Asked by: Catherine West (Labour - Hornsey and Friern Barnet)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what steps his Department is taking to improve the call answer rates for HMRC helplines.
Answered by Victoria Atkins - Shadow Secretary of State for Environment, Food and Rural Affairs
HMRC is working to improve call answer rates, primarily through supporting customers who can use digital services to do so in the first instance. This will reduce call numbers and allow HMRC to focus their telephone support on those with more complex circumstances, or who are unable to engage digitally.
HMRC are also deploying additional temporary resource to answer customer correspondence from April to September 2023. Answering correspondence more quickly reduces the number of progress-chasing calls, and therefore can further improve call answer rates.
Asked by: Catherine West (Labour - Hornsey and Friern Barnet)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what assessment he has made of trends in the level of discrimination against the proximity of Gypsy, Roma and Traveller sites by mortgage providers.
Answered by Andrew Griffith - Shadow Secretary of State for Business and Trade
The pricing and availability of mortgages – including those being taken out on properties situated close to Gypsy, Roma and Traveller sites – is a commercial decision for lenders in which the Government does not intervene.
Asked by: Catherine West (Labour - Hornsey and Friern Barnet)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, with reference to the policy statement by the Prudential Regulation Authority entitled CP7/22 – Credit Unions: Changes to the Regulatory Regime, whether he has made a recent assessment of the potential impact of the restrictions to capital investment in credit unions set out in that paper on trends in the levels of growth in the credit union sector.
Answered by Andrew Griffith - Shadow Secretary of State for Business and Trade
The Prudential Regulation Authority (PRA) is an independent, non-governmental body responsible for regulating and supervising the financial services industry, including credit unions. Although the Treasury sets the legal framework for the regulation of credit unions, it has limited powers in relation to the PRA’s decision-making processes, including any proposed changes as part of their sectoral consultation work.
Regulators are obligated to provide a cost benefit analysis on any proposed changes and an estimate of those costs and benefits if reasonable. This consultation paper includes a cost-benefit analysis; the PRA estimates that any costs are, overall, proportionate to the additional risks involved.
The Government is a strong supporter of the mutuals sector and recognises the unique role credit unions play in their communities, providing savings and affordable loans to their members. As part of the Financial Services and Markets Bill, the Government is bringing forward changes to the Credit Unions Act 1979 to allow credit unions to offer a wider range of products and services. This will allow credit unions to continue to grow sustainably in the future and support them in the vital role they play in financial inclusion.
Asked by: Catherine West (Labour - Hornsey and Friern Barnet)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, with reference to the Prudential Regulation Authority's consultation paper entitled CP7/22 – Credit Unions: Changes to the Regulatory Regime, published 21 September 2022, what assessment he has made of the potential impact of a 50 per cent cap on interest-bearing deferred shares on (a) the ability of the sector to raise capital and (b) access to finance for financially excluded consumers.
Answered by Andrew Griffith - Shadow Secretary of State for Business and Trade
The Prudential Regulation Authority (PRA) is an independent, non-governmental body responsible for regulating and supervising the financial services industry, including credit unions. Although the Treasury sets the legal framework for the regulation of credit unions, it has limited powers in relation to the PRA’s decision-making processes, including any proposed changes as part of their sectoral consultation work.
Regulators are obligated to provide a cost benefit analysis on any proposed changes and an estimate of those costs and benefits if reasonable. This consultation paper includes a cost-benefit analysis; the PRA estimates that any costs are, overall, proportionate to the additional risks involved.
The Government is a strong supporter of the mutuals sector and recognises the unique role credit unions play in their communities, providing savings and affordable loans to their members. As part of the Financial Services and Markets Bill, the Government is bringing forward changes to the Credit Unions Act 1979 to allow credit unions to offer a wider range of products and services. This will allow credit unions to continue to grow sustainably in the future and support them in the vital role they play in financial inclusion.
Asked by: Catherine West (Labour - Hornsey and Friern Barnet)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, if he will hold discussions with the Prudential Regulation Authority on the potential merits of making an assessment of the proposal for a 50 per cent cap on interest-bearing deferred shares.
Answered by Andrew Griffith - Shadow Secretary of State for Business and Trade
The Prudential Regulation Authority (PRA) is an independent, non-governmental body responsible for regulating and supervising the financial services industry, including credit unions. Although the Treasury sets the legal framework for the regulation of credit unions, it has limited powers in relation to the PRA’s decision-making processes, including any proposed changes as part of their sectoral consultation work.
Regulators are obligated to provide a cost benefit analysis on any proposed changes and an estimate of those costs and benefits if reasonable. This consultation paper includes a cost-benefit analysis; the PRA estimates that any costs are, overall, proportionate to the additional risks involved.
The Government is a strong supporter of the mutuals sector and recognises the unique role credit unions play in their communities, providing savings and affordable loans to their members. As part of the Financial Services and Markets Bill, the Government is bringing forward changes to the Credit Unions Act 1979 to allow credit unions to offer a wider range of products and services. This will allow credit unions to continue to grow sustainably in the future and support them in the vital role they play in financial inclusion.
Asked by: Catherine West (Labour - Hornsey and Friern Barnet)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, with reference to the Prudential Regulation Authority’s Consultation Paper, CP7/22, entitled Credit Unions: Changes to the Regulatory Regime, published in September 2022, what assessment he has made of the implications for his policies of those amendments and their impact on credit unions financial services; and whether his Department has had discussions with the Prudential Regulation Authority on the reason for not producing a cost-benefit analysis of the proposed changes.
