London Coalition on Sustainable Sovereign Debt

Emma Reynolds Excerpts

Monday 23rd June 2025 Written Statements

[The Economic Secretary to the Treasury (Emma Reynolds)]

Today marks the launch of the London Coalition on Sustainable Sovereign Debt. The coalition, convened by the Sustainable Sovereign Debt Hub and funded by the Children’s investment Fund Foundation, will bring together private sector stakeholders and Government to find pragmatic solutions to more sustainable sovereign debt financing in developing economies. This will include progressing work on debt contract innovations for bonds and loans to promote transparency, orderly restructurings and more resilient borrowing. Jose Vinals and I will be co-chairs for the coalition. Jose, who will serve in his personal capacity, will be able to draw on his vast experience in both the public and private sectors, most recently as chairperson of Standard Chartered.

The coalition seeks to provide a more formal avenue to engage with private lenders on issues affecting both bonded and non-bonded lending, in order to develop and implement solutions that will ensure that developing economies can access steady, long-term investment from the private sector.

Recognising that the various industry bodies that represent private lenders are not mandated by their memberships to take forward many issues that arise on the global policy agenda, the London coalition seeks to bring together new collaborations among high-ambition private sector market participants to achieve its mission. It has been pleasing to see such interest from our private sector colleagues thus far.

The coalition’s main priorities include making debt contracts clearer and more transparent, improving the way loan terms respond to natural disasters, and addressing problems with group lending practices. In bringing together a wide range of private sector stakeholders, the coalition will tackle broader co-ordination challenges that often arise when restructuring non-bonded debt, with the aim of delivering better outcomes for both borrowers and lenders.

Encouraging fair and open debt restructuring, alongside more resilient borrowing practices, will enable emerging economies to make meaningful progress towards their climate and development goals. The coalition leverages the UK’s strengths in financial services, helping to reinforce its status as a global hub for development finance and supporting economic activity and investment across the country. Direct investment in emerging markets can also drive UK growth by opening new opportunities for British businesses—particularly in financial services—and strengthening trade relationships with rapidly expanding economies in an increasingly uncertain global landscape.

Tackling international sovereign debt challenges is aligned with the UK Government’s plan for change, driving global financial stability while fuelling economic growth and safeguarding national security. By supporting developing countries in managing their debts more sustainably, the UK helps unlock new opportunities for trade, innovation and investment—benefiting British businesses. This leadership not only opens doors to new markets, but helps prevent the kinds of crises that threaten peace and prosperity worldwide, reinforcing the UK’s standing as a champion of responsible finance and a trusted partner.

Looking ahead, the coalition will continue to work collaboratively to develop practical solutions and drive meaningful reform in how countries manage their debts. To achieve this, it will engage closely with a wide range of stakeholders across the official sector, the private sector and the third sector, ensuring that diverse perspectives are represented.

Through ongoing dialogue and partnership, the coalition aims to deliver tangible progress on sustainable sovereign debt financing and support the broader development and climate ambitions of emerging economies.

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Public Sector Pensions: McCloud Remedy

Emma Reynolds Excerpts

Thursday 19th June 2025 Commons Chamber

[The Economic Secretary to the Treasury (Emma Reynolds)]

I congratulate the hon. Member for Edinburgh West (Christine Jardine) on securing this debate. I am grateful for her speech, and agree that the people we are talking about keep us safe and well, and show true dedication to public service. I absolutely understand the point that she is making.

I will talk a little bit about the background to McCloud, before talking about the progress that has been made to date and what further steps the scheme managers still need to take, as the hon. Lady outlined. The McCloud remedy is, by its nature, a complex undertaking, as I am sure she will appreciate. It applies to 20 public service pension schemes in the UK, and the scheme managers for those schemes are responsible for ensuring that the remedy is administered properly and in accordance with their statutory provisions.

This issue, as the hon. Lady said, arises out of the introduction of new pension schemes for public sector workers in 2014-15. When introducing those pension schemes, the Government at the time gave what is called a transitional protection to older workers, but as she set out, in 2018 the Court of Appeal found that those protections gave rise to unlawful discrimination on the grounds of age, race and sex. In 2019, the Government announced that they would address that discrimination through the McCloud remedy.

There are two main elements to the remedy. The ongoing difference in treatment between older and younger workers was removed by closing the older pre-2015 pension schemes and moving all active members into the new pension schemes in relation to employment after 31 March 2022. However, addressing the discrimination that occurred between 2014 and 2022 is considerably more complex, as hon. Members will appreciate, because whether individual members are better off under the older legacy schemes or newer reform schemes will depend on their individual employment histories and circumstances, and in some cases will not be certain until they retire. The remedy therefore gives a choice over legacy or reform scheme benefits, which is given at the point of retirement for active and deferred members, and is in the process of being rolled out for members who have already retired.

Delivering the remedy to more than 3 million affected scheme members is also an intensive administrative challenge. There are many different elements to it, but the most crucial is that all those affected must be provided with individualised information about their pension entitlements during the 2015 to 2022 remedy period, through what is known as a remediable service statement or RSS.

