Asked by: Adam Afriyie (Conservative - Windsor)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what progress he has made on creating an economic environment in which digital currencies can be developed.
Answered by John Glen - Paymaster General and Minister for the Cabinet Office
The UK’s approach to cryptoassets was outlined in the 2018 Cryptoassets Taskforce report, and in July last year the FCA set out its position in relation to the regulatory perimeter in this space. The government and regulators have since taken steps to continue encouraging responsible innovation in this area, while also mitigating risks to consumers and markets.
For instance, this January the Treasury transposed the cryptoasset provisions set out in the EU Fifth Anti-Money Laundering Directive (5MLD). This will combat the risk of cryptoassets being used for illicit activity, in support of the government’s aims for the sector.
More broadly, the government is committed to creating an environment where tech businesses can thrive by investing in areas such as talent, cutting-edge research and growth finance. Venture capital investment in the UK tech sector grew by 44 per cent in 2019, from £7.1bn to £10.1bn. This was a faster growth rate than both the US and China.
The financial regulators continue to provide a platform that facilitates innovation in this space. For example, the Financial Conduct Authority has accepted a significant number of DLT-based projects into its Regulatory Sandbox to help enable the adoption of this technology to deliver better financial services with appropriate consumer safeguards.
Asked by: Adam Afriyie (Conservative - Windsor)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what plans the Government has to increase the uptake of electric cars by removing VAT on the purchase of zero emission vehicles.
Answered by Simon Clarke
The Government has set an ambitious, legally binding target to reach net-zero greenhouse gas emissions from the UK by 2050.
Although there are no plans at present to reduce the VAT charge on electric vehicles, the Government keeps all taxes under review and assesses them against a range of fiscal and environmental considerations. The Government already makes available an incentive for the public to purchase electric vehicles over conventional vehicles: the Plug-in Car Grant (PiCG) provides grants of up to £3,500 for the purchase of a new battery electric vehicle. PiCG was launched in 2011 and has supported the purchase of around 170,000 Ultra Low Emission Vehicles.
Asked by: Adam Afriyie (Conservative - Windsor)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, how much the UK FinTech industry paid the Exchequer in tax revenue in (a) 2017-18 and (b) 2016-17 financial years.
Answered by Jesse Norman
HM Revenue and Customs (HMRC) publishes annual statistics relating to income tax, VAT and corporation tax by industry (including the Financial and Insurance Activities Sector). However, HMRC cannot identify receipts from the UK FinTech industry specifically.
For other taxes, industry-level information is not available.
For business rates, the Ministry of Housing, Communities & Local Government collects data only at local authority level and is unable to provide a breakdown by industry.
Asked by: Adam Afriyie (Conservative - Windsor)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what key performance indicators his Department uses to assess the performance of Open Banking; and what recent assessment he has made of the performance of Open Banking.
Answered by John Glen - Paymaster General and Minister for the Cabinet Office
The independent Open Banking Implementation Entity (OBIE) is responsible for assessing the performance of Open Banking, and HM Treasury’s view is informed by their assessment.
The OBIE’s latest published assessment of Open Banking performance, made in March 2019, shows that in that month the average availability of Open Banking APIs was 97%, the average response time was 798 milliseconds, and that 38.2 million successful API calls had been made, representing over 97% of the total number of calls made to APIs.
Asked by: Adam Afriyie (Conservative - Windsor)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what recent assessment the Government has made of the potential merits of cryptocurrencies as a means of payment.
Answered by John Glen - Paymaster General and Minister for the Cabinet Office
The Government established the Cryptoassets Taskforce – comprised of HM Treasury, the Financial Conduct Authority and the Bank of England – in 2018 to explore the risks and potential benefits of cryptoassets and the underlying distributed ledger technology (DLT). The Taskforce’s final report[1] concluded that benefits associated with the use of cryptoassets may arise in the future, but that the most immediate priorities for the authorities are to mitigate the risks posed by cryptoassets to consumers and markets, and to prevent the use of cryptoassets for illicit activity. As part of this, the Government will consult on its approach to cryptoassets this year. In addition, the authorities continue to encourage the responsible development of legitimate DLT and cryptoasset-related activity in the UK.
