UK Financial Services
Lucy Rigby Excerpts(3 days, 15 hours ago)
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The Economic Secretary to the Treasury (Lucy Rigby)
It is a pleasure to serve with you in the Chair, Mr Twigg. I am not sure either of my descendants wants to serve in this Chamber yet—to the point made by the shadow Economic Secretary to the Treasury, the hon. Member for Wyre Forest (Mark Garnier)—but there we are.
I thank my hon. Friend the Member for Buckingham and Bletchley (Callum Anderson) for securing this debate and for his consistent advocacy for the importance of financial services to the United Kingdom. While I am not sure I needed any convincing, even in the short time since returning to this brief I have seen that importance at first hand: in Leeds, home to an incredibly vibrant financial services cluster; in conversations that I have had with debt advice organisations about the difference that timely support can make to those in difficulty; and in Bournemouth, where I met degree apprentices and those at the beginning of their careers who are building the sector’s future.
Those few engagements have reinforced for me just how much a thriving financial services sector matters to communities right across this country. I wholly appreciate the contributions of all hon. Members to this debate, whether they wear their financial services experience on their sleeve or seek to hide it—whatever experience they have, it has been a very informed debate.
My right hon. Friend the Member for Leeds West and Pudsey (Rachel Reeves), to whom I pay tribute, put financial services at the heart of this Government’s growth agenda and launched our 10-year strategy for the sector. The new Chancellor has been equally clear about its importance. Within days of taking office, he went to Bloomberg, reiterating his support for the central importance of our financial services sector. I think that that answers, at least in large part, one of the questions put to me by the right hon. Member for Godalming and Ash (Sir Jeremy Hunt); the remainder of his questions I shall seek to answer as well. I look forward to supporting the Chancellor as we continue to deliver on the Government’s financial services strategy.
In doing so, I recognise the challenges, but also the opportunities, in the five areas that my hon. Friend the Member for Buckingham and Bletchley has identified as central to the future of financial services. I will take each of those themes in turn. I thank him for his continued advocacy for strengthening UK capital markets and ensuring that those long-standing strengths support long-term investment in the British economy. He is right to recognise the progress that has already been made.
Through the financial services strategy, the Government have taken decisive action to increase investment, to improve outcomes for savers and to support growing British businesses. We have delivered the Pension Schemes Act 2026, established a framework to monitor delivery of the Mansion House accord, enabled targeted support for consumers and launched measures to help to build a stronger retail investment culture, a point I will come back to.
Mobilising more domestic capital must go hand in hand with ensuring that firms can access the right finance at the right time. Innovative businesses need clear funding pathways, from start-up right the way through to scale-up and into public markets, if they are to invest, expand, create jobs and, of course, remain headquartered in the UK. That is exactly why we are strengthening funding pathways at every stage of business growth. The expanded British Business Bank is helping to address market gaps and crowd in investment, while the National Wealth Fund is mobilising investment into the sectors and infrastructure that will drive long-term economic growth.
We also recognise the particular challenge of later-stage funding. Our reforms are intended to support a more diverse range of funding sources and connect high-growth firms with the capital that they need to scale domestically and internationally. Strong capital markets are central to that objective. The UK has deep markets, global expertise and a position as Europe’s leading investment hub. There is no complacency, to answer my hon. Friend’s point, in my saying that we must ensure that our markets consistently deliver what companies need and make the UK the best place for firms to start, scale, list and stay.
PISCES—the private intermittent securities and capital exchange system—provides a stepping stone from private to public markets. Hon. Members may have recently taken note of its first major auctions, which saw Wayve and Moneybox sell more than £100 million of shares between them. We have removed barriers to secondary fundraisings, improved market liquidity and eased accounting and reporting requirements for the smallest companies, because listing must be the beginning of a company’s growth story, not the end.
Alongside these reforms, we are encouraging pension funds to diversify—I acknowledge the passionate case made by the hon. Member for Carshalton and Wallington (Bobby Dean)—supporting investment in private markets and helping savers to access better information and guidance. Trustees and fund managers must, of course, remain responsible for decisions made in the best interests of their members and customers. Sustainable success will come from making UK assets an attractive investment proposition.
On retail investment, I share the view of my hon. Friend the Member for Buckingham and Bletchley that too much capital remains in low-yield savings when it could be working harder for individuals and the wider economy. We are therefore helping people to understand the opportunities and risks of investing, and giving them access to appropriate guidance and support. We have also been working closely with the Bank of England’s Financial Policy Committee to increase the financial system’s ability to support economic growth, which relates to another of the questions put to me by the right hon. Member for Godalming and Ash on financing for SMEs.
Taken together, those measures join up the full investment chain: mobilising more domestic savings, directing capital towards productive assets, widening access to finance for growing businesses and ensuring that UK capital markets help business to build and grow global companies here.
Secondly, I am grateful to my hon. Friend the Member for Buckingham and Bletchley for pointing out the opportunities presented by the digitalisation of financial markets. That is something I am particularly passionate about. The shadow EST, the hon. Member for Wyre Forest, talked about the importance of innovation to financial services—something that I talk about almost on an hourly basis in this job. The UK is a global leader in financial services because we have consistently embraced innovation; I will not go through the coffee houses that were set up on the banks of the Thames decade by decade. I should say at this point that it is fantastic to have leaders in the insurance industry listening to this debate from the Public Gallery. Innovation is important. We must consistently innovate, because it is key to our global competitiveness and the future of our financial services industry.
Our ambition is to digitalise the UK’s financial markets and make the UK a world leader in tokenised finance. It is reassuring and encouraging to hear the right hon. Member for Godalming and Ash indicate that he thinks that is a sensible ambition. We are moving from experimentation to adoption at scale, as set out in our wholesale financial market digital strategy. We appointed Chris Woolard as the Government’s wholesale digital markets champion, and he published his first report in July. We are enabling firms to adopt tokenised securities through the digital securities sandbox, where the first firm recently received permission to conduct live activity. The regulators have committed to publishing a full cross-authority road map on tokenisation of wholesale markets later in 2026.
We have committed to issuing DIGIT, a digital sovereign debt instrument, no later than quarter 1 2027. Alongside that, we are modernising and optimising the foundations of our markets, moving to a T+1 settlement cycle from quarter 4 2027 to reduce risk and improve efficiency. The hon. Member for Witney (Charlie Maynard) talked about the importance of stablecoins, and I think he welcomed the innovation objective that we are giving to the Bank of England. Stablecoins are important because they can enable faster and more efficient transactions, which means that money that would otherwise be held up can be spent by businesses on other things—they free up capital by being an efficient means of payment. The Government want to see Great British pound denominated systemic stablecoins and, as he is aware, we have established the regulatory regime. There really is no shortage of ambition from the Government when it comes to stablecoins—[Interruption.] The hon. Gentleman is gesturing as if I have forgotten something; I think that means he wants me to address the matter of a central digital bank currency. Work in that regard is ongoing among the Government, the Treasury and the Bank, and we will set out the next steps very shortly.
Many Members mentioned AI, which is already delivering benefits across financial services, from improved customer services to tackling fraud, enhancing productivity and supporting decision making. We now have an AI adoption plan; I will not rehearse that, but I want to pick up on the hon. Gentleman’s points, since he rightly highlighted the extreme importance of resilience in our financial system—as he pointed out, the Governor has been speaking about that recently. Work is going on across Government, including with the regulators and in international fora. I hope I can reassure him that the Government are taking the issue about as seriously as it is possible to take it.
The third area that my hon. Friend the Member for Buckingham and Bletchley mentioned was clean energy. The UK is playing a leading role in supporting and financing the global net zero transition, which my hon. Friend the Member for Bristol East (Kerry McCarthy) has spoken passionately about in this place on many occasions. As my hon. Friend the Member for Buckingham and Bletchley will be aware, the UK is already one of the world’s leading sustainable finance centres, and the Government’s focus is on how we can evolve and expand that leadership. We are delivering a number of targeted initiatives and prioritising changes that will have the greatest impact, such as UK sustainability reporting standards. We are also focused on making the UK a global hub for transition finance, which is not only essential to meeting our global net zero goals, but a major opportunity for UK growth and investment.
I will speed up, but I want to mention financial inclusion as another aspect of my brief that I am particularly passionate about. I am grateful to my hon. Friend for his recognition of the financial inclusion strategy; I intend to make it a step change in how easily all our constituents can access the financial services they need. He rightly recognised that the ability to open a bank account, to build a modest savings buffer, to access safe and affordable credit, to secure insurance and to protect against life’s shocks is fundamental to participation in our economy and, therefore, to participation in our society. The hon. Member for Strangford (Jim Shannon) spoke passionately about the importance of ensuring that financial services are available to all who need them. For all those reasons, those areas are the focus of our financial inclusion strategy, with actions ranging from supporting those without a fixed address to open a bank account, to supporting our credit union sector through a £30 million transformation fund.
