3.23 pm

Sir Bob Russell (Colchester) (LD): I am chairman of the all-party group on first aid, whose administrative support comes from St John Ambulance. So far 25 MPs and peers, from all parties, have obtained the certificate in essential first aid here in the House.

I am delighted to follow my right hon. Friend the Member for Banbury (Sir Tony Baldry) and the hon. Member for Batley and Spen (Mike Wood), in putting on the record both personal opinions and facts. I shall not venture into the Kent debate set out by my fellow knight, my hon. Friend the Member for North Thanet (Sir Roger Gale), because I believe that it needs to be dealt with as a constituency matter. St John Ambulance representatives will read Hansard tomorrow and see what he had to say. I hope that in some respects they will take on board his concerns about what he senses is a lack of localism in Kent, and the other points he made.

My first involvement with St John was more than 50 years ago, when I was a young scout and trained in first aid. I recognise and echo all that my right hon. Friend the Member for Banbury said about that. Notwithstanding the criticisms that have been made—one

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might have thought the organisation was dying on its feet—there is a remarkable expansion going on, with 30% more young people trained last year than the year before. That is a record of success and achievement. However, as my hon. Friend the Member for North Thanet said, there are concerns, and I hope that St John Ambulance at national level will consider how it can address them and encourage the localism that I see at the Colchester branch. I occasionally visit the branch—not just the adult training but the Badgers, which is the youngest group, aged five to 10, and the cadets who are aged 10 to 16. The organisation is remarkable and it has evolved.

Mr Newmark: Perhaps the hon. Gentleman will indulge me with one last intervention. As a fellow Essex MP, he will know the tremendous work that the new St John branch in Halstead does. I went on my very first training course in first aid, which was excellent, and I was surprised at the number of young people on the course with me. Will he join me in paying tribute to that work and does he agree that St John Ambulance does an excellent job training young people in basic first aid?

Sir Bob Russell: If the Halstead experience is like the Colchester one—and both towns are on the river Colne—the hon. Gentleman is fortunate to have an excellent St John Ambulance centre in his constituency.

My right hon. Friend the Member for Banbury gave some dramatic statistics, and I will add some more. Community first responders attended 31% more call-outs in 2012 than in 2011, supporting the NHS ambulance service. In addition to youngsters, unemployed young people are going through the training system. An initiative launched in the past year by St John called “In their community” enables youngsters between the ages of 14 and 17, including cadets, to use their skills to deliver first aid training to others—that is self-help among young people. In another programme, “Your first aid”, cadets are given a chance to volunteer at events.

We must accept that St John Ambulance, like many other organisations, needs to remain fresh and vibrant. The Scouts and Guides have already gone down that path, and so have political parties. St John Ambulance will evolve to keep in step in society and to meet changing challenges. St John, facing significant financial losses that could have brought the organisation crashing down, tried with the help of operational front-line volunteers and others to find a way not only to save the organisation but to give it a future. I suggest that that is what the restructuring has done, but I think—referring back to the comments of my hon. Friend the Member for North Thanet—it needs to find a way to retain the ethos of localism. After all, that is what all political parties want—localism is part of their agenda. One way of saving money is to acknowledge the fact that the semi-independent divisions were costing money. We all recognise that not everyone welcomes change, but new arrangements mean more team working and sharing resources.

This is a welcome debate. The circumstances are unfortunate, but we have on the record the good things about St John Ambulance, and I hope that St John will listen carefully to the criticisms and build on its strengths.

Mr Andrew Turner (in the Chair): Hon. Members are doing very well. I call Mr James Gray.

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3.29 pm

Mr James Gray (North Wiltshire) (Con): Thank you, Mr Turner. I will try to be brief because much of what needs to be said in the debate has already been said—I will certainly try to avoid repeating anything.

Let me start with what I believe to be three truths that will be welcomed by everyone in the Chamber. The first is that over many years St John Ambulance has done fantastic work for the people of this country. Every year it attends 52,000 events, many of which would not occur were St John Ambulance not there. An ambulance and first aid service have to be available at such events, and St John provides that at very modest cost to the organisers. I have been a beneficiary of that service.

The second universal truth is that the very many people who are members of St John Ambulance and have been trained by the organisation enjoy their participation greatly. It is a superb volunteer organisation. I pay huge tribute to the people of Wiltshire who are members of our extremely active branches throughout the county. Their great work is much appreciated.

The third universal truth, however, is that when any organisation—whether a voluntary organisation such as St John Ambulance, a business, a military organisation or a political organisation—is reorganised, many people in that organisation do not like it. Those who have been the chairmen or members of the committees of the 41 separate organisations that were previously St John Ambulance—or, indeed, members of the sub-units, or other committees and organisations—do not like the fact that they are no longer involved in the way in which they were previously. I understand that very human emotion.

Let me put the counter-argument for a moment, however. I have been briefed on the matter by my close friend, David Hempleman-Adams, who was the chairman of the Wiltshire branch of St John Ambulance. He assisted in the reorganisation and is now a trustee nationally. He is one of those who say, “We couldn’t go on the way we were. This was not the sustainable structure that we wanted to have for the time to come.”

Let us put aside for a moment the question of whether people in the organisation wanted it to be reorganised, although that is a key matter of great concern, and I am sure that St John Ambulance will be listening carefully to the concerns of many local people that are being raised in the debate. However, as I mentioned in an intervention on my hon. Friend the Member for North Thanet (Sir Roger Gale), that is not a matter for the Government. It would be wrong if the Government took an interest in the internal organisation of a voluntary body such as St John Ambulance, so the Minister is not qualified to respond to those particular criticisms.

The subject of the debate is the charity commissioners’ governance of St John Ambulance, and of course that, to some degree, is a matter for Parliament and Ministers—or at least it would be if the charity commissioners were not doing the job that the Government have asked them to do. The commissioners’ job is to look at the huge number of charities in the UK—I suspect that there may be hundreds of thousands if we include all the very small ones—and keep an eye on them to ensure that they are fulfilling the charitable functions that they are supposed to fulfil and that they are sustainable.

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I think that I am right in saying that the charity commissioners would intervene only if a charity was not doing what it was set up to do, or if it was not sustainable. If a charity were, for example, losing large amounts of money every year and misusing the funds of volunteers or members of the organisation, that would indeed be a reason for the charity commissioners to step in and look that. I was not surprised in the slightest by the reaction that my hon. Friend the Member for North Thanet got from the charity commissioners—indeed, I strongly welcomed it. They said, “We’ve looked into this and actually these are not matters for us; they are matters for St John Ambulance internally.” I was very glad indeed that the charity commissioners did not choose to intervene in detail on the ground.

I suspect, however, that had the organisation continued to lose the £9 million a year that it was losing until the reorganisation, that would indeed have been a matter for the charity commissioners. I understand that St John Ambulance still has reserves of some £20 million. As it was losing £9 million a year, that would mean that it would have been insolvent after another two years, which would indeed have been a matter of grave concern to the charity commissioners, as well as the organisers of the 52,000 events that the body attends every year and the 300,000 people who take part in it. That would be an extraordinarily important matter, and I am glad that that situation will now not occur following the body’s reorganisation.

I fear that bodies that have existed for many tens or even hundreds of years often become a little sclerotic and very local. We in the Conservative party know that extremely well. Some of our branches and associations are not quite of the great strength and power that was the case were many years ago. We see such things nationally all the time, but I very much welcome the fact that St John Ambulance realised the problem that it was facing. It understood that it would be in difficulty with the Charity Commission if it did not do something about it, and it set about saying, “We provide a first-class service for local people, and local people love being part of it. We will therefore take difficult steps to reorganise the organisation so that it remains solvent for the years to come.”

3.35 pm

Peter Aldous (Waveney) (Con): It is a pleasure to serve under your chairmanship, Mr Turner. I congratulate my hon. Friend the Member for North Thanet (Sir Roger Gale) on securing the debate. I should state at the outset of my speech that I served on the county management board of St John in Suffolk from 1991 to 2010. I am also a holder of the Most Venerable Order of the Hospital of St John of Jerusalem.

My observations are very much Suffolk-orientated. They are based on my direct experiences up to 2010 and feedback that I have subsequently received from former colleagues. It is important that we pause and reflect for a few moments to salute those front-line St John staff who turn out at all hours of the day and night, in all weathers, and give their time to help and support others.

I was with members of St John in Lowestoft on the night of the storm surge on 5 December at the rescue centre set up at the Water Lane sports centre. I saw and spoke to them in the evening and in the morning,

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although I have to confess that, unlike them, I went home to bed in between, and they were cheerful, committed and resolute. These volunteers are doing brilliant work, notwithstanding the restructuring of the governance arrangements of St John.

My direct experiences of St John in Suffolk took place between 1991 and 2010. I was on the management board and my role as county surveyor was to advise on its properties. With the benefit of hindsight, I look back on a well-run organisation. Yes, problems arose, but when they did, we held emergency meetings and addressed them head-on. We ran a balanced revenue budget each year. We had a successful fundraising programme that paid for capital improvements and equipment, and our fundraisers knew where the pockets were to be picked. We had notional reserves of more than £700,000. The number of cadets and recruits remained steady. We had high standards of clinical governance, as endorsed by the Care Quality Commission. We ran the most successful patient transport in the country. Our properties were in good order and well used. Our senior volunteers were at the top of their peer group, and St John was widely respected throughout the county.

