Equitable Life

Jim Shannon Excerpts

Thursday 21st January 2021 Commons Chamber

[Jim Shannon (Strangford) (DUP) [V]]

May I congratulate the hon. Member for Harrow East (Bob Blackman) on setting the scene? With every one of these debates that I have attended, unfortunately there are fewer of my constituents who would receive the benefit. That is why today we again ask for the same thing.

In 2010, Equitable Life victims were promised fair and transparent compensation. To date, almost 1 million pension savers have received just 22% of the losses they suffered following the maladministration. That is hardly fair. Her Majesty’s Treasury has refused to disclose the full workings of its calculations of the payments that have been made, and that does not seem to meet the requirements that the Government set that all dealings must be open and transparent. I again call on the Minister and the Government, as he knows I often do, to make clear the method by which calculations are made, to ensure that victims do not continue to be left in the dark.

I have read of cases where policyholders were significantly undercompensated for their losses due to errors, yet I am given to understand that the Treasury made no attempt to contact those individuals. It is very frustrating. It is only upon appeal to the independent review panel that recalculations are made. What is of note to me is that every case has resulted in increased payments. Perhaps there is something there that the Minister could take on board. The process must be reassessed by the Treasury.

I have always found it difficult to reconcile the fact that, although losses were found to amount to £4.3 billion, only £1.5 billion was allocated for compensation for the victims. I have heard that the Government have allocated £620 million to those receiving annual payments, leaving only £708 million to share among 1 million other victims along with a contingency fund of £100 million. The working out of this has been explained to me: savers receive only an average of 22.4% of the money that they lost. Surely, Minister, we can and must do better. Those who have saved hard and consistently and prepared for their later life have been left disenfranchised. This is an issue for the Government and for the Minister directly to answer. Our constituents who contact us regularly have not forgotten about this. Their hard-earned savings have been lost.

The campaign has asked for numerous ways of helping victims, one of which is equality of treatment for those who took out with-profits annuity contracts before September 1992. They are the oldest and most vulnerable victims, and this could be easily met from the £140 million underspend of the £1.5 billion already allocated by Parliament.

Through you, Madam Deputy Speaker, I ask again that this matter is considered by the Minister and his team. Society is always marked by how it treats those who are less well off. Here is a supreme example of those who have saved hard, worked hard and risk losing out. I ask the Minister to please look at this again.

Financial Services Bill

Jim Shannon Excerpts

Report stage & 3rd reading & 3rd reading: House of Commons & Report stage: House of Commons
Wednesday 13th January 2021 Commons Chamber

[John Glen]

Our financial services sector is critical to our national effort to recover from the impacts of covid-19 and move towards a resilient, open and sustainable future for the UK economy. The Bill is the next step in a process to take back control of our financial services legislation, having left the European Union and come to the end of the transition period.

There are a large number of amendments to address, so I will speak at some length, but hopefully as succinctly as possible. Let me start with the 20 new clauses and amendments tabled in my name, which do four things. I will first address new clauses 27 and 28, new schedule 1 and amendments 16 to 20. I hope that the right hon. Member for Wolverhampton South East (Mr McFadden) will be pleased to see this set of new clauses and amendments, which have been tabled in response to an issue that he raised in Committee.

The Government remain committed to supporting the FinTech sector. The UK is widely considered to be a leading market—probably the leading market—for starting and growing a FinTech firm, and I am proud of that reputation. It has recently become clear that provisions in the Proceeds of Crime Act 2002 are creating challenges for some types of smaller firms known as e-money institutions and payment institutions. These institutions, which include industry leaders such as Revolut, Worldpay and TransferWise, have experienced significant growth over recent years. Currently, they need to submit a defence against money laundering request—which I shall refer to as a DAML from now on—to the National Crime Agency, to seek consent before proceeding with any transaction involving criminal property, however small.

[Jim Shannon (Strangford) (DUP)]

Will the Minister give way?

[John Glen]

I will not on this occasion, if the hon. Gentleman does not mind, because I need to make progress.

In the context that I just outlined, e-money and payment institutions are subject to greater bureaucracy than banks and building societies, which benefit from a £250 threshold amount, under which, in certain circumstances, they do not need to submit a DAML and can proceed with the transaction. E-money and payment institutions must submit a large number of DAML requests for low-value transactions, which are generally of extremely limited use to law enforcement. Processing these requests consumes law enforcement resource, as well as placing a disproportionate burden on these firms, so the amendment equalises the treatment between banks and payment and e-money institutions.

Alongside this change, new clause 28 amends the scope of account freezing and forfeiture powers in the Proceeds of Crime Act and the Anti-terrorism, Crime and Security Act 2001 to include accounts held at payment and e-money institutions. That will ensure that law enforcement are able quickly and effectively to freeze and forfeit the proceeds of crime and terrorist property when held in payment and e-money institution accounts. I hope that, given this, the Opposition will consider withdrawing new clause 6, which has a similar purpose. I am grateful to the right hon. Gentleman for his co-operation on this matter.

[Jim Shannon]

I want to ask this question because it is very important. We have had tremendous difficulties in Northern Ireland with paramilitaries and money laundering. I am just wondering, in the context of the legislation to which the Minister has just referred and money laundering in particular—we have this in my constituency of Strangford and across the whole of Northern Ireland—what discussions has he had with the police and those in the Northern Ireland Assembly to ensure that loyalist paramilitaries and republican paramilitaries, who are really criminals at the end of the day, are stopped from using that money? Will that be able to be stopped in Northern Ireland if this legislation goes through?

[John Glen]

I thank the hon. Gentleman for his point. It really does stray beyond the provisions of this particular amendment. He makes an important point, but it is not one that I can address at this point. I would be very happy to write to him to answer his question more appropriately.

