Inheritance Tax Relief: Farms

David Mundell Excerpts

Monday 10th February 2025 Westminster Hall

[David Mundell (Dumfriesshire, Clydesdale and Tweeddale) (Con)]

It is a great pleasure to serve under your chairmanship, Sir Edward. Having participated in the previous debate on the subject in the main Chamber, I welcome the different tone from Government Back Benchers. They will get much further with their constituents by reflecting their concerns than by reading out Whips’ points in these debates.

One issue that I want to highlight, because it goes against some suggestions that have been made in relation to so-called land banking, is that when agricultural land is currently sold in my constituency, it is acquired by private equity firms that want to go down the route of industrial tree planting or solar farm production. If we require farms to be sold to meet inheritance tax demands, they will not be sold to new family farmers or new entrants; they will be sold to private equity firms that want not to produce food on our land, but to maximise tax benefits such as carbon offset and other environmental tax benefits. In addition, they do not employ anyone within the constituency—there is no ongoing employment.

Farming does not just produce food and create generational and environmental benefits; it is at the heart of the economy. I have seen that directly: to counter the 2001 foot and mouth outbreak in my constituency, virtually every hoofed animal was destroyed. When farming closed down, the economy closed down. Everybody in the constituency lost out. People were not in the shops, were not buying cars and were not using other businesses. Farming is not just about all the things we have heard about today; it is right at the heart of the economy.

[Graham Leadbitter (Moray West, Nairn and Strathspey) (SNP)]

Changes to inheritance tax can be made that will prevent people from gaming the system and buying up land to avoid tax. That can be done without an impact on existing farming businesses. Does the right hon. Gentleman agree that for the Government not to have even considered such changes in their previous responses is not only unacceptable, but a dereliction when it comes to food security and national security?

[David Mundell]

What will be unacceptable is if the Minister stands up at the end of this debate and gives the same response that he has given in previous debates, having heard the points that his own colleagues have put forward about how damaging and ill thought through this policy proposal has been. I am looking for a change in tone not just from Government Back Benchers, but from the Minister.

[Esther McVey (Tatton) (Con)]

Does my right hon. Friend agree that the Labour leadership is in serious jeopardy of stubbornly painting itself into a corner, when what is needed is pragmatism and for the Labour leadership to listen to the farmers, the public and its own Back Benchers? For today’s debate to mean anything, for Labour Back Benchers to mean anything and for their words not to be cheap, it is time for the leadership to actually listen and find a way to graciously stop this farm food tax.

[David Mundell]

I absolutely agree. Labour MPs have listened to their constituents—that is being reflected back to us today—and now we need the Minister to listen to Labour MPs.

The other point that I want to get on the record is the point made by the right hon. Member for Orkney and Shetland (Mr Carmichael), the Chairman of the Environment, Food and Rural Affairs Committee, about the specific issue of tenanted farming holdings in Scotland. For tenanted farmers to raise the funds required, they would have to give up their whole holding. They might not even be able to. That has clearly not been thought through as part of this exercise.

What people outside want is a debate that changes policy. They want a debate that shows that the Government are listening, have heard what they have to say and will do something about it. I hope that that will be evident in the Minister’s contribution at the end.

Oral Answers to Questions

David Mundell Excerpts

Tuesday 21st January 2025 Commons Chamber

[Darren Jones]

I thank my hon. Friend for raising that question on an issue that I know is deeply important to him, his constituents and his family, and on which he has worked for many years. The Government are actively considering proposals from the scheme’s trustees, and we will set out the next steps in due course. My hon. Friend the Minister for Industry in the Department for Business and Trade will be working on the detail, and I will be meeting her shortly to consider the options.

[David Mundell (Dumfriesshire, Clydesdale and Tweeddale) (Con)]

I have significant former mining areas in the Douglas valley and Upper Nithsdale in my constituency. Constituents there are concerned about the British Coal scheme, because many people in that scheme actually worked underground before being promoted into other jobs. To ensure fairness in the implementation of this Government policy, will the Minister make sure that the timescale on which they are compensated is the same as that for those in the other scheme?

