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General Committees

Debated on Wednesday 9 December 2015

Delegated Legislation Committee

Draft Disclosure of Exporter Information Regulations 2015

The Committee consisted of the following Members:

Chair: Phil Wilson

Campbell, Mr Gregory (East Londonderry) (DUP)

† Double, Steve (St Austell and Newquay) (Con)

† Elliott, Julie (Sunderland Central) (Lab)

† Hinds, Damian (Exchequer Secretary to the Treasury)

† Hoare, Simon (North Dorset) (Con)

† Long Bailey, Rebecca (Salford and Eccles) (Lab)

McGinn, Conor (St Helens North) (Lab)

† McDonald, Andy (Middlesbrough) (Lab)

† Mak, Mr Alan (Havant) (Con)

† Malthouse, Kit (North West Hampshire) (Con)

† Quince, Will (Colchester) (Con)

† Scully, Paul (Sutton and Cheam) (Con)

† Smith, Angela (Penistone and Stocksbridge) (Lab)

† Stride, Mel (Lord Commissioner of Her Majesty's Treasury)

† Throup, Maggie (Erewash) (Con)

† Williams, Craig (Cardiff North) (Con)

Winnick, Mr David (Walsall North) (Lab)

Daniel Whitford, Jonathan Whiffing, Committee Clerks

† attended the Committee

The following also attended (Standing Order No. 118(2)):

Berry, Jake (Rossendale and Darwen) (Con)

Second Delegated Legislation Committee

Wednesday 9 December 2015

[Phil Wilson in the Chair]

Draft Disclosure of Exporter Information Regulations 2015

I beg to move,

That the Committee has considered the draft Disclosure of Exporter Information Regulations 2015.

It is traditional at the start of these proceedings to say what an unbelievable pleasure it is to see the Chairman in the Chair. On this occasion, that is absolutely true. We have worked opposite each other on Committee before, Mr Wilson, but this is the first time since your elevation that I have seen you in the Chair. It is a particular pleasure to serve under you this morning.

The regulations, which were laid before both Houses of Parliament on 17 November 2015, seek to allow Her Majesty’s Revenue and Customs to disclose a limited set of information relating to individual UK exporters and the goods they export outside the European Union.

The following information will, I hope, help Members place the regulations in context. The legislation promotes both the overall growth agenda and efforts to support UK exporters and small businesses. It is also in line with the Government’s open data strategy. That seeks to place as much relevant data into the public domain as is reasonable and to reuse collected data for more than one purpose, where it is efficient to do so.

The idea is to bring accurate, reliable information about exporters and their products into a single, easily accessible place. Release of the data will provide greater visibility of UK exporters to potential customers in the global market place; assist developers to create exporter registers and online shop fronts to advertise and showcase UK exporters and their products; enable those who are part of the export supply chain, such as logistics or transportation companies, to identify potential customers more easily; and help importers to locate alternative UK suppliers.

Discussions with departments and external stakeholders indicate that publishing the data will help key Government policies on boosting exports, particularly for small and medium-sized enterprises. I would like to mention specifically that UK Trade and Investment and UK Export Finance say it will help them target their advice and financial assistance more effectively. It will effectively provide free advertising to UK exporters and help foreign buyers to find UK goods online. It will also assist in the reshoring of supply chains.

Organisations that represent SMEs, such as the Federation of Small Businesses, are in favour of releasing the data because they say that that will help their members export more. Publishing this list would allow technology companies to set up services to advertise UK exporters and their goods. The US, China and a number of Latin American countries have released similar information and websites use this information to advertise companies and the goods they export.

If this kind of web service existed for UK exporters, it would also assist the Department for Business, Innovation and Skills’s reshoring strategy by allowing UK companies to find local suppliers for goods in their supply chain, which they currently buy from abroad.

