Asked by: Stephen Farry (Alliance - North Down)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what steps his Department is taking to mitigate potentially anti-competitive consequences of the Government's lending schemes via the (a) Bounce Back Loan, (b) Coronavirus Business Interruption Loan and (c) Coronavirus Large Business Interruption Loan for the UK banking sector.
Answered by John Glen - Paymaster General and Minister for the Cabinet Office
Over 1.6 million businesses accessed over £79 billion of finance through the Covid-19 business loan schemes. The Treasury recognises the vital role that non-banks and challenger banks play in the provision of credit to SMEs. It is grateful for the way the sector has responded to the current crisis, and remains committed to promoting the participation of a diversity of lenders in the market and widening the funding options available to UK businesses.We will continue to work with non-bank lenders to support their participation in the new Recovery Loan scheme following the closure of the previous loan guarantee schemes, as well as engaging closely with alternative lenders and continuing to promote competition more generally.
Asked by: Stephen Farry (Alliance - North Down)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what recent changes have been made to the Green Book in assessing value for money to give weighting for bids from particular regions; and if he will set out that weighting.
Answered by Simon Clarke
The Green Book sets out guidance on how to appraise policies,
programmes and projects, to help public servants give objective advice to decision makers. In November 2020 the Government completed a review of the Green Book, which included new requirements for the appraisal of place based impacts. This guidance sets out that where a proposal has geographically defined objectives, then the principal frame of the analysis should be on the effects on that area specifically. Alternatively, where a proposal is expected to have different implications for parts of the UK, then these impacts on different places should be appraised and presented to support decision making.
Value for money is a judgement following the application of the wider Green Book method. These judgements also need to consider un-quantified factors and the extent to which different options best meet the objectives for intervention, rather than a quantified score alone. It is therefore not possible to apply regional weightings to these wider considerations which are necessary in assessing value for money.
Asked by: Stephen Farry (Alliance - North Down)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what steps he is taking to tie measurable outcomes for (a) progress towards net zero emissions and (b) a net increase in employment within the green economy with the green saving bonds initiative.
Answered by John Glen - Paymaster General and Minister for the Cabinet Office
In June 2021, the Government published the UK Government Green Financing Framework. This outlines HM Treasury’s approach to measuring and reporting the impact of Green Savings Bonds and the Green Gilt
The Government will publish biennial impact reports starting no later than 2023. These will include metrics measuring the environmental impacts of six categories of expenditure financed by the programme, including Clean Transportation and Renewable Energy. These metrics will demonstrate the green financing programme’s contribution towards net zero emissions.
Impact reports will also include metrics for social co-benefits of expenditures, including the number of jobs created or supported, making clear the role of green financing in the Government’s levelling up agenda.
Asked by: Stephen Farry (Alliance - North Down)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what assessment he has made of the evidence submitted by the Consumer Council of Northern Ireland to the Treasury Committee’s call for evidence on the future of financial services on the (a) potential comparative levels of financial distress and exclusion in Northern Ireland, (b) provision of basic bank accounts and (c) need for a local presence of the Financial Conduct Authority in Northern Ireland.
Answered by John Glen - Paymaster General and Minister for the Cabinet Office
The Government recognises that there are varying levels of financial inclusion and vulnerability across the UK, including from the ongoing impact of COVID-19, and is committed to helping people access the support they need to get their finances back on track.
The Government remains committed to ensuring that individuals, whatever their background or income, and wherever they live in the UK, are able to access useful financial products and services. In February 2021, the Financial Conduct Authority (FCA) published its finalised guidance for firms on the fair treatment of vulnerable customers. This applies to all firms where the FCA Principles for Business apply, which includes Northern Ireland, in respect of the supply of products or services to retail customers.
The Government is committed to improving access to financial services and recognises that access to a transactional bank account is key to enabling people to manage their money on a day-to-day basis effectively, securely and confidently. The nine largest personal current account providers in the UK are legally required to offer basic bank accounts to customers who do not have a bank account or who are not eligible for a bank’s standard current account. Many of these providers operate in Northern Ireland. The Government keeps the list of designated banks under review.
