Financial Services and Markets Bill [HL]

Baroness Hayman Excerpts

3rd reading
Tuesday 15th September 2026 Lords Chamber

[Baroness Hayman (CB)]

My Lords, I am extremely grateful to the Minister for the clarity with which he has introduced these amendments. I am even more grateful to him for the very great care and attention that he and his team of officials gave to the concerns that were raised across the House about not just the perception but the reality of what Clause 16, as previously drafted, would have done to the ability of regulators—and their duties and responsibilities—to take, within their day-to-day functions, proper cognisance of the risks to financial markets and industry, and to our economy, of changes in climate and in the natural environment.

What we have managed to do is find a way forward that keeps within the bounds of what the Government intended in the regulation but does not sacrifice focus, given that, if nothing else, this summer gave us real experience of the effects that can happen through these issues. I am thinking particularly of the insurance industry and the housing market, and the effects that are already being felt there.

It has been quite a struggle to get here and we have gone down some byways but, in the end, we have reached absolutely the right conclusion. I am extremely grateful to the Minister and absolutely support these amendments.

[Baroness Bennett of Manor Castle (GP)]

My Lords, it is a pleasure to briefly follow the noble Baroness, Lady Hayman, and to applaud the work of her and her allies that has got us to this place, as she said, after a great deal of struggle. One day, we will simply have these provisions arriving in the Bills without the need for struggle—we can but hope.

I have one simple question to put to the Minister, which was inspired by attending “The People’s Emergency Briefing” on climate and nature in Gravesend on Saturday night. It was one of some 3,500 events held all around the country after the initial event in Westminster. We have yet to hear from the Conservative Front Bench, but House rumours suggest that the Opposition are going to oppose this amendment. If that is the case, would the Minister agree that they would benefit from seeing that briefing? I therefore ask the Minister—this is the first time I have asked under the new Prime Minister —whether the Government will organise a live national televised emergency briefing on climate and nature, as all these local events are asking.

Financial Services and Markets Bill [HL]

Baroness Hayman Excerpts

Report stage
Wednesday 9th September 2026 Lords Chamber

[Baroness Northover (LD)]

My Lords, in moving Amendment 34 I will speak to Amendments 55, 65 and 91. I will speak briefly. I thank noble Lords for their support and that of Peers for the Planet. There can be no doubt of the climate challenges we face after another summer of drought, wildfires and loss of life. Underlying all these amendments is concern about the vulnerability of the financial system and the huge consequences of that. We saw the results of ignoring weaknesses in the financial crash of 2008 and its aftermath. The adaptation committee of the Climate Change Committee emphasises the risks in the UK of intensifying heat, floods and wildfires. We need to ensure that these risks are addressed in the financial system.

Clause 17 removes whole swathes of protection, to be replaced by as yet undefined strategies. The FCA is to be given huge new responsibilities, when we know that regulators have a poor track record in monitoring areas under their responsibility, let alone in horizon scanning for new risks. The deletion in the Bill takes out regard for climate change as well as the need to focus on sustainable growth and to be compliant with the Climate Change Act.

Amendment 34 addresses climate risk. It would replace Clause 17’s amendments to the regulators’ general duties with a single new duty requiring both regulators to consider the financial stability risks associated with climate change. I am grateful to the noble Baroness, Lady Hayman, and the right reverend Prelate the Bishop of Manchester for their support. There have been extensive discussions about the sweeping away of the duties in this clause, and this amendment seeks at the very least to ensure that climate risk must be addressed.

Amendment 55 would require annual reports by the FCA and the PRA to include consideration of climate-related financial stability risks. This way, we can see exactly how climate risk is being factored in.

Amendment 65, which is led by the noble Baroness, Lady Hayman, seeks to enable the Government to set out how and when they intend to implement their manifesto commitment to mandate UK-regulated financial institutions to develop and implement credible transition plans.

Amendment 91 is relevant to climate risk in the housing sector. It would require the Treasury to report on the case for clearer standards for mortgage products that are described as green. We need to develop measures that will drive higher environmental standards in the housing market, including ensuring that measures are taken to improve a property’s resilience to climate risk.

I am encouraged by what I have heard informally about the Minister’s sympathy in relation to this group. I am led to believe that he fully gets the potential risk to the financial sector and thence to the whole of the economy and society. What is always best in this House is if people come together and find a positive way forward, where the Government see the case and help to draft suitable changes to legislation to move things forward. I hope that is what we will see here. I therefore look forward to hearing how the Minister proposes to address these risks.

[Baroness Hayman (CB)]

My Lords, I am pleased to follow the noble Baroness, Lady Northover, and will speak to her amendments and my own on this subject in a moment. But first I express my gratitude for the time and effort that the Minister, his colleagues and all the Bill team have put into addressing these issues and attempting to reach exactly the sort of conclusion the noble Baroness referred to.

Perhaps I could first say a few words about the other amendments in this group. I have a great deal of sympathy for Amendments 90 and 97A on forest risk commodities as, over the last five years, we have not made progress in this area. I hope very much that the Minister will be able to give at least a glimmer of hope that this kicking of the can down the road will not continue. I also make clear my support for Amendment 91 from the noble Baroness, Lady Northover, which seeks further clarity from the Government on the issue of green mortgages, which will become even more important as the effects of climate change on the housing market become even more apparent than they are now.

I have Amendment 65, on the timetable for transition plans. We discussed this at length in Committee, but I think that this summer made us all think about our future plans, whether it was to plant more hibiscus and fewer hydrangeas in our gardens, or how to make our homes more habitable with shutters or air conditioning. This summer’s extreme weather has had some very serious impacts, with 2,877 heat-related deaths estimated in May and June alone, 1,000 wildfires raging and disruption and dangers to our transport system causing knock-on impacts to productivity and daily lives. I recognise that transition plans need to be part of a wider programme of action, but if we wait until we have every duck in a row and every avenue explored, we will be leaving a very dangerous gap in progress in this area. I hope that the Government, who recognised in their manifesto the importance of these plans, can give us some sense today of the timetable they see for implementation.

