Financial Services (South-east London)

Mark Hoban Excerpts

Friday 18th March 2011 Commons Chamber

[The Financial Secretary to the Treasury (Mr Mark Hoban)]

I congratulate the right hon. Member for Greenwich and Woolwich (Mr Raynsford) on securing a debate on this issue, and on the powerful way in which he raised the concerns of his constituents. The hon. Member for Lewisham East (Heidi Alexander) and the right hon. Member for Lewisham, Deptford (Joan Ruddock) echoed those concerns about the closure of the branches by the Nationwide building society. I recognise their concerns about the impact of the closures on south-east London. I raised similar concerns when I met Graham Beale, the chief executive of Nationwide, yesterday.

As I am sure right hon. and hon. Members will know, decisions on the opening and closing of branches and agencies are taken by the management team of each bank or building society on a commercial basis, and the Government do not intervene in those decisions. All banking service providers will need to balance customer interests, market competition and other commercial factors when considering their strategy. So, while the closures that we are discussing are a commercial decision for Nationwide, I would like to respond to right hon. and hon. Members’ concerns by setting out the Government’s commitments to improving customers’ experiences of dealing with financial services institutions more widely.

I also want to tackle the issue of access to financial services, especially among the most vulnerable groups in society. When I looked at the measures of financial exclusion in south-east London, I found that this was clearly a big issue for residents in all three constituencies. I shall set out how the Government are responding to support the financial mutuals and I will end with a few comments about increasing competition in the banking sector.

The coalition is committed to improving access to basic financial services, especially for those vulnerable to exclusion. The Government believe that banks and building societies should serve the economy and we are committed to improving access to banking and the transparency of financial products to consumers. We are therefore working actively to ensure that all consumers can access an appropriate mix of financial services.

We should bear in mind that bank or building society branches are not the only channels for accessing financial services; nor are they necessarily favoured by consumers on low incomes. For many people, the barriers will be significantly greater than simply having no local bank or building society branch to visit. Simply saying, as the right hon. Member for Greenwich and Woolwich did, that we should introduce a community reinvestment Act, as the US did, is not the solution given the differences in financial services between the UK and the US.

It is important to acknowledge the real progress that has been made on tackling financial exclusion in recent years. The most recent figures show that since 2002-03 the number of adults living in households without a transactional bank account has decreased from 3.5 million to just over 1.5 million in 2008-09. The unbanked now represent just 3% of the population. Banks have improved the provision of basic bank accounts for those who need them.

There remain a group of people who are unbanked. A recent review by the Financial Inclusion Taskforce found that the remaining unbanked are generally the poorest and most deprived people, and it recommended a number of minor changes to existing basic bank accounts to make them more accessible and easier for poorer households to use. It also highlighted the scale of the challenge of extending bank accounts to those who currently do not have them. As more people open bank accounts, we see the unbanked becoming concentrated in hard-to-reach, more deprived groups. We must think carefully about how to work closely with those groups to get people to open bank accounts and access the benefits that they bring.

We should not assume that simply because someone does not have a bank account, they have not previously held one. Six out of 10 unbanked people have previously held a bank account, but no longer hold one because it did not work for them: they might have been charged too much or perhaps it did not give them right amount of control over their finances. So we believe it is important to find solutions that go with the grain of how people run their lives. Many unbanked consumers express a preference for managing their finances in cash. They want direct control over their spending and can often feel that having a bank account takes that away from them.

We see an important role for the Post Office in promoting access to financial services. The Post Office has more branches than all of the retail banks put together, and an important part of the future sustainability of the Post Office will be the continued growth of revenue from financial services. The Government are also ambitious for all UK current accounts to be accessible through the post office network, making post offices the convenient place for people to access their cash.

The Government are working with banks, building societies, e-money service providers, bill payment organisations, retailers and post offices to pursue new ways to improve the opportunities for low-income households to make the most of their money. We should recognise that the model of banking is changing and that people are increasingly turning to prepayment cards or e-money as a way of controlling their finances or paying bills online. I believe we should encourage the development of safe and convenient new financial services, using those channels.

Let me now deal with mutuals. They are clearly seen by many people as more accessible to those who cannot, or do not want to, readily access banks. The coalition believes that a strong mutual sector should have the capability greatly to enrich British society. It is in the Government’s interest to do whatever they can to help the mutual sector prosper and grow, and it is in everyone’s interest to achieve that in a sustainable way.

Over the last few months, I have had the opportunity to start a meaningful dialogue with the mutual sector about its ambitions, what services it can offer and how it can overcome hurdles that have been holding it back. We recognise that one of the strengths of mutuals is that they do not have to pay dividends to their shareholders, but they do have an obligation to their members. They have to strike a balance between meeting their wider obligations to the communities in which they are based—the people they serve—and providing returns to their members through higher interest rates on savings or lower costs of borrowing. It is their ability to compete that ensures that they remain viable in the long term. Such considerations are at the heart of every decision made by building societies.

Clearly, there is an appetite for change in the way in which financial services operate, and mutuals stand well placed to respond. To achieve that, the Government are implementing a number of legislative reforms to help to create a more equal playing field in financial services, thus promoting diversity of ownership and a better challenge to the banks. The legislative reform order for industrial and provident societies and credit unions will be relaid before Parliament shortly, and will introduce many basic yet far-reaching reforms that will enable credit unions to modernise and grow and fill some of the gap that banks and building societies have chosen not to fill or been unable to fill. After the LRO comes into force, we will also take forward the implementation of the Co-operative and Community Benefit Societies and Credit Unions Act 2010, which will bring the industrial and provident societies’ name into the 21st century as co-operatives, and modernise the powers available to update the legislation in future.

We are also keen to ensure that we do as much as possible to reduce the costs faced by mutuals, so that they can spend more of their income on meeting the needs of members. We will lay an order shortly to give mutual societies the option to use electronic communications to engage with their members, rather than sending statutory information by hard copy, enabling them to reduce costs and invest more in their businesses.

Credit unions in particular have made great progress in recent years in bringing affordable financial services to people who would not otherwise be able to access them. We are providing additional support to such institutions, outside the regulatory and legislative process. Building on the financial inclusion growth fund, the Department for Work and Pensions will continue to support credit unions for four years through a new modernisation and expansion fund worth up to £73 million. The new fund will seek to extend access to basic, appropriate financial services to many more people on lower incomes, through modernising delivery and customer support systems so that credit unions can become financially sustainable. We also see real opportunities for the post office network in building closer links with credit unions. In future, the Government want to see credit unions—in partnership with the post office—providing more services, more efficiently, to more people, and through the Department for Work and Pensions we are looking at the most feasible ways to make that happen.

