Data Transparency (Banking)

Andrea Leadsom Excerpts

Thursday 3rd July 2014 Commons Chamber

[The Economic Secretary to the Treasury (Andrea Leadsom)]

First, I congratulate the hon. Member for Edmonton (Mr Love) on securing this debate and presenting his case so eloquently. He was, of course, one of my partners in crime on the Treasury Committee, during which time together we held the Government to account. Therefore, given that this is our second debate together in as many months, I am very glad that he is doing just as good a job of holding the Government to account now that I am not on the Treasury Committee. I am grateful to him for that. The other thing that he and I share is a huge enthusiasm for greater competition, greater transparency and far greater choice and diversity of financial services for businesses and customers. We have worked together on that agenda for a very long time.

Before I get on to the hon. Gentleman’s specific points, I want to highlight the many measures that the Government are taking to try to improve that competition, choice and diversity. As he will know, we are currently consulting on whether to make the large banks provide referrals to challenger banks when they do not wish to lend to a small or medium-sized business. We are already looking at legislating through the small business Bill to require banks to share credit histories with credit reference agencies so that challenger banks with permission can look at other areas for lending. We are supporting peer-to-peer funding and crowdfunding.

Last week, in our bid to support the credit union movement, and quite apart from the funding from the Department for Work and Pensions, we put out a call for evidence to look at the future of the credit union movement and what is wanted from communities and the credit unions themselves. The Government therefore have a big agenda to promote precisely the transparency and competition on which the hon. Gentleman and I have worked very hard over the past few years.

The hon. Gentleman has raised a number of specific issues, but before turning to them I would like to provide a brief reminder of how far along we are with the work on postcode lending data and why we believe it is so important. As the hon. Gentleman has pointed out, the Government secured an agreement with the major banks last July to publish lending data across nearly 10,000 postcodes. It is worth reminding hon. Members that the measure has made the British banking industry into one of the most transparent in the world.

As the hon. Gentleman well knows, improving competition in banking is a No. 1 priority for many jurisdictions, not least the UK. The publication of the data will therefore play a big role in improving competition by enabling challenger banks, smaller building societies, credit unions and CDFIs to identify and move into areas that are not currently served by the larger banks. It will also mean that our economy is better served by their offering finance to customers who are crying out for support to help their business grow. I certainly believe that the project is vital, and that it will play a key role in improving lending in areas where it is currently lacking. I am sure that he agrees with that overarching sentiment.

I turn now to the specific points made by the hon. Gentleman and the hon. Member for Harrow West (Mr Thomas). On the comments of the hon. Member for Edmonton about expanding coverage across institutions, the Government made a clear commitment during the passage of the Financial Services Bill that the data would initially involve the lending of the seven major lenders. That decision was taken because of their dominance in the market. The Government also made it very clear that we intend to discuss with interested peers and the industry exactly how the data could be extended to cover other types of institutions, including banks, building societies, credit unions and other finance providers. It is, however, important to bear in mind that the cost of such a level of disclosure, particularly for smaller institutions, might be prohibitive and might increase the costs they pass on to their customers. We therefore want to consider the matter very carefully before we act.

With regard to expanding coverage across the country, the hon. Member for Edmonton will know that the first dataset did not include lending in Northern Ireland, due to the differing banking markets and reporting requirements for Northern Ireland banks. However, I assure him that the Government will ensure that any future extension includes the main Northern Ireland banks, and I confirm that the Government, with the British Bankers Association, are discussing with the Northern Ireland banks how the agreement might be extended to them.

I am sure that the hon. Gentleman will agree that it is important that due time is given for discussions to ensure that any agreement is proportionate and that data provided will be beneficial. I am also sure that he will welcome the news that, just yesterday, the BBA published composite bank lending data for Northern Ireland businesses and households for the first time. The Northern Ireland data have been sought after for some time, and their publication has been encouraged and helped by the joint ministerial taskforce on banking and access to finance.

The hon. Gentleman suggested that the framework in question should be managed by an independent organisation, such as the Office for National Statistics, but the BBA already collects and publishes a range of comprehensive data on lending to individuals, households and businesses, so it is very well positioned to agree the necessary standards on data release and accessibility. However, as he would expect, the Government will keep the situation under review.

[Mr Love]

The reality is that data provided through the BBA are not entirely consistent. Are Ministers discussing with the banks and the BBA how to ensure consistency in the provision of data through the voluntary agreement?

[Andrea Leadsom]

Yes, the Government are keeping the matter under review, and we will discuss exactly that with the BBA.

The hon. Gentleman expressed concern that postcode lending data do not give a full picture of lending in the UK, and suggested that a wider set of lenders and products might be included. For example, he noted that SME figures represent about 60% of the national market, covering loans and overdrafts only. Other forms of finance, such as business credit cards and asset-based finance, are not included at this stage. He is therefore right that it is important for public data to be as broad as possible, but as I have mentioned, we must bear in mind that, particularly for smaller institutions, the cost of making such disclosure might be prohibitive and might increase the costs passed on to customers and businesses. It is important to see postcode data as part of a wide range of data to which the Government, banks and businesses have access, on top of data from the Bank of England, the BBA and other surveys.

Those other surveys, including the SME Finance Monitor and the new Business Banking Insight, can also be of real importance. The latter, which the Government announced in the Budget and I launched just over a month ago, is a really useful tool for UK businesses, as it lets them see which banks are in a good place to offer them the products and services they need at the right prices and will give them a decent service in their area and their particular market.

Finally, the hon. Gentleman asked what use the Government are making of the data on bank lending and whether we have a clear strategy for tackling any credit deserts in UK communities; the hon. Member for Harrow West also raised that issue. I reassure them both that the Government regularly interrogate these data as part of our wider analysis of bank lending conditions across the UK. However, the full usefulness of the data will only really be known once we have been able to identify longer-term series and trends.

At the current time, the data do not appear to show any regional imbalances, but we will continue to monitor that. As the dataset grows and trends become more readily identifiable, we plan to make increasing use of the data. We will of course take action on the issue if we think it is needed.

[Mr Thomas]

Will the Minister give us a little more clarity on who is analysing the trends? I ask, having asked the Financial Inclusion Centre specifically to give me a sense of the bank lending data for London; its analysis suggested that there was a wide disparity among different postcodes—potentially 50% to 300% of the average per capita lending per postcode. As my hon. Friend the Member for Edmonton mentioned, my sense was that there was a need for one particular organisation to analyse those data.

[Andrea Leadsom]

As I have said, at the current time the data do not seem to show any major regional imbalances, but my officials, the Bank of England, the BBA and the banks themselves are looking at the data. If the hon. Gentleman wants to write to me on a specific point where he believes that there may be evidence of a distinct imbalance I would be delighted to look into it and respond to him. We will continue to monitor the data and ensure that as trends become more identifiable we can make more use of the data to assess potential areas where there is a lack of banking facilities.

In conclusion—

[Mr Love]

Will the Minister give way?

[Andrea Leadsom]

I will give way one last time.

[Mr Love]

I apologise—when the Minister said, “In conclusion,” I thought I had missed my opportunity. The Financial Conduct Authority has an objective of looking at particular areas, specifically for the purpose of researching into credit deserts. Have Treasury Ministers had any discussions with the FCA on that?

[Andrea Leadsom]

I assure the hon. Gentleman that officials meet the FCA on a regular basis, as do I. If it will make him feel better, I shall make a point of raising that issue with the FCA the next time we meet to ensure that it is looking at it carefully.

I thank the hon. Members for Edmonton and for Harrow West again for raising this important issue. As they know—the hon. Member for Edmonton certainly knows this—transparency and competition are central to the Government’s work on financial services. My interest lies very much in that area, so the hon. Member for Edmonton and I are aligned on that. Although I am sorry that I cannot give him the answers that he wants right now, because the new policy has not been in place for long and we do not have enough material as yet and because of our natural reticence to increase the costs for smaller institutions in the early days, I hope that I have reassured him that we will continue to monitor the data and look for ways to improve the service. Ultimately, I am confident that we will end up with a banking system that better serves people and businesses up and down the country.

Question put and agreed to.

VAT on e-books

Andrea Leadsom Excerpts

Wednesday 2nd July 2014 Westminster Hall

[The Economic Secretary to the Treasury (Andrea Leadsom)]

It is a pleasure to speak under your chairmanship, Mr Hood. I congratulate the hon. Member for Glasgow South (Mr Harris) on securing a debate on this very important subject. I am aware that he has asked a number of questions on the issue recently. As he will be aware from the answers that he has received, I am filling in for my hon. Friend the Exchequer Secretary to the Treasury in Westminster Hall, as he is in the main Chamber leading on the Finance Bill. In his absence, I will do my best to answer some of the hon. Gentleman’s questions.

Of course, no one needs to be an expert on tax to recognise the importance of books. The hon. Gentleman is absolutely right—publishing is an industry in which the United Kingdom can boast to have always been, and to remain, one of the world’s leaders, be it because of Charles Dickens, Jane Austen or Agatha Christie. I understand that Barbara Cartland is one of our most lucrative book exports, but I am not personally so familiar with her novels.

[Mr Harris]

I suppose that at this point we should acknowledge that one of the Minister’s colleagues, the hon. Member for Mid Bedfordshire (Nadine Dorries), is consistently in the top six on the Amazon bestsellers list for e-books.

[Andrea Leadsom]

I am sure that my hon. Friend will be delighted to have been name-checked. Her sales will no doubt rise dramatically as a result of that helpful intervention.

The Government also recognise the crucial role that reading can play in increasing literacy among our younger generations, which is important to their future success. I remember that my two sons were five and three when the first Harry Potter books by J. K. Rowling came out. We used to snuggle up together, and none of us wanted them to go to bed, because we just wanted to get on to the next bit. There is no doubt about the contribution of some of the great British children’s and adults’ literature. I include C. S. Lewis and some of the other great children’s authors among those who have helped to support and sustain literature and pleasure in reading among young people and adults. Our new national curriculum, which comes into force this September, is clear that all pupils must be encouraged to read widely, both for pleasure and for information. We absolutely recognise the important role that books have always played in this country and will continue to play.

On the issue of tax, I begin by reassuring the hon. Gentleman that the Government recognise the importance of the e-services market in the UK and that Ministers are taking a number of actions to support the digital economy. E-services are a growing part of our economy, and we expect them to generate significant tax revenues going forward.

On the specific issue of VAT, I should briefly explain that, as the hon. Gentleman pointed out himself, it is governed by EU law, and that reliefs from VAT are strictly limited under EU law. As hon. Members may know, when the UK joined the European Community in 1973, we successfully negotiated to keep our existing zero rate on items such as children’s clothing, most foods and physical books, newspapers and journals. Most other member states do not benefit from that derogation.

[Mr Harris]

I apologise for interrupting, but when the derogation was granted on our accession to the EU in 1973, there was no reference to physical books, because e-books did not exist at the time. There was a concession on books, and as that derogation stands, it could be extended to e-books, as e-books come under the definition of being a book.

[Andrea Leadsom]

Yes, I accept the hon. Gentleman’s point, and I will come on to it if he will bear with me.

EU VAT law allows member states to implement reduced rates of VAT of no less than 5% for certain goods and services, listed in annexe III of the VAT directive, at the discretion of member states. One of those reliefs relates to the supply of books on all physical means of support, newspapers and periodicals, other than material wholly or predominantly devoted to advertising. Although that may sound like it includes e-books, article 98(2) of the VAT directive specifically excludes electronically supplied services from the reduced rates in annexe III. That means that the UK charges the standard rate of VAT, 20%, on e-books and the zero rate of VAT on physical books.

As hon. Members will be aware, the UK’s e-books market is a growing one. Therefore, it is not clear that it is in need of a stimulus in the form of a reduced VAT rate. Between 2011 and 2012, e-book sales in the UK increased from £138 million to £261 million, so at a time when the Government are working to tackle the economy’s problems head-on and deliver a recovery that works for all, it is not clear that we should offer fiscal support for such a rapidly expanding industry.

[Fiona Mactaggart (Slough) (Lab)]

How many e-books are currently subject to UK rates of VAT and how many are subject to, for example, Luxembourg rates?

[Andrea Leadsom]

The hon. Lady will forgive me—I do not have those specific breakdowns to hand, but I will happily write to her on that point. I apologise for that.

[Mr Harris]

I am grateful to the Minister for giving way again. She has shown great patience, and I appreciate it. What she has just said, though, rather misses the point of my debate. No one is asking the Government to offer subsidies or favours to the e-book industry. What I am asking is that an impending charge that consumers in this country are not currently paying not be levied. She is right to say that the industry is doing well and growing. The problem is that people who buy books currently and pay 3% or 5% VAT will from 1 January pay 20%. We are not asking for any kind of subsidy from the Government; we are asking for the current situation to continue.

--- Later in debate ---

[Andrea Leadsom]

Again, I understand entirely the point of the hon. Gentleman’s debate. The issue is specifically that e-books are not counted as zero-rateable books from the point of view of the EU directive, so this is not an optional VAT charge. The EU directive requires us to treat e-books in that way, because they are treated as an electronic service. As the hon. Gentleman said at the start of his remarks, people can change the font; they can download e-books; they can switch from page to page without having to move pieces of paper, and so on. Therefore, they are deemed to be an electronic service and not the same as a physical book. The point that I am making is that our charging VAT on them is not optional.

Let me come on to the case of France and Luxembourg, about which the hon. Gentleman spoke, and in particular the difficult issue of books on Amazon. I am sure that, although he would support not paying VAT on e-books, he recognises that there has been an issue with big companies locating themselves in other places to take advantage of beneficial tax regimes that no doubt help their sales. As he pointed out, since 2011, France and Luxembourg have levied reduced rates of VAT—7% and 3% respectively—to bring them in line with their VAT rates on physical books. That is creating competitive distortions in relation to economic operators in other member states, and there has been pressure from the industry for the UK to reduce its VAT rate on e-books. The European Commission has begun European Court of Justice infraction proceedings against France and Luxembourg, and it has formally instructed them to apply their standard VAT rates to supplies of e-books. If the UK were to reduce the rate of VAT on e-books, it is extremely likely that we, too, would be infracted. I would be interested to know whether the hon. Gentleman thinks that we should seek to avoid infraction proceedings from the European Court of Justice or embrace them. We could be, unusually, on opposite sides of the argument on that point.

[Mr Harris]

I seem to remember being complimentary to the Minister when she spoke powerfully in favour of votes for prisoners in a debate on which we took the opposite points of view, and I believe that we are going to do the same again. I am more than relaxed about the UK being the target of court action by whichever European institution is relevant. I was relaxed about the idea when it came to votes for prisoners—we have to keep our position on that—and I see no difference, frankly, in this case. If the move would be good for the UK industry, we should stand up for that industry against interference by the EU.

[Andrea Leadsom]

I absolutely respect the hon. Gentleman’s position. Were we unilaterally to decide to change the VAT rate, we would, no doubt, be subject to ECJ infraction proceedings.

The other real issue is that a reduction in the rate of VAT on e-books would be likely to create border-line issues in the wider electronic services market, because problems of definition could lead to a widening of the relief through legal challenge and industry changes. That would put at risk serious amounts of revenue in the UK market, which is worth more than £2.5 billion.

I turn to the VAT changes that will be introduced in 2015. Currently, supplies of services, including electronically delivered services such as e-books, are taxed in the member states where the supplier is based at the VAT rate of that member state. Member states with lower VAT rates therefore have a competitive advantage, which encourages suppliers to locate there and sell to EU consumers, including the UK, at lower VAT rates. From 1 January, therefore, there will be a place of supply change, which will mean that e-books and other e-services will be taxed in the member state where the customer belongs at the VAT rate of that member state. That is designed to make competition fairer and to remove distortions.

Legal advice obtained by the Government indicates that there is no scope to change the VAT treatment of the sale of digital books and similar products under EU law. The Commission’s position is clear on the VAT rate of e-books: e-services attract a standard rate of VAT, because they are electronically supplied services. The UK’s rate is in line with EU law, and there is currently no intention to reduce the rate of VAT for e-books.

I am sorry to disappoint the hon. Gentleman by my reply, but I hope that he will be pleased to know that Ministers are focused on actions outside the VAT system to support the digital economy. In that area, we are making great efforts to encourage the digital economy. For example, in June 2013 the Government launched an information economy strategy, which includes positioning the UK strongly in the field of e-commerce by, among other things, improving digital skills across the population and creating the infrastructure to support innovation and growth.

Although I am sure that the hon. Gentleman is disappointed by my answer on VAT and e-books, I hope that he and other hon. Members are reassured that the Government support the sector and will continue to do so and that we are confident that the electronic services market will continue to grow and generate significant tax revenues.

[Mr Harris]

As there are a couple of minutes left, I wonder whether I could be cheeky and get in with another couple of points.

Tax Policy

Andrea Leadsom Excerpts

Thursday 26th June 2014 Written Statements

[The Economic Secretary to the Treasury (Andrea Leadsom)]

The bank levy, a permanent tax on banks’ balance sheet equity and liabilities, was introduced by the Government from 1 January 2011. It remains an essential policy tool, in helping to ensure a fair contribution from the banking sector and provide incentives for banks to move towards more stable funding profiles, increasing their resilience to liquidity shocks.

Despite recent changes to simplify the tax base and better align it with the regulatory regime, a number of concerns have been repeatedly raised by the sector in respect of the levy’s existing design:

banks’ balance sheets, and thus bank levy receipts, remain highly sensitive to economic and regulatory change;

the need for successive changes to the bank levy rate in order to achieve the revenue target has, it is claimed, created some uncertainty and impacted on perceptions of UK competitiveness; and

the marginal cost of the bank levy has, it is claimed, created risks of distortion and unintended impacts on banks’ behaviour.

Accordingly, the Government announced that they were willing to explore (on a non-committal basis) whether a revenue-neutral reform to the bank levy charging mechanism, in which the headline rate would be replaced by a new banding approach for determining a bank’s charge, could help to address these concerns and increase the predictability and sustainability of bank levy receipts.

Feedback from banks, building societies and advisory bodies as part of the consultation process suggests that it would not, irrespective of how it was structured.

Instead, it was considered that a banding approach would create uncertainty over banks’ charges, strengthen the incentives for activities to be relocated overseas and create arbitrary differences between banks’ effective tax rates and the relevance of the levy’s behavioural incentives.

Reflecting on these concerns—which were raised by banks of different domicile, structure and balance sheet size and trajectory—the Government have decided against the introduction of a banding approach for the bank levy at Finance Bill 2014 and have no plans to consider this idea further.

Two wider revenue-neutral proposals were put forward by the sector as part of the consultation, both of which may warrant further evaluation.

First, a technical amendment was proposed to the bank levy legislation, aiming to address certain banks inability to accrue the costs of the bank levy for quarterly reporting purposes, which is seen to create an inaccurate representation of quarterly operating profit, reduce comparability in interim results and necessitate careful market and shareholder explanation.

Secondly, a number of respondents suggested that the levy could be applied to the opening rather than closing balance sheet, in order to provide greater certainty to banks over their in-year charge and allow them to make more informed commercial decisions over short-term investment horizons.

The case for making these changes remains unclear and the Government need to give further consideration as to their merit, legality and legislative deliverability. However, the Government intend to maintain a dialogue with the sector on these points.

Overall, the Government would like to thank those who participated in the consultation process. The views put forward have been, and will continue to be, valuable in informing policy decisions in this area.

Cheque Imaging/SME Credit Data

Andrea Leadsom Excerpts

Wednesday 25th June 2014 Written Statements

[The Economic Secretary to the Treasury (Andrea Leadsom)]

In March 2014 the Government published a consultation, “Speeding up cheque payments: legislating for cheque imaging”, which set out proposed legislation for the introduction of cheque imaging in the United Kingdom. Cheque imaging is an innovation that speeds up cheque clearing times through the sending of a digital image of the cheque for clearing, rather than the original paper instrument itself. Cheque imaging enables a wide range of benefits to be delivered to consumers, businesses and the banking industry. It will speed up clearing times, increase customer convenience, deliver operational efficiencies and help challenger banks to compete with incumbents.

Separately in December 2013 the Government published a consultation, “Competition in banking: improving access to SME credit data” which set out its proposal to require banks to share information on their SME customers with other lenders through credit reference agencies. The proposals will help small businesses access the finance they need to grow by opening up access to the credit data that the major banks hold on their SME customers to other banks and finance providers. The proposals are intended to make it easier for SMEs to seek loans from a lender other than their bank by improving the ability of challenger banks and alternative finance providers to make accurate SME risk assessments and lending decisions.

The Government are publishing responses to both consultations today, alongside introducing legislation in the Small Business, Enterprise and Employment Bill to allow for the introduction of cheque imaging in the UK and to improve access to SME credit data.

I am placing copies of these documents in the Libraries of both Houses.

Oral Answers to Questions

Andrea Leadsom Excerpts

Tuesday 24th June 2014 Commons Chamber

[Mr Gareth Thomas (Harrow West) (Lab/Co-op)]

2. What recent assessment he has made of the level of bank lending to businesses since May 2010.

[The Economic Secretary to the Treasury (Andrea Leadsom)]

The Government have introduced several measures aimed at improving all types of lending to businesses, such as the funding for lending scheme, the British Business Bank and the SME appeals process. Against this backdrop, gross lending to businesses in Q1 2014 was almost 10% higher than in the same quarter a year earlier, and 32% of SMEs that have been through the appeals process have had their initial loan rejection overturned.

[Mr Thomas]

On the Government’s watch, net lending to business is down by some £57 billion since May 2010. Does that not underline the case for further banking reform, for an expansion of the use of community development financial institutions, and for consistent disclosure of bank lending data?

[Andrea Leadsom]

The hon. Gentleman will know that the great recession in 2008-09 that the previous Government presided over left banks in an absolute mess, and it takes a very long time to recover from such a devastating position. The banks are still trying to sort out their balance sheets, and net lending has been down. It will take time to recover, but this Government are putting measures in place to create new access to finance from all sorts of different lenders. I was delighted yesterday to support the credit union movement on its 50th anniversary with a call for evidence on how we can expand that area of activity for.

[Guy Opperman (Hexham) (Con)]

I draw attention to my entry in the Register of Members’ Financial Interests. Does the Minister agree with me that, as well as stabilising and reforming the banking system, one of the key aspects of the long-term economic plan is the creation since 2010 of many new local banks that provide alternative and expanded lending to retail and business customers?

[Andrea Leadsom]

Yes, I absolutely agree with my hon. Friend. The Government want more competition and diversity in the banking sector, which is why we asked the old Financial Services Authority to review the barriers to entry for banks, why we legislated to give the Financial Conduct Authority strong competition powers, and why we created the payment systems regulator to look at fair access to payment systems.

[Seema Malhotra (Feltham and Heston) (Lab/Co-op)]

In recent discussions with women entrepreneurs I have been struck by the number who have said they were surprised by the banks’ attitude towards them and their businesses. I spoke to one entrepreneur who said that only when she was featured in a TV programme did a bank phone her up and offer her a loan. What discussions has the Chancellor had with banks about women-led businesses, the demand for lending and how many they are lending to?

[Andrea Leadsom]

This Government have taken great steps to improve competition and I am delighted that, currently, the regulator is talking to 25 new applicants for new banks. We are also taking steps to ensure that those who get turned down for credit have the opportunity to go to other challenger banks to access other sources of finance. I am sure that the hon. Lady will welcome the steps that the Financial Secretary to the Treasury, my right hon. Friend the Member for Loughborough (Nicky Morgan), is taking to improve particularly the support the Government are giving to female entrepreneurs.

[Alun Cairns (Vale of Glamorgan) (Con)]

Increasing competition in the sector is key to improving lending. The Minister mentioned that the Prudential Regulation Authority is looking at 25 new applications for licensing to be banks. How does this compare with the decade before 2010?

[Andrea Leadsom]

My hon. Friend may know that in May 2010, when Metro bank was granted a full banking licence, that was the first new full banking licence for over 100 years, so the fact that the regulator is talking to potentially more than 25 new banks is very good news for competition and choice in the UK.

[Sir Richard Ottaway (Croydon South) (Con)]

3. What recent assessment he has made of the potential effect of increasing tax on businesses on public finances.

--- Later in debate ---

[Diana Johnson (Kingston upon Hull North) (Lab)]

14. What progress his Department has made on the Help to Buy scheme.

[The Economic Secretary to the Treasury (Andrea Leadsom)]

Help to Buy is working. Since the Chancellor announced the scheme in the 2013 Budget, it has supported over 27,000 households on to the housing ladder, and the numbers show that it is helping the right people—but we will be vigilant. The Chancellor has asked the Financial Policy Committee to assess the ongoing impact of the Help to Buy mortgage guarantee scheme annually, and it will make its assessment in September.

[Sheila Gilmore]

I thank the Minister for that reply, but when in five London boroughs, for example, the value of properties sold under the scheme has been over £400,000, have we not reached the point at which we should be reviewing this urgently, because at the same time we are hearing increasing calls for the Financial Policy Committee to look at cooling the housing market? We could be cooling the mortgage market on the one hand and encouraging higher prices through Help to Buy on the other. It does not make sense.

[Andrea Leadsom]

The hon. Lady should be aware that the numbers just do not support what she is saying. In fact, 94% of all completions under Help to Buy are outside London, the average price of a home under the mortgage scheme is around £151,000, which is well below the UK average of £260,000, and only 1.3% of total mortgage lending is under the Help to Buy mortgage scheme.

[Diana Johnson]

The Minister will know that Hull North’s Kingswood area leads the table for the number of houses sold under Help to Buy, but is she aware that Ministers in the Department for Environment, Food and Rural Affairs have repeatedly told me in this House that those houses should not have been built because they are on a floodplain and will not get insurance under the Government’s new insurance scheme? Does one hand of Government know what the other hand is doing, because it does not look like it to me?

[Andrea Leadsom]

The Government know exactly what their policy is on Help to Buy—it is to support first-time buyers and, at the same time, to make a significant contribution to new housing starts. The supply of housing is absolutely essential for people to achieve their dream of getting on the housing ladder.

[Justin Tomlinson (North Swindon) (Con)]

A total of 119 households in my constituency have benefited from Help to Buy, of which 96% are first-time buyers. Will the Minister visit Swindon to meet these people and those in the construction industry who have benefited from this opportunity?

[Andrea Leadsom]

I am grateful to my hon. Friend for that invitation, and yes, I would love to take him up on it. As a new Minister, it would be a very exciting visit for me, so I thank him. The chief executive of Barratt Homes has said that its new housing starts are 20% up on two years ago owing to the Help to Buy scheme.

[Mr Speaker]

The Minister is in such a state of high excitement that we are pleased to see it.

[Jessica Lee (Erewash) (Con)]

Does my hon. Friend agree that Help to Buy is a key component in helping families and first-time buyers take the important step on the property ladder, as evidenced by my right hon. Friend the Prime Minister’s recent visit to Ilkeston in Erewash to see the very successful scheme at Briars Chase?

[Andrea Leadsom]

My hon. Friend, who represents Erewash so well, is absolutely right. Aspiring to one’s first new home is something that we all wish for, for ourselves, our children and our grandchildren. This Government are determined to do something about that while ensuring that we do not do anything that would enable an unsustainable housing boom.

[Mark Lazarowicz (Edinburgh North and Leith) (Lab/Co-op)]

15. One of the features of the UK housing market is that millions of houses are inefficient in their use of energy, and even much new housing is not as energy-efficient as it ought to be. The Help to Buy scheme could have been used as a way of providing a massive boost to more energy-efficient UK housing stock, but that opportunity has so far been lost. What will the Government do to remedy this deficiency?

[Andrea Leadsom]

The hon. Gentleman is right that house builders should be seizing the opportunity to make homes as energy-efficient as possible. That does not, however, detract from the very important point that the Help to Buy scheme was started to try to regenerate growth in the housing market, and that is an achievement that all Members should be proud of.

[Tim Loughton (East Worthing and Shoreham) (Con)]

Stamp duty on homes is a major money-spinner for the Treasury, yet it is paid disproportionately by hard-working families in the south-east of England who have to pay at least twice as much for a family home and therefore twice as much stamp duty as they might for a home in the shadow Chancellor’s constituency, for example. Is it not time to consider regional stamp duty rates so as to be fairer to hard-working families?

[Andrea Leadsom]

I accept my hon. Friend’s suggestion as a lobby to my hon. Friend the Exchequer Secretary, to whom I shall chat in due course, no doubt, in the Members’ Tea Room.

[Julian Sturdy (York Outer) (Con)]

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

Bank Structural Reform and Reporting and Transparency of Securities Financing Transactions

Andrea Leadsom Excerpts

Thursday 19th June 2014 Written Statements

[The Economic Secretary to the Treasury (Andrea Leadsom)]

This Government have decided to opt in to the justice and home affairs (JHA) provisions within the European Commission’s proposals on structural measures to improve the resilience of EU credit institutions, and on the reporting and transparency of securities financing transactions.

The first proposal aims to improve the financial stability of the EU by reforming the structures of systemically important banks to make them more stable, and by prohibiting them from engaging in proprietary trading activities. The Government are in favour of this proposal as a means to reduce the implicit taxpayer guarantee which stems from the expectation that the largest banks will be bailed out by the taxpayer, which distorts the EU economy. This proposal is made under a legal base of article 114 (title VII) of the treaty on the functioning of the EU.

The proposal on reporting and transparency of securities financing transactions aims to improve the transparency of certain shadow banking activities by imposing reporting, transparency and consent obligations on firms engaging in such transactions. The Government are broadly supportive of this proposal as a means of increasing the transparency of the shadow banking sector and improving the information available to supervisors. This proposal is made under a legal base of article 114 (title VII) of the treaty on the functioning of the EU.

Both measures include a provision requiring law enforcement bodies to co-operate during the investigation of criminal offences. The relevant provisions are article 28(3) of the structural reform proposal and article 20(3) of the SET proposal. The Government consider that these are JHA obligations on which the Government should exercise their right to chose whether or not to participate.

The Government decided to opt in to these provisions. For those member states who choose to lay down criminal sanctions for breaches of the regulation, the provisions would aid international regulatory co-ordination. Trading activities are often cross-border, and will include activities conducted in other member states. Exchanging information with law enforcement bodies in other member states about specific criminal investigations could be helpful in enforcing such sanctions.

Prudential Regulation Authority (Annual Report)

Andrea Leadsom Excerpts

Tuesday 17th June 2014 Written Statements

[The Economic Secretary to the Treasury (Andrea Leadsom)]

The annual report and accounts 2013-14 of the Prudential Regulation Authority (PRA) has today been laid before Parliament.

The report forms an important part of the accountability mechanisms for the Prudential Regulation Authority under the Financial Services and Markets Act 2000 and assesses the performance of the Prudential Regulation Authority over the past 12 months against its statutory objectives.

Counter-Terrorism Act 2008 (Schedule 7)

Andrea Leadsom Excerpts

Tuesday 10th June 2014 Written Statements

[The Economic Secretary to the Treasury (Andrea Leadsom)]

My noble friend the Commercial Secretary to the Treasury, Lord Deighton, has today made the following written ministerial statement.

Paragraph 38 of schedule 7 to the Counter-Terrorism Act 2008 requires the Treasury to report to Parliament after each calendar year in which a direction under the schedule is at any time in force. This report provides details of the Treasury’s exercise of its functions under schedule 7 during the calendar year 2013.

The schedule 7 powers

Schedule 7 provides HM Treasury with powers to implement a graduated range of financial restrictions in response to certain risks to the UK’s national interests. The risks it addresses are those posed by money laundering, terrorist financing and the proliferation of chemical, biological, radiological and nuclear weapons.

Direction given under the powers in schedule 7

The Financial Restrictions (Iran) Order 2012 (“the 2012 order”) was made and came into force on 21 November 2012, immediately on expiry of the 2011 order. The 2012 order contained a direction by the Treasury in the same terms as in the 2011 order. The decision to give the direction in the 2012 order, in effect maintaining the restrictions in the 2011 order, was made because of the continued risk to the national interests of the UK caused by the activity of Iranian banks in facilitating the development or production of nuclear weapons. The direction mitigates the risk to the financial sector of being involved in proliferation financing.

Licensing

Under paragraph 17 of schedule 7, the Treasury can exempt acts specified in a licence from the requirements of a direction requiring the cessation or limiting of transactions or business relationships between UK and Iranian banks.

Six general licences were issued by the Treasury exempting certain activities from the requirements of the 2011 order. All six licences have since been revoked and on 22 December 2012, HM Treasury issued a new General Licence 1 under article 30(2)(c) of Council regulation (EU) No. 257/2012 (“the EU regulation”). This licence permitted actions authorised under the Financial Restrictive Order 2012 to remain valid.

Specific licenses

In January 2013, three specific licences were issued, one specific licence revoked and one specific licence amended.

Two of these newly issued licenses were issued in connection with payments due by an agreement or contract concluded before the prohibitions;

One newly issued licence related to humanitarian action;

One revoked licence concerned the repayment of a loan; and

One amended licence allowed a UK bank to receive funds from a UK designated bank, amended to add the ultimate beneficiary into the licence.

Financial Services Authority and Connaught Income Fund

Andrea Leadsom Excerpts

Wednesday 7th May 2014 Westminster Hall

[The Economic Secretary to the Treasury (Andrea Leadsom)]

It is a great pleasure to serve under your chairmanship for my second outing in Westminster Hall, Mr Brady. I congratulate my hon. Friend the Member for Vale of Glamorgan (Alun Cairns) on organising this debate on an incredibly important subject. I also have constituents who have lost a huge amount of money as a result of the devastating investment they made. It is important that we get to the bottom of the matter and try to ensure that, if possible, investors can be compensated in some way. Those who are responsible should face the maximum justice available.

This is an important issue not just for my hon. Friend’s constituents and mine. I see many Members in Westminster Hall today whose constituents have also suffered as a result of investing in the fund, so it is important that the FSA, as was, and now the FCA take the matter extremely seriously. I reassure him and all other Members here today that that is indeed the case.

Many investors have lost their life savings as a result of the events involving the Connaught funds, which has caused real hardship for people across the country. As my hon. Friend made clear, the Connaught funds comprise three separate funds: the Connaught Income Fund series 1, series 2 and series 3. In total, approximately £145 million was invested in the funds, which, as we know, were unregulated collective investment schemes. By definition, such schemes are not subject to direct regulation by the FCA or, previously, the FSA.

[Guto Bebb]

I visited the FCA with my hon. Friend the Member for Vale of Glamorgan (Alun Cairns) to look at the issue in question. We were shown a flowchart identifying the selling process for this investment. The number of elements that were regulated and the number not regulated implied that there was significant confusion about the way the regulatory process actually works in the UK.

--- Later in debate ---

[Andrea Leadsom]

My hon. Friend makes an extremely relevant point. As I was looking into the matter in some detail yesterday, I was struck by exactly the same thing. There were regulated elements and unregulated elements, and of course we have ended up with a disastrous scenario in which people have lost a lot of money and it has become difficult to get to the bottom of everything. I will try to unravel that a bit.

As I said, because of the unregulated nature of some of the entities involved, many of the usual protections and safeguards that protect investors in regulated funds were absent. That is why the promotion and distribution of such schemes are subject to strict controls. Unfortunately, it seems that in this instance even those controls did not prevent a large number of individuals from investing in the fund. In addition to the questions that have been raised, to which I will return in a moment, I would like to address two main issues: first, the actions taken by the FCA to try to protect consumers, despite most of the entities involved being unregulated; and secondly, the ongoing work for the benefit of consumers and investors to secure a fair and proper outcome.

First, despite the schemes being unregulated, the FCA has taken a number of steps to try to protect consumers. In May 2011, the FSA altered Tiuta’s permission so that it could no longer carry out any new regulated mortgage lending and issued an alert to consumers telling them what they should do if they thought they had been mis-sold the fund. In June 2011, the FSA wrote to all financial advisers who sold the fund, asking them to review the sales and to contact consumers where there might be risk of unsuitable advice. It also set up a page on its website for consumers and firms to receive information on the fund. In August 2011, it required Tiuta to instruct Connaught Asset Management Ltd to change its marketing materials so that they no longer described the fund as “low risk” and “guaranteed”. The FSA took the view that those descriptions were misleading. Finally, in June 2012, it altered Tiuta’s permission to ensure funds from redeemed loans returned to the series 1 fund.

[Chris Ruane]

In August 2012, Capita, the parent body of the Connaught fund, was given a contract by the Department for Work and Pensions worth hundreds of millions of pounds. Who should pay for the losses? Should it be Capita, or should it be the 1,200 individuals who were falsely sold the investment? Will the Minister use her position with the Secretary of State for Work and Pensions to ensure that Capita does the right thing and compensates those individuals?

[Andrea Leadsom]

I am grateful to the hon. Gentleman for making that point, which I will certainly look into further. Those two organisations belong to the same parent company, but are in fact different subsidiaries. As he might be aware, Government contracts are awarded in line with EU procurement rules.

In addition to the work by the FCA, I can also confirm that other law enforcement agencies are looking into this matter. I will urge the police to consider the case very carefully. I know that Members are interested to hear whether the police are looking at this matter, and I can confirm that they are. The FCA has been working closely with law enforcement agencies to identify and pursue avenues that will yield the best outcome for investors. It continues to look into the matter, and its work is very much ongoing. In the meantime, it is encouraging any investors who believe they might have been mis-sold a product to contact their independent financial adviser. It has disclosed information to the police and the administrators of the firms involved to help them with their inquiries.

A number of points were made during the debate, and I will try to address them. I was asked whether Capita Financial Managers Ltd was negligent in its operation of the fund and whether it breached its obligations under the Financial Services and Markets Act 2000, the operator agreement or its duty of care to consumers. The Government and the FCA take those allegations very seriously, and the FCA is carrying out its own inquiries, but the requirements on the operator of an unregulated fund are limited under FCA rules. I was asked whether the FCA has made a restitution order against Capita. I stress that the FCA is considering all the different avenues by which those who have suffered could obtain compensation. I was asked about the information provided by George Patellis.

[Mr David Davis (Haltemprice and Howden) (Con)]

In a number of these cases, some involving Capita and some involving others, it has been clear that the financial structure of the company has been set up with limited liability subsidiaries to prevent the compensation demands from going back to the parent. Will she ask the FCA to look at the acceptability of that approach, with a view to future concerns like these? It seems to me that it is a way for the company to get the benefit from a reputation, without meeting the liability that goes with it.

[Andrea Leadsom]

I completely agree. There are questions to be asked about how this apparent ability to avoid culpability has been allowed, whether steps can be taken to ensure it cannot happen again and whether there are compensation issues. The FCA is looking into all those matters, but I will take up the point my right hon. Friend makes.

I was just talking about the action the FSA took when it received information from George Patellis. The FSA met with other parties to discuss his concerns, and as a result of those discussions, it became seriously concerned about the financial position of Tiuta plc. Having considered the regulatory options in respect of Tiuta plc, in May 2011 a requirement was added to the permission of the firm that it should cease any further regulated mortgage lending. In the same month, the FSA issued the consumer alert on the fund. A further alert was issued to financial advisers asking them to consider the suitability of advice they had given to consumers who had invested in the fund and to take action accordingly. In light of the fact that very little of Tiuta’s business was regulated, the FSA considered those steps to be appropriate and proportionate at the time. I certainly take on board the point made by my right hon. Friend the Member for Haltemprice and Howden (Mr Davis) about whether that was, with hindsight, acceptable.

On the other questions I was asked, Capita issued an information memorandum that consumers believe to be fraudulent, as the fund did not operate as it said it would. I was asked what action the FCA is taking against Capita. As I said, the FCA is considering all avenues by which investors might be compensated. Unfortunately, I cannot comment on that further at this time. One point I make, because the question has been implied, is that IFAs are not supposed to sell unregulated investment schemes to retail investors. The circumstances in which unregulated schemes can be promoted to consumers are generally restricted to certain types of consumers, such as sophisticated investors and high net worth individuals, for whom the products are likely to be suitable. The FCA has brought in new rules, banning the promotion of unregulated collective investment schemes to ordinary retail consumers. IFAs have the responsibility to promote the fund only to eligible individuals. That is an important point.

My hon. Friend the Member for Hexham (Guy Opperman) asked whether the police are involved. I confirm that they are. A question was asked about the deadlines for issuing complaints. The fund was incepted in June and July 2008 and suspended in March 2012. Action can be taken either six years from the cause of action, which will start to expire from June 2014—all those investors who invested in the early days of the fund need to take careful advice if they wish to make a complaint about that product, because the deadline is fast approaching—or three years from the date of knowledge of the cause of action, which is likely to expire in March 2015 or, at the latest, September 2015. I urge those consumers who feel that they were mis-sold the fund to look carefully at these deadlines. If the case goes to court, it depends on those courses of action. Insolvency reviews of those companies will be reporting in the near future. We do not have a more specific date for that.

Once again, I would like to thank sincerely my hon. Friend the Member for Vale of Glamorgan for instigating this debate on this important case, which is upsetting for many investors. I hope I have reassured him that the Government are fully aware of his concerns and that we take this issue seriously. We are absolutely determined that our financial services sector serves consumers in a right and fair way, and that investors receive the protections they need.

Loan Protection Gap

Andrea Leadsom Excerpts

Tuesday 6th May 2014 Westminster Hall

[The Economic Secretary to the Treasury (Andrea Leadsom)]

Thank you for calling me to speak, Mrs Riordan. It is an honour to serve under your chairmanship, particularly as this is my first outing as a Minister in Westminster Hall.

I am very grateful to the hon. Member for Edmonton (Mr Love), a highly esteemed former colleague of mine on the Treasury Committee, for securing this debate on an incredibly important subject, which, as he well knows, the Treasury Committee has looked at. The Committee has been very concerned not only about the appalling scandal that has been PPI mis-selling, but about the implications for people who can no longer obtain PPI. This is very important not only for the hon. Gentleman’s constituents but for all our constituents right across the United Kingdom. I am very pleased to have the opportunity to set out the Government’s position.

The hon. Gentleman will recall that when we were together on the Treasury Committee one of my absolute pet projects was to try to increase competition in the UK banking system. One of my favourite lines was that people are more likely to divorce not once but twice than to change their bank account. There has been a fundamental lack of competition in the banking system, which has meant that we are in a position now where people are lucky if they are able to get access to certain products and services. He is therefore absolutely right to raise this issue today.

It is very important to me as a Treasury Minister to use my time in the role to ensure that consumers become more empowered and more capable of taking responsibility for their own financial future. I hope that the hon. Gentleman will also be reassured to hear that I wholeheartedly share his central concern that consumers need to build their own financial resilience—if you like, a financial fall-back—into their own financial affairs.

Of course, the hon. Gentleman is absolutely right that one such financial fall-back might be a loan protection product or another kind of income protection product, but it could also be savings, and some people will rely on responsible borrowing to help them to bridge the peaks and troughs in their finances. The key point is that consumers are vulnerable if they do not have any kind of financial fall-back. Financial difficulties can mount up and quickly turn into problem debts, as we have seen all too often. That situation is what the Government are taking comprehensive steps both to prevent and address.

I would like to use my comments this morning to set out, first, what the Government and the regulator are doing to support the development of appropriate protection products; secondly, how the Government are using flexibility and tax relief to promote savings and reward savers; thirdly, how we are reforming the regulation of consumer credit, to ensure that lenders both lend responsibly and treat those consumers who are in financial difficulties fairly and with understanding; and finally, a bit about how we are taking action on debt advice, to ensure that those who have problem debts get the help that they need.

To start with, I shall discuss the protection market. As the hon. Gentleman rightly said, consumer trust in protection products has been severely damaged by the PPI mis-selling scandal, and the market has contracted severely as a result of this lack of consumer trust. With a scandal on such a scale, robust regulatory action is key to restoring faith in the products and in the firms that provide them. I agree that that does not mean that consumers’ need for protection products, as one form of financial fall-back, has gone away. As long as the products are sold appropriately and responsibly, and as long as consumers can trust them, they continue to serve a real purpose. We need to promote them, and on that point the hon. Gentleman and I completely agree.