I turn to the amendments dealing with the major and, for many of us, the most concerning issue: the downgrading of the regulatory principles that the FCA and PRA should have with regard to the exercise of their functions contained in Clause 17. The noble Baroness, Lady Northover, has made very clear the arguments—I will not rehearse them—about the risk to financial stability that we already see in the housing and insurance markets, which could go far wider. That is precisely why we fought for and gained, in 2023, the climate and nature provisions that are contained in FSMA 2023. They ensured that these considerations would be taken into account across the regulators’ work and day-to-day functioning, not simply something to be looked at every five years with a retrospective assessment of what had happened and a strategic statement about what might happen next, as is proposed in the current Bill.

The Government have recognised the concern about Clause 17 and have changed their approach to proportionality by putting forward amendments to ensure that it is reflected in the regulators’ annual reporting and day-to-day operations. The issues of climate and nature risk to our financial systems and their viability for the future are just as important, hence my amendment seeking similar treatment for climate and nature risks as for the proportionality regulatory principle and my support for Amendment 34 from the noble Baroness, Lady Northover. The Minister and his officials have, I know, thought very carefully about these issues when we have discussed them since Committee. I hope that today he will be able to recognise their centrality to the future stability of our financial systems and the role that the FCA and the PRA need to play.

[Baroness Sheehan (LD)]

My Lord, I speak in favour of this group of amendments on re-embedding climate and nature considerations into UK financial institutions’ investment decision-making. I speak in particular in favour of Amendments 90 and 97A. I start by thanking the Minister for his constructive conversation with me earlier this week. I am reassured that he shares the ambition to see this through and has the steel to deliver it. The Minister understands the urgency of the risk that climate change presents to the financial stability of the City and he is the right messenger, not least because he used to work for Hermes. Hermes, the messenger of the Greek gods, was known for his great cleverness and speed. He wears winged sandals and carries a staff. I can vouch for that staff.

Amendment 90 in my name was tabled with the support of the noble Baronesses, Lady Young of Old Scone and Lady Coffey, and the right reverend Prelate the Bishop of Manchester. All co-signatories have been long-standing passionate advocates of getting this legislation on to the statute book: it would be patronising of me to thank them when they have already done so much. I am delighted to see the noble Baroness, Lady Boycott, in her place, because she too has been a passionate, outspoken advocate of legislation against deforestation. Amendment 90 would simply require regulations under Schedule 17 to the Environment Act 2021, which refers to the

“use of forest risk commodities in commercial activity”,

to be made within six months of this Act receiving Royal Assent and would commence the Treasury review into deforestation-linked finance.

Climate Change: Housing Insurability, Mortgage Lending and Financial Resilience

Baroness Hayman Excerpts

Monday 13th July 2026 Lords Chamber

[Lord Livermore (Lab)]

It is a great shame what my noble friend says about the Opposition; with such a significant issue as climate change and the importance of net zero, we want a cross-party consensus to drive forward the measures necessary in this country. He is absolutely right to say that economic growth is our number one mission, but without economic growth we cannot meet our climate change targets, and by investing in climate change measures we can drive greater levels of economic growth. If we step back from that, it would be a great shame and would do serious damage to our economy given that, as my noble friend says, the net-zero economy is growing so strongly.

[Baroness Hayman (CB)]

My Lords, the Minister is obviously correct that we really do need to step back from this divisive and completely unsubstantiated move away from the consensus on the need to do something about the changes in the climate we are seeing around us day in, day out.

What the Minister said about systemic risk to financial services and long-term risk was reassuring, but I wonder whether I could ask him to have a word with his noble friend, the noble Lord, Lord Stockwood, about the Financial Services and Markets Bill currently going through this House. There are grave concerns that the provisions we put in three years ago to a Bill that the Minister will remember are being watered down when they need to be strengthened.

[Lord Livermore (Lab)]

I am grateful to the noble Baroness for her question. She is absolutely right in what she said about climate change. The Intergovernmental Panel on Climate Change—the world’s foremost authority on climate change science—established in its sixth assessment report that climate change is real and is being driven by greenhouse gas emissions. It predicts that if the rate of warming is not limited to 1.5 degrees centigrade above pre-industrial levels, we risk severe and irreversible damage to our planet and our people. Of course, it will be good if we maintain a cross-party consensus on the measures necessary to tackle that.

I heard what the noble Baroness said about financial stability. She will know that the Bank of England’s December 2025 financial stability report set out the committee’s assessment of climate-related risk to UK financial stability: it is low relative to other countries in the shorter term.

Road Pricing

Baroness Hayman Excerpts

Thursday 18th September 2025 Lords Chamber

[Lord Livermore (Lab)]

The noble Baroness asks a hypothetical question that I have already dealt with. The Government have no plans to introduce road pricing. She mentions low-traffic neighbourhoods. We want to support local authorities to deliver streets that work for all road users and enable integrated journeys. Decisions on which neighbourhoods should be low traffic lie with local authorities.

[Baroness Hayman (CB)]

My Lords, I urge the Minister to be not quite so adamant in his rejection of road pricing. My first job in government was as Minister for Roads. A year in, I was due to visit South Korea to look at road pricing and the opportunities that might occur in this country, but I was moved the day before I went. It was to be my first and only trip abroad as Minister for Roads, and I do not believe that anyone went after me. The arguments that have been made by the noble Lords, Lord Young of Cookham and Lord Birt, have become only more pressing in the years that have gone by, but the opportunities for making the system fairer have also increased because of the increase in technologies. I therefore urge the Minister to think a little more broadly on this issue.