[Darren Jones]

I thank the right hon. Member for his question, and I think “fairness” is the right word. That is why we worked in opposition to try to persuade the last Government to act on the mineworkers’ pension scheme, but we failed because the last Government did not think this was an urgent issue for them to consider. The Labour Government have implemented this change at our first Budget, and that is fairness in action. We will continue to work with trustees of the BCSSS, and we will come back with further options in due course.

Public Finances: Borrowing Costs

David Mundell Excerpts

Thursday 9th January 2025 Commons Chamber

[Darren Jones]

It might have been legitimate for the Conservatives to say that their economic policy was to borrow for day-to-day costs—as they did. That could be a decision that they took. What is not forgivable is the fact that they reached a point at which they were making promises to the British people that they knew they did not have the money to pay for, and that is where the £22 billion black hole came from. They should be ashamed of their record on the economy, and they should apologise to the British people.

[David Mundell (Dumfriesshire, Clydesdale and Tweeddale) (Con)]

When will the Chief Secretary take responsibility for the actions of his own Government? We had a general election, and that is when the public held the previous Government to account. They gave their verdict, and the Labour party is in power now. What the public want is accountability for this Government’s reckless decisions: the national insurance increases are an attack on jobs; there has been an attack on the farming community; and business confidence is at an all-time low.

[Darren Jones]

The right hon. Gentleman may not wish to reflect on his party’s performance in government, but I am afraid he has to. Although this is a new Government—we have been in office for six months—the reality is that we are having to clear up the mess that the last Government left us. That is why we have to talk about it, and explain to the country why the actions taken by the Conservative party not only affected family finances, but decimated the British economy and pushed public services on to their knees. We are taking responsibility for clearing up their mess, and that is why we will keep talking about it.

Farming and Inheritance Tax

David Mundell Excerpts

Wednesday 4th December 2024 Commons Chamber

[David Mundell (Dumfriesshire, Clydesdale and Tweeddale) (Con)]

I commend my near neighbour, the hon. Member for Penrith and Solway (Markus Campbell-Savours), on his brave contribution. It is hard to come to this Chamber and tell the truth when the pressure from the Whips and the party is to defend the Government at all costs. He made it absolutely clear that this measure will have a devastating effect on farms and the farming industry in his constituency if it goes through as currently set out.

The hon. Gentleman’s constituency and mine have something in common in that, in the 2001 foot and mouth outbreak, which devastated the farming industry, we saw for sure how important farming was to the whole community. Because farming was shut down, business was shut down. Shops were shut and lots of businesses including garages and all the services in rural areas could not function because farming was not functioning. That showed me the great importance that farming has.

Ironically, however, the outcome for my constituency of this measure from a Labour Government will be the further acquisition of land by private equity companies. This is because, thanks partly to the Scottish Government’s lifting of restrictions on land that can be afforested, good farming land in my constituency is under huge pressure from private equity funds buying it up to plant trees for carbon capture reliefs. It often seems that it is a great thing to plant trees and that we should all be in favour of it, but the reality is that these trees are Sitka spruce trees that are planted very close together. There is no light or environmental content within these forested areas. No creatures can survive in them. They are not environmentally friendly or sustainable, but they are financially attractive. They employ nobody. There is no employment once the forest has been planted.

When farmers come under pressure, as they will, to sell land to meet the inheritance tax, this is who the buyers will be. It will be these private equity firms, and if it is not them, it will in many instances be those who want to develop solar panels in a farming scenario, as other Members have highlighted.

[Tom Hayes]

Does the right hon. Gentleman agree that even the most ambitious estimates show we could cover only 1% of agricultural land with solar farms? Does he agree with Tom Bradshaw, the NFU’s president, who told journalists 85 days ago:

“What I do want to say is that an individual solar farm is not something which risks national food security”?

And does he agree with the CLA, which said in 2022:

“Solar is also a valuable diversification and cost reducing land use for farms—helping to shield exposure to volatile agricultural markets”?

