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24 Mar 2010 : Column 87WH—continued

Reports by the administrator of the PMS to DETI make it clear that the manner in which the society was run, and the actions of certain directors, were highly questionable. FSA guidelines are very clear-that it is
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for a society to establish whether its activities are such that the law requires it to be regulated, and for a society to notify the FSA if it does need to be regulated. Responsibility clearly lay with the PMS to seek the appropriate authorisation.

The circumstances of PMS members are different from those of depositors in other collapsed financial institutions in at least two respects. First, it is important to remember that the PMS was acting illegally. Secondly, financial institutions supported by the Government, such as the Dunfermline building society, were appropriately regulated and authorised by the FSA and paid a levy to the Financial Services Compensation Scheme. Government support to depositors in institutions such as Dunfermline and Icesave was clearly about banks and other deposit-taking institutions that were regulated by the FSA or European economic area equivalents and which contributed to the Financial Services Compensation Scheme or European national deposit guarantee schemes.

Several hon. Members suggested that Government action to support banks and building societies that got into difficulties created the problems with the run on the PMS, but I do not find that argument compelling. Other IPSs in Northern Ireland and elsewhere in the United Kingdom did not find particular difficulties; rather, the PMS's business model and members' ensuing lack of confidence in it led to the collapse. That is not to say, however, that this is not a serious situation, and we need to do something about it.

As the recent Treasury Committee report observed, PMS members should have been informed that the society was unregulated, that they were ineligible to access the Financial Services Compensation Scheme and that risks were associated with investments in commercial property. Many PMS members feel that they were savers, rather than investors, and that issue has been explored in the debate. I repeat that I want to see an acceptable solution achieved during this Parliament, and I will do what I can to bring that about.

As has been mentioned, the Prime Minister set up the PMS ministerial working group, which demonstrates the Government's commitment to addressing the issue and to working with the Northern Ireland Executive to identify what might be done to assist investors in the PMS. I do not need to go into the working group's terms of reference in detail, but I do want to address some of the issues that have been raised.

First, I recognise that it has taken longer than expected for the group to produce a report on a solution to give to the Prime Minister, but the matter has proved particularly complex. Notwithstanding the best endeavours of the Northern Ireland Executive and Treasury officials, efforts to find a solution have taken some time to come to fruition, and I will say more about that in a moment.

Mr. Hoban: Will the Minister tell us when the ministerial working group last met and how many times it has met since its inception?

Ian Pearson: I do not think that the number of meetings should be seen as a reflection of progress. I have met the Moderator and representatives of the PMS and I have had discussions with officials. As the hon. Gentleman will be aware, the working group is chaired by the Chief Secretary to the Treasury. I sit on the group, and other members include the Secretary of
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State for Northern Ireland, the Northern Ireland Minister of Finance and Personnel, the Northern Ireland Minister of Enterprise, Trade and Investment and the right hon. Member for Belfast, East (Mr. Robinson).

As the First Minister said in his helpful contribution to the debate, and as he has said on other occasions, a range of options are under consideration. One is a commercial solution, which would see another financial institution involved in the PMS's portfolio of assets and liabilities. While I recognise that that is the preferred solution for people in Northern Ireland, the fact that a commercial organisation has not so far come forward leads me to conclude that this option is starting to look more unlikely, although it is still being discussed. Clearly, as hon. Members will understand, discussions with commercial institutions must remain confidential.

The Northern Ireland Executive have taken the lead in exploring the possible options, commercial and otherwise, and it is right for them to do so, because the legislation governing IPSs in Northern Ireland is a devolved matter. We need properly to take into account all the issues when working with the Northern Ireland Executive, to see whether we can come up with a solution.

The right hon. Member for Belfast, East mentioned the other options that need to be considered, and there have been discussions about a Northern Ireland solution. A hardship fund for the hardest hit is also being actively looked at. We have reached a stage where, within a short period, the working group can, I hope, produce a report to go to the Prime Minister. There is a basis on which a solution can be found.

