Asked by: Lord Higgins (Conservative - Life peer)
Question to the HM Treasury:
To ask Her Majesty's Government what Sterling to Euro exchange rate they are using to calculate the value of any financial settlement arising from the Brexit negotiations.
Answered by Lord Bates
The arrangements for withdrawal from the EU, including determining the sterling and euro values of the financial settlement, will be a matter for the withdrawal agreement as part of the Article 50 process. The UK government is committed to working with the EU to determine a fair settlement for Britain’s exit and the best deal for UK taxpayers.
Asked by: Lord Higgins (Conservative - Life peer)
Question to the HM Treasury:
To ask Her Majesty’s Government what estimate they have made of the cost to the public purse of (1) arrangements made, and (2) proposed arrangements, to deal with the Greek financial crisis.
Answered by Lord O'Neill of Gatley
The Government has secured a deal that protects UK taxpayers from any risk from financing euro area bailouts now and in the future. This deal gives legal force to the commitment secured in 2010 that UK taxpayers would not be drawn into a euro area bailout. Under the European Financial Stability Mechanism (EFSM) short term financing agreement concluded on Friday 17 July, Greece’s IMF arrears have also been cleared.
Asked by: Lord Higgins (Conservative - Life peer)
Question to the HM Treasury:
To ask Her Majesty’s Government why the compensation limit under the Deposit Guarantee Scheme has been reduced in line with a European directive that sets a limit in euros, despite the fact that the United Kingdom is not in the Eurozone; and whether they will take steps to ensure that United Kingdom citizens do not suffer as a result, if necessary by introducing a separate United Kingdom compensation scheme.
Answered by Lord O'Neill of Gatley
The Deposit Guarantee Scheme Directive (DGSD) updates existing legislation designed to harmonise the level of deposit protection provided across the European Economic Area (EEA), of which the UK is a part.
This is a single market measure to ensure that depositors are entitled to the same level of protection (equivalent to €100,000 per regulated firm, regardless of currency) wherever in the EEA they deposit their money; and that UK firms are not competitively disadvantaged in relation to firms in other EEA jurisdictions.
As a result of the current strength of the pound in relation to the euro, it has been necessary for the Prudential Regulation Authority (PRA) to revise the sterling coverage limit provided by the UK’s deposit guarantee scheme, the Financial Services Compensation Scheme (FSCS). However, the Government has taken action to ensure that UK depositors are not exposed to a sudden reduction in the level of protection they receive.
HM Treasury has laid a statutory instrument to ensure that depositors who are currently entitled to £85,000 of protection from the FSCS will continue to be until 31 December 2015, after which the new deposit coverage limit of £75,000 will come into effect.
This will ensure that there is sufficient time available for depositors to be made aware of the changes, and to take any necessary steps to manage their financial affairs appropriately in light of this change. It is estimated that 5 per cent of retail depositors are affected by this change.
Asked by: Lord Higgins (Conservative - Life peer)
Question to the HM Treasury:
To ask Her Majesty’s Government, in relation to the Deposit Guarantee Scheme, whether the principle of uberrima fides applies to state insurers within the European Union, as well as private insurers.
Answered by Lord O'Neill of Gatley
The principle of uberrima fides does not apply to the UK’s Deposit Guarantee Scheme. Uberrima fides is a principle that applies to insurers and insurance contracts, but the Deposit Guarantee Scheme is not an insurance scheme and is not contractual. The duties of the Deposit Guarantee Scheme are set out in the EU Deposit Guarantee Scheme Directive and the relevant UK legislation.
Asked by: Lord Higgins (Conservative - Life peer)
Question to the HM Treasury:
To ask Her Majesty’s Government whether they consider that the operation of the Eurozone has had a positive effect on the United Kingdom economy.
Answered by Lord Deighton
As the Chancellor said at the Autumn Statement, Britain – as one of the most open trading economies in the world, with a large financial sector – is not immune to the risks of the global economy. This is particularly true of the euro area, the UK’s largest trading partner, which accounts for 40 percent of exports.
While significant steps have been taken by the euro area to place itself on a more sustainable footing, its economy weakened in the second half of 2014, with inflation extremely low and unemployment stubbornly high.
Asked by: Lord Higgins (Conservative - Life peer)
Question to the HM Treasury:
To ask Her Majesty's Government, further to the reply by Lord Newby on 17 June (HL Deb, col 788), by what authority HM Treasury imposes fines on other departments; for what reasons such fines may be imposed; what the effect of such fines are on the Government's overall resources; and whether any disciplinary action is taken against officials found to be responsible for incurring such fines.
Answered by Lord Deighton
The Treasury is responsible for ensuring there is proper accountability to Parliament for the use of public money. It is responsible for setting the ground rules for the administration of public money and is accountable to Parliament for doing so.
The guidelines for managing public expenditure have been set out in a number of documents published by the Treasury, including Managing Public Money[1], the Consolidated Budgeting Guidance[2] and Improving Spending Control[3]. They set out the circumstances where the Treasury may impose fines or penalties on departments. In all cases, the Treasury retains the right to apply whatever penalties are appropriate to incentivise good financial management and value for money.
Fines imposed on departments have had a minimal impact on the Government's overall resources.
Accounting Officers are responsible for ensuring that their departments meet specific standards, as set out in Managing Public Money. The Chief Secretary will write to the Secretaries of State and the Head of the Civil Service where he is concerned that Accounting Officers may fall short in fulfilling their responsibilities for managing public money. Should an Accounting Officer fall short of the standards required he or she may have their designation as Accounting Officer withdrawn, which may lead to termination of employment.
[1] https://www.gov.uk/government/publications/managing-public-money
[2] https://www.gov.uk/government/publications/consolidated-budgeting-guidance
[3] https://www.gov.uk/government/publications/improving-spending-control