St John in Suffolk, although not without its challenges, was run well and was achieving its charitable goals. That said, I am aware that that was not the situation in all counties across the country and, by 2011, an £8.9 million deficit had emerged. Yes, there was a case for restructuring. There were 41 headquarters across the country. There were probably too many people involved in governance and there was a need for a flatter management structure. There was a need for more co-ordination between divisions with regard to fees and charges, equipment and training. One could argue that the fact that St John is budgeting for a small surplus in 2014 justifies its restructuring, although from the feedback that I have received, it is clear that something has been lost along the way.

The priory has failed to take a significant proportion of those previously involved in the governance of the counties along with it on what was always going to be a difficult journey. I do not know the circumstances, but is it right that at a meeting of the chairmen of the eastern region earlier this week, two of them could not attend as they were suspended?

The feedback from Suffolk is not quite as good as it was. Yes, all are working hard to ensure that the front line is not affected. The ambulance services themselves continue to run well. Equipment is provided efficiently, and patient transport is still being run from the former county headquarters, although the service now covers the whole eastern region. However, charges for attendance at events have gone up and, although I understand the need to maximise earnings, bookings as a whole are down. Although financial performance across the country as a whole is improving, in 2013 the eastern region had a deficit of more than £1 million—£825,000 worse than budget.

Fundraising has ceased, at least in the short term. That is probably the most serious effect of restructuring, as the county structure was well established and well suited to fundraising. Recruitment has been hit by the fact that cadets have to pay for their own uniforms, and the hardship fund—in Suffolk, at least—is not working as well as it should.

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Some sort of restructuring was necessary, but the fact that Governments of all colours have received bloody noses when they have set about abolishing county councils should have sent a clear warning to the priory to think carefully before abolishing the county structure. As I said at the outset, we must air our concerns and it is important to be transparent. The restructuring of St John Ambulance must be seen as work in progress. The priory must accept that mistakes have been made along the way and it must not adopt a siege mentality against its critics. It must listen to criticism with an open mind and move on quickly from the agenda of suspensions and disciplinary proceedings.

The Order of St John has a proud and illustrious history that stretches back more than 900 years. It is vital for the United Kingdom that the order continues to carry out its good work. It has an important role to play in 21st century Britain. It works alongside the NHS to provide medical care and it gives volunteering opportunities to young people in areas that are often deprived and challenging. We need to move on, and I hope that this debate can be the beginning of the healing process.

3.41 pm

Mr Julian Brazier (Canterbury) (Con): I, too, congratulate my hon. Friend the Member for North Thanet (Sir Roger Gale) on securing the debate. I will make some local points about the St John home in my constituency, after which I will address several of the national issues that have been raised and debated by people who have had a longer involvement with the Order of St John than I have. I should perhaps say that my grandfather was the St John Ambulance county commissioner for Kent. At the time, he was the county’s largest employer, so I imagine that the many years of his time that he gave for free were of some value. That was a long time ago, but more recently a friend of mine has been involved with the St John eye clinics in Palestine, and I am constantly impressed when I see people on the St John operation.

I will focus specifically on the St John home in Tankerton in my constituency. That much-loved home was founded in 1947 and given to the Priory of England and the Islands in 1955. It was transferred to St John Ambulance in 1999, and it has always had a separate governance structure. The people who gave the home its £750,000 in assets did so, almost without exception, because they had a connection with the home. Had any of them realised that its separate governance structure had no legal basis and that those assets might one day be seized by the centre, I suspect that the fundraising would have taken a very different shape. The capital earns around £30,000 in interest, which bridges the gap between the cost of running the home and the income that it receives from residents and Kent county council. The home is small, with only 18 beds, and that money is essential for its financial viability.

I have huge respect for my right hon. Friend the Member for Banbury (Sir Tony Baldry), but I found some of his contribution surprising. I was surprised by his allusion to the restructuring of the Red Cross, and the fact that he did not pass on—perhaps because St John had not told him—what actually happened with the Red Cross reorganisation. When he referred to the St John home in my constituency, however, I was

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truly staggered to hear him quoting from the letter of 17 October from the prior, when the letter that we received only a fortnight later dated 5 November stressed that the moneys referred to in previous correspondence could not be regarded as legally restricted. As the separate governance structure of the home is being broken up, there is nothing to stop the priory taking those moneys at any notice.

I will turn to the national picture before saying a few words about the role of the Charity Commission, which is the core of the matter. My hon. Friend the Member for Waveney (Peter Aldous) mentioned concerns about how criticism of the changes in St John has been treated. Of course, wherever there is change, some people will be against it, but never in any charity— I have seen it occasionally in a political party—have I seen the kind of conduct that has reportedly occurred over the past two years.

I shall expand a little on what my hon. Friends have referred to. There was a no-confidence motion in January 2013, as a result of which 10 people were suspended. The hon. Member for Batley and Spen (Mike Wood) said that the leafy parts of Kent formed too large a part of the debate, so let me quote from my hon. Friend the Member for South East Cornwall (Sheryll Murray), who is unfortunately detained in the debate on the Floor of the House. She was contacted by a constituent who is an old friend and was one of those suspended. She wrote to me:

“I am very concerned to have heard from my constituent that 10 senior members of the chapter of St John were suspended last March on charges of gross misconduct”—

basically for saying that they did not agree with what was going on—

“on account of signing a motion of no confidence in the trustees and excluded from any further work or contact with St John for the best part of a year. A debate was held as a result of this properly constituted and well supported motion, and in the event the motion was only defeated on a 40/60 split.”

Many of those involved in the debate had served for more than 20 years. My hon. Friend continued:

“The process for deciding on the charges has been dysfunctional and frankly beyond parody”—

those are her words, not mine—

“resulting in each of them being found guilty of the charges and given ‘suspended sentences’ of exclusion from office.”

I have dug a little further into the matter, and I want to share one fact that illustrates the extent to which governance has broken down in the organisation. The case was heard by an individual who was, on paper, extremely well qualified. He had a long involvement with St John, he had legal training and he was a clergyman. Unfortunately, he breached the first principle of natural justice, because he had been an extremely partisan participant on the other side of the debate. He could not, by any possible standards, be said to be independent. Such a breach of administrative justice should not be allowed to occur in any well-founded organisation.

I move on to the role of the Charity Commission. My hon. Friend the Member for North Thanet asked the Minister, whom I am delighted to see in the Chamber—I know that, in the short time he has had available to prepare, he has taken a close interest in the case—a

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specific question, and I would like to ask another one. Is it right that the Charity Commission should confine itself to areas in which it has a specific legal duty to intervene? Might one reasonably expect any regulatory body—one thinks of the Bank of England, as a larger example—to take an informal interest when concerns are reported, and perhaps to do some informal prodding and make the odd telephone call?

I hope that hon. Members do not regard me as particularly pompous, but I find it extraordinary that after a group of MPs wrote to the Charity Commission, it would refuse to see us to discuss the matter. Whatever the merits of a case, if the Charity Commission is not even willing to discuss it with elected representatives, something has gone wrong in the organisation. It may well examine what is going on in the St John charity and conclude that the whole thing is a storm in a teacup, although I maintain that the administrative failings of the process at the centre, and the changing of mind on the various guarantees paid to the St John home in my constituency, need serious answers. The Charity Commission has been unwilling even to hold a meeting. Of course, since we secured the debate, the organisation has said that it will be happy to see us, but it was not able to fit us in before the debate.

Mr Gray: May I make a point on behalf of the charity commissioners? I understand that my hon. Friend may well be frustrated by the inability to hold such a meeting. However, does he agree that, if the charity commissioners were to start having meetings of that kind, with either one side or the other, about the many thousands of charities that might well be in similar disputes throughout the nation, they would be doing nothing else with their time—there are very few of them—and would become improperly involved in the internal politics of the charities? That would seem to be an absolutely wrong use of the commissioners’ time.

Mr Brazier: In its correspondence to us, the Charity Commission said that a charity’s trustees are legally responsible for all aspects of a charity’s management and administration, which I am sure we would all agree with. It went on to say that the commission would take action only if it believed that its regulatory powers were necessary or would be of use. In other words, an informal investigation is ruled out. That is very odd, however, because, to answer my hon. Friend’s question directly, the Charity Commission’s own description of its responsibilities and duties on its website states that it should be concerned with

“breaches of trust or abuses that otherwise impact significantly on public trust and confidence in the charity and charities generally”.

Given that three MPs representing different parties and areas—the hon. Member for North East Derbyshire (Natascha Engel) may have been born in Kent, but she represents a seat in Derbyshire—had already expressed concerns, and that, from memory a fourth, my hon. Friend the Member for South East Cornwall, came on board between the two letters, I would have thought that this was more than just a casual inquiry. I would have thought that the Charity Commission would have liked to have been involved.

I have detained Members for long enough, but would like to end with what I was about to say before the intervention by my hon. Friend the Member for North

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Wiltshire (James Gray), for whom I have huge respect. St John Ambulance is a very precious charity. Every single MP who has spoken in this debate believes passionately in it, and most have had a much greater involvement with it than I have. It seems that something has gone wrong, and that the Charity Commission should be looking at that.