Finally, the Government welcomes the FCA’s announcement on 15th July 2021 that the FCA will be establishing a presence in Belfast for the first time.
Asked by: Stephen Farry (Alliance - North Down)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what plans he has to extend furlough and other covid-related support mechanisms in the event that the 21 June 2021 date for the further easing of covid-19 restrictions is delayed.
Answered by Kemi Badenoch - President of the Board of Trade
Throughout this pandemic, our Plan For Jobs has supported jobs and businesses with over £400 billion of economic support – one of the most generous and comprehensive packages in the world.
At Budget the Government deliberately went long and erred on the side of generosity – specifically to accommodate short delays to the roadmap. Most of the Covid economic support schemes do not end until September or after, in order to provide continuity and certainty for businesses and families.
The Recovery Loan Scheme (RLS) announced at Budget 2021 ensures lenders continue to have the confidence to lend, ensuring viable businesses continue to have access to Government-backed finance needed throughout 2021. The scheme launched on 6 April 2021, following the closure of the emergency schemes to new loan applications on 31 March 2021, and will run until 31 December 2021. The scheme operates UK-wide, providing an 80% guarantee to lenders for term loans, overdrafts, and invoice and asset finance.
The CJRS was introduced to help employers whose operations have been severely affected by coronavirus (COVID-19) to retain their employees and protect the UK economy. All businesses across the UK can access the scheme, with employees receiving 80% of their usual salary for hours not worked, up to a maximum of £2,500 per month. At Budget the government extended the CJRS until the end of September 2021, to support businesses and employees through the next stage of the pandemic. The economy now is in a stronger position than it was last autumn, when businesses also contributed up to 20 per cent of wage costs.
In line with the extension to the CJRS, the government announced at Budget 2021 that the SEISS will continue until September, with a fourth and a final fifth grant. This provides certainty to business as the economy reopens and means the SEISS will continue to be one of the most generous schemes for the self-employed in the world.
As restrictions have been lifted, it is right that we ask employers to contribute more to strike the balance between supporting the economy as it opens up, continuing to provide support and protect incomes, and ensuring incentives are in place to get people back to work.
Asked by: Stephen Farry (Alliance - North Down)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what assessment he has made of the potential merits of issuing long-term covid-19 bonds to finance a sustained economic recovery from the covid-19 outbreak.
Answered by John Glen - Paymaster General and Minister for the Cabinet Office
Since the onset of COVID-19, the Government has announced an extensive package of measures in order to provide the critical support needed by individuals, families, and businesses facing disruption caused by the pandemic. This has significantly increased the Government’s financing requirement in the near term and, as previously announced by the Chancellor, this additional financing will be fully funded via additional borrowing through the Government’s normal debt management operations.
Our core gilt financing programme is the most stable and cost-effective way of raising finance to fund the day-to-day activities of the Government. This includes the significant funding increase required specifically to address the period of economic disruption arising from COVID-19 and the Government’s policy response. The gilt market is deep and liquid, with a good track record in responding smoothly to increases in gilt supply.
At present, the UK Government does not have any plans to introduce long term COVID-19 bonds to help fund the response to the pandemic. The Government remains open to the introduction of new debt instruments but would need to be satisfied that any new instrument would meet value-for-money criteria, enjoy strong and sustained demand in the long term, and be consistent with wider fiscal objectives. The Government recently announced its intention to issue a first sovereign Green Bond in 2021, for example. We keep the introduction of new debt financing instruments under regular review.
The UK already has comfortably the longest average duration to maturity in its debt stock across the G7, at around 15 years. This compares to around 8 years for our closest G7 peer (France) and helps to reduce refinancing risk in the UK. The conventional and index-linked yield curves stretch out to 2071 and 2068, respectively. When setting gilt issuance plans – including on the average duration of issuance – for the year ahead in the spring, HM Treasury and the Debt Management Office (DMO) seek to minimise, over the long term, the costs of meeting the Government’s financing needs, taking into account risk.
