Draft Financial Services and Markets Act 2000 (Cryptoassets) Regulations 2025
Mark Garnier Excerpts(1 day, 5 hours ago)
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Mark Garnier (Wyre Forest) (Con)
I start by welcoming the general thrust of this incredibly important legislation. The Minister and I have sparred a number of times in the past, and so far we have managed to keep it to under five minutes; I must now apologise to the Committee, as I might take a little longer. As the Minister said, work on this piece of legislation was started under the previous Government, and it is absolutely vital for the City of London to maintain its presence as a global financial leader.
The City of London has been innovative and thought-leading for a few hundred years now. Jonathan’s Coffee House was the first to advertise share prices, from which the London Stock Exchange grew, setting the model for equity ownership the world over; similarly, Lloyd’s Coffee House created the insurance market that we see today. As new technology comes forward, it is vital that the City of London, or the UK’s financial services sector, not just adopts this new technology but leads on it, and leads on it with the intelligence and experience that we have gained over the previous centuries of legislating in this area.
As we move forward in the age of new technology, we need to legislate. This SI is possibly the best example of how we can embrace that change. Indeed, the short time that we have been given to debate this piece of legislation belies its importance and the months of consulting that lie behind it. While the Opposition are absolutely behind the thrust of the SI, we believe that it is slightly flawed in its drafting. It appears to draw together two separate things: in very simple terms, it appears to confuse cryptoassets with stablecoins.
Cryptoassets—bitcoin and the like—are commodities in the same way as a bond, a share or other commodities. They are items that are bought and sold with a view to their value changing. However, a stablecoin is an asset fully backed by a fiat currency, and thus a proxy of that underlying fiat currency. A stablecoin is part of the payment system and should be regulated as such.
I am someone who understands the principles of this legislation, but sometimes it is important to have the help of people who really get the law. I am grateful to a couple of people who have helped me to put this argument forward today, in particular Mike Ringer, who is the founder of ReStabilise, but more importantly Professor Sarah Green, who was a law commissioner for commercial and common law at the Law Commission of England and Wales from 2020 to 2024. She was responsible for the Electronic Trade Documents Act 2023 and the Property (Digital Assets etc) Act 2025.
As I have discussed, this draft legislation establishes the regulatory parameter for cryptoassets in the UK, including stablecoins. As such, what we are discussing is crucial for the delivery of HM Treasury’s often repeated policy intention for the UK to become a global hub for digital assets and blockchain technologies—something that we are 100% behind. That means that a properly drafted Bill is mission critical.
The ability of the UK to become a global leader in the digital economy, and to retain its position as a leading international financial centre, depends on the ability of this piece of legislation to set out clearly, decisively and unambiguously how it will distinguish between different types of cryptoassets. Without strong, decisive and nuanced categories, the potential for effective regulation, and therefore optimum growth, will be lost. This is not an opportunity to be squandered, yet the current drafting threatens to do just that.
The Government’s policy note that accompanied the original draft SI, published in April last year, states:
“This is a draft SI and should not be treated as final. It is being published for technical checks, such as any significant errors or oversights in the legal drafting that would mean that the provisions in this SI would not achieve the desired outcomes explained in this note, or that could lead to other significant unintended consequences.”
My goal today is to explain why an oversight in the current drafting means that the SI’s provisions do not achieve their stated aim.
Let me explain. A critical component of the successful development of digital asset markets is an effective form of digital settlement asset—that is, digital cash. There are three forms of digital cash: first, there are central bank digital currencies, or CBDCs; secondly, there are tokenised commercial bank deposits; and thirdly, there are regulated stablecoins. If the UK is to establish itself as a global hub for digital assets, it is essential that all of those can be used interchangeably with traditional fiat money, or state-backed money. For that to happen, each form needs to be regulated in a way that recognises its particular nature and function.
In the case of stablecoins, that will be achieved by regulating issuers under the new regulatory regime brought in by this legislation, which will be introduced and supervised by the Financial Conduct Authority. Also, in the case of sterling-denominated systemic stablecoins, issuers will be subject to dual regulation by the Financial Conduct Authority and the Bank of England.