On competition, through supporting the development and sustainability of financial mutuals, whether building societies or credit unions, the Government seek to address concerns that there is too little competition in the retail banking sector. Furthermore, the Government have established the Independent Commission on Banking, to make recommendations on both structural and non-structural measures to change the current banking system, and promote stability and competition, to the benefit of both businesses and consumers. That will include looking at the issue of consumer choice and considering measures to reduce market concentration. The commission will publish its interim report next month and a final report in September. The Government look forward to receiving its recommendations and will then decide on the best course of action.

I thank the right hon. Members for Greenwich and Woolwich and for Lewisham, Deptford, and the hon. Member for Lewisham East, for raising this important issue. I recognise the importance of access to financial services in south-east London. Clearly, more work needs to be done to encourage access and ensure the right provision of services to people in their constituencies. I hope they can see that the Government are committed to ensuring that everyone, not just in their constituencies but across the country, can access financial services so that they can play a full role in society.

Question put and agreed to.

Pension Tax Relief

Mark Hoban Excerpts

Thursday 3rd March 2011 Written Statements

[The Financial Secretary to the Treasury (Mr Mark Hoban)]

As announced in October, from April 2011 the annual allowance (AA) for tax-privileged pension saving will be reduced from £255,000 to £50,000 and from April 2012 the lifetime allowance will be reduced from £1.8 million to £1.5 million. This is a simpler and fairer approach to making a more sustainable and affordable system of pensions tax relief than the previous Government’s complex and damaging proposals. The reduction of these allowances will generate around £4 billion annual revenue in the steady state while preserving incentives to save, and lessening the impact on the ability of UK business to attract and retain talent. This approach has been welcomed by pension and employer groups and the Government have continued to work in consultation with them to finalise the design of the new pensions tax regime.

The Government expect most individuals and employers to adapt their pension saving behaviour to avoid incurring a charge by exceeding the AA, and has put in place measures such as the carry forward of unused allowances to protect individuals further. However, recognising that in some circumstances individuals could still see high charges reflecting significant uplift in pension value in a given year, the Government have consulted on options to enable individuals to meet these charges from their pension benefits.

In line with the strong preference expressed by most respondents, the Government have decided that where AA charges are met from pension benefits, the tax should be paid at the point the charge arises. In effect, schemes will have a considerable amount of time to complete the payment process, with additional flexibility being granted in the first year. Individuals with AA charges above £2,000 will be able to elect for the full liability to be met from their pension benefit. Schemes will be required to operate this facility only where an individual has exceeded the AA outright within that scheme in the relevant year. The Government have given schemes flexibility in how they operate, but is clear that any adjustment to an individual’s pension benefit should be fair to all scheme members.

The detailed policy specification has been set out in a summary of responses document and draft clauses on which the Government welcome comment by 17 March. An update to the tax information and impact note has also been made. All documents are available on the Treasury website, and have been deposited in the Libraries of both Houses.

Counter-Terrorist Asset-Freezing Regime

Mark Hoban Excerpts

Monday 28th February 2011 Written Statements

[The Financial Secretary to the Treasury (Mr Mark Hoban)]

The Government are committed to reporting quarterly on the operation of the UK’s terrorist asset-freezing regime. We believe this is essential to ensure transparency and accountability of the regime. The Terrorist Asset-Freezing etc. Act 2010 has enshrined in law the commitment to report quarterly to Parliament on the operation of the regime mandated by UN Security Council Resolution 1373.

This report covers the period October to December 2010¹. It is the last to cover the operation of the regime under the Terrorism (United Nations Measures) Order 2009, which was repealed on 17 December when the Terrorist Asset-Freezing etc. Act came into force and it also covers the first two weeks of the operation of the new Act.

The new Act strengthens civil liberties safeguards and makes the new regime fairer, more proportionate and more transparent.

A copy of the Act can be found on the HM Treasury’s website:

http://www.hm-treasury.gov.uk/fin_sanctions_terrorist.htm

This report also covers the operation of the UN al-Qaeda and Taliban asset-freezing regime.

As of 31 December 2010, a total of just under £280,000² of funds relating to terrorism were frozen in the UK. This covers funds frozen under the UK’s domestic terrorist asset-freezing regime, mandated by UN Security Council Resolution 1373, and also funds frozen under the UN al-Qaeda and Taliban asset-freezing regime, mandated by UN Security Council Resolution 1267.

(1) UK’s Domestic Terrorist Asset-freezing Regime

As of 31 December 2010, a total of 91 accounts containing just under £140,000 were frozen in the UK under the domestic terrorist asset-freezing regime mandated by UNSCR 1373.

Operation of the Terrorism (United Nations Measures) Order 2009 (prior to 17 December 2010)

Asset-freezing designations

In the quarter October to December 2010, the Treasury gave no new directions under the 2009 order.

Reviews under the 2009 Order

The Treasury keeps domestic asset-freezing cases under review and completed 38 reviews in this quarter. As a result of these 38 reviews, six persons had their designations revoked.

Licensing

Maintaining an effective licensing system is important to ensure the overall proportionality and fairness of the asset-freezing regime, whether the individuals concerned are subject to an asset freeze in accordance with a UN or EU listing, or domestic terrorism legislation. A licensing framework is put in place for each person on a case-by-case basis. The key objective of the licensing system is to strike an appropriate balance between minimising the risk of diversion of funds to terrorism and meeting the human rights of affected persons and their families. Licences contain appropriate controls to protect against the risk of the diversion of funds for terrorist finance.

Four licences were issued this quarter in relation to four persons subject to an asset freeze under the 2009 order.

In addition to issuing licences relating to a specific person, the Treasury may also issue general licences, which apply to all persons designated under a particular regime or regimes. Licences are granted where there is a legitimate need for such transactions to proceed and where they can proceed without giving rise to any risk of terrorist finance.

One general licence was issued this quarter to allow third parties to pay a designated person’s legal expenses under both the Act and the al-Qaeda and Taliban asset-freezing regime.

No licences were varied or revoked this quarter.

Legal Challenges

Two legal challenges against designations made under the 2009 order were ongoing in the last quarter.

Operation of the Terrorist Asset-Freezing etc. Act 2010 (after 17 December 2010)

The Act contains a transitional provision that ensures that all designations and licences made under the 2009 order remain valid as final designations under the Act until 17 March 2011. All UK asset freezes are therefore currently under review to consider whether they should be renewed under the new Act. The review process will be completed by 17 March 2011.

