Breathing Space Scheme

Debate between Kirsty Blackman and John Glen

Wednesday 19th June 2019 Commons Chamber

[John Glen]

I welcome my right hon. Friend’s observations on the Church of England’s interventions on financial literacy. The ongoing challenge is to develop national consistency in the delivery of financial education and advice. A number of initiatives are under way, one of which is trying to get financial services providers, particularly the banks, to work in a more co-ordinated way. I am happy to endorse the work of the Church of England, which has been a significant partner in improving financial literacy across the country.

[Kirsty Blackman (Aberdeen North) (SNP)]

I am pleased that the UK Government have decided to put this in place and have set out the mechanism for doing so. In Scotland we have the debt arrangement scheme, which was launched in 2004 and significantly reformed in 2011, and a breathing space is built into that scheme.

Over £200 million of debt has been repaid since the reforms in Scotland, and 6,000 people completed a direct payment plan between 2011 and 2018, so I am pleased to see in the consultation responses published today that the Government have looked at how the system works in Scotland and have learned lessons. It is clear that, where the Scottish system has the powers to do so, we have the ability to trailblaze and lead the way.

In 2016, because of the debt arrangement scheme in Scotland, we had the lowest proportion of over-indebted people of any part of the UK. As austerity continues, we continue to see increases in the number of people suffering under the burden of debt. In 2017 there were 2.4 million children living in families with problem debt in England and Wales. StepChange, the debt charity, has said that 60% of those in problem debt fell into it because of an unexpected life event, and not because of poor money management—something external happened that changed their life, meaning they could no longer manage their debt.

I am concerned about why it will take the Government so long to implement the changes. Surely, as they already deal with a similar system in Scotland, most creditors should be able to take on the changes fairly quickly and roll them out over a wider group of people. Could this be done any quicker than 2021, which is the date I have seen in the papers?

Oral Answers to Questions

Debate between Kirsty Blackman and John Glen

Tuesday 21st May 2019 Commons Chamber

[John Glen]

Conversations are going on among Treasury Ministers. The Chief Secretary has heard that representation, and announcements will be made in the autumn Budget.

[Kirsty Blackman (Aberdeen North) (SNP)]

In evidence to the Work and Pensions Committee, the Child Poverty Action Group said of the two-child cap:

“You could not design a better policy to increase child poverty than this one”.

Will the Minister use the spending review to ditch that policy?

[John Glen]

We spend £95 billion on working-age benefits, hardship payments, benefit advances and budgeting loans. Obviously all matters are under review in the context of spending decisions, which will be made clear in the autumn Budget.

[Kirsty Blackman]

That is not good enough. Analysis by Cambridge Econometrics states:

“In all of the Brexit scenarios, real wages for low-pay workers are depressed due to increases in prices and reduced levels of productivity, due to skills shortages and lower industry investment.”

Faced with this child poverty double-whammy, does the Minister agree that it is no surprise that the Tories are set for an absolute drubbing on Thursday?

[John Glen]

I listen to the Office for Budget Responsibility, which is forecasting sustained real-wage growth for every one of the next five years. The latest statistics capture household income up to April 2018, but since then we have had a year of real-wage growth.

Clydesdale Bank and SMEs

Debate between Kirsty Blackman and John Glen

Tuesday 19th March 2019 Commons Chamber

[John Glen]

Again, I thank my hon. Friend for the work he has done in this area. I met representatives of UK Finance just a few hours ago, and I am aware of his correspondence overnight on this issue as he joins the board imminently. The key concern I would have is the extrapolation of one case, or a few celebrated cases—tragic cases—to say that they are normative of practices across the sector as a whole. He smiles because he knows that is a conversation we have had frequently. This historical dispute resolution mechanism is not designed as some sop, but as a meaningful mechanism to interrogate wrongdoing in the past and seek resolution for those individuals who remain dissatisfied.

[Kirsty Blackman (Aberdeen North) (SNP)]

I congratulate my hon. Friend the Member for Lanark and Hamilton East (Angela Crawley) on securing this urgent question.

The issue of transferring funds to an organisation such as Cerberus is far from the only one. The hon. Member for Thirsk and Malton (Kevin Hollinrake) mentioned businesses that did not have any debt issues whose loans were restructured and who were offered incredibly high and arbitrary repayment terms with incredibly high interest rates. That was completely inappropriate. The restructuring of debt should be tackled in the first place, and not just the transferring over. Nobody should be in the situation in which my hon. Friend’s constituent found himself.

The Minister said that these cases are not necessarily indicative of how everybody has been treated, but we have seen enough of them coming forward, and enough people losing their homes, losing their families, and, in some cases, losing their lives as a result. We know as parliamentarians that we see only the tip of the iceberg in the cases that come into our offices, and that there are probably many, many more that we have not seen and have not raised here.

It is clear from cases like the one that my hon. Friend describes that any system of voluntary redress is not working, and is probably not working in many of the cases that we see coming into our offices. I am concerned that the issue with voluntary redress schemes will also happen with the ombudsman scheme given that it is voluntary and not as all-encompassing as it could be. The Government can still take action and save face. What the Minister has said about the ombudsman system is interesting, but it is not the independent tribunal that we on the fair business banking APPG have been calling for. It does not go far enough on that basis.

The other thing that the Government have failed to do so far is to bring forward a massive, comprehensive review of banking culture to ensure that nothing like this happens again in future so we know that SMEs will not be treated in the same way as they were previously. It is incredibly important for our economy that SMEs can borrow, and they will not be able to do so if they do not trust the banking sector to treat them fairly. If the Government have to step in and ensure that this happens, then that is what needs to happen.

[John Glen]

I thank the hon. Lady for her comments. There are two things there, and one is the adequacy of the voluntary mechanism. To be fair, it is unclear how it will play out, because it has only just been established. I see from my engagement with the chief executives and chairmen of the banks a massive desire to ensure that this has teeth and can deliver. This is not about the Government saving face. It is about ensuring that this process is effective. I will have deep engagement with and take a close interest in this process, because it must be effective and thorough in its examination of these cases.

I take the wider point that the hon. Lady makes about banking culture. A lot has changed in the last 10 years, and many of these cases arose before that. We now have a very different regulatory environment, with the Prudential Regulation Authority and the FCA, which has changed things considerably, but I will reflect carefully on her comments.

