Buy Now, Pay Later: Regulation

Debate between Lord Davies of Brixton and Baroness Vere of Norbiton
Wednesday 7th February 2024

(3 months, 2 weeks ago)

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Lord Davies of Brixton Portrait Lord Davies of Brixton
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To ask His Majesty’s Government, further to the publication of draft legislation on ‘Buy Now Pay Later’ arrangements in early 2023, when they intend to fulfil their 2021 commitment to regulate such arrangements.

Baroness Vere of Norbiton Portrait The Parliamentary Secretary, HM Treasury (Baroness Vere of Norbiton) (Con)
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My Lords, the Government’s consultation on proposed draft legislation to bring buy now, pay later into regulation closed in April 2023. In it, the Government reiterated their position that regulation must be proportionate so that borrowers are appropriately protected without unduly inhibiting access to these useful, interest-free products.

Lord Davies of Brixton Portrait Lord Davies of Brixton (Lab)
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My Lords, I have to say that I find the Answer from the Minister deeply disappointing. It is three years since the Woolard Review concluded that more needed to be done to ensure a healthy, sustainable market in unsecured credit, including, in particular, buy now, pay later. Since that time, the use of buy now, pay later has more than trebled, with the citizens advice bureau warning that consumers are left without vital consumer protection and reporting from its own experience a huge rise in the number of people needing services to deal with the problems created by this form of credit. Is that not just evidence that this is no longer a serious Government prepared to undertake tasks to protect ordinary rank and file people?

Baroness Vere of Norbiton Portrait Baroness Vere of Norbiton (Con)
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I disagree with the noble Lord. Obviously, we have received a large amount of stakeholder feedback to the consultation on the draft regulations. We are considering that feedback and it is very varied. In many cases, when provided affordably and used responsibly, interest-free credit can be incredibly helpful to people trying to balance certain payments from month to month. The average outstanding balance of buy now, pay later is £236. These are relatively small amounts of money that can be shifted from month to month, and it is proving incredibly useful to a number of people.

Climate Risk Models

Debate between Lord Davies of Brixton and Baroness Vere of Norbiton
Thursday 25th January 2024

(4 months ago)

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Baroness Vere of Norbiton Portrait Baroness Vere of Norbiton (Con)
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Goodness—that is a very wide-ranging question from my noble friend. I do not think it quite right to say that the Bank of England is committed to the scenarios it used back in 2021. For example, as my noble friend will have seen, two more scenarios were published fairly recently. The Government are not, for example, going to mandate a particular model or scenario for the pensions industry or indeed any part of it, because there are different scenarios out there. They are not forecasts but scenarios, and different groups will feel that different scenarios will come into play. Most pension schemes now have to follow the TCFD requirements, which came into force substantially in October 2022. That will really focus the pension schemes on their climate risks but also the climate opportunities.

Lord Davies of Brixton Portrait Lord Davies of Brixton (Lab)
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My Lords, I need to mention my entry in the register of interests. Following the question from the noble Baroness, Lady Altmann, I urge the Minister to study the report from the Institute and Faculty of Actuaries, whose central conclusion was that commonly used climate models in financial services are underestimating risk. In particular, it says that the choice of assumptions is not widely understood and they pay insufficient attention to the possibility of overoptimistic scenarios for the future of climate change.

Baroness Vere of Norbiton Portrait Baroness Vere of Norbiton (Con)
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Of course, my officials and those who work for the independent regulators will look at all evidence, and one often finds that it is very conflicting. The challenges of the models used have been clearly established. There is a higher number of independent transmission channels than previously thought and a lack of historical data; and, of course, one has to anticipate a firm’s reaction to climate change over the longer term. All those things are being considered. This is an evolving science, as I think all noble Lords will agree. However, I go back to the NGFS, of which the Bank of England was a founding member: it consists of 134 central bankers and supervisors from around the world, who are all working together to improve the available scenarios.

HMRC: Tax Returns

Debate between Lord Davies of Brixton and Baroness Vere of Norbiton
Wednesday 10th January 2024

(4 months, 2 weeks ago)

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Baroness Vere of Norbiton Portrait Baroness Vere of Norbiton (Con)
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HMRC is well aware and has forecasts for how many people will be filling in tax returns or required to pay tax. It is prepared and has the workforce ready to do so. But I would ask the noble Lord how many more HMRC advisers it will take to collect the tax for the £28 billion a year that Labour intends to spend.

Lord Davies of Brixton Portrait Lord Davies of Brixton (Lab)
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My Lords, is HMRC gearing up for the potential problems that will arise because of fiscal drag, as has been mentioned, and the triple lock on state pension benefits and its impact? Income tax is not deducted from state pension benefits directly and has to be paid separately, and many people on state pensions have low incomes and will receive demands to pay their unpaid tax the following year. Is the Minister on board with that, and are we going take action to make sure that people on low incomes do not receive large tax demands to be paid from their low state pensions?

Baroness Vere of Norbiton Portrait Baroness Vere of Norbiton (Con)
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As I have said previously, HMRC is prepared for the type of people that may or may not be in the tax system in the future. At the heart of all this is communication. HMRC sends out tens of millions of messages to people each year. It has a social media campaign and also campaigns in the press to ensure that everybody understands how they can pay the right amount of tax at the right time.

Industrial Action on the Railways

Debate between Lord Davies of Brixton and Baroness Vere of Norbiton
Monday 20th June 2022

(1 year, 11 months ago)

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Baroness Vere of Norbiton Portrait Baroness Vere of Norbiton (Con)
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The noble Lord, Lord Berkeley, asked: what next? The most important thing, to my mind, is for the unions to come back to the table—to sit down with the train operating companies and Network Rail to reach a resolution.

Lord Davies of Brixton Portrait Lord Davies of Brixton (Lab)
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My Lords, I the interesting part of the Statement was, as someone said, its tone, which I think was accurately reflected in the Minister’s delivery to the House. There is clearly no intention from this Government to achieve a settlement. They have convinced themselves that it is in their interest to wind up the issue, reflected in the ministerial Statement in the use of terms such as “union barons”. This strike was because of the frustration among the membership of the unions involved; a massive majority of the entire unionised workforce was in favour of taking action. This is not down to the leadership; it is down to the members and their dissatisfaction. When the Minister comes and reads us a Statement that is more like a Daily Mail op-ed on a bad day, it demonstrates the Government’s total lack of interest in achieving any settlement.

Lord Davies of Brixton Portrait Lord Davies of Brixton (Lab)
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Does the Minister understand that part of the reason for this discontent is the Government’s intention to wind back on the pension schemes that cover the railway staff? The Government make policies to make people’s pensions worse; that is part of the problem. Does she understand that?

Baroness Vere of Norbiton Portrait Baroness Vere of Norbiton (Con)
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A review by the independent regulator for pensions recognised the pension scheme is underfunded. There clearly has to be some sort of remedy to address that. In most train-operating companies, workers can retire at 62—several years earlier than most people are able to retire—and, for those who worked for Network Rail after 2012, at 65. There is lots of work to do on pensions, but the noble Lord spoke about the tone and it is quite interesting to see how this has developed. I do not know if the noble Lord was able to watch Mr Lynch on the television this afternoon and take note of his tone.

P&O Ferries

Debate between Lord Davies of Brixton and Baroness Vere of Norbiton
Tuesday 22nd March 2022

(2 years, 2 months ago)

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Baroness Vere of Norbiton Portrait Baroness Vere of Norbiton (Con)
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I do not have any information on the employment status of workers in freeports but, if I can find out any information, I will certainly write to the noble Baroness.

Lord Davies of Brixton Portrait Lord Davies of Brixton (Lab)
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My Lords, I want to pursue the issue of pensions, which was raised by the noble Lord, Lord Fox, and highlight the question to the Minister: to what extent are the pension arrangements that apply to these workers under threat? Is the company doing this because it is encountering commercial difficulties? Is the covenant to which most company pension schemes rely therefore under any sort of threat? The fact that the pension arrangements are continuing is not sufficient comfort.

It is also important to understand that two pension arrangements are involved here: the P&O scheme and whatever other arrangements that provide pensions for the unfortunate workers who have lost their jobs, and the Merchant Navy Ratings Pension Fund, which is a separate arrangement in which I assume many of those who have been fired have deferred benefits. Because of the way that scheme has operated in the past, P&O potentially owes it a lot of money. There was an implication that pensions are not a problem but the issue bears further investigation and reassurance, both to the House and to the workers involved.

Baroness Vere of Norbiton Portrait Baroness Vere of Norbiton (Con)
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I would be pleased to take that issue away and ensure that we have looked into it in great detail. My understanding is that the employees’ pensions are protected. We are aware of the pension deficit in the Merchant Navy Ratings Pension Fund; P&O Ferries will need to pay what it owes.

Extraordinary Funding and Financing Agreement for Transport for London

Debate between Lord Davies of Brixton and Baroness Vere of Norbiton
Thursday 9th December 2021

(2 years, 5 months ago)

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Baroness Vere of Norbiton Portrait Baroness Vere of Norbiton (Con)
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I will come on to longer-term funding, if the noble Lord will give me time—although I might now run out of time. I will skip on a weeny bit.

We have required the mayor to make much-needed efficiencies and savings in the TfL cost base. It is funny, when you turn the spotlight on, how much money you can find in there: £720 million in ongoing savings. That is quite a lot of money—I am not sure we would have found that had we not gone through the pandemic. Obviously, work continues. We are reviewing the TfL capital programme to draw out the efficiencies and we have asked the mayor to look at new income sources to raise between £0.5 billion and £1 billion and to report regularly on the financial position.

The noble Lord, Lord Adonis, will know, if he looks back through the deal letters, that it is the case that the Government have committed to a review of the future funding of TfL, and that work is ongoing. We will not suddenly have a long-term deal for the next five years from Saturday. I think all noble Lords recognise that, in the midst of a pandemic, that would not be wise. We have also required TfL to initiate other necessary reforms, such as to the TfL pension scheme, so that it can transform into a modern and efficient transport operator, fit for the future of London.

I turn specifically to the pensions issue. As the noble Lord, Lord Davies, said, there is always a pensions issue. TfL’s own independent panel recognised that TfL’s pension scheme was outdated and in need of reform. It is not the Government saying that but its own independent panel. So we agreed with the mayor in the funding settlement that a process would be put in place in order to modernise and reform the pensions, and we will have a report from Sir Brendan Barber by 31 March next year.

On capital, the Government are contributing capital as well as income. There has been the £1 billion of capital a year, which I have mentioned. On top of that we have had to provide further funding for Crossrail—and I am very excited that it is opening soon. There has been funding for Hammersmith Bridge. However, TfL has made an announcement via its financial committee—and this is where we start getting into the PR and spin of TfL, or the “mayor’s world”. This level of funding means that TfL now has to implement something called its “managed decline scenario” for capital investment. Let me be absolutely clear that that rather unambitious phrase comes from the Mayor of London playbook. It is not what we want or expect to see for London, and we will continue to work with TfL to fully understand the detail of the future capital programme.

On new income, noble Lords may be asking: what is holding up the current deal? The plan is. Before the pandemic, 70% of TfL’s revenue came from fares. TfL’s finances need to be more resilient, and again this was noted again by TfL’s own independent panel. Work therefore had to commence to find new income sources, some of which had been identified by the independent panel, so a fair amount of work had been done. The mayor was given a deadline of mid-November, so that we would have the plan in good time before the deal ends. He failed to deliver the requisite document. He was then given an extension until 8 December—yesterday. We finally received a submission from the mayor yesterday at 8 pm. We are urgently considering what he sent us late last night, but we are very clear that it is for the mayor to decide new income approaches.

We know that omicron may provide an additional level of uncertainty. We know that TfL had started to recover and that things were looking better for London, but we are not sure where things will go over the coming days and weeks. The Government remain on-risk for revenue under the current funding settlement and use the top-up mechanism to protect TfL from exposure to unexpected changes in passenger demand.

