Pat McFadden
MP for Wolverhampton South East · Labour · United Kingdom
“In his review Alan Milburn considered that issue and said that, “the UK’s NEET crisis is much more long-term and deep-seated than any decisions taken in the last few years.” As I said earlier, 400,000 more people are in work this year than last year, and the number of young people in employment is up since the election.”
“Since our last DWP questions, both Alan Milburn and the Pensions Commission have published their respective interim reports on young people and on the current state of saving for retirement. I look forward to receiving their final reports later in the year.”
“As Alan Milburn pointed out in his recent report, the UK’s NEET crisis is much more long-term and deep-seated than any decisions taken in the last few years. There are 400,000 more people in work than last year. The number of young people in employment is up by 74,000 since the election.”
“I thank the right hon. Gentleman and send him commiserations for whatever has left him reliant on his crutches today. I am happy to congratulate the businesses he mentioned in his constituency. He raises a serious point: it is important not only to come up with the right policy, but to make it simple for businesses to use.”
“My hon. Friend is right, and I thank Cardiff football club for being a partner. We are supporting nearly 1 million young people and creating up to half a million opportunities for jobs and training.”
“We are making strong progress on expanding youth hubs, with around 130 already in operation across Great Britain. In March, I announced the locations that we want to open in this year, and I have just announced a further 180 locations for the following two years.”
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“In London, a full-time nursery place can easily cost £1,300 to £1,400 a month. Let us pause and think about that. That is £15,000 a year, cash up front. There is a little bit of tax relief for this, but it is essentially cash up front. If people have two children in nursery, which is not uncommon, the cost may fall a little as the child turns two and three and the 15 free hours kick in, but a family could easily be looking at a cash figure of £25,000 a year for two children in nursery. That means that someone with two children would have to earn some £40,000, well above the national full-time average salary, just to pay for child care. Outside London, the costs are lower, but still expensive. In my Wolverhampton constituency, a full-time nursery place costs about £600 to £700 a month or around £8,000 a year.”
“We are not at the top of the league, but we are in a respectable mid-table position. Mothers are entitled to 52 weeks leave, of which they will be paid for 39 weeks, although only the first six weeks is to be paid at the high rate of 90% of their salary. After that, mothers are dependent on contractual provision, which varies among employers. Fathers are now entitled to paternity leave for the first time, which is a welcome change introduced by the Government of whom I was a member. Before that, there was no recognition at all in the system of the role that dads might play around the time of birth or of the degree of support that they could offer to new mums. The costs of child care really kick in when maternity leave comes to an end and mums want to go back to work.”
“Any society that cares about equality of opportunity or life chances should be concerned by that stark statistic. This is about cost, but it is also about quality and opportunity. We cannot have a situation where some are effectively able to pull up the drawbridge on children who do not get good life chances, and allow these patterns of inequality to remain unaddressed. I do not seek to blame the present Government for that pattern. Inequality of opportunity is deep-seated and has existed for a long time. However, as my hon. Friend said, things are getting harder, with the closure of Sure Start centres and rising costs. Let me turn to the costs and the choice faced by working families. We now have decent maternity provision in the UK. We used to be pretty much at the bottom of the European league.”
“It can contribute enormously to their social confidence; it gives them their first friendships outside the immediate family; it helps them to learn the basic building blocks—colours, shapes and numbers—and it improves their speech. It is hugely beneficial. It enables them to be more confident, outgoing children. That is important, because we should all agree that we want children to get a good start in life. We know that it is in the early years, and the early months, of a child’s life that the first inequality often sets in. Good-quality early years care can be important in improving life chances and extending opportunity. In a recent speech, the chair of Ofsted said that some children begin school 18 to 19 months behind in their development, compared with other children.”
“It is a pleasure to serve under your chairmanship today, Mr Hood. Like my hon. Friend the Member for Houghton and Sunderland South (Bridget Phillipson), I declare an interest. I have a four-year-old and a two-year-old. One is still going through the nursery system and one has recently done so. As well as declaring my interest, I also confess that before I had children I did not appreciate the importance of this issue to families or the costs or choices that people were forced into when trying to organise and pay for child care. Before talking about costs, I want say something about the benefits. A good-quality nursery education can be hugely beneficial for young children.”
