Amendment of the Law

Tom Greatrex Excerpts

Monday 26th March 2012 Commons Chamber

[Rachel Reeves (Leeds West) (Lab)]

This has been an important debate—one that will prove, I believe, to be a turning-point in the history of this Conservative-led government, in the reputation and standing of this Chancellor and most of all in the ongoing national debate about how we as a country meet the economic challenges we face and how we ensure that the burdens of doing so are fairly shared.

It is a privilege for me to follow my hon. Friend the Member for Feltham and Heston (Seema Malhotra). We have also heard powerful contributions from my right hon. Friend the Member for South Shields (David Miliband), who spoke of the challenges facing young people out of work, from my right hon. Friends the Members for Wolverhampton South East (Mr McFadden) and for Stirling (Mrs McGuire) and from many more of my hon. Friends. It is a privilege, too, to follow my right hon. Friend the Member for Edinburgh South West (Mr Darling), who argued forcefully that the tax cut for those on more than £150,000 a year is not and could not be the priority right now.

I could not help noticing one phrase that we did not hear from the Government side this evening—that “we’re all in it together”. It has been forgotten—at least by Government Members. I rather agreed with a man who told us in April 2010:

“When the Tories say we’re all in this together, what they really mean is you’re on your own. Their agenda is to take away help from those who need it, and offer it to those already at the top”.

He was right then, which is why it is so disappointing to see the Chief Secretary to the Treasury defending this disgrace of a Budget today, when he would have opposed it two years ago.

But let us try to be fair to the Liberal Democrats tonight. It is true that they played a big role in the Budget, and they deserve congratulations on winning the inclusion of one of their long-standing policy priorities, to which they have been committed for many years and which will be recognised as one of the Budget’s most important changes. I do not mean the mansion tax or the tycoon tax: the Chancellor cannot stomach those. No, I am speaking of a different policy, a stroke of genius for which the Chancellor should not be allowed to claim all the credit. According to The Daily Telegraph, since as long ago as 1998 it has been Liberal Democrat policy to abolish age-related allowances for pensioners. So there we have it: the granny tax, a Liberal Democrat policy since 1998, has finally been delivered by this coalition Government. I look forward to seeing that in the Liberal Democrats’ leaflets.

It is hard to know where to start with a Budget which contains so much that is wrong, but the big story about this Budget is not what is in it, but what is missing. I am talking about its utter failure to do anything in connection with the major task that faces our country: the need to get unemployment falling and the economy moving, which is essential to dealing with the deficit and securing our long-term economic future. In that regard, the judgment of the Government’s own independent Office for Budget Responsibility is clear. It has stated:

“We have made no other material adjustments to the economy forecast as a result of Budget 2012 policy announcements.”

There is nothing in the Budget to make the Office for Budget Responsibility reconsider its view that the economy will bounce along the bottom, and that unemployment will continue to rise month after month after month.

This is a Budget that fails on growth, but it is also a Budget that fails on fairness. It pilfers £500 million from the health budget at a time when the NHS is under pressure and needs every penny that it can get, and it introduces badly designed changes in child benefit which mean that a one-earner family on £55,000 will lose most of their benefit while a couple on as much as £99,000 can keep all theirs.

[Tom Greatrex (Rutherglen and Hamilton West) (Lab/Co-op)]

While my hon. Friend is dealing with some of the measures that are not specified in the Budget, would she care to comment on the £10 billion additional cuts in the Department for Work and Pensions’ budget for benefits, which may well cause severe harm to her constituents and mine, and those of many Labour Members in particular?

[Rachel Reeves]

I said earlier that the big story about the Budget was what was missing from it rather than what was in it. My hon. Friend has identified another thing that is missing, namely an explanation of how the Government will balance the books after the last two years of the current Parliament. We all know that the Government are now borrowing £150 billion more because of the failure of their policies and their decision to cut too far and too fast, which choked off the economic recovery. As a result, deficit reduction will have to continue well into the next Parliament, but we have not heard how.

The Chancellor said that the Budget was about rewarding work. A Budget that takes tax credits from low-paid working couples with children, plunges them into poverty and leaves them better off if they leave their jobs is not a Budget for work, is it? As for the notorious hit on pensioners with modest incomes, springing it on people with no notice and then dressing it up as a simplification was not only ill-judged, but profoundly disrespectful to the millions of pensioners who made sacrifices to save during their working lives.

Budget Leak Inquiry

Tom Greatrex Excerpts

Thursday 22nd March 2012 Commons Chamber

[Mr Gauke]

My hon. Friend makes an excellent point. Presumably, the Labour party would be very supportive of, and co-operative in, any such venture.

[Tom Greatrex (Rutherglen and Hamilton West) (Lab/Co-op)]

The Minister has said three times now in his responses that the Treasury was not responsible for leaking the stamp duty changes. The first time that he said so, he added, “as far as I know.” Is not the point that he should know and, therefore at least on that point, that a leak inquiry should be instituted immediately?

[Mr Gauke]

I have absolutely no evidence that the Treasury briefed on the 7% stamp duty announcement, but none the less an announcement was made in the morning, and the measure came into effect at midnight last night. We also ought to make the point that that measure, on stamp duty land tax, is going to get more money out of the wealthy, and much more successfully, than the Labour party managed with its failed 50p rate.

Financial Services Bill

Tom Greatrex Excerpts

Monday 6th February 2012 Commons Chamber

[Tom Greatrex (Rutherglen and Hamilton West) (Lab/Co-op)]

I wish to make a relatively brief contribution. I do so without the degree of expertise that has been exhibited by a number of right hon. and hon. Members who have spoken, particularly those who have served on the Joint Committee and on the Treasury Committee. I know that they have examined the detail of this Bill and have taken evidence on it over a period of time. My expertise on and knowledge of financial services has largely come about as a result of issues raised by constituents since my election to this House. That is why I wish to spend a little time discussing part 2 of the Bill, which creates the Financial Conduct Authority, which we have heard referred to as one of the successor bodies to the Financial Services Authority, and part 5, which deals with independent inquiries into investment schemes, among other things.

I come to those parts of the Bill as a result of what I suspect will become known soon enough as the latest in a long line of mis-selling episodes, to which the Chancellor and shadow Chancellor referred. My right hon. Friend reminded the House that there have been a number of these episodes over the course of 30 years and under various different regulatory regimes and set-ups. The issue that I refer to is the collapse of the Arch Cru investment vehicle in 2009 and the interests of the 20,000 individuals who have, almost certainly, been adversely affected by it. As many hon. Members will be aware, Arch Cru was established in 2006 and was sold as a vehicle to provide low-risk, cautiously managed funds that were sold through independent financial advisers and, like all investment funds in the UK, were regulated by the FSA. The authorised corporate director was Capita Financial Managers, part of the Capita group, and the two depositories of the fund were the Bank of New York Mellon and HSBC, whose activities were, again, regulated by the FSA. Many of those who invested in Arch Cru did so on the basis that it was managed cautiously, and the use of those household names gave people comfort that the regulator was overseeing those bodies and that people’s money was indeed being invested cautiously and wisely.

