Asked by: Karen Bradley (Conservative - Staffordshire Moorlands)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer what assessment he has made of the impact that proposals to remove the SME support factor in the PRA Consultation CP 16/22 on the Implementation of the Basel 3.1 standards para 4.131 p 144 - para 4.127 p146 on UK competitiveness.
Answered by Andrew Griffith - Minister of State (Department for Science, Innovation and Technology)
The PRA is currently consulting on its proposals for Basel 3.1. This includes its proposals for deleting retained EU law including those which relate to the prudential rules on secured and unsecured SME lending. The detailed implementation of the Basel package however, has been delegated to the Prudential Regulation Authority (PRA) as the UK’s expert regulator. The PRA is also consulting and has requested information from firms on specific measures including those relating to lending to SMEs.
The Government continues to work closely with the PRA and businesses to understand the impact of its proposed changes, including for the international competitiveness of the UK and the impact on SME lending. This includes monitoring the EU’s proposals, which also have not yet been finalised.
Asked by: Karen Bradley (Conservative - Staffordshire Moorlands)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, whether he has had discussions with the Prudential Regulation Authority on the potential impact of the proposals in its Consultation Paper 16/22 on the Implementation of the Basel 3.1 standards page 96 paragraph 3.17 on the capital requirements of challenger banks that lend to small and medium-sized enterprises against commercial premises.
Answered by Andrew Griffith - Minister of State (Department for Science, Innovation and Technology)
The PRA is currently consulting on its proposals for Basel 3.1. This includes its proposals for deleting retained EU law including those which relate to the prudential rules on secured and unsecured SME lending. The detailed implementation of the Basel package however, has been delegated to the Prudential Regulation Authority (PRA) as the UK’s expert regulator. The PRA is also consulting and has requested information from firms on specific measures including those relating to lending to SMEs.
The Government continues to work closely with the PRA and businesses to understand the impact of its proposed changes, including for the international competitiveness of the UK and the impact on SME lending. This includes monitoring the EU’s proposals, which also have not yet been finalised.
Asked by: Karen Bradley (Conservative - Staffordshire Moorlands)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, whether he has had discussions with the Prudential Regulation Authority on the potential impact of the proposals in its Consultation Paper 16/22 on the Implementation of the Basel 3.1 standards, page 96 paragraph 3.17, on the cost to small and medium-sized enterprises of raising funding against commercial premises.
Answered by Andrew Griffith - Minister of State (Department for Science, Innovation and Technology)
The PRA is currently consulting on its proposals for Basel 3.1. This includes its proposals for deleting retained EU law including those which relate to the prudential rules on secured and unsecured SME lending. The detailed implementation of the Basel package however, has been delegated to the Prudential Regulation Authority (PRA) as the UK’s expert regulator. The PRA is also consulting and has requested information from firms on specific measures including those relating to lending to SMEs.
The Government continues to work closely with the PRA and businesses to understand the impact of its proposed changes, including for the international competitiveness of the UK and the impact on SME lending. This includes monitoring the EU’s proposals, which also have not yet been finalised.
Asked by: Karen Bradley (Conservative - Staffordshire Moorlands)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what assessment his Department has made of the potential merits of extending the temporary reduction of VAT for businesses in the hospitality sector beyond 31 of March 2022.
Answered by Lucy Frazer - Secretary of State for Culture, Media and Sport
The temporary reduced rate of VAT was introduced on 15 July 2020 to support the cash flow and viability of around 150,000 businesses and to protect over 2.4 million jobs in the hospitality and tourism sectors. As announced at Spring Budget 2021, the Government extended the 5 per cent temporary reduced rate of VAT for the tourism and hospitality sectors until the end of September 2021. On 1 October 2021, a new reduced rate of 12.5 per cent was introduced for these goods and services to help ease affected businesses back to the standard rate. This new rate will end on 31 March 2022.
This relief has cost over £8 billion and, whilst all taxes are kept under review, there are no plans to extend the 12.5 per cent reduced rate of VAT. The Government has been clear that this relief is a temporary measure designed to support the sectors that have been severely affected by COVID-19. It is appropriate that as restrictions are lifted and demand for goods and services in these sectors increases, the temporary tax reliefs are first reduced, and then removed, in order to rebuild and strengthen the public finances.
