Asked by: Gareth Thomas (Labour (Co-op) - Harrow West)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, if she will introduce legislation to allow cooperatives to issue capital instruments to raise finance which don’t lead to demutualisation.
Answered by Lucy Rigby - Economic Secretary (HM Treasury)
The government is keen to ensure that the law governing co-operatives and community benefit societies supports their growth. That is why we are funding the Law Commission’s independent review of the Co-operative and Community Benefit Societies Act 2014.
The Law Commission’s independent review is considering ways to update and modernise the legislation for co-operatives and community benefit societies, ensuring that it fits the nature and needs of these societies as well as ensuring that regulation is proportionate and effective. The Law Commission is considering methods of raising capital, including society shares, as part of its review.
The Law Commission will publish its final recommendations in 2026. Once this is published, the government will carefully consider the Law Commission’s recommendations to understand whether reform of the legislation is needed to ensure these businesses are supported to grow and succeed into the future.
Asked by: Gareth Thomas (Labour (Co-op) - Harrow West)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, whether she will discuss support for new mutual banks with Ministerial colleagues in the Department for Business and Trade.
Answered by Lucy Rigby - Economic Secretary (HM Treasury)
The government is committed to supporting the growth of mutual financial services in line with the manifesto commitment to double the size of the mutual and co-operative sector.
HM Treasury works closely with departments across government, including the Department for Business and Trade, to deliver this commitment. We also engage regularly with the mutuals sector to understand the challenges they face and explore opportunities to help the sector grow.
Asked by: Gareth Thomas (Labour (Co-op) - Harrow West)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what steps she is taking to increase levels of household savings.
Answered by Lucy Rigby - Economic Secretary (HM Treasury)
Everyone should have access to affordable and appropriate products for their financial wellbeing. The government is committed to breaking down barriers to opportunity and ensuring individuals and households have greater financial security.
This is why the government offers several ways to help people save and increase their financial resilience. The overall ISA allowance of £20,000 ensures that savers can put significant sums away in a tax-free savings account. For those who save outside of an ISA, the Personal Savings Allowance provides up to £1,000 of tax-free savings interest for basic rate taxpayers, and £500 for higher rate taxpayers.
The Help to Save scheme supports financial resilience for working people on low incomes by encouraging consistent, long-term saving and helping them build a financial buffer to plan and prepare for the future. The scheme is currently available to working individuals in receipt of Universal Credit, ensuring it remains targeted at its intended population.
As announced at Autumn Budget 2025, the government will make the Help to Save scheme permanent and, from April 2028, will expand eligibility to include all Universal Credit claimants who receive the child element, the caring element or both.
Asked by: Gareth Thomas (Labour (Co-op) - Harrow West)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what steps she is taking to improve access to affordable credit.
Answered by Lucy Rigby - Economic Secretary (HM Treasury)
The Government recognises that affordable and responsible credit can help households manage unexpected costs and cash flow.
In November, we published the Financial Inclusion Strategy, developed with consumer groups and industry. The Strategy includes a pilot scheme for small sum lending and measures to strengthen the community finance sector, including encouraging partnerships with mainstream financial firms.
We will continue to work closely with stakeholders to implement the Strategy and improve access to affordable credit.
Asked by: Gareth Thomas (Labour (Co-op) - Harrow West)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what further steps she will take to make the cost of business loans more transparent.
Answered by Lucy Rigby - Economic Secretary (HM Treasury)
The Government receives representations from a range of stakeholders about matters across financial services and the economy. Disputes are a matter for the Financial Ombudsman Service rather than the Government.
I would refer my honourable friend to the answers I provided on the topic of SME lending on 24 November, 26 November and 27 November, including in relation to the rates for short-term lending to small and medium sized businesses in the UK.
As set out in my previous response, interest rates, including those offered by individual providers, are a commercial matter decided by the lender concerned, reflecting the base rate, the risk of the applicant, and a margin to make the loan commercially viable given the cost of underwriting and broader funding costs. The Government does not intervene in commercial offerings, and SMEs should shop around to find the product that best suits their needs when choosing finance, which in turn helps drive competition, improves choice, and may support pricing.
Asked by: Gareth Thomas (Labour (Co-op) - Harrow West)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, whether she has received representations on the cost of lending required by (a) Maxcap business loans, (b) Capify business loans and (c) Funding Circle’s Flexipay product.
Answered by Lucy Rigby - Economic Secretary (HM Treasury)
The Government receives representations from a range of stakeholders about matters across financial services and the economy. Disputes are a matter for the Financial Ombudsman Service rather than the Government.