I shall now turn to the remaining amendments in my name, which ensure that the powers that the Prudential Regulation Authority and the Financial Conduct Authority have over holding companies function as intended. Amendments 25, 26 and 27 enable the PRA and the FCA to make rules directly over holding companies to void employment contracts and require recovery of remuneration paid to individuals when rules prohibiting them from being paid in a certain way are breached. This is important because, as a result of the measures brought forward in this Bill, responsibility for ensuring compliance with a banking or investment group’s capital requirements is moving from its operating companies to its holding company. This amendment ensures that the regulator can enforce breaches of the rules at the level at which they are set.

Amendments 15, 28, 29, 30 and 31 are a set of relatively small amendments that ensure that the PRA has the full suite of enforcement tools at its disposal for the supervisory regime over holding companies. Amendment 24 is a technical drafting point. Amendments 22 and 23 are clarificatory amendments, which are necessary to ensure that the investment firm’s prudential regime applies to the correct set of firms and does not have extraterritorial effect. I know that this is an important point for my hon. Friend the Member for Hitchin and Harpenden (Bim Afolami). I thank him for his work on this and hope that he will welcome these amendments.

I shall now turn to the other amendments that have been tabled by Members of this House. First, there are a number of amendments that relate to criminality and money laundering. New clause 4 and new clause 30 would create a new criminal offence for FCA-regulated persons of facilitating and of failing to prevent economic crime. This is an important and complex topic, so I will seek to address it in detail.

The Government have taken significant action to improve corporate governance and culture in the financial services industry. We introduced the new senior managers and certification regime, which enables the FCA more easily to take action against the responsible senior manager where there has been a failure in a firm’s financial crime systems and controls. Separately, the Government have recently strengthened the anti-money laundering requirements on financial services firms.

In 2017, the Government issued a call for evidence on whether corporate liability law for economic crime needed to be reformed. Unfortunately, the findings were inconclusive and, as a result, the Government have tasked the Law Commission to conduct an expert review on this issue to report by the end of this year. That will ensure a more comprehensive understanding of any issues with current economic crime law, as well as the implications of any potential options if reform is considered necessary. Before any broader new “failure to prevent” defence for economic crime is introduced, there needs to be strong evidence to support it, as there was when similar bribery and tax evasion offences introduced in 2010 and 2017 respectively took place. A new offence will also need to be designed rigorously, with specific consideration given to how it sits alongside associated criminal and regulatory regimes and to the potential impacts on business.

The proposed new offences in this amendment would lead to a discrepancy in treatment between FCA-regulated businesses and other businesses under criminal law. The 2017 call for evidence did not provide any evidence to suggest financial services businesses should be specifically targeted with a new offence. Indeed, many of the examples provided related to businesses in other sectors.

--- Later in debate ---

[Jim Shannon]

Unfortunately I did not get the opportunity to speak on Report, but I want to put on record my thanks to the Minister for the prompt responses that he gives us on the matters that we bring to his attention. I believe that the Bill is a step in the right direction—it cements some of the issues that I would have liked to speak about earlier, which other Members have touched on—but there is still much to do. The Minister knows that, and we look forward to working with him.

The Minister talked about how imperative our financial services are and said that we can continue to be the core of financial services in Europe; I hope we can. As we leave the EU, I hope that the financial services industry can attain the highest standards and that we have protections for consumers individually and collectively. I am a person who uses a chequebook and has access to cash, because that is the way that the Northern Ireland man and woman did things over the years. I understand that the Bill puts in place protections for credit cards and so on, but sometimes credit cards do not work; sometimes the system breaks. Those of us of a different generation and a different way of doing things need reassurance that we can have access to cash if we need it and that chequebooks will be available.

The Bill provides protection for small and medium-sized businesses. I have expressed concern that the FCA rules do not protect small businesses in the way they should, and I hope the Bill can do that. Over the years, the hon. Member for Thirsk and Malton (Kevin Hollinrake) has been at the forefront of this issue. He and I have worked together, and with others, to make sure that small businesses are protected from any breach of FCA rules. I also understand his wanting to ensure that multinationals pay their fair share of tax to the UK, instead of hiving it off to tax havens. I hope that, through the Bill, in the future we will see more accountability in the process of ensuring that that takes place.

I am also very much for ensuring consumer protection by introducing ideas of fairness and legality, and I believe that the Minister is very keen to ensure that that happens. However, the individual consumer has no resources for court cases, whereas big business seems to have all the resources, so we probably need something in there for the small man and woman, who I always speak up for—we all do; I am not the only one.

I listened to the Minister earlier on money laundering, and particularly on his point about paramilitaries in Northern Ireland. He said he would come back and give me some details. I hope that, through the Bill, when we try to address money laundering, as the right hon. Member for Wolverhampton South East (Mr McFadden) referred to, we do not miss another opportunity to ensure that gangsters, thugs and paramilitaries are put out of business, as they should be.

Question put and agreed to.

Bill accordingly read the Third time and passed.

Small Business Support: Covid-19

Jim Shannon Excerpts

Wednesday 13th January 2021 Commons Chamber

[The Exchequer Secretary to the Treasury (Kemi Badenoch)]

I will just take my mask off—I am afraid that I am still not used to the mask compliance in the House.

I want to start by congratulating the hon. Member for Edinburgh West (Christine Jardine) on securing a debate on this important subject. Coronavirus has deeply affected the lives of millions of people throughout the country, including those whose livelihoods depend on the small and medium-sized businesses that are the backbone of our economy. I would like to assure the hon. Lady, who spoke passionately about what has been happening in our country, that this Government care deeply about the SME sector, and I know that this strength of feeling is shared by Members across the House.