You are indicating, Mr Twigg, that I should draw my speech to a close. Before I do so, let me again thank my hon. Friend the Member for Buckingham and Bletchley for securing the debate and all Members for their contributions.
Face-to-Face Banking: Rural Areas
Lucy Rigby Excerpts(3 days, 15 hours ago)
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The Economic Secretary to the Treasury (Lucy Rigby)
It is a pleasure to serve with you in the Chair, Mr Wishart. I am very grateful to the hon. Member for South Devon (Caroline Voaden) for securing this debate. I recognise that she has been a consistent advocate for her constituency on this matter.
I was going to make the point that access to banking attracts considerable interest from across the House. However, I hardly need to say that, given the number of hon. Members who have attended today, or who have personally raised this issue with me while I have been in this role—or indeed who raised it with the former Prime Minister at the Dispatch Box, as the hon. Member for South Devon did recently.
I shall endeavour to respond to all the points that have been raised today. I am, I fear, under pressure to do so in a dynamic fashion—following the remarks of the right hon. Member for Beverley and Holderness (Graham Stuart)—so I will do my best.
I am particularly grateful to all those Members who have shared the practical and, in some cases, very personal circumstances of their constituents—that is especially important. I recognise that in rural communities—the subject matter of this debate—the loss of a branch can make everyday banking much harder. That was recognised by the hon. Member for South Devon, as well as my hon. Friends the Members for Clwyd East (Becky Gittins), for Bury St Edmunds and Stowmarket (Dr Prinsley) and for Morecambe and Lunesdale (Lizzi Collinge), and the hon. Member for North Norfolk (Steff Aquarone), and plenty more besides—too many to name.
It is right to acknowledge, as many hon. Members have, that the way people bank has changed significantly in recent years. Many customers now benefit from the convenience and flexibility of online and mobile banking. For many people, those changes have made managing their finances easier, more convenient and also more accessible. However, it is important that we recognise that while digital services work well for many customers, many people still need to access banking services in person—a point that has been set out thoughtfully and, in some cases, very movingly by hon. Members today. Those include some members of our communities who are older or may be more vulnerable, and those who face barriers to digital banking, not least because of connectivity—a point well made by the hon. Members for South Shropshire (Stuart Anderson) and for Chester South and Eddisbury (Aphra Brandreth). Many small businesses also continue to rely on face-to-face support and cash services.
Around 3.3 million current account holders did not bank online or through a mobile app in 2024. That is a significant number. As has been detailed in this debate, branch closures can have a significant impact on communities, especially where transport links are limited—even on a good run, as the hon. Member for South Devon put it—and where towns provide essential services for a much wider rural area. That is exactly why access to banking services remains important. As a Government, we are committed to ensuring that people who need in-person banking can continue to access essential services.
As the hon. Member for Havant (Alan Mak)—who is no longer here—recognised, access to cash is protected by the Financial Services and Markets Act 2023, but access to banking services is currently not. That is why in May the Government announced an independent review into access to banking services chaired by Richard Lloyd. That review will assess whether changes in access to in-person banking services are causing detriment. It will gather evidence on the extent of that detriment, and look into which groups are affected and which of those are most affected. As hon. Members know, that review has been gathering evidence from consumers, businesses, charities, community organisations, local authorities and industry right across the UK. It will consider whether current arrangements are meeting the needs of customers and communities. That includes banking hubs and other alternative banking services.
I know that many Members—not least those in this Chamber—would like immediate answers to these questions, but it is important that interventions in this space are based on robust data and evidence, and a clear understanding of where the problems are and who they affect. That is why the Government’s review matters. I am not making a case for it to be a substitute for action; it is the evidence base that will enable the Government to act in the right way. Importantly, as Members have said, the Financial Services and Markets Bill, which is currently in the other place, includes a power that will allow the Government to take action to protect access to banking services. Together, the review and the Bill will enable the Government to respond swiftly and proportionately to the results and evidence from the review.
Graham Stuart
Banking hubs themselves came out of an industry response from the NatWest executive. Does the Minister agree that we must present the information from the Lloyd review to the banking groups, be clear about what we want, and give them the opportunity to respond and provide a solution, as they did with banking hubs, so that we can perhaps avoid a more heavy-handed governmental approach?
Lucy Rigby
I do not want to prejudge the way that we will deal with the conclusions of the review. In response to one of the questions that I was asked, I can say that the Lloyd review’s results and report will be published next month. We can expect it in that timeframe.
The Government’s commitment is further reflected in our support for the roll-out of 350 banking hubs by the end of this Parliament. I am pleased to report that we continue to make real progress against that target. More than 280 banking hubs have been announced, and 240 are already open. As hon. Members know, they provide assisted cash services and allow customers to receive face-to-face support from community bankers representing individual banks. I very much welcome the progress that has been made on the roll-out and on expanding the services available via the hubs. Community banker services now more closely resemble those of traditional branches.
Torcuil Crichton
Island communities like mine simply do not fit the parameters of banking hubs. The population of Uist, for example, is half the size of that required for a banking hub. Will the Minister consider island solutions in the roll-out of new banking hubs?
Lucy Rigby
We are considering the entirety of the geography of the United Kingdom, as my hon. Friend would want us to. His point relates to not just access to cash but access to banking services, and it is important that the Government take action in that area.
Let me go back to the services now available via banking hubs. Customers can now get help not only with account opening and changes of address, complaints and powers of attorney, but with things such as bereavement support and concerns about fraud and scams, which have been raised in the debate. They can also get help with digital banking. We and the industry recognise that digital banking services are not always completely intuitive, so some people may need assistance to use them. Many hubs are piloting further improvements, including Saturday opening hours and customer liaison officers.
A number of hon. Members raised concerns about how decisions are made about the location of banking hubs under the existing legislation, and whether the current arrangements adequately reflect the circumstances of rural communities in particular. Decisions about the location of banking hubs are made independently by Link, following an access to cash assessment. Link assesses a range of criteria and factors, including population size, vulnerability, transport links, the local retail environment and post office facilities. There is a real strength of feeling across the House about how those criteria are applied, and many feel that there should be a wider consideration of access to face-to-face banking services, beyond access to cash alone—
Motion lapsed (Standing Order No. 10(6)).
Oral Answers to Questions
Lucy Rigby Excerpts(2 months, 1 week ago)
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Matt Bishop (Forest of Dean) (Lab)
The Chief Secretary to the Treasury (Lucy Rigby)
Effective transport links are vital to the prosperity and wellbeing of people across the country, including in our border communities. We have been working closely with the Welsh Government to deliver a plan for Welsh rail, and we continue to work with devolved Governments to ensure that border communities stay connected.
Matt Bishop
I thank the Minister for her answer. The Forest of Dean sits on the English-Welsh border, and many of my constituents rely on cross-border transport links to access work, education and healthcare. Does she agree that improving connectivity in border communities can play a significant role in driving economic growth? What consideration is the Treasury giving to supporting investment in key cross-border transport infrastructure?
Lucy Rigby
Border communities rely on strong transport links, and my hon. Friend is a strong advocate for the interests of his constituency and those in the surrounding area. The Government are delivering for people in all parts of the UK, including investments that will benefit those on both sides of the English-Welsh border. That includes the investment in places like Padeswood, on the Wrexham to Liverpool line, as part of the £445 million of investment allocated for rail enhancements in Wales at the 2025 spending review.
Tim Farron (Westmorland and Lonsdale) (LD)
The TriLink scheme, which connects north-west England with the south of Scotland and upgrades the west coast main line—the busiest railway line in western Europe—has been deferred by this Government and their predecessors for years. This very likely contributed to the near-fatal derailment at Shap just a few months ago. Does the Minister think that the right hon. Member for Makerfield (Andy Burnham) believes that the north-west of England exists beyond the M62, and if he does, will he invest in upgrading the railway line, for the good of everyone in England and Scotland?
Lucy Rigby
My right hon. Friend the Member for Makerfield (Andy Burnham) will speak for himself, but I am confident that his view is that growth extends far beyond the area that the hon. Gentleman referred to. Most importantly, this Government’s approach is to ensure that growth can be generated right across the country, rather than in just a few postcodes.
