Oral Answers to Questions

John Glen Excerpts

Tuesday 9th April 2019 Commons Chamber

[Drew Hendry (Inverness, Nairn, Badenoch and Strathspey) (SNP)]

7. What recent assessment he has made of the effect of his fiscal policy on living standards.

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

Distributional analysis published by the Treasury at Budget 2018 shows that decisions taken by the Government on tax, welfare and spending on public services have benefited households across the income distribution, with the poorest households gaining the most as a percentage of net income.

[Drew Hendry]

The £1.7 billion announced yesterday for universal credit does not even touch the sides of the £12 billion of welfare cuts since 2015, nor does it contain provision to repay the debts that universal credit has caused for local authorities, such as the £2.5 million cost that has been borne by every highland household six years into the roll-out. Should Highland Council send the invoice for that debt for council tax payers directly to the Minister?

[John Glen]

No, it should reflect on the range of measures the Government took at Budget 2018, including the new energy price cap, the doubling of free childcare and the steps we have taken to reduce the burden on households by reducing fuel duty.

[Mrs Emma Lewell-Buck (South Shields) (Lab)]

8. What recent assessment his Department has made of trends in the level of pay since 2010.

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[Gill Furniss (Sheffield, Brightside and Hillsborough) (Lab)]

11. What further steps his Department is taking to regulate lending to small businesses.

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

Loans of less than £25,000 to the smallest businesses are already regulated under the Financial Services and Markets Act 2000. The Government are committed to regulating only where there is a clear case for doing so, to avoid putting additional costs on lenders and businesses, and the Government welcome the recent expansion of the Financial Ombudsman Service and the establishment of a voluntary dispute resolution service.

[Gill Furniss]

A succession of small business lending scandals has come to light in recent months, including from Clydesdale, the Global Restructuring Group and HBOS. This has highlighted that small businesses are still struggling to get fair access to finance. Last week, Labour set out our proposals to fix this, including plans to set up a post bank that would offer relationship banking for small businesses to improve their access to finance. Will the Minister support Labour’s proposition for a publically owned postal bank that will provide trustworthy finance for small businesses?

[John Glen]

I am sorry, but I cannot give the hon. Lady that undertaking. I really passionately believe that we need to resist additional Financial Conduct Authority fees, product reviews, increased compliance and monitoring costs for businesses, stifled product innovation and narrower product choice for small and medium-sized enterprises, which would be the consequences if we followed Labour’s advice on this policy area.

[Several hon. Members rose—]

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[Robert Courts]

22. Mr Speaker, thank you very much. The scourge of late payments is a major problem for small businesses, as I know from my many small businesses in Witney, as a member of the Federation of Small Businesses and as the chairman of the all-party group on small and micro business. Is it not about time that we started celebrating those companies that support the small business supply chain by paying on time?

[John Glen]

My hon. Friend makes a very fair point. That is why the Chancellor announced at the spring statement that we will require company audit committees to review payment practices and report on them in their annual accounts. This is part of a range of measures that the Government will be setting out shortly when we make a full response after the call for evidence.

[Jim McMahon (Oldham West and Royton) (Lab/Co-op)]

The Government know full well that some deep-rooted corruption is taking place within major banking institutions when it comes to commercial lending. At the moment, there is nowhere near the type of protection needed to help cover our small businesses in such an eventuality. Will the Government take action now—eventually—to give small businesses that support?

[John Glen]

We have taken direct action so that small businesses can get a direct and quick response by expanding the authority of the Financial Ombudsman Service and having a retrospective review through the dispute resolution mechanism. What businesses up and down the country want is quick action to deal with disputes that are unresolved.

[Kevin Hollinrake (Thirsk and Malton) (Con)]

High street banks are regulated, but the loans they provide to SMEs are not. There is not even a requirement to treat such a customer fairly and reasonably. In the absence of regulation, should there be a clearer warning about the lack of protection if things go wrong?

[John Glen]

As my hon. Friend knows through his excellent work with the dispute resolution service, there are some avenues for businesses to go down. Many—virtually all—lenders have now signed up to the standards of lending practice, and that, alongside the expansion of the Financial Ombudsman Service’s jurisdiction, gives businesses the assurance they need.

