Future Relationship with the EU

William Wragg Excerpts

Tuesday 9th June 2020 Commons Chamber

[Penny Mordaunt]

I thank the hon. Lady for those questions. At the start of her response, she made a powerful argument for not extending the transition period. If we have learned anything over the last few years, it is that that would only extend the negotiations. I agree that business, our citizens across the EU, and the rest of the world, with which we are also focused on trade negotiations, want to have certainty about the future, so we must press on with that. That is one of the many reasons why we will not extend the transition period.

The hon. Lady is also right to draw attention to the fact that the covid crisis is going on. I know that she is aware of the huge amount of work that was done last year on no-deal preparations, and the tremendous work that civil contingencies and all Government Departments have been doing to ensure that supply chains remain strong, that we can quickly adapt, and that we have stocks of all sorts of goods, including the medicines that we need. These are challenging at times, in the light of what the world is facing, but they are our focus. I assure her of the incredible work that those civil servants are doing to ensure that our citizens have what they need when they need it.

I take a keen interest in those areas as a former employee of the Freight Transport Association. We will shortly be saying more about our border operations. A tremendous amount of work has gone on to improve on our communication with businesses from every part of the UK last year to ensure that is good, and that we are not just giving people the right information, but picking up solutions from the sector, because that will be key to getting it right.

On the hon. Lady’s remarks about rights, animal welfare, security, zero tariffs and zero quotas, our policy has not changed. We will of course respect the Good Friday/Belfast agreement and we expect the EU to do the same.

[Mr William Wragg (Hazel Grove) (Con)]

Regrettably, is not the insurmountable blockage in this entire process the refusal of the EU to accept the UK as a sovereign nation and, therefore, its refusal to countenance a large-scale copy and paste of existing arrangements with the likes of Canada, South Korea and Japan to reach a mutually beneficial trading partnership?

[Penny Mordaunt]

My hon. Friend makes a good point. The areas where we still need to make progress will be helped when the EU remembers that we are a sovereign equal.

Covid-19

William Wragg Excerpts

Monday 11th May 2020 Commons Chamber

[Mr William Wragg (Hazel Grove) (Con)]

When the public inquiry reports after being able to properly consider these events, there will be an almost irresistible urge to blame. That can only be natural, for we will as a nation feel grief—grief for those we have lost, grief for the things we have hitherto taken for granted, and grief for lost futures. The inquiry will demand papers, examine plans, ask awkward questions and reveal uncomfortable truths. There will be admissions, denials and rebuttals, claim and counterclaim, good days for some, bad days for others. There will be tales of heroism, and records of blunder. There will be examples of those who did not make reply, those who should have perhaps reasoned why, and, above it all, the lingering ghosts of those who simply did and died.

The findings of the inquiry will not be phrased poetically. They will be categoric. I will wait for them and accept them, and we will all learn from them. The findings will put aside examples of hindsight-itis, which grow as the real pandemic subsides. Those who say they do not wish to play politics but then subtly do so will be able to deal in the facts, rather than propagate speculation. We will know who knew what and when, from whence this virus came, and myriad hows and whys will find their answer. We know it on reasonable authority that judgment is never quite so harsh upon the admission of responsibility, but perhaps most painfully of all there may be some answers we may never know.

There are some people for whom our Prime Minister will never do anything right, but he is the Prime Minister and they are not. He knows that to govern is to choose. There are invidious choices ahead, and we need the Government to be fully engaged with the concerns and suggestions of wider society. They must also be engaged with this House, and I am sorry to say that this format of a virtual Parliament does not allow for it. As we ask our constituents to return to their place of work, with understandable anxieties and adaptations, so we must lead by example and return to ours.

Through effective scrutiny we will get better government, for there are many candid friends of the Government in this House who want them to succeed on behalf of our entire nation. However, just as the Prime Minister and Ministers must exercise their judgment carefully and clearly, it is also for everyone to play a part in exercising our judgment, rather than entirely abdicating responsibility to the state. Although the state intervention has been great and necessary, it will be our individual patience, good sense and, above all, humanity that will see us through.

Much has been made of the slogan used to convey the Government’s message.  Supposedly clever people scoff and feign confusion. Well, we can argue about this weekend’s communication strategy and wish it were better, but ultimately we must have greater confidence in the judgment of the public.

No-deal Brexit: Short Positions against the Pound

William Wragg Excerpts

Monday 30th September 2019 Commons Chamber

[Mr Clarke]

What I will say is that I believe we can avoid that scenario entirely if we get a good deal and leave the European Union according to plan, on 31 October. We are very clear about the fact that, in a scenario whereby we cannot get a deal through the House, we will deliver on the referendum mandate and leave the European Union. That is uncontested Government policy. We will ensure that we make the dynamic policy choices that will enable our economy to remain strong, robust and full of opportunity.