3.51 pm

Chi Onwurah (Newcastle upon Tyne Central) (Lab): I congratulate the hon. Member for North Thanet (Sir Roger Gale) on securing this important, if difficult, debate. It is important because of the critical work that St John Ambulance does throughout the country, and I would like to echo the words of Members from all parties who have praised that work. Its volunteers are often literally the difference between life and death.

In my constituency, St John Ambulance volunteers are at St James’s Park—for those not fortunate enough to be supporters of Newcastle United, that is the home of football—for every home game, and they were also there for the Olympics. They are out in Newcastle every weekend supporting the ambulance service’s mobile treatment centre, the “booze bus,” so that our young people can enjoy themselves in relative safety and security. They also do vital work, as we have already heard, in educating and training young people in schools across the city.

The hon. Member for North Thanet raised some specific points that I will address in time, but I want to start by raising a few broader points to which the Minister can respond. As we have heard, like many charities, St John Ambulance has recently restructured. The hon. Member for Braintree (Mr Newmark) emphasised the fact that the recession has hit the voluntary and charity sector hard. Last year, 58% of charities reported that Government measures had had a negative impact on levels of funding, and half had taken steps to reduce wages and salary costs.

A survey by The Guardian’s voluntary sector network found that nearly one in 10 charities fear that they will not exist in five years’ time. In its report on the impact of welfare reform in Newcastle, published in November, called “The Big Squeeze”—I have a copy here for the Minister—Newcastle council for voluntary service found that, in the north-east, 30% of charities, rather than one in 10, fear that they will not exist in five years’ time. Nevertheless, year on year, demand for services continues to rise. In Newcastle, 62% of charities experienced an increase in demand for services last year, and 52% were using their reserves simply to survive. Newcastle CVS said in its report that, as a result, charities and voluntary organisations are all having to think differently and change their organisational culture in an attempt to be more resilient. We have heard some of the consequences of that in the case of St John Ambulance.

Sir Stuart Etherington, chief executive of the National Council for Voluntary Organisations, has said:

“The combination of increasing demand, rising costs and income levels that are often static or falling means that many charities are under unprecedented pressure at the moment.”

My hon. Friend the Member for Batley and Spen (Mike Wood) alluded to the fact that that pressure is being felt most in our most deprived communities, where charities are often most concentrated. The Civil Exchange think-tank has said:

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“Millions of people, especially those who might need it most, are being excluded from the big society as cuts hit them hardest.”

That has put increasing demand on charities, and the issue is not just funding cuts. Welfare changes, such as the bedroom tax, and the reorganisation of the NHS, are putting more pressure on charities. At the beginning of the year it was reported that St John Ambulance is being sent to 999 calls as NHS paramedics are being driven to “breaking point”. It is not surprising, therefore, that charities are finding ways to adapt and survive in a climate of near permanent austerity.

The hon. Member for North Wiltshire (Mr Gray) emphasised that charities are not an arm of the state. We must regulate the sector to ensure that donors know that their money is not being spent fraudulently, but charities are not under the direct control of Parliament. Nevertheless, we must remember the pressures under which charities such as St John Ambulance operate when we criticise their response to those pressures.

While they are facing such serious and sustained financial challenges, charities also find themselves under attack from Ministers in the form of the Transparency of Lobbying, Non-party Campaigning and Trade Union Administration Bill, which is being debated on the Floor of the House as we speak. Ministers seem keen to return to some Victorian vision of society where charities provide welfare and services but do not have a say in policy. I hope that the Minister will respond to that point.

It is in such a climate that we must understand the operation of the Charity Commission. It has recently been criticised by the Public Accounts Committee for its failure in tackling fraudulent charities. The Cabinet Office is currently consulting on whether to extend the commission’s powers to act where there is abuse of a charity or non-compliance with charity law. When the Minister responds, will he tell us whether he feels that the commission is able fully to discharge its duties, and the proposed new duties, given the 30% cut it is operating under? Given that its board is picked by Ministers, will the Minister clarify the independence of the commission, which we have debated, and its role in policy making?

We recently learned that the Charity Commission wrote to Lords ahead of their consideration of key amendments to the Transparency of Lobbying, Non-party Campaigning and Trade Union Administration Bill, effectively “torpedoing” amendments to exempt charities from the Bill, as one charity head of policy put it. It is a strange situation wherein the charity regulator—a public sector organisation—is lobbying for a gag on charity campaigning. Will the Minister explain exactly what he sees the commission’s role as and how it can carry that out given its tight budget?

Finally, we have heard much about the concerns regarding the specifics of the St John Ambulance restructuring, particularly the impact in Kent, but also elsewhere. The restructuring of a shared service—on a shared ambulance basis—has apparently undermined local pride and support for the services on which so many depend. That seems to speak to a desire to ape what is all too often the private sector approach to public sector service delivery. However, the strength of charities is in their local communities, something emphasised by the Government’s talk of big society and localism.

Nevertheless, we all too often see priority given to big national players when it comes to public sector contracts. I hope the Minister will give his views on the importance

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specifically of local, social and community assets in carrying on the good work of so many in the third sector.

4.1 pm

The Minister of State, Cabinet Office (Mr Nick Hurd): It is a great pleasure to serve under your chairmanship, Mr Turner.

I have a great deal of personal respect for all three Members of Parliament who supported this debate—my hon. Friends the Members for North Thanet (Sir Roger Gale) and for Canterbury (Mr Brazier), and the hon. Member for North East Derbyshire (Natascha Engel)— and I congratulate my hon. Friend the Member for North Thanet on securing it. I know they would not have brought their concerns about the governance of St John Ambulance to this place in a cavalier way. My hon. Friend spoke in both sorrow and anger and I think regretted that he needed to come here to talk about the issue. We must take it seriously because the concerns are about a massively important institution in this country. The fact that this debate has been so well attended, even though it is arguably about something specific to a constituency, is testament to the importance of the institution described memorably by my right hon. Friend the Member for Banbury (Sir Tony Baldry) as making the difference between a life lost and a life saved.

My right hon. Friend the Member for Banbury, my hon. Friends the Members for North Wiltshire (Mr Gray), for Waveney (Peter Aldous) and for Braintree (Mr Newmark) and the hon. Members for Colchester (Sir Bob Russell) and for Batley and Spen (Mike Wood) all took time to come here and record their thanks and thoughts on this extraordinarily important institution.

I normally agree with everything that the hon. Member for Colchester says, but he was wrong about one thing. He said that the senior management of St John Ambulance would be reading Hansard carefully tomorrow. Well, they will not have to, because they are sitting right behind him, which is testimony—I thought he had eyes in the back of his head, but I was clearly wrong—to how seriously they take this debate and the concerns that have been raised in this place. The Charity Commission is represented here as well, so the debate has left its mark.

As many Members have said, the challenges facing St John Ambulance are well aired. As the hon. Member for Newcastle upon Tyne Central (Chi Onwurah) stated, such challenges are faced by a lot of voluntary organisations—big, small or medium-sized—around the country, because this is an extraordinarily difficult time to be running voluntary organisations. The response of the management of St John Ambulance and the trustees has clearly been radical and controversial. They are not unique in that. As many Members have said, it is not surprising that people have very different views about the rights and wrongs of the strategy. As my hon. Friend the Member for North Wiltshire made clear, it is not something on which the Government have a view, and as a Minister I do not have a view. That is for the trustees and the members and supporters of the organisation.

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What is relevant to us—it was the laser-like focus of my hon. Friends the Members for Canterbury and for North Thanet—is the role of the Charity Commission. That role is extremely important and challenging. We ask the commissioners to be guardians of the integrity of one of the most important sectors of our society, the voluntary sector. That integrity and trust mobilises £14.6 billion-worth of our constituents’ money and millions of hours of volunteering each year, and such integrity and trust is hugely important. There is no doubt that the Charity Commission is operating under very challenging circumstances, given budgetary pressures and the high profile failings that have been identified in the past.

The Charity Commission is under new leadership. There is a new board, which we have confidence in. The leadership have made it clear that they think they can perform their role within the existing budget, but our message to them is that we want them to hunker down on their core regulatory role, because of its importance and because we think that in the past they have gone off-mission. We want them to tackle issues of serious abuse.

The powers of the Charity Commission’s leadership are clear. They do not have a power to intervene outside of a formal inquiry, which is appropriate only where there is serious mismanagement or abuse. They can intervene only where there is serious risk of significant harm to or abuse of a charity, its assets, beneficiaries or reputation, and where the Commission considers that its intervention is a necessary and proportionate response to protect those. Otherwise, the law specifically prohibits the Charity Commission from acting in the administration of a charity. The commissioners do not want to do that, because that is a matter for the trustees. Such interference would conflict with the independence of charities and their trustees being—this is important—one of the cornerstones of charity law in England and Wales, provided they act within the law and the terms of the charity’s governing documents.