Exiting the European Union (Financial Services)

Debate between Kirsty Blackman and John Glen

Monday 18th February 2019 Commons Chamber

[John Glen]

As the House will be aware, the Treasury has been undertaking a programme of legislation under the European Union (Withdrawal) Act 2018 to ensure that if the UK leaves the EU without a deal or an implementation period, there continues to be a functioning legislative and regulatory regime for financial services in the United Kingdom. The two statutory instruments being debated today are part of this programme. The disclosure regulations, as corrected by the corrections slip published on 12 February, will address deficiencies related to the UK’s implementation of EU rules that govern the exchange of confidential information between European economic area and third country regulatory and supervisory authorities. Once the UK is outside the single market and the EU’s joint supervisory framework for financial services, amendments will be needed to these rules so that they continue to operate effectively in a scenario where the UK leaves the EU without an agreement. The money market funds regulations will fix deficiencies in UK law on money market funds and their operators to ensure they continue to operate effectively post exit. The approach taken in these pieces of draft legislation aligns with that of other statutory instruments being laid under the 2018 Act, providing continuity by maintaining existing legislation at the point of exit but amending it where necessary to ensure that it works effectively in a no-deal context.

Let me deal first with the Public Record, Disclosure of Information and Co-operation (Financial Services) (Amendment) (EU Exit) Regulations 2019. As Members across the House will know, an important function performed by financial services regulators is the gathering of supervisory information from firms. Regulators use this information so that they can ensure that regulated firms are operating in a way consistent with regulatory requirements and so they are alerted to any development that may need supervisory intervention. As a great deal of financial services activity takes place across borders and across regulatory regimes, the ability of national regulators to co-operate with each other and to exchange information is vital if they are to discharge their supervisory functions effectively.

The information gathered by regulators is often confidential and often commercially or market sensitive, so it is right that there are strict rules and safeguards on how regulators share such information with other regulatory authorities. EU law currently plays an important role in setting these rules. In order to ensure the effective functioning of the single market in financial services, the EU has developed a joint supervisory framework for national regulators and supervisory bodies in the EEA. This makes co-operation and the sharing of certain supervisory information between EEA national regulators mandatory.

In addition, the EU has established the European supervisory authorities—ESAs— which are responsible for co-ordinating the approach of EEA national regulators. Co-operation and sharing of certain information with the ESAs is also mandatory for EEA national regulators. As well as setting out what information should be shared, EU rules also include restrictions and safeguards. In the UK, these rules are implemented in Part 23 of the Financial Services and Markets Act 2000 and the Financial Services and Markets Act 2000 (Disclosure of Confidential Information) Regulations 2001.

For third country authorities, there are additional restrictions when disclosing confidential information. The UK regulator may need to be satisfied that the third country authority has protections for confidential information in place that are equivalent to those of the EU. There may also be a requirement to enter into a co-operation agreement with the third country authority. In addition, if the UK regulator is disclosing confidential information to a third country authority which originated from an EEA authority, the UK regulator may need to seek the consent of the EEA regulator which originally disclosed the confidential information.

If the UK leaves the EU without an agreement, the EU has confirmed that it will treat the UK as a third country and the UK will also need to treat EEA states as third countries. The UK will be outside the single market and the EU’s joint supervisory framework, so references in UK legislation to this framework, and to EU legislation and EU bodies, will be deficient and will need to be corrected so that the UK’s disclosure rules for confidential information will work effectively. In particular, the rules will need to be amended to reflect the third country relationship that will exist between the UK and EEA states. After exit, it would not be appropriate to provide for different rules and protections on the disclosure of confidential information by UK authorities depending on whether confidential information is being shared with EEA authorities or the authorities of non-EEA states. If this is left unamended, the UK would afford additional protections and less onerous restrictions to EEA states compared with other third countries. In addition where there are currently requirements to seek the consent of an EEA authority before the onward disclosure of information, these requirements will be retained only if an equivalent requirement also exists in relation to seeking consent from non-EEA authorities.

This instrument also provides for a transitional arrangement that will ensure that any confidential information received by a UK regulator before exit day will continue to be treated in accordance with the relevant provisions that existed before exit day. While it is necessary to amend the UK implementation of rules around disclosure of confidential information to ensure that they continue to operate effectively once the UK is outside the EU, it must be stressed that these amendments are in no way intended to diminish the level of co-operation that exists between UK and EEA regulators.

The Government and UK regulators believe that effective co-operation and co-ordination is essential for the effective supervision of financial services. UK authorities will be doing everything possible to ensure that effective co-operation continues. UK regulators have always been key players and key voices of sanity in the global supervision of financial services, as is demonstrated by the close and co-operative arrangements we have with regulators in countries outside the EEA. After exit, it will be necessary for the UK regulators to enter into co-operation agreements with EEA national regulators and with the ESAs. These agreements will help ensure that a high level of co-operation and information sharing will continue.

[Kirsty Blackman (Aberdeen North) (SNP)]

I am seeking some clarity on the first of these SIs and which day the Minister expects the disclosure of information regulations to come into operation. Am I right in thinking that exit day means exit day unless there is an implementation period, in which case it means at the end of the implementation period?

[John Glen]

These SIs relate to a situation where we have no deal. So if there was not a deal or an implementation period after 29 March, these SIs would then take effect.

[Kirsty Blackman]

With respect, that is not what it says in the explanatory memorandum for the first SI, which suggests that it is needed in the event of any Brexit and not just in the event of a no-deal Brexit. The second one covers a no-deal Brexit, but I had understood that the first one was needed for any Brexit.

[John Glen]

I will examine that and, if I may, I will come back to it and seek to clarify it when I wind up this debate.

Both the Government and UK regulators attach very high priority to putting these agreements in place, and I am pleased to report that UK and EU regulators are making good progress in their discussions to finalise these agreements. The Treasury has been working very closely with the Bank of England, the Prudential Regulation Authority and the Financial Conduct Authority in the drafting of this instrument, and there has also been engagement with the financial services industry, including the publication of this instrument in draft, along with an explanatory policy note on 9 January. In summary, the Government believe that the proposed deficiency fixes are necessary to ensure that the UK has a clearly defined and operable set of rules for the disclosure of confidential information.

I turn now to the Money Market Funds (Amendment) (EU Exit) Regulations 2019, which relate to the establishment, management, and marketing of money market funds. Such funds invest in highly liquid instruments, and provide a short-term, stable cash-management function to financial institutions, corporations and local governments. They are commonly used by investors as an alternative to bank deposits. The regulations formed part of the response to the 2008 global financial crash to preserve the integrity and stability of the EU market, and to ensure that money market funds are a resilient financial instrument. They do so by ensuring uniform rules on prudential requirements, governance and transparency for managers of these funds.

Money market funds can either be structured as undertakings for collective investment in transferable securities—UCITS—or as an alternative investment fund. Therefore, they are regulated as UCITS or as an alternative investment fund, in addition to being regulated as a money market fund. The regimes for UCITS and alternative investment fund managers have been separately amended to reflect the UK leaving the EU by the Collective Investment Schemes (Amendment etc.) (EU Exit) Regulations 2019 and Alternative Investment Fund Managers (Amendment etc.) (EU Exit) Regulations 2018, which were taken through Committee, where I believe I was joined by the hon. Member for Oxford East (Anneliese Dodds), and have now been approved in both Houses and will be made shortly. In a no-deal scenario, the UK would be outside the EEA, and outside the EU’s legal, supervisory and financial regulatory framework. EEA money market funds, which currently provide the majority of money market services in the UK, would not be able to continue to service UK clients. The money market funds regulation therefore needs to be updated to reflect this and ensure that the provisions work properly in a no-deal scenario.