[Mr William Wragg (Hazel Grove) (Con)]

Would my hon. Friend care to comment on this splendid irony? Mr George Soros, who in 1992 made a fortune in short positions against the pound, is now one of the bankrollers of the Continuity Remain campaign.

[Mr Clarke]

Tempting as it is to follow the trail laid down by my hon. Friend, I will content myself with saying that, just as I would not comment on the actions of individuals in my reply to an Opposition Member, I will not comment on the actions of individuals now. However, the idea that there are vested interests on only one side of the debate could clearly be contested.

Mortgage Prisoners

William Wragg Excerpts

Thursday 6th June 2019 Commons Chamber

[Mr William Wragg (Hazel Grove) (Con)]

I start by paying tribute to all those involved in the D-day landings 75 years ago today, especially remembering those who gave their lives. We and our allies will forever owe them a debt of gratitude. My constituent Alfred Barlow sadly passed away a few weeks ago, but he had hoped to be in Normandy with other veterans. I mention him particularly following the excellent speech from the hon. Member for Blackpool South (Gordon Marsden), who was a family friend of his.

Let me now turn from a debt of deep gratitude to a kind of debt that is causing harm to families across the country who are locked into uncompetitive and expensive mortgages and unable to move to other more affordable products. That may be because they are trapped by large and expensive exit fees, or—as we have heard this afternoon—because they have been told, quite perversely, that they cannot afford to move to a cheaper deal, owing to an over-rigorous application of credit-scoring or affordability checks. Many are customers with excellent track records of keeping up repayments, but they are trapped by the rigidity of the new lending criteria. Being locked into those expensive products means that they pay more than they ought to pay. That, in turn, can force them into financial hardship, and in extreme cases can lead to the loss of their homes and other assets, especially when the loan is transferred to vulture funds which seek aggressively to recover the debts.

Colleagues may have hoped that on a Back-Bench Thursday we might avoid even a mention of the European Union, but the hon. Member for East Lothian (Martin Whitfield) beat me to it. I mention the EU not with any reference to the current overarching debate, but to refer to a matter of fact. The EU mortgage credit directive is a code of conduct for mortgage firms, which we implemented in the UK in 2016. In an attempt to learn lessons from the 2008 mortgage credit crunch, rules on lenders were tightened to prevent consumers from taking out loans that they might later not be able to afford by stress-testing their ability to make repayments, even in the hypothetical event of large hikes in interest rates. In contrast to the relatively laissez-faire attitude to mortgage lending that had gone before, this was supposed to protect consumers from placing themselves in potentially precarious financial situations. However, its implementation has shown that the rules have been over-tightened, which has resulted in the creation of tens of thousands of mortgage prisoners.

As with everything, there is a general lack of agreement on whether the current rules stem inherently from the EU directive or from the UK’s implementation of it. There is also a question mark over whether the situation of mortgage prisoners is merely an unfortunate and unintended consequence which the industry is keen to rectify, or whether lenders indeed benefit from the position of customers who find themselves trapped, and may therefore have a limited appetite for reform. We have seen in other areas of financial service regulation that when debtors face distress there is always someone around to profit, and that is exactly where vulture funds come in, to pick at the remains. It is a trend that we have seen in the business banking sector too, when lenders have abused small and medium-sized enterprises to extract the maximum profit.

Like many other Members, I was contacted by several constituents before the debate, and was asked to give examples from their cases. I hope that by doing so I will highlight the human side of the story, which is often lost when we talk about market reviews and regulatory consultations. Important as those processes are to reforming the system, we must remember that behind each broken product or recalled asset is a home, and an individual or a family.

I want to mention two cases but this issue affects many more in my constituency. One gentleman from Offerton contacted me. He has a mortgage with Landmark Mortgages following the collapse of Northern Rock and was paying a fixed rate of 6% for two years, which was subsequently reduced to a variable rate of 4.7%. That is clearly quite high in the current market and he was paying a lot in mortgage repayments. I wrote to Landmark Mortgages on his behalf to ask if it would consider offering him a lower interest rate now his fixed product had ended. It declined.

Another constituent, from Hazel Grove, took out a 15-year fixed 1.25% above base rate loan secured against a portfolio of properties with the Yorkshire Bank. He placed his trust in the security of a 15-year loan. However despite his excellent credit ratings and payments being made on time and never in default he soon found himself subject to aggressive sales of further loans on higher interest rates which he felt bullied into accepting. This meant he was paying considerably more interest each month for many years until he started to struggle with the repayments. He therefore made arrangements on a number of occasions to try to refinance, but each time it was denied.

Then the bank appointed Cerberus Capital Management, a US-based private equity firm specialising in “distressed investing” to take over the loan and act in receivership. I know that some Members make more classical allusions in this Chamber than I do, but I will on this occasion indulge the House with such a reference, because Cerberus is a multi-headed dog that guards the gates of the underworld to prevent the dead from leaving; what an apt description of that company. As my constituent found to his cost, it is not in the agent’s interest to help customers, as it will lose fees, so it undermined any attempts made to resolve matters. Now my constituent has all rents from his property portfolio paid directly to the administrators and lives in constant fear that his family home—or even that of his 84-year-old mother—may be repossessed at any moment.

