John Glen
MP for Salisbury · Conservative · United Kingdom
“I welcome the Chief Secretary to her new position, but what words of comfort could she give the residents of Salisbury in Wiltshire, a unitary authority? We are not part of a combined authority and we do not have a metro mayor.”
“Sam Moody is my constituent. He is the chief executive of Rockhopper. During my time in this House, he has been absolutely scrupulous in following the laws of this country and respecting the Falkland Islanders.”
“I listened carefully to what the Minister said about the process, and I respect that. But most people who take a pretty level-headed, pragmatic view of the need for a transition over time still cannot get their heads around the short-term reality: when we have so much turmoil in the middle east, why would we extend the time that we are no…”
“It is 55 days till the Budget. Given the market’s reaction to the Prime Minister’s statement on Tuesday, and given that our gilt rates are higher than those of our peers in the G7, could we have a debate on the implications of higher taxes for growth?”
“Before the hon. Lady makes her statement on Thursday, will she, when reflecting on the arrangement in Wiltshire that would embrace Wessex—although we have been told that that is not the Government’s view—address the prevailing concern that the people of rural Wiltshire will be considerably worse off without having the opportunity to embra…”
“I recognise that the Minister wants to come to what the Government are going to do, but does he not accept that the decisions already made in the last two years—with respect to the price of employment and the national living wage, the cost of employment with regard to legislation, and business rates—have depressed the appetite of many sma…”
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“Friend the Member for Bromley and Chislehurst also drew attention to the role of the City of London Corporation in green finance, and I absolutely endorse his recognition of its contribution and in particular that of Catherine McGuinness, who has been the policy lead through most of my tenure. She has done an excellent job, and her tenure comes to an end next spring. As I have said, the Lord Mayor is also committed to taking on his predecessor’s leadership in that area. Looking ahead, it is important that we do not rest on our laurels, as the motion recognises.”
“As a Government we have taken bold action in this area to transform the UK financial sector. That has involved introducing new economy-wide sustainability disclosure requirements for businesses, and the kick-starting of a green financing programme with two record-breaking sovereign green bonds: one for around £10 billion on 21 September and a further £6 billion on 21 October, achieving a “greenium”—a premium on what we would have gained from a non-green bond—of around 2.5 base points. We will not be complacent about this. We also need global action on green finance, and the Chancellor recently hosted the COP26 finance day, which saw financial firms with assets of over £130 trillion committing to net zero. My hon.”
“I recognise the uncertainty around the maps and the reprofiling of face-to-face and online debt advice. I am taking a close interest in that. We are also trying to innovate when it comes to no-interest loan schemes, which are at the proof of concept phase and could make a massive contribution to assisting many vulnerable people. My hon. Friend the Member for Bromley and Chislehurst (Sir Robert Neill) put a stark statistic before us when he said that more than 36% of his constituents worked in financial services and the broader legal and professional services sector. It is a critical sector for our economy. The financial services sector also has a crucial role to play in our response to climate change. The ambition is clear: we want the UK to be the best place in the world for green and sustainable investment.”
“Friend the Member for Wimbledon (Stephen Hammond) for his kind words, his focus on the importance of the regional agenda, and his challenge to ensure that we have opportunities across the regions. The opportunity to secure high-paid, high-value jobs beyond Wimbledon and across the United Kingdom is a real imperative. I draw his attention to the Kalifa review into fintech that was published at the beginning of March, and to the money secured and announced in the Budget for the centre for financial innovation and technology, which will be a key driver of that. My hon. Friend the Member for Hitchin and Harpenden (Bim Afolami) mentioned levelling up and also raised some specific concerns about debt advice. I draw his attention to the work we have done with the breathing space scheme, which went live in May.”
“Two thirds of people employed in the industry work outside London: 37,000 in Northern Ireland, 69,000 in Wales, and 153,000 in Scotland. I am proud that the Government have used that imperative to headquarter our new national infrastructure bank in Leeds and to establish our new economic campus in Darlington. The sector has also made significant progress on diversity and inclusion, so that the very best people for the job have an equal opportunity to succeed, no matter what their race, gender or background might be. There is a lot more work to be done in that area, and I commend the incoming Lord Mayor of London for his championing of that agenda during his tenure. I want to address some of the points raised by Members during the debate. I thank my hon.”
