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Secondly and more worryingly, powerful financial institutions appear able to evade consumer law protections. In 2006, the British Bankers Association claimed bank charges were fair because it really did cost £39 to send a computer-generated letter. That justification was dropped a year or so later when banking whistleblowers revealed that the true cost of these charges was between £1 and £2.
More recently, most UK banks have altered their terms and conditions to avoid the common law prohibitions on penalty charges, as well as arguing that default charges were truly fees for requesting an informal overdraftan overdraft which would generally be automatically declined.
In July 2007, the Office of Fair Trading launched its bank charges test case, with the full co-operation of the major high street banks. While this case has progressed, the banks have continued to impose excessive charges on customers. At the same time, most customers are being prevented from seeking a refund of unfair charges pending the outcome of the test case. Clearly, this position suits the banks well, and it is hardly surprising that even though they have lost the preliminary rounds of this case before the High Court and the Court of Appeal, they are now pursuing a further appeal to the House of Lords.
While it is for the courts to decide whether the banks are right or wrong in terms of the existing law, I believe there is now an overwhelming case for providing UK consumers with better legal protection in this area. The Bill would overcome current statutory law inadequacies and would require any default charge or fee in a consumer contract to be proportionate and fair. This safeguard would provide protection for all consumers throughout the UK.
Protection would apply to any contract currently regulated by the Consumer Credit Act 1974, or any contract where one of the parties was a consumer. A consumer is defined as any natural person who enters into a contract
outside his or her trade, business or profession.
Also included would be contracts for banking services regulated under the 1974 Act.
Clause 1 of my Bill would make it unlawful for a business to impose a charge, fee, or series of charges and fees for a consumers failed or unauthorised transaction unless those charges were valued at no more than 2.5 per cent. of the transaction. That would ensure that the value of charges was always proportionate to the value of the unauthorised or failed transaction.
Returning to my example of a constituent with four bounced direct debits, if the total value of those debits was £400 the maximum overall charge would be reduced to £10 under my Bill. Whereas most companies would impose £25 for unpaid direct debit chargesresulting in an additional £100 of chargesthe maximum that could be levied under my Bill would again be £10. So, the charges under my Bill would be no more than £20, which can be set against the excessive £284 that would be imposed under the current system.
I believe this proposal to be both fair and proportionate, having regard to the fact that most businesses have efficient computerised credit control systems whereby standard letters, e-mails or automated telephone calls will typically cost around £1 or less to produce and dispatch. The present system of charging is, I believe,
indefensible in terms of the effects it is having on our society, particularly on its poorest and most vulnerable members, especially in the current economic climate. The system simply pushes people into unnecessary financial hardship and exposes countless households to eviction and repossession.
I hope that hon. Members will support my Bill to protect vulnerable people from excessive and unfair charges. I am pleased to say that the Bill commands support from hon. Members from all the main political parties in this House.
That Mr. Mohammad Sarwar, Mr. Jim Devine, Mr. Jim McGovern, Willie Rennie, Mr. Tom Harris, Mr. Virendra Sharma, Mr. Ian Davidson, Lindsay Roy, Mark Fisher, Jim Sheridan, Mr. Charles Walker and Ms Dari Taylor present the Bill.
Mr. Mohammad Sarwar accordingly presented the Bill.
Bill read the First time; to be read a Second time on Friday 16 October and to be printed (Bill 89).
Chris Huhne (Eastleigh) (LD): I beg to move,
That this House regrets the Governments recent statement outlining the eligibility criteria for Gurkhas to reside in the United Kingdom; recognises the contribution the Gurkhas have made to the safety and freedom of the United Kingdom for the past 200 years; notes that more Gurkhas have laid down their lives for the United Kingdom than are estimated to want to live here; believes that Gurkhas who retired before 1997 should be treated fairly and in the same way as those who have retired since; is concerned that the Governments new guidelines will permit only a small minority of Gurkhas and their families to settle whilst preventing the vast majority; further believes that people who are prepared to fight and die for the United Kingdom should be entitled to live in the country; and calls upon the Government to withdraw its new guidelines immediately and bring forward revised proposals that extend an equal right of residence to all Gurkhas.
I am particularly pleased to be leading in this debate since my county of Hampshire has a long and intimate association with the Gurkhas and the Gurkha museum is based in Winchester, next door to my constituency. The museum is a remarkable celebration of this remarkable brigade, and I recommend it to any Member.
The Gurkha regiments have provided extraordinary service to this country since 1815, when the first Gurkhas entered service with the East India Company, which had been impressed by their fighting prowess as opponents in the Nepal war. The company took the eminently pragmatic view that if we found it hard to beat them, we had better hire them. During the first world war, the Gurkhas fought in France, the Suez canal, Mesopotamiathat is, Iraqand Gallipoli. During the second world war, the regiments took part in the campaigns of north Africa, Italy, Greece, Malaya and Burma.
