Finance Bill
Steve Barclay Excerpts(9 years, 7 months ago)
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Mr Speaker
I can now inform the House that I have completed certification of the Bill, as required by the Standing Order. I have confirmed the view expressed in my provisional certificate issued on 5 September. Copies of my final certificate will be made available in the Vote Office and on the parliamentary website.
Under Standing Order No. 83M, as modified by Standing Order No. 83S, a consent motion is therefore required for the Bill to proceed. Copies of the motion are available in the Vote Office and on the parliamentary website, and have been made available to Members in the Chamber. Does a Minister intend to move the consent motion?
The Lord Commissioner of Her Majesty’s Treasury (Stephen Barclay)
indicated assent.
The House forthwith resolved itself into the Legislative Grand Committee (England, Wales and Northern Ireland) (Standing Order No. 83M).
[Natascha Engel in the Chair]
draft Disabled Persons’ Parking Badges (Scotland) Act 2014 (Consequential Provisions) order 2016
Steve Barclay Excerpts(10 years ago)
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Stephen Barclay (North East Cambridgeshire) (Con)
I beg to move,
That the Committee has considered the draft Disabled Persons’ Parking Badges (Scotland) Act 2014 (Consequential Provisions) Order 2016.
In this rare speaking part, I would first like to give the apologies of my ministerial colleague, the Deputy Leader of the House, who is unable to be with the Committee today due to trains being cancelled.
The statutory instrument, which was laid before Parliament on 22 February, is made under section 104 of the Scotland Act 1998 as a consequence of the Disabled Persons’ Parking Badges (Scotland) Act 2014, which makes provisions about badges for display on motor vehicles used by disabled persons. The draft order was requested by the Scottish Government and has been agreed between the UK and Scottish Governments.
One of the main aims of the 2014 Act is to help tackle blue badge misuse by providing additional powers to local authorities and the police to enforce the blue badge scheme in Scotland. The 2014 Act strengthens enforcement powers, including the ability to cancel or confiscate a badge in certain circumstances, and provides for security features of the blue badge format to be approved administratively by Scottish Ministers.
Although eligibility for badges, scheme administration and enforcement measures all vary between Scotland, England and Wales, there is agreement between the Administrations and their respective local authorities to work together on the common parts of the blue badge scheme. That has led to the creation of a shared database for the production of badges, and allows local authorities to enforce the scheme across Great Britain.
The draft order will ensure consistency throughout Great Britain with regard to the validity of blue badges issued in Scotland and will give full effect to the 2014 Act. This will produce certain practical results—for example, a badge issued by a local authority in Scotland will be in a valid form if it meets the requirements of section 1 of that Act. That will ensure that enforcement officers can confiscate badges that are being misused and that have been cancelled by a local authority in another area of Great Britain.
Section 104 of the Scotland Act 1998 provides for subordinate legislation to be made by the UK Government that contains provisions necessary under an Act of the Scottish Parliament. In this case, the provision is required in consequence of provisions made by the 2014 Act, which received Royal Assent on 24 September 2014. The draft order extends to the law of England and Wales the effect of certain amendments made in Scots law by the 2014 Act; those amendments are to section 21 of the Chronically Sick and Disabled Persons Act 1970, which provides for badges to be issued to disabled persons and their carers, entitling them to parking concessions.
Section 1 of the 2014 Act changes the rules about the form badges issued in Scotland must take to be recognised as valid. Section 2 ensures that, in certain circumstances, Scottish local authorities can cancel badges that they have issued. Article 4 of the draft order will fix a cross-reference in section 21(8C) of the 1970 Act, which glosses references to local authorities elsewhere in section 21, so that they fall to be read as including the Secretary of State.
As I have said, the need for and content of the draft order have been agreed between the UK Government and the Scottish Government. The Department for Transport, which has responsibility for the legislation covered by the draft order, has been consulted throughout the order’s drafting, and all its provisions have the approval of that Department and the Scottish Government. The draft order demonstrates this Government’s continued commitment to working with the Scottish Government to make the devolution settlement work.
I hope that the Committee agrees that the draft order is appropriate and sensible in its use of the powers in the Scotland Act 1998, and I commend it to the Committee.
Stephen Barclay
I am grateful to the hon. Members for Banff and Buchan and for Edinburgh South for their supportive remarks. In respect of the one issue that has been raised, it is the responsibility of the Scottish Government to publicise these measures, but we will pass on the concerns of the hon. Member for Edinburgh South.
It is worth pointing out that both before and during the passage of the Disabled Persons’ Parking Badges (Scotland) Act 2014, Transport Scotland engaged with a multi-agency group to bring forward new and focused ways to educate badge holders, with the aim of improving compliance. As the hon. Member for Banff and Buchan mentioned, the wider consultation with Dennis Robertson also raised awareness, but we are happy to pass on those concerns to the Scottish Government.
Question put and agreed to.
Enterprise Bill [Lords]
Steve Barclay Excerpts(10 years, 1 month ago)
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The Chairman of Ways and Means (Mr Lindsay Hoyle)
Do not worry. I can give the answer now: no, I do not.
There will now be a joint debate on the consent motion for England and Wales and the consent motion for England. I remind hon. Members that all Members may speak in the debate but that, if there are Divisions, only Members representing constituencies in England and Wales may vote on the consent motion for England and Wales, and only Members representing constituencies in England on the consent motion for England.
I call the Minister to move the consent motion for England and Wales. I remind the Minister that, under Standing Order No. 83M(4), on moving the consent motion, the Minister must also inform the Committee of the terms of consent for England.
Stephen Barclay (North East Cambridgeshire) (Con)
The legislative consent motions are before the House and available to Members. I beg to move.
Resolved,
That the Committee consents to the following certified clauses and schedules of the Enterprise Bill [Lords] and certified amendments made by the House to the Bill:
Clauses and schedules certified under Standing Order No. 83L(2) as relating exclusively to England and Wales and being within devolved legislative competence
Clauses 30, 32, 39 and 40 as amended in Committee (Bill 142) including any amendments made on Report;
Amendments certified under Standing Order No. 83L(4) as relating exclusively to England and Wales
The omission in Committee of Clauses 33 and 34 of the Bill as introduced (Bill 112).—(Stephen Barclay.)
Mrs Madeleine Moon (Bridgend) (Lab)
On a point of order, Mr Hoyle. I seek some clarification. The paperwork handed out says “Legislative Grand Committee (England)”, but the oral statement referred to “England and Wales”. May I seek clarification about the difference?
Football Governance (Supporters’ Participation) Bill
Steve Barclay Excerpts(10 years, 1 month ago)
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Vicky Foxcroft (Lewisham, Deptford) (Lab)
I congratulate my hon. Friend on promoting the Bill. I am also a Millwall season ticket holder—
Vicky Foxcroft
It is in my constituency. I will be going this weekend to celebrate Jimmy’s Day, and I hope that my hon. Friend will also be there.