As many hon. Members will know, the fund was suspended in March 2009. At the time, it was worth £363 million but by March 2011 its value was estimated at £148.8 million, which means that many people have suffered losses as a result. Far from being cautiously managed, funds were invested in cells registered in Guernsey in a cavalier manner. Investments were made in off-plan property, in real estate in Dubai, and in Greek shipping and ferries. It remains highly dubious as to what level of recompense investors are likely to receive.

The collapse of a supposedly low-risk collective investment scheme such as Arch Cru has caused a high degree of anxiety. Although we accept that no regulatory system can provide absolute protection, the failures of the FSA, in many respects, in this case mean that it is important that the measures being put in place give consumers the right amount of protection. That is why I particularly welcome clauses 64 to 68, which deal with independent inquiries into regulatory failures in respect of collective investment schemes. However, clause 64(5) has the effect of meaning that events occurring before 1 December 2011 will not be subject to the power of inquiry, and Arch Cru’s collapse occurred well before that cut-off date. The Government have the power under section 14 of the Financial Services and Markets Act 2000 to institute an inquiry, and I hope that they will still make use of that power.

Clause 67 deals with the conclusion of an inquiry, noting that the person holding that inquiry must

“make a written report to the Treasury”.

The existing legislation contains a provision stating that the Treasury may publish the whole or any part of a report and, should it decide to do so, the report should be laid before Parliament. However, a similar provision appears to be missing from the Bill, so perhaps the Financial Secretary will enlighten the House on whether I have missed it or whether we will need to make an amendment in Committee to ensure that that degree of transparency is in place for such inquiries.

If we are to minimise the chances of another episode such as the Arch Cru collapse happening again, the people who invest their retirement nest eggs on the basis of being told that a fund is cautiously invested need to be adequately protected by the regulatory regime. There should be some governance over the terms used to describe investment vehicles, especially where, as in this case, the reality turns out to be very different from the description.

[Alun Cairns]

I pay tribute to the work that the hon. Gentleman has done on Arch Cru. Does he share my concern that the risk category of any financial product is assessed by the Investment Managers Association and that there is no regulatory framework or matrix by which such an organisation conducts its work on assessing the risk of a product?

[Tom Greatrex]

I thank the hon. Gentleman for his intervention. I do not wish it to appear as if we are just congratulating each other, but I want to place on the record my appreciation of all the work that he has done on Arch Cru as co-chair of the all-party group on Arch Cru. It is my pleasure to co-chair that group with him and he makes an important and significant point.

As the Bill goes through Committee, we need to consider that issue in detail as it relates to the set-up of the FCA, to ensure that we are never again in a position in which descriptors with no value are attached to investment opportunities, almost as a marketing exercise, with nothing behind them. I hope that the Financial Secretary hears the hon. Gentleman’s important point, and that we can return to it in more detail.

One way in which to prevent a repeat of the experience is fully to learn the lessons of the Arch Cru collapse, and to ensure that, as a result, the consumer is protected by a more robust regime. The Financial Secretary will no doubt recall that in a Westminster Hall debate on Arch Cru last October, many Members on both sides of the House asked the Government to instigate a section 14 inquiry. The Financial Secretary replied that he did not think such an inquiry appropriate at that point and he continued:

“The powers are available where it appears that significant damage has been done to the interests of consumers that might not have occurred but for a serious failure of regulation. It is worth pointing out that the power has never been used.”—[Official Report, 19 October 2011; Vol. 533, c. 285WH.]

First, I am not quite as convinced as the Financial Secretary is that the fact that the power has never been used means that it should not be used. Secondly, to my mind, Arch Cru is an example of regulatory failure. The FSA failed properly to regulate the fund, and let down my constituents and thousands of others across the country by not stepping in earlier. The FSA was statutorily responsible for regulating Capita Financial Managers, which was the authorised corporate director for Arch Cru, yet Capita failed to see what was going on until it was far too late.

As the intervention by the hon. Member for Vale of Glamorgan (Alun Cairns) illustrated, there is cross-party consensus on the issue, and the all-party group extends across the whole House, with members from every party other than the Scottish National party—that might be pertinent. When answering questions in December, the Prime Minister was receptive to the idea of considering what more the Government could do to address this important issue. One course of action could, and I would argue should, be to establish a section 14 inquiry, the findings of which could be used to inform a detailed discussion of the proposed FCA, and to ensure that the body is established with the resources, expertise and powers necessary to minimise the opportunity of anything like the Arch Cru failure happening again.

Even at this late stage, I ask Ministers—the Economic Secretary is now on the Front Bench and might be less familiar with the issue than the Financial Secretary, who was there when I started speaking—to reconsider the position on a section 14 inquiry, so that this part of the Bill can be as robust as possible. When the current regulator admits that it did not know what was happening, because of the structure of an investment vehicle and the nature of some of the investments in Guernsey and elsewhere, in my mind it becomes the responsibility of the Government to minimise the risks of the same thing happening again. The Government have an opportunity, as do we, through the Bill, to ensure that the successor body is better placed to ensure such a result.

It is sometimes easy, when getting into the weeds of an issue such as Arch Cru—as I and others have done over recent months—to forget that ultimately this is about people. It is about my constituents and others who deserve the right consumer protection, and we must be confident that in dealing with the consumer aspects of regulation, the successor body does not fail in the way its predecessor did. To ensure that, we need to know what did not work under that predecessor regime, so that there is confidence in the successor body and people are protected in the right way. That is why it is still relevant and important that the Government consider a section 14 inquiry into Arch Cru under the current legislation, and I hope that Treasury Ministers understand that this point is being made in the best interests of scrutiny, of effective regulation and of the consumers who expect, and deserve, to be protected when purchasing financial services products.

Autumn Statement

Tom Greatrex Excerpts

Tuesday 29th November 2011 Commons Chamber

[Mr Osborne]

I think it will help new businesses borrow, but of course we have also announced today the seed enterprise investment scheme, a new scheme that will specifically help start-up businesses. It will give 50% income tax relief to anyone who invests up to £100,000 in a new company. Also, for one year only, we are allowing people to put capital tax-free gains of up to £100,000 into the scheme. It is all about trying to get investment into new companies such as the ones in the black country that my hon. Friend talks about.

