Financial Services Bill

Baroness McIntosh of Hudnall Excerpts

Report stage
Wednesday 24th March 2021 Lords Chamber

[The Deputy Speaker (Baroness McIntosh of Hudnall) (Lab)]

My Lords, I shall call Members to speak in the order listed. Short questions for elucidation after the Minister’s response are discouraged. Any Member wishing to ask such a question must email the clerk. The groups are binding. A participant who might wish to press an amendment other than the lead amendment in a group to a Division must give notice in debate, or by emailing the clerk. Leave should be given to withdraw amendments. When putting the Question, I will collect voices in the Chamber only. If a Member taking part, remotely wants their voice accounted for if the Question is put, they must make this clear when speaking on the group.

Amendment 1

Moved by

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[Baroness Bennett of Manor Castle (GP) [V]]

My Lords, it is a great pleasure to follow the noble Baroness, Lady Altmann, and her powerful plea, which I hope the Government will listen to. I also speak to Amendment 1 in the names of the noble Lords, Lord Stevenson of Balmacara, Lord Sharkey and Lord Eatwell, to which I was pleased to attach my name, as I did to a very similar amendment in Committee.

Any noble Lords who have read the Second Reading debate will note that I majored on a “duty of care” in my speech. I used what you might call an expanded definition of “duty of care” to suggest that it might not be too much to put on the face of the Bill a demand that the financial sector should not engage in reckless, fraudulent, corrupt, obviously damaging systemic behaviour, including shipping off tranches of cash into tax havens, deploying complex financial instruments that they clearly do not understand and handing over control of markets to automated systems without adequate controls—things that threaten the security of all of us. But while I believe that principle remains sound, the lawyers convinced me that, in narrow legal terms, “duty of care” could not be stretched that far.

What the amendment here clearly introduces is a duty of care to individual customers. As proposed new subsection (2)(ea) says, their

“vulnerability, behavioural biases or constrained choices”

should not be exploited. Once, perhaps, such a clause was not necessary. There was a not ideal, but certainly useful, constraining paternalism: your local bank manager would look after you, both in limiting borrowing and in making allowances for unexpected disasters, personal and business. That has long gone—as of course has, almost universally, the local bank manager and, all too often, the local bank branch—so we need the law to step in to protect people to constrain the behaviour of financial institutions. As noble Lord, Lord Sharkey, said, we are in a situation where malfeasance has just continued to grow, with technical developments being one cause of that and, as noble Baroness, Lady Altmann, said, scandals and fraud have plagued consumers.

So that is the institutional side of where we are, but we also have to think about the state that people and our society are in today and make the law fit for our modern times, for these are times of massive insecurity. The idea of saving, or of even making the incoming funds match the essential outgoings each month, was an impossible dream for millions of people even before the arrival of the SARS-CoV-2 virus.

No one can know when sudden illness might strike—this Bill has been championed by Macmillan Cancer Support, to whose work I give credit—or it could be a redundancy or a pandemic that strikes people unexpectedly. That is one side of vulnerability and care that financial institutions should acknowledge. As Macmillan highlights, almost one in three of those severely financially impacted by their cancer diagnosis had to take out a loan or credit card debt. That is a public health issue. What we have are institutions that have been making profit from customers, sometimes for decades, and they have a duty to act compassionately and fairly in such circumstances.

But I think we also need to pay a bit of attention to the elements of the proposed new clause referring to “behavioural biases” and “constrained choices”. The noble Lord, Lord Holmes of Richmond, has been a rather isolated champion in this Bill on issues around the use of artificial intelligence algorithms and issues such as their potential bias, but he has also highlighted the way in which financial companies now have a historically uniquely detailed understanding of customer behaviour and the chance to exploit that through complex, opaque mechanisms.

As the noble Lord, Lord Stevenson of Balmacara, said in introducing an amendment, there has always been asymmetrical access to information between financial sector companies and their clients, but this has been massively magnified by technology—something that is only likely to grow. To create an assumption that this inequality of arms should not be misused should, we hope, constrain the behaviour of the financial sector—or at least, if it does not do that, provide a potential route for redress should it occur. There are already many who have need to seek redress for the behaviour of financial sector companies. I spent time with some of them this morning at a meeting of the Transparency Task Force.

As noble Lord, Lord Stevenson, said, the Government are likely now to say “Wait”—but why? We know that there is already an existing massive problem and a huge risk. If the Government do not acknowledge the need to act now, I offer the Green group’s strong support for the intention of the noble Lord, Lord Stevenson, to test the view of the House.

[The Deputy Speaker (Baroness McIntosh of Hudnall) (Lab)]

The noble Lord, Lord McNicol of West Kilbride, has withdrawn from the debate, so I call the next speaker, the noble Baroness, Lady Tyler of Enfield.

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[Lord Holmes of Richmond (Con) [V]]

My Lords, it is a pleasure to follow my noble friend Lady Noakes. In essence, since we are on Report on a Financial Services Bill, these amendments can, I hope, be rightly summed up as, “What point profit if no planet to spend it on?” But, as the term “global warming” clearly sets out, it is collectively a global issue, not a national one. In this context, I give more than a nod towards our involvement with the whole Basel process and the letter from Mr Sam Woods on this issue.

I support the amendments tabled by my noble friend the Minister. They strike the right balance on the need for transition—not in any sense slow or fast, but a transition—to get to where we need to get to across financial services and the wider economy. As noble Lords commented, there is no benefit—quite the opposite—in taking an approach to a particular industry in a particular region of United Kingdom only to have a more catastrophic climate impact by having to shore up resource from other parts of the globe.

In short, the PRA has a role to play, as do all elements in the financial services sector. More can probably be done on the use of new technologies and the measurement of how funds and various assets are performing in this sense. That is certainly in our grasp; it is not a matter for this group of amendments, but it could well provide much of the solution, and certainly the clarity and accountability that would come through in the course of business.