The hon. Lady mentioned her pay for postage campaign, and I listened with interest. The Treasury is always very keen on new ideas on how to support businesses as we want to see them grow, thrive and compete. I understand that she has already been in conversation with the Under-Secretary of State for Business, Energy and Industrial Strategy, my hon. Friend the Member for Sutton and Cheam (Paul Scully), on this issue, and I will leave it to BEIS to respond to her proposals in detail. More broadly, the Government have put in place a broad package of support to help as many small and medium-sized enterprises as possible.

I will now turn to some of the main elements of that support, which, at every stage of this crisis, we have really pushed to every part of the economy, targeting a significant proportion of our £280 billion economic support package. Almost 10 million jobs have been furloughed under the coronavirus job retention scheme. This has given business owners the certainty that they can pay their workers’ wages. The self-employment income support scheme has so far provided grants to almost 3 million people, including small business owners, while more than 1.4 million small and medium-sized businesses have received over £68 billion of loans. In addition, we have provided tens of millions of pounds of cash grants to businesses as well as tax cuts and deferrals.

[Jim Shannon (Strangford) (DUP)]

I thank the Minister for giving way and the hon. Member for Edinburgh West (Christine Jardine) for her contribution. I think that this is the first full virtual Adjournment debate that I can recall being a participant in.

I spoke to the Minister beforehand on this matter, but first I would like to put on record my thanks to her and to the Government for all that they have done—we could not have survived this without all their help. May I just make a small plea for egg producers? They continue to sell, but have lost their market in hospitality, and need support. Others such as artisan food producers, whose product is of such a high standard, no longer have footfall and their small business is on the brink of collapse without substantial help to pay off their equipment that cannot be used. What help can we give those people?

Taxation (Post-transition Period) Bill

Jim Shannon Excerpts

3rd reading & 3rd reading: House of Commons
Tuesday 15th December 2020 Commons Chamber

Be that as it may, I have made the point, and sadly I cannot force the Chancellor of the Duchy of Lancaster to appear. It would, however, be extremely useful if he did, because then he would able to explain just exactly what he has agreed in the Joint Committee, of which we have only a smidgen of information. It would be a two-way advantage if he did it, and all I can say is that the position is as I have described it, and I am sorry about that. No doubt we will find out in due course.

[Jim Shannon (Strangford) (DUP)]

I just want to clarify one matter. Perhaps the hon. Gentleman can do that. When it comes to sovereignty and the free trade agreements that he and others have referred to, can he give me an educated guess on where Northern Ireland stands with sovereignty? Do we have the same freedom and the same rule of law across the United Kingdom of Great Britain and Northern Ireland, or will Northern Ireland be treated differently?

[Sir William Cash]

Provided the treaty itself, and therefore the Act of Parliament that follows from it, maintain the principles I set out in my question to the Secretary of State for Business, Energy and Industrial Strategy yesterday, there is no question as to whether we will be entitled to exercise our sovereignty and to displace European Court jurisdiction and the EU laws, for example—there are many others—on state aid. We will be entitled to do so, but it is a matter of constitutional law and also, as I have explained, international law.

I am afraid that there has been a great deal of assertion that we are so-called potentially in breach of international law, but international law recognises the fact that a country can exercise its sovereign rights to defend its economic interests from a national point of view. In fact, Helmut Schmidt did precisely that in, I think, 1998 over the question of the deutschmark and the dollar. There are many examples, and we have not got time to go into them all today.

I will turn to some of the precedents just to illustrate the fact that it is not such a novel idea somehow or other to use a “notwithstanding” clause or formula, and that applies to all parties, whether that is the Labour party, the coalition, where the Liberal Democrats joined in and voted with us on these matters, or the Conservative party. For example, the Income and Corporation Taxes Act 1988 provides that the parts that diverge from treaty obligations—the language of the section was completely unambiguous—were “notwithstanding anything contrary” to those arrangements set out in the Act. The section was enacted to retaliate against the introduction of unitary tax systems adopted by certain states in the US, most notably in California. I think my hon. Friend the Member for Thirsk and Malton (Kevin Hollinrake) may know about that.

What I am saying is that such provisions are not exactly unusual. Indeed, in the Finance Act 2013, which was under the coalition, the Liberal Democrats went along with allowing Parliament to effectively write a blank cheque to interfere with international treaties—approximately 130 of them, in fact. That provision is still in force. No one questioned the Chancellor’s right to introduce any such legislation or, indeed, the lawfulness of the work of Her Majesty’s Revenue and Customs, which still relies on it in combating questions relating to such arrangements.

Then there are other precedents. I shall stick to Finance Acts at this juncture as that is what we are dealing with in the context of this particular Bill, which is, of course, a finance Bill. Section 52 of the Finance (No. 2) Act 1945 overrode aspects of the Ireland-UK tax treaty of 1926. I hope I may be allowed a slight smile here, as I look across the Irish sea and consider the position with regard to the Irish Government in relation to the “notwithstanding” clauses, because we actually did this in 1926. The Act was used as an example in a case involving Collco in which the court said that if the statute is unambiguous, its provisions must be followed even if they are contrary to international law. It could not be clearer. The Finance Act 1955 again overrode the Ireland-UK tax treaty. In the Inland Revenue Commissioners v. Collco Dealings, Viscount Simonds said, “The company has no rights under any agreement. Its rights arise from the Act of Parliament, which confirmed the agreement and give it the force of law.”

Section 59 of the Finance Act 2008 excluded UK residents from benefiting from provisions in respect of profits from the trade etc. Then there is the coalition arrangement under the Taxation (International and Other Provisions) Act 2010 where, again, the position was made entirely clear in accordance with the precedents.

