Government Standards

Baroness Neville-Rolfe Excerpts

Thursday 25th July 2024 Lords Chamber

[Baroness Smith of Basildon (Lab)]

Having just promised to give full answers, I do not have a full answer for my noble friend. I will look into that and come back to it, but we want to get moving on issues like this as quickly as possible. In his first speech in Downing Street, the Prime Minister said we have to prove to people that we will do things differently and do things well. It is not about saying something but about how we act—and how we act in getting to the bottom of some of the issues that have caused enormous concern is very important. I assure him we will do that as quickly as possible.

[Baroness Neville-Rolfe (Con)]

Does the Leader of the House agree that one of the most serious problems we face in many areas of government has been groupthink? Does she agree that Parliament benefits from a wide range of experience of Members, both in our debates and in our committees? Does she further agree that any new rules on propriety or ethics—for example, on second jobs in either House—need to avoid discouraging informed and expert contribution so that we get different perspectives coming together in the public interest?

[Baroness Smith of Basildon (Lab)]

Of course. It is a given that for good decision-making it is necessary to have good input from different sources. I am unclear why the noble Baroness asked that; I would have thought it was an automatic requisite of good decision-making.

Her Majesty the Queen’s Platinum Jubilee

Baroness Neville-Rolfe Excerpts

Thursday 26th May 2022 Lords Chamber

[Baroness Neville-Rolfe (Con)]

My Lords, it is a real pleasure to follow the noble Lord, Lord Khan of Burnley, with his special—and much more youthful than some of ours—perspective. I rise to support the Motion in the name of my noble friend the Leader of the House, who made an excellent speech, and, as others have done, to congratulate Her Majesty the Queen on the 70th anniversary of her accession to the Throne. As the noble and learned Lord, Lord Judge, said, it is a very joyful event for the people of our country and for those of the Commonwealth.

I have always been conscious that I was born in the year of Her Majesty’s Coronation, so I am a coronation baby and still the proud owner of a commemorative coin given to me to mark the occasion. I collected stamps from an early age and grew to love that handsome sideways head on increasingly decorative stamps from across the globe. For the brief period that I was the Minister responsible for recommending the design of new postage stamps to the Queen, I discovered that she also has a very fine collection. Later, I was responsible for the Royal Mint in Wales when we issued the new 12-sided, bimetallic, counterfeit-resistant £1 coin, which bore the unmistakable portrait of the Queen. I should add that in my early years as a civil servant, I had a wonderful black leather briefcase with “E II R” stamped on it in gold, which I carried with great pride. I am not a new or late supporter of the Queen.

Throughout my life, the Queen has been someone I have admired. She is probably the most famous woman in the world, and a supreme professional to make every career woman amazed by her composure, her work ethic, her charm, her humour and her judgment. She has also been a loving wife, mother and grandmother at the same time—how much she must miss her rock, HRH the Duke of Edinburgh, after their many years together. That was a tragic loss during Covid, as the noble Baroness, Lady Chapman of Darlington, described so well.

I met Her Majesty for the first time in my Tesco days at a Red Cross reception to meet those of us involved in helping after the 2004 Boxing Day tsunami in Thailand. She spoke with much obvious affection for Princes William and Harry, who had been working with us, packing relief parcels for some of the unfortunate victims.

Finally, I should mention Her Majesty’s passion for racing and for breeding racehorses, so well described by my noble friend Lord de Mauley, the Master of the Horse, that there is nothing to add. I just wanted to say that, sadly, she does not have a horse in the Derby next week, but I will be cheering to the rooftops if—as I am sure and I hope she will—she wins at Royal Ascot.

It is a great honour to speak today. Like others, I offer my thanks for Her Majesty’s duty, fortitude and sacrifice, and my warmest congratulations on her unrivalled, record-breaking Platinum Jubilee.

Elections Bill

Baroness Neville-Rolfe Excerpts

Lords Hansard - Part 1 & Committee stage
Monday 28th March 2022 Lords Chamber

[Lord Desai (Non-Afl)]

I shall come to that; this is the beginning of a lecture that will take some time.

When I arrived here, I was the holder of an Indian passport. India had become a republic in 1950. Just as we recently saw in the exercise of persuading the Jamaicans not to become a republic, becoming a republic takes a Commonwealth country out of the reciprocity relationship because the country can then choose whether to give reciprocal rights. That is Jamaica’s choice, not ours.