I fundamentally agree with my noble friend Lady Noakes’s commentary on how large corporates go about their funding—[Connection lost.]

[The Deputy Speaker (Baroness McIntosh of Hudnall) (Lab)]

We appear to have lost contact with the noble Lord, Lord Holmes. Perhaps we should move on to the next contributor, the noble Baroness, Lady Altmann.

[Baroness Altmann (Con) [V]]

My Lords, I have added my name to Amendment 3, moved so excellently by the noble Lord, Lord Oates. I congratulate him on his work on the issues relevant to this group of amendments.

I also commend my noble friend the Minister and his department for listening to the concerns expressed in Committee and for laying his own amendments to the Bill, which previously made no mention of climate change at all. I believe that the Government are committed to making a real difference on climate change and environmental issues, and have recognised the dangers that our precious planet faces due to climate change and biodiversity risks, as the noble Baroness, Lady Bennett, mentioned and as is in her amendment. I welcome the Government’s Amendments 43, 46, 47 and 49, and hope that the issue of climate risk will continue to move up the agenda in financial services.

I have enormous respect for my noble friend Lady Noakes and her experience in banking. She makes relevant distinctions between assets held by insurance companies, regulated by the FCA, which hold investments directly in fossil fuel or environmentally damaging firms and activities, whereas banks’ main assets are loans rather than more direct investments. Their balance sheets, as she noted, have some leasing, but, should the worst predictions of climate catastrophe materialise in a shorter timeframe than currently anticipated, there could be unexpected defaults on a number of the loans on the loan books, which also needs to be considered, I would hope, in terms of risk weightings.

In Committee, I supported the noble Lord, Lord Oates, in seeking to update the existing capital risk weightings to reflect climate change risk. Having listened carefully to the Committee’s arguments, he has taken care to adjust his amendment for Report. As we have all discussed in this group, climate change is now recognised widely as posing a significant risk to the entire global financial system and, in fact, to our expected and hoped-for way of life. Current central bank policy risks reinforcing a carbon lock-in through a systemic bias to fossil fuel investments—indeed, insurance arrangements and pension funds also have significant investments in this area. I believe we need a twin-track approach that both reports on and quantifies climate-related financial risks and, at the same time, amends prudential risk tools to reflect the risk of loss or stranding in relation to fossil fuel investments or, indeed, loan books.

Such an approach would reflect the urgency of the challenge we face and, as Andrew Bailey said in a speech last year:

“Investments that look safe on a backward look may be existentially risky given climate risks.”


The Minister’s response in Committee was that the proposed amendments would require the PRA to set punitively high risk weights against exposure to existing and new fossil fuel production and exploitation, and that these risk weights would, in effect, make it more expensive to finance such activities and thereby make them less attractive. Loans would be more expensive, potentially, to companies involved in this area. Is this not the very point that we should be seeking to achieve—to reflect the risks of carbon-intensive investments quantitatively, through higher risk weightings, and potentially through the issuing of loans to such companies?

Amendment 3 recognises the Government’s concerns and now proposes only that the PRA carry out a review of the current risk weightings applied to existing and new fossil fuel activities. In this regard, such a review may indeed confirm what my noble friend Lady Noakes suggested would be the outcome but, without such a review, I feel that we will not necessarily be taking this sufficiently seriously. I hope my noble friend can agree that this is a reasonable and prudent way to recognise the urgency of the climate change challenges we face, and that it would provide evidence to inform any necessary future changes to existing prudential rules around capital weightings, should that be found to be required.

In addition, two reports have just been published highlighting the systemic nature of climate risks. The LSE’s Grantham Research Institute report—I declare an interest as a visiting professor—Net-Zero Central Banking stated:

“Central banks and supervisors will need to take a systemic perspective, addressing both micro- and macroprudential risks over a much longer time horizon than they do now, and work to ensure that financial flows become aligned with net-zero.”


Policy Exchange’s report Capital Shift recently stated:

“Whereas international banking codes require banks to include emerging risks such as cybersecurity in capital adequacy compliance … climate change barely features.”


It recommended:

“Central banks and supervisors should introduce higher capital charges for assets at greater risk from climate and nature-related financial risks.”


I hope my noble friend the Minister can provide assurances that an urgent review of this vital area is possible and will be considered.

I speak briefly in support of the aims of Amendment 22 in the name of the noble Baroness, Lady Hayman, on climate-related financial risk reporting. I commend her for her work in this area and declare a further interest as a member of the Peers for the Planet group, which she so ably leads. Amendment 22 would require adjustments to reflect the systemic risk in the whole financial system. I hope my noble friend will commit to a future consultation, at least, on the FCA and PRA objectives having regard to net zero targets.

Finally, I have added my name to Amendment 23, also in the name of the noble Baroness, Lady Hayman, whose work on environmental protection has been so powerful. I congratulate the new chief executive of the FCA, Nikhil Rathi, on the latest announcement that he is recruiting a senior role focused specifically on environmental and other ESG matters, so I suspect that this amendment may no longer be required.

[The Deputy Speaker (Baroness McIntosh of Hudnall) (Lab)]

My Lords, we have not as yet been able to restore contact with the noble Lord, Lord Holmes of Richmond. Should he reappear before the Minister speaks, I will try to call him, but for the time being he is not with us, so I call the noble Baroness, Lady Kramer.

[Baroness Kramer (LD)]

My Lords, I will follow my practice of trying to be brief and selective on Report. We have had absolutely brilliant speeches and I do not intend to repeat them.