[David Mundell]

No, I do not agree with the hon. Gentleman’s proposition. I do not think that viable prime agricultural land should be used for solar farms. I believe there is plenty of other brownfield land, or land that is not prime agricultural land, that could be used for solar farms. I am, therefore, not supportive of some of the huge developments proposed for my constituency.

I will now touch on one or two other points that have been raised but not expanded on. First, a lot of this discussion has been as if the sole structure of a family farm is mother, father, son and daughter. Brothers and sisters, or cousins, are often involved in the farming business, and it is quite wrong to suggest that some of the reliefs that can be applied would work in that situation. I have constituents who are in exactly that situation. A family farm is not just mum, dad, son and daughter. It is brothers, sisters, cousins and extended family.

The right hon. Member for Orkney and Shetland (Mr Carmichael) touched on tenant farmers. Tenant farmers in Scotland, in particular, are in a very difficult position because they cannot sell a couple of fields to pay their inheritance tax. They will have to give up the whole of their business, if they cannot find the money in other ways to pay these bills. We need to understand the issues that face tenant farmers.

I also commend the right hon. Gentleman’s suggestion that there should be a much wider debate about farming finance. The way to secure farming finance, and to secure our farmers, is not to destroy the family farm.

[Samantha Niblett (South Derbyshire) (Lab)]

I am quite astonished because, as we sat in a pub car park in the run-up to the general election, farmers in my constituency told me—I kid you not—that they know they do better under a Labour Government but they often vote Conservative. It feels like the Conservatives have taken their loyalty for granted. The right hon. Gentleman has been talking about how hard things are, and I agree with him. Farmers talk about their margins, and those margins are tight, but who caused them to be in that situation? We are now in a position of power—

[Madam Deputy Speaker (Judith Cummins)]

Order. I remind Members that interventions need to be interventions. They should be brief and ask a question that is relevant to the speech being made.

[David Mundell]

I do not know whether the hon. Member for South Derbyshire (Samantha Niblett) was here for the speech of the hon. Member for Penrith and Solway, but he set out exactly what happened to him as a Labour MP, having given farmers assurances about what Labour would do in government and the farmers finding that they had been betrayed. Now, the choice is not final, as he said, and hopefully this debate has shown the passion of both farmers and those who represent rural constituencies.

[Markus Campbell-Savours]

I am glad that the right hon. Gentleman enjoyed my speech. Did he enjoy the bit at the end where I listed the abject failures of his Government?

[David Mundell]

I liked the honesty of the hon. Gentleman’s speech in setting out how the Labour Government had let down his voters by going back on their undertakings in relation to the policy. They should listen to what has been said in today’s debate, to farmers and to the hon. Gentleman, and they should change the policy.

Oral Answers to Questions

David Mundell Excerpts

Tuesday 7th May 2024 Commons Chamber

[Jeremy Hunt]

What I would say to those families is that the most damaging thing of all is to have inflation at 11%. Now we have reduced it to 3.2%, and indeed we expect it to go lower. Interest rates are also starting to fall. If the hon. Member is worried about families in her constituency, she might be extremely worried by the shadow Chancellor saying that if interest rates fall, it is somehow not a big deal. It really is.

[David Mundell (Dumfriesshire, Clydesdale and Tweeddale) (Con)]

May I encourage my right hon. Friend the Chancellor to revisit his decision to change the tax arrangements of furnished holiday lets in rural constituencies such as my own? Those businesses make an important contribution to the local economy, provide jobs and enhance the tourism offering. Indeed, they stop depopulation rather than adding to it. His decision is creating much concern among those who operate such businesses.

[Nigel Huddleston]

We recognise the important role that FHLs play in the tourism ecosystem right across the country. The problem was that there was not a level playing field with long-term lets. We are making sure that there will continue to be tax incentives and benefits from such letting, but they need to be on par with short-term and long-term lets.