In addition, a smaller group of members, whose tax position during the remedy period may have changed, need to be provided with a remediable pension savings statement—an RPSS. Given the complexity of the McCloud remedy, schemes are also providing significant levels of guidance and online resources to help members understand the information they receive and the decision they need to make. That information is often very complex, as hon. Members know because many have been in the position of receiving it. There is also a dedicated HMRC digital service to allow members receiving an RPSS to understand their tax position. There are processes in place to allow members to pay additional tax or, as will be the case for the majority of members, to claim either a tax refund or compensation from the scheme where a refund is not possible.

Providing these statements to members, together with the other aspects of implementing the remedy, is the responsibility, as the hon. Lady will know, of pension scheme managers. For the largest public service schemes, including the NHS scheme in England and Wales, the teachers’ scheme in England and Wales, and the civil service scheme across the UK, the scheme manager is the relevant Secretary of State. The local government, police and fire schemes are administered locally, which means each responsible authority, force or brigade has its own scheme manager, who is responsible for the operation of the scheme in that area.

The devolved Administrations—this is pertinent to the concerns raised by the hon. Lady, the hon. Member for Strangford (Jim Shannon) and my hon. Friend the Member for Dunfermline and Dollar (Graeme Downie)—have responsibility for administering their schemes. The Scottish Government, through the Scottish Public Pensions Agency, have responsibility for the police, fire, NHS and teachers’ schemes in Scotland. The Welsh Government are responsible for the firefighters’ scheme in Wales. Pension schemes in Northern Ireland are established under a separate legal framework and are the responsibility of the Northern Ireland Government.

This means that the picture on implementing the remedy across the different schemes is complex and may be subject to particular factors that affect one scheme but not necessarily another. The remedy itself varies across the schemes, reflecting the fact that the schemes themselves are specific to each workforce and have different benefit designs. This can be seen in the differing levels of progress that schemes have so far made.

I am aware that across the police scheme in England and Wales, around 90% of the total number of RSSs have so far been issued, and I understand that the picture is similar in the police scheme in Scotland, with 97% of deferred choice and over three quarters of immediate choice RSSs already issued. Although that is not yet matched by other schemes, significant progress is being made elsewhere. For example, the civil service scheme in England and Wales has issued around 45% of immediate choice RSSs and the teachers’ scheme around 47%.

It was always anticipated that providing RSSs to members would be challenging, and that is specifically recognised in the legislation governing the remedy. In particular, the Public Service Pensions and Judicial Offices Act 2022 sets out that for the provision of RSSs, there is a deadline of 31 March 2025, or—here comes the qualification—

“such later day as the scheme manager considers reasonable in all the circumstances in the case of a particular member or a particular class of member”.

Given that I was asked about delays, I think it is worth reflecting that hon. Members have raised concerns about their constituents who are experiencing delays in receiving the remedy. I am standing in for the Pensions Minister, my hon. Friend the Member for Swansea West (Torsten Bell), but I used to be the Pensions Minister myself, so I have some knowledge of the issue, and I encourage scheme managers to take every step possible to resolve those cases as quickly as possible and to prioritise cases where individuals may be in particular need. The hon. Member for Edinburgh West reflected on a number of such cases in her excellent contribution.

I assure anybody in this position that where there is an uplift in interest on pension payments, interest will be paid on arrears, so they will not lose out financially as a result of the delays, but I do understand that the delays are frustrating. As the hon. Lady will be aware, the overarching principle of the McCloud remedy is to put people back in the situation they would have been in if the discrimination had not occurred. In order to do that, it is necessary to apply interest where payments should have been made at an earlier date, whether by the scheme or the member. In this debate, we have heard more about the delays of the scheme towards the member. Interest is applied at 8% when the scheme owes money to the member. Where the member owes money to the scheme, interest is applied at the NS&I direct saver rate, which is currently 3.5%. I hope that reassures the hon. Lady to a certain extent.

We think it is right that these decisions are made by scheme managers, as they are the only ones with full possession of all the relevant information. As I have said, with that information and the variety of different factors, the situation is complex. Having said that, the Government are committed to ensuring that all affected members are provided with the remedy they deserve as quickly as possible, including ensuring that members already in receipt of pension benefits or approaching their retirement are prioritised.

Where scheme managers have exercised their statutory discretion to extend the deadline for providing some members with an RSS, it is therefore important that appropriate new deadlines are set out and that robust plans are in place to ensure the new deadlines are met. Scheme managers must ensure that the plans are properly communicated to pension scheme members to provide them with certainty. The Pensions Regulator must also be kept informed of plans and progress, and I know that schemes have been having these discussions with the regulator.

Similarly, there have been delays in other aspects of the remedy, such as the provision of the RPSSs to those who need them. As I set out earlier, that affects a smaller number of people. However, it is difficult for those people if they are kept waiting. It is important that schemes keep members informed and provide them with appropriate resources and support. Although I am pleased to say that the process of sending out RPSSs in England and Wales is 90% complete and that some schemes have sent them to all affected members, I know that there are issues in other parts of the country. As I said, this is a very complex area. If I have not answered all of the hon. Lady’s questions, I am happy to write to her.

Given the importance of delivering the McCloud remedy effectively, the Pensions Minister has recently written to responsible Departments, requesting details of their plans to issue remaining RSSs and RPSSs to all affected members. All those affected by the McCloud remedy can be assured that a robust and complete statutory remedy has been put in place and that schemes are working to ensure that members receive the information and support they need. I do, though, note the points that the hon. Lady has made about the impact of the delays on her constituents. They will have the opportunity to decide whether to receive legacy or reform scheme benefits in relation to their service. I again thank the hon. Lady for bringing this matter to the House.

