Oral Answers to Questions
Debate between Paul Flynn and Mark Hoban(11 years, 7 months ago)
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Mr Hoban
My hon. Friend will recognise that we have seen a big fall in the number of people who are out of work and a reduction in the number of people claiming the main out-of-work benefits. I am confident that our reforms to universal credit will further improve the lives of those who are out of work and those who are on low incomes.
Paul Flynn (Newport West) (Lab)
T2. For many, retirement is a welcome liberation from demeaning drudgery. For others, it is an unwelcome end to their useful lives, often leading to ill health. What are the Government doing to ensure more choice in the age of retirement?
Prevention of Nuclear Proliferation
Debate between Paul Flynn and Mark Hoban(13 years ago)
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The Financial Secretary to the Treasury (Mr Mark Hoban)
I beg to move,
That the Financial Restrictions (Iran) Order 2011 (S.I., 2011, No. 2775), dated 21 November 2011, a copy of which was laid before this House on 21 November, be approved.
Today I seek the support of the House for the financial restrictions measures against the Iranian banking sector that the Chancellor announced on 21 November. The Government have taken decisive action to respond to a significant threat against UK national interests by putting a stop to all business between UK financial institutions and those in Iran. The Treasury has laid the Financial Restrictions (Iran) Order 2011 before Parliament under the power in schedule 7 to the Counter-Terrorism Act 2008. This order contains restrictions requiring UK credit and financial institutions to cease business relationships and transactions with all banks operating in Iran, including their branches and subsidiaries, and with the Central Bank of Iran.
I turn first to the rationale behind the order. The Government have serious concerns about activity in Iran that facilitates the development or production of nuclear weapons. This concern has been repeatedly raised by the International Atomic Energy Agency, the UN body charged with monitoring Iran’s nuclear activities. Its latest report, in November, highlights its deepening concerns about
“possible military dimensions to Iran's nuclear programme”.
The restriction in the order was made in response to Iran’s nuclear activities, as highlighted by the IAEA, and the urgent calls from the Financial Action Task Force for counter-measures to be taken against Iran. Iran’s nuclear programme poses a significant risk to the UK’s national interests. This order seeks to address that.
Paul Flynn (Newport West) (Lab)
Is there not a danger, if we push Iran too hard, of it expelling the IAEA inspectors from the country? If that happens, instead of acting in the knowledge with which they provide us, we would be acting in ignorance.
Mr Hoban
It is important that we continue the twin-track approach—of engagement and challenge—that the Government have set out and which the previous Government also followed.
The November IAEA report documents Iran’s failure to co-operate fully with the agency and the possible military dimensions to Iran’s nuclear programme. The IAEA reports on Iran’s programme on a quarterly basis, but the November report set out its concerns in the strongest terms to date. It states that information available to the IAEA indicates that Iran has carried out activities relevant to the development of a nuclear explosive device. The report notes that
“while some of the activities identified have civilian as well as military applications, others are specific to nuclear weapons”.
The Government view these developments with the utmost concern.
In response to the November IAEA report, its board of governors issued a resolution expressing “deep and increasing concern” about the possible military dimensions of the Iranian nuclear programme. The board urged Iran to abide by its international obligations and called on it to engage seriously on the nuclear issue. These concerns are of the most serious nature and have far-reaching consequences for the UK’s interests and those of the region. Some 32 of the 35 countries on the board of governors supported the resolution.
Mr Hoban
I want to make some progress. This is a time-limited debate, and in looking at the number of Members present on both sides of the House, I am conscious that others wish to participate.
The Treasury asked various supervisors, including the Financial Services Authority, Her Majesty’s Revenue and Customs and other Government organisations, to publicise the restrictions and to provide information to firms on the requirements associated with them. Alongside the order, we published six general licences exempting specific activities from the restrictions. Those general licences enable credit and financial institutions with existing business relationships or transactions with the entities concerned to manage the cessation of business in an orderly and controlled way. The licences permit the provision of financial services for humanitarian purposes and of personal remittances between individuals here and in Iran. Further licences, whether general or individual, may be granted by the Treasury to manage the impact of the requirements on third parties. This approach is similar to that used in asset-freezing measures.