Enterprise Bill [ Lords ] (Seventh sitting)
Steve Barclay Excerpts(10 years, 1 month ago)
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Bill Esterson
Those are points I will come to. I did not know that Harrods had a shop in the Minister’s constituency or that it contained the Knightsbridge of the east.
The other description might have been the “domino clause”. The Minister talked about local leaders having the opportunity. The Opposition fully support the proper devolution of powers and responsibilities, and the ability to make a difference in the local area. Although he talked about local leaders, he did not talk about the views of the local community, the workers affected or the small independent retailers and the impact the proposals will have on many small shops.
The problem is that, when talking to local authority leaders and chief executives, as some organisations have done, one main reason given for saying they may well end up implementing these provisions is that they feel they have no choice. Their neighbours having allowed Tesco, Asda or out-of-town shopping centres to have extended opening hours on a Sunday, they fear that loss of trade within their own boundaries will force them down the route of using these provisions in their own local authority area.
The Government knew full well that any attempt to reform Sunday trading legislation would spark significant debate and opposition from a wide range of stakeholders. The Prime Minister’s spokeswoman wrote on 20 April last year to the campaign group Keep Sunday Special assuring them that the Conservatives had no plans to relax Sunday trading laws. Indeed, it was not in the Conservative party manifesto. She wrote:
“I can assure you that we have no current plans to relax the Sunday trading laws. We believe that the current system provides a reasonable balance between those who wish to see more opportunity to shop in large stores on a Sunday, and those who would like to see further restrictions.”
There we have it. Presumably, in the Conservative party, the Government and the previous coalition Government, when the Prime Minister’s official spokesperson spoke it was on his behalf and we should take as gospel what she said at the time. The country as a whole should have trusted what we were told on 20 April. The Government knew this would be opposed and were that worried about it that they went so far as to reassure the country before the election that they had no plans to change Sunday trading laws. They knew it would be opposed, cause problems and break the consensus that had stood for 22 years, since the Sunday Trading Act 1994.
The amendments we are considering include a change to the name of the Bill in amendment 77, as the Minister has just said, to include Sunday trading. We have to wonder what is going on when a Bill started in the Lords and went through the entire Lords proceedings without any mention of Sunday trading. Only on Second Reading in this House was Sunday trading mentioned. In fact, it was so late that Members who oppose changes to Sunday trading did not even know the Bill would consider it.
I spoke to a number of Members on the Government Benches on the day of Second Reading and they had no idea that the issue was in the Bill because they were not in the Chamber to hear the Secretary of State mention it in his opening speech. Had they been, they could have made their opposition clear and raised their concerns but there was no such opportunity for Government Members. That is a great shame.
Stephen Barclay (North East Cambridgeshire) (Con)
With the leave of the Chair, I beg to move that the Committee be now adjourned.
Education (Student Support) (Amendment) Regulations 2015
Steve Barclay Excerpts(10 years, 2 months ago)
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Mr Gordon Marsden (Blackpool South) (Lab)
I beg to move,
That the Committee has considered the Education (Student Support) (Amendment) Regulations 2015 (S.I., 2015, No. 1951).
May I add my appreciation to that of my hon. Friend the Member for Sheffield Central at being able to serve under your chairmanship for the first time, Mr Percy?
The bundle of measures before the Committee are a miscellany, to put it politely, but at their heart is the proposal to scrap maintenance grant support for disadvantaged students and replace it with a loan system. I will address the specifics of the regulations shortly, but for now I observe that the policy change is not an isolated one; it is part of a pattern that is also happening across other areas of Government. It is mirrored by the changes that were debated in the House on Monday, which removed NHS bursaries for nurses and other staff, and it has been foreshadowed by changes that the Government have made to education support and protection over the past three to four years. That included, of course, the scrapping of 24-plus loans in further education, which is particularly relevant to the case before us today.
As the Minister will be aware, the Government released figures in October 2015 showing clear evidence of the deterrent impact on learners that I and others warned about when loans were introduced as replacements for grants in January 2013. The figures showed that in 2014-15, only £149 million of the £397 million allocated for the process had been taken up, or 62% less. Not surprisingly, people in the further education community lamented the lost opportunity of £250 million that could have helped some of our most disadvantaged learners. With that in mind, my first question to the Minister is whether he took any of those figures into account, particularly their impact on older learners, when formulating the proposals in these regulations.
The truth of the matter is that the Government have ducked and dived to avoid further debate on their direction of travel, and particularly on freezing the threshold, which is not specifically part of these regulations, although it is referred to in the assessment that comes with them. We have seen how they have dealt with the regulations before us. My hon. Friend the Member for Sheffield Central has referred eloquently to the failure to bring the debate to the Floor of the House, but I also draw to the Committee’s attention the equality impact assessment that the Government have produced, which is on the table at the back of the room. It runs to some 60 pages, so I am not sure how many Members will have the opportunity to consider it in detail today if they have not read it already. The equality impact assessment was slipped out without ceremony at the end of November, and it came out only after a campaign and legal moves.
Mr Marsden
Well, there might have been weeks to read it if the Government had actually made it available, but they did not.
This is the document that almost dare not speak its name, not least because the detailed evidence of impact tucked away in its pages, to which I will refer later, is belied by the bland conclusions appended to it that it will be all right on the night. What is driving panic measures such as the threshold freeze is the Government’s dawning recognition that their whole set of financial assumptions about repayment in other areas that underpinned their swingeing fees increases is producing a black hole for them and for future taxpayers.
Mr Percy, I am sure that you and those of us who have been here under all sorts of Governments will have observed the rule of thumb in this place that there are two ways for Ministers and their advisers to present and package things that they feel might be unpalatable. One is to bundle in the controversial bits with more technical or anodyne measures that might lull the reader into a false sense of security. Here is an example of such wording in the impact assessment:
“The following maximum grants and loans for living and other costs will be maintained at 2015/16 levels in 2016/17”.
Another way is to entitle the document innocuously, to increase the camouflage. Both methods have been employed on this occasion.
This is not a bit of incidental tinkering with existing financial regulations. It represents a major departure and reversal of policy, only four years after the Government hailed maintenance grants for students from disadvantaged backgrounds as an essential element in their strategy for fairness and in the acceptance of tripled tuition fees. I am afraid the measures are typical of the ideology-driven but evidence-light approach that this Government too often employ. They will affect probably 500,000 of England’s most disadvantaged students and define their futures for good or ill. Has the Minister made, or had given to him, any breakdown, geographical or otherwise, of that total figure and its impact on higher education institutions? If not, why not?
