Oral Answers to Questions

Harriett Baldwin Excerpts

Tuesday 19th April 2016 Commons Chamber

[Maggie Throup (Erewash) (Con)]

11. What steps he is taking to facilitate transactions between UK and Iranian financial institutions.

[The Economic Secretary to the Treasury (Harriett Baldwin)]

The Government fully support expanding the UK’s trade relationship with Iran. The Treasury is actively liaising with UK banks and industry bodies, to understand concerns and help re-establish financial channels between the UK and Iran.

[Maggie Throup]

Despite the improving diplomatic relations between the British and Iranian Governments, UK businesses still face significant barriers to completing legitimate banking transactions for trade purposes. Will the Minister look at what more can be done to help to facilitate financial transactions between UK and Iranian banks, so that the UK economy can begin to benefit from this new market?

[Harriett Baldwin]

I thank my hon. Friend for her question. She is right that the situation with the payment channels between the UK and Iran is quite challenging, particularly because the US still has its primary sanctions in place. We have been speaking to banks at the highest levels. We have also been liaising with the US authorities to push for further clarity for UK banks. It is worth pointing out that some banks have a more extensive US business than others do, and that therefore it might be worth companies in my hon. Friend’s constituency and elsewhere considering switching to banks that have less exposure in the US.

[Sir Simon Burns (Chelmsford) (Con)]

Given the opportunities for British businesses in Iran as a result of the relaxation of sanctions, could the Treasury have a word with our friends the Americans to make sure that they do not seek to use their banking regulations to prevent some of the commercial deals that may flow to British companies as a result of that relaxation of sanctions?

[Harriett Baldwin]

My right hon. Friend is right to highlight one of the key issues. I assure him that we are working at all levels in discussions with the US authorities to ensure that British companies selling to Iran are able to put that money into UK bank accounts.

[Marie Rimmer (St Helens South and Whiston) (Lab)]

14. What recent fiscal steps his Department has taken to support manufacturing exports.

[The Economic Secretary to the Treasury (Harriett Baldwin)]

It is Export Week, and I can announce that UK Export Finance has provided more than £15 billion of support to exporters since 2010 and UK Trade & Investment has more than doubled the number of businesses that it helps to more than 54,000.

[Marie Rimmer]

UK industrial production and manufacturing output suffered sharp falls in February, and they remain well below 2008 levels. Meanwhile, the Office for National Statistics reported that house prices in London have reached an average of £524,000, which is 49% higher than their pre-recession peak and out of the reach of all but those who are on six-figure salaries or who have benefited from a trust fund inheritance. When will my constituents see the Britain held aloft by the march of the makers, and the economy rebalanced towards the north of England, as the Chancellor promised?

[Harriett Baldwin]

I encourage the hon. Lady to seek an Adjournment debate to elaborate further on her question. I am sure that she and her constituents will welcome the fact that employment in the north-west is at the highest level on record; that more than 89,000 businesses in the north-west will not pay business rates; and that 360,000 people in the north-west will now benefit from the living wage.

[Mr Alan Mak (Havant) (Con)]

British exports to China have more than doubled since 2010, led by Havant-based manufacturers such as Colt and Lewmar. Will the Minister join me in congratulating those businesses, and will she encourage others to follow their lead by supporting and maintaining the Government’s pro-export policies?

[Harriett Baldwin]

It is wonderful to hear during Export Week about Colt and Lewmar, and their fantastic work exporting overseas. It is a key priority of the Government to continue to encourage more firms to export. In fact, we have ambitious aims to have another 100,000 businesses exporting over the life of this Parliament.

[Rachel Reeves (Leeds West) (Lab)]

The current account deficit is at a post-war high of more than 5% of GDP, and 44% of our exports go to the European Union. It took Canada seven years to negotiate a free trade agreement with the European Union. Does the Minister agree that the last thing that exporters need, and the last thing that the one in 10 jobs that depend on our exports to the EU need, is the uncertainty that the referendum is bringing—and, indeed, that Brexit would bring—to them and to those jobs?

[Harriett Baldwin]

The last time I looked, I thought it was also Labour policy to have such a referendum, but I agree with the hon. Lady that it is very important that she and others get out the message about the value of exports and the importance for manufacturing of the UK’s membership of the single market. That is why I shall vote in the same way as her on 23 June.

