Bim Afolami
Main Page: Bim Afolami (Conservative - Hitchin and Harpenden)Department Debates - View all Bim Afolami's debates with the HM Treasury
(11 months, 1 week ago)
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Jeff Smith (Manchester, Withington) (Lab)
The Economic Secretary to the Treasury (Bim Afolami)
The Government believe that all customers should have appropriate access to banking services, which is why we have legislated to protect access to cash. We also support the FCA’s bank branch closure guidance as well as industry initiatives to provide in-person access, including shared banking hubs at post offices, and access via digital means.
Jeff Smith
More than 5,000 bank branches have closed since 2015. Sadly, the Lloyds bank in Withington village will join the many more branches closing in the coming months and leave Withington without a bank branch, but by the end of the year the industry will have delivered only 30 shared banking hubs. Does the Minister think that the pace and scale of that roll-out is good enough?
Bim Afolami
First, it is worth stating that, as the hon. Gentleman knows, the decisions on whether to open or close branches are commercial ones, and the Government do not interfere with that. However, we have legislated to protect access for cash. The banks need to abide by the Financial Conduct Authority’s guidance, with the latest guidance published only last week. In relation to shared banking hubs, we should indeed increase the pace at which they are rolled out, and I am talking with the industry about how to do that.
Philip Davies (Shipley) (Con)
It is pretty clear that most legacy banks do not give a stuff about their customers and just want to screw as much money out of people as possible. After the scandal of Coutts’s debanking of Nigel Farage, the Government acted swiftly to try to make that much more difficult for other customers, but many businesses face the same problem. What will the Government do to stop businesses being debanked in the same way as individuals?
Bim Afolami
I am not sure that I quite accept my hon. Friend’s characterisation of the banking industry, but I am happy to meet him and discuss the problems he outlined in relation to specific businesses and access to bank accounts.
Tulip Siddiq (Hampstead and Kilburn) (Lab)
Before I ask my question, I want to convey the apologies of the shadow Chancellor, my right hon. Friend the Member for Leeds West (Rachel Reeves). She is delivering the eulogy at Alistair Darling’s funeral today.
I want to say a few words about Alistair Darling—I am sure you will agree, Mr Speaker—a dedicated public servant, who was respected across both Houses. He led the country’s economic response to the global financial crisis with integrity, honesty and sound judgment, and we will all miss him. [Hon. Members: “Hear, hear!”]
As my hon. Friend the Member for Manchester, Withington (Jeff Smith) just said, nearly 6,000 bank branches have closed since 2015, and only 30 banking hubs are up and fully running. That has left countless people financially excluded and affected lots of small businesses. I ask the Minister once again: will he accelerate the roll-out of banking hubs properly? Why are his Government not doing anything to reverse the decline of the great British high street?
Bim Afolami
I agree with the hon. Lady’s words about Lord Darling and echo the words of my right hon. Friend the Chancellor.
On bank branches, I will repeat my position: it is important that the Government do not decide when a branch opens and when it closes, but it is a concern when communities are left without appropriate access to cash. That is why we were the first Government to legislate for access to cash, as we did earlier this year, and that is why I believe we should speed up the roll-out of banking hubs. I am working with the industry on ways in which we can do that.
Tulip Siddiq
If the Minister is serious about protecting the future of the great British high street, will he back Labour’s pledge, which has been welcomed by Cash Access UK and the wider sector, to guarantee face-to-face banking in every community and give the FCA the powers it needs to roll out hundreds of banking hubs across the country?
Bim Afolami
As the hon. Lady knows, the industry leads the roll-out of banking hubs. We are supporting it—I say this again—to speed that up as much as possible. I have not seen the Labour pledge—I suspect that I will not support it—but it is important that the industry hears the views of constituents and Members from across the House and that we speed up the roll-out of banking hubs in communities that need them.
Mrs Flick Drummond (Meon Valley) (Con)
The Economic Secretary to the Treasury (Bim Afolami)
At the autumn statement, we set out a series of measures to improve pension saver returns, increase opportunities for investment and boost the UK’s capital markets and high-growth companies.
Mrs Drummond
Merry Christmas, Mr Speaker, and to all those in the House. The UK’s pension funds lag behind their counterparts in the USA, Scandinavia and Australia for investing in technology firms. Can my hon. Friend continue his work on reforms and ensure that more pension fund investment stays in the UK, to boost our tech sector?
Bim Afolami
Under the industry-led Mansion House compact, 11 of the UK’s largest defined contribution pension schemes have signed up to the objective of allocating at least 5% of their funds to unlisted equities by 2030. We believe that could unlock £50 billion of investment in high-growth companies and should help increase returns to savers.
Jim Shannon (Strangford) (DUP)
The Minister will appreciate that the greatest investment that anyone can make is in themselves and their own country—Northern Ireland and all the United Kingdom. What steps can be taken to ensure UK-wide investment by pensions schemes in cutting edge businesses such as Wrightbus and Thales?
Bim Afolami
There are a couple of things that we need to do. We need to ensure that the industry abides by its commitment to the 5% target. Working with the Exchequer Secretary, my hon. Friend the Member for Grantham and Stamford (Gareth Davies), we must present the right investment opportunities so that the capital goes into the UK in the right way.
