Mr Alistair Carmichael
MP for Orkney and Shetland · Liberal Democrat · United Kingdom
“I do not know whether this is something I still need to declare, Mr Speaker, but I visited the Falkland Islands in 2003 as a guest of the Falkland Islands Government. They have never invited me back.”
“I remind the House of my entry in the Register of Members’ Financial Interests and also that my wife is a practising veterinary surgeon. What is happening was predictable because it was predicted. The Government were warned by the National Audit Office in June last year that they were unprepared for outbreaks of this sort.”
“The Minister is surely aware that there is no route to net zero that does not go through oil and gas hydrocarbons, and that not exploiting resources on the UK continental shelf leaves us reliant on imports, which also has carbon consequences that must be taken into account.”
“The transition to clean energy could be an opportunity to build a different model that would, to use the First Secretary of State’s own words, end “overly centralised decision making and over-privatisation”.”
“I welcome what the Prime Minister just said about strengthening farming. If he is serious about this, one of the first things he can do is ensure that our farmers do not have to compete with imported food that is produced to lower standards than we expect.”
“Q4. Like others, I have always respected the Prime Minister as somebody who was in politics because he wanted to give service to his country, and he has earned our gratitude for that. In my constituency, those who volunteer as coastguard rescue officers also do so from a wish to give service to their community.”
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Every one of 4,707 lines we hold for Mr Alistair Carmichael, in date order, each linked to its source. Free to read, in full, without an account. Page 29 of 95.
“As it happens, I had my own opportunity to make exactly these representations to the Faroese Prime Minister yesterday and I am sure that, like the Minister, I was able to welcome the undertaking that the Faroese will look at not continuing this arrangement when it expires at the end of the year. However, does she agree that, as I said to the Faroese Prime Minister yesterday, the war in Ukraine is happening in the here and now and, while the Faroese have a good and profitable record of playing both sides against the middle, this is one occasion where they really need to pick a side?”
“T7. May I tell the Minister about the very good meeting yesterday with National Farmers Union Scotland and Scotland Office Ministers on the operation of the Groceries Code Adjudicator, the powers under the Agriculture Act 2020 and the wider problems of keeping the integrity of the UK internal market? It was pretty clear, however, that those issues affect farmers right across the whole of the United Kingdom, and she can expect to hear from the Scotland Office in early course as a consequence of our meeting. When she receives those representations, will she do as the Scotland Office has done and bring in all the farmers?”
“When the Prime Minister raised the case of Jagtar Singh Johal, did he do so on the basis that for the past four years Mr Johal has been the victim of arbitrary detention?”
“The right hon. and learned Gentleman is entirely correct to prosecute the case on the basis of principle, but there is still an amendment on the Order Paper, even if the Government will not move it, which would indicate that not everyone in the House shares his view of the importance of these principles. Does he share my view that at the conclusion of this debate there should be a Division, so that we know where every single Member of this House stands on the principles? At a time like this, on an issue like this, there should be no hiding place for anyone.”
“Will the Home Secretary tell the House how many people she expects to send to Rwanda in the first 12 months of the scheme? She will be aware that Rwandan Government Ministers are on the record as saying that they expect their capacity to be in the hundreds, with a few thousand over the five-year period. Given that 28,000 people crossed the channel last year, does the Home Secretary really think the scheme is going to have the deterrent effect that she claims for it?”
“That point comes to the heart of the matter. With the rising import costs about which the hon. Lady has already spoken, there comes a danger of reduced productivity. That means that there is a gap in the market, which then stands to be filled by those cheaper imports. For that reason, this really is a moment of existential crisis for the UK’s agriculture industry. How does the hon. Lady think that can be avoided?”
“I promise that this is the last time that I shall intervene. Supermarkets have a crucial role in the setting of farm-gate prices. We have the Groceries Code Adjudicator, but it needs more teeth to do the job that we want it to do.”