Answered by Andrew Griffith - Shadow Secretary of State for Business and Trade
Both the Prudential Regulation Authority (PRA) and the Financial Conduct Authority (FCA) are independent, non-governmental bodies responsible for regulating and supervising the financial services industry, including credit unions.
Although the Treasury sets the legal framework for the regulation of credit unions, it has strictly limited powers in relation to the PRA and the FCA’s decision making processes, including any proposed changes as part of their sectoral consultation work.
As part of this legal framework, the regulators are obligated to provide a cost benefit analysis and an estimate of those costs and benefits if reasonable.
Asked by: Catherine West (Labour - Hornsey and Friern Barnet)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what assessment his Department has made of the potential merits of introducing bank hubs on high streets for those unable to use internet banking.
Answered by Andrew Griffith - Shadow Secretary of State for Business and Trade
The government believes that all customers, wherever they live, should have appropriate access to banking services.
Banks are investing in new shared hubs that enable personal and business banking customers to access services such as depositing cheques, checking their balance and withdrawing and depositing cash. To date, industry has committed to shared bank hubs in 29 locations across the UK. Bank hubs also offer a dedicated space where customers can see community bankers from their own bank, where it is participating. The first post pilot phase bank hubs have opened in Brixham (Devon) and Cottingham (Yorkshire).
The locations of bank hub sites are recommended by LINK (which operates the UK’s largest ATM network). In the event of a closure of a core cash service or request from a local community, LINK will undertake an assessment of the community’s access to cash needs. LINK takes into account relevant information such as the size of the population, number of shops, demographic data and the nearest alternative services. In circumstances where LINK considers that a community requires additional cash services, industry will ensure a suitable shared solution for all cash users in that community, such as a bank hub or ATM.
There are also alternative options to access banking services for those who cannot use internet banking, including via telephone banking and via the Post Office.
Asked by: Catherine West (Labour - Hornsey and Friern Barnet)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what assessment he has made of the impact of the additional tax deduction for R&D costs for small and medium-enterprises on those organisation's ability to (a) recruit and retain staff and (b) maintain technological equipment.
Answered by Victoria Atkins - Shadow Secretary of State for Environment, Food and Rural Affairs
As part of the ongoing R&D tax reliefs review, as announced at the Autumn Statement, the Government is reforming the R&D tax reliefs to ensure taxpayers’ money is spent as effectively as possible, to improve the competitiveness of the RDEC scheme, and take a step towards a simplified, single RDEC-like scheme for all.
The SME scheme costs twice as much as RDEC, and its cash value to firm is three times that of RDEC - yet it incentivises as little as 60p of additional R&D for each £1 spent, compared to as much as £2.70 additional R&D per £1 of RDEC. In addition, following the corporation tax rise from April 2023, the SME scheme would have become even more generous in cash terms and the Research and Development Expenditure Credit less.
There is significant error and fraud in the small and medium-sized enterprises (SME) scheme, with the generosity of the relief making it a target for fraud. By contrast, the separate R&D expenditure credit is better value but has a rate that is less internationally competitive.
Following these changes support for R&D investment will continue to increase, with R&D expenditure from businesses via tax credits estimated to increase from £37.2 billion in 2020-21 to around £60 billion by the end of the scorecard period, 2027-28. In addition, direct funding for R&D will reach £20 billion a year by 2024/25. From 2021-22 to 2024-25, this represents a 54 per cent cash increase in Innovate UK’s budgets and 70 per cent of Innovate UK’s grants to businesses go to SMEs.
The Government will consult on the design of a single scheme, and ahead of Budget work with industry to understand whether further support is necessary for R&D intensive SMEs, without significant change to the overall cost for supporting R&D.
Asked by: Catherine West (Labour - Hornsey and Friern Barnet)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, for what reasons the additional tax deduction for research and development costs for small and medium enterprises will be cut from 130 to 86 per cent.
Answered by Victoria Atkins - Shadow Secretary of State for Environment, Food and Rural Affairs
As part of the ongoing R&D tax reliefs review, as announced at the Autumn Statement, the Government is reforming the R&D tax reliefs to ensure taxpayers’ money is spent as effectively as possible, to improve the competitiveness of the RDEC scheme, and take a step towards a simplified, single RDEC-like scheme for all.
The SME scheme costs twice as much as RDEC, and its cash value to firm is three times that of RDEC - yet it incentivises as little as 60p of additional R&D for each £1 spent, compared to as much as £2.70 additional R&D per £1 of RDEC. In addition, following the corporation tax rise from April 2023, the SME scheme would have become even more generous in cash terms and the Research and Development Expenditure Credit less.
There is significant error and fraud in the small and medium-sized enterprises (SME) scheme, with the generosity of the relief making it a target for fraud. By contrast, the separate R&D expenditure credit is better value but has a rate that is less internationally competitive.
Following these changes support for R&D investment will continue to increase, with R&D expenditure from businesses via tax credits estimated to increase from £37.2 billion in 2020-21 to around £60 billion by the end of the scorecard period, 2027-28. In addition, direct funding for R&D will reach £20 billion a year by 2024/25. From 2021-22 to 2024-25, this represents a 54 per cent cash increase in Innovate UK’s budgets and 70 per cent of Innovate UK’s grants to businesses go to SMEs.
The Government will consult on the design of a single scheme, and ahead of Budget work with industry to understand whether further support is necessary for R&D intensive SMEs, without significant change to the overall cost for supporting R&D.