Financial Services Reforms

Tulip Siddiq Excerpts

Tuesday 11th July 2023 Commons Chamber

[Tulip Siddiq (Hampstead and Kilburn) (Lab)]

I thank the Minister for an advance copy of his statement. However, after 13 years of a low growth, low investment economy, these promises are too little, too late. On this Government’s watch, far too many high growth firms, particularly in the tech sector, have been bought by foreign competitors or have chosen to list in the US, in order to scale-up and grow.

Arm holdings, a UK tech success story, is now set to float in New York rather than in London. The Chancellor has been completely silent on this. When alarm bells were ringing, the Ministers shrugged their shoulders. Capital held in pension funds is vital for the growth of our most innovative companies. In the US, approximately 70% of venture capital funding comes from pension funds, while in the UK the figure is below 20%. That is just not good enough. This Government’s failure to mobilise pension money into productive assets comes at a cost. British pension savers have not been getting the returns that they should expect. It seems that a person is more likely to own a share in UK infrastructure today if they are a Canadian teacher rather than a British citizen.

Time and again, the Conservative party has promised action to unlock the patient capital that British firms need to thrive and grow, but has failed to deliver. There would surely be greater confidence given to savers, growing firms and financial services if the Government had provided more detail yesterday on how to turn this around. The Chancellor’s compact for DC pension funds lacks any plan to ensure that this will increase investment in UK assets rather than simply going overseas. What guarantee can the Government provide that British high growth firms will be able to access the capital they need to thrive and create good jobs in every part of the UK? With no clear roadmap, how will that be achieved?

I turn to what the Chancellor said last night about wanting to make London a listings destination. It is as though his party had not been in government for 13 years now. I remind the Chancellor that he was sitting around the Cabinet table for the best part of a decade during that time. Labour has been calling for action on listing for months and the Government have refused to listen. In the first quarter of this year there were just four London listings, raising only £81 million, the sixth-worst quarter for IPOs in London since 1995. That is pitiful.

I acknowledge and indeed welcome the fact that in some areas the Government are rather belatedly starting to follow Labour’s lead, but what has taken them so long? Where was the urgency, the ambition and the drive? Can the Minister explain why there was nothing at all in the Chancellor’s speech on green finance? That complacency puts our status as a net zero financial centre at risk.

Labour is committed to ensuring that the City retains its competitiveness outside the EU, whether through creating a positive environment for fintech or reform of Solvency II, and doing so without compromising on stability. Yet the Government have promised Solvency II reform 10 times in recent years with nothing to show for it.

We, and the country, will not take any lessons on financial stability from a Government that set fire to the economy last autumn with their mini Budget. That resulted in a Tory mortgage bombshell, with families facing £240 per month in higher mortgage costs when remortgaging, through no fault of their own. The truth is that the Chancellor’s Mansion House speech was not a big bang at all—it was a small splutter. There was none of the detail required to build confidence, no responsibility taken for the last 13 years of economic failure, and no strategy to end the doom loop of Tory economic failure.

The Labour party has a plan to unlock the full potential of the private sector to get the British economy growing again in the national interest. Through our active partnership with the City, reforms to the British Business Bank and a modern industrial strategy, we will grow the economy and help Britain to become the best place to start and grow a business. This tired Tory Government are out of time. It is time for them to step aside so that we can have a Government who will favour the national British interest—[Interruption.] There is no point Conservative Members laughing. The truth is that we need a Labour Government to provide the energy, the ideas and the leadership that our country and our constituents desperately need.

[Andrew Griffith]

It is always a pleasure to listen to the hon. Lady. In general, what I learn is that the Opposition have no plan. It is all critique and no counter-proposal. She talked about this being too little, too late, but this Government are moving at pace, in what the sector acknowledges as one of the fastest rates of implementation of financial services reform for a generation, taking advantage of our Brexit freedoms and the regained control of our rulebook, which she and her party seek to oppose again and again.

The hon. Lady talked about the lack of growth, but under Labour I am told that the percentage of the workforce with a private pension declined by 20%. She also talked about patient capital, which should not be a point of disagreement between us. This Government have done an enormous amount to support British patient capital, with £2.3 billion of investment, and we have recently increased the length of the British patient capital scheme for a further period.

The hon. Lady also talked about capital going overseas, but that is nothing to the degree to which capital would be flooding overseas were her party ever to return to power, accelerating us to the point where once again the Chief Secretary to the Treasury is writing notes to remind us there is no money left. I potentially discern a point of difference between us, which perhaps in due course she will clarify, in the approach to the compact. It is not the position of this Government to mandate where people’s pensions should be invested. Indeed, the last time a Labour Chancellor decided what was good for our pension schemes, it did not end well.

