Asked by: Lord Sikka (Labour - Life peer)
Question to the HM Treasury:
To ask Her Majesty's Government what record they have of (1) letters, (2) emails, (3) phone calls, (4) text messages, and (5) other communications, from former Prime Minister David Cameron to officials in (a) the Treasury, and (b) the Department for Business, Energy and Industrial Strategy, in connection with Greensill Capital.
Answered by Lord Agnew of Oulton
Senior civil servants and ministers routinely meet and correspond with a range of private sector stakeholders. Transparency releases are published on a quarterly basis, and are currently publicly available for Senior Official and Ministerial meetings up to and including September 2020, which is in line with normal reporting timelines on disclosures.
Asked by: Lord Sikka (Labour - Life peer)
Question to the HM Treasury:
To ask Her Majesty's Government what plans they have, if any, to establish an independent inquiry into the handling by the Financial Conduct Authority of the alleged frauds at (1) Royal Bank of Scotland, and (2) Halifax Bank of Scotland.
Answered by Lord Agnew of Oulton
As you are aware, the FCA is an independent non-governmental body responsible for regulating and supervising the financial services industry. Although the Treasury sets the legal framework for the regulation of financial services, it has strictly limited powers in relation to the FCA. In particular, the Treasury has no general power of direction over the FCA and cannot intervene in individual cases.
Given the matters raised are the responsibility of the FCA, in view of its independence, it is not for the Government to provide direction.
However, as you may be aware, in the case of HBOS, Dame Linda Dobbs has been appointed as an independent legal expert to consider whether issues in the HBOS Reading Fraud were investigated and appropriately reported to authorities at the time by Lloyds Banking Group. At present the Dobbs review is ongoing and once completed, its findings will be shared with the FCA.
On Royal Bank of Scotland and GRG, the FCA has concluded their final investigation, which reaffirms the outcome of its enforcement investigation, which was announced in July 2018.
Finally, there are currently no plans for the Government to establish an independent review of the conduct of the Financial Conduct Authority in relation to the RBS and Lloyds Banking Group.
Asked by: Lord Sikka (Labour - Life peer)
Question to the HM Treasury:
To ask Her Majesty's Government whether any department has given directions to the Financial Conduct Authority in connection with its investigation of the alleged frauds identified in the 2013 'Project Lord Turnbull Report' at (1) Halifax Bank of Scotland, and (2) Royal Bank of Scotland.
Answered by Lord Agnew of Oulton
As you are aware, the FCA is an independent non-governmental body responsible for regulating and supervising the financial services industry. Although the Treasury sets the legal framework for the regulation of financial services, it has strictly limited powers in relation to the FCA. In particular, the Treasury has no general power of direction over the FCA and cannot intervene in individual cases.
Given the matters raised are the responsibility of the FCA, in view of its independence, it is not for the Government to provide direction.
However, as you may be aware, in the case of HBOS, Dame Linda Dobbs has been appointed as an independent legal expert to consider whether issues in the HBOS Reading Fraud were investigated and appropriately reported to authorities at the time by Lloyds Banking Group. At present the Dobbs review is ongoing and once completed, its findings will be shared with the FCA.
On Royal Bank of Scotland and GRG, the FCA has concluded their final investigation, which reaffirms the outcome of its enforcement investigation, which was announced in July 2018.
Finally, there are currently no plans for the Government to establish an independent review of the conduct of the Financial Conduct Authority in relation to the RBS and Lloyds Banking Group.
Asked by: Lord Sikka (Labour - Life peer)
Question to the HM Treasury:
To ask Her Majesty's Government, further to the fine issued by the US Department of Justice to Goldman Sachs for its role in a conspiracy to bribe high-ranking foreign officials to obtain business, what discussions they have had with financial regulators in the UK about investigating Goldman Sachs for any similar practices in the UK.
Answered by Lord Agnew of Oulton
The Financial Conduct Authority is the regulator responsible for supervising the conduct of financial institutions operating in the UK and is independent from the UK government.The Treasury discusses a wide variety of issues with the FCA regularly. However, the Treasury has no general power of direction over the FCA and any enforcement decisions by the FCA are independent of government.
Asked by: Lord Sikka (Labour - Life peer)
Question to the HM Treasury:
To ask Her Majesty's Government how many (1) bodies, and (2) individuals, have been prosecuted each year under the Criminal Finances Act 2017 for failure to prevent tax evasion; and what outcome was secured in each such case.
Answered by Lord Agnew of Oulton
HMRC currently have thirteen live Corporate Criminal Offence (CCO) investigations with a further seventeen possible investigations under review. HMRC update these figures bi-annually on GOV.UK.
No corporate bodies have yet been prosecuted under the CCO for the failure to prevent the facilitation of UK tax evasion. This is because these investigations are extremely complex and take considerable time before they are ready to be passed to a prosecutor.