Perhaps I can start by being helpful to the noble Baroness, Lady Noakes, and I speak as a fairly weather-worn commercial banker who dealt extensively with loans and risk. She will understand, therefore, that the PRA, as the regulator, in dealing with capital adequacy issues, looks at the loans that sit as assets on the bank’s books, but of course it does not stop there. It looks through that to the operational activities—to the activities and investment of the company to which the loan is made. That is why the terminology “investment” pins exactly what this amendment is intended to do, which is to make sure that the PRA does that look-through to investment. I do not think that any member of the PRA would have the slightest difficulty in understanding what this amendment is guiding them to carry out. They would see that it has genuine precision in it. I do not have a problem with the wording; the wording says what it should, it says what it means and it says what the PRA would understand and follow through.

Very briefly, I thank the Minister for the two “have regard” amendments that he has embedded in this group. To “have regard” to the climate change target of 2050 is a step forward, but we have to recognise that it is very light-touch and will not scare the horses. The noble Baroness, Lady Noakes, captured that rather well when she said that the two “have regard” amendments will do no harm. I do not think they change the landscape, but they give a little hint of a change in direction and I welcome that change in direction.

Like others, I am very frustrated that we have a PRA that is going to do stress tests to test the sufficiency of banks’ capital buffers to deal with the financial instability caused by climate change, but then seems to have taken almost the equivalent of a vow of passivity and will not then follow through and implement the consequential adjustments to capital adequacy ratios that would come from that exploration and examination of the buffers. I really do not understand going through the process and then saying, “But we will not learn from or implement the consequences of that work”.

I sometimes think, as I listen to the speeches, that there is a sense that this requirement to look at capital adequacy ratios is somehow novel or revolutionary. I sit on the Economic Affairs Committee and last week, we were privileged to hear from the noble Lord, Lord Turner of Ecchinswell. I hope I have pronounced that correctly. We were looking at quantitative easing issues and therefore it was a discussion of central banks, but the issue of climate change came up. I thought what he said was quite helpful in understanding how normalised the approach of challenging this issue through capital adequacy ratios is now becoming. He said that any role of central banks in relation to climate change is very much secondary to the fiscal and regulatory authorities—the same issue that I think was raised with reference to quotes from the noble Lord, Lord King—but that is an important statement. It is secondary to the fiscal and regulatory authorities because, of course, the relevant regulatory authority is the PRA. He went on to give an illustration by referring to coal:

“If banks go on lending to coal companies, they may end up with stranded assets on which they will make a loss. That will be bad for their capital ratio. I think that it is reasonable for the PRA to set higher capital ratios for anybody who is still lending to coal.”


I do not want to suggest that he was willing to go further than coal, but he was using it as an illustration. I think most of this House would very happily accept that that language needs to be extended across the full range of fossil fuels, certainly in requiring the PRA to do a review. So, I wanted to underscore that this is a normalised approach; this is where we will go, and where we will end up. Given that we have described climate change, absolutely correctly, as an emergency, a delay in getting to that appropriate application of capital adequacy is really serious.

I wanted to pick up the point made by the noble Baroness, Lady Noakes—that most loans are short or medium term. They are, but they are supporting longer-term projects. Of course, the duration of financing the project itself—the project they enable, the project they empower, the project they drive—has a much longer-term application. So, the fact that the loan itself is short term does not mean that it can be set aside as though it had no longer-term implications. It is merely the first step in an ongoing process, and once the process is started it is almost impossible to stop. Loans might be short term because people think they might get better terms and conditions or pricing in the future. The short-term issue is not applicable here; the urgency issue is.

We know that we face an emergency and that how we act in the future will have to be more draconian and dramatic, and have far greater collateral damage, than if we act early. It is crucial that the issues raised in Amendment 3—getting in place the plan, pattern and process for using capital adequacy ratios to tackle the financial instability that will come from allowing climate change-related activities to continue and grow—be dealt with now, and rapidly. If the Government do not recognise what we have been describing here and commit to this review of the whole issue of capital adequacy and climate change, I very much hope that my noble friend Lord Oates will press his amendment. The message is absolutely critical.

Business of the House

Baroness McIntosh of Hudnall Excerpts

Wednesday 30th December 2020 Lords Chamber

[Lord Adonis (Lab)]

My Lords, I say first, I think on behalf of the whole House, how grateful we are to the staff of the House for the exemplary arrangements that they have made for our meeting today in the most exceptional circumstances. I also thank the Chief Whip for the courtesy that he has shown to me and to the House, as always. I pay tribute to those in the usual channels who have done the best that they can to make—let us be frank about it—the best of a bad job today. However, we should be aware of the enormity of the step that we are taking today, which is why I make no apology for moving this amendment.

What we are essentially doing is giving the Government power, in one of the most important matters that will face us in this generation, to legislate by decree. There will be no Committee on this Bill, no Report and no ability to move amendments on Third Reading. We will have just one debate, then a guillotine, then a vote, and then all 80 pages, 40 clauses and five schedules of this Bill, which is of enormous importance to the whole future of the United Kingdom, will become law immediately, with Royal Assent signified before the end of the Sitting. If this were an act of God, or some emergency for which we had to provide immediately—such as, for example, the pandemic—one might understand the need for legislative arrangements of this kind, although I note that when we passed the Coronavirus Act, which gave huge sweeping powers to Her Majesty’s Government, we gave it significantly more scrutiny in the most difficult of circumstances, including the need for Members to participate in unusual ways, than we are giving this Bill today.

It is not only that this is an act of the Government, not an act of God. Even given the fact that they reached an agreement only on Christmas Eve, it was still possible for there to be significantly more scrutiny of this Bill than we are giving it today. The Government could have called Parliament back on Monday. We could have had three days of debate on the Bill, which would have enabled normal Committee and Report stages to take place. Recognising, after discussions with noble Lords, that, given the constraints we are under—as I say, they are imposed on us by the Government, but we are under them none the less—we cannot have a normal Committee, I am not moving my first amendment, but I think that it is important for your Lordships to put on record that we deplore these arrangements and we do not regard them as in any way acceptable.