Question put and agreed to.

Wholesale Cash Firms: Oversight Regime

Emma Reynolds Excerpts

Thursday 12th June 2025 Written Statements

[The Economic Secretary to the Treasury (Emma Reynolds)]

Wholesale cash distribution is the mechanism that supplies physical cash—specifically banknotes and coins—to retail banks, cash machines and the wider retail market. This is a vital mechanism for ensuring the sustainable provision of and reliable public access to cash.

Under part 5A of the Banking Act 2009, the Bank of England is responsible for managing risks to the effectiveness, resilience, and sustainability of the WCD system. Specifically, the Act gives the Bank of England powers to “oversee” firms recognised by the Treasury in wholesale cash oversight orders as performing relevant WCD activities and as being market significant. The Bank of England can give directions, issue codes of practice, and supervise firms’ compliance. Further detail on the Bank of England’s supervisory approach can be found in its statement of policy. ¹

His Majesty’s Treasury’s decision on recognition

Today I am announcing which firms the Treasury has specified as recognised persons in wholesale cash oversight orders. As required under the Act, in making this decision the Treasury has: notified firms it considered for recognition; sought and considered any representations from these firms; and consulted relevant regulators, including the Bank of England.

Following this extensive process, I am announcing today that HM Treasury has made wholesale cash oversight orders to the following firms:

Barclays Bank UK PLC;

Barclays Bank PLC;

G4S Cash Centres (UK) Limited;

HSBC UK Bank PLC;

HSBC Bank PLC;

Lloyds Bank PLC;

Bank of Scotland PLC;

National Westminster Bank Public Limited Company;

The Royal Bank of Scotland Public Limited Company;

Post Office Limited;

Santander UK PLC;

Vaultex UK Limited.

These wholesale cash oversight orders have been made on 5 June 2025 and will come into force today, 12 June 2025.

In making these orders I have considered the requirements under section 28 of the Small Business, Enterprise, and Employment Act 2015. This requires Minsters to include in certain secondary legislation that regulates businesses and other bodies a provision for review or a statement as to why this is not appropriate.

I consider a provision for review inappropriate as it would be disproportionate relative to the economic impact. The impact on business is expected to be de minimis with annual fees that the Bank of England can charge recognised firms effectively capped by the Treasury, detailed in the Banking Act 2009 (Wholesale Cash Oversight Fees) Regulations 2024. The Bank of England can charge a maximum of £400,000 per firm per year for supervision fees and £150,000 for “special projects”. The current aggregate impact of making these orders is de minimis as defined in the better regulation framework.

Further, including a provision for review would be undesirable for particular policy reasons. The legislation contains provisions which necessitate ongoing review, meaning further provisions would be duplicative. Under section 206J of the Banking Act 2009, HM Treasury must revoke an order if it is no longer satisfied that the firm meets the relevant criteria. Section 206Z2 also requires the Bank of England to produce an annual report on the discharge of its functions and the extent to which risks in the WCD system have been managed. That report will subsequently be laid in Parliament. HM Treasury also plans routine engagement with the Bank of England that will monitor the implementation and impact of the regime.

¹ https://www.bankofengland.co.uk/paper/2023/sop/sop-on-the-banks-supervisory-approach-to-market-oversight-for-wholesale-cash-distribution

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Mortgage Guarantee Scheme: Contingent Liability

Emma Reynolds Excerpts

Wednesday 11th June 2025 Written Statements

[The Economic Secretary to the Treasury (Emma Reynolds)]

Supporting first-time buyers is at the heart of this Government’s housing strategy as we aim to build 1.5 million new homes this Parliament. The Government recognise the difficulties that many aspiring homeowners face in getting on the housing ladder—in particular, the challenge of raising a sufficient deposit for a home. To tackle this problem head on, we committed to introduce a permanent mortgage guarantee scheme in our election manifesto to ensure buyers with smaller deposits can get a mortgage and fulfil their home ownership ambitions.

Today, I can confirm that the Government will be launching a new mortgage guarantee scheme in July 2025, delivering on our manifesto commitment to support homebuyers with smaller deposits across the UK. This Government are committed to home ownership, and we will continue to explore ways to help more prospective first-time buyers own their own homes. The scheme will be permanently available, helping to incentivise and sustain availability of 91% to 95% loan-to-value mortgages through the economic cycle by providing lenders with a Government-backed guarantee—this will insure lenders against a portion of their potential losses on those mortgages. Mortgages offered through the scheme will enable eligible first-time buyers and home movers to buy a home with a deposit as small as 5%.

Guarantees issued under the new, permanent scheme will be valid for up to seven years after the mortgage is originated. Participating lenders will pay HM Treasury a fee for each mortgage entered into the scheme. This will be set and regularly reviewed so that expected claims against the guarantee should be covered by revenue from the fee. To limit the Government’s exposure from the scheme, there will be a cap on the size of the Government’s contingent liability of £3.2 billion. HM Treasury judges the risk of incurring losses through the scheme to be low, which would only materialise if the sum of fees was not sufficient to cover calls on the guarantee.

