Compensation (London Capital & Finance plc and Fraud Compensation Fund) Bill

Rehman Chishti Excerpts

Report stage & 3rd reading
Wednesday 22nd September 2021 Commons Chamber

[Peter Grant]

The hon. Gentleman makes a valid point, which is well worth consideration. I do not want to go into the detail of how we should fix what is wrong with the Financial Conduct Authority just now. The first thing that we have to do is recognise that it ain’t working, and regardless of what promises and assurances we have had, it still is not working. Whether that is best dealt with by putting yet another monitor on top of the regulator to monitor it, I do not know, but there has to be recognition that the existing scheme of regulation, as it is carried out by the Financial Conduct Authority, is simply not fit for purpose. The same applies to the parts of the regulatory environment that fall under other Government Departments. It is not only Treasury Ministers who have such responsibilities.

Let me return to the similarities between London Capital & Finance and Blackmore Bond. They both misled their victims into believing that their activities were regulated by the Financial Conduct Authority. The only difference was that London Capital & Finance had a registration for something else, which it hid behind. Blackmore Bond did not have a registration of its own, but it hid behind the registration of other companies, which knowingly allowed their names to be associated with the marketing and selling of its products. The intention in both cases was the same, and that was to mislead—effectively, to con the customers. The results were the same: thousands of people lost everything. I do not understand why there is such resistance in the Government to saying that the remedy should be the same, or even to consider that the remedy should be the same.

In the immediate aftermath of the collapse of London Capital & Finance, the Financial Conduct Authority took steps to outlaw the marketing of mini bonds to retail investors. It outlawed the very practice that was at the cornerstone of London Capital & Finance’s business plan, as it was for Blackmore Bond and many others. There is still no explanation as to why, when the FCA was able to act so swiftly and decisively to close the door after the horses had gone, it took no effective action to stop those mis-sales years earlier, after it had been given credible and persuasive evidence of exactly what was happening in the mini bond market.

In earlier stages, I have raised concerns that there were other Blackmore Bonds just waiting to come to our attention. There were probably other mini bond-based businesses about to collapse. There were probably other investors about to face the awful reality that they had lost everything. That might be happening even as we discuss this Bill.

Last week, none other than Private Eye magazine reported that another mini bond company, Moregreen Capital Ltd, had written to its investors asking them to forgo their next interest payment. That might be the starting signs of severe trouble. I cannot confirm anything that was in the Private Eye article, and I cannot confirm very much from the public domain about Moregreen Capital Ltd in the way that I could for Blackmore Bond, for the simple reason that Moregreen Capital has failed to file its accounts for the last two years. Its only published accounts were so early in its trading history that today they are almost certainly useless. I should also make it clear, as is often the case, that company names can be similar and that that Moregreen Capital Ltd is unrelated to some other companies with Moregreen in their name. There might well be perfectly valid reasons for the action that Moregreen Capital has taken recently. There could be good reasons why it stopped publishing its accounts, or there might be yet another group of investors who are in the first stage of a journey that sees them lose everything with, as things stand, no prospect of compensation. The best-case scenario for Moregreen Capital’s investors is that they have nothing to worry about—that their investments are safe and that they will eventually get all the funds they were promised. But even if the best-case scenario pans out with Moregreen Capital, it will only be a matter of time before the next mini bond scandal rears its ugly head. Action has been taken to prevent that precise form of financial scam being allowed again, but we need action to anticipate and predict what scams will arise in future and to prevent them before they are allowed to take place. We have to recognise that thousands of people are victims of crime. They were the victims of criminal activity and they should be compensated in the same way as other victims of criminal activity have been compensated.

The amendment does not require the Government to establish an additional scheme, but it does require them to get this debate started. We in this Parliament are ultimately responsible for the regulatory framework in these islands. We collectively, and our predecessors, are ultimately responsible for having to set in place and to enforce a regulatory environment that would have protected our constituents from losing everything.

One of the examples I cited earlier was a retired military person who told Blackmore Bond’s directors, “This is my military pension—I can’t afford to lose it.” They took it and they lost it. That person deserves compensation. They have no chance of getting compensation out of Blackmore Bond. They are not covered by the financial services compensation scheme. Surely the Government have to agree that there is a case to be looked at in such examples. We have to look at a wider compensation scheme, in the same way we have for people who lose their holiday because their travel agent goes bust. Losing a holiday, which has happened to a lot of people over the past couple of years, is not a nice thing to happen—it is a distressing thing to happen—but when people lose their holiday, at worst they lose money they could afford to spend on a holiday; when people lose their pension they are losing their livelihood for the rest of their life. There has to be better provision for compensation for those who, through no fault of their own, see their pension, their plan for retirement and the future of their family’s financial security wiped out by charlatans who right now are taking advantage of a regulatory environment that is open to abuse.

