Asked by: Patrick Grady (Scottish National Party - Glasgow North)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, if he will make an assessment of the potential merits of imposing on financial services firms a general duty of care towards their consumers.
Answered by Andrew Griffith - Minister of State (Department for Science, Innovation and Technology)
The Government is committed to ensuring that consumers of financial services are appropriately protected whilst preserving the competitiveness of the UK financial services sector.
The Financial Services Act 2021 required the Financial Conduct Authority (FCA) to consult on whether it should make rules giving regulated financial service providers a duty of care over their customers. This was in response to concerns from Parliamentarians, who wanted to reduce levels of consumer harm in financial services.
Following extensive engagement with stakeholders, the FCA published a final Policy Statement on 27 July 2022 on its new Consumer Duty. The Consumer Duty will clarify and raise expectations for the standard of care that should be provided by financial services firms to consumers, and ensure consumers benefit from a higher level of care from financial services firms.
The FCA, as an operationally independent regulator, is responsible for implementing and enforcing its Consumer Duty rules. It would not be appropriate for the government to comment on the specific rules introduced by the FCA.
Asked by: Patrick Grady (Scottish National Party - Glasgow North)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, if he will make an assessment of the potential merits of making the findings of the Financial Regulators Complaints Commissioner binding as opposed to advisory.
Answered by Andrew Griffith - Minister of State (Department for Science, Innovation and Technology)
The Financial Conduct Authority (FCA) is an operationally independent non-governmental body responsible for regulating and supervising the financial services industry. The FCA has statutory immunity from claims for damages under the Financial Services and Markets Act 2000. The Government believes this is important in allowing the FCA to take a robust approach to regulation and to focus its resources on pursuing its objectives without the distraction of claims that may frustrate these efforts, or the risk that firms can delay supervisory interventions through vexatious litigation. The FCA’s ability to act robustly is important to millions of consumers across the country.
Given this statutory immunity, it is vital that those directly affected by the FCA’s actions have an avenue to have matters put right where the FCA has failed in carrying out its role. The Financial Services Act 2012 requires that the FCA establishes a complaints scheme and appoints, with the Treasury’s approval, an independent person (the Complaints Commissioner) who can investigate complaints.
The complaints scheme is an informal mechanism for investigating complaints and ensuring that there is transparency around the way the FCA operates whilst not undermining the principle of the FCA’s statutory immunity. The activities of the Complaints Commissioner are governed by the framework set out in legislation and in the regulators’ Complaints Scheme. The Complaints Commissioner has powers to recommend the payment of compensation by the FCA and to require the FCA to publish its response to any recommendation that the Complaints Commissioner makes. The Complaints Commissioner does not have powers to compel the FCA to pay compensation. It is not a court, nor is there a right of appeal for the FCA if the investigator makes an adverse finding against it. The FCA remains solely accountable for the decisions it makes over how to use its funds.
The FCA is a self-financing organisation funded via a levy on financial services firms, which is set by the FCA to cover its funding requirement each year following consultation. The Government has no role in the FCA’s budgeting or the setting of the levy. The FCA, like other public authorities, has the ability to make compensation payments on a voluntary (‘ex gratia’) basis. The FCA publishes their approach to these payments as part of the information on their complaints scheme.
Asked by: Patrick Grady (Scottish National Party - Glasgow North)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, whether his Department is taking steps to help ensure that the Financial Conduct Authority has a (a) robust complaints process and (b) appropriate compensation scheme for cases of regulatory failure.
Answered by Andrew Griffith - Minister of State (Department for Science, Innovation and Technology)
The Financial Conduct Authority (FCA) is an operationally independent non-governmental body responsible for regulating and supervising the financial services industry. The FCA has statutory immunity from claims for damages under the Financial Services and Markets Act 2000. The Government believes this is important in allowing the FCA to take a robust approach to regulation and to focus its resources on pursuing its objectives without the distraction of claims that may frustrate these efforts, or the risk that firms can delay supervisory interventions through vexatious litigation. The FCA’s ability to act robustly is important to millions of consumers across the country.
Given this statutory immunity, it is vital that those directly affected by the FCA’s actions have an avenue to have matters put right where the FCA has failed in carrying out its role. The Financial Services Act 2012 requires that the FCA establishes a complaints scheme and appoints, with the Treasury’s approval, an independent person (the Complaints Commissioner) who can investigate complaints.