[Tom Greatrex (Rutherglen and Hamilton West) (Lab/Co-op)]

On 20 October, the Secretary of State for Energy and Climate Change said in the House that there would be no Treasury backsliding on the £1 billion available for carbon capture and storage investment from the Government. Yesterday morning the Chancellor’s deputy, the Chief Secretary, suggested that part of his £5 billion investment would be funded by taking money from that £1 billion. Can the Chancellor confirm whether that is the case, and what implications that will have for potential CCS projects that are working to a timetable of being on a commercial basis before the end of this Parliament?

[Mr Osborne]

We absolutely want to support carbon capture and storage technology in this country. I confirm that we are still committed to a £1 billion investment, which is a very significant investment in a technology, but it cannot be on an unrealistic time scale. [Interruption.] Well, the previous Government—indeed, the Energy Secretary in the previous Government, who of course is the Leader of the Opposition at the moment—made all sorts of promises about getting carbon capture and storage demonstrations up and running, and that did not happen. We are operating on a more realistic time frame, but we are committed to a £1 billion investment in that technology.

Arch Cru Compensation Scheme

Tom Greatrex Excerpts

Wednesday 19th October 2011 Westminster Hall

[Tom Greatrex (Rutherglen and Hamilton West) (Lab/Co-op)]

It is a pleasure to serve under your chairmanship again, Mr Owen, in what is an important debate. Since it was announced last week, a number of hon. Members have spoken to me about the issue, and I am far from alone in having received e-mails, correspondence and surgery visits from people who have been affected by the collapse of the Arch Cru investment fund. I am pleased that the Minister is present to respond to the debate. I know from previous debates that he has a reputation for seeking to answer questions as fully as possible, and I hope that he will continue to do so today. In recognition of his reputation in that regard, and given the high number of Members present who wish to speak or intervene, I will keep my remarks as brief as I can to give the Minister the maximum time possible to respond. I also wish to recognise the efforts made by the hon. Member for Vale of Glamorgan (Alun Cairns) who is present for the debate. He has been trying valiantly for some time to secure a parliamentary debate on Arch Cru, but it was my fortune that my name happened to be picked. I know that he will contribute to the debate in due course.

Many hon. Members are familiar with aspects of the background that led to the collapse of Arch Cru, but some salient points bear repetition. Arch Cru was established in 2006 to provide low-risk, cautiously managed funds that were sold through independent financial advisers and, like all investment funds in the UK, were regulated by the Financial Services Authority. The authorised corporate director was Capita Financial Managers Ltd, part of the listed Capita group. The two depositories of the funds were Bank of New York Mellon and HSBC. Having spoken to a number of investors and financial advisers over recent weeks, I am in no doubt that the association of those names with the fund lent credibility and provided a degree of comfort for many investors. Approximately 20,000 people invested in Arch Cru, many of whom were small investors who invested retirement savings or lump sum pension payments into the fund, following advice from financial advisers. Those to whom I have spoken invested on the basis that since it involved their retirement pots, funds needed to be cautiously invested. That was the attraction and the reason for their investment.

The fund was suspended in March 2009 by the FSA following a warning that it was insolvent. At that time it was worth a total of £363.6 million but since then—unsurprisingly—the value has fallen and at the most recent evaluation in March 2011, the fund was valued at £148.8 million. Estimates vary but between 4,000 and 10,000 people suffered losses following the collapse of that fund. Many of those people never expected to be in such a position because they were attracted to the low-risk, cautiously managed fund in which they invested. This is not a tale of a get-rich-quick scheme gone wrong, or of a high-risk, high-return investment vehicle. It is a story of thousands of people who were advised to invest savings for their retirement precisely because the fund was categorised as cautiously managed. As we now know, the reality was somewhat different. Far from being cautiously managed, funds were invested via Guernsey cells in what some would argue was a high-risk and cavalier manner. Investments included property in Dubai, Greek shipping and ferries.

My constituents—and, I am sure, those of other Members—have questions that fall within four key areas. First is the role of Capita Financial Managers which, as I have stated, was the authorised corporate director with responsibility for providing assurance that the fund was operating correctly. It sold its services as a hosting solution. I have some of its marketing material with me that states:

“For investment managers looking to manage current assets with authorised fund structures there exists an alternative to establishing your own unit, trust manager or authorised corporate director…Capita offers a ‘hosting’ solution which enables investment managers to focus on investment activities. In this arrangement Capita Financial group becomes the authorised entity by the Financial Services Authority and thereby undertakes the management company function on your behalf, delivering comprehensive administrative and investment servicing and support to your funds.”

That is how Capita sold its services. It is an outsourcing group.

[David Simpson (Upper Bann) (DUP)]

I congratulate the hon. Gentleman on securing this debate. The research papers we have received state that investors were

“sucked into the funds by some of the slickest marketing ever put together in financial services. Marketing so good, in fact, that it bamboozled many good independent financial advisers”.

People will lose 30% or 40% of their money. Does the hon. Gentleman agree that that is unacceptable and that it was a sham from start to finish?

[Tom Greatrex]

I agree wholeheartedly with the hon. Gentleman and I will go on to develop the point about marketing to independent financial advisers.

[Mr Jim Cunningham (Coventry South) (Lab)]

A number of my constituents have written to me voicing their concern about this issue. Does my hon. Friend think that there should be an urgent inquiry into the matter? On the basis of what he has just said, the situation is more serious than a lot of people realised.

[Tom Greatrex]

I agree with my hon. Friend and I will make some of those points later in my remarks. We are only at the beginning of uncovering what went on, and the situation is worrying for many other funds. There are also questions for regulators that I will go on to address.

[Mark Lazarowicz (Edinburgh North and Leith) (Lab/Co-op)]

I congratulate my hon. Friend on the way he presents the subject under discussion and on securing the debate. The fact that MPs from all four nations of the UK and five political parties are present indicates how widespread the problem is throughout the country. We clearly need an inquiry and to find out what has been going on. We do not want a repeat of the Equitable Life saga when it took 10 or 15 years before people got sight of any money. We need an inquiry, but we also need action by regulators and the Government to try and help people who, as my hon. Friend pointed out, in many cases made what they believed to be a low-risk investment for their later years. They will not be able to wait 10 or 15 years.

[Tom Greatrex]

I agree with my hon. Friend. It is important that people get their money and that they get it in the right way. I will make that point later in my contribution. Capita is an outsourcing group. The structure works so that Capita assumes a legal responsibility for the assets and subcontracts management back to the fund house. It is effectively an outsourcing operation.

