Tulip Siddiq MP: speeches

Speeches

• 7 Jan 2025 · Draft Financial Services and Markets Act 2000 (Ring-fenced Bodies, Core Activities, Excluded Activities and Prohibitions) (Amendment) Order 2024 Draft Financial Services and Markets Act 2000 (Designated Activities) (Supervision and Enforcement) Regulations 2024 Draft Short Selling Regulations 2024 · Hansard source

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  I thank the Opposition spokesperson for his questions. I am grateful that he is supporting us. He agrees that the SIs represent an important step in ensuring that our approach for the regulation of financial services is effective and proportionate. We feel that these are sensible, technical reforms. The Treasury undertook detailed work with the PRA after the independent review, which the hon. Gentleman mentioned, released its final report in 2022, consulting on a draft package of measures in 2023 and refined those proposals in line with feedback. It is recognised that the ringfencing regime was originally designed so that the threshold would need to be adjusted over time to reflect the evolution of banking practices and growth in the deposit base. The Treasury considered several metrics as well as financial stability and competition considerations in proposing the £10 billion increase. Increasing the deposit threshold will provide smaller banks with more headroom to grow before being subject to the requirements and costs of ringfencing. We feel that will support domestic competition in retail banking markets. A competitive and dynamic market will improve outcomes for depositors. The reform may encourage inward investment in the UK as new entrants to the UK banking market will have more room to develop economies of scale before being subject to the regime. While the independent review, which the hon. Gentleman mentioned, did not suggest that uprating was necessary to maintain the policy aims of the current ringfence, the Government have recognised that the threshold acts as a barrier to the growth of smaller players in the market, dampening competition for retail customers. His points are valid, and we will be looking at them, but there are no plans at this point to change the threshold in the way he mentioned. On the hon. Gentleman’s points about name-and-shame proposals, I am very pleased to hear that he has been reading my interviews in detail. I have raised those proposals several times with the FCA and welcome the fact that it has listened to industry feedback on them. It has taken some steps to address some of the concerns raised by industry, which he will know about. I have been clear with the FCA that effective, proportionate regulation is key to our aims, and that it needs to deliver the Government’s mission to drive inclusive growth. As the hon. Gentleman knows, the FCA is operationally independent but accountable to Government and Parliament. I am engaging closely with the FCA on name-and-shame proposals and will make sure that any potential impacts on international competitiveness and growth are properly considered. That is not to dismiss the concerns about those proposals from industry, which I have heard first hand. The subject comes up repeatedly in my meetings with the FCA. I hope that reassures the hon. Gentleman a little bit. I think I have covered most of the hon. Gentleman’s questions, but am happy to write to him on any others. Generally, we feel that this SI is important overall to our mission of growing the economy. I know that when the hon. Gentleman was in government, he had sight of a similar SI and was in agreement with it. I thank the Committee for agreeing to pass this legislation. Question put and agreed to. DRAFT FINANCIAL SERVICES AND MARKETS ACT 2000 (DESIGNATED ACTIVITIES) (SUPERVISION AND ENFORCEMENT) REGULATIONS 2024 Resolved, That the Committee has considered the draft Financial Services and Markets Act 2000 (Designated Activities) (Supervision and Enforcement) Regulations 2024. —(Tulip Siddiq.) DRAFT SHORT SELLING REGULATIONS 2024 Resolved, That the Committee has considered the draft Short Selling Regulations 2024. —(Tulip Siddiq.)

• 7 Jan 2025 · Draft Financial Services and Markets Act 2000 (Ring-fenced Bodies, Core Activities, Excluded Activities and Prohibitions) (Amendment) Order 2024 Draft Financial Services and Markets Act 2000 (Designated Activities) (Supervision and Enforcement) Regulations 2024 Draft Short Selling Regulations 2024 · Hansard source