Indeed, it is not just the UK, or even a party in the UK, that has been doing this over a period of time in its economic and national interests. An example from 2020 is the European Central Bank’s bond-buying scheme. In May 2020, the German constitutional court sought to override EU law and the Court of Justice, suggesting that the ECB’s public sector purchase programme was unconstitutional. Then there are the bail-outs. Every one of the bail-outs from 2010 to 2015 could justifiably be described as in breach of article 125 of the Treaty on the Functioning of the European Union. I will not read out the details, but I shall give some examples: the first Greek bail-out in 2010; the Irish bail-out in 2010; the Portuguese bail-out, the second Greek bail-out; the Spanish bail-out; the Cypriot bail-out; and the third Greek bail-out in 2015. There are so many examples—whether in the UK, or in relation to other member states, or, indeed, in relation to the EU itself—that have demonstrated that, when it comes to the question of sovereignty and the ability to override treaties, this is done quite often as a matter of course. I am not saying that it is done generally. I am not saying that it happens every week or every day. What I am saying, however, is that it happens and that it happens for good reasons which are directly related to the arguments on sovereignty which I gave at the beginning, and it is not for the unelected House of Lords to tell us. That is why, in this Bill, they would not have been able to do so because of the issue of financial privilege.

I am bringing forward these amendments. I shall decide as we proceed whether I will press them to a vote. I will leave it at that for the moment, because I am more than fascinated to hear the usual Europhile utterings of the right hon. Member for Wolverhampton South East (Mr McFadden) who is about to speak.

Future Relationship with the EU

Jim Shannon Excerpts

Thursday 10th December 2020 Commons Chamber

[Penny Mordaunt]

Absolutely. As someone who has been very close to this whole process and sits on the Withdrawal Agreement Joint Committee, I can say that that is our prime effort. It is the focus of the Prime Minister, but he is, as my hon. Friend says, not prepared to compromise on those issues that would affect our ability to capitalise on our new-found freedoms. That is what, I think, the people of this country understand and expect.

[Jim Shannon (Strangford) (DUP)]

I, too, thank the Minister for her hard work and for her positive responses to the urgent question. Will she outline the steps that are being taken with regard to the beef, sheep and pork industries and the vegetable sector—particularly the potato sector—to secure tax-free, hassle-free and EU bureaucracy-free transport between Northern Ireland and the other nations of this great United Kingdom of Great Britain and Northern Ireland?

[Penny Mordaunt]

The hon. Gentleman will be aware of the very large amount of work that DEFRA and other parts of Government have undertaken to get the best possible outcome and smooth the path for businesses, whatever the destination of their products. I mentioned the announcement today of £400 million of new money from the Northern Ireland Office; that is obviously on top of the £650 million UK investment announced in August, to deliver the trader support service and our contribution to the PEACE PLUS programme.

UK-EU Future Relationship Negotiations and Transition Period

Jim Shannon Excerpts

Monday 7th December 2020 Commons Chamber

[Penny Mordaunt]

As I have said, we will work until there is no hope left of getting a deal. I, too, have the same great confidence that my hon. Friend has kindly expressed in Lord Frost and the great team that are supporting him. None the less, it is very clear that if we cannot resolve these final issues, in particular the three that I mentioned in my opening remarks, we will not be able to conclude that deal. We must ensure that our sovereignty is not up for grabs. We have been crystal clear from the get-go on that, and I think that that is what the people of the United Kingdom expect.

[Jim Shannon (Strangford) (DUP)]

I thank the Minister for her answers to the urgent question and also wish the negotiating team all the best for the next few hours, and perhaps the next few days. I have seen many concerning reports regarding the deals that have been done in reference to our seas. I ask for a clear and unequivocal assurance from the Minister on behalf of the fishing sector in Portavogie in my constituency that there will be no surrender of our seas or our rights to European fisheries and that we will bring the fishing industry back home, as was promised by our Government in the past.

[Penny Mordaunt]

I can give the hon. Member those assurances. Sometimes, people say that we should not be holding out on these issues, that this is a small contributor to the economy or that it has got some kind of talismanic status because of what went before many years ago, when we first went into the EC. It is not because of those things. This is an incredibly important part of the economy, but also of our communities and our identity as the United Kingdom, and we will not compromise on that. We are a sovereign nation, and these are our waters. We have plans for a resurgence of these industries, and he has my assurances that the Prime Minister will not compromise.

Covid-19: Access to and Acceptance of Cash

Jim Shannon Excerpts

Thursday 3rd December 2020 Westminster Hall

[Jim Shannon (Strangford) (DUP)]

I congratulate the hon. Member for Blackpool North and Cleveleys (Paul Maynard) on securing this debate. This is not the first time we have debated this subject in Westminster Hall; I understand that the hon. Member for North Ayrshire and Arran (Patricia Gibson) and probably numerous other Scottish MPs have had previously had a similar debate. We are back to rehearse the issues, in a nice way. It was a pleasure to hear the opening speech from the hon. Member for Blackpool North and Cleveleys.

I do not feel particularly old—some days I do, but other days I do not—but I am one of those old-school people when it comes to cash and cheques. People can still get cheque books, by the way; I get one almost every month. By and large, the people from whom I buy stuff have been more than happy to receive a cheque. Unfortunately, that has changed, and I will give a few examples to illustrate the issues to which the hon. Gentleman and other hon. Members have referred. I understand the rationale behind shops asking people to use contactless payment if possible at this time, but that is not and cannot be sustainable. A number of businesses in Belfast and Northern Ireland have refused to take cash during the coronavirus pandemic and have lost business for life.

I digress slightly, but flights from Northern Ireland to here are quite restricted. I have to go over first thing in the morning and come back last thing at night, because there are not many options. British Airways has put a flight on in the last week. It informed us this week that we could not get a boarding pass online, but we had to present ourselves at the airport where a person would hand it over face to face. That is totally contrary to the coronavirus rules, and it is hard to understand how some have changed their methodology while others have not. Incidentally, there is not the same problem with Aer Lingus and other airlines.

