Dame Harriett Baldwin
MP for West Worcestershire · Conservative · United Kingdom
“I welcome the Chancellor to his new role. I paid close attention yesterday to the long speech he made to reset the narrative and drive growth Britain. In paying tribute to his predecessor, will he recognise that she left the highest tax burden on record? Instead of postponing the words he could utter to my hon.”
“I welcome the new Prime Minister to the Dispatch Box. I note that in his statement he referred to the biggest issues facing the country as being “the economy and the cost of living crisis”. Will he accept that one of the things that has damaged our economy and caused prices to be higher is the tax-and-spend Budget in November 2024?”
“Could the Leader of the House make a commitment that the new Chancellor of the Exchequer will come to the House on the first day we are back from recess?”
“With a stroke of his Whitehall pen, the Secretary of State has just abolished Malvern Hills district council, Worcester city council, wonderful Wychavon district council and Worcestershire county council. He said in his statement that this is about making “real improvements to people’s lives and…communities”.”
“In recent weeks in West Worcestershire, I have met local police and the police and crime commissioner; the police and crime commissioner is being abolished, and the police are being reorganised. I have met the local health commissioners; they are being reorganised, and Healthwatch is being abolished.”
“Will the Leader of the House confirm that, given that the other place is sitting next week, there is nothing to stop him tabling a business statement to enable this House to sit next week? Given the enormity of the events happening in the Government next week, does he not think that would be a good idea?”
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“If I think about it, I actually cannot remember when I last went into a bank branch. I have been to the cashpoint, here and in my constituency, but I also ask myself when, these days, do I even use cash? The only place seems to be in the House of Commons Tea Room. I understand contactless is coming there soon, so where will we all be then? Customer behaviour is clearly changing. The number of times that we all use a branch in any given year has dropped almost 30%. The most recent data that I have from the BBA show that branch transactions have fallen to 270 million branch customer contacts in 2016. If my maths is right, that is an average of four per year.”
“It is a great pleasure to be able to respond on the Government’s behalf to this really excellent debate. I congratulate the hon. Members for City of Chester (Christian Matheson) and for Ceredigion (Mr Williams) and my hon. Friend the Member for Wells (James Heappey) on securing it, and thank them for giving me the opportunity to update the House on what is going on in this area. I also thank the Backbench Business Committee for scheduling such an interesting debate on a Thursday afternoon. I also thank the hon. Member for Hayes and Harlington (John McDonnell). It is a great honour for me to have the shadow Chancellor respond to the debate. He only lost one member of his team during it, so congratulations to him. I need to start with a confession. I am a rural Member of Parliament. I spend four days a week up here in London.”
“The hon. Lady is right to ask that question, but if customers were surging into branches and transacting valuable business, the banks would not be being as radical as they are.”
“A lot of Members will want to intervene. I have a lot of ground to cover and only seven minutes in which to cover it, so I will give way only very briefly.”
“The role of banks in society is essential. I am glad that that has been acknowledged today. In the interests of time, I want to just highlight some of the issues raised in the debate. First, in the past year we have made significant progress on access to banking services by improving access to the basic bank account. Many more banks now offer that. We have also reduced the practice of charging for failed payments, which was unacceptable. The industry has moved forward on that. I pay tribute to the hon. Member for Walthamstow (Stella Creasy). She has not participated in this debate, but she made such an impact in terms of bringing payday lending under the regulation of the FCA and the progress we are making on that. There has been much discussion about the access to banking protocol.”
“The hon. Gentleman is right to pay tribute to the wonderful staff up and down the land who staff our bank branches. The older members of our communities really value that interaction. It can be very important in protecting them against some of the online fraud, which, we have to acknowledge, targets older customers. It is clear from the points raised today, and from the regular discussions I have with Members, that we are all in agreement that bank branches are an important part of the solution when it comes to access to finance for our local communities. It is one of my top priorities as Economic Secretary to ensure that financial services work for everyone and that they are on the side of people who want to work hard, do the right thing and get on in life. Having a good branch network is part of that.”
“I think we all recognise there will be an ongoing review by banks on how they can best use their branches.”