Mrs Elsie Blundell (Heywood and Middleton North) (Lab)
Munira Wilson (Twickenham) (LD)
The Chief Secretary to the Treasury (Lucy Rigby)
We have been clear that Heathrow expansion needs to benefit everyone, not just London. The Department for Transport has shown that expansion would deliver UK-wide support for trade, with 40% of the estimated GDP benefits from expansion being outside London and the south-east.
Munira Wilson
When the Chancellor announced her support for Heathrow expansion last year, she claimed that it would deliver 0.43% GDP growth. The Heathrow expansion national policy statement snuck out last week predicts a 90% reduction in that figure to just 0.05% growth; what little growth there might be will largely be sucked out of other parts of the country, such as Birmingham and Manchester. Will she now finally admit that Heathrow expansion is not the grand growth plan she thought it was, and that it will hurt areas outside London the most?
Lucy Rigby
Nothing was snuck out. A third runway at Heathrow means more than 60,000 good local jobs, and more than £40 billion for the British economy. The hon. Lady’s question rather highlights the Lib Dems’ curious approach to growth. When they were in government, they decimated our economy with austerity, and now they oppose all the investment in infrastructure needed for growth. This Government are taking a wholly better approach.
John Grady (Glasgow East) (Lab)
Sarah Edwards (Tamworth) (Lab)
The Chief Secretary to the Treasury (Lucy Rigby)
The Pride in Place programme provides £5.8 billion of support to 284 neighbourhoods right across the country, including five places in my hon. Friend’s constituency, which she does so much to advocate for. We will set out more details of further funding in the Budget.
Harriet Cross (Gordon and Buchan) (Con)
In my constituency, we have lost the Scotbeef abattoir and the famous Donald Russell butchers in recent months, both of which were crucial to the agricultural supply chain. Both blamed high energy costs and the increased costs of doing business, such as the huge rises in national insurance under this Government and big business rate rises under the SNP. What steps is the Treasury taking to support, not suffocate, the agricultural supply chain and other crucial elements of the farming sector?
Costs for Motorists
Lucy Rigby Excerpts(3 months, 2 weeks ago)
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Sir Mel Stride (Central Devon) (Con)
(Urgent Question): To ask the Chancellor of the Exchequer if she will make a statement on the Government’s plan for costs for motorists.
The Chief Secretary to the Treasury (Lucy Rigby)
Mr Speaker, your comments have been fully noted, and I will ensure that they are fed back to the entire ministerial team.
The Government are taking steps to support households and businesses with fuel costs in response to the conflict in the middle east. A rapid de-escalation in the middle east remains the best way to bring down fuel prices. The most impactful step, of course, would be to reopen the strait of Hormuz. That is exactly why the UK Government are playing a leading role in the international effort to get shipping flowing freely. Indeed, I contrast that with the position of the Leader of the Opposition, who would have rushed us to war. [Interruption.]
Alongside this key step—[Interruption.] Mr Speaker, the boys’ club—
Mr Speaker
Order. I cannot hear what the Minister is saying. We have agreed to an urgent question in order to hear from the Minister. I am proud of this Parliament and of this country, so I want to hear what the Minister has to say.
Lucy Rigby
Alongside this key step, the Government’s priority will continue to be helping families with the cost of living, including through protecting the public finances. The Government are taking action to bear down on prices at the pump, and in November we extended the 5p per litre cut in fuel duty for a further five months. Right now, petrol and diesel are 11p per litre cheaper than they would have been under the plans we inherited from the previous Government.
Some fuels have been more impacted than others by the conflict, and we recognise that. The Government also recognise the pressures being faced by drivers and other fuel users. That is why we are introducing a package worth over £400 million that combines broad support for motorists with targeted support for the sectors most exposed to and affected by higher fuel prices.
Yesterday the Prime Minister made it clear that we will not increase fuel duty this year. The temporary 5p cut will be extended until the end of the year. Taken together, the Government’s decisions will save the average motorist over £120 this year, compared with the plans we inherited from the previous Government.
We also recognise that farmers face substantially increased costs for fertiliser and fuel. That is why we are going further and cutting the duty rate on red diesel by over a third per litre, to the lowest rate in over 20 years. That will help other users of red diesel too.
The road haulage sector is vital for transporting goods across the country. Recognising the sector’s key role and the increased costs that it is facing, we are introducing a 12-month holiday from vehicle excise duty for the majority of heavy goods vehicles. This will save a typical HGV over £600—up to £912 for some vehicles—on top of the savings that I have just described for fuel duty.
To conclude, this change is one part of our support for households and businesses. It combines universal support for motorists with targeted support for those most affected by higher fuel prices. My right hon. Friend the Chancellor will update the House later today on further support measures for households and businesses.
Sir Mel Stride
May I begin by agreeing with you, Mr Speaker, and saying how disrespectful it is that this U-turn on fuel duty has already been released to the media earlier this week? The news was plastered across national newspapers on Monday, and yesterday the Chancellor conducted a visit to a petrol station with journalists, but it has taken until today for this House to be updated. This is a pattern, Mr Speaker—including, of course, the relentless briefings before the Budget last year about tax measures and fiscal forecasts. You would think that a Government with so little support among their own Back Benchers would have more respect for this place.
This change to fuel duty is yet another humiliating U-turn from a Chancellor and Prime Minister whose authority is shot. The Chancellor fought us tooth and nail on this issue. The Conservative party has been campaigning for a fuel duty freeze for months. The Chancellor repeatedly rejected those calls, creating unnecessary uncertainty for motorists and businesses. Why did it take her so long to realise that putting up fuel duty during an energy crisis is a bad idea? Does she really expect us to believe that this is all only happening, as she has suggested, because of better growth?
Let us be clear: the Chancellor has been pointing to the slight upward revision in the International Monetary Fund’s growth forecast earlier this week. That forecast was for growth of 1%, but until April the IMF was forecasting growth this year of 1.3%, so where is the supposed growth dividend? Perhaps the Minister can address that momentarily. Is the Chancellor seriously suggesting that the outlook is better now compared with how it looked at the last fiscal event? On wider measures, will the Minister confirm what has also been briefed to the press and not told to the House: that HM Revenue and Customs’ mileage rates are to be changed?
Let us be clear that this is a Government lurching from one U-turn to the next. Their mismanagement has left our economy weak. The reality is that they are in no position to support people through these cost of living pressures because they have mismanaged the economy. They have no credibility left, and clearly they have no respect for the House.
Lucy Rigby
Put simply, as I said, the shadow Chancellor’s party would have had motorists hurtling full speed towards higher fuel costs. It is only because of the action that this Government have taken that we have applied the brake to the hikes that his party would have introduced. The Conservatives would have introduced higher costs; we are keeping the freeze on fuel duty and protecting millions of motorists right across the country. Exactly as I said, we are taking further measures on red diesel and for HGV drivers.
That is on top of additional action that we are taking on the cost of living. The shadow Chancellor and I saw each other in the studios earlier this morning when I was out there talking about the free, unlimited bus travel for children that the Chancellor will update us on—
Mr Speaker
Order. I just say to the Minister that if that was being said in the studios, rather than to the House, it is not a good example—it confirms that you somehow think that Sky or BBC are more important than Back Benchers, elected by constituents across this country, who must hear it second-hand. It is not acceptable. Do not think that it is a bonus to tell the House that now.
Lucy Rigby
Mr Speaker, the Chancellor will come to the House later on today, and she—
Mr Speaker
Order. The point I was making was that you said you were doing the studios. You are here now, and I think it should have been announced here first. Do we both agree?
Lucy Rigby
My apologies, Mr Speaker. I had intended to say just then that the Chancellor will come to the House and give a full statement on everything, including the matters that we are discussing.
I am sorry that the shadow Chancellor is so upset and appalled by the recent growth figures. I am in the business of talking this country up rather than down. Indeed, I am grateful to him for highlighting that growth has been revised up, interest rates are coming down, inflation is coming down and real wages are going up. As I said, that is because of the prudent decisions that the Government have taken, all of which are allowing us to take further action on the cost of living.
The action that we are taking on fuel duty is very important. It will save millions of motorists across this country a lot of money. I will address the point on HMRC mileage rates: as I said, the Chancellor will come to the House later and talk about the full package.
Liam Byrne (Birmingham Hodge Hill and Solihull North) (Lab)
Thank you for facilitating the urgent question, Mr Speaker. I welcome the announcements on fuel duty, but I did not hear the Chief Secretary say anything about remedies for the new costs on drivers of electric vehicles. Those new costs, imposed at the last Budget, are suppressing demand for electric vehicles to such an extent that UK automakers are having to subsidise demand by £5 billion a year. That is imperilling their future and imperilling the target of doubling automotive production by 2035. Can we have a statement about what the Government will do to reform the zero emission vehicle mandate and get in place a plan that leads to a thriving auto industry, not a dying one?