[Lord Livermore (Lab)]

As I say, there is a great deal of expertise across the House on this matter, and the noble Baroness is no exception. She knows a great deal about the topic. I think I have said what I was going to say on this matter: we have no plans to introduce road pricing.

Crown Estate Bill [HL]

Baroness Hayman Excerpts

Report stage
Tuesday 5th November 2024 Lords Chamber

[Earl Russell (LD)]

My Lords, I rise to move Amendment 7 on behalf of the noble Baroness, Lady Young of Old Scone, who is not able to attend the House today. This amendment mirrors that laid in Committee by the noble Baroness, Lady Hayman, and supported by the noble Baroness, Lady Young, my noble friend Lord Teverson and the noble Lord, Lord Young of Cookham. It would lay a duty on the Crown Estate to contribute to the Government’s climate change and nature targets as laid out in the Climate Change Act and the Environment Act.

The Crown Estate’s role in enabling these targets to be met is significant. The Crown Estate is the third-largest landowner in the United Kingdom; in particular, it owns significant land in coastal areas and on the seabed, which is important for the big growth in renewable energy that is required and for the recovery of our biodiversity. The deal with Great British Energy means a major uplift in the Crown Estate’s contribution to net zero. The Crown Estate is also a major developer and can contribute to zero-carbon homes and construction, sustainable procurement, and the circular economy.

Since Committee, the noble Baroness, Lady Hayman, has been involved in discussions with the Minister and the Treasury, and Amendment 10 in her name and that of the noble Lord, Lord Livermore, is the result. This requires commissioners to keep under review the impact of their activities on the achievement of sustainable development in the UK. I understand that the Minister will also commit to an addition to the framework agreement between the Treasury and the Crown Estate which would mean that the Crown Estate would have to have regard for the impact of its activities on the environment, society and economy and will include them in considering relevant legislation in the Climate Change Act and the Environment Act. I thank the noble Baroness, Lady Hayman, and the Minister for their negotiations on this occasion.

However, I am concerned that it does not go far enough. While I recognise that the primary purpose of the Crown Estate is to maximise financial contributions to the Treasury from the estate and to do this in a socially and environmentally responsible way, I am concerned on two accounts.

First, as the Crown Estate ramps up its development activities in renewable energy and a range of other activities, the possibility of conflicts between its economic objectives and its environmental responsibilities will become more acute, and the risk is that the primary economic objective will take priority. That might be good for renewable energy, but it could be a very bad for biodiversity. To “have regard” is a particularly weak requirement. Putting in the Bill a clear objective to help meet the legally binding climate change and biodiversity targets alongside the Crown Estate’s economic objective would mean that solutions would be brought that combine the benefits on all these objectives.

Secondly, the status of the framework agreement is not wholly clear. It is negotiated periodically between the Crown Estate and the Treasury. Revisions to it could be subject to negotiation without Parliament being any the wiser. What if the Crown Estate decided that it was going to downplay the guidance on the legally binding targets? Over the 60 years since the power of direction over the Crown Estate was brought into existence in 1961, the Treasury has yet to insist on any provisions of the framework agreement. As a last resort, Ministers have the power of direction over the Crown Estate, but the legal advice is that it can be exercised only in a way that is consistent with the statutory duty under the Act, hence the need for the objectives on targets to be on the face of the Bill. Can the Minister tell the House how much welly the framework agreement has in law and what action the Treasury could take if the Crown Estate did not come up to the mark on the climate and environment targets?

I do not want to repeat the arguments made by noble Lords, including the noble Baronesses, Lady Young of Old Scone and Lady Hayman, in Committee. I will, however, remind the House that the Minister laid considerable stress throughout Committee, in his response to several amendments, on the need for the primary purpose of the Crown Estate to be the effective economic management of the estate. I point out to the House that a nearly identical duty to the one proposed in this amendment, requiring contributions to the legally binding biodiversity targets, was applied to NHS trusts throughout the Health and Care Act 2022 by the previous Administration, with the support of the Labour Party. It is questionable why the environmental considerations in the Bill, which were previously supported for the NHS, are not now considered appropriate for a public body with probably more natural habitats under its control, and more potential for reducing carbon, than any other.

In conclusion, I ask the Minister to reassure the House that the environmental objectives will not end up being second fiddle when the pressure is on; how the framework agreement renegotiations, in future, will be transparent and safeguarded from sliding back on environmental requirements; how the Treasury will measure and hold the Crown Estate accountable for the contribution to the climate change and biodiversity targets; and, finally, what sanctions the Treasury has on the Crown Estate if it does not deliver the framework agreement.

In a personal capacity, I thank the noble Baroness, Lady Hayman, and the noble Lord, Lord Livermore, for Amendment 10. Speaking now as me, I think that it is extremely important that the commissioners

“must keep under review the impact of their activities on the achievement of sustainable development in the United Kingdom”.

This is a welcome development, and I welcome the compromise. I think this helps to strengthen the Bill, and it is great to have it in the Bill. I am very pleased that this has taken place. I beg to move Amendment 7.

[Baroness Hayman (CB)]

My Lords, it is a pleasure to follow the noble Earl, Lord Russell. He clearly set out the reasons why in Committee, we, along with the noble Baroness, Lady Young of Old Scone, who I am sure we all wish a quick recovery, were very concerned to ensure that the Crown Estate, given its potential influence in these areas, plays its part in achieving the Government’s statutory commitments under the Climate Change Act and the Environment Act. Across the Committee, there were contributions that supported that view.