This is all rather similar to another issue: the treatment of small businesses by banks and the aggressive recall of loans and assets. This is an issue with which many of us are well-acquainted through the excellent work of the all-party group on fair business banking and finance, which has spent many years looking at this issue, most notably at Lloyds and the Global Restructuring Group, but it was a practice endemic across the industry.

I want to highlight a few of the similarities that are critical to this debate. The first is the apparent toothlessness of the FCA and its seeming inability or unwillingness to respond to poor practices in the market. As we saw with the business banking scandal, the FCA is slow to instigate reform, and it is not until consumer victims start piling up at its door that it takes note. It is for the Government to ensure that the FCA shows more appetite and greater urgency to protect the consumer. I welcome the current consultation on responsible lending rules and guidance, but if past experience is anything to go by I am not holding my breath that it will provide the kind of solution that customers need and deserve.

Moreover, the FCA often suggests that consumers seek redress from the ombudsmen or the courts, but that is rarely a viable option. The Financial Ombudsman Service is limited in the size of redress it can offer. For larger claims, litigation is an extremely fraught option due to the inequalities in access to justice between an individual customer and huge, often multinational, financial institutions with their armies of lawyers.

As my constituent from Hazel Grove told me:

“The bank squeezes every penny from you so you’re unable to support your family or fight for justice. The court costs of litigation are too high, therefore you’re unable to make a claim or file to protect your rights. I am unable to get legal aid as it’s a civil matter. If you try to bring a claim the banks just say to the court that they will want a cost order, and proof that you can pay the bank’s costs if you lose, which of course I can’t.”

[Bob Stewart (Beckenham) (Con)]

The FCA seems to be an organisation that either ignores people, puts us in a pending tray forever, tells us to go away or suggests we go to an ombudsman, but very rarely does it actually do its job. It is time it was sorted out.

--- Later in debate ---

[Mr Wragg]

I need elaborate no further on that excellent intervention from my hon. and gallant Friend.

The scenario I have just described is nearly a carbon copy of that of another constituent, from Romiley, who was told by the FCA to take RBS to court over his business loans. Sadly, in both instances, it is very much is a case of David versus Goliath, but without the ability to afford the slingshot.

Finally, and most crucially, I want to highlight to the House the impact that such financial struggles can have on individuals and their families, and especially on their mental health and wellbeing. The material impact of financial hardship on both mental and physical health must not be underestimated. I have to ask the Minister how we can condone parts of the financial system having such disastrous effects on people.

In conclusion, the move to reduce barriers to switching to a more affordable mortgage for consumers who are up to date with payments and not looking to borrow more, which the FCA is consulting on, is certainly a good thing. However, to my mind the issue is bigger than that. UK financial services, particularly the consumer lending sector, urgently need to start working more in the interests of the customer. We of course accept and welcome the fact that banks and lenders need to make a responsible profit in order to be sustainable as businesses, to continue to provide services, and to continue as an important cornerstone of the economy. However, with the ongoing SME business banking scandal, and with the mortgage prisoners issue now gaining profile, this profiteering to the point of greed is rapidly creating the impression that the banks are going beyond what is responsible. [Interruption.] With that, Mr Deputy Speaker, I shall heed your indications and conclude.

European Union (Withdrawal) Act

William Wragg Excerpts

Thursday 6th December 2018 Commons Chamber

[Mr William Wragg (Hazel Grove) (Con)]

At the end of this debate, the House will vote in the most significant Division since 28 October 1971, when Edward Heath secured a majority of 112 to approve the White Paper that contained within it the terms of our accession in principle to the then European Economic Community. That evening, Mr Heath returned to Downing Street and so moved was he that he sat at his piano as a means to compose himself. I can only hope that my brief remarks this afternoon will be as well tempered as the music that calmed the late Prime Minister.

I say that because, too often, this debate and all those who have concerned themselves with our departure from the European Union have been unfortunately characterised by frayed tempers. Characters and motivations have been impugned, and mistrust has been sown abundantly. This is a great shame, and I entirely agree that now is the time to heal such divisions.

As the noble Lord Hennessy said when giving evidence to the Procedure Committee, the question of the European Union

“makes the political weather and drives otherwise calm people to distraction.”

I admit to having been driven, at times, to such distraction.

Although it is easy to talk, in general terms, of reconciliation, I take this opportunity to apologise to anybody, including Members of this House, with whom I may have exchanged cross words, whose integrity I have doubted or with whom I have simply let the subject of the European Union impair my judgment.