“This is not just about banks, although they are critically important for the underpinning of lending to our economy. However, I think we should also recognise, as the Scottish National party speakers did, that the industry is not just about the square mile but about the whole United Kingdom. I visited the constituency of the hon. Member for Rutherglen and Hamilton West (Margaret Ferrier) a few weeks ago to see the bank hub that is active there and informing the industry’s response to the challenge of access to cash. In places such as Birmingham, Bristol, Glasgow, Cambridge, Edinburgh and Merseyside, this industry is critical. There is not an equitable distribution across every region, but there are hubs of real significance.”
“In the back offices, people have rolled up their shirtsleeves and worked all hours with us and the regulators to deliver tens of billions of pounds of emergency loans. I have already thanked the industry publicly for what it has been doing, and I am delighted to do so again today at the Dispatch Box. My hon. Friend the Member for Hitchin and Harpenden (Bim Afolami) mentioned the £100 million of loans and other support in his constituency, and that has been replicated across the country. The bounce back loans, the coronavirus business interruption loan scheme and the forbearance measures were critical at what was a critical time for our country. I recognise and acknowledge the sentiments about the financial services industry not always getting a good press.”
“I discerned five themes as I listened to the debate: the response to the pandemic, the issue of levelling up, green finance, the context for our international relationships, and regulation, about which there have been a range of comments across the wholesale and retail sector. I have been the Economic Secretary for nearly four years, and in that time I have come to recognise the vast economic contribution that the financial services industry makes to this country—we have heard a great deal about that today—but I have also observed the many hidden contributions that it has made, which have been particularly clear during the pandemic. On the frontline, bank staff have kept branches open and supported vulnerable customers at times that have been very worrying for them financially.”
“It is a great pleasure to respond to the debate on behalf of the Government. It has been an extremely well-informed debate, and I have enjoyed listening to all the contributions. I particularly thank my hon. Friend the Member for South Cambridgeshire (Anthony Browne), the hon. Member for Wallasey (Dame Angela Eagle) and the hon. and learned Member for Edinburgh South West (Joanna Cherry) for sponsoring the debate. They were absolutely right to point out that the financial services industry is critically important to the United Kingdom’s economy, and to champion the UK as an environment that ensures that the sector is able to retain its competitiveness on the world stage.”
“The instrument ensures that we do not undermine our own equivalence decisions with deficiencies in our domestic law. Rejecting this instrument does not increase the probability of the EU reciprocating equivalence decision. Conversely, it would penalise UK insurance groups and our regulator by increasing regulatory compliance and supervisory cost. To conclude, the Treasury has worked closely with the PRA in the drafting of the instrument. The Treasury has also engaged with the UK insurance industry through its industry body, the Association of British Insurers. The ABI has informed the Treasury that the industry welcomes the instrument and has no concerns with it. I hope the Committee has found my explanation useful and I commend the instrument to it.”
“On 2 December 2021, in its 22nd report, the Secondary Legislation Scrutiny Committee listed the instrument as an “instrument of interest”. In the report, the Committee noted the “absence of a level playing field: while the UK has granted equivalence to the EU in relation to the supervision of insurance groups, the EU has not reciprocated.” Although that is true, I urge the Committee not to conflate those two separate matters. Equivalence determinations are made by the UK and EU unilaterally. One decision is within the power of the UK Government and another is beyond the power of the UK Government. Where the UK Government have unilaterally determined equivalence, we have a duty to ensure that our decisions are meaningful and achieve their objectives in full.”
“Under such guidelines, the PRA could issue waivers to affected UK insurance groups pre-EU exit. However, those guidelines ceased to have effect in the UK following EU exit. Consequently, existing waivers are due to expire on 31 March 2022. The instrument confers on the PRA the power to issue new waivers. The instrument brings advantages to UK insurance groups with a parent in an equivalent third country, to the PRA and to the third-country supervisory authorities. The advantages are reduced regulatory compliance cost for the insurance groups; reduced supervisory cost for the PRA; and reduced need for co-ordination between third-country supervisory authorities and the PRA where they are reviewing duplicative materials.”
“The conditions apply where compliance by firms would be overly burdensome and where waiving the requirements would not adversely impact the PRA’s advancements of its objectives. In that circumstance, the PRA may disapply or modify regulatory requirements, which amounts to issuing waivers to UK insurance groups. In effect, the waivers exempt those UK insurance groups from demonstrating to the PRA compliance with solvency 2 group supervision requirements at the UK sub-group level. That is in recognition of the fact that compliance at the UK sub-group level has already been supervised by virtue of being a subset of the ultimate group that is supervised by the equivalent third countries. Pre-EU exit, the European Insurance and Occupational Pensions Authority issued guidelines to allow EEA supervisors to issue such waivers.”
“The instrument will ensure that the UK Government’s equivalence decisions achieve in full the objective of avoiding unnecessary duplication of supervisory work. The instrument affects UK insurance groups whose parent companies are domiciled in equivalent third countries. Such insurance groups are supervised at two levels: first, the UK insurance group level is supervised by the Prudential Regulation Authority and secondly, the ultimate parent group level, the so-called worldwide group, is supervised by the supervisory authority in the relevant third countries. The instrument enables the PRA, when certain conditions are met, to defer to third-country supervisory authorities if the UK has determined that the third countries are equivalent for the purpose of insurance group supervision.”
“I beg to move, That the Committee has considered the draft Solvency 2 (Group Supervision) (Amendment) Regulations 2021. It is a pleasure to serve under your chairship, Ms Rees. This instrument is being made to address deficiencies in retained EU law relating to the supervision of UK insurance groups under the insurance prudential regime known as solvency 2. The UK Government have made equivalence decisions that assess that the insurance group supervision regime in another country—a third country—is equivalent to the UK. To date, Bermuda, Switzerland and the European economic area countries have been determined to be equivalent to the UK for the purpose of insurance group supervision.”
“I do not think there is too much else I can say to assist, but what we doing is pretty straightforward and uncontroversial. It will ensure that the UK’s equivalence decisions, which assess that the insurance group supervision regime in another country is equivalent to the UK—”
“That is completely distinct from this statutory instrument, but there is encouraging progress there. This is not, though, a deregulatory move on the part of the UK. I think the whole Committee will understand that financial services is a dynamic industry where changes of regulation occur all the time, both on the EU side and here. This SI does not mean lower prudential standards. The PRA cannot issue waivers if by doing so it so adversely impacts the advancement of its objectives, which, as I said, are statutory ones of policyholder protection. The SI simply prevents a cliff edge that would otherwise happen on 1 April 2022. The hon. Member for Glenrothes asked whether the SI takes us back to the pre-Brexit position. The answer is no, it just restores the mechanism by which we can continue to grant equivalence.”
“The context here needs to be understood. We were completely aligned up till the end of the transition period. As a Government, we were very transparent about how we were approaching equivalence. Indeed, we made a number of determinations —I think 17 or 18 out of the 32—in November of last year. We complied fully with the EU and filled in 2,500 pages on equivalence. We also advanced a conversation around a regulatory dialogue and were ready for the memorandum of understanding to be signed. It is now a matter for the EU how it determines the way forward. Both Opposition spokespeople spoke about the broader Solvency 2 reform. That is being looked at by the PRA and the Treasury, which are looking at the risk margin and the matching adjustment. We are looking at that closely with industry to determine the best way forward.”
“I very much appreciate the comments of the Opposition Front-Bench spokesperson and I welcome her to her place this afternoon. I will try to address three or four points that she made about this regulation, and I will come on to the wider issue of equivalence and the broader Solvency 2 reform. This statutory instrument just re-establishes the PRA’s power to exempt UK insurance groups from duplication. It affects 11 groups. If it were not done, that would mean an annual recurring cost of half a million pounds. The hon. Lady asked about the objectives and who would define them. The PRA has a statutory objective to take account of policyholder protections. That is part of its remit and something that it has an enduring and ongoing responsibility for. The ongoing evaluation of prospective alternative countries is a matter for the PRA.”
“Offhand, I cannot give the hon. Gentleman a list of countries, but I am happy to look into matter and write to him if I can say something edifying. I do not want to complicate this anymore than I already may have done by my responses. The instrument simply reduces the regulatory compliance cost for those affected insurance groups and reduces that supervisory cost for the PRA and equivalent third country supervisory authorities. There is nothing that I am trying to do here that represents a significant policy deviation, and I hope that my response has been sufficiently helpful to the Committee to allow the SI to be passed. Question put and agreed to.”