The trustees of a charity are ultimately responsible for its management. They have broad discretion to exercise the powers open to them under charity law and the charity’s governing document as they consider the best interests of the charity and its beneficiaries. That is the framework under which the Charity Commission operates. I know the Kent Members of Parliament—my hon. Friends the Members for Canterbury and for North Thanet—do not agree with its position, but the commissioners feel they have not seen any evidence that funds have been wrongly classified or misappropriated by the trustees. In the absence of such evidence, they feel they have no regulatory remit, although they stress they have provided advice on resolving the dispute.

I have no grounds on which to challenge such a position. I welcome the fact that the commissioners have agreed to meet the Members. I would be disappointed if that was solely because of the noise around this debate, but I am assured that a meeting will take place. On the basis of this debate, and because of the importance of the underlying issue, I will write to the chair of the Charity Commission to seek his assurances that the charity commissioners have looked at the issue in a proper way and not in a dismissive way. I would like that assurance and I welcome the commitment to a meeting.

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On the attitude of St John Ambulance—the seriousness with which it sees the debate is reflected by its presence here—I spoke to the chief executive this morning. She was adamant about the commitment of the trustees to support the St John home. That has been put in writing, but I had her personal assurance on that and her personal commitment to meet both Kent Members of Parliament in person for a discussion.

I was obviously concerned to hear about accusations of high-handed and remote bureaucracies in London, but the leadership are prepared to sit down with both MPs to discuss the concerns in person, which I welcome. I imagine there is a great deal of local unease underlying this, not least from the families of the residents of the home, where the uncertainty is unsettling. It would be good if that concern could be settled at a local level, but those who have concerns about the governance of the charity will have the opportunity to discuss them with the leadership of the charity. It is a magnificent national institution.

The Government recognise everything that Members have said about the importance of the charity. As Minister responsible for youth, I recognise the extraordinarily valuable role that it plays in training young people; as my hon. Friend the Member for Braintree said, the number of young people being trained grew significantly last year. So its work is enormously important, and it is critically important that we continue to take great pride in this institution and trust it.

This debate has secured an important objective in airing Members’ concerns and in ensuring that both the Charity Commission and the leadership of the charity itself respond to those concerns. I welcome that.

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Flooding (Somerset Levels)

4.10 pm

Mr Ian Liddell-Grainger (Bridgwater and West Somerset) (Con): I am delighted to be under your chairmanship once again, Mr Turner. I am also delighted to see my hon. Friends the Members for Taunton Deane (Mr Browne), for Wells (Tessa Munt) and for Somerton and Frome (Mr Heath) in Westminster Hall to take part in this debate about the serious flooding in Somerset.

I have stood in this place and made many similar speeches before. I have criticised the Environment Agency annually because the flooding in our area has become an almost annual crisis—and here we are again, mopping up after the latest deluge, listening to the same lame excuses and hoping that there will finally be some sensible action. I have to tell this House that many of my constituents are not as restrained as I am, and who can blame them, or anyone else across Somerset, for feeling like that? In my constituency alone, 17,000 acres of land on the Somerset levels are now under water: homes are uninhabitable, farms are unworkable and jobs are being expensively destroyed. A huge area of Somerset is now drowning under water that should have been prevented from getting to where it is now.

What went wrong? Was it climate change or incompetence? Let me read an extract from a constituent’s e-mail:

“As I write, the village of Moorland is slowly flooding. Earlier today the Environment Agency brought in additional pumps at Northmoor. But local farmers begged for pumping to start in earnest ten days before Christmas. However, the response was just too slow”.

These floods were predictable and predicted—the Met Office knew that it was going to rain, and anyone in Somerset with half an ounce of common sense or a bit of seaweed would also have realised it—but the Environment Agency apparently failed to cotton on. In spite of its highly paid bosses and a huge team of experts it missed that fact.

The Environment Agency is one of the most expensive quangos in this country. It employs more people than the Canadian environment agency, and the number of people employed by the environment agencies of Denmark, France, Germany, Sweden and Austria put together do not match the number of people that our agency employs. Many of those countries have far longer coastlines and in some cases far bigger populations than we do, but their environment agencies cost a great deal less and do a better job than ours. Why are we spending £1 billion a year on the Environment Agency? Are we seriously getting value for that money?

On the Somerset levels, people are scared and angry—very angry. My local council in Sedgemoor is angry, and I am sure the same is true in Taunton Deane and Mendip. These floods shut off our major roads; the resulting detours add many miles to our journeys, which consequently cost us more. The roads that have flooded have sunk 12% in Sedgmoor. That is not a freak act of nature; it is unforgiveable negligence. Nineteen years ago, the two main rivers that run through Sedgmoor were regularly dredged by the old river boards. Dredging was expensive, dirty and repetitive, but it was a job that everybody realised had to done, because rivers on low-lying land silt up if they are not dredged. That is common sense.

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Once upon a time, Sedgmoor was probably part of the Bristol channel, until the Romans arrived and dug ditches. It took Dutch engineers to tame the levels in the 17th century. They understood the consequences of doing nothing, as much of their own country is below sea level. It is well worth dwelling on that fact: over Christmas and in the ghastly wet days that followed, almost the same amount of rain that flooded my constituency fell in the Netherlands, but there were no floods in the Netherlands, because in Holland they dredge, they prepare and they protect. They plan for the worst and rarely suffer a problem.

One of the benefits of regular dredging is that the riverbanks are built up at the same time. It is a double whammy—ask any Dutch hydrologist. However, 18 years ago the Environment Agency was created and it made a policy U-turn that took everybody completely by surprise, and we have all been suffering from it ever since. Regular dredging of the Parrett and the Tone came to an abrupt end, and the agency decided that the future lay in managing any floods that might result. The agency bears huge responsibility for all the problems that have happened. The Parrett and the Tone are now so silted up that in some places they no longer act as rivers at all.

Mr Jeremy Browne (Taunton Deane) (LD): I congratulate my hon. Friend on securing this important debate today. In my conversations with residents, business people and farmers on the levels, they raise three points with me. One is about whole-river catchment and additional house building in Taunton, and whether that is having an effect on flooding, including making it more rapid. Another issue is pumping, and my hon. Friend has already touched on that, but I would be grateful if he expanded even further on the main issue—the No. 1 priority for people on the levels—which is dredging. I am told that the Tone and the Parrett are operating at only about 60% of their capacity, due to their silting up. Everybody who I speak to on the levels is convinced that dredging is the No. 1 action that needs to be taken to try to prevent this terrible flooding problem in the future.

Mr Liddell-Grainger rose

Tessa Munt (Wells) (LD): Will my hon. Friend give way?

Mr Liddell-Grainger: Of course I give way to my hon. Friend.

Tessa Munt: I would like to add a plea for the Axe and the Brue to be dredged, because they are also in need of dredging, and the level of flooding caused by those rivers is extremely worrying for my constituents. So it is not only the Tone and the Parrett that need dredging but the Axe and the Brue.

Mr Liddell-Grainger: My hon. Friends are both absolutely right. This is a ridiculous situation. All our rivers need to be dredged, and I know that my hon. Friend the Member for Wells has done an enormous amount for the Brue and the Axe, as indeed my hon. Friend the Member for Taunton Deane has for the rivers in his area. He is absolutely right that we are 40% below capacity. If we took an empty Coke bottle and filled

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40% of it with sand, we would not get the Coke in the bottle. It is ridiculous to be told otherwise. I see on the BBC website that the Environment Agency says our comments are “too simplistic”. Is the agency now insulting the people of Somerset? I think it is.

The dramatic effect became visible in summer floods two years ago. The rivers could not drain water away because of the volume of water pumped into them, which happened precisely because, as my hon. Friend the Member for Taunton Deane says, the capacity of both the Tone and the Parrett is so greatly reduced. The Environment Agency was attempting to push water into an outlet that was already completely full. The agency was also having great difficulty pushing water because many of the pumps being used were more than 40 years old and—as we have now discovered—they had not been properly maintained. In case anyone was wondering, the responsibility for maintaining pumps is the Environment Agency’s, nobody else’s.

I am afraid that the people at the agency are what we call serial offenders. They stick to an agenda that seems to allow them to do exactly what they want. The agency’s own literature is full of vague phrases and get-out clauses. No. 1 is:

“We will continue to maintain defences where there is an economic case to reduce the risk from flooding to people and property.”

What do they mean by the words:

“where there is an economic case”?

Who decides that? No. 2 is:

“We will continue to maintain defences that are required to protect internationally designated environmental features from the damaging effect of flooding, for example Sites of Special Scientific Interest.”

That is a big clue. The agency will go out of its way to protect “internationally designated environmental features”, but not our farms or our people. No. 3 is:

“We will consider maintaining defences that do not fit categories 1 and 2 above”—

this is absolutely true—

“but where work is justified due to legal commitments or where stopping maintenance would cause an unacceptable flood risk.”

Note that the agency will only “consider” maintaining defences; it does not promise to do anything at all. No. 4 is:

“We will, following consultation, consider stopping maintenance of defences that do not fit the above three categories. We will work supportively with interested parties to explore options in such circumstances.”

So the agency admits that it may stop maintaining some defences altogether, which is precisely what it did in 1995, as soon as it was established. We have been struggling with those daft decisions ever since.