We have to be aware that our original right to vote was as subjects—we are still subjects—of the Crown, and the whole notion that we are citizens is an entirely European import. We became citizens only when we joined the EU; we ceased to be citizens when we left. The notion of citizenship is not relevant. We are not a democracy: the Crown in Parliament is sovereign; people are not sovereign. That is the constitutional position. Noble Lords can challenge me if they wish.

I am not disputing the principle of what the noble Lord is proposing, because he has explained very clearly and patiently that there ought to be reciprocity or symmetry. The Commonwealth itself is an anomaly because it is not a symmetrical association of equal states. Her Majesty the Queen heads the Commonwealth because of her position as the Crown and she has asked the Commonwealth Heads of Government to agree that His Royal Highness Prince Charles will head the Commonwealth when he succeeds her. So the Head of the Commonwealth will always be the British monarch. The Commonwealth is not a society of equal nations; there is an asymmetry there.

We are not French; we are British. We do not believe in logic; we believe in convention, tradition and evolution, and therefore there is an anomaly. If the Government want to have a logical structure, let them bring a Bill that in the first clause defines who has the right to vote in this country and why, and who does not have the right to vote, despite being a resident, taxpayer or whatever. That exercise has not been carried out, and so we have an anomalous position. That is the beauty of the constitution—it is not a logical construct.

[Baroness Neville-Rolfe (Con)]

My Lords, I was sorry not to be able to speak at Second Reading. It is always a pleasure to follow the noble Lord, Lord Desai. Logic, clarity and lack of reciprocity call for Amendment 154, in the name of the noble Lord, Lord Green, to be taken seriously and for the questions he has raised to be answered. I look forward to hearing positively from my noble friend the Deputy Leader. I will not delay the House.

[Lord Collins of Highbury (Lab)]

My Lords, I have some sympathy with the points made, but I wish this amendment could have been debated in the group of amendments we had on the entitlement to vote, because I do not really want to move away from the principle I articulated before. Not everyone wants to lose the status of their nationality. For example, my husband does not want to give up his Spanish citizenship, which he may have to do. A number of European countries have started to change but they did not allow dual nationality. A lot of people could lie about that, but he does not want to give it up. I certainly do not want to give up my nationality.

When we were in the EU, we were in the comfortable position of being, as we used to describe ourselves, EU citizens; we could locate and meet our families in our respective countries with ease. Now that has changed and we accept that, but I do not quite understand why we do not accept that there is a settled status, where someone has lived in the country for 27 years, paid tax, national insurance and everything else—they have taken the responsibility of a citizenship—but for one reason or another do not want to take formal citizenship, and why that should preclude them from having the right to vote.

It is crazy that, as I mentioned, an Australian student who comes over for their OE can immediately apply for the right to vote. I would rather the debate focused on what entitles somebody to vote. We have talked about taxation, we have talked about responsibility, and I say that clear levels of residence should establish some basic rights, so that we treat people who live here equally, and when they contribute to the success of our country we should acknowledge that.

I come back to what the noble Lord, Lord Green, said. One of the issues his amendment ought to probe and cause us to think about is: what is a British citizen? He says that British nationals (overseas) are not included. We can make commitments suddenly; for example, we made a commitment to Hong Kong citizens who are BNOs because of the breach of an international agreement. I have no doubt that in future, as we have done in the past, we will want to protect our legacy. The noble Lord, Lord Desai, spoke about the legacy of British Empire, which of course we cannot ignore, and things have changed.

I welcome the fact that the noble Lord, Lord Green, has tabled this amendment but we need to consider it in the light of all the amendments we have had on the right to vote and what the qualifications are. I do not think we should ignore residency.

Business of the House

Baroness Neville-Rolfe Excerpts

Thursday 17th March 2022 Lords Chamber

[Lord Hodgson of Astley Abbotts (Con)]

My Lords, before my noble friend replies, may I ask her to reflect on the fact that this is a self-regulating House, and a self-regulating House requires a degree of self-restraint—in the number of amendments tabled, the number degrouped, and the length of the speeches made in pursuit of them?

[Baroness Neville-Rolfe (Con)]

My Lords, I share the concern about issues of major importance being debated in the middle of the night. Last night the noble Baroness, Lady Sugg, moved a very important amendment. I was not able to speak, because there was not enough time, and we could not get answers about the implications of her proposal, because it was a late amendment. Where we have something fairly major like that, it is important that we do not just debate it in the middle of the night.

Ukraine

Baroness Neville-Rolfe Excerpts

Thursday 24th February 2022 Lords Chamber

[Baroness Evans of Bowes Park (Con)]

I am grateful to the right reverend Prelate and all the faith leaders he mentioned for the action they are taking. We stand united in the face of this Russian aggression and, once again, it is fantastic to have leadership from across all our communities standing together. I set out to the noble Baroness, Lady Smith, a number of things that we are doing in relation to the humanitarian effort—in particular working through the UN, which we will continue to do. Of course, we will assess the situation and discuss with international partners other things that we may be able to do to help if we see a refugee crisis unfold within what is happening in Ukraine.

[Baroness Neville-Rolfe (Con)]

My Lords, I thank my noble friend the Leader for taking the time to make this Statement and have a full Front Bench, as well as for finding time tomorrow for a proper debate. I want to return to the economic crime area and ask whether resources will be made available to Companies House for enforcement, because that is of course important and reform there is overdue. Also, will similar measures be taken in other countries? That would level the playing field, act as an incentive for good behaviour and reduce corruption in other countries.

[Baroness Evans of Bowes Park (Con)]

As I have set out in our general discussion—obviously, there was also the G7 call today—we are working with our global partners on a range of issues. I am sure that discussions around the international rules have been part of that. As I said in the Statement, we will set out before Easter further detail on the policies that we intend to bring in, including reforms to Companies House, so my noble friend should not have too much longer to wait for that.

Ukraine

Baroness Neville-Rolfe Excerpts

Wednesday 26th January 2022 Lords Chamber

[Baroness Evans of Bowes Park (Con)]

In answer to questions at the beginning, I set out a whole range of things that we have done, and are doing, to tackle money-laundering and economic crime. We will continue with that work.

[Baroness Neville-Rolfe (Con)]

My Lords, I declare an interest as chair of Crown Agents, which supplies Covid vaccine to Ukraine. I think a further debate on Ukraine would be useful, as the noble Lord, Lord Alton, suggested. I am interested in the position of Germany and France, which were, of course, involved in the Minsk protocol, signed after the 2014 Ukraine crisis. How far are they aligned with UK thinking at present—especially Germany, given its particular trading interests across eastern Europe?

[Baroness Evans of Bowes Park (Con)]

We are working very closely with our allies. I am sure my noble friend will be aware that, today, there is a political advisers meeting taking place in Paris of the Normandy Format—France, Germany, Ukraine and Russia. Although we were not part of that process because we are not within that group, we actively support France and Germany’s efforts, and are working very closely with them.

COP 26

Baroness Neville-Rolfe Excerpts

Tuesday 16th November 2021 Lords Chamber

[Baroness Evans of Bowes Park (Con)]

I thank the noble Lord. I knew that he would probably ask me this question, so I have an answer for him about the United States, which he asked about last week. It intends by 2024 to further double its annual public climate finance to developing countries to around £11.4 billion, including around £3 billion to support adaptation efforts. He might be pleased to know that we have indeed published such a document, COP26 Presidency Compilation of 2021-2025 Climate Finance Commitments, which lists the commitments made in this area and which he might be interested to read.

[Baroness Neville-Rolfe (Con)]

My Lords, I would like to acknowledge the unexpected progress that was made at COP, for example on rainforests, which I do not think anybody has mentioned. On the move to change the energy mix, I think it is at least as important for the Government that they keep the lights on as it is to take measures to save the planet. In that context, does my noble friend agree that the move to intermittent renewables needs to be balanced, and indeed balanced now, by a substantial investment in the British nuclear industry, another source of zero-carbon energy? Does she further agree that the neglect of the nuclear industry since the mid-90s has been a disgrace?

[Baroness Evans of Bowes Park (Con)]

I am sure my noble friend is aware that we have a Bill in the House of Commons looking at this area which will be coming to your Lordships’ House soon so we can discuss these issues. We are certainly looking to reinvigorate that sector. I will also just say that last year was the first year in which renewables were the primary source of the UK’s electricity and we have quadrupled the percentage of our electricity that comes from renewables but, of course, we need a mix in order to make sure that we have security of supply.

Covid-19 Update

Baroness Neville-Rolfe Excerpts

Thursday 13th May 2021 Lords Chamber

[Baroness Evans of Bowes Park (Con)]

Decisions as to whether the inquiry will comprise a panel in addition to a chair will be made in due course, but I can certainly confirm that we want to learn the lessons of the pandemic as four nations together, just as we recover together. That is why, as I say, we have already begun discussions with the devolved Administrations, because we want this to be a UK-wide inquiry. We have gone through this together and we want to come out of it together.

[Baroness Neville-Rolfe (Con)]

I congratulate the Government both on the vaccine rollout and on getting ahead with plans for an independent inquiry. I am, however, concerned by the Covid-related delays in medical treatment, both by GPs and in hospitals, with more people probably dying early or living in pain than actually dying from Covid. Will the Government ensure that the NHS returns to normal rapidly, that energetic efforts are made to reduce the backlog of operations and that all medical practitioners return to offering face-to-face consultations immediately?

Financial Services Bill

Baroness Neville-Rolfe Excerpts

Consideration of Commons amendments
Wednesday 28th April 2021 Lords Chamber

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

My Lords, we have a request to speak after the Minister from the noble Baroness, Lady Neville-Rolfe.

[Baroness Neville-Rolfe (Con)]

My Lords, I join others in congratulating my noble friend the Deputy Leader of the House and other Members of the Front Bench on the way they have dealt with the Bill and got us to this final stage. I just have a question about the consultation on the duty of care, and it stems from my experience in other areas of regulation—that is, health and safety and food safety. I have found that, where a duty of care is introduced, it is sometimes possible to change adjacent rules and regulations in a regulatory area and reduce the bureaucracy that can be a problem for both consumers and operators in the field. I would be interested to know whether that sort of work is likely to be envisaged by the Economic Secretary.

[Earl Howe (Con)]

My Lords, I do not have an answer for my noble friend, but her point is extremely helpful and I shall ensure that it is fed into the thinking that will be wrapped around the consultation process as it goes forward.

Financial Services Bill

Baroness Neville-Rolfe Excerpts

3rd reading & Report stage
Monday 19th April 2021 Lords Chamber

Moved by

[Baroness Neville-Rolfe]

28: After Clause 40, insert the following new Clause—
“Digital identification in the UK financial system
(1) The Treasury may by regulations establish a scheme for the use of a distributed digital identification for individuals and corporate entities operating in the UK financial system.(2) Regulations under this section are subject to the affirmative procedure.(3) In this section, “the UK financial system” has the same meaning as in the Financial Services and Markets Act 2000 (see section 1I of that Act).”

[Baroness Neville-Rolfe (Con)]

My Lords, I shall speak to Amendments 28 and 29 in my name on digital identification, and I thank my noble friends Lady Mcintosh of Pickering and Lord Holmes of Richmond for their support. I take a substantial interest in facilitating the provision of digital ID and have done so for several years. It is the sort of thing where the UK, with its early adoption of digital and skills in matters of security, should be ahead of the curve. Perfectly good systems exist in a number of areas and have been rolled out in other European countries and Asia but, unfortunately, not here.

I tabled amendments in the same sense during the passage of Covid legislation last year. I did not press the matter because I was promised progress and I had good meetings with my noble friend Lady Williams and with the Digital Minister, Matt Warman MP, who published proposals for the UK digital identity and attributes trust framework on 11 February. Last week, my noble friend Lord Holmes and I had another constructive meeting, this time with my noble friend Lady Penn—currently on the Front Bench—and civil servants in DCMS and the Treasury.

I am perhaps a little too impatient for the Civil Service or, indeed, for the Front Bench, which is no doubt why I am better suited to these Benches, but I warn noble Lords that I will continue to press this matter until we introduce a reliable system of online ID—not a consultation and not a plan, but a government-approved system. But I am very reasonable, so let us start in financial services—the subject of today’s Bill. So much progress has been made already that it ought to be possible to capture this in regulation now. As we discussed in Committee, this could be helpful in reducing fraud, which has mushroomed in financial services.

Likewise, we should be able to introduce digital ID for sales of alcohol; the supermarkets already use such methods for preventing the sale of knives to those aged under 18. We should also allow a trial in a pub chain or two, and we could use digital ID in the property sector, where the ID checks for domestic house sales are needlessly bureaucratic and repetitive. We do not need to get into the question of domestic vaccine passports, of which I strongly disapprove, or of ID cards, but evolutionary progress on digital ID—starting in financial services and honed to appropriate use—is overdue.