[Sir Desmond Swayne (New Forest West) (Con)]

12. What steps he is taking to improve the performance of the financial services sector.

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

Automatic enrolment has reversed the decade-long decline in workplace pension saving. Department for Work and Pensions statistics show that since 2012 over 10 million people have been automatically enrolled into a pension. Minimum contributions increased this month to 8%, and everyone who is contributing at the minimum rate should see an increase in their overall remuneration package.

[Bim Afolami]

I thank the Minister for that response. One of my constituents in Hitchin is a stay-at-home mother, and the maximum she can contribute to her pension is £3,000 per year, whereas if she were working, she could contribute up to £40,000 per year. I am sure the Minister will agree that we want to encourage people to save for their future. How can we increase the threshold so that stay-at-home parents can increase the amount they put into their pensions?

[John Glen]

The Government do offer generous tax relief on contributions to, and investment growth within, pensions. We also enable tax-free access to a proportion of savings. It is right that the Government control the cost of tax reliefs, and the £3,600 limit is one method of doing that. I can assure my hon. Friend that all aspects of pension policy and the tax system are kept under review in the context of the wider public finances.

[Ruth Smeeth (Stoke-on-Trent North) (Lab)]

On Thursday last week, one of my oldest manufacturing companies, Dudson, went into administration. The average length of service is over 20 years, and we now have huge concerns about the pension scheme, as we do about everything else to do with the administration—there is no money left even for redundancy. Will the Minister arrange for me to meet the appropriate Ministers to ensure that we get Government support where we most desperately need it?

[John Glen]

I am delighted to give the hon. Lady that assurance. A ministerial meeting will be convened as quickly as possible.

[Adam Afriyie (Windsor) (Con)]

15. What assessment he has made of the potential economic effect of the introduction of FinTech in the UK.

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

FinTech revolutionises financial services, promoting innovation, stimulating competition and incentivising firms to deliver better outcomes for customers. FinTech firms directly contribute £6.6 billion annually to the UK economy, employing over 60,000 people across 1,600 companies.

[Adam Afriyie]

I thank the Minister for that answer, and I thank the Government for keeping us in the No. 1 slot for FinTech. I very much welcome the call for evidence on digital payments, but there is a danger that if the wrong type of payments are taken, particularly around the interchange fees, we could undermine the sector. I therefore urge the Minister to remain open-minded to charging a maximum fee per transaction, as opposed to a proportionate fee.

[John Glen]

I am grateful to my hon. Friend for that question and for his work as chair of the all-party parliamentary group on financial technology over the last four years. The regulator is the UK’s leading authority for interchange fee regulation, as he knows, and it is conducting a review into the fees that businesses face when accepting card payments. I acknowledge his concern, and we are open to hearing views on this issue, and on digital payments more broadly, as part of our call for evidence.

[Gareth Thomas (Harrow West) (Lab/Co-op)]

Can the Minister think of one independent trade expert who thinks FinTech in the UK will do better once Britain has left the European Union?

[John Glen]

As the hon. Gentleman knows, it is the Government’s policy to have an orderly exit from the EU. However, we know that FinTech has proved to be very resilient in all circumstances. We had record investment of £15 billion last year. That is testimony to the creative power of that industry, working in the financial services sector in the City.

[Robert Neill (Bromley and Chislehurst) (Con)]

17. What recent discussions he has had with Cabinet colleagues on funding for remedial fire safety work on privately owned residential tower blocks.

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[Charlie Elphicke (Dover) (Con)]

Does the Chancellor agree that, in view of the failure of London Capital & Finance, of Premier FX, of individual police forces around the country to investigate economic crime, and of the Serious Fraud Office in yet another case, it is time we had a single economic crime police force in this country to deal with things properly?

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

We have a single economic crime board, which was set up in January and chaired by the Chancellor and the Home Secretary, to look at how better collaboration can tackle those challenges more effectively.

[Ian Austin (Dudley North) (Ind)]

T5. We all know that savings had to be made, but funding for schools, road repairs, social services, nurseries and youth clubs in Dudley has almost been halved because Dudley Council has been hit harder than councils elsewhere in the country. Will Ministers meet me and people from Dudley to discuss our case for fairer funding?