Mark Durkan: On a commercial solution, and going back to the circumstances of the collapse, does the Minister recognise that there is evidence of predatory moves by some of the banks in Northern Ireland, which
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told people, "Move your money out of the PMS because it's not covered by guarantee and give it to us"? People are rightly questioning why some of those banks cannot come forward now, not least when some of them have been covered by intervention by the British or Irish Governments.

Ian Pearson: I do not want to get into the detail in responding to that point. We have had a helpful debate and we have said that, rather than getting involved in a blame game, we want to find a solution that works for those who put money into the PMS, particularly those savers-whether they are savers or investors is a point that we can debate-who put in less than £20,000. We need to continue to focus on what that solution may be.

The right hon. Member for Lagan Valley (Mr. Donaldson) mentioned people with tax liabilities who may have most of their money in the PMS, where they cannot access it. As in the case of any taxpayer in temporary financial difficulties, I would expect HMRC to be sympathetic, and it will be up to individuals to contact the tax authorities to explain their difficulties. As I say, HMRC should treat such cases sympathetically.

To conclude, there is a basis for a solution that we and the Northern Ireland Executive can take forward. I hope to be able to play my part as a member of the working group by ensuring that we bring matters to a satisfactory conclusion, and I can assure hon. Members that I want to do so with all possible urgency.

Sir Nicholas Winterton (in the Chair): I am sure that everyone in the House will be grateful to the Minister for that sensitive and factual response, and, if I may say so, for the expectation of hope that the matter can be resolved. I congratulate all the hon. Members who took part. The next debate concerns the splendid constituency of Tunbridge Wells.

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Rail Services (West Kent)

11 am

Greg Clark (Tunbridge Wells) (Con): I am delighted, Sir Nicholas, that you share my love of my constituency.

I should declare an interest, in that I am a regular and frequent user of the Hastings line, between Tunbridge Wells and London, and I want to bring the attention of the House to its performance. I am grateful to Mr. Speaker for granting the debate, because it gives me the chance to ask the Minister the question that is on the lips of many travellers from my constituency: what on earth has gone wrong with the performance of Southeastern trains in recent months? A service and company that were in the past reliable and well run have in recent months undergone such a collapse in performance as to add to the stress of my constituents and subject them to daily delays and uncertainty. I want to get to the bottom of that.

My constituents have gone through three phases with Southeastern in recent months, which could be called the good, the ugly and the bad. To start positively, with the good, six months ago we were looking forward to what we hoped would be a new era for travel from Tunbridge Wells and High Brooms to London. Through the construction of a new turnback facility over the summer at Tunbridge Wells, we had the prospect of a new timetable, which would allow trains at quarter-hourly intervals throughout the day, and five new peak-time services. That came on the back of a 10 per cent. increase in rail fares the previous January, so we thought that it was overdue. Nevertheless, it would be a significant improvement in services.

It would be fair to mention that we have had some improvements to the facilities in the stations. As a result of a debate that I obtained a year ago, the Minister's predecessor kindly put pressure on Southeastern to reverse-which it did-a cut in the capacity of the trains. It had reduced the capacity from 10 carriages to eight, but thanks to that intervention it reverted to the full 10. We have had improvements to the condition of the stations-an overhaul of all the stations in my constituency-including the installation of a long overdue new passenger lift in Tunbridge Wells and a much better look and feel to the station. Even the station clock, which was out of action for many years, is now restored and in full working order.

The Minister will understand that we looked forward to the new timetable in December with a degree of hope and confidence. However, the ugly phase began. The first warning signs were when the new timetable was introduced and much of the new rolling stock turned out to be inferior. It was inner-suburban stock, which was much more crowded and less comfortable than the higher-quality rolling stock that was previously available. In a crowded journey of an hour and more for stations to the south of my constituency, that is a material change in the comfort of the journey.

The big collapse in service, however, came with the bad weather in December. Of course, everyone accepts that severe weather will have consequences for the rail network generally and the service operators in particular. However, it exposed some real failings in the management of Southeastern's response to the events, however severe. First, information was affected. When the snow hit, High Brooms and Tunbridge Wells were, from the point
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of view of Southeastern, cut off. The information conveyed to my constituents was completely inadequate. People turned up at the station and were told over the public address system to go home and inspect the website for information about when the next trains might be available. They went home and found no more useful information on the website than was available in the station; their journeys were wasted.