I have tabled two alternative amendments. Amendment 28 is an enabling power allowing the Treasury to press ahead, subject to a parliamentary debate, as soon as it has sorted out a system of digital ID—whether on a trial basis or when it has a definitive solution for the sector, which should be soon. We do not want to wait for the online harms Bill or another legislative vehicle. Amendment 29 provides for a review by 1 September this year. My own experience as a Minister and a civil servant is that such reviews and a clear date can be effective where there is a political will to get something done, as I believe there is here. I beg to move.

[Lord Holmes of Richmond (Con)]

My Lords, it is a pleasure to follow my noble friend Lady Neville-Rolfe; in doing so, I declare my financial services interests as set out in the register.

My noble friend and I came into the House in the same autumn and, since 2013, we have both talked very much about distributed digital ID. It was pressing in 2013, so it certainly is in 2021. I will speak to all the amendments in this group briefly. I had pleasure in adding my name to my noble friend Lady Neville-Rolfe’s amendments; they are clear, succinct, short and to the point, and do the job. Does my noble friend the Minister agree?

My Amendment 30 merely seeks to flesh out some of the elements which must be considered if we are to have a successful distributed digital ID—the issues around scalability, flexibility and, crucially, inclusion. Does my noble friend the Minister agree that not only are these three issues vital to any distributed digital ID but that any ID should be predicated on the 12 principles set out in self-sovereign identity? Does she also agree that, because of the nature of this issue—as my noble friend Lady Neville-Rolfe pointed out—including issues around ID cards and Covid passports, there is a pressing need not only to move forward with this work but to have a public engagement to enable people to understand the issues and really get to grips with a system that can work for all?

My Amendment 31 seeks only to push the opportunity for the UK around open finance. We have seen the advantages open banking has brought; does my noble friend the Minister agree that open finance could be a boon for the UK, and could she set out the Government’s plans to enable this? I brought Amendment 32 forward in Committee so I will not dwell on it, except to seek a specific answer on subsection (2)(a) of the proposed new clause. Does my noble friend the Minister agree that we need to seriously consider the dematerialisation of UK securities at least at the same speed as that proposed in the EU? This is a competitive market; it is a race.

Finally, my Amendment 37E was brought forward simply to push the need for a review of access to digital payments. Digital payments are the future, accelerated by Covid, but, crucially, huge swathes of the population rightly rely—and must be allowed to rely—on cash. Does my noble friend agree that we urgently need a review of access to digital payments?

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I hope that I have demonstrated the Government’s commitment to this important area, and that noble Lords will therefore feel able to not press their amendments.

[Baroness Neville-Rolfe (Con)]

My Lords, I thank all who have spoken in this short but wide-ranging debate. Time is passing, and we live in a digital age, as my noble friend Lady McIntosh of Pickering said—a revolution indeed, in the words of the noble Baroness, Lady Kramer. My noble friend Lord Hunt of Wirral reminded us that the withdrawal of cash halved during the pandemic, with some cruel consequences. LINK does great work; I remember that from my time at Tesco. We need a network to endure as normality returns. I thank the Minister for updating us on the Chancellor’s statement on fintech and open finance today.

It may not surprise noble Lords that I remain disappointed at the pace of change on digital ID. The Minister is right to emphasise what has been done in recent months, and I strongly support this. However, years are passing, our leadership in digital is eroding, and we can no longer blame the EU. We must solve this problem for the industries, services and, above all, consumers involved. Of course there must be public engagement, but this must not be used as an excuse for undue delay. I will be back, but for today, I beg leave to withdraw my amendment.

Amendment 28 withdrawn.

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[Baroness Neville-Rolfe (Con)]

My Lords, I rise to speak on Amendment 33 in the name of the noble Lord, Lord Sikka, having studied the comments made in Committee and repeated today. I can understand his frustration with history in this area. In particular, I would highlight the long delay and prevarication by Lloyds and the then regulator in dealing with the HBOS scam, which led to the demise of a number of small businesses banking with HBOS’s corporate division in Reading. Maybe more transparency would have helped there but it was actually a failure by the bank itself and by the regulator, which I very much hope would not happen again today. I am still not entirely sure what eventually happened; I know that there were some high-profile convictions. Perhaps my noble friend the Minister could update us on that sorry tale. I share everyone’s wish to see a system where it could never happen again.