[Rebecca Pow (Taunton Deane) (Con)]

T1. If he will make a statement on his departmental responsibilities.

--- Later in debate ---

[Rushanara Ali (Bethnal Green and Bow) (Lab)]

T3. Analysis by the House of Commons Library, including that on the 2016 Budget, shows that, cumulatively, 86% of savings in the period between 2010 and 2020 will come from women’s pockets. What has the Chancellor got against women?

[The Economic Secretary to the Treasury (Harriett Baldwin)]

The analysis by the House of Commons Library is fundamentally flawed. First, it assumes that every pound of Government borrowing benefits people. It also does not highlight the fact that it is higher rate taxpaying women such as me, whose child benefit has been ended, who form the largest part of that group. Is the hon. Lady saying that her party wants to reinstate child benefit for higher rate taxpayers?

[Stephen Hammond (Wimbledon) (Con)]

T6. Last year when I held a small business breakfast in Wimbledon, the level of business rates was the biggest issue, so my constituents are understandably delighted with the Chancellor’s permanent doubling of small business rate relief. Will my right hon. Friend say what else he is doing and what else the Government can do to support small businesses to ensure that they invest for growth and further jobs?

Financial Services

Harriett Baldwin Excerpts

Wednesday 13th April 2016 Written Statements

[The Economic Secretary to the Treasury (Harriett Baldwin)]

In November 2013, the Financial Conduct Authority (FCA) announced that it would investigate the serious allegations made against RBS’s global restructuring group, regarding the treatment of small and medium-sized business customers.

In a letter from Tracey McDermott—acting chief executive of the FCA—dated 12 April 2016, the FCA states that it has now received the draft final report from Promontory Financial Group, who were appointed by the FCA to undertake the review.

There are a number of important steps to be taken by the FCA before the report is finalised, and the FCA remains committed to completing the review as soon as possible.

I have placed a copy of the FCA’s letter in the House of Commons Library.

[HCWS670]

Tax Avoidance and Evasion

Harriett Baldwin Excerpts

Wednesday 13th April 2016 Commons Chamber

[The Economic Secretary to the Treasury (Harriett Baldwin)]

I am again delighted to be given the opportunity to outline the action that the Government are proud to have taken to tackle tax evasion, tax avoidance and aggressive tax planning. No Government have done more to ensure that people and companies pay the taxes they owe and to crack down on those who do not play by the rules. That is why, from day one, we have introduced measure after measure to close the tax loopholes we inherited, to increase the punishment for those who break the law, to drive forward tax transparency and ensure that the UK is at the forefront of new global standards, to ensure that international tax rules are fit for the 21st century, to reform the regimes in overseas territories and Crown dependencies, and to increase HMRC’s powers to collect the money that pays for the public services on which we all depend.

Yes, individuals and companies should pay their fair share of tax, which is exactly what this Government have been ensuring that they do. The activities in Panama are already the subject of intensive HMRC investigation. It is imperative that the leaked data are examined closely, which is why we are setting up and providing funding for an operationally independent, cross-agency taskforce to sift through the millions of pages of data. Where there is evidence of any wrongdoing, rapid action will be taken. The Government also attach great importance to giving HMRC the resources to protect our tax base, which is why at last year’s summer Budget we announced an extra £800 million to fund additional work to tackle evasion and non-compliance by 2020-21. That will enable HMRC to recover a cumulative £7.2 billion in tax over the next five years.

The Opposition motion talks about beneficial ownership. Thanks to this Government’s action, our register of company beneficial ownership will go live in June. We are the first major country to have such a list in place, free for anyone to access. In addition, we are consulting on requiring foreign companies that own property or bid on public contracts in England to provide beneficial ownership information, too.

We heard from a range of speakers today. The hon. Member for Hayes and Harlington (John McDonnell) has a new-found interest in a topic he asked no questions on during 13 years of Labour government, but he has managed over the past week to confirm his party as anti-aspiration and anti-wealth-creation, and as wanting to create an atmosphere of envy. We heard from the hon. Member for Dundee East (Stewart Hosie), who was much more welcoming of the measures the Government have introduced, and he also attacked Labour’s lack of action in 13 years. We heard a very informed speech from my hon. Friend the Member for Torbay (Kevin Foster), a member of the Public Accounts Committee, who shared with us his expertise in that area. We also heard an interesting speech from the hon. Member for Newcastle upon Tyne North (Catherine McKinnell), who is chair and founder of the all-party group on anti-corruption. She will be aware of the proposed new offences that we are introducing in terms of prosecuting companies that fail to prevent evasion. She will want to participate in that consultation and in the process of legislation on that offence.

