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3 Apr 2003 : Column 1134—continued
4.35 pm
Mr. Desmond Swayne (New Forest, West): Before the House rises for the Easter recess, I want to raise with the Minister the case of my constituent Mr. Alan Clark, who was grossly unfairly dismissed by Hill Samuel, which is now part of Lloyds TSB. The cover-up
surrounding his dismissal began in the 1990s and has stretched to this very day. In dealing with that constituency case, I want to touch on more general issues with respect to financial regulation. Indeed, I have a specific proposal for Treasury Ministers.In coming across this injustice, I am indebted to our former colleague Sir Tom Arnold, who was Chairman of the Treasury Committee. He drew the case to my attention and, while Chairman of that Committee, also drew it to the attention of the Bank of England. As a consequence of that action, there was an inquiry—at least one carried out by the lawyers of Hill Samuel and Lloyds TSB—although its findings have never been published. I ask Ministers to look into the possibility of securing the publication of that inquiry so that it can be brought into the public domain. However, Sir Tom Arnold's work, with the assistance of Mr. Michael Gross, ensured that legal proceedings took place resulting in a criminal fraud conviction for one of the bank's senior directors, a Mr. Gordon Skingley.
My constituent Mr. Alan Clark was a director of Hill Samuel bank. He had an exemplary record of service over 22 years, but he was made redundant—I use that term advisedly—days before his 50th birthday. I was in the banking sector in the mid to late 1990s, and I know of many people in similar positions who were made redundant at that time, but the institutions concerned maintained a policy of ensuring that executives, managers and ordinary staff approaching that age could continue until they were 50, owing to the pension arrangements that would kick in when they reached that age.
I know for a fact that at that time Hill Samuel bank maintained just such a humane policy for its employees. After all, it costs the financial institutions concerned very little, but makes a hell of a difference to the individual. My constituent was made redundant at a cost to him of some 40 per cent. of his accrued pension rights. Why was he made redundant? I believe that it was because he stood up to the said Mr. Skingley, who was subsequently convicted of fraud. He blew the whistle and he was punished for it.
My constituent had spent 20 years running Hill Samuel's property section and dealing with the property portfolio. After a merger, the said Mr. Skingley took over that department and Mr. Alan Clark began to become familiar with his dishonest ways of doing business and his manipulation and falsification of figures to liquidate the bank's clients to his own advantage. In a particular case, he sought to do just that to Gross-Hill properties, a well-run and profitable property company with a large portfolio of business and freehold property in south Wales in which the bank was the major shareholder. Mr. Alan Clark was the bank's representative on its board of directors. He raised a warning flag, telling the bank's directors that the liquidation was about to take place and that it was out of order and quite improper. Consequently, his unfair dismissal was engineered by Mr. Skingley, who recognised the threat posed to his dishonest schemes.
I make that assertion on the basis of evidence provided by no less an individual than the then head of personnel at Hill Samuel, Mr. Rodney Gardner. He said
that the bank's senior executives, Messrs McCrichard, Barrington and Freedberg, had wrongly supported Mr. Skingley against my constituent.Let us contrast the treatment of my constituent with the subsequent treatment of Mr. Skingley once the truth was known and he was convicted of fraud. Mr. Skingley still benefits from his enhanced pension of £50,000 a year. Even if the bank succeeds in freezing it to secure the return of £108,000 that was knowingly misdirected, only two years will elapse before he enjoys the benefits of that enhanced pension again. My constituent Mr. Clark, however, is without 40 per cent. of his rights.
What has been the reaction of Lloyds TSB to representations made by me, by Sir Tom Arnold and by the former personnel officer of the bank concerned? It has been to sweep the matter under the carpet. The lawyers' report on the goings-on remains secret.
Mr. Eric Forth (Bromley and Chislehurst): Why did my hon. Friend's constituent not avail himself of the possibility of going to an industrial tribunal? I assume that he did not do so. Perhaps my hon. Friend will tell us about that aspect of the case, if he has not reached it yet.
Mr. Swayne: That is a very fair question, and one that occurred to me when the matter was first brought to my attention by Sir Tom Arnold. When he came to the House with Mr. Clark, he said "When I chaired the Treasury Select Committee I was told about this, and passed it on to the Bank of England. That at least resulted in the inquiry by the lawyers, whose report remains secret. I am no longer in a position to pursue the matter; will you do so?" My immediate reaction was to wonder why Mr. Clark had not taken the case to law at the time. Why had he not availed himself of the tribunal procedure?