No new designations or licences were made under the powers of the Act between 17 December and the end of the quarter.

The Independent Reviewer

Under the Act the Treasury is required to appoint an independent reviewer to review the operation of the domestic terrorist asset-freezing regime. The independent reviewer will report on the first nine months of the regime and every 12 months thereafter.

The Treasury has decided to appoint David Anderson QC to the role of Independent Reviewer. He has recently been appointed by the Home Office as the independent reviewer of counter-terrorism legislation.

(2) UN al-Qaeda and Taliban Asset-Freezing Regime

The UN al-Qaeda and Taliban asset-freezing regime is implemented in the UK through EC Regulation 881/2002. Enforcement measures are provided for in the UK’s al-Qaeda and Taliban (Asset-Freezing) Regulations 2010.

As of 31 December 2010, a total of 112 accounts containing just under £140,000³ were frozen in the UK under the al-Qaeda and Taliban asset-freezing regime.

Designations

During this quarter, the EU added five people to its list made under EC Regulation 881/2002, implementing the UN al-Qaeda and Taliban asset-freezing regime established under UNSCR 1267.

Licences

One licence was issued this quarter in relation to one person subject to an asset freeze under the al-Qaeda and Taliban asset-freezing regime.

No specific licences were varied or revoked this quarter. The general licence referred to above also applies to the UNSCR 1267 regime.

Proceedings

In the quarter October to December 2010, no proceedings were taken for breaches of the prohibitions of the 2009 order, the Act or the al-Qaeda and Taliban (Asset-Freezing) Regulations.

¹ The detail that can be provided to the House on a quarterly basis is subject to the need to avoid the identification, directly or indirectly, of personal or operationally sensitive information.

² This figure reflects the most updated account balances available and includes approximately $64,000 of suspected terrorist funds frozen in the UK. This has been converted using exchange rates as of 12/01/11.

³ Includes approximately $64,000 of suspected terrorist funds in the UK.

Financial Regulation

Mark Hoban Excerpts

Thursday 17th February 2011 Written Statements

[The Financial Secretary to the Treasury (Mr Mark Hoban)]

The Government have today presented to Parliament a consultation document, “A new approach to financial regulation: building a stronger system” (Cm 8012), which provides further detail on the coalition Government’s proposals to reform the framework of financial regulation in the UK following the complete failure of the tripartite system over many years to identify or tackle the build up of risk in the financial system. That failure precipitated the biggest financial crisis for a generation, leading to a run on a major high-street bank and the part-nationalisation of two of the largest banks in the world. We need a wholly new approach. The reforms detailed today will address the fundamental weakness of the regulatory system, created in 1997. This document is available on the Treasury website.

This document expands and further consults on the Government’s proposals, set out last year, to disband the Financial Services Authority and establish a new system of more specialised and focused financial services regulators. The Government’s reforms focus on three key institutional changes: the creation of an independent Financial Policy Committee (FPC) in the Bank of England, the establishment of a new Prudential Regulation Authority (PRA) as a subsidiary of the bank, and the creation of an independent conduct of business regulator, the Financial Conduct Authority (FCA), which was formerly provisionally titled the consumer protection and markets authority. This corrects the failures of the past by creating regulators with clear objectives and the powers needed to deliver them.

“A new approach to financial regulation: building a stronger system” outlines the Government’s thinking on a range of issues, including: the objectives of the new regulatory bodies and the factors which they must consider in fulfilling their objectives; the levers and likely tools the FPC will have at its disposal to protect financial stability; the PRA’s judgment-led approach in regulating firms; the FCA’s more proactive and focused approach to regulating conduct in financial services and markets; accountability measures for the new regulatory bodies; and co-ordination mechanisms which will determine how the regulatory authorities will work together, and with regulated firms. Our reforms will create a stronger regulatory structure which reinforces stability in financial markets and helps deliver better outcomes for consumers.

Following the consultation, the Government will present a further White Paper including a draft Bill for pre-legislative scrutiny in the spring. The Government expect the new regulatory structure to be in place by the end of 2012.

Economic Regeneration (Glasgow)

Mark Hoban Excerpts

Wednesday 16th February 2011 Westminster Hall

[The Financial Secretary to the Treasury (Mr Mark Hoban)]

I congratulate the hon. Member for Glasgow East (Margaret Curran) on securing the debate. She struck me as passionate about her city, its people and their prospects. I commend that, and it will serve her well in this place.

I have to disappoint the hon. Member for Rutherglen and Hamilton West (Tom Greatrex), but I am not sure that I need much of a history or geography lesson about the city. I have visited Glasgow quite frequently, I have met businesses in Glasgow and I am going to Edinburgh next month. [Interruption.] I know there is some fraternal rivalry between the cities, but the hon. Member for Edinburgh East (Sheila Gilmore) is in her place representing Edinburgh and ensuring that the Glaswegians do not get everything their own way. I understand some of the challenges in the Scottish economy. Having been born and brought up in the north-east, I recognise from my own region some of the trends referred to by the hon. Members, such as the decline in shipbuilding, or in coal mining, as mentioned by the hon. Gentleman. I see strong parallels.

I congratulate other right hon. and hon. Members, including my hon. Friend the Member for East Dunbartonshire (Jo Swinson), on participating in the debate and making the case for their constituencies.

Before I turn to the main text of my contribution, let me deal with four areas mentioned by a range of speakers. First, it is vital for Glasgow to use the Commonwealth games as an opportunity for economic development. I note the job creation initiatives around the games. Some lessons could be learnt from the London Olympics, not only in the regeneration provided for east London but in how the games are a focal point for businesses to promote the benefits of London as a place of inward investment. I encourage people in Glasgow to work closely with the Olympic authorities in London to understand the opportunity to attract inward investment and to raise the profile of the city.

The Clyde Gateway, as with the spending for the Commonwealth games, is a devolved matter, for prioritisation by the Scottish Government, but I am sure that Scottish Enterprise will have heard the strong messages from this morning’s debate. However, if MPs and others from Glasgow wish to see funding devoted to that project, they must place pressure on the Scottish authorities.

I will raise with my right hon. Friend the Secretary of State for Transport the issues about the completion of High Speed 2, which affects a number of areas of the country not covered by the current route, such as the northern part of England as well as Scotland. I will ensure that he is aware of the concerns expressed.

