Asked by: Jonathan Reynolds (Labour (Co-op) - Stalybridge and Hyde)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what steps the Government is taking to encourage greater switching and transparency in the UK mortgage market.
Answered by John Glen - Paymaster General and Minister for the Cabinet Office
The FCA’s final report of the Mortgage Market Study found that there are high levels of consumer engagement, with over three quarters of consumers switching to a new mortgage deal within 6 months of moving onto a reversion rate.
The Government has worked closely with the FCA to consider how to remove the regulatory barriers that prevent some customers, particularly those with inactive lenders, from accessing better deals. The Government welcomes the FCA’s plans to move the affordability assessment from an absolute test to a relative one. This change removes the regulatory barrier that prevented some customers, who otherwise may have been able to switch, from accessing new mortgage products. The Government also welcomes the industry voluntary agreement covering 95% of the UK mortgage market to help ‘trapped’ customers of active lenders.
Transparency and fairness in the mortgage market is a priority for the Government. The Treasury welcomes and supports the work the FCA are doing to improve this as a result of their findings in the final report of the Mortgage Market Study. The Government will continue to monitor the market and support the FCA when necessary.
Asked by: Jonathan Reynolds (Labour (Co-op) - Stalybridge and Hyde)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what steps the Government is taking to (a) minimise the effect of IT outages on consumers’ ability to pay for goods and services and (b) ensure that digital payment systems are more reliable.
Answered by John Glen - Paymaster General and Minister for the Cabinet Office
We take the operational resilience of the finance sector and any detrimental impacts on consumers very seriously. HM Treasury works closely with the Bank of England, the Prudential Regulation Authority (PRA) and the Financial Conduct Authority (FCA) (collectively the ‘Financial Authorities’) to assess, test and improve the operational resilience of the sector and to respond to any major disruption, including to payment systems.
In July 2018, the PRA and the FCA published a joint Discussion Paper on an approach to improve the operational resilience of firms and financial market infrastructures, including to payment systems. The Authorities will use responses to this to inform supervisory activity and future policy-making to support firms’ and FMIs’ operational resilience[i].
The Financial Authorities also have a single mechanism, the Authorities’ Response Framework, to coordinate a response to incidents affecting the finance sector. The Financial Authorities regularly exercise incident response frameworks with the sector to assess their effectiveness and identify improvements. The Bank of England held a sector resilience exercise (SIMEX18) in November 2018 which tested the joint response by public authorities and industry to a simulated disruption.
Asked by: Jonathan Reynolds (Labour (Co-op) - Stalybridge and Hyde)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, when his Department plans to publish the findings from its call for evidence on cash and digital payments; and what steps he is taking to progress that work.
Answered by John Glen - Paymaster General and Minister for the Cabinet Office
Following a programme of currency modernisation we initiated a discussion on payment methods last year, through our Call for Evidence on Cash and Digital Payments in the New Economy. This was launched at Spring Statement 2018. This sought to gather evidence on how changing preferences for cash and digital payments impact on different sectors, regions and demographics. Furthermore, it demonstrated the Government’s intent to explore how cash can remain accessible.
The Government intends to publish a response to this Call for Evidence in due course.
Asked by: Jonathan Reynolds (Labour (Co-op) - Stalybridge and Hyde)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what steps his Department is taking to examine the (a) role of cash in the UK and (b) effect of reduced access to cash has on different groups and communities.
Answered by John Glen - Paymaster General and Minister for the Cabinet Office
Following a programme of currency modernisation we initiated a discussion on payment methods last year, through our Call for Evidence on Cash and Digital Payments in the New Economy. This was launched at Spring Statement 2018. This sought to gather evidence on how changing preferences for cash and digital payments impact on different sectors, regions and demographics. Furthermore, it demonstrated the Government’s intent to explore how cash can remain accessible.
The Government intends to publish a response to this Call for Evidence in due course.
Asked by: Jonathan Reynolds (Labour (Co-op) - Stalybridge and Hyde)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what his Department's policy is on entitlement to child tax credits once a dependent in full-time education turns 19 years old.
Answered by Elizabeth Truss
Entitlement to Child Tax Credit can be paid for a qualifying young person up until the age of 20. This is provided the qualifying young person is in full-time non-advanced education, and they enrolled on their course before they turned 19.
Asked by: Jonathan Reynolds (Labour (Co-op) - Stalybridge and Hyde)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, whether he plans to publish a formal response to the Access to Cash review, published on 6 March 2019; and if he will make a statement.
Answered by John Glen - Paymaster General and Minister for the Cabinet Office
The Government is committed to safeguarding access to cash. We have been engaging, and will continue to engage with, the regulators and industry to ensure people continue to have real choice over how they spend their money.
Last year we conducted a call for evidence on cash and digital payments in the new economy. This sought to gather evidence on how changing preferences for cash and digital payments impact on different sectors, regions and demographics. The Government welcomes the Access to Cash Review, which will help inform our ongoing work to ensure cash remains accessible.