Mr. Clark's answer was this. "I had not yet turned 50. I hoped to use my contacts and networks in the City to secure comparable employment. Let me be realistic and frank with you, Mr. Swayne: if I had expected to secure such employment in the City, I would not have been able to do so had I gone to an industrial tribunal and made such a fist of it."
That is, perhaps, an indictment of the City and its ways, and perhaps Mr. Clark's estimate was a misjudgment; but that is the case that he made to me at the time. I am not in a position to second-guess his judgment. Time elapsed, however, and eventually the option was no longer available. He pursued his case by other means, and the result was the conviction of his oppressor but no redress from the bank.
What lesson can we draw from this? We have learned, I think, that we cannot allow the banks to discourage employees from blowing the whistle because they maintain so much power and influence over our financial affairs. I am glad to say that the Financial Services and Markets Act 2000 gives the Financial Services Authority a number of mechanisms to promote whistle-blowing of the kind that my constituent had the honesty, decency and bravery to stand up and do. We cannot allow the banks to undermine that through their own policies, as evidenced in this case. I ask the Parliamentary Secretary to draw the matter to the attention of the Chief Secretary and the Financial Secretary and find out what safeguards are available to
prevent a repetition of the sort of cover-up carried out by Lloyds TSB in respect of the fraud perpetrated by Mr. Skingley.I would suggest that the Parliamentary Secretary discuss with the Chief Secretary and the Financial Secretary the possibility of establishing supervisory powers within the Treasury itself. An independent supervisor could then independently prepare a report when allegations such as the one that I have brought before the House today are made. Such matters could then be properly investigated. I would feel more comfortable if the Treasury or the Financial Services Authority had mechanisms in place to deal with such obvious injustices.
We cannot allow Lloyds TSB to conduct a report of its own and then keep it entirely to itself. That is unacceptable. A clear injustice has been committed and an enormous amount of skulduggery and financial impropriety has been uncovered beneath it, but it has not been properly exposed.
4.47 pm
Mr. Alan Hurst (Braintree): I am grateful to you, Mr. Deputy Speaker, for your indulgence in calling me to speak in this afternoon's debate. As hon. Members may have noticed, I was not present for most of the debate. I can pray in aid that I was chairing a Standing Committee, though I am also mindful of the adage that excuses are for losers, so I shall not go further down that path. I always find debates like this profitable and try to contribute when so called. Today, I will be brief.
I should like to speak about the schools admission policy in my constituency, particularly in the town of Braintree. Hitherto, the town was divided into catchment areas and those living near one senior school could expect to go to that senior school. In practice, three high schools are available: the Notley, the Tabor and the Alec Hunter high schools. The particular problems that I want to highlight relate to the Notley high school in the south-west of the town—an area in which extensive developments have taken place.
The education authority entered into a policy to guarantee places at Notley high school to a series of villages outside the town. That pledge was given at a time when those villages and that area were comparatively undeveloped. Since then, a vast expansion of population and building has taken place outside the town limits of Braintree, and in some of the parishes that had benefited from the pledge of guaranteed places. Consequently, the number of children taking up guaranteed places at the school from those villages has increased, putting pressure on the number of places available at Notley high school.
The county council's proposal, currently under consultation, is that there will be no guaranteed places for those living in Braintree, but that such places will remain for those living in the villages outside. That has the ludicrous and singularly unfair consequence that children living next door to Notley high school will in all likelihood not be able to attend that school in future. It has the further problem of breaking up family groups. Older children from the adjacent John Ray primary school went on, in the natural order of events, to Notley high school, but under the new policy their younger brothers and sisters will have to go to other schools. It
adds a burden on some parents, who have to ferry children to different parts of the town at the same time. However, the overriding problem is that it makes no sense to parents that they can look our of their window and across the road at the high school—which many attended themselves—yet their children cannot attend it as they had anticipated.I have called on the county council to consider the matter in conjunction with the Department for Education and Skills. I hope that the school and the local education committee will give serious consideration to expanding Notley high school to accommodate the growth of the population on that side of town.
I appreciate that it will be argued that vacant places remain in one of the other high schools. However, there is extensive population growth in that part of town too, and it is anticipated that the demand for school places there will also become great in a few years.
Given the rise in the number of people on the electoral register, I suspect that Braintree may be one of the fastest growing towns in the country. It will need many more school places in the future. I hope that my hon. Friend the Minister will speak to other Ministers to see whether, through co-operation, some policy can be devised to assist parents and children in the part of Braintree that I have referred to. They may otherwise be denied a place in the school of their choice.
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