My right hon. Friend is absolutely right. The levels of compensation should be determined by an independent third party, not by the bank itself, because there is no methodology. Nobody can contest the findings of Professor Griggs. There is no way of interrogating how he has arrived at a number. They simply say—I have heard this so many times from Lloyds directors—“Well, we settled most of the claims,” as if that is somehow an endorsement of the process. The fact is that the victims had no other option—no appeal process—other than going to court, which would have cost millions of pounds.
Victims cannot even get access to the evidence. In a normal court process there would be disclosure of evidence, so that they could see the evidence they are being judged against. There was no disclosure of evidence. Lloyds has found a better way, according to a letter it sent me on
Eligibility is determined by the bank itself. It decides who is eligible for the review and who is not by invitation only. Only directors get to decide, not shareholders or suppliers, nor Her Majesty’s Treasury, which must have lost a lot of money through this process in respect of tax. It only dealt directly with the individuals who were convicted, not their deputies or other people who may well have been involved in the fraud. This is not an independent review. Professor Griggs is paid by the bank. His remit is determined by the bank. I have seen evidence that determinations he has made have been overruled by the bank.
This is in no way an independent process. Of course, everybody who goes to it is subject to a gagging order. The bank provided us with confirmation that clause 4 in its settlement agreements does not prevent victims talking to it or to the press. However, I have seen another agreement, completely different from the one the bank provided to the Treasury Committee, which contains extra clauses that do prevent these victims speaking to the press or to the authorities. Justice must be seen to be done. Lloyds bank is the judge, jury and executioner. The all-party parliamentary group on fair business banking and finance, of which I am now co-chair, said right from the start that this is the wrong way to deal with the process, but Lloyds pushed on anyway.
Moving on to a solution to these problems, the APPG believes that all cases—anybody who has been subject to the Griggs review—should be re-examined through a completely independent process. The APPG has recommended a financial services tribunal, which would judge cases based on a fair and reasonable test, with one-way cost shifting, so the banks cannot simply keep people out of court by writing huge cheques out to their own lawyer. That would mean that people would get an independent examination of their case. Victims can then get compensation and move on.
We believe that a tribunal is required, with an arbitration process for past claims. There have been four different reviews this year of how we can fill this gap, make this process fairer and get back to a more balanced situation, with restitution and redress. Three of those reviews recommended a financial services tribunal, as we do. The one report that did not was sponsored by the banking industry itself and it simply says that we should increase the powers, remit and jurisdiction of the ombudsman schemes. While that is a good step forward, we do not feel that it is enough.
That addresses compensation, but we need to go further. We need to change the culture in the whole sector, as Chris Elmore said. In terms of the Lloyds management, I do not see how the position of the chief executive, António Horta-Osório, is tenable. Given the way that the effective whistleblower has been treated, the way this has been covered up and the way that the process has been deliberately partial, I do not see how the Lloyds management have been consistent with the behaviour required under the senior managers regime. I think António Horta-Osório should resign. I also think he should face investigation under the senior managers regime.
Finally, the Financial Conduct Authority itself—our regulator—has many questions to answer. Why did it approve the scheme? Did it approve the scheme? We have heard conflicting evidence on that. It is a national disgrace that Lloyds has been allowed to operate this sham of a review process. Andrew Bailey himself has questions to answer. Why did he allow the process to continue? Why was he not aware of the patent defects in the process? Nevertheless, the FCA should take charge and undertake an investigation of the senior management under the senior managers regime.
We in this place are defenders of free markets. For me, this is the most important issue that any of us will ever deal with. Certainly, as far as I am concerned, I cannot rest until the matter is settled. My life has been transformed through the opportunities of free markets. In the main, the bankers I have dealt with over 25 years have done a tremendous job—a fair job—to help my business to thrive through some difficulties. I was one of the lucky ones. Not all bankers are the same. Most people in the industry are decent people trying to do the right thing, so it is even more important to hold those who are not to account. We have to make sure that everyone has the opportunities that I have had—that we have had—including all our children and grandchildren. We must all demand, for the sake of the victims, that justice is done and is seen to be done.