“Does my hon. Friend agree that the issue is not just the total number of Sure Starts? It is what they are doing. Many have stayed open but have had to cut back what they offer. The argument about numbers is important, but it is not the whole story. The diminished offer from some Sure Starts that have managed to stay open is part of it.”
“Given what happened at the end of the war in Sri Lanka and what has happened since, why does the Prime Minister think that the Sri Lankan Government can be trusted to set up a proper independent inquiry? Why is it not right for us to press now for what he said he might press for in March, which is an international inquiry in which the world can have trust?”
“Following Monitor’s report yesterday on the closure of walk-in centres, is it not the case that at the heart of the Government’s NHS reforms is a massive shift in power from the consumers—the patients—to the producers of services? When the Government’s slogan is, in effect, “All power to the producers”, it is not surprising that services have been reorganised in a way that does not benefit patients. May I suggest that instead of sticking up for the BMA, the Secretary of State starts to stick up for patients?”
“It is the first duty of any Government to protect the public. Since the Prime Minister decided deliberately to downgrade the country’s anti-terror laws, two suspects have used their Government-granted freedom to escape, the latest one clad in a burqa. Will the Prime Minister admit that that decision was a hugely irresponsible mistake, and in particular will he revisit the sunset clause that will lift the remaining regime on the remaining suspects in January?”
“The Home Secretary has sought to blame the courts for chipping away at the previous regime, but she cannot escape the fact that it was a deliberate decision by her and her Government to increase the freedoms of these terror suspects by granting them access to technology and removing the relocation power. The former independent reviewer of terrorism legislation, Lord Carlile, said today that the lack of a relocation power was “always going to be a vulnerability in the way TPIMs operate”. In the wake of this latest absconsion, will she now reconsider the sunset clause in relation to the remaining TPIMs? If not, will she acknowledge that, as a result of a deliberate political decision by her Government, the rest of the suspects will be released on to the streets without supervision in a few months’ time?”
“The Lord Chancellor is being generous in giving way. Let me make it clear that I believe there is valuable expertise among the many charities that work with offenders on some of the problems he has raised—on mental health, alcohol and drugs—but can he define medium-risk offenders? What offences is he talking about? How does he deal with the point that was raised earlier about offenders who fluctuate between medium risk and high risk? If there is a logic to keeping the management of high-risk offenders in the current system, what is the logic for those who fluctuate between the two?”
“What progress—or lack of it—was made on banking union and did the Prime Minister find any support among fellow EU leaders for the idea that it would benefit Britain’s very important financial services industries to pull out of the EU and erect barriers between us and our most important market?”
“I wonder whether any of those lessons have really been learned given the way that this issue is being dealt with. Like the hon. Member for Wyre Forest, I spent much of the past year serving on the Parliamentary Commission on Banking Standards chaired by the hon. Member for Chichester (Mr Tyrie), where we looked into the standards and culture of the banks more widely. We found a sales culture, backed by the bonus systems, going right down to branch level. The banks pushed products like this, often allied with a product that the customer wanted, namely a loan, yet sometimes the customer was not even aware that a product was being sold to them or, if they were, whether it was a voluntary agreement or something they had to accept as a condition of the loan.”
“I pay tribute to the hon. Member for Aberconwy (Guto Bebb) and all the supporters of this debate on raising an important issue. I also pay tribute to my Treasury Committee colleague, the hon. Member for Wyre Forest (Mark Garnier) for his detailed explanation of a complex aspect of this subject that probably not everyone understands. This is the latest in a series of issues that has corroded, damaged and sometimes destroyed trust between banks and their customers following the payment protection insurance scandal. We should pause and consider a couple of features of the PPI scandal. It was characterised, first, by a refusal to admit that there was a problem; secondly, by a refusal to take responsibility for that problem; and finally, by a huge bill for the banks because it had taken too long to face up to those things.”