Lucy Rigby
My right hon. Friend makes an important point. I know how passionate he is about these issues. He refers to changes made at the Budget, which were made with the best of intentions and from the point of view of encouraging the use of electric vehicles. I believe that the Chancellor may say something on that later on.
Daisy Cooper (St Albans) (LD)
Like so many Labour Government announcements, the announcement to extend fuel duty relief later this year is too little, too late. When we look around the world, we see other countries acting now. Other countries are cutting fuel duty now. Other countries are cutting public transport costs now. That is why we Liberal Democrats continue to call on the Government to cut fuel duty and public transport costs now. What message does the Minister think it sends to people that the Government will take action later in the year when people are feeling the pain in their pockets right now?
On farmers, the Government will be aware that the cost of fertiliser is going through the roof; world prices are up 44%. The Minister says that there will be a further cut in duty on red diesel, but what assessment have the Government made of the cumulative impact of the war in Iran on farmers? It is clear to me that the cut in red diesel duty will not touch the sides when the cost of fertiliser is rocketing through the roof.
Lucy Rigby
The hon. Member makes a really important point about the cost that farmers are facing, but that is exactly why we are taking steps to cut the duty on red diesel by more than a third to its lowest rate in over 20 years. As I said, that will help not just farmers, but other sectors, too, including in relation to freight. I am afraid that, as so often, we hear suggestions from the Liberal Democrats, “Cut this”, “Cut that”, “Try to bring things down”—[Interruption.]—but they are never funded. We manage the public finances—[Interruption.]
Mr Speaker
Order. The hon. Member for St Albans (Daisy Cooper) has asked her question and I want respect given to the Minister when she is answering it, please.
Lucy Rigby
Thank you, Mr Speaker. The point is that we have to manage the public finances responsibly. We cannot put in place measures that are not fully funded, and I wish that some of the proposals being put forward were adequately backed up and fully funded.
Jim McMahon (Oldham West, Chadderton and Royton) (Lab/Co-op)
These are welcome announcements, and I welcome the Chief Secretary to her place. The Government have a very important convening power, and one thing that residents in Oldham raise all the time is how much they pay for car insurance compared with those in other areas. For low-paid workers, particularly those who need their car for business, that additional premium represents a lot of money going out every year above and beyond what those in neighbouring areas pay. Will the Chief Secretary convene the insurance industry and see what can be done to finally address the postcode lottery?
Lucy Rigby
My hon. Friend raises a really important issue, and I thank him for all the work that he has done in this space to try to bring down the cost for people across the country. In my old role as Economic Secretary to the Treasury, I was closer to the work of the insurance sector and the work that the current Economic Secretary is now taking forward to try to ensure that prices are brought down, but I am more than happy to convene with the new Economic Secretary and take forward the work that my hon. Friend suggests.
Bob Blackman (Harrow East) (Con)
Obviously, the Minister is not aware that the previous Conservative Government froze fuel duty for 14 years. Some of us lobbied for the Government of the day to abolish the escalator, but we did not do it. However, may I ask her one key question? How much extra money has the Treasury obtained as a result of the rise in the wholesale price of fuel at the pumps?
Lucy Rigby
I am afraid that the hon. Member has entirely missed the fact that the plans that his Government left in place would have seen fuel duty go up. It is only because of the action that this Government are taking that millions of motorists across the country will save money.
Justin Madders (Ellesmere Port and Bromborough) (Lab)
I welcome the efforts to support drivers at the petrol pumps, but this situation has not led to an increase in demand for electric vehicles. As the Chair of the Select Committee, my right hon. Friend the Member for Birmingham Hodge Hill and Solihull North (Liam Byrne) has said, the automotive sector is facing a real crisis because of the ZEV mandate. I was at the Vauxhall plant in my constituency last week; there is not, and there will not be, the consumer demand to meet the escalating demands of the ZEV mandate. Will the Treasury please use its convening power across Government to bring forward the review of the mandate?
Lucy Rigby
As I said in response to my right hon. Friend the Member for Birmingham Hodge Hill and Solihull North (Liam Byrne), I appreciate that this is a really important issue, and I know what an important issue it is to my hon. Friend and his constituency too. As I said, I am more than happy to take up the matter, and I will discuss it with the Exchequer Secretary.
David Chadwick (Brecon, Radnor and Cwm Tawe) (LD)
Increased fuel costs are a real pain point in a constituency like mine. Rural households that depend on their cars spend nearly £800 a year more on fuel than people who live in urban areas. Will the Government listen again to the Liberal Democrats’ demands for an immediate 10p cut in fuel duty, which would bring down pump prices by 12p per litre?
Lucy Rigby
I think that these suggestions are being made with the best of intentions, but with the deepest respect to the hon. Member, this is all motherhood and apple pie. If we want to do these nice things, we have to be able to say where the money will come from.
Kirsteen Sullivan (Bathgate and Linlithgow) (Lab/Co-op)
I thank the Minister and my right hon. Friend the Chancellor for recognising the important role that hauliers and freight play in our national and local economies. The steps announced yesterday will hugely support the 3,500 people in my constituency who work in transport and logistics. These are the people who keep our shelves stocked and our economies moving. Will the Minister liaise with her colleagues in other Government Departments on what other support could be made available for the logistics sector, including improved welfare facilities?
Lucy Rigby
My hon. Friend raises the important issue of hauliers and the road haulage sector. What we are discussing today is so critical to the costs that hauliers are paying, including vehicle excise duty, which of course is on top of the changes we are making to fuel duty to save hauliers money. This is one of the ways in which we are recognising the critical role that hauliers play in setting costs, including of consumer goods. All these things fit together, and I recognise how important the sector is to my hon. Friend’s constituency.
Dame Harriett Baldwin (West Worcestershire) (Con)
Rural drivers in West Worcestershire will be delighted that the Chief Secretary to the Treasury has seen the political reality that it would have been mad to put another 5p on petrol on 1 September, but can she explain to my constituents why we are not allowing oil and gas extraction from our own basin yet we are allowing an increase in Putin-produced oil and gas?
Lucy Rigby
I am grateful to the hon. Member for her question, but if it would have been so mad to deal with fuel duty in that way, why was it her party’s intention to do exactly that? On oil and gas, we have been very clear that they will play a part in our fuel mix for years and years to come.
Adam Thompson (Erewash) (Lab)
The Tories oversaw the only Parliament in history where living standards were lower at the end than they were at the start. This Government, by contrast, got wages up more in a year than the Tories did in a decade, with growth and inflation rates better than forecast. Does the Chief Secretary to the Treasury agree that ours is the best possible economic plan when it comes to delivering for my constituents, including their interests as motorists?
Lucy Rigby
I am grateful to my hon. Friend for his question. It is because of the fiscally responsible choices that the Chancellor has made that growth and real wages have gone up, and inflation and interest rates have come down. [Interruption.] These things do not happen by accident; they are because of the fiscally responsible way that the Chancellor is managing our economy. That is fiscal responsibility for a purpose, that purpose being to support working people across this country.
Sir Alec Shelbrooke (Wetherby and Easingwold) (Con)
I welcome the hon. and learned Lady to her new role in the Cabinet. She was an excellent colleague when she was on the NATO Parliamentary Assembly, and it does not surprise me that she is the first of her intake to make it.
It is in that spirit that I hope to be able to help the hon. and learned Lady in marking out her career. Some 90% of my constituency is rural, and increases in the price of fuel worry people. They do not put money into the economy because they do not know where that price will go. Will the hon. and learned Lady take the opportunity to do something that should have been done by the last Conservative Government? Rather than put out false figures for raising fuel duty that never happen, it would be a much better boost to the economy if people had certainty about their fuel costs.
Lucy Rigby
I am very grateful to the right hon. Member for his kind comments. I appreciate where he is trying to go with his remarks, but what we are doing with this announcement is saving the average motorist over £120 this year, compared with the plans that we inherited. By saying—as the Prime Minister has—that we are going to extend the cut until 31 December, we are trying to give people a bit of certainty and reassurance. We recognise that family budgets are really stretched at the moment, which is why we are introducing this measure, and plenty of others, to try to help people with the cost of living.
Patricia Ferguson (Glasgow West) (Lab)
Does the Chief Secretary to the Treasury agree that it is right that we did not rush into the Iran war and that our Government’s plans and actions to support households are responsive to changing events, rather than being knee-jerk reactions that end up causing more damage to our economy in the longer term?