The restrictions apply requirements to persons operating in the UK financial sector, including FSA-authorised firms, money service businesses and insurers. Firms are required to establish whether any current or future business relationships or transactions are affected and comply with the requirements of the restrictions. Although the restrictions are given only to the financial sector, they will make it more difficult for other companies to trade with Iran. The UK Government actively discourage trade with Iran, and UK trade with the country has declined by 46% during the first eight months of this year in comparison with the same period in 2010.
As I said to my hon. Friend the Member for Wyre and Preston North (Mr Wallace), companies affected by the restrictions can apply for a licence of exemption, and we are willing to grant licences where UK companies are owed money under existing contracts that can only be paid via an Iranian bank to the company’s UK account. We will examine applications on a case-by-case basis.
The use of existing procedures means that firms will already have in place systems to meet obligations relating to financial sanctions and anti-money laundering, which should assist in minimising the burden of compliance with the restrictions. All institutions operating in the UK financial sector will need to ensure that they do not undertake new transactions or enter into new business relationships with any bank incorporated in Iran, including the central bank, and branches or subsidiaries. It is expected that compliance costs for the sector as a whole will be moderate, although any institution with significant business relationships with an Iranian bank will face higher costs.
Supervision of compliance with the restrictions will form part of the existing supervisory regime of entities such as the FSA, Her Majesty’s Revenue and Customs, the Office of Fair Trading, and the Department for Enterprise, Trade and Innovation in Northern Ireland. It is an offence to fail to comply with the requirements of the direction or intentionally to circumvent the requirements. Breaches may be subject to civil penalties imposed by supervisors, or to criminal prosecution. The maximum criminal penalties are: a fine not exceeding the statutory maximum, £5,000, in the magistrates court; or two years’ imprisonment or an unlimited fine in the Crown court. Those penalties are equivalent to those for breach of other financial sanctions regimes such as the EU asset-freezing regime in relation to Iran. The financial services sector takes very seriously the implementation of restrictions and sanctions, and takes steps to ensure its compliance with any restrictions.
To conclude, the order was issued by the Government to respond to the severe risk that Iran’s nuclear activities pose to the UK national interest. The measure is strong but necessary. Iran’s proliferation-sensitive activities are a serious and ongoing concern for the UK and the international community as a whole. It is vital that we continue to take steps to increase pressure on the Iranian regime and encourage Iran back to the negotiating table to find a diplomatic solution. For those reasons, I commend the order to the House.
Equitable Life
Debate between Paul Flynn and Mark Hoban(14 years, 4 months ago)
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Mr Hoban
The debate is one of proportion rather than principle. In its representations on the matter, EMAG accepted that some policyholders would have stayed with Equitable Life or invested in it, despite knowing that it was not properly regulated. Indeed, several people joined Equitable Life quite late on, when its problems were well known, so there is some sense to the approach. The debate is about proportion, and I am prepared to take representations on that.
Paul Flynn (Newport West) (Lab)
It is unfortunate that the Financial Secretary has omitted any word of gratitude to Tony Wright and other members of the Public Administration Committee, who pursued the matter with great energy and intelligence. Perhaps the hon. Gentleman wants to make the issue a political football. My constituents will ask what alchemy reduced £4.8 billion to a maximum of £650 million. Why do they have to wait another year? Were they not deceived by the Conservatives’ exaggerated claims in their election propaganda?
Mr Hoban
Given that the hon. Gentleman was meant to be seeking a bipartisan spirit, it did not last much longer than his first sentence. I paid tribute to the hon. Member for Leeds North East (Mr Hamilton), and I know from discussions with hon. Members of all parties that all Members of Parliament want to get the matter resolved. We all have constituents who have been involved, and the Public Administration Committee was one of many routes whereby the previous Government were pursued to deliver justice for policyholders quickly.