Asked by: Stella Creasy (Labour (Co-op) - Walthamstow)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what assessment he has made of the impact of increasing living costs on the number of people using buy now pay later services.
Answered by John Glen - Paymaster General and Minister for the Cabinet Office
HM Treasury regularly monitors changes in the consumer credit market, including the impact of economic developments, as part of its normal process of policy development.
However, it does not hold information regarding the impact of increasing living costs on the number of people using Buy-Now Pay-Later (BNPL), or the prevalence of the use of BNPL products to purchase essential items. Instead, HMT draws on the research of various stakeholders, including consumer groups and the wider financial services industry, to inform policy development.
The Woolard Review into the unsecured credit market found several potential risks of consumer detriment from interest-free BNPL products. The Government recognises those risks, but also notes that as an interest-free product, BNPL can often be lower-risk than other forms of borrowing and a useful tool to help consumers manage their finances. That is why on 2 February 2021, the Government announced its intention to regulate BNPL products in a proportionate manner.
The Government published a consultation on policy proposals for the regulation of BNPL on 21 October 2021, which closed on 6 January 2022. The Government is now reviewing responses to this consultation and considering next steps and intends to publish a consultation response in the spring.
Asked by: Stella Creasy (Labour (Co-op) - Walthamstow)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what recent assessment the Government has made of the prevalence of the use of buy now pay later products to purchase (a) toiletries, (b) food and (c) other essential items.
Answered by John Glen - Paymaster General and Minister for the Cabinet Office
HM Treasury regularly monitors changes in the consumer credit market, including the impact of economic developments, as part of its normal process of policy development.
However, it does not hold information regarding the impact of increasing living costs on the number of people using Buy-Now Pay-Later (BNPL), or the prevalence of the use of BNPL products to purchase essential items. Instead, HMT draws on the research of various stakeholders, including consumer groups and the wider financial services industry, to inform policy development.
The Woolard Review into the unsecured credit market found several potential risks of consumer detriment from interest-free BNPL products. The Government recognises those risks, but also notes that as an interest-free product, BNPL can often be lower-risk than other forms of borrowing and a useful tool to help consumers manage their finances. That is why on 2 February 2021, the Government announced its intention to regulate BNPL products in a proportionate manner.
The Government published a consultation on policy proposals for the regulation of BNPL on 21 October 2021, which closed on 6 January 2022. The Government is now reviewing responses to this consultation and considering next steps and intends to publish a consultation response in the spring.
Asked by: Stella Creasy (Labour (Co-op) - Walthamstow)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, how much the Government has spent on promoting the tax-free childcare scheme in each of the last four financial years.
Answered by Simon Clarke
The government is committed to supporting families with their childcare costs. 316,000 families used Tax-Free Childcare for 371,000 children and spent £35.0 million on top-up for families in September 2021; compared to 227,000 families who used Tax-Free Childcare for 263,000 children and spent £26.5m in September 2020.
The government has spent the following on marketing and research in the current and three previous financial years.
2018/19 – £1,113,270
2019/20 – £241,580
2020/21 – £197,338
2021/22 – £151,205 (full year forecast and not all costs are committed)
In 2018/19 marketing spend involved a national campaign as part of the phased rollout of the scheme.
Asked by: Stella Creasy (Labour (Co-op) - Walthamstow)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, how many and what proportion of eligible families with children under five (a) have an open Tax Free Childcare account and (b) used their Tax Free Childcare account in 2020-21.
Answered by Simon Clarke
The total eligible population is 1.3m families. This estimate is not broken down by family characteristics. The total number of eligible children in those families is 1.7m for 2020-21.The table below shows the total number of children with open and used Tax-Free Childcare accounts for 0-4 year olds in 2020-21:
Month/Year | Total Open Accounts (0-4 year olds) | Total Used Accounts (0-4 year olds) |
Apr-20 | 447,725 | 87,055 |
May-20 | 442,905 | 62,575 |
Jun-20 | 446,180 | 117,490 |
Jul-20 | 460,955 | 157,200 |
Aug-20 | 470,145 | 159,840 |
Sep-20 | 465,120 | 225,020 |
Oct-20 | 464,860 | 232,435 |
Nov-20 | 474,150 | 240,935 |
Dec-20 | 477,185 | 245,065 |
Jan-21 | 490,315 | 230,370 |
Feb-21 | 503,135 | 230,450 |
Mar-21 | 525,770 | 283,095 |