Living Standards

David Mundell Excerpts

Thursday 1st February 2024 Westminster Hall

[Michael Shanks]

I am grateful to the hon. Member for North Ayrshire and Arran for her dedication in checking my leaflets and retaining that information; I think that is what we call “cut-through” in the political world. I accept the interesting point that she makes. She has questioned the Government on that point on a number of occasions. I think that there is an issue when somebody on £28,500 is paying more tax—those are not wealthy people. In the midst of what we have all been talking about in this debate, that is an increase in the cost of living.

On the subject of the council tax—I feel like I am relitigating a by-election that I thought was behind me for now—I opposed the proposal of a 25% increase, which was in the consultation carried out by the Scottish Government. There is a world of difference between opposing a 25% increase and announcing a council tax freeze, which will hammer communities all across Scotland. Of course, the hon. Member may be very aware of my leaflets, but I am not sure that any of her party were aware that the First Minister was going to announce that policy before he announced it, which shows just how little thought went into it.

I will get back to Labour’s new deal for working people, which is what I thought the interventions were going to be about. We have made it very clear that, in the first 100 days of a Labour Government, we want to introduce the strongest commitment to improving the lives of workers in a generation: raising wages, improving working conditions, bringing stability back to employment and enshrining workers’ rights from day one. That would undo the damage of much of the anti-worker legislation we have seen over the past 14 years.

We have also set out how we will bring down energy bills by building cheaper and cleaner power across the country, through the creation of GB Energy, a publicly owned clean energy generation company headquartered in Scotland—something that I am sure my colleagues from Scotland will warmly welcome. We will also look to reform things like work capability processes—I have raised that on a number of occasions in this Parliament—so that people entitled to benefits are not locked out of them by bureaucracy that simply does not work.

I return to the comments that the hon. Members for Glasgow South, for North Ayrshire and Arran and for Dover made about the intergenerational question, which is incredibly important. I spoke about being a teacher. Before that, I worked for a charity that worked with young people involved in gangs and offending. The route out of that involvement was often through giving people something to aspire to: a sense of hope that their future would be better than the poverty and destitution that they found themselves in. It seems to me that we are increasingly turning our backs on a generation of young people who have done nothing to cause any of the crises that they face, but who are going to pay the price of them for a long time to come.

I will briefly address the issue of disability. I draw attention to my entry in the Register of Members’ Financial Interests, as I am a trustee of two disability charities. Disabled people face higher costs of living across the board. Scope found that disability-related costs represent the equivalent of 63% of a disabled person’s income. Just by having a disability, you are already at a financial disadvantage, and the cost of living crisis has exacerbated that hugely.

I want to mention a woman who I met just before Christmas. She was forced out of her home because she could not afford to heat it any more. She had spent the past three months in the living room. She had a hospital bed where she ate her meals, had her personal care and spent most of the day because it was the only room in her home that she could heat properly. The downside was that the rest of her house became damp and infected with mould because she could not turn the heating on. She had been failed by the benefits system, cuts to her care package and rising energy and food bills. She also lost the opportunity to continue in her employment programme, which was what gave her opportunities in life.

There are countless such examples. I am sure that every one of us could recount an example from our constituents. We should be ashamed that in 2024, in a country as rich as ours, people have such a standard of living.

I want to close by saying what the hon. Member for Glasgow South started by saying: the fall in living standards is a huge crisis facing our country. It affects mental and physical health, education, family wellbeing, housing, employment—a whole range of issues. It is not going away. It has not declined. It is not getting better. It will stalk families for years to come, possibly for a generation. Debt is piling up to eye-watering levels and with it comes the impact on families. The Government have failed in basic economic tests, and working people, as always, pay the price.

I thank the hon. Member for Glasgow South for securing this important debate. I look forward to hearing what the Minister will do in the few weeks that the Government have left to change the situation for families across the country.

[David Mundell (in the Chair)]

I call the Minister. My only request is that we leave a few minutes for Mr McDonald to conclude the debate. It must end at 3 o’clock, so there is ample time for the Minister to respond.