Asked by: Stephen Farry (Alliance - North Down)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what measures are in place to ensure debt forbearance for companies that received loans under the (a) Bounce Back Loan scheme and (b) Coronavirus Business Interruption Loan scheme and who will likely encounter continued financial difficulties as a result of ongoing covid-19 restrictions.
Answered by John Glen - Paymaster General and Minister for the Cabinet Office
The Government has already taken action to give businesses the flexibility and space they need to repay their loans. Under the Bounce Back loan scheme no repayments are due from the borrower for the first 12 months of the loan, and the Government covers the first 12 months of interest payments charged to the business by the lender.
In order to give businesses further support in making their repayments, the Government announced “Pay as You Grow” (PAYG) options. PAYG will give businesses the option to repay their Bounce Back loan over ten years. This will reduce their average monthly repayments on the loan by almost half. Businesses will also have the option to move temporarily to interest-only payments for periods of up to six months (an option which they can use up to three times). They can also pause their repayments entirely for up to six months – and given the continued challenges businesses are facing, the Government opted to enable borrowers to make use of this option from the first repayment, which means that businesses can choose to make no payments on their loans until 18 months after they originally took them out. If borrowers want to take advantage of this option, they should notify their lender when they are contacted about their repayments.
Furthermore, the Government have amended the CBILS rules to allow lenders to extend loan terms from six to a maximum of ten years where the borrower is in difficulty and where the lender judges that an extension would help their situation. I should be clear that CBILS term extensions will be offered at the discretion of lenders, unlike the “Pay As You Grow” options for Bounce Back loans. Any business concerned about their ability to repay their finance should discuss this with their lender in the first instance.
Asked by: Stephen Farry (Alliance - North Down)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what assessment his Department has made of the potential merits of reducing VAT on hospitality and housing renovation in Northern Ireland to increase the uptake of retrofitting measures in existing buildings.
Answered by Jesse Norman
The Government maintains a number of VAT reliefs on construction and renovation, including a zero rate of VAT on new-build residential or qualifying buildings, a reduced rate of VAT on residential renovations which includes conversions of buildings from one residential use to another, converted from commercial to residential use, and the renovation of properties that have been empty for two years or more prior to the renovation work. Renovation of commercial buildings attracts the standard rate of VAT and is recoverable in the usual way.
Expanding these reliefs to include all renovations would cost approximately £3.75bn per year and would require reductions in spending or increasing taxes elsewhere. The Government has no plans to conduct a review of the VAT treatment of construction.
Asked by: Stephen Farry (Alliance - North Down)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what assessment he has made of the potential merits of extending access to the UK Trader Scheme to companies without a formal base in Northern Ireland.
Answered by Jesse Norman
The conditions for authorisation for the UK Trader Scheme (UKTS) are set out in the Withdrawal Agreement Joint Committee’s decision on ‘not at risk’ goods. The Government has already provided an easement to allow GB traders who do not have a fixed place of business in Northern Ireland time to prepare, allowing them to be authorised for the UKTS until 1 November 2021 providing they meet other UKTS eligibility requirements. As part of current discussions to address outstanding issues with the Protocol and ensure it operates in the pragmatic and proportionate way intended, the Government would want to consider flexibilities that could support the streamlined flow of goods between Great Britain and Northern Ireland.
Asked by: Stephen Farry (Alliance - North Down)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, how many licences have been granted in relation to frozen Libyan assets in the UK; and to whom those licences have been granted.
Answered by John Glen - Paymaster General and Minister for the Cabinet Office
The Office of Financial Sanctions Implementation (OFSI) releases an annual review each year, which provides information about the number of licences issued. From April 2017 to March 2020, OFSI issued a total of 66 new licences under the Libya regime.
OFSI does not publish details of individual licences granted.