Asked by: Harriett Baldwin (Conservative - West Worcestershire)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, with reference to the oral contribution of the Economic Secretary during the debate on Financial Advice and Guidance: Consumer Market of 9 January 2024, Official Report, column 32WH, when he plans to provide the hon. Member for West Worcestershire with information on whether a specific vote on primary or secondary legislation is required to deal with the proposals in the joint Government and FCA review of the regulatory boundary between financial advice and guidance.
Answered by Bim Afolami - Economic Secretary (HM Treasury)
The government and Financial Conduct Authority (FCA) are exploring a range of regulatory and legislative options for implementation and there are elements of the package that could require amendment to the Financial Services and Markets Act 2000 (Regulated Activities) Order 2001 through secondary legislation. We will consider whether any wider changes to the existing regulatory and legislative regime would be required to deliver the proposals successfully within a coherent broader framework.
Asked by: Harriett Baldwin (Conservative - West Worcestershire)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, which computer systems used by His Majesty's Revenue and Customs have been supplied by Fujitsu since 2000.
Answered by Nigel Huddleston - Financial Secretary (HM Treasury)
I understand that the honourable member has written in similar terms to Jim Harra (Permanent Secretary at HMRC) in her capacity as Chair of the Treasury Select Committee and that Jim Harra will be responding in due course.
Asked by: Harriett Baldwin (Conservative - West Worcestershire)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, whether he plans to bring forward legislative proposals to permit protected cell companies to insure defined benefit pension plans in the United Kingdom to match the regulations in Gibraltar.
Answered by Bim Afolami - Economic Secretary (HM Treasury)
The Government keeps all legislation under review and actively seeks to learn from international jurisdictions. However, there are currently no plans to allow protected cell companies to insure defined benefit pension plans in the UK.
Asked by: Harriett Baldwin (Conservative - West Worcestershire)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what assessment he has made of trends in the level of inflation on the £25 billion retail deposit level at which banks are required to ring-fence their retail deposit-taking operations.
Answered by Andrew Griffith - Minister of State (Department for Science, Innovation and Technology)
On 28 September 2023, the government published draft secondary legislation for consultation on reforms to the ring-fencing regime. The reforms will make the regime smarter and simpler by taking forward recommendations made by the independent ring-fencing review and going further in a number of areas. This includes increasing the “core deposit” threshold, above which firms become subject to the regime, from £25bn to £35bn.
The deposit threshold was originally set at £25bn by HM Treasury following recommendations from the Independent Commission on Banking (ICB) in 2011. The government white paper published in 2011 in response to the ICB outlined that the threshold would need to be adjusted over time to reflect the evolution of banking practices and growth in the deposit base.
Since then, the deposit base has grown significantly and the resilience of the banking sector has increased. The proposed £10bn increase to the threshold would result in approximately 90% of banks’ UK retail deposits being covered by the ring-fencing regime, which is broadly in line with the proportion covered when the threshold was set originally.
The updated threshold will provide banks currently below the £25bn deposit threshold with more room to grow before becoming subject to the ring-fencing regime. By removing a potential barrier to growth for banks, this proposal will support competition in the UK retail banking industry, and benefit the sector and its customers as a whole
The government will publish an impact assessment on its proposed reforms to the ring-fencing regime alongside introducing forthcoming secondary legislation.
Asked by: Harriett Baldwin (Conservative - West Worcestershire)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what recent assessment he has made of the potential impact of the £25 billion threshold for banks to separate out their retail deposit-taking operations into a ring-fenced entity on the competitiveness of the UK retail bank industry.
Answered by Andrew Griffith - Minister of State (Department for Science, Innovation and Technology)
On 28 September 2023, the government published draft secondary legislation for consultation on reforms to the ring-fencing regime. The reforms will make the regime smarter and simpler by taking forward recommendations made by the independent ring-fencing review and going further in a number of areas. This includes increasing the “core deposit” threshold, above which firms become subject to the regime, from £25bn to £35bn.
The deposit threshold was originally set at £25bn by HM Treasury following recommendations from the Independent Commission on Banking (ICB) in 2011. The government white paper published in 2011 in response to the ICB outlined that the threshold would need to be adjusted over time to reflect the evolution of banking practices and growth in the deposit base.
Since then, the deposit base has grown significantly and the resilience of the banking sector has increased. The proposed £10bn increase to the threshold would result in approximately 90% of banks’ UK retail deposits being covered by the ring-fencing regime, which is broadly in line with the proportion covered when the threshold was set originally.
The updated threshold will provide banks currently below the £25bn deposit threshold with more room to grow before becoming subject to the ring-fencing regime. By removing a potential barrier to growth for banks, this proposal will support competition in the UK retail banking industry, and benefit the sector and its customers as a whole
The government will publish an impact assessment on its proposed reforms to the ring-fencing regime alongside introducing forthcoming secondary legislation.
Asked by: Harriett Baldwin (Conservative - West Worcestershire)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, with reference to his Department's policy paper, Mortgage Charter, updated on 5 July, what recent assessment he has made of the implications for his policies of proposed solutions in the report entitled Releasing the mortgage prisoners, published by the London School of Economics in February 2023.
Answered by Andrew Griffith - Minister of State (Department for Science, Innovation and Technology)
The Government understands that being unable to switch your mortgage can be extremely stressful, and, alongside the Financial Conduct Authority (FCA) and industry, have shown we are willing to act through the introduction of a ‘modified affordability assessment’. We are also regularly in contact with key stakeholders, including recently with the All Party Parliamentary Group on Mortgage Prisoners.
Importantly, all lenders – including those with inactive books - are regulated by the FCA and must provide tailored support to borrowers. The Chancellor has made clear his expectation for lenders to live up to their responsibilities and support any mortgage borrowers who are finding it tough right now. The Government hopes other firms will do the right thing and sign up to the Mortgage Charter as soon as possible.
However, the Government remains committed to the issue of mortgage prisoners, and we are considering the proposals put forward in the London School of Economics report very carefully. While we cannot force lenders to lend to borrowers they consider too high a risk, the Government welcomes any further practical and proportionate solutions that would meaningfully assist affected borrowers and be fair to other borrowers in the wider market.
Asked by: Harriett Baldwin (Conservative - West Worcestershire)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, whether he plans to review the Lifetime Individual Savings Account first home property value limit.
Answered by Andrew Griffith - Minister of State (Department for Science, Innovation and Technology)
The Government is committed to supporting people of all incomes and at all stages of life to save, and to making the aspiration of home ownership a reality for as many households as possible.
Data from the latest UK House Price Index demonstrates that the average price paid by first-time buyers is below the LISA property price cap in all regions of the UK except for Inner London, where the average price paid is affected by Boroughs with very high property values.
The Government keeps all aspects of the savings tax regime under review.
Asked by: Harriett Baldwin (Conservative - West Worcestershire)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, when he plans to review the Interchange Fee Regulation in the United Kingdom for domestic interchange fee caps.
Answered by Andrew Griffith - Minister of State (Department for Science, Innovation and Technology)
As set out in the ‘Edinburgh Reforms’ package, the Interchange Fee Regulation 2015 is due to be reviewed as part of Tranche 3 of the Future Regulatory Framework Review implementation programme.
This prioritisation reflects the fact that the Payment Systems Regulator (PSR) is currently undertaking market reviews into card fees, including aspects of interchange fee policy. The government continues to monitor the reviews with interest and will consider, following the outcomes of the reviews, whether there are implications for legislative change.
Asked by: Harriett Baldwin (Conservative - West Worcestershire)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what progress his Department has made on implementing the recommendations of the 2016 Financial Advice Market Review.
Answered by Andrew Griffith - Minister of State (Department for Science, Innovation and Technology)
The Financial Advice Market Review (FAMR) final report was published in March 2016, setting out a package of 28 recommendations, which HM Treasury and the FCA have since implemented.
Key pieces of work taken forward as a response to the FAMR recommendations include clarifying the definition of financial advice and introducing the Pension Advice Allowance to allow consumers to withdraw £500 from their pension pots to pay for advice.
In December 2020, the FCA published an evaluation of the 2016 FAMR. This showed that the financial advice market was moving in the right direction, with more people accessing financial advice. However, there are still some remaining policy challenges to help the market work better for consumers, including around helping consumers make better investment decisions.
As part of the Edinburgh Reforms, the Chancellor committed to working with the FCA to examine the boundary between regulated financial advice and financial guidance, with the objective of improving access to helpful advice, support and information, while maintaining strong protections for consumers.
Asked by: Harriett Baldwin (Conservative - West Worcestershire)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, whether it remains the policy of his Department that the Royal Mint issue a Non Fungible Token.
Answered by Andrew Griffith - Minister of State (Department for Science, Innovation and Technology)
In consultation with HM Treasury, the Royal Mint is not proceeding with the launch of a Non-Fungible Token at this time but will keep this proposal under review.