While preparing for this debate I had the opportunity to speak to some individuals who used to work for Capita. What they told me shocked and appalled me. I was told that there was relatively little oversight over funds in Capita Financial Managers, and that there was a small team of people, a high staff turnover, and lots of relatively young and inexperienced staff who worked for over 300 funds at the same time. One individual who previously worked for Capita told me that Capita was

“not the best managed firm and the compliance culture left a lot to be desired. Capita is not particularly well respected in the industry and it is no surprise to me that they found themselves in trouble.”

Those remarks contrast greatly with the way that many people viewed Capita on the basis of their investments. Capita is a household name that for many people has a degree of respectability. People made their investment decisions partly because Capita’s name was attached to that investment.

[Bob Stewart (Beckenham) (Con)]

Capita is also international. How much power might we have over Capita if it spreads to New York and other places?

[Tom Greatrex]

The hon. Gentleman is right to say that Capita group is involved in a range of businesses across the world. Capita Financial Managers, however, was regulated by the FSA and was supposedly in a position to provide assurance in this case. That is where questions need to be asked.

[Sammy Wilson (East Antrim) (DUP)]

The hon. Gentleman makes the important point that whatever management inadequacies there may have been in Capita, it was regulated by the FSA. It oversaw what was supposed to be a prudently managed fund. Money was being put into totally illiquid assets and very dodgy assets, yet that was never identified. Was there not a regulatory failure in that regard?

[Tom Greatrex]

The hon. Gentleman makes an important point. I want to come on to the role of the FSA as the regulator and I particularly want the Minister to respond on the potential role of the Financial Conduct Authority in the future as the FSA is wound up.

[Mr Iain McKenzie (Inverclyde) (Lab)]

Does my hon. Friend agree that Capita needs to step up to its responsibilities? What it is offering in compensation is derogatory to the people who have lost their life savings. It needs to step up to its responsibilities and offer 100% compensation.

[Tom Greatrex]

My hon. Friend makes a very important point. I want to come on to the inadequacy of the payment deal—it is not a compensation deal—on the table at present, because there are serious questions to ask about that as well.

If what I have set out was Capita’s reputation among some in the industry, it is perhaps not surprising that Capita appears not to have known about the activity of the sub-funds investing in the very high-risk activity via the Guernsey cells; that Capita appears not to have been aware of the illiquidity in the fund by 2008; and that Capita appears not to have provided a proper sign-off for the accounts. I say “appear” because we do not know for certain the detail of the failings, because the FSA, in correspondence that it has copied to Members of Parliament, says that it is unable to provide details of its investigations.

Suffice it to say that those independent financial advisers who trusted the Capita brand worked on the basis of the CF Arch Cru marketing material, which Capita would have had responsibility for signing off and copies of which I have with me. It includes material headed “Going Well” from November 2008, by which time the FSA had, we know, started looking into Arch Cru. There is also a weekly update from 9 March 2009—four days before suspension of the fund. In approving tones, it boasts of cumulative decline year to year of 2.6% compared with double digit falls in most major traditional public asset houses. It says that all its UK funds retain a top five rank in their category. Those statements were issued to financial advisers just four days before the fund was suspended.

In addition to that type of material, the chief executive of Capita Finance Managers, Chris Addenbrooke, in Investment Adviser in September 2008, said:

“We’ve got the credibility to take on the ACD”—

authorised corporate director—

“role. Our clients see that as attractive.”

Given that material and comments such as that, there is no doubt that people thought that they were investing in something that was very different from what it turned out to be. It is apparent that at the very least there were serious shortcomings in the role of Capita as the ACD.

Secondly, there is the role of the FSA. Earlier this week, I spent some time with representatives of the FSA, discussing Arch Cru, and I am grateful for their time and their engagement in seeking to answer some of my questions, but serious questions remain for the FSA to answer. It was statutorily responsible for regulating Capita Financial Managers. Why did it not know or not appear to know what was happening with Arch Cru? I also spoke to people who had previously worked for the FSA. They said that the ARROW—advanced, risk-responsive operating framework—visit was not until late 2008 and that was not atypical given the risk matrix, which would have meant that the likely ARROW visits would have taken place only every 18 months approximately. I understand and accept that this matter can be complex.

[Anne Marie Morris (Newton Abbot) (Con)]

Is the hon. Gentleman making the point that this is not simply a matter of what the FSA did and whether it did it appropriately, inappropriately, negligently or otherwise, and that there was something fundamentally wrong with the processes of the regulatory regime that was operating at the time?

[Tom Greatrex]

I thank the hon. Lady for her intervention. There are two points: a point about what the FSA did in relation to Arch Cru, and a further point about the regulatory regime. As I said, with the FCA about to be set up, there is an important issue for the Government to deal with in that regard as well.

[Mr Andrew Smith (Oxford East) (Lab)]

I congratulate my hon. Friend on obtaining the debate and on the forensic and effective way in which he is presenting a very important case, which affects my constituents as it does others. Does it not pass all understanding how the FSA could have said on 21 June in its statement that it “considers that this package”—the £54 million package—

“is a fair and reasonable outcome, which is in the best interests of investors”

when it is not fair, not reasonable and clearly not in the best interests of investors?

[Tom Greatrex]

I agree wholeheartedly with my right hon. Friend. I hope to make a couple of remarks about that package in a few moments.

[Sir Alan Beith (Berwick-upon-Tweed) (LD)]

May I return to the point that was made a moment ago? Does it not appear that the structure set up for Arch Cru was designed to ensure that the FSA did not notice what was going on, although the setting up of the structure should have been noticed by the FSA and picked up at an earlier stage?

[Tom Greatrex]

I thank the right hon. Gentleman for his intervention. When I spent some time with representatives of the FSA, they showed me a diagram of the structure of the fund and it was amazing to see quite how labyrinthine it was and is. The right hon. Gentleman is right to say that that is the root of part of the problems. At the same time, seeking to say, “Well, that’s the responsibility of the Guernsey regulator. That’s the responsibility of someone else,” does not deal with the central issue. That is the lesson for the future that we need to be conscious of.

[Fiona O’Donnell (East Lothian) (Lab)]

My hon. Friend is being extremely generous in giving way. Although it is welcome to see cross-party support today for the investors who are innocent victims of absolutely disgraceful behaviour by Capita, will my hon. Friend seek an assurance from the Government that their red tape challenge will not get in the way of effective regulation of this sector to prevent other people from losing out in the way in which the Arch Cru investors have?

[Tom Greatrex]

I thank my hon. Friend for her intervention. I am sure that the Minister heard her entreaty. I agree with her that in seeking to ensure that the regulation is right, there is a great danger in looking to light-touch regulation. The consequence of that could well be the position that we find ourselves debating this morning. I am sure that the Minister will take that warning on board.

