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Money Transfer Accounts

Volume 566: debated on Wednesday 17 July 2013

[Hugh Bayley in the Chair]

It is a pleasure to serve under your chairmanship, Mr Bayley.

I am delighted to have secured this debate on the provision of money transfer account services by banks and their impact on Britain’s ethnic minority communities in particular. Remittance plays a vital and complementary role in helping to lift millions of people out of poverty across the world, and it plays a vital role in ensuring that, as well as our commitment to aid, we engage the public in giving to their loved ones, who are often on the verge of poverty and would not qualify for development aid. This is a vital debate because we need to consider how we support individuals to give to family members across the world.

Remittance helps to save lives through direct support by providing for loved ones in remote areas of the world. It helps save lives in the Indian subcontinent, for instance in Pakistan and Bangladesh, and in many other places, especially during times of crisis such as Cyclone Sidr in Bangladesh a few years ago and the earthquake and floods in Pakistan. Many of our constituents from various African and Latin American countries send money through remittance.

I will focus on the recent decision that has propelled us into calling for this debate. Barclays made the decision to withdraw banking facilities from small and medium-sized community-based money transfer agencies, which provide low-cost, legitimate routes for sending money to remote places across the world. In some of those places, it is very difficult for mainstream money exchange and money transfer companies that do not have networks, agents or structures to get assistance to family members. Taking the example of disasters, those are the times when people need to get assistance to their families immediately, which is certainly what happened in countries such as Pakistan and the many others that I mentioned.

I thank the hon. Lady for giving way so early in this debate. One area she has not mentioned is Poland. I have a large Polish community in my constituency that is facing the loss of One Money Mail, which has become a tried and trusted service for many people in the Polish community when sending remittances back to Poland. Those people are extremely concerned that they may have to lose the service, which they have grown to trust and which they use frequently; it will be a great loss to the community.

I thank the hon. Lady for her intervention. She has added an important perspective to the debate, which is that the issue also affects countries that people might not have thought about.

I commend parliamentarians, because some 46 Labour MPs have already signed a letter to Barclays, and I know that the all-party group on Somaliland and Somalia has also made representations to the Government. MPs and parliamentarians from both sides of the House, and many other people, have raised the alarm bell with the Government. That highlights our deep concern about how decisions that have been made in the past, not just by Barclays but by other banks such as HSBC, to remove banking facilities that are affordable for hard-pressed families who are trying to get support to other parts of the world, have been supported rather than punished. We should encourage people to give, and I hope that the Government will consider the issue closely.

According to the Financial Times, more than 250 money transfer companies are now facing closure following the decision by Barclays to withdraw the service. Other banks have already withdrawn it, so the suggestion that those small and medium-sized companies could go elsewhere is nonsense. We need to ensure that the decision of those banks does not send a signal to other banks that there is something wrong with such businesses and that other banks should not do business with them, which is essentially what has happened. That is the insidious conclusion that is being drawn at the moment. Allegations are being made that those businesses, many of which are in our constituencies, are engaged in activity that is not legal.

Barclays has said to me that it is concerned about only the 1% of companies that represent 46% of the problem. The Government and regulatory authorities should consider how to assist Barclays and other companies that need to clean up operations where there are problems. If that 1% is a problem, assistance should be provided to address that problem rather than involving the 99%, in the case of Barclays, that do not pose a problem. If that logic were applied to the banking sector, for instance, we would not have a banking sector left. I ask the banking sector to have some empathy and to think about what the consequences would have been for it if, during the financial crisis, all companies in the sector had had to be shut down just because there were certain bad apples.

I hope the Minister will consider the issue and answer the question about how we can focus and zoom in on the areas where there are cowboy operators, which none of us want. The diaspora and ethnic minority communities in this country and across the world do not want to see cowboy operators; they want legitimate, well regulated mechanisms for sending money to loved ones.

As I said, 45 other MPs and I supported the letter to Barclays bank that the Minister has seen, and I look forward to hearing what he, his Department and the regulatory authorities will do to try to help with this important matter. We are asking for some breathing space. We are asking Barclays—I do not believe this is an unreasonable request—to extend the date from August by another six months to give the Government, the regulatory authorities and the Minister the breathing space to bring people together, including the British Bankers Association, the banks and interested parties such as the money transfer agencies and the communities that use their facilities, wherever possible, to arrive at a solution that does not lead to the industry’s closure.

More than $3.2 billion of remittance a year is sent from the UK, and remittance amounts to some $530 billion worldwide, which is more than the total global international development budget. We must act internationally in concert with our American partners. The decision to apply fines to Standard Chartered and HSBC has led to the decision by UK banks such as Barclays to stop remittance facilities. Frankly, the companies have nothing to do with what has happened in the US with the breaching of sanctions, or with the other cases in which banks have been involved, but they are being punished.

If we do not find a way to address the problem, the risk is enormous, because there will be no legitimate ways for people to send money to remote parts of the world. Of course, there is virtually no way for people to get assistance to countries such as Somalia through a legitimate route. We need a constructive way forward, and I hope the Minister can explain how his Department and officials will work with the banking sector to develop an industry-wide solution so that we can ensure that the remittance and money transfer industries are strengthened in light of the crisis, rather than destroyed.

I also hope that the Minister will consider that if banking facilities to money transfer agencies end, what is likely to happen is what used to happen before a regulated mechanism was in place. On the whole, people who are not wealthy want cheap and affordable means to get assistance to their loved ones, particularly in times of desperation and crisis, such as when a family member has died and money needs to be sent quickly for burials and associated costs, or when there is an urgent health care emergency, likely or actual conflict or a humanitarian emergency, as was the case in Somalia and the rest of east Africa in 2011 and as is likely to happen in future. If there is no legitimate route to send money, there is a major risk that the industry will be driven underground and that clandestine mechanisms will be used to get money to family members. If that happens in the billions of pounds, we will not be providing remitters with the back-up, support and legal mechanisms to send money safely to their loved ones. It will also mean that some countries are unlikely to be able to monitor the amount of money flowing into their economy, leading to inflationary pressures.

Furthermore, there are security issues. People worry, rightly, that their money might end up in the wrong hands, and potentially in the hands of extremists. In countries such as Somalia and Somaliland, there are grave concerns about that risk.

I congratulate my hon. Friend on securing this debate. She mentioned that more than £2 billion in remittances is sent abroad. It is important to emphasise that although that is a large amount, people often send small amounts— £50 or £100—to their family. Small businesses are therefore incredibly important to people without a lot of means who send small amounts of money.