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  It is a pleasure to serve under you, Mr Vickers, during this quiet week in politics. The regulations that we are introducing today will ensure effective, proportionate regulation for the financial services sector, first, by reforming the ringfencing regime to be more flexible while upholding financial stability safeguards; secondly, by creating a new framework for the regulation of short selling; and thirdly, by enabling better supervision and enforcement of designated activities under the Financial Services and Markets Act 2023. I will turn first to the reforms to the ringfencing regime for banks. As the Committee will know, ringfencing was introduced following the global financial crisis on the recommendation of the Independent Commission on Banking, and it came into full force in 2019. It requires large, complex banks to separate the services that they provide to households and small and medium enterprises from investment banking activity. In 2022, an independent statutory review of the regime recommended updates to ensure that it operates as intended and is proportionate. This statutory instrument improves the regime and implements changes from the review. The reforms that it contains will improve competition in the banking sector, reduce costs and support economic growth. They have been developed with the Prudential Regulation Authority, which is content that they also maintain appropriate financial stability protections. I will outline the most material updates to the regime. The reforms will ensure that in future only the largest, most complex banks are subject to the regime, with two key changes. The first is an increase in the primary deposit threshold—the amount of core deposits a bank can hold before it is required to ringfence—from £25 billion to £35 billion. This accounts for growth in the deposit base and other relevant economic indicators since ringfencing was introduced and it supports competition. The second change is the introduction of a new secondary threshold, which exempts retail-focused banking groups from the regime, where investment banking activity accounts for less than 10% of common equity tier 1 capital. This SI also makes changes to the way that banks within the regime can operate. It introduces measures to encourage more investment by ringfenced banks in UK small and medium enterprises and to reduce the compliance burden associated with the regime. It also creates significant new flexibilities to allow ringfenced banks to operate globally, subject to PRA rules, as well as to provide a wider range of goods and services to their customers. I turn to the draft Short Selling Regulations. Short selling is the practice of selling a security that is borrowed or not owned by the seller with the intention of buying it back later at a lower price to make a profit. Short selling plays a healthy role in the proper functioning of financial markets. It provides essential liquidity to markets, which drives investment in British companies; it helps to drive economic growth; and it helps to ensure that investors pay the right price when investing in shares. The draft regulations introduce a more streamlined UK short selling regime, which focuses on equities, rather than both equities and sovereign debt. The new regime also introduces a reformed public disclosure regime for short selling, ensuring that there is transparency over short selling activity, without the issues identified with the current regime through the 2022 call for evidence. However, as I am sure the Opposition spokesperson will identify, there can be risks associated with short selling. As such, it is important for the Financial Conduct Authority to have the tools to effectively monitor short selling activity and intervene if necessary. This statutory instrument provides the FCA with broad rule-making powers in relation to short selling. This will allow the FCA to effectively oversee short selling in UK markets. It will also mean that the UK’s short selling rules can be adapted and updated by the FCA in a more agile way in future—for example, to better adapt to new global standards or to take account of market innovation and new business models. The instrument retains the FCA’s powers to intervene in relation to short selling activity in UK markets in exceptional circumstances, which is an important feature of the current regime. Turning to the Financial Services and Markets Act 2000 (Designated Activities) (Supervision and Enforcement) Regulations 2024, to give the FCA the broad rule-making powers for short selling that I just mentioned, the new short selling regime operates under the designated activities regime—known as DAR. The DAR was introduced into the Financial Services and Markets Act 2000 by the Financial Services and Markets Act 2023, which the Opposition spokesperson will know very well, since we sat across from each other, debating it for days. It allows the Treasury to designate certain activities to be regulated by the FCA. However, persons carrying on those activities under the DAR do not need to become full authorised persons like banks or insurers. This enables proportionate regulation for activities where it would be disproportionate to have met all requirements for authorisation. The Financial Services and Markets Act 2000 (Designated Activities) (Supervision and Enforcement) Regulations 2024 enable the FCA to supervise and enforce the rules it makes under the DAR. They do this by enabling the FCA to exercise existing supervision and enforcement powers under FSMA 2000 on persons carrying out designated activities, whether or not they are authorised. In the first instance, these powers will be extended to the activities covered by the Consumer Composite Investments (Designated Activities) Regulations 2024 and the Short Selling Regulations 2024. Tha will enable effective supervision of these regimes. I thank the Committee for putting up with these quite technical amendments. The statutory instruments ensure that our financial services industry is subject to a rulebook that is fit for purpose, more proportionate and tailored to UK markets. I hope the Committee will join me in supporting these regulations.

• 11 Dec 2024 · Finance Bill · Hansard source

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  This is something I have seen in my own constituency, so I know what my hon. Friend is referencing. It is our intention to tackle that, but we have had to make these decisions because of our economic inheritance when we got into government, which the Conservative party obviously hid during the election. We have had to make some difficult decisions, and this is how we plan to fix the foundations of our economy.

• 10 Dec 2024 · Finance Bill · Hansard source

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  I thank hon. Members for their contributions to today’s debate. I will take a few moments to respond to some of the points, and will then give the Government’s views on the proposed amendments. If there are questions that I do not answer, I will write to hon. Members. I thank my hon. Friend the Member for Dartford (Jim Dickson) for his important speech and agree with his points about much-needed reform to our tax system. I also thank my hon. Friend the Member for Earley and Woodley (Yuan Yang) for her powerful speech and wholeheartedly agree with her constituent, who seems very principled and knowledgeable. To respond to the points made by the Conservative spokesperson, the hon. Member for Grantham and Bourne (Gareth Davies), about the revenue impacts of the carried interest measure, the OBR-certified costings demonstrate that this measure raises revenue over the scorecard period. The Budget does deliver on the Government’s manifesto commitments on tax: estimated revenues for these policies have been adjusted for final policy decisions and to account for underlying changes in the OBR’s forecast, but overall, the hon. Gentleman may be interested to know that the tax measures raise over £1 billion more than was in the manifesto. To answer the hon. Gentleman’s question about why the changes are being made in-year, the in-year rate changes were made to protect Exchequer revenues from the impacts of forestalling. It is common practice for tax changes to take effect from the date of the Budget. As for anti-forestalling, we would not expect the anti-forestalling provisions to apply to an ordinary commercial sale of an asset where the contract was entered into prior to 30 October. Those provisions target those who enter into artificial arrangements to lock in the pre-Budget tax treatments. The Lib Dem spokesperson, the hon. Member for St Albans (Daisy Cooper), talked about inflation indexation of CGT. Indexation previously existed when CGT rates were charged at income tax levels with a top rate of 40%. A rate schedule of 18% and 24% is significantly below those levels, so for the important reason of simplicity, indexation is not a part of the system. New clause 1 would require the Government to present to Parliament a review of the capital gains tax package’s impacts on long-term investment, disposable income across the distribution, and tax revenue. In deciding on these changes to capital gains tax, the Government have already considered all three factors. On long-term investment, the OBR assessed the CGT package to have no measure-specific macroeconomic impact. On impacts across incomes, distributional analysis for all Budget measures combined is set out in the “Impact on households” publication. The Government do not normally publish the impacts of individual measures. Finally, the Government’s projection of the revenue raised by these CGT changes has been certified by the OBR and published in the Budget document. Every year, the Government publish the amount of CGT paid in the most recent tax year with available data, where table 3 breaks down gains by income. For those reasons, the proposed report is unnecessary, and I implore Members to reject the new clause. New clause 4 would require the Government to publish a review within three months of the passing of this legislation covering various issues in connection with our reforms to the tax treatment of carried interest. As set out earlier, the CGT rates applicable to carried interest will increase to 32% from April 2025. This is a first step in advance of moving to a revised regime fully within the income tax framework from April 2026. The Government believe that their reforms will deliver increased fairness and place the tax rules on a more sustainable footing, while preserving our country’s position as a global fund management hub. We will also be undertaking extensive technical consultation ahead of legislating for the revised regime in a future finance Bill, which the House will of course have the opportunity to scrutinise. We therefore do not consider that new clause 4 is a necessary addition to the Bill that is before us today.

