Asked by: Jim McMahon (Labour (Co-op) - Oldham West, Chadderton and Royton)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, whether she plans to further regulate business lending where (a) a private residence is used as security (b) personal guarantees are required as a condition of the loan.
Answered by Lucy Rigby - Economic Secretary (HM Treasury)
The Government has set out its plans in this area in its small business strategy, ‘Backing Your Business’, published this summer, and in the Government’s reply to the Call for Evidence on SME Finance, published earlier this month.
As set out in the Government’s small business strategy, the Government is committed to working with lenders to ensure the appropriate use of personal guarantees. This includes the introduction of a mandatory Code of Conduct for accredited lenders that use the British Business Bank’s Growth Guarantee Scheme, to ensure that personal guarantees under the Scheme are used fairly and transparently.
The Government is also working with UK Finance to build on its existing lender commitments to use personal guarantees responsibly, and with the business finance community to help businesses access the right finance on the right terms, including where personal guarantees are involved.
More widely, personal guarantees can play a necessary role in business lending, where they may help enable SMEs to access lending that might otherwise not be advanced, or where the price of lending would deter SMEs from accessing finance. This includes cases where a business has limited or no trading history, nor assets for use as collateral to access debt finance. While personal guarantees may be called upon, this does not automatically result in enforcement action, and property repossessions linked to personal guarantees remain rare.
The Government will continue to keep the issues relating to personal guarantees under review and promote further transparency around their use.
Asked by: Neil Shastri-Hurst (Conservative - Solihull West and Shirley)
Question to the Department for Education:
To ask the Secretary of State for Education, what steps her Department is taking to ensure that (a) apprentices and (b) young entrepreneurs have access to financial education.
Answered by Josh MacAlister - Parliamentary Under-Secretary (Department for Education)
Financial education is integrated into the curriculum at key stages 3 and 4 (ages 11-16) through citizenship education and elements of the mathematics curriculum. Together this covers such areas as personal budgeting, saving for the future, managing credit and debt and calculating interest.
Financial education is not compulsory post-16, however, providers are free to teach it and our 16-19 study programme guidance sets an expectation that students take part in other non-qualification activity to develop life skills, including managing personal finances.
There are a range of financial education-related qualifications for 16 to 19-year-olds to study, in including qualifications and courses at levels 1 and 2, with both the mathematics GCSE and L2 Functional Skills Qualifications supporting financial education. At Level 3 there is the T Level in Finance and Core Maths, which also covers financial literacy.
The current curriculum and assessment review will consider coverage of areas including applied knowledge and skills young people will need in life and work such as financial education.
Upskilling in English and mathematics is a key feature of all apprenticeships and young apprentices aged 16-18 at the start of their apprenticeship are required to achieve English and mathematics qualifications.
Asked by: Ben Goldsborough (Labour - South Norfolk)
Question to the Ministry of Justice:
To ask the Secretary of State for Justice, what recent steps her Department has taken to help reduce levels of reoffending in (a) South Norfolk constituency and (b) Norfolk.
Answered by Alex Davies-Jones - Parliamentary Under-Secretary (Ministry of Justice)
All individuals are assessed for their risk of harm and factors that pertain to re-offending as part of recommending the appropriate sentence and interventions. These deliver a combination of individual supervision and group programmes to assist people on probation developing more pro-social behaviours. Alongside this, timely enforcement is critical when conditions are breached, or risk escalates beyond a manageable level in the community. In relation to South Norfolk and Norfolk, the following specific arrangements are in place to help reduce levels of re-offending:
Partnerships - There is a strong relationship with Norfolk PCC which has enabled co-commissioning of services, for example, HGV Driver and Forklift Truck Driver Training.
Commissioned Rehabilitative Services - There are services directly commissioned by HMPPS providing services for women and ethnic minority people. These services also support people in probation with accommodation, personal wellbeing, finance, benefit and debt. In addition, dependency and recovery workers, co-commissioned with Norfolk County Council are in place for dealing with alcohol and drug misuse.