My hon. Friend the Member for South Suffolk (James Cartlidge) brought in his expertise in business, highlighting the steps the Government have taken to help low earners. The hon. Member for Oldham East and Saddleworth (Debbie Abrahams) used some fairly dodgy statistics, but I am pleased to confirm that the amount of £1.8 billion has been made available for compliance and enforcement, which is an increase in resources, over the last two Parliaments. She raised questions about trusts, asking whether the arrangements relating to the beneficial ownership of companies should be extended to trusts. There are many legitimate reasons for creating a trust and the vast majority of trusts across the UK are used for legitimate purposes. Setting up a blanket requirement would distract action from the areas of most concern, such as shell companies.

My hon. Friend the Member for Bracknell (Dr Lee) made an interesting speech, in which he recommended abolishing corporation tax completely. The Government are not ready to do that at this point in time. The hon. Member for Newport West (Paul Flynn) made an angry speech that included rather a lot of personal attacks on individual Conservative politicians. My hon. Friend the Member for Lewes (Maria Caulfield) made an excellent speech highlighting the Labour party’s politics of envy and our steps to make our income tax system even more progressive.

The hon. Member for Blaydon (Mr Anderson) spoke up for the low-paid, but I detected a strong streak of the politics of envy for anyone else in his speech. My hon. Friend the Member for Newark (Robert Jenrick) made a good speech about the credible action against corruption and criminality that this Government have taken. He gave an excellent and incisive summary of what we have done, drawing on his knowledge of the art world. We heard an interesting speech from the hon. Member for Glasgow South (Stewart Malcolm McDonald), and I can confirm that HMRC does work closely with Interpol and is indeed finalising the list for the anti-corruption summit as we speak. We heard helpful contributions from Members from Northern Ireland, who welcomed some of the steps the Government have taken.

In conclusion, this country is leading the way on tackling tax evasion and tax avoidance, bringing in billions from offshore tax evaders since 2010 through the actions we have taken. We have made more than 40 changes to tax law in the last Parliament alone, and in this Parliament more than 25 have already been announced for legislation.

Although Labour has suddenly decided to give lectures on tax, I remind the House that when we came into office there were foreign nationals not paying capital gains tax when selling UK property, private equity managers paying lower rates of tax than their cleaners, and rich homebuyers getting away without paying stamp duty by owning homes through companies. We have taken action to fix that. We have increased the amount paid in income tax by the top 1% from £31 billion 10 years ago to £47 billion now. We have made our taxes more internationally competitive. We have cut income tax for tens of millions of hard-working people, rewarded aspiration and made the tax system better, fairer and more efficient. That is our record. We are proud of it, and I urge the House to vote against today’s Opposition motion.

Bank of England Appointment

Harriett Baldwin Excerpts

Monday 11th April 2016 Written Statements

[The Economic Secretary to the Treasury (Harriett Baldwin)]

The Chancellor has announced that Sam Woods has been appointed as the next Chief Executive of the Prudential Regulation Authority.

Sam will succeed Andrew Bailey on 1 July 2016, who has been appointed the Chief Executive of the Financial Conduct Authority. He will build on Andrew’s work in delivering a strong, secure and globally competitive regime for all financial services.

[HCWS666]

Financial Services Update

Harriett Baldwin Excerpts

Thursday 24th March 2016 Written Statements

[The Economic Secretary to the Treasury (Harriett Baldwin)]

I can today confirm that I have laid a Treasury Minute informing the House of a reduction in HM Treasury’s contingent liabilities to Bradford & Bingley.

The Treasury Minute concerns the guarantee arrangements announced on 29 September 2008 that put in place arrangements in relation to wholesale borrowings and deposits. At March 2015 the maximum contingent liability to HM Treasury on this guarantee arrangement was £2.4 billion.

I can confirm that, following the repurchase of two outstanding Bradford & Bingley covered bonds, the maximum exposure to HM Treasury under this guarantee arrangement has fallen to around £1.5 billion.

If the remaining liability is called, provision for any payment will be sought through the normal supply procedure.

I will update the House of any further changes to Bradford & Bingley associated guarantee arrangements as necessary.

[HCWS663]

Contingencies Fund Advance: UK Government Investments Ltd

Harriett Baldwin Excerpts

Thursday 24th March 2016 Written Statements

[The Economic Secretary to the Treasury (Harriett Baldwin)]

In May 2015 the Chancellor announced that the Shareholder Executive (ShEx) and UK Financial Investments (UKFI) were to be brought together under a single holding company, UK Government Investments (UKGI). UKGI was incorporated on 11 September 2015 and will commence operations from 1 April 2016.

The resources and cash to finance UKGI’s spending will form part of HM Treasury’s main estimate for 2016-17. Parliamentary authority enabling UKGI to be funded is included in the Enterprise Bill which is currently before Parliament but is yet to receive Royal Assent.

Parliamentary approval for resources of £12,100,000 for this new service will be sought in the main estimate for HM Treasury. Pending that approval, urgent expenditure estimated at £2,400,000 will be met by repayable cash advances from the Contingencies Fund.

[HCWS662]

Budget Resolutions and Economic Situation

Harriett Baldwin Excerpts

Monday 21st March 2016 Commons Chamber

[The Economic Secretary to the Treasury (Harriett Baldwin)]

The right hon. Member for Wentworth and Dearne (John Healey) had certainly prepared his soundbites earlier.

In every region of the United Kingdom, the policies announced in the Budget will bring the economic security that Britain needs. They are the commitments that we set out in our manifesto last year, and the Budget will help to deliver them. Over the past six years, we have worked hard and made the tough decisions. That has brought our country’s economy back from the brink, and growth and jobs are now delivering greater economic security for everyone. Today, I am proud that, here in the United Kingdom, a record number of people are in work, the deficit is down by two thirds and we are well on the path to surplus. Our whole economy is set to grow faster next year than any other major advanced economy in the world. However, with the pace of growth in the global economy showing signs of weakening, now is the time to redouble our efforts, and that is precisely what the Budget does.

Today’s debate is about devolution and local government. The foundations of our long-term success are laid in each and every corner of this country. Every region makes a distinctive contribution to the UK’s economic success and every region benefits from this Budget’s programme for growth. Hon. Members should listen to the facts. Employment is growing quickest in Wales, and it is a shame that we did not hear Welsh voices today. Youth unemployment is falling quickest in the west midlands. The right hon. Member for Birmingham, Hodge Hill (Liam Byrne) said that we were not delivering a budget for the next generation, but the next generation is finding work in the west midlands, which I am sure he will welcome. The number of people claiming unemployment benefits is falling fastest in Yorkshire and the Humber. Through a combination of greater devolution, greater investment and targeted support, the Budget will allow our regions to continue growing from strength to strength.

The Budget also delivers for the devolved Administrations. To help Scotland, there are tax breaks worth more than £1 billion to support the North sea oil and gas industry through challenging times and a freeze in duty on Scotch whisky. The Scottish National party had three demands for the Budget—action on oil and gas, action on fuel duty and action on Scotch whisky—and we have delivered on all three fronts. To help Wales, there is a £1.2 billion deal for the Cardiff capital region and a 50% reduction in tolls on the River Severn crossings in 2018. To help Northern Ireland, there will be enhanced capital allowances for investors in the Northern Ireland Executive’s pilot enterprise zone near Coleraine. For all three of our devolved Administrations, the Budget delivers the benefits of being part of a strong, successful United Kingdom, with the opportunities that come with devolution.

For the cities and regions of England, this is a Budget that creates fresh opportunities and opens new doors. For the north, there is greater devolution to Liverpool and Manchester, a schools strategy for the northern powerhouse, more than £700 million extra for flood repairs and resilience, and the go-ahead for HS3, bringing Leeds and Manchester closer together. For the midlands, the midlands engine investment fund will get £250 million, and there is a new devolution deal for Greater Lincolnshire and a strong statutory body to help provide the transport that the midlands needs.

For East Anglia, we have another new devolution deal, and I can confirm to my hon. Friend the Member for North West Norfolk (Sir Henry Bellingham) that the £30 million is indeed new money and that an elected mayor will be the single point of accountability. I can also confirm to my hon. Friend the Member for Milton Keynes South (Iain Stewart) that we plan to make the most of the Oxford-Cambridge-Milton Keynes corridor. For the south-west, almost £20 million will help young families on to the housing ladder. For London, the green light has been given for Crossrail 2. In addition, policies such as the cut to businesses rates and our reform of commercial stamp duty will revitalise high streets up and down the country, including those in Bury South.