“The right hon. Gentleman knows that I have argued for this move for some time now. I am particularly pleased to welcome it, not least because the Lord President of the Supreme Court, Lord Reed, is somebody whom I have known and respected for many years. I never felt comfortable being on the other side of the argument to him, and we seem to have resolved that. Does the right hon. Gentleman agree that this now requires a response not just here, but from all those who have perhaps taken some comfort from the presence of the British judiciary in Hong Kong? I think it was the Hong Kong Bar Association that said the presence of British judges was a “canary in the mineshaft.” That canary has well and truly fallen off its perch today, and those in Hong Kong who care about the rule of law have a responsibility to respond.”
“When the Secretary of State is constructing the next round of the tonnage tax, will he listen first to the unions representing the ratings and the officers, and not just the shipping companies?”
“I very much welcome the Secretary of State’s statement today. It is one of the most substantial and significant statements I have heard in almost 21 years as a Member who has taken a close interest in matters of the merchant marine. I hope that this is the start of a very different practice from what we have seen in recent decades. One of the problems we have had over the years is that when successive Governments were introducing the tonnage tax and refining it, there was a link to training, but not enough of a link to post-training employment. That is the sort of thing that has to change. Protection has to be given not just to officers, but to ratings.”
“Further to that question, surely the results of those inspections will be published in full, so the public can have confidence in what is being done. It appears that, as well as being in breach of its duty to inform the Secretary of State about its intentions, P&O is in breach of its duty to inform flag states. Do the Government intend to pursue that matter?”
“The question of distress and alarm is an interesting one jurisprudentially. By what means does the Minister anticipate that it will be established in court? Does he see it as an objective or subjective test?”
“If I were a frontline police officer or prosecutor, I would see this as an absolute poisoned chalice and I would not want to have anything to do with it.”
“Tellingly, the only answer the Minister had was, “Well, we’ve got courts who will look at these things and define them.” It is the job of this place, Parliament, when we are passing legislation, to give proper definition; we should not be subcontracting that to the courts, especially not on something as important as the right to protest. If that degree of uncertainty is left hanging, it is not difficult to see that there will quickly come to be a chilling effect. When we are dealing with legislation governing the right to protest, definition—the right of the individual to know exactly where they stand in relation to the police and the courts—is crucial. That is why it would be irresponsible of this House to allow the Government to have their way.”
“On noise protest, it will not be lost on the House that when I asked the Minister about the test to be applied he said that he would come to it later, but then did not do so, as he did not have any meaningful answer. As things stand, it is incredibly widely drawn and it takes us back to what used to be the situation in Scotland, where we described a breach of the peace as, “anything that two cops did not quite like the look of”. Things have advanced somewhat since then, but the broad definitions we are being asked to accept tonight are a retrograde step.”
“I might have had some more sympathy 20 to 25 years ago for some of the arguments that the Minister advanced, but I have seen the way in which interaction with the criminal justice system has been transformed for so many different groups in our communities, in relation to racial aggravation, religious aggravation and the rest of it, and this measure is surely long overdue. A consultation, such as is being offered by the Minister, just does not cut it. If the Government were to have the courage of our convictions and to go ahead with an amendment such as the one tabled by the hon. Member for Walthamstow, they would be doing something transformative in the way in which the police interact with women and girls, and are seen by them.”
“I will touch briefly on all three areas under debate this evening. On food crime, I am delighted that we have got to what seems a sensible, workable compromise. It says something about the attitude of the Home Office and this Government in general to Parliament and the other place that for something as prosaic as this it has taken two rounds of ping-pong before the Government have been prepared to accept what was surely to the rest of the world blindingly obvious. I welcome the fact that we have got there nevertheless. On the issue of misogyny, there is little I could add to the excellent contribution from the hon. Member for Walthamstow (Stella Creasy).”
“It is focused on protecting those charged with its regulation and the bodies that are regulated, rather than the consumers, who will ultimately be left out of pocket when it all goes wrong. That is what has happened with Midas Financial Solutions, and that is something that the Government now need to consider with some urgency. We have spoken elsewhere in the House about the attitude that fraud is somehow a victimless crime—it is not as direct as housebreaking or crimes of violence. My constituents who are tens of thousands of pounds of their savings and hard-earned cash out of pocket would not agree with the assessment that fraud is a victimless crime. We pay the Financial Conduct Authority a lot to regulate, and we deserve better.”