I note that the noble Lord, Lord Ashton, said that this Motion and our arrangements today should not be regarded as a precedent, but they will be regarded as a precedent. Let us be clear: precedents are things that have happened before—that is the meaning of the word “precedent”. We cannot do something and then argue that it is not a precedent for the future; it is a precedent. I can tell the noble Lord, because I have sat on that Bench too, that Ministers in future will be salivating at the powers that your Lordships will give the Government today over the most important piece of legislation that this Parliament will enact. They will cite it as a precedent for similar arrangements, which are without precedent before today.

There is no precedent at all—I have consulted the clerks, who are learned in these matters—in, so far as we can tell, the 800-year history of the House of Lords, and certainly not its modern history, for both suspending the need to have gaps between consideration of Bills in Committee and on Report and suspending Committee and Report entirely, which removes the power to move amendments. There is no precedent for this on a piece of major contested legislation. Your Lordships have done that historically only ever for emergency legislation that has the agreement of the opposition parties—notably terrorism legislation, where there is an obvious and sometimes compellingly urgent need to do so. In the history of this House, a piece of legislation like this has never been considered in the way that we are considering it today.

The issues that we are talking about are not small. Those of your Lordships who listened to the opening speeches in the House of Commons today will have seen the gravity of the issues that are being considered. If I may put in a plug for my leader, my right honourable friend the leader of the Opposition made a forensic speech, which went through in detail all the big issues in this agreement which must be debated and tested and which are at the moment unclear—the Erasmus programme, workers’ rights, the ability of artists and professionals to travel across the continent, what will happen to financial services, which are outside this treaty, business services and the nature of the security partnership. Noble Lords need only read the headings of each of the 40 clauses in the Bill, which relate to matters as big as any that your Lordships have ever debated and legislated for, to see the importance of the issues at stake. What is happening today is not just, as the noble Lord, Lord Ashton, said, not in keeping with our usual practices—I must say that that is the understatement of the parliamentary year; it is the noble Lord’s job to try to keep our proceedings as low key as possible—but something that the House should regard as totally unacceptable.

We are where we are. Today is the 30th and the Bill must become law, so I do not propose that we reimpose Committee stage, but it is important that we put on record that these arrangements are unacceptable. They will be regarded as a precedent in future. They treat the general public, who are looking at our proceedings and expecting us to legislate with scrutiny, with contempt. That is why it is right that we put on record that we deplore these arrangements. With that in mind, I beg to move as an addition to the Chief Whip’s Motion that

“this House regrets the gross abuse of the Parliamentary process and lack of any opportunity for effective scrutiny that has been necessitated by the failure of Her Majesty’s Government … to enable Parliament to meet in a more timely manner, and … to make other provisions for the rights of Parliament to be upheld.”

[The Deputy Speaker (Baroness McIntosh of Hudnall) (Lab)]

My Lords, the original Question was that the first Motion in the name of the Lord Privy Seal be agreed to, since when a second amendment has been moved by the noble Lord, Lord Adonis, as set out on the Order Paper. The Question before the House is that the second amendment in the name of the noble Lord, Lord Adonis, be agreed to. I have received no notification, but I suspect the noble Lord, Lord Stoneham, would like to speak.

[Lord Stoneham of Droxford (LD)]

My Lords, as a member of the usual channels I have to accept my collective responsibilities in that mechanism, but I must say that I am unhappy with the cavalier way in which Parliament is being treated over such an important piece of legislation. We should never have been put in this situation. There were remedies to avoid it if the Government had wanted to use them, but they decided not to.

However, we must accept that we are where we are, as the noble Lord, Lord Adonis, has said. When we discuss the legislation, we will face the situation that the Commons, after four and a half hours’ debate, will probably have passed it by a huge majority, and we will be left with six hours to discuss it. We thought it important that those in the House who wanted to discuss it should at least have that opportunity today. That is why the longest session should be available for Second Reading.

Frankly, if the whole issue around Europe and the deal is about getting back control, this is about getting back control for the Government, not Parliament, and we should all be very concerned. We would have liked at least two days for the debate. We also asked for a full day’s debate to follow once we have had time to discuss and analyse the details. I am grateful to the Chief Whip for conceding a day, but one day next Friday is too soon and inadequate.

We must accept that this is a special situation, as the Chief Whip has said. He has told us that it will not be a precedent and assured us of that in the usual channels. I accept that with good grace. However, this leaves us with a situation where our Select Committees will have to do a great deal of heavy lifting. Our European Union Committee and our trade agreement committee will now have to look at the legislation clause by clause. We should have regular reports from them on their progress so that we can, subsequently, do our due diligence on this legislation and on the deal.

Having said that, doing this in one day will sadly require a lot of people in this Chamber. One thing that we will have to look into again in the new year, given what is going on outside with the Covid pandemic, is whether we should be encouraging people to be in this Chamber, certainly in these numbers, in future.

For today, we in the usual channels accept that the deed is done. There will be a big vote in the Commons. We regret the lack of scrutiny that we will have, but I very much hope that, as the Chief Whip has accepted that this will not be a precedent, we will get the opportunity to scrutinise this Bill and the deal through the work of our Select Committees in the coming months.

[The Deputy Speaker (Baroness McIntosh of Hudnall) (Lab)]

I call the noble Baroness, Lady Hayter—oh, I call the noble Lord, Lord Purvis.

[Lord Purvis of Tweed (LD)]

I thank the noble Baroness for allowing me to raise a question, if I may, of the Chief Whip. I have sympathy with the noble Lord, Lord Adonis, and his comments about precedent. This is the second Bill in a row which this House has considered under the fast-track procedure. There was the Bill immediately before the Christmas break—a trade Bill, which I covered—which had all its stages taken in one day because the Government knew they did not have the correct procedures in place for tomorrow. Therefore, I think there is a degree of sympathy.

The question I wish to ask is linked with the necessity now for detailed scrutiny after we come back in January, as my noble friend Lord Stoneham indicated. In the drop-in call yesterday, the noble Lord, Lord True, contradicted the Explanatory Notes of the Bill today. The Explanatory Notes state, in paragraph 99, that the Government believe:

“The Bill is not suitable for post legislative scrutiny as it implements an international treaty.”


The noble Lord, Lord True, reassured my noble friend Lord Fox, who asked the question, that there will be opportunities for scrutiny. So can the Chief Whip outline that there will be sufficient debating time and government time in January for us to debate the component parts of the Bill? Will the Government facilitate committees of this House to scrutinise the various components?

Linked with that, Liz Truss and the noble Lord, Lord Grimstone, have said repeatedly that every trade treaty will come with an independently verified economic impact assessment. The noble Lord, Lord True, told me in letter on 19 May that the Government would capture the widest possible range of analysis, from economists and academics to businesses and civil society groups, to, as he put it, represent all parts of the United Kingdom. He said: “We will continue to keep Parliament informed with appropriate analysis”. Will the Chief Whip outline when we can expect to see the impact assessment that will be so vital to understand—as the noble Lord, Lord True, said—the various impacts that will be felt across the different parts of the economy?

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[Baroness Hayter of Kentish Town (Lab)]

My Lords, there is something in what my noble friend Lord Adonis said about the inadequacies, thanks to—I think— the drawn-out negotiating technique chosen by our Government, which has ended up with an agreement which probably could have been reached many weeks ago and left us this very inadequate way of dealing with an important Bill. In normal times, the Commons having sent us a Bill, we would scrutinise it, test whether it fulfils the roles set for it, and ensure that it is workable and that there is transparency and accountability. But, sadly, that is not what we have the chance to do, partly, as I say, because of the Government’s own delaying in negotiations—whether because they were afraid of the ERG or your Lordships’ House, I leave to others to conclude.

But what it does mean is that the House today does have to take exceptional and extraordinary action. I thank particularly the amazing work of our Constitution Committee, which kindly looked at this and, in particular, at the fast-tracking of it. It agreed and accepted absolutely the case for taking exceptional, extraordinary action, which is necessary in this case basically to make sure that we do not crash out without a deal—nor, indeed, find ourselves with legal uncertainty when there is a gap in law between the end of 31 December and the beginning of 1 January. We do need a statute book that works on Friday morning.

Of course, I particularly regret not being able to get into this Bill. I love all that: negotiations, amendments and groupings. No? Okay, well, I quite enjoy them anyway. What was important, particularly over the internal market Bill, was how much change this House made. We sent back a much-improved Bill, partly because of the hard work, commitment and knowledge of Members of your Lordships’ House. Having looked at the Bill, which I saw only at 12 o’clock yesterday, there really is a lot there that we would be able to get stuck into, with the sort of scrutiny we normally do, if we had the time.

But that is not where we are. We cannot alter the treaty anyway—not a jot or comma of it—because that is agreed by 27 Governments. We should not pretend, therefore, that there is anything we can do, other than stop it in its tracks and have no deal, which I know none of us would want. In fact, for those of us who have looked at it, the Bill takes the deal and drops it into legislation. Given that we cannot alter that deal and have to drop it into legislation, the truth is that even with a Committee stage, a Report stage and a Third Reading, there would be nothing we could do that would alter the treaty. So I think that a degree of realism is perhaps worth bearing in mind.

Of course we are not going to be able to do what we should do, but, as everyone has accepted, the Bill has to get Royal Assent tomorrow. It seems to me that the important thing is that we can carry out the other function that this House is so renowned for—not just detailed legislation but the influencing of public opinion, the Government and the Commons. The most important thing is that we can do that today via the debate, and I therefore hope that we can get on and hear as many of your Lordships, with their views on the treaty, as possible. I think that that is something we can do.

So I think we have to let this business get on. I would like to thank not only the usual channels but all the staff who have enabled us to do this and be here today. Your Lordships do not get holidays, so you are not giving one up, but they are giving up their Christmas holiday to be here and do all the work, and we owe them a great debt of gratitude.

I believe that we have to leave with a deal, and therefore we have to do this Bill today. We therefore will support the government Motion but will not support the amendment to it.

[The Deputy Speaker (Baroness McIntosh of Hudnall) (Lab)]

My Lords, before I call the Chief Whip to reply, is there any other Member in the Chamber who wishes to contribute to this debate? As there is not, I will call the Chief Whip to reply.

[Lord Ashton of Hyde (Con)]

My Lords, I echo the previous speaker’s remarks on the staff who have helped us be here today. They have to do it; we do it for fun, and because, actually, we have a serious job in front of us. As I made clear in my opening remarks, we had to make a difficult decision about how best to use the time available to us.

I turn specifically to the amendments in the name of the noble Lord, Lord Adonis. You can tell he was the Secretary of State for Transport: you wait for weeks for an Adonis amendment and then two come along at once. But that is why I am particularly grateful that he has not moved the first—and ruined my joke, really.

But, seriously, he and a lot of other noble Lords have asked why the House was not recalled earlier than today. The deal was agreed late on Christmas Eve, and the Bill and its associated documents then had to be finalised, so today is the soonest the legislation could be considered. Also, bearing in mind that we are in the middle of a pandemic, we had to use hybrid proceedings—which involve speakers’ lists beforehand—otherwise we would have excluded many Peers who wanted to speak.

Perhaps I might say a quick word about the timing—about before and after. The reason that we have to finish today, in this sitting, is that the UK and the EU need to exchange notification of completion of procedures for provisional application early on Thursday 31 December. This exchange cannot be done until the Bill has received Royal Assent, as the passing of the legislation is a necessary procedure for provisional application. So we were very much stuck in a gap between being able to do it when the Bill and its associated documents were ready and having to do it at a very quick pace.

If we did as the noble Lord would like and had a provision for a substantive Committee stage, the time available for Second Reading would necessarily be reduced, and far fewer Back-Benchers would be able to take part. As I said, our proceedings today cannot be open-ended—Royal Assent must be notified to both Houses today.

We have heard that many noble Lords do not like the deal, and there have been criticisms of the negotiating process; I expect that we will hear more of that later on today. But I ask the House to consider what the alternative will be if the Bill does not complete its passage through the House today, which the noble Baroness, Lady Hayter, referred to.

If I might say a word about precedent, I repeat what I said in my opening remarks that the way we have to consider the Bill today is not in keeping with our usual practices. The House rightly takes pride in its role as a revising Chamber, but today, time really is of the essence, and I consider these circumstances to be exceptional.

House of Lords: Appointments

Baroness McIntosh of Hudnall Excerpts

Thursday 30th January 2020 Lords Chamber

[Earl Howe]

My Lords, I recognise the noble Baroness’s concern on this matter and I shall ensure that the points she makes are fully considered.

[Baroness McIntosh of Hudnall (Lab)]

My Lords, may I take the noble Earl back to the question from my noble friend on the Front Bench about the Burns committee report? That report had significant support in this House and is focused on taking reform forward without the need for legislation, using what one might call the natural processes already available to us. Is the leadership of the House pressing the Prime Minister to take seriously the recommendations of the Burns report?

[Earl Howe]

My Lords, I think we can all agree that our numbers in this House need to reduce. However, in the light of the Government’s commitment to review the role of your Lordships’ House, with all that that entails, it is difficult for me to go further as I cannot pre-empt the conclusions of that review.

European Council

Baroness McIntosh of Hudnall Excerpts

Monday 24th June 2019 Lords Chamber

[Baroness Evans of Bowes Park]

As I have said, and as the Statement made clear, the Prime Minister approached this Council as she always does—in an extremely co-operative manner. We have been very clear that we want a strong partnership with the European Union going forward, but it will be up to her successor to take that forward. The Prime Minister has always been constructive in her discussions with the European Union and our international partners.

[Baroness McIntosh of Hudnall (Lab)]

My Lords, I realise that the noble Baroness cannot be held responsible for the views or words of the Tory party leadership candidates. However, unless I misheard her, she said very clearly in answer to the noble Lord, Lord Campbell, that, without a withdrawal agreement, there can be no implementation period. If I did not mishear her, would she care to speculate on why that apparent truth is not clear to at least one of the candidates?

[Baroness Evans of Bowes Park]

I am afraid I will not be drawn into speculation, but I am happy to say that the noble Baroness did not mishear me. The EU has said, and I believe a number of Council members said so again over the weekend, that without a withdrawal agreement, there is no implementation period. That is why I, the Cabinet and the Prime Minister have been working hard to get a deal. I have always been clear that, in my view and the Prime Minister’s, that was the best way to leave and begin a prosperous and successful relationship with the EU.

Business of the House

Baroness McIntosh of Hudnall Excerpts

Thursday 4th April 2019 Lords Chamber

[Viscount Ridley]

I have taken five minutes so I do not quite understand his point, but there we are.

I am always conscious that the House of Lords should not exceed its powers. It is not an elected Chamber and it does not have the democratic legitimacy of the Commons. That applies to life Peers as well as to hereditary Peers. Our job is not to force through legislation but to tidy up, revise, gently question, and sometimes to ask the Commons to think again. This is surely a case where we should be doing that. We should ask the Commons to think again about shoving legislation through in this unprecedented fashion. I am equally clear that if there is ever a time when the House of Lords suddenly needs to discover its constitutional teeth, it is when the Commons is doing something unconstitutional, egregious, hurried and potentially worrying. This is not an argument about Brexit but about doing things properly.

If there ever was a justification for the constitutional monstrosities of hereditary Peers being still here, it is that we can occasionally cry foul when a despotic majority tries to ride roughshod over the carefully balanced but fragile device that is the British constitution and—if noble Lords will excuse the mixed metaphor—to stand against the sudden and dangerous enthusiasm of a temporary, 50.08%, majority that does not want to do things in the proper way. What is more temporary than the majority exercised by Sir Oliver Letwin? In this case, the despotic majority is the Motion passed by a single vote in the other place at something like the third attempt. A majority is no less despotic for being small if it is allowed to be unconstitutional.

The purpose of the Commons passing that measure was to take control of the House of Commons and force a Bill on to the Order Paper to defy the clear wishes of a huge popular vote of 17.4 million people and deny them what they have voted for—namely, Brexit, if necessary without a deal, on the date they had been repeatedly promised. You can be in favour of that or against it—

[Baroness McIntosh of Hudnall (Lab)]

Respectfully, can the noble Viscount supply the evidence to show that the 17.4 million British people who voted to leave voted to leave without a deal? They were given many options, and many promises were made to the effect that that would not happen. What evidence does he have that they would prefer no deal to any other outcome?

[Viscount Ridley]

Those 17.4 million people voted for Brexit, and it is abundantly clear from what both Houses of Parliament have done since—passing Article 50, setting a date, and the Prime Minister saying hundreds of times that no deal is better than a bad deal—

[Baroness McIntosh of Hudnall]

Can the noble Viscount explain why—when we have been telling ourselves for a long time that Parliament and the people no longer speak with the same voice—Parliament having made that decision and said those things is the same as the people having done so?

[Viscount Ridley]

We are here because there is a difference between a remainer Parliament and a leaver majority in the country. That is why we are here; that is the problem we are trying to resolve. My argument is that this Bill does not resolve it because it denies them the clearest form of Brexit, which all the polls suggest an awful lot of people want.

Privileges and Conduct Committee

Baroness McIntosh of Hudnall Excerpts

Monday 17th December 2018 Lords Chamber

[Viscount Hailsham]

The noble Lord may say it is wrong, but that is my opinion. It is based on a great deal of experience and is in accord with the recommendations.

