Asked by: Julian Sturdy (Conservative - York Outer)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what assessment his Department has made of the accessibility of in-branch banking services for people living in urban areas.
Answered by John Glen - Paymaster General and Minister for the Cabinet Office
The branch strategy of individual firms may be driven by a variety of factors, including customer interests, market competition and other commercial considerations. These are commercial decisions for firms and the Government does not intervene in this decision-making.
Throughout the Covid-19 pandemic, the Government has been working closely with the financial regulators, banks, building societies and credit unions to ensure they continue to maintain branch access for essential services while balancing the needs of their customers with the safety and welfare of staff. Though many firms have reduced their opening hours the vast majority of branches have remained open for customers. Furthermore, several retail banks have put in place solutions for vulnerable customers, including enabling them to make payments through a trusted person or have their cash securely delivered to them at home. Many firms have also set up dedicated phone lines so these customers can speak to their provider as quickly as possible.
The way consumers interact with their banking is changing. In recent years, over two-thirds of UK adults have used contactless payments and online banking and nearly half have used mobile banking, according to UK Finance. As a result of the pandemic, many customers may have used these channels for the first time. However, the Government still firmly believes that the impact of branch closures should be understood, considered, and mitigated where possible so that all customers, wherever they live, continue to have access to over-the-counter banking services if they wish to use them. That’s why the Government supports the industry’s Access to Banking Standard which informs customers of the bank’s reason for closure and helps customers to understand the options they have locally to continue to access banking services.
The Post Office also allows 95% of business and 99% of personal banking customers to carry out their everyday banking at 11,500 Post Office branches across the UK. Customers have been able to use the Post Office for essential banking services as an alternative to their branch throughout the pandemic. Customers can also use ATMs or cash machines as normal for cash withdrawals and balance enquiries.
In July 2020, the regulator the Financial Conduct Authority published draft guidance setting out their expectation of firms when they are deciding whether and how to reduce their physical branches or the number of free to use ATMs. Firms are expected to carefully consider the impact of a planned closure on their customers’ everyday banking and cash access needs, and other relevant branch services and consider possible alternative access arrangements, which may include mobile branches. This will ensure the implementation of closure decisions is done in a way that treats customers fairly.
Asked by: Jamie Stone (Liberal Democrat - Caithness, Sutherland and Easter Ross)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what discussions his Department has had with the Financial Conduct Authority and the Payment Systems Regulator on a minimum service guarantee for cash; and with reference to the March 2020 Budget whether he has a timeframe for bringing forward legislative proposals on protecting access to cash.
Answered by John Glen - Paymaster General and Minister for the Cabinet Office
The Government recognises that cash remains extremely important to the daily lives of millions of people across the UK. The Government remains closely engaged with the financial regulators to monitor and assess risks around cash access and acceptance resulting from COVID-19. This includes working closely with industry to ensure access to cash.
At the March 2020 Budget, the Chancellor announced that the Government will bring forward legislation to protect access to cash in the longer-term. The Government is engaging with regulators – the Payment Systems Regulator, Financial Conduct Authority and Bank of England – and stakeholders across industry while designing legislation, to ensure the needs of cash users continue to be met. Further details on timing for legislation will be set out in due course.
Regarding face-to-face banking, the Government has been working closely with the financial regulators to ensure that banks, building societies, the Post Office and credit unions continue to maintain branch access for essential services while balancing the needs of their customers with the safety and welfare of staff. The vast majority of branches are open, though many are open for reduced hours.
Banks, building societies and credit unions are keeping their websites up to date and we would encourage customers, wherever possible, to use online services for their banking. If customers are not able to use online forms of banking, they may choose to use telephone banking rather than using a branch. The Government advises any customer who has questions or concerns about their banking to contact their provider.
Bank customers can also use the Post Office for essential banking services as an alternative to their branch and can continue to use ATMs or cash machines as normal for cash withdrawals and balance enquiries. Furthermore, several retail banks have in place solutions for vulnerable customers who may be self-isolating, including making payments through a trusted person.
