Asked by: Karen Bradley (Conservative - Staffordshire Moorlands)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, with reference to the report entitled Coronavirus Survey Report, published by the APPG on Challenger Banks and Building Societies, if he will make an assessment of the potential merits of the recommendations in that report; and if he will make a statement.
Answered by John Glen - Paymaster General and Minister for the Cabinet Office
The Government recognises the crucial role of challenger banks and building societies in providing customers with more choice on the high street and is committed to maintaining competition in financial services.
HM Treasury officials have consistently engaged with regulators and representatives from the building society and challenger bank sectors on issues related to the COVID-19 pandemic. I have regularly engaged with representatives from the building society sector through the Consumer Finance Forum and Financial Inclusion Policy Forum, which are bringing financial services and consumer group representatives together to discuss how to best support people through this period.
The Government recognises that the COVID-19 crisis has been difficult for many organisations, including challenger banks and building societies.
That is why in April 2020, I wrote to thank frontline staff for their efforts to continue to provide essential services to their members.
We have considered the Coronavirus Survey Report produced by the APPG on Challenger Banks and Building Societies and thank the APPG for taking the time to produce the report. The Government remains committed to ensuring that challenger institutions have an appropriate environment to grow and offer more robust competition to the established players. The government will continue working with the regulators to ensure the UK has a highly competitive banking sector, working in the interests of all consumers and businesses right across the country. We will continue to work closely with challenger institutions and building societies as we consider the next steps in our economic recovery
Asked by: Grahame Morris (Labour - Easington)
Question to the HM Treasury:
To ask Mr Chancellor of the Exchequer, what steps he is taking to support greater diversification in forms of lending in the UK banking sector.
Answered by Harriett Baldwin
The Government is committed to competition and diversity in financial services and would like to see firms with a range of business compete and succeed.
The Government has supported both the Peer-to-Peer (P2P) and Crowdfunding sectors, which provide alternative sources of finance for both businesses and individuals, by introducing a proportionate regulatory regime as well as other policies, such as the inclusion of P2P loans in ISAs.
The Small Business, Enterprise and Employment Act 2015 contained two policies to support Small and Medium-sized Enterprises (SMEs) in accessing finance. The first requires the major banks share information on their SME customers with other lenders through designated Credit Reference Agencies. This will improve the ability of challenger banks and alternative finance providers to conduct accurate risk assessments and level the playing field between providers. The second requires major banks to refer SMEs they reject for finance, with the SMEs permission, to ‘finance platforms’ that can match SMEs with alternative finance providers.
The Government has established the British Business Bank to support the development of diverse finance markets for smaller businesses in the UK. The British Business Bank’s £950m Business Finance Partnership aims to diversify the sources of finance available to smaller and mid-sized firms and reduce their dependence on bank finance. £863m has been allocated to funds supporting mid-sized firms, with £333m already invested alongside private money, generating over £1bn of lending to businesses.
The Government has also continued to support the building societies sector through a number of measures including: carving out building societies from the Independent Commission on Banking ring-fencing regulations, extending ISA eligibility to Core Capital Deferred Shares, and applying a £25m sector-specific allowance to carried-forward losses for Corporation Tax. More recently, the Government listened to the concerns of smaller organisations, including building societies, when taking steps to remove the reverse burden of proof from the senior managers regime.
The Government has also taken significant steps to support the credit union sector by investing £38m in the sector through the Department of Work and Pensions’ (DWP) Credit Union Expansion Project, changing legislation to allow credit unions to admit corporate members, providing £500,000 to help armed forces personnel access credit union services and launching a Call for Evidence which allowed all credit unions, regardless of size or influence, the opportunity to contribute their vision for the future of the sector to the wider debate.
Asked by: Grahame Morris (Labour - Easington)
Question to the HM Treasury:
To ask Mr Chancellor of the Exchequer, what assessment he has made of the role of stakeholder banks in supporting regional growth.
Answered by Harriett Baldwin
Each quarter the British Bankers Association and the Council for Mortgage Lenders publish data showing the outstanding stock of lending in each postcode. This allows challenger banks, smaller building societies, credit unions and community development finance institutions (CDFIs) to find areas where there is a lack of lending so they can offer finance to those customers and support growth in that regional area.
The Government recognises the important role that stakeholder banks play in supporting their communities. We more commonly refer to stakeholder banks as credit unions, building societies and mutually-owned savings banks.
Asked by: Gareth Thomas (Labour (Co-op) - Harrow West)
Question to the HM Treasury:
To ask Mr Chancellor of the Exchequer, if he will require the Prudential Regulation Authority to conduct an analysis of recently released personal and business lending data by postcode to examine (a) levels of disparity in lending and (b) progress in achieving financial inclusion; and if he will make a statement.
Answered by Andrea Leadsom - Parliamentary Under-Secretary (Department of Health and Social Care)
In July 2013 the Government announced that it had reached an agreement with the major UK banks to publish lending data across 10,000 individual postcodes.
The first dataset was published in December 2013 and shows the outstanding stock of lending that has been committed to customers across three categories; loans and overdrafts to SMEs, mortgages and unsecured personal loans (excluding credit cards).
The data will allow challenger banks, smaller building societies, credit unions and community development finance institutions (CDFIs) to find areas where there is a lack of lending so they can offer finance to those customers who are crying out for support to help their business grow.
Asked by: Gareth Thomas (Labour (Co-op) - Harrow West)
Question to the HM Treasury:
To ask Mr Chancellor of the Exchequer, if he will require banks and their financial institutions to release further personal and business lending data by postcode; and if he will make a statement.
Answered by Andrea Leadsom - Parliamentary Under-Secretary (Department of Health and Social Care)
In July 2013 the Government announced that it had reached an agreement with the major UK banks to publish lending data across 10,000 individual postcodes.
The first dataset was published in December 2013 and shows the outstanding stock of lending that has been committed to customers across three categories; loans and overdrafts to SMEs, mortgages and unsecured personal loans (excluding credit cards).
The data will allow challenger banks, smaller building societies, credit unions and community development finance institutions (CDFIs) to find areas where there is a lack of lending so they can offer finance to those customers who are crying out for support to help their business grow.
Asked by: Gareth Thomas (Labour (Co-op) - Harrow West)
Question to the HM Treasury:
To ask Mr Chancellor of the Exchequer, what representations he has received about the publication of personal and business lending data by postcode; and if he will make a statement.
Answered by Andrea Leadsom - Parliamentary Under-Secretary (Department of Health and Social Care)
In July 2013 the Government announced that it had reached an agreement with the major UK banks to publish lending data across 10,000 individual postcodes.
The first dataset was published in December 2013 and shows the outstanding stock of lending that has been committed to customers across three categories; loans and overdrafts to SMEs, mortgages and unsecured personal loans (excluding credit cards).
The data will allow challenger banks, smaller building societies, credit unions and community development finance institutions (CDFIs) to find areas where there is a lack of lending so they can offer finance to those customers who are crying out for support to help their business grow.
Asked by: Gareth Thomas (Labour (Co-op) - Harrow West)
Question to the HM Treasury:
To ask Mr Chancellor of the Exchequer, if he will require banks to publish data on the number of new small business accounts in 2011-12, 2012-13 and 2013-14; and if he will make a statement.
Answered by Andrea Leadsom - Parliamentary Under-Secretary (Department of Health and Social Care)
In July 2013 the Government announced that it had reached an agreement with the major UK banks to publish lending data across 10,000 individual postcodes.
The first dataset was published in December 2013 and shows the outstanding stock of lending that has been committed to customers across three categories; loans and overdrafts to SMEs, mortgages and unsecured personal loans (excluding credit cards).
The data will allow challenger banks, smaller building societies, credit unions and community development finance institutions (CDFIs) to find areas where there is a lack of lending so they can offer finance to those customers who are crying out for support to help their business grow.