Oral Answers to Questions

David Mundell Excerpts

Tuesday 14th November 2023 Commons Chamber

[Jeremy Hunt]

My right hon. Friend the Member for Salisbury (John Glen) did an excellent job and we all salute his brilliant work. If he were here now, he would remind the hon. Gentleman that we have the lowest tax burden of any European country in the G7.

[David Mundell (Dumfriesshire, Clydesdale and Tweeddale) (Con)]

I know that the Chancellor is aware of just how important the whisky industry is to the economy of rural Scotland. It was very disappointing that the policy of a duty freeze was not continued in the Budget. Can he offer any reassurance that we will return to the policy of duty freeze in the autumn statement, and in next year’s Budget?

[The Exchequer Secretary to the Treasury (Gareth Davies)]

We are incredibly supportive of the Scotch whisky industry. In fact, the Scotch Whisky Association was my first meeting in post. In nine out of 10 previous fiscal events we either cut or froze duty on whisky, and we have acted to remove punitive tariffs on Scotch whisky in the US market. It will not be a surprise to my right hon. Friend that all taxes remain under review and he will not have long to wait until the next fiscal event.

Oral Answers to Questions

David Mundell Excerpts

Tuesday 20th June 2023 Commons Chamber

[John Glen]

The Office of Financial Sanctions Implementation works closely with our allies across the G7 to ensure that we have co-ordinated action among our international partners on this unprecedented package of sanctions. We have frozen the assets of 1,600 individuals and entities. We have implemented 35 different sanction regimes across government. I would be happy to take away the specific question that she has asked, because it is technical, and respond.

[David Mundell (Dumfriesshire, Clydesdale and Tweeddale) (Con)]

A multimillion-pound start-up project that could be transformational in my constituency is now at risk because the Office of Financial Sanctions Implementation is yet to process an asset freeze licence application in respect of just 0.002% of the company’s capital, which was submitted in April. What steps is the Minister taking to ensure that such applications are dealt with swiftly? If I provide him with details of the company, will he ensure that the application’s progress is expedited?

[John Glen]

I am happy to take up my right hon. Friend’s case. We have expanded the OFSI resources. We have a monthly monitoring and efficiency dashboard. I accept how frustrating it can be for constituents’ businesses when such situations arise, and I am happy to take the matter away and get back to him swiftly.

Financial Services and Markets Bill

David Mundell Excerpts

Report stage
Wednesday 7th December 2022 Commons Chamber

[Andrew Griffith]

I am going to finish this point, and then we will hear from more Members. We must not underestimate the significance of what the Bill is doing: it is taking legislative action for the first time in the more than 1,000-year history of the Royal Mint, where the UK pioneered paper banknotes in the 17th century and since we introduced the world’s first ATM in 1967. This Government—right now, today—are putting on the statute book and protecting access to cash, to safeguard the needs of those who need it.

[David Mundell (Dumfriesshire, Clydesdale and Tweeddale) (Con)]

Like my right hon. Friend the Member for South Northamptonshire (Dame Andrea Leadsom), I had a very useful conversation with the Minister. Will he confirm what I think he just said, which is that if it becomes clear that people do not have free access to cash across the United Kingdom, the Government will proactively intervene to make sure that they do?

[Andrew Griffith]

We talked about my right hon. Friend’s relative munificence of 53 free cash machines in his constituency—I think it was that at the last count. What he says is the case. The Bill gives the Government the ability at any point in time to give direction to the Financial Conduct Authority, the relevant regulator—this is the basis on which we regulate all our financial services in this country—through a policy statement that will set out the Government’s policy on such matters as cost and location. I am being clear that it is our expectation that the industry will deliver on this important issue for our constituents. If not, the Bill gives any future Government the ability to mandate that.

--- Later in debate ---

[Tulip Siddiq]

My hon. Friend is a doughty champion for his constituents. I will speak about that later, but I feel that we politicians have a duty on this: even if there has been a decline in the number of people using cash, there is still a small group of vulnerable people who do so, and they risk being excluded if we do not save free access to cash and face-to-face banking services. We have a duty to our vulnerable constituents, disabled constituents and those from black and minority ethnic backgrounds who still rely on cash.

