Financial Services and Markets Bill [HL]

Baroness Barker Excerpts

Committee stage
Monday 22nd June 2026 Grand Committee

[The Deputy Chairman of Committees (Baroness Barker) (LD)]

I have to advise noble Lords that if Amendment 31 is agreed, I cannot call Amendments 32 or 33 because of pre-emption.

[Lord Sharkey (LD)]

My Lords, I will speak to my Amendments 33, 35, 37, 42 and 43 in this group. All these amendments, and my Clause 7 not-stand-part question, relate to the FOS and its regime. I will try very hard not to repeat too much of what the noble Lord, Lord Davies, was saying a moment ago. The proposed reforms of the FOS regime are extensive and fundamental, but there is nowhere a clear and convincing explanation of why such fundamental changes are necessary. In fact, I see no real evidence at all of the need for reform on the scale being proposed here.

What we see, looking at the far-reaching proposals in the Bill, is an assault on the four key pillars designed into the FOS by Parliament: independence, speed and simplicity, time limits on bringing complaints, and the “fair and reasonable” test for determining those complaints. Taken together, Part 2 replaces each of those pillars with subordination to the FCA, a rather undefined change to time limits, and a heavy qualification of the “fair and reasonable” test amounting to its entire abandonment. This raises the question of why such a radical reform can be seen as necessary and/or beneficial. At Second Reading, I asked the Minister what evidence there was of systemic failure in the current operation of the FOS, and for evidence, for example, that the FOS was acting as a quasi-regulator. I have had no reply.

The obvious question in all this is: who benefits? The answer is: not the ordinary consumer. My amendments are aimed at eliminating, or at least reducing, the weakening of consumer protection. To that end, my Amendments 33 and 35, to Clause 6, address the time limits for complaints to the FOS, which the noble Lord, Lord Davies, has dealt with extensively; I agree with most of what he said. What my amendments offer as an alternative to his is that they are perhaps not quite as strong—that might be their virtue. It is often very difficult to get things written into a Bill; it is sometimes easier to deal with them via secondary legislation, as I do rather obliquely.

In Part 2, the Bill proposes other very substantive changes to the way in which the FOS operates. One of these changes, in Clause 7, sets out the circumstances under which the FOS must notify the FCA of a matter relating to a complaint, under which the FOS must request an opinion from the FCA as to the interpretation of FCA rules. It then sets out in detail how consultation should take place on the matter. There really is detail: five whole pages of the Bill set out in great detail the various stages required in the referral process. It adds complexity for no obvious gain and subordinates the FOS’s judgments to the FCA’s. I have no doubt that the byzantine array of subclauses or qualifications will, overall, introduce greater complexity for no foreseeable benefits and will greatly increase the workload of the FCA. The FCA is already under pressure and is planning to absorb the PSR. The last thing we need is the creation of new systems, rules and powers that show no clear promise of benefit, or at least no benefit to the retail complainant.

On necessity, we have to take into consideration whether the current FOS methods are faulty or unproductive. I have seen no compelling evidence that this is the case, only a rather unconvincing summary of the consultation responses. The FOS received 214,000 new complaints in 2025-26. It is projecting a resolution of 207,000 complaints in the coming year, of which 206,000 concern banking and consumer credit companies. It has a target of 70% of cases being resolved within three months and 90% within six. It does not seem as though it is having difficulty operating, and I am not aware of any significant problems for the average consumer. I hear from the industry that the FOS acts inconsistently and that it has strayed into becoming a quasi-regulator, but I have seen no evidence of that, and I am unconvinced by the simple assertion. Taken as a whole, Clause 7 in effect subordinates the FOS to the FCA, removing yet another foundational pillar: independence. We should remove Clause 7.

I turn now to the proposed amendments to Clause 8. I will speak to Amendments 37, 42 and 43, which deal with how a complaint to the FOS is to be determined. This is a controversial matter; the Bill proposes very significant changes. This has already provoked calls to have the whole clause removed from the Bill, and I recognise the strength of feeling behind that.