The Environment Agency believes that the levels should be allowed to return to the swampy wilderness that they were in the middle ages, and all in the name of “managed flood risk”. The most it is prepared to do is to dig out teeny-weeny bits of two rivers—“pinch points”, as it calls them. One of them, at Burrowbridge in the constituency of my hon. Friend the Member for Taunton Deane, is not capable of being dug out. The agency promised to do the work last year. It started—guess what?—in October and it is not even halfway through the work. The price of this unfinished business alone is put at roughly £4 million. Obviously, that is a great deal of money. I have no idea whether or not the agency is telling the truth about the figures; we are taking the best guesstimate we can.

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The Environment Agency’s argument throughout the past 19 years is that dredging is uneconomic—tell that to the locals—but when Northmoor and Currymoor were allowed to sink beneath the flood waters last year, I can tell this House that the real cost to the local economy was in the region of £10 million.

Mr Jeremy Browne: I support my hon. Friend’s last point on the economic analysis of the cost of flooding. I have first-hand experience of speaking to people who live on the levels in my constituency. They are unable to get their children to school, they are unable to get to work, and local businesses such as pubs lose a large amount of their custom during the busy new year period. That is hugely detrimental to people living in that part of Somerset, and it needs to be factored in to any cost-benefit analysis of dredging.

Mr Liddell-Grainger: I thank my hon. Friend. He puts the situation in a beautiful nutshell. That is delightfully put.

We are suffering because of inadequacy and absolute ineptitude. Why should people not get to work? People in the constituency of my hon. Friend the Member for Somerton and Frome are carrying out their bins in boats, which is farcical in the 21st century. I know you would not put up with that on the Isle of Wight, Mr Turner, and neither should we. You have a bigger island than we have.

The previous chief executive of the Environment Agency, Barbara Young, or Baroness Young of Old Scone as she is now, once admitted that she would like to place limpet mines on all the old pumping stations just to get rid of them. She preached the gospel of sustainability, and she said that the only long-term solution would be to open the flood banks and let the waters spill over the flood plains wherever the rain or tides dictate. What has changed? Lady Young has gone, but her director of operations, Paul Leinster, adopted most of her dotty ideas and took her £200,000 a year job—nice if you can get it.

Today on the levels, the Environment Agency spends far more money creating floods than averting them. Right now the agency is pioneering an extravagant, ridiculous scheme to flood the Steart peninsula near the Hinkley Point nuclear power station, which we in Somerset know about, in order to create a “wonderful” habitat for wildlife. The agency will also prove to the nosey parkers in Brussels that we are doing all we can to meet EU objectives to make life more comfortable for reed warblers. That is of course a load of nonsense, absolute rubbish and a waste of money. The agency is spending £31 million digging holes on Steart. I am all in favour of our feathered friends—I should be—but I have missed something. Is a new European directive likely to put birds before people? I am beginning to wonder.

Poor people are being baled out of their homes in Northmoor, Moorland and across Somerset, and my hon. Friend the Member for Somerton and Frome will say a few words about that in a minute. The Environment Agency has a woeful track record of being led by wets, do-gooders and twitchers. Lady Young with her limpet mines was once chairman of English Nature and chief executive of the Royal Society for the Protection of Birds. Tweet, tweet.

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The noble Lord Smith of Finsbury, Chris Smith as he was when he was Labour, remains chairman of the Environment Agency until July 2014. He is a typically wishy-washy man and a townie. He is a man who described last year’s flooding as being caused by the “wrong type of rain” when he stood in the constituency of my hon. Friend the Member for Taunton Deane. The Environment Agency wants us to believe that it is far too expensive to dredge rivers, which is rubbish. If those people really cared about the environment, they would know that failure to dredge completely upsets the ecology of the whole area and the very wildlife that they religiously want to protect.

So what are we going to do in Somerset? Wait until Lord Smith pulls his finger out of the dyke, metaphorically speaking? I am afraid that we have had enough. We are not going to put up with it, year in and year out. Flooding is not a once-in-100-years event now; it is happening every year. The Royal Bath and West show and Michael Eavis of Glastonbury festival fame have started rattling tins to try to raise £2 million towards dredging. That money is gratefully received, and they are doing a good job, as my colleagues in Somerset know. Perhaps Her Majesty’s Government would care to give as generously, or at least lean or sit heavily on the Environment Agency to give seriously. Perhaps the Secretary of State for Communities and Local Government could sit on the Environment Agency.

It is always being said that the Environment Agency is broken, but it is still the biggest quango on the planet as far as I am concerned. The fundraisers are already talking to the Dutch. There is a wonderful machine used in East Anglia which has been brilliant, and I am going to go to see it in action—I am arranging to see Dutch engineers to support the task, and I will speak to my Somerset colleagues about it. The task is not difficult or impossible. We can do it on a much bigger scale in different areas. I am meeting members of the Dutch Parliament in Strasbourg next week at the Council of Europe to talk about what they can do to help us to get the Environment Agency to change its mind.

The Environment Agency has failed us once again, and I am absolutely sure that the Minister and the whole Government want the organisation to be slimmed down and to make it work better and more efficiently. Now is the time for action. Will the Minister please tell us what we want to hear? The people of Somerset not only deserve this; they need it. Get the rivers dredged and give us hope.

4.24 pm

Mr David Heath (Somerton and Frome) (LD): I am grateful for the opportunity to say a few words and to congratulate the hon. Member for Bridgwater and West Somerset (Mr Liddell-Grainger) on securing this debate. The Minister must have wondered what on earth he has wandered into at this Somerset festival of complaint. He can pass on the comments that are more apposite for another Department.

I just want to say on behalf of my constituents that yet again we are facing what are described as once-in-100-years events, which now seem to happen every year. Villages and communities in my constituency are cut off. Muchelney—the clue is in the name, which means “big island”—has reverted to being an island for the past several weeks, and it will continue to be so for

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weeks to come. Individual constituents have also been cut off. I have just been on the phone to a constituent who has a relatively new house built over the past couple of years to the requirements of the Environment Agency to be above the flood line; nevertheless, she has found herself cut off.

We want to get across the message that, first, the floods this year are worse than ever. We are used to flooding on the levels, but these floods are worse than ever. Places in my constituency have flooded that have never previously been flooded. The road at Pibsbury, one of the main roads into Langport, is closed. Aller drove is flooded, which may be a result of the Environment Agency tinkering with the spillway there. Nevertheless, houses there are flooded.

There is a strong feeling that we now have to do something about the flooding. I am grateful to the Under-Secretary of State for Environment, Food and Rural Affairs, my hon. Friend the Member for North Cornwall (Dan Rogerson), who has responsibility for flooding, for taking the trouble to come down to my constituency last Wednesday. I took him around the road closures and the flooding, so far as I could, to see the affected areas. He was both fascinated and appalled to see the situation. He kindly joined me at a meeting in Somerton with what nowadays we call stakeholders—people who know about flooding. There was unanimity on the Somerset end that we want exactly what the hon. Member for Bridgwater and West Somerset set out.

What we need to do is increase the capacity of our watercourses, which means the Parrett and the Tone; it also means the local clearing of our watercourses and rhynes to provide capacity so that we can run the pumps and get water away. That is what people find most offensive—that we cannot get water away. The pumps are not even on at the moment. We have a forecast for heavy rain at the end of this week, and right at this moment the local authority is considering whether it needs to declare a major incident for this weekend.

Dredging, dredging, dredging is our first request to increase capacity. Secondly, how on earth is it that a main road, which is mainly in the constituency of my hon. Friend the Member for Taunton Deane (Mr Browne), the A361, can be closed for weeks? It is the main road from our part of the world to Taunton. The Minister’s Department can help communities to help themselves by providing support for the mitigation work that is needed and for the cost to the local authority of road maintenance. When such causeway roads are flooded, they literally fall apart and we as council tax payers have to pay.

Will the Minister please take those messages back? I am confident that this is the year we will do something about the flooding on the Somerset levels, not to prevent it ever flooding again—we understand that flooding happens—but to stop water getting into people’s houses, to stop communities being cut off and to stop the water sitting for week after week with nothing apparently happening.

4.28 pm

The Parliamentary Under-Secretary of State for Communities and Local Government (Brandon Lewis): It is a pleasure to serve under your chairmanship, Mr Turner. I begin by congratulating my hon. Friend the Member for

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Bridgwater and West Somerset (Mr Liddell-Grainger) on securing this debate. Before I answer some of the points that have been raised and comment on the issues, particularly those affecting local authorities, I acknowledge the comments of the hon. Member for Somerton and Frome (Mr Heath) on my position in responding to some points that probably sit better with the Department for Environment, Food and Rural Affairs. We will ensure that that Department receives a note of what has been said today. However, I will address his comment on the possibility of a major incident being called at the weekend.

As we have been sitting here during this afternoon’s debate a major incident has been called in Somerset at the request of the council. A meeting of the strategic co-ordination group has just concluded, and for the moment the situation will be managed in the county to ensure assistance is provided as required. The Government liaison officer from my Department will be in attendance. Indeed, the chief fire and rescue adviser is sitting in the room at this very moment.