I will give an example of the problems with contactless payment. My parliamentary aide, who was determined to shop in the local high street for her Christmas gifts, went to the local Menarys department store in the main town of Newtownards to buy Christmas gifts for her children’s teachers. When she came to pay, an issue with the card machine meant that she could not. That seems to be a recurring problem, although I do not know why. She has told me that she will make every effort to go back and select the merchandise and pay for it, because she knows that coronavirus and the lockdown could be the death knell for the high street. Next week, there will be a debate about the high street, not in Westminster Hall, but in the main Chamber. It will probably be oversubscribed, because every hon. Member present will want to make a contribution if possible. The fact that my aide does not bother to carry money and has her card on her phone meant the loss of that sale, as it would for many people.

I requested a breakdown of access to cash in Strangford and received some interesting results. In total, the constituency lost 13 free-to-use ATMs from January 2018 to September 2020, according to the latest data at that time, despite the fact that the number of pay-to-use ATMs increased by four. There was also a reduction of two ATMs from the start of lockdown in March to May 2020. By the end of 2021, my constituency will have lost seven bank branches since 2015. That figure includes the proposed closure of a TSB branch that was announced earlier this year.

Access to cash is declining and our reliance on contactless is growing, but the technology and security are not keeping pace with that. A chat with local merchants will tell of the unreliability of card machines, or of being caught out when a customer unintentionally leaves before it is realised that their card has been declined. I have seen that happen in the Members’ Dining Room. Let me be clear that that is nobody’s fault; nobody is doing that intentionally, and they have put their card on the reader. Of course, in the Members’ Dining Room, people do not go too far away—they only go to wherever they are going to sit to have a cup of tea, or whatever they are having—and the staff come up and say, “Look, that didn’t go through. Will you go back and do it again?” That can happen, and it underlines some of the issues.

I have been contacted by the Association of Convenience Stores, which represents some 33,500 local shops and petrol forecourts across the whole of the United Kingdom of Great Britain and Northern Ireland, many of which trade as independents under brands such as Spar, Nisa and Costcutter. I support their calls to restore the independent setting of LINK interchange fees for ATMs and to require bank participation in LINK; to enable cashback without a purchase, but without any obligation for retailers to offer that service and with guaranteed fair remuneration; and to develop an access to cash guarantee to ensure that access is maintained where exceptional circumstances lead to a lack of coverage. The hon. Member for Luton North (Sarah Owen) referred to that as well. We do need some help from the Minister, who is here to respond to our requests.

As Which? put it,

“The pandemic has accelerated the decline in cash use and demand: ATM withdrawals fell significantly during the first national lockdown, and with an increasing number of shops encouraging non-cash payments, we anticipate this reduction in cash to persist long after restrictions have been lifted. This is putting immense pressure on the UK’s already fragile cash infrastructure, leaving it at a high risk of collapse.

However, while overall use has fallen, our research has found that cash remains a fundamental payment method for many, often vulnerable, people.”

The right hon. Member for Dumfriesshire, Clydesdale and Tweeddale (David Mundell) talked about that just before I rose to speak. We are here to speak for vulnerable people. Every one of us will mention them, we all know them and we know what the issues are for them. I am sure that the hon. Member for North Ayrshire and Arran, who will follow me, will underline that with real understanding and with lots of examples of where the system falls down for them.

In a survey in May, less than half of all consumers said that they were accessing or using cash in the same way as before the pandemic, while almost a third said that coronavirus would not affect their cash use in the next six months. Although the Government pledged to protect access to cash in March, just before coronavirus came online, legislation is needed urgently to prevent people from losing access to their only payment method. We have all said that, but I will say it again. I know that others, including the shadow Minister, will say the same thing.

I believe the Government must set out a clear timetable for introducing a Bill to Parliament, with detail on the scope and contents of the proposed legislation, highlighting how it will build on and complement current work being done to protect consumers’ ability to access cash. Can the Minister set that out?

My constituents have, by and large, supported the coronavirus rules and regulations, and they have understood the need not to use cash, but they also understand the predicament and the problems that come with having a cashless society. We need to make sure that the vulnerable are looked after. Quite clearly, at the moment, they are not.

--- Later in debate ---

[The Financial Secretary to the Treasury (Jesse Norman)]

It is a delight to see you in the Chair, Ms Ali. I am sure all colleagues will join me in taking my hat off to the genius of improvisation and quick thinking that allowed our colleagues, my hon. Friend the Member for Dumfriesshire, Clydesdale and Tweeddale (David Mundell) and the hon. Member for Makerfield (Yvonne Fovargue), to take the Chair—the vital element. Thank you, Ms Ali, for coming in at the end and allowing us all to take our positions in the Chamber.

This has been a very good debate—very thoughtful, very constructive, very well informed and on a very important topic—and I thank everyone who has made contributions to it. I am sure everyone present will join me in thanking in particular my hon. Friend the Member for Blackpool North and Cleveleys (Paul Maynard) for securing the debate, and also for his excellent and very thoughtful speech. He picked up on themes that he and many other hon. Members have been pressing over the previous years and months. His knowledge of and engagement in the issue of cash access and the use of cash are well known, and I thank him and everyone else for their contributions.

As colleagues will be aware, I am not the Economic Secretary to the Treasury. He, tragically, is unavoidably detained with the trivial matter of the Financial Services Bill—he sends his apologies and thanks. It has been mentioned by several colleagues in this debate that he has been very accessible to them in discussing these issues; his style is a very open and friendly one. We try to do that in the Treasury and he has been an exemplar. I am sure that colleagues will continue to engage with him. I am afraid that, compared to his grandmastery and immense skill, I am very much a novice chess player in this area.

It is clear that digital payments are, as colleagues have mentioned, playing more and more of a role in the lives of people across the country and in the activities of business. In many ways, this is to be profoundly welcomed; it allows for faster, cheaper payments and for easier management of household and business finances—those are the forces that in large part have powered the change hitherto.

