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Lots of people have come to me—I am sure this has happened to other Members, too—who are incredibly frustrated that they are unable to squeeze any money out of the banks and other institutions. They have good business prospects, they employ quality people and they know how to run businesses, but they still cannot get the money out. It is not that they get a flat rejection;
what they get are delays and barriers—they might be asked to return to their bank with yet another requirement—and eventually they just give up.
I met someone on Saturday who was incredibly frustrated. He was a smart guy with a great business opportunity, but he is not managing to go ahead with it simply because the banks were not prepared to lend him the money he needed. This is partly to do with the skills of the people who work in the banks. In the past they were salesmen grabbing every opportunity they possibly could, but now they are being told to hold back, and they think, “I’m not going to be the first person to say to my manager that I want to make a slightly more risky loan than others might recommend even though I think it’s a great opportunity.” We need to ensure that we have quality people within these institutions who can assess whether a business is a good opportunity.
Mark Durkan: I have talked to people involved in banking in my area of Northern Ireland and they have confessed that in the past 10 to 15 years banks were lending junkies. Yet now, as the hon. Gentleman acknowledges, we are relying on the very pushers to manage their way through this problem. We have recapitalised the banks—we have put the money in and helped to stabilise them—and are simply relying on them to conduct things, yet, as he says, we hear from businesses that they are not getting the credit. Does he agree that this House perhaps needs to have more oversight of banking performance and practices in such circumstances? We cannot leave it to the Treasury Committee to try to pursue and examine these things, in addition to the huge amount of other things that it is having to deal with in this situation. Given the scale of intervention and support that there has been from the taxpayer, perhaps we need to see how the House can provide a bit more oversight and put better manners on some of the banks.
Willie Rennie: That is absolutely right, although I am not sure that we are the best people to run the banks and I fear that in the current circumstances we may go from one extreme to the other. I think that the banks have gone from being lending junkies to not lending anything at all because they have clamped down on everything out of the fear that they will be the first to get it wrong. We should have more oversight, but the banks should look at the quality of the people working for them—I am sure that they are doing that. We do not need the pushers any more; we need the assessors, who can spot value and spot the winners. If we do not get that area right, we will end up suffering even more.
The Government should be putting much more of a social economic requirement on the banks. It should no longer be the case that we are just trying to look after the taxpayers, which seems to be the only requirement in the Red Book—the aim is to try to get the money back into the Government’s coffers as quickly as possible. A measure needs to be in place to ensure that we direct the banks more to have a social economic requirement. We own most of them now so they should have such a requirement in place.
I wish to discuss carbon capture in the last couple of minutes available; I was very enthusiastic about today’s decision, because it presents a great opportunity for one of the biggest coal-fired power stations in the UK—Longannet power station, in my constituency. I understand that the hon. Member for Dundee, East
(Stewart Hosie), who is not in his place, is sceptical about whether the Government will go ahead with the proposals, but I think that they will go ahead; I shall be encouraging them every step of the way as I want it to be done as quickly as possible. If we can get carbon capture up and running effectively, we will make a significant impact on climate change.
Longannet power station has been the powerhouse for Scotland for decades, but it could now become the green powerhouse for Scotland. I strongly believe that we could create a centre of excellence around it. I know that it has to go through a competition process and it is not guaranteed to secure a scheme, but the Government did talk of up to four, and there are only three on the shortlist, so there is a possibility that it might get one. I was delighted to hear that that is being introduced.
On more of a disappointed note, the final thing that I wish to mention is the Forth road bridge, which, again, is local to my constituency. The cables on it are breaking and there is a recognition that it needs to be replaced, but that will cost about £1.7 billion to £2.3 billion. The Scottish Executive have singularly failed to raise a single penny to fund the new crossing and are now going cap in hand to Westminster. I appeal to the Treasury to come up with the necessary funding to ensure that we are able to build the new bridge, because if we are not, that major artery will be lost not only to the east coast of Scotland, but to the whole of Scotland.
Ordered, That the debate be now adjourned. —(Helen Goodman.)
Debate to be resumed tomorrow.
Business Without Debate
delegated legislation
Mr. Deputy Speaker (Sir Alan Haselhurst): With the leave of the House, I shall put motions 2 and 3 together.
Motion made, and Question put forthwith (Standing Order No. 118(6)),
That the draft Asian Development Bank (Ninth Replenishment of the Asian Development Fund) Order 2009, which was laid before this House on 9 March, be approved.