I am pleased that we are having this debate, not least because it provides an opportunity to put on the record, while we talk about local authorities, the Government’s and my appreciation for the effective way in which emergency responders, local authorities and the emergency services, in particular the fire service, managed the flooding events witnessed across England throughout December into January, and for the continued support that local authorities and the wider community are providing during the ongoing flooding of villages on the Somerset levels. My hon. Friend the Member for Bridgwater and West Somerset commented on the role played by local authorities, which have worked hard to ensure that people have what they need and should be congratulated.

I also want to say how sorry we are for those people who have had their homes or businesses flooded, some of whom have experienced re-flooding. I represent a constituency that has recently experienced tidal surges and flooding, and the effects are felt not just in the loss of personal possessions but in the wait for a home or business to dry out and be fit to live or work in again—flooding is equally devastating for business owners. It is horrible time for all those affected and our thoughts obviously go out to them.

We cannot prevent flooding completely, as hon. Members have acknowledged. When the weather deteriorates, there are well practised approaches to warning and informing emergency responders and the general public of what is likely to happen. That is why we have local resilience forums, one for each police force area, identifying the risks faced at the local level and drawing up plans to ensure a response if such risks materialise. If local responders are overwhelmed or if an emergency affects multiple areas, the Government can support the response.

For all emergencies, the lead Government Department —in this case the Department for Environment, Food and Rural Affairs—is responsible for monitoring the situation on the ground, assessing what, if any, Government support is needed in the immediate aftermath, and ensuring that the Government as a whole respond as necessary. Throughout this entire period of severe weather that England has experienced, the Department did exactly that, including convening daily, often twice-daily, teleconferences of officials, and the Secretary of State for Environment, Food and Rural Affairs chaired daily meetings of Cobra.

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I want to be clear about what the Government have done to help communities to recover from these most recent floods. We have been there in the aftermath: not only have we activated the Bellwin scheme for emergency financial assistance, but on 17 January I announced a further severe weather recovery support package that local authorities can call on over and above Bellwin. We have continued to work with local authorities in their transition from response to recovery, and our officials have called the chief executive of every local authority affected by the flooding so that we are clear about the local impacts. We are already inviting every local authority leader from affected communities, along with representatives from the voluntary sector, to meet me to discuss any further support that may be necessary and to look at the lessons learned exercise, which some Members have commented on today.

Tessa Munt: I wonder whether I might draw the Minister into looking forward. I appreciate everything that has been done and absolutely endorse his comments about those who act in emergencies. The reality, however, is that if the money paid by internal drainage boards to the Environment Agency is given back to the IDBs, such as the Axe Brue IDB in my area, along with some responsibility, then contractors with expertise and knowledge of the local area can actually carry out work to prevent flooding in future.

We really have to address this. I spoke with my hon. Friend the Member for Newbury (Richard Benyon), then the Minister with responsibility for flooding, when he visited farmers in my constituency in April last year. Promises have been made, but we need to take action and stop the poor farmers and landowners, who are paying rates to the drainage boards, having to pay twice. Every time they are asked to respond by taking action to help themselves, they have already paid for that response in the money that goes to the Environment Agency. We have to do something.

Brandon Lewis: All hon. Members have made strong, passionate cases for ensuring that progress is made and that they get the right response, including, in particular, forward work by the Environment Agency across Somerset. My colleagues in the Department for Environment, Food and Rural Affairs will want to look at the information and will be speaking to Members. The Prime Minister has already announced that the Secretary of State will be coming back to the House in the next couple of weeks to discuss where we are going and what the Environment Agency’s next steps will be. Members will then have the chance to quiz him further.

Tessa Munt: I have to say that the Environment Agency has been pretty clear locally that it cannot cope with the situation, so much more radical action is needed. The expertise sits in the internal drainage boards. They have the people with all the knowledge and they should be allowed to do the work. They can do it. Somebody needs to take some action about removing that responsibility from the Environment Agency.

Brandon Lewis: I am sure that my hon. Friend will be putting that point to the Secretary of State for Environment, Food and Rural Affairs.

I want to say a little bit about the Bellwin scheme, which has been supporting affected areas since we activated it in December. As most local authorities are fully aware,

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it is a means by which the Government can reimburse a local authority for its immediate and uninsurable costs associated with responding to an emergency or disaster in its area. Bellwin is a well recognised and respected funding scheme. Local authorities have one month from the end of an incident to notify the Department that they intend to apply for activation of the Bellwin scheme. So far, 37 authorities have given us notification. The colleagues of my hon. Friend the Member for Bridgwater and West Somerset at Somerset county council have already registered an interest to apply for Bellwin support in respect of the current flooding.

Due to the way the Somerset levels and moors are managed, they are designed to flood, which results in the entire area effectively still remaining a response phase to the recent flooding—as I said, a major incident has been declared today—and will remain so for some weeks. I recognise, however, that the recent flooding in some villages is worse than that seen in 2012. The full extent of the flooding may not be realised until the levels and moors are fully pumped out. My chief fire and rescue advisor has offered additional pumping capability and the use of local fire and rescue services’ high-volume pumps to support the local Environment Agency efforts in returning the levels to a safer capacity for this time of year. They have further supported Somerset county council by providing a fire boat and crew, to be used as ferry service for the residents of the cut-off villages to enable them safely to obtain necessary supplies, and this will remain in place.

I have been advised that the local Environment Agency took action to mobilise pumping appliances in advance along the River Parrett. This was following the numerous contingency plans that have been put in place since the 2012 floods. In recognition of the serious impact that the flooding is having in Somerset, the Environment Agency is mobilising an additional 20 temporary pumps, increasing its pumping capacity by 150% and making it probably the single biggest pump mobilisation in the country. The agency has also brought in extra manpower from around the country to support what has been a 24/7 incident response for some weeks.

Since the summer flooding of 2012, the Environment Agency has been working with several local organisations and communities to consider how best to manage future flood risk in the levels area. Members have made their views clear on that today, and I will ensure that comments are fed back to the Under-Secretary of State for Environment, Food and Rural Affairs, the hon. Member for North Cornwall (Dan Rogerson). A local task force, comprising locals, partners and communities, has been established to develop a clear, long-term vision for the future of the Somerset levels and moors. The task force will be funded by the Department for Environment, Food and Rural Affairs, local authorities and local environmental groups with expert support from both the Environment Agency and Natural England.

On dredging, which was mentioned by my hon. Friend the Member for Bridgwater and West Somerset in particular, the Environment Agency is working closely with local partners to develop options to improve the situation on the levels.

Mr Liddell-Grainger: I am sorry to intervene here, but I never hesitate to correct a Minister. I know that he is working from what material he has, but that is absolute rubbish. The Environment Agency is not working with

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locals and certainly has not been in touch with Members from Somerset, and I am not aware that my right hon. Friend the Member for Yeovil (Mr Laws) has had any more success than us. That is absolutely not the case at all. I am sorry to have to correct the Minister.

Brandon Lewis: It is a point well made. If my hon. Friend’s understanding is that the Environment Agency is not meeting locals, I will certainly feed that through to DEFRA Ministers to ensure that they instruct the Environment Agency to talk to locals about what they are doing and how they are doing it in order to get things moving in a way that is satisfactory for everyone. Ultimately, we want to ensure that residents, on whose behalf hon. Members have spoken so passionately today, are properly protected.

Mr Heath: What the Minister may not realise, because his Department is not leading on this, is that the issue is the policy that the Environment Agency is required to follow. In cost-benefit analysis, we will always lose out to city and urban areas. What we are saying today is that we have simply run out of patience. A political decision and a governmental decision are needed, and I am confident that my former colleagues in DEFRA will make that political decision.

Brandon Lewis: The hon. Gentleman makes a fair point. He read my mind because I was going to say that the matter will depend on the economic case according to existing policy. I will ensure that the Secretary of State knows hon. Members’ views on the criteria. The Department will look at the matter, and I expect hon. Members to continue to quiz us and to make the case for Somerset.

As I said, I was pleased to be able to announce on Friday the extra support we are giving to local authorities on top of the Bellwin scheme. There will be a clear expectation for results to be achieved with the extra funds. Local authorities will have a key role in identifying priorities for assistance, working closely with communities and businesses to enable that to happen, using the

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re-prioritisation of existing budgets that we announced. My officials are working to finalise arrangements for allocating the money and will be writing to chief executives very shortly to outline exactly what the application process will be.

In closing, I turn specifically to the role of local authorities, which are often subject to a tough line from hon. Members and residents about what they do not do. This afternoon, hon. Members have recognised that local authorities have worked really hard and have provided superb support for the communities, pressing the case to make sure that people have the right support in the tragic situations in which they find themselves. The Bellwin scheme is there to provide extra support, as will the money we announced on Friday. Flooding is devastating for those affected, and I am grateful to have had the opportunity to set out what the Government are doing and to support the work of the emergency services, local authorities and voluntary groups.

Mr Liddell-Grainger: Many council leaders are watching our debate, and information has been sent through to us. Could the Minister convene a meeting of the leaders of the affected councils—Taunton Deane, Sedgmoor, Mendip, South Somerset and West Somerset—to talk about the matter in greater detail? Perhaps he will think about that.

Brandon Lewis: I would be happy to do that. This week, we are writing to every local authority in the country that has been affected by flooding to invite them to send representatives in relevant and logical groups to talk to me about the issues. Those letters may already be on their way to chief executive and leaders. I will ensure that the Department for Environment, Food and Rural Affairs takes note of what has been said today that is relevant to that Department.