Finally, the hon. Lady talked about green finance. This Government are doing a copious amount on green finance; only yesterday my right hon. Friend the Secretary of State for Energy Security and Net Zero met some of the world leaders in green finance, and earlier this year we published an ambitious green finance strategy, continuing the UK’s progression to being one of the world’s first net zero-aligned financial centres.

Business Banking Resolution Service

Tulip Siddiq Excerpts

Tuesday 11th July 2023 Westminster Hall

[Tulip Siddiq (Hampstead and Kilburn) (Lab)]

It is a pleasure to serve with you in the Chair, Mr Pritchard, and I thank the hon. Member for Hazel Grove (Mr Wragg) for securing this timely debate.

Small and medium-sized businesses are the lifeblood of our economy and our communities, as I am sure everyone will agree. The smaller companies driving growth and creating jobs in every part of the UK deserve to be able to fairly resolve disputes with their lenders, and the BBRS was designed to do just that. That is why some of the issues with the BBRS, which we have heard about today from Members across the House, are so concerning and deserve to be looked at by the Treasury.

The BBRS emerged from the Walker review in 2018, after the Government chose not to accept calls from both the Financial Conduct Authority and the Treasury Committee for formal regulation of SME lending. In their 2018 response to the Treasury Committee’s report on SME finance, the Government gave several reasons for not accepting those calls and to justify their view that an ombudsman-style approach to dispute resolution was preferable to a statutory body. First, a statutory body and regulation could negatively impact SMEs’ ability to access finance. Secondly, there would be no real difference in how an ombudsman or a statutory body would make adjudications. Thirdly, an ombudsman would represent a less costly process for SMEs. Fourthly, an ombudsman would be able to arrive at decisions more quickly. Finally, a statutory body would require primary legislation—a response not proportionate to the problems faced by SMEs.

I hope that the Minister will address this question, five years on and in the light of the issues raised today. Does he believe that his Government’s reasoning still holds, that the cost of a statutory body and formal regulation would still outweigh the benefits and that the evidence on the ground suggests a new approach is needed, including for those businesses deemed too large for the Financial Ombudsman Service and which fall under the remit of the BBRS? For example, the Walker review estimated that more than 60,000 cases would be eligible for review by the BBRS, of which 6,000 were expected to register. However, according to the BBRS’s figures as of June 2023, only 28 cases, both historical and contemporary, directly adjudicated by the service, have resulted in financial awards being made.

We have heard numerous concerns about the transparency and accountability of the service in relation to the low number of cases and financial settlements, most notably those raised by Antony Townsend, who said it was too difficult for him to make progress when he resigned as chair of the BBRS SME liaison panel in March. Cat MacLean voiced similar concerns when she resigned last year, as the Minister will know. In 2019, the then Chancellor of the Exchequer, Philip Hammond stated that if the scheme did not bring resolution to a meaningful number of cases, he would expect further discussions about its scope and eligibility. Does the Minister believe his former Chancellor’s threshold for further thought on the effectiveness of the scheme has been reached? In particular, what assessment has the Minister made of the proposal to extend the jurisdiction of the Financial Ombudsman Service to take complaints from businesses with a turnover of up to £10 million?

I understand that the FCA recently concluded a call for input to inform its review of whether the thresholds for SMEs to access the Financial Ombudsman Service remained appropriate. However, since the consultation closed in April, businesses have received no update. Considering the concerns we have heard today, I hope the Minister will set out how the Treasury will work with the FCA to ensure that a timely and satisfactory outcome to the review is brought forward for Britain’s business community.

SMEs are vital to the UK economy. British businesses deserve a tax and payment system, procurement process and dispute resolution service that work for them. That is why I look forward to hearing the Minister talk about how the Treasury will respond to the concerns outlined in today’s debate. In particular, does he think we need a new approach to the resolution of disputes between SMEs and lenders? How will the Government work to ensure there is sufficient transparency and accountability in the resolution process? Finally, does the Minister believe it is time to widen access to the Financial Ombudsman Service?

Money Laundering and Terrorist Financing (High-Risk Countries) (Amendment) Regulations 2023

Tulip Siddiq Excerpts

Monday 10th July 2023 General Committees

[Tulip Siddiq (Hampstead and Kilburn) (Lab)]

It is a pleasure to serve under your chairmanship, Sir Graham.

The Labour party is completely committed to supporting the global effort to combat money laundering and the financing of terrorism. We will support the draft regulations today to remove Cambodia and Morocco from the list of high-risk third countries, reflecting the same changes made to the Financial Action Task Force’s list.

