Asked by: Tulip Siddiq (Labour - Hampstead and Kilburn)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what assessment he has made of the impact of levels of unfilled vacancies at the Financial Conduct Authority on the regulator's ability to fulfil its statutory objectives.
Answered by John Glen - Paymaster General and Minister for the Cabinet Office
The Financial Conduct Authority (FCA) is operationally independent from the Government. Questions about the FCA’s day to day decision making, including details about staffing, budget and spending are matters for the independent FCA.
These questions have therefore been passed to the FCA who will respond directly to the honourable member by letter. A copy of the letter will be placed in the Library of the House.
Asked by: Tulip Siddiq (Labour - Hampstead and Kilburn)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, how much of the £1.5 billion in announced by the Treasury for compensating Equitable Life policyholders has not been spent as of 24 June 2022.
Answered by John Glen - Paymaster General and Minister for the Cabinet Office
At 31 May 2022, the total value of payments made by the Equitable Life Payment Scheme was £1,305,099,430.44
Asked by: Tulip Siddiq (Labour - Hampstead and Kilburn)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, whether his department requested the publication of Towers Waston's calculations of the relative losses of Equitable Life policyholders affected by maladministration.
Answered by John Glen - Paymaster General and Minister for the Cabinet Office
The methodology for calculating payments to Equitable Life policyholders was published in 2011 and can be found at: www.gov.uk/government/publications/equitable-life-payment-scheme-design.
Asked by: Tulip Siddiq (Labour - Hampstead and Kilburn)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, whether he plans to provide compensation to victims of the collapse of Blackmore Bond plc.
Answered by John Glen - Paymaster General and Minister for the Cabinet Office
The Financial Conduct Authority (FCA) is responsible for ensuring consumer protection for a broad range of financial services products. However, it does not regulate all financial services firms and products. Blackmore Bond Plc was not authorised by the FCA and the sale of the ‘mini-bond’ product it offered was not an activity regulated by the FCA. The FCA does not have power to investigate a firm that is unauthorised and not carrying out any regulated activities. The Government therefore has no plans to commission an independent inquiry into the FCA’s handling of the collapse of Blackmore Bond plc.
The Financial Services Compensation Scheme (FSCS) is the compensation scheme of last resort for financial services. The FSCS is an independent non-governmental body that carries out its compensation function within rules set by the FCA and the Prudential Regulation Authority (PRA), who are also independent of Government. The FSCS can only pay compensation in respect of certain regulated activities and the Government is unable to intervene or comment on specific cases and decisions taken by the FSCS.
It is an important point of principle that the Government does not step in to pay compensation in respect of failed financial services firms that fall outside of the FSCS. Doing so would create the wrong set of incentives for individuals and an unnecessary burden on the taxpayer.
In April 2021, the Treasury launched a consultation on proposals for bringing mini-bonds (also known as Non-Transferable Debt Securities) within the scope of regulation. On 1 March 2022 the Treasury published a response setting out its preferred approach and intentions for taking this proposal forward.
Asked by: Tulip Siddiq (Labour - Hampstead and Kilburn)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, whether he plans to commission an independent inquiry into the regulators' handling of the collapse Blackmore Bond plc.
Answered by John Glen - Paymaster General and Minister for the Cabinet Office
The Financial Conduct Authority (FCA) is responsible for ensuring consumer protection for a broad range of financial services products. However, it does not regulate all financial services firms and products. Blackmore Bond Plc was not authorised by the FCA and the sale of the ‘mini-bond’ product it offered was not an activity regulated by the FCA. The FCA does not have power to investigate a firm that is unauthorised and not carrying out any regulated activities. The Government therefore has no plans to commission an independent inquiry into the FCA’s handling of the collapse of Blackmore Bond plc.
The Financial Services Compensation Scheme (FSCS) is the compensation scheme of last resort for financial services. The FSCS is an independent non-governmental body that carries out its compensation function within rules set by the FCA and the Prudential Regulation Authority (PRA), who are also independent of Government. The FSCS can only pay compensation in respect of certain regulated activities and the Government is unable to intervene or comment on specific cases and decisions taken by the FSCS.
It is an important point of principle that the Government does not step in to pay compensation in respect of failed financial services firms that fall outside of the FSCS. Doing so would create the wrong set of incentives for individuals and an unnecessary burden on the taxpayer.
In April 2021, the Treasury launched a consultation on proposals for bringing mini-bonds (also known as Non-Transferable Debt Securities) within the scope of regulation. On 1 March 2022 the Treasury published a response setting out its preferred approach and intentions for taking this proposal forward.
Asked by: Tulip Siddiq (Labour - Hampstead and Kilburn)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, pursuant to the Answer of 19 May 2022 to Question 1257 on Cryptocurrencies, if he will provide the 2022 estimate for the proportion of UK adults holding money on crypto exchanges who give their reason for buying cryptocurrencies as a gamble to make or lose money.