“Previous receipt of covid-19 support should not, in and of itself be a barrier to credit provided that the applicant meets the lender eligibility criteria. It remains important that lenders carry out checks to ensure that they do not lend to individuals in an unaffordable way.”
“The Government have worked with the Financial Conduct Authority and we will continue to work with it and with credit agencies to ensure that those payment holidays have no impact on borrowers’ credit ratings. However, the checks that banks and financial institutions undertake need to reflect changes to individuals’ income. We do not seek to involve ourselves in commercial decisions. The mortgage lending rates to the self-employed are in line with those overall for the self-employed, but of course I will continue to work with the banks and financial institutions, and the regulators, to keep the situation under review.”
“The Government recognise that inflation is rising, and are closely monitoring the situation. The Bank of England is responsible for keeping inflation at its 2% target. As my colleagues mentioned earlier, we are working with international partners to tackle global supply chain disruption, and are taking targeted action worth more than £10 billion over the next five years to help people with the cost of living.”
“The Government very much recognise the challenge that people are facing, which is why we have introduced a range of interventions, including: the warm home discount; the household support fund, giving £500 million to local authorities to distribute; changes to the taper rate; and an increase in the national living wage. That range of interventions will help with the cost of living challenges, and will help many of the hon. Lady’s constituents.”
“I do not agree with my hon. Friend’s characterisation of the causal relationship, but I recognise that the Bank of England continues to be responsible for monetary policy. My hon. Friend has always held distinct views that represent a particular school of economists, and I will continue to listen carefully to what he has to say to the House.”
“I welcome the hon. Lady to the Front Bench. I draw her attention to the answer that I just gave concerning the number of interventions that the Government have made, including the warm home discount and additional support through local authorities. Households in the lowest income decile receive on average more than £4 in public spending for every £1 that they pay in tax. The Government are acutely sensitised to the challenges that we face this winter.”
“The Joint Money Laundering Steering Group guidance helps firms to meet their obligations under the money laundering regulations. Banks should take measures to assess risks presented by pooled client accounts to ensure that the accounts are not abused for criminal purposes.”
“My hon. Friend knows a lot about this matter and the industry, and I take her concerns very seriously. Although the Government will never insist on individual lending decisions and behaviours of banks, we will engage closely. I will meet her, and the Association of Brokers and Yacht Agents, and I will write to UK Finance to ensure that the guidance that is posted is being used effectively in the circumstances that she has raised.”
“I draw the hon. Gentleman’s attention to the financial action taskforce report in December 2018 that gave the UK the best ever evaluation in terms of anti-money laundering. There are two or three areas where we have taken action.”
“The hon. Member keeps asking “Where is the register?” I will answer the question in a moment. What the Government have done is put in an additional £63 million in the last Budget to deal with Companies House reform, which is one of the areas. We have been the world’s leader in terms of common reporting standards. We were the first country, five years ago, to raise the standard in terms of transparency. We will implement that register when legislative time becomes available.”
“The Government remain absolutely committed to protecting this country from illicit finance. We have been a leader in the global community, making this place the safest place to do business, and we will continue in that vein.”
“As the hon. Gentleman knows, we have had considerable engagement on this subject. This is a matter for the Financial Conduct Authority, and we have discussed it. Obviously, members will now vote on the proposal. On the broader issue of how this sector is treated, I remain willing to engage with him on further changes and reforms that may help it in future.”
“The Bill will enable Reclaim Fund Ltd, the scheme’s administrator, to accept a broader range of asset classes in the sectors of insurance and pensions, investment and wealth management, and securities. Of course, there could be even more dormant assets to unlock in future. The Bill will therefore introduce a new power to provide the flexibility to expand the scheme through regulations. I stress that the four core principles that underpin the scheme—voluntary participation, reunification first, full restitution and the additionality principle—will remain unchanged by the Bill. The Bill will require the Secretary of State to “carry out periodic reviews of…the operation of the dormant assets scheme and…any use made of the powers” to extend the scheme.”