I do have a question for the Minister about the performance of British overseas territories that remain on the list. It is worth noting that, despite the changes to the list that the SI introduces, two British overseas territories remain on it: Gibraltar and the Cayman Islands. The reputational damage that does to the UK cannot be overstated, not least in light of the recent US Treasury report which described Britain as a “higher-risk jurisdiction” comparable to financial centres “such as Cyprus” in enabling money laundering. What is the Minister doing to work with his counterparts in Gibraltar and the Cayman Islands to ensure they raise their standards, and can he update me on where Britain’s overseas territories are on delivering against their commitments to introduce public beneficial ownership registers, like the UK’s, by the end of this year?

Financial Services and Markets Bill

Tulip Siddiq Excerpts

Consideration of Lords message
Monday 26th June 2023 Commons Chamber

This Bill and the Government’s amendments made in the Lords make important changes to ensure that the legislation delivers the Government’s ambitious vision for the future of the UK’s financial services sector and reflects the comprehensive scrutiny of the Bill in both Houses. I hope the House will approve the Government’s motions.

[Tulip Siddiq (Hampstead and Kilburn) (Lab)]

I thank the Lords for their work in considering this important Bill. In particular, I thank Lord Tunnicliffe, Lord Livermore and Baroness Chapman, who led for the Opposition in the relevant debates. I also put on record my thanks to the Minister and his office for briefing me and my office in good time on the Government amendments.

The Labour Party supports the various amendments tabled by the Government in the other place; they represent an important step in supporting the City to take advantage of opportunities outside the EU, whether that is creating a welcoming environment for fintech or unlocking capital in the insurance industry for investment in infrastructure through the reform of Solvency II. In particular, we welcome Lords amendments 6, 11 and 16 to 25, which strengthen the accountability of the FCA and the PRA.

This Bill facilitates an unprecedented transfer of responsibilities and powers from retained EU law to the regulators. We recognise that in this new context it has never been more important that the FCA and the PRA are appropriately held to account by democratically elected politicians. That is why Lords amendments 16 to 23 are so important to ensure that Parliament can take full advantage of the expertise in the other place when assessing the effectiveness of regulators.

However, accountability cannot be left to Parliament alone. That is why we support the principle behind Lords amendment 11, which will require the regulators to set out the process for how consumer groups and industry can make representation to review a rule that they believe is not working. We must ensure that regulation works for both consumers and the financial services sector. We also support Lords amendment 6, which will require the FCA and the PRA to report after 12 and 24 months on how they have complied with their duty to advance the secondary competitiveness and growth objective. However, as I am sure the Minister will agree, that new requirement must not detract from the regulator’s primary duties of promoting financial stability and consumer protection. As the banking turbulence of recent months has reminded us all, the success of the City depends on the UK’s reputation for strong regulatory standards.

I turn now to Lords amendments 72 to 77. I am delighted that, after months of voting against Labour’s amendments to protect free access to cash, the Government have finally U-turned. I congratulate in particular my hon. Friend the Member for Mitcham and Morden (Siobhain McDonagh) on all her tireless campaigning on that topic. It was her determination that got us over the line.

If you will indulge me for a minute, Madam Deputy Speaker, I wish to send my condolences to my hon. Friend. I pay tribute to her sister, who was the first female secretary-general of the Labour party and an inspiration to many young women across the party.

Lords amendments 72 to 77 are especially important because they will ensure that millions of people across the country who rely on free access to cash will not be cut off from the goods and services that they need. However—the Minister will have anticipated this—I am disappointed that the amendments will do nothing to protect essential face-to-face services. Analysis published by consumer group Which? found that over half of the UK’s bank and building society branches have closed since January 2015—a shocking rate of about 54 closures each month—which risks excluding millions of people who rely on in-person services for help with opening new accounts, applying for loans, making or receiving payments, and standing orders.

[Alison Thewliss (Glasgow Central) (SNP)]

The hon. Lady is making an excellent point on bank closures. Even in urban constituencies such as mine, banking closures are forcing people into the city centre to get their cash. The Albert Drive branch in Pollokshields is the latest closure proposed by the Bank of Scotland. Does she agree that such closures are very difficult for many communities to bear?

[Tulip Siddiq]

It is a similar story across my constituency. A Labour Government would give the FCA the powers it needs to protect essential in-person banking services, which would help a lot of the constituents the hon. Lady is talking about.

To be clear to the Minister, Labour is not calling for banks to be prevented from closing branches that are no longer needed. We recognise that access to face-to-face services could and should be provided increasingly through banking hubs, be they delivered at the post office, in shared bank branches or by other models of community provision. But so far, only four hubs—I repeat: only four—have been delivered. [Interruption.] The Minister is indicating that there are six, which I do not think is a massive improvement, but I will take it. Six banking hubs have been delivered, about which he seems very proud. Figures from LINK reveal that only a further 52 hubs are in the pipeline. On top of that, many of those planned banking hubs will not even provide the essential in-person services that I am speaking about, so although we welcome the progress made in Lords amendments 72 to 77, there is a lot more to do to ensure that no one is left behind.

