Oral Answers to Questions

Harriett Baldwin Excerpts

Tuesday 21st July 2015 Commons Chamber

[Robert Neill (Bromley and Chislehurst) (Con)]

2. What steps he is taking to ensure as many policy holders as possible are identified before the Equitable Life payment scheme closes to new claimants on 31 December 2015.

[The Economic Secretary to the Treasury (Harriett Baldwin)]

The Equitable Life payment scheme has already gone to great lengths to find policyholders, including checking against credit histories, a national advertising campaign and sending letters to last-known addresses. Thanks to that, almost 90% of policyholders have been paid. Where possible the scheme is now tracing all those remaining who are due £50 or more against DWP, national insurance numbers and address records.

[Robert Neill]

I accept that this Government and their predecessor have done much—more than anybody before did—to right an injustice that was done, but Equitable Life policyholders were victims of a regulatory failure, for which ultimately Government is responsible. As the economy grows, is it not time, out of decency and fairness towards that diminishing group of elderly people, to revisit the amount to be paid in compensation?

[Harriett Baldwin]

I am sure that my hon. Friend will welcome the fact that my right hon. Friend the Chancellor, in his excellent summer Budget, did in fact announce that all eligible non-annuitant policyholders in receipt of pension credit will see their lump sum payments doubled.

[James Berry (Kingston and Surbiton) (Con)]

3. What steps the Government are taking to support (a) people with savings and (b) home ownership.

--- Later in debate ---

[Geraint Davies (Swansea West) (Lab/Co-op)]

13. What assessment he has made of the likelihood of the Government meeting its 2020 export target.

[The Economic Secretary to the Treasury (Harriett Baldwin)]

The 2020 export target of £1 trillion is ambitious. UK Trade & Investment has doubled the number of businesses it helps since 2010. The productivity plan sets out steps to take this further by mobilising the whole of Government behind helping our great British businesses to export much more.

[Geraint Davies]

Britain needs export growth, not just cuts, to clear the deficit, but the Chancellor is set to miss his export target by a massive £350 billion and to deliver the worst peacetime trade deficit since 1830. What action are the Government taking to combine the creative industries with our manufacturing base to target emerging middle classes in BRIC countries—in particular, China and India—to fire up growth and not rely solely on hitting the poor with cuts?

[Harriett Baldwin]

We can see the disarray in the hon. Gentleman’s personal life, given that he walked through the Lobby to support one leadership candidate last night, while publicly backing another who abstained. He mentions the importance of exporting to emerging markets. I can confirm that UK exports to China have increased by 72% since 2010, while exports to South Korea—many of them in the creative industries—are up by 148% and to Hong Kong by 63%.

[Mr David Nuttall (Bury North) (Con)]

Does my hon. Friend agree that British business would find it easier to export to the rest of the world if it did not have to comply with the red tape imposed on it by Brussels bureaucrats?

[Harriett Baldwin]

My hon. Friend is an example to Opposition Members in the consistency of his political viewpoint. He is right to point out that the euro area has indeed been sluggish. One of the reasons we are experiencing slow growth in the euro area is that our goods exports have been falling to that part of the world. That is why it is so important that we refocus British businesses on exporting to some of the faster growing parts of the world.

[Jonathan Reynolds (Stalybridge and Hyde) (Lab/Co-op)]

16. That was an extraordinarily complacent answer from the Minister. On this Chancellor’s watch, the UK’s current account deficit has become the largest of any advanced economy, and the value of UK exports is largely what it was in 2010, when the Government came to power. Crucially, that cannot be put down to the sluggishness of the eurozone, because exports to non-eurozone countries have been equally static, and the figure the Minister gave for China reflects demand in the Chinese economy. Does she accept that whatever the strategies the Government have deployed so far, they simply have not worked?

[Harriett Baldwin]

I am glad that the hon. Gentleman shares my view that it is very important for us to help British businesses to export more. We have some fantastic British businesses, and many of them have started to export. UKTI has doubled the number of companies that it has helped in the past five years. He is absolutely right that we should aim to be very ambitious in this area. I would like to point out that export volumes outside the EU have actually grown by 24% since the first quarter of 2008.

[John Pugh (Southport) (LD)]

14. What steps he is taking to rebalance the economy away from London and the south-east.

[The Economic Secretary to the Treasury (Harriett Baldwin)]

The Government are committed to rebalancing the economy and strengthening every part of the UK. The summer Budget announced new commitments to rebalance the economy, including devolving further powers to city regions, inviting a new round of bids for enterprise zones and launching an ambitious transport package for the north of England.

[John Pugh]

I thank the Minister for that response. Currently, northern cities with elected Mayors have below-average economic performance in their region, whereas northern cities with above-average performances do not yet have elected Mayors. Why are the Government making a fetish of elected Mayors?

[Harriett Baldwin]

I know the hon. Gentleman has a long-standing point of view in this regard. The important point is that we want to empower local economic areas to grow as fast as London and the south-east. Among the important measures in the Cities and Local Government Devolution Bill are the strong and accountable governance arrangements for, for example, Mayors.

[Mr Speaker]

Last but not least, I call Mr Green.

--- Later in debate ---

[Martin Vickers (Cleethorpes) (Con)]

In her reply to my Westminster Hall debate last week, the Economic Secretary to the Treasury spoke warmly of bank sharing. Will she join me in encouraging HSBC and NatWest, which are proposing to close their branches in Barton-upon-Humber, to delay that closure so that sharing can be seriously considered?

[The Economic Secretary to the Treasury (Harriett Baldwin)]

Residents in Barton-upon-Humber are very fortunate to have such a champion as my hon. Friend representing their interests. I am sure that as he has raised the matter in the House the banks in question will have noted his point, and he has represented his constituents well.

[Mr Speaker]

I call Callum McCaig. No? I call Mr Skinner.

Infrastructure (Financial Assistance) Act 2012: Annual Report

Harriett Baldwin Excerpts

Monday 20th July 2015 Written Statements

[The Economic Secretary to the Treasury (Harriett Baldwin)]

The annual report to Parliament under the Infrastructure (Financial Assistance) Act 2012 for the period 1 April 2014 to 31 March 2015 has today been laid before Parliament.

The report is prepared in line with the requirements set out in the Infrastructure (Financial Assistance) Act 2012 that the Government report annually to Parliament on the financial assistance given under the Act.

Copies are available in the Vote Office and the Printed Paper Office.

[HCWS154]

Counter-Terrorism Asset Freezing

Harriett Baldwin Excerpts

Monday 20th July 2015 Written Statements

[The Economic Secretary to the Treasury (Harriett Baldwin)]

Under the Terrorist Asset-Freezing etc. Act 2010 (“TAFA 2010”), the Treasury is required to report to Parliament, quarterly, on its operation of the UK’s asset-freezing regime mandated by UN Security Council Resolution 1373.

This is the seventeenth report under the Act and it covers the period from 1 April 2015 to 30 June 2015. This report also covers the UK implementation of the UN al-Qaeda asset-freezing regime and the operation of the EU asset-freezing regime in the UK under EU Regulation (EC) 2580/2001 which implements UNSCR 1373 against external terrorist threats to the EU. Under the UN al-Qaeda asset-freezing regime, the UN has responsibility for designations and the Treasury has responsibility for licensing and compliance with the regime in the UK under the Al-Qaida (Asset-Freezing) Regulations 2011. Under EU Regulation 2580/2001, the EU has responsibility for designations and the Treasury has responsibility for licensing and compliance with the regime in the UK under part 1 of TAFA 2010.

Annexes A and B to this statement provide a breakdown, by name, of all those designated by the UK and the EU in pursuance of UN Security Council Resolution 1373. The two individuals subject to designations, which have been notified on a restricted and confidential basis, under Sections 3 and 10 of TAFA 2010 are denoted by A and B.

The following table sets out the key asset-freezing activity in the UK during the quarter ending 30 June 2015:

Counter-terrorist Asset Freezing

Harriett Baldwin Excerpts

Thursday 16th July 2015 Written Statements

[The Economic Secretary to the Treasury (Harriett Baldwin)]

Under the Terrorist Asset-Freezing etc. Act 2010 (“TAFA 2010”), the Treasury is required to report to Parliament, quarterly, on its operation of the UK’s asset freezing regime mandated by UN Security Council Resolution 1373.

This is the 16th report under the Act and it covers the period from 1 January 2015 to 31 March 2015. This report also covers the UK implementation of the UN Al-Qaida asset freezing regime and the operation of the EU asset freezing regime in the UK under EU Regulation (EC) 2580/2001 which implements UNSCR 1373 against external terrorist threats to the EU. Under the UN Al-Qaida asset freezing regime, the UN has responsibility for designations and the Treasury has responsibility for licensing and compliance with the regime in the UK under the Al-Qaida (Asset-Freezing) Regulations 2011. Under EU Regulation 2580/2001, the EU has responsibility for designations and the Treasury has responsibility for licensing and compliance with the regime in the UK under Part 1 of TAFA 2010.

Annexes A and B to this statement provide a breakdown, by name, of all those designated by the UK and the EU in pursuance of UN Security Council Resolution 1373. The two individuals subject to designations, which have been notified on a restricted and confidential basis, under sections 3 and 10 of TAFA 2010 are denoted by A and B.

The following table sets out the key asset-freezing activity in the UK during the quarter ending 31 March 2015:

Bank Closures (Northern Lincolnshire)

Harriett Baldwin Excerpts

Wednesday 15th July 2015 Westminster Hall

[The Economic Secretary to the Treasury (Harriett Baldwin)]

What a pleasure it is to serve under your chairmanship this afternoon, Mr Davies! I congratulate my hon. Friend the Member for Cleethorpes (Martin Vickers) on securing the debate. He has spoken eloquently on behalf of his constituents and communities. He is without a doubt the most diligent and effective Member for Cleethorpes I have ever known.

As my hon. Friend set out, bank branches play an important role in their communities—communities such as Barton-upon-Humber, Caistor and Market Rasen. They are valued by individual consumers and small businesses, and the services that they provide make a real difference to people’s lives. One of my key priorities as Economic Secretary is financial services that deliver for customers. I strongly believe that banks should be there to help and enable customers to achieve their aspirations at every stage of their lives, whether that is saving for their first home, taking out a mortgage, buying a car or saving and investing for the future.

As my hon. Friend mentioned, how we bank is going through a period of unprecedented change. New online and mobile technology means that customers are reducing their use of high street branches. As he mentioned, some banks had pledged not to close a branch if it was the last one in town, but since those pledges were made the volume of transactions in high street branches—including in the last branches in town in places such as Caistor—has continued to decline. Those changes mean that the banking industry, which has to modernise and improve its services to maintain profitability, often has to make tough decisions. They are commercial decisions for the individual institutions, but it is right for the Government to seek to ensure access to banking services for everyone, wherever they live.

We made strong progress on that agenda during the last Parliament. In March this year, the Government welcomed an industry-wide agreement known as the access to banking protocol. I am pleased to say that all the major high street banks agreed to that protocol, which came into effect in May this year. The protocol means that when a bank decides to close a branch, it must think carefully about the consequences of doing so; it must engage with its customers; it must consider the needs of its customers; and it must identify ways for its customers to continue banking after the branch has closed. The results of that engagement with the community and an impact assessment will be made public before the branch is closed. We have also made it easier for my hon. Friend’s constituents in north Lincolnshire to switch their bank accounts, with seven-day switching to one of the banks that remain open.

I appreciate my hon. Friend’s concern about the impact that branch closures will have on shops in local high streets. I assure everyone that the Government are committed to safeguarding high streets and town centres. For example, through the high streets innovation fund we have provided funding to the 100 towns that have the highest rates of empty property. Small business rate relief is also a valuable bonus for high street shops. In March 2015, the vacant share of retail outlets fell to 13%, which is the lowest vacancy rate since 2010.

As well as taking seriously the impact of branch closures on local communities, we must consider how customers will continue to access banking services. A range of alternative measures is in place, and I would like to talk in more detail about some of those measures. As my hon. Friend mentioned, at more than 11,500 of its branches in the UK, the Post Office allows customers to access their bank accounts, check their balances, withdraw money and deposit cash and cheques. Sixteen banks offer services to their personal customers and small businesses through the Post Office, including those that he mentioned. That is a huge network, which offers most customers a real opportunity to continue banking locally.

I know that more can be done, however. The range of services offered by the Post Office may be more limited than those offered in a traditional bank branch, and my hon. Friend has mentioned how popular they are. Service provision may vary by bank and by the capacity of each post office. That is why the Government are supporting measures to improve the banking services that the Post Office offers and to make those services more consistent for customers.

Late last year, the British Bankers Association and the Post Office began negotiations to agree a standard set of services, such as withdrawals, deposits and balance checking. The agreed services will be made available to bank customers at post office counters across the country. The negotiations are ongoing, but I make it clear that the Government consider completion of that work to be a priority. The protocol includes a measure for an independent review after one year, which I hope will indicate whether it has been effective—I will take a close interest in that matter.