On the green investment bank, I am afraid that Glasgow will have to join the queue of bidders for the headquarters. A number of parts of the country have made representations through their Members for the site of the headquarters. Green investment is a huge opportunity for economic growth and development. Existing skills in local communities or in the universities serving those areas can be used to promote renewable energy and green industries. The issue affects all parts of the country but, at the time of the Budget, my right hon. Friend the Chancellor of the Exchequer said that at least £250 million from the green investment bank will be spent in Scotland. We have not lost sight of the important role such investment can play in stimulating economic growth.

As pointed out by the hon. Member for Glasgow East, Glasgow was at the forefront of the industrial revolution and it remains one of the most important and innovative cities in the UK. It is Scotland’s largest urban economy, generating £13 billion gross value added each year and supporting 400,000 jobs. As we heard, the jobs are enjoyed by those living not only in Glasgow but in the surrounding areas, as part of the economy of the west of Scotland.

We want to work in partnership with the Scottish Government to promote our shared objective of increasing economic prosperity for all in Scotland and Glasgow. As mentioned, economic regeneration policies are largely a matter for the Scottish Government and their local authorities and agencies, which was evidenced by the criticism made by the hon. Lady of the Scottish National party Government. I am sure she will take every opportunity over the coming weeks to remind SNP Members of that and to question their non-attendance today.

Setting out the Government’s economic strategy and its impact on Scotland—in particular, Glasgow—will be helpful. We set out three strands last year: first, to reduce the deficit inherited from the previous Government; secondly, to increase economic growth, including by rebalancing the economy throughout all the countries and regions of the UK; and, thirdly, to promote fairness for all.

As my hon. Friend the Member for East Dunbartonshire rightly pointed out, we have a deficit to tackle and we are spending £120 million on interest every day—we spend more in interest than we do on schools. Clearly, we need to resolve that issue if we are to support economic growth, keep interest rates low and protect jobs in all parts of the UK.

The reality that the right hon. Member for Delyn (Mr Hanson) keeps trying to escape from—he and I have had many debates on such issues—is that the previous Government set out cuts starting from April this year that would have been only £2 billion less than the cuts we have outlined. When he talks about front-loading, he ought to think about the previous Government’s plans and acknowledge that the cuts this year are only £2 billion more than in the plans we inherited. All parts of the UK, including Scotland, must bear their share of the deficit reduction made necessary by what we inherited from the previous Government.

Funding for the Scottish Government in the spending review reflects the Government’s commitment to invest in infrastructure and to ensure that conditions for growth are in place throughout the UK. The spending review increased capital funding in the UK by £2 billion compared with June’s Budget plans, which is more than what the previous Government had set out as their capital plans for the new Parliament. I repeat, the right hon. Gentleman must be careful what he criticises: we have been more generous in our capital settlement than his Government had intended. We are keen to ensure that capital expenditure is used to protect projects with high, long-term economic value and that spending is focused on investment promoting economic growth, including in transport, science, regional growth, digital infrastructure and supporting the low-carbon economy. Glasgow MPs need to challenge the Scottish Government on how they will prioritise their budgets to deliver those objectives. These are devolved matters, and the Scottish Government are accountable for the priorities they set and how they respond to the needs of Scotland.

[Margaret Curran]

I take the point about devolved matters, and we do pursue those. Housing benefit, however, is a reserved matter. Will the Minister confirm whether the Government are going ahead with the 10% cut in housing benefit after a year to those receiving jobseeker’s allowance?

[Mr Hoban]

I will return to the issue of housing benefit in a moment. Let us be clear: the Scottish Government have not suffered disproportionate cuts. Funding has been determined by the Barnett formula in the usual way. The percentage of Scottish Government total reduction in departmental expenditure limits for 2014-15 is below the UK average—they are getting a better spending settlement than the rest of the UK. Public spending per head in Scotland is substantially above the UK average and is expected to remain so over the spending review period. The Scottish Government have benefited from substantial increases in spending since devolution.

If we are to promote strong and sustainable economic growth that is evenly shared across the country and between industries, we need to tackle the debt and deficit that we inherited. The Government are inviting businesses to take part in a fundamental review into what each area of Government is doing to address the barriers facing industry. They have already acted to remove barriers to growth, and the growth review announced last year set in train an intensive programme of work to drive forward action on the Government’s priority areas. That relentless focus on growth will continue to form the basis of the Government’s agenda for the rest of this Parliament. We started by focusing on planning, trade and inward investment, competition, regulation, access to finance and corporate governance.

The review will look at all sectors of the economy, but we have first identified six key sectors: advanced manufacturing; digital and creative industries; business and professional services; retail; construction; and health care and life sciences. Manufacturing is a strong part of the Scottish economy, and it has seen six consecutive quarters of growth. That is a helpful sign of the rebalancing of the economy.

As the Financial Secretary to the Treasury, financial services is my specialist topic, and the importance of financial services to Glasgow has been mentioned a couple of times during the debate. In 2009, I visited National Australia Bank at the Clydesdale branch in Glasgow and spoke to management and businesses from the west of Scotland. The financial sector is one of the most significant contributors to UK GDP and employment, and although London is the heart of that industry, there are important financial centres across the country, including in Glasgow. Financial services firms in Scotland account for 9% of total UK employment in the sector.

Financial services is one of the biggest employers in Glasgow. In 2008, 95,000 people were employed in financial services firms in Scotland, and many of those jobs were based in Glasgow. Major local employers include National Australia Group, which I referred to earlier, and Lloyds Banking Group. I know that Glasgow has recognised the potential role that financial services can play in a growing economy. The £750 million joint public-private venture investment in the international financial services district could bring an extra 20,000 jobs to the city.

We often think of the strong tradition of businesses that are based in Scotland, but we should not lose sight of the fact that many international financial services that we associate with Canary Wharf and the City have significant operations outside London. Morgan Stanley is in Glasgow, as are Deutsche Bank and Citibank. Those global businesses chose to locate some of their operations to Glasgow, which shows that the benefit of having London as a global financial services centre spreads beyond the boundaries of the square mile. We are doing as much as we can to ensure that the UK remains an attractive and competitive place for financial services to do business.

As well as measures for the financial services sector, we must ensure that the UK is a good place for inward investment. In the Budget we announced plans to reduce the rate of corporation tax from 28% to 24% over the next four years. We published a corporate tax road map that set out a significant programme of corporate tax reforms designed to restore the UK’s tax competitiveness, including reform of the controlled foreign company regime. The Government are responding to business concerns about the instability and unpredictability of the UK tax system while taking action where they can to improve the UK’s competitiveness. We will work with our partners in the Scottish Government and elsewhere to ensure that Scotland is an attractive place in which to do business.

