Oral Answers to Questions

Debate between Tessa Munt and Mark Hoban

Tuesday 10th May 2011 Commons Chamber

[Tessa Munt (Wells) (LD)]

2. What recent assessment he has made of trends in levels of bank lending to small businesses.

[The Financial Secretary to the Treasury (Mr Mark Hoban)]

Repayment of debt by small businesses is running ahead of lending to the same sector. As a consequence, net lending fell in the first quarter of this year. However, the availability of credit to business in the same period increased.

[Tessa Munt]

I would like to draw attention to the situation affecting my constituent George Archer, a business man who has had a £5,000 overdraft that was unused for three years, with the exception of four days when he requested a £20,000 extension. The bank—which is one of the big four—offered him £25,000 on rates that he initially refused, before beating it down to acceptable rates. On paper, that bank has increased its lending to a small or medium-sized business by £20,000, but I wonder what the Minister can do to halt this duplicity and ensure that loans are real, active, needed and utilised.

[Mr Hoban]

I cannot comment on the particular circumstances that my hon. Friend has raised, although I am happy to look at them more carefully. I am sure that she would welcome, as does the whole House, the commitment of banks to increase their capacity to lend to businesses of all sizes.

Crown Currency Exchange

Debate between Tessa Munt and Mark Hoban

Tuesday 7th December 2010 Commons Chamber

[Mr Hoban]

No, I am going to continue.

The regulation of these businesses, including capital requirements, would impose costs on them and on their customers, so we must be sure that the benefits of regulation outweigh the cost to consumers. I assure hon. Members that we are looking at the other companies to see if any are operating in the same way as Crown. We have not yet identified any, although the investigation is still ongoing. I undertake that the Government will seek to learn the lessons from Crown’s failure, once we have all the facts, and take whatever action is appropriate.

[Tessa Munt]

Will the Minister give way?

[Mr Hoban]

Let me continue for a bit longer.

I recognise that there are innocent victims at the heart of this, but because Crown’s activities are not regulated by the FSA, its customers are not covered by the financial services compensation scheme. Crown did not accept credit card or debit card payments, so its customers are not covered by the protection they offer, and I am afraid that they are therefore awaiting the outcome of the administration process. I believe that it is vital that consumers understand their rights and what products and services are covered by the FSCS. I welcome the fact that the FSCS is launching a campaign in the new year to raise consumer awareness and encourage them to seek more information on what is and is not covered by the scheme. However, I also believe that there is a responsibility on companies to be up front with their customers about the protection that is available if something goes wrong, particularly where the business is complex, as was the case with Crown.

[Tessa Munt]

Exactly what purpose is served by registering a small payments institution with the FSA? Given that the FSA makes it perfectly clear that it denies any regulatory involvement with small payments institutions, of which there are 547, I am not entirely sure for what one is paying £500.

[Mr Hoban]

The hon. Lady makes an important point, but the reality is that this activity falls outside the regulatory perimeter of the FSA. The reason these businesses are registered with the FSA is that when the payments services directive was introduced, there had to be somewhere for these businesses to be registered, so the decision was taken to register them with the FSA. That decision was taken not by this Government, but by the previous Government. The hon. Lady is right that that situation leads to some confusion for consumers. The reality is that such businesses were not regulated by the FSA. The same applies to the other 1,500 bureaux de change that operate under this model.

Equitable Life

Debate between Tessa Munt and Mark Hoban

Thursday 22nd July 2010 Commons Chamber

[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.

[Tessa Munt (Wells) (LD)]

I thank the Financial Secretary very much indeed for his comments about the speed with which he will deal with the matter, particularly on behalf of my 80-year-old constituent, Jim Barratt, who said that, at his age, time was not on his side. Given that the coalition has declared that it will apply transparency to the matter, has EMAG received the information on “Head A” calculations, which it requested, but was not forthcoming under the previous Administration?

[Mr Hoban]

I have made it my duty to maintain a good and open relationship with EMAG. I met its members again earlier this week and I spoke to the chairman, Paul Braithwaite, this morning to advise him that I was making the statement. Today, I am publishing 2,500 pages of material that help underpin Sir John’s work and I hope that people who are interested will examine that in detail and respond to his findings and the actuarial advice that he received.