I would refer my honourable friend to the answers I provided on the topic of SME lending on 24 November, 26 November and 27 November, including in relation to the rates for short-term lending to small and medium sized businesses in the UK.
As set out in my previous response, interest rates, including those offered by individual providers, are a commercial matter decided by the lender concerned, reflecting the base rate, the risk of the applicant, and a margin to make the loan commercially viable given the cost of underwriting and broader funding costs. The Government does not intervene in commercial offerings, and SMEs should shop around to find the product that best suits their needs when choosing finance, which in turn helps drive competition, improves choice, and may support pricing.
Asked by: Gareth Thomas (Labour (Co-op) - Harrow West)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what estimate she has made of the number of of small business finance applications rejected by (a) high street banks and (b) all banks in (i) total and (ii) just for non asset backed lending applications in the most recent year for which figures are available.
Answered by Lucy Rigby - Economic Secretary (HM Treasury)
The Government, and specifically the Treasury, is responsible for the legislative framework for financial services, and does not collect significant volumes of market data. External bodies including the British Business Bank, Bank of England, UK Finance, and other such parties, produce certain information on the SME lending market, some of which may offer insights of this nature.
However, HM Treasury publishes statistics on the use of the Government’s Bank Referral Scheme on an annual basis, which is a Scheme designed to help match loan applicants rejected for finance with potential alternatives. The latest release covers statistics up until Q3 2024 and can be found on the Government’s website. This data represents businesses that have been rejected by designated banks under the Scheme and can be used to understand some of the rejection rate trends in the market.
Asked by: Gareth Thomas (Labour (Co-op) - Harrow West)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, whether she will bring forward plans to make car insurance more affordable in general and particularly for those living in areas of deprivation.
Answered by Lucy Rigby - Economic Secretary (HM Treasury)
Insurers make commercial decisions about pricing and the terms of cover they offer based on their assessment on the likelihood of a claim being made and the cost of those claims. The government does not generally intervene in these pricing decisions by insurance companies.
However, the government is determined that insurers should treat customers fairly and firms are required to do under Financial Conduct Authority (FCA) rules. The FCA requires firms to ensure their products offer fair value, meaning the price paid by consumers should be reasonable compared to the overall benefits received.
The Government launched a cross-government Motor Insurance Taskforce in October 2024 to address the rising costs of motor insurance, identifying short and long-term actions aimed at stabilising or reducing premiums, while maintaining appropriate levels of cover. The government plans to publish the final report of the Taskforce shortly. As part of the taskforce’s work to understand how the cost of motor insurance impacts on particular groups of customers, the FCA is conducting statistical analysis to evaluate the impacts on different age groups and consumers living in areas with a higher proportion of minority ethnic residents. The FCA will publish its findings later this year.
Asked by: Gareth Thomas (Labour (Co-op) - Harrow West)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, if she will make an assessment of the potential impact of proposed changes to EU customs arrangements on UK businesses.
Answered by Dan Tomlinson - Exchequer Secretary (HM Treasury)
On 17 May 2023, the European Commission proposed a revision of the Union Customs Code. The proposal is still subject to EU internal procedures; therefore, we cannot comment on the final proposal. However, we are following these suggested reforms closely, and continue to engage with the EU and business, particularly on potential impacts for UK businesses
Asked by: Gareth Thomas (Labour (Co-op) - Harrow West)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, how many complaints the a) Financial Ombudsman Service, b) Financial Conduct Authority and c) Prudential Regulation Authority received about i) the cost of loans to SMEs, ii) debt recovery behaviour by those offering to lend to SMEs and iii) fees charged by lenders when lending to SMEs in each of the last three years for which data is available.
Answered by Lucy Rigby - Economic Secretary (HM Treasury)
I refer my honourable friend to the answers I provided on the topic of SME lending on 23 October.
Complaints are the remit of the Financial Ombudsman Service (FOS), which publishes regular data on complaint trends. In its latest quarterly report, it noted that complaints about unaffordable lending had halved, though this figure does not distinguish between household and business credit, and complaint patterns can fluctuate each quarter. Over the past five years, credit card complaints have consistently ranked among the top five issues, while business lending has generated relatively few FOS disputes compared to personal and household credit.
The Bank of England’s ‘Bankstats’ data tracks business and household credit, including average interest rates for SMEs. As of 31 August 2025, the average rate for new SME loans from UK banks is 6.35%, reflecting a decline in line with base rate reductions.