After the war and Indian independence, the Gurkha regiments split between the Indian army and the British Army. Our British regiments saw service in the 12-year Malayan emergency, the Falklands, Kosovo, Bosnia, East Timor, Iraq and Afghanistan. The Gurkhas have a deserved reputation for effectiveness, bravery and loyalty. Given that remarkable history, it is perhaps surprising that until 2004 it was difficult if not impossible for foreign and Commonwealth members of the armed forces and Gurkhas to obtain settlement and British citizenship at the end of their service.
The view before 2004 seemed to be that Gurkha rights were governed by the tripartite agreement of 1947 between Britain, India and Nepal, which stated that a
Gurkha soldier must be recruited as a Nepali citizen, must serve as a Nepali citizen, and must be resettled as a Nepali citizen.
We should pay tribute to the Gurkha welfare campaign and to the right hon. Member for Maidstone and The Weald (Miss Widdecombe), who I do not believe is in her place today, for raising the issue in 2003 both in parliamentary questions and in two Adjournment debates. We should also pay tribute to my right hon. Friend the Member for Ross, Skye and Lochaber (Mr. Kennedy) for pushing the issue at Prime Ministers questions.
In 2004, the right hon. Member for Sheffield, Brightside (Mr. Blunkett), who was then the Home Secretary, set out changes to the immigration rules so that all those with at least four years service in HM forces could apply for settlement in the UK after discharge. It is important that we recognise that crucial precedent. However, one key stipulation discriminated against Gurkhas compared with other foreign and Commonwealth troops, namely that they had to be discharged on or after 1 July 1997. There were some exceptions, but the fundamental rule was there.
The rationale was simply that 1997 was the point at which the Gurkha regiment moved from its base in Hong Kong to the UK, following the handover of Hong Kong to China. That was never, frankly, the dividing line that some in Government seemed to think. One has only to look at the areas in which the Gurkhas served in the last 100 years to see that they were an integral part of the British armed forces. That decision led to some ridiculous and shameful anomalies. In a famous case, the Victoria Cross holder, Honorary Lieutenant Tul Bahadur Pun, was initially refused indefinite leave to remain for having inadequate ties to the United Kingdom. Indeed, veterans of Malaya, the Falklands, the first Gulf war and long service veterans who were seriously ill were all refused entry. The standard reason given was that they had failed to demonstrate strong ties to the United Kingdom.
A landmark in the recent history of the issue was the judicial review of the Limbu case by the honourable Mr. Justice Blake on 30 September 2008. Mr. Justice Blake found that the policy regarding Gurkhas was unlawful and should urgently be revisited. He noted the apparent concerns of the Ministry of Defence concerning the attitude of the Government of Nepal, but pointed out that they were not based on evidence. Instead, Mr. Justice Blake cited the honouring of an historic debt, and quoted the military covenant as follows:
Soldiers will be called upon to make personal sacrificesincluding the ultimate sacrificein the service of the Nation. In putting the needs of the Nation and the Army before their own, they forego some of the rights enjoyed by those outside the Armed Forces. In return, British soldiers must always be able to expect fair treatment, to be valued and respected as individuals, and that they and their families will be sustained and rewarded by commensurate terms and conditions of service.
Mr. Justice Blake added his own comment:
Rewarding long and distinguished service by the grant of residence in the country for which the service was performed would, in my judgment, be a vindication and an enhancement of this covenant.
Mr. John Redwood (Wokingham) (Con): I am grateful to the hon. Gentleman, and thank him for the case that he is making. We want justice for the Gurkhas but does he agree that, rather than introducing easier immigration procedures, that just means giving priority to people who served this country well?
Chris Huhne: I am grateful to the right hon. Gentleman for making that clear and obvious point. I entirely agree with him, and I shall deal with some of the practical implications a little later in my speech.
Hugh Bayley (City of York) (Lab): The hon. Gentleman is making a powerful case, but the motion says that
people who are prepared to fight and die for the United Kingdom should be entitled to live in the country.
Does he apply that to all foreign nationals who have served in our armed forces?
Chris Huhne: I was grateful to the hon. Gentleman for signing the early-day motion earlier this year that called for exactly what todays motion calls for, so I hope that he will join us in the Lobby later today. However, he will know that the current arrangements are that foreign and Commonwealth servicemen have the right, after four years of service, to apply for citizenship. That seems to be absolutely crucial.
Mr. Parmjit Dhanda (Gloucester) (Lab): On a point of clarification: my grandfather, in his beard and turban, fought in the Indian armys Bengal Engineers but he also fought for King and country in Burma, so would he have fallen under the proposed rules? He passed away a few years ago, but many of his colleagues are still around. Would they be entitled to come and live in this country?