In its consultation paper on its proposed regulatory regime for sterling-denominated systemic stablecoins, published in November last year, the Bank of England confirmed that the use of regulated stablecoins could lead to faster, cheaper retail and wholesale payments, with greater functionality, both at home and across borders. It therefore wants to support such a role for stablecoins as part of a “multi-money” system alongside commercial bank money, including tokenised bank deposits, so in effect they would be part of the payments system itself.
Similarly, we know that as the world progresses, capital markets, foreign exchange and asset management will increasingly be settled through digitalised blockchain technologies. For the UK to maintain its leading global position in those markets and others, it is vital that we take a leading role in adopting blockchain technologies in the payments system. Used in this way, stablecoins will bring immense benefits in terms of speed, lower costs and programmability. In other words, they are the key to growth both in our economy and in our financial services industry.
However, importantly, without a proper treatment of stablecoins that recognises the way in which the assets actually function in practice, the UK risks not only missing out on positive growth benefits but, crucially, losing ground to other jurisdictions. That ground will be difficult to recover because market provision will already have been established elsewhere, where providers can be certain of their legislative position. We will be trying to catch up where other jurisdictions will have made progress and secured their lead. With the current wording of the SI, that important lead, which provides much economic benefit to the winner, will not be here in the UK.
The SI does not achieve what I hope we all agree we want, which is the UK to lead the way in cryptoassets, including stablecoins and the wider payments opportunity that distributive ledger technology—DLT—provides. However, the solution is simple, straightforward and easily achieved. Essentially, market participants should be able to use regulated stablecoins and tokenised commercial bank deposits in place of traditional fiat currency for the purposes I have mentioned—to make payments, settle capital markets and foreign exchange transactions, and for collateral and corporate treasury management. But crucially, they must do that without suddenly needing to apply for additional licences from the Financial Conduct Authority. If that is the effect of the SI, these new forms of money will not be used because of the unnecessary regulatory hurdle put in the way of market participants. As a result, the development of digital assets and blockchain technologies in the UK could simply grind to a halt. That will take all its growth potential with it, as well as the chance of the UK remaining the pre-eminent force in the financial world.
Unfortunately, the likely need for those additional licences is precisely the effect of the wording in the draft regulations, despite the fact that it appears to run counter to the Government’s often stated, and highly laudable, policy intention. There appears to be a simple drafting error that could be easily rectified. There is currently no defined distinction for the majority of the new regulated activities between “qualifying stablecoins” specifically and “qualifying cryptoassets” generally, which has a number of cascading and adverse effects. The most adverse is that, under the current wording, stablecoins, including those regulated by the FCA and the Bank of England, are treated in the same way as unbacked cryptoassets such as bitcoin. Given that the risk profile of those assets is starkly different from that of a fiat-pegged stablecoin, which is, crucially, simply another form of regulated money, that makes no sense. Lumping unbacked assets together with stablecoins for regulatory purposes is rather like buying a car instead of a horse, but still tying the car to a post in case it runs off. Of course, both need securing, but in ways that recognise the fundamental difference between the two.
From a practical perspective, applying the new “dealing” and “arranging” activities to regulated stablecoins has the effect of potentially requiring market participants who are seeking to use or facilitate the use of regulated stablecoins for the purposes I have mentioned to apply for new licences from the FCA, purely because they are using regulated stablecoins instead of traditional fiat money. In that world, market participants simply will not use them, and the principal benefit and advantage of stablecoins may never be realised.
The Government appear to have attempted to address the issue in the case of payments, by copying across the legacy purpose-based sale of goods and services exemption from the traditional regulatory regime, which disapplies the new “dealing” and “arranging” activities for the use of stablecoins to buy or sell goods. That does not, however, achieve the aim of exempting all those who are crucial to the stablecoin payments process. Significantly, it is not clear that it covers those who exchange fiat money for stablecoins and stablecoins for fiat money. The payments process stands and falls by the ability of users to convert the fiat currency into stablecoins and back again, yet the exemption as currently drafted is likely to deter market participants from providing those essential services because it is not clear that it applies to them.