I am disappointed that the Government have decided not to back Lords amendment 10 on financial inclusion, for which my hon. Friend the Member for Kingston upon Hull West and Hessle (Emma Hardy) has been a powerful advocate. The amendment is an important opportunity to rethink fundamentally how financial resilience, inclusion and wellbeing issues are tackled in the UK, and to empower the FCA to confront issues such as the poverty premium—the extra costs that poorer people pay for essential services such as insurance, loans or credit cards.

Although I agree with the Minister that financial inclusion is a broader social policy issue, I do not believe that that is a legitimate argument for rejecting the Lords amendment fully. As the Treasury Committee found it its report last year:

“The regulations made by the FCA, and the manner in which it supervises and enforces those regulations, could have a significant impact on financial inclusion”,

such as restricting the practice of charging the poorest in society more for paying insurance in monthly instalments. That is why the Labour party will vote for Lords amendment 10.

Finally, I will address Lords amendment 5 on sustainability disclosure requirements, and the Government amendments tabled in lieu of Lords amendment 7 on expanding the regulatory principle on net zero emissions, and in lieu of Lords amendment 36 on forest risk commodities. We welcome once again that the Government have finally U-turned and acknowledged concerns that our regulatory system must play a role in protecting nature and ending deforestation. However, as I am sure the Minister will agree, that can only be the first step in ensuring that the transition to net zero and the protection of nature are primary considerations across the financial system. The Treasury’s review of deforestation must be meaningful and put forward concrete proposals. The Government cannot continue to kick the can down the road.

Similarly, although we welcome the new requirements in Lords amendment 5 for the FCA and PRA to have regard to the Treasury’s sustainability and disclosure requirements policy statement, we have been calling on the Government to move on that for months. Even now, the Government have yet to confirm the date on which the sustainability disclosure requirements will be introduced. We need clear timing and direction so that we give businesses the confidence to invest and do not undermine their certainty.

The Labour party will support the amendments. As I am sure the Minister knows, I will continue to hold him to account on his actions regarding green finance, financial inclusion and in-person banking services.

[Dame Andrea Leadsom (South Northamptonshire) (Con)]

May I start by sending my condolences to my fellow Treasury Committee member, the hon. Member for Mitcham and Morden (Siobhain McDonagh)? Her sister will be greatly missed by Members across all parties.

I am delighted at the Bill’s progress. I congratulate my hon. Friend the Minister on all his work in taking into account the views expressed across the House. Of course, the existence of the Bill is a huge Brexit dividend in itself, enabling us to deregulate while strengthening financial services in the UK, which is in the top two financial services sectors in the world and creates up to 2 million jobs right across the UK.

So far, the Treasury Committee has proven to be a good overview body for the financial services and markets regulation that is coming back to the UK. That Committee has done a great job, and I can say that without appearing to boast because I was not on the Committee when it did that scrutiny. We have done a good job, and the Treasury Committee will continue to be the right place to provide the scrutiny and checks and balances that will always be needed in the financial services sector.

I point out, however, that their lordships need carefully to consider their approach to the Bill. Far from enabling us to seize the opportunity and recapture the initiative, they seem to be trying to over-burden the regulators, pinning them down with reports and further obligations and duties that would militate against the UK continuing to be one of the most successful places on earth for financial services.

Draft Amendments of the Law (Resolution of Silicon Valley Bank UK Limited) (No. 2) Order 2023

Tulip Siddiq Excerpts

Wednesday 7th June 2023 General Committees

[Tulip Siddiq (Hampstead and Kilburn) (Lab)]

It is a pleasure to serve with you in the Chair, Ms McVey. I thank the Minister and his team for briefing me ahead of today’s debate. We welcome the quick work done by the Treasury, the Bank of England and regulators to secure the HSBC rescue deal for the UK arm of Silicon Valley Bank. SVB UK serves a high concentration of life sciences and tech companies in this country, and those firms play an indispensable role in driving growth and innovation across the economy. We recognise that granting an exemption to the ringfencing regime for HSBC was necessary to guarantee the sale of SVB UK in exceptional circumstances. That is why the Labour party will support the draft order.

I just want to ask the Minister a few questions. First, has he considered whether maintaining a special exemption for HSBC in the future represents the best long-term solution? Can he assure me that he and his officials, alongside the Bank of England, have considered all the alternative options now that the collapse of SVB UK has been averted? I recognise the specific circumstances of SVB UK, but does he agree that ringfencing reforms were introduced for good reasons, to protect savers and taxpayers from a banking crisis? Can the Minister reassure me that, beyond SVB UK, his Government are committed to the integrity of the ringfencing regime, and that regulation must prioritise the safety and soundness of our banks?

Corporate Profit and Inflation

Tulip Siddiq Excerpts

Tuesday 16th May 2023 Westminster Hall

[Tulip Siddiq (Hampstead and Kilburn) (Lab)]

It is a pleasure to serve under your chairmanship, Sir Mark. I congratulate my hon. Friend the Member for Leeds East (Richard Burgon) on securing this important debate.

As I think everyone in this House will know, working people are facing the biggest hit to living standards since records began. Real wages are lower than they were 15 years ago, with families in the UK going into the cost of living crisis significantly poorer than those in comparable European countries. The price of everyday essentials has risen by an eye-watering £3,500 since 2020 and there have been 24 tax rises since 2019 alone, with working people facing the highest tax burden in 70 years.

After the former Prime Minister crushed the economy last year, the resulting rise in interest rates and economic instability has added hundreds of pounds a month to first-time buyers’ bills. Whether it is stagnant wages, rocketing prices and bills or sky-high taxes, at every turn it is hard-working people in our constituencies who are paying the price of economic instability. The Opposition have been calling for policies to support people with the cost of living crisis and rampant inflation. For example, since last August we were calling for a fairer deal for those paying a premium on energy prepayment meters. The Chancellor finally gave in in his 15 March Budget—after months and months of lobbying from the Labour Benches.

Since this crisis began, Labour has been calling for a windfall tax on energy giants to support working people with their energy bills. After months of the Prime Minister dismissing our proposals as “disastrous”, he was forced into a U-turn in May last year. But even after his party supported our idea of a windfall tax, the Government still did not adopt a comprehensive windfall tax as we have been suggesting. By refusing to backdate the tax to January 2022, end the investment allowance tax loophole and raise the rate in line with other countries, the Government has left £10.4 billion on the table, leaving working people to foot the bill.

The Labour party will always put ordinary families first, which is why we would: reverse the expensive cash giveaway to the wealthiest pension savers and introduce specific measures to keep doctors in work; scrap the unfair non-dom tax status, which cost the UK over £3 billion a year, in order to pay for free breakfast clubs and the biggest ever expansion in the NHS workforce; and slash business rates for small shops—paid for by properly taxing online giants—to cut the eye-watering cost of everyday items.

With the ONS figures confirming that 2022 was a record year for North sea oil and gas profits, Labour would prioritise the needs of working people by introducing a proper windfall tax to raise an additional £10.4 billion. We would use the additional funds to cut energy bills for domestic food manufacturers and processors to bring down food prices for people across the country.

Fundamentally, we understand that the UK needs a long-term economic plan to boost living standards for working people and bring down the prices of everyday essentials. The crisis has exposed structural problems in the British economy, and our constituents have been trapped in a cycle of stagnant growth, low wages and high tax. If our growth rate stays where it has been over the past 13 years, families in the UK will be poorer than those in Hungary and Romania by 2040.

That is why a Labour Government’s first mission will be to secure the highest sustained growth in the G7 and to create well-paid jobs in every part of the country. We want to achieve that through an active partnership with business and our modern industrial strategy, while our green prosperity plan will drive bills down and let British businesses and workers compete in the global race for the jobs and industries of the future. The US has passed the Inflation Reduction Act, and the EU has its own Net Zero Industry Act. The UK has fallen behind. In contrast, the Labour party’s economic plan will get the UK growing again. Our new deal for working people will ensure that they benefit from that growth by boosting living standards and wages across the country.

That is why I hope the Minister will listen to all the comments made in this debate and, in his closing remarks, finally commit to putting working people before the energy giants and lend his Government’s support to Labour’s windfall tax to help tackle inflation and the cost of living. More than that, I hope he will reflect on everything he has heard today from colleagues across the Chamber and get behind Labour’s mission to secure the highest sustained growth in the G7.

High Street Bank Closures and Banking Hubs

Tulip Siddiq Excerpts

Thursday 11th May 2023 Westminster Hall

[Tulip Siddiq (Hampstead and Kilburn) (Lab)]

It is a pleasure to serve under your chairmanship, Mr Davies. I thank the right hon. Member for Aldridge-Brownhills (Wendy Morton) for securing this debate, and for eloquently laying out the case for why bank branches are still important in many of our constituencies, whether rural or suburban. Too often the political discussion on bank branch closures focuses only on concerns around cash. While the issue of cash is important, and I will touch on it later, there is also the issue of the many other essential services that bank branches provide. They have been outlined in this debate.

Age UK and others have rightly highlighted the importance of the local bank branch to communities across the country. It provides vital in-person services that older people rely on, whether they are opening accounts, applying for a loan, making or receiving payments or need help with a standing order. It would, however, be wrong to assume that it is just older people who use bank branches. There will always be a significant part of the British population that needs the extra face-to-face support that hon. Members have mentioned.