Local Strategic Engagement - HMPPS convenes and chairs pre-release panels for those leaving prison. These are establishing and developing professional relationships between stakeholders by taking a multi-disciplinary approach to release planning and move-on for people at risk of homelessness. The local Probation Service is an active member of the Community Safety Partnership Group that brings together organisations from across Norfolk to tackle crime and disorder, to ensure the county remains a safe place for people to live, work and visit. The members of the NCSP represent local councils, policing and fire services, probation, youth offending, health and housing.
Additional services - There is currently an education, training and employment pilot in Norfolk which looks to improve employment outcomes (and sustaining employment) for people on release from custody and for those on community orders. This has seen many positive results with people gaining and maintaining employment. Purfleet Trust are also co-commissioned with West Norfolk Local Authority to provide additional support to provide a bespoke programme of support for all individuals referred into the service to help people sustain accommodation. We have an advanced service using Peer Mentors under our engaging people on probation framework which results in better engagement from our people on probation who may otherwise not engage fully with services, breaking down barriers and leading to desistance. It also helps us as a service to develop and enhance our culture to meet the diverse needs of people on probation.
Asked by: Bell Ribeiro-Addy (Labour - Clapham and Brixton Hill)
Question to the Department for Education:
To ask the Secretary of State for Education, what assessment her Department has made of the (a) affordability and (b) long-term sustainability of the student loans repayment system for (i) low and (ii) middle-income graduates.
Answered by Janet Daby
It is important that we have a sustainable higher education (HE) funding system that provides opportunities for all, supports students, and maintains the world-leading status of our universities. This government keeps the student finance system under continuous review to ensure that it delivers good value for both students and taxpayers. We are determined that the HE funding system should deliver for our economy, for universities and for students, and the government is committed to supporting the aspiration of every person who meets the requirements and wants to go to university. We will set out this government’s longer term plan for HE reform by summer 2025.
Interest rates do not impact monthly repayments made by student loan borrowers. Regular repayments are based on a fixed percentage of earnings above the applicable student loan repayment threshold, not on amount borrowed or the rate of interest. If a borrower’s income drops, so does the amount they repay. If income is below the relevant student loan repayment threshold, or a borrower is not earning, repayments stop.
Any outstanding debt, including interest built up, is written off after the loan term ends at no detriment to the borrower. This protects lower and lower-middle earners in particular. This government subsidy of student loans is a deliberate investment in our young people and the economy.
A detailed impact assessment for the current student loan system is available at: https://www.gov.uk/government/publications/higher-education-reform-equality-impact-assessment.
To consider both students and taxpayers, and ensure the real value of the loans over the repayment term, interest rates on student loans are linked to inflation by being set in reference to the Retail Price Index (RPI), from the previous March, and applied annually on 1 September until 31 August. The next annual update will be based on the RPI from March 2025 and will apply from 1 September 2025.
As an additional borrower protection, interest rates on post-2012 loans are automatically capped by the prevailing market rate for comparable unsecured personal loans.
Asked by: Bell Ribeiro-Addy (Labour - Clapham and Brixton Hill)
Question to the Department for Education:
To ask the Secretary of State for Education, what steps her Department is taking to review (a) Plan 2 and (b) Plan 5 student loan repayment terms, in the context of decreases in levels of inflation.
Answered by Janet Daby
It is important that we have a sustainable higher education (HE) funding system that provides opportunities for all, supports students, and maintains the world-leading status of our universities. This government keeps the student finance system under continuous review to ensure that it delivers good value for both students and taxpayers. We are determined that the HE funding system should deliver for our economy, for universities and for students, and the government is committed to supporting the aspiration of every person who meets the requirements and wants to go to university. We will set out this government’s longer term plan for HE reform by summer 2025.
Interest rates do not impact monthly repayments made by student loan borrowers. Regular repayments are based on a fixed percentage of earnings above the applicable student loan repayment threshold, not on amount borrowed or the rate of interest. If a borrower’s income drops, so does the amount they repay. If income is below the relevant student loan repayment threshold, or a borrower is not earning, repayments stop.
Any outstanding debt, including interest built up, is written off after the loan term ends at no detriment to the borrower. This protects lower and lower-middle earners in particular. This government subsidy of student loans is a deliberate investment in our young people and the economy.
A detailed impact assessment for the current student loan system is available at: https://www.gov.uk/government/publications/higher-education-reform-equality-impact-assessment.
To consider both students and taxpayers, and ensure the real value of the loans over the repayment term, interest rates on student loans are linked to inflation by being set in reference to the Retail Price Index (RPI), from the previous March, and applied annually on 1 September until 31 August. The next annual update will be based on the RPI from March 2025 and will apply from 1 September 2025.
As an additional borrower protection, interest rates on post-2012 loans are automatically capped by the prevailing market rate for comparable unsecured personal loans.
Asked by: Blake Stephenson (Conservative - Mid Bedfordshire)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what assessment she has made of (a) trends in the level of financial literacy in the UK and (b) the potential impact of improving young people's financial literacy on economic growth.
Answered by Emma Reynolds - Secretary of State for Environment, Food and Rural Affairs
The Government is committed to ensuring that individuals have the financial capability to manage their money well. While the Government does not hold specific data quantifying the economic benefits of this, we recognise the importance of financial literacy in people’s economic participation and have taken a number of steps to promote this, including among young people.
Financial education is currently incorporated into the national curriculum in England through mathematics at key stages 1 to 4 and citizenship at key stages 3 and 4, which together cover personal budgeting, saving for the future, managing credit and debt and calculating interest. The Government has established an independent, expert-led Curriculum and Assessment Review to ensure it is fit for purpose and meeting the needs of children and young people.
In addition, the Money and Pensions Service (MaPS) is supported by the Government to provide comprehensive guidance for each stage of consumers’ financial lives. It’s MoneyHelper website offers a range of tools and calculators to help consumers with issues around benefits, everyday money, family and care, home finance, money troubles, pensions and retirement, savings and work (https://www.moneyhelper.org.uk/en/tools-and-calculators).
The Government recognises that there is still more that can be done to further improve financial literacy. That is why Financial Education and Capability has been made an area of focus within the Financial Inclusion Strategy. The strategy will aim to tackle barriers to individual and households’ ability to access affordable and appropriate financial products and services, including financial literacy.
The Financial Conduct Authority’s nationally representative Financial Lives Survey gathers insights into the financial behaviour, attitudes and experiences of adults aged 18 and over across the UK. The survey covers a wide range of topics, including financial capability.
Asked by: Gregory Campbell (Democratic Unionist Party - East Londonderry)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, if she will make an assessment of trends in the level of consumer credit debt relating to car purchases in the last five years.
Answered by Emma Reynolds - Secretary of State for Environment, Food and Rural Affairs
The Government regularly engages with the Bank of England, the Financial Conduct Authority (FCA) and the Money and Pensions Service (MaPS) to monitor personal finances and debt levels.
According to the FCA, 2 million cars were bought on finance in the 12 months to October 2024, with a total of £38.7 billion being borrowed. HMT does not hold data for the last 5 years.
Asked by: Alex Baker (Labour - Aldershot)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what assessment she has made of the potential impact of the cost of living on the numbers of (a) businesses at risk of insolvency and (b) people in debt in Aldershot constituency; and what fiscal steps she is taking to support those (i) businesses and (ii) people.
Answered by Tulip Siddiq
The Government recognises the significant impact the cost of living has had on personal finances, and particularly for those struggling with debt. We regularly engage with the Bank of England, the Financial Conduct Authority (FCA) and the Money and Pensions Service (MaPS) to monitor personal finances and debt levels. The Money and Pensions Service conducts an annual survey of people in financial difficulty. The results of their latest survey were published on 29 February 2024.
Given cost-of-living pressures, the Government remains committed to helping people that are in problem debt and vulnerable circumstances. For this reason, the Government offers a variety of debt advice services through the Money and Pensions Service to support individuals facing debt issues in England, including both national and community-based debt advice provision.
The Government has also put in place several measures to support the households who face the greatest hardships, including the Fair Repayment Rate for debt deductions in Universal Credit, which means approximately 1.2 million families will keep more of their award each month. The Household Support Fund has also been extended to 2025-26, which will help households facing financial crisis by supporting them with the cost of essentials such as food, energy and water.
We’ve also increased the National Living Wage to £12.21 per hour, an increase of 6.7% which is worth up to £1,4000 for a full-time worker.
With respect to business debt, this is principally a commercial matter. However, the Government is strongly supportive of the work of the British Business Bank as a critical tool to help ensure finance reaches those parts of the economy that otherwise may struggle to obtain the capital they need.
This is why at Autumn Budget, to help support the Government’s mission to kickstart economic growth, the Department for Business and Trade’s (DBT) settlement will allow them to invest over £1 billion across 2024–25 and 2025–26 for the BBB to enhance access to finance for small businesses, including over £250 million each year for small business loans programmes, including Start Up Loans and the Growth Guarantee Scheme.
Asked by: Peter Bedford (Conservative - Mid Leicestershire)
Question to the Department for Education:
To ask the Secretary of State for Education, what steps her Department is taking to improve financial education in schools.
Answered by Catherine McKinnell
Financial education currently forms a compulsory part of the National Curriculum for mathematics (at key stages 1 to 4) and citizenship (at key stages 3 and 4). The primary mathematics curriculum includes arithmetic knowledge that supports pupils’ ability to manage budgets and money, including, for example, calculations with money and percentages. In secondary mathematics, pupils are taught topics such as how to calculate compound interest, which is relevant for personal finance. In citizenship, pupils are taught the function and uses of money, how to budget and manage credit and debt, as well as concepts like insurance, savings and pensions.
High and rising school standards are at the heart of the government’s mission to break down barriers to opportunity and give every child the best start in life. The government‘s ambition is for a broad, rich and cutting-edge curriculum that equips children and young people with the essential knowledge and skills required to thrive as citizens, in work and throughout life. That is why the department has established an independent, expert-led Curriculum and Assessment Review, covering ages 5 to 18, chaired by Professor Becky Francis CBE. The review will seek to deliver an excellent foundation in the core subjects of reading, writing and mathematics, and a broader curriculum that readies young people for life and work, and reflects the diversities of our society. The review group ran a call for evidence, receiving over 7000 responses, and held events over the autumn term to gather the views of education professionals and other experts, parents, children and young people, and other stakeholders. The feedback received will help the review group to consider its next steps and recommendations. The review group will publish an interim report early in 2025 setting out their interim findings and confirming the key areas for further work and the final report with recommendations will be published in autumn 2025.
Asked by: Claire Hazelgrove (Labour - Filton and Bradley Stoke)
Question to the Department for Education:
To ask the Secretary of State for Education, what steps she is taking to ensure adequate levels of financial education in schools.
Answered by Catherine McKinnell
Financial education currently forms a compulsory part of the National Curriculum for mathematics (at key stages 1 to 4) and citizenship (at key stages 3 and 4). The primary mathematics curriculum includes arithmetic knowledge that supports pupils’ ability to manage budgets and money, including, for example, calculations with money and percentages. In secondary mathematics, pupils are taught topics such as how to calculate compound interest, which is relevant for personal finance. In citizenship, pupils are taught the function and uses of money, how to budget and manage credit and debt, as well as concepts like insurance, savings and pensions.
High and rising school standards are at the heart of the government’s mission to break down barriers to opportunity and give every child the best start in life. The government‘s ambition is for a broad, rich and cutting-edge curriculum that equips children and young people with the essential knowledge and skills required to thrive as citizens, in work and throughout life. This is why the government announced a Curriculum and Assessment Review on 19 July 2024, chaired by Professor Becky Francis CBE.
The Curriculum and Assessment Review group has launched a call for evidence. The review group has set out a number of key questions and themes where it would particularly welcome evidence and input from the sector and stakeholders to help direct the focus of the review and engagement with the sector over the autumn term.
The views of young people, parents, teachers, lecturers, leaders and other education staff and experts are pivotal to the recommendations, so that the panel can draw on the wealth of expertise and experience across the sector. Anyone can access and respond to the call for evidence.