• 9 Dec 2024 · Draft Financial Services and Markets Act 2023 (Addition of Relevant Enactments) Regulations 2024 · Hansard source

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  I beg to move, That the Committee has considered the draft Financial Services and Markets Act 2023 (Addition of Relevant Enactments) Regulations 2024. It is a pleasure to serve under your chairmanship, Ms Vaz. The draft regulations will add four pieces of legislation to the list set out in section 17(3) of the Financial Services and Markets Act 2023 so that legislation can be temporarily modified as part of financial market infrastructure sandboxes. The Treasury was granted the power to make provision for FMI sandboxes by section 13 of FSMA 2023, and the list of legislation that the Treasury can temporarily modify in an FMI sandbox is set out in section 17(3). An FMI sandbox is designed to provide a controlled regulatory environment in which existing legislation and regulation is temporarily removed or modified. FMI sandbox participants can test new and developing technologies and practices that would otherwise be inhibited by existing legislation outside of the sandbox. If activity in an FMI sandbox is successful, and only after laying a report before Parliament, the Treasury can make permanent changes to legislation by introducing a further affirmative statutory instrument. The testing of new technology and practices is inherently uncertain and will evolve over time, meaning that it is likely that the list of legislation in scope will need to be added to. For that reason, the Treasury has the power to add further legislation to the list in section 17(3) of FSMA 2023, as set out in section 17(6). Through the testing of new technologies and practices in an FMI sandbox, we are likely to identify additional legislative modifications, and the ability to add further legislation to the list is a way of ensuring that the FMI sandbox regime can be kept up to date. The draft regulations exercise the power set out in section 17(6) of FSMA 2023, so that the four items of legislation can be added to support two FMI sandboxes, namely the existing digital securities sandbox, which I will refer to as DSS, and the future private intermittent securities and capital exchange system sandbox, also known as the PISCES sandbox—we love acronyms in the Treasury. The DSS will enable firms to test new and innovative technology across financial market infrastructure activities, and the PISCES sandbox will allow private companies to have their shares traded on an intermittent basis on a new type of stock market. The draft regulations will bring the following legislation into scope of the power to make temporary modifications in FMI sandboxes: the Stock Transfer (Gilt-edged Securities) (CGO Service) Regulations 1985, which I will refer to as “STRs”; the Government Stock Regulations 2004, which I will refer to as “GSRs”; the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017, which I will refer to as “MLRs”; and regulation (EU) 2017/1129 of the European Parliament and of the Council, also known as the prospectus regulation, which we inherited from the EU. Temporarily modifying the STRs and GSRs will enable us to support the issuance of a digital gilt instrument through the DSS. I and the Financial Secretary to the Treasury set out further details of that pilot in written ministerial statements to both Houses on 18 November, which hon. Members may have seen. The MLRs will be modified to facilitate an exemption from the cryptoasset regime in the MLRs for DSS participants, on the basis that activity in the DSS will involve securities, such as bonds and equities, that are already regulated, so conventional anti-money laundering legislation will be applied in the normal way. The prospectus regulation will be modified as part of the PISCES sandbox so that prospectus requirements can be disapplied in favour of bespoke disclosure requirements in that sandbox. I should note at this point that the draft regulations do not make any temporary changes to the four specific items of legislation. Under the procedure stipulated by FSMA 2023, that will be done as part of further negative SIs to be laid before Parliament, which will provide all the relevant explanatory information for the changes being made to each enactment. The Government published a draft of the instrument that will set up the PISCES sandbox in November for public comment ahead of its being laid before Parliament in May. The DSS was established by a statutory instrument laid last December, although changes to the MLRs will require a further statutory instrument, which is to be laid before Parliament in January. I recognise that this is a very technical measure, but the draft regulations will make changes consistent with the powers established by FSMA 2023—the Conservative party led the introduction of that Act, and we supported it when we were in opposition—and support the continued development of the DSS and of future FMI sandboxes, such as the PISCES sandbox. The Government believe that this will help to support innovation through each of these FMI sandboxes. I hope that the Committee will feel able to support the draft regulations and their objectives, and I commend them to the Committee.

• 9 Dec 2024 · Draft Financial Services and Markets Act 2023 (Addition of Relevant Enactments) Regulations 2024 · Hansard source

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  I thank the shadow Minister for his comments about our constructive relationship. I am sure there will be many fights in these rooms, but they are not happening yet. He will be delighted to know that we will be back here at 6 o’clock to consider a similarly simple statutory instrument. We intend to lay the statutory instrument providing the legal framework for the PISCES sandbox before Parliament by May next year. As the shadow Minister will probably know, the testing of new technology and practices is uncertain, so there may be further FMI sandboxes with a different focus that require changes to legislation that have not been considered previously. Therefore, it is not really possible to set out a timeline, but the statutory instrument for PISCES will be laid by May 2025. As I am sure the shadow Minister will recognise, the draft regulations are an important step forward in the development of the digital securities sandbox and future financial market infrastructure sandboxes such as PISCES, which is world leading and very impressive for our Government, and will be a good thing for the financial services sector. The draft regulations will ensure that FMI sandboxes are able to facilitate innovation while ensuring that all the risks are proportionately managed, as well as ensuring that firms are incentivised to participate. The changes will be laid out in detail in a negative statutory instrument that we intend to lay before Parliament. We will be modifying the money laundering regulations to ensure that activity in the digital securities sandbox is not caught under the definition of cryptoassets in the MLRs. We will also provide the shadow Minister with a timeline on that, if that makes sense. I thank Members for participating in the debate. I hope they found it informative, I hope they will learn all the acronyms, like I have, and I hope they will join me in supporting the draft regulations. Question put and agreed to .