[1] Full version of the report is available at: https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/752070/cryptoassets_taskforce_final_report_final_web.pdf
Asked by: Adam Afriyie (Conservative - Windsor)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, whether he has made an assessment of the net fiscal effect on the public purse of the Government’s decision to increase the number of Tier 5 Exceptional Talent visas from 1,000 to 2,000.
Answered by John Glen - Paymaster General and Minister for the Cabinet Office
The Treasury has not made an assessment of the net fiscal impact of increasing the number of Tier 1 Exceptional Talent visas available. In 2018, the number of Exceptional Talent Visas granted was within the previous quota.
The increase in quota ensures that we have sufficient headroom in the Exceptional Talent route to continue to attract highly skilled people from across the globe; and is a demonstration of the Government’s commitment to ensuring that the UK remains a world-leader in the digital technology, science, arts and the creative sectors.
Asked by: Adam Afriyie (Conservative - Windsor)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what assessment he has made of the competitiveness of the UK peer-to-peer lending sector compared to (a) the US, (b) China and (c) the rest of the world.
Answered by John Glen - Paymaster General and Minister for the Cabinet Office
The Government has introduced a robust and proportionate regulatory regime for peer-to-peer (P2P) lending, balancing the need for consumer protection with allowing the sector to grow, innovate and provide competition in the lending market.
The British Business Bank’s Small Business Finance Markets 2018/19 report sets out that P2P business lending increased to nearly £2.3bn in 2018, and assesses the P2P business lending markets in the UK, the USA and China. The report notes that the increased regulation in the P2P market in the UK has been mostly seen as positive, in contrast to China where regulators were slow to address the sector, leading to opportunities for fraudulent activity.
The UK has been independently ranked by EY and Deloitte as the world’s leading hub for Fintech – the best place in the world to start and grow a Fintech firm. The Government is committed to ensuring that it remains the best place in the world for Fintech, and has set out how it intends to do that in the ambitious Fintech Sector Strategy, launched in March 2018.
Asked by: Adam Afriyie (Conservative - Windsor)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what assessment he has made of the comparative merits of flat rate Interchange Fees as opposed to fees proportional to the value of the transaction; and whether his Department plans to exercise section 7 of the Interchange Fee (Amendment) (EU Exit) Regulations 2018 to decrease the per transaction interchange fee.
Answered by John Glen - Paymaster General and Minister for the Cabinet Office
The Government is open to hearing views on this issue, and digital payments more broadly, as evidenced by its call for evidence on cash and digital payments in the new economy. Amongst other things, this explored how the Government can best support digital payments. The Government will formally respond to the call for evidence in due course.
The European Commission is in the process of reviewing the effectiveness of the Interchange Fee Regulation as part of its usual process. The Payment Systems Regulator, who is the UK’s lead competent authority for the Interchange Fee Regulation, is also conducting a review into the supply of card-acquiring services. Amongst other things, this review will examine the fees merchants pay for these services. The Government has therefore not made a formal assessment of the Interchange Fee Regulation.
Asked by: Adam Afriyie (Conservative - Windsor)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, how many people have invested in an Innovative Finance ISA; and what assessment he has made of the level of uptake of that ISA.
Answered by John Glen - Paymaster General and Minister for the Cabinet Office
According to HMRC statistics, 31,000 innovative finance ISA accounts were subscribed to during the 2017-18 tax year.The Innovative Finance ISA increases the investment options available to investors and forms part of the wider ISA family. An attractive market for peer to peer lending within ISA already exists, with sufficient providers offering a product which meets the needs of lenders and investors.
Asked by: Adam Afriyie (Conservative - Windsor)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what proportion of productivity growth in the last five years can be attributed to financial technology.
Answered by Robert Jenrick
The government has not made an assessment of the proportion of productivity growth in the last five years that is attributable to financial technology.
However, the Government has taken significant steps to increase competition in financial services, including creating an environment in which Fintech firms can grow and compete with incumbents. The Competition and Market Authority has led the Open Banking initiative, bringing more competition and innovation to financial services. The FCA has also established the Innovation Hub and Regulatory Sandbox to support Fintech, both of which are held up as global examples of best practice. Further information on the Government’s efforts to promote FinTech can be found in the FinTech Sector Strategy, published in March 2018.