Asked by: Jamie Stone (Liberal Democrat - Caithness, Sutherland and Easter Ross)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what steps he is taking to support people who require access to (a) offline and (b) face-to-face banking during the covid-19 outbreak.
Answered by John Glen - Paymaster General and Minister for the Cabinet Office
The Government recognises that cash remains extremely important to the daily lives of millions of people across the UK. The Government remains closely engaged with the financial regulators to monitor and assess risks around cash access and acceptance resulting from COVID-19. This includes working closely with industry to ensure access to cash.
At the March 2020 Budget, the Chancellor announced that the Government will bring forward legislation to protect access to cash in the longer-term. The Government is engaging with regulators – the Payment Systems Regulator, Financial Conduct Authority and Bank of England – and stakeholders across industry while designing legislation, to ensure the needs of cash users continue to be met. Further details on timing for legislation will be set out in due course.
Regarding face-to-face banking, the Government has been working closely with the financial regulators to ensure that banks, building societies, the Post Office and credit unions continue to maintain branch access for essential services while balancing the needs of their customers with the safety and welfare of staff. The vast majority of branches are open, though many are open for reduced hours.
Banks, building societies and credit unions are keeping their websites up to date and we would encourage customers, wherever possible, to use online services for their banking. If customers are not able to use online forms of banking, they may choose to use telephone banking rather than using a branch. The Government advises any customer who has questions or concerns about their banking to contact their provider.
Bank customers can also use the Post Office for essential banking services as an alternative to their branch and can continue to use ATMs or cash machines as normal for cash withdrawals and balance enquiries. Furthermore, several retail banks have in place solutions for vulnerable customers who may be self-isolating, including making payments through a trusted person.
Asked by: Ronnie Cowan (Scottish National Party - Inverclyde)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what support his Department is providing to people who require access to offline or face-to-face banking during the covid-19 outbreak.
Answered by John Glen - Paymaster General and Minister for the Cabinet Office
Banks, building societies, the Post Office and credit unions are working closely with the Treasury and the financial regulators to maintain branch access for essential services while balancing the needs of their customers with the safety and welfare of staff. The vast majority of branches are open, though many are open for reduced hours.
Banks, building societies and credit unions are keeping their websites up to date and we would encourage customers, wherever possible, to use online services for their banking. If customers are not able to use online forms of banking, they may choose to use telephone banking rather than using a branch. The Government advises any customer who has questions or concerns about their banking to contact their provider.
Bank customers can also use the Post Office for essential banking services as an alternative to their branch and can continue to use ATMs or cash machines as normal for cash withdrawals and balance enquiries. Furthermore, several retail banks have in place solutions for vulnerable customers who may be self-isolating, including making payments through a trusted person.
Furthermore, several retail banks have in place solutions for vulnerable customers who may be self-isolating, including making payments through a trusted person.Asked by: Baroness McIntosh of Pickering (Conservative - Life peer)
Question to the Department for Business, Energy and Industrial Strategy:
To ask Her Majesty's Government what steps they are taking to promote access to, and services provided by, rural post offices; and wwhether they will provide an update on the status of the Post Office Card Account.
Answered by Lord Duncan of Springbank
Government committed in its 2017 manifesto to safeguard the Post Office network and protect existing rural services, recognising the important role post offices play in serving their communities. The Government promotes access to rural post offices by setting accessibility criteria which the Post Office must meet. This ensures that in rural areas over 95% of people are within 3 miles of their nearest post office service. In remote and rural areas where it is difficult to deliver services to consumers via a permanent site, Post Office Limited use outreach services, such as a mobile van, or a village hall. These offer the same products and services as bricks-and-mortar branches.
In recent years the Government has provided over £2bn investment into the Post Office which has seen over 7700 branches modernised, many thousands in rural areas. Having a modern accessible network enables the Post Office to secure and deliver services for customers, such as banking, bill payment and mails services, across the whole network, including rural areas, where in many cases the post office is the last shop in the village.