The CCO was implemented on 30 September 2017, which means HMRC are only able to consider potential investigations from that date. The offence applies solely to corporate bodies.
Individuals are prosecuted under pre-existing legislation that deals with tax evasion and the facilitation of tax evasion. Since April 2017, HMRC have prosecuted 60 facilitators of tax evasion. These cover a range of professional services and apply to different taxes and duties.
The CCO legislation was not brought in to simply increase the number of corporate prosecutions but to change long standing industry practices and reduce the opportunity for the facilitation of tax evasion to occur. There are positive signs of this happening with many organisations putting in place reasonable preventative procedures.
Asked by: Lord Sikka (Labour - Life peer)
Question to the HM Treasury:
To ask Her Majesty's Government how many transfer pricing specialists are employed by HMRC for dealing with the tax practices of multinational corporations.
Answered by Lord Agnew of Oulton
In 2019 to 2020 there were 456 (441 in 2018 to 2019) full-time equivalent staff working on international issues involving Multinational Enterprises (MNEs) including transfer pricing, diverted profits tax, Controlled Foreign Companies (CFCs) and cross border debt.
This figure includes time spent on international issues by dedicated international specialists, Corporation Tax specialists and policy and technical advisers.
These staff work with other expert industry and tax specialists to tackle issues that represent a substantial risk of tax loss to the Exchequer in line with HMRC’s “resource to risk” compliance policy.
HMRC have invested significant time in training staff to deal with international issues, including transfer pricing.
Asked by: Lord Sikka (Labour - Life peer)
Question to the HM Treasury:
To ask Her Majesty's Government what plans they have to legislate to authorise the Prudential Regulation Authority to carry out stress tests on the adequacy of capital at (1) hedge funds, and (2) private equity firms.
Answered by Lord Agnew of Oulton
The Prudential Regulation Authority (PRA) was established as the prudential regulator of firms which manage significant risk on their own balance sheet as a core part of their business and regulates and supervises banks, building societies, credit unions, insurers and systemic investment firms in the UK. This does not include any hedge funds or private equity firms, although such businesses may fall into scope of the PRA’s regulatory activity to the extent that they are part of wider banking or insurance groups. The Financial Conduct Authority is responsible for the regulation of other financial services firms not supervised by the PRA, including non-systemic investment firms.
The Financial Policy Committee (FPC) acts as the UK’s macro-prudential authority, tasked with identifying, monitoring and addressing emerging risks and vulnerabilities across the financial system. In its August 2020 Financial Stability Report, the FPC identified the need for further work domestically and internationally to review the resilience of investors and markets under stress, including leveraged investors. The relevant UK authorities are working with their international partners at the Financial Stability Board (FSB) to assess the role of leveraged investors in core funding markets, as set out in the FSB’s November 2020 Holistic Review of the March Market Turmoil.[1]
These institutional arrangements strike the right balance in securing a resilient and stable financial system and maintaining the UK's position as a leading financial centre for hedge fund and private equity investment - providing high quality jobs and capital investment to support businesses. The Government does not currently have plans to change these arrangements.
[1] https://www.fsb.org/wp-content/uploads/P171120-2.pdf
Asked by: Lord Sikka (Labour - Life peer)
Question to the HM Treasury:
To ask Her Majesty's Government how many penalty notices for late filing of company tax returns have been issued in accordance with each subsection of paragraphs 17 and 18 of Schedule 18 of the Finance Act 1998 for each of the last five years.
Answered by Lord Agnew of Oulton
Information in the form requested is not readily available and could only be compiled at disproportionate cost.
Asked by: Lord Sikka (Labour - Life peer)
Question to the HM Treasury:
To ask Her Majesty's Government how many proceedings for insolvency have been initiated by HMRC for failure to pay taxes when they were due.
Answered by Lord Agnew of Oulton
Routine insolvency action has been paused by HMRC since the first lockdown in March 2020.
The figures below are for the 2020 calendar year relating to proceedings for insolvency which have been initiated by HMRC for failure to pay taxes when they were due:
Bankruptcy/Sequestration
January – March 2020 409
April – June 2020 0
July – September 2020 0
October – December 2020 0
Companies Winding Up/Liquidation
January – March 2020 1108
April – June 2020 9
July – September 2020 1
October – December 2020 1
These figures cover England, Scotland, Wales and Northern Ireland.
Asked by: Lord Sikka (Labour - Life peer)
Question to the HM Treasury:
To ask Her Majesty's Government how many Company Voluntary Arrangements for financially distressed businesses were approved by HMRC in each of the last five years.
Answered by Lord Agnew of Oulton
HMRC only hold information on approved Creditor Voluntary Arrangements for the last three years, as follows:
2018: 118
2019: 142
2020: 118