However, I always worry that bad cases make bad law. The cases being quoted are generally old, while the FCA’s powers have been strengthened over the years and the culture has changed so that it is now very pro-consumer. Moreover, as my noble friend the Deputy Leader of the House explained on 10 March, the FCA is an independent body and the power of Ministers to intervene is very circumscribed. I suspect we will come back to these issues in the next financial services Bill, so I would like to make two points today.

First, reports from the United States have to be treated with some care. It is a sad fact that, unlike our own regulatory authorities, the US ones are more than a little protectionist. They come down harder on foreign entities than their domestic ones and like to levy huge fines whenever they can. It is not a level playing field, unlike the UK, which is of course one of the reasons why investors like it here. Secondly, in the sort of cases we are talking about, Ministers—I speak from experience, first as a civil servant and secondly as a Minister at BEIS, DCMS and HM Treasury—act on advice, not as free-talking politicians. If they make a direction in an investigation, it will reflect a public policy need and that could be a confidential matter, such as security or a government interest. Once that is made public it might be difficult for those being investigated to get a fair hearing, which is unfortunate in itself and likely to lead to aborted prosecutions. Whichever party is in power, this would not be in the public interest. For all these reasons, I encourage those involved to withdraw their amendment today.

[The Lord Bishop of St Albans [V]]

My Lords, I will be brief in my support for this amendment. I am very grateful to the noble Lord, Lord Sikka, and the noble Baroness, Lady Bennett of Manor Castle, for speaking at great length. I therefore do not need to add a huge amount more, not least as I intend to go into a bit more detail on my concerns about transparency when speaking in support of Amendment 34, which touches on similar issues of accountability.

I am a little puzzled why the noble Baroness, Lady Neville-Rolfe, thinks that this is a case of bad cases making bad laws. It seems to me that there have been very considerable concerns in the past. Surely those ought to be investigated.

We are facing a real crisis of trust in public bodies at the moment, and I believe that this amendment will be a beneficial addition to this Financial Services Bill. In making provisions for an additional layer of transparency, it will act as an incentive against any possible interference; whether done formally or informally, it will still have that effect. The truth is that we do not know whether ministerial interference in FCA investigations has occurred, and positively stating either way is speculative.

Although I was not privy to the written response from the noble Earl, Lord Howe, which he promised to send to the noble Baroness, Lady Kramer, confirming whether there were provisions within the Ministerial Code to allow for interventions in FCA investigations, the assumption in Committee was that any attempt to steer an FCA investigation would constitute a breach of the Ministerial Code. That would require breaches of the Ministerial Code or other offences to be taken seriously, and not treated lightly or even dismissed. Last year, an inquiry found evidence that the Home Secretary had breached the Ministerial Code, yet the consequences extended little further than an apology. In February, it was revealed that the Health Secretary had acted unlawfully when his department failed to reveal details of contracts signed during the Covid-19 period. Just before Easter, we all started reading about allegations surrounding conflicts of interest in a former Prime Minister’s dealings with the financial services firm Greensill, and there have been concerns about the current Prime Minister’s dealings during his time at City Hall. It is vital that, if we are to rely on breaches of the Ministerial Code, they are given some teeth and have some effect.

I have no evidence, but it may be that no Minister has ever interfered in any FCA investigation, in any way. I sincerely hope that that is the case, but we cannot rule it out. If interferences have occurred, it would be doubtful to assume that investigations are always steered in the interests of consumers. Although provisions are in place to prevent misconduct, they should not discount the contribution that this important amendment can make in strengthening those rules and further disincentivising any possible ministerial interferences in FCA investigations. If Her Majesty’s Government have concerns about small parts of the wording here, I hope they come back with some improvements to ensure that the levels of transparency are clear to everybody, in every part of the system.

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Some may claim that the supervisory boards would increase the cost of regulation. That cost would be miniscule—certainly far less than the cost of the last banking crash, the possible shadow banking crisis or the pain suffered by stakeholders in LCF, Blackmore Bond, the Woodford fund and many other headline scandals. I do not intend to divide the House on this amendment, but I believe that we can find a solution together to the capture of the regulators, which is a most pressing issue facing us. I beg to move.