Increasing fairness is a strand of our work, and that point was touched on by a number of hon. Members. We must be clear about the important reforms to welfare set out by the Government. I recognise that there is a degree of support for those reforms from Labour party Members, but we clearly need to improve work incentives and get more people into work. Too many people must make a decision about whether they can afford to go to work, or whether the system means that they are trapped on benefits. That is why my right hon. Friend the Secretary of State for Work and Pensions is setting out plans for the universal benefit, which will be introduced from 2016. It means that for new claimants, it will always be better to be in work than on benefits. That sends a positive signal that people should take employment opportunities and will be better off if they do. That is not just economically better off—significant social benefits flow from people being in work.

The future jobs fund was mentioned by a number of hon. Members, and it is a convenient soundbite to say that the fund has been scrapped. We should all recognise, however, that many of the jobs that were funded were temporary and many were in the public sector and did not represent good value for money. That is why we are bringing forward the Work programme that will strengthen support for those seeking to get into work.

The hon. Lady mentioned housing benefit. She will recognise—as do a number of her colleagues—that the bill for housing benefit increased significantly under the previous Government. There are some anomalies in how the system works and the way that it distorts incentives. That is why it is important to restructure housing benefit and engage in reforms. We recognise the challenges that that will create, which is why additional money has been set aside to help manage the transition.

The hon. Lady also spoke about defence and shipbuilding. She will know that some of the work on the new aircraft carriers is being done on the River Clyde, just as some is being done in Portsmouth just outside my constituency in the Vosper Thornycroft yard. The Astute class submarines will also be based in Scotland and there is a great deal of support for Glasgow from central Government. However, if we are to achieve the great goals of this Government to rebalance the economy, spread wealth and prosperity, create jobs and ensure that prosperity continues across the nation, not just in London and the greater south-east, difficult decisions have to be made. We must tackle the deficit and find ways to remove some of the barriers to growth in the UK. That is why the Government are committed to the growth review and to ensuring that we do as much as possible to remove the barriers to economic growth.

Having claimed part of Merseyside and north Wales, the right hon. Member for Delyn (Mr Hanson) spoke about the importance of partnership. It is important to recognise the way that Scottish local authorities have worked with the private sector on a number of initiatives to support economic growth. We need to see more such partnerships but we must also tackle some of the underlying issues that we inherited from the previous Government, including the deficit and the national debt. Alongside tackling those things, we must lay the foundations for increased prosperity across the whole United Kingdom.

Financial Mutuals

Mark Hoban Excerpts

Wednesday 16th February 2011 Westminster Hall

[The Financial Secretary to the Treasury (Mr Mark Hoban)]

It is a pleasure, Mrs Main, to serve under your chairmanship for the first time.

I congratulate the hon. Member for Harrow West (Mr Thomas) on securing this debate. He roots his support for financial mutuals in the co-operative movement, which he represents in the House. Many on the Government Benches would see financial mutuals as a coming together of communities to meet the needs of their members, which may be an early articulation of the big society.

We should not forget the role that mutuals play in providing financial services. They hold about 20% of UK retail deposits, and provide financing for 17% of outstanding UK mortgages—including mine. They employ 70,000 people and half of the UK’s population are members of mutuals. The one member, one vote ownership model sets mutuals apart from their plc peers, as it enables them to focus solely on the needs of their members. It is unsurprising that mutuals frequently rank highly in surveys of customer satisfaction. As we know, many mutuals operate in areas of economic and social deprivation throughout the UK. They provide services that would be seen as sub-scale for big banks, including as the small loans offered by credit unions whose customers might otherwise turn to doorstep lenders.

The hon. Gentleman made an important point about access to credit unions. When I read the transcript of a recent debate on high-cost credit, I was struck by the fact that one of the challenges is to increase access to credit unions as an alternative to doorstep lenders. In a moment, I shall discuss some of the measures that we will take. It is the importance of mutuals and the choice and diversity that they provide that drives our commitment to see them thrive and prosper.

The causes of the financial crisis have been stated many times, and I do not intend to rehearse them here. None the less, it is important that we learn from the crisis and take steps to ensure that the same mistakes are not repeated in the future. The Government want to create a financial services sector that works differently and is driven by different values, which is why we are committed to implementing measures that will foster diversity in financial services, promote mutuals and create a more competitive banking industry.

The Government have established an Independent Commission on Banking to make recommendations on both structural and non-structural measures to change the banking system and promote stability and competition for the benefit of both consumers and businesses. A strong sustainable mutual sector, which has the ethos of working in the interests of members, can support that.

We must be realistic and recognise that the financial crisis and the subsequent economic climate have posed many challenges for mutuals. Those challenges include greater competition for retail deposits, more intensive supervision and tougher capital requirements. I do not apologise for the tougher regulatory environment that we are now in. Adapting to this new world has been, and remains, a key challenge for financial mutuals as well as for the whole financial services sector. The Government are keen to ensure that the legislative framework is in place to enable mutuals to fulfil their role.

There are number of changes to which we are committed to help create a more equal playing field in financial services. Let me turn now to the point about capital that the hon. Gentleman rightly raised. We are committed to achieving high capital standards across the financial sector, including for mutuals. At the same time, it is right that we have capital requirements that are appropriate for mutuals. The Government seek to address that issue in negotiations on the capital requirements directive. This is a matter that the Treasury and I take very seriously, and we are leading the debate on this in Europe to ensure that the specific nature of mutuals is taken into account while, at the same time, not compromising the quality of capital in the banking system. We expect a proposal from the Commission on that later in the year.

I say to the hon. Gentleman that one of the driving forces behind our reforms on capital is that we want to ensure that financial institutions never again turn cap in hand to the taxpayer for financial support in a financial crisis. That is why it is important that all deposit-taking institutions, regardless of their form of ownership, have access to loss-absorbing capital.

Capital is a key issue for mutual insurers, too, which is why the FSA is considering the use of with-profits funds. It will be publishing a consultation paper on that shortly. I do not want to pre-empt the proposals that have been made today, but having extolled the virtues of the mutual model, it is reasonable to expect that mutual with-profits policyholders should expect at least as favourable an outcome, if not a better outcome, than proprietary with-profits policyholders. It is important that mutual insurers ensure that they treat their with-profits policyholders fairly, too.

[Jonathan Evans]

The hon. Member for Harrow West (Mr Thomas) alluded to the previous ministerial statement. He knows that it was a statement that I made, but it related to the position of stock-owned companies. It deliberately excluded the position of mutuals, because it was an assessment of what policyholders’ reasonable expectations were and it was based on previous experience. Those factors have been erased from the way in which the FSA has taken the matter forward, so will my hon. Friend agree to revisit that area?

