Mark Garnier MP: speeches 2025

Speeches

• 22 Apr 2025 · Retail Investment · Hansard source

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  I think the Minister has covered most of my questions, but I will review and we can perhaps have a conversation later.

• 22 Apr 2025 · Retail Investment · Hansard source

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  It is a pleasure to serve under your leadership, Mrs Hobhouse, and I congratulate you on your first Westminster Hall debate as a member of the Panel of Chairs—you have handled it masterfully. I also congratulate the hon. Member for Buckingham and Bletchley (Callum Anderson) on securing this debate. He previously worked for the London stock exchange; he may be interested to know that I started my 27-year investment career as a dealer on the floor of the exchange in what we like to refer to as “the olden days”. There will be an almost unanimous outbreak of agreement across the Chamber. The hon. Member made some very important points. There is one point on which I slightly disagree, but he could basically have written my speech. One of the things that the hon. Member mentioned is the idea of acclimatising people to the idea of investment. When I was first elected as an MP, a number of us spearheaded a campaign to get investing and financial education into the national curriculum. At the time, it was clear that too many young people were leaving school without any understanding of the basics of personal finance, let alone the potential of sensible long-term investment. Whether it is saving for a rainy day or putting away money to buy a home, making the right investment choices is absolutely vital. Retail investment should absolutely form a cornerstone of any investment strategy, but not enough people are aware of the long-term benefits of stocks and shares investment versus cash deposits. Polling conducted by Opinium last year highlighted that fewer than half of respondents felt confident about opening a stocks and shares ISA. I have always felt that the lack of knowledge starts with the lack of the right education. Better financial education was recommended by the Parliamentary Commission on Banking Standards when I was on it over a decade ago—a long time before many Members here were elected. In 2014, I thought we had finally settled the debate about financial education in the curriculum. The national curriculum was updated to see financial education become a statutory part of it for the first time. Although it is still on the national curriculum, it has become clear that there is not enough focus on getting schools to teach it consistently. Academy schools that do not follow the curriculum have no requirement to teach financial education if they choose not to. I thank my hon. Friend the Member for Mid Leicestershire (Mr Bedford) for recently taking up the baton. His private Member’s Bill would make financial education mandatory for all students aged five to 18, which could resolve some of the issues we are debating here. Of course, things have moved on since my original campaign. It is clear that there is a real appetite for young people to become investors. Although the UK continues to lag behind countries like the United States when it comes to active retail investment, since the pandemic interest in investing has substantially risen among younger age groups, particularly Gen Z. That has partly been driven by cryptoasset investment, which, if I am being entirely honest, is something I find a bit odd. Younger investors aged between 18 and 24 are more likely than older investors to invest in cryptoassets. A survey carried out by the Financial Conduct Authority showed that 46% of young investors report holding cryptocurrencies compared with just 7% of investors aged 55 to 65. They are influenced by trends they see on social media such as TikTok, with cryptocurrency influencers bragging about fabulous returns—of course, there are fabulous losses as well. The bedrock of financial education is the old adage, “If it is too good to be true, then it probably is.” I am not against investment in cryptoassets, but as any good investor knows they should be seen as part of a balanced portfolio. Any young people with an appetite for taking investment risks should know that they could be better served with investments into the stock market rather than in the volatility of cryptotrading. I hope the Minister will outline how the Government intend to get our schools teaching financial education. Will she confirm whether the Government support the principles set out in the Financial Education Bill, which has had cross-party support? Online trading platforms have now made it easier than ever to become an investor. Despite the easy accessibility, the FCA’s 2022 Financial Lives survey showed that while more than 15 million adults in the UK have investable assets exceeding £10,000, more than half hold at least 75% of those assets in cash. There are very good reasons to hold cash, particularly as people get towards retirement age or want to divest to buy a property or a car. It is for that reason that we believe it is important to retain the individual choice of how to use a tax-free ISA and keep its current allowance unchanged. There is another important point about cash ISAs. They provide substantial capital for building societies, which use the capital to lend on in the form of mortgages. If we reduce the amount of money that can go into cash ISA, we potentially reduce the amount of money available to the mortgage market. We need to think in a balanced way. There are other ways to focus the minds of people, helping them to make better investment decisions, while retaining the flexibility to spend their ISA in their and their families’ best interests. The Investment Association has called for cash products to come with risk warnings, in the same way as all financial products. That could be as simple as comparing the quoted savings rates against inflation—a point the hon. Member for Buckingham and Bletchley made. In that way, an investor would know that their investment could in fact be losing money in real terms versus inflation. Just as we rightly warn investors that markets can go down as well as up, we should also be honest that holding cash, while it may feel safe, risks steadily losing value through inflation. The Investment Association has also suggested that renaming the stocks and shares ISA the investment ISA could be a way of changing the mindset of investors. I would welcome the Minister’s thoughts on how we can highlight to investors the pitfalls of holding long-term cash. A successful hearts and minds campaign could, according to estimates from Aberdeen, unlock £3.5 trillion of capital for markets, if UK adults held as much wealth in investments as their US peers. That clearly raises another question: how do we encourage retail investment into UK stocks and shares? If we are serious about encouraging long-term investment and wider public participation in the UK’s capital markets, we must take a hard look at stamp duty on shares—again, the hon. Member for Buckingham and Bletchley made that point. At 50 basis points, the UK has one of the highest rates of this kind of transaction tax in the developed world. We should not be taxing investment in British businesses; we should be incentivising it. Stamp duty creates a direct disincentive to buy UK shares and disproportionately impacts those investing smaller amounts, for whom every pound counts. It also reduces the attractiveness of London as a global listing destination and adds friction to the secondary market, which ultimately feeds back into the cost of capital for UK firms. In short, stamp duty is a tax on growth, on participation and on financial inclusion. We need to ask ourselves whether that levy, introduced in a very different era, still serves a useful purpose, or whether reform could help us to unlock a stronger culture of long-term share ownership in this country. I ask the Minister to consider whether the tax could be looked at again, particularly for retail investors. As an idea, perhaps we could also look again at how the ISA tax-free allowance could be incentivised to stay in the UK. I recently spoke to a successful investor, someone who makes full use of his £20,000 annual stocks and shares ISA allowance. As one would expect, he is shrewd with his money, putting it where he believes it will deliver the best returns. In recent years, that has meant investing primarily in the American markets, where growth has outpaced much of what has been available here in the UK. What struck me was a comment he made a little later about his gardener, who is on minimum wage. The gardener can only afford to put a tiny amount of money, if anything, each month into a cash ISA; yet through his taxes he is effectively subsidising a tax break that allows his employer to invest tax-free in overseas companies. That does not feel right, and it is another point also made by the hon. Member for Buckingham and Bletchley. ISAs are a cornerstone of our savings culture, but if they are primarily being used to funnel capital abroad, it is time we asked ourselves whether the current system is doing what we intended it to do. Perhaps it is time to explore how we can better direct ISA investment towards British companies. I am sure the Minister will be addressing that subject in her speech. I think we are all in wholehearted agreement on the need for more retail investment in the UK. The opportunity for investment into UK companies is substantial if we can get it right. I am sure the Minister will have a plethora of ideas—she is writing them down ferociously as I speak—and we look forward to hearing what she has to say.

