Asked by: Lord Kennedy of Southwark (Labour - Life peer)
Question to the HM Treasury:
To ask Her Majesty's Government what plans they have to reform the law in respect of credit unions in the UK.
Answered by Lord Agnew of Oulton
The Government recognises the vital role of credit unions in the financial wellbeing of their communities, providing an ethical home for their members’ savings, and affordable loans to those who may otherwise have to resort to high-cost lenders.
That is why at Autumn Budget 2018, the Chancellor announced a pilot of a new prize-linked savings scheme offered through credit unions. This operated with 15 credit unions and has helped support the sector through increased membership, awareness and deposits. The Chancellor also announced a new £2 million challenge fund to promote innovative solutions from the UK’s Fintech sector to address challenges faced by social and community lenders, including credit unions. The winners of the challenge, which included Capital Credit Union and Serve and Protect Credit Union, were announced at Budget 2020.
The Government has also regularly engaged with the credit union sector, the Financial Conduct Authority and the Prudential Regulation Authority to assess the impact of the COVID-19 pandemic. Fair4All Finance, the independent body set up by Government to distribute dormant assets funding to support financial inclusion, has set up a £5 million resilience fund to support credit unions and community development finance institutions in England during the COVID-19 pandemic.
The Chancellor announced at Budget 2020 that the Government intends to bring forward changes to the Credit Unions Act to allow credit unions to offer a wider range of products and services. This will allow credit unions to continue to grow sustainably for the future and support them in the vital role they play in financial inclusion. The Economic Secretary recently spoke at the Association of British Credit Unions Limited and National Credit Union Forum annual conferences to reaffirm the Government’s commitment to legislative change and ongoing support for the sector.
The Government is engaging with the credit union sector and carefully assessing options before bringing forward legislation to ensure that we are delivering reforms which meet members’ needs and support the development of the credit union sector.
Asked by: Lord Kennedy of Southwark (Labour - Life peer)
Question to the HM Treasury:
To ask Her Majesty's Government what assessment they have made of the credit union sector in the UK.
Answered by Lord Agnew of Oulton
The Government recognises the vital role of credit unions in the financial wellbeing of their communities, providing an ethical home for their members’ savings, and affordable loans to those who may otherwise have to resort to high-cost lenders.
That is why at Autumn Budget 2018, the Chancellor announced a pilot of a new prize-linked savings scheme offered through credit unions. This operated with 15 credit unions and has helped support the sector through increased membership, awareness and deposits. The Chancellor also announced a new £2 million challenge fund to promote innovative solutions from the UK’s Fintech sector to address challenges faced by social and community lenders, including credit unions. The winners of the challenge, which included Capital Credit Union and Serve and Protect Credit Union, were announced at Budget 2020.
The Government has also regularly engaged with the credit union sector, the Financial Conduct Authority and the Prudential Regulation Authority to assess the impact of the COVID-19 pandemic. Fair4All Finance, the independent body set up by Government to distribute dormant assets funding to support financial inclusion, has set up a £5 million resilience fund to support credit unions and community development finance institutions in England during the COVID-19 pandemic.
The Chancellor announced at Budget 2020 that the Government intends to bring forward changes to the Credit Unions Act to allow credit unions to offer a wider range of products and services. This will allow credit unions to continue to grow sustainably for the future and support them in the vital role they play in financial inclusion. The Economic Secretary recently spoke at the Association of British Credit Unions Limited and National Credit Union Forum annual conferences to reaffirm the Government’s commitment to legislative change and ongoing support for the sector.
The Government is engaging with the credit union sector and carefully assessing options before bringing forward legislation to ensure that we are delivering reforms which meet members’ needs and support the development of the credit union sector.
Asked by: Lord Kennedy of Southwark (Labour - Life peer)
Question to the HM Treasury:
To ask Her Majesty's Government what assessment they have made of the impact of the COVID-19 pandemic on the credit union sector in the UK.
Answered by Lord Agnew of Oulton
The Government recognises the vital role of credit unions in the financial wellbeing of their communities, providing an ethical home for their members’ savings, and affordable loans to those who may otherwise have to resort to high-cost lenders. In April 2020, the Economic Secretary wrote to credit union trade bodies to thank frontline staff for their efforts to continue to provide essential services to their members.