It would be far clearer and simpler to have an exemption drafted in a way that is bespoke to stablecoins, rather than attempting to shoehorn them into a legacy definition that was not drafted with the stablecoin payment process in mind. Alternatively, an existing statutory definition could be used that accommodates the full range of payment activities, such as referring to the use of stablecoins and providing “payment services” in the way that the Payment Services Regulations 2017 do.
Equally as important is the fact that there is, in the current draft, no similar purpose-based exemption for the use of stablecoins in capital markets or foreign exchange transactions, nor in asset or corporate treasury management. Again, those would be straightforward to introduce and should be entirely uncontroversial from a policy perspective. To allow that in the legislation would provide immense benefits to the City.
A failure to make those simple and textually minor clarificatory changes would not only make it very difficult for the UK to become a global hub for digital assets and blockchain technologies, but would risk the UK losing its position as a leading international financial centre. This piece of legislation is intended to be ground-moving in terms of seizing an opportunity for our financial services industry, and it would be tragic if it were reduced to a minor tremor for the sake of simple loose drafting. Those concerns go into great detail, but we need to address them to ensure that we do not mess up a golden opportunity to get this right.
One or two other concerns have been raised with me, but I think we can talk about them at a different time. The principle behind this is something that fundamentally we are 100% behind. It is a very good policy, and it is really important that we get this right, but issues have been raised by legal experts who are cleverer than me—but probably not cleverer than the Minister, who I think started at Slaughter and May. Obviously, we are very keen to work with the Government to get this right; I was hopeful that the Minister would agree to meet me and some experts in this area to look at the drafting of this legislation to see if that is possible. We will support it if she is happy to do that, and then we can move forward, get something together and hopefully get this right. It is important that we get this right, but I would be grateful to hear the Minister’s thoughts.
Oral Answers to Questions
Mark Garnier Excerpts(1 month, 1 week ago)
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Mark Garnier (Wyre Forest) (Con)
In the recently published financial inclusion strategy, the Government state:
“Our aim is to create a culture in which everyone is supported to build a savings habit, building their financial resilience in the long term.”
What is not to like about that, Mr Speaker? But that makes the Chancellor’s political decisions in the Budget even more confusing. Just look at what was announced: reducing the cash individual savings account limit to £12,000; scrapping the lifetime ISA; capping salary sacrifice schemes at £2,000; increasing tax on dividends by two percentage points; increasing savings income tax by two percentage points; freezing the repayment thresholds for student loans; freezing income tax thresholds for working people; freezing personal allowance thresholds for pensioners—
Mr Speaker
Order. [Interruption.] No, please just sit down. Don’t challenge me; it is not a good idea. We did quite a few days on the Budget. I think we can all remember every point you are making. Is there anything you would like to add? If you are carrying on the list, forget it. I call the Minister.
Taxes
Mark Garnier Excerpts(2 months, 1 week ago)
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Charlie Maynard
I think we should have all the economic benefits of Europe while controlling our borders and controlling movement—[Interruption.] Well, look at Norway, Switzerland and Turkey. There are lots of options out there. Let’s go and negotiate something that makes sense for us.
My final point is that we need an office for value for money—an effective regulator with proper scrutiny and proper teeth that really looks into our Budget. I ask the Government to take inspiration from the Swedish model of tax scrutiny. I understand that after introducing these changes 30 years ago, and aided by strong economic growth, Sweden has reduced its national debt from nearly 80% of debt to GDP to 32%. Meanwhile, our public debt is around 95%, which means that billions that we could be spending on our public services are instead going towards servicing our debt.
