Jon McKnight

Direct Line's reputation on the line?

Why does Direct Line use an 0845 number for its car insurance Customer Services? And why doesn't it allow customers to e-mail it?

The Customer Services woman I've just spoken to after a seventeen-and-a-half-minute wait on hold couldn't answer either of those questions.

So I was forced to speculate myself.

Could it be, I asked her, that Direct Line makes huge profits every year from forcing customers to ring expensive 0845 numbers when it could have used an ordinary landline number that almost everyone could ring for free as part of their bundled calls packages?

Could it be that Direct Line doesn't allow customers to e-mail it because that would be free, fast, and efficient - as opposed to having them waiting ages on over-priced phone lines?

All I'd wanted to do was e-mail a PDF of a proof of no-claims bonus to Direct Line. It would have taken seconds and cost nothing.

Yet I had to wait, listening to the most mind-numbingly repetitious music on hold, for more than a quarter of an hour before I even spoke to a human being.

No, I couldn't e-mail it, she said, because they don't ue e-mail. And no need to check the date of this posting; I am writing in the 21st Century.

The woman was happy for me to fax her, had I had a machine to hand, but couldn't accept that a scanned and e-mailed PDF of a document had exactly the same status and properties as one that had been faxed.

If Direct Line is unable to answer its phones more quickly than that, why doesn't it make its customer service line a freephone number? That would mean that instead of the customer paying for Direct Line's inefficiency, the firm would pick up the tab itself with a huge phone bill.

But I suspect that the firm would simply begin answering quickly, as it should, to avoid the costs that it doesn't mind passing on to us.

If more people complained about it, she said, Direct Line might take notice.

I know readers of this column do like a challenge, so there you are!

Jon McKnight

Author of Sort The Bastards!

MPs to investigate Bradford & Bingley shareholders' scandal

Bradford & Bingley shareholders who feel that no-one has considered them or listened to their complaints since the bank was nationalised in a behind-closed-doors scandal will finally get a chance to have their say, thanks to MPs.

The powerful and influential Treasury Select Committee has announced an extra hearing, in November, into the goings-on that led to Bradford & Bingley's 940,195 shareholders losing all of their money.

The new hearing, announced today, is in addition to the hearing that will see the Chancellor of the Exchequer, the Governor of the Bank of England and the Chairman of the Financial Services Authority summoned to appear before it to answer tough questions about the banking crisis.

As reported in this column, the committee has invited the public to submit questions to the committee about the banking crisis generally - but the announcement of the new and separate hearing suggests that the demand for answers from aggrived B&B shareholders has already been overwhelming enough to merit it.

The new hearing is into "the performance and actions of two banks that have recently been nationalised: Northern Rock and Bradford & Bingley", according to an official press release from the committee.

The date has yet to be decided, but the committee will invite written evidence on the specific topic of Bradford & Bingley when it announces the date and witnesses for the hearing.  

Further written evidence, it says, will be invited at a later stage in the inquiry. Details about the submission of written evidence will be given in a subsequent press notice.

This column, the home of the Bradford & Bingley Shareholders' Campaign, urges all of Bradford & Bingley's shareholders to submit questions to the special committee hearing as soon as the date is announced... unless, of course, they're happy to have had their shareholdings peremptorily "extinguished" and wouldn't dream of tackling the perpetrators or demanding redress and compensation!

For the record, here is the committee's press notice in full:

22 October 2008: For Immediate Release

TREASURY COMMITTEE ANNOUNCES NEXT STEPS IN BANKING CRISIS INQUIRY

The Treasury Committee announced today that it will take evidence from the Chancellor of the Exchequer, the Governor of the Bank of England and the Chairman of the Financial Services Authority at the start of its inquiry into the Banking Crisis, and also set out plans for the next steps in its inquiry.

Initial hearing

The first public evidence session will take place at 4.00 pm on Monday 3 November 2008 in the Grimond Room, Portcullis House, with the following witnesses appearing together:

The Rt Hon Alistair Darling MP, Chancellor of the Exchequer
Mervyn King, Governor of the Bank of England
Lord Turner of Ecchinswell, Chairman of the Financial Services Authority

As previously announced (in the Committee’s press notice of 14 October, the Committee is inviting members of the public to send in questions they would like to see put to the witnesses, which can be sent to bankingcrisis@parliament.uk up to 48 hours before the start of the hearing. 