How the FOS decides on complaints is absolutely critical to its operations and to their general acceptability. At the moment and historically, the FOS rules on complaints on the basis of what is fair and reasonable under all circumstances. The Bill changes that. It says:

“A complaint may be determined in favour of the complainant only if, in the opinion of the Financial Ombudsman … at the time the disputed act or omission occurred, either … the act or omission did not comply with an FCA rule applying to the respondent, or … there was no FCA rule applying to the respondent that related to the act or omission, and the disputed act or omission was not fair and reasonable in all the circumstances of the case”.


This adds one of two requirements not present now, in addition to the “fair and reasonable” test. In essence, it removes the FOS’s current and critical independent status and reduces the FOS’s scope to a subset of FCA rules. If you ask who benefits from all this, the answer, it seems to me, is not likely to be the consumer.

The small print of the Bill makes the situation for the complainant even less attractive. The Bill specifies a long list of other requirements to be considered in making a determination, most of them tilting the scales in favour of FCA rule-based compliance. This long list includes

“any other matters specified in regulations made by the Treasury”

and the general principle that consumers should take responsibility for their decisions. Here, we are a very long way from the “fair and reasonable under all circumstances” test.

The net effect for the Bill’s proposals will inevitably be to increase bureaucracy and to increase a remoteness from practical circumstances and a reliance on box-ticking procedures. It will convert the independent FOS into a compliant subsidiary of the FCA. We have not seen spelled out any evidenced justification for such a radical narrowing of the FCA’s reach and independence. I ask the Minister again to provide the evidence that supports these radical changes. By “evidence”, I mean hard data, not simply a headcount of consultees’ opinions, as interpreted by HMT.

As I noted at Second Reading, the UK’s financial sector thrives not merely because it is competitive but because it is trusted. For it to be trusted, consumers must have confidence that, when things go wrong, there is an independent, accessible and effective route to redress. We have one of those already: the FOS. My Amendments 37, 42 and 43 would remove the new bureaucratic and complex restrictions, qualifications and subordinations in the Bill. In their place, the amendments would restore a simple and clear operating framework. They would restore the primacy of the “fair and reasonable” test, and they would update the list of things that the ombudsman must or may take into account.

Employment Rights Bill

Baroness Barker Excerpts

Committee stage
Tuesday 10th June 2025 Lords Chamber

[Baroness Coffey (Con)]

My Lords, in moving Amendment 216YC, I will also speak to Amendment 216YD and address Amendment 217, tabled by the noble Lord, Lord Burns, to which I have added my name—as indeed has my noble friend Lady Finn, whose birthday it is today; she knows how to have a good time. I will also address Amendment 218A and various other amendments, and Clause 77.

In essence, we are debating Clauses 58, 59 and 77. Clause 58 is about political funds. The situation has been that a political resolution is needed, and a fair, open, democratic process occurs every 10 years at most where members of the union are invited to keep the resolution going, or a new resolution may be put forward. One thing that concerns me is that this clause could simply wipe out that need.

I do not know in detail how every political resolution can be put forward, but my understanding of trade unions is that, by and large, individuals cannot put them forward. They can be put forward only through resolutions and motions, often by a person who is a delegate of a branch or similar. As a consequence, in effect, we have a situation where a political resolution can go on ad infinitum. I am not sure that that is the right approach.

I recognise that a lot of the rest of the Bill is about changing ways that people can vote to try to make it a lot more digital and a lot easier. I understand why the Labour Government, in partnership with the trade unions, believe that that is the right approach. I am also conscious, though, of why changes have been made in the past.

I am looking just to probe with my proposal. At the moment, there is a threshold for a strike where at least half of those eligible to vote have to vote. Here, there is none of that at all. It shows me somewhat that, even with trade unions, there is a lot of disengagement from this part of the process. I get that a lot of people are not necessarily opting out. To give an example, with the Musicians’ Union resolution, only 18% of members actually voted or participated in the ballot. With UNISON’s last resolution, fewer than 15% of its members were involved in determining whether to keep the resolution. As I said, this does not seem very open to anybody who might want to table a different resolution. I am not expecting UNISON to start contributing funds to the Conservative Party any time soon—I guess the name of its political fund, Labour Link, gives the game away on where UNISON would like its funds to go—and that is democracy, but I am thinking of ways that we could potentially extend this.