I again congratulate my hon. Friend on securing this important debate that makes clear the case for the people of Somerset.

4.43 pm

Sitting suspended for Divisions in the House.

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Rothschild Bank and Mortgage Equity Release (Spain)

5.8 pm

Huw Irranca-Davies (Ogmore) (Lab): It is a delight, Mr Turner, to serve under your capable stewardship again this afternoon. I am delighted to have secured this debate about an issue of direct concern to not only my affected constituents but, as I have become aware, several hundred other UK citizens. I am seeking justice for them. I urge financial institutions such as Rothschild to come clean on their involvement and to discharge their moral responsibility towards people, many of whom are elderly and retired, who risk being left destitute. That has happened primarily because they had good reason to believe that Rothschild was the reputable and trusted brand behind a financial product that now looks more and more like a property scam and mis-selling. Will the Government and the Minister investigate the matter fully to assess whether victims have been scammed and there is a case for compensation? Will the Minister speak to Rothschild to make a moral case about what the bank may end up defending in courts in Spain, the UK and elsewhere on the flimsy pretext of, “Not me, guv”?

The matter resembles nothing more or less than an equity release scam, and it is not only Rothschild that is linked to it. Other banks, including Scandinavian and British ones, lured pensioners into gambling away their lifetime savings and homes on two enticing but ultimately flawed pretexts: first, that by investing in a loan secured against a mortgage on a property in Spain, they would obtain a small income additional to their often limited pension in retirement; and, secondly, that by registering a mortgage on that property, they could be helped in eliminating inheritance taxes for their children. Imagine an elderly couple who have worked hard all their lives, paid their taxes and contributed to society and the community—a professional couple who have planned for their retirement carefully, one of whom has suffered significant health problems in later life. They have invested all their wealth and savings in one retirement property in Spain. They do not have other assets or sources of wealth, and they are offered an enticing double bonus of releasing equity and gaining inheritance tax advantages regarding their retirement property in Spain.

Such an enticing offer perhaps sounds too good to be true, and it certainly was for my constituents, a retired couple whose lives I have just described in summary. When that offer is packaged and presented as being backed by such an eminent and reputable financial institution as Rothschild, that is the icing on the cake. They might have thought twice if they were dealing with some fly-by-night operator, but Rothschild? Even someone unfamiliar with the financial world would recognise that name and see it as conferring some prestige and status on any product being offered.

Rothschild is, as its website and company information proudly proclaim, one of the world’s largest independent financial advisory groups, employing around 2,800 people in 40 countries around the world. This worldwide brand proudly states that its 200-year-old reputation is based on clear values of excellence, teamwork, focus on the client, the long-term interest of the client and—at the top of the list—putting the client first. Rothschild explains:

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“We provide outstanding client service, with the highest standards of professional integrity to build enduring relationships of trust and confidence.”

I say to Rothschild: “You have badly deviated from your core values, badly served your brand and reputation, and badly served people who regarded themselves as your clients and not the clients of some intermediaries, as you claim. They are now facing penury after investing in products in which your name—Rothschild—your integrity and your values were used as a key selling point.” To walk away from those hundreds of citizens and to deny not only liability, but any assistance, and to force them through costly court actions in Spain or elsewhere, is a stain on Rothschild’s history. The Rothschild family motto “Concordia, Integritas, Industria”—harmony, integrity, industry—seems somewhat absurd when my constituents and others face personal ruin.

As I mentioned earlier, Rothschild is not alone in the firing line. Danske Bank, Sydbank, Nykredit and others are not only in the firing line over this, but in the dock, with some people in custody. A warrant was issued in Spain by the general directorate of police and the Guardia Civil in Madrid on 26 November for two Rothschild employees, Mark Coutanche and Stephen Dewsnip, who are directors, to appear in court to face criminal charges. The warrant relates to accusations that N. M. Rothschild & Sons sold mortgages to Spanish-based pensioners as a tool, albeit a legal one, to defraud the Spanish tax office and deliberately concealed crucial data that would prove that its equity release product was impractical as an investment.

Let us look at the evidence for the case against Rothschild and others. They completely, unarguably and incontrovertibly provided support, training, the terms of business for intermediaries selling the inappropriate products, supportive promotion through glossy brochures and websites, and much more. For Rothschild to say that it was not directly involved and that the product was sold through intermediaries, which distances it from the situation, is akin to a parent saying to their child, “It’s not my fault that the Christmas presents are broken or cruddy, it’s Santa’s—sue him!”, or to a retailer blaming its supply chain for worker exploitation in Bangladesh when it is selling T-shirts for £2, or for horse meat in its beef lasagne. It is not good enough. We all know who should take responsibility.

Heather Wheeler (South Derbyshire) (Con): I apologise for not being present at the start of the debate, Mr Turner; we had a little vote at the 1922 committee. When we look at the terrible tragedy that has happened, does the hon. Gentleman agree that the only safe way for people to take forward equity release is to use firms that are part of the Equity Release Council, which holds them to a high standard? In saying that I should declare an interest, because I hold an unremunerated position on the advisory board of the UK Equity Release Council.

Huw Irranca-Davies: The hon. Lady is absolutely right to guide people towards good and assured equity release products. Not all such products are bad and nor are all sellers. It is a question of how the products are used and at whom they are targeted—I will come to that in a moment.

How can companies such as Rothschild choose to distance themselves from this matter when the people affected are UK citizens who were sold to by a Rothschild

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subsidiary based in Guernsey—Rothschild, of course, was established in England two or more centuries ago? It is not good enough for Rothschild to say that the situation is nothing to do with it and that people should take the matter up in the Spanish courts. The hon. Lady’s advice, however, is very good.

We all know who should take responsibility. As we say at home, “Man up.” Rothschild backed these products to the hilt, resourcing and designing them. It lent its name and support to the selling of them. It was party to the flogging of unfit products to unsuitable clients who did not suspect that they were on the back-end of a dodgy scam that was fit for Trotters Independent Traders. At least we could laugh along with Del Boy and Rodney; there is no laughter when my constituents and many others face poverty and hardship in their retirement.

Rothschild and its compliance and legal teams have been robust in disputing the allegations and, indeed, have threatened legal sanctions against those who repeat them. The allegations are very sensitive. When I first raised the matter on the Floor of the House, I received a letter offering a meeting and suggesting that the facts, as explained to me, were “both incomplete and inaccurate”. The letter went on:

“Your statement that Rothschild gave advice and support is factually incorrect.”

I dispute that, as evidenced by my earlier comments and the further remarks to follow.

This debate has obviously caused Rothschild some consternation, as it contacted me yet again to stress that there were “serious factual inaccuracies”. It wrote:

“We trust you understand the importance to us that the position is fairly and accurately portrayed in Parliament.”

Here then is the truth, put fairly and accurately.

Although Rothschild has not provided me with wholly precise figures, it has advised me that just short of 130 loans were provided, of which fewer than 50 were loans to Spanish non-tax resident individuals, some of whom live in the UK. Parliament will note that the reason why Rothschild has those statistics is because a Rothschild product underpins the scam. Let us remember that it disputes that the situation has anything to do with it—it is those pesky intermediaries and savings people. As the now infamous CreditSelect series 4 product is a Rothschild product, I am sure that after this debate Rothschild will be able to provide me and Parliament with the precise figures on the number of loans and the number of people affected who are in this country, along with what the total and the average level of loan debt are for UK citizens, as well as the age profile of those UK citizens. It is a Rothschild product, after all—it is not delivered by Santa or anybody else.

I am fortunate to have seen—indeed, I have it with me—a copy of the presentation pack used back in 2006 to support the sale of these Rothschild products and to train and inform the intermediaries who went on to sell them to unsuspecting victims. It is prominently marked as

“not for circulation to the public”.

Its title is “Rothschild Channel Islands: CreditSelect Series 4 presentation”, and it is by none other than “Stephen Dewsnip, Director”, who as I mentioned earlier has been served a warrant to face charges in Spain.

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The first slide—this is not for public consumption, remember—tells aspiring intermediaries and salesmen who want to flog this dodgy deal that Rothschild Channel Islands is the

“premier choice for offshore private banking services”.

That would have been reassuring for the intermediaries, who no doubt repeated the bold claim to future victims.

After detailing the design and extensive back-up for the CreditSelect series 4 product, the presentation lists by name, with phone numbers and e-mail addresses, five Rothschild contacts, including Dewsnip and Coutanche —he was also mentioned in connection with warrants in Spain—who were the guys behind the package. “Contact them,” it says. “You won’t be on your own as intermediaries. Look at this back-up provided directly by N.M. Rothschild and their senior people. They are, after all, the premier choice for offshore banking services.”

The presentation goes on to explain how the initial launch of the product in Spain will be followed by its roll-out in Portugal, France, the UK and so on—how exciting! It explains how Rothschild will instruct the valuer, check the application pack, clarify the details with an independent financial adviser and prepare the credit papers for the Rothschild credit committee, and how the lawyers would be instructed to prepare the legal documents. It goes on to explain the benefits, saying that there is no upper age limit, which is very handy for retired folk, and that no proof of income is required. Of course not; it is the property as collateral, stupid. There is no need to worry if those people are retired pensioners and the property is the only thing they have—if it is their life savings and entire worldly wealth invested in bricks and mortar.