The Government will formally respond to the call for evidence in due course.
Asked by: Jonathan Reynolds (Labour (Co-op) - Stalybridge and Hyde)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, for what reason access to the alternative remedies package has been limited only to applicants authorised by the Prudential Regulatory Authority to take deposits.
Answered by John Glen - Paymaster General and Minister for the Cabinet Office
The Alternative Remedies Package (ARP) is the package of Royal Bank of Scotland (RBS)-funded measures agreed in September 2017 between HM Government and the European Commission (EC) as a resolution to RBS’ final State aid commitment to divest the business formerly known as Williams & Glyn.
The ARP design and eligibility criteria were agreed with the EC following a period of extensive consultation with financial service providers and UK regulators. Banking Competition Remedies Ltd (BCR) is the independent body established to implement the ARP. Final decisions on award allocation will be made by BCR. The eligibility criteria can be found on BCR’s website (https://bcr-ltd.com/).
Non PRA-regulated firms may apply for Pool D of the Capability and Innovation Fund, which makes available £25 million of funding to facilitate the commercialisation of financial technology that is relevant to SMEs.
Asked by: Jonathan Reynolds (Labour (Co-op) - Stalybridge and Hyde)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what assessment he has made of the effect on access to alternative remedies package funds the employment of senior people historically connected to RBS GRG unit will have.
Answered by John Glen - Paymaster General and Minister for the Cabinet Office
The Alternative Remedies Package (ARP) is the package of Royal Bank of Scotland (RBS)-funded measures agreed in September 2017 between HM Government and the European Commission (EC) as a resolution to RBS’ final State aid commitment to divest the business formerly known as Williams & Glyn.
The ARP design and eligibility criteria were agreed with the EC following a period of extensive consultation with financial service providers and UK regulators. Banking Competition Remedies Ltd (BCR) is the independent body established to implement the ARP. Final decisions on award allocation will be made by BCR. The eligibility criteria can be found on BCR’s website (https://bcr-ltd.com/).
Non PRA-regulated firms may apply for Pool D of the Capability and Innovation Fund, which makes available £25 million of funding to facilitate the commercialisation of financial technology that is relevant to SMEs.
Asked by: Jonathan Reynolds (Labour (Co-op) - Stalybridge and Hyde)
Question to the HM Treasury:
To ask Mr Chancellor of the Exchequer, what representations he has received from (a) financial organisations (b) other organisations and (c) individuals on the introduction of the 2019 Loan Charge.
Answered by Mel Stride - Secretary of State for Work and Pensions
The charge on disguised remuneration (DR) loans was announced at Budget 2016 and has been introduced to tackle the use of DR tax avoidance schemes. These schemes are contrived arrangements that pay loans in place of ordinary remuneration to avoid income tax and National Insurance contributions. The charge will apply to outstanding DR loan balances on 5 April 2019 to ensure scheme users pay their fair share of tax.
The Government published a consultation document on this policy on 10 August 2016. The Government received 338 written responses to the consultation, of which 260 were from individuals and 78 from organisations including businesses, and professional bodies. A list of the organisations which responded can be found at Annex A of the ‘Tackling disguised remuneration: Technical note and summary of responses document’. This can be found here:
The charge on DR loans was introduced by Finance (no. 2) Act 2017, with supplementary provisions in Finance Act 2018. Representations were made by organisations and individuals as legislation passed through Parliament.
Asked by: Jonathan Reynolds (Labour (Co-op) - Stalybridge and Hyde)
Question to the HM Treasury:
To ask Mr Chancellor of the Exchequer, for what reason a 10 pence discount on the market closing price was offered to institutional investors purchasing RBS shares from UK Government Investments on 4 June 2018.
Answered by John Glen - Paymaster General and Minister for the Cabinet Office
The Government’s shareholding in the Royal Bank of Scotland (RBS) is managed at arm's length and on a commercial basis through UK Government Investments Ltd (UKGI), a company which is wholly owned by the Government, with the objective of creating and protecting value for the taxpayer.
On 5 June 2018 the Government concluded a second sale of its shareholding in RBS, restarting the phased return of the bank to full private ownership. The Government sold approximately 7.7% of the bank (925m shares) through an overnight accelerated bookbuild (ABB) process, raising just over £2.5bn for the taxpayer (at a price of 271p per share). This reduced the government shareholding to 62.4% (from 70.1% pre-sale).
UKGI advised that an ABB would be the most appropriate method for restarting the RBS sale programme. It is usual market practice for ABB sales to price at a small discount to the closing market price. This is necessary to enable the sale of a large number of shares in a single transaction, with recent discounts on large ABBs ranging between 2% and 6%. The Government takes account of this discount when considering the value for money of a transaction, given it is a usual feature in such large transactions.