Asked by: Karen Bradley (Conservative - Staffordshire Moorlands)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what assessment he has made of the potential merits of extending the VAT reduction for hospitality and tourism to alcohol to help support pubs during the covid-19 outbreak.
Answered by Jesse Norman
The temporary reduced rate of VAT was introduced on 15 July to support the cash flow and viability of over 150,000 businesses and protect 2.4 million jobs in the hospitality and tourism sectors, and will run until 31 March 2021.
While the Government keeps all taxes under review, this relief comes at a significant cost to the Exchequer, and there are currently no plans to extend the scope of the reduced rate. Pubs that sell food will be able to apply the reduced rate to meals and non-alcoholic beverages consumed on the premises. They are also able to sell hot food and non-alcoholic drinks for take away at the reduced rate.
Alcohol duty was frozen at Budget 2020 in order to help pubs and the alcoholic drinks sector.
Asked by: Karen Bradley (Conservative - Staffordshire Moorlands)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what assessment his Department has made of the effect of the covid-19 pandemic on UK building societies; and if he will make a statement.
Answered by John Glen - Paymaster General and Minister for the Cabinet Office
The Government recognises the vital role of credit unions in the financial wellbeing of their communities, providing an ethical home for their members’ savings, and affordable loans to those who may otherwise have to resort to high-cost lenders. The Government also recognises the important role played by building societies in supporting their local communities, particularly during the COVID-19 pandemic. In April 2020, I wrote to building society and credit union trade bodies to thank frontline staff for their efforts to continue to provide essential services to their members.
HM Treasury has regularly engaged with regulators and representatives from the building society and credit union sectors to understand the impact of the COVID-19 pandemic. I have engaged with representatives from both sectors through the Consumer Finance Forum and Financial Inclusion Policy Forum, which are bringing financial services and consumer group representatives together to discuss how to best support people through this period. I also attended a roundtable of building society chief executives hosted by the Building Societies Association in July 2020, to discuss experiences of COVID-19 and future priorities. HM Treasury officials have also been engaging with the Building Society Association on a regular basis to understand the impact of the COVID-19 pandemic and discuss the application of relevant measures to the sector.
Fair4All Finance, the independent body set up by Government to distribute dormant assets funding to support financial inclusion, has also set up a £5 million resilience fund to support credit unions and community development finance institutions in England.
Asked by: Karen Bradley (Conservative - Staffordshire Moorlands)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what assessment his Department has made of the effect of the covid-19 pandemic on the UK Credit Union sector; and if he will make a statement.
Answered by John Glen - Paymaster General and Minister for the Cabinet Office
The Government recognises the vital role of credit unions in the financial wellbeing of their communities, providing an ethical home for their members’ savings, and affordable loans to those who may otherwise have to resort to high-cost lenders. The Government also recognises the important role played by building societies in supporting their local communities, particularly during the COVID-19 pandemic. In April 2020, I wrote to building society and credit union trade bodies to thank frontline staff for their efforts to continue to provide essential services to their members.
HM Treasury has regularly engaged with regulators and representatives from the building society and credit union sectors to understand the impact of the COVID-19 pandemic. I have engaged with representatives from both sectors through the Consumer Finance Forum and Financial Inclusion Policy Forum, which are bringing financial services and consumer group representatives together to discuss how to best support people through this period. I also attended a roundtable of building society chief executives hosted by the Building Societies Association in July 2020, to discuss experiences of COVID-19 and future priorities. HM Treasury officials have also been engaging with the Building Society Association on a regular basis to understand the impact of the COVID-19 pandemic and discuss the application of relevant measures to the sector.
Fair4All Finance, the independent body set up by Government to distribute dormant assets funding to support financial inclusion, has also set up a £5 million resilience fund to support credit unions and community development finance institutions in England.
Asked by: Karen Bradley (Conservative - Staffordshire Moorlands)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what steps his Department has taken to ensure that a repeat of the Wirecard collapse could not occur in the UK.
Answered by John Glen - Paymaster General and Minister for the Cabinet Office
The German merchant acquirer Wirecard AG entered administration in June. It has a UK subsidiary, Wirecard UK, which is authorised and regulated by the Financial Conduct Authority (FCA). The FCA ensures that payments firms make suitable safeguarding arrangements in compliance with the regulatory requirements as a condition of firms receiving FCA authorisation, protecting client money.