“Dormant assets remain the property of their owners, who can reclaim any money owed to them in full at any time. However, only a small percentage do so, meaning that the rest of the money lies dormant. The scheme responds to the imperative to put the money to better use. The Bill marks the completion of a five-year review in collaboration with industry leaders, including an independent commission and a public consultation. The scheme’s success is down in no small part to the commitment and drive of the banks and building societies that have led the charge on unlocking dormant assets for the public good. However, it is only right that the scheme continues to grow and evolve. Currently, only assets from dormant bank or building society accounts are eligible to be transferred into the dormant assets scheme.”
“I beg to move, That the Bill be now read a Second time. Over the past decade, the dormant assets scheme has released more than £800 million to tackle systemic social challenges and to support the communities that need help most. This Bill is estimated to unlock £880 million of additional funding to ensure that the dormant assets scheme can continue to support innovative, long-term programmes addressing some of our most pressing social and environmental challenges. The scheme is led by industry and backed by the Government. Its aim is to reunite owners with their financial assets; where that is not possible, the money supports vital social and environmental initiatives across the UK. Consumer protection is at the heart of the scheme.”
“No changes to the existing restrictions can be made until and unless a new order is laid. After 10 years of operation, it is right that we carefully consider how the scheme can deliver the greatest impact once it has been expanded.”
“The Bill will amend the approach to distributing dormant assets funding in England, aligning it with the model used in the devolved Administrations, who have powers to focus funding through secondary legislation, provided that it is within the parameters of social or environmental purpose. In England, the Dormant Bank and Building Society Accounts Act 2008 restricts the English portion of funding to youth financial inclusion and social investment. The Bill will enable the current restrictions to be removed from primary legislation and put into secondary legislation so that the scheme can respond to changing needs over time. The Bill will require the Secretary of State, before making an order, to publicly consult on the social and environmental focus of the English portion of funds.”
“I thank the hon. Gentleman for his intervention. There will be a consultation; I or the Under-Secretary of State for Digital, Culture, Media and Sport, my hon. Friend the Member for Mid Worcestershire (Nigel Huddleston), will come to it later. The Bill makes provision to reflect Reclaim Fund Ltd’s establishment as a Treasury non-departmental public body and names it as the scheme’s only authorised reclaim fund. In addition, the Bill includes a new power for the Treasury to designate additional authorised reclaim funds in future. To guarantee consumer protection, the Bill’s money resolution will enable the Government to cover the liability, in the form of a loan, for reclaims should any authorised reclaim fund face insolvency.”
“I thank my hon. Friend for that point—a legitimate point that will be raised in different ways across the country during the consultation, and one on which the Secretary of State will need to reflect in due course before an order is laid. It is vital that we afford everyone a fair and open opportunity to have their say, so the Government plan to launch the first public consultation, which will last for at least 12 weeks after the Bill receives Royal Assent. Until we have launched the consultation and fully considered the responses, the Government are not prepared to make decisions or commitments on the ways in which future funds will be used in England. To do so would clearly undermine the validity and transparency of the consultation exercise.”
“I hope that the Bill will command cross-party support this evening, and that we will be able to work together on expanding the scheme to unlock hundreds of millions of pounds more for good causes throughout the country in the years to come. I commend the Bill to the House.”
“In short, no; that will not feature on the face of the Bill. However, my hon. Friend is a doughty advocate for that cause, and I am sure he will make a hearty contribution to the consultation which will inform the Government’s response in respect of those future parameters. Mindful of time and the need for contributions from so many Members on both sides of the House, I will end by reiterating that the Government are committed to supporting industry efforts to reunite more owners with lost money, and to provide a practical way for unclaimed and unwanted funds to be put to good use. The dormant assets scheme has achieved that, and we are determined to ensure that it continues to be a success.”
“I hope that I have shed light on some of the main elements of the instrument, and that hon. Members have found the explanation helpful. In short, it plays an important part in our work to build a financial system that is both responsive to the UK’s specific needs and mindful of our responsibilities to the wider world. I must inform hon. Members that a correction slip has been issued in relation to a typographical error in this draft instrument. The error is an incorrect cross-reference in the title of regulation 38. However, the operative provisions in that regulation are correct, and as a result the error has no legal effect and hon. Members can be assured that the change is minor. I therefore commend the order to the Committee.”