This is a Budget for a nation of shopkeepers whether they are in Cardiff or Cornwall, or Chester or Chelmsford. We have heard from 27 Back Benchers from all over the country in tonight’s debate: North West Norfolk, Glasgow Central, Rugby, Jarrow, Telford, Sheffield South East, Blackpool North and Cleveleys, Bury South, Poole, Batley and Spen, Milton Keynes South, Copeland, Bolton West, and Birmingham, Hodge Hill.

[Mr Betts]

Will the Minister give way?

[Harriett Baldwin]

I will not as I have very little time, but I will get to the hon. Gentleman’s point. The list continues: Chesham and Amersham, Henley, Harrow West, Wealden, as well as Southampton, Test, and Bromley and Chislehurst, Washington and Sunderland West, Hazel Grove, North Norfolk, Warrington South, Dulwich and West Norwood, and Aberdeen North. A number of common themes came up in those speeches. Almost everybody welcomes the business rates cut and the help for the self-employed. This is a Budget that puts our small business job creators front and centre. Many points were made about northern infrastructure, so I draw everyone’s attention to page 77 of the Red Book. I am not referring to Mao’s little red book on this occasion. Page 77 gives a list of projects, including £130 million of road repair funds to deal with the damage caused by Storm Eva and Storm Desmond, in Cumbria and elsewhere.

A number of colleagues mentioned devolution and the impact on business rates. I can confirm that local government will be compensated for the loss of income as a result of the business rates measures announced in the Budget with a section 31 grant. The impact will be considered as part of the Government’s consultations on the implementation of 100% business rate retention in summer 2016.

[Mrs Gillan]

Will the Minister give way?

[Harriett Baldwin]

I would love to give way, but I have not got time to do so. The NHS was discussed by a number of colleagues, and I am sure that they welcome the record amount of cash going into our NHS, thanks to our strong economy. A number of colleagues welcomed the fairer funding for schools and the ultimate devolution of power to academies. I can confirm that an extra £1.6 billion is going into schools, with no change at all to the special educational needs obligations on schools. [Interruption.] We have heard a fair number of rants, whinges and lectures from the Opposition tonight, but we will take no lectures from the party that crashed the economy in the first place. We will take no lectures from the Labour party, whose plans, had we followed them, would have led to—

[Mrs Gillan]

On a point of order, Mr Speaker. I wonder whether you could advise me on something. I have asked the Minister, who is speaking so ably and fluently at the Dispatch Box about a Budget, certain elements of which have been well welcomed on both sides of the House. I have asked her to give way on two specific points that I raised in my contribution to this debate. Could you advise me whether it is in order for the Minister to decline, on account of the amount of time left for speaking, when a considerable number of minutes are left until 10 o’clock?

[Mr Speaker]

It is a matter for the judgment of the Minister, but the discontent of a former Cabinet Minister has been registered.

[Harriett Baldwin]

In that case, I will simply commend this Budget to the House.

Ordered, That the debate be now adjourned.—(Julian Smith.)

Debate to be resumed tomorrow.

[Mrs Gillan]

On a point of order, Mr Speaker. I wish to seek your guidance on the next item on tonight’s Order Paper. I gather that Standing Order No. 9(6), which deals with sittings of the House, states:

“After the business under consideration at the moment of interruption has been disposed of, no opposed business shall be taken, save as provided in Standing Order No. 15 (Exempted business).”

As I read it, the Order Paper contains a sittings motion on the business of the House on the High Speed Rail (London - West Midlands) Bill and if it comes to the Floor of the House after 10 pm, it does not have to be debated. It is possible to object to that business of the House. Of course, Mr Speaker, you will appreciate that I raised a point of order earlier—[Interruption.]

draft Financial Services and Markets Act 2000 (Regulated Activities) (amendment) order 2016

Harriett Baldwin Excerpts

Monday 7th March 2016 General Committees

[The Economic Secretary to the Treasury (Harriett Baldwin)]

I beg to move,

That the Committee has considered the draft Financial Services and Markets Act 2000 (Regulated Activities) (Amendment) Order 2016.