The tone of the debate is important. Although it is understandable that momentous decisions stir passions, often it is not only what we say but how we say it that matters. Just like during the referendum, it pains me to see my right hon. and hon. Friends perhaps lose sight of the fact that, whatever happens next Tuesday, we must come back together.

A good number of my constituents have wondered why I have not publicly declared my position on the withdrawal agreement and the political declaration. Indeed, a number of my colleagues have expressed surprise that they have not heard a word on the matter. [Hon. Members: “Leadership.”] Not quite; I know my limits. Given my consistent view on the virtue of leaving the European Union, I will reassure, or perhaps disappoint, my colleagues. My view has not changed in the slightest. However, as I said at the outset of my speech, this is the most important matter to be considered for more than a generation, and it therefore warrants the utmost consideration, care and appreciation of the arguments.

There is much that is practical and to be commended in the withdrawal agreement and the declaration, and I pay tribute to my right hon. Friend the Prime Minister for her tenacity, yet this honourable intent is now against a backdrop of fear. I have determined that how I vote next week will not be because of fear; nor will it be based on a misplaced optimism. Instead, it will be rooted in consistency and fidelity to my sense of what the United Kingdom is. As such, the Northern Ireland protocol contained in the withdrawal agreement is unacceptable, and the arguments have been much rehearsed. My right hon. Friend has her own reservations about it, and she must take from this, the will of the House, the strength and the instruction to change it.

Leaving the European Union is not a matter of left or right, Labour or Conservative; it is about a sovereign United Kingdom having the confidence to govern itself. It is as simple and—dare I say it?—as noble and beautiful as that.

Business Banking Fraud

William Wragg Excerpts

Tuesday 9th October 2018 Westminster Hall

[Mr Laurence Robertson (in the Chair)]

Before I call Mr Wragg to move the motion, I say to Members that I will ask Back Benchers following him to take just five minutes each initially. That is not a time limit imposed from the Chair, but I ask for self-restraint, and we will see how we go so that we can get everyone in.

[Mr William Wragg (Hazel Grove) (Con)]

I beg to move,

That this House has considered the investigation of business banking fraud.

It is a pleasure to serve under your chairmanship, Mr Robertson. We have had many debates in both Westminster Hall and the Chamber that have focused on the mistreatment of thousands of small and medium-sized enterprises at the hands of financial institutions which, in the wake of the financial crisis, sought to shore up their balance sheets as they plundered those of their business customers.

The subject is becoming an all too familiar one for debate. Indeed, this is the fourth such debate in which I have spoken. Looking around at my distinguished colleagues from across the House I see many familiar faces who have taken part in previous debates. Many Members will be familiar with the cases of hard-working businessmen and women who have had their businesses broken up and livelihoods destroyed by acts of deliberate deception and fraud, systemic asset stripping and inflated charges and fees, all at the hands of their banks.

[Mr Alister Jack (Dumfries and Galloway) (Con)]

I thank my hon. Friend for securing the debate. It is sad and disappointing that this is the fourth time he has had to speak on the subject. Does he agree that it is an indictment of the Financial Conduct Authority that proper, independent redress schemes have not been set up and that, 10 years on, no one has been brought to justice for destroying many people’s lives?

[Mr Wragg]

My hon. Friend is absolutely correct. In his remarks in previous debates he has shown his personal experience, and he speaks for many on the issue. With the passage of time, the issues that are exposed only multiply rather than diminish. I have spoken before at length about my constituent Mr Eric Topping, who lost hundreds of thousands of pounds, including his home and retirement savings, when his profitable building company was forced into liquidation by the Royal Bank of Scotland. For every constituent like him, there are a thousand more SME owners across the country who were similarly victims of the widespread malpractice across the entire banking sector, and today we speak for them collectively.

[Sammy Wilson (East Antrim) (DUP)]

Does the hon. Gentleman accept that what makes it even more difficult for people is that those banks have been financed by taxpayers? They are using taxpayers’ money to fight these legal cases when they know that they have done wrong but that their victims do not have the resources to take them all the way through the courts.

--- Later in debate ---

[Mr Wragg]

The right hon. Gentleman is correct. The actions of the banks are entirely indefensible. It is, I hope, for the Government to seek appropriate redress.

While the Hansard column inches increase, meaningful actions to properly investigate business banking fraud and seek redress for its victims have been woefully insufficient so far. I would like to turn attention to the investigation of allegations of fraud by our crime prevention agencies and regulators, to the role of financial institutions, and to the role the Government play.

As a nation, we pride ourselves on the rule of law. Above the Old Bailey stands the gilded statue of Lady Justice. She carries the sword of justice in one hand and the scales of justice in the other. She wears a blindfold to symbolise that justice is blind and does not distinguish between the powerful and the weak. Yet for those who have been the victims of the systematic fraud practised by UK banks and financial institutions, such sentiment is nonsense. The statue representing their experience of justice would be heavily rusted rather than gilded. It would wear a blindfold to avoid having to see the activities of the financial institutions whose wrongdoing has ruined individuals and families, and its arms would be firmly tied behind its back to symbolise the lack of activity by both the police and the regulators.