• 8 Apr 2025 · Investment: Regulatory Policies · Hansard source

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  There is a great deal of speculation about the future of the cash individual savings account. As we know, it is an important savings mechanism for many savers across the country, all of whom will be dismayed at the loss of a significant cash savings opportunity. Just as importantly, cutting cash ISAs will deprive building societies of important funds for their balance sheets, reducing the amount of capital available for the residential mortgage market. This point has been raised with me by the mutual societies. Given that the loss of the cash ISA would have a profound effect on mutuals’ ability to raise debt capital, what research have the Government undertaken to establish the extent of the damage that such a measure might inflict on the residential mortgage market, which is not just important for all our constituents, but crucial for the 1.5 million new homes that the Government propose building?

• 31 Mar 2025 · Myanmar Earthquake · Hansard source

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  I associate myself with the Minister’s words about what is going on in Myanmar and Thailand. In my former role as the Prime Minister’s envoy to Thailand and Myanmar, I had the opportunity to see the extraordinary work that British businesses do in both countries. I fully understand that the British mission in Thailand is supporting all such businesses there, as it has done for many years. In Myanmar the situation is far more complicated, yet there are still a number of British businesses—from big conglomerates down to entrepreneurs trying to cut a furrow in that country—and they employ Burmese nationals, who would otherwise be starving given the complex political situation there. May I urge the Minister to work with the Department for Business and Trade to see how we can support British businesses in and around Yangon that are otherwise not being supported because of the situation with the junta?

• 28 Mar 2025 · Water Bill · Hansard source

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  I thank the Chair of the Treasury Committee for her wise words about the risks that shareholders take when they invest. Has she considered the alternative? At the moment, we are talking about privatisation versus nationalisation, but the alternative is mutualisation, where a water company’s customers would own and control the company on their own behalf.

• 28 Mar 2025 · Water Bill · Hansard source

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  It is working for us.

• 24 Mar 2025 · Cadets: Career Preparation · Hansard source

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  14. What steps his Department is taking to help prepare cadets for potential careers in the armed forces.

• 24 Mar 2025 · Cadets: Career Preparation · Hansard source

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  In my new role as the chair of the British Shooting Sports Council, I take a keen interest in cadet target rifle shooting. The Minister will be aware that the Ministry of Defence is proposing to withdraw from service the 7.62 cadet target rifle from 2026, and the .22 rifle just two years later. Aside from depriving cadets from the opportunity to learn the highly disciplined and valuable skills of firearms safety and use, the proposal calls into question the future of target rifle shooting in the UK. Will the Minister meet me and representatives of the shooting and target rifle community to discuss opportunities to reverse this decision?

• 4 Mar 2025 · Saving · Hansard source

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  The City of London has been a leader of innovation in the world of finance and savings for a few hundred years now, and it has been successful because it has always seized opportunities and innovation when presented. In that spirit, we are pleased that the Chancellor in her Mansion House speech embraced the concept of securities tokenisation, but we now find that the catalyst for this innovation in the UK—a pilot for the digital gilt instrument known as DIGIT—has found itself in a two-year black hole. Innovation is not something that can hang around for two years, so will the Minister give assurances that she will do everything she can to deliver DIGIT as soon as possible?