First, these draft regulations remove references to the Union which are no longer appropriate and to EU legislation which will not form part of retained EU law. These references will be replaced by references to the UK and to relevant domestic and retained EU legislation. Secondly, in line with the general approach taken to the onshoring of EU legislation, the SI will transfer functions currently within the remit of EU authorities; from the European Securities and Markets Authority to the FCA, and from the European Commission to Her Majesty’s Treasury.

As the UK’s regulator for investment funds and the current national competent authority for money market funds, the FCA has extensive experience in the asset management sector, and it is therefore the most appropriate domestic institution to take on these functions from the European Securities and Markets Authority. This statutory instrument transfers all powers exercised by ESMA to the FCA. The FCA will become responsible for technical standards on how funds should stress test their funds, and it will gain two operational powers to establish a register and reporting template for money market funds.

This statutory instrument transfers any power currently exercised by the Commission to the Treasury, in line with the other statutory instruments that we have taken through. Those powers all relate to creating rules concerning standards for money market funds, such as their liquidity and quantification of credit risk.

As I have mentioned, EU money market funds are structured and further regulated as UCITS or alternative investment funds. This statutory instrument makes provision to ensure that EU money market funds can use the temporary marketing permissions regime, as legislated for in the Collective Investment Schemes (Amendment etc.) (EU Exit) Regulations 2019 and the Alternative Investment Fund Managers (Amendment etc.) (EU Exit) Regulations 2018. Following an assessment by the FCA and the submission of a written statement to both Houses, the Treasury will be able to extend that by a maximum of 12 months at a time. It will also allow for EU money market funds that are currently marketing into the UK, and any subsequent UCITS sub-funds, to continue to market into the UK for up to three years after exit day.

This statutory instrument amends the scope of the regulation to apply to the UK only, with the effect of only allowing the marketing of UK-authorised MMFs or MMFs managed by UK fund managers. However, further amendments maintain the eligibility of EEA MMFs with temporary permissions to continue to market in the UK at the end of the temporary marketing permissions regime if they gain the required permissions to market as a third country fund under the UK domestic framework.

Money market funds that are UCITS will be required to gain authorisation under section 272 of FSMA, while the managers of money market funds that are alternative investment funds will need to notify under the national private placements regime. The UK currently has a very small domestic market that relies heavily on EEA money market funds, so these provisions address the cliff-edge risks that could arise as a consequence of defaulting to a UK-only market. That will ensure that local government, businesses and other UK investors can continue to access their investments and have a choice of money market funds to use for cash management.

As with the previous statutory instrument, the Treasury has been working very closely with the FCA in the drafting of this statutory instrument and engaging with the financial services industry. I would like to put on record my gratitude to TheCityUK for convening appropriate representative bodies throughout the process. In November the Treasury published the statutory instrument in draft, along with an explanatory policy note, to maximise transparency to Parliament and industry.

In summary, the Government believe that the proposed legislation is necessary to ensure that the framework for money market funds continues effectively, and that the legislation continues to function appropriately if the UK leaves the EU without a deal or an implementation period. I hope colleagues will join me in supporting the regulations.

I would like to respond to the point raised by the hon. Member for Aberdeen North (Kirsty Blackman). Parliament will amend the regulations as necessary for a deal scenario. If we have a deal, an amendment process would apply to all the regulations that we have taken through. Most of them would need to be repealed, but we would do so according to the terms of the deal. I have nothing more to say at this point, and I commend these regulations to the House.

--- Later in debate ---

[John Glen]

There were typos.

[Kirsty Blackman]

If they simply correct typos, that is absolutely fine. I was worried that they might have been the result of concerns raised about the legislation. I welcome that clarification.

The explanatory memorandum states that no consultation was undertaken. Once again, I think that consultation should have been undertaken on the SIs, and particularly the one that makes changes to the legislation. The explanatory memorandum states that no impact assessment was done, but it does say that

“a de minimis impact assessment has been carried out.”

This is the first time that I have seen that phrase used in an explanatory memorandum on a financial SI, and I do seem to be spending quite a lot of my life dealing with them—I am sure that the Minister is spending even longer. I do not know what a de minimis impact assessment is, and I do not know where I could find it, because it is certainly not provided on the website. I can find no further information on this thing that has apparently been done to assess the impact.

We have criticised the Government before for not carrying out impact assessments. I think that it would have been useful to have an impact assessment on this. In fact, I fully intend to challenge the Government on this. They carry out an impact assessment only when there is likely to be an impact of £5 million or more on businesses. They do not carry out impact assessments when there is likely to be an impact of millions, or indeed hundreds of millions, on consumers or individuals living anywhere in these islands. It strikes me that, according to the Government’s own better regulation guidance, this process is entirely unfit for purpose, given that it involves literally hundreds of SIs coming through, many of which could do with an impact assessment.

I will move on to the Money Market Funds (Amendment) (EU Exit) Regulations 2019, which is a no-deal SI. The Labour spokesperson made a comment about taking no deal off the table. [Interruption.] Mr Deputy Speaker, it would be easier to speak if it was a little quieter in the Chamber. We are not asking the Government to take no deal off the table now—the hon. Member for Thirsk and Malton said that we were doing so at a critical point in the negotiations; we have been asking them to take no deal off the table pretty much since the Brexit process started, because it should never have been an option in the first place. We are not asking for it to be done now; we were asking for it to be done almost three years ago.

The regulations also change the powers of the Financial Conduct Authority. I have raised concerns before about the powers of the FCA, and the fact that the Government are making piecemeal changes without any kind of overall strategy on what they expect it to look like at the end of the process. I know that the FCA can request more money from Parliament, and I assume that it will have to do so in order to carry out the additional functions that are being delegated to it as a result of all the SIs coming through.

The explanatory memorandum for the money market funds regulations states that HM Treasury will have

“the power to make delegated acts specifying quantitative and qualitative liquidity requirements on MMFs.”

I would appreciate it if the Minister could seek some divine intervention on this and let us know how those delegated acts will be introduced. Will SIs be introduced under the affirmative or negative resolution procedure, or will the Treasury simply be allowed to make its own regulations without any recourse to Parliament? It would be useful if Parliament were across this, given that it is an area that Parliament is not in the habit of dealing with, because it has been an EU area. I think that, in the event of no deal, Parliament would benefit from having some input into those requirements on MMFs.