It is 10 years this week since the taxpayer bailed out the financial services sector, and the state continues to control a significant stake in certain institutions. Ten years on, confidence in the sector is low, particularly among small and medium-sized enterprises. The nation has yet to fully recover from a decade that saw the destruction of viable businesses, jobs and thousands of individual lives as banks frantically rebuilt their balance sheets following the crash, at the expense of their customers’ financial wellbeing and their own reputations. We need to be clear: the process of shoring up a balance sheet is a zero-sum game. For every winner there is a loser. The losers here were small and medium-sized enterprises, the backbone of our economy. They lost because they did not have the resource or the legal firepower they needed, or a system to support them.

We are not saying that every SME business that folded over the last decade was viable, nor that every business was the victim of fraud. But we have seen clear evidence of tampering with documents, false witness statements and the leveraging of a position of power and clout to drive many thousands of good businesses into insolvency. In a free economy there will always be legitimate failures alongside legitimate successes. Many businesses may not have been viable and may not have survived, but that did not make them fair game for mistreatment or, even worse, fraud. It just made them easy targets.

[Mr Jack]

Is my hon. Friend aware that in one year alone the Global Restructuring Group division of RBS made over £1 billion in profit? He says that some of these businesses may have failed, but rightly points out that a lot of them were viable and had a lot of hidden assets.

[Mr Wragg]

My hon. Friend is absolutely correct about the role of GRG.

Following the cases of, at times, blatant mistreatment and fraud, which we saw consistently and across the board, there is either a lack of willingness or lack of capability from our investigative bodies, both civil and criminal, to pursue complaints. Instead, the victims of mistreatment and fraud are left to go round in circles making a series of fruitless complaints. The complaints are either made directly to the institutions that defrauded them in the first place, which have a vested interest not to investigate properly—as was the case with my constituent and the Royal Bank of Scotland—or referred to a series of industry-led trade bodies or the Financial Conduct Authority, which does not take on individual cases. It is simply not good enough.

The only successful prosecution for fraud thus far has been that of HBOS in Reading. That was not down to the actions of our regulator or the Serious Fraud Office relentlessly pursuing the truth to bring the perpetrators to justice. Indeed, the bank—first as HBOS and then as Lloyds, after the takeover—insisted there was no fraud, despite there being a victim with losses in the hundreds of millions of pounds.

[Mr Steve Baker (Wycombe) (Con)]

I want to put on record my personal admiration for the police and crime commissioner for Thames Valley, Anthony Stansfeld, who personally saw to it that the fraud was prosecuted.

I hope that my hon. Friend will agree that the current situation is not good enough. If the state is to fulfil its duty to protect the public from fraud, it will be necessary for the Government to find the money to equip the authorities to prosecute fraud cases without funds coming out of individual PCCs’ budgets.

[Mr Wragg]

My hon. Friend hits the nail on the head. I pay tribute to the police and crime commissioner, but I also wish to pay tribute to a couple of people who I believe are here in the Gallery today. Instead of the authorities investigating, it was left to a couple of music producers from Cambridge, Paul and Nikki Turner, to crack the case. I hope they are here in Parliament. They are still fighting for compensation for other victims of the crime.

[Kevin Brennan (Cardiff West) (Lab)]

I endorse what has been said about Anthony Stansfeld.

Does the hon. Gentleman agree that this is not just about RBS, as some people seem to think? My constituent, Mike McGrath, went out of business because of his treatment by Lloyds bank.

[Mr Wragg]

The hon. Gentleman is absolutely correct: it was systemic across the whole business lending sector. He is right to put that on the record.

The Turners’ reward for bringing the case to the bank’s attention back in 2007 was to be branded conspiracy theorists. The bank—first as HBOS, then as Lloyds—tried to evict them from their home 22 times, spending more on legal action than the value of the home itself. It sent a top partner from one of the country’s best regarded law firms to Cambridge county court to watch the hearings. The Turnbull report, which details a comprehensive cover-up of the fraud from within the bank, notes lawyers as saying that, once the Turners were out of their home, they would have to accept their fate. This was not the pursuit of justice but a witch hunt to silence whistleblowers.

The Turners approached the Financial Standards Authority, the Serious Fraud Office and the Treasury. Indeed, there was a debate in this very room in June 2009, during which Members urged the authorities to investigate. However, all they encountered was denials and deflection. As my hon. Friend the Member for Wycombe (Mr Baker) pointed out, the case was eventually taken seriously only after Thames Valley police recognised that a crime had been committed. The investigation took seven years to complete and the resource of 151 officers and staff, and it cost £7 million, with only £2 million eventually recovered from the Home Office. Thames Valley police stated that they could have done it in half the time and for half the money, if only the bank had co-operated fully. Unfortunately, the scale and difficulty of investigating the fraud only serves as a warning to other cash-strapped police forces: “Investigate at your peril”.

