Asked by: Lord Myners (Crossbench - Life peer)
Question to the Department for Business, Energy and Industrial Strategy:
To ask Her Majesty's Government whether the recovery of loans under the Bounce Back Loan Scheme considered fraudulent is the responsibility of lending banks or the Government.
Answered by Lord Callanan - Parliamentary Under Secretary of State (Department for Energy Security and Net Zero)
Lenders are expected to pursue appropriate recovery processes including in relation to fraudulently obtained loans under the Bounce Back Loan Scheme, in line with their existing standards. The Government will be providing further guidance to lenders on this.
The Government will also consider other appropriate mechanisms to recover fraudulently obtained funds as required.
Asked by: Lord Myners (Crossbench - Life peer)
Question to the Department for Business, Energy and Industrial Strategy:
To ask Her Majesty's Government what advice they received, if any, from officials on (1) the percentage by number, and (2) the value, of loans received under the Bounce Back Loan Scheme estimated to be fraudulent.
Answered by Lord Callanan - Parliamentary Under Secretary of State (Department for Energy Security and Net Zero)
As part of the Bounce Back Loan Scheme application process lenders undertake fraud checks, including Know Your Customer and Anti Money-Laundering checks as required. In addition, the application form is clear – any individual who knowingly provides false information is at risk of criminal prosecution. We are working across Departments, and with lenders and law enforcement agencies, to tackle fraudulent abuse of the scheme.
Details of how we expect BBLS to perform are set out in our accounts for 2019-20, a copy of which has been placed in the Libraries of the House. At this early stage, such estimates are naturally highly uncertain as reflected in the explanatory notes of the Accounts.
Asked by: Lord Myners (Crossbench - Life peer)
Question to the Department for Business, Energy and Industrial Strategy:
To ask Her Majesty's Government what steps they have taken, if any, to identify fraudulent applications under the Bounce Back Loan Scheme; and what advice they took from banks or specialist advisors on identifying fraudulent applications.
Answered by Lord Callanan - Parliamentary Under Secretary of State (Department for Energy Security and Net Zero)
The Government takes the threat of fraud very seriously and a range of measures have been put in place to mitigate fraud and error risk for the Bounce Back Loan Scheme. These include data and intelligence sharing arrangements, enabling us to work with lenders, law enforcement bodies and others to identify fraud.
Asked by: Lord Myners (Crossbench - Life peer)
Question to the Department for Business, Energy and Industrial Strategy:
To ask Her Majesty's Government whether they plan to publish the names of the recipients of loans made under (1) the Coronavirus Business Interruption Loan Scheme, and (2) the Bounce Back Loan Scheme; and if not, why not.
Answered by Lord Callanan - Parliamentary Under Secretary of State (Department for Energy Security and Net Zero)
There are currently no plans to publish the recipient data on who has taken out loans under the Coronavirus Business Interruption Loan Scheme or Bounce Back Loan Scheme. This is on the grounds that the release of information regarding SME beneficiaries could reveal information on their financial standing and may therefore damage their commercial interests. Information on lending is also commercially sensitive for lenders who deliver the schemes on behalf of Government. Provision for withholding this information is contained within S43(2) of the Freedom of Information Act (FOIA).
Additionally, some company names may reveal the names of individuals if they are sole traders, where the company name is their actual name/part of their name. This is classed as personal data which is exempt under S40(2) personal data under FOIA.
Asked by: Lord Myners (Crossbench - Life peer)
Question to the Department for Business, Energy and Industrial Strategy:
To ask Her Majesty's Government what plans they have to investigate the actions of JD Sports in relation to its decision to place its wholly owned subsidiary Go Outdoors into administration and then subsequently to reacquire that company from the administrators in a pre-pack deal without creditor liability.
Answered by Lord Callanan - Parliamentary Under Secretary of State (Department for Energy Security and Net Zero)
Insolvency Practitioners appointed in an administration must report to the Insolvency Service on the conduct of an insolvent company’s directors within three months of the beginning of the insolvency. Where the Insolvency Service identifies evidence of misconduct an investigation will be undertaken where it is in the public interest to do so. Outcomes may include director disqualification or criminal prosecution where there is evidence of serious wrongdoing.
In a pre-pack administration, the appointed Insolvency Practitioner is under a duty to achieve the best result for the company’s creditors as a whole. There is a regulatory requirement to provide a statement to creditors explaining why a pre-pack sale was undertaken, what marketing was done, what valuations were obtained and any alternative options considered. This statement is also sent to the Insolvency Practitioner’s authorising body which monitors to ensure compliance with the regulatory requirements.
