Andrea Leadsom: 'I was a little stern, but he paid up and we’ve recovered £1.3bn'
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Version 0 of 1. Right, says Andrea Leadsom, let’s get straight to the point: “I want the taxpayer to know four things about what we are doing to restore trust in banking. First, the £134bn they spent in rescuing the banks is being repaid. Second, bankers are being disciplined. Thirdly, bankers can never get away with such appalling behaviour again and, finally, we are restoring confidence and improving banking for all consumers.” The Economic Secretary to the Treasury goes further: “I understand and get completely how angry people are about the banking crisis and its crucial we – the Government – explain what is being done to restore trust in banking.” Ms Leadsom pauses for breath – she doesn’t have much time – to say that if the Treasury were to receive all loan payments in full and the Government were to sell shares at their current values in RBS and Lloyds, there would be an overall cash surplus of around £8bn. She brings out her notes, and reels off the numbers. “So far we have recovered £53bn from all the different loan and asset protection schemes that were put in place. This includes £36bn in repayments and capital loans, and £7.2bn in interest fees as well as repayments from Icelandic banks, Northern Rock and Bradford & Bingley Building Society.” And if you add in the value of shares in RBS, where the Government, through the UK Financial Investments (UKFI) body, owns 80 per cent, as well as the 24 per cent in Lloyds, which is being dribbled out for sale, then you get to the surplus, she declares. It may have taken Ms Leadsom longer than she hoped to get to a position of control over getting back taxpayer money, but she has made it the priority of her new banking brief. But it’s also a frustrating one. “While I love what I’m doing, it’s tough when you can’t get things done as quickly as you want or hope.” The room chosen for our meeting at Westminster’s Portcullis House has the slightly sweaty feel of a sixth-form classroom, and the 51-year-old MP for South Northamptonshire makes the perfect headmistress. By all accounts, a bolshie one. Not just with the banks but overseas politicians too. She recounts the story of how, last autumn, she met Iceland’s Finance Minister, Bjarni Benediktsson, to persuade him to hurry up and pay back the couple of billion pounds that the UK spent on helping bail out one of the country’s banks. “It was a friendly drink and chat. He was charming and agreed the money would be paid back,” she says. Then a couple of days later a well-known Icelandic blogger wrote that Bjarni Ben, as the dashing minister is known at home, had been looking forward to a “collegial meeting” with the economics secretary. Instead, the blogger reported, what he got “was an almighty dressing down from the fearsome Leadsom. There are even rumours that she was waving around a legal writ.” A Leadsom handbagging, then? “No,” she laughs. “I was a little stern but I didn’t think I had been that hard. But he paid up and we’ve now recovered £1.36bn from the Landsbanki estate in Iceland, which operated as Icesave in the UK. We’re now in talks about getting the last £700m.” Thank goodness the minister – now to be known as Fearsome Leadsom – hasn’t lost her touch or gone too native since being promoted to the Treasury team in last year’s reshuffle. She has a reputation to uphold: one of the most highly rated MPs of the 2010 intake, she first made the spotlight with her forensic questioning of Barclays’ Bob Diamond during the Treasury Select Committee’s probing of the financial crash, suggesting he lived in a parallel universe to the rest of us. Rare among MPs, she knew the subject matter better than most, as a former Barclays banker, although even she admitted the committee had been “useless” in getting Diamond to come clean. While her questioning impressed her peers, less politically cute was her demand to George Osborne that he apologise to Ed Balls for falsely accusing him of involvement in the Libor-fixing scandal. Making matters worse, she was reported to have told Mr Osborne to “fuck off” after he asked her to vote against an in/out EU referendum in 2011. She has always denied this. Her version is that they agreed to differ and that she would never speak to a colleague using such language. Knowing her a little, I believe her. Equally, there’s no smoke without fire and it always seemed odd that someone so knowledgeable had spent so long in political Siberia without promotion. Luckily, Mr Osborne appears to have born no grudges. On top of retrieving the bailout cash, she wants us to know that serious disciplinary action, and criminal investigations, are being pursued against those who have misbehaved. “It’s essential that the public knows that action is being taken against bankers whose behaviour was appalling. Many senior bankers have quietly either lost their jobs, or had bonuses taken away from them after internal inquiries.” The Serious Fraud Office is also investigating multiple cases of misconduct. More pertinently, Ms Leadsom says they won’t get away with such misconduct again. The introduction of the Senior Managers and Certification Regime by the new Bank of England regulator, the Prudential Regulation Authority, should make sure that bankers will be legally accountable for their behaviour, with strict criminal sanctions for reckless behaviour or failure, she says. “This means that regulators will have such sharp teeth that if people either transgress or are complicit, then they will go to prison. That means a jail sentence and never working in finance again.” More banks will also mean healthier banking. “The PRA now has a new competition objective which will make it easier for new banks to be launched – there are 25 new licences in the pipeline – and should improve services of the existing high street banks.” Once a champion of breaking up the banks into smaller pieces, Ms Leadsom has also led the drive for a new payments regulator which will make it far easier for new banks to operate and for bank account switching. On the subject of the latest HSBC tax avoidance fracas, Ms Leadsom is more careful: “David Cameron has done more than any other prime minister to crack down on tax avoidance and evasion. Essentially, the Government has done superbly well in reducing tax rates and at the same time making sure people and businesses pay them.” And what about the accusations last year – in this newspaper – that her office was funded with £70,000 that came from family members, paid out of companies run offshore. Although the payments were within the rules for political donations, they were criticised because of the Treasury’s stated aim of preventing tax avoidance by channelling money through offshore firms. At the time a spokesman for Ms Leadsom said the “donations are made by UK companies, employing hundreds of UK staff and generating UK profits – they are fully transparent and properly declared”. There is nothing more to add, she says. With that, Leadsom is off: she is running late for a meeting with James Leigh-Pemberton, the UKFI chairman. Hopefully not to deliver a handbagging. |