The statistics are clear: in 2009, some 58% of payments were made using cash; just a decade later in 2019, it was 23%. That astonishing rate of change has now been accelerated by covid-19, as colleagues have said.

It is important to say that cash has not, by any means, had its day; it is still the second most popular form of payment in this country. According to figures published last year, a reported 2.1 million people mainly use cash for everyday payments, many of whom may be vulnerable, elderly or on low incomes. However, the pandemic has clearly had a marked impact on cash usage. We recognise that and, as I think colleagues have noticed, the Government have not been slow to press forward on the issue. That, of course, creates the impetus and energy that they have shown in bringing attention to these issues in the debate.

I reassure colleagues that the Treasury has been working very closely with regulators and industry to try to ensure that people have access to essential banking services, and to cash in particular. As colleagues will be aware, the Joint Authorities Cash Strategy group only launched in May 2019, but it is very much engaged in facilitating co-ordination and seeking to ensure comprehensive oversight of the UK’s cash infrastructure. If I may, I will talk a little more about the wider picture, then I will come to specific comments and questions that have been raised by colleagues in the debate.

The JACS group is chaired by the Treasury, and brings together the Payment Systems Regulator, the Financial Conduct Authority and the Bank of England. The group has continued to try to coordinate efforts throughout the pandemic and, as Members will be aware, it published an update on the actions of its members in July 2020. Also in the summer, the FCA and the PSR published a statement setting out their approach to addressing issues in relation to access to cash, including local-level areas that have lost access to cash. In September, the FCA introduced new guidance for banks, building societies and credit unions when they are considering closing branches or ATMs.

I think it fair to say that throughout the pandemic, the regulators on the one side and the industry on the other have taken steps to support customers who are reliant on cash. Those have included more proactive communications, cash deliveries to people’s homes, and issuing carer cards to trusted third parties. As a result, the vast majority of people have continued to have access to cash during the pandemic. That, of course, does not address those who may have been struggling, whose position has been highlighted by many of the individual stories told in the debate.

There is the question not merely of cash access, but of cash acceptance, as my hon. Friend the Member for Blackpool North and Cleveleys highlighted. The one is as essential as the other. Of course, to help to control the virus, businesses and individuals have been encouraged to follow the latest Government advice, which involves a range of measures to protect personal health, but also to minimise contact in transactions. However, it does remain the choice of an individual retailor whether to accept a particular form of payment, be that cash or card. What is interesting is how different groups, including the FCA, the PSR and the Bank of England, as I have mentioned, are joining forces to improve data collection and, therefore, gain a better understanding.

My hon. Friend the Member for Blackpool North and Cleveleys raised the question of mandation. The Government do not believe that mandating cash acceptance is the answer, but exploring means to incentivise the acceptance of cash is high on the agenda and was a key issue raised in the call for evidence. If protecting access to cash is a complex issue, requiring a long-term and collaborative effort, it is no less important that that work continues across industry regulators and the Government.

The ATM network has been mentioned by colleagues. LINK, which is the largest network of ATMs, has taken action to ensure that remote and deprived areas continue to have access to free-to-use machines. The Government are working to bring legislation to protect access to cash to ensure that the nation’s cash infrastructure is sustainable over the longer-term, as the hon. Lady for Houghton and Sunderland South (Bridget Phillipson) highlighted, and as was prefigured in the March 2020 Budget.

[Jim Shannon]

As I said in my contribution, the Association of Convenience Stores has put forward ideas for helping the ATM system. I realise this is not the Minister’s responsibility to be honest, but has the Department had the opportunity to talk to those people to see how we could work together?

[Jesse Norman]

I thank the hon. Member very much. I do not know whether the Department has had the opportunity to talk to the Association of Convenience Stores specifically, but I do know that the issue is very much on the agenda—it is certainly on the agenda of the Economic Secretary. It is important to realise, and to remind everyone, that the call for evidence on access to cash only closed last week. The timeliness of this debate rams home that point, and rightly so, but it is merely a week. It says more than I could for the high esteem in which colleagues across the House must hold the Government, if they think we can make a decision without having published a response and having only closed the call for evidence last week.

Nevertheless, the call for evidence is an important aspect. It set out the Government’s view that cash has the potential to continue to play an important role—and cashback within the cash infrastructure—and also asked for views on how that can be achieved. We will publish a summary of responses to the call for evidence and set out steps alongside that in due course. As colleagues will know, the call for evidence asked for views on key considerations associated with cash access, including deposit and withdrawal facilities, cash acceptance and regulatory oversight of the system.

The call for evidence also set out the Government’s views on the aims of legislation: that it should be proportionate, flexible, cost-effective, efficient and sustainable. The Government’s view, and we should be perfectly clear about this, is that legislation will need to ensure that business and people can have access to cash withdrawal and depositing facilities within a reasonable travel distance, as is needed in their day to day lives. I remind colleagues of that central point.

Support for SMEs: Covid-19

Jim Shannon Excerpts

Tuesday 10th November 2020 Westminster Hall

[Jim Shannon (Strangford) (DUP)]

May I say what a pleasure it is to follow the hon. Member for York Central (Rachael Maskell)? She is a friend and we have been involved in many debates similar to this one. I congratulate the hon. Member for Carshalton and Wallington (Elliot Colburn) on securing the debate, and I thank the Backbench Business Committee for selecting it.

As we have heard, SMEs are truly the backbone of our economy. During the initial lockdown, my office was inundated with more than 1,000 emails from SMEs that were at a loss as to how to deal with that dreadful scenario. It was an incredibly difficult times to be an elected representative: I had never felt so much pressure as I did at that time, with the number of people who came to see me and the real tragedies that they faced. The burden became quite onerous, but we were able to help those people, and I thank goodness for that. My promise to them then—as it is now—was that I would do all that I could to get them information and press for the help that they needed.