A slide labelled “Key Features” explains that these products are

“Well-structured loan and investment products from excellent brand names”,

and that clients are

“not exposed to unnecessary risks due to Rothschild’s conservative approach”—

there is that Rothschild name being used again as back-up.

Do we really think that the salesmen—the intermediaries —did not go big on the Rothschild name when they were flogging the product? Every single victim says that Rothschild was central to the sales pitch. It was made clear that Rothschild was behind the scheme and was backing the scheme—that it was the scheme. “No worries,” said the intermediaries whom Rothschild were training and supporting to sell CreditSelect series 4.

The main client benefits are listed in the document as an initial cash-back facility, liquidity providing a loan for investment, the prospect of long-term capital growth and tax planning opportunities. That is irresistible for the sales guys and for vulnerable victims, too.

In case anyone was in any doubt about how good the product was and who was backing it, the presentation told us that it was:

“A responsible, competitively priced asset-backed lending facility from a prestigious bank available to Spanish residential property owning clients.”

A “prestigious bank”: Rothschild Channel Islands, established in 1967 in Guernsey; a subsidiary of the Rothschild Group, established in England in 1798 and

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owned by the Rothschild family, whose motto is “Concordia, Integritas, Industria”, or harmony, integrity, industry. How incongruous that word “integrity” seems in the family motto in light of the action towards my constituents and others.

In case the role of Rothschild in this debacle is not yet clearly established, let me again go back to 2006 when Rothschild was saying this to promote the scheme:

“Our innovative product CreditSelect is available throughout a network of financial advisers around the world, thus giving clients straightforward access to credit”

for a wide “range of purposes”. It also said:

“To help support those professional financial advisory firms with whom we have agreed terms of business for the availability of CreditSelect, we have a website dedicated to assisting the promotion and delivery of the service...This website is regularly updated to ensure that our introducers have round the clock access to all facility documents for downloading and printing…clients brochures, the latest Funds List”.

Fast-forward to 2012 and Rothschild, faced by potential actions in Spain and elsewhere, has changed its tune. It is now saying to complainants:


that is one of the independent advisers, but you can insert any number of other financial advisers at your discretion, Mr Turner—

“were your financial adviser and acted as your agent in relation to your application for a CreditSelect loan facility, we are not able to accept responsibility for any advice that may have been given to you by Hamiltons”,

or any other assorted intermediaries. That is dissembling and distancing worthy of Pontius Pilate, and it is just as distasteful.

There are all sorts of scams and mis-selling, big and small: from the cowboy builder who sells someone roof repairs that they do not need, to payment protection insurance and mortgage mis-selling. There are real issues of mis-selling, but there are also fundamental issues of trust and integrity. We have seen a practice that can be described as predatory lending. Intermediaries might have laid a trap, but the trap was built by Rothschild. Unless Rothschild and others that are implicated in the scandal step up to the mark and accept their responsibility, this will become the latest chapter of banks and financial houses despoiling the very beds they lie in.

Rothschild’s family empire is estimated to be worth $300 billion to $400 billion. My elderly retired constituents’ net worth was tied up in the property in Spain that the Rothschild group ended up taking. Will the Minister examine the scandal and force Rothschild and the other banks involved to face their responsibility for impoverishing pensioners and to make good their losses? Rothschild can afford to do so; its reputation cannot afford not to. Rothschild has offered to meet me. I will be happy to do so on the clear understanding that I am looking for justice for my constituents and others, not excuses and legal defence.

5.26 pm

The Financial Secretary to the Treasury (Sajid Javid): I welcome you to the Chair, Mr Turner. It is always a pleasure to serve under your chairmanship. I thank the hon. Member for Ogmore (Huw Irranca-Davies) for making a powerful case on behalf of his constituents. I assure him that I have listened very carefully.

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Some of us will have constituents affected by these products who now face an uncertain financial future instead of the comfortable retirement they thought they had earned. As the hon. Gentleman said, the equity release products in question were sold to some UK pensioners resident in Spain. It seems that they were sold by independent financial advisers operating in Spain who suggested that they release equity from their houses and invest the loan in a fund, often claiming that that would have inheritance tax benefits. The products were then provided by a variety of banks, mainly based in Scandinavia, but including Rothschild bank.

With the onset of the financial crisis, those investments did not perform, so many of the investors breached the terms of the loan they were given. That has left many expats in Spain, including those from the UK, with significant financial losses. Some of the banks involved, many of which were facing their own financial difficulties, have sought to repossess the properties on which the loans were secured. That has left some pensioners facing not only large losses, but the threat of repossession, which is a stark contrast with the comfortable retirement they had planned.

Of course, I am sympathetic to the difficulties that these people are facing. Many of them have lost a great deal, but I am afraid that the Government’s ability to act in this case is limited. The products were not sold in the UK or by UK companies and the loans were not secured against properties located in this country, so the UK authorities do not have any jurisdiction over that activity.

What I have said will be frustrating for the individuals involved, but the same rules allow our own regulators to protect our domestic consumers from foreign banks operating here in the UK. I realise that some banks in Europe were involved in providing the products sold by independent financial advisers in Spain. The hon. Gentleman highlighted Rothschild bank specifically. It has strong historic connections with the UK.

I have looked into the matter further, and I understand that Rothschild sold around 130 of the products between 2005 and 2008. However, that activity was carried out by its Guernsey-based entity and, as the hon. Gentleman knows, the Channel Islands do not come under the jurisdiction of the UK Government or UK regulators. The Guernsey regulator may have some jurisdiction over the design and distribution of the product, but that is not for the UK authorities to establish. I understand that some of those who have lost out have taken the case up with the Spanish authorities, and that may be an appropriate option for them.

I am sorry to report that the UK Government have limited influence over this case. I understand that Rothschild has provided affected customers with some flexibility. For example, it is my understanding that it is not repossessing the properties of those that have been affected. That, of course, is welcome. As I said, the UK authorities do not have any jurisdiction over this activity. However, I appreciate that Rothschild has major operations in the UK, so I am happy to write to it to pass on some of the concerns that the hon. Gentleman has raised. I will also raise the matter with my counterparts in Spain and Guernsey to bring it to their attention. I will be more than happy to meet the hon. Gentleman and his constituents if he would find that useful.

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The hon. Gentleman may be interested to know that the UK ambassador to Spain wrote to the Spanish regulator about this issue in 2012. Following that exchange, the Foreign Office published advice for people considering taking out equity release products in Spain. It highlighted the importance of checking that the company offering the mortgage is registered with the Spanish financial regulator, known as the CNMV. The publication explains that consumers unhappy with the product should first complain to the company responsible and that, if they are still dissatisfied, they can complain to the Spanish financial regulator.

In a broader context, my hon. Friend the Member for South Derbyshire (Heather Wheeler) gave sensible advice for people who are thinking of taking out similar equity release products in the UK.

In summary, I fully understand and support the hon. Gentleman’s concerns for his constituents affected by these products.

Huw Irranca-Davies: I thank the Minister for a very positive, full and helpful response. He may not be able to answer this question now, but does he think that there is any scope within European legislation or elsewhere to avoid this situation happening in the future? In this situation, a UK-based company that has a subsidiary in Guernsey operates in Spain, and people assume that it is applying the same ethical and moral standards elsewhere. Let us lift the debate above Rothschild for a moment. Any company doing what has been described could, within the European Union, be brought to book in one way or the other. Does the Minister think that there is something there that we should be exploring?

Sajid Javid: When I first looked into the issue, I thought about that. Unfortunately, I do not think that there is such an avenue through European Union institutions. I am happy to explore the matter further; perhaps when we meet, I can give the hon. Gentleman

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more information. He may be interested to know that there is currently a mortgage market directive. It is in its final stages in the European Union, but I think that I am right in saying that it does not include equity release products. Obviously, it would not have helped the hon. Gentleman’s constituents anyway; it is for the future.

I am happy to raise the issue with people in the way I have explained to the hon. Gentleman and I thank him again for bringing up this case. I will be happy to report back to him.

Huw Irranca-Davies: The few minutes remaining provide an opportunity to get more issues on the record. The Minister may be interested in responding to some other people who have written to me subsequently, when they learned of the debate. One of them wrote:

“When my wife and I met Mr Dewsnip”—

who came up earlier in the debate—

“at one of his public presentations and had a private chat with him after the main event, he most certainly did advise us as to the suitability of the investment fund and assured us that Rothschild would be working on a daily basis with the fund managers to ensure that it was meeting expectations and performing as expected.”

I could cite other examples that imply an intimate, daily, minute-by-minute relationship, but I have yet to discover whether that also means that Rothschild or anyone who worked for Rothschild was financially benefiting from it. That would be interesting and it may figure in a subsequent meeting that I have with Rothschild.

Sajid Javid: The hon. Gentleman is right to ask such questions and to raise them in any meeting that he may have with Rothschild and with the relevant regulators for the entities that we have discussed today. I will report back to the hon. Gentleman in due course. I thank him again for raising this important issue.

Question put and agreed to.

5.34 pm

Sitting adjourned.