[Rehman Chishti (Gillingham and Rainham) (Con)]

On the allocation of compensation to different individuals, all victims are victims of this scam, but is the hon. Gentleman saying that priority should be given to those who have suffered the most when it comes to how the Government move forward in the allocation of compensation for their losses?

[Peter Grant]

We have to remember that we are dealing with a large number of people. It is not just one company with 50 or 60 people who are victims; there are thousands of victims that we know of and probably many more than we do not know of, and the amounts of money that they have lost individually are life-changing for them. Someone who has worked for 20 years on a Member of Parliament’s salary probably has £20,000 or £30,000 they can afford to lose; these people did not. The amounts they have lost individually are significant; the amount that has been stolen collectively, as I said, is almost certainly over £1 billion. If people stole £1 billion out of a bank vault, law enforcement would not stop until every last one of them was behind bars for a very long time, and would, if need be, change the rules to make sure that it could not happen again. We should regard the theft of £1 billion out of people’s pension funds just as seriously as the theft of £1 billion of gold bullion out of the back of a Securicor van. All this amendment asks is that the Government recognise that as an issue and start to put answers in place as to how they can protect our constituents from falling victim to these scams in future.

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[Kevin Hollinrake]

Anybody reading the report will be appalled by the regulator’s performance in this case, given not just the number of complaints about LCF but the lack of joined-up thinking within the FCA. This was some years down the line; it happened after Andrew Bailey had taken over at the FCA. He knew there were problems right at the start, but there was no joining of the dots and there were the clear allegations of inappropriate conduct within LCF. The independent financial adviser who drew attention to it was a very competent person; he was not simply raising the issue saying, “I don’t like this company.”

The IFA was called Neil Liversidge. He wrote to the FCA setting out exactly what was going wrong with the designation of unsophisticated investors as sophisticated, the encouragement to class themselves as sophisticated, and where some of the investments were going. It was pretty clear what the problem was at LCF, and the FCA failed to act. That is simply unacceptable. That is why I welcome the compensation. However, it still has to be down to investors to make an educated decision. Certainly my constituent and others I have seen could see that this was not a Government gilt they were investing in; there were obviously some risks attached.

[Rehman Chishti]

My hon. Friend says that he welcomes the compensation that is being made. Of course, so do I and so does everybody else here, but linked to the question of compensation is justice and the delay in bringing the perpetrators to account through the investigation by the Serious Fraud Office. I would be grateful if the Minister or my hon. Friend could say why there is such a delay in to bringing those perpetrators to account, because people want compensation but they also want justice and to have the perpetrators brought to account.

[Kevin Hollinrake]

I could not agree more. The UK has a pretty poor record in terms of bringing forward fraud prosecutions. There are a number of things we need to do that are not really within the scope of this Bill. Not the least of them —the Government are committed to this—is bringing forward an offence of a failure to prevent an economic crime. That would make it far easier for the SFO to bring forward prosecutions. I would welcome my hon. Friend’s joining my campaign to bring that legislation forward, because it would make a huge difference to the SFO’s ability to bring forward speedy prosecutions.

[Rehman Chishti]

I am very happy to support my hon. Friend’s campaign to ensure that justice is done in this case.

[Kevin Hollinrake]

That is very welcome.

The key point in the amendment is about oversight. I am concerned that the FCA is not as accountable as it could be to this House. With repatriation, a number of regulations and regulatory oversight of the FCA have now passed back to us domestically whereas before there was accountability through the EU institutions. I am concerned that we have proper oversight of what the FCA does. The hon. Member for Glenrothes and the hon. Member for Harrow West (Gareth Thomas) are quite right: the jury is still out on the FCA. It has made some bold claims that it is reforming and becoming more effective. I welcome the fact that only a couple of weeks ago it set out some clear targets for a reduction in the number of investors investing in high-risk investment and being subject to scams. There are some specific criteria that the House can now hold it to account for; I am just not clear how we do so. I can see how the Treasury does so, but it is important that the House can, too.