“It enables the FCA to continue to modify, revoke or amend IFPR-relevant technical standards, and allows for transitional provisions that support the functioning of the UK securitisation market by extending the existing risk retention requirements for one year, before they change once the IFPR is introduced. Risk retention ensures that firms retain an economic interest in a portion of the risk that is being sold on to investors. Finally, the instrument addresses a small number of deficiencies arising from the withdrawal of the UK from the European Union that have been identified in the process of making these Basel and IFPR amendments. The Treasury has worked closely with the Bank of England, the PRA, the FCA, industry and, on the resolution change, the Banking Liaison Panel in drafting this instrument.”
“This reflects the Government’s view that the FCA’s existing toolkit, along with the measures the FCA will implement in future through IFPR and the investment bank special administration regime are more appropriate ways of managing the failure of such firms. Indeed, FCA investment firms would currently use the existing rules in the first place and go into insolvency proceedings. Therefore, keeping them within the resolution regime only serves to create administrative costs for those firms, for no benefit. The instrument also contains a savings provision and a transitional provision for the IFPR.”
“Initial capital requirements will no longer be set for some firms at €730,000, so references to such firms need to be deleted. Other updates, of which there are two notable instances, are more substantive where appropriate. First, the regulations extend the securitisation regulation’s due diligence requirements to all FCA investment firms. That ensures that all FCA investment firms buying securitisations must conduct due diligence, thereby helping to safeguard the integrity of the UK securitisation market. Secondly, the regulations remove Financial Conduct Authority investment firms from the UK resolution regime.”
“The UK leverage ratio framework has been and continues to be set by the Financial Policy Committee, which recently reviewed it in its entirety. The regulations also remove a legacy equivalence determination on article 132, tied to an equivalence regime that was revoked as part of the Capital Requirements Regulation (Amendment) Regulations 2021 earlier this year. That change is simply tidying-up. The regulations protect the status quo of CRR permissions by ensuring that firms do not have to reapply for permissions where the relevant article of the UK CRR is revoked and replaced with PRA rules. The regulations then make updates to support the effective implementation of the IFPR across the statute book. Some are straightforward, such as removing terminology that is now defunct due to changes made by the FCA through its IFPR rules.”
“The combination of these two prudential packages requires consequential changes to the statute book, and the regulations ensure that the changes mesh appropriately and provide a complete functioning legal regime for firms. Many of the measures in the regulations therefore update references in existing legislation to the UK CRR so that they now relate to the new rules made by the PRA, known as the CRR rules. On the use of the Basel powers under the 2021 Act, the regulations revoke the reporting and disclosure requirements for the leverage ratio, which is a capital backstop that prevents banks from becoming excessively leveraged. To reassure hon. Members, the PRA was already able to set leverage-based capital requirements through PRA rules.”
“The Government have legislated through the Financial Services Act 2021 to enable the Prudential Regulation Authority to update the UK’s capital requirements regime to implement the remaining Basel accords, subject to an accountability framework. In September, the House approved the Capital Requirements Regulation (Amendment) Regulations 2021 under the 2021 Act, which revoked the provisions in the UK capital requirements regulation necessary for the PRA to make these updates. The Act also enabled the Financial Conduct Authority to introduce the investment firms prudential regime, which is the UK’s new tailored prudential regime for FCA-regulated investment firms. The regime carves FCA-regulated investment firms out of the UK CRR.”
“I beg to move, That the Committee has considered the draft Financial Services Act 2021 (Prudential Regulation of Credit Institutions and Investment Firms) (Consequential Amendments and Miscellaneous Provisions) Regulations 2021. It is a pleasure to serve under your chairmanship, Ms Elliott. The regulations, among other things, support the implementation of the remaining Basel III standards and the investment firms prudential regime. As hon. Members will recall, after the 2008 financial crisis, the international community worked together to create new banking standards known as the Basel III accords. As a G20 member, the UK is committed to implementing the standards.”
“That was done to ensure that there was no delay in implementing the Basel III reforms and the IFPR, but it will be for the regulators to determine going forward how the new duty will operate in practice. The Government anticipate that it should function in much the same way as other obligations during the PRA’s implementation of Basel III standards, such as the need to have regard to the ability of firms to continue to provide finance to business and consumers in the United Kingdom. The key point is that, subsequent to the implementation agreed in the Act, they will have an ongoing obligation to have regard to these matters.”