When Sally Masterton discovered a £1 billion fraud at Lloyds Bank the bank discredited her, constructively dismissed her and prevented her from working with the police investigation. Five years later Lloyds apologised for her mistreatment but nobody at the bank has been formally investigated or sanctioned for this mistreatment. Will the Minister use his powers to instruct the Financial Conduct Authority to carry out that investigation?

When Sally Masterton discovered a £1 billion fraud at Lloyds Bank the bank discredited her, constructively dismissed her and prevented her from working with the police investigation. Five years later Lloyds apologised for her mistreatment but nobody at the bank has been formally investigated or sanctioned for this mistreatment. Will the Minister use his powers to instruct the Financial Conduct Authority to carry out that investigation?

As my hon. Friend knows, the FCA is conducting two investigations into the events at HBOS Reading and Lloyds has instructed Linda Dobbs to look into who knew what when. It is absolutely clear now that such circumstances could not be repeated given the action we have taken with the senior managers regime, but I look forward to the outcome of those reviews and we will be taking action accordingly.

As my hon. Friend knows, the FCA is conducting two investigations into the events at HBOS Reading and Lloyds has instructed Linda Dobbs to look into who knew what when. It is absolutely clear now that such circumstances could not be repeated given the action we have taken with the senior managers regime, but I look forward to the outcome of those reviews and we will be taking action accordingly.

To ask the Chancellor of the Exchequer, what assessment his Department has made of the findings of the review by Jonathan Laidlaw QC on Lloyd's Banking Group's compensation scheme for the victims of the HBOS Reading fraud, published by SME Alliance on 18 December 2018.

To ask the Chancellor of the Exchequer, what assessment his Department has made of the findings of the review by Jonathan Laidlaw QC on Lloyd's Banking Group's compensation scheme for the victims of the HBOS Reading fraud, published by SME Alliance on 18 December 2018.

To ask the Chancellor of the Exchequer, whether he has had discussions with the Financial Conduct Authority on potential failures at Lloyds/HBOS to follow the Senior Managers Regime in respect of disclosure of the Turnbull report; and if he will make a statement.

To ask the Chancellor of the Exchequer, whether he has had discussions with the Financial Conduct Authority on potential failures at Lloyds/HBOS to follow the Senior Managers Regime in respect of disclosure of the Turnbull report; and if he will make a statement.

To ask the Chancellor of the Exchequer, whether he has had discussions with the Bank of England on potential failures at Lloyds/HBOS to follow the Senior Managers Regime in respect of disclosure of the Turnbull report; and if he will make a statement.

To ask the Chancellor of the Exchequer, whether he has had discussions with the Bank of England on potential failures at Lloyds/HBOS to follow the Senior Managers Regime in respect of disclosure of the Turnbull report; and if he will make a statement.

Q13

.

Kevin Hollinrake (Thirsk and Malton) (Con):

Senior managers at Lloyds and HBOS were convicted of a disgraceful fraud against their own business customers. Now there is compelling evidence of a cover-up at the highest level, including a recent admission of the disgraceful mistreatment of a whistleblower. This week, the compensation scheme for victims was described by Jonathan Laidlaw, QC, as “partial” to the bank’s interests. Does my right hon. Friend agree that the chief executive, Antonio Horta-Osorio, should now consider his position and that the compensation scheme should be replaced by an independent process of arbitration?

Q13

.

Kevin Hollinrake (Thirsk and Malton) (Con):

Senior managers at Lloyds and HBOS were convicted of a disgraceful fraud against their own business customers. Now there is compelling evidence of a cover-up at the highest level, including a recent admission of the disgraceful mistreatment of a whistleblower. This week, the compensation scheme for victims was described by Jonathan Laidlaw, QC, as “partial” to the bank’s interests. Does my right hon. Friend agree that the chief executive, Antonio Horta-Osorio, should now consider his position and that the compensation scheme should be replaced by an independent process of arbitration?

My hon. Friend raises an important issue, and I know that he has consistently campaigned on it. I understand that he raised it yesterday in a debate in Westminster Hall. As he said in his question, the events at HBOS Reading—at that branch—constituted criminal activity, and it is right that those responsible were brought to justice. Decisions about whether to launch financial services conduct investigations are the responsibility of the Financial Conduct Authority, as the independent regulator for the sector. I understand that it is currently conducting two investigations into the events at HBOS Reading, including into the bank’s communications with regulators following the discovery of the misconduct. Obviously, we look forward to the conclusions of those investigations. I know that my hon. Friend will continue to champion the needs and concerns of all those who found themselves recipients and victims of what was identified as criminal activity.