My hon. Friend is absolutely right. The amounts of money are often small. People work hard to make a living and provide a bit of support. I know that because many of my constituents tell me stories about how they are supporting the education of distant relatives or immediate family members by sending them money every month. During Ramadan, which we are in right now, people have a duty to give charity, or zakat. They want to give it to people they know who are poorer, and not through charitable organisations, where administration costs are high compared with direct giving. There are many occasions on which people give small amounts of money. For example, the Muslim community in Britain contributes £100 million in charitable giving during the month of Ramadan alone.

A local activist in my constituency recently said:

“There is simply no other legal way of sending money to Somalia. If these firms are closed, it just means people will have to carry large amounts of money from airport to airport, and all that’s achieved is that everyone will end up a criminal.”

We cannot risk criminalising people who are simply trying to support their families.

Another major opportunity is at risk. Ethnic minority communities have insights and connections in their countries of origin. I see that in my constituency, as I know other right hon. and hon. Members do. They have insights into how to trade with their countries of origin, and affordable remittance facilities are critical to doing so. We are closing off opportunities for small businesses to operate and develop. It is also costing more than 3,000 jobs here in the UK and jobs in those countries.

I congratulate the hon. Lady on securing this debate. She has explained the security issues created by driving remittances underground. Is it not also true that it could drive the business into the hands of the big American globals, wiping out our domestic small and medium-sized enterprises in the market? That is a dangerous step, which the Government should do all they can to avoid.

Absolutely. I would be interested to hear whether the Minister has had any representations from such companies. I understand that some lobbying has been done, certainly in America. It would be useful to know whether he has had representations from bigger agencies, including MoneyGram and Western Union. One concern is that the underlying agenda is to shut down small operators because they do not charge as much and banks do not get as much revenue, and that this is about profit as much as anything else. We need clarity on the criteria that Barclays and other banks have used to stop providing banking facilities.

It is depressing that, unfortunately, the banking sector seems to have learned nothing from the past few years. Small community-based businesses are being hurt while they are trying to run decent businesses and support people. They should come together to consider how to address some of the underlying problems. We understand that there are grave concerns in the banking system about being fined by the US authorities. It is right that we should support the banking sector in ensuring that their due diligence processes are done, but that cannot be an excuse to shut down smaller companies just because they provide competition.

I will press on quickly to a few final points so that others can speak. Somalia presents a unique problem: it does not have a banking sector. That means not only that Somalia will be affected when remittance flows stop, but that humanitarian aid organisations such as Oxfam will lose the ability to send money to the region. Some 40% of people in Somalia who depend on remittance would be affected by that decision. Last year, the Somali authorities said that about $2 billion, or one third of the country’s GDP, is channelled to Somalia through small money transfer agencies.

The country has come out of a conflict that went on for a long time and cost many lives. It relies on the Somali diaspora around the world, who are working hard to rebuild Somalia and Somaliland. This decision would cripple the country. We cannot afford to let that happen, not least because it is in our interest to have a stable, prosperous and effective state in Somalia and Somaliland. That is what my constituents, many of whom are from Somaliland, want. I hope that the Minister will see the connection between this decision and its effect on undermining our aid and peace-building efforts in countries such as Somalia.

Although it could be said, and the Minister may have been told, that this is not as much of a problem for other countries that have a banking sector, the reality is—as he will know from his experience and background, as I do—that in remote places such as the Indian subcontinent, where we have our origins, during floods and in areas where there is no proper infrastructure and no proper roads, getting money to people is difficult. The banking sector is not localised enough. Banks such as HSBC might call themselves the world’s local bank, but they are not local enough. Our response must address the fact that it is impossible to get money to people, in particular at times of crisis, in countries throughout Africa, where there are still major infrastructure problems, and in many Asian countries, so that the banking sector—Barclays in particular—does not fob the Government off by saying, “Well, there are plenty of other operators available,” or, “The Government own a couple of banks, why don’t they to do it?” We need an industry-wide solution that is constructive and that safeguards the remittance industry and companies providing remittance services at low cost.

I have a few final points. On competition, I hope that the Government and the regulatory authorities will look closely at what is really going on. To what extent is this about trying to respond to the fact that these organisations are giving—to use a metaphor—the larger money transfer agencies a run for their money? To what extent is this about the regulatory pressures? I believe that to some extent it is. Where the regulatory concerns are legitimate and genuine, what can the Government and the regulatory authorities do so that we have a set of criteria for those companies to fulfil? Barclays and the regulators certainly have not provided any criteria or explained why banking facilities are being withdrawn. That is the least that these businesses should expect when they employ more than 3,500 people here in the UK and provide desperately needed assistance, not to mention trading opportunities between our country and developing countries.

I hope that the Minister will be able to look broadly at those interconnected issues. I have been told by his fellow Minister in the House of Lords that Barclays is merely making a commercial decision, but we have a responsibility to developing countries, where remittances support millions of people, taking pressure off our international aid budget. We also have a responsibility, if the sector is pretty much eliminated through those decisions, to ensure that money transfers and flows are not driven underground. How do the Minister and his colleagues in the Department for International Development intend to address this? Will he work with our American allies on an international solution, because we recognise that they are calling the shots on fines? Will he make representation to Barclays to provide six months of breathing room to allow the industry, working with the Government, to come up with a framework that can protect this vital industry?

As we speak, thousands of people are signing petitions; the diaspora community, in particular, and the aid agencies in the different sectors believe that people’s lives will be devastated. I hope that the Minister will work with the regulatory authorities on a solution—my colleagues and I are also happy to work with him—because we do not want to return to a debate in years to come and hear that, because of the decision today, many of the agencies stopped operating and people ended up being exploited. In some cases, money might be stolen—we have seen past examples of that—because the sector is not regulated at all, and in some cases remittances might end up in the hands of the wrong people, such as terrorists, and that would be a dereliction of duty on our part. The international community has a responsibility to ensure that people can get money safely and securely, and at an affordable rate, to their loved ones around the world.

I intend to start the wind-ups at 3.40 pm, which leaves us about 45 minutes. With six people wanting to speak, that works out at about seven and a half minutes each.

It is a pleasure to serve under your chairmanship, Mr Bayley. I also place on record my appreciation of my hon. Friend the Member for Bethnal Green and Bow (Rushanara Ali), not only for securing the debate, but for championing the cause—raising awareness, expressing concern and bringing MPs of all political parties together to ensure that the issue reaches a far wider audience. I genuinely appreciate that. She said much about this banking policy and how it will affect people in Somalia and other countries, and I want to concentrate my comments on the impact in my constituency and similar towns in the United Kingdom.

