Asked by: Duncan Baker (Conservative - North Norfolk)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, if he will make an assessment of the potential impact of trends in the number of ATM closures on (a) access to and (b) the depositing of cash.
Answered by Bim Afolami - Economic Secretary (HM Treasury)
Currently, LINK (the scheme that runs the UK's largest ATM network) has commitments to protect the broad geographic spread of free-to-use ATMs and is held to account against these commitments by the Payment Systems Regulator. LINK has committed to protect free-to-use ATMs more than one kilometre away from the next nearest free ATM or Post Office, and free access to cash on high streets (where there is a cluster of five or more retailers) that do not have a free-to-use ATM or a Post Office counter within one kilometre.
LINK publishes monthly statistics on its ATM network on its website https://www.link.co.uk/initiatives/financial-inclusion-monthly-report/#:~:text=LINK%20has%20also%20committed%20to,commitment%20can%20be%20found%20here.
However, in recognition that cash continues to be used by millions of people across the UK, including those who may be in vulnerable groups, the government legislated through the Financial Services and Markets Act 2023 to establish a new legislative framework to protect access to cash. This establishes the Financial Conduct Authority (FCA) as the lead regulator for access to cash and provides it with responsibility and powers to seek to ensure reasonable provision of cash withdrawal and deposit facilities. The FCA recently held a consultation on its proposed regulatory approach: FCA Access to Cash Consultation. The FCA is currently considering feedback and expects to publish its final rules in the third quarter of this year.
Asked by: Justin Madders (Labour - Ellesmere Port and Neston)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what assessment he has made of the implications for his policies of the reduction in numbers of credit unions.
Answered by Bim Afolami - Economic Secretary (HM Treasury)
The Government is a strong supporter of credit unions, recognising the vital role they play in local communities throughout the country.
Through the Financial Services and Markets Act 2023, the Government allowed credit unions in Great Britain to offer a wider range of products and services, diversifying their income streams and enhancing their role in financial inclusion.
According to the latest data from the PRA, credit union membership in Great Britain has increased for the fifth consecutive quarter, reaching a record level of over 1.5 million. Their total assets have also increased to over £2.67 billion.
The Government continues to engage with the credit union sector to assess how they can best be supported moving forward.
Asked by: Lord Jackson of Peterborough (Conservative - Life peer)
Question to the HM Treasury:
To ask His Majesty's Government what discussions they have with the Competition and Markets Authority on the recent increases in car insurance premiums and access to car insurance for motorists on lower incomes.
Answered by Baroness Vere of Norbiton - Parliamentary Secretary (HM Treasury)
Treasury Ministers and officials have regular meetings with a wide variety of organisations in the public and private sectors, including the financial services regulators, on an ongoing basis.
The Government does not prescribe the terms, conditions or price that insurance companies set when offering insurance. Insurers make commercial decisions about the pricing of insurance following their assessment of the relevant risks. The Government does not intervene in these decisions as this could damage competition in the market.
The Financial Conduct Authority (FCA) is the independent regulator responsible for supervising the insurance industry. Alongside the Competition and Markets Authority, the FCA can enforce against breaches of competition law for the provision of financial services.
The FCA also requires firms to ensure their products offer fair value (i.e. if the price a consumer pays for a product or service is reasonable compared to the overall benefits they can expect to receive). The FCA has been clear that it will be monitoring firms to ensure they are providing products that are fair value, and, where necessary, it will take action.
Asked by: Thérèse Coffey (Conservative - Suffolk Coastal)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what recent assessment his Department has made of the adequacy of the availability of cash withdrawal facilities in Suffolk.
Answered by Bim Afolami - Economic Secretary (HM Treasury)
The government recognises that cash continues to be used by millions of people across the UK, including by those in vulnerable groups.
The government legislated through the Financial Services and Markets Act 2023 to establish a new legislative framework to protect access to cash. This establishes the Financial Conduct Authority (FCA) as the lead regulator for access to cash and provides it with responsibility and powers to seek to ensure reasonable provision of cash withdrawal and deposit facilities, on both a national and local basis. The FCA expects to finalise its regulatory rules in the third quarter of this year.
The most recent analysis undertaken by the FCA on cash access coverage across the UK found that in Q1 2023, over 99% of people in urban areas are within 1 mile of a cash access point offering withdrawals, and over 98% of people in rural areas are within 3 miles of a cash access point offering withdrawals. Further details of this analysis, including a breakdown of cash access coverage by Local Authority District is available on the FCA website: Access to cash coverage in the UK 2023 Q1
Asked by: Chris Law (Scottish National Party - Dundee West)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what criteria the Financial Conduct Authority uses to decide what markets to (a) monitor and (b) intervene in.