The reality is that white-collar crimes such as this are expensive and difficult to prosecute, and the agencies responsible for fighting economic crime simply do not have the necessary resources to tackle complex, mid-tier banking fraud. The SFO takes on only a small number of very large cases and has a budget of £53 million. The National Crime Agency’s economic crime command has a budget of £10 million, and the newly established National Economic Crime Centre has a budget of just £6 million. Compared with the sheer scale of fraud in the United Kingdom, which is estimated at more than £190 billion a year, and given the potential for consequential losses, these investigative budgets are, frankly, insignificant.

For those who may think that this is a one-off, it is important to note that the processes employed by HBOS in this case—turnaround units, business valuations and the use of insolvency—are exactly the same tactics seen in the case of other complaints that the all-party parliamentary group on fair business banking has investigated. Such complaints were found to be commonplace, as the hon. Member for Cardiff West (Kevin Brennan) alluded to, across most financial institutions. The system is ripe for abuse, and we have serious concerns about it.

At this point, I pay tribute to the incredible dedication of the co-chairs of the all-party group, my hon. Friend the Member for Thirsk and Malton (Kevin Hollinrake) and the right hon. Member for North Norfolk (Norman Lamb). In addition, I thank the group’s officers and members for their significant work in running a thorough inquiry into how so many SMEs were abused by their banks, exposing the scale of the issue and the mechanisms by which the frauds were conducted. The APPG has produced an important report that identifies the shortcomings in the current investigative tools and bodies and makes vital recommendations as to how we might start to unpick this sorry mess.

I reiterate the APPG’s calls for a full public inquiry into the treatment of businesses by financial institutions. There are currently more than 10 different inquiries looking at different, isolated issues. It is time that we had a holistic approach and investigated the system as a whole.

[Vicky Ford (Chelmsford) (Con)]

I thank my hon. Friend for his work in this area. Two of my constituents have been affected—one through a mis-selling of swaps by RBS and the other through the dreadful situation at HBOS that my hon. Friend has mentioned. Does he agree that the tragedy of this case is partly the lack of transparency and independence, and that people feel that they cannot get fair redress? A decade later they are still not being treated fairly by those institutions.

[Mr Wragg]

My hon. Friend is spot on. The level of obfuscation by these institutions would be quite suspicious if one were to suspect them of any wrongdoing. I am sure that we can deduce our own conclusions from their behaviour.

On a civil level, the APPG’s proposal for a financial services tribunal has been well received, and we look forward to the Government’s response. That may at least provide a civil remedy for those who have been wronged. However, we have been asked what will happen when civil mistreatment tips over into the criminal abuse of power. Where is there to go? At this point, there is no satisfactory answer. The Thames Valley police and crime commissioner believes that we should have regional fraud squads akin to our counter-terrorism squads, funded by the Treasury via FCA fines and funds recovered from criminal gangs. We wholeheartedly support those proposals. Whatever action is taken, it requires the utmost degree of urgency, so that more and more cases do not—as has already started to happen—run into statutes of limitations, lose documents and evidence to the sands of time or see responsible and culpable individuals leave the industry and witnesses become unavailable.

I look forward to Members’ contributions and the Minister’s response. As I mentioned at the start, this is becoming an all too familiar debate, and I rather hope that we are not all back here in six months reliving it again. I also hope that we can resolve to agree a path of action that will see the tarnish start to be scrubbed off Lady Justice and allow her to start to uncross her arms.

--- Later in debate ---

[Mr Wragg]

Thank you for chairing the debate, Mr Robertson. [Interruption.] I can hear the crowds outside protesting at the thought that I will be back in six months’ time to make the same speech—I hope that I will not be.

I thank the many members of the public who are watching from the Gallery. They are the people we are fighting for across the country, so it was good to hear contributions from all four nations of the United Kingdom today.

My hon. Friend the Minister said that action would come “imminently”, at least from the Treasury—a drastic improvement on the “very soon” that he promised before. That action cannot come soon enough.

Question put and agreed to.

Resolved,

That this House has considered the investigation of business banking fraud.

Banking Misconduct and the FCA

William Wragg Excerpts

Thursday 10th May 2018 Commons Chamber

[Mr William Wragg (Hazel Grove) (Con)]

I congratulate the hon. Member for East Lothian (Martin Whitfield) on securing this debate, and I pay tribute to my hon. Friend the Member for Thirsk and Malton (Kevin Hollinrake) who chairs the all-party group on fair business banking and finance.

I would normally begin by saying what a pleasure it is to speak in such a debate, but although it is always a pleasure to speak with you in the Chair, Madam Deputy Speaker, I do not feel that such a sentiment is appropriate, given the seriousness of the issues we are discussing. It is clearly far from a pleasure for thousands of business owners up and down the country who have had their lives and livelihoods destroyed by a broken, and in places rotten, banking system. As I have done previously, I shall refer in particular to one of my constituents, Mr Eric Topping, whose business was destroyed by the iniquity we are debating today.