It is a pleasure to be here under your chairmanship this evening, Ms Buck. The draft order makes changes to the respective regulatory frameworks for mortgage and peer-to-peer lending. I will talk about the provisions on the regulatory framework for mortgages first.

In March 2015, Parliament approved the Mortgage Credit Directive Order 2015, which ensures that the UK implements the EU mortgage credit directive on time and with a limited impact on the UK mortgage market. The order is due to come into effect on 21 March this year. Since that order was made, the Government have been monitoring the progress of the mortgage industry towards implementation. In that ongoing monitoring, it came to light that in some areas the order did not achieve what was intended, or could be improved on. The Government acted quickly and laid a statutory instrument, which was made in November 2015. It made a small number of amendments to the scope of regulation, to ensure that the regulatory framework continued to operate as intended.

Today’s draft order makes further changes designed to ensure that the legislation delivers on previously agreed policy. It clarifies the regulatory status of a number of categories of loan entered into before April 2014. Specifically, it clarifies that the regulatory status of the loans depends on their regulatory status under the consumer credit regime before the transfer of regulatory oversight to the Financial Conduct Authority.

Since the transfer of the consumer credit regime from the Office of Fair Trading to the FCA in 2014, much of the industry has assumed that the legislation applied the principle of “once regulated, always regulated” to loans entered into before April 2014. That is a different test from the one generally applied under the FCA regulatory regime, where regulation is applied to ongoing activities with the regulatory status of those activities changing over time. Following engagement with the industry and the FCA, we have been made aware of the ambiguity about which test now applies to loans entered into before April 2014. There is also ambiguity about the loans that are to be moved across to the mortgages regime when the mortgage credit directive comes into force on 21 March. The draft order removes that ambiguity.

Providing clarity as to the regulatory status of the loans will also ensure that the holders of the loans are able to assess accurately what regulatory permissions they require. Furthermore, it will ensure the continuation of consumer protections, preventing consumers from inadvertently losing regulatory protections that they had at the point they took out a loan.

In 2014, the Government removed English and Scottish housing associations’ new second-charge mortgage lending from the scope of conduct regulation. The draft order also exempts second-charge mortgage loans made from April 2014 by Northern Irish and Welsh housing associations.

The peer-to-peer lending-related amendments in the draft order extend the scope of the regulated activities relating to the operation of peer-to-peer lending platforms and providing advice on lending through such platforms. In changes to the provision of advice on peer-to-peer loans, the Government are committed to supporting savers and to increasing the choice available to ISA savers. To support that aim, the Government announced at Budget 2014 that loans made through peer-to-peer platforms will become ISA-qualifying investments. From 6 April repayments of interest and capital made to lenders on new peer-to-peer loans will qualify for tax advantages where such loans are held in a new type of ISA, the innovative finance ISA. The Government anticipate that that could significantly increase the provision of advice to investors on peer-to-peer lending.

The draft order aligns the treatment of advice on peer-to-peer loans with advice on other ISA-qualifying investments by making the provision of advice to lenders on entering into a peer-to-peer loan a regulated activity. The consultation on the changes identified broad, industry-wide support for that change, which will ensure that the FCA is able to make rules to ensure that firms providing advice to investors on peer-to-peer loans act properly and in the best interests of their customers. That will mitigate the risk of unregulated firms setting up and acting improperly in providing advice to consumers.

The draft order also extends the scope of the peer-to-peer regulation to ensure that all the relevant activities are included within this framework. In particular, it brings the activity of facilitating the transfer of rights under a peer-to-peer loan between lenders on a secondary market within scope of article 36H regulated activity. That will mean that a peer-to-peer loan brought on the secondary market is subject to the same regulatory framework as new loans originated by peer-to-peer platforms.

The draft order also clarifies the definition of an article 36H agreement, or peer-to-peer loan. The change clarifies that if the peer-to-peer platform is the lender or borrower on its own platform, the agreement is not a peer-to-peer loan. That ensures that peer-to-peer lending remains exactly that—peer to peer. These amendments are an example of the Government’s proportionate and flexible regime in action, providing the space for peer-to-peer platforms to grow and providing competition to the major banks, while maintaining the right level of protection for consumers.

Finally, the draft order makes a minor amendment to the Small and Medium Sized Business (Finance Platforms) Regulations 2015, which set out the circumstances in which designated banks must refer unsuccessful SMEs that have applied for finance to online platforms, to assist in finding other sources of finance. The amendment clarifies that when a small business is already using a broker to seek finance on its behalf, unsuccessful applications by that broker do not need to be referred to finance platforms.