The commencement provisions for both SIs state that they will take effect on “exit day.” Now, I understand that exit day is defined in the European Union (Withdrawal) Act, which sets out a definite date and time. I am told that the SIs that refer to “exit day” mean that date and time. However, the withdrawal Act also gives the Government the power to vary exit day. If the Government vary exit day, presumably the SIs would come into effect only on the day that they have decided is to be exit day.

I want to know what will happen if we approve these SIs. The process is as follows. If an SI is approved, it does not get Royal Assent—that is not something that happens to SIs. Instead, it basically sits in a pile of SIs that are waiting to be “made”, and they are “made” at a date and time of the Government’s choosing. I was unable to get any further information on that, other than that it is the Government who decide—is it the Cabinet Office or the Prime Minister?

When we were asked to approve these SIs, I genuinely thought that the first one was not to do with a no-deal Brexit, because nowhere in the explanatory memorandum could I find the words “no deal”. The second SI, however, is very clearly to do with no deal. We are being asked to approve the money market funds regulations, which the explanatory notes state will come into effect only if there is no deal, but there is nothing to stop the Government from making this SI, or indeed any other, at a time of their own choosing; it would then apply after exit day. The House of Commons is basically being asked to agree to all these SIs coming into force on exit day, and then the Government have carte blanche to make any of them whenever they desire.

The Minister and I were both a little confused about the provisions of the disclosure of information regulations, given that I thought they applied in any circumstance. I am not sure what will happen if there is a deal now, because I do not know how the disclosure of financial information will work, because we have not been provided with an SI that works in the event of a deal scenario—surely we should have been, because there would be deficiencies in EU law.

What happens in that event? How do the Government decide when to make these SIs? If there is a deal, will they suddenly rush through provisions? The House of Commons has so many SIs in front of it, and we are now only dealing with no-deal SIs. In the event of a deal, will we have a mad situation where the Government have to make edits to each of these SIs and bring them through the House again so that we can approve them, followed by some sort of procedure to put them in place?

There have been screw-ups of monumental proportions in relation to everything to do with Brexit. Specifically in terms of the SI process, we have not seen all the SIs for a no-deal scenario. Apparently we will not even see some of the SIs for a deal scenario until the Prime Minister manages to get something through the House, and who knows when that may be? Are we going to continue with this shambles? For people who are interested in House of Commons procedure, it is wonderful to see it not working. It is great to see the millions of places where House of Commons procedure is completely deficient, and it is particularly great to be able to discuss these SIs and raise those issues on the Floor of the House.

I understood that the disclosure regulations were for the event of any deal or no deal. If they are only for the event of no deal, what information will the Minister provide about that? What information will he provide about the powers of the FCA and what it will look like in future? How will he ensure that the FCA is adequately funded to fulfil its obligations? Lastly, these two SIs and all the other financial services SIs we have seen have not been adequately consulted on, and I would appreciate it if the Minister commented on the consultation process.

Securitisation Regulations 2018

Debate between Kirsty Blackman and John Glen

Wednesday 13th February 2019 Commons Chamber

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

As part of our obligations while the UK remains a member of the EU, it is our responsibility to ensure that domestic law is compatible with EU legislation. That includes this statutory instrument, which will, as the hon. Member for Oxford East (Anneliese Dodds) said, ensure that the EU securitisation regulation is effective and enforceable in the UK. It is not an EU-exit statutory instrument through which functions are transferred from an EU authority to domestic authorities. The instrument that does that—the Securitisation (Amendment) (EU Exit) Regulations 2019—was laid on 23 January and will be debated in due course.

It might be helpful if I gave the House some background information. The securitisation market’s slow recovery after the financial crisis reflects concerns among investors and prudential supervisors about risks associated with the securitisation process itself. The EU responded by proposing in 2015 legislative measures to promote a transparent and liquid market for securitisation. There were 120 responses to the 2015 consultation that gave rise to the regulations, which evolved over two years of EU discussions. They were then scrutinised in Parliament and were approved by the House of Lords scrutiny Committees in July 2017 and by the House of Commons European Scrutiny Committee in February 2017.

[Kirsty Blackman (Aberdeen North) (SNP)]

The Minister mentioned the number of consultation responses; were they from throughout the EU or just from companies and organisations in the UK?

[John Glen]

I am not certain, but I would imagine they were from the UK. It was an extensive consultation that led to the evolution of the regulations, which were then scrutinised at different intervals by the Lords and Commons Committees before their final approval in 2017.

The UK voted in favour of the package of reforms in 2017 because it ensures high standards of process, legal certainty and comparability through a greater degree of standardisation of products. The new rules bear no relation to the securitisation of sub-prime mortgages created in the US that contributed so significantly to the financial crisis. Along with other legislation, including on the overhaul of the credit ratings agencies and more stringent rules for mortgage and credit granting, the proposals build on the lessons learned from the financial crisis by improving regulation and oversight, and they implement standards introduced by the international supervisory community.

The EU regulation, which the instrument we are debating implements, is derived from the new international standards set by the Basel Committee on Banking Supervision and the International Organisation of Securities Commissions. These two bodies worked to create a new framework of high-quality securitisations to introduce the degree of assurance around the information on securitisation that was necessary in the markets. Their work seeks to restore an important funding channel for the EU economy while making the market less risky and supporting financial stability.

At a time when bank lending is constrained, securitisation can boost credit and growth. It can help to free up banks’ balance sheets so that they can lend to households and businesses. The good functioning of and access to securitisation as a funding tool allows investors to diversify their investments and supports the real economy. It is for that purpose that effectively supervised securitisation is actively supported by the prudential authorities, including the Bank of England, which supported the EU initiative as playing

“an essential role in de-stigmatising European securitisation, helping the market to develop on a sustainable track”.

Let me turn now to the securitisation regulations. Although the EU rules themselves were agreed in 2017, the statutory instrument under consideration concerns empowering the regulators to effectively supervise the new securitisation rules that came into force at the start of the year. As the industry has prepared itself for the new regime, the Government are obliged to ensure that the new framework is operable. In essence, this SI simply gives effect to the directly applicable EU securitisation regulation and ensures that it is effective and enforceable in the UK.

The supervisory, investigative and sanctioning powers that this instrument delegates to the relevant competent authorities give effect to the EU framework. The hon. Lady mentioned the resourcing of the Financial Conduct Authority and the Bank of England. Both have been instrumental in the development of these regulations and are primed and ready to take on responsibility for them. The instrument fulfils the necessary obligations of the EU regulation in designating roles to the domestic regulators and provides them with the powers that they require to effectively supervise the market.

