Asked by: Neale Hanvey (Alba Party - Kirkcaldy and Cowdenbeath)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, when he plans to publish details on the Government’s approach to the compensation scheme for London Capital & Finance bondholders.
Answered by John Glen - Paymaster General and Minister for the Cabinet Office
I refer the Honourable Member to my answer given on 28 January to PQ UIN 143081. The Written Ministerial Statement of 17 December 2020 set out the three main channels through which London Capital & Finance plc (LCF) bondholders can seek compensation. These are the administration process, the Financial Services Compensation Scheme (FSCS), and the Financial Conduct Authority’s (FCA) Complaints Scheme.
The Written Ministerial Statement also set out that, taking into consideration the specific and complex set of circumstances surrounding the collapse of LCF, the Treasury will set up a compensation scheme which will assess whether there is justification for further one-off compensation payments in certain circumstances for some LCF bondholders. The Government will announce further details in due course.
Asked by: Neale Hanvey (Alba Party - Kirkcaldy and Cowdenbeath)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, with reference to the report of the Independent Investigation into the Financial Conduct Authority’s Regulation of London Capital & Finance plc by Dame Elizabeth Gloster, published in November 2020, whether the 11,625 London Capital & Finance bondholders will be offered compensation for their losses.
Answered by John Glen - Paymaster General and Minister for the Cabinet Office
I refer the Honourable Member to my answer given on 28 January to PQ UIN 143081. The Written Ministerial Statement of 17 December 2020 set out the three main channels through which London Capital & Finance plc (LCF) bondholders can seek compensation. These are the administration process, the Financial Services Compensation Scheme (FSCS), and the Financial Conduct Authority’s (FCA) Complaints Scheme.
The Written Ministerial Statement also set out that, taking into consideration the specific and complex set of circumstances surrounding the collapse of LCF, the Treasury will set up a compensation scheme which will assess whether there is justification for further one-off compensation payments in certain circumstances for some LCF bondholders. The Government will announce further details in due course.
Asked by: Neale Hanvey (Alba Party - Kirkcaldy and Cowdenbeath)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, pursuant to the Answer of 18 January 2021 to Question 137329 on Self-employed: Coronavirus, what steps he is taking to include the newly self-employed in 2019-20 in the Self-Employment Income Support Scheme.
Answered by Jesse Norman
The Government recognises that taxpayers have faced immense challenges during the COVID-19 pandemic and it has prioritised delivering support to as many people as possible while guarding against the risk of fraud or abuse.
The Self-Employment Income Support Scheme (SEISS) is one of the most generous in the world and has received claims from almost 2.7 million people so far, totalling over £18.5 billion.
The practical issues that prevented the Government from being able to include the newly self-employed in 2019-20 in the SEISS, namely that HM Revenue and Customs (HMRC) do not have access to the full set of 2019-20 self-assessment returns in order to verify their eligibility, still remain. The latest year for which HMRC have tax returns for all self-employed individuals is 2018-19.
The SEISS continues to be just one element of a substantial package of support for the self-employed which includes Bounce Back loans, tax deferrals, rental support, mortgage holidays, self-isolation support payments and other business support grants.
Asked by: Neale Hanvey (Alba Party - Kirkcaldy and Cowdenbeath)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what assessment he has made of the potential merits of the recommendation of the Treasury Committee in its report Economic impact of coronavirus: Gaps in support that the Government undertake an urgent review to see how it can extend support to the newly self-employed who are unable to benefit from the Self-Employment Income Support Scheme.
Answered by Jesse Norman
The Government has acknowledged the recommendations of the Treasury Select Committee report, the Economic impact of coronavirus: Gaps in Support.
The Committee states in its report that it recognises the challenges of offering support to those who need it while implementing the safeguards required to mitigate the very real risk of fraudulent claims for support.
The practical issues that prevented the Government from being able to include the newly self-employed in 2019-20 in the Self-Employment Income Support Scheme (SEISS) still remain. The latest year for which HMRC have tax returns for all self-employed individuals is 2018/19.
Asked by: Neale Hanvey (Alba Party - Kirkcaldy and Cowdenbeath)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what plans he has to help people with savings that have been affected financially by low interest rates since (a) 2020 and (b) the start of the covid-19 outbreak.
Answered by John Glen - Paymaster General and Minister for the Cabinet Office
The pricing of financial products (including the interest rates offered on savings accounts) is a commercial decision for firms and the government does not seek to intervene in such decisions. Monetary policy, including recent interest rate cuts, is the responsibility of the independent Monetary Policy Committee (MPC) of the Bank of England. The government therefore seeks to avoid commenting on the conduct and effectiveness of monetary policy.
The MPC’s primary objective, as set out in law, is to maintain price stability and its secondary objective is to support the government’s economic policy. The government believes that low and stable inflation is an essential pre-requisite for economic growth; providing certainty for households and businesses, helping them in their day-to-day economic decision making. The MPC is sensitive to the effect of low interest rates on savers and does consider the effect that their decisions may have on all households.
That said, the government is very aware of the challenges faced by savers in the current circumstances and has taken action on a number of fronts. In order to support savers and to reflect the government’s funding requirements during the Covid-19 pandemic, in April 2020 National Savings and Investments (NS&I) reversed planned rate reductions on NS&I’s variable rate products that were due to take effect on 1 May 2020. The government also announced on 1 May 2020 that the Lifetime ISA withdrawal charge will be reduced temporarily to 20% from 25% for any unauthorised withdrawal made between 6 March 2020 and 5 April 2021 recouping the government bonus and any interest or growth that may have accrued on that bonus, but with no further charge. Finally, the government has made significant changes over recent years to the way that income from savings is taxed, as part of its commitment to supporting people of all incomes and at all stages of life to save – this means that around 95% of people with savings income have no tax to pay on that income.
Asked by: Neale Hanvey (Alba Party - Kirkcaldy and Cowdenbeath)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what discussions he has had with the Secretary of State for Health and Social Care on the effect of NHS pension rules on trends in the level of recruitment and retention of NHS staff.
Answered by John Glen - Paymaster General and Minister for the Cabinet Office
The Government is listening carefully to concerns raised by senior doctors and NHS employers about the effect of limits on pensions tax relief. As part of a wider drive to ensure the NHS has the staff it needs to meet demand and transform care, the Government is carrying out an urgent review of the pensions annual allowance taper problem that has caused some doctors to turn down extra shifts for fear of high tax bills. Ministers at HM Treasury and the Department for Health and Social Care have met the Academy of Medical Royal Colleges and the British Medical Association as part of this review.
The review is also considering the responses to the Department for Health and Social Care’s consultation on pension flexibility. The review will report at Budget.
In addition, in September 2019 guidance was issued by NHS Employers informing employers of the short-term approaches that they could take to mitigate the effect of pension tax on their workforce this tax year. The NHS has also implemented an immediate measure to preserve clinical capacity amid the increased pressure on services during the winter period. This has enabled NHS employers to compensate NHS clinicians for the effect on their pensions of annual allowance charges incurred in 2019/20.