As long ago as November last year, I wrote to HSBC about one of my constituents, Mr Shamshad Ali—I have the letter with me. He has a money service business called Sterling Currency Exchange Ltd and is the general secretary of the remittance association of the United Kingdom. HSBC decided unilaterally to close his bank account, because it no longer wished to operate in the sector. I worked with Shamshad to get the bank to change its mind, but to no avail. He and I then worked together to find an account with another bank, again to no avail. As Shamshad pointed out, we tried the Royal Bank of Scotland and NatWest, both funded through the public purse and in receipt of much public money, but they too refused him. He now has to operate his business in conjunction with another business, which still has an account with Barclays—but time is running out, and that might well end as well.

The Government need to know about the serious consequences, which include the closure of good businesses, as my hon. Friend pointed out, at the cost of many thousands of jobs throughout the United Kingdom and certainly of a number of jobs in Rochdale. There is also a direct impact on people in my community. Migrant workers, many of them professionals, many on whom the Rochdale economy relies, depend on those independent businesses to be able to send money back to their country of origin. Those workers are being turned off working in towns such as Rochdale, which concerns me.

I thank my hon. Friend the Member for Bethnal Green and Bow (Rushanara Ali) for securing the debate and I thank my hon. Friend the Member for Rochdale (Simon Danczuk) for giving way. I, too, have many people from Somalia and other parts of the world living in my constituency. The important thing, which we often learn, is that the family back home rely on the money being sent to them to survive. If they are not allowed to survive in that way, they go underground and are driven to other means. The sooner the Minister takes the matter up and talks to the banks in this country, the better, because not only are people in Somalia affected, but Somalians and other people who have businesses in this country, through transactions and jobs.

That is exactly the point that I am leading on to. People in my community send money back to their families—in this instance, in my constituency, to Pakistan, Kashmir and Bangladesh. At this important time of Ramadan, as my hon. Friend the Member for Bethnal Green and Bow pointed out, people rely on the businesses that we are discussing to help them send charitable contributions to the countries from which they originate. We should not underestimate that. Friends and families out in other countries may be exceptionally poor and reliant on such charitable donations, in particular at this important time of year of Ramadan, to help them to celebrate Eid and to buy new clothes, so that they can have a reasonable time at a key point in the Islamic calendar. As a result of the changes, my constituents, instead of being able to use a good, local and independent firm, which complies with all the regulations, will have to use one of the banks, Western Union or MoneyGram.

On the point about small businesses following regulations, may I share with my hon. Friend my experience of sending money abroad? In my constituency, the regulations are followed with passport copies, addresses and so on. Does he agree that it is disingenuous of the banks to use that as an excuse for not carrying out transactions for those companies?

Absolutely. That does seem to be an excuse, and is the crux of where we are.

Another point that has been made clear to me is that without the small independent firms in towns such as Rochdale, my constituents, instead of paying a flat fee of £5 and receiving a good exchange rate, will have to use Western Union or MoneyGram, pay a flat fee of £20 and receive a less competitive exchange rate. They will have to use a less local and less personalised service and pay more for it. That is the consequence, which can only be described as outrageous.

I have some points for the Minister to consider. First, why is Barclays closing these accounts after it made businesses spend thousands of pounds on compliance? Secondly, why are Western Union and MoneyGram not affected? I believe that Western Union in registered in southern Ireland, not the UK, for tax purposes and perhaps that is an issue in its own right. Thirdly, will the banks benefit and start to do the sort of business that they are denying small independent firms from doing? The changes will push such businesses underground, which could feed the criminal fraternity. I urge the Minister to do all that he can to remedy the situation.

I congratulate the hon. Member for Bethnal Green and Bow (Rushanara Ali) on securing this important debate and on all her work on the matter. I declare an interest, which is in the Register of Members’ Financial Interests, as a non-executive director of a global consultancy, Developing Markets Associates, which is an expert on this subject.

During my time as a Foreign and Commonwealth Office Minister for Africa and the Caribbean, I received many briefings on the importance of remittances and the role that they play. As the hon. Lady pointed out, they complement the aid and development programme of many countries, including Britain, France and America. Very often, those remittances get through to areas such as small businesses, self-employed people and small non-governmental organisations and charities that aid money can never get to. Furthermore, they bypass any infrastructure of bureaucracy or middlemen and go direct to communities, where they can make a real difference.

I think that everyone agrees that those remittances are vital not just to the communities that receive the money in developing countries, but to the developed countries from where the money comes. As the hon. Lady said with her intimate knowledge of her own community, which was reinforced by the hon. Member for Rochdale (Simon Danczuk), communities here that we welcome as part of this country often feel a moral responsibility to help family members back in the countries where they came from. The agenda is incredibly important.

I know, from having visited Somalia on a couple of occasions, the importance of that country, which is coming out of conflict. It has been through the most appalling time. At long last, there is stability in Somaliland, and there has been for some time. There is now a Government in Mogadishu who can control much more of the country, and certainly the big cities of Kismayo, Beledweyne, Berbera are now under the Government’s control. It seems that normality is resuming in some of those areas, but there is still a long way to go before a normal banking system can be set up to support businesses and communities in the way that banks do, or should do. The more recently that a country has come out of conflict, the more crucial that is to its economy.

I want to touch briefly on one or two points concerning recipient countries and then on the current crisis that has been caused by the action of some banks. In recipient countries, the danger in the past has been that a lot of remittance money has simply gone under the bed. Many people have not had enough of an incentive to use money responsibly through a bank account or to invest in a business. The tendency has been to put money under the bed for a rainy day and to use it on an ad hoc basis.

Perhaps our own Department for International Development and aid departments in other countries should explore how money can be made available for investment in small businesses, self-employed projects and other areas. At the moment, there is certainly a considerable lack of understanding of how that money is spent. It reaches the communities in different ways and often the charges when transferring it and sometimes when receiving it can be excessive.

What work can the Treasury and the Department for International Development do to understand better what is happening in some of those countries, how that remittance money can be better harnessed for the benefit of the communities and whether there is a role for telephone banking, which is taking off in many developing countries? I understand that the UK has signed up to the five times five commitment to halve remittance prices by 2014. Perhaps the Minister will tell us what progress has been made on that commitment.