Further information about submitting questions is given in Note 2 at the end of this announcement.

Listed financial institutions during the current period of heightened instability

The Committee has decided that, during the current period of heightened instability, it would not be appropriate for the Committee to take oral evidence from listed financial institutions. The Committee does expect to take evidence from such institutions at a later stage in its inquiry.

Topics for further hearings planned for November

The Committee plans to hold three further hearings in November on the following topics:

• The performance and actions of two banks that have recently been nationalised: Northern Rock and Bradford & Bingley;
• Fair value accounting and accounting standards, and their role in the current financial crisis;
• Incentive structures (including remuneration policies) within financial institutions, and their potential effects on financial stability, both at the institutional and system-wide level.

The Committee will invite written evidence on these three specific topics when it announces the dates and witnesses for these hearings.  Further written evidence will be invited at a later stage in the inquiry. Details about the submission of written evidence will be given in a subsequent press notice.

1. PRESS NOTICE ISSUED ON 14 OCTOBER 2008

For details of the Committee’s press notice issued on 14 October, see:

http://www.parliament.uk/parliamentary_committees/treasury_committee/tsc0708pn74.cfm

2. GUIDANCE FOR SUBMITTING QUESTIONS RELATING TO HEARING ON 3 NOVEMBER 2008

Questions can be submitted up to 48 hours before the hearing, which will take place at 4pm on 3 November. The Committee regrets it cannot accept any other form of submission apart from email to the following address: bankingcrisis@parliament.uk

Submissions should take the form of questions rather than statements and should be no longer than 100 words.  If  you wish to remain anonymous, please state clearly at the beginning of the email. 

The Committee regrets that not all questions submitted can be guaranteed to be asked.

FURTHER INFORMATION:
Committee Membership is as follows: Rt Hon John McFall (Chairman), Nick Ainger, Mr Graham Brady, Mr Colin Breed, Jim Cousins, Mr Philip Dunne, Mr Michael Fallon (Sub-Committee Chairman), Ms Sally Keeble, Mr Andrew Love, Mr George Mudie, Mr Siôn Simon, John Thurso, Mr Mark Todd, Sir Peter Viggers.

(Press release ends)

DON'T FORGET!  This column will publish the date of the meeting as soon as it is announced, and give details of how to submit questions or written evidence. 
Keep checking this column for details and all the latest news on the Bradford & Bingley Shareholders' Campaign - and if you can mention it or even put a link to www.jonmcknight.typepad.com on appropriate forums or message boards, it can only add to our strength.

Jon McKnight

Author of Sort The Bastards!

Bradford & Bingley shareholders – a chance to have your say

At last, Bradford & Bingley shareholders are about to get a chance to have their say about the needless nationalisation that robbed them of their investments.

The powerful Treasury Select Committee of the House Of Commons is inviting members of the public to submit questions about the banking crisis to be answered by the Chancellor, Alistair Darling, Bank of England chairman Mervyn King, and Financial Services Authority chairman Lord Turner.

With 940,195 Bradford & Bingley shareholders deprived of millions of pounds by the nationalisation that many consider unnecessary, the committee can expect a lot of questions!

John McFall, chairman of the Treasury Select Committee, says the public should have a chance to question those in authority, so he's inviting the public to submit questions by e-mail to bankingcrisis@parliament.uk

Questions are limited to 100 words - which isn't much, considering the number of questions shareholders are entitled to know the answers to - but at least they will be heard.

So this column urges all those shareholders who believe they were wrongly deprived of their shares to e-mail the committee at the address above.

The more people who e-mail, the more chance there is that Mr McFall, his committee, the Chancellor, the chairman of the Bank of England and the chairman of the FSA actually take notice of the shareholders' plight.

If shareholders don't bother to register their protest and question those responsible for their losses, they have only themselves to blame.

And if anyone needs inspiration for a question to ask, look at the previous posting in this column and help yourself.

Select Committees, for those unfamiliar with them, are extraordinarily powerful committees of the House Of Commons that have the power to summon even the most reluctant Ministers and officials to testify before them.

The press release says the trio in this case have been "invited" to appear before the committee, but should any of them not entirely relish the idea, they will be aware that the committee has the power to drag them there kicking and screaming if necessary.

