceredigion talked about the broader concept of financial services, and financial advice. I would add to that the controversy about access to independent financial advice and independent financial advisers, or IFAs. Sometimes, IFAs are one of the only providers of independent financial advice in small communities. Hon. Members may be familiar with the retail distribution review being conducted by the Financial Services Authority, and the impact that that might have on the ability of communities in rural areas to access independent financial advice.

The IFAs are under pressure, not only as a result of the FSA review, in terms of the extra qualifications that they need to gain, but as a result of changes to commission structures, which need to be handled far more carefully. There are also increasing pressures as a result of the levy placed on them by the Financial Services Compensation Scheme. There a number of factors, some of which have reasonable arguments behind them, that together could place in jeopardy the ability of individuals to get free or low-cost financial advice. Will the Minister confirm that he is conscious of that strategic risk to the IFA community? What steps will be taken to ensure that that advice will still be available, despite so many proposed changes?

The hon. Member for Ceredigion congratulated the Government on maintaining the financial inclusion fund for another year. That is one of those strange things that happens in politics when something that is valued is initially scrapped. There were howls of protest in the previous Budget when the Conservative-led Administration decided to scrap the £27-million financial inclusion fund. The fund pays for at least 500 debt advisers—largely face-to-face citizens advice bureaux advisers and so on—and I think it helps to support approximately 100,000 appointments each year. Those howls of protest helped to bring about a partial U-turn from the Government, and a few weeks ago they announced that they will keep the fund going for another financial year. Are we supposed to show gratitude for that? Well, perhaps, but it is not enough to say “Thank you for continuing the fund for another year.”

I want to know what the Government’s plans are for the end of the 2011-12 financial year. What will happen, in April 2012, to the financial inclusion fund? We are in the spending review period, so there is no excuse for not knowing the available finances. The Minister needs to say now what his plans are for the financial inclusion fund from that point; at the very least, it is surely necessary to give charities and organisations that provide debt advice certainty about what will happen over the spending review period, so the Minister needs to answer that point.

[Mr Mark Williams]

I appreciate the point that the hon. Gentleman is making. I share the general direction of his comments. None the less, it would be churlish not to congratulate the Government, because they listened to the strong concerns that were expressed on the issue. I was certainly relieved that two debt advisers in my constituency would carry on their excellent work in helping 500 families.

[Chris Leslie]

Absolutely. It would be churlish not to be glad that there is a continuation of that, but it is such a pity that it is on a piecemeal, ad hoc, year-by-year basis, when the fund should be a strategic plank of the Government’s approach to providing financial services and advice, especially in rural communities.

Funding Formula

Mark Williams Excerpts

Tuesday 18th January 2011 Westminster Hall

[Andrew Selous]

The hon. Gentleman is right. There are significant differences. I am an east of England MP, and that region has the lowest spending of any region in England. Perhaps that is why I get increasingly angry communications from my constituents on the matter.

Having outlined the problem and some of the unfairness, I want to talk more about what we can do. I direct my hon. Friend the Minister to the excellent conclusions of the House of Lords report of 2009 on the Barnett formula. The report looked across the world to Australia—I declare an interest in that my mother was Australian, but that does not affect whether I think the Australians have a fair and good solution, from which we could learn. In Australia, the Commonwealth Grants Commission is an independent body charged with the responsibility of dividing the cake between the Australian states and territories. It is an advisory body to the federal Government and its impartiality is completely accepted by the states and territories of Australia. I understand, and agree with Government colleagues, that we are not looking to set up extra quangos. If my hon. Friend does not want an extra quango my proposal is that we should add the specific responsibilities in question to the remit of the Office for Budget Responsibility. However, if she says that that is too much for the OBR, it is not fair to tell me that we should not have an extra quango. I would be happy to go either way, with whichever option seemed most sensible and would cost the Government less. We could add the responsibilities to those of the OBR, but if we wanted a separate body we could have one. Given the figures involved—the sums of public spending—it would be a serious body.

What the Committee in the House of Lords proposed was only illustrative. If the Government have other or better ideas, or if colleagues from either side of the House want to contribute ideas about what the needs-based formula should include, let us start the debate now. Let us get ideas rolling into the Treasury, so that we can proceed with total fairness.