Where creditors are dissatisfied with the actions or decisions of an Insolvency Practitioner in relation to a pre-pack, they can raise the matter directly with the practitioner’s regulatory body.
Asked by: Lord Myners (Crossbench - Life peer)
Question to the Department for Business, Energy and Industrial Strategy:
To ask Her Majesty's Government what plans they have to introduce an equivalent of the US Sarbanes-Oxley Act 2002 in the UK; and what assessment they have made of whether any such legislation would (1) increase confidence in company accounts, and (2) reduce fraud.
Answered by Lord Callanan - Parliamentary Under Secretary of State (Department for Energy Security and Net Zero)
The Independent Review of the Financial Reporting Council recommended that government should consider the case for adopting a strengthened framework around internal controls on a similar basis to the Sarbanes-Oxley regime in the US. In response, the Government is exploring options in this area and will bring forward a detailed consultation in due course.
The Review heard that the Sarbanes-Oxley Act, passed in 2002, has led to better financial reporting, with a lower incidence of significant accounting re-statements, but also recognised the higher costs for companies. Any strengthening of the UK regime would need to take account of the UK’s well-established internal control framework comprising interlocking company law requirements, Listing Rules, UK Corporate Governance Code provisions and auditor responsibilities.
Asked by: Lord Myners (Crossbench - Life peer)
Question to the Department for Business, Energy and Industrial Strategy:
To ask Her Majesty's Government whether they will review the remit and powers of the Competition and Markets Authority further to the statements made in the Chairman’s resignation announcement.
Answered by Lord Callanan - Parliamentary Under Secretary of State (Department for Energy Security and Net Zero)
The Government is committed to ensuring that markets work well for consumers and businesses and keeps the remit and powers of the Competition and Markets Authority under constant review.
Asked by: Lord Myners (Crossbench - Life peer)
Question to the Department for Business, Energy and Industrial Strategy:
To ask Her Majesty's Government what risk assumptions they will use in the pricing of reinsurance offered to trade credit insurers; and what commitments they have obtained from these insurers to maintain cover.
Answered by Lord Callanan - Parliamentary Under Secretary of State (Department for Energy Security and Net Zero)
The Trade Credit Reinsurance Scheme operates as a reinsurance agreement which will see trade credit insurers continuing to write and maintain cover to businesses affected by the Coronavirus pandemic. The cost to insurers of participating in the scheme is ceding 90% of their premium income to Government, with 35% returned to cover their costs. The retention of 10% income by insurers ensures alignment of incentives so that underwriting standards and pricing approaches are maintained in line with normal market conditions. Losses are also being shared with Government taking 90% and insurers 10%, up to a £3 billion cap. Losses between £3 billion and £10 billion will be 100% covered by Government. Insurers will offset the 10% of premium they retain against their share of the losses.
The Scheme will see the vast majority of TCI cover maintained in the market. The reinsurance agreement requires insurers to maintain cover where there are reasonably identifiable Covid-19 related economic impacts on an in-scoped insured. Where there are no identifiable Covid-19 related economic impacts, participating insurers will continue to act according to their existing underwriting practices. BEIS’s delivery partner will have oversight of insurers throughout the scheme and monitor their behaviour to ensure that underwriting standards and prices are maintained.
Asked by: Lord Myners (Crossbench - Life peer)
Question to the Department for Business, Energy and Industrial Strategy:
To ask Her Majesty's Government what plans they have to publish the names of the members of the Scientific Advisory Group for Emergencies; and what assessment they have made of the impact of any such publication on public confidence in that group.
Answered by Lord Callanan - Parliamentary Under Secretary of State (Department for Energy Security and Net Zero)
SAGE is not a membership body. Her Majesty's Government does not routinely publish the names of SAGE participants in line with advice from the Centre for the Protection of National Infrastructure and standard procedure for COBR meetings, to which SAGE gives advice. For the COVID-19 response and to ensure transparency on who is contributing to the science advice being given to the Government, we have published the names of those who are happy to have their names published.
The names that have been published are available on the SAGE page on GOV.UK.
Asked by: Lord Myners (Crossbench - Life peer)
Question to the Department for Business, Energy and Industrial Strategy:
To ask Her Majesty's Government, further to the Written Answer by Lord Callanan on 26 February (HL1607), whether the British Business Bank's aggregate loan experience and losses in the event of default of loans as a result of loans made through peer-to-peer platforms differs from the aggregate experience of loans made by other channels to SME borrowers.
Answered by Lord Callanan - Parliamentary Under Secretary of State (Department for Energy Security and Net Zero)
I refer the noble Lord to the answer I gave him on 9 March to Question HL1776: