Asked by: Seema Malhotra (Labour (Co-op) - Feltham and Heston)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what assessment the Financial Conduct Authority has undertaken on promotions issued by firms with company numbers 743416 and 622666, currently known as Lendy Ltd.
Answered by John Glen - Paymaster General and Minister for the Cabinet Office
As you may be aware, there is an ongoing Financial Conduct Authority (FCA) enforcement investigation into the collapse of the firms known as Lendy Ltd. It is important to stress that the independence of the FCA’s investigation, and its wider supervision of firms, is vital to its role. The FCA’s credibility, authority and value to consumers would be undermined if it were possible for the Government to intervene in such operational matters.
As such, it is not appropriate for the Government to publicly discuss the FCA’s discharging of their supervisory duties in respect of Lendy’s financial promotions. However, I have passed your requests onto the FCA for them to respond to directly. A copy of the letter will be placed in the Library of the House.
Asked by: Seema Malhotra (Labour (Co-op) - Feltham and Heston)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what recent discussions he has had with the Financial Conduct Authority on its investigation into the circumstances that led to the collapse of firms with company numbers 743416 and 622666, currently known as Lendy Ltd.
Answered by John Glen - Paymaster General and Minister for the Cabinet Office
The FCA is an independent non-governmental body responsible for regulating and supervising the financial services industry. Although the Treasury sets the legal framework for the regulation of financial services, it has strictly limited powers in relation to the FCA. The Treasury has no general power of direction over the FCA and cannot intervene in individual cases. This matter is the responsibility of the FCA.
There are currently no plans to undertake a review of the conduct of the Financial Conduct Authority in relation to the collapse of the firms known as Lendy Ltd.
Asked by: Seema Malhotra (Labour (Co-op) - Feltham and Heston)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, when he plans to undertake an independent review of the conduct of the Financial Conduct Authority in relation to the collapse of firms with company numbers 743416 and 622666, currently known as Lendy Ltd.
Answered by John Glen - Paymaster General and Minister for the Cabinet Office
The FCA is an independent non-governmental body responsible for regulating and supervising the financial services industry. Although the Treasury sets the legal framework for the regulation of financial services, it has strictly limited powers in relation to the FCA. The Treasury has no general power of direction over the FCA and cannot intervene in individual cases. This matter is the responsibility of the FCA.
There are currently no plans to undertake a review of the conduct of the Financial Conduct Authority in relation to the collapse of the firms known as Lendy Ltd.
Asked by: Seema Malhotra (Labour (Co-op) - Feltham and Heston)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what recent discussions he has had with the financial services sector on tackling financial exclusion.
Answered by John Glen - Paymaster General and Minister for the Cabinet Office
Tackling financial exclusion remains a key priority for the Government and HM Treasury engages on a regular basis with a wide range of stakeholders, the financial services sector and the regulators to ensure that all individuals, regardless of their background or income, have access to useful and affordable financial products and services.
The Government established the Financial Inclusion Policy Forum in November 2017 with a membership of leaders from across the financial services sector, charities and consumer groups. The Forum is co-chaired by the Economic Secretary to the Treasury and the Minister for Pensions and Financial Inclusion and meets twice a year. It provides leadership and ensures collaboration across government and with the sector in tackling financial exclusion. The Forum’s last meeting was in November 2020.
In recent months, the Government has worked closely together with the financial services industry, charities and the regulators to provide unprecedented support to those at risk of financial exclusion as a result of COVID-19. This work is detailed in the Government’s Financial Inclusion Report 2019-20, which was published on 19 November 2020 and can be accessed at: https://www.gov.uk/government/publications/financial-inclusion-report-2019-2020.
Asked by: Seema Malhotra (Labour (Co-op) - Feltham and Heston)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what guidance he has provided to banks on the opening of new (a) personal, (b) business, and (c) charity accounts in (i) Tier 1, (ii) Tier 2, and (c) Tier 3 covid-19 restriction areas.
Answered by John Glen - Paymaster General and Minister for the Cabinet Office
The Government recognises that bank and building society branches continue to play an important role in providing access to banking for individuals, businesses and charities, including for those who either do not have access to digital services or require specialist support. The Government has worked with the financial regulators and the industry to ensure that personal, business and charity customers can continue to access bank branches for essential services, including opening accounts, in all Covid-19 restriction tiers. The vast majority of branches have remained open throughout the Covid-19 pandemic.