Authority for any expenditure required under this liability will be sought through the normal procedure. HM Treasury has approved this proposal in principle. A departmental minute has been laid in Parliament today. If, during the period of 14 parliamentary sitting days, a member signifies an objection by giving notice of a parliamentary question or by otherwise raising the matter in Parliament, final approval to proceed with incurring the liability will be withheld pending an examination of the objection.

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Bank Closures and Banking Hubs

Emma Reynolds Excerpts

Thursday 5th June 2025 Commons Chamber

[The Economic Secretary to the Treasury (Emma Reynolds)]

It is a great pleasure to speak in this debate. I want to thank and to congratulate my hon. Friend the Member for Blyth and Ashington (Ian Lavery) on bringing forward this important debate, which was heavily subscribed across the House. He highlighted the needs of his constituents, particularly the elderly, the vulnerable and the disabled. My hon. Friends the Members for Weston-super-Mare (Dan Aldridge), for Bolton South and Walkden (Yasmin Qureshi) and for Leigh and Atherton (Jo Platt), and the hon. Members for Bromsgrove (Bradley Thomas), for Farnham and Bordon (Gregory Stafford) and for Chesham and Amersham (Sarah Green) all stressed the importance of in-person services, particularly for vulnerable constituents.

I congratulate my hon. Friends the Members for Isle of Wight West (Mr Quigley), for Derbyshire Dales (John Whitby) and for Gillingham and Rainham (Naushabah Khan), the right hon. Member for Wetherby and Easingwold (Sir Alec Shelbrooke) and the hon. Member for Brecon, Radnor and Cwm Tawe (David Chadwick) on securing banking hubs in their constituencies— in the case of my hon. Friend the Member for Derbyshire Dales, two banking hubs are soon to open, as I understand it.

Other Members spoke about their campaigns to secure banking hubs, including my hon. Friend the Member for Southampton Itchen (Darren Paffey), my hon. Friend the Member for Welwyn Hatfield (Andrew Lewin)—who is apparently expecting a call from one such bank— and the hon. Member for Broxbourne (Lewis Cocking). My hon. Friend the Member for South Norfolk (Ben Goldsborough) and the hon. Members for North Shropshire (Helen Morgan), for Dumfries and Galloway (John Cooper) and for Strangford (Jim Shannon) talked about the importance of access to cash and banking services in rural areas.

[Alex Mayer (Dunstable and Leighton Buzzard) (Lab)]

Will the Minister give way?

[Emma Reynolds]

I do not have very long left, I am afraid.

The hon. Member for Aberdeen North (Kirsty Blackman) and my hon. Friend the Member for Weston-super-Mare rightly stressed the importance of these services in urban areas as well. I will not go through all of them, but we heard lots of really good speeches on both sides of the House and a surprising degree of consensus, which is not always the case. It is interesting to see the right hon. Member for Tatton (Esther McVey) and my hon. Friend the Member for Blyth and Ashington so closely aligned, which is not something I expected.

Through the Financial Services and Markets Act 2023, the last Government legislated to protect reasonable access to cash, giving the Financial Conduct Authority new powers to ensure that communities could both withdraw and deposit cash. The Government recognise that the ability to access cash and in-person banking support remains essential for many, particularly in rural areas and for vulnerable people, which is why we have secured the industry’s commitment to roll out 350 banking hubs by the end of this Parliament, ensuring that access to face-to-face banking is protected. Over 220 have been agreed, and more than 160 are open.

Banking hubs are a voluntary initiative by banks as part of meeting their access to cash obligations, as legislated for in FSMA. Many Members have asked the Government to demand that Link reviews its assessment procedure, but it is worth reminding colleagues that the process for deciding where hubs are needed is independently determined by Link, the operator of the UK’s largest ATM network. The Government are not minded to review the legislation passed by the previous Government.

A number of Members—including the hon. Member for Dumfries and Galloway, who mentioned this to me yesterday as well—talked about ATMs’ lack of reliability. I have done a little bit of work on that, and Link assures me that it takes a hard line with its members over the functionality of ATMs. However, I urge Members to raise these issues with me, so that I can raise them with Link. I am soon to meet John Howells, the chief executive of Link, and I will feed back the concerns that Members have raised today about how Link applies its criteria.

I know that this is not necessarily the conclusion to the speech that Members were hoping for, but we think it is important that local communities have access to cash and banking services, which is why our Government are committed to rolling out 350 banking hubs across the country.

[Madam Deputy Speaker (Caroline Nokes)]

I call Ian Lavery to wind up very briefly.

Draft Payment Services and Payment Accounts (Contract Termination) (Amendment) Regulations 2025

Emma Reynolds Excerpts

Wednesday 4th June 2025 General Committees

[The Economic Secretary to the Treasury (Emma Reynolds)]

I beg to move,

That the Committee has considered the draft Payment Services and Payment Accounts (Contract Termination) (Amendment) Regulations 2025.

As ever, it is a pleasure to serve under your chairmanship, Mr Mundell. I am grateful for the Committee’s time this afternoon. Financial services fulfil a vital role for people and businesses across the UK. The Government are committed to ensuring high standards of both consumer protection and financial inclusion. The regulations form part of that commitment by strengthening protections for customers, including individual consumers, businesses and charities, when their bank accounts or other payment services are terminated by their provider.