Natalie Ceeney has been working on the issue for a long time. She is the chair of UK Finance’s access to cash action group, and she has made it clear that there is a substantial overlap between the people who rely on access to cash—around 10 million adults across the UK—and those who depend on their local bank branch for financial advice and support. In her report of her research and engagement with local communities, which I encourage hon. Members to read, she found that it was often the most vulnerable—ethnic minorities, people whose first language was not English, and the poorest in society—who relied on cash and in-person help with their finances in their day-to-day life. That point was echoed by the hon. Member for East Renfrewshire (Kirsten Oswald), who talked about what happened in her constituency, and noted that many people from hard-to-reach communities needed those services. That is why some of the figures that we heard in today’s debate are so concerning.

Analysis published by Which? found that over half of the UK’s bank and building society branches have closed since January 2015. That is a shocking rate of around 54 closures each month, and there have already been 158 closures in 2023, with another 274 branches expected to close by the end of this year. My hon. Friend the Member for Barnsley East (Stephanie Peacock) said that that is taking place in her constituency, and explained how it has cut off countless people in her area from the goods and services that they require. Unfortunately, last year, when the Government introduced provisions on access to cash in the Financial Services and Markets Bill, which I led on, they did not introduce protection for essential face-to-face banking services, which was a glaring omission. I wonder whether the Minister will comment on that. It risks leaving millions of people behind—not just those without the digital skills needed to bank online, but people in rural areas with poor internet connections, and the growing number of people who cannot afford data or wi-fi because of the cost of living crisis. That is another point made powerfully by my hon. Friend.

The Opposition recognise that it is inevitable that payment and banking systems will continue to innovate, which is a good thing. Online banking is a far more convenient way for people to manage their finances, but we have to ensure that the digital revolution does not further deepen financial exclusion in our country. That is why the Labour party wants to give the FCA the powers that it needs to protect essential in-person banking services. To be clear, I am not calling for banks to be prevented from closing branches if they are genuinely no longer needed—quite the opposite. I recognise that access to face-to-face services could and should increasingly be provided through banking hubs, whether those are delivered by the Post Office, as we have heard, or take the form of shared bank branches or other models of community provision. If a branch is genuinely not being used, it makes sense that it should not exist, but if it is well used, I do not see why we would close it.

I anticipate that the Minister will say that the Government support banking hubs. We have heard that time and again, but let us be honest: the roll-out of banking hubs has been pathetic. Communities have lost 5,605 bank branches since January 2015, while only four hubs have been delivered so far. That is just not good enough. Figures from LINK reveal that only a further 52 are in the pipeline. The figures do not add up or make us feel very positive. People in our constituencies are telling us that it is not enough, and a lot more has to be done. On top of that, many of those planned banking hubs will not even provide essential in-person services. They must provide a more comprehensive service when they are built. That is why we must empower the FCA to review the community’s need for access to essential in-person banking services, and get a clearer picture of what is needed in our constituencies.

That, of course, will not be enough on its own to tackle financial exclusion. Alongside that, we will need to put in place a proper strategy for digital inclusion. Banking hubs will have to play a role in that. The Post Office has called for banking hubs to have financial inclusion advisers, who can ensure that no one is left behind. That is a very interesting idea, and I hope that the Minister will comment on it. Labour believes that banking hubs have the potential to tackle digital exclusion—for instance, through dedicated staff, who could teach people how to bank online and provide internet access to those who need it. I would like to hear what the Minister has to say about those proposals, although I recognise that this is not his brief; perhaps he could comment on behalf of his colleagues.

We of course welcome the fact that the Financial Services and Markets Bill finally introduced some protection for access to cash, but it sadly falls short of what is truly needed. It does not make any commitment to protect free access to cash. The hon. Member for Carshalton and Wallington (Elliot Colburn) talked a bit about free access to cash and the community need in his constituency, which I know well. I was born in St Helier Hospital, like him—many years earlier, I have to say. I think his point was important. It shows that it is not just rural areas that are affected; suburban constituencies in London still have that community need. We need free access to cash.

Data collected by Which? shows that there has been a rapid drop in provision of free-to-use ATMs in recent years. There must be something in legislation that protects free access to cash; otherwise, our constituents will be in trouble. We saw a decline of 30,000 free-to-use ATMs between August 2018 and February 2023. That is a stark 26.1% fall. It is a shocking statistic. It is forcing the poorest people in the UK to pay for access to their own money. That seems ludicrous. We know that a massive 3.8 million people are in financial difficulty, and 15 million people in total use cash for budgeting purposes. The right hon. Member for Aldridge-Brownhills made the point that more and more people are using cash to budget because of the cost of living crisis.

The need to protect cash services will only grow in importance as the cost of living crisis increases. The data collected by the Post Office that I looked at showed that the use of cash has actually risen in recent months. The cost of living crisis is deepening. The poorest in society are increasingly turning to cash to manage their budgets day to day, and week to week, and we should help them by providing free access to cash.

I hope the Minister will take on board the concerns that have been raised today. If his Government are serious about leaving no one behind, there are three fundamental questions he must address in his closing remarks, or take back to the Minister who has this brief. Does he agree that the rate of bank branch closures is reaching an all-time high? This is the time to empower the FCA to protect in-person services. If not now, then when will that happen? Secondly, does he recognise that the Government must work with industry to accelerate the roll-out of banking hubs if the initiative is to have any impact at all, and that banking hubs must provide all the services that people need, not just a select few? Finally, how will he ensure that everyone—particularly the poorest in society, who rely on doing so—can access their own money, without it burning a hole in their pockets?

--- Later in debate ---

[Gareth Davies]

I accept the challenge, of course. The hon. Member for Motherwell and Wishaw (Marion Fellows) also asked me to comment on what support the Government are providing to post offices. I can respond to both points.

In the 2021 spending review, some £227 million was secured in Government investment between ’22 and ’25, including a subsidy of £50 million to protect access to post office services in commercially challenging locations. That later increased to £335 million, including a £150 million subsidy to those in commercially challenging locations. I therefore accept what the hon. Member for East Renfrewshire (Kirsten Oswald) says, but the reality for the 93% who live within 1 mile of a post office cannot be ignored. For those who are not within that catchment area, the Government have stepped in with subsidy and significant funding to ensure access to a post office.

[Tulip Siddiq]

We are lucky in this place, with two post offices that hardly ever have queues, but in my constituency there are massive queues outside the post offices, in which people have to wait a long time. Also, some of the services that constituents want to use a bank for are just not appropriate in a post office. Some post offices, certainly in my constituency, are based in WHSmith or another shop; it would not be appropriate to go in there to talk about personal banking services. Will the Minister comment on that?

[Gareth Davies]

What services banks provide is a commercial decision for them, but they provide a lot of different ways to interact with them these days, including several online options. As I pointed out right at the start, the majority of the British public access banking in those ways, whether online through a website, web chat or a mobile banking app, or via the telephone. Customers of commercial banks have a variety of ways to interact and get advice, and I would encourage them to do so. It is not the Government’s place to intervene in the commercial decisions of banks on what services they provide and where.

In addition to what I have just laid out on the variety of online services, many banks and building societies have programmes in place involving community centres, libraries, mobile banking vans or semi-permanent banking pods. The pods are structures that provide a dedicated private space to support customers with banking services. They can be moved around to different locations, depending on demand—the hon. Member for Hampstead and Kilburn (Tulip Siddiq) may wish to engage the banks on those for her area. For people who need to speak to their bank face to face, such places can make a vital difference.

Alongside those programmes, there is the high-profile innovation of shared banking hubs, which many Members have referred to in the debate. The hubs provide a dedicated space where customers can meet community bankers, who support them with more complex services. The hubs also offer a range of everyday banking facilities, allowing customers to deposit cheques, check their balance, and withdraw and deposit cash. More than 50 shared banking hubs have been announced for communities across the country, as has been said. Four have opened their doors already and two more are expected in the coming weeks.

Oral Answers to Questions

Tulip Siddiq Excerpts

Tuesday 9th May 2023 Commons Chamber

[Mr Speaker]

I call the shadow Minister.

[Tulip Siddiq (Hampstead and Kilburn) (Lab)]

Last week, the Public Accounts Committee revealed that our country lost £9 billion-worth of tax revenue during the pandemic because HMRC redeployed 4,000 staff members whose jobs were to chase down tax avoiders. The Prime Minister was Chancellor at the time and presumably signed off that decision. Can the Minister tell me whether the Prime Minister did that as a deliberate act to give the green light to tax avoiders, or is it just another example of Tory incompetence?

[John Glen]

I think that is a ridiculous suggestion, to be honest. HMRC received £863 million to modernise the tax system, and that included £136 million invested over the spending period to deliver improvements in terms of a single customer record and account. On what happened over covid, I have already set out the investment we made, including the £100 million in the taxpayer protection taskforce. We take fraud very seriously. Now it is about HMRC looking at financial records of excessive trading to come to terms with those businesses that used some of those schemes fraudulently. We will continue to work on that.

Draft Insider Dealing (Securities and Regulated Markets) Order 2023

Tulip Siddiq Excerpts

Tuesday 9th May 2023 General Committees

[Tulip Siddiq (Hampstead and Kilburn) (Lab)]

It is a pleasure to serve with you in the Chair, Mrs Latham. Labour fully supports the draft statutory instrument; we will always welcome any tightening of the rules on insider dealing. However, I have a few questions for the Minister, as he would expect.