The committees are also renowned for putting their witnesses on the spot and interrogating them, on camera, with all the enthusiasm and clinical expertise of the best QCs.

So don't miss this golden opportunity to have your say and ask the uncomfortable questions that Messrs Darling, King and Turner would rather you didn't!

Full details of the committee's press release are available on its site  and I'm reproducing it below in its entirety in the hope that fellow shareholders will be inspired to take Mr McFall up on his offer.

The full text of the Treasury Select Committee press release follows:

TREASURY COMMITTEE INVITES QUESTIONS FROM THE PUBLIC TO PUT TO THE CHANCELLOR ON THE BANKING CRISIS
Following the unprecedented financial intervention announced by the Chancellor over recent days, the Treasury Committee today announces it will undertake an urgent inquiry into the banking crisis.
John McFall, Chairman of the Committee said:
“This inquiry will take a fundamental look at the causes of the present banking crisis, the current responsibilities of the banks and the Government to the taxpayer, and the future shape of the financial and regulatory landscape.”
Given the public concern about the stability of the UK banking system and commitment of such a large sum inherent in the Chancellor’s proposals, the Committee is asking members of the public to send in questions they would like to see put to the following witnesses, who the Committee has invited to appear as soon as possible.
Witnesses:
The Rt. Hon. Alistair Darling MP, Chancellor of the Exchequer
Mervyn King, Governor of the Bank of England
Lord Adair Turner, Chairman, Financial Services Authority
Questions should be emailed to the following address:
bankingcrisis@parliament.uk
The date of the hearing will be announced in due course.
John McFall, Chairman of the Committee said:
“Taxpayers are naturally very concerned about the scale of this investment. The Committee hopes that by providing people with the chance to have us put their questions to those in charge, we can provide a constructive way of engaging the public on a matter of such deep concern to the whole country.”
FURTHER INFORMATION ON SUBMITTING QUESTIONS
Questions can be submitted up to 48 hours before the hearing, which will be announced at a later date. The Committee regrets it cannot accept any other form of submission apart from email to the following address:
bankingcrisis@parliament.uk
Submissions should take the form of questions rather than statements and should be no longer than 100 words.  If you wish to remain anonymous, please state clearly at the beginning of the email. 
The Committee regrets that not all questions submitted can be guaranteed to be asked.
Full written submissions of evidence for the inquiry will be solicited at a later date.

Shareholders who wish to contact committee chairman John McFall directly can e-mail him at john.mcfall@blueyonder.co.uk  

If anyone who e-mails a question to the committee wishes to see a copy of the question appear in this column, please cc or bcc your e-mail to shareholders (at) poshaddress.com and we'll publish the best.

Jon McKnight

Author of Sort The Bastards!

10 questions Bradley & Bingley's boss won't answer

Bradley & Bingley boss Richard Pym is refusing point-blank to answer any questions about the reassurances he gave shareholders only two trading days before the bank was nationalised and they lost all their money.

Despite numerous requests for interviews since the shock nationalisation, Mr Pym is still refusing to explain himself to investors who bought shares in the bank after reading his assurances that the bank was "well capitalised" and "fit for purpose going forward".

He issued his statement on Thursday 25 September, and said nothing to contradict those assurances before the close of the Stock Market on Friday 26 September.

As Bradford & Bingley's 940,195 shareholders now know to their cost, the bank was nationalised without warning before the Stock Market opened again on Monday 29 September.

The series of events raises a number of questions to which Mr Pym, of all people, ought to know the answers.

And there are many shareholders who believe that, as the £750,000-a-year Chief Executive Officer of Bradford & Bingley, Mr Pym might want to say at least something to shareholders. Maybe even a sentence including the word "sorry".

But he won't say a word. 

Does he even care? We don't know, because he won't say.

As a journalist and Bradford & Bingley victim (just £3,700 in shares in my case) I approached Bradford & Bingley's press office requesting an interview and was told it was extremely unlikely he would agree.

I e-mailed a list of 10 detailed questions that shareholders want Mr Pym to answer, hoping he would at least have the manners to offer a written reply, but all I received back was the following short message from the press office: 

"Many of your questions relate to the nationalisation of B&B plc and, therefore, you should direct your questions to The Government, which is B&B's single shareholder.

"All statements made by the Company prior to nationalisation were entirely accurate."