“I do agree, but there is also the question of who gets that redress and who does not. Underneath this sales culture, we found that instead of a culture of a duty of care to the customer there was—characterised by the combining of products, often a simple product with a complex one—a culture of “buyer beware” that put the responsibility for fully understanding and being aware of all this in the customer’s lap, with, in many cases, the bank showing a lack of responsibility.”
“This is also a test of the FCA. We are in the early stages of a new regulatory system, as the FCA has been in existence for only about six months. The system of redress that it has proposed is an important test of whether it is going to be able to do its job in restoring trust between banks and consumers in the face of sometimes increasingly complex financial products;”
“People have to understand what they are buying and the product has to be suitable for them. When the lifetime of the hedging product is completely different from that of the loan, there is a serious problem about that product’s suitability. This issue provides a really important test of the standards and culture in the banks after everything that has happened. They have to show whether they have learned the lessons of previous mis-selling scandals or whether there has been a repeat of the pattern of behaviour that we saw before in which there was first a refusal to face up to responsibility. That was followed by increasing anger among the customer base and the destruction of trust, followed by a redress scheme that might have ended up being more expensive than the one that might have been put in place earlier.”
“That is a really important point. Having heard the speech by the hon. Member for Wyre Forest, I wonder how many of the people selling these products would have been in a position to explain the consequences to their customers. I think we know the answer. Products were being sold, allied to another product, that may or may not have been suitable for the person buying them. The customer may or may not have fully understood what they were buying, but they were left fully with the consequences of having bought it, to the extent that we had the situations highlighted in this debate whereby the banks pursued customers to such a degree that they were put out of business. We should recognise that hedging is not always wrong, and trying to insure against risks is not always wrong, but a degree of understanding is important.”
“Previous mis-selling scandals have been characterised by years of unnecessary delay that have caused incredible grief to those subject to them. If there is one further lesson that should be learned about interest rate swaps, it is that this process should not drag on for years. We need a system of redress that learns the lessons of the past and is implemented as quickly as possible.”
“The hon. Gentleman makes a good point. Culturally, we should be trying to get to a situation in which the banks have a duty of care to their customers instead of marketing and developing products that are driven by a sales and bonus culture that, in effect, says “Buyer beware” and puts all the onus on to the customer. The proposed system of redress is based heavily on the sophistication test. That leaves a lot to be desired, because unless it is very carefully designed it cannot take account of the wide variety of types of business. Size and sophistication are not the same thing. It cannot take account of the wide variety of circumstances in which these products were sold or the wide variety of difficulties that businesses find themselves in.”
“On the sales culture, what does my hon. Friend have to say about the evidence that the Parliamentary Commission on Banking Standards received from the trade unions representing bank staff that said that, sometimes, if branch staff did not meet their sales targets, they would be taken aside, given special management and pressurised to sell more products over the next month or two in order to meet the targets on which their bonuses were based?”
“Before the Minister leaves the issue of the FCA, will he say what he thinks of the FCA’s reply to some businesses in distress—that it will not consider individual cases?”
“On the issue of the supply chain and its capacity to do the maximum amount of work under today’s announcement, does the Secretary of State regret undermining the UK nuclear supply chain by withdrawing the loan to Sheffield Forgemasters? That limited this country’s capacity to do nuclear work domestically and for export. In the light of today’s announcement, does that not look like a stupid, short-sighted decision?”
“The A and E at the Wolverhampton New Cross hospital is already under great pressure and earlier this year had its busiest day in history, but what really concerns local people are the possible implications of the closure of the A and E at Mid Staffs and the transfer of the work to New Cross. Can the Secretary of State confirm that if that goes ahead, New Cross hospital will have the resources in terms of capital and staff to make it work, because the alternative will be a second-class service for patients in both Wolverhampton and Staffordshire?”
“It would also be an open recognition of the diminished stance and capability of the international community, and it would beg the question as to what international law banning chemical weapons would mean if it could not be enforced.”