“The hon. Gentleman knows that that is worth a whole Adjournment debate in itself, so I will talk about the access to banking protocol instead. The protocol means that when a bank decides to close a branch it must think carefully about the consequences of doing so, particularly when it is the last bank in town. We have heard today—this debate is timely—that Professor Russel Griggs has been appointed by the BBA to review how it has been working in its first year. All the points raised by Members will be excellent submissions to that review. I hope he will take the opportunity to meet hon. Members to hear at first-hand the feedback on the independent review of the protocol. I would like practical recommendations to come out of the review on how we can move forward.”
“Member for City of Chester to conclude—but this has been a very important and well-timed debate.”
“We have also talked about lending to small and medium-sized enterprises and the importance of the community finance network, which I know from my own constituency is very important. There are also now other platforms through which small businesses can access finance, such as peer-to-peer platforms and so on. I do not have time to make all my points, but my door is open. We all aspire to ensure that as we go through this evolution we maintain good access to finance for everybody. Healthy competition is also important. The new starter banks—five have got a banking licence in this Parliament so far—are an important part of the solution, as too is the way firms are adapting branches to use technology to provide more services. I have run out of time—I want to hand over to the hon.”
“Members have mentioned the importance of mobile phone signals, digital connectivity and our commitment on universal access. Those things are also an important part of the solution. Moreover, we currently have a record number of free-to-use ATMs in this country—about 45,000—and there is a commitment from the LINK network to continue expanding their number, particularly into harder-to-reach communities. We have heard powerful and passionate contributions from the right hon. Member for Tottenham (Mr Lammy), my hon. Friend the Member for Brecon and Radnorshire (Chris Davies) and the hon. Members for Clwyd South (Susan Elan Jones) and for Harrow West (Mr Thomas), the last of whom talked about the affordable credit sector and the help we are giving to the mutuals sector.”
“I encourage credit unions to come forward with proposals on how they could be a part of this really important saving product. Many Members have alluded to the important role that the post office network can play in solving this problem. As we know, this Government, like the last one, have committed to subsidising the network and making it viable. I dispute what the hon. Member for Ynys Môn (Albert Owen) said about the network having fallen from 11,900. The figure has stayed above 11,500—just over 11,600, I think—so there has been a small decline, but not the precipitous decline we saw when Labour was in government. Post offices are an important part of the solution. For example, the network’s opening hours have increased by nearly 200,000 as a result of the modernisation process.”
“I am glad to confirm that all the occupants of the Government Front Bench are entirely reasonable and sane. I regularly meet members of the credit union industry. The hon. Gentleman’s point brings me on to credit unions specifically. We think that credit unions are very much worth backing. As the hon. Gentleman will know, we have put a great deal of money into improving their technology. One of the challenges they have is scale: the smallness of some credit unions means that they need a communal IT platform. We have subsidised that to the tune of £38 million. I also want to highlight to the House that we have, in the past few days, launched a consultation—people may have missed it, with all the other news that has been coming out—on how the Help to Save product will work.”
“Exempt insurance includes long-term insurance such as life insurance and critical illness cover. Long-term insurance products are exempt from insurance premium tax to avoid creating a distortion between savings products and long-term insurance products, which can serve the same purpose for consumers. Reinsurance is also exempt to avoid double taxation.”
“Clause 129 increases the standard rate of insurance premium tax from 9.5% to 10% to raise revenue to invest in flood defence and flood resilience. Insurance premium tax is due on general insurance premiums related to risks located in the UK regardless of where the insurer is based. It is charged as a percentage of the gross premium that an insurer charges, including any broker commissions and other directly related costs—so it is a charge on the insurer, not on the individual. Insurance premium tax is due on general insurance, which accounts for approximately 20% of total insurance premiums. General insurance includes motor insurance, home insurance, employers’ liability insurance and medical insurance. Approximately 80% of insurance premiums are exempt from insurance premium tax.”
“However, with those points answered, and given that the link we have made—rather than the explicit hypothecation—means that these measures have been pretty widely welcomed by all commentators, without any further ado, given rival attractions on television, I would like to commend this clause to the House. Question put and agreed to. Clause 129 accordingly ordered to stand part of the Bill . To report progress and ask leave to sit again.— (Margot James.) The Deputy Speaker resumed the Chair. Progress reported; Committee to sit again tomorrow.”