We also expect to see concrete progress on publicising the services that are already available. As I have made clear, banks should be there to help their customers achieve their aspirations at every stage of life. We should also recognise that the modernisation of banking services is leading to new opportunities for customers, and we should all be excited about that. Since April 2014, for example, customers have been able to transfer money instantly to another bank account using only their mobile phone number; from 31 July 2016, customers will be able to use their smartphone to photograph cheques for payment into their bank account, helping to make life easier for customers in remote areas. Banks are taking action to ensure that customers are able to use such new and exciting technologies with confidence.

Those innovations also apply to the UK’s ATM network, which can play a more important role in addressing some of the concerns voiced by consumers when their local branch closes. Steady progress is being made in extending the ATM network across the UK, and the number of free-to-use ATMs is at an all-time high. In fact, 97% of withdrawals are now made free of charge. Isolated, disadvantaged and rural communities often have the worst access to free-to-use ATMs, however, so the Government are working closely with the Link network’s financial inclusion programme to subsidise free-to-use cashpoints in more than 1,400 remote and deprived areas across the UK. Importantly, members of the public in my hon. Friend’s constituency can nominate their area for inclusion in that programme.

This debate has focused on branch closures, but it is also important to recognise that many banks are choosing to prioritise their branch network and are opening new high street bank branches, with TSB and Metro bank being good examples. Metro bank is planning to open 150 branches by 2020, and its branches are open seven days a week.

[Martin Vickers]

I thank the Minister for the information she has provided. My constituents, and people across the country, would appreciate more opportunities for face-to-face contact. Can she give an assurance that the Government will do all they can to influence the banks to make provision for people who want personal contact? It is one thing for people who are applying for a car loan of a few thousand pounds not to have face-to-face contact, but people who are committing to a mortgage for 25 or 30 years need detailed, experienced advice. It is much easier to provide such advice on a one-to-one basis.

[Harriett Baldwin]

I agree. My hon. Friend will be glad to know that 58% of people agree with both of us that face-to-face contact and having a local branch are important when choosing where to bank and engaging in major transactions. Some banking organisations take the view that they will gain market share by opening new branches. I have mentioned Metro bank, and TSB currently has 630 branches serving 4.5 million customers, which makes it the eighth-largest branch network with 6% of all UK branches. The Government are keen to encourage such healthy competition between different brands, some of which offer a face-to-face banking model.

The Government’s ambition is for 15 new banks to enter the market over the life of this Parliament. If we achieve that, it will give customers far more choice of whom to bank with and encourage banks to compete more effectively with one another. Competition will also continue to drive innovation in the delivery of banking services, such as contactless payment and payment by mobile phone. Atom bank, which recently received its banking licence, is a good example of innovation. It plans to be an online-only organisation and has ambitions to offer a range of innovative services to customers, which could include face-to-face contact through technology, as well as between individuals in the same location.

One often suggested solution is the sharing of bank branches, which would allow banks to lower overheads and maintain local provision when they may otherwise have to close their branches. Of course, each bank must specialise and differentiate itself from its competitors, but that should not prevent the industry from thinking creatively about how premises and services could be shared. The British Bankers Association is currently considering that issue in consultation with its members. In particular, it is exploring where local circumstances may mean that sharing a branch is the best solution.

I understand the concern of communities in northern Lincolnshire about local bank branch closures—my hon. Friend mentioned Barton-upon-Humber, Caistor and Market Rasen—and many communities across the UK, including the one I represent, are experiencing a similar situation. Changes in the banking industry reflect changes to customers’ needs and habits. Banks and building societies need to balance customer interests, market competition and other commercial factors when considering their strategy. It is right that the Government do not intervene in such commercial decisions, but we are clear that banks and building societies should support access to banking services for everyone.

Once again, I congratulate my hon. Friend on raising these important issues today.

Question put and agreed to.

Financial Ombudsman Service

Harriett Baldwin Excerpts

Tuesday 14th July 2015 Written Statements

[The Economic Secretary to the Treasury (Harriett Baldwin)]

The annual report and accounts 2014-15 of the Financial Ombudsman Service has today been laid before Parliament.

The report forms an important part of the accountability mechanisms for the Financial Ombudsman Service under the Financial Services and Markets Act 2000 (FSMA), and assesses the performance of the Financial Ombudsman Service over the past 12 months in discharging its functions.

[HCWS105]

Equitable Life

Harriett Baldwin Excerpts

Monday 13th July 2015 Written Statements

[The Economic Secretary to the Treasury (Harriett Baldwin)]

The Equitable Life Payment Scheme has issued payments of over £1.06 billion to 902,000 policyholders as of 31 May 2015. With final tracing efforts now concluding, the scheme is reaching the limit of how many policyholders it will be able to trace and pay. As announced in the Budget on 8 July, the scheme will close to new claims on 31 December 2015. Payments to with-profits annuitants are unaffected and will continue as planned for the duration of their annuity.