The information to be disclosed will be limited to the following items: the business name and address; a code to identify the type of goods exported, known as the commodity code; a description of the category of goods covered by the commodity code in question; and the month and year of export. Specifically, it does not include the value of the goods, the specific customer or the non-EU country to which they are being sold.

For the benefit of the Committee, I have an example of the existing imports version of this dataset, copies of which are available for Members who wish to peruse it. For the benefit of Hansard I will read out the field names: company name; com code, which is the commodity code; description, which is the description of that commodity class; the month imported; and the address. On the document, we can see only the first line of the address, but further lines are available by scrolling to the right of the screen.

It is important to make the point that this type of data has been available publically in relation to importers for many years. That popular service receives about 60,000 hits a month. This measure seeks to bring exporter information into line, to enable HMRC to provide a better quality, comprehensive and joined-up service to UK exporters and others.

Today, HMRC receives many requests from the public and other Government Departments for access to exporter information, which it is unable to provide. HMRC is often asked why it can provide this for importers but not for exporters, a not unreasonable question. The service will be provided without unduly prejudicing the protection and privacy that exporters rightly enjoy.

The information originates from customs declarations made to HMRC at the time the goods are exported. It will be made available via a unique HMRC website called HMRC hopes to have this service up and running around the beginning of April and there will be no charge for accessing it. Full publicity will be made available by HMRC nearer the time through a variety of channels. This will be targeted to reach all exporters whose details it is reasonable to foresee will be published. HMRC will use not only and its own website,, but its own forum for engaging directly with trade representatives in the international trade sector, the joint customs consultative committee.

The same legal disclosure standards relating to importer information will be applied and the same website will be used to disclose the information. Commercial confidentiality will be protected to avoid disclosure where there are fewer than three exporters exporting goods in the same commodity code in the same month. This mirrors the arrangement for importers. Information relating to the export of sensitive or strategic goods will similarly be protected from disclosure. Again, this mirrors what is already in place for importers. At present, importers may write to HMRC to request removal or opt-out from the disclosure of importers’ details. HMRC plans to match this opt-out facility for exporters.

It is a pleasure to serve under your chairmanship today, Mr Wilson. I thank the Minister for his thorough introduction to the measure before us today. I am quite blessed; this is the second time this week that we have debated opposite each other.

As we have heard, the draft regulations permit the disclosure of certain information about exporters and the goods they export. This includes the business name and address, the commodity code, a description of the commodity code covering the goods and the month and year of export. Powers to introduce such regulations were provided by section 10(1) of the Small Business, Enterprise and Employment Act 2015. Although we took issue with many aspects of the Act, the Opposition did not oppose the creation of these powers, nor shall I oppose the enactment of the regulations today.

Indeed, this measure is an example of public sector information, infrastructure and investment playing a critical role in supporting the success of the economy as a whole, an approach that we all advocate more widely. Similarly, I am sure we all have an interest in successful exports that stimulate growth, not least in manufacturing, and create good jobs for our constituents. This is something that I am particularly passionate about, because my own constituency of Salford and Eccles has historically been a hub of both industry and export, with the two of course being linked. Nor is this a matter simply of history. I hope that Port Salford will be Britain’s first tri-modal inland port, but the investment and jobs that go with that are of course dependent on the future demand for transport links. Many of my hon. Friends here today represent constituencies with similar traditions and needs for the future. However, I am sure it will not surprise the Minister that I have a few questions and points for clarification on which I hope he will be able to respond today.

The Government have indicated that sufficient safeguards are in place to ensure that taxpayer confidentiality remains intact. It is my understanding that this includes omitting any data that would identify three or fewer exporters in a given market and providing an option to opt-out in much the same way as for the disclosure of importers’ information. Can the Minister clarify what criteria will be used to judge whether an opt-out request is valid?