While terminations of services are generally considered commercial decisions, customers must be treated fairly. Concerns have been raised in that area over recent years, including concerns about services being terminated on the basis of customers’ lawful beliefs and political opinions. The Government are unequivocal that customers should not see payment services terminated on grounds relating to their lawful freedom of expression.

There are clear protections in law that already prohibit providers from discriminating against UK consumers based on protected characteristics and their lawful beliefs and political opinions. However, in other areas, existing legislation does not always provide appropriate protection and is not sufficiently clear. Currently, payments legislation contains no obligation on providers to explain why they are terminating services, and the existing two-month notice period is not always long enough, meaning that customers do not have the information and time they need to understand providers’ decisions, rectify issues or make a complaint.

The statutory instrument before us today addresses those issues. It would increase the amount of notice that providers must give to at least 90 days and introduce a new requirement that customers be given an explanation that is sufficiently detailed and specific for them to understand why the contract for their payment service is being terminated. Providers would also be required to advise customers on how they can make a complaint to their provider and on any right they may have to take their complaint to the Financial Ombudsman Service.

The SI clarifies ambiguities in existing legislation to ensure that the new rules are applied consistently. There are some exceptions to the new requirements in the SI, as Members will see, mainly so that providers can continue to meet their other legal requirements. The strengthened rules would take effect from 28 April 2026 and apply to the termination of payment services contracts that are concluded for an indefinite period and entered into on or after that date.

The regulations would make crucial changes that would ensure that customers are treated fairly while respecting providers’ rights to make commercial decisions. The reforms will increase transparency, ensuring that customers understand providers’ decisions and have the time and information they need to bring a complaint or find an alternative provider. I thank the Committee for its attention and welcome any questions from the shadow Minister or other Members.

--- Later in debate ---

[Emma Reynolds]

It started so well—I am slightly confused by the hon. Gentleman. On one hand he says it is as though nothing changed, and did we need a general election to get to this point? On the other hand he calls into question the provisions of the SI and what impact they might have. I will come to his questions in turn. First, there has been a big change since the election. I was not here in the last Parliament, so there has been a welcome change from my point of view and on the Labour side of the House, where we have a quite hefty majority, in case he had not noticed.

The reforms were consulted on and thought about in the last Government—the hon. Gentleman was right to make that point. We consider, as did the previous incumbents in my role and the Conservatives in government, that the current notice period of 60 days is simply not adequate for customers who have their accounts closed to either make a complaint or seek an alternative provision, and that is bad for individual customers, but particularly bad for businesses. As he set out, it is crucial that businesses and individual customers have access to bank accounts.

We do not think, although I can write to him with more evidence, that this measure will make banks more reluctant to open bank accounts in the first place. The balance that we are striking in this statutory instrument is on the one hand enhanced consumer protection and on the other hand ensuring that we do not place unnecessary and disproportionate burdens on banks and other providers—it is not just about banks; it is about other payment providers, too. We have not included a statutory review clause, but that does not mean that we cannot review the legislation. We do not judge that this provision will make banks more reluctant to open bank accounts for people in the first place.

The shadow Minister asked more broadly about access to banking services, which is something that we are monitoring. As he said, that is crucial to both the operation of a business and customers. In our financial inclusion strategy, we are looking at access to banking and the relationship between financial exclusion and digital exclusion. We are doing broader work in this area to understand not only the root causes from providers but why individuals have perhaps had their accounts closed and not sought alternative provision.

We are doing broader work on financial provision, as the hon. Gentleman knows, and we will produce a strategy by the end of the year on this vital issue. I know that many of my hon. Friends will welcome that, as well as other Members across the House, because financial inclusion is something that we all care about and this Government are very committed to. I believe that I have answered all the questions.

[Mark Garnier]

Not mine, perhaps.

[Emma Reynolds]

Sorry; could the hon. Gentleman remind me of the specific question?

[Mark Garnier]

It was to do with the assessment being done of the impact on politically exposed persons. When can we expect that report to come out?

[Emma Reynolds]

I thank the shadow Minister for that question. As he will know, changes were brought into force in January 2024 under the previous Government that ensured that domestic PEPs, as they are called, were not deemed to be on the same level of risk as non-domestic PEPs. That SI was introduced under the last Government and FSMA—the Financial Services and Markets Act 2023—committed to bringing forward that legislation.

It also committed the FCA to doing a review of so-called PEPs and debanking. That review concluded that banks were not necessarily taking the wrong approach, but it said that there needs to be more proportionate application of rules. Therefore, the FCA will bring forward updated guidance on this issue, and I am happy to write to the shadow Minister in more detail on the timing of that and what will be included.

Question put and agreed to.

NatWest Group: Government Shareholding

Emma Reynolds Excerpts

Tuesday 3rd June 2025 Written Statements

[The Economic Secretary to the Treasury (Emma Reynolds)]

The Government are no longer a shareholder in NatWest Group—NatWest, formerly Royal Bank of Scotland—due to the disposal of the remainder of the Government’s shares through the trading plan on 30 May 2025.

This concludes nearly 17 years of the Government being a shareholder in the bank and brings to an end the public ownership of banks resulting from the 2007-09 global financial crisis.

In total, the Government raised £24.8 billion in proceeds from sales of their shares in NatWest. Also accounting for dividends and other fees, the Government received a total of £35 billion in relation to their shareholding in NatWest. This is approximately £10.5 billion lower than the amount of capital originally provided to stabilise the bank. However, the Government believe that the cost of not acting to protect the economic and financial stability of the UK economy would have far exceeded £10.5 billion.