HM Treasury officials have regularly engaged with the Financial Conduct Authority and Prudential Regulation Authority to understand the impact of the COVID-19 pandemic. The Economic Secretary has also engaged with representatives from the credit union sector through the Consumer Finance Forum and Financial Inclusion Policy Forum, which are bringing financial services and consumer group representatives together to discuss how to best support people through this period.
Fair4All Finance, the independent body set up by Government to distribute dormant assets funding to support financial inclusion, has set up a £5 million resilience fund to support credit unions and community development finance institutions in England during the COVID-19 pandemic. On 20 May, the Government announced that additional funding through the dormant assets scheme would be released immediately to Fair4All Finance. This includes an expanded Affordable Credit Scale-up Programme, which aims to improve the access and availability of affordable credit, and which I expect to be of benefit to credit unions.
Asked by: Lord Kennedy of Southwark (Labour - Life peer)
Question to the HM Treasury:
To ask Her Majesty's Government what assessment they have made of the impact of the COVID-19 pandemic on those who are unbanked.
Answered by Lord Agnew of Oulton
The Government is committed to supporting all groups in society, including the most vulnerable, with the challenges caused by Covid-19. The Government has boosted the generosity of the welfare system by £7.4bn in 2020-21 including through a temporary £20 a week increase in Universal Credit (UC) standard allowance and Working Tax Credit basic element, an increase in Local Housing Allowance rates and relaxation of UC minimum income floor for self-employed claimants. The Department for Work and Pensions offers HMG Payment Exception Service that allows customers access to funds via PayPoint outlets, for individuals who cannot access a bank account.
However, the Government recognises the importance of having a bank account, as it provides a way of receiving income, whether that be salary, pension, benefits or tax credit and opens up opportunities to access other financial products such as savings accounts, credit, insurance and mortgages. Throughout the Covid-19 pandemic, HM Treasury and the financial regulators have worked closely with banks, building societies and credit unions to maintain branch access for essential services, including for the purposes of opening a bank account.
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 (FCA) published the results of the Financial Lives Survey which found that 1.3 million UK adults do not hold an account they can use for day-to-day payments and transactions.
The 9 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 in the UK or who are ineligible for a bank’s standard current account. The Treasury publishes data on basic bank accounts annually. The December 2019 publication shows that in total there are nearly 7.5 million basic bank accounts open in the UK. More information can be found here:
https://www.gov.uk/government/collections/basic-bank-accounts
Asked by: Lord Kennedy of Southwark (Labour - Life peer)
Question to the HM Treasury:
To ask Her Majesty's Government what assessment they have made of the impact of the COVID-19 pandemic on the (1) use, and (2) circulation, of cash in the UK.
Answered by Lord Agnew of Oulton
The Government remains closely engaged with the financial regulators, including through the Treasury-chaired Joint Authorities Cash Strategy Group, to monitor and assess risks around cash relating to COVID-19.
It is too early to predict what permanent impacts the COVID-19 pandemic will have on cash usage and payments more broadly. However, it is reasonable to expect that knock on changes in how people purchase goods and services, and social distancing measures, have accelerated the decline in the use of cash, as people have become more comfortable with other forms of transactions and payments, for example contactless card payments.
During the COVID-19 pandemic, there has been an increase in the value of notes in circulation; the Bank of England considers this may be because of banknotes being held for contingent purposes. The return of coin to banks by businesses and the public has varied from its usual pattern. As a result there has been a greater demand for new coin from the Mint than forecast prior to the pandemic.
Asked by: Lord Kennedy of Southwark (Labour - Life peer)
Question to the HM Treasury:
To ask Her Majesty's Government what estimate they have made of the cost of financial scams to the UK economy.
Answered by Lord Agnew of Oulton
The Office for National Statistics publishes estimates on the volume of fraud against adult individuals in England and Wales in the Crime Survey for England and Wales quarterly releases.[1]
The ONS estimated that in the year ending June 2020 there were approximately 4.3 m fraud offences against adults in England Wales.
The ONS also publishes, as part of its data on crime, the total number of fraud offences that are referred to the National Fraud Intelligence Bureau (NFIB) by industry bodies (UK finance and CIFAS) or recorded by Action Fraud each year. In the year ending June 2020, 733,967 cases were referred to the NFIB or recorded by Action Fraud. The ONS also provide a breakdown of this data by fraud type. For example, there were 415,274 cases of banking and credit industry fraud reported and 14,616 cases of financial investment fraud.[2]
The Home Office has estimated that the total cost of fraud to individuals in England and Wales in 2015/2016 was £4.7bn[3]. They also estimated that the economic cost of organised fraud against businesses and the public sector in the UK was £5.9bn.[4]
[1] https://www.ons.gov.uk/peoplepopulationandcommunity/crimeandjustice/bulletins/crimeinenglandandwales/yearendingjune2020
Asked by: Lord Kennedy of Southwark (Labour - Life peer)
Question to the HM Treasury:
To ask Her Majesty's Government what assessment they have made of the (1) scale, and (2) type, of financial scams targeted at people in the UK.
Answered by Lord Agnew of Oulton
The Office for National Statistics publishes estimates on the volume of fraud against adult individuals in England and Wales in the Crime Survey for England and Wales quarterly releases.[1]
The ONS estimated that in the year ending June 2020 there were approximately 4.3 m fraud offences against adults in England Wales.
The ONS also publishes, as part of its data on crime, the total number of fraud offences that are referred to the National Fraud Intelligence Bureau (NFIB) by industry bodies (UK finance and CIFAS) or recorded by Action Fraud each year. In the year ending June 2020, 733,967 cases were referred to the NFIB or recorded by Action Fraud. The ONS also provide a breakdown of this data by fraud type. For example, there were 415,274 cases of banking and credit industry fraud reported and 14,616 cases of financial investment fraud.[2]
The Home Office has estimated that the total cost of fraud to individuals in England and Wales in 2015/2016 was £4.7bn[3]. They also estimated that the economic cost of organised fraud against businesses and the public sector in the UK was £5.9bn.[4]
[1] https://www.ons.gov.uk/peoplepopulationandcommunity/crimeandjustice/bulletins/crimeinenglandandwales/yearendingjune2020
Asked by: Lord Kennedy of Southwark (Labour - Life peer)
Question to the HM Treasury:
To ask Her Majesty's Government what plans they have to extend the business rate holiday for (1) hospitality businesses, and (2) their suppliers, as such businesses recover from the COVID-19 pandemic.
Answered by Lord Agnew of Oulton
The Government has taken the unprecedented step of providing over £10 billion in business rates relief this year for eligible retail, hospitality and leisure properties.
As announced at the Spending Review, to support businesses next year the Government will freeze the multiplier and will announce any decisions on future rate reliefs in the New Year.
Asked by: Lord Kennedy of Southwark (Labour - Life peer)
Question to the HM Treasury:
To ask Her Majesty's Government what plans they have to extend the VAT deferral scheme to support the hospitality sector as that sector recovers from the COVID-19 pandemic.
Answered by Lord Agnew of Oulton
The VAT payments deferral scheme ended on 30 June 2020, as planned. As part of the Winter Economy Plan, the Government announced further support for those with deferred VAT, allowing them to spread what they owe over smaller monthly payments. More information on the VAT deferral new payment scheme is available on GOV.UK, as is more information on other support for businesses.
Asked by: Lord Kennedy of Southwark (Labour - Life peer)
Question to the HM Treasury:
To ask Her Majesty's Government what assessment they have made of the risk of countries defaulting on repayments as a result of the COVID-19 pandemic.
Answered by Lord Agnew of Oulton
The Government is closely monitoring the impact of the crisis on the debt situation in developing countries, including through our membership of the International Monetary Fund, World Bank and Paris Club. It is clear that the COVID-19 pandemic is placing extraordinary pressures on the finances of low and middle income countries. Recognising this, the G20 has taken action to support these countries, agreeing the landmark DSSI (Debt Service Suspension Initiative). The DSSI provides a suspension of debt repayments to eligible countries so they can focus resources on their coronavirus response. The UK is also pleased with the in-principle agreement by the G20 to a Common Framework for debt restructuring. This is crucial to ensuring coordinated debt relief to countries which require it on a case-by-case basis, with fair burden sharing between all official and private creditors.