Asked by: Kirsty Blackman (Scottish National Party - Aberdeen North)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, how many and what proportion of the (a) primary and (b) secondary legislation sponsored by (i) their Department or (ii) their predecessor Department has undergone a post legislative review in each of the last 10 years.
Answered by Helen Whately - Shadow Secretary of State for Work and Pensions
In the last 10 years, HM Treasury has records of three Acts of primary legislation having undergone post legislative reviews.
HM Treasury does not hold information on how many post legislative reviews the Department has undertaken on secondary legislation in each of the last ten years.
Section 28 of The Small Business, Enterprise and Employment Act 2015 (‘SBEE Act 2015’) brought in a new duty to review secondary legislation, with exceptions where it is deemed inappropriate by the responsible Minister to do so. Prior to this, there was no statutory requirement to review secondary legislation.
HM Treasury does not hold information on the proportion of post legislative reviews the Department has undertaken on primary and secondary legislation in each of the last ten years.
However, post legislative reviews prior to the introduction of the SBEE Act 2015 will be available on legislation.gov.uk or gov.uk where it was possible to publish them, considering market sensitivity.
This information on primary and secondary legislation is only held for internal administrative reasons and may not be exhaustive, for example, due to machinery of government changes to departmental structure in the past decade.
Asked by: Kirsty Blackman (Scottish National Party - Aberdeen North)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, how many post legislative reviews (a) their Department or (b) their predecessor Department has undertaken on (i) primary and (ii) secondary legislation in each of the last five years.
Answered by Helen Whately - Shadow Secretary of State for Work and Pensions
In the last five years, HM Treasury undertook and laid one post legislative review for primary legislation, which covered multiple Acts. Separately, post legislative memorandums may be found on gov.uk.
For secondary legislation, post legislative reviews are known as Post-Implementation Reviews (PIRs) if they come under the Better Regulation Framework. Between Jan 2017-Jan 2022, under the scope defined by the SBEE Act 2015 and the Better Regulation Framework, HM Treasury has records of 19 PIRs having been completed and published. The breakdown for each of the last five years is as follows: 1 in 2017; 3 in 2018; 6 in 2019; 2 in 2020; 6 in 2021; 1 in 2022.
This information on post legislative reviews of both primary and secondary legislation is only held in HM Treasury for internal administrative reasons and may not be exhaustive, for example, due to machinery of government changes to departmental structure in the past decade.
Where possible, considering any market sensitivity, all post legislative reviews or post legislative memorandums are published on gov.uk, and PIRs are published alongside the original legislation on legislation.gov.uk for transparency and accountability.
As well as completed reviews, there are a number of PIRs currently being undertaken, some of which cover multiple pieces of legislation.
Asked by: Kirsty Blackman (Scottish National Party - Aberdeen North)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what assessment he has made of the potential merits of expanding eligibility for the Matching Adjustment to include morbidity liabilities as part of the Solvency II Review.
Answered by John Glen
The Government published a Call for Evidence for its Review of Solvency II in October 2020. The Government published a Response to its Call for Evidence on 1 July 2021. This Response set out the next steps including a consultation in early 2022.
The matching adjustment was identified in the Call for Evidence as an area for review. As noted in the Response to the Call for Evidence, “respondents also raised a variety of other eligibility-related points, for example that the eligibility of liabilities for the matching adjustment could be expanded”. The Government is considering the range of views received on this topic.
Asked by: Kirsty Blackman (Scottish National Party - Aberdeen North)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, when he plans to publish formal proposals arising from the Solvency II Review; and if he will make a statement on the timetable for implementation of those proposals.
Answered by John Glen
The Government published a Call for Evidence for its Review of Solvency II in October 2020. The Government published a Response to its Call for Evidence on 1 July 2021. This Response set out the next steps including a consultation in early 2022.
The matching adjustment was identified in the Call for Evidence as an area for review. As noted in the Response to the Call for Evidence, “respondents also raised a variety of other eligibility-related points, for example that the eligibility of liabilities for the matching adjustment could be expanded”. The Government is considering the range of views received on this topic.
Asked by: Kirsty Blackman (Scottish National Party - Aberdeen North)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what recent comparative assessment his Department has made of the (a) performance and (b) effectiveness of (i) UK business banking regulation and (ii) that of other OECD countries.
Answered by John Glen
The government, along with regulators, are committed to ensuring that UK regulation promotes safe and sustainable financial services, while still allowing room for innovation and continually reviews its effectiveness.
It has long been the case in the UK that business lending is generally not subject to regulation – much like many other major economies such as; the US, Canada, and Australia. Ultimately, the government only looks to regulate where there is a clear case for doing so, in order to avoid putting additional costs on lenders that would ultimately lead to higher costs for business customers.
But of course, that does not mean – should things go wrong - that businesses do not have access to free, independent dispute resolution services. In fact, 99% of businesses have recourse to the Financial Ombudsman Service. And with the launch of the Business Banking Resolution Service in February this year, larger eligible SMEs also have somewhere independent to take their complaint.