Of course, in some ways I would like the amendment that has just been moved to be put in the Bill. Here, I should declare my interest as chair of Peers for the Planet. Like others, I thank the Minister and his officials for the time, care and effort they have put into trying to resolve the issues that would arise if the full amendment were included in the Bill. From my point of view, it has been an exemplary process. The noble Baroness, Lady Kramer, made this point as well, as have many other noble Lords. The care and transparency that the Minister and his officials have provided throughout the passage of this Bill have been extremely welcome.

In Committee, when we were debating the amendment then in my name, the Minister made two things absolutely clear. One was the Government’s commitment to achieving the same ends by ensuring that the Crown Estate is a good citizen in respect of these events, and that is also manifested in what the Crown Estate is doing and the way it is reporting on its activities. So I think there is a shared objective between the amendment proposed by the noble Baroness, Lady Young of Old Scone, which we just heard spoken to, and the Minister and the Crown Estate. It is certainly shared by me.

Concerns have been articulated about the importance of safeguarding the prime objectives of the Crown Estate and not putting the detail into the Bill. I think we have come up with a solution that will achieve, certainly from my point of view, the vast majority of what I was looking to achieve in my original amendment. Amendment 10 would implement the climate and nature objectives by inserting in the Bill an obligation on the Crown Estate to conduct its affairs in a way that ensures sustainable development. That, of course, is a much wider and not very precise term that covers economic, environmental and social issues. Mind you, there has been a lot of debate this afternoon about the importance of the Crown Estate covering exactly those issues and taking them into account.

In a sense, having placed that in the Bill, we then have a paving amendment on to the framework agreement. I was very reassured by the letter we all received on 4 November, stating that the specific concerns about two aspects of the Climate Change Act—mitigation and our net-zero obligations, and the importance of adaptation to existing climate change and the nature protection objectives under the Environment Act—would be spelled out in the framework agreement and reported on publicly in the annual report, so that we can judge the contribution made to achieving those objectives through the publication of the framework agreement. Such reporting is another theme that has run through today’s debate.

In my view, it is better to achieve 80% of what we achieve in legislative terms than to have 100% judged by this House, which I am not at all sure we would win on. What matters is the endgame and the results, not whether my phraseology or the noble Earl’s goes in the Bill. What matters is the impact we have and how much we have shifted the dial in terms of what the Crown Estate achieves in support of the Government's climate and nature objectives. So, I am very pleased to be able to propose Amendment 10 and I am grateful to the Minister for adding his name to it.

I will say only one other thing, which is that I have spent the last four and a half years putting provisions like this into individual Bills as they go through this House. I hope the Government will recognise that, when they say that climate and environment issues are for everybody and that all departments, private industries and public bodies are affected and ought to be looking at the implications, they act on that realisation and do not rely on Back Benchers making Ministers’ lives miserable because they have been missed out. The Government should cut out all that argument and do it for themselves by including those issues in Bills. They were not included in the first place in this Bill, which was silent on the climate and nature. Now they are included, albeit in slightly convoluted but, I hope, effective way.

I end by saying once again how grateful I am to the Minister and his team for the constructive way in which they have handled this issue.

[Baroness Vere of Norbiton (Con)]

I rise only briefly to say that we on these Benches want to see the Crown Estate taking action to improve our environment, and we share the concerns of other noble Lords in this area. We note that the Government have expressed their support for the amendment in the name of the noble Baroness, Lady Hayman. I agree with her that it is all about outcomes in these circumstances. We agree that this is a sensible amendment and that it deserves the Government’s support.

--- Later in debate ---

Moved by

[Baroness Hayman]

10: After Clause 2, insert the following new Clause—
“Sustainable developmentIn section 1 of the Crown Estate Act 1961 (general provision about the Crown Estate Commissioners), after subsection (3) insert—“(3A) The Commissioners must keep under review the impact of their activities on the achievement of sustainable development in the United Kingdom.””Member's explanatory statement
The amendment would require the Commissioners to keep the impact of their activities on the achievement of sustainable development under review. Sustainable development goals as recognised by the United Nations, the Commonwealth and other bodies refer to human development that aims to meet the economic, environmental and social needs of the present while also ensuring the ability of future generations to meet their own needs.

Crown Estate Bill [HL]

Baroness Hayman Excerpts

Committee stage
Monday 14th October 2024 Lords Chamber

Amendments 14, 15 and 17 are about protecting the seabed, our population, mental well-being, and putting positive objectives forward for the future. I look forward to the Minister’s response. I beg to move.

[Baroness Hayman (CB)]

My Lords, I declare my interest as co-chair of Peers for the Planet—oh, I am not co-chair, I am chair now! I am sorry, I must have an old version of my speech.

I will speak to Amendment 25 in my name in this group. I am grateful for the support of the noble Baroness, Lady Young of Old Scone, and the noble Lords, Lord Teverson and Lord Young of Cookham. I am very glad to follow the noble Lord, Lord Holmes of Richmond, in his widening of the debate about the role of the Crown Estate into some of the huge challenges that we face as a nation and as a society.

This group of amendments takes up the themes suggested by the noble Lord, Lord Lansley, and the questions raised by the noble Lord, Lord Young of Cookham, which challenge us to answer the question of how the core responsibilities of the Crown Estate —the financial responsibilities and the objectives of creating an income stream for the Treasury—fit in and interact with other major responsibilities and other pieces of legislation. The noble Lord, Lord Young, was talking about this in relation to tenancy questions, while the noble Lord, Lord Lansley, was asking whether the Crown Estate is constrained in some of the things it wants to do—the environmental and climate change issues that I am interested in, for example—by the 1961 Act, and whether it is unable to recognise other responsibilities and objectives that the Government have put into legislation since that Act.

