Interest Rate Swap Derivatives

Debate between Richard Fuller and Robert Syms

Thursday 24th October 2013 Commons Chamber

[Mr Robert Syms (Poole) (Con)]

I, too, pay tribute to my hon. Friend the Member for Aberconwy (Guto Bebb) for his leadership of the all-party group on interest rate swap mis-selling. The issue is important for all Members, which is why the Chamber is so full.

We all know of a number of cases in which people were switching banks or wanted loans for a project, and one of the last products slid across the table to them was an interest rate swap. Many felt that they did not have much choice but to take it. The British economy is showing welcome signs of starting to recover, and the Bank of England is pushing cheap credit into it to get the banks to lend, which is having an impact. However, we should all reflect on the fact that 30,000 to 40,000 businesses run by serial entrepreneurs could well go out of business before the process that we are discussing is finished, which would have a cataclysmic effect on the businesses with which they deal, the people who work for them and many of our local economies. The issue is not just mis-selling but whether we maintain stable economic growth and create jobs and prosperity in future.

[Richard Fuller]

Does not my hon. Friend find it sadly ironic that the victims of mis-selling were people who had shepherded their money and built their businesses carefully over many years, while the people who benefited were those who were in it for a fast buck?

[Mr Syms]

I do, and many of the people who have been affected have a lifetime’s work in their business—more than one lifetime in the case of many family businesses, which are the bedrock of our constituencies. Those people have been key members of the community and employed many people. Today’s debate is therefore important, as we need to give the FCA and the Government a strong message that the authorities must get the banks to get on with it. Things are going too slowly. As we heard earlier, the banks have put forward some billions of pounds for compensation, but they have dealt with only 0.2% of cases. Of the £3 billion that is potentially available for redress, only £2 million has been paid out to 32 businesses, which shows that we need to speed things up.

In many cases, first the capital was sucked out of businesses and then the break clauses were such that many people could not afford to get out of the contracts. With most normal capitalist activity, if someone felt they could not make a go of it, they would sell their business on. However, nobody will buy a business that has the poison pill of an interest rate hedging product because they know that it is a major drag on the business. It is not free enterprise as we know it, and I rather agree with Members who have suggested that the banking system has not done itself any favours.

What is so tragic about the products in question is that people have no way out. We need to get on with achieving compensation. Members have made some good contributions today, and behind every story they have told is tragedy and worry. People cannot sleep at night because they are not sure how to deal with the problem. I say to Ministers and the FCA that we need to get some speed up and get compensation paid. We need to deal with people fairly, and to support and cherish serial entrepreneurs, who should be playing a major role in the economy’s recovery, rather than being put in a position of not knowing what will happen in a week, six months or a year. We need to give them our support.

Anti-social Behaviour, Crime and Policing Bill

Debate between Richard Fuller and Robert Syms

Tuesday 15th October 2013 Commons Chamber

[Mr Syms]

No.

We all know the problem is irresponsible dog owners, and the Government’s raft of proposed legislation ought to be able to deal with that effectively. I therefore urge the Minister to resist most of the amendments, but I also urge him to give special attention to what my hon. Friend the Member for Bedford (Richard Fuller) said. The Committee came up with some refreshing ideas. Some of the Back-Bench Members had meetings with Ministers, including the Department for Environment, Food and Rural Affairs Minister Lord de Mauley. The refreshing thing was that they were prepared to look at the issue of the tariff and sentencing. A consultation took place in the summer, and although my hon. Friend is disappointed that it has not yet been published and any changes will be made in the House of Lords, by Whitehall standards this is the speed of light: we have a Bill, we meet a Minister, the Minister undertakes to have a consultation, we have the consultation and in a matter of weeks something will come back to the other place. That is pretty good, so I welcome what the DEFRA officials and the Minister have said.

[Richard Fuller]

I join my hon. Friend in commending Lord de Mauley for his speed of reaction in DEFRA. We are just looking for the same speed of reaction from the Home Office.

[Mr Syms]

Absolutely. Progress has been made and the Government listened to our Committee debates. I was surprised that my hon. Friend the Member for Chatham and Aylesford (Tracey Crouch), who mentioned cats, did not mention Mungo and Basil, as they got a mention in Committee. It was an interesting Committee and things were well debated. We made proposals that will improve the Bill. I urge the Minister to resist most of the amendments, but to consider the amendment to do with the tariff, which needs to be given serious consideration.

To go back to my first point, the Bill is about simplifying things and making them more flexible, and I urge the Minister to resist more complicated legislation. Let us get on with the job and let us make it easier for legislators. This is a good Bill, extending the Dangerous Dogs Act 1991 to private property and protecting assistance dogs. It contains a lot of good things and if we can get the tariff up as well, it will be a result for those who served on the Committee and for this House.

