Asked by: Lord Mendelsohn (Labour - Life peer)
Question to the HM Treasury:
To ask Her Majesty's Government what assessment they have made of the money lender Oakam charging an APR of 1,421 per cent; and what assessment they have made of the effectiveness of the interest rate cap, introduced in 2015, on reducing high-cost short, and medium-term loans.
Answered by Lord Bates
The government is committed to protecting consumers from unfair lending practises, including excessive interest rates. To this end, the government legislated to require the Financial Conduct Authority (FCA) to introduce a cap on the cost of payday loans, which came into force on 2 January 2015. All firms which offer payday loans, including Oakam, are restricted by the payday price cap, and the FCA has strong powers to take action against any firms which do not comply with these rules.
The cap consists of three parts: a daily interest cap of 0.8%; a £15 cap on default charges; and a total cost cap of 100% to ensure that consumers never need to pay back more than twice the sum they have borrowed.
The FCA reviewed the payday price cap and published its findings last summer, showing that the price cap has been effective, leading to savings of approximately £150 million for the 760,000 individuals using payday loans each year. The price cap will remain at the same level, and the FCA has committed to review it again in three years.
The FCA is also reviewing the high-cost credit market more broadly, focusing on rent-to-own, doorstep lending, catalogue credit, and overdrafts. The FCA will publish an update at the end of May.
Asked by: Lord Mendelsohn (Labour - Life peer)
Question to the HM Treasury:
To ask Her Majesty's Government what assessment they have made of the impact of rent-to-own schemes for electrical and white goods on low-income households.
Answered by Lord Bates
The government is committed to protecting consumers from unfair lending practises. To this end, the government transferred regulatory responsibility for consumer credit to the Financial Conduct Authority (FCA) in 2014, and gave the FCA strong powers to protect consumers.
The FCA is conducting a review of the high-cost credit market, and has noted concerns in specific areas of the market, including rent-to-own. The FCA will publish an update later this month, and the government will continue to work closely with the FCA to ensure that all customers are treated fairly.
Asked by: Lord Mendelsohn (Labour - Life peer)
Question to the HM Treasury:
To ask Her Majesty's Government, further to the Written Answer by Lord Henley on 10 November (HL2703), how many of the 13 National Minimum Wage prosecutions made in the past nine years involved roles advertised as internships.
Answered by Lord Bates
The government is determined that everyone who is entitled to the National Minimum and Living Wage (NMW) receives it. Anyone who feels they have been underpaid NMW should contact the Acas helpline on 0300 123 1100. HMRC review all complaints that are referred to them.
HMRC acts on information from a range of sources, including workers, third parties and unions but does not disclose the source of an investigation in specific cases for reasons of confidentiality.
As referenced in the answer to question [[1]] HL2704, HMRC has recorded no prosecutions in relation to interns and the National Minimum Wage.
Asked by: Lord Mendelsohn (Labour - Life peer)
Question to the HM Treasury:
To ask Her Majesty's Government, further to the Written Answer by Lord Henley on 10 November (HL2703), for each National Minimum Wage prosecution since 2007, by whom the case was referred to HMRC for investigation.
Answered by Lord Bates
The government is determined that everyone who is entitled to the National Minimum and Living Wage (NMW) receives it. Anyone who feels they have been underpaid NMW should contact the Acas helpline on 0300 123 1100. HMRC review all complaints that are referred to them.
HMRC acts on information from a range of sources, including workers, third parties and unions but does not disclose the source of an investigation in specific cases for reasons of confidentiality.
As referenced in the answer to question [[1]] HL2704, HMRC has recorded no prosecutions in relation to interns and the National Minimum Wage.
Asked by: Lord Mendelsohn (Labour - Life peer)
Question to the HM Treasury:
To ask Her Majesty's Government, in each year since 2010, how many complaints were referred to HMRC from (1) ACAS, (2) Citizens Advice, and (3) individuals, relating to workers being unpaid or paid less than the National Minimum Wage for internship roles; how many of those complaints were investigated by HMRC; and how many resulted in a prosecution against an employer.
Answered by Lord Bates
HM Revenue and Customs (HMRC) only holds data on referrals that resulted in an investigation being opened.
HMRC began receiving complaint referrals from Acas on 17 March 2015. From this date until 31 March 2016 HMRC opened 6 investigations relating to interns that were referred by Acas.