[Baroness McIntosh of Hudnall (Lab)]

My Lords—

[Viscount Hailsham]

If the noble Baroness will forgive me, I will proceed for the moment.

[Viscount Hailsham]

Very well. If it is the wish of the House I will certainly give way to the noble Baroness.

[Baroness McIntosh of Hudnall]

Before the noble Lord proceeds with his argument, will he please answer the question put to him by the Leader of the Opposition?

[Viscount Hailsham]

Of course I believe that we need to look at our procedures and I am quite willing to consider the prospect of having an alternative method. I know, for example, that the noble and learned Baroness, Lady Butler-Sloss—

[Baroness McIntosh of Hudnall]

That is not the question to which I referred. The noble Viscount was asked by my noble friend whether he had read the transcripts of the evidence. There is a simple yes or no answer to that, I believe.

[Viscount Hailsham]

I have not read the entire transcript.

Working Group on Independent Complaints and Grievance Policy

Baroness McIntosh of Hudnall Excerpts

Thursday 8th February 2018 Lords Chamber

[Baroness Evans of Bowes Park]

My noble friend is absolutely right and that is why the Commissioner for Standards, the Lords’ Conduct Sub-Committee and the Privileges and Conduct Committee will be involved in developing what type of sanction, as my noble friend points out, is relevant and appropriate at various stages. Again, that is something that will then come back to the House if we need to make changes.

[Baroness McIntosh of Hudnall (Lab)]

My Lords, I apologise for not having read every detail of the report but, going back to the answer that the noble Baroness gave to my noble friend Lady Symons, I am slightly puzzled by the role of the independent experts she mentioned. I can see that there is value in people who are thinking about making a complaint or have already gone some way towards doing so being helped to understand what the process would be for doing that, but is there, anywhere in the continuum envisaged, a role for mediation that would include both, as it were, complainer and complained against? I ask because I think it is a matter of fact in law that harassment is in the mind of the beholder. That is to say that it is not for the person doing the harassing to determine whether they have harassed somebody; it is in the first instance for the person who feels themselves injured to determine that that is the case. Sometimes, in order to resolve it, it is necessary for both parties to see their own behaviour differently. Can the Minister tell us how that is likely to work in practice?

[Baroness Evans of Bowes Park]

Yes, the noble Baroness is absolutely right. The intention is to procure two independent services, including one independent sexual violence adviser service and another workplace dispute resolution service. So there will indeed be opportunities for mediation and if that can solve the issue, that is fantastic. The services will also mean that if that cannot happen, the complainant can move forward and if worse things have happened, further sanctions can be involved. That is at the heart of what we want to do: we want to make sure, obviously, that everyone has a workplace in which they feel safe and valued.

Palace of Westminster: Restoration and Renewal

Baroness McIntosh of Hudnall Excerpts

Tuesday 6th February 2018 Lords Chamber

[Baroness McIntosh of Hudnall (Lab)]

My Lords, I support the Motion before us and therefore do not support the amendment in the name of the noble Lord, Lord Naseby, although I understand his arguments. I believe that a full decant as soon as possible is the only responsible way forward. As we have heard, it will be expensive, difficult and inconvenient, because all such projects are. We must ensure that only the most rigorous processes are in place to manage it well.

The proposed arrangements of the sponsor board and the delivery authority have been tried and tested pretty thoroughly recently by the Olympics and, now, Crossrail, so we can and should have confidence in them. However, we would be well advised to heed the words of the noble Lord, Lord Blencathra, who gave us an entertaining but very pertinent description of what can go wrong when not contractors but clients do the wrong thing. Many projects go wrong because they are in the hands of bad clients. It is Parliament’s responsibility, if we go forward with this project, to be a good client.

I draw noble Lords’ attention to the book written by Caroline Shenton, Mr Barry’s War, which has already been referred to. In it, she asks: who was Barry’s client? Was it the Government, Parliament,

“or—most difficult of all—over a thousand MPs and Peers, fractious, opinionated, vocal, partisan and above all with as many individual views on how the work should progress as there were members”?

Let us not be those parliamentarians; let us not be our Victorian forebears. Let us be sensible, modern parliamentarians and good clients.

I was a member of your Lordships’ now-defunct Administration and Works Committee twice, the first time between 2007 and 2010, so it is over a decade since I first became aware of the increasing deterioration of this building. I took a tour of the basement back then as a member of the committee; it was pretty scary then and it is a whole lot scarier now. So I watched and listened with interest and, I have to say, increasing alarm as the Joint Committee on the Palace of Westminster —to which I, along with everyone else, pay tribute—gathered its evidence and then delivered a detailed and comprehensive report. I experienced something close to despair as those clear recommendations began to lose traction in the face of political challenge.

So I am more pleased than I can say not to be making the speech that I prepared a week ago in the confident expectation—it is very nice to have been proved wrong—that we would today be discussing further delay in getting this vital project under way.

I am really delighted that Members in the other place have found the courage finally to set us on the road to a proper plan for the rehabilitation of a building which, like it or not, plays a huge part in our national story and belongs to the whole nation, as many noble Lords have said—indeed, to the world—and not just to Parliament.

I love this building. I love what it looks like and I love what it means, which my noble friend Lady Andrews expressed so eloquently. It is indeed a privilege to come here every day. I hate the thought of having to leave it, but I hate much more the thought that it might have been allowed to rot away or suffer catastrophe because this generation of parliamentarians—we are only passing through—was too squeamish or too self-absorbed to take the decisions necessary to save it.

Happily, we have the opportunity today to make sure that that disaster is averted. Let us embrace it as an opportunity to honour the past and protect the future, not for ourselves but for our children and their children and all those who will come after, and let us do it soon.

