Oral Answers to Questions

Debate between Neil Parish and Heather Wheeler

Monday 22nd January 2018 Commons Chamber

[Mrs Wheeler]

I thank my hon. Friend for that question; he never fails to disappoint. Interestingly, one area where councils will be able to flex their muscles more is in taking on empty homes and looking into quality rented properties that are affordable for everybody so that communities stay together. I think that is something Bradford Council ought to do.

[Neil Parish (Tiverton and Honiton) (Con)]

5. What steps the Government are taking to increase the number of affordable homes in rural areas.

Interest Rate Swap Products

Debate between Neil Parish and Heather Wheeler

Thursday 21st June 2012 Commons Chamber

[Neil Parish]

Does my hon. Friend think that, in many cases, bank head offices put huge pressure on local managers to sell these products, which local managers actually have no knowledge about?

[Heather Wheeler]

That is becoming clearer and clearer as this debate goes on and as more and more constituents come out and tell us their stories.

Two advisers visited my constituent and went through all the advantages of an IRSA, but they did not mention any possible downsides or advise him to take specialist independent advice about the IRSA. He was also told that he could not get a loan if he did not take out the IRSA, giving my constituent very little choice over the matter and putting him under considerable pressure to accept. It has since become apparent to him that the so-called advisers were just sales people from the bank set on selling him this product, regardless of any consequence to himself or his business.

To my constituent’s knowledge, he having researched the matter, only two companies in the UK at the time were qualified to give advice, but both belonged to large City firms that would have been beyond his budget. My constituent is now left with a product that will have cost him £200,000 by the end of this year alone. I think we would agree that this is a considerable sum for a garden centre. He has had to make several redundancies, as well as personal sacrifices, to remain solvent, and his business is clearly feeling the ramifications; the turnover, which was £2.2 million at the time, has dropped, with the marketplace as it is, to below £2 million.

Furthermore, it is evident that banks are not taking claims of mis-selling seriously. Another constituent of mine, the owner of a motorcycle company, has had a long banking relationship with Lloyds. In fact, they used to use Lloyds to buy stock rather than property, and had loans from it for many, many years. It was important that they had this strong relationship with their bank, yet, since they fell into the trap of buying an IRSA, incurring huge costs, the bank appears to have little interest in dealing with the matter satisfactorily. In February, my constituent’s solicitor sent a letter of claim to Lloyds; it is now June and he is still waiting for a reply.

The situation needs investigating further. Constituents have written to me on this issue about three of the top banks—NatWest, RBS and Lloyds TSB—so the situation is far-reaching and needs to be dealt with. These heavyweight banks are effectively taking advantage of small business owners’ lack of financial expertise, bombarding them with the idea that they must enter into such agreements to get a loan. Indeed, this could be one of the biggest financial scandals to come to light since PPI. The agreements need to be made more transparent, so that people are fully aware that such products have significant break costs and are viewed as separate from the loans that the individuals concerned originally wanted to take out.

I urge the Minister to take steps wherever possible to support small and medium-sized enterprises and to ensure that where there is widespread misconduct against them, as in my constituency of South Derbyshire, appropriate action is taken to support them. I look forward to hearing her concluding remarks and hope that she will take my constituents’ cases on board.