Policy rationale

The Government have been committed to returning NatWest to full private ownership, given that the original policy objective for the intervention in NatWest—to preserve financial and economic stability at a time of crisis—has long been achieved. The Government conducted sales of NatWest shares only when it represented value for money for the taxpayer to do so.

Format and timing of the final sale

The Government concluded that selling shares through the trading plan represented value for money. The trading plan, which was launched in August 2021 and was most recently extended in April 2023, has now ended. In total, the trading plan generated over £13.2 billion in proceeds from sales of NatWest shares.

Table 1: The net impacts of sales made via the trading plan on a selection of fiscal metrics are summarised as follows:

Oral Answers to Questions

Emma Reynolds Excerpts

Tuesday 20th May 2025 Commons Chamber

[Harpreet Uppal (Huddersfield) (Lab)]

2. What recent discussions she has had with the Financial Conduct Authority on the adequacy of support from mortgage lenders for older people with interest roll-up lifetime mortgages.

[The Economic Secretary to the Treasury (Emma Reynolds)]

Lifetime mortgages have been regulated by the FCA since 2004. Those rules provide robust consumer protections, including requiring lenders to engage and provide tailored support to all their customers.

[Harpreet Uppal]

One of my constituents, a 96-year-old man, took out in 1990 what he thought was a £15,000 loan, but what was actually an interest roll-up lifetime mortgage. Despite paying £40,000 over the years, he now owes over £52,000 due to compound interest. He has been denied redress by the financial ombudsman due to time limits, and my team has also contacted the FCA and the lender without success. My constituent is now left to deal with the consequences. Will the Minister meet me to discuss this case, and how we can better support other people who have been mis-sold those products?

[Emma Reynolds]

I am really sorry to hear about the circumstances that my hon. Friend’s constituent is facing, and I would be happy to meet her to discuss the issue further. Lifetime mortgages are complex financial products, and I suggest that anyone considering equity release seeks independent financial advice to help ensure those products are suitable for their needs.

[Dr Al Pinkerton (Surrey Heath) (LD)]

An increasing number of pensioners are reaching the end of their mortgages with outstanding borrowing and finding themselves unable to meet later-life lending criteria, and this is likely to become even more prevalent in years to come as house price rises continue to outstrip earnings. What discussions is the Minister having with lenders and the mortgage industry about expanding those criteria and giving hard-working pensioners who might otherwise be forced to seek council support the opportunity to remain in their own homes?

[Emma Reynolds]

I thank the hon. Gentleman for raising this important issue. I discuss mortgages with lenders and, indeed, with the Financial Conduct Authority on a weekly basis, and I will ensure that I pass on his comments.

[Graham Stuart (Beverley and Holderness) (Con)]

3. What assessment she has made of the potential impact of the autumn Budget 2024 on costs for businesses.

--- Later in debate ---

[Mr Joshua Reynolds (Maidenhead) (LD)]

T3. With interest rates still high, what assessment has the Chancellor made of the number of homeowners going into mortgage arrears and the impact that is having on families right across the UK?

[The Economic Secretary to the Treasury (Emma Reynolds)]

We are in weekly touch with the Financial Conduct Authority, which regulates mortgages, and under this Government we have seen four interest rate cuts since the election, which is bringing mortgage rates down for hard-working people across the country.

[Deirdre Costigan (Ealing Southall) (Lab)]

T7. Does the Chancellor agree that four interest rate cuts, three trade deals, two successive quarters of growth and almost 1% of growth announced last week show that our plan for change is working? Does she also agree that it is now essential that this House supports the Government’s Planning and Infrastructure Bill and other efforts to boost growth and put money in the pockets of my constituents in Ealing Southall?

--- Later in debate ---

[Luke Myer (Middlesbrough South and East Cleveland) (Lab)]

Last week I raised with the Minister for Social Security and Disability the case of a local disability charity being hit by increased bank charges, and the Minister committed to work with me on the issue. Will Treasury Ministers do the same so that we can take these banks to task and support fantastic local organisations?

[Emma Reynolds]

I would be happy to meet my hon. Friend to discuss that issue.

[Wendy Chamberlain (North East Fife) (LD)]

Access to banking services is a particular issue in North East Fife, where the limitations of the access to cash legislation are becoming clear. Will the financial inclusion committee agree to look at the Financial Services and Markets Act 2023 to ensure that we get the access to banking services that local communities need?

[Emma Reynolds]

Our Government secured the commitment of the banking industry to roll out 350 banking hubs across the country; 200 have already been agreed and over 150 are open. The financial inclusion committee, which I chair, is looking at financial inclusion, including digital banking and ensuring that people have the bank accounts they need.

--- Later in debate ---

[Mr Gregory Campbell (East Londonderry) (DUP)]

The roll-out of banking hubs is helping to a small degree, but what plans do the Government have to increase the number of banking hubs beyond those in the pipeline?

[Emma Reynolds]

As I said in my previous answer, we have secured the commitment of the industry to open 350 banking hubs by the end of this Parliament. The FCA keeps the access to cash rules under review. As legislated for under the last Government, it has the power to make rules to ensure that there is access to cash across the country.