The complaints scheme is an informal mechanism for investigating complaints and ensuring that there is transparency around the way the FCA operates whilst not undermining the principle of the FCA’s statutory immunity. The activities of the Complaints Commissioner are governed by the framework set out in legislation and in the regulators’ Complaints Scheme. The Complaints Commissioner has powers to recommend the payment of compensation by the FCA and to require the FCA to publish its response to any recommendation that the Complaints Commissioner makes. The Complaints Commissioner does not have powers to compel the FCA to pay compensation. It is not a court, nor is there a right of appeal for the FCA if the investigator makes an adverse finding against it. The FCA remains solely accountable for the decisions it makes over how to use its funds.
The FCA is a self-financing organisation funded via a levy on financial services firms, which is set by the FCA to cover its funding requirement each year following consultation. The Government has no role in the FCA’s budgeting or the setting of the levy. The FCA, like other public authorities, has the ability to make compensation payments on a voluntary (‘ex gratia’) basis. The FCA publishes their approach to these payments as part of the information on their complaints scheme.
Asked by: Patrick Grady (Scottish National Party - Glasgow North)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, if he will make an assessment of the potential merits of removing the Financial Conduct Authority's exemption from civil liability.
Answered by Andrew Griffith - Minister of State (Department for Science, Innovation and Technology)
The Financial Conduct Authority (FCA) is an operationally independent non-governmental body responsible for regulating and supervising the financial services industry. The FCA has statutory immunity from claims for damages under the Financial Services and Markets Act 2000. The Government believes this is important in allowing the FCA to take a robust approach to regulation and to focus its resources on pursuing its objectives without the distraction of claims that may frustrate these efforts, or the risk that firms can delay supervisory interventions through vexatious litigation. The FCA’s ability to act robustly is important to millions of consumers across the country.
Given this statutory immunity, it is vital that those directly affected by the FCA’s actions have an avenue to have matters put right where the FCA has failed in carrying out its role. The Financial Services Act 2012 requires that the FCA establishes a complaints scheme and appoints, with the Treasury’s approval, an independent person (the Complaints Commissioner) who can investigate complaints.
The complaints scheme is an informal mechanism for investigating complaints and ensuring that there is transparency around the way the FCA operates whilst not undermining the principle of the FCA’s statutory immunity. The activities of the Complaints Commissioner are governed by the framework set out in legislation and in the regulators’ Complaints Scheme. The Complaints Commissioner has powers to recommend the payment of compensation by the FCA and to require the FCA to publish its response to any recommendation that the Complaints Commissioner makes. The Complaints Commissioner does not have powers to compel the FCA to pay compensation. It is not a court, nor is there a right of appeal for the FCA if the investigator makes an adverse finding against it. The FCA remains solely accountable for the decisions it makes over how to use its funds.
The FCA is a self-financing organisation funded via a levy on financial services firms, which is set by the FCA to cover its funding requirement each year following consultation. The Government has no role in the FCA’s budgeting or the setting of the levy. The FCA, like other public authorities, has the ability to make compensation payments on a voluntary (‘ex gratia’) basis. The FCA publishes their approach to these payments as part of the information on their complaints scheme.
Asked by: Patrick Grady (Scottish National Party - Glasgow North)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what discussions he has had with UK-based private creditors and financial institutions that have bought debt owed by Zambia as part of its recent debt restructuring process.
Answered by Andrew Griffith - Minister of State (Department for Science, Innovation and Technology)
The Common Framework was agreed in November 2020 by the UK, along with the G20 and Paris Club, to help deliver a long-term, sustainable approach for supporting low-income countries to tackle their debt vulnerabilities. Zambia is one of three countries – along with Chad and Ethiopia - to have so far requested the Common Framework.
Private sector participation in the Common Framework is critical. Under the terms of the Common Framework, a debtor country that signs an MoU with participating official creditors will be required to seek from all private creditors a treatment at least as favourable. Accordingly, once Zambia signs an MoU for its case it will need to engage its private creditors to ensure their participation on comparable terms.
The Government engages private sector creditors on international debt issues in a number of fora and will work closely with its international partners to ensure private creditors fully play their part in Zambia’s restructuring.
Asked by: Patrick Grady (Scottish National Party - Glasgow North)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, in the context of remarks made by Anglican Bishops at the recent Lambeth Conference, what assessment he has made of the potential merits of cancelling debts owed by countries in southern Africa that are facing food shortages.
