Asked by: Lord McNicol of West Kilbride (Labour - Life peer)
Question to the HM Treasury:
To ask His Majesty's Government what discussions they have had with the Scottish Government since it projected a potential £1 billion resource spending gap in 2024–25, rising to £1.9 billion by 2027–28.
Answered by Baroness Vere of Norbiton - Parliamentary Secretary (HM Treasury)
The Chief Secretary to the Treasury engages regularly with the Deputy First Minister and Cabinet Secretary for Finance to discuss matters relating to Scottish Government funding. They met most recently in Edinburgh on 25 January at the Finance: Interministerial Standing Committee.
The UK Government is providing the Scottish Government with a record block grant settlement of £41 billion per year over this Spending Review. On top of this, the Scottish Government is receiving over £2 billion in additional funding through the Barnett formula over 2023-24 and 2024-25 as a result of decisions taken at fiscal events.
In August 2023, the UK and Scottish Government reached agreement on an updated Fiscal Framework for the Scottish Government. This included provision to maintain the Scottish Government’s preferred block grant adjustment methodology to account for tax and welfare devolution, remove drawdown limits from the Scotland Reserve and increase the Scottish Government’s borrowing and reserve limits in line with inflation each year.
Asked by: Lord McNicol of West Kilbride (Labour - Life peer)
Question to the HM Treasury:
To ask His Majesty's Government whether they consider that the Financial Ombudsman Service and Financial Services Compensation Scheme protections enacted under the Financial Services and Markets Act 2000, which underpin retail investor confidence in the UK financial industry, remain "an expression of UK national policy".
Answered by Baroness Vere of Norbiton - Parliamentary Secretary (HM Treasury)
The government believes that it is important that consumers of financial services have appropriate routes to seek redress without having to go through the court system. The Financial Services and Markets Act 2000 established both the Financial Ombudsman Service (FOS) and the Financial Services Compensation Scheme (FSCS) for this purpose.
The FOS provides consumers and small businesses with a free, independent service that enables the proportionate, prompt and informal resolution of disputes with financial services firms. It is designed as an alternative to resolution of cases through the courts, which can be expensive for both firms and consumers and delay redress.
The courts also continue to play an important role alongside the FOS in ensuring consumers have access to redress and in some cases may be a more appropriate route to ensuring effective resolution of disputes.
The FSCS is the UK’s compensation scheme of last resort and pays compensation to consumers when authorised financial services firms fail. However, the FSCS does not cover losses that arise purely from investment performance. The UK does not operate a zero-failure regime in financial services and individuals have responsibility for choosing investments that are suitable for their risk profile.
Asked by: Lord McNicol of West Kilbride (Labour - Life peer)
Question to the HM Treasury:
To ask Her Majesty's Government whether the National Insurance Fund is classified as a liability or a contingent liability on their balance sheet.
Answered by Baroness Vere of Norbiton - Parliamentary Secretary (HM Treasury)
It is neither a liability nor a contingent liability but is recorded as an asset on the government balance sheet.
Asked by: Lord McNicol of West Kilbride (Labour - Life peer)
Question to the HM Treasury:
To ask Her Majesty's Government what assessment the Financial Conduct Authority has made for the levels of over-indebtedness in the UK; and what independent evidential basis informs that assessment.
Answered by Baroness Penn - Minister on Leave (Parliamentary Under Secretary of State)
The Financial Conduct Authority (FCA) is an independent public body responsible for regulating and supervising the financial services industry. As such, the Government is unable to comment on the FCA’s assessment of their consumer research work and the evidence base that impacts their assessment. The Government has therefore passed this enquiry on to them directly and they will respond to the noble Lord by letter.
Asked by: Lord McNicol of West Kilbride (Labour - Life peer)
Question to the HM Treasury:
To ask Her Majesty's Government what assessment the Financial Conduct Authority has made of the reasons for the high levels of personal debt in the UK; and what independent evidential basis informs that assessment.
Answered by Baroness Penn - Minister on Leave (Parliamentary Under Secretary of State)
The Financial Conduct Authority (FCA) is an independent public body responsible for regulating and supervising the financial services industry. As such, the Government is unable to comment on the FCA’s assessment of their consumer research work and the evidence base that impacts their assessment. The Government has therefore passed this enquiry on to them directly and they will respond to the noble Lord by letter.
Asked by: Lord McNicol of West Kilbride (Labour - Life peer)
Question to the HM Treasury:
To ask Her Majesty's Government what assessment they have made of the availability of independent information resources for consumers to check that representative annual percentage rates (APRs) are fairly and accurately stated; and what action the Financial Conduct Authority advises customers to take where they are concerned they have been mis-sold under a representative APR that was not fairly stated.
Answered by Lord Agnew of Oulton
Firms are required by FCA rules to include a representative APR in certain circumstances. The FCA’s handbook provides further rules and guidance on when a representative APR must be shown, how it should be denoted and the level of prominence it must be given.
If an advertisement includes an interest rate or any amount relating to the cost of credit, it must also include a representative example. This must contain certain standard information including a representative APR. The example must be clear and concise and must be no less prominent than the information that triggered the inclusion of the example.
If a customer is concerned that they have been mis-sold a credit agreement, the customer can make a formal complaint to the firm in question in the first instance. If they feel that their complaint has not been dealt with satisfactorily, they are able to refer the matter to the Financial Ombudsman Service (FOS) – an independent body set up to provide arbitration in such cases.
Asked by: Lord McNicol of West Kilbride (Labour - Life peer)
Question to the HM Treasury:
To ask Her Majesty's Government why the Financial Conduct Authority (FCA) has decided as part of its supervision strategy to make no independent periodic checks on the compliance of FCA regulations by authorised firms, in particular the accuracy of key consumer protection information such as representative annual percentage rates.
Answered by Lord Agnew of Oulton
This question has been passed on to the Financial Conduct Authority (FCA). The FCA will reply directly to the noble Lord by letter. A copy of the letter will be placed in the Library of the House.
Asked by: Lord McNicol of West Kilbride (Labour - Life peer)
Question to the HM Treasury:
To ask Her Majesty's Government, in each of the last six years, how many Skilled Persons Reports the Financial Conduct Authority has commissioned where the issue of representative annual percentage rates (APRs), including the formulation or deployment of representative APR in the market, has been the “matter concerned”.
Answered by Lord Agnew of Oulton
This question has been passed on to the Financial Conduct Authority (FCA). The FCA will reply directly to the noble Lord by letter. A copy of the letter will be placed in the Library of the House.
Asked by: Lord McNicol of West Kilbride (Labour - Life peer)
Question to the HM Treasury:
To ask Her Majesty's Government, in each of the last six years, (1) how many times the Financial Conduct Authority (FCA) has asked a firm to outline how it calculates its annual percentage rates (APRs) except at the point of granting of authorisation; (2) where the FCA has discovered representative APR breaches, how many times it has required changes to a firm’s (a) website, and (b) product literature; and (3) how many firms have been referred to the enforcement division for resolution.
Answered by Lord Agnew of Oulton
This question has been passed on to the Financial Conduct Authority (FCA). The FCA will reply directly to the noble Lord by letter. A copy of the letter will be placed in the Library of the House.
Asked by: Lord McNicol of West Kilbride (Labour - Life peer)
Question to the HM Treasury:
To ask Her Majesty's Government what independent information resource is available to consumers to check that representative APRs are fairly stated; and what action the Financial Conduct Authority advises customers to take where they are concerned they have been mis-sold under a representative APR that was not fairly stated.
Answered by Lord Agnew of Oulton
Firms are required by FCA rules to include a representative APR in certain circumstances. The FCA’s handbook provides further rules and guidance on when a representative APR must be shown, how it should be denoted and the level of prominence it must be given.
If an advertisement includes an interest rate or any amount relating to the cost of credit, it must also include a representative example. This must contain certain standard information including a representative APR. The example must be clear and concise and must be no less prominent than the information that triggered the inclusion of the example.
If a customer is concerned that they have been mis-sold a credit agreement, the customer can make a formal complaint to the firm in question in the first instance. If they feel that their complaint has not been dealt with satisfactorily, they are able to refer the matter to the Financial Ombudsman Service (FOS) – an independent body set up to provide arbitration in such cases.