[Mr Speaker]

I call the Chair of the Treasury Committee.

[Dame Meg Hillier (Hackney South and Shoreditch) (Lab/Co-op)]

Yesterday, there was a lot of coverage of the Chancellor’s comments about the ISA limit. She pledged to keep it at £20,000 but did not specify how much within that would be cash and how much would be investments. Can the Minister reassure me that she is seriously considering the impact on the mortgage-lending market of changing the cash ISA limit?

[Emma Reynolds]

As we announced in the spring statement, we are looking for options for ISA reform to ensure that we get the balance right between cash and equities. I can reassure my hon. Friend that we understand that cash savings are a vital tool for people and act as a financial buffer for a rainy day.

[Esther McVey (Tatton) (Con)]

I am sure that the Chancellor subscribes to the basic principle that if the cost of something is put up, we will see less of it. That is why Governments have, over many years, put taxes on things like smoking. Does she accept that the principle also applies to employing people—that the more expensive the Government make employing people, with their jobs tax increasing NICs for employers, the less we will see of that?

Consumer Credit Regulation

Emma Reynolds Excerpts

Monday 19th May 2025 Written Statements

[The Economic Secretary to the Treasury (Emma Reynolds)]

Last year marked the 50th anniversary of the passage of the Consumer Credit Act 1974. The way people interact with their finances and the consumer credit market is dramatically different today and the transformation in 50 years has been vast. Digital technology has transformed how people use and take out credit. With that, many new challenges and opportunities have emerged, such as the rapid emergence and growth of buy-now, pay-later products.

Today the Government have announced a package of measures designed to future-proof the regulatory framework of the UK’s £200 billion-plus consumer credit market. These measures aim to allow businesses to innovate effectively and ensure that consumers have access to useful and affordable credit products, and clear rights where things go wrong.

BNPL products have become increasingly popular with many UK consumers. When offered responsibly, they can serve as a useful and affordable credit option. However, these unregulated products carry certain risks, as highlighted in particular by the 2021 Woolard review.

Last October the Government published a consultation setting out their plans to address this by bringing the sector into regulation.^[1] Under the proposals, BNPL firms will need to be authorised by the Financial Conduct Authority and will be subject to ongoing supervision. These proposals aim to ensure that people using BNPL products receive clear information, avoid unaffordable borrowing, and have strong rights when issues arise. The Government’s approach will maintain access to these popular products while adding crucial safeguards.

The Government have today published our consultation response, summarising the feedback we received and setting out our final position on the proposals.^[2] Respondents expressed a strong desire for action in this area and were generally supportive of the proposed regulatory regime. The Government have also laid the Draft Financial Services and Markets Act 2000 (Regulated Activities etc.) (Amendment) Order 2025—the affirmative procedure statutory instrument needed for bringing BNPL products into regulation.

Once the SI is approved by Parliament, the FCA will proceed to draft and consult on its rules for BNPL lending. This will give interested parties the opportunity to comment on the rules before they are finalised. Regulation is then expected to come into force in mid-2026.

Alongside this, HM Treasury is also publishing its consultation on phase 1 of CCA reform.^[3] The CCA has served the UK well for many decades and continues to provide important protections, but it has failed to keep up with developments in the market and the changing ways in which people engage with credit. As a result, the regime is confusing and burdensome for firms, stifling innovation and is not delivering the best outcomes for consumers.

The consultation sets out the Government’s proposals to move much of the CCA out of regulation so that it sits in the more agile rulebook of the FCA. The proposals aim to create a modern, agile and proportionate regulatory regime for consumer credit that is equipped to provide robust protection for consumers. A further consultation will follow in due course, covering rights and protections, scope and definitions.

Overall, reforming regulation for firms while ensuring robust consumer protection will unlock the full potential of the consumer credit sector. This is an important milestone in delivering the Government’s plan to go further and faster to drive economic growth through the plan for change, by supporting our consumer credit sector to innovate and become a driving force in delivering economic growth and enhancing competitiveness.

^[1] https://www.gov.uk/government/consultations/regulation-of-buy-now-pay-later-consultation-on-draft-legislation-october-2024'>https://www.gov.uk/government/consultations/regulation-of-buy-now-pay-later-consultation-on-draft-legislation-october-2024

^[2] https://www.gov.uk/government/consultations/regulation-of-buy-now-pay-later-consultation-on-draft-legislation-october-2024'>https://www.gov.uk/government/consultations/regulation-of-buy-now-pay-later-consultation-on-draft-legislation-october-2024

^[3] https://www.gov.uk/government/consultations/consultation-on-consumer-credit-act-1974-cca-reform.

[HCWS647]

Draft Pension Fund Clearing Obligation Exemption (Amendment) Regulations 2025

Emma Reynolds Excerpts

Wednesday 14th May 2025 General Committees

[The Economic Secretary to the Treasury (Emma Reynolds)]

I beg to move,

That the Committee has considered the draft Pension Fund Clearing Obligation Exemption (Amendment) Regulations 2025.

It is a pleasure to serve under your chairmanship, Mr Betts. The draft regulations will remove the time limit on the temporary exemption that pension funds have from clearing over-the-counter derivatives contracts, such as interest rate swaps, through a central counterparty. The exemption will continue indefinitely, ending the need for the Government to renew it every two years if they conclude that it is necessary.