Lucy Rigby
My hon. Friend’s comments again highlight that the Conservative party would have raced to war. When I said that earlier—Conservative Members are doing it again; they are shaking their heads at me. The reality is—
Lucy Rigby
Okay. One of two things is true: either the Leader of the Opposition said that she would have taken us into the conflict and she did not mean it, in which case she is really confused, frankly; or she said it and she meant it, which is demonstrative of catastrophic judgment. Neither of those things—catastrophically bad judgment or deep confusion—is an ideal quality for someone who wants to run the country.
Wendy Chamberlain (North East Fife) (LD)
The Government have repeatedly pointed to the fuel finder website as the best way to keep prices low through competition. Yet in my constituency costs have gone up so much that there is basically no variation between the pumps. Those high prices are crippling for everyone, but particularly for local businesses such as the fish merchants from the East Neuk, who go far and beyond North East Fife to deliver to customers directly. Driving is not avoidable for a constituency such as mine. Obviously, the Government are not looking at the Lib Dem proposals, but why do they not offer meaningful support beyond red diesel in rural constituencies? What about EV charging, for example? Often, in constituencies such as mine, people have to charge away from home because they need their car to get about the constituency.
Lucy Rigby
We are supporting motorists in a meaningful way and it is really important. The hon. Member mentioned the Competition and Markets Authority’s fuel finder scheme. The intention of that is to save households that own a car up to £40 a year. She is right that the key principle behind that is competition. We know that competition is the way that we get to greater choice and lower prices for consumers.
David Mundell (Dumfriesshire, Clydesdale and Tweeddale) (Con)
Will the Chief Secretary to the Treasury reassure me that the Treasury really understands that in rural areas the cost of fuel not only relates to what motorists pay for driving but affects everything—all the goods and services provided—on sale in the shops? Therefore, rather than trying to put caps on the things that are on sale in shops, the best way to help keep costs down in rural areas is to keep fuel costs down.
Lucy Rigby
I have to tell the right hon. Member that we are not attempting to cap the prices in supermarkets and nor were we intending to do so. The Chancellor is having discussions with supermarkets, as she is with other sectors, with a view to putting downwards pressure on prices and helping people with the cost of living. As I have said repeatedly, we on the Government Benches recognise that there is a cost of living crisis out there, not least because of the inheritance we received from the Conservatives, and we are seeking to help people with those costs.
Johanna Baxter (Paisley and Renfrewshire South) (Lab)
May I thank my hon. Friend for recognising and supporting hauliers and logistics companies, such as the Malcolm Group, the UK’s leading independent provider of third-party logistics services, which is based in my constituency and supports many hundreds of jobs across Paisley and Renfrewshire South? Those companies play such an important role in keeping our shelves stocked and our economies running. I echo the calls made by my hon. Friend the Member for Bathgate and Linlithgow (Kirsteen Sullivan) for us to go further in supporting greater welfare facilities for drivers. Will the Chief Secretary to the Treasury make some comment on the safety of logistics staff who, too often, man vehicles that are targeted by criminals?
Lucy Rigby
I am glad to hear that the measures will help the Malcolm Group in my hon. Friend’s constituency, as indeed they will hauliers right across the country. She raises, as other hon. Members have, an important point around welfare. She also alludes to freight crime, which has been discussed at length in this House and is something in which I am particularly interested, given the nature of my constituency. The Government are taking forward action to seek to deal with freight crime, as well as taking action on welfare, but I would be more than happy to convene a meeting with other Ministers and my hon. Friend on the issue.
Sarah Pochin (Runcorn and Helsby) (Reform)
Does the Minister agree that one of the Government’s main responsibilities is to provide energy security for its citizens? As a nation resplendent with our own resources, why will this Government not issue more licences to drill in the North sea for oil and gas, which would make us energy-sufficient and have a knock-on effect at the pumps?
Lucy Rigby
The best way to get to energy security is by doing exactly what the Secretary of State for Energy Security and Net Zero is doing at the moment with the push towards renewables. New licences in the North sea would not bring new oil and gas on stream for another 10 years, so they really are the wrong solution.
Chris Hinchliff (North East Hertfordshire) (Lab)
The freeze in fuel duty will be a relief to drivers in North East Hertfordshire, but part of the reason there is such a problem is that the Conservative party’s last stint in government left public transport virtually non-existent in rural communities such as mine. We discussed earlier this week the enormous cost of HS2—more than £100 billion. If we were investing at that scale in bus services, we could provide a vastly improved network across the whole country for decades to come. Will the Government learn the lessons of the current crisis and redirect our public transport spending towards the journeys we need to make in our day-to-day lives?
Lucy Rigby
My hon. Friend raises an important point about the critical nature of bus services to the entire country. That is exactly why we are providing more than £3 billion for buses over the next three years, to cap fares at £3 and maintain and improve services. That includes funding for local authorities to put in place local fare initiatives if they wish to do so, as I believe the North East combined authority has done. We are also making reforms to bus franchising, which will allow for new and better services.
Ben Obese-Jecty (Huntingdon) (Con)
I want to come back to what the Minister said earlier about the war in Iran. She knows full well that the Leader of the Opposition did not say that she would take us into the conflict, and she knows full well that it was a NOFORN—no foreign nationals—operation and that there was never an opportunity for the UK to be involved. If she does not know that, she should go and speak to the Defence team and get up to date with the details. She has some cheek, considering that the Government have just decided that they are going to row back on the pressure they put on Russia. Given that the Minister did not explain it in her media round this morning, will she now explain exactly why the Government decided to exempt oil and oil products that originate from Russia under commodity codes 2709 and 2710?
Lucy Rigby
I wholeheartedly reject any accusation or idea whatsoever that we are somehow going soft on Russia and Putin. That is completely wrong. The new package of sanctions that we have introduced is stronger today—[Interruption.]
Mr Speaker
Order. I told the Front Benchers, and I am telling the Back Benchers: they have had the courtesy of being able to ask a question; I want them to hear the answer, and I need to hear it as well.
Lucy Rigby
The package of sanctions in place today is stronger than the package of sanctions that was in place last week. We have a world-leading sanctions regime in this country: at the moment, we have more than 3,300 sanctions on Russian entities, businesses, individuals and ships—the list goes on and on. Why does it go on and on? It is because of our steadfast support for Ukraine.
Graham Leadbitter (Moray West, Nairn and Strathspey) (SNP)
Scotland is an energy superpower, so it is particularly galling for constituents and businesses in my constituency, which is a two and a half hour drive end to end, and where road vehicles are an absolute necessity to conduct daily life, to face the prices they currently face. Will the Government commit to using the hundreds of millions of pounds of extra tax revenue from VAT for a VAT freeze for the duration of the current crisis?
John Lamont (Berwickshire, Roxburgh and Selkirk) (Con)
While it is good news that the Chancellor has been forced into another humiliating U-turn over her increase to fuel duty, it just delays the increase until the end of the year. The cost of living is surging, and families are feeling the pinch in every aspect of their lives. Why will the Government not give people and businesses the certainty they need and cancel the fuel duty increase altogether?
Lucy Rigby
There is absolutely nothing humiliating about the action being taken by the Chancellor and the Prime Minister to protect millions of motorists across this country. Again, I have to remind the hon. Member that the plans we inherited from the previous Government would have seen motorists paying more.
Sir Ashley Fox (Bridgwater) (Con)
I welcome this latest U-turn by the Chancellor to freeze fuel duty, which will help my constituents, and I also welcome the cut in duty on red diesel to help our farmers. The Government’s carbon border adjustment mechanism comes into effect on 1 January. That will increase further the cost of fertiliser, which in turn will push up the price of food. Will the Chief Secretary undertake a review of that carbon border adjustment mechanism, to protect all our constituents from further food price increases?
Lucy Rigby
I am grateful for the hon. Member highlighting the measures we are taking when it comes to red diesel. He mentions fertiliser costs. We know that substantially increased fertiliser costs, as well as fuel costs, are hurting farmers. That is exactly why we are taking these measures on red diesel, cutting the duty rate by over a third per litre from just over 10p to 6.5p, which, as I said, is the lowest rate for more than 20 years.
Ben Maguire (North Cornwall) (LD)
I warmly welcome the Chief Secretary to her new role. My rural constituency does not have a regular or reliable bus service. It does not even have a single mainline train station, so my constituents are forced to rely on their cars to get to school or work and to care for relatives, not to mention the transport of goods. I welcome this modest freeze, but please will the Minister meet me to discuss North Cornwall being part of the Government’s rural fuel duty relief scheme? While we are there, perhaps I can explain how our excellent Lib Dem proposals are all fully costed.