As the hon. Member for Bethnal Green and Bow pointed out, the UK has 60% of the total number of authorised payments institutions and single payment institutions in Europe. That is a huge figure, so any action taken by the banks in the UK in closing accounts of money transfer agents will have a disproportionate effect on the UK. We are facing a serious problem. I do not want to underline too heavily any criticism of Barclays and HSBC. It has not been said so far that Barclays was fined $300 million in the United States earlier this year and HSBC was fined a larger amount for allegations of money laundering that were not proved in court but were settled out of court. Our high street retail banks are wary of any dealings with America, but their action is precipitate.

Will the Minister have urgent discussions with the US Treasury Department and the US State Department because US regulators are setting the agenda, which is having the damaging impact that hon. Members have referred to and that will lead to job losses and many people being put out on a limb? They will have to take whatever action they can and may have to look at illegal routes. More money will go to cash couriers and there will be huge disruption, so I urge the Minister to have urgent discussions with his US counterparts, having listened carefully to what has been said in this debate.

Perhaps the Minister could also have discussions with the Financial Conduct Authority, because we are talking about a regulated sector. The irony is that it is regulated, but it is respected, does a good job and fills an incredibly important niche. It employs a significant number of people, but it could be forced underground and people would have to pay much higher rates. Furthermore, consolidation may be sensible in some industries, but we would see many small businesses put out of business with higher charges and a worse service. I urge the Minister to take this agenda seriously.

It would be helpful if the Minister told us what discussions he has had with the Department for International Development on this important matter and whether the Treasury and DFID will work together on what is happening not just here in the UK, but in receiving countries, which badly need help, involvement and engagement.

A colleague whom I was expecting to speak has left the Chamber, which leaves us with three speakers and 10 minutes each.

It is always a pleasure to serve under your chairmanship, Mr Bayley, and I know you take a great personal interest in these issues. I congratulate my hon. Friend the Member for Bethnal Green and Bow (Rushanara Ali) on securing this important debate. I also congratulate other Members on the excellent contributions that we have heard so far.

I declare a number of interests. Like many other Members, I have a significant number of constituents from Somaliland, Somalia, Yemen, Pakistan, India, Bangladesh and Sudan. Those communities have a long and proud history in my constituency, and they all remit funds to those locations. I also declare an interest as the secretary of the all-party group on Somaliland and Somalia.

Some weeks ago, these issues were brought starkly to my attention by a number of the money transfer organisations involved in remitting to Somaliland and Somalia. A month ago, we had urgent discussions with the new ambassador to Mogadishu and with senior Foreign Office officials, so people have been aware of this challenge for some time, and I will return to that at the end of my remarks.

I want to underline how important remittances are and how crucial it is that we find a solution and get things right. Members have spoken of the value of remittances to individual families, who are often in difficult circumstances. Oxfam provided a helpful briefing, which said:

“in most cases, money received is used to cover basic household expenses including food, school fees and medical costs.”

It notes that, in a recent survey,

“one third of respondents said that they would not be able to meet these basic needs if remittances were stopped.”

That is in addition to the concerns Oxfam and other humanitarian organisations have about their ability to provide services if money transfer services are stopped.

Many hon. Members have mentioned the security and stability implications, particularly in the case of Somaliland and Somalia. The hon. Member for North West Norfolk (Mr Bellingham) eloquently noted that the changes could be a step back for the country, which is coming out of conflict and instability. That is certainly not what the UK Government want, particularly after the recent Somalia conference and the many other steps that friends of Somaliland and Somalia have taken to see the two countries progress.

Remittances are also a complement to aid. There are two crucial issues. This is not only about my constituents; it is also very much in the UK national interest to find a solution to this problem. Remittances play a crucial role alongside our aid moneys. In the end, we want to graduate countries out of aid and ensure that they can stand on their own two feet, so pulling the rug out from under a number of them in this way will be particularly problematic.

We have heard many of the figures already, but I want to reflect on a few of them. I have tabled questions to the Treasury, and the answers show that the UK remits upwards of $23 billion a year to third countries. Remittance flows globally are estimated at upwards of $500 billion. Those are huge sums and often dwarf aid flows to countries.

An answer from the Minister of State at DFID said that the Department estimated that Somaliland received upwards of £500 million annually, while 50% of Somalia’s gross national income came from remittances, which ultimately supported 3.8 million people. Those are huge numbers, so this is not a small problem—it is fundamental to the ability of these countries to be successful. As my hon. Friend the Member for Bethnal Green and Bow said, Somaliland and Somalia face particular problems, which need to be addressed. They do not have the services that are available in some other countries, and with 70% of money transfer services potentially affected by the changes, we really have a very large problem.

I do not think that anyone would disagree that we want safe and secure transfer methods for senders and recipients. There are also legitimate concerns about money laundering, terrorist financing and other issues, although only a small amount of remittances are affected by such activities, and the vast majority end up in the destinations where they belong. However, we really could be jumping from the frying pan into the fire. We could increase the security risk and end up with channels for transferring money that are not policed or regulated in the same way as existing channels. Individual constituents could be ripped off, as they are forced to use more expensive or less secure methods of sending remittances —indeed, there is the possibility of theft increasing and money going missing—rather than the reputable organisations that already operate in this field. With 70% of money transfer services potentially at risk from the changes, we have a huge problem.

As I said at the beginning of my remarks, I met Foreign Office officials and the new ambassador to Mogadishu some weeks ago. Since then, I have had discussions with the Minister and with other officials. I have also had discussions with Barclays itself. My hon. Friend the Member for Brent North (Barry Gardiner) and I secured a meeting with it the other week, and we had a constructive conversation, notwithstanding the criticisms and concerns that have been raised, a number of which Barclays must answer further questions on. To be fair, however, Barclays was constructive, and it did not just want to shrug its shoulders and turn away from the issue; it wanted to work with the Government and diaspora communities to find solutions.

I was therefore concerned when Barclays told us that it had written to the Treasury two weeks ago. I have the letter here, and it is dated 3 July. Indeed, Barclays has had other correspondence with the Treasury. I very much hope that the Treasury has responded by now. Barclays offered to sit down and have constructive discussions with the Treasury, the Foreign Office, DFID, the Home Office and all the other interested Departments to try to find solutions. This is really one of those cases where the Government have to step in.

We were indeed at the meeting together. It is a very constructive suggestion that there should be a round table with all the major banks, which can then work with Treasury to resolve the problem. It is unfair to load everything on to just one bank, which happens to be the last in line. The Treasury needs to address this issue very seriously. Mr Bayley, let me also apologise for coming late to the debate, owing to another commitment.