The third issue is the payment scheme negotiated by the FSA from Capita, HSBC and BNY Mellon. As everyone knows, they are careful to say that that deal is not an admission of liability. The FSA says and has said to investors that it is a “reasonable outcome” for them. It says that it saves time, given that a breach does not have to be proved in what the background note describes as a very complex case, involving multiple parties with different responsibilities. It says that it considered that it was appropriate to align the Financial Ombudsman Service decision making with the payment scheme rules.

[Derek Twigg (Halton) (Lab)]

I congratulate my hon. Friend on securing the debate. It is nothing less than a scandal that hard-working people are being treated in this way. They are suffering anxiety and concern when all they wanted to do was to secure their future. Two of my constituents have written to me to say this:

“Would it be possible for you to support a request for a Section 14 enquiry under the Financial Services Act? This will provide the best opportunity for all investors to receive an improved compensation package.”

I would welcome my hon. Friend’s view on that. Clearly, I would support such an inquiry if it could deliver an improved compensation package, because the concern and anxiety that people are suffering is terrible. Listening to what they have to say is heart-rending.

[Tom Greatrex]

I thank my hon. Friend for his intervention. I agree with him and will go on to ask the Minister—I am sure that he is expecting this—for a section 14 inquiry and for him to explain why one has not been instituted so far.

To me and to many of the investors, the deal brokered by the FSA—the payment scheme—sounds like an admission of defeat. They cannot work out what went wrong and why.

[Heather Wheeler (South Derbyshire) (Con)]

I thank the hon. Gentleman for the sterling work that he has done, along with my hon. Friend the Member for Vale of Glamorgan (Alun Cairns), to bring this matter to the fore. I am delighted that it is my hon. Friend the Financial Secretary to the Treasury who is here to answer questions. What the 15 people in South Derbyshire who have written to me about the matter have experienced is heartbreaking. They thought that they were doing the right thing, but they have been presented with this letter by the FSA saying, “Take it or leave it—70%. You’re lucky to be getting something quickly.” Is that really how we should play the financial game? Perhaps there should be a bigger inquiry into the way the FSA has been carrying out its duties?

[Tom Greatrex]

I thank the hon. Lady for her intervention. That all points to the case for a section 14 investigation to get to the bottom of these events and to prevent them from ever happening again.

To return to the payment scheme, it sounds like the FSA cannot work out what went wrong and why, and where the liability was.

[Angela Smith (Penistone and Stocksbridge) (Lab)]

My constituent Linda Marsh is particularly exercised by the fact that she is being pressured to accept the payment offer on the table because of the looming November deadline. Is it not really urgent that we remove that deadline and allow a proper inquiry to take place?

[Tom Greatrex]

I thank my hon. Friend for her intervention. She makes an important point about people being able to make the right decision when they are offered this payment deal, particularly given that it seems to bind in the Financial Ombudsman Service in a way that makes it impossible for it to take a case subsequently. My hon. Friend makes an important point.

[Naomi Long (Belfast East) (Alliance)]

On that point, one of the concerns raised by constituents who have come to me is that the compensation offer is conditional and precludes legal action against Capita being brought to court by any investor who accepts it. However, it leaves open the option of the investor pursuing the financial advisers, who were, as Members have rightly said, misled by the information provided to them. That seems a very unjust transfer of responsibility.

[Tom Greatrex]

The hon. Lady is exactly right. It is almost as though the deal that has been reached leaves the liability with people who have, as she said, been misled, with the result that they end up carrying the can, which would be very unfair. That is why the deal on the table is wholly inadequate, and I will go on to make a few points about that.

[Ann McKechin (Glasgow North) (Lab)]

Does my hon. Friend agree that it is inappropriate, given that such serious regulatory failures have been identified in this crisis, for the FSA to be so directly involved in the negotiations and the settlement being offered? The FSA lacks the appropriate independence, because it might be to its advantage for the settlement not to result in legal action and further inquiry.

[Tom Greatrex]

I thank my hon. Friend, who makes an important point, which goes to the heart of this issue—the role of the FSA as the regulator and, it seems, the broker of a deal that might help to get something off its back.

It seems the FSA cannot work out what happened. It wants a line to be drawn under this issue, but thousands of unhappy people expected the regulator to prevent this abuse from happening. The FSA has said that the deal will return to investors approximately or up to 70% of their investment, and the words “up to” are quite significant. That 70% is based on the £54 million that has been returned already, £149 million from the sale of other assets, which were valued at that level at 31 March 2011, and an additional £54 million, which Capita, HSBC and BNY Mellon agreed to without accepting liability in a deal brokered by the FSA. However, that £149 million might well not be realised, especially when we consider that the asset base included Greek shipping and what have been described to me as rust-bucket ferries, as well as middle eastern property, the value of which—if there is any left at all—could have fallen, even in the short time since March, given the current economic conditions.

The question I put to the FSA—it was entirely reasonable, but the FSA was unable to answer it—was why it did not add up the asset sales and projected asset sales and subtract them from the investors’ losses to give a figure that would make the compensation up to 100% of what people invested. In that way, people could get their money back; they would not make a profit, but simply get back what they invested, based on the assurances they were given by an organisation that was regulated by the FSA when they took out their investment.

[Jim Shannon (Strangford) (DUP)]

One thing that has come to my attention through my constituents is that the FSA has given advice to investors pushing them towards independent legal advice. Some of that legal advice has led to further complications and added to the money they had already lost. Does the hon. Gentleman feel the direction the FSA pushed investors in should be addressed, given the extra heartache and money losses they have experienced as a result of seeking legal advice that has turned out to be wrong?

[Tom Greatrex]

I thank the hon. Gentleman for his intervention. I do not wish to get drawn into the background dispute between people who have paid into a class action legal fund and people involved in a different action group on behalf of investors. To be frank, I have spoken for far longer than I intended, and I want to give others the chance to get in. There are lots of complicated issues, and I want to focus on the compensation scheme before I draw my remarks to a conclusion. I hope the hon. Gentleman will forgive me.

The approach I have suggested would simply enable people to get their money back—to get up to 100%. This case has been described as one of the worst investment scandals of recent years. There was a similar scandal under the FSA’s predecessor, the Investment Management Regulatory Organisation, and the name Peter Young will mean something to many people here. The relationships and problems involved were broadly similar, but following the suspension of the fund in question in 1996, IMRO achieved a settlement whereby people got their money back. The deal was funded by Morgan Grenfell, which was broadly in the same position as Capita.