[Mr Hoban]

My hon. Friend makes an important point and it is one that he and I discussed before this debate. His argument, which he has expressed publicly, is that his statement was not intended to be applied to all forms of with-profits funds. The FSA is aware of that view. None the less, it is important that this issue is treated very carefully. I am well aware that for many mutual insurers, their capital comes from with-profits funds. Without that with-profits fund, they would not be able to function in the way in which they do now. It is also fair to say that for a proprietary-owned business, the with-profits fund belongs to its policyholders. We have seen a number of firms go through a reattribution process in recognition of the fact that those funds belong to the members of that fund. There is a challenge there that we need to address and we need to be very careful about the impact of decisions on the ecology of the mutual insurer sector.

[Mr Thomas]

As I suggested in my remarks, the FSA’s position appears to be based on a particular legal opinion that it has secured. Will the Minister ask the FSA to revisit that legal opinion, bearing in mind that all the other legal opinions that the industry has received are at odds with that opinion? Will he also specifically ask the FSA to share that legal advice with the industry, as part of the process of trying to facilitate a solution?

[Mr Hoban]

The best route for resolving this is through the response to the consultation paper, which the FSA will publish later this year. It is for the FSA to decide whether or not it should disclose legal opinions, because it is an independent regulator. The consultation paper is an important way in which to resolve these issues.

I was talking about the need to create a modernised legislative framework for mutuals, and capital is part of that. The Government are also implementing legislation to allow mutuals to modernise the way in which they communicate with their members and to enable them to prosper. The Legislative Reform (Industrial and Provident Societies and Credit Unions) Order 2010 has been a long time coming. It will be re-laid before Parliament next month and will introduce many quite basic, yet far-reaching reforms that will enable credit unions to modernise and grow.

[Damian Hinds (East Hampshire) (Con)]

Will the Minister give way?

[Mr Hoban]

I know that my hon. Friend, as chairman of the all-party parliamentary group on credit unions, will have a great deal to say on this matter, but may I just finish my point? I may even be able to answer his intervention before he makes it.

One of the biggest changes will be to allow credit unions to admit corporate bodies to their membership. Those new members will be able to deposit in and borrow from their local credit union, which provides opportunities for investment and growth in communities. Alongside that, various deregulatory measures relax the rules on age limits for memberships, year-end dates and the ability to offer interest on deposits. These proposals should increase the appeal of local credit unions to the local community and increase their steadily expanding membership still further.

[Damian Hinds]

Many of us are waiting with excited anticipation for the legislative reform order. What expanded role does the Minister see credit unions potentially playing as a result of the changes in the legislative reform order both in a big society context and in encouraging enterprise because of being able to work with corporate bodies as well as individuals?

[Mr Hoban]

It would be a way for credit unions to make the greatest opportunity of this. We are trying to open up more possibilities for the financial and mutual sector through a number of our measures. I go back to the debate about capital. One of the challenges that I put to the building society sector and others is that if it had the opportunity to raise more capital, what would it do with it. How would it benefit more people as a consequence of having that flexibility? I say to my hon. Friend that corporate members could include charities and voluntary groups, and their deposits could help credit unions to expand their base, so that they can lend more to local communities. There is an opportunity there for the voluntary service to help expand that base. That will also help to create a much more viable credit union sector. Like me, my hon. Friend will have had conversations with Mark Lyonette, who wants to make sure that we move the credit union sector on to a much more stable and viable footing, enabling it to take deposits from others and pay interest on them.

[Chris Evans (Islwyn) (Lab/Co-op)]

The Minister may be aware that in Wales everybody has access to a credit union. Has his Department made any study of the policy of the Welsh Assembly in that regard?

[Mr Hoban]

That point about access to credit unions in Wales was made before the hon. Gentleman came into Westminster Hall for the debate. We need to learn the lessons. The Treasury is very open to new ideas and any thoughts that he has about why Wales has that degree of access to credit unions would be much appreciated.

We will also implement the Co-operative and Community Benefit Societies and Credit Unions Act 2010 once the legislative reform order comes into force. That will modernise the industrial and provident society name and the powers available to update the legislation in the future. Other reforms include a consultation on the use of electronic communications in the mutual sector. That consultation closed at the end of January, and we will lay an order shortly to enable mutual societies to have the option of using electronic communications to engage with their members, which would reduce their costs.

Before I go on to talk about the regulatory framework, let me address the issue of Northern Rock. That issue was raised in the Treasury Committee, and I am aware of the work that has been done on it by Kellogg college. There is a degree of elegant circularity about remutualising Northern Rock, given its antecedence. But of course the responsibility for managing the Government’s investment in Northern Rock rests with United Kingdom Financial Investments Ltd. UKFI gave evidence to the Select Committee, and if the hon. Member for Harrow West reads the transcript of that sitting, he will see that it is open to ideas about the remutualisation of Northern Rock. The principal objective of UKFI is to promote and create value for taxpayers from its management of our stakes in banks, but it also has to pay due regard to financial stability and act in a way that promotes competition. Clearly a remutualised Northern Rock might help it to do those things.

[Mr Thomas]

rose—

[Mr Hoban]

Before I give way to the hon. Gentleman, I will just say that the taxpayer has a £1.4 billion stake in Northern Rock, so any solution in terms of remutualisation would need to identify a clear way in which the taxpayer would receive a return on that investment. Furthermore, it is not clear how a large Government shareholding in a mutual would affect mutual status.

[Mr Thomas]

As I said in my opening remarks, I absolutely acknowledge the point about the taxpayers’ interest in Northern Rock. However, rather than just allowing the people at UKFI to sit there waiting for ideas, will he write to them and specifically ask them to conduct a feasibility study into the remutualisation of Northern Rock, addressing the taxpayer issue that he quite rightly mentioned as well as other wider issues? Will he take proactive action on this issue?

[Mr Hoban]

If the hon. Gentleman reads the transcript of the evidence given by UKFI to the Treasury Committee, he will know that remutualisation is very much on its agenda. In conjunction with Northern Rock, it is about to appoint advisers to advise it on the disposal process. I know that UKFI is looking at remutualisation. However, I have yet to see a proposal that demonstrates why remutualisation is in the interests of taxpayers. Nevertheless, we are open-minded on this issue, and we will wait to see a viable proposal emerge.