A key component is significantly strengthening the scrutiny powers of this Chamber when it comes to the Government’s financial management. The Chancellor’s practice of keeping the Budget secret until the day, at which point everyone else has to scramble to assess the detail and has no time to provide a proper, meaningful critique, is far from the best way to scrutinise the Government’s economic policy. This is not how many of our international peers go about their economic policy. Proper, detailed scrutiny of the Budget, as opposed to the wave-through regime we currently have, with no proper transparency before approval, needs to be addressed—
Charlie Maynard
Okay, can I just respond to my colleague chuntering in the background? He keeps saying “the OBR”. We are Parliament. We have a responsibility to scrutinise the Budget, and I believe that we, as a Parliament, should be doing that properly, line by line and taking out what is wasted—[Interruption.] I would do it tomorrow if we had the chance, yes. I will finish in a moment, then I will be off—
Mark Garnier
Even the Lib Dems agreed with the OBR. Danny Alexander agreed with the OBR. I will stop chuntering now.
Charlie Maynard
Just because we have always done things a certain way does not mean that there is not room for fresh thinking, a more collaborative approach and greater ambition. Realistically, if we are going to repair the economic damage of the last few years, we need fresh thinking and new ideas.
Dan Tomlinson
And the Conservatives have the gall to lecture us about managing the public finances well. They say that they want to cut civil service numbers. Between 2016 and when the Conservatives left office, there were 130,000 more civil servants. The former Member for Uxbridge and South Ruislip and former Prime Minister said that he would cut civil service numbers by 91,000; they then went up. In October ’23—when the Opposition spokesperson, the hon. Member for Grantham and Bourne (Gareth Davies), was in my role—the right hon. Member for Godalming and Ash (Sir Jeremy Hunt) unveiled an immediate cap on civil service numbers and pledged to cut them by 66,000; they then went up. Between May 2022 and July 2024, the numbers went up in every single quarter. I am not sure that the public would leave the Conservatives’ restaurant at all satisfied if they bought the items on their menu, because everything they have promised does not seem to turn into reality.
I will conclude, Madam Deputy Speaker.
Dan Tomlinson
Hon. Members want more! Okay.
If this debate has taught us anything, it is simply this: not only do the Conservatives need to stay in opposition for longer, but I am sure that they will do so. So far, they have learned nothing from their time on the Government Benches. There is no humility for their mini-Budget, no plan for giving Britain a brighter future, and no grasp of the realities that the country and the world face. They also have no will to face up to reality, to show leadership or to make choices that will support our public services, businesses and citizens.
Meanwhile, this Government have given the country the fastest growth in the G7 in the first half of the year. We have raised wages and living standards, and the Bank of England has cut interest rates five times because of the economic stability we have brought, which has reduced mortgage payments and lowered the cost of borrowing. This Government have increased public investment in capital spending by over £120 billion over the course of this Parliament, building for the future—something that the Conservative party failed to do. That is the difference that a Government with British values at their heart can make. At this month’s Budget, we will put those values into practice again, with fairness and opportunity for all so that we can secure our economy, strengthen our public services and lift living standards for the British people.
Question put.
Oral Answers to Questions
Mark Garnier Excerpts(2 months, 2 weeks ago)
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Mark Garnier (Wyre Forest) (Con)
In this month of blaming everyone else for every woe that befalls the Government and using it as an excuse to bust manifesto pledges left, right and centre, it seems that the Government are claiming credit for more banking hubs, but we all know that the rolling out of banking hubs is a purely commercial decision by the banks. It is the banks that are choosing to do this, to serve their customers. Is it now the Government’s policy to blame everyone else for their own incompetences, and to claim credit for everyone else’s good ideas?
Lucy Rigby
Where it is appropriate to do so—indeed, it is very often appropriate to do so—we will blame the Conservative party for the state of the country, and it is appropriate to do so here. On the criteria that Link uses for banking hubs, I will remind the hon. Gentleman that, in relation to the access to cash regime, that was designed and passed by the previous Government.