That settlement was agreed three months after suspension. Although IMRO took action against the chief executive of the fund manager, the offer was not paid until January 1999—two years and four months after suspension. In the case of Arch Cru, however, it is now two years and eight months since suspension, and only now are letters starting to go out to people with the payment offer—I understand that they are going out now or will be going out in the next couple of weeks. Why was the FSA unable to get close to the resolution achieved by its predecessor as regulator in a similar time frame? Why is up to 70% acceptable to the FSA, when IMRO managed to get 100%?

Fourthly, there is the issue of ensuring that these events do not happen again. Something needs to change if these things are not to happen again, and people who invest their retirement nest eggs or lump sums on the basis of being told that a fund invests cautiously are not to lose their money, not to have to battle through the press to get a hearing, not to have to get a debate in Parliament so that issues can be aired and not to experience the stress, anxiety and rank unfairness of losing their money in a high-risk gamble they were told was a cautious investment.

In this regard, the FSA is about to be replaced by the Financial Conduct Authority, and the relevant proposals are beginning their pre-legislative scrutiny. What will be put in place to enable the FCA to prevent something similar from happening again? All of us, including the Government, have an opportunity to get the proposals right, and that is why these issues are a matter for the Minister and the Government. The Minister and the Treasury correspondence unit have been clear that this affair is a matter for the regulator, not them, but when the ACD fails, the regulator admits it did not know what was happening because of the structure of an investment vehicle, and the basis of a payment offer is so woefully inadequate, these things become a matter for the Minister; it becomes the Government’s responsibility to prevent or minimise the risk of such things ever happening again.

It also becomes a matter of my constituents and those of other Members present being entitled to information, but the FSA and others are not releasing much information. That is why I am putting the questions to the Minister today. Does he believe that Capita fulfilled its role effectively? Does he accept that the FSA has been hampered in fulfilling its role as regulator by its structure? Does he understand that in not providing information, there is suspicion among the investors? Does he realise that on that basis, up to 70% is just not good enough? Does he now know that the FCA needs to be bolstered for the future? Given all the above, will he now ensure that there is a section 14 investigation into what went on with Arch Cru?

I have spoken for far longer than I had intended, so I will conclude. It is easy, when looking into the matter, as I have done over the past few weeks, to get into the details and get lost in the technicalities and minutiae of the regulatory regime, and in the reputations of blue-chip companies, the statements of their chief executives and other individuals, and even the reputations of some of those in high-profile positions in the investment fund. Ultimately, the matter is about people—people such as my constituent Mr Pringle of Cambuslang, whom I have been in correspondence with. He e-mailed me yesterday and asked me to include a final point in the debate, which I will conclude on. He said that

“my wife…and I invested all our pension money with the Cru in this ‘Low Risk’ venture. Being pension money we obviously did not want any high risk ventures that would put our money at risk…We are extremely disappointed in the FSA’s attitude towards this case, by saying that they think Capita’s offer is ‘Fair and Reasonable’. Not in any way is their offer ‘Fair and Reasonable’. Investing in Greek Shipping is not ‘Low Risk’!”

That is the crux of the issue. That is why it is a matter for the Government as well as the regulator, and that is why the Minister needs to respond to the debate this morning.

Independent Banking Commission Report

Tom Greatrex Excerpts

Monday 12th September 2011 Commons Chamber

[Mr Osborne]

The agreement among my right hon. Friend the Chief Secretary to the Treasury, the Business Secretary, me, the Prime Minister and other members of the coalition Government has been solid on this report. Anyone who has been looking for disagreement in the coalition has not really been able to find it today because both parties agreed that this was a good idea and we both support the report’s conclusions. On lending, briefly, we have the Merlin agreements and we are trying to protect small and medium-sized businesses as these huge banks deleverage, and the process has helped to do that. Indeed, the targets are for a big increase in small business lending, and I am confident that they will be met.

[Tom Greatrex (Rutherglen and Hamilton West) (Lab/Co-op)]

It does not take an expert in forecasting—or even the Chancellor of the Exchequer—to foresee large banks seeking to use the proposed changes to increase restrictions on customers accessing bank accounts, cashpoints and other services, or to impose charges for bank accounts. What reassurance can the Chancellor provide me and my constituents that his Government will not let that happen?

[Mr Osborne]

As I said in my initial statement, an important part of this report—it will not be at the top of the evening news tonight, but it is important—is the proposals to enhance competition on the high street and create a new challenger bank, so that customers have real choices. There is also a proposal for a free service that would enable anyone who wanted to switch their current account to do so almost immediately, with all their direct debits and all the other things attached to their account switched too. That will really help customers to shop around—at the moment, customers do not switch their current accounts because they think that it would be too difficult and cumbersome—and is one of the most retail-friendly proposals in the report.

Financial Mutuals

Tom Greatrex Excerpts

Wednesday 16th February 2011 Westminster Hall

[Mr Thomas]

I end up at the same point as the hon. Gentleman, although I took a different journey to get to that point. I will come back, if I may, to the excellent work he has been doing in chairing the all-party inquiry into financial mutuals.

An expert think-tank based in the university of Oxford set out in September 2009 how and why Northern Rock could and should be remutualised, ensuring that its debt to the taxpayer was paid down, creating a stable financial services provider and constraining it from making the previous mistakes, while helping to secure a more competitive retail financial services market.

The next step, which the hon. Member for Cardiff North (Jonathan Evans) hinted at, would be a full feasibility study examining in detail the financial, governance and leadership issues in respect of a remutualisation. Will the Minister encourage such a feasibility study to be undertaken, either as a Green Paper examining the issues in all their complexity or, if the Treasury wants to maintain some distance, requiring UK Financial Instruments to do that instead? In short, will he now actively investigate the feasibility of the case for remutualisation?

In 2003, PA Consulting Group—not a body that one would naturally think of as being on the left—published an interesting analysis of the relationship between the profits of commercial banks and the market share of mutuals. In short, as mutuals gain market share—in other words, as competition between the various private banks and their mutual competitors increases—bank profits from the retail banking market come down. Potentially, that gives the Minister a significant opportunity to deal with the criticism that, under a Tory-led Treasury, it is business as usual for the banks; he can promote greater competition through the growing mutual sector.

The biggest advantage that mutuals can offer is their long-term view. They are not faced with the short-term need to secure profits. Indeed, Nationwide estimates that the mutual pricing benefit that it enjoyed between 1997 and 2007 because it did not have to put shareholders ahead of members totalled some £3.7 billion. New research, using the published accounts of six shareholder-owned insurers, shows that more than £2.2 billion was paid to shareholders in dividends. That is the dividend drag—the loss incurred by all who seek insurance as a result of buying from a business owned by shareholders. That helps to explain why mutuals, which do not suffer that drag, typically pay higher investment returns, provide better standards of service and pay more claims.