• 11 Feb 2025 · Bank Resolution (Recapitalisation) Bill [ Lords ] (First sitting) · Hansard source

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  I will be brief, because I do not want to take up too much of the Committee’s time. I reiterate that accountability is an incredibly important part of the Bill; accountability of the Bank of England and the Treasury to Parliament is absolutely crucial. Having had the experience of spending my first five years in Parliament scrutinising this sector, the more information Parliament has when making legislation, the better it is for us all in producing good legislation.

• 11 Feb 2025 · Bank Resolution (Recapitalisation) Bill [ Lords ] (First sitting) · Hansard source

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  You will be delighted, Ms Jardine, as I am sure the whole Committee will be, to hear that my contribution will be even shorter than the last one. The Minister rightly says that we are considering a lot of procedural-type amendments to do with the delivery of the Bill. I thank the Government for listening to industry over excluding credit unions from falling within the scope. It is incredibly important that we do not find lots of other people emerging into these sectors and suddenly finding themselves being part of a much more complicated area. On the procedural point of the Government amendment, we will absolutely support that. Question put and agreed to. Clause 6 accordingly ordered to stand part of the Bill. Clause 7 ordered to stand part of the Bill. Clause 8 Extent, commencement and short title Amendment made: 2, in clause 8, page 6, line 1, leave out subsection (5).— (Emma Reynolds.) This amendment removes the privilege amendment inserted by the House of Lords. Clause 8, as amended, ordered to stand part of the Bill. Question proposed, That the Chair do report the Bill, as amended, to the House.

• 11 Feb 2025 · Bank Resolution (Recapitalisation) Bill [ Lords ] (First sitting) · Hansard source

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  To be absolutely clear, the Minister and I are absolutely as one on that particular point: to have a negative resolution SI, or indeed any SI, would hold up progress and create a lot of hassle. The substantive part of the amendment, which is the MREL bit, prevents us from being able to support the amendment, so we will vote against it. It is the other amendment—the growth amendment—that we will support. My apologies to the Chairman; I hope that is clear.

• 11 Feb 2025 · Bank Resolution (Recapitalisation) Bill [ Lords ] (First sitting) · Hansard source

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  It is a great pleasure to serve under your chairmanship for the first time, Ms Jardine. I also thank the Minister, because we have had a fantastic time of agreement so far—but not on this particular point. I will speak to Government amendment 1 and amendment 3 from the hon. Member for Wokingham. Government amendment 1 is aimed at reversing an amendment that was put in place by those in the other House. It was proposed by my colleague Baroness Vere, so we refer to it as “the Vere amendment”. The Minister made quite a strong and convincing case for why the Bank of England feels that it needs the ability to use this type of financial services compensation scheme redress in the case of some of the larger banks. But what worried me, as I was listening to the Minister’s words, was that she was highlighting the fact that the MREL regime could fail. I spent three and a half years or so on the Parliamentary Commission on Banking Standards, coming up with this MREL stuff in the first place, and also on the Treasury Committee, analysing the banking crisis. We completely accept that there is no way we can legislate for any possible type of failure in the future. However, we can try to learn from mistakes. The Minister is suggesting that there is an exception—that the MREL regime is not right—but I would prefer the MREL regime to be looked at again to make sure that it operates properly. The Minister makes the very good point that a bank could issue an MREL convertible bond, which converts into equity in the event of a default; and that the bank could be successful during the course of its life and the MREL bond is not, in fact, sufficiently big enough to meet the liabilities in the event of a default. To me, the answer is not to try to squeeze into place another bit of legislation that tries to fudge it. We should look more carefully at making sure that the MREL regime is right, although I completely understand her point that the regime is only going to make up the top-up. However, the problem is that if the Government are going for a growth agenda—we all know that the City of London and financial services institutions can grow quite quickly—we could end up with a situation in which quite a lot of money is being asked for by the other banks to be able to support this. We will press this amendment to a Division and vote against it. I am glancing towards my Liberal Democrat friend, the hon. Member for Dorking and Horley, and I hope that enthusiastic nod means that we will not be by ourselves in doing so. Liberal Democrat amendment 3 would bring back, in a slightly different form, the amendment proposed by Baroness Vere in the other place, but it adds something else that we are slightly worried about. Having looked at this on the Parliamentary Commission on Banking Standards for a number of years, I have become quite a purist about it. The amendment restores a fundamentally important point but what worries me is that it looks to have a negative resolution statutory instrument to ensure that that happens.

• 11 Feb 2025 · Bank Resolution (Recapitalisation) Bill [ Lords ] (First sitting) · Hansard source

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  Yes.

• 11 Feb 2025 · Bank Resolution (Recapitalisation) Bill [ Lords ] (First sitting) · Hansard source

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  I thank everybody for their work. It is a great pleasure to see so many new Members of Parliament and former hedge fund managers; it is terrific. On so many occasions, I have joked about being a former investment banker and hedge fund manager, and now that I am a politician, I have the hat trick of the three most unpopular jobs known to humanity. For a next job, I will be a traffic warden. I thank everyone for their hard work.

• 5 Feb 2025 · Overseas Territories: Tax Transparency · Hansard source

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  It is a great pleasure to serve under your leadership, Mr Turner, as it is to respond to the debate called for by the hon. Member for Kensington and Bayswater (Joe Powell). This will be one of those debates where there is ferocious agreement in all parts of the House. Before I get into the substance of my speech, it is worth mentioning that there is a legitimate role for tax havens. The City of London will certainly have investment funds located in tax havens in order to have tax neutrality for investors into those funds. Those investors have to pay their domestic tax, but they do not want to pay tax on the funds as they go forward. It is also worth mentioning that, in some cases, small islands will look to see if they can grow their economies by providing financial services. Again, if they are doing that in a legitimate way, and one that fits with the wishes of the world, there is nothing wrong with that. But that is the important point: it is incredibly important that what they are doing is seen to be legitimate, right and fair for everybody else. Turning to the substance of the debate, as hon. Members have rightly pointed out, there is still much work to be done on tax transparency. As part of the Sanctions and Anti-Money Laundering Act 2018, overseas territories were required to introduce public registers of beneficial ownership. In 2020, the previous Government set out in a written ministerial statement the expectation that the territories would implement registers by the end of 2023. Intense discussions took place with overseas territories over the implications of the ruling by the Court of Justice of the European Union that publicly accessible registers were contrary to the EU charter of fundamental rights. Despite some overseas territories’ raising concerns over the ruling, which does not apply to the UK, the previous Government were satisfied with the lawfulness of the public register. I am sure the Minister will confirm that today. However, the impact of the EU ruling has led to delays in the overseas territories implementing the public register. The previous Government made it clear that they expected progress in 2024, yet, as we would all agree, progress remains far too slow. Too many jurisdictions under our responsibility continue to allow opaque corporate structures that enable illicit finance to flow unchecked. That is particularly concerning in the light of recent geopolitical developments, including the increase in money from sanctioned countries—Russia —being laundered through offshore entities. I am looking forward to the Exchequer Secretary updating us on what progress has followed the November joint ministerial council for overseas territories. The Opposition welcome the communiqué, which reaffirmed the Government’s expectation that overseas territories should provide public access to beneficial ownership registers. It is right to commend Gibraltar and Montserrat, which have implemented public registers, and the Falkland Islands and St Helena, which have pledged to do so by April 2025. It is worth adding that, while not directly legislated for by the UK, the Crown dependencies—Jersey, Guernsey and the Isle of Man—have made commitments to greater transparency, too.

• 5 Feb 2025 · Overseas Territories: Tax Transparency · Hansard source

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  I hope my right hon. Friend will not mind if I do not, because I am conscious that we have very little time. It remains a concern that major financial centres such as the British Virgin Islands, Bermuda and the Cayman Islands remain resistant to these measures. Will the Exchequer Secretary provide an update on what pressure the UK Government are placing on those overseas territories that are not fully complying with the Sanctions and Anti-Money Laundering Act 2018? The UK Parliament has sovereign powers over the overseas territories. Therefore, we cannot allow any jurisdiction to water down these proposals. The previous Government allowed for an interim step of a legitimate interest model, which would allow access to beneficial ownership information by members of the public with a legitimate interest in accessing it, including media and civil society organisations involved in the fight against illicit finance and money laundering. Even if that might be a stepping-stone for some overseas territories, I hope the Minister will confirm that it should not dilute efforts to create a public register. Overseas territories must align with the UK’s own standards and comply with UK law. What is the Government’s plan if further delays occur? Will there be consequences for non-compliance? This Government and the previous Government have repeatedly stated that tackling illicit finance is a priority—we agree on that point. The current Foreign Secretary has declared: “The golden age of money laundering is over”. I am sure the Minister would agree that our overseas territories and Crown dependencies must not become the weak link in the fight against money laundering and corruption.

• 22 Jan 2025 · Bank Resolution (Recapitalisation) Bill [Lords] · Hansard source

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  I welcome the new Minister to her place. I think this is her first Bill that she has taken through as Economic Secretary and, interestingly, she is absolutely right. This is one of the frequent occasions on which we will agree on pretty much everything. This Bill was obviously written by the previous Government who, I think we all agree, delivered 14 years of strong and stable government. Broadly speaking, we will not disagree on this Bill. As the Minister set out in her opening speech, this legislation was born out of the learnings of the failure of Silicon Valley Bank. The failure came out of the US parent company, with a contagion that quickly spread to its UK subsidiary. Although the Bank of England had initially planned to use insolvency procedures, HSBC emerged as a buyer thanks to the tireless work over the course of a weekend in March 2023, and much credit must be given to the former Chancellor of the Exchequer, my right hon. Friend the Member for Godalming and Ash (Jeremy Hunt), and the former Economic Secretary to the Treasury, my hon. Friend the Member for Arundel and South Downs (Andrew Griffith). They secured an outcome that has not cost the taxpayer any money at all, and which protected millions of pounds’ worth of customer deposits, primarily in the tech sector. The bank’s customers would face an uncertain financial future were it not for that intervention, so I am sure that the House will join me in commending the action that was taken by the previous Government. The failure and subsequent transfer of Silicon Valley Bank UK shows how robust our post-2009 banking reforms have become. The Bank of England has used its resolution powers only three times since 2009, and this was the first time since the Southsea Mortgage and Investment Company failed in 2011. It is fair to say that the process worked absolutely as it should have done: the transfer of Silicon Valley Bank UK to HSBC was done in an orderly manner, there was no wider contagion in the banking sector, and withdrawals and panic did not spread to other banks. In short, it demonstrated why the UK is such a financial centre of excellence, and we must continue to champion that point. However, we can continue to uphold our world-leading reputation only if we review and learn from when the system is stressed in real life. In some ways, we were very fortunate. HSBC was the only credible bidder for Silicon Valley Bank that did not require financial support or guarantees from the Government or the Bank of England. In addition, HSBC’s level of capital and liquidity resources greatly reduced the risk to public funds, delivered stability and boosted market confidence. However, had HSBC not come forward, the only option for the Bank of England was the bank insolvency procedure. This Bill comes out of the subsequent root-and-branch review, and it went for industry consultation under the previous Government. I thank the current Government for supporting it. The Opposition recognise that some banks may fail due to issues outside their control and should have pathways to continue as a going concern if transferred to another entity, and it is right that the Bank of England has more tools in its arsenal to support the financial system. We are therefore delighted to support the Bill—it is one that we started. As it made progress in the other House, it benefited from considerable scrutiny from noble peers. The successful amendments and new clauses enhanced the Bill and will significantly improve transparency. This was a point addressed by my right hon. Friend the Member for North West Hampshire (Kit Malthouse) during the Delegated Legislation Committee on Monday, which finalised the transfer of Silicon Valley Bank UK to HSBC with no compensation to shareholders. He rightly raised some of the unanswered questions on what changed the Bank of England’s decision between announcing that the Silicon Valley Bank UK was going into insolvency procedures on the Friday and being transferred under resolution by the Monday. These additional transparency arrangements will ensure that colleagues in this House remain confident in the independence of the Bank of England. Will the Minister confirm that the Government intend to support those amendments in this House? I would be amazed if he said no, actually. I will move on to what could be the crux of any potential disagreement. When this Bill was introduced in the other place, there was no limit to the scope of this regime. We can safely categorise our banks into three different groups. First, there are the large-scale institutional banks that have reached the end-state minimum requirement for own funds and eligible liabilities, or MREL, as it is known. Secondly, there are the challenger banks such as Monzo and Starling that are working towards end-state MREL. Finally, there are the smaller banks that do not meet the threshold for MREL, such as Silicon Valley Bank. The Banking Act 2009 provides a robust framework for dealing with banks that have achieved end-state MREL status, and while there is a sensible argument for saying the new mechanism could provide top-up funding for banks working towards end-state MREL, it is not fair or reasonable to expect the mechanism to be used for the largest banks. The consequences of such a decision could be extremely costly for banks and their customers, and if an institutional bank failed and this mechanism were used to facilitate a transfer, our fear is that there could be a recapitalisation requirement that was many times the annual cap of the financial services compensation scheme. The only decision left to the FSCS would therefore be to borrow from the national loans fund via the Treasury. The ex-post levy set out in this legislation would therefore be charged not only in the year in which the levy was first implemented but potentially for many years thereafter. MREL requirements should ensure the safety of our largest institutions. Bank directors should be ensuring sound compliance of MREL, not taking comfort in the fact that they can fall back on to an ex-post levy of the banking sector in times of trouble. The Opposition took reassurance from a policy statement that the mechanism would be used for the largest banks only in exceptional circumstances. However, this still left the key question as to why the legislation allowed large-scale banks to trigger the mechanism. In her opening speech, the Minister referred exactly to this. Baroness Vere’s amendment makes it clear that this mechanism cannot be used on the largest banks—those that have achieved end-state MREL. That amendment was opposed by the Government in the other place. I was hoping that the Minister would update the House today on the Government position and she has done that, but we may want to talk about this at greater length. Concerns were also rightly raised by peers that this mechanism, and using resolution to transfer failing banks, should not become the default position of the Bank of England, which is important. Ultimately, banks are businesses. They have shareholders that bear the responsibility and the burden of risk, and we should not create a system where banks can always expect to fall back on industry-funded life support. The code of practice, alongside this Bill, rightly states that using the insolvency procedure should be the default position. I would welcome the Minister’s comments on whether there could be further need for that to be strengthened in the legislation. The introduction of this mechanism is another example of a banking industry in strong health. In 2007, it was the taxpayer bailing out the banks. Now we have a system whereby the industry is expected to cover the cost of a failing bank. This raises questions as to whether the Government need to review how we can make the UK banking sector more internationally competitive—we have had an informal chat about this. Let us take the bank levy as an example. It was introduced for three main reasons. First, it was introduced to help repay the cost of the banking bail-out, and it has raised something in the region of £25 billion since it was first introduced. Second, the bank levy acted as a kind of insurance premium in case the post-financial crisis stability of the banking sector were to falter and fall and there needed to be another bail-out. Finally, it was almost a quasi-punishment to the banking system for the failures that led to the financial crisis. It was there to reassure unhappy shareholders that there were consequences for a sector in which there was bad practice. If we add up the total cost to the UK taxpayer of the financial crisis, it was £137 billion, according to the House of Commons Library, as of 2023. That has been reduced to £33 billion now, so there still is some outstanding cost. On top of the bank levy, other post-2009 reforms include much more stringent ringfencing and capital requirements. That might not be a subject for this debate, and I am not calling for the bank levy to be abolished, but I would certainly welcome the Minister’s comments on whether there could be scope to review the international competitiveness of the banking sector alongside the Chancellor’s growth agenda. The international competitiveness of the City of London should be an absolute priority for this Government—I believe that it is—yet according to UK Finance’s 2024 banking sector tax report, produced by PwC, UK banks face the highest tax contribution since the study started a decade ago. In terms of international competitiveness, according to PwC, the total tax burden of a model bank operating in the UK is currently 45.8%. That is significantly higher than our competitors in Frankfurt at 38.6%, in New York at 27.9%, or in Dublin at 28.8%. The City, as I am sure Ministers and the whole House will agree, is an extraordinary asset for this country. For a Government who are seeking a growth agenda, the City is the oil in the engine of that economic growth. Banks do a very important job, and it is a job of significant social and economic importance. Banks take money from where it has accumulated and distribute it to where it is needed for investment. This is crucial to fairness across our economy and delivering growth. They transfer overnight deposits into 25-year mortgages that provide hope and opportunity for people to bring up their families in safety. So we should not demonise banks, and we must remember that shareholder returns on bank investments are as important as shareholder liability in the event of a failure. We must ensure that there is a good return, given the fact that bank shareholders bear the ultimate risk of losing everything. This Bill is a shining example of the fact that the banks and regulators are now in a position to keep their industry in order. As I said at the start of this speech, I believe that there is cross-party support for the Bill, and I look forward to working with the Government as these reforms progress through the House. They are magnificent, because of course they came from the previous Government, but I thank the Ministers for continuing with them in the spirit with which they were intended.

• 22 Jan 2025 · Bank Resolution (Recapitalisation) Bill [Lords] · Hansard source

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  It gives me great pleasure to wind up this debate, with the leave of the House, on behalf of the Opposition. First, I thank the handful of Members present, who have made very helpful contributions. The hon. Member for Newcastle-under-Lyme (Adam Jogee) rightly asked questions on behalf of his constituents. He asked whether they will be under the cosh if a bank goes bust again—they should not be, under this legislation—and what banks will do to generate economic growth in his area. The Liberal Democrat spokesman, the hon. Member for St Albans (Daisy Cooper), rightly raised a point about the legislation being extended to and used for the larger banks, which is not its intention. As ever, my right hon. Friend the Member for North West Hampshire (Kit Malthouse) has brought an intelligent scepticism to the question of what could happen with this legislation, and has demonstrated why Parliament is such a brilliant place, with intelligent people like him scrutinising what goes on. I also welcome the Parliamentary Secretary to the Treasury. He has had a glittering career, and has done extraordinarily well in his meteoric rise to Minister in not one but two Government Departments in his first Parliament. He is double-hatting already; he is a clever chap. We have come across each other in the past. I will not take too much of the House’s time, as I was on my feet just a few minutes ago, but I would like to come back to three points that I hope the Minister will address. The first is the amendment to the Bill; the Economic Secretary to the Treasury made the point that the Government do not want to support that amendment. This may come up later, and we may have more conversations about it. Secondly, does the Parliamentary Secretary to the Treasury feel that the Bank of England’s code of practice provides enough reassurance that the bank insolvency procedure remains the default option for failing smaller banks? Finally, how does he weigh up continued use of the bank levy and regulation of our banking system against the Chancellor’s growth agenda? I appreciate, however, that that is beyond the scope of the Bill. As I said in my opening remarks, the Bill retains surprisingly strong cross-party support. It is a good thing for the Bank of England to have more tools at its disposal during periods of heightened stress, and the version of the Bill before us today—the version amended in the other place—is more robust than it started out. We look forward to getting clarity from the newly appointed shadow Minister. [Hon. Members: “The Minister.”] My apologies—it will be a few years before that. I congratulate the newly appointed Minister on his appointment.

• 21 Jan 2025 · Servicing Government Debt · Hansard source

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  The Chancellor makes reference to the PWC report, but half of the survey in that report was done before the Budget. The Chancellor and I spent a very happy three years sitting next to each other at the Treasury Committee, and she was incredibly good at demanding straight answers from the witnesses that came in front of the Committee. She has already been asked questions about the fact that the fiscal headroom is only £10 billion and the increase in the cost of borrowing is now going to go through the roof so, at some point, she will have to raise taxes, cut investment or increase debt. Which will it be?

• 21 Jan 2025 · Stourport Relief Road Fund · Hansard source

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  The hon. Gentleman is absolutely right. He hits the nail on the head. I will be addressing these points a little later in my speech, but if we want to generate economic growth we need to build the infrastructure first—the growth will follow. Coming back to Stourport and what is going on in the Snipes and with Malvern Hill district councillors, a number of developers put in an application to build 500 to 1,000 houses. It was met with absolute disdain by Malvern Hills district council, Wyre Forest district council, local parish councils, town councillors, me and my hon. Friend the Member for West Worcestershire (Dame Harriett Baldwin). We all rejected it, but when it went to appeal, the Planning Inspectorate ruled that Malvern Hills district council had an unmet planning demand and accordingly granted planning permission against the wishes of literally everybody. Through a quirk of geography, local government boundaries and poor management by politicians in Malvern Hills, Stourport will see hundreds if not thousands more homes relying on its town centre and facilities, but coming from outside the district. And it gets even worse. The Secretary of State for Housing, Communities and Local Government told us that in Wyre Forest, we are to build an extra 617 new homes ever year for the next five years, putting yet more burdens on the local infrastructure. That is just Wyre Forest; the total for the whole of Worcestershire is 5,300 homes a year. Add to that 1,375 homes for Herefordshire and 1,200 for Shropshire—that is every year—and one can see how the congestion on River Severn crossing pinch points will increase significantly. A lot of that will come through the point in Worcestershire where the three counties meet. The argument for the Stourport relief road has never been stronger. It is time to revisit what is proposed. I do not profess to be a transport infrastructure expert, and I certainly do not fully understand traffic flows, but I can understand what it is like to be stuck in a traffic jam. The current 20-year-old proposals may still be perfect, but my instinct is that we need to look again at the whole issue of traffic across the Severn in Wyre Forest, and at how traffic flows across the river. It may be that we need to look at how to join the Bewdley bypass with a road heading south, to the west of the new, unwelcome homes in the Snipes to the west of the river, that then crosses the Severn to the south of the cricket club, joining the Worcestershire A449; or it may be that the Bewdley bypass should continue when it lands on the eastern side of the bank, as was originally envisaged, between Kidderminster and Stourport, bypassing our main town to the south-east and joining the bypass with the A451 Kidderminster Road and the A449 Worcester Road, going on through the A448 Bromsgrove Road and up to the A456 Birmingham road—all of that adding to the existing Stourport relief road and effectively joining all the major roads that serve Wyre Forest. This would deliver a comprehensive and very long-term solution. All this is for the experts, and for the community to unite behind. I have already spoken to Marc Bayliss, the Worcestershire county council cabinet member responsible for highways and transport. He agrees that this is an opportunity, and has indicated that it will be worked up and included in plans for the county. The county council is keen to progress our local infrastructure needs, but it needs clarity. It is keen to draw up local transport plan 5, but needs guidance from the Minister’s Department on what is expected of it. My ask is for that guidance to encourage local road schemes such as the one I am suggesting, a scheme that will bring not just a relief of traffic congestion but a boost to economic prosperity of the kind that was mentioned by the hon. Member for Strangford (Jim Shannon), and—this is important—for the guidance for LTP 5 to come soon. I also ask the Minister to give clarity on funding. Of course we need funding and plenty of it—and obviously the Minister receives many demands for that—but as part of the settlement, it would be good to understand the status of the proposed reallocation of HS2 money, which was suggested by the last Government to be £209 million over the coming seven years. Additionally, we await the announcement on road investment strategy 3, which will cover the Government’s plans for the strategic road network until 2030. I understand that it has been delayed to align with the spending review, but can the Minister tell me when RIS3 will be published, and whether a Stourport relief road could be considered as part of those plans—and will she come and open the new relief road? It would be great to see her there, and I mean not just to cut a ribbon but to drive a Morgan sports car up the new road. We are extremely proud of the fact that some Morgan cars are built just down the road in Malvern, and it would be a fantastic opportunity for her to demonstrate what this Government are doing to support my constituents in Worcestershire. The new Government are making a very big deal of economic growth, which is incredibly important—I think we would all agree that economic growth is a driver of good for our society—and that is one of the reasons they are keen to build new homes. We can argue across the Chamber on details of how to achieve growth, but the one thing on which we will surely agree is that growth is generated by investment in infrastructure. If we are to build these new, economically productive new homes, we must serve their householders with easy ways to get to work, to school, to medical services when they are needed, and to the town centres to relax and shop and enjoy their communities. The Stourport relief road is one such infrastructure development, which will not just support the town of Stourport-on-Severn and my constituency, but deliver economic growth to the wider rural west midlands. I very much look forward to hearing what the Minister has to say about my proposals.