To summarise, the Government believe that this instrument is needed to ensure that the new securitisation regulatory regime works effectively. This will support a sound and transparent securitisation market in the UK, bringing real benefits to investment, jobs and growth while enhancing long-term financial stability. The whole purpose of the EU regulation is to address the challenges of the past and to ensure that mistakes prior to the financial crisis in respect of securitisation are not repeated by keeping the measures simple in form and more transparent. The proposal to revoke the instrument would only endanger that and disrupt the market as supervisors would not be able to enforce infringements to the rules that seek to better regulate the market.

The hon. Lady raised a number of points. I have clarified that this measure is not related to a no-deal situation. A point was made about the amendment to primary legislation and the fact that criminal offences already on the statute book will be affected. Although the EU regulation is directly applicable, the Securitisation Regulations 2018 make changes to UK law to ensure that EU regulations are fully effective and enforceable in the UK. The power under section 2(2) of the European Communities Act 1972 makes it possible to give effect in national law to measures in EU law by secondary or delegated legislation such as statutory instruments. Importantly, such secondary legislation can amend an Act of Parliament—section 2(4)—as the delegated legislative power includes the power to make such provisions as might be made by an Act of Parliament. So the instrument applies and modifies certain provisions of the Financial Services and Markets Act 2000 and other UK legislation both to create the new supervisory, investigative and sanctioning powers required by the EU regulation and to ensure that UK legislation is compatible with EU regulation, including applying and/or modifying necessary offences pursuant to sections 398 and 177 of the 2000 Act. This instrument allows an approach consistent with existing enforcement regimes elsewhere in the sector and with other financial services implementing SIs.

The hon. Lady referred to preferential treatment of capital for banks and risk retention and needing to have skin in the game. These rules are derived directly from international standards, which are set by the Basel Committee on Banking Supervision and by the International Organisation of Securities Commissions. There is no attempt to develop some bespoke UK regime. These measures are completely consistent, which has been acknowledged during the significant scrutiny process to which they have already been subject. The hon. Lady also mentioned the CMA. The CMA was not designated as it does not have a role to play under the EU regulation.

I think that I have dealt with the points that have been raised. These are straightforward regulations that give effect to the directly applicable EU securitisation regulation. When Sub-Committee A of the Secondary Legislation Scrutiny Committee looked at these regulations on 17 December, it cleared them without comment. This is an attempt to update the regulations appropriately to give more confidence in the markets. I hope that the House will join together in support of the continued application of this instrument, and to oppose the motion to revoke it.

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[John Glen]

Thank you, Madam Deputy Speaker. I feel it is appropriate for me to respond to the remarks of the hon. Members for Enfield, Southgate (Bambos Charalambous) and for Aberdeen North (Kirsty Blackman).

The Treasury has not undertaken a formal consultation on this SI, as the changes to domestic legislation required are minor, and the enforcement approach taken is in line with existing enforcement regimes in the financial services sector. We have worked closely with the FCA and the PRA throughout.

The hon. Member for Aberdeen North made some remarks about the resourcing of the FCA. It has additional resources through the onshoring programme, but this SI has nothing to do with that. This is a business-as-usual SI that would have happened anyway. There was certainly no attempt to slip it in amidst all the others that were taken through Committee. It was a consequence of these regulations being taken through the scrutiny process. I can confirm that there were 120 responses from across the EU as a whole in 2015 to the Commission’s proposals, which were then iterated over the two years before they were approved.

I agree with much of what the hon. Member for Enfield, Southgate said about the aspirations of the regulations underlying this SI. This will bring in more stringent underwriting criteria for mortgage and credit granting. It will overhaul the supervision of credit rating agencies. We have updated international standards on the amount of capital that banks need to hold against securitisations. It responds directly to the work of the Basel Committee on Banking Supervision and the International Organisation of Securities Commissions. The process of consultation that led to the regulations being agreed in this House and through the Commission has lasted two years, from 2015 to 2017, and this SI is simply implementing them.

In conclusion, I believe that the securitisation regulations will enable the FCA and the PRA to supervise the new framework for securitisations agreed in the EU, which introduces stricter standards and makes securitisations simpler and more transparent.

[Kirsty Blackman]

On the point about the powers of the FCA and the changes that are being made to it—I am not suggesting that he is trying to slip out this particular one, but there do seem to have been various changes along the way—is it likely that the Government will come forward with something explaining how they expect the FCA to look in future and how we will get to that point?

[John Glen]

There are two or three things going on. There are 53 financial services SIs going through Committee in connection with no-deal preparations, which is certainly an additional burden on the FCA, and it has had the resources for that. The hon Lady asked about the Government’s holistic view of the role of the FCA. It is subject to a periodic review, having been formed under the legislation of five or six years ago, and that will happen in due course. We hope there will be more financial services legislation in future Sessions.

This instrument is necessary to enable the regulations to take effect. I hope that the House has found this afternoon’s debate on this matter informative and will be able to join me in opposing the motion.

Draft Financial Markets and Insolvency (Amendment and Transitional Provision) (EU Exit) Regulations 2019

Debate between Kirsty Blackman and John Glen

Tuesday 5th February 2019 General Committees

[Kirsty Blackman]

Can the Minister explain whether, in the event of the Prime Minister’s deal getting through and there being some sort of implementation period, he envisages a transitional regime or whether everything will just go ahead as it is currently?

[John Glen]

I am very happy to respond. In the situation that we have a deal, which is what the Government wish to happen, we would enter the implementation period. That means we would have continuity of current arrangements until we secured the enhanced equivalence solution, which we would be working towards, by the middle of next year, before the end of the implementation period.

The hon. Member for Stalybridge and Hyde expressed concern about the cost. We estimate that 126 EEA firms benefit from UK protections via the SFD and would therefore be in scope for this regime. Each firm is expected to have a one-off familiarisation cost of £210, so the total cost would be £27,000.

The hon. Member for Aberdeen North asked about the extension of the Bank’s power to designate non-EEA systems, which she posited was a significant policy change to the EU SFD and therefore incompatible with the general onshoring approach. The key point is that if, in the undesirable circumstances that we leave the EU with no deal, the UK becomes a third country and therefore is treated the same as any other non-EU jurisdiction, the new regime would need to reflect that. The SFD is a directive rather than a regulation and so allows for a degree of member state discretion on transposition into national law. I suspect that is why there is the impression of some arbitrary decision being taken.

A number of member states, including the UK, have in place or are working towards a framework for designating non-EEA entities. I would therefore submit that the Bank’s power to designate non-EEA systems is not a significant policy change from how the SFD framework currently operates in the EU at member state level. I note the hon. Lady’s observations about how her approach would differ, in that, if changes were made to the EU directive, we would submit another SI. I cannot give her the explicit rationale for why we did not adopt that approach, but I am happy to write to her on that point.