The Financial Conduct Authority also believes that there is a place in the market for income protection products. It has issued guidance that is designed to encourage a new generation of products that are fit for purpose. Although PPI is no longer allowed to be sold at the point that a loan or credit is given, a number of alternative protection products are available to consumers, some of which the hon. Gentleman has mentioned, such as income protection insurance, and innovations such as debt waivers, as the market adjusts to consumer demands.

The Government have been driving the industry, and will continue to drive it, to design and bring to market simple and transparent income protection products that are fit for purpose and that consumers can more easily understand and trust. In fact, that was one of our aims in commissioning Carol Sergeant to conduct a review of simple financial products. As the hon. Gentleman may know, her report recommended the development of a number of simple products, including savings products and a simple income protection product. The industry is making good progress against her recommendations. It has committed to getting a simple products accreditation model up and running by the end of the year. In parallel, the Association of British Insurers is leading on the development of a simple group income protection product, which can be sold throughout the workplace. We are confident that simplifying products in this way will make it easier for consumers to see the benefits of protection products, and will redevelop the income protection market in a way that works better for consumers.

[Mr Love]

I hear what the Minister is saying about all the developments and the work that both consultants and the regulator are doing in relation to protection policies, but unfortunately there has been very little impact on the market so far. That may be understandable in the context of the disaster that PPI has been in terms of providing income protection policies. However, the debt waiver is something different and something that everyone can have confidence in: it is truly tried and tested in other countries. Will she give the House a reassurance that firmer, more robust steps will be taken by the Government to influence the regulator to do more to get the industry to take these protection policies seriously?

[Andrea Leadsom]

Yes, I think I can give the hon. Gentleman some reassurance that the Government are committed to the proper development of alternative income protection products, which would certainly include the debt waiver. Obviously, as he has pointed out, there has been a real crisis in consumer trust in these products, but the Government are certainly committed to ensuring that that lack of provision is addressed, and his raising the issue today will certainly reinforce our endeavours to achieve faster progress.

There are other ways in which the Government are trying to ensure that consumers and customers have proper financial protection. Of course, one of those measures has been to promote saving. Having a savings “buffer” is many people’s financial fall-back, and as the Chancellor made clear in March, this year’s Budget was a Budget for savers. We announced a reduction in taxes for the lowest-income savers, so that from next April the starting rate of savings income tax will be lowered from 10% to zero, and the band to which it applies will be extended to £5,000. That should help the worse off—the smaller savers—and encourage them to save in order to create a financial fall-back for themselves.

We also announced increased flexibility in saving and investment choices through the ISA system and an increase in the overall ISA limit to £15,000. We have introduced new National Savings and Investment products in order to help retired savers to get a better return. The Government have taken action on the promotion of savings products and increased saving as a means to create a financial fall-back, and we are determined to do more to help people to provide for their own financial fall-back needs.

There have been some important changes on the regulation of consumer credit that I am sure the hon. Gentleman would welcome. Regulation of consumer credit is vital to this debate in two ways: first, it is vital that lenders lend responsibly and only to those who can afford to pay it back; and secondly, lenders should treat people in financial difficulty fairly and with the appropriate understanding. The Government are committed to curbing irresponsible lending and strengthening consumer protections, and we have a clear vision for the consumer credit market. We want to see firms meeting the standards expected of them, lending responsibly, and offering competitively designed and priced loans and credit products that will meet consumers’ needs.

The hon. Gentleman will be aware that responsibility for consumer credit regulation has now transferred from the Office of Fair Trading to the new Financial Conduct Authority, which has far stronger powers. In particular, the FCA has turned the OFT’s non-binding guidance into binding rules. We are confident that the FCA is better resourced to take a proactive approach to identifying risk and that it has a broader and more robust suite of enforcement powers to punish breaches of its rules. As such, we are confident that in future lenders will both lend more responsibly and treat customers more fairly.

[Mr Love]

This is a slight aside to the thrust of the Minister’s comments, but with regard to the mortgage market review, which sets the terms of the discussion between the customer and the lending institution, I am not aware that within the comprehensive discussion that is now required any room is given to insurance products to protect the loan. I would have thought that that was one way in which the regulator could ensure that at least it is brought to the customer’s attention that they should get a protection policy, so that if things go wrong, they can rest assured that their loan will be insured.

[Andrea Leadsom]

The hon. Gentleman make a very good point. Since I am extremely new in the job, I hope that he will forgive me because that is a point that I cannot answer. Nevertheless, it is an excellent idea and perhaps I can write to him on it. I would certainly take such a good suggestion forward.

[John McDonnell]

The Minister may well gain inspiration on that while I am talking. I requested earlier that she come to meet the Plane Saver credit union in my constituency. That group meets the objectives she mentioned not just by providing protection; we have found that it is also encouraging more savers to join the credit union. It seems to tackle both issues at the same time, so perhaps that is a model she would like to explore in more detail.

[Andrea Leadsom]

I am grateful to the hon. Gentleman for his invitation. I am keen to become more closely involved in such an important issue and so will discuss with my team whether I can come to meet his constituents. I thank him again for the invitation.

Finally, I want to mention the provision of debt advice. Where people get into financial difficulty, the Government are committed to ensuring that they can access free help and advice on managing debts. That is why the Government have put funding for debt advice on to a sustainable footing.

In conclusion, I thank the hon. Member for Edmonton again for instigating this debate on such an incredibly important issue. We know that times have been extraordinarily tough and continue to be so for many people in the United Kingdom, and we are determined to do more to ensure that consumers get the advice and support, the responsible lending, and the suite of products that they need to enable them to manage their own financial affairs more effectively.

[Mr Love]

I thank the Minister for being so liberal in taking interventions. One conclusion that I have reached on this issue is that the relationship between the Treasury and the regulators is extremely important. Will the Minister discuss with the regulator what further action it can take to get the industry to live up to its responsibilities to give customers not just a responsibly delivered loan, but protection for that loan should things go wrong?

[Andrea Leadsom]

I can assure the hon. Gentleman that I will take up that issue with the FCA when I see it next.

I hope that the hon. Gentleman is reassured that the Government fully agree with his concerns and are already taking action to address them, and that I have undertaken to try to take further his specific recommendation that we look more closely at debt waivers. We are determined that financial services serve consumers in the way that they should, and that consumers understand the benefits of all the products, including income protection, that are on offer. I am very glad to have had my first Westminster Hall debate as a Minister with such a sensible and measured colleague, and I shall look forward very much to his holding me to account in the coming years.