[David Mundell]

I fully understand what the hon. Lady is saying, but it is not a small number of people: it was estimated in 2019 that 8 million people across the United Kingdom would struggle without access to cash.

[Tulip Siddiq]

I thank the right hon. Gentleman for his intervention. I welcome the fact that the Government have finally announced that they will bring forward access-to-cash legislation, but this Bill does nothing to protect face-to-face banking or free access to cash, which is our main concern and is what the most vulnerable in our society depend on.

Since 2015, on this Government’s watch nearly half of the UK’s bank branches have closed. It is inevitable that banking systems will continue to innovate—no one is denying that—but the failure to protect these services risks leaving millions of people behind. My amendment would empower the Financial Conduct Authority to review communities’ needs for and access to essential in-person banking services. To be clear, I am not saying banks should be prevented from closing underused branches—far from it. I explained this thoroughly in Committee but will say it briefly again now: vital face-to-face services could be delivered through a variety of models, such as shared banking hubs, which are already being set up across the country to provide cash services.

In Committee, the Minister was again very persuasive and convinced me to withdraw my new clause. He said he accepted the underlying need for action and that solutions would be brought to the table. I believed him, but despite warnings from Age UK, Which? and the Access to Cash Action Group—which does fantastic work in this area—that vulnerable people are at risk of being cut off from the services they desperately rely on, the Government have completely failed to engage on this important issue, and this time I will not be making the same mistake: I will not withdraw my new clauses. The Government need to demonstrate they will not simply abandon those who are struggling to bank online.

--- Later in debate ---

[Nick Smith (Blaenau Gwent) (Lab)]

I rise in support of new clause 10, and I am pleased to have worked alongside the hon. Member for The Cotswolds (Sir Geoffrey Clifton-Brown) on it, as fellow members of the Public Accounts Committee. Since 2017, I have worked with others supporting steelworker pensioners across Blaenau Gwent and the United Kingdom. Thousands of them fell victim to financial sharks. They were wrongly advised to move out of their defined benefit British Steel pension scheme. It took until last Monday, five years later, for the Financial Conduct Authority to announce a redress scheme. It was about time. The FCA righted those wrongs, but I think too late.

Early on in the campaign, I remember meeting the then chief executive of the FCA, now the Governor of the Bank of England, Andrew Bailey, where I was met with a lacklustre response. Along with my hon. Friend the Member for Aberavon (Stephen Kinnock) and other campaigners, I continued to press the FCA. In 2020, I wrote to its newly appointed chief executive, however Mr Rathi did not want to meet. He asked one of his directors to meet us instead.

Later, in 2021, frustrated with the FCA giving us the cold shoulder, I wrote to the Comptroller and Auditor General of the National Audit Office. I asked if it would please investigate the FCA’s oversight of this terrible scandal. Fair do’s, the NAO did that, and it published its full report in March this year. It observed that in the summer of 2017:

“The FCA had limited insight into…what was happening in the BSPS at the time of its restructure.”

There were terrible things going on.

Even more damning were the conclusions of the Public Accounts Committee. We found that:

“The FCA failed to take swift and effective action at all stages of the BSPS case.”

It failed

“to prevent consumers from being harmed”,

which makes clear the

“limitations with the FCA’s supervisory approach”.

The point is that the FCA took proper notice of this injustice only when Parliament, through the NAO and eventually the Public Accounts Committee, dug deep to investigate.

Of course, the BSPS case is not the only example of the FCA’s failure to protect consumers in recent years; I have heard many complaints from Members across the House. The scandals surrounding Blackmore Bond, Dolphin and Azure come to mind. Consumers are our financial sector. As long as the FCA fails to exercise its powers to protect ordinary workers, it will continue to fail our constituents. New clause 10 would require the FCA’s consumer panel to lay an official report before Parliament. We could then judge whether the regulator is fulfilling its duty to protect consumers.