The statistics about those institutions helpfully provided to me by the House of Commons Library amount to a Domesday Book listing the numbers of students who will lose their grant under the new rules. Institutions in all parts of the country will be affected, both old universities and new ones. Further education colleges will be affected, of course, because they make an increasingly valuable contribution, 10% and more, to higher education for the group of people affected. Of course—this is not irrelevant in today’s circumstances—Scottish students who are taking courses at English universities will be affected.
There are a number of disadvantaged students studying at higher education colleges, and the Association of Colleges tells me that many of the colleges that deliver higher education are in northern towns—Blackpool and Blackburn are cited. Cornwall and the south-west also help to provide the large number of places at HE colleges. The association has said in specific response to these regulations, “We have real concerns about the proposed change as many of the students may never earn enough to pay back the money and the policy does appear to penalise poorer students. The new system therefore needs careful monitoring to ensure it is as fair as possible.”
These changes will affect significant numbers of students, from the north to the south. On the basis of the figures for 2014-15, for example, 14,728 students at Manchester Met University will be affected; 8,167 at the University of Manchester; 1,527 at my own excellent further education college, Blackpool and The Fylde College; 10,924 at Nottingham Trent University; 4,897 at Bournemouth; and 3,738 at King’s College. The other institutions that I have not had the opportunity to mention are far from incidental. The list will be a roll-call of lost opportunities if this issue is not handled carefully.
However, despite this being such a major issue, as my hon. Friend the Member for Sheffield Central has observed the Government have refused to bring the changes to the Floor of the House and prefer to try to sneak them through the delegated legislation route, whereby it can be debated and voted on by only a handful of MPs. As he said, there is cross-party support on the issue.
Importantly, the shadow Business Secretary, my hon. Friend the Member for Wallasey (Ms Eagle), in her letter to the Secretary of State explaining why there needed to be a full debate on these measures, wrote that scrapping maintenance grants for lower income students and replacing them with loans would have a regressive impact and should therefore receive further scrutiny from Members of Parliament. That was why she went on to call for a debate on these measures in Government time. She also made the practical point, which I will come on to, that the change would not improve Government finances in the long term, and she also made the link with the adverse impact of freezing student loan repayment, which I have touched on briefly.
Can the Minister explain why the Secretary of State did not deal adequately with any of those points in his reply? As my hon. Friend the Member for Sheffield Central has asked, will the Minister also explain why his Department has ignored the words of the Leader of the House in December and is prepared to break the precedent of debates in the House under these circumstances?
Turning to the impact of the regulations, of course we can only speculate on the future cohorts of people who come in, but we have some reason to make those speculations on the basis of existing experience. The National Education Opportunities Network, which is the professional organisation for widening access to education in England, and the University and College Union are currently undertaking research with more than 2,000 final-year A-level and level 3 students to look at how costs influence the HE choices they make. The interim findings from that research show that more than half the students who are deciding not to go into HE are taking that decision because of the lack of direct financial maintenance grant support that they had envisaged for the year ahead. If research suggests that a large number of students are deciding not to go to university due to that lack of support, why are the Government risking even more students dropping out by introducing the regulations?
A study by economists at the Institute of Education in 2014 showed that a £1,000 increase in grants would create a 3.95% increase in participation, and that the removal of grants would see participation levels fall. In fact, the institute said that it should also be of grave concern that more than a third of students had told a recent survey that they would not have chosen to go to university if they had not had access to maintenance grants. Does the Minister not fear a severe drop in participation levels, given that statistics indicate that the accessibility of a maintenance grant is a deciding factor for many when choosing whether to go into higher education? His equality assessment, which has been circulated, as I have said, states:
“At an aggregate level there is currently no evidence that the 2012 reforms, which saw a significant increase in HE fees and associated student debt levels has had a significant impact in deterring the participation of young students from low income backgrounds.”
That is debatable, because the safety net of maintenance grants, introduced in 2012 with that tripling of fees, is now being removed.
My hon. Friend the shadow Secretary of State wrote in her letter praying against the regulations:
“Labour are concerned that this change won’t improve Government finances in the long-term.”
Hon. Members might say, “You would say that, wouldn’t you?” but perhaps more cogent is the view of the Institute for Fiscal Studies:
“The replacement of maintenance grants by loans from 2016–17 will raise debt for the poorest students, but do little to improve government finances in the long run.”
The IFS states that in the short term, Government borrowing will drop
“by around £2 billion per year. This is because current spending on grants counts towards current borrowing, while current spending on loans does not.
In the long run, savings will be much less than this. The amount of money lent to students will rise by about £2.3 billion for each cohort, but only around a quarter of these additional loans will be repaid. The net effect is to reduce government borrowing by around £270 million per cohort in the long run in 2016 money—a 3% decline in the government’s estimated contribution to higher education.
About two-thirds of those eligible for the full maintenance grant will repay no more as a result of this reform because they will end up with the additional debt being written off.”
There is the rub. Will the Minister tell us what conversations he has had with his colleagues in the Treasury about the accuracy of those predictions, and why his Department is embarking on a leap in the dark that will, as the IFS makes clear, diminish the contribution to higher education and do little to address the black hole?
The IFS states:
“Students from households with pre-tax incomes of up to £25,000 (those currently eligible for a full maintenance grant) will have a little more “cash in pocket” whilst at university. But they will also graduate with around £12,500 more debt, on average, from a three-year course. This means that students from the poorest backgrounds are now likely to leave university owing substantially more to the government than their better-off peers.”
It also states:
“The poorest 40% of students going to university in England will now graduate with debts of up to £53,000 from a three-year course, rather than up to £40,500. This will result from the replacement of maintenance grants”.
The removal of those grants threatens access to higher education and, importantly, follows on from the removal of the national scholarship programme, which was designed to help students from low-income households. The programme has been scrapped, just as the Government are doing to maintenance grants.
In 2012, when the Government tripled tuition fees, they tried to sweeten the pill by talking up the centrality of the maintenance grant to ensuring that the most disadvantaged could still access higher education.
“The increase in maintenance grant for students from household with the lowest incomes, the National Scholarship Programme, and additional fair access requirements on institutions wanting to charge over £6,000 in graduate contributions should ensure that the reforms do not affect individuals from lower socio-economic backgrounds disproportionately.”
That is what the Conservative-led Government said in 2011-12 through the Minister’s predecessor, but the regulations will disadvantage the same groups of students the Government promised to protect two years ago. In June 2011, the Minister’s predecessor, David Willetts, pledged in Parliament:
“We want students from a wide range of backgrounds to benefit from the reforms. We are increasing maintenance grants and loans for nearly all students”.—[Official Report, 28 June 2011; Vol. 530, c. 770.]