Selaine Saxby (North Devon) (Con)
Jessica Morden (Newport East) (Lab)
The Economic Secretary to the Treasury (Bim Afolami)
I was pleased to speak at the launch of the Money and Mental Health Policy Institute’s report on this subject last week, alongside the FCA. It is worth saying that I used to be on the advisory board of that institute. The Government and the FCA will continue to work closely to ensure that consumer protections are fit for purpose, including through our upcoming reform of the Consumer Credit Act 1974.
Jessica Morden
A constituent who was a victim of domestic abuse and whose ex-husband fraudulently took out a loan in her name was constantly harassed by creditors as she tried to clear the debt, and, according to a recent report by the organisation that the Minister mentioned, that is an experience shared by others. Will Ministers discuss with the FCA imposing legal limits on arrears communications in cases such as this, as other countries have done?
Bim Afolami
Let me say two things. First, I pay tribute to the former Financial Secretary, now the Health Secretary—my right hon. Friend the Member for Louth and Horncastle (Victoria Atkins)—who did a great deal of work in relation to economic abuse. I am committed to continuing that work with the Treasury to ensure that we limit the circumstances in which the incidents described by the hon. Lady can occur. As for the broader question of what the regulator does in such cases, we have put a record level of funding, to the tune of some £93 million, into working with regulators on debt advice. I shall be happy to discuss with the hon. Lady the details of how we can help her constituents in the way that she suggested.
Rachel Hopkins (Luton South) (Lab)
The Economic Secretary to the Treasury (Bim Afolami)
As the hon. Lady knows, the path to lower interest rates is through low inflation, and the independent Bank of England has the Government’s full support as it takes action to return inflation to target. The Government’s mortgage charter, brokered by my right hon. Friend the Chancellor earlier in the year, is available to 90% of borrowers. Real disposable income per person is about £800 higher than the Office for Budget Responsibility predicted in its March forecast.
Rachel Hopkins
The expiry of 1.5 million fixed-rate mortgage deals next year will mean even more people paying sky high-costs. It comes at a time when many are suffering increased financial hardship and personal debt, which is having an impact on their mental and physical health. Does the Minister think it fair that families are paying hundreds of pounds more each month to cover the costs of the Government’s mini-Budget disaster?
Bim Afolami
Mortgage costs and interest rates have gone up throughout the world, and we are in more or less the middle of the pack—they are higher in the United States, for example—but what will definitely make things harder for the hon. Lady’s constituents, and indeed all our constituents, is borrowing an extra £28 billion that will only serve to increase inflation and keep rates higher for longer.
Kerry McCarthy (Bristol East) (Lab)
Dr Thérèse Coffey (Suffolk Coastal) (Con)
The Economic Secretary to the Treasury (Bim Afolami)
This Government have been one of the largest donors to the global market-led taskforce on nature-related financial disclosures—TNFD—initiative. We will consider how best the TNFD’s recommendations should be incorporated into policy and legislative architecture in a manner that is coherent with global sustainability reporting.
Dr Coffey
Merry Christmas to you, Mr Speaker, and to the officers, Clerks and staff of the House. I am encouraged by my hon. Friend’s answer. It was a year ago today that the global biodiversity framework was agreed in Montreal, and it was absolutely necessary to restore biodiversity loss. The TNFD initiative was launched by the UK G7 presidency in 2021 and it featured in the green finance strategy that my right hon. Friend the Chancellor and I did the ministerial foreword to earlier this year. He will be aware of the recommendations that were launched in September. I am conscious that there was a lot of support from the Treasury previously and that we should try to accelerate the International Sustainability Standards Board standards so that we can bring in this initiative just as successfully as we have done for the TCFD—the taskforce on climate-related financial disclosures.
Bim Afolami
I thank my right hon. Friend for her question. She mentions the Treasury’s green finance strategy, which contains plans to bring forward the sustainability disclosure requirements, building on the global commitments. We have already implemented the climate-related financial disclosures, and we are looking very carefully at the nature-related financial disclosures. We hope to update the House in due course.
Jack Brereton (Stoke-on-Trent South) (Con)
Dave Doogan (Angus) (SNP)
UK capital requirement regulations mandate a 50% level of capitalisation to be held by lenders for longer terms as opposed to 20% for shorter terms. Car manufacturer banks, such as Renault’s RCI Financial Services, underpin every franchise car dealer across these islands and operate on a seven-day notice period to terminate in order to minimise their capital requirements at 20%. The problem arises when a bank such as RCI maladministers a serious activity report, panics over its obligations under the regulations and terminates an award-winning Renault, Nissan and Dacia dealer such as Mackie Motors in my constituency with seven days’ notice. Will the Chancellor or one of his Ministers meet me to discuss this crisis?
The Economic Secretary to the Treasury (Bim Afolami)
I thank the hon. Gentleman for his question. Indeed, I will meet him to discuss the matter to make sure that this regulation does not have the adverse effects that he has outlined.
Philip Dunne (Ludlow) (Con)
Since the Prime Minister’s speech on net zero in September, Nissan has announced a £2 billion investment in Sunderland, which comes hot on the heels of Tata’s £4 billion investment in batteries. EDF Masdar has announced an £11 billion investment in offshore wind in Dogger Bank. In his autumn statement, the Chancellor announced a tripling of tidal energy contracts for difference. We had 11 hydrogen projects announced last week. There are six companies bidding for small modular reactors. [Interruption.] Is it not the case that, hot on the heels of yesterday’s announcement of a £6 billion allocation of energy efficiency funding and the carbon border adjustment mechanism—