My hon. Friend raises an important issue, and I know that he has consistently campaigned on it. I understand that he raised it yesterday in a debate in Westminster Hall. As he said in his question, the events at HBOS Reading—at that branch—constituted criminal activity, and it is right that those responsible were brought to justice. Decisions about whether to launch financial services conduct investigations are the responsibility of the Financial Conduct Authority, as the independent regulator for the sector. I understand that it is currently conducting two investigations into the events at HBOS Reading, including into the bank’s communications with regulators following the discovery of the misconduct. Obviously, we look forward to the conclusions of those investigations. I know that my hon. Friend will continue to champion the needs and concerns of all those who found themselves recipients and victims of what was identified as criminal activity.

I beg to move,

That this House has considered the independent review of HBOS Reading.

It is a pleasure to serve under your chairmanship, Sir Christopher. There are some fundamental business principles that underpin any free market economy: we compete on a fair and level playing field; we all have a fair,...

I beg to move,

That this House has considered the independent review of HBOS Reading.

It is a pleasure to serve under your chairmanship, Sir Christopher. There are some fundamental business principles that underpin any free market economy: we compete on a fair and level playing field; we all have a fair,...

The hon. Gentleman knows my view of him. He does an enormous amount of work on these issues, and I pay tribute to him for all that work. He will be aware of my constituent, Mr Alun Richards, whose business went under through the Lloyds Banking Group. He has mentioned...

The hon. Gentleman knows my view of him. He does an enormous amount of work on these issues, and I pay tribute to him for all that work. He will be aware of my constituent, Mr Alun Richards, whose business went under through the Lloyds Banking Group. He has mentioned...

I do agree. The sector is so far away from the banking sector that we need that fundamental reform is needed not only in the regulatory process, but in the mechanisms that enable victims to hold the banks to account, which I will come on to soon.

I do agree. The sector is so far away from the banking sector that we need that fundamental reform is needed not only in the regulatory process, but in the mechanisms that enable victims to hold the banks to account, which I will come on to soon.

I congratulate the hon. Gentleman on securing the debate. One of my constituents, Michael Field, has been a victim of the banks as well. He borrowed from Lloyds to finance the building of several houses. He maintained his payments and fulfilled the terms and conditions of the loan agreement, yet...

I congratulate the hon. Gentleman on securing the debate. One of my constituents, Michael Field, has been a victim of the banks as well. He borrowed from Lloyds to finance the building of several houses. He maintained his payments and fulfilled the terms and conditions of the loan agreement, yet...

The hon. Gentleman makes his case very well. The difficulty goes back to my point about justice being seen to be done. There is no mechanism currently. I cannot judge the guilt or innocence in the business relationship between his constituent and his bank. The key is to allow mechanisms...

The hon. Gentleman makes his case very well. The difficulty goes back to my point about justice being seen to be done. There is no mechanism currently. I cannot judge the guilt or innocence in the business relationship between his constituent and his bank. The key is to allow mechanisms...

rose —

rose —

I will give way briefly.

I will give way briefly.

I just want to make the point that my constituent fulfilled all the terms and conditions and maintained his payments, yet he has no recourse. I take the point about being able to make a complaint, but what happened should never have been allowed to happen.

I just want to make the point that my constituent fulfilled all the terms and conditions and maintained his payments, yet he has no recourse. I take the point about being able to make a complaint, but what happened should never have been allowed to happen.

I agree, and there are many cases like that. I will talk about the redress processes shortly.

There are three elements to what we are discussing: the fraud itself, the potential cover-up of the fraud, and the review that supposedly provides justice for the victims of the fraud. There were finally...

I agree, and there are many cases like that. I will talk about the redress processes shortly.

There are three elements to what we are discussing: the fraud itself, the potential cover-up of the fraud, and the review that supposedly provides justice for the victims of the fraud. There were finally...

I am sorry to interrupt the flow of the hon. Gentleman’s speech. He has referred to the people who are in jail at the moment. One of my constituents was working for a company called Carringworth. Through its dealings with those people who are in jail now, her company was...

I am sorry to interrupt the flow of the hon. Gentleman’s speech. He has referred to the people who are in jail at the moment. One of my constituents was working for a company called Carringworth. Through its dealings with those people who are in jail now, her company was...

Yes. The hon. Gentleman is absolutely right, and he touches on the human cost of these issues as well as the financial cost, which is critical. What we want to see, which I will come on to, is an opening up of all the cases that have been through the...

Yes. The hon. Gentleman is absolutely right, and he touches on the human cost of these issues as well as the financial cost, which is critical. What we want to see, which I will come on to, is an opening up of all the cases that have been through the...

Will the hon. Gentleman add one more element, namely deliberate over-complication? It seems that this whole saga has been made so opaque that it is difficult to get to the bottom of what really happened. Does he agree?

Will the hon. Gentleman add one more element, namely deliberate over-complication? It seems that this whole saga has been made so opaque that it is difficult to get to the bottom of what really happened. Does he agree?