On the point about Nexus made by the noble Lord, Lord Shipley, all that I will say is that I met Nexus earlier this week—so everything he said, I already knew, and I have heard its pleas.

In conclusion, the Government will continue to support TfL in a way that is fair to the UK taxpayer and ensures continued services on London’s transport system. In return, the Mayor of London must step up and lead from the front by making potentially difficult decisions in difficult times. At the moment, we are seeing a PR blitz of overexaggerated claims of doom, which he blames on others. We as central government have not been able to swerve difficult decisions, and neither should he. We look forward to working with the mayor in the coming hours, days, weeks and months to ensure that the capital has the modern, efficient and sustainable transport system that it needs and deserves.

Lord Davies of Brixton Portrait Lord Davies of Brixton (Lab)
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I am afraid that my actual Question in the way I phrased it in my introduction was not answered. Effectively, reading between the lines, the Minister is saying that it is totally the mayor’s fault and the Government are not prepared to do anything to avoid this situation arising in future.

Baroness Vere of Norbiton Portrait Baroness Vere of Norbiton (Con)
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I am over time, but I will respond. I am saying that there is definitely fault on the mayor’s side, but I am saying that we have had to be very flexible in this process all the way through. I have been deeply involved in it for the past 18 months or whatever. We have always had to be very flexible, because things change. That has always been our goal. However, at the core of all that is the direction of travel of making TfL financially sustainable and understanding what it would look like by April 2023 and, thereafter, what a longer-term future for TfL looks like. That is our prize and what we have our eyes on. We would like the mayor to join us on that journey. He is not quite there yet, but I am forever hopeful.

Insulate Britain

Debate between Lord Davies of Brixton and Baroness Vere of Norbiton
Tuesday 26th October 2021

(2 years, 7 months ago)

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Baroness Vere of Norbiton Portrait Baroness Vere of Norbiton (Con)
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I cannot agree more with my noble friend.

Lord Davies of Brixton Portrait Lord Davies of Brixton (Lab)
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My Lords, there is no doubt that the activities of the Insulate Britain campaign have caused problems and disruption for many people. I guess that was the point. Does the Minister agree that these problems will come to be seen as trivial when compared to the disruption we shall all face to our lives if we fail to address climate change?

Baroness Vere of Norbiton Portrait Baroness Vere of Norbiton (Con)
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This Government have one of the strongest records in the world in tackling climate change, and I fear that using the word “trivial” in relation to this disruption is a poor choice of word. Insulate Britain has said that days of disruption are necessary to force the Government to act. This is just a small, rag-tag group of people who will not force the Government to do anything.

North of England: Rapid Mass Transport System

Debate between Lord Davies of Brixton and Baroness Vere of Norbiton
Monday 28th June 2021

(2 years, 11 months ago)

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Baroness Vere of Norbiton Portrait Baroness Vere of Norbiton (Con)
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I am sure all noble Lords will agree that, just because something is old, that does not mean it is useless. We must look at all technologies, and that is precisely what we do. My noble friend makes an important point in saying that systems around the world use this, but just one operational high-speed system does so at the moment: the Shanghai City maglev. There are many others operating at lower speeds—that is, less than 100 mph—and obviously, there is one in construction in Japan, but it is coming up against some cost pressures.

Lord Davies of Brixton Portrait Lord Davies of Brixton (Lab)
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Will the Minister give a clear commitment on behalf of the Government to Northern Powerhouse Rail as part of the integrated rail plan?

Baroness Vere of Norbiton Portrait Baroness Vere of Norbiton (Con)
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I can reassure the noble Lord that the Government are considering all options as part of the integrated rail plan and of course, Northern Powerhouse Rail is a very important part of that. Once the IRP is published, Transport for the North will submit a business case consistent with policy and the funding framework.