My hon. Friend makes the point perfectly. As I said, there was a great willingness on the part of Barclays to sit down with Departments. I hope the Minister can reassure us by telling us what steps have been taken—perhaps in the past week—so that we can know that these conversations are going on and will involve all the crucial Departments. Obviously, numerous Departments, banks, organisations and Members have an interest in resolving this matter. Barclays had a number of technical solutions, which I was unable to comment on, but I hope that Treasury officials and the Minister might be able to.

I second the comments made by the hon. Member for North West Norfolk regarding the need for the Government to engage in urgent discussions with the United States, where a lot of the regulatory pressures are coming from, so that we can secure answers.

In conclusion, this is a huge problem with serious implications not only for my constituents and their families, but, ultimately, for this country’s national interests in international development financing and our security needs. We urgently need to find a solution because time is pressing and will run out at the end of August; otherwise we will find ourselves in a very difficult situation.

I should do a commercial between each speech: the Minister is asking to have a little more time, if possible, so that he can better answer your questions. I leave that thought in your minds.

Mr Bayley, I will endeavour to get through my speech as quickly as possible, given that request from the Minister.

I thank my hon. Friend the Member for Bethnal Green and Bow (Rushanara Ali) for the fantastic job she has done in leading the campaign on this issue. She has been a brilliant advocate on behalf of her constituents and those of many other Members in the room, and I thank her for that.

Last year, my hon. Friend visited my constituency, which is the neighbouring constituency to that of my hon. Friend the Member for Cardiff South and Penarth (Stephen Doughty), whom I am following in the debate. She met many of my constituents who use a business in Riverside called Trust Exchange UK Ltd, which is run by Anwar Ali. It is a model of what a small business in our local communities should be—goodness knows, we need more small businesses in Wales, in particular. It is the only business of its kind in Wales. It deals with many of my constituents, my hon. Friend’s constituents and others who want to transfer money to relatives, often overseas.

I will not go through the arguments other hon. Members have given for the importance of such transfers. However, my hon. Friend the Member for Bethnal Green and Bow pointed to the huge value of this business and its importance to developing countries, with remittances representing a far larger sum than international aid. That is not something we hear much about in the press, but I hope the debate will help to highlight it, as well as the importance of remittances to the countries involved and to our constituents.

My constituent Anwar Ali approached me some time ago about this matter. I was quite shocked when he told me that, effectively, he would be put out of business by the decision by Barclays bank. His business not only provides a valuable service to my constituents but has been involved in setting up charitable work, aid projects and so on, particularly in Bangladesh, reflecting Mr Anwar Ali’s ethnic origin. It provides a service to people of all sorts of ethnicities and from all sorts of communities.

The point has been made that it is not only Barclays that is involved, and that other banks involved in the business have withdrawn before. HSBC was found guilty by the US authorities of a “blatant failure” in relation to anti-money laundering legislation, and was required to pay a record $1.9 billion fine as a result. Perhaps understandably, it has become extremely risk-averse about the sort of business we are talking about, and businesses such as Barclays have taken notice.

It seems that the principle that applies for large banks is “innocent even if proved guilty”. Being found guilty of money-laundering activity and getting a huge fine means being permitted to carry on business. Western Union, which was mentioned before and which seems to be due to benefit greatly from what is happening, paid $94 million in February 2010 to settle civil and criminal investigations by the Arizona attorney-general’s office, in relation to having turned a blind eye to the movement of illegal funds by drug cartels in Mexico. In the light of that, would not it be ironic if Western Union were to benefit from the decision to withdraw services from the small companies that provide our constituents with financial services on a small scale, and which have done everything to obey the compliance regulations, and if those local businesses were to be put out of business?

The local businesses seem to be subject to the principle that they are guilty when nothing has been proved against them—when they have done all that is legally required to comply with regulations. Small is not beautiful in this case; small is vulnerable, and small businesses are being assumed to be guilty when they have done nothing wrong—even when big businesses have been proved to have acted illegally and have been fined. Is the Minister content that small businesses that have done everything possible to comply with the law and regulations will be put out of business by the decisions of large organisations, which, leaving aside the activities that nearly brought the country to economic ruin, have often been proved to have engaged in activities outwith regulation, and have been heavily fined? If he is not content, what will he do to ensure that the Government, and in particular the Treasury, take a more active role to save those small businesses at the eleventh hour, before they are put out of business?

We have heard about the Barclays letter, and I hope that the Minister will give a positive response from the Government to the proposal for an industry round table. I hope that he will speak up for small British businesses, which have done nothing wrong.

I apologise to my hon. Friend the Member for Bethnal Green and Bow (Rushanara Ali) and to the Minister. I have a Select Committee meeting at a quarter to 4 and hope that they will accept my apologies for having to leave.

I want to comment briefly on two things. First, my hon. Friend the Member for Cardiff South and Penarth (Stephen Doughty) referred to the position taken by Ministers at the beginning of July; but unfortunately, I am going to disappoint him. I have received a letter dated 10 July from Lord Deighton, in response to representations that I made in June on behalf of constituents. He said:

“I hope your constituents will be able to secure banking facilities from another bank, or make alternative contractual arrangements, rather than close. I cannot oblige the banks to make facilities available. The choice of business customer is a commercial decision for banks to make.”

He simply refers to the fact that the Office of Fair Trading will examine support for small and medium-sized enterprises later in 2013.

As for the 12 August deadline, which businesses in my constituency face, I received a letter from a Mr Duale of the largest organisation that transfers money to the Somali community—other Members may have received the same letter—and it pointed out how just a few weeks after the international Somalia conference in London, when we pledged £180 million of support, the damage implied by the decisions that have been made could outweigh that increased support.

Other hon. Members have talked about the effects elsewhere. I have constituents in various organisations who are very concerned about the impact in countries all over the world. My constituent Mr Shah of Zak Money Exchange, Ilford lane says that the business could close and that eight employees would lose their jobs. He raised the same concerns that others have raised: why cannot the nationalised banks do more? Barclays may have got into trouble, and we have heard about Mexican drug barons and money laundering, but why cannot other banks do something?

Barclays’ reputational damage in this country is an issue. I suspect that many people who will be affected by what is happening will have bank accounts—their own commercial bank accounts for their small businesses, or personal accounts. It is not good for Barclays’ reputation if the perception arises among millions of British people that it has a down on the poor and on migrant communities. Barclays should consider that carefully.