A service was continuing from Tonbridge, further up the line, and the natural response would therefore be to put on a bus service to connect Tunbridge Wells and High Brooms with it. However, that service was much delayed in starting, and was then completely inadequate. I pay tribute to the bus drivers of Arriva, the local bus company. However, despite the fact that the regular buses were able to operate, the number of buses put on by Southeastern was completely inadequate to my constituents' needs.

I remember turning the corner to approach the station, to try to come to the House at the time in question, and finding a queue snaking out of the station, over the bridge, round the corner and up a road called Mount Pleasant. A vastly greater number of people than could be accommodated were waiting to board those very infrequent buses. Surely it should have been possible to mount a response that would have provided enough capacity?

When, eventually, some trains were got moving again on the line, we had a limited skeleton service-a shuttle service-between Tunbridge Wells, High Brooms and Tonbridge. However, it went once an hour. I said earlier that we are now used to four trains an hour at peak times, and in fact throughout the day, from Tunbridge Wells and High Brooms to Tonbridge; the consequences of attempting to pack the passengers of four trains into a single train can be imagined.

The result was chaos, confusion and misery. I understand from conversations that the reason for what happened is that the Hastings line south of Tonbridge was considered to be a branch line and was not given the same priority as the line to Tonbridge. However, the Minister will know, having done his research, as I am sure he has, that there are probably just as many commuters in Tunbridge Wells as in Tonbridge, and the line should not be classified in that way. I hope that that will not happen again.

To move on from what can be seen as a very ugly phase of transport in my constituency, we at least hoped that when the weather improved services would improve with it. Instead, although we may have come through the worst, we are still in what everyone would consider a bad phase, with continuing problems. I can do no better than to quote some of the e-mails that I have received from my constituents. I have received them in recent days, during the improved weather, not at the height of the bad winter weather. A constituent wrote at the end of February to describe the effect on his wife, who commutes to London, saying that

He continues:

Another constituent writes that he needs to


I could mention some of the knock-on effects of the recent chaos. Another constituent wrote just this week to say that

the neighbouring franchise's-

That constituent and his partner

I might add, Sir Nicholas, that from your earlier remarks it seems that you are aware that the station at Eridge is 5 miles further from London than Tunbridge Wells. The situation is ridiculous.

Sir John Stanley (Tonbridge and Malling) (Con): I am grateful to my hon. Friend for giving way. Is he aware that my constituents in west Kent have been sending me similar communications? Is he also aware that those of my constituents who use the Maidstone East line have in addition suffered the axing, from last December, of all services to crucial London stations, particularly Cannon Street, Charing Cross and London Bridge? Is he further aware that, as a consequence, several of my constituents have been forced to move home, incurring enormous costs as a result? Does he not agree that that is a reflection of the profound stupidity and social irresponsibility of the Government entering into the integrated Kent franchise agreement, which enabled Southeastern to axe those services?

Greg Clark: My right hon. Friend is right to describe the strength of feeling of his constituents about those services. His constituents know how assiduous he is in holding those responsible to account. I am delighted that he has come to support us today.

When I asked Southeastern about the performance of the Hastings line after the recent cold weather, I was surprised to be told:

That strikes me as a worrying argument. The concern of those of my constituents who use the Hastings line is the Hastings line. It matters not that the service of the new High Speed 1 line might be performing well, as they do not use it. They are galled enough at having to pay for the service, let alone to realise that the possibility of compensation for poor performance is excluded because of an averaging out across the whole region. People use a particular service. It is almost as if someone bought a TV that broke down, but when they asked for a refund from the store they were told that one was not available because the washing machines were working. It is a ridiculous way of proceeding.

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I am fortunate in my constituency in having an excellent local rail travellers group. It has investigated the performance of the Hastings line. It estimates that in the first three weeks of February at least eight trains were cancelled, 33 trains were delayed due to asset failure and 115 trains were disrupted because of absent train crews and other operational reasons. There is plenty of evidence to suggest that there is a particular problem on that line.

Many of my constituents are well aware of some of the causes. One constituent e-mailed me, saying:

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