There is clearly no easy solution to the mess we are in—it is hard to find a solution to get the redress that so many victims deserve, to rebuild crushed livelihoods, or to restore public faith in the system. There are, however, three steps to take, each of which might help in part. First, we need some form of acknowledgement that what my constituent, Mr Topping, has suffered is an outrage and an injustice. His complaint was dismissed out of hand because the issue occurred in 1998, and therefore outside the “relevant period” that was set arbitrarily at between 2008 and 2013. Whatever form of redress the Government, regulators or banks come up with, they must consider events before 2008 and the narrow scope of the FCA’s skilled persons reports. They must also look beyond RBS GRG, and into its precursor bodies such as the “specialised lending service”, and any other sham department, in whatever bank, that was engaged in systematic and organised fraudulent asset stripping.

Secondly, it is clear that the Financial Ombudsmen Service lacks teeth as a method of redress, given that in most instances it can look only at cases involving microbusinesses with 10 employees or fewer. With claims capped at £150,000, thousands of SMEs affected by this scandal cannot apply. There is a clear problem for businesses with more than 10 employees, as their only option is to go to the courts. That is too expensive and places small businesses against international financial institutions, which is a complete mismatch.

In a move that would be laughable if it were not so unjust, in the bank’s final letter to Mr Topping, RBS’s director of operations suggested that he seek redress through the Financial Ombudsmen Service, and helpfully enclosed a leaflet to that effect. RBS knew, however, that Mr Topping’s business was too large to come within the scope of the ombudsmen’s remit, and by suggesting such a move it was either incompetent in its advice or it was simply mocking him—I am not sure which is worse.

Proposals for enlarging the remit of the ombudsman are not the answer—as I have said, it lacks teeth—and there is a gap in the current structure that must be filled. It is necessary to have a completely independent system or tribunal that sits outside the regulatory structure and has sufficient powers and knowledge to deal with complex financial disputes that include contracts, insolvency and all associated issues. Such a system must be able to address the backlog of legacy cases and ensure that those who have been mistreated are given an outlet through which their grievances can be heard, and suitable redress awarded. Any system will need to address the statute of limitations so that victims are not barred from taking action.

Finally, as I have said, these issues are no longer just about RBS or even the banks themselves, and it is clear that we have had a systemic failure. This issue has become too wide ranging for either the Treasury, the Business, Energy and Industrial Strategy Committee, or even the excellent all-party group on fair business banking and finance to deal with, and it is now of such scale and complexity that it demands a full public inquiry. A scandal such as this, just like LIBOR before it, is yet another reason why people and businesses lose faith in the banking sector. Faith in the banks is essential for faith in our whole economy, but SMEs, which are the lifeblood of that economy, are now reluctant to borrow from such institutions. A full public inquiry would be to the benefit of financial institutions, the business community and the wider economy. We must draw a line under the past, obtain redress for our constituents who have been the victims of financial misconduct and create an environment in which trust in financial institutions can be restored.

Treasury

William Wragg Excerpts

Tuesday 24th April 2018 Ministerial Corrections

[Mr Hammond]

No. The Government are pursuing a Brexit that protects British jobs, British businesses and British prosperity, as the hon. Gentleman well knows. We have protected school funding so that it will rise in real terms per pupil next year, and as we move to the fair funding formula for schools, every authority will be funded to enable every school to receive a cash increase. The police settlement on which the House recently voted provides £450 million of additional resource for police forces across the country. We have protected police budgets since 2015.

The following is an extract from the Chancellor of the Exchequer’s spring statement on 13 March 2018.

[Mr William Wragg (Hazel Grove) (Con)]

My right hon. Friend has struck the right balance between the need for financial discipline and the justifiable need for investment in public services. With that in mind, will he ensure in the autumn Budget that additional funds are provided for schools to ensure the successful implementation of the national funding formula, which we welcomed in Stockport?

[Mr Philip Hammond]

When she was Education Secretary, my right hon. Friend the Member for Putney (Justine Greening) announced that the fair funding formula would be introduced in a way that would protect per capita spending per pupil, and we would guarantee that every school would receive a cash-terms increase. That guarantee stands today.

[Official Report, 13 March 2018, Vol. 637, c. 742.]

Letter of correction from Mr Philip Hammond:

An error has been identified in the response that I gave to my hon. Friend the Member for Hazel Grove (Mr Wragg).

The correct response should have been:

Spring Statement

William Wragg Excerpts

Tuesday 13th March 2018 Commons Chamber

[Mr Hammond]

Of course I did no such thing. [Interruption.] No, I did not. We spend more than £50 billion a year on benefits to support disabled people and people with health conditions. That is a record high, and we have spent £7.5 billion more in real terms since 2010. As a share of GDP, our public spending on disability and incapacity is the second highest in the G7. It amounts to 2.5% of our GDP and to 6% of all Government spending.