On Amendment 216YD, we seem to have had a lot of general elections recently, but I hope we are now in a situation where we hold elections every five years. If your Lordships were so inclined, it would make sense, recognising the direct link between political funds and political parties, to start to think about these political resolutions happening every five years instead of every 10 years. We are in a political world that is significantly changing. Almost every parliamentary constituency has at least five candidates, with at least six or seven outside of England, in Scotland, Wales or Northern Ireland. It is worth considering whether we should update this.

I generally agree with the proposal that we should get rid of Clause 59 in its entirety. I think back in particular to Second Reading. I will not go into detail, but the noble Lord, Lord Burns, spoke eloquently about what happened with his review. I do not plan to dwell on his amendment, as there are others who will contribute to it more. For me, it goes back to the need for a sensible approach instead of having to go through a long procedure, which to some extent is probably contrary to Article 11 and the implicit right not to join either a trade union or a political fund. This clause scraps that. Ministers have commented that that is okay. The basis is that you can opt out, and it will take effect the following January. You might have contributed a lot of money by then, but they think that is all right.

This is why I tabled my Amendment 218A; I am delighted that my noble friend Lady Cash supports it. If we go ahead with the opt-out approach then someone who opts out may not have all the necessary paperwork on the day they decide to opt out—apart from when they join the union in the first place. Therefore, if we gave them four weeks from their becoming a member of a trade union, during which they could decide that they did not want to contribute, their decision could be backdated to the day of joining. This is an approach for a modern world, where people may not want to spend all their time looking at the small print when they sign up to something to understand quite what they can or cannot do, which can affect their rights. Contrary to the Bill’s title—the Employment Rights Bill—the text as it stands in effect removes an employee’s rights. If the Government were to scrap that element about “the day” I would be more than delighted, although I would prefer to stick to the amendment tabled by the noble Lord, Lord Burns.

As regards some of the other approaches put forward in various amendments in this group, I would not in any way want to accuse any trade union of trying to allow intimidation or the like in their dealing with their members. We have heard the noble Baroness, Lady O’Grady of Upper Holloway, eloquently cite, I am sure with good evidence and good experience, cases of employers intimidating. However, I think it is fair to say that some of the trade union reforms that happened over the past decades—very few of which were changed by the Blair and Brown Governments, I should point out—were made on the basis of concerns about intimidation. I hope the Minister will at least recognise some of the concerns that noble Lords may have in this group. A variety of amendments have been tabled, which all seek to get us to us to a similar place.

Finally, I will speak to Clause 77, which starts, in effect, to remove transparency. Transparency is a good thing when we talk about democracy and the contributions that organisations make to a variety of political parties. I am surprised that the Government are going down this route. I cannot believe that it is that arduous for trade unions to compile this information. There are other aspects of what is happening with the certification officer, which we will get on to in another group, but given the importance that has rightly been given to considering the issues concerning the Electoral Commission, it is right that we should also consider this issue carefully at this stage. I do not believe that removing transparency is the right direction for the Committee to take.

Although I intend to keep this debate lively and pacy, it is important that we make sure that we get to the bottom of why this provision has been felt to be necessary. I hope that the Minister will be able to explain, fundamentally, why the Government have taken a complete and utter about-turn if it has not been designed —I do not want to upset the noble Lord, Lord Goddard of Stockport—to increase the amount of political funds. I am sure those funds will be use in very good ways—well, considering my political party, perhaps not always in good ways—but when the transparency is removed we will not be able to have that scrutiny. I beg to move.

[The Deputy Chairman of Committees (Baroness Barker) (LD)]

I advise noble Lords that if Amendment 216YC is agreed to, I cannot call Amendment 216YD because of pre-emption.