The Government said in the other place that they would consider issues such as danger to the personal safety of owners and employees. I am sure all hon. Members here today would certainly hope that that would be a valid ground, but that is of course quite a high bar and hopefully also a quite exceptional circumstance, so it would be helpful to clarify whether less serious but none the less valid concerns will be addressed. I also want to know what level of opt-out the Minister anticipates, and whether he thinks that such an opt-out is likely to affect the overall value of the data published.

Furthermore, the consultation carried out by the Government attracted only 15 responses. Of those, only five were from businesses and two from individuals. Can the Minister confirm what steps the Government took to ensure the consultation was widely advertised? Does he think that five responses from businesses is a sufficient sample to get an accurate idea of the feeling in the sector?

On the wider context, I am sure the Minister is aware of the Chancellor’s commitment to double exports to £1 trillion by 2020 and get an additional 100,000 companies exporting. Can he provide a brief update on the progress towards that goal? The British Chamber of Commerce recently reported that the target would be missed by 14 years. In addition, earlier this year the independent Cole commission, set up by the then shadow Chancellor and shadow Business Secretary, reported that significantly more must be done to encourage and support export growth. As no impact assessment has been provided, will the Minister confirm that these draft regulations will contribute to that much-needed growth in exports? He alluded to that earlier in his speech, but further clarification would be helpful. Specifically, how will they enable more small and medium-sized businesses to begin exporting?

On a similar issue, does the Minister anticipate that the measure will help other companies to source supplies or services in their supply chains within the UK, rather than needing to import? What efforts will be made to promote that? Again, he alluded to that earlier, but more detail would be helpful. Can he also confirm that the restriction that is applied to the disclosure of importers’ information, limiting it to non-EU trade, does not apply here?

On the logistics of reporting, we have received a helpful spreadsheet—it is quite exciting. Will the Government use exactly the same format as the database for exporters, or do they anticipate making changes to it? Can the Minister indicate the costs that he anticipates being incurred in the creation and management of this, and is there any intention to recover any of the costs from the beneficiaries?

Finally, the Cole commission made a series of helpful recommendations, including Cabinet-led action to simplify support to businesses. Specifically, the report called for a committee to be convened to ensure that urgent action was taken. Will the Minister confirm whether the Government will act on the Cole commission’s recommendations in the near future?

I thank the hon. Lady who speaks for the Opposition for her, as ever, constructive and insightful contribution to the debate. She asked a number of questions and raised several issues for clarification, some of which we have covered and others of which I will try to respond to now.

The measure is all about the Government’s commitment to UK growth and giving exporters and their customers the right information at the right time to allow them to prosper and increase their business. It adds to the range of tools at their fingertips. Exactly how it will be used remains to be seen. Companies and intermediaries tend to be creative, and people operating online tend to be even more creative, so they will probably come up with ways of leveraging data that were not anticipated when the dataset was created.

The hon. Lady asked about the safeguards and opt-outs, and about whether concerns that are less serious, as she put it, but still significant and legitimate will be taken into account. I set out the current safeguards to protect commercial and strategic confidentiality and the measures proposed by HMRC to ensure confidentiality of businesses in the future with the new exporter dataset, which will be fully in line with those currently in place for importers’ details. I should clarify that it is about non-EU trade.

The arrangements for importers have been in place for many years. They have a high level of usage and industry is highly confident in them. No significant issues about disclosure have arisen.

When we look at the explanatory notes and the consultation outcome and hear that there were only five respondents—

The figure is very small. We were told that a small number are concerned that the publication of their identity and the sensitive nature of the goods that they export might attract adverse interest, and that measures will be put in place to address their concerns. Can the Minister say a little more about the nature of the businesses that are so concerned about this measure, given that it must be a pretty targeted and focused group of activities?

I do not have the names of the individual respondents or the details of their business, but clearly businesses in sensitive sectors are more likely, first, to be concerned and, secondly, to respond to a consultation on the issues. We think that we have created a sufficient framework of opt-out and of mitigating measures to protect confidentiality and that we have got the balance right. Clearly, there is a value to the dataset and to promoting trade, but there are also the legitimate concerns and reasonable requirements of certain businesses to keep their details confidential. We have to find the balance, and we think that this one is reasonable.

I am grateful to the Minister for giving way. We are talking about the “sensitive” nature of some businesses—are we talking in particular about people dealing in arms? What are we talking about? What are the specific trades that cause concern?

Armaments would be a sensitive category of goods, but they would not be the only sensitive category. For example, high-value jewellery might also count as a sensitive trade. The hon. Member for Salford and Eccles asked the question directly and it is a sensible one. HMRC would consider the circumstances. It might not be possible for the Government to have the full list in advance of what someone else considers to be sensitive, so it is right that HMRC may consider requests as they are made.

The flipside of that is the other question asked by the hon. Lady, which was about whether the data are devalued if we have businesses opting out. Clearly it makes the dataset less than 100%, but those who have opted out have opted out and said that they do not want their data to be made available for all those business opportunities that might be forthcoming. Again, the matter is one of balance, and we believe that the balance we are striking is about right.

The hon. Members for Salford and Eccles and for Middlesbrough asked about the number of responses to the consultation, whether they were sufficient and what communications were undertaken. HMRC circulated the details of the consultation widely among its standing group of trade consultees, known as the joint customs consultative committee. Trade sectors represented on the committee distributed details to their members, some of whom took part in the consultation.

The hon. Member for Salford and Eccles also asked whether the format of the data would be the same as for the importer scheme. That is the default assumption, but as time goes on the way in which things are presented on Government-owned websites may evolve. That is quite natural. It is a set of data, so how the user interface works in any third-party application is a matter for those third parties.

In conclusion, this is a significant contribution to the visibility of British exporters and to their ability to grow and build their business. The draft regulations will be a significant part of efforts to support exporters and small businesses and I commend them to the Committee.

Question put and agreed to.

Committee rose.

Draft Payment Accounts Regulations 2015

The Committee consisted of the following Members:

Chair: Steve McCabe

† Baldwin, Harriett (Economic Secretary to the Treasury)

† Burgon, Richard (Leeds East) (Lab)

† Burns, Conor (Bournemouth West) (Con)

† Cadbury, Ruth (Brentford and Isleworth) (Lab)

Cooper, Julie (Burnley) (Lab)

† Field, Mark (Cities of London and Westminster) (Con)

† Flint, Caroline (Don Valley) (Lab)

† Knight, Julian (Solihull) (Con)

† Kyle, Peter (Hove) (Lab)

† Lefroy, Jeremy (Stafford) (Con)

† McGinn, Conor (St Helens North) (Lab)

† Sandbach, Antoinette (Eddisbury) (Con)

† Stride, Mel (Lord Commissioner of Her Majesty's Treasury)

† Tracey, Craig (North Warwickshire) (Con)

† Tugendhat, Tom (Tonbridge and Malling) (Con)

† Wilson, Sammy (East Antrim) (DUP)

† Wood, Mike (Dudley South) (Con)

Alda Barry, Committee Clerk

† attended the Committee

Third Delegated Legislation Committee

Wednesday 9 December 2015

[Steve McCabe in the Chair]

Draft Payment Accounts Regulations 2015

I beg to move,

That the Committee has considered the draft Payment Accounts Regulations 2015.

It is a great pleasure to serve under your chairmanship, Mr McCabe. I am pleased to introduce these draft regulations, which aim to ensure the UK’s compliance with the EU payment accounts directive. The directive sets common standards across member states that payment service providers—in this context, principally banks and building societies—must meet.

First, for the accounts that we use for day-to-day transactions—in most cases, a current account—the directive aims to make fees and charges clearer and more comparable. Secondly, the directive seeks to make it easier to switch to another provider of such an account, in order to facilitate competition. Thirdly, the directive creates a right of access to a payment account with basic features—more commonly known as “basic bank accounts” in the UK—for all consumers legally resident within the EU.

The Government supported the directive and have already taken action in many of those areas. Agreements with industry already aim to improve transparency of fees and charges, and we have established the seven-day current account switch service. For more than 10 years, our largest banks have offered basic bank accounts, and they have recently committed to improve that offering even further. The regulations comply with the directive where necessary but minimise negative impacts on industry and customers and preserve structures that are already working well in the UK.

I will start with a few words on the scope of the directive—namely, the definition of the term “payment account”. For the avoidance of doubt, when I refer to a payment account today, I do so in line with the definition used in the draft regulations. The definition of that term in the directive could capture very simple types of payment account, well beyond the types of account used for day-to-day transactions that were discussed in open negotiations. However, the detailed recitals to the directive make it clear that the following should, in principle, be excluded: savings accounts; credit card accounts, into which funds are usually paid for the sole purpose of repaying a credit card debt; current account mortgages; and e-money accounts. The exception to that is where such accounts are used for day-to-day payment transactions.

Accordingly, the Government have defined “payment account” in the draft regulations in a way that describes and clarifies the accounts that will be in scope. It is the Government’s view that the definition should be sufficient to limit the application of the draft regulations to current accounts or accounts that have functionalities directly comparable to those of current accounts in the UK.

The Government have given as much clarification as the text for the directive allows. To go further and entirely exclude some types of account would be to risk a failure to comply with the directive. It will be for firms themselves to determine whether each of their products falls within the scope of the regulations and whether the regulations therefore apply to them. The Financial Conduct Authority will supervise and enforce most of the requirements set out in the draft regulations.

Where firms offer a payment account in line with the draft regulations, they will need to make new documents available to customers: first, a fee information document setting out the fees that may be charged before the consumer decides to enter into a contract; secondly, an annual statement of fees provided each year to explain the fees that have been charged; and thirdly, a glossary to explain the main terms used in the documents and their definitions. Some of the terminology used in those documents and in related contractual, commercial and marketing information will be standardised at European level. The process for carrying out that standardisation is already under way.

As required by the directive, the Financial Conduct Authority has established a provisional national list of the most representative services that are linked to current accounts in the UK and subject to a fee. Each member state has submitted its list to the European Commission and the European Banking Authority, so that they may develop EU standardised terminology for the services that appear on a majority of member states’ national lists.

After the European Commission adopts the EU standardised terminology, the FCA will integrate standardised terminology into its provisional national list, where necessary, and publish the final list for UK payment service providers to use. In addition, the Money Advice Service will operate a comparison website allowing customers to compare at least the fees that appear on the final list.

The directive will also require action on packaged accounts, which are payment accounts that offer an additional service or services such as insurance or car breakdown cover. Customers will now need to be informed whether the account is available without the additional services and, if any of the additional services may be purchased separately from the same firm, how much each of those additional services would cost. Taken together, the measures should help customers understand and compare how much they are charged.

I will now set out the approach to account switching. As I have mentioned, the UK already has a world-leading current account switch service, which has been recognised by the European Commission. It is managed and operated by BACS, a not-for-profit organisation. Not all EU member states are in our happy position, however, so the directive sets out some rules that all EU payment service providers must abide by when customers wish to switch to another payment account in their member state.

Where a UK payment service provider is not a member of the current account switch service and it offers a current account-type product, it must at least follow the EU rules. However, for the vast majority of the current account market, the draft regulations allow our current account switch service to continue to work as it does today.

Compared with the switching rules set out in the directive, our current account switch service must meet three simple criteria: it must continue to be in the interest of the consumer; it must present no additional burden to the consumer; and it must be at least as fast. As the directive makes clear, we may maintain existing services where they meet those three criteria.

There is no requirement to mirror the switching rules set out in the directive exactly. The Government’s clear view is that our existing current account switch service exceeds the three criteria. However, the UK’s compliance with the directive should be beyond question, which is why the independent Payment Systems Regulator will be responsible for confirming that the current account switch service meets and continues to deliver against the three criteria.

We have agreed a proportionate set of powers for the Payment Systems Regulator, as a competent authority, to use should they ever become necessary in its limited role. The Payment Systems Regulator will provide further information on the designation and monitoring process in due course.

I will move on to the provisions on basic bank accounts. Such accounts help to ensure that everyone can access essential banking services. They should be fee free and not offer an overdraft or cheque book. The draft regulations on basic bank accounts reflect the UK’s existing basic bank account policy, in particular where that is more advantageous to customers, but they bring the UK into line with the requirements in the directive where necessary.

In December last year, the Government reached a new agreement on basic bank accounts with the nine largest providers of current accounts. That agreement clarifies who should be eligible for a basic bank account and brings to an end the widespread practice of charging basic bank account customers for a failed payment, such as a failed direct debit or standing order.

We have taken action in the draft regulations to ensure that we do not move backwards as a result of implementing the directive. For example, the directive would allow us to establish arrangements less advantageous to UK basic bank account customers by allowing banks to charge fees. However, the Government believe that a basic bank account and its standard services should continue to be provided free of charge, as long as the services are provided in pounds sterling. Nor should basic bank account customers be charged for failed payments or for over-running, given that a key principle underpinning basic accounts in the UK is that they should not be offered with an overdraft.

The directive will allow us to restrict accounts to only the unbanked, but we are clear that basic bank accounts are also necessary for access to banking for those who may already be banked but unable to use their existing account owing to financial difficulty. That is why the eligibility criteria in the draft regulations establish that consumers should be offered at least a basic bank account if they are unbanked or if they do not meet the bank’s stated eligibility criteria for standard current accounts.

We do not want to move backwards, but we have had to ensure that the UK can demonstrate its compliance with the directive. For example, we had to legislate to establish a clear legal right of access to a basic bank account and a right to challenge banks’ decisions before a court. A voluntary agreement could not establish those rights with sufficient legal certainty.

We have also had to limit and make more specific the reasons why a bank may refuse an application for a basic bank account or close one. However—I recognise the concern from the industry on that—no bank is required to open an account or continue to operate one where it would otherwise be unlawful to do so. I hope my words have assured the Committee that the regulations meet the UK’s obligation in implementing the directive in a sensible and pragmatic way and that, therefore, it will support the motion to approve them.

It is a real pleasure to serve under your chairmanship, Mr McCabe. I thank the Minister for the way in which she outlined the regulations, which implement the EU payment accounts directive. The Opposition will not oppose the regulations, but since we want a banking sector that works in the interests of consumers rather than penalising them, I would appreciate further detail on some matters from the Minister and further explanation of the rationale behind some of the decisions that the Government have made.

Some payment account fees for switching accounts or using overdraft facilities have cost individual account holders billions of pounds. That has been subject to campaigning by consumer advocacy and advisory groups such as and Which? for several years. Those campaigns have seen not only millions won back for consumers, but changes in the industry to fees and the information available about fees. That is to be welcomed, but with the most recent research from Which? in August 2014 confirming that several of the biggest banks have relatively poor customer satisfaction levels for their current account offerings, and continued concern regarding overdraft fees and their impact on people on lower incomes, the debate will clearly continue after today’s discussion.

The shadow Minister is making a robust case for the consumer, but does he recognise that ensuring that a basic account is available for any legal resident of the EU under the directive may increase the prospect of fraud or financial crime? How would he ensure that the concerns raised by some in the finance industry are dealt with properly, while standing up for those who otherwise would be left behind in the way that he suggests?

The Minister raised the issue of everyone in the UK being able to have a bank account. With respect, it is for the Government to suggest how fraud will be guarded against in these circumstances. The Minister may be able to address that in her further comments.

Today we are talking about the implementation of the EU payment accounts directive and our regulations. As the Minister indicated, the PAD has three main principles: first, to improve the transparency of fees relating to accounts that are principally personal accounts; secondly, to make it easier for consumers to switch accounts, and thirdly, to make sure that all EU consumers can access banking services by ensuring the availability of a sufficient number of accounts with basic features. When the Minister touches on that, she may wish to outline the Government’s position on the point that the right hon. Member for Cities of London and Westminster made about preventing fraud in such circumstances.

I will pick up the point on payment account fees. There is significant crossover between the regulations and the Competition and Markets Authority’s recent report on the banking sector. On overdraft fees, the CMA’s analysis shows that outcomes are particularly poor for heavy overdraft users and indicates that around 9% of customers have paid more than £20 a month in overdraft charges. Furthermore, around 2% have paid more than £60 a month in overdraft charges. So the CMA’s evidence shows how the monthly charges for using an unarranged overdraft can be as much as 15 times higher than for those with an arranged overdraft.

The consumer group, Which?, has said that the CMA should tackle higher overdraft charges. One proposed remedy is to consider stopping banks differentiating their charging structures for arranged and unarranged overdrafts.

With regard to switching accounts, research conducted for the Competition and Markets Authority found that 37% of people had been with their bank for more than 20 years and a further 20% had had an account for between 10 and 20 years. The report also found that only 3% of customers switched in 2014.

Will the Minister explain what analysis of this the Government have undertaken? If so few people change banks, as these figures suggest, is there a failure to extend the regulations to cover existing customers and is that undermining their effectiveness?

The CMA’s report also made the following points:

“Low levels of customer switching mean that banks are not put under enough competitive pressure, and new products and new banks do not attract customers quickly enough… Bank customers fear that switching their current account to a new bank will be complicated, time-consuming and risky.

Will the hon. Gentleman give the banks some credibility and accept that the lack of switching may be down to customers’ broad satisfaction? It is often assumed that we do not have large-scale switching. As the hon. Gentleman pointed out, many adults have bank accounts at a particular bank for decades—20 or 30 years at a time. That might reflect their broad satisfaction with the service they receive, rather than any fault of the Government, which have gone a long way in at least trying to ease the process of switching.

I am not seeking to attack the credibility of the banks, but I think that, given the statistics I have just cited, we need to look into this further and ensure that people are not staying with banks during their busy lives just out of habit, and that they are fully aware of the options. Opposition Members will also agree that competition is very important in the banking sector as it is elsewhere.

However, despite identifying those problems, the remedies that the CMA propose put the onus on consumers to navigate the system, focusing on measures to make it easier to switch bank accounts. With this in mind, will the Government say how they anticipate that the Competition and Markets Authority’s report into the banking sector will be integrated into this framework?

The regulations also state that the Money Advice Service would be required to operate a comparison website. There is some concern that this could be funded by cuts to Money Advice Service spending elsewhere rather than by increasing the levy on industry. Will the Minister clarify how the website will be funded and provide more detail about the timescale? For example, when does she expect the resource to be available to consumers?

Finally, during the consultation, no information was received about the anticipated costs to non-current-account switching members, as a result of the proposed approach on switching, nor did the responses address the costs or benefits to consumers as a result of the proposed measures. Will the Minister also comment on these points?

As I said at the beginning of my remarks, we do not oppose the measures. Public confidence in the banking system needs to be addressed urgently. It is vital to ensure that people in all categories are treated fairly, particularly those living on lower incomes who are hit by unexpected fees or stuck in accounts that do not give them the best deal for fear of being hit by switching fees. The measures go some way to achieving that and, therefore, we are happy to support them.

Mr McCabe, I apologise to you. I was a moment or two late for the beginning, but no discourtesy was intended. I would like the Minister to answer one quite straightforward question, in addition to answering the shadow Minister’s questions. Is the Minister satisfied that there is sufficient time for the banks to develop the solutions required to meet the challenge before the draft regulations take effect in nine months, in September 2016?

Although the Government are rightly putting a lot of obligations on our banks to ensure that fraud and any sort of financial crime is kept to an absolute minimum, there is a concern that giving free rein to any legal resident of the EU, rather than just UK residents, to be able to open bank accounts in this way is potentially quite a burden on the banks. Is the Minister satisfied that there is sufficient time? Also, if there are particular problems as we get closer to that September 2016 date, will she be open minded about looking at those to ensure that the banks can provide the robustness in security that we all want, and extend the services to provide the competition that the directive has in mind?

I welcome the support of Her Majesty’s Opposition, who have acknowledged that the draft regulations simply recognise that we are in the fortunate position, across the whole UK banking sector, of already having in place most of the component parts of the architecture required by the measure. The questions asked by the hon. Member for Leeds East are really more general questions about banking, competition and switching between bank accounts. I am happy to answer those questions but I will first answer the question of my right hon. Friend the Member for Cities of London and Westminster about the requirement for a basic bank account to be provided for any citizen of the EU who comes here and chooses to open one. I reassure him that exactly the same high standards of anti-money-laundering regulations would still apply in those situations so the banks should certainly satisfy themselves that the person whose basic bank account they are being asked to open can legally open one in the UK. Of course, that has come into particularly sharp focus as a result of the terrorist act in Paris recently. We must ensure that rigorous checks are in place.

My right hon. Friend asked whether the banks have enough time. As this is largely already in place in the United Kingdom, I have not had concerns expressed to me about timing. If he has representations that he would like to pass on or if he has specific concerns, I would be interested in hearing them. Our understanding is that, because a basic bank account has been available in the UK for many years, the industry is not concerned about implementing the regulations.

The hon. Member for Leeds East asked about a range of things related to the recent CMA report about bank account competition. That report has had its first publication and is open for consultation and feedback. I encourage him to write in to that. Clearly, we do not think that the directive will prevent us, in any way, from making the changes that we might want to make in the UK as a result of the CMA recommendations. The draft regulations will not prevent the UK from moving ahead on domestic initiatives. They are still being consulted on and they will be published next spring.

The hon. Gentleman is absolutely right to highlight the fact that people in the UK are much more likely to get divorced that to move bank accounts. That is not a very happy statistic. Nevertheless, since the current account switch service came in, we have certainly had a big increase in the number of people using it, because it makes it so much easier for consumers to move all their direct debits and payments across. In fact, 2.25 million people have used the service since it started and it seems only a few months ago that we were celebrating the 2 millionth. Clearly, many people are using it and, importantly, the fact that we have put such an emphasis on banking competition in this country means that consumers have more choice of who they might move to.

A lot of new challenger banks are opening in the UK. In the five years up to 2010, only one new bank opened in the UK. In the previous Parliament, eight new banks opened in the UK, and in this Parliament, we hope that 15 new banks will open in the UK. Of course, the opening of new banks gives consumers more choice and makes for a more competitive marketplace. The rate of change in switching is going up, but we welcome the initial report from the CMA, which is consulting on ways in which we might make it easier for consumers to get a better deal from their bank account.

The hon. Gentleman also asked about the timetable for the Money Advice Service. I can confirm that the Money Advice Service is funded through a levy. We work closely with it and with the FCA on its overall budget but that will clearly form part of its work stream. As for the timetable for that, as I mentioned in my opening remarks, we need to get the final list published by the FCA of the applicable terms to which it would expect the Money Advice Service to link. Once that happens, we expect the FCA to publish that list during the first half of 2017. Obviously, the Money Advice Service may choose to set up its website sooner, but there is no obligation for it to do so until six months after the FCA publishes its final linked services list.

If there are no further questions, I hope that the Committee will now support the draft regulations.

Question put and agreed to.

Committee rose.