He had previously defended the measure as a quid pro quo for the trebling of tuition fees, saying:
“Our proposals are progressive, because they help to encourage people from poorer backgrounds to go to university, because of the higher education maintenance grant, and because of the higher repayment threshold. That crucial commitment to taking progressive measures is one of the reasons we commend these proposals to the House.”—[Official Report, 3 November 2010; Vol. 517, c. 940.]
Does the Minister accept that the Government have now broken both those promises? His colleague, who is now Lord Willetts, must be revolving in his ermine at the way his promises have been so lightly regarded by the Government.
Post Office Closures
Steve Barclay Excerpts(10 years, 4 months ago)
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Westminster Hall is an alternative Chamber for MPs to hold debates, named after the adjoining Westminster Hall.
Each debate is chaired by an MP from the Panel of Chairs, rather than the Speaker or Deputy Speaker. A Government Minister will give the final speech, and no votes may be called on the debate topic.
This information is provided by Parallel Parliament and does not comprise part of the offical record
Stephen Barclay (North East Cambridgeshire) (Con)
It is a pleasure to serve under your chairmanship, Mrs Gillan. I congratulate my hon. Friend the Member for Bexhill and Battle (Huw Merriman) on securing the debate and the way in which he has championed this issue most effectively since his election to Parliament. He raised a number of points that it may be helpful to address at the outset, on whether this is a new model in the Post Office, to what extent it is commercially attractive and how the Post Office is being held accountable.
Like my hon. Friend, I represent a rural constituency and I have a similar change programme in my area. I am also aware of the challenges in areas such as mine on public transport, to which he alluded. As for whether the franchise model is new, it is not; it has been around since the 1990s and it is long-held practice to collocate a post office and a shop. What is changing to a certain extent is the number and scale of post offices being collocated, and while in the past we had post offices with shops that sold sweets, birthday cards and various other things—many of us will remember that from our childhood—now we more often have shops with a post office attached to them.
On whether running a post office is commercially attractive, the footfall generated is very attractive to many shop owners. Indeed, having one counter as opposed to two can mean that customers do not have to queue twice and can make managing staff in the shop more efficient. There are therefore commercial attractions to collocating a post office in another business nearby, which is part of the appeal for many taking that approach forward.
The hon. Member for Strangford (Jim Shannon) rightly spoke of the social hub that the post office offers. That is why I hope he will support the Government’s manifesto commitment to secure 3,000 rural post offices and, as part of the arrangements with the Post Office, to maintain 11,500 branches as part of the network. The Government recognise, through the funding that has been allocated, the important social hub that post offices provide. Indeed, that is in stark contrast to the previous Labour Government, under which at least 5,000 branches closed as part of their closure programme. The Government have made a commitment to the Post Office in recognition of the exact point the hon. Gentleman raised—that post offices make an important social contribution to communities.
My hon. Friend the Member for Central Suffolk and North Ipswich (Dr Poulter) injected a welcome note of optimism to the debate, recognising that, in securing the network as the Government have done, we have increased significantly the hours that branches are open, often on Sundays, compared with the past.
Alongside the allocated funding, there is a specific £20 million community branch fund, which I urge Members to take advantage of. The fund encourages branches that may be the last shop in their community to bid for things they may need to make their businesses more viable, so measures are available within the funding mechanism to help preserve post offices where they are aligned with the last shop in a village or community. That is part of the wider £2 billion allocated since 2010 as part of this programme.
Before I come to the specific case in the constituency of my hon. Friend the Member for Bexhill and Battle and the chain of events behind the post office’s temporary closure there, I turn to my hon. Friend the Member for Brigg and Goole (Andrew Percy), who raised the issue of the hoops that have to be jumped through, causing frustration and adding to the time taken to open a new post office or appoint a new postmaster. I think we all share that frustration, but there are good reasons for it, given the significant position of trust that postmasters and postmistresses hold within their communities and the large sums of money they often handle. It is therefore right that a thorough consultation process is part of those appointments, but that can have an impact.
Andrew Percy
I think any reasonable person would accept that. We could perhaps do better by ensuring that interim measures are in place while something else is being worked on. That is the problem. Everyone understands the importance of a postmaster’s job and the compliance regime that must go behind it, but the length of time between the closure of a post office and the opening of a new one is unacceptable, and we need to smarten up on that.
Stephen Barclay
My hon. Friend raises a valid point. These things are looked at on a case-by-case basis, and each case tends to be different. That is highlighted in the case of the post office in the constituency of my hon. Friend the Member for Bexhill and Battle, where a number of interim measures were tried. He alluded to a portakabin being used and the attempt made to look at whether that could be located close to the store or needed to be further away. The issue of temporary staff was considered. A mobile van was also considered, which is sometimes suitable, but the volume of customers at the Heathfield store was too high. There were specific issues with the portakabin, but that solution was tried.
Attempts are made to mitigate the time taken, but sometimes local factors work against that. Unfortunately, in my hon. Friend’s case, a chain of events has made it more difficult to put the interim solution in place. I hope that better news is imminent. I know he supports the proposal for a new permanent host for the post office in Heathfield: Unique Wine Ltd, which is on the high street. The consultation is ongoing, so I hope there is light at the end of the tunnel for him.
In terms of locating a post office in an existing business—in that case, an off-licence—there are plenty of examples around the country of such collocation working well, not least due to the longer hours in which it enables the public to access the post office. I take slight issue with the suggestion from the hon. Member for Makerfield (Yvonne Fovargue) that the Post Office is imposing unfair terms by asking for longer hours. She also suggested that the public are not getting access to post offices. I think most customers will welcome the fact that a post office, through collocation, is open for longer hours. That is part of the public benefit.
Yvonne Fovargue
I will simply give the Minister an example from my constituency, where a local shop has a post office in it but is finding it difficult to maintain a profit with that post office because of the hours for which it has to maintain that particular counter. It is thinking of closing the service, rather than keeping it open for shorter hours.
Stephen Barclay
Indeed, but the proposed new branch in the constituency of my hon. Friend the Member for Bexhill and Battle would be open for 21 hours longer a week than the previous store. Notwithstanding the time taken to put the new branch in place, once it is in place, subject to the consultation, the collocation means that the post office will be open for an additional 21 hours, which I think will be particularly welcome to his constituents.
The Post Office is tasked by Government to maintain a network of 11,500 branches and to meet specific access criteria—for example, that 90% of the UK population live within 1 mile of a post office. The Post Office is meeting those criteria, as set out in the annual report it publishes. That agreement does not specify that every community must have or retain a post office. That is because the business needs the flexibility to respond to local circumstances in each case. Were we to require the Post Office to maintain individual branches or reopen them within a set period—an issue that my hon. Friend the Member for Bexhill and Battle raised—it could lead, in extremis, to a new post office having to be built if a lease could not be secured on an old site. Such a restriction would be counterproductive to protecting the commercial viability of the network.