The hon. Lady also raised concerns about who had looked at the SI and asked about hits on the website. I do not have that data. I do not know whether it has been collected; I do not think it has. We engaged with stakeholders, including the financial services industry, while drafting these SIs, and they were published in advance. We shared the draft legislation with industry to allow stakeholders the opportunity to familiarise themselves with our approach and to test our understanding of the impact, and it was welcomed and supported. I cannot give the hon. Lady a precise answer about the iterations leading to the final SI being laid before the House, but I can say that there are no concerns about where it has ended up.

The hon. Lady asked about my view on the likelihood of no deal and whether it has changed. Obviously, we cannot completely rule out the possibility that the UK will leave the EU without a deal, but from my perspective as a junior Treasury Minister, it is important that I deliver a fully functioning legislative and regulatory regime come what may, and that is what I am determined to do. We have engaged with stakeholders to ensure that happens. The Commons continues to debate and, I hope, approve SIs relating to no deal, but I think the process the Government are going through is well known.

The hon. Member for Stalybridge and Hyde asked what the procedure would be for extending the temporary designation regime. Under this instrument, the Treasury will be able to extend the temporary designation regime by an additional 12 months beyond the initial three-year period. We would do that by laying a negative SI, given that we would not be substantively changing anything; it would be an administrative change. We would lay a written ministerial statement before both Houses in advance of laying that SI, in order to inform them of the situation.

[John Glen]

I am grateful for the advice I have received, mystically, from behind me. It could be a multiple approach, but, again, that would be justified in the written ministerial statement. It is quite difficult to see how that would go on in perpetuity, but if there was a justification from the Bank of England, that would be made clear and that would happen.

[Kirsty Blackman]

As the Minister managed to get divine inspiration for that question, he might manage to get some for this one. He has talked about the cost to companies of having to make these changes and go through the registration process. I failed to ask about, and the Minister did not mention, the additional cost that the Bank of England might incur from administering the transitional designation regime.

[John Glen]

I am very happy to write to the hon. Lady about that. I think the cost would be minimal, and it would be in the context of the Bank’s overall work. I do not know whether the cost relevant to this directive can be isolated, but I will write to her in general about the resourcing of the work of the Bank of England.

The hon. Lady also asked whether the Government have decided not to recognise systems that are recognised by EU authorities. The mutual recognition process works by virtue of the UK being a member state and hence subject to the settlement finality directive. I may have raised this point earlier. When we leave the EU, we will no longer be subject to the SFD, so this is not a policy decision; it is a necessity to provide continuity in respect of EEA systems. That is why the temporary designation regime is being created.

There is also the question of our overall aspiration. Clearly, we hope to secure a deal, and therefore we have ambitious plans subsequent to that, during the implementation period, to have an ambitious arrangement with the EU where we have strong relationships, regulator to regulator. This SI is essential for ensuring that we continue to have an effective framework for financial markets insolvency in the UK in a no-deal scenario. I hope this sitting has been informative and that the Committee will join me in supporting this SI.

Question put and agreed to.

Draft Collective Investment Schemes (Amendment etc.) (EU Exit) Regulations 2019 Draft Long-term Investment Funds (Amendment) (EU Exit) Regulations 2019

Debate between Kirsty Blackman and John Glen

Wednesday 30th January 2019 General Committees

[John Glen]

From my point of view at this point, it seems reasonable not to suggest that there will be a register for something that does not yet exist, but the hon. Lady’s point is perfectly reasonable. I will write to the FCA following what she has said.

[Kirsty Blackman]

It would be helpful if the Minister explicitly said, “Yes, we would like the FCA to keep a register of those new LTIFs as they arise in the UK.” The form of that register could be decided later.

[John Glen]

I am sympathetic to what the hon. Lady says, but she has to understand that the regulator is the regulator, and it will have reasons in terms of the market actors around that. My view is that it would be entirely appropriate for the regulator to have that register, and I would expect to see clear market-driven reasons for why it would not be necessary. Again, it would not be responsible for me to make a commitment without knowing all the background factors, but I will write to the regulator to express the Committee’s concerns and ask what its approach would be in the circumstances where those funds existed in the United Kingdom.

--- Later in debate ---

[Kirsty Blackman]

One last time, Minister. If the UK Government are trying to do what they tell us they are trying to do—to replicate EU law in UK law—the most sensible thing to do would be to start with a requirement for the FCA to keep this. Should there be a change and it is decided that it is not necessary, we can then legislate down the line with secondary legislation to say, “Actually, we feel like this is not appropriate for our regulatory regime.”

[John Glen]

I think I have said all I can on that matter at this point. I will move on to the drafting point on territorial power for the FCA, which the hon. Member for Oxford East raised. I will consider that point carefully—there may be a drafting error. It is difficult for me to be certain about that now, but I will respond in due course.

The hon. Member for Aberdeen North raised the issue of how many people engaged with the draft legislation. She will probably not be surprised to know that I do not have the numbers in front of me, but we have sought wide engagement with the industry and stakeholders as the legislation has developed, which can be seen in the fact that we relayed on 6 December following engagement on the sub-funds point. I am happy to examine any data on that and write to her on that matter.

The hon. Member for Oxford East made a point—I think it was also made by the hon. Member for Aberdeen North—about the Government’s general policy of reciprocity in the prioritisation of certain areas in a no-deal scenario. We want to continue to engage constructively with EU partners and be in a position to deliver on the political declaration in a negotiated deal, in which we would respect the autonomy of both sides but would be ambitious about the degree of collaboration on recognition. We think that that is realistic—there is a very strong relationship with our regulators across the EU, and we expect that to continue.

I have answered most of the points that have been made. If there are any others, I shall write to both hon. Ladies on the Opposition Benches. I have demonstrated why we need this SI to pass in the event of the UK leaving the EU without a deal, and I hope the Committee can now support the regulations.

Question put and agreed to.

Resolved,

That the Committee has considered the draft Collective Investment Schemes (Amendment etc.) (EU Exit) Regulations 2019.

Draft Long-term Investment Funds (Amendment) (EU Exit) Regulations 2019

Motion made and Question put,

That the Committee has considered the draft Long-term Investment Funds (Amendment) (EU Exit) Regulations 2019.—(John Glen.)

Draft Over the Counter Derivatives, Central Counterparties and Trade Repositories (Amendment, Etc., and Transitional Provision) (EU Exit) Regulations 2018

Debate between Kirsty Blackman and John Glen

Tuesday 22nd January 2019 General Committees

[John Glen]

Because I wanted the opportunity to explain face to face in the Committee and, given the need to secure the SIs for industry, as I made clear in the quotation from TheCityUK, it is not the perfect process. [Interruption.] I understand the point that the hon. Lady makes but I think I have responded to it as reasonably as I can.