That, as we journalists know, is called passing the buck.

However, there is a significant admission in the second sentence. If Mr Pym's assessment of B&B's trading position was correct, as he now maintains it was, that throws doubt on the need for the nationalisation to have happened either at all or at that time.

Here, for the record, are the questions that Mr Pym refuses to answer:

1 - Why have you declined to give any interviews or make any Press statements since the nationalisation?

2 - There are 940,195 Bradford & Bingley shareholders who believe the nationalisation was not necessary at the time and want to know if you share their view. What do you have to say to them?

3 - You issued statements a few days before the nationalisation in which you reportedly said Bradford & Bingley was "well capitalised" and "fit for purpose going forward". Is it correct that as the CEO of what was then a listed company, your comments were subject to regulation and therefore had to be accurate so that shareholders were not misled?

4 - Will you confirm that the statements you made were indeed accurate?

5 - As nothing happened to the detriment of Bradford & Bingley's trading position in the few trading days between you issuing those encouraging statements and the nationalisation being imposed, were you (with hindsight) wrong in your assessment of Bradford & Bingley's trading viability?

6 - If you still believe you were correct in your assessment of B&B's trading viability, do you think the nationalisation was unnecessary at that time?

7 - What do you have to say to people who read your statements, believed them, and bought shares in Bradford & Bingley on the strength of your personal reassurances, only to have their shareholdings "extinguished" by the nationalisation a few days later?

8 - If you now believe your assessments of B&B's trading viability were wrong - or, if you believe they were correct and that, consequently, the nationalisation should not have been imposed - have you considered offering your resignation as a matter of honour or in a gesture of protest?

9 - Did you lose your own personal shareholdings in Bradford & Bingley as a result of the nationalisation or were you able to sell them in the knowledge that they were about to become valueless - in which case, at what stage did you sell them, and how much did you receive for them?

10 - As the nationalisation was only rumoured after trading on the stock market had closed for the week, were you able to dispose of what were about to become valueless shares before the market closed on the Friday - and if you were aware of the nationalisation, why did you not warn other shareholders so that they, too, could sell their shares and recover something of their investment?

No-one is suggesting that Mr Pym acted improperly at any time. Indeed, the only answer his press office has given - ie that the statements he made on the Thursday were correct - support this column's and other shareholders' belief that he was telling the truth when he said the bank was still viable.

But shareholders do want to know - and deserve to hear it from the man himself - whether he believes that the nationalisation was unnecessary and that the loss of their shares and the money tied up in them was also unnecessary.

If he came out and said so, it would add immense weight to shareholders who are campaigning for full compensation for their losses.

But if Mr Pym doesn't say anything, he's effectively leaving them to drown when he could, if he chose, throw them a lifeline.

So why won't he speak? We deserve to be told.

Jon McKnight

Author of Sort The Bastards!

Sign the Bradford & Bingley petition!

Bradley & Bingley shareholders have started a petition on the Number 10 website calling for full compensation for their lost shares and, gratifyingly, making many of the same points that this column has been making ever since the shock nationalisation.

The petition reads: 

We the undersigned petition the Prime Minister to ensure investors in Bradford & Bingley receive a fair price for their shares.

Bradford & Bingley was a going concern and could have continued trading or have been bought by another company. In nationalising the company and taking the shares into Treasury ownership, the Government have effectively stolen from the shareholders of the company. Recompense is due and the Government must make a fair and reasonable payment for the shares it has compulsorily acquired.

I urge every B&B victim who has even the slightest interest in getting their money back to sign the petition now.

You can find the petition at http://petitions.number10.gov.uk/Bradford-Bingley/ or just click here .

Jon McKnight

Author of Sort The Bastards!

John Redwood smells the B&B rat, too

Bradford & Bingley shareholders who lost a fortune when the Government unexpectedly nationalised the bank, "extinguishing" their shares (to use the official terminology), may take some comfort from the knowledge that at least one MP shares their belief that the nationalisation was ill-timed and unnecessary.

Tory John Redwood, writing before the nationalisation happened, posted a particularly prescient observation on his blog, John Redwood's Diary, that questioned why nationalisation should have been contemplated at all.

He points out that just because B&B's share price was falling, that didn't mean it had to be nationalised, and that even a bank could carry on trading despite a low share price if people were happy to leave their deposits in it, as they were with B&B.