For personal account customers, the 9 largest personal current account providers in the UK are legally required to offer fee-free basic bank accounts to customers who do not have a bank account in the UK or who are ineligible for a bank’s standard current account. Throughout Covid-19, designated providers have continued to offer basic bank accounts.
Unprecedented demand for services has meant banks have faced significant capacity pressures which has limited their ability to meet demand, for business bank accounts in particular. Banks are doing all they can to meet this demand in these difficult circumstances.
Asked by: Seema Malhotra (Labour (Co-op) - Feltham and Heston)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what assessment he has made of the effectiveness of permitting a standard variable rate of over 4 per cent on former Northern Rock mortgages now managed by unregulated lenders, following confirmation by the Bank of England that interest rates will remain at 0.1 per cent; and what recent discussions he has had with the Financial Conduct Authority in relation to their oversight of unregulated lenders.
Answered by John Glen - Paymaster General and Minister for the Cabinet Office
The setting of SVRs is a generally a matter for lenders, in which the government plays no role. In government sales of NRAM mortgages, however, purchasers have been restricted in the changes they can make to the SVR for at least 12 months after the transfer of ownership. The purchasers in most recent UKAR asset sales have been required to set the SVR by reference to the SVRs charged by a basket of 15 active lenders, for the lifetime of customers’ loans.
Recent data from Moneyfacts found the average standard variable rate (SVR) across the entire mortgage market to be 4.44%. The rates former NRAM customers pay are therefore consistent with market standard rates.
In all sales of UKAR assets, the servicer of customers’ loans has remained FCA-regulated. In all but the first sale, the legal title holder of customers’ loans has also remained FCA-regulated.
The Government is open to considering an extension to the regulatory perimeter where the benefits to consumers and markets can be demonstrated. It is important to note, though, that a change in perimeter will not help customers to switch to a cheaper deal, or materially lower the rates of their mortgage.
Thousands of borrowers will now find it easier to switch to an active lender or continue interest only payments thanks to recent rule changes by the FCA, and we continue to work with the FCA to look for practical new solutions to help borrowers.
Asked by: Seema Malhotra (Labour (Co-op) - Feltham and Heston)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what recent discussions he has had with the Secretary of State for Work and Pensions on the progress of the Kickstart scheme.
Answered by Steve Barclay - Secretary of State for Environment, Food and Rural Affairs
Ministers and officials in Her Majesty’s Treasury continue to work closely with colleagues in the Department for Work and Pensions on the development and progress of the Kickstart scheme.
As of 11 November, the scheme has received 4,359 applications from employers and gateway organisations across Great Britain and 19,672 job placements have been created for young people at risk of long-term unemployment. The roles cover a range of different sectors, including construction, arts and entertainment, health social work, manufacturing, retail, transport and the public and voluntary sector.
The first Kickstart participants have started in their roles and we expect hundreds of thousands more jobs to be created over the next year.
Asked by: Seema Malhotra (Labour (Co-op) - Feltham and Heston)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what assessment he has made of the effect on unemployment of the covid-19 outbreak in areas with a high proportion of aviation-related jobs.
Answered by Kemi Badenoch - President of the Board of Trade
The Government recognises the challenging circumstances facing the aviation industry as a result of Covid-19 and firms experiencing difficulties can draw upon the unprecedented package of measures announced by the Chancellor, including schemes to raise capital and flexibilities with tax bills. The aerospace sector and its aviation customers are being supported with over £9 billion support through the Bank of England’s Covid Corporate Financing Facility, grants for research and development, loan guarantees and support for aerospace exports.
The Chancellor also announced on 5 November that the CJRS will be extended until March, with employees receiving 80% of their usual salary for hours not worked, up to a maximum of £2,500 per month. This will continue to protect jobs and businesses across the UK in light of recent developments in the path of the virus, and the new temporary restrictions announced by the Prime Minister.
The Government also recognises that every region and community will be feeling the impact of this crisis and remains committed to helping the unemployed return to work and supporting those most vulnerable to job losses. We will continue to work closely with local areas to make sure that individuals and businesses are directed to the right support during this difficult period, and will continue to consider how best to target interventions at the places where they are most needed.
Asked by: Seema Malhotra (Labour (Co-op) - Feltham and Heston)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, if he will publish an economic impact assessment of the effect on airports of his decision to (a) withdraw the VAT Retail Export Scheme for all passengers and (b) remove tax-free sales for non-excise goods throughout the UK.
Answered by Jesse Norman
Ahead of the end of the transition period, the Government has announced the VAT and excise duty treatment of goods purchased by individuals for personal use and carried in their luggage arriving from or going overseas (passengers). The following rules will apply from 1 January 2021:
- Passengers travelling from Great Britain to any destination outside the United Kingdom (UK) will be able to purchase duty-free excise goods once they have passed security controls at ports, airports, and international rail stations.
- Personal allowances will apply to passengers entering Great Britain from a destination outside of the UK, with alcohol allowances significantly increased.
- The VAT Retail Export Scheme (RES) in Great Britain will not be extended to EU residents and will be withdrawn for all passengers.
- The concessionary treatment on tax-free sales for non-excise goods will be removed across the UK.
The Government published a consultation which ran from 11 March to 20 May. During this time the Government held a number of virtual meetings with stakeholders to hear their views and received 73 responses to the consultation. The Government is also continuing to meet and discuss with stakeholders following the announcement of these policies.
The detailed rationale for these changes is included in the written ministerial statement and summary of responses to the recent consultation: https://questions-statements.parliament.uk/written-statements/detail/2020-09-11/hcws448 and https://www.gov.uk/government/consultations/a-consultation-on-duty-free-and-tax-free-goods-carried-by-passengers. A technical note has also been issued to stakeholders to expand on this document and to respond to issues raised by stakeholders.
HMRC estimate that VAT RES refunds cost about £0.5 billion in VAT in 2019 for about 1.2 million non-EU visitors. In 2019 the ONS estimated there were substantially more EU visitors (24.8 million) than non-EU passengers (16.0 million) to the UK. This implies an extension to EU residents would significantly increase the cost by up to an estimated £0.9 billion. This would result in a large amount of deadweight loss by subsidising spending from EU visitors which already happens without a refund mechanism in place, potentially taking the total cost up to about £1.4 billion per annum.
The concessionary treatment on tax-free sales currently affects airports that fly to non-EU destinations. The extension of duty-free sales to EU bound passengers will be a significant boost to all airports in England, Scotland and Wales, including smaller regional airports which have not been able to offer duty-free to the EU before.
HMRC estimate that about £150 million of VAT is not charged as a result of tax-free airside sales. As with the VAT RES, extending the relief to the EU would significantly increase the cost of the scheme and result in a large amount of deadweight loss by subsidising spending from EU-bound passengers which already happens.
The final costings will be subject to scrutiny by the independent Office for Budget Responsibility and will be set out at the next forecast.
The Government also recognises the challenges that the aviation sector is facing as it recovers from the impacts of COVID-19 and has supported the sector throughout the pandemic, including schemes to raise capital, flexibilities with tax bills, and financial support for employees.
Asked by: Seema Malhotra (Labour (Co-op) - Feltham and Heston)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what assessment he has made of the potential effect on airports of the proposals he made in the Consultation on the potential approach to duty- and tax-free goods arising from the UK’s new relationship with the EU: A summary of responses, published by his Department in September 2020.
Answered by Kemi Badenoch - President of the Board of Trade
Ahead of the end of the transition period, the Government has announced the VAT and excise duty treatment of goods purchased by individuals for personal use and carried in their luggage to or from Great Britain. The following rules will apply from 1 January 2021:
- Passengers travelling from Great Britain to any destination outside the United Kingdom will be able to purchase duty-free excise goods once they have passed security controls at ports, airports, and international rail stations.
- Personal allowances will apply to passengers entering Great Britain from a destination outside of the United Kingdom, with alcohol allowances significantly increased.
- The concessionary treatment on tax-free sales of non-excise goods and the VAT Retail Export Scheme will not be extended to passengers travelling to the EU, and will be withdrawn for all passengers.
The concessionary treatment on tax-free sales currently affects airports that fly to non-EU destinations. The extension of duty-free sales to EU bound passengers will be a significant boost to all airports in England, Scotland and Wales, including Heathrow and smaller regional airports which have not been able to offer duty-free before.
The Government also recognises the challenges the aviation sector is facing as it recovers from the impacts of Covid-19 and has supported the sector throughout the pandemic, and continues to do so, including schemes to raise capital, flexibilities with tax bills, and financial support for employees.