As for Western Union, there is a wider issue to do with the relationship between the United States, the US authorities—perhaps in particular US jurisdictions—and their way of dealing with extraterritoriality. We have the potential through the forthcoming European Union-US negotiations, which are to do with trade and international co-operation, to exert pressure back from the European side. Britain is more significant than many European countries in such matters, but we should not ignore the potential to raise with the US authorities, at all levels, the effect of their behaviour globally on communities in the UK, in the wider European context and worldwide. That is a matter for another debate—perhaps tomorrow—but I want to highlight the need for us to be more robust about the issues.

It is true that we need to eradicate money laundering, crack down on terrorist and drug financing, and all the rest. However, an alternative to the present arrangements is that people will start to take money in suitcases through airports and smuggle it across borders, making themselves vulnerable to being taken prisoner—to hostage taking, banditry and piracy. That is a bigger global threat than some of the other problems that are cited.

I should like to comment on the point about fears of money laundering and drug dealing. People in my constituency—I do not know about other parts of the country—who use small companies to send remittances are hard-working people who earn very ordinary amounts of money. They send very ordinary amounts: £50, £100 or £150. They do not send thousands and thousands of pounds, and therefore those small businesses feel insulted that somehow they are being tarnished by the suggestion that they are laundering money.

People are right to feel that way, because it appears on the one hand that Barclays and on the other that the Government do not care. The Minister says, “This is a commercial matter and we are not going to get involved.” However, Barclays, without giving reasons to people in small money exchange firms, is simply saying, “Sorry, we are no longer prepared to deal with you.” It is not saying that those people have done anything irregular or illegal; it is saying only that the facility is no longer available. That is terrible.

In a wider context, we have been criticising the banks for their failure to support small and medium-sized enterprises; yet it seems in this context that the Government are not prepared to get off their seat and do anything to help the poorest communities globally and the people in Britain who are trying to transfer money, which, as has been said, is a larger amount than the international development assistance that is transferred from states to countries and people in the poorest countries in the world. Instead, the Government say, “This is nothing to do with us. This is simply a commercial arrangement.” I am sorry, but that is not good enough.

It is a pleasure to serve under your chairmanship, Mr Bayley. I join my hon. Friends in congratulating my hon. Friend the Member for Bethnal Green and Bow (Rushanara Ali) on securing this important and very timely debate: we are coming up to a period when the clock is ticking and those who might be affected are facing the prospect of significant anxiety and a change in the circumstances. It is an incredibly important point that she and others who have participated, on a cross-party basis, have been making.

Given the realities of internationalism these days and the crises that some families can encounter, the ability for people to support their family is part and parcel of the warp and weft of much of society. The role that legitimate small and medium-sized remittance and money transfer companies play should not be ignored; it is absolutely crucial. However, it is no surprise, given what has been happening in financial services in the past couple of years, that a lot of the agenda of the anti-money laundering reforms to deal with particular concerns is beginning now to bite. As my hon. Friend the Member for Cardiff West (Kevin Brennan) commented, it is more than ironic that it tends to be the smaller firms that end up being punished most of all, when the anti-money laundering reforms that we require and some of the changes need to be made particularly by the larger organisations. They are the ones where, in my view, there is a significant risk.

My hon. Friend the Member for Ilford South (Mike Gapes) made a pertinent point in the speech preceding mine about the fact that we should not see this only as a commercial matter—we should not take a laissez-faire approach and let the market decide—because ultimately, regulators and public policy are very much part and parcel of what is happening here. It is also not only a UK question, but a global matter, which requires leadership from UK Government authorities to do something now to sort out the problem.

Of course, it is vital that strong steps be taken to deal with the risks of money laundering. Nobody is arguing against that, but we cannot turn a blind eye to the impact that crude, blanket attitudes to these issues might have on real lives and businesses. We do not want to find ourselves with perverse consequences occurring in the endeavour to solve a very real problem. As my hon. Friend the Member for Bethnal Green and Bow said, particularly in this month of Ramadan, when so many of my constituents and hers are making charitable donations—small sums of money—and sending them abroad, it is a good time to be thinking about the solution.

The points that many hon. Members have made about Somalia and Somaliland are very relevant. There is the need to ensure that this is not seen only as a Treasury concern, but as one that touches on policy questions in the Foreign and Commonwealth Office and the Department for International Development. We need to see all those branches of Government working together in co-ordination on the issue. My hon. Friend the Member for Rochdale (Simon Danczuk) made a number of strong points, particularly on the dangers of ending up with a less competitive market here, especially where fees and exchange rates would be higher for the consumer and where access to those services is potentially at risk.

I would be the last person to voice concern for some of the big banks on this one. They can and should do much more, but it would not be right simply to pin this on one banking institution, which might be at the end of a queue on this issue. However, I would like the Minister to say what conversations he has been having with Barclays bank, in particular, about the imminent decision. To me, it seems not only that a long-term problem must be resolved, but that we are facing an immediate short-term crisis. Will the Minister address the discussions with Barclays, in particular, about the grace period and the extent to which there needs to be a different time frame to the approach being taken?

We have to focus on solutions now, and it is important that we give the Minister ample time to address those, so that we can cross-examine him and scrutinise the Government’s attitude. I just want to raise a number of points with him. Does he agree that it should be incumbent on the banks, as well as the regulators, to tell the industry—those small firms—what due diligence, improvements and audit checks they feel are necessary to overcome some of the hurdles and concerns? They would be the first to want to put beyond doubt any concerns that might exist about them.

As well as the Minister saying whether he has been able to talk to Barclays, will he address the questions that go beyond the United Kingdom? Clearly, the United States has a slightly different regulatory attitude, which is impinging very much on the larger banks and Barclays in particular. Therefore, we need to know what conversations have happened so far and ought to be happening with the American regulators and with the US Treasury Department and the State Department. Can we have some co-ordination with those other authorities? We do not want to see money laundering risks any more than the Americans do, but they will also be facing their own problems internally in the United States on some of these questions, because they are also a diverse society and a diverse community. Can we align ourselves to ensure not only that we have a gold standard of anti-money laundering practices, but that we do not throw the baby out with the bathwater?

What conversations has the Minister had with the Department for International Development and the Financial Conduct Authority? The FCA is a brand-new regulator, which has been operating for several months. It has a consumer remit and a competition remit. It seems to me that the FCA needs to be firmly involved in the issue and that it may have some expertise to bring to bear.

Suggested solutions have involved guarantees from the state or some sort of underwriting. Should the state-owned banks take that on their shoulders? The Bank of England has been mentioned perhaps as a way to do that in the short term. I am a little wary about the taxpayer ending up always being the one who must bear the burden of the solution; but clearly, as my hon. Friend the Member for Bethnal Green and Bow pointed out, the issue cuts across our international aid and development policies in another bit of the Government. We do not want to see Somalia, for example, retrench in development terms because of something that has been happening in another branch of the Government. I wonder what the Minister’s attitude is to those aspects and, in particular, to whether some aid agencies might be part and parcel of a solution in the interim, until we get some of the regulatory issues ironed out.