Answered by John Glen - Paymaster General and Minister for the Cabinet Office
The Financial Conduct Authority plan to re-run the UK cryptoassets consumer research later this year.
There is currently no 2022 estimate for the proportion of UK adults holding money on crypto exchanges who give their reason for buying cryptocurrencies as a gamble to make or lose money.
Asked by: Tulip Siddiq (Labour - Hampstead and Kilburn)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what estimate he has made of the average value of the money held by UK adults on crypto exchanges who give their reason for buying cryptocurrencies as a gamble that could make or lose money.
Answered by John Glen - Paymaster General and Minister for the Cabinet Office
The Financial Conduct Authority (FCA) published consumer research in June 2021, which offered insight into the cryptoassets market in the UK. The FCA found that 4.4% of UK adults currently hold cryptocurrency, or approximately 2.3 million consumers. The FCA also found that the median value of holdings of crypto owners was £300, and 47% of crypto owners (who chose to declare their holdings) had £260 or less in crypto.
Additionally, the FCA explored consumers’ reasons for buying cryptocurrencies and found that 38% of crypto users bought their cryptocurrencies “as a gamble to make or lose money”. This reasoning was down 9 percentage points on 2020, where 47% of users bought their cryptocurrencies “as a gamble”.
The Cryptoasset Taskforce – HM Treasury, the Bank of England, the FCA and the Payment Systems Regulator (PSR) – continues to monitor ongoing development in cryptoasset markets, and is taking forward a number of regulatory initiatives to manage risks and support innovation.
Asked by: Tulip Siddiq (Labour - Hampstead and Kilburn)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what estimate he has made of the average value of the money held by UK adults on crypto exchanges.
Answered by John Glen - Paymaster General and Minister for the Cabinet Office
The Financial Conduct Authority (FCA) published consumer research in June 2021, which offered insight into the cryptoassets market in the UK. The FCA found that 4.4% of UK adults currently hold cryptocurrency, or approximately 2.3 million consumers. The FCA also found that the median value of holdings of crypto owners was £300, and 47% of crypto owners (who chose to declare their holdings) had £260 or less in crypto.
Additionally, the FCA explored consumers’ reasons for buying cryptocurrencies and found that 38% of crypto users bought their cryptocurrencies “as a gamble to make or lose money”. This reasoning was down 9 percentage points on 2020, where 47% of users bought their cryptocurrencies “as a gamble”.
The Cryptoasset Taskforce – HM Treasury, the Bank of England, the FCA and the Payment Systems Regulator (PSR) – continues to monitor ongoing development in cryptoasset markets, and is taking forward a number of regulatory initiatives to manage risks and support innovation.
Asked by: Tulip Siddiq (Labour - Hampstead and Kilburn)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what estimate he has made of the number of UK adults who have money held on crypto exchanges.
Answered by John Glen - Paymaster General and Minister for the Cabinet Office
The Financial Conduct Authority (FCA) published consumer research in June 2021, which offered insight into the cryptoassets market in the UK. The FCA found that 4.4% of UK adults currently hold cryptocurrency, or approximately 2.3 million consumers. The FCA also found that the median value of holdings of crypto owners was £300, and 47% of crypto owners (who chose to declare their holdings) had £260 or less in crypto.
Additionally, the FCA explored consumers’ reasons for buying cryptocurrencies and found that 38% of crypto users bought their cryptocurrencies “as a gamble to make or lose money”. This reasoning was down 9 percentage points on 2020, where 47% of users bought their cryptocurrencies “as a gamble”.
The Cryptoasset Taskforce – HM Treasury, the Bank of England, the FCA and the Payment Systems Regulator (PSR) – continues to monitor ongoing development in cryptoasset markets, and is taking forward a number of regulatory initiatives to manage risks and support innovation.
Asked by: Tulip Siddiq (Labour - Hampstead and Kilburn)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what assessment he has made of the impact of the collapse in the value of cryptocurrency on financial stability in the UK.
Answered by John Glen - Paymaster General and Minister for the Cabinet Office
The Bank of England’s Financial Policy Committee (FPC) has recently noted that direct risks to the stability of the UK financial system from cryptoassets are limited. The FPC also noted that crypto-technologies are growing and becoming more interconnected with the core financial system, and the government is working to ensure that the authorities have the appropriate tools to manage associated risks.
In April the government announced a number of specific reforms to strengthen crypto asset regulation, including a commitment to bring stablecoins into payments regulation, and to consult on a wider regulatory regime later this year. Internationally, the Treasury is working through the Financial Stability Board to assess and develop supervisory and regulatory approaches to address global financial stability risks posed by cryptoassets, including market risks driven by price volatility.
The government has also announced forthcoming legislation which, along with supportive Financial Conduct Authority (FCA) rules, will regulate in-scope cryptoasset financial promotions, requiring them to be fair, clear and not misleading for consumers.
Working with the Bank of England and FCA, the Treasury will continue to monitor developments in crypto asset markets closely.