• 21 Jan 2025 · Stourport Relief Road Fund · Hansard source

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  It is a great pleasure to raise the issue of the Stourport relief road in this Adjournment debate. Madam Deputy Speaker, you will be well aware that Worcestershire is an astonishingly beautiful county, and Wyre Forest in the north of the county is a perfect example of what Worcestershire has to offer. We have the forest and the hills, not one but two Georgian towns, and the River Severn, with its astonishing valley and heritage railway. The River Severn, the longest river in the UK, is a fabulous source not just of natural beauty but of water to the 8 million customers of Severn Trent, and it also divides Worcestershire and my constituency in two halves. Inevitably, this leads to crossing pinch points, and along the stretch of the Severn that runs through Worcestershire there are surprisingly few crossing points. The city of Worcester enjoys a number, but, to the north of Worcester, there are just four points to cross east-west before getting into Shropshire; even then, the next crossing point is in Bridgnorth, 15 miles to the north of Bewdley. Of the four bridges on the 38-mile stretch between Worcester and Bridgnorth, three were built by the Victorians and are not fit for 21st-century traffic. Just one bridge was built in the 20th century, and that is the only bridge that can really take any heavy usage. The most recent bridge, the Bewdley bypass, was built to support the east-west traffic and relieve Bewdley of heavy congestion through the town centre, which has, for a long time, been on a major route from the midlands to Wales. However, with the incredibly welcome flood defence works going on at the moment in Bewdley, the bridge has necessarily been closed to two-way traffic, increasing the burden on other local infrastructure, and the congestion has inevitably put pressure on other crossings. Of course, the flood defences will be completed by this summer, and normal service will resume in Bewdley. However, the problems remind us why, four or five decades ago, proposals were put forward for a relief road for the town of Stourport-on-Severn, just to the south of Bewdley. As a parliamentary candidate back in 2004, I got hold of a set of 14 proposals for road improvements for Stourport, from minor town centre improvements to the full £14 million—at the time—bypass. It is important to remember the problem these proposals were trying to solve. Stourport has a complicated town centre, with a one-way system that everybody accepts is far from ideal. It is trying hard—and, by the way, succeeding—to be a tourist destination town, attracting a lot of people from Birmingham. Yet because of its location and layout, many of the cars in the town centre are not there to be in Stourport, but in Stourport to be on their way to somewhere else. It is important to remember that this stretch of the River Severn in Wyre Forest has a denser population than the wider rural community, with 102,000 people living in the three towns of Stourport, Bewdley and Kidderminster. As I say, it is an incredibly important conurbation in Worcestershire. Of the 14 proposals, the most ambitious for Stourport was the most popular at the time. It proposes taking a road from the busy Stourport to Kidderminster dual carriageway, running around the town to the south using existing roads that were at the time designed to take the Stourport relief road and old railway track that had been closed under the Beeching reforms, and then crossing the River Severn heading west and landing in the cricket club, before continuing its semi-circular route to join the A451 to Dunley. It then heads off to the western part of Worcestershire and then on to Wales, providing a major route to Wales. That was a popular proposal and it was signalled for further investigation and development. Back in 2010, the cricket club was looking for Sport England’s support but was unable to secure it due to planning blight—the prospect that at any time it may find itself bisected by the new Stourport relief road—so the proposals were shelved. Although they never disappeared, they were not moved on. Since then, the Stourport relief road has been talked about as a lost opportunity, a myth and a piece of cultural history that a few people remember. So what has changed? What has happened since then? Why is this now something that needs reviving? I mentioned earlier that the flood defence works have temporarily brought extra pressure on Wyre Forest’s river crossings, but that will be resolved in the summer. However, the local population is due to increase significantly. Wyre Forest district council recently published its local plan, under which nearly 5,000 new homes will be built across the district. Around 1,400 of those will be in Stourport and that will, inevitably, increase pressure on local infrastructure. That is an 11% increase in housing stock across the district, and a 13% increase in Stourport itself. The problems are more profound. To the west of Stourport, directly adjacent to the Stourport suburb of Areley Kings, is an area of beauty known as the Snipes. It is right up against Stourport, but is in Malvern Hills district council’s area. Malvern Hills district council is a multi-party coalition and it has failed to come up with a local housing plan.

• 20 Jan 2025 · Draft Silicon Valley Bank UK Limited Compensation Scheme Order 2024 · Hansard source

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  It is a great pleasure to be standing opposite—albeit in opposition—the newly promoted Minister. I look forward to spending an entire week locking horns with her. Let me start by saying that it is fantastic that we have seen some very swift action. It just goes to show that the Banking Act 2009 has worked extraordinarily well, and how efficiently the previous Government did when it came to resolving this financial problem. A huge amount of work was done by a number of people in the previous Government, including the Treasury Committee, which looked at the Financial Services Act 2012, and the Parliamentary Commission on Banking Standards, which looked at the Financial Services (Banking Reform) Act 2013. A huge amount has gone on and it is reassuring to see that when something does go wrong, the system cuts in incredibly quickly and resolves the situation very well. The Minister and I will be talking directly about bank resolution on Wednesday; it is incredibly important that we work together on this, and I think we are probably in broad agreement. This order raises an incredibly important point about shareholders—the people who take the ultimate risk in any sort of business. Shareholders are at the bottom of the list of people who are compensated in the event of the winding-up of any privately owned institution. That is the right thing—at the end of the day, private shareholders need to take that risk—but we need to remember that they are taking the ultimate risk in any business. We in this place sometimes beat them up, because we do not necessarily like to see them make too much money, but part of the risk-reward ratio of the current system is that shareholders take a lot of risk; we should not attack them for taking good returns, given the fact that they can lose every penny of their money. The other point about shareholders is that they provide an incredibly useful service in the governance of any institution: making sure that something like this situation should not happen. There was a single shareholder in this case, but multiple shareholders do provide good scrutiny, and we need to address the tone with which we talk about them. The instrument is absolutely right, and the Opposition recognise that the system is working extraordinarily well. We will certainly not oppose the order; it is very good that we are finally delivering the last part of the resolution. I have no more to add.