The contract for the Post Office Card Account (POca) is a commercial matter for the Department for Work and Pensions (DWP) and Post Office Limited (POL). The contract will come to an end on 30 November 2021. DWP is working with Post Office Limited (POL) to prepare POca users for this by undertaking a project to move significant volumes of existing POca service users onto a mainstream bank account. Those POca customers who transition to a mainstream account will still be able to access their pension and benefit payments via the post office.
For claimants who are unable to open a mainstream account ahead of this date, DWP will implement an alternative payment service that allows users to obtain cash payments whatever their location before the end of the contract.
Asked by: Anne Main (Conservative - St Albans)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what steps his Department is taking to increase the level of support it provides to the FinTech sector in the UK.
Answered by John Glen - Paymaster General and Minister for the Cabinet Office
The UK has been independently ranked as the best place in the world to start and grow a Fintech firm, and the government is committed to maintaining the UK’s leading edge in the sector. That is why the government has delivered against all of the commitments made in the Fintech Sector Strategy, which was launched last year.
The government announced at Mansion House 2019 that HM Treasury would launch a review into the payments landscape, which looks to ensure that regulation and infrastructure is able to keep pace with new payments models. The government also announced that it would explore building on the success of Open Banking by developing an agenda for ‘Open Finance’, looking at ways to safely and securely share data across a wider range of financial services products. This will further revolutionise the sector and increase the ability of Fintech firms to compete with traditional financial services firms.
Asked by: Debbie Abrahams (Labour - Oldham East and Saddleworth)
Question to the Department for Work and Pensions:
To ask the Secretary of State for Work and Pensions, what discussions she has had with the Secretary of State for Business, Energy and Industrial Strategy on the effect of the franchise of crown post offices to WHSmith on people who receive and access their welfare and pensions from a Post Office card account.
Answered by Guy Opperman - Parliamentary Under-Secretary (Department for Transport)
The DWP will continue to maintain Post Office card accounts until 2021 and anyone affected after this date will be able to access their money via a suitable banking product that they are able to open themselves. Most bank accounts are available over the counter at Post Office branches and supportive messages are used to signpost customers and encourage them to continue collecting their money at the Post Office. Where this is not possible, the DWP will provide a suitable replacement service after this date.
The DWP has a contract in place with Post Office Limited to provide access to Post Office card accounts throughout its network of branches and ATM’s, this includes some retail outlets. The contract ensures that Post Office card account users have reasonable access to their benefit and pension payments.
Asked by: Jo Platt (Labour (Co-op) - Leigh)
Question to the Department for Levelling Up, Housing & Communities:
To ask the Secretary of State for Communities and Local Government, what steps his Department is taking to support home ownership among people with poor or no credit history.
Answered by Alok Sharma - COP26 President (Cabinet Office)
The availability and pricing of mortgages is ultimately a decision for lenders, and the Government does not seek to directly intervene in these.
First time buyers can benefit from a tax-free Government bonus of up to £3,000 if they save with a Help to Buy:ISA. The bonus will represent 25 per cent of the amount saved, up to a maximum of £3,000 on £12,000 of savings. The bonus will be calculated and paid when you buy your first home, available on homes up to £250,000, or £450,000 in London.
In addition, the Government is supportive of efforts to help borrowers access credit, including mortgages. The Government will introduce new Open Banking standards from January 2018, allowing consumers to share data directly from their payment accounts in a secure way. This will enable quicker and more accurate credit reporting, allowing lenders to take other factors into account when assessing a borrower's creditworthiness, such as a history of meeting rent payments on time.
Asked by: Lord Taylor of Warwick (Non-affiliated - Life peer)
Question to the HM Treasury:
To ask Her Majesty’s Government what steps they are taking to help small lenders to compete effectively with the larger banks, in the light of the new bank corporation tax surcharge.
Answered by Lord O'Neill of Gatley
The banking tax roadmap set out at the Summer Budget means that banks will end up paying a corporation tax rate which is the lowest in the G7 and lower than at any time under the last Labour government. There is also an allowance in the surcharge for the first £25 million of a banking group’s profits, reducing the impact on smaller banks and excluding many altogether.
The Government is committed to improving competition in banking to improve outcomes for consumers. Challenger banks play a crucial role in providing consumers with more choice on the high street.
The Government has already taken significant action to improve competition in banking and create an environment that reduces barriers to entry and incentivises new banks to enter the market. This includes:
driving the delivery and supporting the continued success of the Current Account Switch Service and Midata, so customers can compare personal current accounts and switch banks where they see a better deal – simply, quickly and reliably;
committing at Budget 2015 to deliver an open standard to Application Programming Interfaces (APIs) in UK banking – as well as helping customers engage more with their bank, it will drive innovation and increase competitive intensity by supporting the growth of technology that can be used by banks and non-bank providers to offer new products;
improving competition in the small and medium sized enterprise (SME) lending market by requiring the major banks to share SME credit data with other lenders through designated credit reference agencies, and to offer any SMEs they turn down for finance the chance to have their details passed to online platforms that can help match them with alternative finance providers;
announcing at Summer Budget 2015 that the Prudential Regulation Authority (PRA) and Financial Conduct Authority (FCA) will establish a joint New Bank Unit to help prospective new banks enter the market and through the early days of authorisation – the PRA and FCA will also produce annual reports on how they are delivering against their respective competition objectives;
putting competition at the heart of the regulatory system by creating the new Payments System Regulator to ensure challenger banks can access payment systems on fair and equal terms – the Government has also created a single, stronger competition regulator: the Competition and Markets Authority.
Asked by: Adam Afriyie (Conservative - Windsor)
Question to the HM Treasury:
To ask Mr Chancellor of the Exchequer, what steps his Department has taken to boost the growth of the financial technology industry.
Answered by Andrea Leadsom - Parliamentary Under-Secretary (Department of Health and Social Care)
As part of our long term economic plan, the Government is committed to supporting the continued growth of the Financial Technology (FinTech) sector. The Government has taken a number of steps to achieve this, including:
Creating a new Payments Systems Regulator (PSR), which will ensure that smaller banks and alternative providers of finance – including FinTechs – can access payment systems in a fair and transparent way, and thereby contributing to a fairer and more competitive payments industry. The PSR will open its doors on 1 April this year.
Committing to additional funding of £100m to the British Business Bank’s Investment Programme – including funding for FinTech.
Launching the GO-Science’s Blackett Review on FinTech Futures, which looks ahead 10 years to the future and identify what the technologies, enablers and barriers are that will shape the future of the UK FinTech sector.
Naming the big banks that will have to share credit data, and refer on SMEs they reject for finance – helping alternative finance providers, including FinTech firms, to lend more effectively;
Supporting the development of the peer-to-peer lending and crowdfunding market: consulting on ISA eligibility for crowdfunded debt securities; announcing we will review EU regulations standing in the way of P2P institutional lending; and creating a bespoke regulatory framework for P2P.
Most recently at budget 2015, we announced a further package of measures to build on the government’s wide-reaching programme of reform to drive competition in banking and FinTech, including announcing that:
The Government intends to apply anti-money laundering regulation to digital currency exchanges in the UK, launch a new research initiative into digital currency technology, with £10 million additional funding, and work with the British Standards Institution and the digital currency industry to develop voluntary standards for consumer protection.
Gocompare will launch the first personal current account comparison tool making use of customers’ bank midata releases on 26 March 2015.
The Government will work with the banks and FinTech firms to develop an open API (Application Programming Interface) standard for banks, by the end of the year.
the Financial Conduct Authority’s (FCA) ‘Project Innovate’ will work with HMT and the Prudential Regulation Authority (PRA) to investigate the feasibility of developing a regulatory ‘sandbox’ for financial services innovators
Innovate Finance has agreed to deliver its FinTech regional strategy through a series of local partnerships; the first partnership has already been established in Leeds, and further partnerships will be established in Manchester and Edinburgh by April, and in Newcastle, Bristol and other centres before the end of the year.