My amendment tries to ensure that the Crown Estate does what it can as an important part of our national wealth to contribute to combating the nature and climate crises. It would equip the Crown Estate to play its role and future-proof that commitment against a future change of government. It does so by ensuring the Crown Estate has a statutory duty to contribute to national efforts to meet our climate and nature targets, as set out in the Climate Change Act and the Environment Act. In relation to the seabed, about which the noble Lord, Lord Holmes, spoke so eloquently, the amendment would also safeguard the Crown Estate’s ability to fulfil its stated mission to,

“take a leading role in stewarding the UK’s natural environment”,

by requiring seabed leaseholders to meet a new conservation condition.

The amendment would enable the Crown Estate to continue to fulfil its role of creating wealth for His Majesty’s Treasury while recognising that, as it moves away from being solely an asset owner and takes on new borrowing and investment powers, it should also be accompanied by obligations to deliver for nature and the climate. The last significant modernisation of the Crown Estate was over 60 years ago, when the issues relating to climate change and the threats to the natural environment were far less understood and far lower down the national and global agenda. Today, however, the impacts of climate change are undeniable. Only last week, a new report on the state of the world’s climate led by international scientists concluded that:

“Much of the very fabric of life on Earth is imperilled. We are stepping into a critical and unpredictable new phase of the climate crisis”.


The report highlights that we are still moving in the wrong direction, with emissions and their often catastrophic effects, which we have seen so recently, still rising.

At Second Reading, the Government did not seek to deny the threat or the urgency of the climate and nature crises, nor the need for the Crown Estate to play its part in combatting them. Rather, they suggested that a statutory duty was not necessary because:

“the Crown Estate has existing governance structures in place to ensure that environmental impacts are a central consideration of its investment decisions”.—[Official Report, 2/9/24; col. 1021.]

But there is an important difference between considering environmental impacts in investment decisions and making sure that those decisions actually contribute to our nature and climate targets.

My amendment supports the Crown Estate not just to think about minimising the impacts on the environment but to look at the contribution it can make that will bring us closer to our climate and nature goals. I welcome the important progress that the Crown Estate is making through its new nature goals and the initiatives it has taken, including the Marine Delivery Routemap, but our amendment seeks to embed such initiatives in legislative form. It is constructive work that is already being done, but—I go back to it not being a cuddly organisation—we need to embed it and to future-proof it, and we can do that only by changing the Bill.

The need for a legislative base to underpin environmental responsibilities was, in fact, recognised in the Scottish Crown Estate Act. I believe that my amendment reflects a similar, and indeed even stronger, objective by linking the contribution to our legally binding targets. I know that there is concern about the possibility of these provisions in some way encroaching on the commercial independence of the Crown Estate, but my amendment does not seek to constrain that commercial independence. It simply commits the organisation only to

“take all reasonable steps to contribute to … the achievement of”

our nature and climate targets, in line with the legally binding targets the Government have already committed to.

There is a growing recognition that we have to integrate nature and climate responsibilities across our national and local bodies and across all organisations that discharge public duties. As the Minister will recall, there have been a number of Bills affecting regulators and public bodies on which we have brought forward amendments similar to this and often succeeded in integrating nature and climate responsibilities into legislation—but we are doing it piecemeal at the moment. The noble Lord, Lord Krebs, has a Private Member’s Bill before the House this week that gives us the opportunity to take a more coherent and comprehensive approach. I support that—I hope we will have coherent and comprehensive support—but today, and as we go through this Bill, we have the opportunity to make a very specific contribution through the work of the Crown Estate. I hope that the Minister will be sympathetic to amending the Bill in the ways that I suggest.

[Baroness Young of Old Scone (Lab)]

My Lords, I add my support to Amendment 25, to which I have put my name, alongside the noble Baroness, Lady Hayman, and the noble Lords, Lord Teverson and Lord Young of Cookham.

I think that we have all agreed that the Crown Estate is not cuddly, but it is also big and hugely important. It is the third-biggest landowner in this country and it is a major owner of the seabed, covering an area twice the landmass of England, Wales and Northern Ireland, so it is absolutely crucial that it does the right thing. The decisions it makes about land and sea are important not just for energy and climate change but for biodiversity, food resilience, flood risk, water management, and the quality and quantity of water—a whole plethora of things. That is why I bang on about the need for a land use framework, but you could almost say that the Crown Estate could have a mini land use framework and a mini sea use framework all of its own, because it is sufficiently large a player.

As the noble Baroness, Lady Hayman, said, we have national targets set in statute for net zero and biodiversity recovery. It is absolutely clear that the Government will simply not be able to make these targets without the Crown Estate playing a full role, as it is one of the big boys on the block. For example, the offshore wind partnerships that we have heard about in collaboration with Great British Energy will leverage £60 billion of private investment and provide energy to nearly 2 million homes.

The Crown Estate is also fundamental to economic and environmental issues, including flood risks, owning as it does great tracts of the coast. Carbon capture, use and storage, if you believe in it, is a big part of the net zero strategy—I have my doubts that it will actually play that role—but it depends hugely on the Crown Estate playing its role, otherwise it simply will not be able to happen. We have to recognise that the Crown Estate is a massive player, including in coastal habitats which are uniquely important in UK terms. We are a major staging post for marine and bird migration as a result of our globally important coastal habitats. The Crown Estate is big in all of those things.

Crown Estate Bill [HL]

Baroness Hayman Excerpts

2nd reading
Monday 2nd September 2024 Lords Chamber

[Baroness Hayman (CB)]

My Lords, I declare my interests as chair of Peers for the Planet and as a director of the associated company. I, like others, congratulate the Minister both on his appointment and the clarity with which he introduced the Bill. I was grateful for the opportunity to discuss some aspects of the Bill with him last week.