During my 12 years in this House, I have learned many things, but one thing stands out: parliamentary scrutiny matters. I am pleased to have support from across the House for the new clause—from our Labour Treasury team, senior Conservative Members, the Liberal Democrat spokesperson, Treasury Committee members, other colleagues and fellow members of the Public Accounts Committee. By supporting our new clause, Britain’s consumers could be better heard, and our financial services sector would be all the better for it.

[David Mundell]

I apologise in advance to you, Madam Deputy Speaker, to the Minister, and to the hon. Member for Mitcham and Morden (Siobhain McDonagh), who tabled new clause 7, as I may not be able to be present at the conclusion of the debate, but I wanted to speak on the issue, having campaigned on it since I returned to the Back Benches, principally with my hon. Friend the Member for Blackpool North and Cleveleys (Paul Maynard). I am very pleased with what is proposed overall in the Bill, because during the period of covid it became clear that the system of use of cash could have collapsed. It was incoherent in the way it was managed and regulated, and we saw the potential pressures of not using cash or its usage not being permitted.

I am disappointed that my right hon. Friend the Member for North West Hampshire (Kit Malthouse) has left the Chamber, because I could not disagree more with the points that he made in interventions. We cannot simply move in an unstructured way to a cashless society. We are not ready for that. As I pointed out in an intervention, about 8 million people, whether they are rural dwellers or those living in deprived areas, rely on cash and will continue to do so. I declare that I still have a chequebook, because there are circumstances, particularly when dealing with small voluntary organisations, where a cheque is accepted. Cheques may be on the way out, but there are still circumstances where they are required. Therefore, we have to move forward at the pace of the slowest in our society.

I believe that the prospect of regulation has been very positive, in terms of forcing the banks and others in the sector to become a lot more constructive in the debates and discussions. As the hon. Member for Mitcham and Morden mentioned, the banks have been pretty disingenuous over the period. I have had many closures in my constituency, and they have often been made with undertakings that certain things would happen. For example, in the community of Lochmaben, the branch closed and the free auto-teller was to remain; now it is to be removed, two or three years on. Often the promises given are not worth very much, but I am sure that the threat of legislation, and hearing the Minister say that the Government’s position is a commitment to free access to cash, will ensure that the industry stays on board and delivers for people.

As has been set out, there has been a significant drop in the number not only of bank branches but of free-to-access ATMs, while the number of ATMs that require a fee has risen. As the Minister would expect from our lively discussion, I am in favour of consumer choice—if people want to pay for convenience, that is fine by me—but they should not have to pay several pounds to withdraw £10 from an ATM. At the core of this issue is the fact that many transactions are small transactions, not the ones that we might think of that are made of larger cash sums, which is why we have to stick to the free-to-access commitment.

Financial Services and Markets Bill

David Mundell Excerpts

2nd reading
Wednesday 7th September 2022 Commons Chamber

[Richard Fuller]

The hon. Lady is right to talk about the urgency and complexity of the issue. She understands that it is complex and will invigorate us all to move as quickly as possible. I note that even as recently as 19 August the FCA has followed up with the buy now, pay later companies to remind them of the rules that they have to operate under, and that the Government have committed to bring forward the consultation on the draft legislation before the end of the year. I look forward to discussing matters further with the hon. Lady.

The 2021 Act made legislative changes to support the widespread offering of cashback without a purchase by shops and other businesses. Clause 47 and schedule 8 go further and give the FCA the responsibility to ensure reasonable access to cash across the UK. The FCA will have regard to local access issues and a Government policy statement on access more generally. The Treasury will designate banks, building societies and cash co-ordination arrangements to be subject to FCA oversight on this matter.

[David Mundell (Dumfriesshire, Clydesdale and Tweeddale) (Con)]

I very much welcome the provision in the Bill, because access to cash is an extremely important issue not only for rural communities that I represent but for deprived areas. Will the Minister make sure that when the various reviews and mechanisms are put into place they focus on the specific needs of rural and deprived areas in their determination of cash requirements?

[Richard Fuller]

My right hon. Friend is absolutely right. He will know that the question of access in urban areas is very different from that in rural areas. I can give him the assurance that he seeks.