Living Standards

Debate between Richard Fuller and Robert Syms

Wednesday 30th November 2011 Commons Chamber

[Mr Syms]

Yes, partly because of that. Traditionally in Britain it has been about 40%, so that gave the Government some room for manoeuvre. Any Government in office would have had a large increase in its deficit given what hit them in 2007 and 2008. There is no great argument about that and, as someone sitting on the other side of the Chamber, I think that many of the things that the right hon. Member for Edinburgh South West (Mr Darling) did were beneficial in trying to maintain a fragile economic situation.

Having said that, we cannot continue to increase debt year on year at the rate we were in 2009, 2010 and 2011 or we will overwhelm the British economy. The worst thing for our constituents is not paying tax; it is paying tax to pay interest on money being borrowed from someone else. The Government had to make a judgment, and their judgment was to set out an economic policy gradually to reduce our debt over five to seven years to a level that, once it tops off in 2016-17, can then start to be brought back to the level of more normal years, which is about 40% of GDP. In an environment in which the world was growing rapidly, that would be easier. In an environment in which the eurozone is blowing up, and there are high fuel and food prices, it becomes much more difficult. That is part of the problem for the Government in the short term. It is events—it is what is happening around the world.

There is nothing surprising about where the Government are. Sticking with the policy is perfectly sensible, but things do not go in a straight line in economics, and there will be OBR forecasts and Budgets where the figures for debt increase, and some where they decrease. It will depend to some extent on world events.

[Richard Fuller (Bedford) (Con)]

My hon. Friend is talking about debt levels. Was not one of the issues under the Labour Government the integrity of the public finances? Their estimates of public sector debt did not include the private finance initiative, which was a grossly exaggerated amount of public benefit, and they did not include the burgeoning increase in public sector pension claims on the economy. Does my hon. Friend agree that another aspect of debt in which the Labour Government’s policies were embedded was increasing the costs that people had to pay for their housing through the ever-increasing impression that housing wealth was real wealth? That has had a real impact on people’s well-being and living standards today.

[Mr Syms]

Clearly, and another problem in the British economy is that there is a lot of private sector borrowing. We have a high level of indebtedness, both of government and of the private sector. In Italy, they save rather more than we do, and as a country we should try to encourage more of our citizens to save and not live on the never-never in the long term.

I support what the Chancellor did in the autumn statement. We are clearly in choppy weather, but that is no reason to change course. We cannot adjust the budget down or raise taxation painlessly. The living standards of most of the population will be squeezed. As the IFS and other organisations have said, living standards have fallen by about 7% over the past two to three years. The good news is that next year the projection is for things to be fairly flat, with some modest recovery after that. It may well be that when we get to 2015—the general election year—we have lower living standards than in 2010 as a consequence of the fact that we have inherited a major deficit, very difficult problems and a pretty rotten international environment. That is no reason for going off course, but it is a reason for sticking to a very sensible policy. Labour Members may think that we cannot do things without breaking eggs, but that is not so. We have to raise the tax burden and reduce spending, and I am afraid that that has consequences.

Amendment of the Law

Debate between Richard Fuller and Robert Syms

Wednesday 23rd March 2011 Commons Chamber

[Richard Fuller (Bedford) (Con)]

Does my hon. Friend agree that the previous Government were the worst villains in fiscal drag that this country has ever seen? They failed to raise thresholds year after year, and dragged many taxpayers into higher income tax brackets.

[Mr Syms]

My hon. Friend makes a good point. I welcome what the Chancellor has done with the personal allowance and the £10,000 target. If a central part of the Government’s plans is welfare reform, it is inevitable that we must reduce the tax on the lowest-paid. Otherwise, we will not get people off welfare and into work, which I think is what all of us want.

I will touch on one or two measures, but I do not want to take up too much time. I welcome the Government’s plans to assist the housing market. I wish they had gone farther, because there is a lot of capacity in the housing market, which could provide more jobs and help to get the economy going. However, what the Chancellor announced was very good.

I welcome the Chancellor’s proposals on charities. Poole has one of the biggest charities in the UK, the Royal National Lifeboat Institution, which raises a considerable amount of money from bequests. People getting relief on inheritance tax will be a major boost to that charity and to many others.

I welcome the move back to enterprise zones, because we have to become an enterprise economy. One lesson of the last decade is that we do not want to rely on an overheated south-east and London. We must ensure that future growth is balanced so that it occurs in greater Birmingham, Manchester, Leeds and many of our great provincial cities. What the Chancellor announced will assist in that.

The Government are doing what they can to help people, with limited room for manoeuvre, by putting off the fuel duty rises and freezing council tax. We have a difficult inheritance and the Chancellor has precious little room for manoeuvre. He started his Budget speech by saying that this is basically a neutral Budget. I think that it is right to have a neutral Budget. In some respects, it would be better not to have a Budget at all, but just to let the long-term plans of the Government roll on. That gives the best hope of getting the economy sorted, and of restoring growth to the British economy.

We have heard debate about the OBR forecasts. They are forecasts and will change several times before we know what the situation is. I think that we have an excellent chance over the next four or five years to get growth. I think that the Government’s strategy is right. They are concentrating on training and simplifying the tax code. Hopefully, when we can, we will start to reduce the rates.