That the draft European Communities (Definition of Treaties) (United Nations Convention on the Rights of Persons with Disabilities) Order 2009, which was laid before this House on 18 March, be approved. —(Helen Goodman.)
european union documents
Motion made, and Question put forthwith (Standing Order No. 119(11)),
That this House takes note of European Union Document No. COM(08) 763, Commission Communication on the EU and the Arctic Region; welcomes the Commission’s Communication as the first step towards an EU Arctic policy; and encourages the Government’s active engagement in further discussions to ensure that UK interests are reflected in the EU policy. —(Helen Goodman.)
Welsh Grand Committee
That—
(1) the matter of the Budget Statement and its implications for Wales be referred to the Welsh Grand Committee for its consideration; and
(2) the Committee shall meet at Westminster on Wednesday 6 May at 9.25 am and between 2.00 pm and 4.00 pm to consider the matter referred to it under paragraph (1) above. —(Helen Goodman.)
Petition
Sri Lanka
7 pm
Mr. Parmjit Dhanda (Gloucester) (Lab): I have a petition to present on behalf of members of the Tamil diaspora in the UK, specifically from the area of Gloucester.
The Petition of supporters of members of the Tamil Diaspora in the United Kingdom,
Declares their deep concern about the current humanitarian crisis facing the Tamil people in northern and eastern Sri Lanka.
The Petitioners therefore request that the House of Commons urges the Prime Minister and the Secretary of State for Foreign and Commonwealth Affairs to call on the Sri Lankan Government for an immediate ceasefire to be implemented to prevent the unnecessary loss of innocent civilian lives; to recognise the right of the Tamil community on the island to self determination; and to allow all necessary humanitarian aid and international aid workers into the conflict zone in northern and eastern Sri Lanka instead of calling for the Tamil people to leave their traditional homes and villages.
And the Petitioners remain, etc.
Debt Collection (Consumer Credit Act)
Motion made, and Question proposed, That this House do now adjourn. —(Mr. Ian Austin.)
7.1 pm
Andrew Mackinlay (Thurrock) (Lab): The purpose of this debate is to draw the House’s attention to the abysmal state of debt collection methodology and the spirit governing it in the UK and the wholly inadequate safeguards for good and innocent people who are endeavouring to pay debt or who dispute it. It is a matter of fact that the debt collection industry relies on a combination of fear and ignorance to make a profit, and that is despicable.
In 2006, the Office of Fair Trading and related agencies received some 5,700 complaints. In 2007, that figure had reached 8,000 and more than 11,000 complaints had been received by August 2008. That is a total of 25,000 complaints in three years, but the Office of Fair Trading took formal action—such as licence revocation or suspension, or the imposition of other requirements on debt collection agencies—in only four cases. I shall illustrate tonight that that is a wholly inadequate response and that Parliament has failed to stiffen the sinews of the OFT and give it legislative powers and duties to protect and promote the interests of innocent people.
By coincidence, in the past 24 hours, the OFT has taken action against an outfit called Mackenzie Hall. Some of its procedures were found to breach the OFT’s guidelines. Ray Watson, the OFT director of consumer credit, said:
“Persisting with debt collection activity when debts are in dispute can give rise to significant consumer detriment, particularly where vulnerable consumers are involved.”
But that is a pathetic response, because similar abuse happens every day in countless agencies. All we see is limp and late action by the OFT.
How did I come to seek this debate? There were several reasons and I shall share them with the House. First, a constituent wrote to me in March because he had received a menacing letter from the communications company 3, which claimed that he owed it more than £800. The letter requested that he
“treat this matter with the utmost urgency. Failure to respond within 20 days of the date of this notice will result in our chosen specialist debt purchasing partner Lowell Portfolio 1 Ltd directly contacting you to arrange repayment of the outstanding balance.”
This menacing letter totally bewildered my constituent, who had never had knowledge of 3, or dealings with it. As his Member of Parliament, I wrote to the company on 26 March. I asked what all that was about and said that my constituent was bewildered and anxious, but I have not received a reply—except for the fact that, by another amazing coincidence, there was a phone call to my office just two hours before I commenced this Adjournment debate, asking for more information. That gives an idea of the sort of cavaliers and cowboys that we are dealing with, among both the companies themselves and their agents. Such behaviour has got to stop.
