Written questions by Rosindell.

What progress she has made through (a) the G7, (b) the G20 and (c) other international forums on developing global standards for crypto and digital asset regulation.

On 29 April, HM Treasury published draft legislation for the future financial services regulatory regime for cryptoassets. The Government intends to bring forward final legislation before the end of the year.In developing the regime, the Government has sought to strike the right balance between attracting business to the UK while facilitating the UK’s access to global markets (and vice versa).The UK – through representation from HM Treasury, the Bank of England and the Financial Conduct Authority (FCA) – has played an active role in the Financial Stability Board’s (FSB) workstreams on cryptoassets and will continue to engage with the FSB’s future cryptoasset workstreams.The Government remains committed to working closely with international partners, and through global fora, on our response to developments in the cryptoasset sector as they emerge.

How many (a) crypto and (b) digital asset firms have been granted licences to operate by the Financial Conduct Authority; and how many and what proportion of applications were rejected in the last three years.

The Government launched an anti-money laundering and counter-terrorist financing regime for cryptoassets in January 2020. This means UK cryptoasset exchange providers and custodian wallet providers are now in scope of the UK’s Money Laundering and Terrorist Financing Regulations (MLRs) and must register with the Financial Conduct Authority (FCA).Applications for registration are considered on a case-by-case basis. The length of time taken is a matter for the FCA and depends on the individual circumstances of the firm. To date, 51 cryptoasset firms have been registered with the FCA under the MLRs and there are 48 firms with current registration.

What assessment she has made of the potential implications for her policies on (a) crypto and (b) digital asset regulation of policies on those matters in overseas jurisdictions.

On 29 April, HM Treasury published draft legislation for the future financial services regulatory regime for cryptoassets. The Government intends to bring forward final legislation before the end of the year.In developing the regime, the Government has sought to strike the right balance between attracting business to the UK while facilitating the UK’s access to global markets (and vice versa).The UK – through representation from HM Treasury, the Bank of England and the Financial Conduct Authority (FCA) – has played an active role in the Financial Stability Board’s (FSB) workstreams on cryptoassets and will continue to engage with the FSB’s future cryptoasset workstreams.The Government remains committed to working closely with international partners, and through global fora, on our response to developments in the cryptoasset sector as they emerge.

What steps her Department is taking to ensure that regulation of the (a) crypto and (b) digital asset sector helps to (i) protect consumers and (ii) foster innovation in the sector.

On 29 April, HM Treasury published draft legislation for the future financial services regulatory regime for cryptoassets. The Government intends to bring forward final legislation before the end of the year.The Government’s approach seeks to strike the right balance between protecting consumers and giving firms regulatory certainty, while ensuring the sector has the space and flexibility to innovate.

Whether she is taking steps to help ensure that (a) UK crypto and digital asset businesses and (b) businesses and sectors associated with the digital asset industry are able to open UK bank accounts.

The Government recognises that access to banking services is critical for operating a business, and is a matter of concern for certain sectors in particular such as the digital asset industry.The Government continues to engage with the banking sector and affected industries to better understand the existing and emerging issues in this area.The Government also welcomes the Financial Conduct Authority’s (FCA) work to date on the factors leading banks to reject or close bank accounts. Where the FCA has found areas where firms need to improve customer outcomes, the Government expects firms to consider the FCA’s findings and act accordingly.With regard to account closures, the Government expects businesses to be treated fairly, and has brought forward legislation to enhance relevant protections in cases where consumers and businesses have their bank account terminated by their provider.

What estimate she has made of total revenue generated by Air Passenger Duty from children aged under 16 years old who travelled in Premium Economy in each of the last three years.

Air Passenger Duty (APD) applies to airlines, not individual passengers, and is the principal tax on the aviation sector. It is expected to raise £4.2 billion in 2024-25 and it aims to ensure that airlines make a fair contribution to the public finances, particularly given that tickets are VAT free and aviation fuel incurs no duty. The distance-based band structure ensures that those who travel furthest, and in the greatest comfort, incur a greater tax liability. Children under 16 years old on the date of the flight, and in the lowest class of travel, are exempt from APD. This means that no APD will be paid on that passenger by the airline to the UK government. If children under 16 years old are travelling in any other class (such as premium economy) or in business jets, they are not exempt. Children under 2 years old without a seat are exempt from Air Passenger Duty for all classes of travel. Airline operators declare the number of chargeable passengers by destination band and by rate. They do not break down chargeable passengers by age, and therefore this is not information that HMRC collects. The government has published annual statistics and analysis on airline passenger numbers and Air Passenger Duty (APD) receipts in the UK which are administered by HM Revenue and Customs. It is available at: https://www.gov.uk/government/statistics/air-passenger-duty-bulletin.