I could not attend Westminster Hall yesterday, when the hon. Member for Carshalton and Wallington led another debate—he is here almost as much as I am! I just want to let him know that I read Hansard—maybe it is just me—and I read what he says. The hon. Gentleman referred yesterday to the UK and that

“Northern Ireland operated socially distanced weddings since June”.—[Official Report, Westminster Hall, 9 November 2020; Vol. 683, c. 272WH.]

I have that marked in Hansard. However, I want to refer to one wedding venue in the short time I have, as one industry I feel needs to be focused on is that of a wedding.

Within a wedding are so many SMEs. The industry mirrors exactly what is happening across the whole of the United Kingdom of Great Britain and Northern Ireland. Venues for weddings, entertainment providers, the photographers, the make-up artists, the hairdressers, horse-drawn carriage providers, bridal boutiques and evening-entertainment providers, from florists to the small online businesses that make party favours—all have been precluded from working. Many are self-employed and none is looking optimistically at the future without massive changes and help.

As the Member for Strangford, I make this statement, which I know to be true although other Members may disagree. I represent Strangford, probably one of the most beautiful areas in the whole of the UK. I shall outline why shortly. I know that you, Sir Edward, might have a different opinion and others might as well, but that is just by the way. The wedding industry and the demand are strong in my constituency, and so too has been the adverse impact on the industry.

Just a mile or two from my home—I live on the edge of Strangford Lough on a farm—is one of the most beautiful venues you can imagine: the Orange Tree House. Since it opened, it has been a virtual hub for events, from weddings to birthdays to celebrations and business events. It is owned by Jan Hollinger and Simon Shaw—I name them because I am going to send them a copy of Hansard—and they have built that place up. I remember when it was just an old, abandoned building, and I have followed the whole process all the way. With just one look at this beautiful wee gem, we can see what the appeal is. Rain or shine, the views of the lough are incredible. However, one look today will show closed gates, closed doors and uncertainty.

As an SME, at one stage the owner had 37 staff on retention. When news of the new furlough scheme was released, she contacted me to say she was unable to pay the amounts that were the responsibility of the employer and was having to let 31 staff go—crippling news. I have watched this small business go from strength to strength, becoming not simply a viable but a thriving business. To put that into perspective, let me highlight the cancellations. I have the permission of the owner to say this, Sir Edward, because I asked her beforehand whether it would be okay. I want to give hon. Members the opportunity to hear what this means to one venue. There were 130 bookings 115 of them in the diary already by March: 75 of them were cancelled. The owner has kindly worked out the net loss to the local economy. The bed nights for the weddings, which are the main staple of local Airbnbs, have disappeared. The restaurants are not getting the usual visitors the days before and after the weddings. The suppliers of flowers and food and so on are getting no business. The effect of those cancellations from one business is £753,900 removed from the economy.

I know that every Member here could do the same thing for their businesses and the cost of the bed nights and food tabs. That is just one wedding venue and the owners need help. They need assurance they can take bookings, and the fact that there is so much uncertainty has led to people not feeling confident to rebook this year or in the year ahead. Venues and the local economy are losing income from that intricate web of service provision. I have wedding photographers whose business has been decimated, who cannot even do baby photos or other staples such as school photos. They need to get people in, but no one is allowed in at present. They need help and they need it now. Those who provide evening entertainment at weddings, whose job is their music and their art, are also finding that they have no hope for the future. To lose a sector of those artists is worrying for our future as a nation. We have asked the question many times, and we ask the Minister again to look at that.

Time has beaten me, but worse still, time is beating the wedding industry. We need to think out a better way of keeping people safe; this perpetual lockdown is not sustainable. I hope, as others have said, that when we look to the potential vaccine that the Health Minister referred to this morning on the news—I watched it in the hotel before I left this morning and it is good although it is early days—we can look at safety measures that allow people to celebrate a wedding and even safely allow people to gather after a funeral, which is another issue. I attended a personal funeral this last week and I understand what it means for the family not to be able to get together after a funeral, never mind a funeral service when we can only have 35 people there as well.

We have to offer support in the interim, but more than that, we have to futureproof the industry. Part of our task, as Members and Ministers, is to learn from what has happened and then look forward to the future, where we can make it better, and allow it to continue in any circumstance, in a safe and meaningful way. I am sorry if I have gone over my time, Sir Edward.

Financial Services Bill

Jim Shannon Excerpts

2nd reading & 2nd reading: House of Commons & Programme motion & Programme motion: House of Commons & Ways and Means resolution & Ways and Means resolution: House of Commons
Monday 9th November 2020 Commons Chamber

[Jim Shannon (Strangford) (DUP)]

You almost caught me unawares, Madam Deputy Speaker—I thought that the hon. Member for Grantham and Stamford (Gareth Davies) would be about.

I broadly support what is in the Bill, but I have a couple of requests, as others have had. I want to make three specific points on the LIBOR transition, debt respite and the inadequate FCA regulatory framework for SME lending. I say, first, that it is a pleasure to see the Minister in his place. He is always very responsive to us all on the questions we ask him, and he always keeps a smile on his face—it is always something you do extremely well, even though the questions that we may put to you are hard and perhaps not always put in the way that they should be.

LIBOR, the London interbank offered rate, is an interest rate benchmark used to indicate banks’ costs of funding their activities: for example, the cost of obtaining money for a loan they will make. It has been used and continues to be used as a reference in hundreds of trillions of pounds-worth of financial contracts, so this is a very important issue. The former FCA chief executive officer and now Bank of England Governor, Andrew Bailey, said that after 2021 the FCA will no longer persuade or compel banks to submit the underlying data that goes to calculating LIBOR, causing concern that it could cease to exist. Minister, it is a really big issue for us all, and certainly one that people have contacted me about. There have been many loans in the past and that are still in force where banks have used LIBOR.