[Kirsty Blackman]

Lastly, although the Minister has not said it, it appears to me that the issue might be with the Regulatory Policy Committee not getting through the impact assessments that are sent to it. Given that we are going to have an awful lot of SIs and, presumably, an awful lot of impact assessments, that is likely to become more of a problem. Is it necessary for the assessment to go to the Regulatory Policy Committee? Is there a way we could see it without it going to the RPC?

[John Glen]

The responsibility rests ultimately with me and my officials, and I have to take it on board. It is for me to be accountable for the impact assessments—I am not blaming anyone else. I will continue to do everything I can over the coming hours and days.

The hon. Lady mentioned impact. The draft regulations will not place new regulatory burdens on UK firms. We expect a one-off familiarisation cost for legal experts to examine the draft regulations, which we estimate will have an impact on just over 400 firms and cost £350,000 in total.

The regulatory requirements for trade repositories as defined in title VII of EMIR, will remain largely unchanged. The FCA has been given the power to supervise trade repositories against those requirements, but it has been in close engagement with trade repositories to ensure that their transition is as smooth as possible. Trade repositories will have to familiarise themselves with changes to the supervision and enforcement procedures under the UK regime, but we do not anticipate that that will be burdensome or that the familiarisation costs will be high.

The hon. Member for Oxford East asked how likely the FCA is to use the power to suspend the reporting obligation. It is almost certain that it will not need to use that power because the trade repositories regulations enable it to process advance applications for new trade repositories, or convert authorisations for existing UK trade repositories, to ensure that the UK has operational trade repositories from exit day.

Draft Money Laundering and Transfer of Funds (Information) (Amendment) (EU Exit) Regulations 2018

Debate between Kirsty Blackman and John Glen

Tuesday 8th January 2019 General Committees

[John Glen]

I would be happy to respond on that matter as well.

A point that often comes up in these discussions is the resourcing of the FCA. I acknowledge the great work that it has done over the last 18 months in helping the Government to prepare these SIs. It is funded by an industry levy and has set out in its business plan the resources involved in working towards exit. The Government are confident that the FCA has made adequate preparations ahead of leaving. If additional resources are needed in the event of no deal, it would be able to raise those funds very quickly, but we would all be in a situation where we would have to do things that we had not anticipated. This programme of SIs is about getting to the basic starting point that allows us to have confidence in the regulatory regime, but I do not deny that a considerable amount of work would need to take place.

On maintenance of standards and equivalence with the EU on anti-money laundering, the hon. Member for Oxford East discussed the use of the word “may” versus “must”. I want to clarify that what we have removed is the obligation to report in a specific way, as per the legislation. It is not our intention to remove ourselves from either the spirit or substance of that obligation; it is just that it would be inappropriate to leave a legal obligation to an entity when we are a third party. That is the only way that I can describe it.

To expand further on future co-operation, through the bilateral agreement with the EU, we expect to have an expansive relationship that would have a wide scope of cross-border activity. The changes in the SIs do not preclude deep co-operation between UK and EU regulators in the future. It is desirable to have that co-operation.

The hon. Member for Aberdeen North raised the burden on banks’ IT systems. When one makes a transfer between one bank and another, if it is in an unfamiliar, non-mainstream destination in Africa—I will not name an individual country for fear of getting a letter from its ambassador—some checks would be done, because the bank would then obviously receive those funds. A check would be done on that, but because that sort of transaction is inherently risky, the same degree of checking will need to take place—and does take place in practice in the banking industry—with countries in the EU that are more familiar to us. Broadly, there is harmony on that matter anyway.

I mentioned the SARs reform, which the Home Office leads on. We anticipate that new IT will provide a more user-friendly portal for reporters from all sectors and that improved data processing, storage, analytics and distribution will be required. Work is being done across the Treasury, the Home Office and the MOJ to look at how we can refine that.[Official Report, 17 January 2019; Vol. 652, c. 10MC.] At the moment, the basic problem is that there is a high volume of SARs and we could better interrogate that data pool.

The hon. Member for Oxford East mentioned the concerns raised by the Thames Valley police and crime commissioner. He has also raised them with me and I will get in touch with him about them. Obviously, we do not rest on our laurels with respect to the FATF evaluation. I have mentioned the concerns that the Government have acknowledged in terms of the FIU, and the improvements to SARs and to the Companies House register, on which we expect a Government report in Q1 or Q2 of this year.

The statutory instrument is needed to ensure that the UK’s anti-money laundering and counter-terrorism financing regime operates effectively and that the legislation functions appropriately if the UK leaves without a deal. I hope that I have adequately responded to the points raised.

[Kirsty Blackman]

Will the Minister give way?

--- Later in debate ---

[John Glen]

I am very happy to; I have obviously missed something.

[Kirsty Blackman]

When the Minister was talking about the resourcing of the FCA in the event of a no deal, he suggested that it would be able to draw down extra money very quickly. Is he basically suggesting that, in the event of a no deal, on 1 April, Parliament will come in and approve lots of money to be given to lots of different Government agencies to deal with that scenario, or will that happen in advance of a no deal? We have only 80 days to go.

[John Glen]

My colleague the Chief Secretary has set out comprehensive budgets for each Department for the financial year with respect to a no deal, and a process for urgent requests. The FCA would be able to raise its levy autonomously and separately from Government. It will have contingency arrangements for doing that quickly. I obviously cannot address all Government agencies and Departments, because it will be done through different Ministers in different Departments, but I can say that the Treasury has fully communicated the process for making additional requests in a no-deal situation to all Ministers in all Departments.

[Kirsty Blackman]

What about communicating that to Parliament rather than just to Ministers? I know that the scrutiny process is rubbish and Parliament does not have much say on Government spend generally, but surely it should have some say on that.

[John Glen]

If I take the Department for Education, for example, where a large portion of the budget is for providing food in schools, in a no-deal circumstance where additional costs might be associated with that food, the Minister would need to make a statement to Parliament about that and respond to it. Inherently in the process, there is a mechanism for the Government and different Departments to bring matters to Parliament. They would need to justify where they would spend that additional money and the basis for it. With respect, I think that is beyond the scope of the statutory instrument—at least, that is my judgment.

2019 Loan Charge

Debate between Kirsty Blackman and John Glen

Tuesday 20th November 2018 Westminster Hall

[John Glen]

I certainly will. I took the precaution of speaking to the Financial Secretary again this morning, and I would like to clarify that, with the time-to-pay arrangements, the five-year period will automatically be put in place for those with incomes of less than £50,000. For those with larger incomes, there is an opportunity for dialogue with HMRC. With respect to individuals who have not had that settlement made known, I will be happy, as we all will as constituency MPs, to take those cases up with HMRC.

HMRC is helping thousands of scheme users to get out of avoidance for good.

[Kirsty Blackman]

rose—

[John Glen]

Just one moment. It will consider all personal circumstances to agree a manageable and sustainable payment plan wherever possible, and it has recently announced simplified payment terms for individuals looking to settle their tax affairs before 2019.