In the work that I have done on the all-party parliamentary group on fair business banking, we have seen numerous cases in which the FCA has not been proactive or used the mechanisms at its disposal to sanction the people responsible. That is simply unacceptable. The FCA must be a much more proactive organisation and, for it to be held account for such proactivity, we need a clear line of responsibility between it and the House and its Members. The amendment is a good attempt, but not one that I can support.

[Gareth Thomas]

I am sympathetic to the broad thrust of the amendment tabled by the hon. Member for Glenrothes (Peter Grant) and his concern, which I alluded to in my intervention, that the Government, and certainly the FCA, appear to be saying, “Don’t worry—we’ve had a change of leadership and everything is going to be all right now. You don’t need to worry about the quality of the regulation of investment firms going forward, or the implementation and enforcement of consumer financial regulation, whether in this case or more generally.” I have some sympathy with the point of the hon. Member for Thirsk and Malton (Kevin Hollinrake) that we should be sceptical about such a claim. It is good that Treasury Ministers will be having a more regular dialogue with the FCA, partly as a result of this scandal.

As the House knows, I have taken a particular interest in the demutualisation of Liverpool Victoria. That is very different from the case of LCF, so it would not be appropriate for me to go into the particular details, but there are parallels in the treatment of Liverpool Victoria consumers and those of LCF products. Some of those parallels relate to the culture that appears to exist within the FCA. The all-party parliamentary group for mutuals received a letter from the FCA and one from the PRA, and they reveal that there have been almost 60 meetings between the regulators and the board of Liverpool Victoria, but not one meeting with its consumer-owners on its demutualisation. I wonder whether there is not a frog in hot water-type problem here, with the FCA so close to the Liverpool Victoria board in this case—and potentially to other financial firms—that it fails, perhaps accidently, to do its job on behalf of consumers with sufficient robustness.

I welcome the Dame Elizabeth Gloster report, which was excoriating in its findings. To pick out some key concerns, it said that there were “unclear” policy documents for use by FCA staff, a

“flawed approach to the Perimeter”

and a “failure to consider” the behaviour of particular businesses holistically. It also said that there was insufficient training of staff and pointed to confusion between Her Majesty’s Revenue and Customs and the FCA—our regulators—over the handling of particular issues.

I appreciate that the FCA has not only had a change of personnel but brought forward proposals for a consumer duty to try to rebuild some confidence. However, my problem with the duty, which it consulted on until the end of July, is that there is no sense of understanding the difference between consumers who also own a business—a mutual in this case—and consumers per se, or a willingness to take additional actions for consumers who are also owners. I worry about whether that additional duty will be robust enough.

[Rehman Chishti]

I really appreciate all the work that the hon. Gentleman has done on this matter. On the consumer duty, my concern, raised with me by local residents, is that the company was allowed to continue trading without investigation in 2015 after warnings of malpractice and maladministration. With his expertise and experience, does he think that, whether through the consumer duty or further regulation following the Gloster inquiry, the measures proposed would prevent what happened in 2015?

[Gareth Thomas]

The hon. Member invests an awful lot of confidence in me to predict what might happen, but I can well understand a Conservative looking to the Labour party for such guidance. I certainly hope that the consumer duty and better enforcement will help to prevent such a terrible debacle from happening again, because, as the House has rightly noted, many good people have lost an awful lot of money and deserve the compensation that the Bill will provide. However, many others who have been victims of similar cases would have also merited better protection from the FCA.

I will ponder aloud, in response to the Minister having some sympathy with the points made by the hon. Member for Glenrothes and my right hon. Friend the Member for Wolverhampton South East (Mr McFadden) in Committee, whether there is a need for a smaller body that does not just concentrate on the FCA but looks at some of the strategic issues around consumer protection and financial products in particular, and has a small number of inquiries each year looking at the performance of regulators in that regard, in part to help prevent a repeat of the LCF debacle.

As a model for such a body—I do not suggest it is perfect—I put on the Floor of the House, so to speak, the Independent Commission for Aid Impact, which the House uses to consider how our international aid money is being spent and the strategic challenges in that. It is a small, dedicated body that operates in a completely different sphere from this, but it produces important and useful reports that are used by the relevant Department, experts in the sector and, crucially, the International Development Committee. I wonder whether such a body would be appropriate to keep the PRA and FCA’s feet to the fire. It could be used by the Treasury Committee, and indeed other Committees of the House, to assess the quality of consumer financial regulation and the job that the FCA, PRA and other regulators are doing to protect consumers from any repeat of the LCF debacle.

