Debates between Baroness Noakes and Lord Sikka during the 2019 Parliament

Mon 21st Mar 2022
Elections Bill
Lords Chamber

Lords Hansard - Part 1 & Committee stage: Part 1
Wed 9th Jun 2021
Professional Qualifications Bill [HL]
Lords Chamber

Committee stage & Committee stage
Mon 19th Apr 2021
Financial Services Bill
Lords Chamber

3rd reading & Report stage & 3rd reading
Wed 24th Mar 2021
Financial Services Bill
Lords Chamber

Report stage & Report stage
Mon 8th Mar 2021
Mon 1st Mar 2021

Elections Bill

Debate between Baroness Noakes and Lord Sikka
Lords Hansard - Part 1 & Committee stage
Monday 21st March 2022

(2 years, 2 months ago)

Lords Chamber
Read Full debate Elections Act 2022 View all Elections Act 2022 Debates Read Hansard Text Read Debate Ministerial Extracts Amendment Paper: HL Bill 96-V Fifth marshalled list for Committee - (21 Mar 2022)
Lord Sikka Portrait Lord Sikka (Lab)
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Thank you very much. I certainly have not come across any evidence to suggest that ID cards are an answer to the problem of voter fraud. I would like to broaden the debate a little and think about the consequences. I grew up in east London, where it was not unusual for people of certain backgrounds to be stopped in the street by the police and asked to show ID, when you are not required to carry any ID. What would happen in this brave new world when the police stopped people and said, “By the way, you now have an official ID. Have you not got it? Can you not bring it from home and report to the police station?” What would be the consequences for the young people who are unwilling or unable to produce those officially sanctioned ID cards? Would that drive a wedge between the police and the community? Would that criminalise people? Would that fuel more dissatisfaction with our parliamentary system? Would that fuel social instability? I would like to hear from the Minister where this ID concern will stop. What would be the broader social consequences? It seems to me that we would be opening up American-type social problems. They would be imported here, because people simply do not have or cannot produce officially sanctioned ID cards.

It is minorities who will be targeted. It is well known and well documented that the police target minorities. They would have a new authority to wield to criminalise minorities. I would love to hear the Minister’s views on that.

Baroness Noakes Portrait Baroness Noakes (Con)
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My Lords, voter ID is not something dreamed up by the Government with the express intention of suppressing voter turnout, as various noble Lords have come perilously close to suggesting in both today’s debate and our debates last week. I am sure that, as parliamentarians, we all share a belief in the centrality of elections to our democracy and a desire to achieve the highest standards of integrity and participation. I believe that it would be a unworthy slur to suggest that my party believes anything else. The plain fact is that the Electoral Commission has recommended voter ID, as have international election observers. Most European countries require it; Northern Ireland has had it for nearly 40 years.

Professional Qualifications Bill [HL]

Debate between Baroness Noakes and Lord Sikka
Baroness Noakes Portrait Baroness Noakes (Con)
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My Lords, I put my name down in this group in order to speak to Amendments 19 and 29, but I shall say a few words first on Amendments 52 to 55. Normally, I do not support Report amendments, which are a slightly lazy way of trying to open up a debate on wider issues, but in this case I think they have a point.

The Government’s impact assessment is, to use a tactful term, pretty light. It certainly does not analyse very much impact, probably because the Government do not have a clear idea of what they are going to do with the powers in the Bill. If that is not clear from the Bill itself, it is certainly clear from the report of the Delegated Powers and Regulatory Reform Committee. Poor impact statements are a widespread problem and we will not solve that for this Bill, but it is incumbent on the Government to be transparent about the impact of a Bill once it becomes law.

I shall therefore be listening carefully to what the Minister says, because it may well be that some or all of Amendments 52 to 55 will need to be considered again on Report. Alternatively, as my noble friend Lord Lansley suggested, we could legislate for post-legislative scrutiny; after five years might be an appropriate time for a report. However, it is very important that we monitor the Bill’s impact.

If the noble Baroness, Lady Hayter, has one defining characteristic, it is her determination to get the consumer interest felt, and she frequently finds all kinds of surprising ways to do that in Bills, but I want to explain why in this instance she is wrong to try to get the Bill amended with her Amendments 19 and 29. I was particularly struck by a briefing from the British Dental Association that commented that this Bill appears to focus on services, consumers and trade. Those are inappropriate concepts to describe the healthcare professions, which are certainly one of the major reasons given for this Bill being enacted and are cited as the professions likely to be covered by the regulations under Clause 1.