“But in asking questions and calling for evidence, it is important that this is done as a means of taking a decision rather than a means of avoiding a decision. Let us see the evidence and the reports, but let us not escape the fact that we will still have a responsibility to decide; if not tonight, then very soon. If the lesson that we drew from Iraq was that we must never again intervene, that military action could never again take place where repression was taking place and that it is impossible to act no matter how brutal a dictator is being to his own people, and if our policy was governed by a world-weary resignation that these issues are difficult and complex and therefore there is little that we can do, then I say that would be a dismal conclusion for victims of repression around the world.”
“This debate inevitably takes place in the shadow of the decision taken in the House a decade ago to go to war with Iraq, and it is absolutely right that we learn from that experience, but the past should inform us rather than imprison us. After the experience of the 20th century, chemical weapons are rightly regarded with unique horror by the world. It is completely understandable, in the light of the decision taken by this House a decade ago, that people want to know more about the facts of the use of chemical weapons this time. That is why it is right that we should look closely at the facts and at the reports, and analyse them very carefully. The bar to action is necessarily higher now because of the experience of the past decade.”
“I understand the fears expressed by my hon. Friend, but for the reasons I have set out, I believe that my right hon. Friend the Leader of the Opposition was right in his speech and in the amendment not to rule out military action. People say that it is difficult and complex, and of course it is. We cannot predict with certainty the consequences of action. But difficulty and complexity cannot be reasons to give dictators the right to do as they wish to their own people. Difficulty and complexity cannot be justifications for abandoning people to their fate, including death through the use of chemical weapons. In terms of consistency, the fact that we cannot do everything and that we do not act in every circumstance is not a reason never to act, whatever the circumstances.”
“The use of the fact that we have not acted in the past where perhaps we should have done as an argument against action in every circumstance is, in the end, a counsel of despair and an abdication of our responsibilities. I do not believe that tonight’s votes are the key because I do not think that this is the debate or the motion that the Government intended. But that decision and that key debate is coming. We will soon be faced with the decision and the responsibility as to what we, as permanent members of the UN Security Council and as people who have stood up against repression in the past, will do in the face of chemical weapons being used against innocent civilians. That decision is coming soon and we will have to take it.”
“Can the Minister tell the House how placing 12 conditions on the use of CCTV cameras by the police and local authorities will help to fight antisocial behaviour? Why are the Government tilting the balance in favour of the criminal and away from victims of crime and antisocial behaviour?”
“The Secretary of State said that this process began five years ago with the Hooper review, and he is right, but will he also confirm that the critical difference between the Bill he passed and the one proposed by the previous Government was that our Bill contained a clause stating that Royal Mail must remain publicly owned?”
“My hon. Friend will know that the banking commission recommended having a proper study of the good bank/bad bank option for RBS. Does he think that in advance of that study it might help if the Government exercised a little more care in their stewardship of RBS, given that their disastrous political meddling of the past month has resulted in a fall in the share price of some 20%, the bank losing a chief executive without a plan being put in place for replacing him, and confidence among investors being lost by the Government’s handling of the bank?”
“We need more competition among the banks as well as an easier system of transferring accounts. The seven-day switching process that will come into play in September is an advance, and it should be given a chance to work; we should test it properly. At the same time, the new clauses tabled by the hon. Member for South Northamptonshire and by my hon. Friend the Member for Nottingham East call for proper reports to be produced on full account portability. The hon. Lady set out very well the reasons why we need a proper report, one of which is the issue of cost. The incumbents say, typically, that this will cost a fortune and that it will have to be passed on to the consumer, so let us explore the cost properly and get to the bottom of whether that argument is valid.”
“When a fault appears in a model of one of the big-brand car makers, they will very quickly issue a recall notice to ask the customer to come in and have the fault fixed at no expense and at a time that is convenient to them. Car companies do that because they care about their reputation and want that customer to buy a car from them the next time they get one. The same logic does not apply in banking, because the same forces of easy departure do not apply. There are two sides to this story. It is not all about the easy transfer of accounts, although that is important; it is also about what one would be transferring to and from. There is little point in creating a perfect exit system if the choice is merely between three or four offers that are all much the same anyway. There is inertia on both sides.”
“Member for South Northamptonshire (Andrea Leadsom) and the very similar new clause tabled by my hon. Friend the Member for Nottingham East (Chris Leslie). At the heart of this is how much banks care about reputational loss; the hon. Lady referred to that. If the banks were in a normal business environment and there were a big IT failure or another failure of conduct such as mis-selling or LIBOR interest rate fixing, they would care because they would worry that their customers would walk, but they are not in a normal business environment. Banks seem to be immune to, and careless about, reputational damage that would really matter in another business environment. During the banking commission’s deliberations, a parallel was drawn with the car industry.”
“Over the period of a month, we have had political briefing about the bank’s share price and the announced departure of the chief executive with no successor in place, and, as a result, a loss of investor confidence in the Government’s future strategy for the bank. That is no way to exercise stewardship of arguably one of the most important banks in the country. It has undermined the Government’s reputation as regards these state-owned assets and done harm and damage to the bank. I hope that in future the best interests of, and best value for, the taxpayer will be uppermost in the Minister’s mind rather than the politically motivated dabbling that we have seen in recent weeks. On a happier and more bipartisan note, I turn to the new clause tabled by the hon.”
“If they were holding out hope that the banking commission would have given them comfort on that front, it did not turn out like that, and rightly so, because it would have been wrong to give a running commentary on the share price for an institution. An institution’s share price should be determined by the market, based on its future prospects. After the briefing, we then had the unseemly departure of the chief executive at the Government’s hands. Most people saw him as doing a good job of reducing the risks on the bank’s grossly overblown balance sheet and trying to get it back into a healthier position, in the best interests of the taxpayer. Not only was he bundled out before he had completed that task, but this was done without any proper succession plan being put in place.”
“I want to make a few points about new clauses 10, 12 and 14. New clause 10 deals with securing the best interests of the taxpayer as regards the state-owned banks and their future. If the best interests of the taxpayer were in the Government’s mind in recent weeks in their stewardship of RBS, that has been shown in a very peculiar way. This story does not begin with the departure of the chief executive. It begins before that with a briefing from the Minister’s Department about the share price in which it said that the previous Government had overpaid for the shares, and the briefing tried to set the scene for a pre-election fire sale of the bank that would have short-changed the taxpayer. I am glad to say that despite that briefing, the Government seem to be edging away from that strategy.”
“The hon. Lady may be right and that is another reason that we should have a proper report to drill into the issue. On privacy, in addition to the cost argument I think that customers could also be discouraged by the argument that all their account details could be held in a single black box to which all the banks in the country have access.”
“Friend the Member for Nottingham East are asking for is also important, because it would bottom out theses issues and others that I have not mentioned. It is a shame that the hon. Lady does not intend to put her new clause to the vote. After all, it only asks for a report; it does not seek to mandate a change before we have done the work and got the proper evidence. I hope that the Minister will respond positively to her suggestion and that of my hon. Friend. It is really important that there is proper competition between providers in this sector to attract consumers and that the kinds of free choices that enable consumers to walk away and get another product from another provider are available in practice, not just in theory.”
“I thank the hon. Gentleman for making that important point. If consumers are going to have confidence in a system of speedy switching such as that being advocated by the hon. Members for South Northamptonshire and for Wyre Forest (Mark Garnier), these questions about privacy and security of information will have to be bottomed out to the public’s satisfaction. My view is that that will be a more important argument than the one about the cost to the banks of whatever IT changes will be necessary to put this system in place. In conclusion, it is important that we give the seven-day switching service a chance to operate, but the report that the hon. Member for South Northamptonshire and my hon.”
“I stress to the Minister that it is not accurate to say that the Government have accepted the vast majority of the parliamentary commission’s recommendations. The document that was published yesterday is full of excuses and sleights of hand that pass on to the regulator for consideration firm recommendations that we made. I stress to those in another place, who may have a greater opportunity to amend the Bill, that they should read the document that was published yesterday with a careful eye to see what has been accepted and what has not.”