The economics of the Post Office is such that with the changes brought about by the internet and the digital world, small stand-alone post offices sometimes do not generate enough business to be sustainable on their own. The modernisation programme that the business has been following for the past few years has been about moving local post offices into a vibrant shop where the overheads of a business, such as property and staff costs, are shared with the host business, which is what we are seeing in my hon. Friend’s constituency.
The experience of the Post Office’s directly operated branches—the Crown branches—is illustrative. Collectively, those businesses have moved from making an annual £50 million loss to breaking even. That underlines the Government’s commitment to the Post Office network and a mix of modernisation, automation, labour reform and, in no small part, the franchising of weaker branches that are not delivering that performance. Were the Post Office to be forced to run more directly operated businesses with weaker turnover than in busy town centres, those branches would not be sustainable without greater public subsidy. Rather than force that on the business, we are allowing the estate to manage itself in a more value-for-money way, while protecting the 3,000 rural branches and the wider network.
It is regrettable that the Post Office has been unable to maintain service provision at Heathfield since April. However, that is not due to a lack of effort or expense by the Post Office. Unfortunately, local circumstances sometimes prevent the ideal outcome, as we saw with the portakabin example. In most cases, the business is able to find a way to maintain provision successfully. I am glad that a potential branch has now been found in my hon. Friend’s constituency, which I know he supports.
In seeking a solution at Heathfield, we should not lose sight of the fact that the Post Office is delivering a service that is open for more hours, with less public subsidy, and therefore offers a better, value-for-money service for the taxpayer. That reflects the Government’s commitment to maintaining the branch network and recognising the social hub that the hon. Member for Strangford described so well.
Question put and agreed to.
Resolved,
That this House has considered service provision in the event of post office closures.
Speaker’s Statement
Steve Barclay Excerpts(10 years, 6 months ago)
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Mr Speaker
I have two short statements to make. The first is an announcement in relation to the management of the House.
On 22 January the House agreed to the recommendations of the Governance Committee chaired by Jack Straw. That included the appointment of a new post of director general of the House of Commons reporting to the Clerk of the House but with clearly delineated autonomous responsibilities for the delivery of services and with the task of chairing the Executive Committee. I am pleased to tell the House that, in line with the process of recruitment agreed by the House, Mr Ian Ailles has been appointed as the first director general of the House of Commons and will be joining the House service on 27 October. He brings a wealth of experience in the private and public sectors, notably in the travel industry, and I am sure will enable us to raise our game in the quality of services which we provide.
I also want to make a short statement that is relevant both to today’s debate and much more widely, and which reflects discussions I have had with the other occupants of the Chair.
Colleagues, a very large number of Members have put in to speak in today’s Second Reading debate—the last time I looked no fewer than 62 Members were seeking to catch the eye of the Chair. I shall try to accommodate as many as possible by setting a time limit on Back-Bench speeches, but I am afraid some will inevitably be disappointed.
This may be a good moment to remind Members, and particularly new Members, of the expectation that those called to speak must remain for at least the next two speeches and must return to hear the wind-ups. That is in addition to being here for the opening speeches. This is not just a matter of courtesy, although that is not to be disregarded: it is important to the quality of the debate in this House that Members listen, and respond, to each others’ contributions, rather than merely offering their own opinions in isolation.
Mr Speaker
It is always very reassuring to have a Government Whip say from a sedentary position, “Very sensible.” [Interruption.] Mr Barclay it is on the record; you can’t retract now, man.
National Minimum Wage
Steve Barclay Excerpts(12 years, 2 months ago)
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Chris Ruane
Absolutely. The Conservatives were whingeing when I raised these points, but it is obscene that the Chancellor of the Exchequer scurries off to Brussels to protect the multimillion pound bonuses of British bankers at the same time as he is reducing workers’ rates by £1,600 a year.
Chris Ruane
No, I will not.
More than 7,000 people have visited me in Parliament since I was elected in 1997. Many have been schoolchildren and sixth formers. I always allocate a good period of time for questions and one of the most common questions is, “What are you most proud of from your 16 years as an MP?” I am most proud of this piece of legislation, which Labour introduced in 1998. It is totemic. It was an indicator at that historical time of what Labour was about and what the Tories were about. We were for the many and they were for the few. I welcome the massive U-turn that the Conservatives have made on that, but it is too little too late.
Financial Services (Banking Reform) Bill
Steve Barclay Excerpts(12 years, 9 months ago)
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Greg Clark
I will be even more secure when I have persuaded the hon. Gentleman, as I hope to do. He, being a fair man, will reflect on the fact that his distinguished commission undertook pre-legislative scrutiny of the proposals made by Sir John Vickers and his commissioners. Sir John did not recommend that there should be the power to separate. In fact, he has been persuaded by the institution-specific power of separation that his commission proposed, but has reflected in evidence to his commission that to go further and introduce a system-wide power is a separate matter and should come before Parliament in an explicit way rather than, as would be the case here, through a statutory instrument following an independent review.
The proposals before us, most fair-minded colleagues would concede, fall very far short of the degree of scrutiny and rigorous assessment, including by the hon. Gentleman’s commission, that the current proposals have gone through. Parliament would not have the ability to present amendments to proposals and at that stage to take account of the recommendations even of the independent review. So the procedures proposed are less than adequate to the scale of the policy change that would be embodied in them. If we are to be serious about the need to respect the views and the role of Parliament—as I have made clear, these are important matters—we must accept that the only right and proper and democratic way of legislating for full separation is by coming back to Parliament with full primary legislation, including the rigorous process that we have undertaken.
Stephen Barclay (North East Cambridgeshire) (Con)
I very much agree with the case that my right hon. Friend is making. Is there not a danger with a fixation on structure, which the review advocated by the Opposition would promote, that we work less on making the existing electrification work and getting the behaviours right, and instead allow a focus on structure and the further review? As with any structure, it is possible to ratchet up, but it is also possible to ratchet down, and it would allow a nibbling of the electrification, which would not be constructive.
Mr Deputy Speaker (Mr Lindsay Hoyle)
With this it will be convenient to discuss the following:
New clause 3—Professional standards—
‘After section 65 of FSMA 2000 insert—
“65A Professional Standards
(1) The regulator will raise standards of professionalism in financial services by mandating a licensing regime based on training and competence. This must—
(a) apply to all approved persons exercising controlled functions, regardless of financial sector;
(b) specify minimum thresholds of competence including integrity, professional qualifications, continuous professional development and adherence to a recognised code of conduct and revised Banking Standards Rules;
(c) make provisions in connection with—
(i) the granting of a licence;
(ii) the refusal of a licence;
(iii) the withdrawal of a licence; and
(iv) the revalidation of a licensed person of a prescribed description whenever the appropriate regulator sees fit, either as a condition of the person continuing to hold a licence or of the person’s licence being restored;
(d) be evidenced by individuals holding an annual validation of competence;
(e) include specific provision for a Senior Persons Regime in relation to activities involving the exercise of a significant influence over a controlled function under section 59 of the Act.