[Rehman Chishti]

The hon. Gentleman’s idea of an independent committee should be considered among the wider tools to get the right support for consumers. Of course, I have admiration for him because, being a fair man, I see he also went to the University of Wales Aberystwyth, and we were taught at university always to respect other colleagues’ talents. That is why I respect his expertise on this matter.

[Gareth Thomas]

I am not sure I need to respond other than to thank the hon. Member for his intervention.

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[Mr Pat McFadden (Wolverhampton South East) (Lab)]

I want to use the opportunity provided by the amendment to raise a few points, particularly about clause 1, and to put them to the Minister. I thank Dame Elizabeth Gloster and both the Treasury Committee and the Work and Pensions Committee for the work they have done on this issue.

The issues covered by the Bill have been widely set out in debates on Second Reading and in Committee. They include: the wholly deficient practices at the FCA that meant that hundreds of reports of harm were not acted on, which was described by Dame Elizabeth Gloster as an “egregious” failure of the FCA to fulfil its statutory duties; the fact that this failure allowed LCF to continue in operation for years longer than it might otherwise have, thereby multiplying the harm to investors; the reassurance at one point from the FCA that what was happening was not a scam; the impact of the halo effect in having a regulated firm selling unregulated products, leading unsuspecting investors to believe that these products were far safer than they actually were; the loss of a whistleblower’s letter three years before the firm’s collapse, and the damning conclusion from Dame Elizabeth Gloster that the loss of that letter probably did not make any difference, because the FCA was so dysfunctional that, even if it had not been lost, it would not have been acted on; the repeated failure to join the dots and the treating of each LCF transgression—for example, on its use of financial promotions—as an isolated incident, when instead it was a pattern of behaviour designed to use its regulated status to bolster confidence in unregulated products; and the public disagreement between Dame Elizabeth and the Governor of the Bank of England about the issues of responsibility and personal culpability.

I served on the Parliamentary Commission on Banking Standards, which said that

“a buck that does not stop with an individual stops nowhere.”

That quote has been much used in the debate about this issue, which has raised sharply the limitations of collective accountability and the question of whether in this case the buck really stopped with anyone. Of course, most importantly of all, there is the issue of the distress and the financial loss to investors and the question of how they should be compensated. All of this has led to the Government stepping in with this Bill to authorise compensation up to a certain level for investors.

Based on the amendment, I want to put a number of questions to the Minister arising from the Bill. First, why has compensation been set at 80% of the Financial Services Compensation Scheme maximum of £86,000, not the full level? That is probably the main outstanding concern of LCF investors, who are grateful that compensation will come but who cannot understand the 80% cap given the manifest failures set out in Dame Elizabeth’s report. Are the Government completely fixed on this 80% figure, or is there any prospect of that being reconsidered?

[Rehman Chishti]

I thank the shadow Minister for giving way, and I will of course raise the same point with the Minister in due course. The right hon. Gentleman says that the victims will of course welcome the compensation coming their way, but the point raised with me by those who have suffered a loss is whether the Government can look to prioritise those who have suffered the most due to their loss. There has been a lot of data gathering by the FSCS, the FCA and the Serious Fraud Office, so that should be easily apparent. What is his view about ensuring that compensation is quickly given out and prioritised to those who have suffered the most?

[Mr McFadden]

The hon. Member raises a very fair point. It has already been referenced in the debate that this is not just about amounts, but about the timescale, and we all want the Government and whoever is administering this scheme to be able to get on with it.

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[Mr McFadden]

The hon. Gentleman makes a fair point. On how we can be sure that this will not happen again, and the transformation programme, it is to be expected that companies would go through such a programme, given the damning nature of Dame Elizabeth’s findings. There is also, however—and this is not just about this specific case—understandable public scepticism when a scandal happens, people talk about lessons being learned, there are some changes to management, and the organisation moves on. How do we ensure that, while understandable, such public scepticism is not justified in this case because something different is happening, and that we will not end up back here, some time in the future, debating another investment scam that was not spotted and acted on in time?

The second aspect to the question of how we can ensure that this does not happen again relates to legislative protections. This scam was promoted by a lot of online advertising. The online safety Bill is coming up, and at the moment paid-for advertising is excluded from that. Why should that be the case? Surely the LCF case shows that paid-for advertising must be included. As the Minister will be aware, there is a growing coalition behind the argument that the online safety Bill must offer greater protection against financial scams and fraud, and that is bound to be a major issue as the Bill goes through the House.