Answered by Bim Afolami - Economic Secretary (HM Treasury)
The Financial Services and Markets Act 2000 establishes the framework for financial services regulation. It provides for the Treasury and Parliament, through legislation, to determine which activities, products and markets are regulated and fall within the remit of the Financial Conduct Authority (FCA). The Financial Services and Markets Act 2000 also gives the FCA a set of statutory objectives and the appropriate regulatory tools and powers to pursue those objectives.
The question of how the FCA monitors and intervenes in the markets it regulates, in order to fulfil its statutory functions, is a matter for the FCA, which is operationally independent from Government. The FCA will respond to the Honourable Member by letter on this matter, and a copy of the letter will be placed in the Library of the House of Commons.
Asked by: Matt Hancock (Independent - West Suffolk)
Question to the Department for Business and Trade:
To ask the Secretary of State for Business and Trade, how many industry secondees worked in what departments of the Competition and Markets Authority in financial year 2022/23.
Answered by Kevin Hollinrake - Minister of State (Department for Business and Trade)
In the financial year 2022 to 2023 there were a total of 23 industry secondees working at the Competition and Markets Authority. One was working in Enforcement, nine in the Office of the Chief Economic Adviser and thirteen in Legal Services.
Asked by: Baroness Bennett of Manor Castle (Green Party - Life peer)
Question to the HM Treasury:
To ask His Majesty's Government what assessment they have made of the systemic impact from the Financial Conduct Authority’s crackdown on wealth management services under the Consumer Duty; what estimate they have made of the likely total compensation that will need to be paid by wealth management firms; and what other areas of the financial sector they expect to be impacted by the Consumer Duty.
Answered by Baroness Vere of Norbiton - Parliamentary Secretary (HM Treasury)
Requirements regarding financial adviser ongoing services started in 2013 following the Retail Distribution Review, with additional requirements resulting from the Markets in Financial Instruments Directive in 2018.
In February, the FCA wrote to a number of financial adviser firms requesting information about their delivery of ongoing services, for which their clients continue to be charged. The FCA is collecting this information to assess what, if any, further regulatory work it may undertake in this area.
The FCA’s new Consumer Duty seeks to set a higher and clearer standard of care that firms owe their customers. The FCA is an independent non-governmental body and is responsible for determining the application of the relevant rules. The Government will continue to monitor the effectiveness of Consumer Duty rules, as they bed in and as industry becomes more familiar with them.
Asked by: Lord Sharkey (Liberal Democrat - Life peer)
Question to the HM Treasury:
To ask His Majesty's Government what, if any, statutory powers the Bank of England has to issue binding directions to (1) the Prudential Regulation Authority, (2) the Financial Conduct Authority, and (3) the Payment Systems Regulator; and on how many occasions in each year since 2007 they have been exercised.
Answered by Baroness Vere of Norbiton - Parliamentary Secretary (HM Treasury)
The Treasury has statutory powers to issue directions to the Bank of England, which can only be used under specific conditions or circumstances. None of the powers outlined below have ever been used.
The Bank of England also has powers to direct the Prudential Regulation Authority (PRA), Financial Conduct Authority (FCA) and Payment Systems Regulator (PSR).
Asked by: Lord Sharkey (Liberal Democrat - Life peer)
Question to the HM Treasury:
To ask His Majesty's Government what, if any, statutory powers they have to issue binding directions to the Bank of England; and on how many occasions in each year since 2007 they have been exercised.
Answered by Baroness Vere of Norbiton - Parliamentary Secretary (HM Treasury)
The Treasury has statutory powers to issue directions to the Bank of England, which can only be used under specific conditions or circumstances. None of the powers outlined below have ever been used.
The Bank of England also has powers to direct the Prudential Regulation Authority (PRA), Financial Conduct Authority (FCA) and Payment Systems Regulator (PSR).
Asked by: Gregory Campbell (Democratic Unionist Party - East Londonderry)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, whether he plans to publish a report on the impact of Consumer Duty on consumer contact with financial services firms in the 12 months since it's establishment.
Answered by Bim Afolami - Economic Secretary (HM Treasury)
The Government has no plans to publish a report on the impact of the Consumer Duty.
The Consumer Duty was introduced by the Financial Conduct Authority (FCA), which is operationally independent from Government and is directly accountable to Parliament for how it carries out its functions. The FCA has committed to monitoring the outcomes experienced by different consumer groups, including those in vulnerable circumstances, to check they are not being disadvantaged as a result of the Duty. It also publishes information about the implementation of the Consumer Duty by firms, including examples of good practice and areas for improvement, on its website: https://www.fca.org.uk/firms/consumer-duty
The Financial Services and Markets Act 2023 introduced a new requirement on the financial services regulators to keep their rules under review, and to publish a statement of policy for how they conduct rule reviews. The FCA’s rule review framework can be found at: https://www.fca.org.uk/publications/corporate-documents/our-rule-review-framework.