Taken together, the changes in the draft order are another important step to ensuring that the UK’s financial system is competitive, resilient and works for the good of the country. I hope that hon. Members will therefore support the order.

--- Later in debate ---

[Harriett Baldwin]

I note that the shadow Minister started with the second section, on peer-to-peer ISAs. I was not clear from his remarks whether he welcomes the development of peer-to-peer lending in this country and the introduction of the innovative finance ISA, but it is worth stressing how important the Government believe this area of lending is to consumers and small and medium-sized businesses. It offers them a potential alternative source of funding locally. I am sure he shares my aspiration for a competitive and diverse range of funding to be available to growing companies in this country.

If I may, I will plug my own local peer-to-peer lending platform in Worcestershire. It is called ThinCats.com —the antithesis of the fat cats in the banking industry that so aggravate the hon. Gentleman occasionally. He is right that this is a nascent market. We are expecting that, as of the date in April when it becomes possible to invest in an innovative finance ISA, there will be seven firms available in which consumers can invest their ISA allowance, and that is on top of the range of different peer-to-peer lending platforms already growing in this country.

The hon. Gentleman asked about the perimeter of regulation in terms of peer-to-peer lending, the Financial Services Compensation Scheme and whether we ought to consider guaranteeing the first £75,000 invested in peer-to-peer platforms, just as the FSCS guarantees the first £75,000 put in a bank. We think it is important that the peer-to-peer lending industry falls within the perimeter of regulation. That is much better for consumers and for the long-term success of the industry, but the extent of the regulation is fairly light, in the sense that if people invest in such platforms, they can lose the amount that they invest. Obviously, most platforms will compete on diversification of investments, the allocation that they hold back to withstand losses and so on, and on making that transparent to consumers, but it is definitely an alternative source of funding in an innovative area where the market is developing a range of solutions.

I gently correct the hon. Gentleman: Adair Turner is not the former Governor of the Bank of England; he was the chairman of the Financial Services Authority. He was right to highlight to consumers that this is a different kind of investment from investments in a bank, which are guaranteed up to £75,000—that is why the returns are higher—but to pour scorn on it and deter informed investors from investing in such platforms would be wrong. Obviously, we have worked closely with Christine Farnish, whom the hon. Gentleman mentioned, and the peer-to-peer industry on supporting the aspiration for the industry to be regulated and for consumers to be given clear information when they make such investments.

The hon. Gentleman also asked questions about the mortgage credit directive, along with a question about when second-charge mortgages will come into regulation, asking, “If not, why not?” As he will understand, it has been pretty clear for some time that the European mortgage credit directive will include second-charge mortgages, so it makes sense to wait for that regulation to come into force to include second-charge mortgages, which is why there has been a timing difference in bringing the regulation of second-charge mortgages into line with that for first-charge mortgages. We did not want to disrupt firms and customers excessively by predating regulations that are clearly on their way.

The hon. Gentleman asked about the treatment of advice and whether it will be subject to a future review—that was with reference to peer-to-peer regulations. Of course, we will continue to keep that under review in the light of developments. He asked about the risk of misidentification of consumers or businesses in the buy-to-let regulations, and it will be for lenders and brokers to identify the type of lending. That means that lenders and brokers will need a system in place to collect the relevant information from the borrower but, with the main implementing order having been in place for a year, they will have had time to do so, which is the benefit of our publishing the regulations last March and being able to work with the industry during the transition period to ensure that, by the time we get to implementation day on 21 March, all the questions that the hon. Gentleman rightly asked today have been answered.

I trust that answers all the hon. Gentleman’s questions. I commend the draft order to the Committee.

Question put and agreed to.

Oral Answers to Questions

Harriett Baldwin Excerpts

Tuesday 1st March 2016 Commons Chamber

[Mr Laurence Robertson (Tewkesbury) (Con)]

9. If he will reopen the compensation scheme for Equitable Life policyholders.

[The Economic Secretary to the Treasury (Harriett Baldwin)]

The Equitable Life payment scheme has now successfully traced and paid 90% of eligible policyholders. Payments to with-profits annuitants will continue for the life of these annuities. The scheme is now closed to new claims.

