Lord Ahmed of Rotherham: My Lords, I do not speak as a former Minister, banker, adviser or member of a finance committee, but as a consumer, customer and service user. I welcome the Government's proposals in the Bill. However, they do not go far enough. Whereas the Bill could unify and codify the entire legislation affecting all financial services, it excludes two vital elements: the Banking Ombudsman, and mortgages and advice to the major lending arena; namely, the high street banks.
One has to ask oneself: what is the reason behind that exclusion? I take great pleasure in taking an historical perspective in this House. I am reminded of Magna Carta, which was an attempt to protect all the King's subjects from a king who might be too forceful or barons who might be too powerful. Unfortunately, the high street banks today are what the barons were in medieval times, for they force us into financial serfdom. I consider it my duty to ensure that Clause 39 of the Bill enables Magna Carta to remain valid. Magna Carta states that,
Magna Carta establishes that no person, not even the King, is above the law. Today, however, it seems that banks are above the law and everybody who is maderedundant, bankrupt or dispossessed is financially and socially destroyed. Most victims suffer serious health and family problems, and suicides are not uncommon.
The current omissions from the Bill make sure that the FSA provides first aid but it does not stop the terminal disease called global capitalism. If we had a statutory code of practice to regulate lending and protect the borrower as much as the lender, we would have a new Magna Carta to protect the freedom of the individual. Instead, our democratic freedom is threatened by debt, including the debt owned by lending institutions. These debts create a new underclass as evidenced by liquidators' sales and the auctioning of repossessed properties which we see every day. The victims of predatory actions by banks are the new underclass in our society.
Noble Lords may recall that at the beginning of the year I invited them to attend meetings of the Forum for Stable Currencies that I host every three weeks in this House. At its previous meeting, Gill Hankey of the Bankruptcy Advisory Service said that 90 to 95 per cent of all bankrupts were innocent but all of them were victims of lending institutions. Her organisation is one of about half a dozen all of which have harrowing tales to tell. This Bill, therefore, must be put right, not by more than 500 amendments but by the inclusion of all banks and lending institutions and the Banking Ombudsman. If we do not get the Bill right, the underclass of the unemployed, the homeless, the bankrupts and the victims of banks will grow enormously, year after year, for the accumulation of personal, corporate and national debt strangles the essence of people's lives and freedom.
We must strive for a new form of economic democracy. This can be achieved by a Bill that regulates lending and borrowing in a way that is economically sustainable and mathematically balanced. Everybody strives for exponential profits from trading and lending, but nobody looks at personal, corporate and national indebtedness world-wide, which is equally exponential. Economic democracy will not be socialistic, nor should it cohabit with the worst excesses of capitalism. New Labour is a modernising force, and it owes that to its electorate. But the Bill as it stands does not go far enough in its obligation to ensure that ordinary hard-working people all over the country can exercise their individual freedom in a liberal democracy free from the harshness of the debt problem which the lending institutions continue to make worse.
I am aware of a class action against the Bank of England for its failure to regulate banks. I trust we shall ensure that the FSA becomes a regulatory body in which we can all have trust. I commend the Bill to noble Lords as an opportunity to prove that this House delivers what it is meant to do; namely, that it debates matters with the long-term perspective in mind for the benefit of all citizens.
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