“Paragraph 5.11 rejects our recommendation to consider splitting RBS into regional banks as part of the Government’s study on RBS. Paragraph 5.28 rejects our recommendations on the governance of the Bank of England. Paragraph 5.31 rejects our recommendations on the chairmanship of the Prudential Regulation Authority. As my hon. Friend the Member for Nottingham East (Chris Leslie) said, the Government have also rejected recommendations on leveraging and ring-fencing, in particular ring-fencing in respect of the sector as a whole. When it comes to the implementation of recommendations, the chairman of the parliamentary commission yesterday described the attempt to ring-fence one particular group as “virtually useless”.”
“We read in yesterday’s newspapers that the Government were going to accept the vast bulk of the recommendations and the Minister opened the debate by saying something very similar. However, I have looked through the Government document in detail and wonder whether the Minister could confirm that the position is not that simple. Paragraphs 2.32 and 2.33 reject part of our recommendations on pay. Paragraph 4.5 makes no commitment to legislation on access to basic bank accounts. Paragraph 3.24 passes to the regulator only consideration of the changes that we recommended on the corporate governance responsibilities of executives and bank chairmen. Paragraphs 3.34 and 3.35 in effect reject our recommendation for gender reports on operations on the trading floor.”
“This is an unusual Bill, in that at the same time that it has sought to implement a reform recommended by the Vickers commission two years ago, it has run in parallel with the Parliamentary Commission on Banking Standards, which periodically has produced reports and asked the Government to use the Bill to implement their findings. I place on record my thanks to colleagues who served on the commission and all its staff. It was an intense effort and I do not think we could have produced our reports without the able efforts of the many staff who worked for us, led by Colin Lee, who is a great servant of this House. I want to draw the Minister’s attention back to yesterday’s official response from the Government to the commission’s report of a few weeks ago.”
“Perhaps the Minister and I have different interpretations of the word “broad”. He may be able to persuade the hon. Member for Chichester (Mr Tyrie), on the basis of some warm words, that these are great concessions, but I remain to be convinced. The Government have a great deal more to do to convince Parliament—this House and the other House—that they endorse the vast majority of the recommendations. The more one reads the report that was published yesterday, the less one comes to that conclusion. I hope that those who are in a position to amend the Bill in future take heed of that and press with greater determination than Members of this House the amendments that would fully and faithfully implement the recommendations of the Parliamentary Commission on Banking Standards.”
“On a point of order, Mr Speaker. I rise to seek your guidance, because the Minister is making, in effect, a statement on a series of Government policies related not to clause 1 or amendment 1 but to policy areas where amendments have not yet been tabled. Is that in order? Should this not have been done in the proper way—making a statement and allowing the House to ask questions in the normal way?”
“The Minister is being generous in giving way. I would like to take him back to the intervention by my hon. Friend the Member for Edmonton (Mr Love). Will the Minister confirm that paragraph 5.11 of the publication that his Department published today states: “The Government does not believe that the case for breaking RBS’s core operations into multiple entities meets the objectives of maximising the banks’ ability to support the British economy”? In layperson’s terms, the Government have today rejected the notion that their review will look at regional banks, as distinct from a good bank/bad bank split. Is that how we should read that?”
“I want to compare the Minister’s six-year timetable with the one that the hon. Member for Chichester (Mr Tyrie) has set out in his amendments. What would be the difference for an individual group between moving to full separation under the Minister’s timetable and its doing so under the timetable that would apply if the amendments tabled by the hon. Member for Chichester were accepted?”
“I want to ask the hon. Gentleman the same question that I asked the Minister about the difference in time scales between his amendments (a) and 19 combined, and the five to six-year timetable in total that the Government have set out. Were we to go down the road recommended in the hon. Gentleman’s amendments, how long does he think it would take between a decision on separation of an individual group being taken and that eventually happening?”