[Mr Robertson]

I thank the Minister for that response, but given that many policyholders lost out because of a failure of regulation, which should be overseen by not just this Government but any Government, is it not fair that those policyholders should receive compensation? If they do not, how can any investor have any confidence in the regulatory system that is put in place?

[Harriett Baldwin]

The Chancellor has done more than anyone else to tackle the regulatory failure of the 1990s with regard to Equitable Life. For example, with-profits annuitants will receive full compensation for the life of the annuity, pre-1992 annuitants have received ex gratia payments of up to £10,000, and £775 million has been paid out tax-free to others, despite the constrained public finances. Those on pensions credit got a doubling of their payment just before Christmas.

[John Pugh (Southport) (LD)]

Will the Minister clarify how much of the £1.5 billion promised by the Government has been delivered and handed over?

[Harriett Baldwin]

I regularly update Parliament on the precise figures. So far, we are at almost £1 billion. Of course, the payments for the annuitants will continue for the rest of their lives.

[Neil Carmichael (Stroud) (Con)]

10. What fiscal steps he is taking to encourage small businesses to grow.

--- Later in debate ---

[Craig Tracey (North Warwickshire) (Con)]

I welcome the fact that my constituents have been given more control over their finances, thanks to changes implemented by the Government. Can the Minister advise me on what steps have been taken to ensure that the regulation applied to small high street financial advisers and insurance brokers is both fair and proportionate, given the important service that they provide?

[The Economic Secretary to the Treasury (Harriett Baldwin)]

I thank my hon. Friend for raising this point. We have launched something called the financial advice market review, which will be reporting around the time of the Budget. We will be looking at how to make financial advice more affordable and more available, and also at how to get the right kind of regulatory balance for smaller firms.

[Matthew Pennycook (Greenwich and Woolwich) (Lab)]

T6. Following reports that Hinkley Point C faces further delays, will the Chancellor revisit his decision effectively to write the French an extremely generous long-dated option and instead bring forward fall-back options?

--- Later in debate ---

[Byron Davies (Gower) (Con)]

The Chancellor will be aware that debates have been held and questions asked in the House regarding serious allegations of collusion between banks and valuers in order to deliberately undervalue and seize assets. Has he considered the current regulations on such banks and valuers, and whether there needs to be a broader remit for the Serious Fraud Office and other organisations to investigate these serious allegations, whose number is growing?

[Harriett Baldwin]

I am aware of the points my hon. Friend has raised in Westminster Hall and obviously I am keen for our system to have a tough set of rules on conduct in the banking system. I would welcome the opportunity to meet him to discuss these specific allegations in more detail.

[Nic Dakin (Scunthorpe) (Lab)]

T10. If the Chancellor believes that a strong steel sector is fundamental to a strong northern powerhouse, what steps is he taking to level the playing field for the steel industry, the foundation of our manufacturing and defence industries, so that it can have a prosperous future to match its prosperous past?

UK’s Counter-terrorist Asset Freezing Regime

Harriett Baldwin Excerpts

Wednesday 24th February 2016 Written Statements

[The Economic Secretary to the Treasury (Harriett Baldwin)]

Under the Terrorist Asset-Freezing etc. Act 2010 (TAFA 2010), the Treasury is required to report to Parliament, quarterly, on its operation of the UK’s asset freezing regime mandated by UN Security Council Resolution 1373.

This is the 17th report under the Act and it covers the period from 1 October 2015 to 31 December 2015¹. This report also covers the UK implementation of the UN Al-Qaida asset freezing regime and the operation of the EU asset freezing regime in the UK under EU regulation (EC) 2580/2001 which implements UNSCR 1373 against external terrorist threats to the EU. Under the UN Al-Qaida asset freezing regime, the UN has responsibility for designations and the Treasury has responsibility for licensing and compliance with the regime in the UK under the Al-Qaida (Asset-Freezing) Regulations 2011. Under EU regulation 2580/2001, the EU has responsibility for designations and the Treasury has responsibility for licensing and compliance with the regime in the UK under part 1 of TAFA 2010.

Annexes A and B to this statement provide a breakdown, by name, of all those designated by the UK and the EU in pursuance of UN Security Council resolution 1373. The two individuals subject to designations, which have been notified on a restricted and confidential basis, under sections 3 and 10 of TAFA 2010 are denoted by A and B.

The following table sets out the key asset-freezing activity in the UK during the quarter ending 31 December 2015: