Asked by: Angela Eagle (Labour - Wallasey)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, whether his Department has made an assessment of the potential merits of incorporating closed book mortgages into existing mortgage regulatory frameworks.
Answered by Andrew Griffith - Minister of State (Department for Science, Innovation and Technology)
The Financial Conduct Authority’s (FCA) review into mortgage prisoners, published in November 2021, found that there are 47,000 mortgage prisoners who might benefit from switching to a new mortgage deal but are considered too high risk to do so, despite being up to date with payments.
The review makes clear that the reason mortgage prisoners are unable to switch are varied and complex. As such, there is no silver bullet to address the circumstances of this entire population of mortgage holders without being unfair to other borrowers.
The Government has already worked with the FCA to implement changes to its mortgage lending rules, removing the regulatory barrier that prevented some mortgage prisoners, who otherwise may have been able to switch, from accessing new products. These rules should allow customers to switch to an active lender as long as they meet the lender’s risk appetite and certain criteria, such as not looking to borrow more.
Ultimately, the pricing and availability of mortgages is a commercial decision for lenders in which the Government does not intervene. As such, the Government cannot force lenders to lend to borrowers that sit outside of their risk appetite.
Any further work on this issue must consider the impact and practicality of solutions and their effects on the wider mortgage market, including the resilience of firms and fairness to other borrowers. There is no evidence, for instance, that consumers have experienced detriment that would be resolved by an extension of the regulatory perimeter. It is also worth noting that the Standard Variable Rates (SVRs) charged by inactive firms are in line with those paid by borrowers in the active market. The Government remains open to practical and proportionate solutions to help mortgage prisoners that do not pose unacceptable financial stability risks, and are not unfair to other borrowers in the mortgage market.
More broadly, the Government understands that people across the UK are worried about the cost of living. That is why we have announced £37 billion of support for the cost of living this financial year. We have also taken decisive action to support millions of households with rising energy costs this winter through the Energy Price Guarantee and the Energy Bill Relief Scheme. Millions of the most vulnerable households will receive £1,200 of support this year, with additional support for pensioners and those claiming disability benefits.
When mortgage borrowers are in financial difficulty and struggling to pay their mortgage, FCA guidance requires firms to provide support through tailored forbearance options. The Government also offers support to borrowers through Support for Mortgage Interest (SMI) loans to homeowners in receipt of an income-related benefit, and protection in the courts under the Mortgage Pre-Action Protocol.
Asked by: Angela Eagle (Labour - Wallasey)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what assessment his Department has made of the potential merits regulating interest-only mortgage lenders’ adjustment of variable rates.
Answered by Andrew Griffith - Minister of State (Department for Science, Innovation and Technology)
The Financial Conduct Authority’s (FCA) review into mortgage prisoners, published in November 2021, found that there are 47,000 mortgage prisoners who might benefit from switching to a new mortgage deal but are considered too high risk to do so, despite being up to date with payments.
The review makes clear that the reason mortgage prisoners are unable to switch are varied and complex. As such, there is no silver bullet to address the circumstances of this entire population of mortgage holders without being unfair to other borrowers.
The Government has already worked with the FCA to implement changes to its mortgage lending rules, removing the regulatory barrier that prevented some mortgage prisoners, who otherwise may have been able to switch, from accessing new products. These rules should allow customers to switch to an active lender as long as they meet the lender’s risk appetite and certain criteria, such as not looking to borrow more.
Ultimately, the pricing and availability of mortgages is a commercial decision for lenders in which the Government does not intervene. As such, the Government cannot force lenders to lend to borrowers that sit outside of their risk appetite.
Any further work on this issue must consider the impact and practicality of solutions and their effects on the wider mortgage market, including the resilience of firms and fairness to other borrowers. There is no evidence, for instance, that consumers have experienced detriment that would be resolved by an extension of the regulatory perimeter. It is also worth noting that the Standard Variable Rates (SVRs) charged by inactive firms are in line with those paid by borrowers in the active market. The Government remains open to practical and proportionate solutions to help mortgage prisoners that do not pose unacceptable financial stability risks, and are not unfair to other borrowers in the mortgage market.
More broadly, the Government understands that people across the UK are worried about the cost of living. That is why we have announced £37 billion of support for the cost of living this financial year. We have also taken decisive action to support millions of households with rising energy costs this winter through the Energy Price Guarantee and the Energy Bill Relief Scheme. Millions of the most vulnerable households will receive £1,200 of support this year, with additional support for pensioners and those claiming disability benefits.
When mortgage borrowers are in financial difficulty and struggling to pay their mortgage, FCA guidance requires firms to provide support through tailored forbearance options. The Government also offers support to borrowers through Support for Mortgage Interest (SMI) loans to homeowners in receipt of an income-related benefit, and protection in the courts under the Mortgage Pre-Action Protocol.
Asked by: Angela Eagle (Labour - Wallasey)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, whether his Department plans to introduce new measures to support mortgage prisoners in response to increases in the (a) base rate and (b) cost of living.
Answered by Andrew Griffith - Minister of State (Department for Science, Innovation and Technology)
The Financial Conduct Authority’s (FCA) review into mortgage prisoners, published in November 2021, found that there are 47,000 mortgage prisoners who might benefit from switching to a new mortgage deal but are considered too high risk to do so, despite being up to date with payments.
The review makes clear that the reason mortgage prisoners are unable to switch are varied and complex. As such, there is no silver bullet to address the circumstances of this entire population of mortgage holders without being unfair to other borrowers.
The Government has already worked with the FCA to implement changes to its mortgage lending rules, removing the regulatory barrier that prevented some mortgage prisoners, who otherwise may have been able to switch, from accessing new products. These rules should allow customers to switch to an active lender as long as they meet the lender’s risk appetite and certain criteria, such as not looking to borrow more.
Ultimately, the pricing and availability of mortgages is a commercial decision for lenders in which the Government does not intervene. As such, the Government cannot force lenders to lend to borrowers that sit outside of their risk appetite.
Any further work on this issue must consider the impact and practicality of solutions and their effects on the wider mortgage market, including the resilience of firms and fairness to other borrowers. There is no evidence, for instance, that consumers have experienced detriment that would be resolved by an extension of the regulatory perimeter. It is also worth noting that the Standard Variable Rates (SVRs) charged by inactive firms are in line with those paid by borrowers in the active market. The Government remains open to practical and proportionate solutions to help mortgage prisoners that do not pose unacceptable financial stability risks, and are not unfair to other borrowers in the mortgage market.
More broadly, the Government understands that people across the UK are worried about the cost of living. That is why we have announced £37 billion of support for the cost of living this financial year. We have also taken decisive action to support millions of households with rising energy costs this winter through the Energy Price Guarantee and the Energy Bill Relief Scheme. Millions of the most vulnerable households will receive £1,200 of support this year, with additional support for pensioners and those claiming disability benefits.
When mortgage borrowers are in financial difficulty and struggling to pay their mortgage, FCA guidance requires firms to provide support through tailored forbearance options. The Government also offers support to borrowers through Support for Mortgage Interest (SMI) loans to homeowners in receipt of an income-related benefit, and protection in the courts under the Mortgage Pre-Action Protocol.
Asked by: Angela Eagle (Labour - Wallasey)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, for what reason his Department did not consult the Cabinet Office fraud team regarding the potential fraud risks of the Bounce Back Loan Scheme during the scheme's establishment.
Answered by John Glen - Paymaster General and Minister for the Cabinet Office
The Treasury engaged regularly with a wide range of stakeholders across government and industry before and after the scheme launched – and received expert advice on fraud risks from PWC.
Under the Scheme there were a range of checks to minimise fraud – lenders were obliged to use a reputable fraud bureau to screen applicants against potential or known fraudsters and were required to make or maintain know-your-customer and anti-money laundering checks. Lenders reported preventing over £2.2 billion worth of fraudulent applications whilst BBLS was open, and work to recover against fraudulent loans is underway through both lenders and enforcement agencies.
Asked by: Angela Eagle (Labour - Wallasey)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, if he will publish details of the advice received by his Department from consultancy PwC regarding the key fraud risks associated with the Bounce Back Loan Scheme, as referenced in the letter dated 2 March 2022 from the Permanent Secretary at HM Treasury to the Treasury Select Committee.
Answered by John Glen - Paymaster General and Minister for the Cabinet Office
The Treasury will continue to consider what is appropriate to put into the public domain in relation to our counter fraud work noting the need to balance the public interest and ongoing work in this space.
Asked by: Angela Eagle (Labour - Wallasey)
Question to the HM Treasury:
What recent assessment he has made of the strength of the UK economy.
Answered by John Glen - Paymaster General and Minister for the Cabinet Office
Last year we saw a faster-than-previously-expected economic recovery, with the fastest growth in the G7.
However, the conflict in Ukraine has affected the global economy. The government is closely monitoring developments and the channels which may impact the UK economy. The precise impacts will depend on the size and persistence of any shocks to trade, financial markets, and energy markets, which are highly uncertain.
Asked by: Angela Eagle (Labour - Wallasey)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what recent estimate he has made of the number of businesses who were aware that the Coronavirus Job Retention Scheme could also be used to cover self-isolation of employees.
Answered by Jesse Norman
No such estimate has been made.
The Coronavirus Job Retention Scheme is not to be used simply because of short-term absences from work due to sickness or self-isolation.
Where an employee is on sick leave or self-isolating as a result of coronavirus, the rules in relation to Statutory Sick Pay apply.
Conversely, an employee is eligible for CJRS if they are unable to work because they are Clinically Extremely Vulnerable or are in the equivalent highest-risk group for severe illness from coronavirus, and following the public health guidance.
These rules have been in place and clearly reflected in all versions of the guidance, since March 2020.
Asked by: Angela Eagle (Labour - Wallasey)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what estimate he has made of the (a) number of businesses that did not claim for self-isolating employees on the Coronavirus Job Retention Scheme and (b) savings were to the public purse as a result of those non-claims.
Answered by Jesse Norman
The information requested is not available.
HM Revenue and Customs neither collect nor hold data on the reasons that eligible employers make claims through the Coronavirus Job Retention Scheme.
The Coronavirus Job Retention Scheme is not to be used simply because of short-term absences from work due to sickness or self-isolation.
Where an employee is on sick leave or self-isolating as a result of coronavirus, the rules in relation to Statutory Sick Pay apply.
Conversely, an employee is eligible for CJRS if they are unable to work because they are Clinically Extremely Vulnerable or are in the equivalent highest-risk group for severe illness from coronavirus, and following the public health guidance.
These rules have been in place and clearly reflected in all versions of the guidance, since March 2020.
Asked by: Angela Eagle (Labour - Wallasey)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what estimate he has made of the number of businesses who claimed on the Coronavirus Job Retention Scheme to cover self-isolation of employees with covid-19.
Answered by Jesse Norman
The information requested is not available.
HM Revenue and Customs neither collect nor hold data on the reasons that eligible employers make claims through the Coronavirus Job Retention Scheme.
The Coronavirus Job Retention Scheme is not to be used simply because of short-term absences from work due to sickness or self-isolation.
Where an employee is on sick leave or self-isolating as a result of coronavirus, the rules in relation to Statutory Sick Pay apply.
Conversely, an employee is eligible for CJRS if they are unable to work because they are Clinically Extremely Vulnerable or are in the equivalent highest-risk group for severe illness from coronavirus, and following the public health guidance.
These rules have been in place and clearly reflected in all versions of the guidance, since March 2020.
Asked by: Angela Eagle (Labour - Wallasey)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, for what reason his Department did not widely publicise that the Coronavirus Job Retention Scheme could be used by employees who were self-isolating due to covid-19.
Answered by Jesse Norman
It has always been clear that the Coronavirus Job Retention Scheme is designed to protect jobs. HMRC guidance has been clear from the start that the scheme is not intended for short term absences from work due to sickness, and self-isolation should not be a consideration for employers when deciding if they should furlough an employee. The Government has specific, separate support in place for those self-isolating and has always been clear that businesses should support staff who are self isolating to work at home where possible.
An extensive support package is in place for those self-isolating due to coronavirus including help for those on low incomes through the Test and Trace Support Payment scheme, where eligible individuals unable to work from home can receive a £500 one off payment, as well as Statutory Sick Pay being payable from Day 1. If an employer wants to furlough an employee for business reasons and they are currently off sick, then they are eligible to do so as with other employees. This has been set out in guidance since April last year.