“I call on the FCA, and hope the Minister will also use his office to impress on it the unsatisfactory nature of that. Quite apart from the legalities, if the FCA acted so badly and inadequately that it had to issue a letter of apology in June 2020 to the people who had invested, but will not do anything to make good the losses sustained by my constituents and others in exposing conduct, which the FCA should have exposed, something has gone badly wrong. It is in that sense that the House should now have an interest. It is clear to me from my dealings with Midas and other cases that the regulation of the financial services sector is enormously complex—far too complex for people entering the sector in good faith, with no experience or understanding of how it works—and it is not consumer-friendly.”
“Most of those who suffered loss as a consequence of the activities of Alistair Greig were able to avail themselves of that, and many have been compensated in full. The fact is, however, that that route only came to light as a consequence of the legal proceedings that were taken by Colin Stewart and the 94 other investors. They would never have been able to make that claim to the FSCS, but for the fact that they took the court case, even though that was ultimately unsuccessful. The 95 are still out of pocket to a collective tune of £2 million in legal fees. My constituent has been left with an £80,000 shortfall for the money he invested. It seems wrong to me that, even where the FCA is entitled to make ex gratia payments, for fairly opaque reasons in this case, it has refused to do so.”
“I was surprised when I learned this. The fact that a major building society felt it necessary to remove advisers from its panels because of concerns about their integrity might be seen as a good reason for the regulator to make significant further inquiries.” That was information that went to the FSA in 2008. It did not act then, and did not act when further information was given to it in 2012. As a consequence, the activities of Alistair Greig were allowed to continue unchecked for at least six years. When Greig’s activities were eventually exposed, legal action was taken. Although the complainants were unsuccessful, it was held that there was eligibility as—I have lost the term of art; as a collective investment scheme, which would open the door to compensation under the Financial Services Compensation Scheme.”
“In your”— that is, the claimants’— “response to my preliminary report, you argued that you ought to be able to see any unpublished policies applying at the time in order to be able to respond. I have considerable sympathy with your point of view, but the fact is that for regulatory reasons the FCA considers that detailed policies of this kind should not be published. I invite the FCA to consider whether it might be more open about the historic policies of the FSA, but that is as far as I can go.” As far as I am aware, it has never made any such explanation. In relation to the information provided by the Yorkshire Building Society, the commissioner is blunt: “I recognise that you—and many others—might be surprised to learn that the FSA considered that reports suggesting mortgage fraud should not necessarily be followed up.”
“The commissioner states: “I have queried the FCA’s position on this, and it has explained that, while the general criteria by which decisions were and are made are not covered by s348, explaining how they were applied to a particular case is likely to involve breaching s348 because it may disclose confidential information received by the FCA.” The protection in section 348 is all about protection for the FCA and those who are authorised, not protection for consumers. That is what I suggest requires some attention. The commissioner concluded: “The view of section 348 is problematic, because it makes it hard to understand why the regulator has made decisions, and can lead to an erosion in public confidence.”
“The regulator had three opportunities to identify Mr Greig as dishonest and to remove him from the industry before he was able to defraud it. The regulator did not uphold the complaints in respect of the first two opportunities, but it did expect that it should have taken further steps. The judgment of the complaints commissioner overseeing the work of the FCA, which was published on 27 May 2020, is significant, and I want to draw the House’s attention to two parts of it. The first relates to section 348 of the Financial Services and Markets Act 2000, which details the policy on sharing information.”
“The judgment now leaves consumers at the mercy of unscrupulous ARs acting in breach of their private agreement with their principal, for which the principal avoids liability despite the law providing for it to seek damages from the AR for breach of that contract. The principal can take action against the appointed representative, but the customer—the consumer—cannot. As well as taking the court action, the claimants took a complaint to the FCA about the failure of its predecessor, the Financial Services Authority, to take steps to prevent Mr Greig from operating in the financial services sector. The process for authorisation requires a test to ensure that those accessing the public are fit and proper individuals. The test requires honesty, competence and capability, together with financial soundness.”
“If Midas had been directly authorised, the claimants would have been protected. The judgment is relevant to any appointed representative acting outside its private agreement with its principal. The fact that the investment in this case was a Ponzi scheme is irrelevant to the decision that the judge made and the consequences for the general public. Any client of an appointed representative advised in relation to anything that falls outwith the agreement with the principal will leave the client without protection entirely, without their knowledge. In the Midas case, obviously the staff at Midas did not inform the claimants that the advice fell outside the agreement with their principal. One wonders whether they would have even understood the significance of it had they done so.”
“The court upheld that the private contract between the principal and the appointed representative, not the publicly available information on the FCA register, defines the business for which the principal is responsible. Even though the customer would not know what the arrangement is between the principal and the AR, that arrangement will govern the acts for which the principal is responsible. As a result, the customer will be in the dark and potentially at risk—more so than if they had done business with the principal directly. Where the advisor is not an appointed representative but is directly authorised by the FCA, the consumer will be protected in relation to the business that it is permitted to undertake and which is listed in the publicly available register.”
“It was also disclosed in the course of the court proceedings that there were good reasons for Sense, the Financial Services Authority and the Financial Conduct Authority to know that Alistair Greig was dishonest and was not fit and proper to be registered and authorised by them. In fact, it was revealed that the Yorkshire Building Society had found him to be selling mortgages under false pretences. The management of Sense Network was aware of that but allowed Mr Greig and his firm to continue as an appointed representative of Sense Network. The effect of the court’s decision was to create a two-tier system of protection for UK investors.”
“The FCA, and before it the FSA, made it clear in everything it ever said to members of the public that they should check the status of the people with whom they were doing business—there are online registers available for ready inspection. However, the truth of the matter is that whether or not the actions of the appointed representative are covered, as they should be by having a principal such as Sense Ltd, is something that someone coming in off the street to invest their money cannot know. Indeed, that ran to the very heart of the difficulties faced by those who invested with Midas Financial Services.”
“They were unsuccessful both at first instance and on appeal, on the basis that it was held that the obligations of Sense for its appointed representative were strictly limited to the exact terms set out in the appointed representative agreement between them, which included which product providers Midas could use. Where Midas used a different product provider, that was held to fall outside the responsibility of Sense, despite the fact that the claimants were not made aware of that nor could they have discovered it from any publicly available source. I want to labour this point for a second, because it is material.”
“Alistair Greig operated as an appointed representative, which is a term of art, of Sense Network Ltd, a network of financial advisers. As I said earlier, this was actually a Ponzi scheme operated by Alistair Greig. The true nature of the scheme was eventually exposed by a whistleblowing notice in August 2014, leading to enforcement action against Midas and Mr Greig by the Financial Conduct Authority in September 2014. That investigation revealed that 279 members of the public had contributed £12.8 million to the scheme, but that only £379,000 remained at that point. Proceedings were taken by 95 claimants against Sense as the principal and supervisor of Midas.”
“We have to bear in mind that the sums involved are massive—tens or hundreds of thousands of pounds—and represent life savings or perhaps an inheritance. These are not investment bankers in the City of London who are just taking a bit of punt with last year’s bonus. These are massive amounts of money to the people involved, and it is money that none of the people to whom I have spoken could afford to lose. One of my constituents remains £80,000 out of pocket to this day. I pay handsome tribute to some of the legal practitioners involved. Robert Morfee was the solicitor when I first became involved, and more recently it has been Philippa Hann, who has prosecuted the case for her clients in a way that reflects very well on the best traditions of the legal profession. My constituents have been very fortunate to have her on their side.”
“We are not focusing on RBS today, but I will mention in passing that one of my constituents rather dryly observed that throughout the scheme RBS had demonstrated a quite remarkable lack of curiosity. The prosecutor at the trial said that Greig had used the funds from Midas Financial Solutions (Scotland) Ltd “as his own personal slush fund.” My constituents would prefer not to be named, as Shetland is a small community and it is not difficult to work out who has lost sums of this sort. I have worked closely with the group that organised and corralled the 95 investors to raise legal proceedings, and I pay tribute not just to my constituents, who have been dogged in their pursuit of the action, but also Colin Stewart, who was one of the main actors in bringing the group together.”