Draft Financial Services and Markets Act 2023 (Mutual Recognition Agreement) (Switzerland) Regulations 2025
Mark Garnier Excerpts(2 months, 3 weeks ago)
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Mark Garnier (Wyre Forest) (Con)
I will not keep the Committee for too long. I thank the Minister for her kind words about the work of the previous Government in this area. As she rightly said, the regulations originate from the Berne financial services agreement, signed back in 2023, so it is something we have worked on. As somebody who worked in financial services for 27 years before coming to Parliament—I worked for two Swiss banks, had clients in Switzerland and did this kind of cross-border business—I can attest that this is a fantastic opportunity for our financial services sector. Anything that formalises the arrangement and makes transactions less sticky and easier to do can only be a good thing, so we will certainly be supporting the proposal 100% this evening. I thank the Minister for her excellent speech and her kind words about the work of the previous Government—I think she forgot to add “Strong and stable for 14 years”, but still.
Question put and agreed to.
Draft Financial Services (Overseas Recognition Regime Designations) Regulations 2025
Mark Garnier Excerpts(2 months, 4 weeks ago)
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Mark Garnier (Wyre Forest) (Con)
We welcome the general thrust of the regulations, which are all about the internationalisation of our financial services market, continuing our moving on from a post-Brexit Britain. I was not a fan of Brexit, but we are where we are. It is incredibly important that our financial services centre remains internationally competitive, and the regulations support that. I will not detain the Committee any longer—I can see smiles on Government Members’ faces. [Laughter.] Let us hope the Liberal Democrats continue in that spirit.
Question put and agreed to.
Oral Answers to Questions
Mark Garnier Excerpts(4 months, 1 week ago)
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Mark Garnier (Wyre Forest) (Con)
I also congratulate the hon. Member on her elevation to Economic Secretary to the Treasury; I am sure she will do very well.
The UK banking sector provides a valuable service to our economy, keeping money in circulation, funding business and mortgages and all the rest of it. The financial services sector is the UK’s biggest export sector. According to UK Finance, UK banks generate around £45 billion in tax every year, but because of things like the bank levy, UK banks now pay an effective rate of around 46%, which is higher than competitors in New York, Frankfurt, Dublin and Singapore. The Chancellor of the Exchequer has managed to dig her own £30 billion black hole in the economy, but can the Minister reassure the City of London and this House that there are no plans to increase taxes on our banking and wider financial services sector in the upcoming Budget in November?
Draft Markets in Financial Instruments (Miscellaneous Amendments) Regulations 2025
Draft Financial Services and Markets Act 2023 (Capital Buffers and Macro-prudential Measures) (Consequential Amendments) Regulations 2025
Mark Garnier Excerpts(4 months, 1 week ago)
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Mark Garnier (Wyre Forest) (Con)
It is a great pleasure to speak in this incredibly dry debate about incredibly technical aspects of regulation. I am only disappointed not to see the new Economic Secretary to the Treasury make her debut today, although it is always nice to see the Chief Secretary.
Mark Garnier
Quite right. The hon. Gentleman’s leader is with the parliamentary Labour party right now, I think, which will be very exciting.
The regulations are technical, dry but welcome changes to the detailed firm-facing regulations and definitions in the MiFID organisational regulations and capital buffers regime. They follow the comprehensive changes to regulation and tax that the last Government introduced through the Edinburgh reforms, while helping to implement the announcements the Chancellor set out in her 2024 Mansion House speech.
We on the Conservative Benches will always support reforms that aim to make the UK financial market more competitive and growth-oriented. Our financial services are our biggest export and it is vital that we do everything we can to ensure we keep them competitive with their counterparts in Europe and the rest of the world, while at the same time ensuring the UK is a principal destination for international capital. Let me be clear that we support the considered approach being presented, which will allow us to embrace the regulatory autonomy that Brexit provides while keeping us relatively aligned to EU frameworks such as MiFID. That is important because although we need to innovate to maintain our competitive advantage, we must equally avoid trying to reinvent the wheel on financial services regulation.
I push the Minister to look at the wider regulatory burden that MiFID II has placed on UK financial firms. Many in the sector think the reporting obligations, investor protection rules and governance standards have imposed significant compliance costs and operational complexity. Although the intention is noble, we can over-regulate and we must remember that risk will always be something that we cannot remove completely. That was highlighted in a submission by UK Finance to a recent House of Lords Committee inquiry that showed that the rules have constrained the City’s ability to innovate and grow capital markets.
