Asked by: Chris Ruane (Labour - Vale of Clwyd)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, pursuant to the Answer of to Question 291263, what steps (a) his Department and (b) the FCA have taken to ensure that insurers are aware of their responsibility to inform consumers of changes to the way their policies are serviced in the event that the UK leaves the EU without a deal.
Answered by John Glen - Paymaster General and Minister for the Cabinet Office
HMT has been assessing the risk that a small minority of insurance payments from UK insurers into the EU may be delayed. While HMT is responsible for setting the policy direction, it is the role of the independent regulator – the Financial Conduct Authority (FCA) – to engage with industry and test firm planning.
The FCA has made it clear to insurers and insurance intermediaries that they should have appropriate plans in place to manage a no-deal exit, this should include plans to communicate with consumers should there be a change in the way their policy is serviced. The FCA expects firms to continue to service all their customers as fully and fairly as the law permits, including what regulatory protections will apply for their customers. The FCA has delivered these messages through a combination of direct contact with firms, senior leadership speeches, dedicated Brexit pages on its website, and trade association events.
Asked by: Chris Ruane (Labour - Vale of Clwyd)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, with reference to Operation Yellowhammer HMG Reasonable Worst Case Planning Assumptions paragraph 8, if he will list all cross-border financial services and their estimated value to the UK economy which will be disrupted in the event that the UK leaves the EU without a deal.
Answered by John Glen - Paymaster General and Minister for the Cabinet Office
Working closely with the regulators, the government has legislated extensively to prepare for a No Deal. This includes the Temporary Permissions Regime (TPR) which will allow EEA firms currently passporting into the UK to continue doing so temporarily after Brexit, and a transitional power for regulators to phase in post-exit regulatory requirements for firms where they have changed as a result of the UK leaving the EU.
Following this and wider action by industry and regulators, the Bank of England’s Financial Policy Committee (FPC) judges that “most risks to UK financial stability from disruption to cross-border financial services in a ‘no deal’ scenario have been mitigated”. The FPC have also said that the core of the UK’s financial system is “resilient to and prepared for the wide range of risks it could face, including a disorderly Brexit”. While most risks have been addressed, the FPC is clear that the UK authorities are not able to fully address risks to EEA customers through unilateral action and “in the absence of further action by EU authorities, some disruption is possible.”
Asked by: Chris Ruane (Labour - Vale of Clwyd)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, with reference to Operation Yellowhammer HMG Reasonable Worst Case Planning Assumptions, what assessment he has made of potential delays for UK citizens travelling to and from the EU from (a) Holyhead port, (b) Liverpool John Lennon airport and (c) Manchester airport in the event that the UK leaves the EU without a deal.
Answered by Jesse Norman
In preparation for EU Exit, the Border Delivery Group and Border Force have assessed 135 transport hubs across the United Kingdom, including these named locations. Based on this assessment, the Government does not expect material passenger delays at these locations as a result of leaving the EU. The Government is continuing to engage with local stakeholders across the UK to support their planning for a range of EU Exit scenarios.
Asked by: Chris Ruane (Labour - Vale of Clwyd)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, with reference to Operation Yellowhammer HMG Reasonable worst case planning assumptions paragraph 16, what estimate he has made of the proportion of insurance payments from UK insurers into the EU which would be delayed in the event of the UK leaving the EU without a deal; and what estimate his Department has made of the potential length of any such delays.
Answered by John Glen - Paymaster General and Minister for the Cabinet Office
As the question notes, HMG’s Operation Yellowhammer planning assumptions are not a prediction, but a reasonable worst-case scenario. The specifics on the length and proportion of affected policies would depend on each individual case – by definition, any delays would relate to exceptional cases which therefore cannot be estimated.
However, substantial progress has been made towards mitigating this risk. The Bank of England’s Financial Stability Report shows that UK insurers’ actions in restructuring their business have made good progress towards being able to service the majority of their £61 billion of EU liabilities after Brexit - £56 billion of this liability is expected to be addressed by 31 October. Temporary regimes announced by EU states are expected to further reduce the residual ‘at risk’ liabilities.
The FCA expects insurers to let customers know if there will be any changes to the way policies are serviced after the UK leaves the EU. Information on gov.uk makes it clear that customers concerned about the status of their insurance policy should contact their provider.
Asked by: Chris Ruane (Labour - Vale of Clwyd)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, with reference to Operaton Yellowhammer HMG reasonable worst case planning assumptions chapter 17, what steps his Department is taking to protect low income groups from price rises in food and fuel.
Answered by Rishi Sunak - Prime Minister, First Lord of the Treasury, Minister for the Civil Service, and Minister for the Union
HM Treasury routinely monitors economic conditions and risks, and the Government has a range of mechanisms available to support vulnerable people from price rises in food and fuel.
Furthermore, officials estimate the direct impact of spending decisions on household living standards, and this is a central consideration when allocating public funds.
Asked by: Chris Ruane (Labour - Vale of Clwyd)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what estimate he has made of per head of population spending on contingency plans in the event of the UK leaving the EU without a deal in each (a) nation and (b) region of the UK.
Answered by Rishi Sunak - Prime Minister, First Lord of the Treasury, Minister for the Civil Service, and Minister for the Union
This Government would prefer to leave with a deal and will work in an energetic and determined way to get that better deal.
But the Treasury stands ready to provide funding to prepare for leaving without a deal. That is why the Chancellor and I have made over £2bn available for no deal preparations this year (2019-20) since taking office. All parts of the UK have benefitted from this funding, with the Barnett formula being applied in the usual way.
Should the UK leave without a deal, the Treasury will consider the appropriate response. The Government and the Bank of England have fiscal and monetary policy tools available, and are ready to respond as appropriate to support the economy should the circumstances require.
The government has already guaranteed that UK organisations who get EU programme funding will continue to do so should the EU cease to fund these organisations after exit.
Asked by: Chris Ruane (Labour - Vale of Clwyd)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what steps his Department is taking to ensure that UK banks fulfuil their obligations under the EU Payment Accounts Directive; and whether he plans to retain the consumer protections in that directive after the UK leaves the EU.
Answered by John Glen - Paymaster General and Minister for the Cabinet Office
The Payment Accounts Directive 2014 has three main objectives: (1) to improve the transparency and comparability of fees related to payment accounts that are used for day-to-day payment transactions; (2) to facilitate the switching of those accounts; and (3) to ensure access to payment accounts with basic features (‘basic bank accounts’) for EU residents. The Payment Accounts Regulations 2015 (PARs) transposed this Directive into UK law.
The Financial Conduct Authority (FCA) is responsible for monitoring and enforcing the Payment Accounts Regulations’ requirements on payment service providers. The Payment Systems Regulator (PSR) is responsible for designating and monitoring alternative switching schemes.
Designated UK banks must provide accessible information and assistance about the features and conditions of basic bank accounts under the Payment Accounts Regulations (PARs). The PARs also require the FCA to gather and submit to HM Treasury certain data on basic bank accounts and the switching of payment accounts. This information is reported to HM Treasury every two years. HM Treasury also collects data on basic bank accounts and this is published annually.
The Government has amended the PARs to ensure that they continue to operate effectively in the UK once the UK has left the EU.
Asked by: Chris Ruane (Labour - Vale of Clwyd)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what recent estimate he has made of the percentage of adults in the UK who do not have a UK bank account.
Answered by John Glen - Paymaster General and Minister for the Cabinet Office
The Treasury does not make assessments of the number of people who do not have a bank account. However, in 2017, the Financial Conduct Authority published the results of the Financial Lives Survey which found that 1.3 million UK adults were unbanked, i.e. have no current account or alternative e-money account.
The Financial Lives Survey report contains further information on the characteristics of the unbanked. The report analyses survey results across the four nations of the UK, the nine regions of England, and by rural and urban areas. The FCA intend to repeat the Financial Lives Survey on a regular basis in future. The report can be found here:
https://www.fca.org.uk/publication/research/financial-lives-consumers-across-uk.pdf
This government is committed to building an economy where everyone, regardless of their background or income, can access the financial services and products they need, including a bank account. Under the Payment Account Regulations 2015 (PARs) the nine largest personal current account providers in the UK are legally required to offer fee-free basic bank accounts to customers who do not have a bank account or who are ineligible for a bank’s standard current account. Accounts have all the standard payment features such as direct debits and standing orders, though no overdraft or cheque book facilities. The Treasury’s December 2018 publication shows that in total there are nearly 7.5 million basic bank accounts open in the UK.
More generally, in November 2017, the Government announced the creation of the Financial Inclusion Policy Forum. The Forum has now met three times and has successfully brought together key leaders from industry, charities and consumer groups, as well as Government ministers and the regulators, to provide leadership in tackling financial exclusion. The Forum has delivered important work already, and made tangible progress. A sub-group of the Forum set up last summer, examined the issue of access to affordable credit, and made a number of recommendations, many of which formed part of a package on affordable credit presented at Budget 2018. The Government also published its first annual financial inclusion report on 25 March which takes stock of the Government’s progress in this area.
Asked by: Chris Ruane (Labour - Vale of Clwyd)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what assessment he has made of the potential merits of making protecting access to cash a statutory duty of the Payment Systems Regulator.
Answered by John Glen - Paymaster General and Minister for the Cabinet Office
On 3 May 2019, in response to a Call for Evidence on Cash & Digital Payments in the New Economy, the Government committed to supporting digital payments whilst safeguarding access to cash for those who need it.
The Government will carefully consider whether legislation would be required to support access to, and acceptance of, cash, though there are important steps that can safeguard access to cash without changes to the law. We will therefore engage closely with industry and regulators on their role in these issues.
The Government has launched the Joint Authorities Cash Strategy (JACS) Group, which brings together the Payment Systems Regulator, Financial Conduct Authority and Bank of England to ensure a comprehensive oversight of the overall cash infrastructure in light of changing trends.
Asked by: Chris Ruane (Labour - Vale of Clwyd)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what assessment he has made of the economic effectiveness of the no-interest loan scheme pilot announced in Budget 2018.
Answered by John Glen - Paymaster General and Minister for the Cabinet Office
At Budget 2018, the Government announced that it will carry out a study into the feasibility of establishing a no-interest loans scheme in the UK, and design a pilot.
The Government has now launched the feasibility study, which is examining issues such as access, eligibility and funding models in order to determine how a pilot could work. The feasibility study is due to conclude shortly and the Government will be considering its recommendations.