That issue is important, because consumers are being targeted every day with adverts, text messages, emails, and phone calls geared either to obtaining their financial details, or promising get-rich-quick schemes. As covid has pushed more of our lives online, it is imperative that legislation keeps pace with the increased use of online scams that are designed to strip people of their money. It is becoming more and more difficult for consumers to ascertain the difference between a genuine approach and a scam approach. We in this House have a legislative duty to keep pace with what organised criminals are trying to do.

[Rehman Chishti]

rose—

[Mr McFadden]

I am coming to the end of my remarks; I hope the hon. Gentleman does not mind. I leave the Minister with this: is it not better to try to stop people being ripped off in the first place, than to have to ask the taxpayer or, as in clause 2, members of pension schemes, to compensate people after such scams have already happened? I will leave it there, although I will later have a few remarks and questions about clause 2.

--- Later in debate ---

[Rehman Chishti]

I am grateful to the Minister for allowing me briefly to intervene. He said he has had conversations with those social media companies. I sat on the Home Affairs Committee when we discussed online harms. What was the response of those social media companies, and what will it take to get them to do the right thing?

[Guy Opperman]

It will take strong pressure by fantastically good constituency MPs such as my hon. Friend, and others, so that those companies realise that they have an obligation to do the right thing in respect of the many constituents we represent. Clearly, though, these are matters to be considered by the Government, and I am sure my hon. Friend will be making representations to the Secretary of State for Digital, Culture, Media and Sport.

Let me turn briefly to the amendment. A lot of the speeches made had nothing to do with the amendment, and it is important to avoid creating the misconception that the Government will stand behind all bad investments in the future, where FSCS protection does not apply. The Government will establish a scheme based on the level of FSCS compensation, capped at £85,000. We have carefully considered the issues and are satisfied that the individual circumstances surrounding LCF are completely unique. Other mini-bond firms have failed, but LCF is the only mini-bond firm that was authorised by the FCA and sold bonds in order to on-lend to other companies. As the House will know, only three Government compensation schemes have been established in the past three decades, for Barlow Clowes, Equitable Life, and now LCF, despite many firms failing over that period. This type of intervention is the exception, not the rule.

Although the amendment is legitimate and considered to be principled and practical, there is a practical reality that the FCA is already reporting and is held to account by the Treasury. With respect, I therefore ask the hon. Member for Glenrothes (Peter Grant) to withdraw his amendment.

Question put, That the amendment be made,

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[Rehman Chishti]

I echo the comments made by my hon. Friend the Member for Leigh (James Grundy) and it is a real pleasure to follow him on this issue. I thank the Minister and, through the Minister, the Treasury and all involved in the Government for what they have done on this matter. The point made by my hon. Friend and others today is this: there are individuals who have suffered due to no fault of their own. It is absolutely right that each and every one of us who has those constituents stands up and fights to ensure they receive fairness and justice. I thank the Government for doing the right thing by offering compensation in these circumstances. Again, I thank all hon. Members who have pushed for that. Members of Parliament often need to push the Government to do the right thing and I thank the Government for doing the right thing.

The question I have for the Minister—it links to the point made by the right hon. Member for East Antrim (Sammy Wilson)—relates to prioritising individuals who have suffered the most. His point is absolutely right: how do we determine who has suffered the most? Will the Minister ask the Treasury to clarify whether there is a way to determine who has suffered the most? It is only fair and proper to ensure that when money goes out, those who have suffered the most, taking all factors into account, get compensation at the earliest opportunity.

My second point, also made by my hon. Friend the Member for Leigh, is on timescale. When will the compensation start to go out? Will it be before or after Christmas? What is the full timescale for the compensation to go out? What people do not like is injustice or delayed justice. I speak as a former barrister who prosecuted and defended cases. I understand that serious and complex Serious Fraud Office cases take time, but there needs to be an explanation from the Government to people outside about what is causing the delay and when they will receive justice. We know a fraud has been committed. We know the Gloster report identified a wrongdoing. Can the Minister therefore seek a clarification from the Attorney General’s office on the timeline for prosecuting individuals?