“Although I welcome the Labour party’s sudden welcoming of lower taxes—something I hope all parties can subscribe to—we do need to raise tax revenues. The hon. Gentleman asked what this will actually cost. For average annual combined contents and buildings insurance, this would add just £1 to the annual bills, or 2p a week. For the average motor insurance premium, it will add just £2 a year or 4p a week. Just going from one petrol station to a slightly better value petrol station can save considerably more than that, which puts this measure into perspective. I cannot imagine that there is anything more exciting to watch on television at the moment than this debate, but if there is, it may explain why the Chamber is not particularly vigorously attended.”
“In terms of the availability of flood insurance for homeowners, the Flood Re initiative has been very helpful and beneficial in making sure that homeowners who perhaps in the past found it difficult to access affordable flood insurance are able to continue to access that. That has been very widely welcomed by those homeowners across the country, and I can certainly say in terms of my constituency experience that it is important that people shop around. If their existing insurer is causing difficulties in terms of price changes, it is worth getting in touch with the excellent British Insurance Brokers Association, who can be very helpful in terms of alternatives. The hon. Member for Leeds East asked about hypothecation and about rate increases. We need to keep this in perspective.”
“It is very important that we continue to find ways to make our country more resilient to what will occur on unpredictable occasions when we have the kind of weather that we had last winter. The hon. Member for Aberdeen North (Kirsty Blackman) was right to point out the importance of flood defence spending. She was concerned about the fact that this Budget raises IPT by 0.5% and asked whether it was our policy to make any further changes to IPT. On that, I will have to give her the standard Treasury Minister answer, which she can probably guess: the Government keep all taxes under review. As others have pointed out, this 0.5% increase is considerably less than was feared at the time of the Budget announcements.”
“I know the Opposition are having a hard time being an Opposition at the moment, but it can only be left to the imagination how hard they might find some of the difficult choices people have to make in government. We all agree that flood defence spending is an incredibly important part of what we need to do to help our communities. The hon. Member for Leeds East (Richard Burgon) is a Leeds MP, so I would have liked more of a welcome from him for the millions of pounds of additional funding this measure will give fund flood defences in his constituency. I, too, represent a very flood-prone area, with it containing the confluence of the Rivers Severn, Avon and Teme, and nobody in government argues for more money for flood defences more than I do.”
“That will be not only good for the market by helping to boost competition, but help to create better products and services for the people who use them. I therefore commend the draft order to the Committee.”
“The draft order will make further provisions in relation to the repeal of the floating charges restriction. It will amend the Building Societies Act to apply companies insolvency legislation if the building society were to go into receivership. Therefore, in the unlikely event that it becomes necessary to enforce the security, a floating charge holder can appoint a receiver to enforce the terms of a floating charge. The draft order is uncontroversial, and it will help to provide legal certainty and ensure the effectiveness of the repeal of the restriction made last year. The draft order proposes a technical change that will allow us to continue our work to support building societies by allowing them to compete with banks on a level playing field.”
“However, the Building Societies Act 1986 created a restriction that building societies could not use such charges. Banks therefore denied building societies access to certain transactions, because of the risk that a court could ultimately reclassify a fixed charge on a building society’s assets to a floating charge and make the security void. Secured funding is an accepted and flexible funding tool that is far more commonplace and necessary now than when the restriction was introduced. That is why the Government made an order last year under the Financial Services (Banking Reform) Act 2013 that repealed the restriction and allowed building societies to create floating charges. Initial estimates indicate that the change will save the sector around £2 million a year by allowing building societies to enter into such transactions with banks.”
“One key thing that building societies told us was that they found it difficult to compete because, unlike banks, they could only create fixed charges over their assets and not floating charges. It may be helpful at this point if I explain briefly what floating charges are and how they are used. In short, they are securities over an undefined set of assets—for example, a building society’s mortgage book—that fluctuates in the course of business. That is in contrast with a fixed charge, which is over a fixed, defined asset such as a building or a specified set of loans. Floating charges allow financial institutions to borrow money and use their mortgage book as collateral, while still being able to exchange and dispose of any individual mortgages during normal trading activity.”
“I beg to move, That the Committee has considered the draft Building Societies (Floating Charges and Other Provisions) Order 2016. It is a pleasure to serve under your chairmanship, Ms Buck. We all want to see a healthy and competitive banking sector that delivers for consumers. For many years now, building societies have been strong competitors to the major banks, particularly in the mortgage market, and we want to see that kind of competition not only continue but grow further. In 2012, the Government launched a consultation to look at how we could level the playing field between banks and building societies. We wanted to maintain the distinctiveness of the building society sector but remove any unnecessary barriers that were getting in the way of their success.”
“She is also right that further representations have been made about some of the reporting requirements. It is incumbent on us, as we have done in this instance, always to look for opportunities to simplify or clarify regulations on behalf of the sector. In the interests of potentially beating the record for the length of consideration of such a technical change, I commend the draft order to the Committee and hope that it will be widely welcomed and accepted. Question put and agreed to.”
“The Prudential Regulation Authority has set up a new bank unit, which might welcome—although this is unlikely—new building societies to the fold. Competition is something that we think is helpful and beneficial for consumers, and something that we back wholeheartedly. We, too, are looking forward to the final report from the CMA later this year and its recommendations. One thing I will share with the hon. Lady is that, when bringing such measures to a Committee of the House, I try to bunch them together as much as possible, so it is perhaps unfortunate that we have such a short discussion today. She asked about deceased investors in building societies. She is right that representations have been made and are being considered by the Treasury on that matter.”
“I congratulate the hon. Member for Salford and Eccles on the expertise with which she addressed the draft order. I do not know whether hers is a permanent or temporary substitution on the Opposition Front Bench, but she has acquitted herself with great excellence, and I am glad that her colleague from the Whips Office, the right hon. Member for Tynemouth, is here to observe her. I welcome her support for the measure and her enthusiasm for potential further deregulation in the building society sector. The hon. Lady is absolutely right that we put competition in the banking sector right at the heart of what we are trying to do. I welcome the fact that eight new banking licences were awarded in the UK in the last Parliament and that five have been awarded so far in this Parliament.”
“Over the last six years, UK Trade & Investment has more than doubled the number of businesses that it helps. It now aims to help a further 100,000 firms to export by 2020.”
“My right hon. Friend the Chancellor mentioned earlier the important work that UKTI is doing in not only promoting the Exporting is GREAT brand around the world, but, now—across the whole Government—encouraging all our embassies around the world to focus their resources on increasing the potential opportunities for our world-class exporters.”
“My hon. Friend is absolutely right that there is an important role to be played by not only our embassy network, but our chambers of commerce and the Federation of Small Businesses. I also welcome the fact that some of our larger banks have also set themselves targets for getting additional customers to start to export during the next five years.”
“The hon. Gentleman is absolutely right to highlight the fact that the UK’s universities are unanimous in expressing the value that they put not only on higher education, but on the potential for those educated in universities to export in due course. He is absolutely right to highlight the fact that all other trade deals would be worse than the current zero-tariff trade deal that we have as a member of the EU.”
“I can announce that although the Equitable Life payment scheme is now closed to new claims, payments being made under the scheme to with-profit annuitants are not only tax free but will continue for the life of the relevant annuity.”
“I hope that my hon. Friend has experienced only the ambulance chasers, not the whiplash. He is right to highlight the cost that this puts on motorists, which we estimate is about £90 a year for every motorist in the country. That is why we have already taken steps to reform this area. Last year in the autumn statement we announced further reforms, which will remove the right to cash compensation for minor whiplash injuries, while ensuring that genuine claimants are rehabilitated.”
“I welcome this question because our financial services sector is not only our highest-paid sector, but the one with the widest gender pay gap. That is why we launched the Women in Finance charter, and we are asking all financial services firms to implement the recommendations in the excellent review by Jayne-Anne Gadhia, the chief executive of Virgin Money, on the representation, or rather the under-representation, of senior women in financial services.”
“The Government fully support expanding the UK’s trade relationship with Iran. The Treasury is actively liaising with UK banks and industry bodies, to understand concerns and help re-establish financial channels between the UK and Iran.”
“I thank my hon. Friend for her question. She is right that the situation with the payment channels between the UK and Iran is quite challenging, particularly because the US still has its primary sanctions in place. We have been speaking to banks at the highest levels. We have also been liaising with the US authorities to push for further clarity for UK banks. It is worth pointing out that some banks have a more extensive US business than others do, and that therefore it might be worth companies in my hon. Friend’s constituency and elsewhere considering switching to banks that have less exposure in the US.”