(2) In section 59, remove “authorised” and insert “licensed” throughout the section.”.’.
New clause 4—Duty of Care—
‘At all times when carrying out core activities a ring-fenced body shall—
(a) be subject to a fiduciary duty towards its customers in the operation of core services; and
(b) be subject to a duty of care towards it customers across the financial services sector.’.
New clause 5—Remuneration reform—
‘Within six months of Royal Assent of this Act the Chancellor of the Exchequer shall, in consultation with the appropriate regulation, lay before Parliament proposals on reform of remuneration at UK financial institutions which shall include incentives to take account of the performance and stability of a UK financial institution over a five- to 10-year period.’.
New clause 7—Protection for whistleblowers—
‘(1) After section 43B(f) of the Employment Rights Act 1996 there is inserted—
“(g) that a breach of regulated activities under FSMA 2000 or the Financial Services Act 2012 has been committed, is being committed, or is likely to be committed.”.
(2) After section 43B(5) of the Employment Rights Act 1996 there is inserted—
“The chairman of the board of directors of any relevant UK financial institution will be informed of any protected disclosure made by a worker which qualifies under the terms of Part IVA of this Act.”.’.
New clause 11—Reckless misconduct in the management of a bank—
‘(1) Within the three months of Royal Assent of this Act the Government shall publish proposals for the creation of a new criminal offence of reckless misconduct in the management of a bank.
(2) The new offence in subsection (2) should cover those approved persons who are licensed under a Senior Persons Regime.
(3) The Government shall bring forward further proposals within three months of Royal Assent of this Act for the civil recovery of monies obtained by individuals who have been found guilty of reckless misconduct in the management of a bank.’.
New clause 13—Financial Services Crime Unit—
‘(1) The Treasury shall conduct a review into the creation of a Financial Services Crime Unit and consult on its proposals for the Financial Services Crime Unit’s powers and responsibilities.
(2) The Treasury shall lay its proposals before both Houses of Parliament no later than six months after this Act comes into force.’.
Stephen Barclay
In speaking to new clause 2, which I will not press to a vote, I wish to follow the line of argument pursued by my right hon. Friend the Member for Wokingham (Mr Redwood) on new clause 9. He drew attention to the tension created by building up capital while also lending more and used the analogy of driving with one foot on the accelerator and the other on the brake. If I may, I will take a step outside the car. With new clause 2, I wish to draw the House’s attention to a similar, I am sure unintended tension. The Government are taking a positive step forward, because in paragraphs 2.13 and 2.14 of their response to the parliamentary commission’s report, they make the welcome announcement that they accept the premise of reversing the burden of proof. In doing so, however, they will adopt a measure suggested in paragraphs 1170 and 1171 of the commission’s report that will create a potential handicap. A new condition will be attached to using that burden of proof, whereby the regulator must have concluded a successful enforcement action against the firm prior to doing so.
I do not think there can be any doubt about the merits of reversing the burden of proof. It is clear that if the regulator is required to sift through reams of e-mails looking for evidence to incriminate a senior banker, it will be a time-consuming and costly exercise. It is also highly likely that it will fail, because senior executives are not so stupid as to write boastful and wilful e-mails such as we saw from some of the LIBOR traders, who bragged of having their bottles of Bolly. Most senior executives are wise to the risks of e-mails and would not fall into such a trap. It is proportionate and reasonable to argue that senior executives who say that their hands-on leadership is sufficient to justify very high individual bonuses should also, on the other side of the coin, be able to demonstrate that they have personally acted reasonably.
The Government’s announcement that they will reverse the burden of proof is extremely welcome. However, the acceptance of paragraph 1171 of the Commission’s report could lead to a real impediment. If we open the door to personal enforcement, why would a chief executive wish to settle on behalf of their firm? We are trying to make it easier for the regulator to focus in a time-efficient and cost-effective manner on the individuals who should be held responsible, but that will be impeded by the additional requirement for enforcement to be concluded against the firm. The senior leadership whom we want to target will be incentivised to drag out proceedings and impede any settlement with the firm. I do not believe that is the Government’s intention, but I wished to draw the Minister’s attention to it so that the issue could be discussed in more detail and tackled in the other place.
I do not share the confidence of some colleagues who have spoken about the ability of criminal sanctions to operate effectively. They are a welcome tool to have, and many of our constituents would like the golden handcuffs to be replaced with the prison variety. Indeed, the images on US television of white-collar arrests and convictions have a powerful deterrent effect. My concern, however, is that if we look at the individual fines and enforcement to date, we see that the regulator has struggled to reach the evidential level required to prosecute individuals successfully. Now we are suggesting that it will have to meet a higher standard of proof to secure criminal convictions. It is a bit like asking a hurdler who has just failed at one level to jump over a much higher hurdle.
The reversal of the burden of proof is one aspect of what we need, and the deterrent effect of criminal sanctions is another, because it brings with it the power of the headline. The question is, will we fall into the trap that we so often fall into in this House of passing legislation that sounds tough but proves difficult to use in practice? My fear is that the standard of proof required of the regulator to deliver a criminal prosecution will make it a tool that is rarely used.
We therefore need to consider how we can target individuals, not firms, because that will drive the culture of firms. Currently, where there is wrongdoing, a firm will settle quickly and get a 30% discount. The more junior staff—the heads of the divisions responsible—are quickly exited, and the senior staff wilfully claim blindness, because the most controversial briefings are usually done orally. Reversing the burden of proof will address part of the ill, but through the new clause I wish to draw attention to the limitations of fines on firms, which at the end of the day penalise shareholders and pension funds. Our constituents pay twice—first for the bail-out, and then through the impact on their shareholding.
Stephen Barclay
Does the hon. Lady not recognise that the difficulty with catch-all provisions, such as that for a 10-year period, is that they capture the good as much as the bad? New clause 2 would create targeted regulation to focus on those who have done wrong, instead of a catch-all provision that captures everyone.
Cathy Jamieson
I might have been tempted to support new clause 2 had the hon. Gentleman decided to put it to the vote, and I look forward with interest to hearing what the Minister has to say. I understand the issues relating to length of time and the dangers of a catch-all provision but, in the aftermath of the banking crisis, the legal and regulatory structures, and the further changes that the Government promise to introduce, we need to ensure that the banking culture really changes. New clause 5 attempts to ensure that banks think for themselves about how to ensure that their performance is sustainable. Now that the Government have moved to an acceptance of the broad principle, the devil will be in the detail of what they do next. Perhaps the Minister will have more to say on that.
Cathy Jamieson
Again, my hon. Friend makes an important point that this is an all-party stance and that everyone on the banking commission took this issue seriously.