His argument is compelling, and supports the views of B&B shareholders who have complained to this column about they way their shares were seized without notice and devalued to zero at a stroke.

This adds to the growing calls for an explanation from Gordon Brown - did he panic and nationalise unnecessarily? - and for full compensation for 940,195 B&B shareholders who were robbed by him that day.

We need an official and independent enquiry into the events leading up to the nationalisation, and I trust Mr Redwood will be among the first to use his considerable Parliamentary clout and call for one.

Jon McKnight

Author of Sort The Bastards

Gordon Brown and the B&B scandal

An open letter to Gordon Brown on behalf of Bradley & Bingley shareholders

Dear Prime Minister

On behalf of the 940,195 shareholders in Bradford & Bingley who have lost £123.5 million in the nationalisation, I'd like to ask you the following questions - the answers to which may well result in almost a million votes being cast for or against you at the next General Election.

A million votes could easily decide that election and result in David Cameron settling into the rather hot seat you're sitting on now in Number 10, so I trust you will take the concerns of Bradford & Bingley shareholders seriously and provide straight answers to these straight questions.

1 - Why were Bradford & Bingley shareholders not consulted in any way about the future of the company in which they had invested their money - and why were they not allowed to exercise their democratic and legal right to call for an Extraordinary General Meeting?

2 - Richard Pym, the CEO of Bradford & Bingley, said the bank was "well capitalised" and "fit for purpose going forward" - two trading days before you stepped in to nationalise it. His comments were taken seriously by myself and other investors who put their money into B&B shares after hearing them, on the grounds that (a) he of all people ought to know, and (b) any public comments he makes are strictly regulated, so have to be true. Nothing happened to B&B's traqding position in the period between his comments being uttered and you nationalising the bank, so either Mr Pym was deliberately misleading shareholders (which I doubt), he was catastrophically wrong (which I also doubt), or you decided to nationalise it anyway even though B&B would have been able to continue trading for some time. So which of those possibilities represents the truth? If Mr Pym did mislead shareholders, will you be ordering an enquiry? And if you did nationalise B&B at a time when it was not strictly necessary, how could it be legally or morally justifiable to do so when it stripped almost a million shareholders of their hard-earned money?

3 -  Why did you not suspend dealing in B&B shares immediately after Mr Pym issued his comments (if you believed he was wrong)? Your failure to do so meant that shareholders like me were allowed to climb aboard, like last-minute passengers joining a doomed Titanic, when you knew all along that it was heading for an iceberg. To prevent shareholders from pouring their money into a bank that you knew was about to be nationalised would have been the decent thing to do. And whatever else people say about you, the one thing that distinguished you from most policitians was your inherent decency. But how does your reflection look in the mirror these, days, Mr Brown? 

4 - If Mr Pym was right, and B&B could have carried on trading successfully for some time, then how do you justify seizing the assets of almost a million shareholders in a move that Fidel Castro and numerous banana republic dictators would have been proud of as a strike against capitalism? Is this really the sort of behaviour we should expect from an elected politician in a democracy in the 21st Century?

5 - You have muttered something about shareholders receiving compensation "in due course", yet even the least cynical of us do not expect to see any of our money back any time soon. By nationalising the bank without warning, you diminished its value at a stroke, prompting a fire sale, so the real value of shareholders' investments will have catastrophically reduced. And that's your fault, Mr Brown.

6 - Can you confirm that if you instruct valuers to decide what compensation shareholders will receive, if any, you don't allow an army of them at a fee rate of several hundred pounds an hour to spend so long working it out that their fees effectively wipe out anything that might have been left for shareholders?

7  - Why were you so concerned to protect the interests of B&B savers yet showed no concern whatsoever about the interests of its shareholders? Don't shareholders matter?

8  - By nationalising Bradford & Bingley without warning, you have sent out a message to investors that it is no longer safe to buy shares in any company as they can lose all their money and have all their rights extinguished on a politician's whim. Do you realise what would happen to this country's economy if investors throughout the UK sold their shares wholesale in an attempt to put their money into safer forms of investments?

We need answers to all of these questions, Mr Brown. Every one of Bradford & Bingley's 940,195 shareholders will want to hear what you say - and if you ignore them, you will do so at your electoral peril.

We await your response.

Jon McKnight

Plymouth

4 October 2008