“I have been consulted with, worked with constituents who have lost tens of thousands of pounds—some have lost hundreds of thousands of pounds—and engaged with people throughout the north-east of Scotland, as well as Orkney and Shetland, as Midas Financial Services Ltd was based in Aberdeen. The managing director was Alistair Greig, who was convicted of fraud involving £13,281,671.25. For his role in the fraud, he was sentenced to 14 years’ imprisonment, which was reduced on appeal to 10 years. The fraud ran from August 2001 to October 2014. The pretence at the heart of the fraud—that money was being placed in short-term deposit schemes with Royal Bank of Scotland for fixed periods—was essentially fairly simple, but this turned out to be, bluntly, a Ponzi scheme.”
“It is worth reflecting that, in this case—which forced the FSA to act in 2014, although it had been aware of much of it beforehand—it took until 2020 and court action by 95 of the investors for the FCA to apologise in writing. That illustrates the obstruction that seems to lie at the heart of much of the complaint handling by the FCA. Finally, there are issues around the future pattern and shape of regulation. The law as it stands leaves us, effectively, with two tiers of protection, and I suggest that that requires to be addressed. Today’s debate is the latest junction in a road that has represented six years of casework for me.”
“I have another such constituency case, although I will not refer to it as criminal proceedings are still live and it would therefore be improper to do so. However, the position of those investors in Midas Financial Solutions Ltd who took the legal action against Sense, the principal of Midas Financial Solutions, remains highly unsatisfactory. Related to that position, it appears to me that the workings of the Financial Conduct Authority, and before it the Financial Services Authority, require close parliamentary scrutiny, particularly the inability to focus on the needs of the consumer, rather than the various other professional parties that come within its ambit.”
“I beg to move, That this House has considered the matter of the people affected by the Midas Financial Solutions collapse. It is a pleasure, as ever, to serve with you in the Chair, Mr Stringer, and I am grateful to the Backbench Business Committee for allowing time to bring the matter before the House. I do so for a number of reasons, some to do with the people directly affected by the collapse of Midas Financial Solutions, but also because the case brings to us bigger issues that require attention and, potentially at some point, reform. Another reason for bringing the matter to the House is that I know from my constituency casework that, bad though the situation around Midas Financial Solutions is, it is far from the only case.”
“I was given the figure by my constituents—of course, it was a collective action. Even if it was £1.5 million, it is still chunky money in terms of being left out of pocket and it still hits particularly hard. There is the financial and also the emotional cost to those who had to take the action to make the FCA do its job.”
“I have struggled this morning to resist the temptation to be drawn down into the weeds. I have had six years of dealing with this matter. The complexities, technicalities and minutiae are incredibly involved. I have learned more about the regulation of financial services than I would have believed possible or desirable, but the message for the House is fairly clear: the system is not working. It has left my constituents and others significantly out of pocket. But for the fact that they were prepared to take legal action, every one of the 279 investors would have been out of pocket. For that reason, the system requires further scrutiny by the Department. Mr Stringer, I have taken rather longer than I intended. I await the Minister’s reply with interest.”
“I have a question that I hope the Minister will answer in the next sentence or two. How would any individual investor know the extent of the authorisation and the relationship between the principal and the AR? This does not conform to any other aspect of the law of agency.”
“I am grateful to the Minister for giving way; I see that he is on the last sheet of his speech and I think that we are coming to the very heart of the matter here. Access to the FSCS was only an option because of the action taken by the 95 against Sense. Quite apart from that, the FCA has a power to pay ex gratia payments. It has not done so, even though it has apologised for the shortcomings in the actions of the FSA. This point was considered by the Commissioner, who declined to order an ex gratia payment, drawing a parallel with damages and saying it would “clearly undermine Parliament’s intention to provide the regulator with some protection”. What is more important to the Government here? Is it providing the regulator with protection or the consumers with protection?”
“I am afraid that, as things stand, the citizens are being short-changed by the state, and that is not something with which we as parliamentarians should be satisfied. Question put and agreed to. Resolved, That this House has considered the matter of the people affected by the Midas Financial Solutions collapse.”