Treasury and Financial Services Authority orthodoxy appears to be that corporate form does not matter, but that what counts is what those various corporate bodies do for their consumers. Such a view is simplistic and not sufficiently considered to warrant the hands-off approach to corporate diversity that often appears to characterise the approach of the FSA and the Treasury. Let me be clear: I do not advocate a mutual-only way, but robust diversity is important in ensuring real competition and giving consumers a real series of options in the market.

New capital rules being introduced in the wake of the global financial crisis may give rise to insufficient care being given to protecting and increasing the remaining strength of the building society movement. The FSA’s new interpretation of the rules on capital may, over a number of years, bring about the end of friendly societies. Both sets of draft capital requirements could profoundly damage the competitiveness of financial mutuals, and they do not reflect the fundamental difference between financial mutuals that are run for members, and the basic banks or private insurers, which are run for shareholder gain.

The European capital requirements directive is designed to enable financial services businesses better to absorb losses following the introduction of the new Basel standards. I accept that that is an important part of the response to the global financial crisis; it focuses on improving the quantity and quality of capital, particularly what is called core tier 1 capital. Over the last 20 years, building societies’ capital reserves have been supplemented by permanent interest-bearing shares. However, they will not meet more demanding definitions for core tier 1 capital.

I recognise that building societies need to have access to new ways of securing capital that are permanent and that fully absorb losses. At the moment, the rules are being framed with only one type of corporate form in mind—the private bank. They do not recognise the fact that mutuals are structured and function differently, providing value to their customers over the medium and longer term. If building societies are forced to adopt plc-like capital, they will have to adopt plc-like behaviour. Building societies are trusted, safe and responsible precisely because they are not part of what “St Vince” calls the casino economy. Surely it would be a mistake to force upon them a new type of equity capital that would import excessive risk-taking.

I realise that there has been movement in the discussions between building societies and the Government on this matter, but I ask the Minister what progress has been made—and, just as important, what has he done personally to move things forward with his European counterparts?

There has been less progress in discussions with friendly societies. The FSA, revisiting its own rule book, seems hellbent on clinging to a piece of legal advice that has not been shared with the industry and which is at odds with every legal opinion that the industry has received. It seems to be based on a ministerial view from the mid-1990s that the then Minister publicly acknowledged was not intended for mutuals. Why cannot the FSA share its legal advice with the industry? If its motivation is that it does not want to damage friendly societies, why cannot a joint solution be found? If a solution cannot be found, mutual insurers would have to pay out a significant proportion of the capital held in their organisations; the consequence of that could be that they had little or no working capital and would have to shut up shop or demutualise.

I am grateful that Hector Sants attended the inquiry of the all-party group on building societies and financial mutuals, but frankly I doubt whether he has yet grasped the seriousness of the situation that friendly societies face as a result of his organisation’s proposal. Even now, I hope he will agree to an urgent review of the FSA’s legal advice and step up efforts to find a solution. If he does not, and if the Minister does not intervene, consumers will have less choice, plcs will take greater profits and customers will face higher charges. I would welcome the Minister’s response.

The Minister is responsible for ushering in changes to financial services regulations. They offer the opportunity to lock in a new requirement to champion corporate diversity and, crucially, new structures to ensure that we have people of sufficient calibre and status in the regulatory landscape to deal with building societies and friendly societies. Will the Minister support a requirement to promote corporate diversity in financial services when bringing forward the Bills to set out new arrangements for the City? What action is he taking to ensure that mutuals will be the responsibility of those high enough in the pecking order to make a difference when needed?

I turn to credit unions. The Minister will recognise that there is widespread concern about high interest rates for consumer credit and the activities of illegal loan sharks. I hope he realises the opportunity that properly managed credit unions can provide in meeting the needs of those wanting relatively small sums of money at affordable rates. Access to credit unions in the UK has been growing. For example, I understand that Wales has a credit union in every part of the country. That is not the case in England, although things have been slowly improving in recent years.

[Tom Greatrex (Rutherglen and Hamilton West) (Lab/Co-op)]

My hon. Friend may be aware that access to credit unions in Scotland has improved of late. I hope he will join me in paying tribute to Hamilton credit union, which is developing financial services for children and young people to help get them into the culture of saving, so that in future they will be more financially responsible.

[Mr Thomas]

I welcome the progress that has been made in Scotland, and particularly the work of the Hamilton credit union outlined by my hon. Friend. What action will the Minister take to champion the further growth of credit unions across the UK?

Mutuals make a vital difference by generating more competition in financial services, and they help to create more value for the consumer, as opposed to the shareholder. I look forward to the Minister’s response to my questions.

Economic Regeneration (Glasgow)

Tom Greatrex Excerpts

Wednesday 16th February 2011 Westminster Hall

[Tom Greatrex (Rutherglen and Hamilton West) (Lab/Co-op)]

I will endeavour to keep my remarks as brief as possible, so that other Members are able to make their points.

I congratulate my parliamentary neighbour, my hon. Friend the Member for Glasgow East (Margaret Curran), on securing this important debate. She rightly spoke of the history, character and legacy of the city of Glasgow and, importantly, of the city’s potential. I pay tribute to her and the other hon. Members who are standing up for the great city of Glasgow in this debate.

I speak as somebody who definitely does not represent a Glasgow constituency. My constituents who live closest to Glasgow are not slow to remind me that they live in the Royal Burgh of Rutherglen. They might have Glasgow postcodes and phone numbers, but the River Clyde forms a natural boundary between Rutherglen and the east of the city, although that natural boundary might not be respected in future by the Boundary Commission, depending on the outcome of deliberations elsewhere today. However, I suppose that that is a debate for a much later hour.

Although my constituency interest is not directly in Glasgow, the fact that my constituency neighbours Glasgow gives me a strong connection with the city across the river. The southernmost part of my constituency shares many characteristics with the east end of Glasgow, as described by my hon. Friend in her speech. Due to that connection, my constituency has a direct interest in the regeneration of Glasgow, particularly through the Clyde Gateway project, which she mentioned and I will discuss briefly.

I realise that the Minister will get both a geography and a history lesson during this debate. I hope that the Clyde Gateway is a fairly self-explanatory description of the regeneration area. It takes in the area to either side of the Clyde and east of the city, and includes the constituencies of my hon. Friends the Members for Glasgow Central (Anas Sarwar) and for Glasgow East on one side, and mine on the other. The Minister might be less familiar with the work of the Clyde Gateway urban regeneration company. I pay tribute to the work of Clyde Gateway, which has learned the lessons from sometimes less successful regeneration initiatives in other parts of the country. Clyde Gateway has actively involved and engaged communities since its establishment in late 2007, and its priorities have been led by what local communities say they need and want for the area.