Tempting though it is, I will not follow the argument of the noble Lord, Lord Howard of Rising, with which I did not agree. I look forward to the Minister taking on that challenge. I will—as the noble Lord, Lord Young of Cookham, predicted—address my remarks to the environmental, energy and biodiversity aspects of the Bill. I believe it is an important step on the road of turning aspirations in this area into delivery, and it is delivery we are going to need in the years taking us up to 2030 and beyond.

Despite that focus, I was extremely interested in the points raised by the noble Lord, Lord Young of Cookham, on governance, and by the noble Lord, Lord Turnbull, on the basis of the sovereign grant. I look forward both to the Minister’s response and, perhaps, to discussing those issues in Committee.

The King’s Speech briefing promised:

“This Bill will modernise The Crown Estate by removing outdated restrictions on its activities, widening its investment powers and giving it the powers to borrow in order to invest at a faster pace”.


Alongside that, the Crown Estate’s own strategic objectives make clear its mission of

“supporting the UK towards a net zero carbon and energy-secure future”

and

“stewarding the UK’s natural environment and biodiversity”.

So this Bill gives us the opportunity to look at the reforms in the context of the UK’s progress towards net zero and the part that the Crown Estate can play in helping with the delivery of the Government’s wider net-zero policies and aspirations—which are clearly already the aspirations and policies of the commissioners themselves.

If we are to achieve those aspirations, as has been said many times, we need to have cross-cutting measures that span and interconnect a wide variety of sectors and bodies that need to work positively together to achieve our statutory obligations and the progress that we want to see. There is a complicated jigsaw to put together here, and the Crown Estate is a critical and important part of that wider net-zero jigsaw.

As others have said, the Crown Estate is also an organisation that makes a not insignificant contribution to the government purse and whose investment firepower has the potential to make a difference in tackling the dual climate and nature crisis, which the Government have recognised as

“the greatest long-term global challenge that we face”.

To rise to that challenge, we need not only to integrate the work of all government departments—which, frankly, is difficult enough in itself—but to recognise the potential contributions and responsibilities of all UK organisations with a public role and that discharge important public responsibilities, which clearly includes the Crown Estate. I hope that in Committee we can explore how we can combine the rightly valued independence of the Crown Estate and its commissioners with ensuring that the legislative proposals contained in the Bill contribute to what the Crown Estate itself acknowledges is at the core of its strategic activities. It underlines the need

“to make a positive impact for net zero, nature and communities while creating financial value for the UK”.

Both the Crown Estate and the Government are clearly on the same page on this, yet the fundamental duties of the Crown Estate have not been updated over the last 60 years. I hope that there will be opportunity to discuss how we can acknowledge the shared understanding that we need not only to drive up renewable power generation but to better mitigate and adapt to climate change while creating space for nature-based solutions and natural capital. Those points have already been clearly made.

As a number of others have also made clear, the new borrowing and investing powers that the Bill gives to the Crown Estate clearly have the potential to contribute to the delivery of a low-cost, secure and flexible renewables-led energy system. However, it is important also to recognise, as the Climate Change Committee has said, that there are advantages to protecting the UK’s marine and coastal environments, given that they

“represent potentially very large natural carbon stores and may provide extremely efficient carbon removal”.

If we are imaginative and committed, we can ensure that the aims of generating renewable energy can go hand in hand with other aims, particularly in respect of our responsibilities to the natural environment and nature-based solutions for both the seabed and land. With a joined-up strategic approach, there are major opportunities for achieving both.

However, there will inevitably be times when these priorities may be perceived to be in competition with one another and times when it will then be important that we make decisions, and that we do so in a transparent way. This need not impinge in any way on the independence of the commissioners’ decision-making. Indeed, the provisions on the Crown Estate’s independence, set out in the 1961 Act, are extremely robust and will remain in place. Rather, it is a clearer and better articulation of what value and good management mean in the long term.

We are now getting to the stage where the detail of how we deliver the transition to clean energy really matters, and the Bill is a positive opportunity to link how the Crown Estate will achieve both delivering more renewable energy and infrastructure, while at the same time navigating the best ways to protect and enhance our natural environment. Drawing these different aspects together clearly in the context of the Bill would ensure transparency to the Government, the public, developers and wider stakeholders around how different considerations are being factored into decisions when the inevitable arguments arise about, for example, where to site projects, the need to preserve views of the countryside and to protect wildlife species, and how to balance those views against the opportunities for more clean energy, job creation and green growth—and, of course, the ever-present need to provide value for money for the taxpayer.

Both our nature and our energy aspirations need to be in the context of other broader issues: most obviously, as has been described by others, the interface and interaction with the urgent work on upgrading the transmission grid and securing our skills pipeline, so that the 20 gigawatts to 30 gigawatts of offshore wind the Crown Estate believes it can unlock is connected up to the places it needs to power.

So, I am afraid that it is not a simple jigsaw puzzle to fit together. However, the Bill gives us a chance to review the Crown Estate’s role in the context of not only enabling more offshore wind as an end in itself but rather as part of the whole landscape of net zero and environmental solutions that we will need to deliver in order to achieve our own environmental and climate targets and to lead from the front on the global challenges we face.

We are taking important and necessary steps with the Bill but we could make a major leap forward if we commit and understand that contributing towards the delivery of climate and environment targets is secured within the remit of all our institutions with a public function, and especially those with substantial investment muscle to generate public value, and that includes the Crown Estate.