Lucy Rigby
I am grateful to the hon. Member. I might ask that our meeting—when indeed we do meet, as I am happy to do so—is fully focused on the matters at hand.
Bradley Thomas (Bromsgrove) (Con)
Having worked in the oil industry, I understand the flow of oil products around the world quite well, and it is unquestionable that the Government have eased the prospect of Putin’s oil flowing into the UK’s oil market—that is beyond doubt. I have three questions for the Chief Secretary. Can she explain the Treasury’s calculation of the extent to which this move may benefit UK motorists? Can she explain why the Government have decided to do this, and can she tell us what she thinks the cost will be to the Government’s integrity and whether it is worth it?
Lucy Rigby
I assume that the hon. Member is referring to the decision on licences in the sanctions regime. These licences are specific, targeted and will be reviewed on a very regular basis. Given that he understands the flows of oil so well, he will know that licences are a very common part of the sanctions regime. The reason these licences are being put in place is to stage the impact on the economy. Indeed, the European Union is going to achieve a full ban by the end of 2026—it, too, is staging the impact. This is a sensible measure when it comes to our economy. What is totally beyond doubt is our steadfast support for Ukraine and the pressure that we continue to put, with our international allies, on Vladimir Putin.
Reforms to Money Market Fund Regulations
Lucy Rigby Excerpts(3 months, 3 weeks ago)
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The Economic Secretary to the Treasury (Lucy Rigby)
Money market funds play an important role in the financial system. MMFs are widely used for cash management and provide an alternative or complement to bank deposits for a broad range of investors, including asset managers, insurers, pension funds, large corporates and local authorities. However, recent periods of market stress have highlighted the need to strengthen the resilience of these funds.
The Government, together with the Financial Conduct Authority and the Bank of England, have worked actively with international partners, including the European Commission and at the Financial Stability Board, to enhance MMF resilience so these funds are better able to withstand market disruption. As part of this, the Government and FCA committed to reforming the UK money market fund regulation regime, to ensure the UK’s regulatory framework appropriately supports the resilience of these markets while maintaining our international competitiveness. These reforms mark an important step forward in enhancing the resilience of the wider non-bank financial sector.
In 2023, HM Treasury and FCA consulted on replacing and reforming MMFR. The Government will now lay legislation as soon as parliamentary time allows to establish the new regulatory framework, under which most requirements for UK MMFs will be set out in FCA rules and guidance. This will include guidance setting out expectations that UK MMFs hold higher levels of liquidity. This approach reflects internationally developed proposals that the UK helped to shape alongside other jurisdictions. The Government and the FCA also welcomed feedback from across the sector to help develop a proportionate set of proposals that will enhance the resilience of money market funds. The UK’s new regime is expected to be in place by Q4 2026, subject to parliamentary approval, and the FCA will issue a statement shortly with further details on its plans.
The Government recognise the cross-border nature of this sector, and the important role that EU-domiciled MMFs play in the UK market. In March, at the Joint EU-UK Financial Regulatory Forum, the UK and EU recognised the value of constructive engagement on the practices that will enhance the resilience of our respective MMF sectors. The Government therefore welcome the report published by the European Commission on 11 May that sets out its expectations for these funds.
The Government can confirm their intention to extend the temporary marketing permissions regime, with a view to establishing a longer-term solution on market access, in line with the UK’s framework and process for recognition of overseas firms and funds.
[HCWS1562]
Access to Banking Services Review
Lucy Rigby Excerpts(3 months, 3 weeks ago)
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The Economic Secretary to the Treasury (Lucy Rigby)
The way people access banking services has changed significantly in recent years. Access to these services is provided through a range of channels, including different in-person models as well as digital channels, which many customers benefit from. Many find that the ease and convenience of remote banking and digital innovations allow them to manage their finances more easily. However, some still need or prefer access to in-person banking services, including those who are vulnerable, less digitally confident, or who rely on face-to-face support to manage their finances.
It is for this reason that the Government committed in our manifesto to working with the financial services industry on the roll out of 350 banking hubs by the end of this Parliament. Over 275 hubs have been announced so far, and more than 230 are already open.
However, the Government recognise that the location of banking hubs is based upon a legislative framework which protects access to cash, as opposed to access to banking services. Specifically, the Financial Services and Markets Act 2023 provides a framework to safeguard cash withdrawal and deposit facilities, and the Financial Conduct Authority has responsibility and powers to ensure the reasonable provision of such services. There are currently no equivalent statutory protections specifically for access to in-person banking services more broadly.
While the Government recognise it is neither possible nor reflective of customer behaviour to reverse the long-term trend towards digital banking, the Government are committed to ensuring that customers, including those who are vulnerable or less digitally able, retain sufficient access to essential banking services in line with their needs. HM Treasury has therefore commissioned an independent review into access to banking services to assess the impact of changes in the provision of in-person banking services across the United Kingdom. The review will consider the scale and nature of any detriment to consumers arising from a lack of access to banking services, including impacts on vulnerable groups. The review will be chaired by Richard Lloyd OBE, chair of IPSA and former interim chair of the Financial Conduct Authority (FCA).
The review will also seek to examine which groups of customers need or require access to in-person banking services.
It will seek input from market participants and consumer representatives, and Government and regulators may also be consulted. Evidence collected by the review will inform future decisions on whether further action is needed. The review will conclude in October 2026 and the chair will provide a report and recommendations to the Government.
In addition to this, the Financial Services and Markets Bill will include provisions to enable the Government to take further action in respect of this issue, including implementation of any recommendations arising from the access to banking services review, should the evidence demonstrate that this is necessary. This will ensure that Ministers have the ability to act in a timely and proportionate way in future, following the conclusion of the review.
The Government will consider the review’s findings carefully and will update the House in due course.
Further details about the review, including the terms of reference, can be found on gov.uk at: https://www.gov.uk/government/publications/hm-treasury-access-to-banking-services-review
[HCWS1565]
Treasury
Lucy Rigby Excerpts(3 months, 3 weeks ago)
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Sarah Olney
More than 1.3 million people use lifetime ISAs to save for their first home. The property cap of £450,000 has been frozen since 2017, despite rising house prices, but those buying their first home over that threshold face a 25% penalty. First-time buyers across London are disproportionately affected. Data from February this year showed that the average price paid by a first-time buyer in London was £463,000. Can the Chancellor tell us how she is ensuring that first-time buyers in London are not unfairly disadvantaged by using this saving scheme?
Lucy Rigby
The Government are committed to making the aspiration of home ownership a reality for as many people as possible, and we recognise that the LISA is not working for everyone. That is exactly why we have launched a short consultation on the implementation of a new ISA product that will support more first-time buyers.
[Official Report, 28 April 2026; Vol. 784, c. 736.]
Written correction submitted by the Economic Secretary to the Treasury, the hon. and learned Member for Northampton North (Lucy Rigby):
Lucy Rigby
The Government are committed to making the aspiration of home ownership a reality for as many people as possible, and we recognise that the LISA is not working for everyone. That is exactly why we will launch a short consultation in early 2026 on the implementation of a new ISA product that will support more first-time buyers.
Oral Answers to Questions
Lucy Rigby Excerpts(4 months, 1 week ago)
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Jacob Collier (Burton and Uttoxeter) (Lab)
The Economic Secretary to the Treasury (Lucy Rigby)
This Government are backing our brilliant British businesses to trade globally, including through our new trade strategy that expands UK Export Finance’s capacity to £80 billion. This Government have secured new trade deals with India, South Korea, the EU and the US to back British businesses globally, delivering improved access to key markets and protecting British jobs.
Jacob Collier
I recently joined Cosy Direct for its second King’s Award presentation, this time for international trade. Cosy Direct is an award-winning business in early years education resources, exporting globally and continuing to grow. The Chancellor saw its success, and its goats, at first hand when she visited with me last year. Will the Minister join me in congratulating Pete, Amanda and all the team, and will she say what work she is doing to allow such businesses to expand and export globally?
Lucy Rigby
I warmly congratulate Pete, Amanda and the wider team—and the goats—on their success. In inviting me to do so, my hon. Friend shows that he is indeed a true champion for the businesses in his constituency. The support that this Government are giving to businesses will enable more of our fantastic British companies to export globally and to emulate Cosy Direct’s success.
Graham Stuart (Beverley and Holderness) (Con)
Integrated industrial clusters such as Saltend in my constituency provide fundamental chemicals and other inputs into defence and wider industries right across the country. Yet higher energy costs and global events mean that they are under unprecedented pressure. Will the Minister look at establishing an industrial support fund, so that rather than having an ad hoc approach, such as that seen when supporting Grangemouth, we have something strategic to ensure that we do not lose the industrial base upon which so much of this country depends?