“The intention of Parliament was clearly that people should be protected from this sort of behaviour and, if they were not protected, for there to be some compensation. The Financial Compensation Authority has wriggled like worms on the end of a hook for years over this, continuing to deny any responsibility or liability. I think that is wrong, and our constituents deserve better. The limited compensation that people have received was only given because of the actions taken by the 95 claimants. It strikes me that there are very strong parallels here with the sub-postmasters and sub-postmistresses who took legal action to expose the scandal around Horizon. At the end of the day, it is a question of not only law or justice, but the culture and the relationship between the citizen and the state.”
“It is more than 20 years since I left legal practice, no doubt to the relief of many. The further I get from it, the clearer it becomes that we should never confuse law with justice. It seems that we have exposed some fairly fundamental points here today. The system of regulation has been inadequate, which is why the Government now speak about changing it. The actions of the Financial Conduct Authority—the body set up by Parliament to protect consumer interests—have been woefully inadequate; that is why it has apologised. The people who have paid the cost of the inadequacy in regulation and the conduct of the body set up by Parliament are not Parliament, the Financial Conduct Authority or the taxpayer, but the constituents who were defrauded in this way.”
“History suggests that the day will come when the hon. Gentleman’s party is not in government, and it is eminently possible that there will one day be a Government who wish to depart from our obligations under the 1951 convention. Is that not why it is a good idea to have such a provision on the face of the Bill?”
“Believe me, the Home Secretary in the coalition Government was not always an immediate ally for Liberal Democrat Ministers. She had a particular knack for generating tension, not just within the coalition but occasionally within her own party, but she really understood the importance of this issue and drove it forward in a way that I think the party should be proud of. I am afraid that what I see in relation to Lords amendments 24 to 26, coming from people such as Lord Randall—someone with whom, again, I was pleased to work during his time in this House—flies in the face of that work. It undermines the tremendous progress this country and the Conservative party have made.”
“I shall of necessity be very brief. First, I would like to place on record my appreciation of my colleagues in the other place, in particular Lord Paddick, Baroness Hamwee, Baroness Ludford and Baroness Suttie. I find myself somewhat perplexed about the measures relating to modern slavery because, as the right hon. Member for Chingford and Woodford Green (Sir Iain Duncan Smith) said, the Conservative party has until recently had a really good story to tell on modern slavery. It started with the work of Anthony Steen. The right hon. Gentleman spoke about the passing of the Modern Slavery Act 2015, and in this context I pay particular tribute to the former Prime Minister, the right hon. Member for Maidenhead (Mrs May). I saw how, as Home Secretary, she drove this agenda in Government.”
“Today, the UK Chamber of Shipping tells me that it does not condone the actions of P&O. That of course is very different from the full-throated condemnation that we might have hoped for, but I am sure that the House will want to be made aware of the position.”
“Given the enthusiasm of the Chamber for its position being properly understood, it would probably be its wish that I should point out to the House that in that same interview the spokesperson for the UK Chamber of Shipping was asked in relation to different matters whether he condemned the manner in which this was done and he said: “I can’t comment on the conduct of it”. When the interviewer said that he must have an opinion, he said, “I would be speculating so I can’t possibly comment.” Then, when he was told that usually when more than 100 people have been sacked, the Government have to be told 45 days in advance, he again said, “I can’t comment.” It is curious therefore, that in relation to the contentment and confidence about the safety measures he did seem to be quite happy about that.”
“On a point of order, Madam Deputy Speaker. Yesterday, in the same debate on P&O Ferries, I said that a spokesperson for the UK Chamber of Shipping had said in an interview on Radio 4 “that he was ‘content and very confident’ that P&O had acted properly.” —[ Official Report , 21 March 2022; Vol. 711, c. 75.] The UK Chamber of Shipping has asked me to point out that it had in fact said that it was “content and very confident that P&O will have put procedures in place to ensure that the individuals that are going to be in control of those vessels would be familiar with the ships and the systems and would be competent to operate those vessels in a safe manner.” I am happy to make that clear.”