Before it closes, however, the scheme will continue attempts to trace and pay eligible policyholders, including tracing policyholders through the Department of Work and Pensions due £50 or more. I would urge colleagues to make constituents aware that if any of them are holders of an Equitable Life policy and have not yet claimed a payment under the scheme, they should contact the scheme on 0300 0200 150 as soon as possible, quoting their policy number.

Despite these efforts, the scheme expects that some policyholders will remain unpaid as of 31 December 2015. The scheme will use money that would have been distributed to the untraced policyholders to double the amount of the lump sum payments of 22.4% of relative losses to policyholders on pension credit. Around 40,000 people are expected to benefit by an average of over £1,000, although actual payments will depend on the amount of an individual’s relative loss.

In order to benefit from this payment, policyholders must be in receipt of pension credit. Policyholders are therefore urged to check whether they can make a claim for pension credit by calling the pension credit claim line on 0800 99 1234 or contacting a local advice centre as appropriate.

[HCWS96]

Financial Services Compensation Scheme

Harriett Baldwin Excerpts

Monday 6th July 2015 Written Statements

[The Economic Secretary to the Treasury (Harriett Baldwin)]

The level of protection offered by the Financial Services Compensation Scheme (FSCS) is changing. The statutory level of deposit protection is set by the European deposit guarantee schemes directive (DGSD), which was updated last year. It requires that all European member states provide for a deposit protection limit of €100,000. The FSCS limit must be set at the prevailing exchange rate on 3 July 2015.

Given the strength of sterling in relation to the euro, this means that the current level of protection provided by the FSCS under the statutory scheme will reduce. The Government have taken action to ensure that depositors are not exposed to a sudden reduction in the level of protection they receive from the FSCS.

HM Treasury has laid a statutory instrument to ensure that depositors who are currently entitled to up to £85,000 of protection from the FSCS will continue to be so until 31 December 2015. This is to ensure that depositors can have clarity and certainty about the protection they are entitled to, and time to react accordingly. These depositors will continue to be protected up to the maximum level of £85,000, by the FSCS until 31 December 2015, after which the new rate of £75,000 announced by the Prudential Regulation Authority (PRA) will come into effect. The PRA must review the coverage level at least every five years.

Individuals and small businesses that are depositors of banks, building societies or credit unions authorised by the PRA will qualify for the protection. The protection is not dependent on the time when the deposit was made—eligible deposits made after 3 July 2015 will also be protected.

These actions ensure that depositors who are currently entitled to protection of up to £85,000 are not subjected to a sudden reduction in this protection. It will ensure that there is sufficient time available for depositors to be made aware of the changes, and to take such steps as they feel necessary to manage their financial affairs appropriately in light of this change.

Implementing the new DGSD has resulted in a number of changes to deposit protection in the UK including expanding the coverage provided by the FSCS to cover large corporates and small local authorities; and provision of a new “temporary high balance” cover of up to £1 million for six months for certain deposits, such as the proceeds from the sale of your home. The extended coverage will not apply to deposits which only became entitled to protection under the new DGSD, which came into effect on 3 July 2015.

[HCWS86]

Financial Conduct Authority/Payment Systems Regulator

Harriett Baldwin Excerpts

Thursday 2nd July 2015 Written Statements

[The Economic Secretary to the Treasury (Harriett Baldwin)]

The annual reports and accounts 2014-15 of the Financial Conduct Authority and Payment Systems Regulator have today been laid before Parliament.

These reports form a key part of the accountability mechanism for the Financial Conduct Authority under the Financial Services and Markets Act 2000 and the Payment Systems Regulator under the Financial Services (Banking Reform) Act 2013. They assess the performance of the Financial Conduct Authority and Payment Systems Regulator over the past 12 months against their statutory objectives.

[HCWS84]

UK Debt Management Office (Business Plan)

Harriett Baldwin Excerpts

Thursday 25th June 2015 Written Statements

[The Economic Secretary to the Treasury (Harriett Baldwin)]

The United Kingdom Debt Management Office (DMO) has today published its business plan for the year 2015-16. Copies have been deposited in the Libraries of both Houses and are available on the DMO’s website, www.dmo.gov.uk.

It is also available online at: http://www.parliament.uk/writtenstatements.

[HCWS58]