Lucy Rigby
I believe the right hon. Member mentioned the British industrial competitiveness scheme. That is being expanded. He will also be aware of the British industry supercharger package, which provides additional price relief from April 2026 as well.
Mark Garnier (Wyre Forest) (Con)
The Economic Secretary to the Treasury will know that our financial services industry is a shining example of our international economic might. However, overinterpretation of rules and regulations has led to banks being nervous of taking risks, and that has slowed growth in the City and holds up international trade. For example, overinterpretation of anti-money laundering rules means that foreign inward remittances can take up to two weeks to clear into a UK bank account, while poor classification of risk-rated assets potentially starves businesses of growth debt capital. Will the Economic Secretary please assure the House that this ever-unnecessary tightening of the rules will be addressed in the financial services Bill, due to be announced in the King’s Speech?
Lucy Rigby
The hon. Gentleman will not expect me to pre-empt anything that may or may not be announced in the King’s Speech. What I will tell him, though, as he already knows, is that this Government are backing our financial services sector to the hilt to ensure that it continues to be the world-leading success that it is.
John Milne (Horsham) (LD)
Sarah Olney (Richmond Park) (LD)
The Economic Secretary to the Treasury (Lucy Rigby)
The Government are committed to making the aspiration of home ownership a reality for as many people as possible, and we recognise that the LISA is not working for everyone. That is exactly why we have launched a short consultation on the implementation of a new ISA product that will support more first-time buyers. That new product will include the Government bonus being paid at the point the individual makes a withdrawal for a home purchase, therefore removing the need for a withdrawal charge.
Tom Rutland (East Worthing and Shoreham) (Lab)
Shockat Adam (Leicester South) (Ind)
Leicester South has a home ownership rate of just over 40%—nearly 23 points below the national average—in a city where the average house costs 8.5 times average local earnings. My young constituents work very hard and save responsibly to get on to the housing ladder, yet the tax system offers them absolutely nothing, while incorporated landlords deduct full mortgage interest through a company structure. Canada and Nordic countries are offering targeted tax relief for first-time buyers. Has the Chancellor considered introducing a similar relief here to ensure that young people are supported by the tax system, not left behind?
Lucy Rigby
This Labour Government are committed to enabling more people to realise the dream of home ownership. Mortgages have become more affordable under this Government, thanks to increased economic stability and six interest rate cuts.
Bills Presented
Newhaven West Beach (Public Access)
Presentation and First Reading (Standing Order No. 57)
James MacCleary presented a Bill to provide for a right of public access on foot to Newhaven West Beach; to impose duties on the harbour authority in respect of that right, including requirements to open and maintain specified access routes; to provide for exemptions from those duties for reasons of safety or in connection with harbour operations; and for connected purposes.
Bill read the First time; to be read a Second time on Friday 8 May, and to be printed (Bill 436).
Defence Bonds (Proposals)
Presentation and First Reading (Standing Order No. 57)
James MacCleary presented a Bill to require the Secretary of State to publish proposals for the issuing of defence bonds, including for purchase by members of the public; and for connected purposes.
Bill read the First time; to be read a Second time on Friday 8 May, and to be printed (Bill 437).
Car Insurance Industry: Fraud
Lucy Rigby Excerpts(4 months, 1 week ago)
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Westminster Hall is an alternative Chamber for MPs to hold debates, named after the adjoining Westminster Hall.
Each debate is chaired by an MP from the Panel of Chairs, rather than the Speaker or Deputy Speaker. A Government Minister will give the final speech, and no votes may be called on the debate topic.
This information is provided by Parallel Parliament and does not comprise part of the offical record
The Economic Secretary to the Treasury (Lucy Rigby)
It is a pleasure to serve under your chairship, Ms Lewell. I am grateful to the hon. Member for North Shropshire (Helen Morgan) for securing the debate and highlighting the impact that fraud can have and the devious tactics that fraudsters use. She also spoke about the interplay between those issues and the legal profession. I will address the people who run such platforms later on. I also want to thank other Members who contributed to this thoughtful and important debate, including my hon. Friend the Member for Bracknell (Peter Swallow), the hon. Member for Strangford (Jim Shannon) and my hon. Friend the Member for York Outer (Mr Charters), as well as the shadow Economic Secretary to the Treasury, the hon. Member for Wyre Forest (Mark Garnier), and the Liberal Democrat spokesperson, the hon. Member for Honiton and Sidmouth (Richard Foord).
Car insurance is not a luxury; it is a legal requirement. For many businesses and families, it is essential to daily life, whether taking children to school, getting to work or caring for relatives. As has been said, fraud undermines confidence in the motor insurance market. It causes direct harm to consumers and drives up costs across the system. Those costs are ultimately paid by people who do the right thing by driving with insurance, as the hon. Member for Strangford rightly highlighted.
My hon. Friend the Member for Bracknell pointed out that some drivers—far too many, in fact—do not get insurance, but drive regardless, which is a criminal offence. I regret to say that between 2019 and 2024, the cost of claims involving uninsured drivers increased by a huge 37%. As my hon. Friend said, that increases premiums for everyone else. The Government are considering how, in the light of its seriousness, the penalties should be strengthened for that offence. I hope that he can take from what I have just said that the Government take fraud extremely seriously.
Fraud is the largest crime type in the UK. It harms individuals and businesses, as well as costing our economy billions of pounds each year. It is increasingly driven by organised crime and enabled by technology, as hon. Members have highlighted. That is why fraud is a national security priority for this Government, and we will do what we must to protect the public. In honouring our manifesto commitment, the Government published the new and expanded fraud strategy in March, as we have heard. The central focus of the strategy is disruption: denying criminals the ability to commit fraud in the first place by targeting the tools and methods they use to reach victims. That means acting across the system of Government, law enforcement, regulators, financial institutions, technology companies and telecoms providers, because no single organisation can tackle fraud alone.
As part of the strategy, we are investing £31 million in a new online crime centre that will bring together the Government, law enforcement, GCHQ and industry to identify and address the technological enablers of fraud and deliver high-impact interventions. In practice, that means better data and real-time analysis so that we can identify patterns earlier and take faster action. That could mean taking down fraudulent websites, disrupting malicious advertising networks or supporting the freezing of accounts linked to fraud. Alongside that, we have launched a call for evidence on economic crime information sharing. We want to remove barriers that can prevent firms and agencies from acting on intelligence earlier so that suspected scam activity can be identified and stopped before more people are harmed.
Let me turn to paid ad spoofing and fraudulent advertising, which was raised by the hon. Member for North Shropshire. The Government recognise that paid-for advertising is being exploited by criminals to reach potential victims at scale. Spoofed ads are designed to look like they come from trusted brands, insurers, brokers, comparison sites and even public bodies. Those are particularly pernicious examples. As the hon. Member noted, they can be highly convincing. Indeed, to the point made by my hon. Friend the Member for York Outer, they look too good to be true. They can appear at the top of search results and be targeted at people precisely when they are looking for help, as the shadow Economic Secretary explained.
My hon. Friend the Member for York Outer talked about ghost broking. My statistics might well be worse than the ones that he read out, because my understanding is that the Insurance Fraud Bureau thinks that ghost broking increased by 50% in the last two years. Whatever the exact statistic, there is a serious increase in the crime. My hon. Friend also highlighted a troubling example of identity theft and pointed to the links between ghost broking and follow-on activities. The story that he told was hard to hear.
All these things are not just consumer issues, but significant questions of responsibility and liability in the online ecosystem. If criminals can buy their way into prominence through paid advertising, we must ensure that the systems that place and profit from those adverts do not turn a blind eye. That is exactly why the Online Safety Act 2023 places duties on the largest social media platforms to tackle fraudulent adverts on their services. Ofcom is due to consult on those measures later this year. Once implemented, Ofcom will have the power to take robust enforcement action when it finds non-compliance, including fines of up to £18 million or 10% of qualifying worldwide revenue, whichever is greater.
The Government have also launched a new partnership between the Home Office, the Department for Culture, Media and Sport and industry: the online advertising taskforce. The purpose is to strengthen and maximise the adoption of transparency standards across the wider programmatic ecosystem so that bad actors can be identified, disrupted and, when appropriate, prosecuted. That work will report back in early 2027, and the Government have been clear that we will take legislative action within this Parliament if there are not sufficient improvements.