Regarding the regulatory framework for mutuals, we will bring Northern Ireland credit unions within the regulatory structure that is in place in the rest of Great Britain. That will enhance consumer protection and ensure that those credit unions become part of the Financial Services Compensation Scheme, which will enable their members to appeal to the Financial Ombudsman Service. It will also enable those credit unions to seek approval to enter new markets and therefore help them to grow. In addition, we are looking at the registration and regulation of industrial and provident societies as part of our review of the regulatory architecture. I know that that is a concern of the co-operative movement and we will seek views on it shortly.

The hon. Member for Harrow West raised the issue of an objective on diversity for the new regulatory structure. Again, that point has been raised with me before. My concern is to ensure that the new regulators, learning from the mistakes of the past, focus on what matters—confidence in financial services, and the stability and soundness of institutions. That should be their driving force and I do not think that an objective on diversity would fit within the new framework.

We want to see mutuals grow and thrive. We are introducing measures on legislative reform and new capital levels, and we are offering greater support to the mutual sector. Mutuals have a big role to play in the future development of financial services, and this Government are keen to do all we can to ensure that they continue to provide an important service to communities across the UK.

Question put and agreed to.

Asset Protection Agency

Mark Hoban Excerpts

Tuesday 15th February 2011 Written Statements

[The Financial Secretary to the Treasury (Mr Mark Hoban)]

The interim report for the Asset Protection Agency (APA) has today been deposited in the Libraries of both Houses.

The report contains commentary on key developments in relation to the APA and the Asset Protection Scheme (APS) over the period from 1 July 2010 to 31 December 2010.

I am pleased to note the statements in the report that the likelihood of the Royal Bank of Scotland (RBS) being able to make a claim under the APS has receded slightly.

I have also placed in the Libraries a number of legal documents relating to the APS which RBS and HM Treasury have executed since RBS’s accession to the scheme in December 2009. These reflect changes to the implied write down trigger for long-dated assets, revised arrangements for the assessment of APS performance-related remuneration for relevant RBS staff, a move from annual to quarterly fee payments and a number of operational matters.

Government Actuary's Department: Departmental Expenditure Limit (2010-11)

Mark Hoban Excerpts

Monday 14th February 2011 Written Statements

[The Financial Secretary to the Treasury (Mr Mark Hoban)]

Subject to parliamentary approval of any necessary supplementary estimate, the Government Actuary’s Department total DEL will be increased by £387,000 from £299,000 to £686,000. Within the total DEL change the impact on resources and capital is set out in the following table:

National Savings and Investments: Departmental Expenditure Limit (2010-11)

Mark Hoban Excerpts

Monday 14th February 2011 Written Statements

[The Financial Secretary to the Treasury (Mr Mark Hoban)]

Subject to parliamentary approval of any necessary supplementary estimate, National Savings and Investments resource departmental expenditure limit (DEL) will be increased by £3,942,000 to £172,344,000 and capital DEL will be increased by £1,000,000 to £1,464,000. Within DEL change, the impact on resources and capital are set out in the following table:

Oral Answers to Questions

Mark Hoban Excerpts

Tuesday 8th February 2011 Commons Chamber

[The Financial Secretary to the Treasury (Mr Mark Hoban)]

Our objective in these discussions is to create a banking industry that lends to the British economy, contributes to the Exchequer, and supports economic growth and employment. The Government are in discussions with the banks to see if a new settlement can be reached so that bonuses and remuneration policies are more transparent and levels of bonuses paid are smaller than they would otherwise have been. Alongside this, we are looking at options to ensure that banks make an appropriate contribution to local economies and communities and provide the credit required to support the economic recovery, facilitate growth and create jobs.

[Vernon Coaker]

Can the Minister tell the House why the Chancellor refuses to adopt Labour’s plan to repeat last year’s £3.5 billion bank bonus tax, as well as the bank levy, and use that money to help create the jobs and growth that so many of our communities badly need?

[Mr Hoban]

The hon. Gentleman should remember the words of the former Chancellor of the Exchequer, who said that the bank payroll tax did not work. Labour Members went into the last election ruling out a bank levy; they would not take the action that we have taken to ensure that banks pay a fair contribution to the costs they pose to the economy.

[Rosie Cooper]

My constituents are appalled that the general attitude of the Government seems to be to withstand all criticism and not to deal with the real problem by making bankers accountable for what they are doing and pay their fair share. We are not all in it together.

[Mr Hoban]

I find that quite rich coming from Labour—the party that gave Fred Goodwin his knighthood. The reality is that under our bank levy the banking sector will pay more every year than it paid in one year under the bank payroll tax. That is the action that this Government have taken to ensure that banks pay their fair contribution towards the Exchequer.

[Mr Campbell]

The Chancellor must think he is good when he has put hundreds of thousands of public servants on the dole, cut pensions, especially those of the police and armed forces, and cut local government finance. It has been reported in the newspapers that a banker is to receive a £9 million bonus. Why does not the Chancellor get off his backside, get into the banks, and get it sorted?

[Mr Hoban]

I will take no lessons from the Labour party on bank bonuses. The shadow Chancellor presided at the Treasury when big bonuses were being paid out in cash, with no clawback and no lock-up. He backed that light-touch regime in government. We have taken the tough decisions on tackling bonuses. The Opposition should be apologising, not criticising.

[Sir Peter Tapsell (Louth and Horncastle) (Con)]

Do Treasury Ministers agree that the real problem with bankers’ bonuses is that they are paid not out of profits, but out of revenues? Taxing banks after the bonuses have been paid merely depresses dividends, particularly for pension funds. Why are bankers’ bonuses not paid out of profits, as they always were by my very efficient stockbroking firm?

[Mr Hoban]

My hon. Friend makes an important point. Of course, under the old regime, there was no clawback when bonuses were paid out in cash, and no lock-up. The new code on remuneration introduced by the Financial Services Authority, which is ahead of international practice, has clear rules on deferral, requires that bonuses be clawed back for poor performance, and requires that bonuses for significantly highly paid members of staff—those who take risks—be paid out principally in shares, not in cash. That will ensure that the interests of bankers are aligned with those of shareholders.

[Matthew Hancock (West Suffolk) (Con)]

How much has the Minister been constrained in his dealings with the majority state-owned banks by the contracts on payments that were signed by the Labour party before the election?

[Mr Hoban]

My hon. Friend puts his finger on the problem. When the previous Government entered into arrangements to bail out RBS and Lloyds, they limited the period of their involvement in the bonus regime. That is why we had to take action this year and why we have engaged with banks through project Merlin to achieve restraint on bank bonuses. We will make an announcement in the next week.