Can we have a round-table discussion with the whole sector and particularly with small and medium-sized businesses, involving not just the regulators but the Treasury, the Department for International Development and the FCO, and can we have that quickly? We are coming up to the summer holidays, but that is no excuse. The deadline is expiring very soon, and all hon. Members will want action taken, particularly on the issues that my hon. Friends the Members for Brent North (Barry Gardiner) and for Cardiff South and Penarth (Stephen Doughty) and others have talked about in their contributions.

As I said, I want to give the Minister time to respond, so that we can question him on policy. In summary, this cannot just be left as a commercial decision. We cannot say, “We are walking away from this. We don’t care about it. This is just one company making a particular call on this matter.” It is not just a market question. There is a downstream consequence from public policy, and it is therefore incumbent on us to get public policy right—to go the extra mile and ensure that we spend the time and effort necessary to find a solution. I just do not believe that having strong anti-money laundering policies is anathema to having proper facilities for diaspora communities to provide decent family support on an international basis. That is the sort of society that we need to support at this time.

I am grateful for this opportunity to speak under your chairmanship, Mr Bayley. I, too, add my thanks and congratulations to the hon. Member for Bethnal Green and Bow (Rushanara Ali) for securing this important debate. We have had a number of discussions on this issue already, and I look forward to continuing to have those discussions with her. I know that this is a very important issue for her and for all of us in this Chamber and beyond, and I welcome this opportunity to respond.

This issue is of concern to Ministers across Government and to hon. Members on both sides of the House, because a healthy, functioning remittance sector is crucial for the thousands of our constituents up and down the country who use such services to send money abroad. If you will allow me, Mr Bayley, I would like to speak for a moment about my gran. My gran—my mother’s mother—has been receiving remittances regularly for more than 50 years, since my parents first arrived in our great country and settled, first, in Rochdale. She continues to receive the benefit of remittances. When I first visited her while I was growing up, one of the things that I noticed was that she lives in a very remote village in Pakistan that has no bank. I think that the nearest bank is at least 10 miles away. She is unbanked. There were only a few remitters, at least to begin with, many years ago, that could get money to my gran. I mention that only to show that, at a very personal level, I do understand this issue and how important it is in Britain and particularly to British individuals such as myself, who are from an ethnic minority background.

The sector plays a crucial role in supporting the economies of all the developing countries that have been mentioned today that receive these funds. We all want to see a healthy remittance sector, but we also want to see a legitimate remittance sector. Our banks and regulators have a real responsibility to ensure that they are not inadvertently facilitating any kind of criminal activity. That could be money laundering, drug trafficking or the financing of terrorism, some of which we have heard about today. All are activities that pose real threats not just to UK citizens, but to global security. Of course, there is a fine balance to be struck between managing those risks and ensuring that essential services are still available to families in the UK. I would like to reassure hon. Members that we are committed to getting the balance right. This afternoon, I will set out some of the steps that this Government are taking towards ensuring a robust and sustainable remittance sector.

We recognise the role of Government in effectively supervising and regulating the money service business sector to help to drive up standards in this area. Last year, we strengthened the Money Laundering Regulations 2007, with a particular view to helping Her Majesty’s Revenue and Customs, as the relevant regulator, to strengthen its supervision, and HMRC is making every attempt to close down those businesses that are engaging in criminal activity and tarnishing the sector as a whole. Last month, it worked closely with the Metropolitan police and the Serious Organised Crime Agency to target organised criminals operating in this sector. However, in the longer term, proactive solutions must be found to avoid the need for such action in the future. The best way to achieve that is by creating a remittance sector in the UK that is trusted by all stakeholders and with which all banks can feel confident about doing business.

I have spoken with several of the leading high street banks—including, of course, Barclays—during the last few days. Some have expressed important concerns on the structural features of the sector and particularly on the issues surrounding transparency. I can confirm that I am looking urgently into what measures the Government might be able to take, and speaking to all relevant authorities to look at what options are open to us to try to allay as far as possible some of the concerns that those banks have expressed.

Separately, work has already been under way for some time through Project Quaver, led by HMRC and SOCA, on developing a healthy and sustainable sector. That project brings together the Government, law enforcement, regulators and industry to help banks and money service businesses to understand the risks that come from abuse of this sector, and to strengthen their compliance.

However, we recognise that having effective anti-money laundering and counter-terrorist financing procedures in place is not only essential to preventing, detecting and disrupting illicit finance. They provide the confidence for foreign investment and stable economic growth in many of the developing countries that have been mentioned. Developing effective regimes requires effective co-operation between the public sector and the private sector to understand and mitigate the threat of illicit finance, so under the UK presidency, the G8 has this year committed to launch a public-private sector dialogue on illicit finance, which will be held in Namibia in September of this year. That will not only help to tackle the issue of robust regimes in the traditional financial sectors, but address the opportunities and the risks posed by new payment methods, such as mobile money services. By bringing together private sector experts from around the world and Ministers and officials, the dialogue will be a unique opportunity to leverage expertise and drive reform that meets the specific needs that countries face, particularly in sub-Saharan Africa.

I am sure that some very good initiatives are being developed, but will the Minister be able, in his remarks this afternoon, to give any direct comfort to the businesses that hon. Members here are concerned may go out of business in the next few weeks?

I will, but before I respond fully, I will give way to the hon. Member for Cardiff South and Penarth (Stephen Doughty) as well.

I thank the Minister for being very generous about interventions. Again, I am very interested to hear what is going on at international level—dialogues and so on at the G8—but, echoing the comments of my hon. Friend the Member for Cardiff West (Kevin Brennan), we want to know what will happen in the next couple of weeks, given what is happening on 12 August. I do not want to betray any confidences, but Barclays was offering a meeting at its headquarters. Will we see a meeting of the key stakeholders—the banks, the non-governmental organisations and the diaspora communities—in the next fortnight?

I think that both hon. Gentlemen knew that I was coming to this issue next. I am referring to the immediate effect of Barclays’ decision. I recognise that some of the things that I mentioned a moment ago, although very welcome, are long-term projects. In the short term, the Government are committed to doing everything that they can to minimise the impact on individuals and businesses in the UK of any immediate changes in this market. I understand that businesses in this sector will face challenges. That is why we are committed to working with the banks, trade associations and money service businesses to try to find solutions that do not mean extensive business closures. However, the truth is that we do not know what the full impact of some of the decisions that have been discussed here today will be. We are monitoring the situation and will continue to do so in the course of the next few months.