My third point, raised by the shadow Minister, the right hon. Member for Wolverhampton South East (Mr McFadden), is on what action the Government will take with regards to false advertisements and online harms. When I was a member of the Home Affairs Committee, we had the same issue with regards to extremism and material going online. We asked Google, YouTube and all the other social platforms what action they were going to take. I am grateful to the Minister for saying that it is down to Members of Parliament like myself to push Google to do that, but we do not have the same clout as the Government—or the sanctions and levers available to the Government. If the new Secretary of State for Department for Digital, Culture, Media and Sport wants to look at platform verifications, that is something she may want to consider. I say to the Minister: will he please get the compensation out as quickly as possible and ensure that lessons are learned so that nothing like this ever happens again in our financial regulation of institutions?

Oral Answers to Questions

Rehman Chishti Excerpts

Monday 9th March 2015 Commons Chamber

[Stephen Metcalfe (South Basildon and East Thurrock) (Con)]

2. What support his Department provides to young people seeking employment or education.

[Rehman Chishti (Gillingham and Rainham) (Con)]

11. What support his Department provides to young people seeking employment or education.

[The Minister for Employment (Esther McVey)]

Work coaches offer all claimants tailored support from day one of their claim. Claimants in need of experience are guided towards work experience or sector-based work academies, and those who require more focused training are supported through traineeships and apprenticeships.

[Esther McVey]

My hon. Friend is right and we must make sure that young people are properly equipped for the world of work. I know of an ex-business man who ran a family business in printing. He knew who came through his door, which included young people who he wanted to give a job to, but they needed what people call “soft skills” and I like to call “core skills” for employability. We are working with the Department for Education on a new careers and enterprise company, and through the Inspiring The Future initiative young people are meeting business people to get a feel for what business and employment is all about, and we must support them as best we can. As my hon. Friend will know, we have increased work experience considerably and introduced sector-based work academies to that end.

[Rehman Chishti]

Will the Minister welcome the initiative that has been set up in my constituency with support from DWP and the local Gillingham football club, along with Medway Watersports, to provide young people with skills and positive experiences to assist them in securing employment or further training?

[Esther McVey]

I welcome the fact that my hon. Friend is working closely with Gillingham football club and its chairman, Paul Scally, who recently launched that help for young people, which is key. Various community and sports groups up and down the country are helping young people through the flexible support fund, and that should be highlighted. As many people as possible coming together to support young people into employment is key.

Oral Answers to Questions

Rehman Chishti Excerpts

Monday 26th January 2015 Commons Chamber

[Mark Menzies (Fylde) (Con)]

4. What progress he has made on supporting people with a mental health condition to find work.

[Rehman Chishti (Gillingham and Rainham) (Con)]

8. What progress he has made on supporting people with a mental health condition to find work.

[The Minister for Disabled People (Mr Mark Harper)]

The Government are committed to helping people with mental health problems into work. We are piloting a number of innovative approaches to employment support for those with mental health problems, and the Access to Work mental health support service can help people with a mental health condition who are absent from work or who are finding it difficult to get back into work.

[Mr Harper]

I am pleased that my hon. Friend mentions the Disability Confident campaign. I have invited Members from both sides of the House to talk about Disability Confident at an event in the House on Wednesday. Specifically on mental health, I had the privilege last Thursday to visit the constituency of my hon. Friend the Member for Gloucester (Richard Graham) and to meet with the work coaches in the jobcentre and with those who have been on some of our pilot programmes to hear about the success we have had in encouraging people with a mental health problem to get back into work, or to avoid having one in the first place.

[Rehman Chishti]

Will the Minister join me in recognising the importance of the voluntary sector in helping those with mental health issues to get back into work? Organisations such as Relate in my constituency work tirelessly to improve mental health and provide vital counselling that allows people to get back into work and progress with their careers.

[Mr Harper]

I am happy to pay tribute to organisations such as the one my hon. Friend has just mentioned. The important thing is to have a proper partnership with Jobcentre Plus, voluntary and third-sector organisations, the NHS and employers working together to ensure that we stop people from falling out of work if they develop a mental health problem, and that they can get back into work if they do so.

Oral Answers to Questions

Rehman Chishti Excerpts

Monday 8th December 2014 Commons Chamber

[Steve Webb]

When the Pensions Regulator notifies employers of their automatic enrolment duties, that letter flags the National Employment Savings Trust, which was designed with small businesses in particular in mind, but the regulator is considering putting more information on its website about other potential providers. I shall be hosting an event in the House for all Members to help them to support small businesses in their constituencies.