Asked by: Kirsty Blackman (Scottish National Party - Aberdeen North)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what assessment his Department has made of the adequacy of business banking regulation during the covid-19 pandemic.
Answered by John Glen
The government, along with regulators, are committed to ensuring that UK regulation promotes safe and sustainable financial services, while still allowing room for innovation and continually reviews its effectiveness.
It has long been the case in the UK that business lending is generally not subject to regulation – much like many other major economies such as; the US, Canada, and Australia. Ultimately, the government only looks to regulate where there is a clear case for doing so, in order to avoid putting additional costs on lenders that would ultimately lead to higher costs for business customers.
But of course, that does not mean – should things go wrong - that businesses do not have access to free, independent dispute resolution services. In fact, 99% of businesses have recourse to the Financial Ombudsman Service. And with the launch of the Business Banking Resolution Service in February this year, larger eligible SMEs also have somewhere independent to take their complaint.
Asked by: Kirsty Blackman (Scottish National Party - Aberdeen North)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what assessment his Department has made of the (a) costs and (b) risks to UK businesses of Government covid-19 loans from banks and other authorised lenders.
Answered by John Glen
The government guarantee loan schemes have provided a lifeline to thousands of businesses, supporting over £79 billion in funding. There are robust rules in place that set out how accredited lenders must behave, including treating borrowers fairly.
The government has always been clear that these are loans to be repaid, and that they may not be the right answer for all businesses. That’s why our varied package of support also includes grant funding and tax deferrals.
Asked by: Kirsty Blackman (Scottish National Party - Aberdeen North)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what assessment he has made of the implications for his policies of the profits made by banks and authorised lenders from providing finance under government covid-19 loan schemes.
Answered by John Glen
Under the rules of our guarantee schemes, accredited lenders are required to pass on to borrowers the benefit of the guarantee in their pricing, reflecting the reduced credit risk provided by the government guarantee.
To provide further protection, under the Bounce Back Loan Scheme the government fixed interest rates at 2.5% for all borrowers. Under the Coronavirus Business Interruption Loan Scheme , the government imposed a cap on interest rates at 14.99% - although the vast majority of loans saw interest rates well below this cap.
Asked by: Kirsty Blackman (Scottish National Party - Aberdeen North)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, if he will take steps to strengthen the system of accountability in the financial sector to ensure that banks are accountable for financial misconduct in (a) the UK and (b) overseas.
Answered by John Glen
The Government is committed to ensuring that the interests of businesses and individuals who use financial services are protected.
In response to the banking crisis and significant conduct failings, Parliament passed legislation leading to the Financial Conduct Authority and the Prudential Regulation Authority applying the Senior Managers and Certification Regime. This regime aims to reduce harm to consumers and govern market integrity by making individuals more accountable for their conduct and competence.
Additionally, the FCA has been given a strong mandate to stop inappropriate behaviour in financial services, and the Government is confident they have the appropriate tools to protect consumers, including powers to ban or restrict products; powers of disclosure; power to take formal action against misleading financial promotions; and a power to accept super-complaints from consumer bodies about competition and consumer problems.
The Chief Executive of the FCA has set out his plans to transform the FCA into a more assertive regulator; testing the limits of its powers and working with other agencies to ensure they bring their own powers to bear, to ensure consumer protection and market integrity.
Asked by: Kirsty Blackman (Scottish National Party - Aberdeen North)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what assessment he has made of the changes by the major banks to interest charges on personal overdrafts relative to levels before the covid-19 outbreak.
Answered by John Glen
The pricing of financial products, including the interest rates charged on overdrafts, is a commercial decision for firms and the Government does not seek to intervene in, or make assessments of, such decisions.
In April 2020, the Financial Conduct Authority (FCA) required firms to have implemented new rules governing how they can charge for overdrafts. These included mandating that firms cannot charge more for unarranged overdrafts than arranged overdrafts, banning fixed daily and monthly charges, and a package of measures to improve the transparency of pricing. FCA analysis found that 7 out of 10 overdraft users would be better off or see no change to their overdraft costs as a result of the FCA’s rules.
In response to the Covid-19 pandemic, the FCA announced a series of temporary proposals to provide emergency support for consumer credit customers who were facing short-term cash flow problems as a result of the Covid-19 outbreak. On overdrafts, firms were expected to provide up to £500 interest free buffer for customers, if requested, and make sure that customers did not see increased overdraft fees.
In September 2020, the FCA announced updated guidance to ensure that firms continued to provide tailored support for users of consumer credit and overdraft products who continue to face payment difficulties due to Covid-19. Where a customer needs further support, firms are expected to use measures such as reducing or waiving interest, agreeing a programme of staged reductions in the overdraft limit, or supporting customers to reduce their overdraft usage by transferring the debt.
In 2022, the FCA will carry out a post-implementation evaluation of the remedies it introduced on overdrafts.