Oral Answers to Questions

John Glen Excerpts

Tuesday 22nd May 2018 Commons Chamber

[Justin Madders (Ellesmere Port and Neston) (Lab)]

5. How many people have paid a 25% withdrawal charge to use their lifetime ISA savings since that scheme was established.

[The Economic Secretary to the Treasury (John Glen)]

In the first financial year, 2017-18, there was no unauthorised withdrawal charge in place. The data for 2018-19 is obviously not yet known, but HMRC will publish it when it is available.

[Justin Madders]

Will the Minister look at the effect of the withdrawal charge more closely? A first-time buyer has told me that he has found a home that suits his needs, but because his lifetime ISA is less than a year old, he will not only lose his Government bonus but have to pay a £375 penalty charge back to the Government out of his own money. Why are aspiring homeowners being penalised in this way?

[John Glen]

I am of course happy to look at that case. Following my appearance at the Treasury Select Committee, I asked my officials to look at the guidance on the website, as I am anxious not to put misleading advice on there. The LISA is available for long-term savings. That was the scheme’s objective when it was set up.

[Nicky Morgan (Loughborough) (Con)]

I am pleased the Minister just mentioned his appearance before the Select Committee, where we explored the issue of the 25% charge and the fact that a further 6% of capital can also be lost. Will he update us? He has talked to officials about looking at the website. Will he ensure that the Treasury website is fully compliant with Financial Conduct Authority rules applicable to firms in the private sector?

[John Glen]

I am taking this up further, but I am concerned not to put a misleading flat-rate percentage on there, given that most savers who make an unauthorised withdrawal will pay a different amount according to their circumstances.

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

We have junior ISAs, cash ISAs, stocks and shares ISAs and lifetime ISAs. Will the Minister consider simplifying the entire ISA system to help young people in particular with long-term, cost-effective saving?

[John Glen]

The Government have developed a range of savings products and incentives, or encouraged providers to do so, to reflect the range of needs. We have also raised the ISA allowance to £20,000 and introduced the personal savings allowance, meaning that 95% of people do not pay any tax on their savings income. It is important that we have that range of options for all age groups.

[Andrew Bowie (West Aberdeenshire and Kincardine) (Con)]

6. What steps he is taking to increase productivity throughout the UK.

--- Later in debate ---

[David Hanson (Delyn) (Lab)]

14. What recent estimate the Government have made of the cost to the economy of money laundering and criminal finance in the UK.

[The Economic Secretary to the Treasury (John Glen)]

The social and economic costs of organised crime, of which money laundering is a key facilitator, total tens of billions of pounds a year. The Government are committed to tackling illicit finance in the UK and have implemented recent measures including the Criminal Finances Act 2017 and the updated money laundering regulations, both of which were brought into law in the past year.

[David Hanson]

The cross-party Foreign Affairs Committee said only yesterday that the Government should show stronger political leadership in tackling the importing of dirty money into the United Kingdom. Is it not time that the Government supported the Labour Front Bench’s proposals for an overseas register of interests?

[John Glen]

I acknowledge the report of the Select Committee. This Government stand by the rule of law. We do not do random confiscations but, alongside the work being undertaken, work is under way across Whitehall to examine what further steps are necessary. I am eager that we go as far as we can, and we must do so in ways that are consistent with our values.

[John McDonnell (Hayes and Harlington) (Lab)]

I associate myself with the Chancellor’s eloquent words on the Manchester tragedy. I also commend the emergency services that operated on that day.

“The Government cannot afford to turn a blind eye as kleptocrats and human rights abusers use the City of London to launder their ill-gotten funds”.

Not my words but the words of yesterday’s Foreign Affairs Committee report. For eight years this Government have turned a blind eye to the flow of dirty money through the City. Not only have they delayed until 2021 the introduction of a full public register of overseas companies that own UK property but they have refused to introduce the tougher scrutiny and regulation of City flotations that we have demanded, and they have failed to broaden the definition of “politically exposed persons” to include more individuals linked to crime or criminal regimes.

Will the Government do as the Foreign Affairs Committee has demanded and start taking money laundering and tax avoidance seriously by bringing forward the date for the register of overseas companies that own property in the UK?

[John Glen]

We will continue to take these matters very seriously. We will freeze Russian state assets where we have evidence that they will be used to threaten the life or property of UK nationals and residents. As the Prime Minister made very clear in her statement to the House, the National Crime Agency will bring all UK capabilities to bear against serious criminals and corrupt elites. As somebody who has experienced that directly in my constituency in recent months, I stand by the Prime Minister’s statement. There is no place for these people and their money in our country.

[John McDonnell]

That is just not good enough. We were promised a register in 2015, and we are still having to wait another three years. The Government are letting the crooks, the tax avoiders and the money launderers off the hook again. They have failed to introduce and enforce stricter due diligence for companies as registered companies, they have failed to take on the service providers that set up these laundering scheme, and they have refused to legislate to create a new offence of failing to prevent money laundering. Those are all amendments that the Opposition tabled to the recent Sanctions and Anti-Money Laundering Bill. The people of this country are entitled to ask why this Government are soft on tax evaders and money launderers.