Transport for London: Financial Settlement

Debate between Lord Davies of Brixton and Baroness Vere of Norbiton
Tuesday 2nd March 2021

(3 years, 2 months ago)

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Baroness Vere of Norbiton Portrait Baroness Vere of Norbiton (Con)
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My noble friend raises a very interesting period of time that unfortunately I do not remember, but it is the case that the Mayor of London has some very interesting ideas as to how he wants vehicle excise duty to be spent. It is one of the proposals in the financial sustainability plan he has prepared, which I have to say does seem to have been drafted with a money-no-object mindset. Noble Lords will know that vehicle excise duty is used for the strategic roads network, which is the motorways and the major A roads, so unless we are going to stop Londoners from using our motorways and buying products that have been brought into London by HGVs travelling on them, I see absolutely no rationale for devolving VED.

Lord Davies of Brixton Portrait Lord Davies of Brixton (Lab) [V]
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My Lords, I read in the Financial Times today that the ONS says that as an average Londoner I receive about £4,000 less in public spending than I pay in tax. As a proponent of progressive taxation, I am happy to pay, but the fable of the goose that lays the golden egg comes to mind. Will the Minister agree that the economic prosperity of the whole country depends on a prosperous London, and that that requires, among other things, a well-connected London with excellent public transport? Is it not remarkable that London is the only major city in the world where there is no contribution from general taxation, from which the whole country would benefit?

Baroness Vere of Norbiton Portrait Baroness Vere of Norbiton (Con)
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The noble Lord is right that London will play a very important part in the economic future of our nation; in 2018 it made 23% of UK GDP. But while much of the funding for Transport for London comes from passenger revenues, there are other routes by which it gets money; for example, business rates retention, which is a retention which would otherwise have gone to Her Majesty’s Government. So one might assume that there is a broad breadth of sources of funding for TfL, but I agree—the Government want to support London’s recovery and we want to keep the capital moving.

HS2: Phase 2B

Debate between Lord Davies of Brixton and Baroness Vere of Norbiton
Monday 8th February 2021

(3 years, 3 months ago)

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Baroness Vere of Norbiton Portrait Baroness Vere of Norbiton (Con)
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My Lords, this Government completely agree with the noble Lord, and that is why transport infrastructure and building back better is our priority for Britain over the coming years.

Lord Davies of Brixton Portrait Lord Davies of Brixton (Lab) [V]
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My Lords, I join the general trend of support and welcome for the Government’s continued commitment to the entire HS2 project. Could the Minister take the opportunity to reinforce the point that this is not a zero-sum game, with one part of the country gaining at the expense of another? We all gain from the introduction of the project, not least those of us who live in London; we gain because the north gains. Would the Minister confirm that?

Baroness Vere of Norbiton Portrait Baroness Vere of Norbiton (Con)
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The noble Lord is completely right—this project is about connectivity and capacity, and the connectivity strand is about connectivity throughout the country. HS2 provides a wonderful opportunity to create a high-speed rail spine down the centre of the country which will benefit both the cities it connects and the local communities beyond them.

Rail Fares: Flexi-season Tickets

Debate between Lord Davies of Brixton and Baroness Vere of Norbiton
Thursday 4th February 2021

(3 years, 3 months ago)

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Baroness Vere of Norbiton Portrait Baroness Vere of Norbiton (Con)
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The Government proactively asked the train operating companies to come up with ideas for fares and other innovative passenger-led solutions as we come out of Covid. At the moment, we are building the evidence base to support the proposals—for example, on flexible season tickets—and assessing the potential commercial impact of these new products. How they are to be implemented will be published in due course.

Lord Davies of Brixton Portrait Lord Davies of Brixton (Lab) [V]
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My Lords, does the Minister agree that even before the pandemic, we were seeing big changes in working patterns? A growing proportion of the working population no longer expect to go to the workplace five days a week. Does she accept that the Government need to show more leadership here so that we can move on from ticketing systems that reflect the work patterns of the 1950s?

Baroness Vere of Norbiton Portrait Baroness Vere of Norbiton (Con)
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My Lords, I believe the Government are showing leadership on this issue, which is precisely why we proactively approached the train operating companies and made it absolutely clear to them that, going forward, we are going to see a very different type of train system—one that is really focused on the passenger and that provides punctual and reliable train services, but at a price that is fair to the taxpayer and the passenger.