Pension Investments

Baroness Hayman Excerpts

Tuesday 23rd January 2024 Lords Chamber

[Baroness Vere of Norbiton (Con)]

The Chancellor and indeed the Government have put forward a number of reforms to ensure that we make the UK the best place not only to raise capital but to invest pensions in future. As I am sure the noble Lord has seen, we have been delivering on the recommendations of the noble Lord, Lord Hill, for overhauling the UK’s prospectus regime, we have been looking at the recommendations of Rachel Kent’s investment research review and we have been developing a new type of trading venue that will act as a bridge between private and public markets. We can be innovative, but this is a process of evolution not revolution.

[Baroness Hayman (CB)]

My Lords, I declare my interests as in the register. In their green financial strategy, the Government recognised that clarifying the fiduciary duties of pensions investors, which could help to increase support for long-term and sustainable investment in the UK, was needed. When will the Financial Markets Law Committee, which is reviewing the clarity of the law relating to fiduciary duty, be publishing its report?

[Baroness Vere of Norbiton (Con)]

I am grateful to the noble Baroness for raising this issue, about which I had a meeting last week with a number of fund managers. Some felt that the fiduciary duty needs to be changed, while others were content with it. The Government remain committed to considering how the fiduciary duty can be clarified. The financial markets group that she referenced is independent of government and includes various law firms and pension schemes. We look forward to the publication of its final report, but, as I say, it is independent of government and it will publish its report when it is ready.

King’s Speech

Baroness Hayman Excerpts

Monday 13th November 2023 Lords Chamber

[Baroness Hayman (CB)]

My Lords, I declare my interests as chair and a director of the associated company Peers for the Planet. I will follow the noble Baroness, Lady Sheehan, in two respects. The first is to start with a positive and welcome the measures in the gracious Speech in relation to smoking and finally achieving a generation that will be smoke-free in this country. The second respect is that I will also be speaking on issues relating to climate and energy.

As the noble Baroness said, there are two separate, and arguably contradictory, elements relating to these issues in the Government’s proposals. First, there is the plan to mandate annual licensing for North Sea oil and gas drilling, which is a specific policy proposal to be underpinned by legislation. In contrast, we have much a more high-level and aspirational commitment to

“seek to attract record levels of investment in renewable energy sources and reform grid connections”

as well as to

“lead action on tackling climate change and biodiversity loss”

and

“support developing countries with their energy transition”.

These are high ambitions, but with no accompanying legislation or specific policy initiatives.

I have grave concerns about both sets of proposals: on the first, whether it is quite simply wrong in principle; and, on the second, whether it is mere words without the necessary substance behind them. Nowhere is there a commitment, which we need so badly, to provide a comprehensive, effective energy transition plan against which government proposals and government progress can be assessed.

I do not dispute, and I do not think anyone does, that we need existing oil and gas now and in the immediate future, and residual amounts once the majority of the grid is decarbonised, but the annual licensing regime proposed by the Government is, according to the FT, unlikely to reverse the dwindling reserves, a poor use of parliamentary time, and

“particularly short-sighted, given the volume of private capital globally now looking for a home in supporting the green transition”.

Last week the United Nations Environment Programme’s powerful Production Gap Report 2023 concluded:

“There is a need for governments to adopt both near- and long-term reduction targets for fossil fuel production and use”.


Yet our Government seem to be going in the opposite direction.

We will not achieve an orderly energy transition and meet ambitious electrification targets based only on top-line commitments and assertions for the future. We need serious plans led by government in partnership with industry, explained properly to the public, that are long-term in nature and accountable in their governance. That means key milestones, robust measures against which progress can be assessed, and clear roles and responsibilities. It means addressing the current woeful absence of comprehensive plans to address energy demand and efficiency, and a serious plan will need to address the fundamental lack of equity in our tax and subsidy regimes for investing in fossil fuels versus renewables and other clean technologies. It cannot be right that oil and gas companies receive a 29% investment allowance, which can rise to 80% for building new infrastructure, whereas renewable energy producers receive no investment allowance whatever. To put it simply, our taxation provisions favour the building of oil rigs over wind farms. I hope that when the Minister responds she will undertake to look at financial provisions to incentivise clean energy and support the move away from high-polluting, expensive and ultimately insecure fossil fuels.

The Prime Minister has committed to putting accountability and long-term decision-making at the heart of his Government. Without a transparent and robust transition plan that drives up renewables and exits fossil fuels, there is neither long-termism nor accountability. Industries and individuals in multiple sectors deserve to understand the Government's proposals for shifting our country’s energy profile and the implications and opportunities in green growth for those industries and individuals. If we wish to continue to lead globally, as the Government say they do, other countries need to see us doing this, and doing it well, at COP 28 and beyond.

Financial Services and Markets Bill

Baroness Hayman Excerpts

Consideration of Commons amendments
Tuesday 27th June 2023 Lords Chamber

[The Parliamentary Secretary, HM Treasury (Baroness Penn) (Con)]

My Lords, I beg to move Motion A and, with the leave of the House, will also speak to Motions B and C. I am grateful to all noble Lords for their considered scrutiny of the remaining issues in front of us today and throughout the Bill’s passage.

I will speak first to Lords Amendments 7 and 36, and I thank the noble Baronesses, Lady Hayman and Lady Boycott, in particular, for their leadership on these issues during the passage of the Bill.

The UK is a global leader in sustainable finance. The Government’s ambition to support the growth of this important area is demonstrated by the amendment relating to sustainability disclosure requirements made on Report, and the amendments in lieu of Amendments 7 and 36 introduced during Commons consideration.

I turn first to Lords Amendment 7. The regulators have an important part to play in supporting the Government’s ambitions, which was demonstrated by the inclusion of the net-zero regulatory principle at introduction. The Government have reflected carefully on the calls to ensure that the regulatory framework also reflects the Government’s nature targets.