There is another issue that has to be addressed today, as highlighted by the allegations against Lycamobile. Will the Government bring forward legislation requiring any political party found to have accepted donations from money launderers and tax evaders to forfeit or return that money?

[John Glen]

Obviously, it is impossible for a Minister to comment on live cases, but we will continue to use powers to disrupt and pursue money launderers and terrorists. We will use the anti-corruption strategy, and my right hon. Friend the Minister for Security and Economic Crime is committed to using the National Economic Crime Centre to pursue those who need pursuing, but we will do so within the rule of law, consistent with the values of this country.

[Laura Smith (Crewe and Nantwich) (Lab)]

16. What steps he has taken to give Her Majesty’s Revenue and Customs the appropriate powers and resources to tackle tax evasion.

--- Later in debate ---

[Andrew Bridgen (North West Leicestershire) (Con)]

T3. I have a constituent who, despite having ample equity in her home and never having been in arrears with her payments, is unable to extend her mortgage beyond the age of 75 because of Government rules. That means that she will have to sell the house that she loves. Will my hon. Friend look urgently at whether those rules are absolutely necessary?

[The Economic Secretary to the Treasury (John Glen)]

Lenders are not restricted from extending mortgages beyond the age of 75, as long as the consumer can demonstrate affordability. Several lenders are currently looking into this issue. There is considerable merit in interest-only retirement mortgages.

[John Cryer (Leyton and Wanstead) (Lab)]

What action are the Government taking to tackle payroll and umbrella companies, some of which—not all—are used to perpetuate bogus self-employment and undermine terms and conditions?

--- Later in debate ---

[Jamie Stone (Caithness, Sutherland and Easter Ross) (LD)]

T6. The Royal Bank of Scotland branch in Wick in my constituency has now closed, and a sad sight that is. Last week, we heard that the Homebase branch is also to close. The Chancellor may say that we have to accept change and live with it, but these are hammer blows for a community such as Wick, and I begin to wonder when we will see tumbleweed blowing down the street. Does the Chancellor agree that we should carry out some kind of assessment of the impact of such closures on the local economies of places like Wick and Caithness, before it is too late?

[John Glen]

It is a matter for banks to make commercial decisions on the basis of their assessments, and there are rules on how they inform the affected constituents. I am, though, very concerned about the situation in rural and sparsely populated areas. I shall visit Scotland over the summer recess to address some of the issues that the hon. Gentleman has raised.

[Trudy Harrison (Copeland) (Con)]

T5. I welcomed the Treasury’s recently closed consultation on single-use plastics. Will my hon. Friend update the House on what his Department intends to do next to tackle this problem?

[Wes Streeting (Ilford North) (Lab)]

I am sure that Ministers will be just as concerned as the rest of us about the startling revelations about the conduct of Lloyds and HBOS outlined in the Project Turnbull report. Will the Treasury now demand that, after three years, the Financial Conduct Authority pulls its finger out to expedite its investigation into this matter? Has the Treasury received any requests from police authorities to fund appropriate investigations into criminal activities? If so, will it look favourably on them?

[John Glen]

The hon. Gentleman rightly points out that the events at HBOS in Reading constituted criminal activity. As such, it was right that those responsible were brought to justice. He referred to a report by an internal employee; that matter should be taken seriously by the FCA and is being taken seriously by Lloyds, and it will be followed up on in due course.

[Several hon. Members rose—]

--- Later in debate ---

[John Glen]

The hon. Lady makes a very sound point. The FCA is looking into four aspects of that. It is reporting next week, and I look forward to hearing what it has to say.

[Sir Patrick McLoughlin (Derbyshire Dales) (Con)]

In the autumn statement, the Chancellor announced the extension of the railcard from age 26 to 30. When will my constituents be able to take advantage of that?

--- Later in debate ---

[Bambos Charalambous (Enfield, Southgate) (Lab)]

A Home Affairs Committee report published in summer 2016 found that the suspicious activity reporting system intended for use by the banks to crack down on money laundering was not fit for purpose. The Committee demanded immediate reform, but the Government stated that they would implement the reforms only by 2018. In the light of the Foreign Affairs Committee report on Russia, criminal financing and the UK, will the Minister immediately bring forward plans to reform and improve the system, as was recommended two whole years ago?

[John Glen]

I refer the hon. Gentleman to the response I gave earlier. The Government are taking forward a range of options, but I will examine the issue he raises and write to him.

[Eddie Hughes (Walsall North) (Con)]

The people of Bloxwich will soon be hearing more about blockchain. Will the Chancellor confirm that the Government will continue to invest in this innovative technology to keep the public’s data safe?

--- Later in debate ---

[Yvonne Fovargue (Makerfield) (Lab)]

The Government have decided not to proceed with the legislation that they committed to bring forward to protect consumers from the rip-off practice of logbook loans, despite the Bill being prepared and ready to go through the accelerated procedure. Will the Minister explain why he is prepared to allow innocent buyers to continue to be exploited through this outdated, misused legislation?

[John Glen]

The FCA is looking at a range of options, but I would be happy to meet the hon. Lady to discuss her concerns on this matter as soon as possible.