The draft regulations will help UK pensioners by supporting pension funds’ ability to invest in assets that generate returns for their benefit. Maintaining the exemption is also in line with the Government’s priorities to increase productive investment by pension funds to support economic growth.

Central counterparties are a type of financial market infrastructure that firms use to reduce risks when trading on financial markets. They sit between the buyers and sellers of financial instruments, providing assurance that contractual obligations will be fulfilled. They do so by collecting collateral, known as margin, from all their users, which can be used to cover any shortfall if a default occurs. The process of transacting through a CCP is known as clearing.

In 2009, G20 countries agreed that certain standard derivatives contracts should be cleared through CCPs to reduce risks in the financial system. In the EU, this was implemented through legislation and is known as the clearing obligation. At the time, it was decided that pension funds should be exempted from the obligation because of the particular challenges that pension funds would face in meeting CCP margin requirements.

CCPs require certain types of margin to be posted in cash. Pension funds do not usually hold large cash reserves, as they invest a large majority of their resources in assets such as gilts and corporate bonds to provide returns for pension holders, meaning that meeting the requirement to post margin in cash can be more difficult for pension funds than for other firms. Requiring pension funds to clear their derivatives could cause them to increase their cash holdings, reducing their investment in other assets and their ability to generate returns for future pensioners over the longer term.

The UK assimilated the clearing obligation and the exemption into UK domestic law through the European Union (Withdrawal) Act 2018, which was passed under the previous Government. The exemption was initially designed as a temporary measure, but it has since been extended several times. At present, the Government need to lay secondary legislation every two years if they conclude that it is necessary to extend the exemption. The most recent extension was in June 2023, under the previous Government, who noted that

“it would be desirable to put in place a longer-term policy approach and remove the need for future temporary extensions”.

That is what the draft regulations seek to achieve.

The Treasury has since conducted a review of the exemption, working closely with UK financial services regulators and with input gathered from industry stakeholders through a call for evidence, which was launched in November 2023. The review found that requiring pension funds to clear derivatives could bring financial stability benefits, such as reducing counterparty risk, and could enhance resilience to shocks by increasing pension funds’ cash buffers. However, it identified concerns from some market participants that removing the exemption could increase pressure on the liquidity management of pension funds, particularly under stressed market conditions, which could increase risks to financial stability.

The review also found strong evidence that pension funds would need to hold more cash and reduce investment in more productive assets if the exemption were removed. That could reduce their returns, with a potential impact on the retirement benefits of future pensioners; it would also be inconsistent with the objectives of the Government’s wider growth reforms, including the pensions investment review, which seeks to unlock new productive investment by pension funds in things like businesses and infrastructure to support economic growth.

Overall, the Government concluded that there was clear evidence that removing the exemption would reduce pension funds’ ability to invest in productive assets, and that that could have an adverse effect on the retirement benefits of future pensioners, while the extent to which removing the exemption would generate direct financial stability benefits was very unclear. The Government have decided that, on balance, it is appropriate to maintain the exemption for the longer term. However, we will keep the policy under review, in co-ordination with the financial services regulators. If there are changes to market dynamics or wider Government reforms that have a material impact on the value of mandatory clearing for pension funds, the Government may reassess the issue.

The draft regulations will implement that policy decision by removing the time limit on the exemption, preventing it from expiring on 18 June this year, as is currently scheduled. They will also remove the Treasury’s power to extend the exemption by two years at a time if it concludes that that is necessary; as the exemption will have no time limit, that power will obviously no longer be required. Firms will not have to do anything differently as a result of the draft regulations, because they will maintain the status quo. This approach provides longer-term clarity and certainty for market participants on the policy position, which will support planning for their long-term investment strategies.

The regulations will maintain this important exemption for the longer term. They will provide certainty for pension funds and will remove the need for the Government to renew the exemption every two years via secondary legislation. They will support pension funds’ ability to generate returns, which fund the retirement benefits of future pensioners, and align with the Government’s objectives to unlock productive investment to support economic growth. I hope that the Committee feels able to support the draft regulations and their objectives; I commend them to the Committee.

--- Later in debate ---

[Emma Reynolds]

I thank both hon. Members. As I expected, the shadow Minister agrees with the policy of the previous Government. He asked a couple of questions, and I will take them in the wrong order.

The shadow Minister is right that there is a very slight difference between ruling clearing out completely and making the exemption permanent, but the outcome, which is what we are focusing on, is exactly the same. We have said that we will keep the policy under review if we need to, but overall we think that a permanent exemption gives the industry a lot more certainty than having to roll the exemption over every couple of years. I hope that that gives him some comfort.

In a way, the shadow Minister has answered his own question on divergence from the EU. Our pension systems and the UK defined-benefit market are structurally different from those in other jurisdictions such as the US and the European Union, so we think it entirely appropriate to take a different decision on this issue. The Government are committed to maintaining our high standards of regulation and financial services, including adhering to relevant international standards where appropriate, but we do not think that this will create a divergence that is worrying in any way.

I completely concur with the hon. Member for St Albans that the focus should be on pension outcomes. Maintaining the exemption over time will give certainty to those in the industry, so that they can invest, over the longer term, in assets that will produce returns for their members and therefore pay out the defined-benefit pensions that they are contractually obliged to provide for their members. I hope that I have answered all the Committee’s questions.

Question put and agreed to.