It is fair to describe this as a once-in-a-lifetime chance to make a difference to some of the most deprived areas of Glasgow and South Lanarkshire. The opportunity has been created partly by the Glasgow bid for the Commonwealth games in 2014, as my hon. Friend mentioned, and partly by the construction of the final, missing section of the M74 from Cambuslang in my constituency to join the M8. The improved transport connection and legacy sports facilities from the games will make a massive difference to the area. At the same time, an opportunity is at stake to do much more in relation to housing, industry and jobs—not only construction work but sustainable long-term jobs.

So far, only some of those benefits have come to fruition in the form of improvements in and around Rutherglen station, the opening in the past few weeks of small business units in Stonelaw road in Rutherglen and an innovative arrangement with Campbell Construction Group to ensure that the construction jobs and training associated with the Clyde Gateway project are geared as far as possible towards local people.

The Clyde Gateway area on the side of the river that I represent has a long and proud industrial history, but history does not always get us far. It does not provide many jobs, keep local people in the communities where they want to live or help economic growth. Although the pits have long gone and the Cambuslang Hoover factory has been closed for several years—some of the physical structure is still around—the steel works continue. There is huge potential to help regenerate what was once and can again be a thriving economic base in my constituency.

The potential is clear. Thanks to the work of Clyde Gateway, public support exists and some of the first projects have been delivered. Visible progress has been made not just in Rutherglen but in Bridgeton on the other side of the river. The project has also gained the support of business organisations, Glasgow city and South Lanarkshire councils and, until recently, Scottish Enterprise, the regeneration agency in Scotland. Clyde Gateway has been an evolving success story, with huge potential and the support—at least in words—of Ministers in the devolved Administration in Edinburgh.

It was therefore of great concern when in January this year, without notice, consultation or explanation, Scottish Enterprise announced that the budget of Clyde Gateway and other URCs in Scotland would be cut by nearly half, which is well beyond the level anticipated or warned about and places in doubt the future of Clyde Gateway and its ability to deliver some key projects. Many people felt utterly betrayed, not by Clyde Gateway or by their local authorities, which were keeping to their side of the bargain as founders of the regeneration company, but by the crass actions of Scottish Enterprise.

The once-in-a-lifetime opportunity has been left cruelly in limbo by Scottish Enterprise. Last week, after pressure, John Swinney, the Finance Minister in Holyrood, managed to find the money to reinstate the sum cut from the budget for URCs for this year by creating an underspend elsewhere, a juggling act of the type I am sure Treasury Ministers are practising for March.

Clyde Gateway is still at the mercy of Scottish Enterprise. A week later, Scottish Enterprise has still not confirmed how much money will be redirected back into the projects to which it committed, nor what the long-term position is given its previous commitments to funding until 2016. Scottish Enterprise said in its business plan, published less than a year ago, that it will

“continue to work…to deliver national regeneration priorities”

such as Clyde Gateway, ring-fencing £12.5 million in 2011-12 and 2012-13 and maintaining funding until 2016.

As I am sure the Minister will understand, the continued ability to lever in private sector investment and commitment from potential employers depends on stability and confidence that plans will be delivered, not left in the lurch. It is not good enough that, although John Swinney was forced to restore the money cut from the budget, Scottish Enterprise has failed to explain what that will mean for Clyde Gateway next year. There is no sense of what the position will be in the further two years for which money was previously committed.

We have heard in this debate and will continue to hear about the importance of regeneration to many communities in Glasgow. Clyde Gateway covers one aspect of that regeneration in a specific area, but it is a crucial time for the east end of the city and the areas across the river in Shawfield and Rutherglen. If taken, this opportunity can make a difference to many people. If it is missed, they will be cruelly let down. The area has needed regeneration for far too long, as is obvious to anyone travelling through it. Progress has been made recently, creating hope, but there is now a danger that due to the twisted logic of Scottish Enterprise, the opportunity could be lost.

I realise that it is not the Minister’s direct responsibility, but I take this opportunity to place on the record my hope that Scottish Enterprise will do what it can to make clear its ongoing commitment to Clyde Gateway so that crucial capital projects can progress. Failure to do so will let down the communities in my constituency and other hon. Members’ in a shoddy and disgraceful way.

Crown Currency Exchange

Tom Greatrex Excerpts

Tuesday 7th December 2010 Commons Chamber

[Tessa Munt]

I could not agree more. One problem I have discovered is that, although in the registration process the FSA takes receipt of £500, it is an overseer and not in any way, shape or form a regulator. The directors and responsible officers of a company have to declare under registration unspent criminal convictions for financial crimes, terrorist funding, money laundering and fraud, but there are two difficulties with that. First, the punishment for not doing so appears to be no more than three months in jail, and, if one is rocking along with £100 million, that is probably worth it. The other thing is that it appears that the FSA has absolutely no means of checking the information because it has no access to the Criminal Records Bureau. Registration is clearly not effective; we need to look at regulation for all these companies.

[Tom Greatrex (Rutherglen and Hamilton West) (Lab/Co-op)]

I am grateful to the hon. Lady; she has taken a number of interventions, although she has limited time to make her case. I congratulate her on securing the debate. Does she share my concern? I have raised constituents’ cases with the FSA, but I have not had any replies at all.

[Tessa Munt]

I have one quote from the FSA complaints department. It says:

“We are unable to look at your case under our complaints scheme as your complaint falls outside the scope of the scheme…However, we will deal with the complaint…It appears that registered companies are not part of the complaints scheme.”

It seems a little confused. To be honest, if the FSA does not know what falls within and without the complaints scheme, it will be difficult for any member of the public who has been brought into the situation with a false sense of security.

Oral Answers to Questions

Tom Greatrex Excerpts

Tuesday 13th July 2010 Commons Chamber

[The Financial Secretary to the Treasury (Mr Mark Hoban)]

My hon. Friend makes an important point. A large number of Equitable Life policyholders are very angry about how they were treated by the previous Government. We have committed to setting up an independent, fair and transparent payments scheme, further information on which will be presented to the House later this month.

[Tom Greatrex (Rutherglen and Hamilton West) (Lab/Co-op)]

The Economic Secretary, the Chief Secretary’s Front-Bench colleague, referred to the establishment of the Office for Budget Responsibility as a welcome step forward for transparency. In the interests of transparency, could the Chief Secretary tell me precisely when he saw the revised unemployment figures produced by the OBR?

[Danny Alexander]

The revised unemployment figures were published by the OBR on the Wednesday morning. The figures were circulated in the normal way, as happens with the Office for National Statistics, the day before in the Treasury. That is when I saw the documentation that was published. The requirements for confidentiality that apply to ONS figures also apply to OBR figures.