[Duncan Hames (Chippenham) (LD)]

I congratulate the Chancellor on extracting a further £800 million from the banks this morning. Will he take this opportunity to rule out any reduction in his permanent bank levy, should it turn out to raise more money than expected?

[Mr Hoban]

My hon. Friend makes an important point, and I thank him on behalf of the Chancellor for his congratulations on the levy. As he recognised, the levy is a permanent feature, not a one-off tax like the previous Government’s bank payroll tax. It will raise more than the bank payroll tax did in its year in operation, on a net basis. We are committed to raising the levy from the banks over the life of this Parliament.

[Chris Leslie (Nottingham East) (Lab/Co-op)]

It is clear that the partial U-turn on the banking levy happened today purely by coincidence and had nothing to do with Treasury questions. Has the Minister anything else to tell the House? For example, what is he going to do about excessive bonuses? Perhaps we can coax him into another U-turn on the £1 billion corporation tax cut that he is giving the banks. If he wants to announce that at the next Treasury questions, that is fine.

[Mr Hoban]

I do not think that the hon. Gentleman is entirely on top of his brief on this matter. He knows that banks will pay more tax as a consequence of the levy. The tax cuts for the financial sector are far lower than the amount we will raise from the bank levy. This is a permanent measure. The previous Government failed to take action on bank levies and ruled out introducing them on a unilateral basis. This Government have gone ahead and done the right thing for the economy and for the taxpayer.

--- Later in debate ---

[Steve Rotheram (Liverpool, Walton) (Lab)]

14. What recent assessment he has made of the progress of the work of the Independent Commission on Banking.

[The Financial Secretary to the Treasury (Mr Mark Hoban)]

The Government set up the Independent Commission on Banking to consider reforms to the banking sector. We welcome the progress that the commission has made, and look forward to receiving its report in September 2011.

[Steve Rotheram]

If the banking commission recommends breaking up the big banks, will the Government judge the Vickers report on its own merits, or will they put the value of their shareholding in the nationalised banks first?

[Mr Hoban]

The commission that has been set up is independent. It is looking at the structure of banking in the UK, and its impact on the wider economy and competition, and we await the outcome of its findings later this year.

[Mr Iain Wright (Hartlepool) (Lab)]

16. What assessment he has made of the effects on consumer confidence of the recent increase in the basic rate of value added tax.

--- Later in debate ---

[Steve McCabe (Birmingham, Selly Oak) (Lab)]

17. What assessment he has made of the effectiveness of support and advice on financial planning and financial literacy for young people and vulnerable groups.

[The Financial Secretary to the Treasury (Mr Mark Hoban)]

The Consumer Financial Education Body, which is soon to be renamed the Money Advice Service, has statutory objectives to improve understanding of financial matters among the general public, and to enhance the ability of members of the public, including young people and vulnerable groups, to manage their financial affairs. CFEB is the independent body that is responsible for measuring the effectiveness of its work.

[Steve McCabe]

Given people’s reliance on citizens advice bureaux, is the Minister at all worried about the cuts to them, including the closure of all five in Birmingham? How will that help vulnerable people who are seeking reliable financial advice?

[Mr Hoban]

The Government take the issue of financial advice very seriously. That is why we have supported the establishment of CFEB, which will be funded through a levy raised on the financial services sector, which is very important. It is also important that CFEB takes forward its work and considers how to reach out to some of the most vulnerable people in society.

[Mark Menzies (Fylde) (Con)]

18. What recent steps he has taken to implement the Basel III framework; and if he will make a statement.

[The Financial Secretary to the Treasury (Mr Mark Hoban)]

The Government are taking forward work on the implementation of Basel III. The agreement will be implemented on an EU-wide basis through revisions to the capital requirements directive. Legislative proposals known as CRD 4 are expected from the European Commission before the summer. The Commission is working towards the implementation of CRD 4 in member states including the UK on 1 January 2013, with the majority of measures to be phased in by 1 January 2018.

[Mark Menzies]

Does my hon. Friend agree that the Government’s willingness to consider capital control and liquidity reform vastly contrasts with what took place under previous Governments?

[Mr Hoban]

My hon. Friend makes an important point. Of course, part of the problem was that the light-touch regime introduced by the previous Government for the regulation of the financial services sector meant that, when losses rose, banks did not have sufficient capital to absorb them. The Basel III reforms will tackle that challenge, and I hope that we will see a stronger and more sustainable financial sector.

[Andrew Selous (South West Bedfordshire) (Con)]

T1. If he will make a statement on his departmental responsibilities.

--- Later in debate ---

[Mr George Mudie (Leeds East) (Lab)]

T7. The Chancellor referred to the need for the regulator to have good judgment. Do Ministers think that the same regulator is using good judgment in all aspects of the retail and mortgage reviews?

[The Financial Secretary to the Treasury (Mr Mark Hoban)]

The hon. Gentleman raises an important question about the continued work load of the Financial Services Authority and its work on financial services. He and I would agree that we want better consumer outcomes from retail financial services, and that means that these areas should be reviewed very carefully. However, I am also certain that the outcome of the mortgage market review should take into account the stability of the housing market.

[James Wharton (Stockton South) (Con)]

T4. The 2010 North East Research and Information Partnership annual jobs report shows a net increase in employment in the region of about 1,300 jobs over the past year. What are the Government doing to ensure that the private sector recovery in the regions continues?

--- Later in debate ---

[Rachel Reeves (Leeds West) (Lab)]

In Leeds we will lose 11 citizens advice bureaux debt advisers next month because of the cancellation of the financial inclusion fund. Where would the Minister suggest that my constituents who are struggling with debt and excessive and escalating charges from doorstep lenders go for advice?

[Mr Hoban]

The hon. Lady will be aware that the financial inclusion fund, which was set up by the previous Government, was coming to a close at the end of March. Other sources of debt advice are available. For example, the Consumer Credit Counselling Service is an effective provider of advice, while the Money Advice Trust provides advice over the phone. There are sources of advice out there, but as I said in response to a question from the hon. Member for Birmingham, Selly Oak (Steve McCabe), the Consumer Finance Education Body, which was set up by the previous Government and which we proposed, will reach out to the most vulnerable people in society to ensure that they get access to high-quality advice.

[Gavin Williamson (South Staffordshire) (Con)]

T8. Will my right hon. Friend join me in welcoming the decision by Moog Aircraft, which is based in my constituency, to invest millions of pounds in a new site to replace its old factory, securing 400 jobs in South Staffordshire? After 13 years of Labour’s decline in manufacturing, is this not a further sign that we are now seeing a manufacturing recovery?