Answered by Andrew Griffith - Minister of State (Department for Science, Innovation and Technology)
The Government recognises the significant debt vulnerabilities in developing countries and the critical challenge posed by food insecurity and is working closely with international partners to address these issues.
The UK, along with the G20 and Paris Club, agreed a new Common Framework for Debt Treatments beyond the DSSI (CF), which was designed to help deliver a long-term, sustainable approach for supporting low-income countries facing debt vulnerabilities. 73 of the most vulnerable countries are eligible to request a debt treatment under the Framework and our priority is to work with our G20 partners to implement it quickly for those who have requested it and support new countries who come forward.
The UK also continues to work with the international community to directly support countries affected by the food security crisis. For example, the UK played a leading role in securing the World Bank’s commitment of $12 billion of new projects in the next 15 months to respond to the food security crisis, on top of $18 billion of existing projects.
Asked by: Patrick Grady (Scottish National Party - Glasgow North)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what discussions the Government has had with BlackRock on participating in internationally agreed debt relief in Zambia.
Answered by John Glen - Paymaster General and Minister for the Cabinet Office
Zambia is one of three countries – along with Chad and Ethiopia - to have so far requested the Common Framework, which was agreed between the G20 and Paris Club to help deliver a long-term, sustainable approach for supporting low-income countries to tackle their debt vulnerabilities.
Under the terms of the Common Framework, a debtor country that signs an MoU with participating official creditors will be required to seek from all private creditors a treatment at least as favourable. Accordingly, once Zambia signs an MoU for its case it will need to engage its private creditors to ensure their participation on comparable terms.
The UK is fully committed to ensuring the private sector plays its part and the Government engages private sector creditors on international debt issues in a number of fora.
Asked by: Patrick Grady (Scottish National Party - Glasgow North)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what assessment he has made of the potential merits of bringing forward legislative proposals to require lenders to take part in internationally agreed debt relief.
Answered by John Glen - Paymaster General and Minister for the Cabinet Office
The Government does not currently have any intention to pursue a legislative approach that would force private lenders to participate in debt relief initiatives.
Any legislative approach would need to address a number of challenges. For example, legislating may increase the cost of finance for low-income countries or reduce the availability of finance to meet wider development goals.
The Government is instead prioritising the implementation of the Common Framework for Debt Treatments beyond the DSSI. The UK, along with the G20 and Paris Club, agreed the Common Framework to deliver a long-term, sustainable approach to dealing with debt vulnerabilities. Private sector participation on at least as favourable terms as bilateral creditors is a fundamental principle of the Common Framework. We are fully focused on ensuring that the private sector plays its part in any debt treatments under the Framework.
Asked by: Patrick Grady (Scottish National Party - Glasgow North)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what recent progress he has made on legislating to protect access to cash; and if he will make a statement.
Answered by John Glen - Paymaster General and Minister for the Cabinet Office
The Government recognises that cash remains an important part of daily life for millions of people across the UK, and remains committed to legislating to protect access to cash.
As part of the Financial Services Act 2021, the Government made legislative changes to support the widespread offering of cashback without a purchase by shops and other businesses.
From 1 July to 23 September last year, the Government held the Access to Cash Consultation on further proposals for new laws to make sure people only need to travel a reasonable distance to pay in or take out cash. The Government’s proposals intend to support the continued use of cash in people’s daily lives and help to enable local businesses to continue accepting cash by ensuring they can access deposit facilities.
The Government received responses to the consultation from a broad range of respondents, including individuals, businesses, and charities. The Government has carefully considered responses to the consultation and will set out next steps in due course.
Asked by: Patrick Grady (Scottish National Party - Glasgow North)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what assessment he has made of the effect of the VAT regime for (a) residential off-street charging and (b) public charging on the uptake of electric vehicles.
Answered by Lucy Frazer - Secretary of State for Culture, Media and Sport
The Government has no plans to review the current rate of VAT applied to electric vehicle (EV) charging.
In order to keep costs down for families, the supply of electricity for domestic use, including charging electric vehicles at home, attracts the 5 per cent reduced rate of VAT. However, electricity supplied at EV charging points in public places is subject to the standard 20 per cent rate of VAT.
Expanding the existing relief would come at a cost. VAT makes a significant contribution towards the public finances, raising around £130 billion in 2019-20, and helps fund the Government's priorities including the NHS, schools, and defence. Any loss in tax revenue would have to be balanced by a reduction in public spending, increased borrowing, or increased taxation elsewhere.