Building society given £1.4m fine

18 April 2011 Last updated at 14:40 GMT The FSA said N&P had failed to provide suitable advice to its customers, mainly pensioners Norwich and Peterborough building society has been fined £1.4m for mis-selling investments to 3,200 customers.

The Financial Services Authority (FSA), which imposed the fine, said the society had failed to give them suitable advice.

The building society sold high-risk policies provided by the now insolvent Keydata investment firm, which the FSA says were inappropriate.

N&P apologised for the "hardship and anxiety" suffered by its customers.

The society has already agreed to make compensation payments totalling £51m.

"N&P failed in its basic duty to provide suitable advice to its customers, despite an internal compliance report pointing out that there were problems as early as 2007," said Tracey McDermott, the FSA's acting enforcement director.

"Firms cannot treat customers fairly unless they pay attention to their financial circumstances and attitude to risk when they make recommendations," she added.

Fraud

The problem for N&P customers, and thousands of other people who were sold Keydata polices by independent financial advisers, became evident when Keydata was closed down by the FSA in 2009.

Continue reading the main story Ian Pollock Personal finance reporter, BBC News

The Keydata saga has been a disaster for the Norwich and Peterborough building society.

It is about to lose its independence and it has only itself, or at least its senior management, to blame.

They were told by their own staff that the Keydata policies were being mis-sold by its own "advisers" but apparently did nothing about it.

It is a pity the FSA does not say who, exactly, was responsible.

This text-book example of mis-selling joins an ignominious list of industry-wide mis-selling of products such as personal pensions, endowment policies and payment protection insurance.

The day when the FSA stops this happening in the first place, instead of clearing up the mess afterwards, cannot come too soon.

The policies it sold had been based on second-hand life insurance policies bought from elderly people in the US.

The investors would earn a return when those people died and the life insurance policies paid out.

After Keydata's closure it swiftly emerged that £103m invested by 5,500 people in one set of policies, packaged for Keydata by a Luxembourg firm called SLS, had in fact been stolen in a fraud.

About £350m had been invested by another 23,000 people in another set of Keydata policies.

These polices were packaged for Keydata by another Luxembourg firm called Lifemark.

They stopped paying their expected monthly income and are still at risk while an administrator in Luxembourg tries to rescue Lifemark.

High risk

The FSA said the Keydata policies, sold by N&P over a period of three years, were unsuitable for the society's customers because of the risk they might not pay the promised rate of return, or give the customers their capital back.

Most of the N&P customers had told the society's sales advisers that they wanted only low risk investments.

Often these customers ended up investing an unhealthily large proportion of their savings in the inherently risky policies.

With an average age of 62 the customers had very little opportunity to make up for any investment losses.

The regulator revealed for the first time that N&P, which earned £2.7m in commission for selling the Keydata policies, knew as far back as 2007 that they might be unsuitable but took no action and continued to sell them vigorously.

"N&P failed properly to assess the financial circumstances of many of its customers, designating them as having a higher tolerance of risk than was appropriate," the FSA said.

"Some customers were moved out of low risk products such as deposit accounts into Keydata investments, putting their income and capital at risk.

"Many of these customers were approaching or already in retirement, and could not afford to lose their money," the regulator added.

The N&P is now in talks to be taken over by the Yorkshire Building Society, and Matthew Bullock, its long-standing chief executive, retired at the end of March.

The N&P's sales force of investment advisers was closed down last December but is now being investigated by the FSA to see if it was guilty of mis-selling any other investments.

The collapse of the Keydata has become the biggest problem yet for the Financial Services Compensation Scheme (FSCS) which has offered compensation to both sets of Keydata investors - SLS and Lifemark.

The management of Keydata is still being investigated by the Serious Fraud Office (SFO).

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'Smoke-free society' aim in Wales

24 February 2011 Last updated at 11:27 GMT The chief medical officer wants to start a "debate" on smoking in cars carrying children Plans have been unveiled to dramatically reduce smoking levels in Wales with the ultimate goal of a "smoke-free society".

Playgrounds and all NHS property could be made smoke-free zones, as the assembly government aims to reduce smoking levels to 16% by 2020.

Around a quarter of adults in Wales smoke.

The chief medical officer also wants to start a "debate" on smoking in cars carrying children.

Dr Tony Jewell said: "Just as Wales took a bold step in creating smoke-free environments in public places, we recognise that the time is right to champion new approaches to further protect children from the harms of second-hand smoke.

"The plan proposes that local authorities will be encouraged to introduce smoke-free policies for playgrounds and to initiate a debate on smoking in cars carrying children.

"The NHS should set an example when it comes to creating smoke-free environments and supporting staff to quit smoking.

"The NHS should also encourage patients to stop smoking, particularly before elective surgery."

Continue reading the main story Leadership in tobacco control Reducing the uptake of tobacco use, especially among children and young peopleReducing smoking prevalence levelsReducing exposure to second-hand smokeWales brought in a ban on smoking in enclosed public places in April 2007.

The assembly government does not have the powers to ban smoking in cars with children but is keen to raise the issue.