I am extremely grateful to the Minister for giving way; he is being very generous. In terms of immediacy, does he not agree with this point? My constituent George Boateng has contacted me to say that an entire parallel industry—the so-called hawala system—exists now and is totally and utterly unregulated, and we could end up with a situation in which we have a sort of reverse Gresham’s law: we end up losing money transfer that is legitimate and regulated and going into a completely unregulated system. Surely that cannot be anyone’s intention.

The hon. Gentleman raises a fair point. He is correct, to the extent that if individuals cannot find a legitimate alternative that can reach the parts of countries they want to reach at a reasonable cost, they may be tempted to use illegitimate means, which makes the issue all the more important. I accept his general point.

We are committed to ensuring that commercial decisions taken by banks do not inhibit individuals in the UK from remitting money to families abroad, but, once again, there may be challenges. Individuals might need to approach firms other than those with which they are used to dealing. There may be increased charges. Remittance flows to some countries may be affected, specifically those with less developed or non-existent banking sectors, such as Somalia, as we heard from the hon. Member for Cardiff South and Penarth. I share his concern.

I was encouraged to hear the Minister’s reference to his personal experience—his family experience —but I am disappointed at the lack of focus in his response on the fact that we need an urgent solution. I appreciated his time before the debate thinking through a constructive way forward. I hope that he will use the last 10 minutes to talk about how he will get his officials, the FCA and interested parties to use their insights to look at how we can solve the problem. He would be commended for making that happen. Across Government —in DFID as well as in the Foreign Office and his Department—and in his party and my party, there are grave concerns, which have been expressed in the debate. I hope he will use the last 10 minutes to focus on action and delivery, because he will be commended for that.

The hon. Lady is absolutely right to set that challenge and say that we should focus on action and delivery, and that is what I believe we are doing. I am sure she understands that there is no magic bullet or overnight solution that can be provided by any Government. As we heard today, this is a complex matter. The hon. Member for Nottingham East (Chris Leslie) recognised in his remarks that the banks have legitimate concerns. Other regulatory authorities are involved and hon. Members have mentioned the United States. Whatever the solutions, they may not be perfect and we may not get back to the world as it was before in this space. There will probably be changes to the structure of the industry. I hope she will be reassured, as I make further remarks, that we take the issue seriously.

The hon. Lady mentioned DFID, which I was coming to. I have discussed the recent bank actions with DFID officials and my right hon. Friend the Secretary of State for International Development. Initial indications do not suggest a significant impact on the economies of developing countries or their humanitarian situation. The Government will however assess the impact of market restructuring on developing countries and work with private sector and aid partners to mitigate any negative repercussions. The Secretary of State confirmed that the provision of UK Government aid will not be affected. My hon. Friend the Member for North West Norfolk (Mr Bellingham), who has great experience in development, talked about the work of DFID. It has said that it will commission an independent research report to understand the impacts of the recent bank actions on development outcomes in recipient countries.

I thank the Minister for being generous. Can he explain what evidence DFID used to come to that conclusion? I have not been given any evidence, nor have my hon. Friends or other hon. Members. DFID should be looking at how to improve this important industry, because we want to end aid dependency. It is scandalous that DFID is being so complacent and commissioning a research project, when businesses will go bust in the next month. Will he press DFID to take urgent action with him? I accept that there are no magic wands, but there have been constructive suggestions in the debate, which I ask him to take forward and lead on. He will be commended for coming up with a solution.

I assure the hon. Lady that DFID takes the issue as seriously as other parts of Government and Members here today do. DFID, the FCO and the Treasury are working closely on it, because it affects all three Departments.

If the Minister does not give a clear indication this afternoon that there will be a round-table meeting of which Government are part, everybody will leave with the impression that the Government support big business, but not small businesses.

I will come to that point before I finish, but, given the questions asked today, let me say a few words about Barclays.

When I met Antony Jenkins, Barclays chief executive, we discussed its recent decision to end its relationship with a number of money services businesses in the UK and I tried better to understand its perspective. Although we did not discuss decisions taken on individual firms, I was reassured to understand that the recent review of its customers in the sector is being conducted on a case-by-case basis. I was also reassured that it is working with firms to manage the impact of its decision. He confirmed that Barclays will consider on a case-by-case basis extensions to any initial notice period it has given companies, particularly where those companies can show that they are in active discussions with other banks that may take their business.

I do not have much time. A number of questions were raised by hon. Members, but I will give way very briefly.

Without wishing to betray any confidence that Barclays relayed at the meeting with me and my hon. Friend the Member for Cardiff South and Penarth (Stephen Doughty), it is clear that it has decided not to continue to do business with certain remittance companies, and, despite what the Minister has said about the assurances he received from the chief executive, that was made very clear to us in the meeting. The matter is much more urgent that the Minister is acknowledging.

I take those points on board. The hon. Gentleman is right to suggest that Barclays has made the decision. It is however showing flexibility over the timing of closing certain accounts, and that flexibility is better than no flexibility.

I shall turn to a few questions raised by hon. Members. The hon. Member for Bethnal Green and Bow asked whether I had received representations from the large money transfer companies. I have not received any representations from such companies. She also suggested—if I understood her correctly—that the banks’ behaviour could be anti-competitive. There is no evidence that banks are acting in concert or are distorting competition. They appear to have acted in accordance with their commercial interests and their desire to minimise risk.

The hon. Member for Rochdale (Simon Danczuk) asked why larger organisations, such as Western Union, are not affected by the decisions of the banks and whether the banks would benefit from the withdrawal of some services. The short answer to why some larger institutions are not affected is that their internal compliance procedures are in many cases similar to what the banks themselves adopt internally; in many cases, they spend more resources on compliance and transparency issues, which they are clearly in a better position to afford than smaller operators; and in many cases they are regulated differently. All companies are supervised by HMRC, but there is a difference between a company registered with the FCA and one fully authorised with it, and banks take that into account.

The hon. Member for Rochdale and others, including the hon. Member for Nottingham East, asked whether we were having discussions with the US. We work closely with the US Treasury and State Department at all times on all regulatory matters, including money transfer. It is important to point out that since many transfers are ultimately in US dollars, there is a US interest. Lastly, I asked the British Bankers Association for a round-table meeting and it has agreed. We will have one, the Government will of course take part and I look forward to it.