The hon. Member for North Shropshire and the shadow EST referred to claims management companies and legal professionals who associate themselves with such companies, and the links between them and car insurance fraud. The Ministry of Justice leads on elements of that agenda but, in some areas, the Financial Conduct Authority has responsibility. I hope the hon. Member will be reassured by the fact that there is ongoing dialogue on the issue between His Majesty’s Treasury and the MOJ to determine what might be done in this area. I hope she will agree that that addresses some of her important points.
I want to address specifically the link between online fraud and car insurance. Insurance fraud is a serious issue for all the reasons that I have noted, and it has been well covered in this debate. However, it has an interaction with online criminality. The spoofed ads that are used to harvest personal data, misdirect consumers to fake brokers and facilitate scams ultimately feed wider fraud, particularly serious forms of money laundering. The Government are working closely with the industry, regulators and consumer groups to close the gaps that criminals exploit. I should add that the FCA is alive to the issue of ghost broking and is looking into it specifically.
In October 2024, the Home Office launched the insurance fraud charter with key insurance firms to reduce insurance fraud. The charter supports stronger collaboration and shared action to prevent, detect and disrupt fraud, because the more effectively we tackle fraud at source, the more we protect consumers and the integrity of the market.
More broadly, the Government’s motor insurance taskforce, which published its final report in 2025, included actions for regulators, industry and the Government to tackle fraud, given the unfortunate role that fraudulent activity plays in increasing claim costs and, in turn, premiums for all consumers.
It is also important to be clear about the wider framework that supports this work. Financial institutions are required to maintain robust systems and controls to detect and prevent financial crime under the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017. Banks must report certain suspicious activity to the National Crime Agency under the Proceeds of Crime Act 2002, and they may also freeze and block accounts if suspicious activity is detected. We have also recently introduced new rules allowing banks to delay and investigate suspicious payments for up to 72 hours, which supports the interception of suspicious payments, giving firms more time to prevent funds from reaching fraudsters in complex cases and helping to break the spell that fraudsters have over victims. As we have set out in the fraud strategy, we are reinforcing the system-wide response through the Online Crime Centre and improved information sharing so that suspected scam accounts can be spotted sooner and action taken more quickly.
I do not pretend that tackling fraud is simple. Fraudsters adapt quickly, and technology, including some of the technology that we have been talking about today, moves very fast, but the direction of travel is very clear. We are shifting from a reactive model, picking up the pieces after harm occurs, to a disruption model that targets the infrastructure that criminals rely on, including the online advertising routes they use to reach victims.
Through our fraud strategy, the Online Crime Centre, strong action on fraudulent advertising via the Online Safety Act, and further work through the online advertising taskforce, backed by a clear commitment to legislate if necessary, we are taking decisive action to protect the public and disrupt the criminals behind these crimes.
I thank the hon. Member for North Shropshire again for raising these important issues. I reiterate that the Government recognise the importance of car insurance to people’s lives and livelihoods, and we are determined to tackle the fraud that drives up costs for honest motorists.
Draft Capital Requirements Regulation (Market Risk Transitional Provision) Regulations 2026
Draft Credit Institutions and Investment Firms (Miscellaneous Definitions) (Amendment) Regulations 2026
Lucy Rigby Excerpts(4 months, 2 weeks ago)
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The Economic Secretary to the Treasury (Lucy Rigby)
I beg to move,
That this Committee has considered the draft Capital Requirements Regulation (Market Risk Transitional Provision) Regulations 2026.
The Chair
With this it will be convenient to consider the draft Credit Institutions and Investment Firms (Miscellaneous Definitions) (Amendment) Regulations 2026.
Lucy Rigby
Both statutory instruments are made under FSMA, the Financial Services and Markets Act 2023. Together, the two instruments will help to deliver a more agile and responsive capital framework for UK banks and investment firms.
Following the EU exit, the UK retained a body of financial services legislation known as assimilated law, which includes the capital requirements regulation, which sets the detailed and often technical capital rules. As hon. Members know, the UK follows the FSMA model of regulation, which involves regulatory standards being set by expert independent regulators that work within a policy framework set by Government and Parliament.
The Government are now applying the FSMA model to the CRR by revoking the CRR, so that the Prudential Regulation Authority can replace requirements in legislation with requirements in PRA rules, resulting in a more user-friendly, single-source book of prudential rules for firms. Where important elements of the CRR need to stay in legislation to provide the policy framework within which the PRA must operate, those elements are restated, using powers provided under FSMA 2023.
The first SI that I will discuss is the Credit Institutions and Investment Firms (Miscellaneous Definitions) (Amendment) Regulations 2026, which simply restate important definitions from the CRR that need to stay on the statute book. For example, the definition of what constitutes an investment firm is being restated in legislation, rather than being defined by the PRA rule book. That is necessary for the continuity of existing legislation and to ensure that the Government and Parliament remain in control of which regulatory activities should be regulated. The instrument does not introduce new regulatory requirements, and it does not make any substantive change to the scope or effect of the definitions being restated. Its purpose is simply to maintain legal continuity and to ensure that the prudential framework continues to operate as intended as we complete the move to the FSMA model.
The second SI that I will discuss is the draft Capital Requirements Regulation (Market Risk Transitional Provision) Regulations 2026. The UK remains committed to the full and consistent adoption of the Basel reforms, and the PRA intends to implement most of the new Basel 3.1 rules from 1 January 2027. That will help to ensure that the banking system is well capitalised, while giving domestic-focused firms the regulatory certainty that they need to plan for the future and to invest in the real economy, including small businesses and infrastructure projects.
We recognise, however, that the timing of implementation in other major jurisdictions remains unclear, in particular for certain market risk requirements affecting banks that use internal models. That is particularly relevant for the internationally active firms with cross-border trading activity. Implementing those specific requirements in the UK ahead of clarity elsewhere risks unnecessary operational complexity for internationally active firms and potentially misaligned implementation, which is exactly why the Government, in conjunction with the PRA, decided to build in flexibility to the UK’s approach.
For the new internal model market-risk requirements, the element of Basel 3.1 that will most affect the ability of UK banks to compete in international markets, implementation will be delayed until 1 January 2028. The draft instrument gives effect to that approach by disapplying the updated internal market risk rules during the transitional period from 1 January 2027 to 31 December 2027 and, during that period, firms will continue to apply the existing requirements. This limited delay will allow the UK to flex the new internal model requirements for market risk, should that prove necessary, to ensure that the UK remains competitive with other major jurisdictions. The draft regulations also provide the Treasury with the ability to extend the transitional period by making further regulations. Any such extension would be time limited, subject to parliamentary approval and used only if necessary to respond to material international developments.
In summary, the draft regulations bring near to completion the work to deliver a more agile and responsive prudential regime for banks and investment firms, and I commend them to the Committee.
Lucy Rigby
I am very grateful to the shadow Economic Secretary to the Treasury and the Liberal Democrat spokesperson for their input on the draft regulations. Their questions are very apt and go straight to the nub of this issue.
What is happening in other jurisdictions is really important, and that is why we are seeking to include a degree of flexibility in the draft regulations. As I said in my opening remarks, we are postponing a certain element until 1 January 2028 for internationally active banks, and I set out why doing so is really important. However, there is potential for further flexibility, exactly as I said, subject to what goes on in other jurisdictions.
As I am sure the shadow EST knows, the US recently put out some revised proposals in March. Without getting into all the nitty-gritty detail, the upshot is that the revised US proposals remain broadly aligned with international standards and the UK’s rules. Briefly, I also want to touch on the EU, because that is also very important. Again, there is broad alignment, although there has been some commentary in the press that the EU banking union is thinking about going out to an even longer date—they were talking about 2030. I think I am right in saying that we are yet to have that fully confirmed. If anything, that comes back to the importance of building in flexibility. We, particularly the PRA, need to have a sufficient degree of agility and nimbleness built into what we can do, which is the approach that we are taking. Should international circumstances change, we and the PRA need to remain alert to those positions.
For all the reasons I have set out, which I will not repeat, the draft regulations are designed to ensure that, for our internationally active banks, we do not create an undue, unnecessary and problematic degree of inconsistency between all those very important jurisdictions. As I made clear, the draft regulations allow the Treasury the power to extend the transitional period that we are putting in place, if necessary, which would then be subject to the negative procedure.
Question put and agreed to.
DRAFT CREDIT INSTITUTIONS AND INVESTMENT FIRMS (MISCELLANEOUS DEFINITIONS) (AMENDMENT) REGULATIONS 2026
Resolved,
That the Committee has considered the draft Credit Institutions and Investment Firms (Miscellaneous Definitions) (Amendment) Regulations 2026.—(Lucy Rigby.)