First, I understand that the order is the outcome of the 2015 fair and effective markets review. Will the Minister explain why it has taken eight years to deliver the order and modernise our rules on insider dealing? As he knows, the EU has been years ahead of us in criminalising most forms of serious market abuse. Why did we have the delay? What assessment has the Treasury made of how much that serious eight-year delay has cost the public?

Will the Minister tell me about the scale of insider trading that preceded the order? How many instances of abuse were treated simply as civil offences? How many instances would have been treated as criminal offences if the draft order had been made earlier, as should have happened eight years ago? The Opposition support the draft order, but I hope that the Minister will be able to answer some of the questions about the long delay.

Funding for Major Infrastructure Projects

Tulip Siddiq Excerpts

Wednesday 3rd May 2023 Westminster Hall

[Tulip Siddiq (Hampstead and Kilburn) (Lab)]

It is a pleasure to serve under your chairmanship, Mr Sharma. I congratulate the hon. Member for Bath (Wera Hobhouse) on securing this important debate. Some Members may be surprised to see me; I am covering for a colleague in the shadow Treasury team, but I always welcome the opportunity to hold the Government to account on their record on public and private funding for major infrastructure projects. There are three main areas that I will focus on: the Government’s underinvestment in energy, the Government’s record on transport and the dysfunctional planning system that means that infrastructure, especially housing, simply does not get built.

First, on energy, the UK is losing the global competition for green jobs. We are now investing five times less in green industries than Germany, and roughly half of what France and the USA invest. The Institute of Directors has warned that:

“the UK will find itself left behind in the accelerating race to lead the green economy.”

Only now, eight months after the passage of the Inflation Reduction Act, has the Chancellor finally confirmed that the UK will have to wait more than a year to respond. The Opposition think that is simply not good enough.

Ordinary families have paid the price for the Government’s dithering and delay. In 2015, the Government slashed solar subsidies, causing a huge crash in the market. That missing capacity has left household energy bills another £2.5 billion higher this winter in the midst of the worst cost of living crisis on record. We must remember that in 2013, the coalition cut energy efficiency programmes, which saw home insulation rates crash by 92%. If we had insulated 2 million homes every year since then, people’s bills would today be £1,000 a year lower.

On the offshore wind markets, as Scottish Power CEO Keith Anderson has said:

“The wind farms that are coming online today were approved when Gordon Brown was in power.”

Unfortunately, yards across the UK are closing and we are delivering three times fewer offshore wind jobs than Denmark, despite our being over 10 times their size. The Government said in December 2022 that they would introduce planning reform for onshore wind by April of this year. That deadline has been missed and no action has been taken. I hoe that the Minister will confirm whether the Government will end the ban on onshore wind, and, if so, when that will happen.

Let me turn to transport. A recent survey of global investors has seen the UK slip down the rail infrastructure rankings; we now sit between India and Kazakhstan at 30th in the global league table. That is a national scandal—how on earth did we get here? We know that transport projects need certainty, but time and again Ministers have mismanaged key projects. On the key trans-Pennine route, for example, we wasted hundreds of millions of pounds of taxpayers’ money before cancelling the project and starting again. That has meant that on one of the major rail routes in the country, which transports millions of passengers a year, upgrades are almost a decade late. That has hurt the taxpayer and has profound consequences for the UK, costing the northern economy £16 billion.

Finally, I come to our planning system. Planning applications for homes fell to a record low last year, while the number of local housing plans submitted in the last few years have plummeted. What are the Government doing about that? Planning changes snuck out by the Government three days before Christmas have already resulted in 55 local authorities withdrawing housebuilding plans. Experts are now saying that housebuilding is set to fall to the lowest level since the second world war.

Wherever we look, it is the same story—housebuilding is at a record low, inward investment in transport is in decline, and Britain is falling behind on green energy. But we do not need to continue down this path of managed decline, because Labour has a plan to get the economy growing and to drive the investment and infrastructure that we so desperately need. The Labour party is committed to overturning the senseless ban on onshore wind and to the radical reform of planning rules, to drive growth and build affordable homes.

Fixing our transport system is a prerequisite for growth in this country, and that is why we are working hand in hand with business leaders and pledging that a future Labour Government will deliver Northern Powerhouse Rail, including that vital new train line through Bradford. Meanwhile, our green prosperity plan will grow the UK economy by investing in the green industries that can power our economic future, cut the cost of living for British families, and make Britain a clean energy superpower.

The Minister has listened carefully to all the concerns voiced in the debate. I hope that he responds to them, including those that I have just outlined.