[Mr Mark Williams (Ceredigion) (LD)]

I too congratulate the hon. Gentleman on obtaining the debate. I welcome the direction of travel that he has outlined, but I want to ask about timing. He has alluded to the impatience in England, whereas I and colleagues from Wales and Scotland would allude to the shortfall, such as that in education; there is £500 less per child in Wales than in England. There is impatience about that. The coalition Government have said that in a Welsh context a Calman-style commission will be set up after the referendum. What are the hon. Gentleman’s views on that? Do they reflect that impatience, or is he more on the go-slow track?

[Andrew Selous]

I am naturally quite an impatient person, and I want to get things done when I see something that I think is not right. However, we are in difficult times financially, and it will be incredibly difficult to move from one formula to another in these challenging times.

A sensible time scale would be for the Government to start doing the work now, setting out how we are to allocate money fairly between England, Scotland, Wales and Northern Ireland on a needs basis. Once we agreed on it, there would need to be a transitional period. We cannot get away from that, because we have to do such things fairly and in a way that does not cause undue difficulties in any part of the United Kingdom.

I would be a happy person at the end of this debate if I had a sense that the Government would move toward setting up a system that allotted funding on a needs basis, and that they would agree to create some sort of body to do that, and consider a transitional period. The beauty of that is that by then we would have got through these difficult financial times, and more money would be available as we started to implement such a system. It would also make the transition easier for the parts of the United Kingdom that did not benefit.

Oral Answers to Questions

Mark Williams Excerpts

Tuesday 8th June 2010 Commons Chamber

[Danny Alexander]

I am grateful to the hon. Lady for making that point, and I have certainly heard what she said. Obviously, we are reassessing carefully projects approved by the previous Government between 1 January and the election, and we will make an announcement in the near future.

[Mr Mark Williams (Ceredigion) (LD)]

11. What his policy is on the mechanism for the provision of funding from the Exchequer to the devolved Administrations; and if he will make a statement.

[The Chief Secretary to the Treasury (Danny Alexander)]

The Government recognise the concerns expressed by the Holtham commission about the system of devolution funding, but as we made clear in the coalition programme for government, the first priority has to be reducing the deficit.

[Mr Williams]

I thank my right hon. Friend for that answer, and for the acknowledgement in the coalition agreement of the work of the Holtham commission. Its message was that there was historical underfunding of Wales to the tune of £300 million a year; that was backed up by Lord Barnett himself and a Lords Committee. Does my right hon. Friend accept the report’s conclusion that Wales has, historically, been underfunded? We acknowledge that cuts will be borne right across the UK, and across all its regions and nations, but will he use this opportunity to confirm the Government’s commitment to fair funding across the country?

[Danny Alexander]

In the coalition agreement, we say that we recognise the concerns raised by the Holtham commission, but the priority must be to reduce the deficit. We also said that once the forthcoming referendum has taken place, there will be a Calman commission-like process. The Calman commission looked at greater financial accountability for the Scottish Parliament, and a similar process for Wales might help to address some of my hon. Friend’s concerns.

--- Later in debate ---

[The Economic Secretary to the Treasury (Justine Greening)]

We do support credit unions. In fact, one of the first things that the new Secretary of State for Wales did on her appointment was to visit her local credit union in Wales. We have said that we want vibrant, sustainable credit unions. We are looking at the legislative reform order to which the hon. Lady referred and I hope that we can come back with some further dates in the next few weeks. As she can imagine, the focus right now has been on the emergency Budget, but I am aware of the order and officials are talking to me about the time lines for it.

[Mr Mark Williams (Ceredigion) (LD)]

T4. There was great relief in the tourism sector when the furnished holiday lettings rules were scrapped just before the election in the wash-up. What will the Government do to ensure that the rules are EU compliant, but do not disadvantage tourist operatives in the way that it was feared that the old rules would do?

[The Exchequer Secretary to the Treasury (Mr David Gauke)]

My hon. Friend raises a very good point, and what was proposed on the furnished holiday lettings rule would have caused great difficulties. There is an issue with the EU law, but I can assure him that we are working hard on the matter and we hope to be able to say more in the next few weeks.