• 3 Dec 2024 · Topical Questions · Hansard source

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  The FCA is held to account by the Government and Parliament, but Treasury Ministers cannot comment on individual cases, and the Treasury has no stake in the operational issues of the FCA. I am very happy to meet with the right hon. Lady and the FCA to discuss that matter, but let me be clear: the FCA is an independent regulator.

• 2 Dec 2024 · Draft Scottish Rates of Income Tax (Consequential Amendments) Order 2024 · Hansard source

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  I beg to move, That the Committee has considered the draft Scottish Rates of Income Tax (Consequential Amendments) Order 2024. It is a pleasure to serve under you as Chair, Sir Roger. The draft order enables the calculation of deficiency relief to take account of the introduction of the Scottish advanced rate of income tax. Deficiency relief reduces the tax that some individuals are required to pay when certain life insurance policies come to an end. It applies in unusual circumstances in which the policyholder would otherwise be taxed on more than the actual economic gain they made on the policy. That might include when a tax charge arose on an earlier withdrawal. On 22 February this year, the Scottish Parliament introduced the new Scottish advanced rate income tax band. That means that, from 6 April 2024, the former Scottish higher rate income tax band was split into the Scottish higher rate and the Scottish advanced rate income tax bands. The current deficiency relief rules do not take account of the new tax band. This reduces the amount of deficiency relief available to a small number of Scottish taxpayers from 6 April 2024. The order applies from 6 April 2024, and ensures that the new Scottish advanced rate of income tax can be included in the calculation of deficiency relief. At the same time, the Government are taking the opportunity to simplify the wording of the legislation. The order ensures that the calculation of deficiency relief takes account of the new Scottish advanced rate of income tax.

• 25 Nov 2024 · Draft Financial Services and Markets Act 2000 (Ombudsman Scheme) (Fees) Regulations 2024 · Hansard source

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  I beg to move, That the Committee has considered the draft Financial Services and Markets Act 2000 (Ombudsman Scheme) (Fees) Regulations 2024. It is a pleasure to serve under your chairship, Mrs Harris. These regulations are made under powers in the Financial Services and Markets Act 2023. The Committee may be aware that the Secondary Legislation Scrutiny Committee raised this statutory instrument as an instrument of interest in its second report, which was published on 5 September. This instrument will enable the Financial Ombudsman Service—the FOS, as it is commonly known—to charge case fees to claims management companies and relevant legal professionals when they bring cases to the FOS on behalf of complainants. The FOS enables consumers and financial services firms to resolve disputes without having to go through the courts, which can be expensive and time consuming for both parties. To deliver a service that is cost-free to consumers, the FOS is funded by a combination of case fees paid by firms subject to complaints and an annual levy on industry. The FOS is designed to be an accessible service that consumers can use for free, and the majority of consumers raise their complaints directly with the FOS. However, some consumers choose to use claims management companies or legal professionals to bring claims to FOS on their behalf. Collectively, they are known as professional representatives. These professional representatives normally take a cut of any compensation awarded as payment for their services. This payment can be as much as 30% of the compensation awarded to a consumer. Currently, while these professional representatives can make money from bringing a case to the FOS, they cannot be charged for doing so. Many of these professional representatives act responsibly, but there is evidence that some are taking advantage of the cost-free nature of the service that the FOS provides. Rather than properly assessing complaints and taking forward those with merit, these representatives submit large numbers of complaints that are poorly evidenced. This behaviour is negatively impacting the ability of the FOS to promptly resolve other consumer complaints. As firms are required to pay a case fee of £650 regardless of whether or not a complaint is upheld against them, this practice also has significant costs for industry. Firms subject to large numbers of complaints from professional representatives can face significant bills in case fees, despite not being found to have committed any wrongdoing at all. The Government have also noted concerns that firms experiencing this treatment might feel pressured into settling claims early. In order to reduce the overall cost to a firm, they may simply offer to settle for an amount below the £650 case fee, even where they feel that the claim itself is without merit. In order to address those exploitative practices, the regulations will enable the FOS to charge a case fee to professional representatives for bringing complaints on behalf of claimants. This will ensure that there is a financial incentive for those professional representatives to carefully consider the merits of any cases that they are bringing. There will now be a cost to flooding the Financial Conduct Authority with templated complaints that have a low chance of success. Charities bringing complaints on behalf of consumers are not included in the instrument and will therefore not be charged by the FOS. Of course, the FOS remains completely free for consumers to access directly. The FOS will be responsible for determining exactly who is charged and any level of fee. This is in line with how the system already works for financial services firms subject to complaints. In anticipation of this instrument, the FOS consulted on its proposed detailed approach to charging fees to professional representatives. It published a statement on 15 November detailing the feedback it had received to the consultation, and its initial response. In that feedback statement, subject to Parliament approving this instrument, the FOS proposes that professional representatives will be charged a fee of £250 for each case they bring. When the FOS finds in favour of the claimant represented by the professional representative, the fee will be reduced to just £75. In addition, each professional representative will not be charged for the first 10 cases that they bring each year. In that way, we hope, the FOS has sought to disincentivise bad behaviour while ensuring minimal impact on those professional representatives bringing cases with merit. If this instrument is approved, the FOS will confirm its final plans, having considered the responses to its consultation. The approach taken through this SI ensures that the FOS will remain cost-free to consumers while ensuring that the poor behaviour of some professional representatives does not undermine the ability of the FOS to deal with consumer complaints properly. I therefore commend the regulations to the House.

• 20 Nov 2024 · Financial Assistance to Ukraine Bill · Hansard source

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  I have listened closely to what the hon. Gentleman has said, especially with regard to other countries, and I am happy to have conversations with ministerial colleagues across different countries and find out what they are doing. This is our position for now, but this is an ongoing situation and things will move. I am happy to speak to Ministers from different countries who are using assets differently. The ERA is an innovative scheme. It will ensure that Ukraine receives vital support throughout 2025 and beyond. It will take the money generated from Russian sovereign assets and use it to support Ukraine in the best possible way. This is further proof for us that the G7’s support for Ukraine will not falter, and that the UK will stand shoulder to shoulder with Ukraine for as long as it takes. I echo the comments of my hon. Friends the Members for Lichfield (Dave Robertson) and for Rushcliffe (James Naish) in thanking the people of our country for all the support that they have shown Ukraine. Madam Deputy Speaker, I hope you will indulge me for one minute while I say that my own constituents of Hampstead and Highgate have opened their doors for Ukrainian refugees, giving them their homes, community spaces and education spaces, and I particularly pay tribute to my local synagogue, South Hampstead synagogue, which is providing free English lessons for Ukrainian refugees. I was very pleased to meet those people in Parliament last week. Question put and agreed to . B ill accordingly read a Second time. Financial Assistance to Ukraine Bill (Programme) Motion made, and Question put forthwith (Standing Order No. 83A(7)), That the following provisions shall apply to the Financial Assistance to Ukraine Bill: Committal (1) The Bill shall be committed to a Committee of the whole House. Proceedings in Committee, on Consideration and on Third Reading (2) Proceedings in Committee shall (so far as not previously concluded) be brought to a conclusion one hour after their commencement. (3) Any proceedings on Consideration and proceedings on Third Reading shall (so far as not previously concluded) be brought to a conclusion two hours after the commencement of proceedings in Committee of the whole House. (4) Standing Order No. 83B (Programming committees) shall not apply to proceedings in Committee of the whole House, to any proceedings on Consideration or to proceedings on Third Reading. Other proceedings (5) Any other proceedings on the Bill may be programmed. —(Anna McMorrin.) Question agreed to. Financial Assistance to Ukraine Bill (Money) King’s recommendation signified. Motion made, and Question put forthwith (Standing Order No. 52(1)(a)), That, for the purposes of any Act resulting from the Financial Assistance to Ukraine Bill, it is expedient to authorise the payment out of money provided by Parliament of any sums required by the Treasury or Secretary of State for the purpose of providing loans or other financial assistance to, or for the benefit of, the government of Ukraine as a result of— (a) the arrangements described as the Extraordinary Revenue Acceleration Loans for Ukraine announced on 14 June 2024 at the G7 summit in Apulia in Italy, or (b) any subsequent arrangements that are supplemental to or modify or replace those arrangements. —(Anna McMorrin.) Question agreed to. Speaker’s Committee for the Independent Parliamentary Standards Authority Ordered, That Marie Goldman, Leigh Ingham, Gordon McKee, Charlotte Nichols and Jesse Norman be appointed to the Speaker’s Committee for the Independent Parliamentary Standards Authority until the end of the present Parliament, in pursuance of paragraph 1(d) of Schedule 3 to the Parliamentary Standards Act 2009, as amended.— (Lucy Powell.) House of Commons Members’ Fund Ordered, That Holly Lynch, Sir Charles Walker and Peter Grant be removed as Trustees of the House of Commons Members’ Fund and Mark Tami, Chris Elmore and Dr Danny Chambers be appointed as Trustees in pursuance of section 2 of the House of Commons Members’ Fund Act 2016.— (Lucy Powell.)

• 18 Nov 2024 · Financial Services: Mansion House Speech · Hansard source

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  As my hon. Friend said, she stood on a ticket as a Labour and Co-operative Member of Parliament, and she has done a lot of work in that area. Last week, the Chancellor set out multiple new measures to unlock the full potential of the mutual sector, as we outlined in our manifesto. That included publishing a call for evidence and reforming the credit union common bond, and asking the PRA and the FCA to report on the current mutual landscape by the end of 2025.

• 18 Nov 2024 · Financial Services: Mansion House Speech · Hansard source

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  Our regulators do a very good job, and we are lucky to have them, but we will hold them to account. When the Chancellor talked about risk taking, she was saying that the post-financial crisis regulatory changes created a system that sought to eliminate risk, but which has gone too far and led to unintended consequences. For example, the certification regime has helped to improve standards and accountability, but some elements have become overly costly and administratively burdensome. That is what we are looking at. Getting rid of the regulators is not the way to grow the economy. Holding them to account, and considering how we increase risk taking in our system, is the way in which this Government will approach things.

• 18 Nov 2024 · Financial Services: Mansion House Speech · Hansard source

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  I apologise on behalf of the Chancellor for the fact that she could not be here. If there are any specific questions for her, I will ensure that she knows what they are, and that she personally writes to Members. With permission, Madam Deputy Speaker, I will update the House on the Government’s work to support the growth of the UK economy. The financial services sector is the jewel in the crown of the UK economy, as I am sure everyone across the House will agree. It is one of our largest and most successful sectors, employing 1.2 million people and making up 9% of gross value added, and the UK is the second largest exporter of financial services in the G7. On Thursday night at Mansion House, the Chancellor placed the sector at the heart of the Government’s growth mission and, building on the economic stability and public investment that the Budget provided earlier this year, she set out a plan for investment and reform of the sector. The plan builds on the rapid work that the Government have already done to support the growth of the sector. One week into office, the Government welcomed the biggest changes in the UK’s listings regime in more than three decades; in our first month we launched the landmark pensions review and in September we delivered the final stage of the post-crisis capital reforms for banks, working closely with the Bank of England, strengthening our banking system while also protecting lending to the wider economy. The package that the Chancellor set out at Mansion House builds on those steps, beginning with a commitment to develop a comprehensive plan to grow our financial services sector. In spring next year, the Government will publish the first ever financial services growth and competitiveness strategy, giving the financial services sector the confidence it needs to invest in the long term by setting out our plans for the sector over the next 10 years. Published alongside our modern industrial strategy, it will be clear-eyed about our strengths, proposing five priority growth opportunities: fintech, sustainable finance, asset management and wholesale services, insurance and reinsurance markets, and capital markets, co-designed with voices across the financial services sector. From the base of long-term stability, the Chancellor also laid the foundations for getting even more investment into our country. The Government have already confirmed our plans to capitalise our flagship investment vehicle, the National Wealth Fund, to invest in the industries of the future. To support investment in our green industries, the Chancellor’s speech confirmed the Government’s next steps to deliver a world-leading sustainable finance framework. The Chancellor also set out our plans in another key area that I know has generated interest across the House: pension funds. The UK has one of the largest pension markets in the world, but pension capital is often not used enough to drive investment and growth in our economy. Thanks to the excellent work taken forward by the Under-Secretary of State for Work and Pensions, my hon. Friend the Member for Wycombe (Emma Reynolds), the Chancellor announced the interim report of the pensions investment review. The report sets out our plans to harness the collective size of our pension funds to create larger pools of capital for investment, supporting pension funds to invest at scale. To do that, we will deliver a significant consolidation of the defined contribution market and the Local Government Pension Scheme in England and Wales, providing better outcomes for savers while supporting investment for growth. Indeed, we could unlock around £80 billion-worth for investment in private equity and infrastructure through those actions alone, according to domestic and international comparisons. Alongside economic stability and higher levels of investment, the Chancellor’s Mansion House speech put reform at the heart of the Government’s growth agenda. The Government’s approach to regulation is a core part of that. Across our economy, we will upgrade our regulatory regime, reviewing the guidance we give to the Competition and Markets Authority and other major regulators to underline the importance of growth. That includes our financial services regulators. While it was right that successive Governments made regulatory changes after the global financial crisis to ensure that regulation kept pace with the global economy of the time, it is also important that we learn lessons from the past. Those changes have resulted in a system that sought to eliminate risk taking, and in some cases they have had unintended consequences that we as a new Government must now address. Regulation has costs as well as benefits. It has costs for firms when they are spending large sums on compliance and not using that money to innovate and to grow, and it can have costs for consumers, for example by restricting access to financial advice that could help them to plan for the future. While maintaining important consumer protections and upholding international standards of regulation, we therefore feel that now is the moment to rebalance our approach and take forward the next stage of reforms needed to drive growth, competitiveness and investment. To support that aim, the Government issued new growth-focused remit letters to the financial services regulators to make clear that the Chancellor and I fully expect them to support the Government’s missions on economic growth. The Financial Ombudsman Service plays a vital role for consumers in getting redress. That will not change, but reform is needed to create a sure environment. We will work closely with the Financial Conduct Authority and the FOS to develop a new agreement between the two institutions, with clear expectations on how they co-operate, including on historic market practice and mass redress events. The Government welcome the call for input that asks for views on how to improve the rules governing how the FOS operates. The Government’s ambitions for reform are much wider than regulation. Building on our work to improve the UK’s listing regimes, we are unlocking funding for our capital markets and legislating to establish, by 2025, PISCES—the private intermittent securities and capital exchange system—which is an innovative new stock market to support companies to scale and grow. We are also supporting innovation in the financial services sector by launching a pilot to deliver a digital gilt instrument using distributed ledger technology, as my written statement sets out. Insurance markets are pivotal to supporting growth and creating resilience by helping us to manage risk. The Government have launched a consultation on captive insurance, where a new approach could cement the UK’s position as a leading financial services centre. As the House will know, this Government prioritise the growth of the mutuals sector. We have launched a call for evidence on the credit union common bond, asking regulators to report on their mutuals landscape to support their growth, and welcoming the establishment of an industry-led mutual and co-operative business council. The Chancellor also published the national payments vision to set out the Government’s ambition for this vital sector, ensuring that our approach to regulation allows firms to grow and innovate, and including decisive action to progress open banking and to support our fantastic fintech businesses. Finally, we are working with tech platforms and telco networks to reduce the scale of fraud originating on their platforms. The Chancellor, the Home Secretary, and the Secretary of State for Science, Innovation and Technology, have written to leading tech and telecom companies, calling on them to go further and faster, with clear action to reduce the level of fraudulent activity that exploits their platforms and networks. We will be monitoring that closely in the coming months. This is a significant package to support the growth of the financial services sector and invest in the wider economy. I have heard lots of murmuring from Opposition Members while I have been speaking, which I hope shows their approval for our overall package. I look forward to working across the House to deliver these important reforms from the first Labour Mansion House speech in 14 years.

• 6 Nov 2024 · Draft Packaged Retail and Insurance-based Investment Products (Retail Disclosure) (Amendment) Regulations 2024 Draft Consumer Composite Investments (Designated Activities) Regulations 2024 Draft Securitisation (Amendment) (No. 2) Regulations 2024 Draft Prudential Regulation of Credit Institutions (Meaning of CRR Rules and Recognised Exchange) (Amendment) Regulations 2024 · Hansard source