What estimate she has made of the cost to the public purse of extending the Air Passenger Duty exemption for children under 16 years old to (a) Premium Economy and (b) any other cabin class travel.

Air Passenger Duty (APD) applies to airlines, not individual passengers, and is the principal tax on the aviation sector. It is expected to raise £4.2 billion in 2024-25 and it aims to ensure that airlines make a fair contribution to the public finances, particularly given that tickets are VAT free and aviation fuel incurs no duty. The distance-based band structure ensures that those who travel furthest, and in the greatest comfort, incur a greater tax liability. Children under 16 years old on the date of the flight, and in the lowest class of travel, are exempt from APD. This means that no APD will be paid on that passenger by the airline to the UK government. If children under 16 years old are travelling in any other class (such as premium economy) or in business jets, they are not exempt. Children under 2 years old without a seat are exempt from Air Passenger Duty for all classes of travel. Airline operators declare the number of chargeable passengers by destination band and by rate. They do not break down chargeable passengers by age, and therefore this is not information that HMRC collects. The government has published annual statistics and analysis on airline passenger numbers and Air Passenger Duty (APD) receipts in the UK which are administered by HM Revenue and Customs. It is available at: https://www.gov.uk/government/statistics/air-passenger-duty-bulletin.

Whether she plans to reform Air Passenger Duty to extend the exemption for children under 16 years old to travel in Premium Economy or any other cabin classes.

Air Passenger Duty (APD) applies to airlines, not individual passengers, and is the principal tax on the aviation sector. It is expected to raise £4.2 billion in 2024-25 and it aims to ensure that airlines make a fair contribution to the public finances, particularly given that tickets are VAT free and aviation fuel incurs no duty. The distance-based band structure ensures that those who travel furthest, and in the greatest comfort, incur a greater tax liability. Children under 16 years old on the date of the flight, and in the lowest class of travel, are exempt from APD. This means that no APD will be paid on that passenger by the airline to the UK government. If children under 16 years old are travelling in any other class (such as premium economy) or in business jets, they are not exempt. Children under 2 years old without a seat are exempt from Air Passenger Duty for all classes of travel. Airline operators declare the number of chargeable passengers by destination band and by rate. They do not break down chargeable passengers by age, and therefore this is not information that HMRC collects. The government has published annual statistics and analysis on airline passenger numbers and Air Passenger Duty (APD) receipts in the UK which are administered by HM Revenue and Customs. It is available at: https://www.gov.uk/government/statistics/air-passenger-duty-bulletin.

What comparative assessment she has made of the potential cumulative impact of (a) (i) the extended producer responsibility scheme, (ii) VAT and (iii) beer duty and (b) equivalent taxes in other major European economies on pubs.

I refer the hon. member to my answer 41143 on 2 April.

If she will take steps to increase Inheritance Tax thresholds.

The previous Government fixed the nil-rate band and residence nil-rate band at their current levels until the end of 2027-28. This Government set out its plans for inheritance tax thresholds at Autumn Budget 2024 by fixing the nil-rate band and residence nil-rate band at their current levels for a further two years in 2028-29 and 2029-30. This is included in Finance Act 2025.

Whether she plans to provide support to people affected by the inclusion of unused pension funds in Inheritance Tax calculations from April 2027.

As announced at Autumn Budget 2024, from 6 April 2027 most unused pension funds and death benefits will be included within the value of a person’s estate for inheritance tax purposes. Estates will benefit from the normal nil-rate bands, reliefs, and exemptions available. For example, the nil-rate bands mean an estate can pass on up to £1 million with no inheritance tax liability, and the general rules mean any transfers to a spouse or civil partner are fully exempt from inheritance tax. Comprehensive guidance will be published in the normal way ahead of the changes coming into effect, which will support individuals in understanding the rules.

Whether life insurance policies written in trust will be subject to taxation following the changes made to Inheritance Tax rules at the Autumn Budget 2024.

As announced at Autumn Budget 2024, from 6 April 2027 most unused pension funds and death benefits will be included within the value of a person’s estate for inheritance tax purposes. No changes were announced to the taxation of life assurance policies written into trust.

Whether her Department is taking steps to support the tokenisation of real world assets.

The government’s ambition is to be at the forefront of tokenisation adoption, given its potential to transform the UK’s financial services sector by enhancing efficiency, increasing liquidity, and strengthening risk management. We are pressing ahead with the Digital Securities Sandbox (DSS), which provides a live regulated environment for firms to utilise tokenisation in the trading and settlement of regulated securities. This opened in September, and six firms have so far been admitted. In November, the Chancellor announced that the Government would proceed with a pilot digital gilt issuance or ‘DIGIT’ through the DSS. DIGIT will exist solely on a digital platform, as opposed to being a tokenized real-world asset. This issuance will allow the Government to explore the potential benefits that Distributed Ledger Technology could bring to the debt issuance process and stimulate wider development of DLT platforms and infrastructures across UK capital markets.

If she will make an assessment of the potential merits of establishing a central bank digital currency.

At Mansion House, the government committed that HM Treasury and the Bank of England will continue to explore a potential retail central bank digital currency, the digital pound. No decision has been taken on whether to launch a digital pound. This work will provide the evidence base to make such a decision, providing a rigorous view of the costs and benefits and take account of wider trends in money and payments, both domestically and internationally. HM Treasury and Bank of England continue to engage internationally on a variety of payments topics, including through G7 engagement. This includes the digital pound. Irrespective of whether the government decides to issue the digital pound, work undertaken during the design phase of the project will support private innovation in digital currency technologies through partnership with the private sector on proofs of concept and experiments. It will also deepen the retail payments expertise of the UK public authorities and support the UK in its ambition to further build its global leadership on payments and fintech innovation.

Whether she has had recent discussions with her international partners on the potential merits of establishing a central bank digital currency.

At Mansion House, the government committed that HM Treasury and the Bank of England will continue to explore a potential retail central bank digital currency, the digital pound. No decision has been taken on whether to launch a digital pound. This work will provide the evidence base to make such a decision, providing a rigorous view of the costs and benefits and take account of wider trends in money and payments, both domestically and internationally. HM Treasury and Bank of England continue to engage internationally on a variety of payments topics, including through G7 engagement. This includes the digital pound. Irrespective of whether the government decides to issue the digital pound, work undertaken during the design phase of the project will support private innovation in digital currency technologies through partnership with the private sector on proofs of concept and experiments. It will also deepen the retail payments expertise of the UK public authorities and support the UK in its ambition to further build its global leadership on payments and fintech innovation.

Whether she has had recent discussions with her international partners on the potential impact of real world asset tokenisation on economic growth.

The UK has ongoing dialogues with other jurisdictions, particularly those that are pioneering the use of distributed ledger technology, such as Singapore and Hong Kong, to share knowledge about tokenisation, including its potential benefits. UK regulators also participate in a range of international initiatives relating to tokenisation, such as Project Guardian, ran by the Monetary Authority of Singapore and Project Agora, coordinated by the Bank of International Settlements.

What steps she is taking to promote the economic diversification of the Sark economy.

Sark, a self-governing jurisdiction within the Crown Dependency of the Bailiwick of Guernsey, is responsible for its own domestic affairs, including economic policy. While HM Treasury recognises the importance of the UK-Crown Dependency economic relationship to our jurisdictions, including Sark, the UK Government is not directly responsible for promoting economic diversification on Sark, and HM Treasury has not been approached to discuss this topic by the Sark Government.

If she will make an assessment of the merits of lowering Air Passenger Duty rates.

Air Passenger Duty (APD) applies to airlines and is the principal tax on the aviation sector. It is expected to raise £4.2 billion in 2024-25 and it aims to ensure that airlines make a fair contribution to the public finances, particularly given that tickets are VAT free and aviation fuel incurs no duty. At Autumn Budget 2024, the Government announced APD rates for 2026-27, including a partial adjustment to help compensate for two recent years of inflation that was higher than expected. As with all taxes, APD is kept under review and the Chancellor makes decisions on rates at fiscal events in the context of public finances.

What steps her Department is taking to help stop high street bank closures.

The Government understands the importance of face-to-face banking to communities, high streets and rural areas across the UK, and is committed to championing sufficient access for all as a priority. This is why the Government is working closely with banks to roll out 350 banking hubs, which will provide local residents and businesses up and down the country with critical cash and banking services. Over 200 banking hubs have been recommended so far, and over 100 banking hubs are already open. Banking has changed significantly in recent years with many customers benefitting from the ease and convenience of remote banking. While branch closures are commercial decisions for banks and building societies, FCA guidance expects firms to carefully consider the impact of planned branch closures on their customers’ everyday banking and cash access needs and put in place alternatives where reasonable. This seeks to ensure that branch closures are implemented in a way that treats customers fairly. Alternative options to access everyday banking services can be via telephone banking, through digital means such as mobile or online banking and via the Post Office. The Post Office Banking Framework allows personal and business customers to withdraw and deposit cash, check their balance, pay bills and cash cheques at 11,500 Post Office branches across the UK.

Whether she has plans to amend the rates of Air Passenger Duty.

At Autumn Budget 2024, the Government announced APD rates for 2026-27, including a partial adjustment to help compensate for two recent years of inflation that was higher than expected. As with all taxes, the Chancellor makes decisions on APD rates at fiscal events in the context of public finances.