Chris Huhne: I am grateful to the hon. Gentleman for making the point that some traditions in the armed services go back many generations. However, not many regiments can boast the continuous tradition that the Gurkhas have shown for nearly 200 years. That makes the Gurkhas a rather special case, but I believe that the case for the hon. Gentlemans grandfather, were he still alive, would be worthy of consideration by the Ministry of Defence. However, I suspect that any policy along those lines would be impractical, if only because the people involved would be unlikely to avail themselves of it.
Mr. Dhanda: I am grateful to the hon. Gentleman for giving way again, and assure him that I am not asking awkward questions merely for the sake of it, but because this is a complex area of policy and we need to clarify exactly what his motion proposes. Is he saying that he would widen the eligibility criteria so that they covered not just the Gurkha regiments but also, for example, the Sikh regiments that served with the British Army over the years?
Chris Huhne: No, I am not saying that. Although I believe that we ought to give serious consideration to extending the criteria to people who have served in the British Army or armed services, todays motion is specifically limited to the Gurkhas because of the long history involved. Moreover, I remind the hon. Gentleman of what I said about the history of the Gurkha regiments. Some of those who served in the Gurkhas and who went into the Indian army regiments after independence would not necessarily benefit from our proposalalthough, frankly, the age of the people involved means that the question is no longer of practical relevance. However, if Ministers are able to find any members of the Brigade of Gurkhas who went into the Indian army after independence and who are still alive, I would be delighted.
The Parliamentary Under-Secretary of State for Defence (Mr. Kevan Jones):
The hon. Gentleman is talking complete nonsense. There are people who fought for Britain in
the second world war who transferred into the Indian army. My hon. Friend the Member for Gloucester (Mr. Dhanda) asks a very good question: is the hon. Gentleman suggesting that they should be included as well? He says that not many of them are still alive, but I met some of them when I was in Nepal three weeks ago.
Chris Huhne: The Minister makes a nitpicking point about a handful of people, but the key issue that he needs to address concerns those Gurkhas who went into the British armed services after Indian independence. They pose a practical problem, and that is what we are concerned about. The Minister is talking about people aged over 80 whose numbers can be counted on the fingers of one hand. If he wants us to believe that they represent a serious impediment to the House passing the motion before us this afternoon, all I can say is that he is living in a fantasy land.
Paul Holmes (Chesterfield) (LD): My hon. Friend has referred to Mr. Justice Blake, who made exactly that point in his judgment. He said that any member of the Indian army was entitled to apply for British citizenship from 1947 until at least 1962, when visa restrictions were introduced. All the people about whom we are talking would be 80 years old or more, but they all had the opportunity to apply for British citizenshipan opportunity that is being totally denied to the Gurkhas because they are from Nepal. Does my hon. Friend agree that, as Mr. Justice Blake pointed out in his judgment, the situations of the two groups are therefore utterly different?
Chris Huhne: I am very grateful to my hon. Friend for making that point and for reminding us of the other terms of Mr. Justice Blakes judgment.
Bob Spink (Castle Point) (Ind): Will the hon. Gentleman give way?
Mr. Frank Field (Birkenhead) (Lab): Will the hon. Gentleman give way?
Chris Huhne: No, as I want to make some progress.
Last weeks Government response was to announce new criteria for the settlement of discharged Gurkhas. They must now have at least three years continuous lawful residence in the UK during or after service, and close family ties in the UK. They must also have at least a level 1 to 3 award for gallantry, leadership or bravery, 20 or more years of service, or a chronic or long-term medical condition. There were some other exceptions for Gurkhas who did not fulfil those criteria, but many hon. Members want to speak so I will not go into them.
However, to make the point that I want to make, I shall deal with just one example from the list of criteria that I have set out. The 20-year rule seems to me to be a key discriminator, as so many Gurkhasand especially private soldiers and riflemenserve just 15 years. Only officers would have achieved 20 years of servicesomething that some Labour Member might find surprising, given what I am sure is their desire to treat officers and men equally. That criterion is five times as long as the period for which a foreign and Commonwealth soldier must serve to be granted settlement in the UK.
What does this new package mean in practical terms? The Government say that 4,000 ex-Gurkhas and 6,000 spouses and children will be able to enterin other words, a total of 10,000 people. Lawyers acting for the campaign say that, to their knowledge, the total would be more like 100. What if we were to extend the pre-1997 rights on a equal footing with those after 1997? The Minister is on record as saying that 100,000 people could enter.
Who should we believe? When I was an economic journalist, I was always very suspicious of well rounded numbers, and hon. Members may note that the Ministers estimate of our proposed policy is precisely 10 times as big as his estimate of his own policywhich, in turn, is a nice round 10,000. Let no one accuse the Home Office of failing to decimalise.
However, we see the same cavalier attitude to figures when we look at costs. The Minister has spoken in various interviews about a potential extra cost of £1.5 billion, but during todays Prime Ministers questions the Prime Minister put that at £1.4 billion. The Government cannot even get their own story straight to within the nearest £100 million.
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