[Mr William Wragg (Hazel Grove) (Con)]

My right hon. Friend has struck the right balance between the need for financial discipline and the justifiable need for investment in public services. With that in mind, will he ensure in the autumn Budget that additional funds are provided for schools to ensure the successful implementation of the national funding formula, which we welcomed in Stockport?

[Mr Hammond]

When she was Education Secretary, my right hon. Friend the Member for Putney (Justine Greening) announced that the fair funding formula would be introduced in a way that would protect per capita spending per pupil, and we would guarantee that every school would receive a cash-terms increase. That guarantee stands today.[Official Report, 24 April 2018, Vol. 639, c. 8MC.]

Community Bank Closures

William Wragg Excerpts

Thursday 8th February 2018 Commons Chamber

[Mr William Wragg (Hazel Grove) (Con)]

It is a pleasure to follow the hon. Member for Stoke-on-Trent North (Ruth Smeeth), who gave a splendid exposition of the issue we face in the country and clearly showed her dedication to her constituents.

The number of Members present is testament to how important this debate is. Given the extent of bank branch closures, it is likely that we all have an interest in this issue because of what is happening in our own constituencies. In the past 25 years, the UK has seen the closure of nearly 10,000 bank branches, which is over half of all of them. The rate has accelerated, with more than 600 branch closures in the past year. It is right that we should embrace technological change, but the rise of new approaches, including online banking, means that we are faced with the decline of traditional banking.

Many customers have a preference for in-branch banking. They prefer face-to-face service and the chance to talk to people, to get financial advice, to access their money physically, and to have the security of seeing their bank transaction take place and of receiving a paper record to prove it. In recent times, against a backdrop of scandals, one of banking’s redeeming features has been the personal relationships that banks still offer to customers. Members of the community often struggle when a bank closes, and closures are particularly important for elderly or vulnerable people who may not use online banking.

In recent years, my constituency has suffered from the closure of several local banks. Like other Members, I am sure, my constituency postbag and inbox have swelled as a result. In May 2016, Lloyds bank earmarked its branch in Woodley precinct for closure as part of a cost-saving measure. At the time, I presented a 583-signature petition to the House on behalf of local residents, calling on Lloyds to reconsider its decision. Despite that large demonstration of popular feeling, the bank went ahead with the closure regardless. That decision made it harder for hundreds of customers to access their money and to get financial advice and that face-to-face service.

The NatWest has also recently closed branches in two local towns, namely, in Romiley and in Marple. The last case was particularly galling as the justification given by NatWest at the time of its closure of the Romiley branch during the statutory consultation process was the proximity of the Marple branch as an alternative. However, just a few months after shutting the first branch, the bank announced its intention to close the Marple branch, too. Customers who had taken early assurance about a back-up branch in good faith felt that they had been treated as fools and that the behaviour of the bank in this instance made a mockery of the process of consulting on closures. Of course, if customers feel sufficiently overlooked, banks may well find that they start voting with their debit cards and switch accounts.

Although I accept that decisions on bank closures are ultimately a commercial decision, I urge all banks to show a lot more consideration of the needs of customers and how they can best be met. They must think carefully before making any decisions on a branch closure, particularly in rural or semi-rural areas, which have been hard hit by these measures.

Although it may not be a matter for the Government to intervene directly in a decision on an individual basis, the Government do have a role in promoting general access to banking services. Therefore, I ask the Economic Secretary to the Treasury to consider placing a duty on the Financial Conduct Authority to promote financial inclusion as one of its core objectives, as recommended by the Financial Inclusion Commission. That duty could include a mandate to require financial service providers to meet certain standards relating to access and customer service. Such a duty should require the design of products and services to be more inclusive and to maintain access to essential services for people who may not be online.

During my research for this debate, I was pleased to learn that a lot of the services offered by banks can now be done over the post office counter. Post offices continue to offer basic banking services to many bank customers. Indeed, around 99% of a bank’s personal customers and 95% of its business customers are now able to withdraw cash, deposit cash and cheques and make balance enquiries at a post office counter. All post offices can take cash deposits of up to £2,000. However, that begs two important questions on which I would like the Minister’s thoughts when he winds up. First, what is being done to ensure that local people are aware of the options available following the closure of a local branch? Secondly, and perhaps most crucially, although this is good news for customers, why is it deemed acceptable for privately owned banks, and indeed publicly owned banks in some circumstances, to close their own branches and rely on the state-owned Post Office to process their transactions for them? Are they making a profit while the overhead costs are met by the Post Office?

I thank all Members of the House for turning up this afternoon on our last day of term and for participating in this debate. I look forward to hearing their contributions and the response from the Minister.