“My right hon. Friend is right to highlight one of the key issues. I assure him that we are working at all levels in discussions with the US authorities to ensure that British companies selling to Iran are able to put that money into UK bank accounts.”
“It is Export Week, and I can announce that UK Export Finance has provided more than £15 billion of support to exporters since 2010 and UK Trade & Investment has more than doubled the number of businesses that it helps to more than 54,000.”
“I encourage the hon. Lady to seek an Adjournment debate to elaborate further on her question. I am sure that she and her constituents will welcome the fact that employment in the north-west is at the highest level on record; that more than 89,000 businesses in the north-west will not pay business rates; and that 360,000 people in the north-west will now benefit from the living wage.”
“It is wonderful to hear during Export Week about Colt and Lewmar, and their fantastic work exporting overseas. It is a key priority of the Government to continue to encourage more firms to export. In fact, we have ambitious aims to have another 100,000 businesses exporting over the life of this Parliament.”
“The last time I looked, I thought it was also Labour policy to have such a referendum, but I agree with the hon. Lady that it is very important that she and others get out the message about the value of exports and the importance for manufacturing of the UK’s membership of the single market. That is why I shall vote in the same way as her on 23 June.”
“The analysis by the House of Commons Library is fundamentally flawed. First, it assumes that every pound of Government borrowing benefits people. It also does not highlight the fact that it is higher rate taxpaying women such as me, whose child benefit has been ended, who form the largest part of that group. Is the hon. Lady saying that her party wants to reinstate child benefit for higher rate taxpayers?”
“I would like to start by emphasising that the Treasury Committee is an esteemed Committee of this House and provides exceptional scrutiny of the Government and their regulators. Through its programme of pre-commencement hearings, it questions appointees to several posts before they start work. After appointees have started, they can expect to appear regularly before the Committee, and the public can expect the Committee to hold appointees firmly to account. The Government welcome that scrutiny of appointees—it is a critical democratic function. That is why we have tabled new clause 12 to ensure in statute that the Committee always has the chance to scrutinise a new Financial Conduct Authority chief executive before they start work.”
“Indeed, today the Chancellor has written to the Chair of the Treasury Committee, agreeing that the Government will make appointments to the role of chief executive of the FCA in such a way as to ensure that the Committee is able to hold a hearing before the appointment is formalised.”
“I am speaking very narrowly to new clause 12. I am sure the Treasury Committee and other Committees will look at the issue again. I expect it to be part of the ongoing discussions between Parliament and the Executive. However, I am speaking to the very narrow characteristics of new clause 12. Since we tabled our new clause, there have been further discussions with the Chair of the Treasury Committee over its role in the appointment of FCA chief executives. I am pleased to announce that we have found a means of reinforcing its scrutiny role that goes further than the context of this Bill.”
“The letter is in my binder and I would be happy to read it out, provided that the Chair of the Committee does not object. I will ensure that a copy is put in the House of Commons Library, if that has not already happened. I am sure that the Chair of the hon. Lady’s Committee will be more than happy to share it with her. Would she like me to read the letter out in full?”
“Additionally”— it does not stop there— “I will seek, in a future Bill, to make a change to the legislation governing appointments to the FCA CEO to make the appointee subject to a fixed, renewable 5-year term. This would not apply to Andrew Bailey, who I recently announced as the new head of the FCA, but would first apply to his successor. I believe that these changes will reinforce the Treasury Committee’s important scrutiny role.””
“By popular demand, this is what the letter states: “Dear Andrew, During the passage of the Bank of England and Financial Services Bill, we have considered the role of the Treasury Select Committee (TSC) in scrutinising the appointment of the Chief Executive of the Financial Conduct Authority (FCA). This scrutiny is important and welcome. I will therefore ensure that appointments to the Chief Executive of the FCA are made in such a way to ensure the TSC is able to hold a hearing, after the appointment is announced but before it is formalised. Should the TSC recommend”— this is more exciting news— “in its report that the appointment be put as a motion to the whole House, the government will make time for this motion and respect the decision of the House.”
“I can confirm that Andrew Bailey, the new CEO of the FCA, has been appointed to a five-year term that can be renewed, so the agreed process will first apply to his successor. The agreement is the right way to reinforce the crucial scrutiny role of the Treasury Committee.”