Secondly, in February I happened to listen to the very fine BBC programme. “You and Yours”, on which I think that the Minister subsequently appeared. The whole programme was devoted to the menacing attempts by debt collection and communications companies, as well as banking and financial institutions and others, to
extract money from people. Some of the people involved are wholly innocent and do not have any debt, while others either dispute the debt or are willing to come to an arrangement about its repayment. The programme found that the companies had responded with bureaucratic inertia or an inability to communicate, or with the malevolent and menacing actions that I have described.
Last Sunday week, The Sunday Times carried a very forensic and skilful article by its “Insight” team, in which they described the conduct of the Lloyds Banking Group’s debt collection department. Workers in the so-called “recovery” department were secretly tape recorded, and the tapes revealed that it was suggested that they should put “the frighteners” on and “f...” customers who owed the bank money. Bank staff were incentivised by bonuses and, contrary to the code of practice of the Office of Fair Trading, claimed to represent firms of solicitors.
The bank’s staff are poorly paid, and have every incentive to maximise the extraction of money from the people whom they telephone. Inevitably, that leads to breaking the OFT code and often to a menacing attitude. One lady, a nurse, told The Sunday Times that she had been called six times a day at work, something that again breaches the OFT guidelines. Moreover, it was reported that the people who train new staff and induct them into the recovery unit persuaded them to remind home owners about repossession, and to tell them that they could be credit blacklisted.
Mr. John Leech (Manchester, Withington) (LD): Will the hon. Gentleman give way?
Andrew Mackinlay: No. I hope that the hon. Gentleman will forgive me, but there is not enough time. Perhaps he will be able to intervene in a minute.
Although recovery department staff were Lloyds’s employees, they tried to imply that they were part of a firm of solicitors by the name of Sechiari Clark and Mitchell. That, of course, was quite false. I hope that the Minister will confirm that he has read the article in The Sunday Times , as I have been able to give only a summary of it in the few minutes available this evening.
The programme “You and Yours” showed the extent, scale and gravity of the callous and dilatory nature of debt collection in this country. I know that the Minister listened to the programme, and I hope that he has been able to consider the follow-up programmes. For instance, one lady described how the Bank of Scotland had constantly bombarded her and her terminally ill husband with insensitive automated phone calls. Another person, Marian Parks, described how the same bank’s actions had impacted on her father, John Leather, and set out all the problems that arose as a result. To their credit, her family was so incensed that they entered into litigation before Mr. Recorder Grice at the Truro county court, where the matter was determined on 23, 24 and 25 February. It is interesting that Mr. Recorder Grice described the so-called Triad system, which involves constant automated telephone calls to alleged debtors, as
“a juggernaut which cannot be stopped very easily”.
“the Bank of Scotland comes at you from all sides”,
and that the Bank of Scotland’s explanation
“would be farcical had it not been so stressful.”
He described how use of the Triad automated telephone system went on and on. He said that there were certainly grounds for “criticism” of the Bank of Scotland and its “inflexible system”, adding:
“what I find really disturbing is the complete absence of a personal safety net...I think the Bank of Scotland should be subject to significant criticism”.
Also in the bundle of documents presented to the court was the “advanced call skill read-ahead package” for staff who work in the bank’s recovery system. It tells them to use the following threats:
“keep your car...protect your credit rating...be able to get future credit...prevent legal action”.
It suggests “borrowing from...relatives” and asking:
“Is your husband/wife employed?”
and so on. All that, of course, is against the spirit of the OFT code and the banking code.
The radio programme to which I referred also demonstrated the courage of a Mr. John Cooper, who took on the communications company 3, which I have already mentioned. He had purchased, some time ago, phones for his daughters, but they did not work in his area. He cancelled his direct debit. It would appear that that alleged debt was sold to a company called HFO Services, which persisted, menacingly, in trying to get him to cough up some money, to the extent that his daughter was fearful that its representatives would seize property in the home. I heard on the radio—I think that the Minister will have done so, too—a recording of a telephone conversation in which a representative from HFO Services, speaking from a call centre in Asia, said:
“Despite leaving several messages on your answer machine and despite trying to get in touch with you, you have failed to respond back. Now if I don’t receive your call today I would go ahead and forward the”—
there followed an indistinct word—
“to Northampton County Court so that there would be a county court judgement issued against you. And it might be also the court appointed bailiffs. If you want to save yourself some legal hassles please call me back.”
That is completely and utterly contrary to the codes. Of course, the company was exposed by the BBC. In a feeble statement, the outfit called HFO Services said:
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