Shortly after the entry into administration of Wirecard AG, the FCA temporarily blocked the distribution of funds from the UK subsidiary, Wirecard UK, to ensure client monies were properly safeguarded. Wirecard UK is being wound down but the business will continue to trade while alternative arrangements are being made with its card providers.
Payments in the UK have seen rapid change over recent years, including the growth of firms like Wirecard UK. These changes offer exciting opportunities for UK businesses and consumers, with many making payments faster and cheaper. However, and as will always be the case with a rapidly changing technological landscape, they also present new challenges and risks.
Given the pace of change, a HM Treasury led review of the payments landscape was announced in June 2019. A Call for Evidence is the first stage in this review, open until 20 October.
The Government recognises the crucial role of challenger banks in providing customers with more choice and is committed to maintaining competition in financial services. We recognise the COVID-19 crisis has been difficult for many firms, including challenger banks, and we continue to engage regularly with the sector to understand how firms are being impacted.
Asked by: Karen Bradley (Conservative - Staffordshire Moorlands)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what assessment his Department has made of the effectiveness of the regulatory response to the collapse of Wirecard; and if he will make a statement.
Answered by John Glen - Paymaster General and Minister for the Cabinet Office
The German merchant acquirer Wirecard AG entered administration in June. It has a UK subsidiary, Wirecard UK, which is authorised and regulated by the Financial Conduct Authority (FCA). The FCA ensures that payments firms make suitable safeguarding arrangements in compliance with the regulatory requirements as a condition of firms receiving FCA authorisation, protecting client money.
Shortly after the entry into administration of Wirecard AG, the FCA temporarily blocked the distribution of funds from the UK subsidiary, Wirecard UK, to ensure client monies were properly safeguarded. Wirecard UK is being wound down but the business will continue to trade while alternative arrangements are being made with its card providers.
Payments in the UK have seen rapid change over recent years, including the growth of firms like Wirecard UK. These changes offer exciting opportunities for UK businesses and consumers, with many making payments faster and cheaper. However, and as will always be the case with a rapidly changing technological landscape, they also present new challenges and risks.
Given the pace of change, a HM Treasury led review of the payments landscape was announced in June 2019. A Call for Evidence is the first stage in this review, open until 20 October.
The Government recognises the crucial role of challenger banks in providing customers with more choice and is committed to maintaining competition in financial services. We recognise the COVID-19 crisis has been difficult for many firms, including challenger banks, and we continue to engage regularly with the sector to understand how firms are being impacted.
Asked by: Karen Bradley (Conservative - Staffordshire Moorlands)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, if he will make an assessment of the implications of the Wirecard collapse for (a) UK financial regulation and (b) future financial services regulation.
Answered by John Glen - Paymaster General and Minister for the Cabinet Office
The German merchant acquirer Wirecard AG entered administration in June. It has a UK subsidiary, Wirecard UK, which is authorised and regulated by the Financial Conduct Authority (FCA). The FCA ensures that payments firms make suitable safeguarding arrangements in compliance with the regulatory requirements as a condition of firms receiving FCA authorisation, protecting client money.
Shortly after the entry into administration of Wirecard AG, the FCA temporarily blocked the distribution of funds from the UK subsidiary, Wirecard UK, to ensure client monies were properly safeguarded. Wirecard UK is being wound down but the business will continue to trade while alternative arrangements are being made with its card providers.
Payments in the UK have seen rapid change over recent years, including the growth of firms like Wirecard UK. These changes offer exciting opportunities for UK businesses and consumers, with many making payments faster and cheaper. However, and as will always be the case with a rapidly changing technological landscape, they also present new challenges and risks.
Given the pace of change, a HM Treasury led review of the payments landscape was announced in June 2019. A Call for Evidence is the first stage in this review, open until 20 October.
The Government recognises the crucial role of challenger banks in providing customers with more choice and is committed to maintaining competition in financial services. We recognise the COVID-19 crisis has been difficult for many firms, including challenger banks, and we continue to engage regularly with the sector to understand how firms are being impacted.