Although we welcome the regulations, the Government now have the freedom to go further and simplify the onerous rules MiFID II introduced. Doing so would unlock growth in our financial services sector and help us to regain ground lost to competing hubs such as New York and to emerging financial centres in the EU. Nevertheless, we have to accept that the EU is our largest trading partner, so it is right that the changes do not significantly deviate from what was in place before. As I said, the UK deviating to a new regulatory regime would not necessarily help our cause.
We also welcome the fact that the changes will help to make the UK more responsive to emerging trends and risks. That is crucial as we seek to be competitive in an ever more volatile world and it would be remiss of me not to mention that many stakeholders feel the regulatory burden placed on them by the FCA and PRA is already too high and, in some instances, unnecessary. Although the changes should not increase that burden significantly, I hope the Minister and Treasury officials will be mindful of that when making changes in the future.
All together, we broadly welcome the technical changes that the regulations introduce as they will help to streamline capital market regulation and ensure legal coherence. I was going to ask some questions, but I think in the interests of time we can probably pass on that—we do not want to keep anybody waiting. I will leave it at that.
Financial Services Reform
Mark Garnier Excerpts(6 months ago)
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Mark Garnier (Wyre Forest) (Con)
I am very grateful to the Minister for advance sight of her statement. There is much in these Leeds reforms—many of which were formerly known as the Edinburgh reforms—that can be welcomed, and some of the details were laid out by the Chancellor in her Mansion House speech last night.
The Conservatives will always support reforms to our financial sector that ensure that the City of London remains a global powerhouse, but the Chancellor’s rhetoric last night about growth and stability obscures the truth of this Government’s record of delivery. Inflation is now at 3.6%—the highest in the G7—and growth has all but stalled. Despite yesterday’s fanfare for reform, the reality is that having run short on other ideas, the Government are now forced to turn once again to the City of London for inspiration—a last throw of the dice, hoping that it will provide an engine for the growth that their policies are stifling.
Last night the Chancellor described her Government as a “beacon of stability”, but let us not forget the actual legacy that was handed over to her. We enjoyed near record levels of employment. Unemployment was at historic lows, and inflation was under control. That is the stable foundation on which this Government were handed the keys, yet they now preside over instability. The Office for Budget Responsibility, the OECD and the Bank of England have all sounded the alarm that our growth prospects have collapsed. The Government claim to be cutting red tape for industry, but let us remember that their plan to make work pay would in fact burden employers with over 70 new regulations, reminiscent of the 1970s.
The Chancellor’s talk of unleashing the power of the City comes even as her party threatens to smother businesses in paperwork and expense. When it comes to proposals for financial services, the Conservatives welcome much that gives the sector confidence and clarity, but warm words must be matched by careful delivery. On reforms to the Financial Ombudsman Service, there is agreement that it should return to its impartial roots as a fast and effective dispute resolution service, not a quasi-regulator, but so many business and consumers are awaiting clarity, so can the Minister confirm whether these changes will limit the FOS’s power to make backdated legal determinations, and what impact will the reforms have on ongoing legal proceedings, such as the crucial car finance case before the Supreme Court?
Streamlining the approach of the FCA and the PRA may remove unnecessary friction, but we must ensure that this does not become window dressing while critical challenges remain. The FCA and the PRA must accept that stability in the markets is not the only way to deliver growth. Both their objectives must be aligned and equally ambitious in their drive for reform.
The Chancellor trumpeted reforms to ISAs, including new rules for long-term asset funds, which we welcome if that broadens access to higher-return assets for ordinary savers, but there is still no certainty on the future of the cash ISA. Without clarity, the Government risk undermining their own ambition to promote home ownership and inclusive investment, which again was trumpeted by the Chancellor during her Mansion House speech last night.
On capital investment policy, we welcome MREL reform, which was a change I championed during the recent passage of the Bank Resolution (Recapitalisation) Act 2025. This will help challenger banks to compete and expand lending.
