Grenfell Tower and Building Safety

Debate between Sajid Javid and Bill Wiggin

Monday 18th December 2017 Commons Chamber

[Sajid Javid]

First, it is not for me, as a Minister, to recommend what type of cladding should or should not be used. That work should be done by experts, which is why the expert panel that we established, which is still in place, has issued guidance ever since the date of the tragedy. It continues to update guidance on what cladding should be used at all times.

[Bill Wiggin (North Herefordshire) (Con)]

Everybody is united in never wanting to see something like this happen again. An insulation manufacturer in my constituency, Kingspan, which was not involved in this tragedy, is keen to work to ensure that building regulations deliver the fire-proofing that we all hope for and expect. Will the Secretary of State agree to meet Kingspan?

[Sajid Javid]

I hope that my hon. Friend will understand that I should not comment on which companies were or were not involved in the tragedy; that will be a decision for the public inquiry and the criminal inquiry. Although in principle I am happy, at the right time, to meet any company that is involved in building services, it is appropriate that I do so only once I am comfortable that any inquiries and reviews are over.

Financial Products (Mis-selling)

Debate between Sajid Javid and Bill Wiggin

Wednesday 12th June 2013 Westminster Hall

[The Economic Secretary to the Treasury (Sajid Javid)]

This is the first opportunity that I have had to serve under your chairmanship, Ms Dorries, and it is a real pleasure. I congratulate my hon. Friend the Member for North Herefordshire (Bill Wiggin) on securing this important debate. I acknowledge the strength of his feeling on this particular subject. He has put forward a considered and eloquent argument to the Chamber, and made a strong representation on behalf of his constituent.

I am sure that everyone present is keen to see a speedy conclusion to the Financial Conduct Authority review of the mis-selling of financial products. It is only right that businesses that have been mis-sold products are compensated accordingly.

The Government have been clear from the start that such practices are unacceptable. We take extremely seriously the abuse that has taken place, and we are determined that any wrongs that have been inflicted on businesses should be put right. My hon. Friend shared with us the example of allpay Ltd, which is a company in his constituency that was sold a hedging product but is not eligible for the FCA review. I am sure that my hon. Friend will understand if I do not go into the specifics of that particular case right now, but I am happy to look into any case, including the one that he has raised, in further detail.

I want to take this opportunity to address the key points that my hon. Friend has raised. First, he challenged the definition of an SME as used by the FCA in its review. He has argued instead that all businesses, not just the smaller ones, should be given support and assistance from the FCA in claiming compensation.

The FCA used the criteria for non-sophisticated customers, as set out in the UK Companies Act 2006, in its objective test. That is because those criteria are used for classifying companies that are subject to the small companies regime, and that have lighter reporting requirements. They are therefore the companies that are less likely to have staff or advisers with appropriate knowledge and skills to advise directors on the purchasing of financial instruments.

Moreover, I understand that the FCA review also changed the sophistication test in January to ensure that certain customers who were classified as sophisticated under the Companies Act test are instead classified as non-sophisticated and therefore brought into the scope of the review. I am sure that my hon. Friend will welcome that move, particularly as his constituency in Herefordshire, like mine in Bromsgrove, has many farmers. Had the change not happened, many farmers who typically have larger work forces and balance sheets than other SMEs could have been excluded.

The Government have been clear that where a business lacks the necessary skills and knowledge to understand fully the risks of such products, it should receive the appropriate redress. However, we do not agree that all businesses should have access to the FCA review. Instead, there needs to be a defined cut-off point where more sophisticated businesses are able to take responsibility for understanding the products or services they are entering into. There will be organisations that took one of these product with a full understanding of the risks involved if interest rates changed, and it is not for the Government to perform due diligence for such large, sophisticated organisations. Any such action would weaken incentives for businesses to act sensibly when purchasing financial instruments, and would potentially open the floodgates—a word my hon. Friend also used—to any businesses that have lost out from a financial transaction. I am therefore confident that the FCA has found the right balance to ensure that all non-sophisticated businesses fall inside the scheme.

My hon. Friend also mentioned the limitation placed on the type of financial products that are part of the FCA review. Given the widespread sale of the particular products included in the review to small businesses, it is reasonable that the FCA has established the parameters of its review on that basis. The FCA did that based on a full review of what products were sold to which businesses and by whom, and the full review includes all those products that were widely sold to small and unsophisticated businesses.

The FCA must also consider how to allocate its resources economically and efficiently, and it therefore seems reasonable that the review is focused on the products where the bulk of sales took place.

In closing, I reiterate that the Government take extremely seriously the abuse that has taken place in very many cases.

[Bill Wiggin]

I am most grateful to the Minister for taking the trouble to reply to this debate. He is right that there are some things in there, but will he agree to think about how a regulator such as the FCA should proceed in the future so that we get regulation across the board, and not just for specific groups of companies? It strikes me that it does not matter how many employees a company has or how big its balance sheet is, it should be behaving responsibly. In the case of larger companies, more jobs are put at risk if financial mis-selling takes place, and we rely on the FCA to be a regulator. I would be grateful if he bore that in mind.