While I welcome the intention behind Amendment 7, the Government cannot accept this amendment because it is too broad and therefore too open to interpretation. We have therefore brought forward Amendments 7A, 7B and 7C in lieu of Amendment 7, which add the relevant and well-defined targets made under the Environment Act 2021 to the new regulatory principle. It is important to recognise that addressing climate change and nature issues is not the regulators’ primary function, which is, broadly, to advance their objectives, including to protect the integrity of the financial markets and the safety and soundness of firms within the financial system and to deliver appropriate protection for consumers. Most of the levers for reaching our net- zero and environmental targets sit outside the regulators’ remit and control.

The amendments in lieu will ensure that, when acting to advance their objectives, the regulators will be required to consider the Government’s commitments to achieve the net-zero emissions target and the environment targets. I assure noble Lords that the amendments do not weaken the requirement for the regulators to consider the Government’s net-zero target. FSMA requires the regulators to act in a way that advances their statutory objectives when carrying out their general functions. When advancing their objectives, the regulators must also have regard to the regulatory principles, which aim to promote good regulatory practice.

It is for the independent regulators to decide how best to meet the requirements placed on them in legislation when discharging their general functions. The drafting of the amendments in lieu makes this clear: the regulators are required to have regard to the regulatory principle only in so far as it is relevant to advancing their objectives. This does not change the effect of the net-zero requirement, but the Government considered that this additional language was needed, alongside expanding the principle, to make this point clear and to ensure consistency. I am confident that the Government’s approach meets the intended effect of Amendment 7, and I hope noble Lords will acknowledge it as a significant step to further support the growth of sustainable finance in the UK.

I turn to Lords Amendment 36 on deforestation-linked financing. As I set out on Report, the Government again support the intention behind this amendment. The policy considerations for tackling the financing of deforestation risk commodities are complex. We are grateful for the work of the Global Resource Initiative and in particular its report on this issue from May 2022. This emphasised the need to take a staged approach and that further exploratory work would be needed to investigate the implementation of a prohibition on the financing of the use of prohibited forest risk commodities.

The Government have therefore brought forward Amendment 36A in lieu of Amendment 36, which commits the Treasury to undertake a review to assess whether the financial regulatory framework is adequate for the purpose of eliminating the financing of illegal deforestation and to consider what changes to the regulatory framework may be appropriate. This will ensure that any intervention is scoped appropriately and that the UK moves in lockstep with our international partners to ensure the effectiveness of any regime in tackling the financing of illegal deforestation.

The Treasury will be required to undertake this review within nine months of the first relevant regulations under Schedule 17 to the Environment Act being made. This will enable the Government to reflect those regulations in the review, which is essential if we are to have a joined-up and effective approach.

As the Government set out in the updated green finance strategy, we will convene a series of round tables this year. These will form the basis of a taskforce to drive forward the work of this important review and support the development of clear conclusions. This will complement the Government’s existing commitment to explore how best the final Taskforce on Nature-related Financial Disclosures—or TNFD—framework should be incorporated into the UK policy and legislative architecture. As the GRI report acknowledged, the developing work of the TNFD is increasingly important, especially as it has now included recommendations relating to deforestation in its draft standards.

Following the review, the Government will consider what further action is appropriate to progress the goal of eliminating the financing of illegal deforestation. The Bill and the existing provisions in FSMA provide the Treasury with extensive powers, including through the regulated activities order or the designated activities regime, to bring new activities into the scope of regulation if needed.

Finally, I turn to Lords Amendment 10. As the Economic Secretary set out yesterday, and as I set out on Report, the Government cannot accept this amendment. While I acknowledge the intention behind it, I reiterate the point that financial inclusion is a complex societal issue that cannot be solved through financial regulation alone. The Government are committed to the aim of ensuring that people, regardless of their background or income, have access to useful and affordable financial products and services. The Government’s view is that the FCA’s current and ongoing initiatives around financial inclusion demonstrate that it can already effectively support the Government’s leadership on this agenda through its existing operational objectives and regulatory principles.

Parliamentary scrutiny of the introduction of the new secondary growth and competitiveness objectives for the regulators comes after two consultations on the Future Regulatory Framework Review and extensive engagement with industry and other stakeholders. It is not appropriate to amend the regulators’ objectives, which are crucial to the effective regulation of financial services in the UK, at this late stage of the Bill’s passage without due consultation. Furthermore, the FCA’s new consumer duty, which comes into force on 31 July, seeks to set a higher and clearer standard of care that firms owe to their customers, and includes a new principle requiring firms to act to deliver good outcomes for consumers. It is important that the sector is given the opportunity to embed these important new requirements before considering further action of a similar nature.

I ask noble Lords not to insist on Amendments 7, 10 and 36 and to agree with the Commons in their Amendments 7A, 7B, 7C, and 36A in lieu. I beg to move.

[Baroness Hayman (CB)]

My Lords, I declare my interests as set out in the register, and will speak to Amendment 7A. I thank the Minister and her team for the considerable efforts that have been put in, since the Bill left this House, to find a way to respond positively to the issues raised in my original amendment, which was supported from all sides of the House. As the Minister knows, the central issue was that of providing a clear legislative basis for financial regulators to act, not only on our climate change duties, which the Government themselves recognised and included in the original Bill, but in relation to our duties relating to the natural environment.

This issue is seen as important in Parliament but also outside it. The inclusion of nature was supported both by Professor Sir Partha Dasgupta and, in a statement last week, by a group of eight leading financial firms. I am extremely pleased that the Government decided not to try to completely overturn the amendment but to introduce the amendment we have before us now, the basis of which the Minister has just explained. It recognises that the importance of climate should go alongside the importance of nature, which was not there originally.