House of Lords: Lord Speaker’s Committee Report

Baroness McIntosh of Hudnall Excerpts

Tuesday 19th December 2017 Lords Chamber

[Baroness McIntosh of Hudnall (Lab)]

My Lords, it is a pleasure to follow the noble Lord, Lord Cormack, who, as he said, chairs the Campaign for an Effective Second Chamber, a group of which I am very proud to be a member. I was also a member of the Labour Party’s working group to which the noble Baroness, Lady Boothroyd, alluded earlier, which looked at these issues a couple of years ago. Therefore, I am in a reasonably good position to say that the task that the noble Lord, Lord Burns, and his team undertook was fiendishly difficult and that they have have done an extraordinarily good job in resolving what some people have already referred to as apparently irresolvable issues.

They have presented us with a report which, of course, it is easy to pick holes in if one is minded so to do. Indeed, the noble Lord, Lord Burns, did it very effectively himself. However, in my view it is not helpful at this point not to take a broader overall view of what the report offers, precisely for the reason the noble Lord, Lord Cormack, identified, which is that this opportunity to help ourselves will not come again, probably in this Parliament or, possibly, ever. So we had better take the opportunity before us.

Many of your Lordships will be familiar with William Shakespeare’s great tragedy, “Othello” and will therefore recall the painful cry of despair from young Cassio when he finds himself fallen from grace through, to quote my noble friend Lord Hain, “no fault of his own”. He says:

“Reputation, reputation, reputation! O, I have lost my reputation, I have lost the immortal part of myself—and what remains is bestial”.


Those are strong words, but that is, and has been for some time, the danger in which we now stand.

It was not Cassio’s fault that he lost his reputation. He, like the House of Lords, was misunderstood, misrepresented and traduced, as we frequently are. But that does not alter the fact that reputation once lost is extremely hard to regain. We have an opportunity now to stop our reputation from becoming irrecoverable. The virtue of this report is that it is constructed to deliver benefits over a reasonably long period, but which, if we take them, will last. And they would do so without impeding or preventing wholesale reform of a different kind should any Government suddenly find themselves with the time and energy to undertake it—although, as the noble Baroness, Lady Boothroyd, suggested, it would be unwise to hold our breath on that either.

Our job in this matter and in others is to take the long view, thinking not just of ourselves and what will immediately impact on us, but on those who come after. Let us give these proposals fair wind. Let us send the Leader of the House, who gracefully contributed to the debate earlier, a strong message that she can take back to the Prime Minister that there is consensus in this House for this kind of reform, and let us get on with it.

House of Lords: Size

Baroness McIntosh of Hudnall Excerpts

Monday 5th December 2016 Lords Chamber

[Baroness McIntosh of Hudnall (Lab)]

My Lords, a great deal of what needs to be said has already been said, and repetition is inevitable. It is also quite daunting to come on to the stage after so many star actors have already done their turn, but I shall press on. I do so speaking as a member of the Campaign for an Effective Second Chamber, so ably and consistently led by the noble Lords, Lord Cormack and Lord Norton, without whose tireless advocacy I think it is fair to say this debate would not be taking place. We have much to be grateful to them for.

I speak also with experience of membership of the Labour Peers’ Working Group, to which my noble friends Lady Taylor and Lord Dubs referred and whose 2014 report has already been mentioned. I have also been a member of several other informal groups during what is now getting around to being nearly a decade. Over all that time and with all that talking, thinking and writing, the emphases of conclusions may have been different from time to time, but the issue of numbers has been increasingly prominent, especially since 2010.

As has already been said cogently, most recently by the noble Lord, Lord Elton, but also by others who preceded him, we live in dangerous political times, both here and elsewhere. There are huge challenges ahead. It is vital that our institutions are able to meet those challenges robustly. They must be trusted. At the moment, the House of Lords is particularly vulnerable. It is true that the issue of numbers is partly a practical matter, but it is so only partly—although the growing cost of the House is not insignificant. We in the House know what the realities are: probably that no more than 500 of us are regularly active. But the continuing ability of hostile commentators to portray us as bloated, self-serving and unrepresentative—all adjectives which we have already heard today—severely undermines that precious thing, our reputation, and allows the vital scrutiny, committee and other work that we do to be either overlooked or wilfully misrepresented, which happens a great deal.

The Government have made it clear that they have no intention of embarking on parliamentary reform on any scale any time soon—which is no surprise given everything else they have in front of them. However, we should not let this Parliament go by without doing what we can to address the concerns raised here today and elsewhere. I support the aim of this Motion and ask the Leader of the House, when she comes to reply, to support the establishment of a Select Committee as soon as possible to investigate how numbers can be reduced and then capped at a manageable level, taking as a framework the key criteria of the noble Lord, Lord Cormack, about—as we have heard many times already—the essential primacy of the Commons, this House not being larger than the Commons, the 20% of Cross-Benchers and no one party having an overall majority.

Much work has already been done, including by the Labour Peers’ Working Group and others, that would assist such a Select Committee. It ought not to need to sit for a protracted period. I really hope that by the end of this debate there will be enough support shown—I believe a consensus is building—for it to be obvious to the Leader that she should take that particular project under her wing.

I will say one brief word about a matter that I do not think has yet been raised in this debate, and I do so with a certain amount of trepidation: it is the issue of restoration and renewal. I have been around a few restorations and renewals of iconic buildings, not ever on this scale but some of them with enormous controversy attached. When you undertake a project of that kind, particularly where public money is involved, controversy is almost inevitable. How do you overcome that? You do so by demonstrating through the creation of a better building that you will also create a better institution. Such an opportunity is before us now. I know not everyone agrees with exactly how the restoration and renewal project should be undertaken; indeed, we have not yet had a chance to debate that. However, it is pretty obvious that the building needs it—so does the institution. Let us take this opportunity to get ahead on the institution so that it is in good shape before the building catches up.