It is worth remembering that in response to a question from the Leader of the Opposition last month, the Prime Minister told the House that he would use this Bill to implement the report of the parliamentary commission. The Leader of the Opposition asked:
“Following the Parliamentary Commission on Banking, can the Prime Minister confirm that he supports its important recommendations on bonuses and criminal penalties, and that he will use the banking Bill to implement them?”
The Prime Minister responded:
“Yes, I do support both those measures...Penalising, including with criminal penalties against bankers who behave irresponsibly— I say yes. Also, making sure that for banks in receipt of taxpayers’ money we can claw back and have a ban on bonuses—I say yes too.”
The Leader of the Opposition then asked a further question, to which the Prime Minister replied:
“We will be using that Bill to take these important steps.” —[Official Report, 19 June 2013; Vol. 564, c. 883.]
I hoped the Minister would have been able to bring forward appropriate amendments or new clauses—or whatever is needed—at this stage, rather than leaving that to elsewhere. I hope he will be able to give us some further information on how the work will be progressed and when he now expects to give us more detail.
New clause 13 relates to the financial services crime unit in the Serious Fraud Office. We raised this issue in Committee, and my hon. Friend the Member for Nottingham East gave an eloquent description of some of the areas that an FSCU would be able to address. This new clause would require the Treasury to report on the establishment of the FSCU and to do so within six months of the Act coming into force.
I fear the Minister might sigh and think, “Here go the Opposition once again, asking for another report to be produced.” Before he says that or any Member seeks to intervene to make that point, I will say that the reason we are asking for these reports to be produced is to ensure that progress is made and that things do not just gather dust on a shelf somewhere.
We know we have to look at the resources available to tackle white collar crime. Financial products are becoming ever more complex, and they are being traded faster, and increased resources could enable specialist police officers to develop their expertise. There are huge financial incentives in looking at developing this, too. It is worth remembering that fraud costs Britain about £73 billion a year, according to the Home Office’s National Fraud Authority. As my hon. Friend the Member for Nottingham East recalled in Committee, Andrew Bailey, the PRA chief executive, said it was “more than odd” that bank directors had not faced formal charges over the events leading up to the crisis. The Serious Fraud Office has a bit of a mixed record on tackling the high-profile cases. The Home Secretary was forced to perform a bit of a U-turn on her plans to abolish the SFO. It is clear that the SFO needs to be improved. The LIBOR scandal again shows that misconduct in financial services can have ramifications for traders, for industry, for shareholders, for the reputation of the City and, indeed, for criminal law.
Stephen Barclay
I seek to understand the scope of new clause 13 and the financial crime unit. Would it have taken criminal sanctions against the auditors of RBS, who so failed that they required the then permanent secretary of the Treasury to seek a letter of direction?
Cathy Jamieson
I am sure the hon. Gentleman will not be surprised to learn that I am not going to go into the detail of that case. He has had a career in the banking sector dealing with such issues, and he will be as aware as I am that looking at one case in isolation is sometimes not the best way to appreciate the overall picture. The overall picture is what I am interested in, and why I specifically mentioned LIBOR, because it is already a criminal offence to attempt to fix that rate. We need to seek to ensure that the SFO has the resources necessary to tackle this and to prevent any further scandals.
We have tabled new clause 13 to give Parliament a chance, once again, further down the line to discuss the creation of a new agency, and we hope it would send a firm message to those tempted to engage in criminal conduct. I hope that the Minister may be able to say something more on that in his response. He did not seem to be persuaded in Committee of the need for a new unit or even a subdivision. My recollection is that he took that view, “Its all fraud and there is no need to have a specific unit or part of an organisation dealing with it.”
I think I have covered a number of issues relating to these proposals. Once again, it is important to put on the record the fact that although we have had the opportunity to raise some of these issues in Committee and this evening, it is unfortunate that on Report we are not going to be able to scrutinise the detail of some of the new clauses—it is fair for us to assume that they might have been tabled at this stage. I seek the Minister’s further reassurance that we are going to get the important detail of how he intends to proceed, that we will see as much as is possible of the draft new clauses and legislation as things are taken forward, and that we will have an appropriate opportunity to discuss all that further in this place.
Stephen Barclay
Does my hon. Friend share my incredulity that when David Strachan conducted his review at the Financial Services Authority following the Legal and General case and brought forward his recommendations for a light-touch enforcement regime, the vice-chair of the FSA was Sir James Crosby, who is one of the three figures who are especially criticised in the banking commission’s report? We have a multi-layered, light-touch enforcement regime that often creates a disincentive to the regulator—this is why market abuse often involves criminal sanctions, not civil sanctions. One of the people criticised in the banking commission report actually designed the system that applies to the regulator.
Richard Fuller
I am appreciative of that intervention, which adds not only to my body of knowledge, but to the commonly held disgust that, following all these efforts involving the best minds we can put in place, no one is going to jail. In the absence of anyone going to jail, we have gone through all the fraud, all the mis-structured, light-touch regulation and all the mis-positioning of responsibilities without a single person being truly accountable. If there is a point on which I disagree with my hon. Friend, which I rarely do, it is that he said in his speech that financial penalties are likely to be more successful. He might have a point in saying that there will be more successful prosecutions, but the loss of one’s liberty cannot be put in a discounted cash flow—there cannot be a beta high enough. If we want to change behaviour, we have to show that people will go to jail and lose their liberty. If, having gone through the worst financial recession that we have experienced in our lifetimes, not a single person goes to jail as a result of all our work, I do not care that there is a cross-party consensus because, in my view, this is failing the people.
Mr Love
I will comment on the commission’s thought processes on some of the issues that the hon. Gentleman mentioned. He will remember, as we all do, the evening on which we set up a special parliamentary vehicle in the wake of the LIBOR rate-rigging scandal. Since 2008, there have been a variety of critical events, including the credit crunch and the recession. All that led to a catastrophic decline in the reputation of the financial services sector. Trust in bankers sank to an all-time low, and frankly LIBOR was the last straw. This was truly shocking behaviour on an unprecedented scale. Something had to be done, and the focus was very much on our terms of reference on standards and culture.
As a result, the commission had to answer some tough questions, and the hon. Member for Bedford (Richard Fuller) has posed some of them: why had so few bankers been held to account for their failings? Why had it appeared that bankers pocketed the gains, but passed on the losses to the taxpayer? Why were customers who should have been treated fairly treated in the exact opposite way—a point that my hon. Friend the Member for Kilmarnock and Loudoun (Cathy Jamieson) raised? We tried to answer those questions through three themes that came out in our report. The first theme is individual responsibility.