[Baroness Neville-Rolfe (Con)]

I start by sharing the powerful words of my noble friend the Deputy Leader on the sudden loss of the noble Lord, Lord Judd, who contributed so very recently to this Bill and whom I remember well as an effective Minister of State at the FCO when I was a young civil servant. His death is a great loss.

As I understand it, Amendment 34 is designed to improve the culture of the financial services sector—a sentiment that I empathise with—although it would do so by adding an extra layer of regulation through a stakeholder supervisory board. I am against this for the FCA, the PRA and other regulators. I have substantial experience of regulation from my Civil Service past, as an executive and a non-executive of non-financial companies, as a Minister and, currently, as a non-executive of a small bank. In my judgment, adding an extra layer of board members without practical experience could have a perverse and negative effect.

For good outcomes, one needs clear, simple and outcome-based regulation, and company directors who take their responsibilities seriously and promote a good culture, with a focus on customers and protection, on risk and the good use of capital, on fraud and cyber, on the people who operate the business—from the top right down to the bottom—and on innovation and cost control. Above all, one needs directors who will challenge, get into the detail and be listened to.

I have been a non-exec for over 20 years and, until recently, there has not been enough attention paid to, or appreciation of, the challenge function and directors who challenge. Cases such as the HBOS scam, which we have been concerned about today, are the result. This needs to change, in terms of the selection of non-executives and with strong internal challenge in the executive structure of companies. This applies to financial services companies and more broadly.

An extra layer in the form of a supervisory board will not solve the problems of culture that have been highlighted. It risks introducing a further confusion of responsibility. To my mind it is, I am afraid, a bad idea.

[Baroness Noakes (Con)]

My Lords, I am sure that the noble Lord, Lord Sikka, will not be surprised to find that I do not support his Amendment 34. In particular, as a former director of a supervised bank, I do not recognise the regulatory capture that he majored on in Committee and again today. In my experience, the relationships are always challenging and, sometimes, worse than that.

I have two main reasons for opposing the amendment. First, a supervisory board sitting over the top of the existing regulators undermines a fundamental characteristic of regulation in the UK—namely, that regulators are independent. That means that they are independent of government, certainly, and of Parliament and anyone else who thinks that they might have an interest in what they do. They are certainly accountable for delivering against their objectives and expect to be scrutinised by Parliament, but they are autonomous bodies. This amendment runs against that.

Secondly, the regulators already have governance structures that oversee the work that the executives undertake. In the FCA, it is the FCA’s own board, which has a chairman and a majority of non-executive directors. I believe that the only executive on the FCA board is, in fact, its chief executive. In the case of the PRA, there is a Prudential Regulation Committee, which has Bank of England executives and outside members, and is chaired by the Governor of the Bank of England. More importantly, in governance terms, as the PRA is part of the Bank of England it is overseen by the Court of the Bank of England, which, again, is a largely non-executive body chaired by a non-executive, although it does have the governor and the deputy governors, including the head of the PRA.

Governance of the regulators is carried out in the way in which governance in the UK is normally done. It covers the very things mentioned in proposed new subsection (8), which is therefore duplicative. If there are concerns, they should be dealt with within the organisations concerned, without writing reports to Parliament. I believe in transparency, but there is a point at which transparency becomes counterproductive, and I am sure that this amendment is way beyond that point.

Accountability to Parliament takes many forms, a key one being the annual reports that are laid before Parliament, setting out the regulators’ performance against their objectives, which is required by existing statute. It really is difficult to see what added value this amendment would create.

The amendment is also deficient in a number of respects. Perhaps the most glaring is the reference to the “Executive Board” of the PRA and of the FCA. As far as I am aware, there is no such thing specified in legislation or the governance arrangements of either body. I believe that each regulator has an executive committee or equivalent, but they do not have an “Executive Board”, with a capital “E” and a capital “B”.

The amendment would require the exclusion from the supervisory board of anyone who might actually understand what the PRA and the FCA actually do. Proposed new subsection (5) would disqualify “current and past employees” not just of the FCA and the PRA but of any organisation that they supervise. I have never thought that ignorance was a good qualification to be a member of a board.

Proposed new subsection (10) talks about “open meetings” but does not explain what that means in practice. Proposed new subsection (11) says that all the supervisory boards papers must “be made publicly available”, but it seems to pay no heed to the need for confidentiality or data protection. I could go on. These are unnecessary and ill-thought-out proposals, and I hope that my noble friend the Minister will not accept them.