Media and Public Affairs
Public Affairs
Public Affairs Activity
March, April and May 2009|
Date:
9 Feb 2010
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Budget 2009
The Chancellor delivered the 2009 Budget to the House of Commons on 22 April. Matters of interest to societies included:
Individual Savings Accounts (ISAs)
The Government announced an increase in the annual investment limit to £10,200 on ISAs. This increase will come into effect from 6 October 2009 for individuals aged 50 or over, and from 6 April 2010 for everyone else.NS&I
The Government has set a net financing target for NS&I of zero, following a contribution of £12.5 billion in the 2008/09 tax year, greater than the £11 billion estimated in the PBR last year.Child Trust Funds (CTF)
The Government announced that they will contribute an additional £100 a year to the CTF accounts of all disabled children, and contribute an additional £200 to children with severe disabilities.Saving Gateway
The Government is seeking to extend the Saving Gateway scheme to allow recipients of carer’s allowance to be eligible to open Saving Gateway accounts.Encouraging mutuals
The Government is looking at how to reform financial services in the UK, covering issues such as corporate governance, capital and liquidity, accounting rules, how to deal with failing institutions and how to promote efficiency and competition.The Government also announced a change to the taxation of merged financial mutuals to prevent adverse tax consequences arising on the merger of mutual institutions.
Stamp Duty
The stamp duty land tax holiday for houses costing up to £175,000 announced last year will be extended until the end of 2009.Asset-backed Securities Guarantee Scheme
The scheme guaranteeing mortgage backed securities announced in January will be available, initially until October 2009. It is an extension of the Credit Guarantee Scheme announced in 2008, and the institutions eligible for the CGS will be eligible for the new scheme. The Government will also review the current regulatory regime for covered bonds which was introduced a year ago.Mortgage Rescue Scheme
The Government has expanded the Mortgage Rescue Scheme to include homeowners in Negative Equity (up to 120% LTV) and has set up a £20m local authority Repossessions Prevention Fund to provide small loans to homeowners when appropriate to help them avoid repossession.Support for Mortgage Interest
The Government extended the Support for Mortgage Interest scheme for a further six months.
Lords Economic Affairs Committee
The Director-General appeared before the Lords Economic Affairs Committee on 10 March to discuss banking supervision and regulation. Angela Knight from the BBA also gave evidence. The Committee questioned on the de Larosière recommendation for the creation of a European system of financial supervision. The Association warned that if we do have pan-European rules or greater concentration on those, that the requirements of those institutions that operate within single jurisdictions are maintained and that we do not have a set of harmonised rules which damage those institutions which do not operate cross-border.
On a question on corporate governance, the Association said it would be an unnecessary cost to provide independent staff for the non-executive directors. There was sympathy from the Lords on building societies’ concerns over the scale of FSCS levies. The full transcript of the session cane be viewed here http://www.publications.parliament.uk/pa/ld/ldeconaf.htm#evid
Treasury Select Committee (TSC) banking crisis Inquiry
The TSC has continued with its Inquiry. On 4 April it published a report covering a part of its Inquiry – the impact of the failure of the Icelandic banks. One section of the report, looking at credit rating agencies, quotes the BSA - “The Building Societies Association agreed that ratings were a useful tool, but cautioned that their track record in enabling investors to avoid credit losses in the banking crisis had been unimpressive”. The Committee stated they will consider the extent to which the credit rating agencies were implicated in the banking crisis in a future report.
The next report from the TSC - Banking crisis: dealing with the failure of UK banks - is due to be published on 1 May.
Early Day Motion 426
Ann Cryer MP’s EDM on FSCS levies and building societies now has 173 signatures.