When all the head bankers came before us, we were genuinely shocked to hear that they denied any responsibility for what happened in their banks. Whether it was ignorance of the serious failings happening under their noses, or because there was collective decision making, the result was the same: no one could be held to account. That, we discovered, was the result of the failure of the approved persons regime, which did not attribute responsibilities to senior staff, who, as a result, could not be held to account.
Two steps are proposed to try to address that problem. First, we have already mentioned the new senior persons regime, designed to ensure that the most important responsibilities are assigned to specific individuals, who will more easily be held to account for them. Secondly, for a much wider group—not every employee, but those who could do serious harm to the bank, or its customers, due to their customer-facing position—we propose a new licensing regime, with a set of banking standard rules that enable them to be held to account.
However, for people to be held to account, we need more effective sanctions, and that is the second theme of the commission’s report. Identification of those responsible under the new regime will provide a stronger basis for the regulator to enforce existing civil penalties, such as fines, restrictions and bans. One of the great difficulties was assigning responsibility; we hope that individual responsibility will address that.
Given the seriousness of the wrongdoings—an issue mentioned in earlier contributions—the commission is recommending two new, far-reaching powers. New clause 2 does not address this point, but under certain conditions, the regulator should be able to impose a full range of civil sanctions, unless the person can demonstrate that reasonable steps were taken to prevent or mitigate the failing. In effect, that does what new clause 2 suggests: it reverses the burden of proof, but only under certain conditions.
Stephen Barclay
In essence, the hon. Gentleman is describing the purpose of new clause 2. Earlier, I alluded to the fact that there is a condition that militates against the effectiveness of the new clause: the tool can be used only if there is a successful prosecution, which gets in the way. As much as I agree with my hon. Friend the Member for Bedford (Richard Fuller), does the hon. Member for Edmonton (Mr Love) agree that we need to be careful about changing the law retrospectively, particularly on custodial sentences? One of the issues that we are addressing today is how we get it right for the future, and what the sanctions should be.
Mr Love
Personally, I oppose retrospective legislation. It was not considered by the commission, which does not make any recommendations on it. I suspect, however, that none of its members would be in favour of addressing these issues in that way.
The other change is the much publicised criminal offence of reckless misconduct in the management of a bank, which normally carries, as has been suggested, a custodial sentence. Importantly, we have laid down preconditions before a charge of that nature can be brought. There must be a cost to the taxpayer—the bank has turned to the taxpayer to bail it out; or there are consequences for the financial system—stability is critical, and anything that destabilises the system should be subject to a criminal sanction; or there is serious harm to customers. We think that we have framed a big change in the law. Bankers continually ask why they are singled out as the only commercial group that can be charged in that way. It is a delicate balance, and I hope that the Government will look seriously at what we are trying to do.
The third area I want to touch on is remuneration and incentives. The reality is that rewards have been huge, and still are huge for a more limited supply of senior bankers. That incentivises excessive risk taking and, occasionally, misconduct. The commission concluded that risk and reward are still misaligned, particularly when making pay awards over a short period. It therefore sees advantages in making a significant portion of remuneration variable, rather than fixed. We do not have much sympathy for the European solution in relation to that, but we think that reform is necessary in this area. More variable pay should be deferred to take into account changing circumstances at the bank at which the banker works, with power for the regulator to extend the period for up to 10 years. To those who say that that is a long time, many banks have a good year, but then some less good years, and the commission wanted to recognise that that can go on for an extended period.
Regulators should be able to limit or prohibit sales-based incentives. We were shocked at the way in which sales-based incentives were used to create the mis-selling scandals of PPI and interest rate swaps. There was a cascading group of incentives from senior management through to the customer-facing end of the bank, and we think that that made a major contribution to the problems that arose. We want to give the regulator much stronger powers. Where a bank requires taxpayer support, the regulator should have discretionary power to cancel all deferred compensation. It is shocking that, as happened in some banks, they were still paying remuneration to employees after the bank had taken on taxpayer funds.
The issues of conduct and remuneration that I have raised lie at the heart of what the commission thinks needs to be done in respect of culture and standards. These recommendations have been much debated and discussed. We have done everything we can to make them practical and realisable, and I hope that, when there is an opportunity to debate them in the other House, or when they come back to this place, the Government will give serious consideration to those recommendations.
Greg Clark
This summer.
New clause 11 concerns the new criminal offence of reckless misconduct recommended by the parliamentary commissioner. As we have already announced, we agree with the commission’s recommendations and will over the summer draft amendments to create such a legally watertight criminal offence, including compliance with the European convention on human rights. As my hon. Friend the Member for Bedford suggested, the commission did not recommend retrospectivity, and these provisions are intended to enact its recommendations. I hope that he will understand that.
My hon. Friend the Member for Bury St Edmunds (Mr Ruffley) was absolutely right to point out that it was of course this Government who first raised the possibility of criminal sanctions for managerial misconduct in July last year. We are grateful to the commission for its extensive work. We will follow its advice on misconduct committed by persons covered by the regime that is being set up. The commission noted the legal challenges involved in mounting a successful prosecution, but we absolutely agree that the creation of this offence should be justified by the signal that it sends and the potential deterrent effects it can have. We have to make it clear that reckless behaviour by those in charge of our banks cannot be tolerated.
New clause 13 proposes to create a new financial services crime unit. A similar amendment was discussed at some length in Committee. I can assure hon. Members that the Government fully recognise the importance of tackling financial crime. There is to be a dedicated command within the new National Crime Agency responsible for directing the national response to economic and financial crimes. The economic crime command will have a clear remit to reduce the threat from economic and financial crimes, working collaboratively across the different sectors. Substantial progress has already been made in establishing the National Crime Agency and driving early operational success against criminals who seek to engage in economic and financial crimes.
The Government accept the broad recommendations of the parliamentary commission on each of these matters. We will be acting quickly to take the opportunity afforded by this Bill to make amendments that are legally watertight and likely to pass into law in the early part of next year, just six months after the parliamentary commission’s extensive report. In acting in this way, we are keeping faith not only with the recommendations of the parliamentary commission but with the urgency of the need to enact these reforms, which I commend to the House.
Stephen Barclay
We have had a full and constructive debate that builds on the cross-party nature of the work of the banking commission. That has been reflected in the consensual tone of hon. Members’ speeches. I am very reassured by the comments of my right hon. Friend the Minister about the Government’s willingness to look at the outcome that new clause 2 seeks, which is in line with the comments made by Members across the House. For that reason, I will not press the new clause to a vote but ask leave to withdraw it.
Clause, by leave, withdrawn.
New Clause 4
Duty of Care
‘At all times when carrying out core activities a ring-fenced body shall—
(a) be subject to a fiduciary duty towards its customers in the operation of core services; and
(b) be subject to a duty of care towards it customers across the financial services sector.’.—(Cathy Jamieson.)
Brought up, and read the First time.
Question put, That the clause be read a Second time.