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  It is a pleasure to serve under your chairmanship, Mr Efford. The regulations that we are introducing today will ensure effective, proportionate regulation for the financial sector by laying the groundwork for wholesale reform of consumer disclosure for financial services, and for effective prudential arrangements. Let me turn first to the draft Consumer Composite Investments (Designated Activities) Regulations 2024. The packaged retail and insurance-based investment products regulation, or PRIIPs regulation, was designed to standardise disclosure across a wide range of financial instruments and across the EU in an attempt to improve transparency and enable comparison between products for retail investors. However, as many Members will be aware, the regime was overly prescriptive and burdensome with the one-size-fits-all template of the key information document, or KID, resulting in the presentation of misleading information to consumers on potential risks and returns. The previous Government took urgent action to address the most pressing issues with the KID in the Financial Services Act 2021, and the draft statutory instrument will deliver on this Government’s commitment to wholesale reform of these EU-inherited rules, with a new regime tailored to UK markets and firms. The SI provides the Financial Conduct Authority with tailored rule-making and enforcement powers to deliver this long-called-for reform and to ensure its effective implementation. The new regime for CCIs will have tailored and flexible rules that address the key issues with PRIIPs and will support investors to better understand what they are paying for. The FCA’s consultation later this year will provide an opportunity for a full range of stakeholders to provide feedback on the new regime to ensure that it works as intended. I return to the draft Packaged Retail and Insurance-based Investment Products (Retail Disclosure) (Amendment) Regulations 2024. I have heard concerns from industry about PRIIPs. The current disclosure requirements have had unintended consequences on the investment trust sector specifically. Listed investment trusts are a British invention dating back 150 years, and they are unique to our country. Representing over 30% of the FTSE 250, and predominantly investing in illiquid assets—including infrastructure projects and renewables—they play an active role in supporting the Government’s growth agenda. Investment trusts are a unique and well established type of closed-ended investment vehicle, and the Government recognise that the prescriptive cost disclosure methodology required by the PRIIPs regulation does not reflect the actual cost of investing in these close-ended funds. The industry has told us again and again that the methodology is negatively impacting its ability to fundraise, and competitiveness. Therefore, this instrument will immediately exempt listed investment trusts from the current PRIIPs regulation and other relevant assimilated law as we finalise the replacement CCI regime, delivering on a key industry ask. We have worked quickly to deliver these changes and firms are able to take advantage of this provision immediately, before the legislation takes effect, due to the FCA’s regulatory forbearance. This approach is intended as an interim measure, and investment trusts will be included within the scope of the new CCI regime, once it is in place. The FCA, recognising that the pace of legislative reform can be slow, has already implemented regulatory forbearance so that firms can take advantage of the provision immediately, before the instrument takes effect. In the long term, investment trusts will follow bespoke and tailored rules befitting the industry, and I encourage all sides to come together to find a sensible solution under the CCI regime. Let me now turn to the draft Prudential Regulation of Credit Institutions (Meaning of CRR Rules and Recognised Exchange) (Amendment) Regulations 2024, which make two amendments. The first is a technical change supporting the implementation of Basel 3.1, the final round of bank capital reforms following the global financial crisis. Bank capital rules are contained in the capital requirements regulation, part of assimilated law on financial services. This SI will enable revocations of these regulations, allowing the Prudential Regulation Authority to replace those rules in its rulebook, while ensuring that the PRA’s rule making remains subject to appropriate accountability and scrutiny. The second amendment will expand the definition of a “recognised exchange”, from referring only to domestic investment exchanges to include those from overseas. This will enable stocks and shares from qualifying overseas exchanges to receive preferential prudential treatment when used as collateral to secure financial services, and will broaden our definition, making the UK comparable with international counterparts and ensuring that we are competitive. Finally, the draft Securitisation (Amendment) (No. 2) Regulations 2024 extend a temporary arrangement allowing UK banks to treat EU securitisation products as though they originate from the UK, providing that they meet the standards of the “simple, transparent and standardised” framework. This means that banks and insurance firms holding such products may be able to benefit from preferential capital treatment. The current arrangement is due to expire at the end of December 2024, which would mean that no additional EU STS securitisations would be able to enter the temporary arrangement after that date. As that could impact the range of investment options for UK market participants, the Government are legislating to extend this arrangement to June 2026. The EU securitisation regulation was recently incorporated into the European economic area agreement, and the EEA-European Free Trade Association states have indicated their intention to align themselves with the EU securitisation regulations over the course of 2025. The extension granted by this instrument will allow time for the EEA-EFTA states to implement these changes and for UK authorities to make a more informed decision about the non-time limited designation of EU STS securitisation products by June 2026. These SIs will empower regulators to ensure that our financial services industry is subject to a rulebook that is fit for purpose, more proportionate, and tailored to UK markets. I know that the hon. Member for Grantham and Bourne is familiar with the regulations, as I have debated with him several times in Committee. I hope that he and the Committee will join me in supporting the regulations, which I commend to them.