Its new plans are outlined in a consultation to reduce smoking and exposure to second-hand smoke.

Proposals include lobbying the UK government on issues such as increasing the price of tobacco through taxation, and continuing to discourage children from smoking.

The consultation says smoking continues to be the largest single preventable cause of ill health and premature death in Wales, causing around 5,650 deaths each year.

Dr Jewell wants to protect children from second-hand smoking at home and in cars after speaking out on the issue last year.

"Reducing children's exposure to second-hand smoke will help to protect the most vulnerable in society and promoting smoke-free cars carrying children will bring home to parents the risks of smoking in front of their own children," he said.

"Children are not able to protect themselves from this exposure and it must be shown to be a serious public health risk through the development of legal protections, where appropriate, and policy initiatives."

Simon Clark, director of smoking rights pressure group Forest, said he would be "strongly opposed to any further restrictions on smoking in public places".

"There is no justification on health grounds for banning smoking in the open air. To ban smoking in hospital grounds would be very unfair on patients, staff and visitors," he said.

"The war on tobacco has gone far enough. I'm sure the Welsh assembly has better things to do than to target smokers."

Anti-smoking charity Ash Wales welcomed the proposals.

"This is an historic day for public health in Wales and the best news since the smoking ban was introduced in 2007," said Ash Wales chief executive, Tanya Buchanan.

"The action plan is the first such strategic plan for Wales which aims to systematically address smoking prevalence rates which have stagnated at 24%, and ensure our young people are protected from second-hand smoke."

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PM pledges £200m to Big Society

9 February 2011 Last updated at 17:07 GMT Ed Miliband tells David Cameron he is not Mother Theresa after an apparent dig at Gordon Brown

David Cameron has announced a £200m boost for his Big Society drive - as Labour's leader says his cuts are making society "smaller and weaker".

The PM said a Big Society bank would invest £200m from the financial institutions in the voluntary sector.

Ed Miliband said billions of pounds were being cut from voluntary groups across the country.

And Labour accused the PM of not being "straight with people" over cuts to Sure Start children's centres.

The row over the Big Society follows criticism from the retiring head of one charity that cuts were "destroying" Britain's "volunteer army".

Dame Elisabeth Hoodless told The Times on Monday that "massive" cuts to council spending would make it harder for people to do more in their communities.

At Prime Minister's Questions, Mr Miliband asked why Mr Cameron "doesn't listen to people who know about volunteering" and said charities up and down the country were concerned about the impact of spending cuts.

The Labour leader said Mr Cameron had promised to protect Sure Start children's centres but had cut funding by 9% and said there were predictions from childcare charity The Daycare Trust that 250 would close within a year.

'Sniping'

He said even the Conservative leader of the Local Government Association believed Communities and Local Government Secretary Eric Pickles was "detached from reality" about the impact of the cuts.

And he asked Mr Cameron: "How do you expect people to volunteer at the local library if it is being shut down?"

Continue reading the main story

You shouldn't get so angry, it will cloud your judgement - you're not the first prime minister I have said that to”

End Quote Ed Miliband But the prime minister accused Mr Miliband of "sniping" and said all parties supported the aims of the Big Society - in terms of devolving power to councils and communities.

He said he disagreed with Dame Elisabeth as the government was putting in £470m over four years into charities and voluntary bodies and a further £100m would be made available to help charities worst affected by spending cuts.

Mr Cameron added: "And something I can tell you for the first time today because of our deal with the banks, the Big Society bank will be taking £200m from Britain's banks to put in to the voluntary sector."

On Sure Start, he said the budget was "going up" from £2,212m to £2,297m and said the chief executive of the Daycare Trust, Anand Shukla, had said the government had "allocated sufficient funding for the existing network of Sure Start children's centres to be maintained".

'No idea'

But Mr Miliband said the government was "cutting billions of pounds from voluntary sector organisations up and down this country".

He said Mr Cameron was "cutting too far and too fast and society is becoming smaller and weaker, not bigger and stronger".

The prime minister said the Labour leader did not have "a single idea for making this country a better place" and should support the Big Society.

As noise levels rose in the Commons, Mr Miliband, who was a cabinet minister under Gordon Brown, joked: "You shouldn't get so angry, it will cloud your judgement - you're not the first prime minister I have said that to."

A spokeswoman for the Daycare Trust told the BBC that the government had removed the ring-fence around Sure Start budgets and the charity stands by its warning that 250 Sure Start Centres face closure.

The figures referred to by Mr Cameron related to the Early Intervention Grant to local authorities, which includes other projects as well as Sure Start, and cover 2011-12 and 2012-13. But they are lower than the budget for 2010-11, £2,483m.

Shadow Education Secretary Andy Burnham said: "David Cameron needs to be straight with people. The truth is that he's cutting Sure Start funding, not increasing it - that's what his own figures show.

"On top of a real terms cut for Sure Start, he's cutting funding for children, young people and families by 10.9% next year. No wonder the Daycare Trust is standing by its claim."

The government says it protected Sure Start's budget in cash terms in the spending review - although the ringfencing of the money was removed.

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