[Rehman Chishti (Gillingham and Rainham) (Con)]

T2. If he will make a statement on his departmental responsibilities.

[The Secretary of State for Work and Pensions (Mr Iain Duncan Smith)]

Even with the employment record at a high this week, I welcome the autumn statement announcement of more help to enter work across the generations, for young or old. We are introducing intensive support for those not in education, employment or training claiming universal credit to prevent a wage scar developing any further, and we are piloting work placements for older workers, helping with the transition to a new job in later life.

[Rehman Chishti]

I thank the Secretary of State for that answer. I welcome the announcement that the compensation scheme for diffuse mesothelioma has paid out over £15 million in its first seven months. What plans do the Government have to ensure that all victims, such as those in the Medway towns linked to the Chatham dockyards, are made aware of their rights to this compensation?

[Mr Duncan Smith]

I thank my hon. Friend who, with some of his colleagues, has put in a huge amount of effort to bring this to the Government’s attention. The new scheme is already making payments, with compensation averaging £125,000 for this desperate and terrible disease. We know that there are many more victims and families to be encouraged to come forward, and the Government are promoting that through the regional press and work in administrations to publish it further. Should the need arise—and should it be possible—we will keep this under review with a view to possibly raising that as well.

Oral Answers to Questions

Rehman Chishti Excerpts

Monday 23rd June 2014 Commons Chamber

[Steve Webb]

The hon. Gentleman raises an important point. We already hear anecdotal examples of people getting cold-calls that say, “This is your Government guidance offer.” We want to make it clear that that is not based on Government guidance, because that has not started yet. We are trying to make sure that instead of people making retirement choices with no information or advice, which often happens, they will have a right to go to a reputable provider and get information and guidance from someone who does not have a commercial interest in selling them something.

[Rehman Chishti (Gillingham and Rainham) (Con)]

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

[The Secretary of State for Work and Pensions (Mr Iain Duncan Smith)]

Today I welcome the National Audit Office’s positive response to the report on the child maintenance scheme, which simplifies the system and helps parents work together in the best interests of their children. There will be further to come on this soon. Already we know that twice as many parents intend to pay direct, even before the second stage of our reforms and ahead of expectation.

[Rehman Chishti]

What support are the Government giving to older workers and their employers in Medway to assist them into work and to build a fairer society?

[The Minister of State, Department for Work and Pensions (Esther McVey)]

I, along with the Pensions Minister, my hon. Friend the Member for Thornbury and Yate (Steve Webb), recently published the “Fuller Working Lives—A Framework for Action” document, which sets out the support that we are going to give to older workers. That includes a new health in work service, Jobcentre Plus tailored support, guidance and a toolkit for employees, and from next week the right to request flexible working hours.

Oral Answers to Questions

Rehman Chishti Excerpts

Monday 18th November 2013 Commons Chamber

[Esther McVey]

If I gave the impression of being complacent, I am sorry, but I am certainly not. I know the size of the job that the Government have to do to help all the youth out there. We are doing that job and will continue to do it as best we can. We do talk to other Departments. There is a duty on head teachers to provide careers guidance in their schools. We have a National Careers Service at Jobcentre Plus. We can work with schools to ensure that children have the best careers advice.

[Rehman Chishti (Gillingham and Rainham) (Con)]

17. In my constituency, youth unemployment has fallen to its lowest level since before the last election. Will the Minister join me in paying tribute to the excellent partnership in my constituency between MidKent college and ActivKids, which improves the job prospects of young people?

State Pension Reform

Rehman Chishti Excerpts

Monday 14th January 2013 Commons Chamber

[Steve Webb]

We have already given a guarantee that, having renegotiated the public sector pension schemes, we will make no further changes in rights under those schemes for 25 years. While we are changing the national insurance state pensions of public sector workers, we are not touching the public sector pension. Private sector workers may—indeed, probably will—find that their employer adjusts the private sector scheme in response, but, as I have said, even with that adjustment—even with the higher national insurance payment—the vast bulk of workers, certainly those within 20 to 25 years of pension age, will still be net beneficiaries.

[Rehman Chishti (Gillingham and Rainham) (Con)]

How will the new system affect those on low earnings?

[Steve Webb]

In the past, the state provided a flat basic pension and then an earnings-related second pension. By definition, low earners received low earnings-related pensions. What we propose is simply a flat pension, which means that low earners will, on average, tend to benefit.