I understand that the existing powers on benchmarks granted to the FCA, passed under EU law and to form part of UK law from 2021, are seen as insufficient to ensure a smooth transition away from the use of LIBOR, so again, Minister, perhaps you can give me an answer on that. I welcome, among other things, clauses 8 to 19, which appear to grant the FCA greater powers to compel the continued publication of the benchmarks, to prohibit the use of benchmarks and to oversee the orderly wind-down of benchmarks. I hope that the new FCA chief executive officer will now deploy these powers at the earliest opportunity. Again, Minister, perhaps we will be able to get some indication of a timescale for that, if possible, to assure us on where we are.

I welcome the fact that the Government have made a commitment to Gibraltar. Others have referred to it and others will—it is certainly one of the issues that I am concerned about. This gives peace of mind to that sector and we thank you for that.

Can I, Minister, perhaps underline another issue—

[Madam Deputy Speaker (Dame Eleanor Laing)]

Order. The hon. Gentleman cannot say, “Can I, Minister—”. How many millions of times have I said this to the hon. Member for Strangford (Jim Shannon)—only usually, I do not, because there is no time and there is a lot going on? Here I have my opportunity: he has heard my request to him a hundred times to please address the Chair. He cannot say, “Minister, will you do this?” And even worse, when he is addressing the Prime Minister, he must not say, “Prime Minister, will you do this?” He has to say, “Will the Prime Minister do this?” and “Will the Minister do this?”—in the third person, not the second person, please.

[Jim Shannon]

I stand corrected, Madam Deputy Speaker, and I will use my best endeavours to do that. Sometimes I get carried away in the emotion of the debate—it is a very emotional debate, of course—and I find that maybe I do not use the correct words.

Will the Minister look at the issue of money laundering in Northern Ireland? I make that comment because in all the countries across the globe, and particularly in this United Kingdom of Great Britain and Northern Ireland, money laundering is one of the issues that concerns me greatly. We have had many cases of money laundering over the last while, and we have many cases in Northern Ireland where paramilitary groups are involved in clear money laundering activities, which are against the law. With the Bill coming forward, will the Minister be able to give an assurance on money laundering, particularly in Northern Ireland? What discussions have taken place with the regional Assembly and the Minister in the Northern Ireland Assembly with responsibility for policing and justice, and what has been the feedback from that? I think that if we are going to do this well, we have to ensure that contact is made with the regional devolved Administration and that there are discussions outside that, particularly with the Republic of Ireland. Many illegal things are taking place in respect of transport across the border in all places, but we must tackle the ability of paramilitary groups to actively use the border with this purpose in mind.

Secondly, on the debt respite scheme, will the Minister confirm that clause 32 will amend the Financial Guidance and Claims Act 2018 to empower the Government to make regulations that compel creditors to accept amended repayment terms; provide for a charging mechanism through which creditors will contribute to the costs of running the scheme and repayment plans; and include debts owed to a Government Department at any level, including the devolved Administrations, in the statutory debt repayment plan? Again, I make a plea for the Northern Ireland Assembly: what will be the position in relation to any debts that are due? When do the Government expect to bring forward the relevant regulations? What discussions have taken place with the devolved Administrations on the statutory debt repayment plan?

The Treasury will be aware that the Business Banking Resolution Service has to be part of an effective solution under this process. The Democratic Unionist party remains concerned that we are not on track to do that. While the income from financial services is notable, so is the responsibility not only to shareholders but to the Government. We must ensure that that obligation is understood completely by enforcing the BBRS within legislation.

Thirdly and lastly, I refer to the bank lending regulatory framework. I finish with this because I believe it is the most important point. I know that the Minister is fully aware of it from discussions with the DUP and others who have contacted him. I have been in contact with him regularly about this issue since he first spoke about it at the Dispatch Box in January 2019. Of course, I have also been in touch with the Chancellor over the past month. The Minister must agree that it is crucial for SMEs to have the opportunity to export their products and services to the global economy, and the support to do so. I believe that our financial services industry, and banks in particular, must be regulated by the FCA in a much more legally effective way under this Government. Minister, it is very important that we have the bite, so to speak. It is all very well having words, but we need the strength of legislation to govern the banks’ small business lending post-Brexit.

The Government must get this right. I know that they can and I know that there is a will to do so. It is important that the future legal and regulatory framework allows our SMEs to have confidence in the 21st century global economy. I believe we have an opportunity to get it right this time, and it is time to do just that.

Madam Deputy Speaker, I hope that is to your satisfaction. Thank you very much.

Future of Financial Services

Jim Shannon Excerpts

Monday 9th November 2020 Commons Chamber

[Rishi Sunak]

What the financial services sector needs is a vision for the future that will ensure we remain the most competitive place to do financial services in the world, and the announcements that we have made today will ensure that that becomes a reality.

[Jim Shannon (Strangford) (DUP)]

Can I thank the Chancellor for his statement and for bringing very often to this Chamber some good news? He is absolutely right about the financial and professional services work outside London. In Belfast, there are some 24,000 jobs playing a very significant and key role. Therefore, all of the United Kingdom of Great Britain and Northern Ireland benefits. Bearing in mind the need for small and medium-sized enterprises to export their products and services to the global economy—and for that to happen and take place, financial services and banks must be regulated by the FCA in a more efficient way—could I ask the Chancellor to outline how this can be done and how it can be better achieved?

[Rishi Sunak]

I would point the hon. Gentleman to the phase 2 consultation that is currently outstanding of our future regulatory framework review. The key purpose of that review is to ensure that our regulatory regime, after we leave the transition period, is fit for purpose. It will take into account a wide range of inputs from stakeholders, and I would urge him and his small businesses to feed into it.