• 6 Nov 2024 · Budget Resolutions · Hansard source

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  The right hon. Gentleman has intervened 18 times. I shall not give him another chance. Let me continue. That is the only way that we can really fix the foundations. Of course, that involves taking tough decisions, particularly on spending and taxation, but I will take no lectures from those who were content to levy a £22 billion pound tax on this country’s future, and, through their unfunded spending commitments, attempt to undemocratically bind the hands of a future Government. Well, guess what? This Government will do things differently. While the previous Government allowed investment in our country to fall to its lowest level on record, this Government will put investment at the heart of everything that we do. That is why we held the international investment summit in October—to show firms at home and abroad that Britain is open for business once more. That is why we have introduced a new fiscal rule—the investment rule—which, alongside appropriate guardrails provided by the OBR and our new stability rule, means that this Government can meaningfully invest in our country’s future. Of course, investment means taking a long-term view. As anyone who has bought a property, built a business or raised a family will know, the early days are always the hardest. But if they take the hard calls now, in time they will get back far more than they put in. I pick those examples deliberately, but with regret. The sad truth is that, for working people—particularly young people—up and down the country, home ownership, entrepreneurship and starting a family have never been more distant. This Budget will start to change that. Our manifesto made a clear commitment to get Britain building again. This Budget puts the first shovels in the ground, with a commitment to spend an average of 2.6% of GDP on public sector net investment over the course of this Parliament. This will include an additional £500 million in new funding for social and affordable homes, which brings total investment in housing supply to more than £5 billion and supports the delivery of tens of thousands of new homes. We will build more than just homes; we need to build communities. Infrastructure is key to tying those communities together while ensuring that they plug into the wider economy. [Interruption.] The shadow Foreign Secretary asks how. If she listens, she will learn, so she should pay attention. Getting our country moving again will be key to growing the economy. [Interruption.] She should not chunter from the Front Bench. She needs to listen, because our commitment to infrastructure investment will help us to do so—by, for instance, increasing local roads investment by £500 million in 2024-25. These are the things that the previous Government failed to do, but we will deliver for our country. For working families, that means less time wasted dodging potholes and more time for the things that actually matter. Of course, infrastructure helps not just families but firms. In an increasingly volatile world, Government should play an important role in securing our energy supply so that firms can price that into their business plan. We heard powerful and authentic maiden speeches today from my hon. Friends the Members for North Ayrshire and Arran (Irene Campbell), for Stoke-on-Trent North (David Williams) and for Sherwood Forest (Michelle Welsh). We will see them as huge assets to Parliament. Some of them mentioned that their families did not think that they would get here; I am really pleased that their families were wrong. I will finish by echoing something that the shadow Minister, the hon. Member for North Bedfordshire (Richard Fuller), said. It is not often that I agree with him, but he said that we had choices. The truth is that we did have choices, and guess what? We chose to act. In 10 years’ time, the country will look back on this Budget as the moment when we got Britain’s future back. In the future, the economy will have grown because at this moment we chose to prioritise a healthy workforce; we will have record levels of investment because we prioritised fiscal and economic responsibility; and people will have more money in their pockets because we prioritised protecting hard-working people’s payslips. The merry-go-round of austerity and economic irresponsibility is over. We made a choice—a choice to rebuild Britain. Question put and agreed to. Resolved, That income tax is charged for the tax year 2025-26. And it is declared that it is expedient in the public interest that this Resolution should have statutory effect under the provisions of the Provisional Collection of Taxes Act 1968.

• 29 Oct 2024 · Economic Productivity · Hansard source

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  Increasing economic productivity is a key mission in the Labour Government’s growth agenda. After 14 years of weak productivity, depressed living standards and unfunded spending commitments, we are adamant about bringing our country into an upward trajectory, using the national wealth fund and the significant planning reforms that we are bringing together to ensure a decade of national renewal for our country.

• 29 Oct 2024 · Topical Questions · Hansard source

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  The proposed regulations will drive high standards of conduct among “buy now, pay later” firms, ensuring that consumers receive clear information and have access to strong protections. Our proposals will also allow the Financial Conduct Authority to require “buy now, pay later” firms to carry out affordability checks, ensuring that firms lend only to borrowers who can afford to repay.

• 2 Sept 2024 · Banking Services: Rural Northumberland · Hansard source

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  I commend my hon. Friend the Member for Hexham (Joe Morris) for securing this important debate, which I think is his first Adjournment debate. I also congratulate him on being the first Labour MP for Hexham. His Wikipedia entry famously boasts that he broke a 100-year streak of Conservative MPs to be in this place. If that is not an accolade, I do not know what is. Just before I came to this debate, I was having dinner with my hon. Friend the Member for Warwick and Leamington (Matt Western). I mentioned to him that I was answering a debate called by our hon. Friend the Member for Hexham; our hon. Friend will be pleased to know that he said that Hexham is the most beautiful place he has ever been to in his life—I would say other than Hampstead and Highgate, obviously. I thank all hon. Members who have contributed to this important debate. The fact that they have stayed behind at a quarter past 10 on a Monday, on their first day back to Parliament on a one-line Whip, demonstrates their commitment. I know that this issue affects many of our constituents, and hon. Members are absolutely right to champion it.

• 2 Sept 2024 · Banking Services: Rural Northumberland · Hansard source

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  I thank my hon. Friend for her intervention. I know that she is a doughty champion for her constituents. I hear what she says about her rural constituency. Mine is not a rural constituency, but I speak to people across the country who are really struggling with digital connectivity, as she outlines. It is something that the Government are taking very seriously, and we are aware of the obstacles in the way of people trying to access services online. I am pleased that this is my first parliamentary debate as the Economic Secretary to the Treasury, because this is an issue that is close to my heart, and one that I am determined to try to address. It is a privilege to be able to use this office to tackle some of the country’s most important issues, as my hon. Friend just said. Ensuring access to banking and supporting financial inclusion featured very highly in our manifesto, which all Labour Members were elected on. We want to ensure that our constituents manage to access the services that they deserve. Before I get on to the meat of the topic, I will briefly provide the context. Although many people have benefited from changes to the UK’s banking landscape, such as the ease and convenience for some people of remote banking, it is clear to me that others have found it a lot more challenging. According to the consumer organisation Which? over 600 branches in the UK have closed since 2015. Bank branch closures have significantly impacted those in communities who need access to in-person banking services. I am really sorry to hear about some of the specific cases that have been raised. My hon. Friend the Member for Hexham talked about his 74-year-old constituent who has to travel so far. That example particularly stood out to me, because that should not be the case. I assure my hon. Friend that the Government understand the importance of face-to-face banking, and banking access, to our communities. Not only is it is key to the health and vibrancy of those communities, but as he pointed out, it helps them to drive forward and benefit from our country’s economic growth, and the rural economy. To anyone listening to the debate, please be in no doubt that the Government share the objective of enhancing access to banking services, and we will be prioritising the delivery of that accordingly. Work has already started. Obviously, we have not been in Government for very long, but even before the election we committed to working closely with banks to roll out at least 350 banking hubs, which will provide individuals and businesses up and down the country with critical cash and banking services.