I want to address another issue of the debate. Those who oppose the legislation have made claims that the loan charge will bankrupt public sector workers, including teachers, nurses and social workers. It is my understanding that 1,500, or 3%, of individuals will be involved in the health and education sectors but that most of the scheme users worked in professional services. The average salary of the scheme users was £66,000, which is considerably higher than the average annual wage.

--- Later in debate ---

[Kirsty Blackman]

I have contacted HMRC on behalf of constituents and have been told that it cannot talk to me about those individuals and that they will get an answer by 5 April. That is not helpful.

[John Glen]

I obviously cannot respond on an individual’s situation, but what I will say is that disguised remuneration schemes are complex and contrived and, as my hon. Friend the Member for Wycombe said, fail the “too good to be true” test.

Although the Financial Secretary and I have tremendous sympathy for those facing large tax bills, it is unfair to let people get away with not paying the tax they owe. There is support for people who have used the schemes and now find themselves in difficult situations, which require those affected to approach HMRC and bring the matter to a close. I will now allow my hon. Friend the Member for Wycombe to make some concluding remarks.

EU Customs Union and Draft Withdrawal Agreement: Cost

Debate between Kirsty Blackman and John Glen

Monday 22nd October 2018 Commons Chamber

[John Glen]

I have set forward the Government’s position with respect to the negotiation and the idea about a modest extension in terms of months. It will be for the Secretary of State and the Prime Minister to update the House sooner, but I acknowledge my right hon. Friend’s point with respect to the opportunities that exist beyond the EU in terms of finding a settlement that gives us the freedom to develop our trading relationships.

[Kirsty Blackman (Aberdeen North) (SNP)]

I was going to start my question by thanking the Chancellor for coming and answering questions on the cost of Brexit, but it is not the Chancellor who is here and I am afraid that the Economic Secretary is not doing a very good job of answering the questions on the cost. Can he tell us please: in the event of no agreement on staying in the customs union and the single market, what will be the loss in productivity to businesses in the UK and in Northern Ireland specifically and how many redundancies does he expect to see in Northern Ireland and in the UK? What is the loss cost to the UK economy of the EU citizens who have chosen not to come here or who have chosen to leave as a direct result of the Brexit vote? Lastly, if he truly believes that we would be better off as a result of the UK leaving the EU without being in the customs union or the single market, can he tell us what his models say about how much better off each of us will be?

[John Glen]

No, I cannot give the hon. Lady a cash figure for every member of the United Kingdom, but what I can say is that the Government and the Treasury are determined to make preparations for all eventualities. That is why we are preparing 70 statutory instruments to take through this House in the event of a no deal. The EU should be very clear that we are going to be ready for all eventualities while being committed to negotiating the best possible outcome, as directed by the British people two years ago.

Oral Answers to Questions

Debate between Kirsty Blackman and John Glen

Tuesday 11th September 2018 Commons Chamber

[John Glen]

The Chancellor has set out in successive Budgets our commitment to invest in this economy with the national productivity plan. We must recognise that we need affordable investment, and we have found out over the past 24 hours that the Opposition’s plans are confused. If £500 billion is just a down payment and the start of the investment, where will it end? Is that affordable?

[Kirsty Blackman (Aberdeen North) (SNP)]

Let us have some facts. The OBR predicts that unsecured household debt will reach 47% of income by 2021. The last peak was 45% in 2007. Families are using credit to pay for essential items. The people who are going to food banks are often in work, because work is not paying. What is the Treasury going to do? Will Ministers admit that austerity has created this mess?

[John Glen]

The Government are creating the conditions for growth and raising the national living wage. When I visited Glasgow just a few weeks ago, it was encouraging to see the constructive way that the 1st Class Credit Union and Sharon MacPherson of Scotcash are working with the poorest to help them when they are in difficulty.

[Kirsty Blackman]

I am really pleased that the Chancellor said that he will consider visiting a local pub. Will he consider coming to the Community Food Initiatives North East food bank in my constituency, which has today called for more food because its shelves are empty? If he was to come and visit a food bank such as CFINE’s, he would find out at first hand the effect that Tory UK Government policies are having on individuals up and down the country. The Minister cannot stand there and say that employment is up when the reality is that people are poorer than ever.

[John Glen]

I will take no lectures from the hon. Lady about food banks. The Trussell Trust was founded in my constituency. I have a dialogue with the charity, which has done a great deal to assist many people up and down the country, and I am proud of its work.

Banking Misconduct and the FCA

Debate between Kirsty Blackman and John Glen

Thursday 10th May 2018 Commons Chamber

[Kirsty Blackman]

Will the Minister commit to, if possible, putting the RBS letter in the Library, so that we can all see it? Will he also ensure that when the FCA does conclude the final part of the report, we can all see the full version as soon as possible?

[John Glen]

I am grateful for that intervention. I am happy to clarify that the letter has been copied to the chair of the APPG and the Chair of the Select Committee, and I will make it more widely available.

There are already a number of avenues for SMEs seeking a resolution when dealing with their bank. Our smallest businesses have the Financial Ombudsman Service. I am of course aware of the “Dispatches” programme, and I have met the chief executive. The FOS is reviewing its operations and addressing the matters raised.

Where there are widespread issues, the FCA can ensure, and has ensured, redress through industry-wide or firm-specific redress schemes. Of course, there is also the usual legal process open to business, although I know this can be a time-consuming and costly process.

Since the last debate, the FCA has published a consultation paper on expanding the remit of the Financial Ombudsman Service, which would widen eligibility to include a greater range of SMEs.

Oral Answers to Questions

Debate between Kirsty Blackman and John Glen

Tuesday 16th January 2018 Commons Chamber

[Kirsty Blackman (Aberdeen North) (SNP)]

Personal debt is the biggest worry for many people I meet. The figures released by the Institute for Fiscal Studies today show that a third of those on the lowest incomes are in net debt. This debt is persistent; it is a spiral that people get stuck in for years. What are the UK Government doing to improve the financial position of households with the lowest incomes?

[John Glen]

We recognise that on occasions people find themselves in challenging debt situations. That is why we committed in our manifesto to a six-week breathing space, and we will bring that legislation forward in due course in the Financial Guidance and Claims Bill.

[Kirsty Blackman]

Over a third of people aged under 45 live in households with financial wealth of less than zero. For too many people there is not enough money at the end of each month or each week. From next year individuals earning less than £26,000 in England will pay more income tax than they would if they lived in Scotland; how can the Minister justify that?

[John Glen]

The Government recognise the challenges facing those on lower salaries, which is why we have increased the tax-free allowance, have had the eighth successive fuel duty freeze, and have increased the national living wage above the inflation rate.