HMRC began receiving complaint referrals from Citizens Advice from September 2016. HMRC has recorded no investigations opened after referral from Citizens Advice that specifically relate to interns.
The following numbers of investigations were opened as a result of direct complaints in relation to interns from 1 April 2010 to 17 March 2015:
Year | Investigations opened from direct complaints |
2010/11 | 0 |
2011/12 | 30 |
2012/13 | 28 |
2013/14 | 44 |
2014/15 | 56 |
2015/16 | 5 |
HMRC has recorded no prosecutions in relation to interns and the National Minimum Wage.
Asked by: Lord Mendelsohn (Labour - Life peer)
Question to the HM Treasury:
To ask Her Majesty's Government what plans they have for revising the Enterprise Investment Scheme; and what assessment they have made of the economic impact of any future reductions in support available through that scheme.
Answered by Lord Bates
The consultation Financing Growth in Innovative Firms set out the vital role the Enterprise Investment Scheme (EIS) plays in incentivising investment into early stage, high-growth firms. In 2015-16 more than 3,400 companies raised £1.9 billion through the scheme. The consultation also noted an ongoing issue of low-risk ‘capital preservation’ investments structured around the relief and asked an open question about how best to target the relief to ensure it helps innovative, high-growth firms receive the investment they need. The government will set out its response to the consultation in the Budget.
Asked by: Lord Mendelsohn (Labour - Life peer)
Question to the HM Treasury:
To ask Her Majesty's Government what assessment they have made of the impact on small and medium sized businesses of the Valuation Office Agency's decision to class communal spaces such as staircases, corridors and lifts as separate premises for the calculation of business rates.
Answered by Lord Bates
In July 2015, the Supreme Court clarified existing rating law relating to communal spaces such as staircases, corridors and lifts. The Valuation Office Agency (VOA) has a legal duty to adapt its practices to reflect the judgment.
The VOA assesses the value of property and not the businesses that occupy the property. As such, it does not hold information on whether the occupant of a property is a small or medium business.
Asked by: Lord Mendelsohn (Labour - Life peer)
Question to the HM Treasury:
To ask Her Majesty's Government how many small and medium sized businesses will be impacted by the Valuation Office Agency's decision to class communal spaces such as staircases, corridors and lifts as separate premises for business rate purposes; and how many such businesses will be billed retrospectively as a result of this change.
Answered by Lord Bates
In July 2015, the Supreme Court clarified existing rating law relating to communal spaces such as staircases, corridors and lifts. The Valuation Office Agency (VOA) has a legal duty to adapt its practices to reflect the judgment.
The VOA assesses the value of property and not the businesses that occupy the property. As such, it does not hold information on whether the occupant of a property is a small or medium business.
Asked by: Lord Mendelsohn (Labour - Life peer)
Question to the HM Treasury:
To ask Her Majesty's Government what assessment they have made of the findings contained in the Bank of England's Money and Credit June 2017 Statistical Release that there was (1) a £0.2 billion fall in loans to non-financial small and medium enterprises, and (2) an £8.2 billion rise in loans to large business, in the year to June.
Answered by Lord Bates
The Treasury monitors the Bank of England’s Money and Credit statistical releases and other statistical publications.
The Government is supporting lending to SMEs in a variety of ways, such as through the establishment of the British Business Bank to make finance markets work better for small businesses. The Government is also helping alternative lenders which lend to small businesses, for example through support for challenger banks; introducing a bespoke regime for peer-to-peer lending; and structural interventions such as the bank referral scheme and the SME credit data sharing scheme.
Asked by: Lord Mendelsohn (Labour - Life peer)
Question to the HM Treasury:
To ask Her Majesty's Government what assessment they have made of the finding contained in the Bank of England's Money and Credit June 2017 Statistical Release that there was a 10 per cent rise in outstanding unsecured consumer credit in the year to June.
Answered by Lord Bates
The Treasury monitors the Bank of England’s Money and Credit statistical releases and other statistical publications. The government established an independent Financial Policy Committee (FPC) and gave the FPC a primary objective to identify, monitor and take action to remove or reduce systemic risks with a view to protecting and enhancing financial stability. The FPC’s June 2017 Financial Stability Report (FSR), published on 27 June, assesses recent trends in unsecured debt in the consumer credit market. The FSR notes that consumer credit has been growing rapidly, but that loss rates on consumer credit lending are low at present.