We cautiously welcome the Government’s review of ringfencing rules, but will they confirm that all options are being considered, including alignment with the US and the EU, which, as the Minister knows, never implemented ringfencing rules?
More broadly, the history of the last Labour Government reminds us that good intentions are never enough. The Financial Services and Markets Act 2000, introduced by the then Chancellor, along with the tripartite system, was well conceived but badly implemented, contributing to the events of the 2008 financial crisis. It falls to this Government now to demonstrate that they will not repeat those mistakes.
Finally, at Mansion House last night the Chancellor missed a crucial opportunity to be straight with the British people and rule out further tax rises. Will the Minister guarantee that working families and businesses will not face more tax increases? Will she rule out any further surprise raids on the British taxpayer?
Britain’s financial services sector has always thrived when reforms are clear. The test of these reforms will come when the full details emerge, but ultimately growth will come only when the Chancellor realises that hard-working people and businesses across the country are the real engines of economic growth.
Emma Reynolds
Well, half of that was all right, I suppose. I do want to start constructively and thank the hon. Member for his welcome for some of the reforms. I will answer some of his specific questions before I come to the wider points.
On the Financial Ombudsman Service, we have set out in great detail what we will do. As he will be aware, some of the changes require primary legislation. We are proposing an absolute time limit of 10 years, but with discretion for the FCA to give longer periods in the case of products with a longer lifetime. I cannot comment on the ongoing car finance issue, which as he knows is working its way through the courts.
The hon. Member talked about the regulators’ different objectives. We have been very clear with the regulators that we expect them to embed their secondary objective to facilitate economic growth and competitiveness while obviously complying with their other objectives. He will see that in the remit letters that the Chancellor sent to the regulators at the last Mansion House speech last November.
On ISAs, I welcome what the hon. Member said about long-term asset funds, which we think will unlock great opportunities for savers. We continue to consider reform to ISAs. We would like to ensure that more people have the opportunity and confidence to invest, which is why we hope that targeted support, which will be introduced by firms by the end of this tax year—we have worked at pace on this—will really shift the dial and give people that confidence to invest.
I think the hon. Member said he was in favour of what we are doing on MREL, and I know that he agreed with the Bank Resolution (Recapitalisation) Act, which we put through the House and is coming into force today. I thank him for his support on that.
On ringfencing, we have detailed which areas we will look at. I am happy to write to him further on that, but one area, for example, is sharing resources across the ringfenced and non-ringfenced parts of banks. We want to ensure that we strike the right balance between growth and stability.
I turn to the hon. Member’s points about economic stability. I will take no lessons from the Conservatives—I hate to say it. We had inflation at 11%, people paying extremely high mortgage rates and debt rising year after year. The only thing that was stable under their Government was wages, which were flatlining.
Oral Answers to Questions
Mark Garnier Excerpts(6 months, 2 weeks ago)
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Mark Garnier (Wyre Forest) (Con)
In her Budget last year, the Chancellor tucked away about £10 billion over the next couple of years from reform to the non-dom tax regime. It is important to remember that the OBR said in its fiscal outlook that that figure was “highly uncertain”, and a high-level survey by Oxford Economics found that fully two thirds of non-doms are considering leaving the country in the next couple years as a direct result of those policies. That implies not an increase of £10 billion but a decrease of £8 billion. The Chancellor has created a fiscal black hole of £18 billion with just one policy alone. In this week of heroic U-turns from the Government Front Bench, will the Minister confirm whether they will be axing this tax? When will it finally be condemned to the history books?
James Murray
I am not really sure whether there was a policy suggestion in that comment or not. As the shadow Minister will know, the fiscal black hole that we had to address when we won the general election was the £22 billion black hole that the Conservatives left after their mismanagement of the economy. As I said, the Office for Budget Responsibility has confirmed that our reforms to the non-dom regime, with our removal of non-dom tax status, will raise £33.8 billion over the five years of the forecast. It is the OBR’s figures that we will trust in that regard.