Jobs and Social Security

Rehman Chishti Excerpts

Wednesday 28th November 2012 Commons Chamber

[Guto Bebb]

I disagree on the whole. Quite often the current restriction means that when people go over a certain number of hours, they are penalised. That will be dealt with when we introduce universal credit. What I have found is that there is a feeling out there that people are still being penalised for wanting to work more. Universal credit will certainly deal with that, which is an important change that is required.

We have heard a lot in this debate—from the Opposition Front-Bench spokesman and some Opposition Back Benchers too—about youth unemployment. Obviously it is absolutely problematic if too many young people are not working, but between 2004 and 2010, youth unemployment in my constituency of Aberconwy increased by 192%. If I recall it correctly, I think the Labour party was in government at that point.

[Rehman Chishti (Gillingham and Rainham) (Con)]

Does my hon. Friend agree that a number of councils out there are working in partnership with Jobcentre Plus? They include Medway council, which reduced youth unemployment from 1,600 to 1,200 between April and October. That clearly shows that where there is the will, the Government’s policies, with local councils working in partnership with Jobcentre Plus, are reducing youth unemployment.

[Guto Bebb]

Indeed, and that example should be replicated in other parts of the country, where partnership working can make a difference.

Despite a 192% increase in youth unemployment in my constituency of Aberconwy during the last six years of the Labour Government, we have seen a 21% reduction in youth unemployment since this coalition came into play. Twenty-one per cent is not enough—the fact that I still have young people not working in my constituency is unacceptable—but we should recognise the success in getting young people back into employment. Every young person who is not claiming unemployment benefit or lying around doing nothing is a success story as far as I am concerned. When Labour Members talk about youth unemployment, it is important that they consider their performance in government.

However, I suspect that this debate is more about the Work programme than about the general context. I have talked about the general context, but it is important to bear in mind that the Work programme is the Department’s flagship programme, and a lot rests on its success. My concern is that this debate is premature, because it is difficult to look at a long-term programme—which is looking at paying people based on their performance over the long term, not the short term—and say after a year that it is failing. Even going on the figures that came out yesterday, it looks as though the programme is doing exactly as it was supposed to be doing. They show that 56% of Work programme starters in June 2011 are no longer on benefit, that 30% of them have been off benefit for 15 weeks and that 19% have been off benefit for 26 weeks.

Oral Answers to Questions

Rehman Chishti Excerpts

Monday 23rd January 2012 Commons Chamber

[Maria Miller]

My hon. Friend is referring to the future of the personal independence payment. He will be aware of my firm commitment to ensuring that that payment is focused on helping those who need help the most. He will have seen from our recently published documentation that our initial work in that area shows that more of that money is going to people who really need it in order to live independent lives.

[Rehman Chishti (Gillingham and Rainham) (Con)]

13. What steps he is taking to protect the interests of people with small pension pots.

[The Minister of State, Department for Work and Pensions (Steve Webb)]

The problems associated with small pension pots can include higher charges, losing track of a pension or facing barriers to moving the pension and getting a decent annuity. That is why we published a paper last month that sets out some radical options for some form of automated transfer system to make it easier for people to build up one large pension pot.

[Rehman Chishti]

Does the Minister have evidence on the number of small pension pots that will be created after automatic enrolment?

[Steve Webb]

I am grateful to my hon. Friend for that question. There is a risk that without action, in an auto-enrolment world hundreds of thousands of new small pension pots will be created each year as people change jobs. That is why it is doubly important that we should have some mechanism to combine those pots so that they are a pension worth having.

Welfare Reform Bill

Rehman Chishti Excerpts

Wednesday 9th March 2011 Commons Chamber

[Mr Duncan Smith]

rose—

[Rehman Chishti (Gillingham and Rainham) (Con)]

rose—

[Mr Byrne]

I will give way to the hon. Gentleman.

[Rehman Chishti]

Considering that the right hon. Gentleman agrees that it is absolutely right and proper to support families, does he concede that the Labour party got that wrong because couples were paid to live apart?

[Mr Byrne]

I do not know whether the hon. Gentleman was in the Chamber when my hon. Friend the Member for Swansea West (Geraint Davies) spoke of the disincentives for families to stay together under the new regime, but if he wants to pretend that the Bill ends the couple penalty in the welfare system once and for all, perfectly and immaculately, I look forward to him setting out his argument.