Those terms may well be appropriate for other professions which qualify and oversee professionals who trade their services, though I am not sure that “consumers” is always the right description for those other professions. For example, I do not really know who the consumer is in relation to regulated auditors, who are covered by this Bill via the Financial Reporting Council. The healthcare professions are focused on safety rather than on what consumers want or need from the profession, and we should never lose sight of that.

I do not think that either the consultation requirement in Amendment 19 or the board membership requirement in Amendment 29 fit well within this Bill, given the focus on the healthcare professions that is likely to follow once the Bill becomes law. I completely get that regulated professions and their regulators must not be focused on their own narrow interests but bear the public interest in mind. But that is usually achieved through regulators being independent of the professionals they regulate, and they often have independent members comprising some or the majority of their boards. If they are not on their boards, they are certainly well entrenched in their disciplinary processes. That aspect, the independent characteristic of the regulators, is what we should focus on in this instance, rather than the consumer interests.

Lord Sikka Portrait Lord Sikka (Lab) [V]
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My Lords, it is a great pleasure to speak in this debate, especially after the noble Baroness, Lady Noakes. I support Amendment 55 in the name of the noble Baroness, Lady Bennett of Manor Castle.

This amendment takes a broader view about the nature of skills shortages and human consequences from the recognition of professional qualifications. There are many reasons for this Bill, and one is the failure of the United Kingdom to produce skilled labour, and the relative absence of any coherent government strategy to produce the desired skilled labour force. The problems have been well documented. For example, in 2000 a report published by the National Skills Task Force said that there were

external skill shortages, that is, recruitment difficulties due to an excess of demand over supply of required skills in the external labour market”.

Examples included

“highly-paid occupations requiring specific technical qualifications such as engineers and technologists and health and related occupations … and craft and technician vacancies in the engineering industry”.

It also referred to internal skills shortages—that is,

“skill deficiencies among existing employees”.

Similar skills gaps were identified in the 2019 report by the Industrial Strategy Council, which said that about 21 million workers—two-thirds of the workforce—might

“lack the basic digital skills”

that employers will need in 2030.

Some businesses have responded to skills shortages by renting talent from external partners—for example, through outsourcing partnerships. Of course, that creates its own logistical and organisational problems. Nevertheless, in the absence of a coherent strategy, neither the Government, the industry nor universities have been able to address the perennial problem of skills shortages.

Finding appropriate PhD students, as the noble Lord, Lord Patel, mentioned, is also highly problematical. It is simply too costly for many individuals to undertake a PhD in the UK. In supervising PhD students for nearly 30 years, I can only recall about one or two indigenous British students who came to do a doctorate in accounting, business or finance. It is so rare.

At the moment, the Government and industry are not even connecting the dots. The spate of hiring and rehiring workers on inferior pay and working conditions will not address skills shortages and will have a negative effect on attracting new local talent to crucial industries. After all, if the wages and working conditions are poorer, why would somebody want to go into that industry?

The Government’s strategy so far has been to enrol and recruit foreign workers to fill the gaps. That is especially evident in the National Health Service. Brexit has added new dimensions because it has alienated many EU workers residing in the UK. Their departure and the unwillingness of many other EU citizens to work in the UK have deepened and widened the skills shortages.

The Government are now looking to recognise foreign qualifications to address the local skills shortages. The aim, as always, is to poach skilled persons from abroad. The traffic will predominantly be one way from developing countries to the UK. I doubt that many Brits will actually want to go and work in countries such as Ghana, Zimbabwe or Nigeria, where the wages may be lower and the working conditions may not be comparable.

This ability to poach workers from other places will inevitably dilute the pressure on the UK to develop its own institutional structures to address the skills shortages. That development is highly necessary, and we need a government strategy. Therefore, it is absolutely right that Parliament must monitor the impact of this Bill on the management of strategies for addressing skills shortages, as has been extremely well articulated by the noble Baroness, Lady Bennett of Manor Castle.

To be clear, I am not against mutual recognition of qualifications, as this increases opportunities for individuals, but I am very concerned about the negative consequences for developing countries. They spend millions of pounds to educate and train engineers, doctors, surgeons and other skilled persons, but will never see the full benefit of their social investment. It can take more than a decade to train a skilled doctor or surgeon and, at the end, having developed those individuals, the developing countries will be unable to receive the benefits. There are also other consequences. To put it another way, if the UK started to see its highly educated citizens leave on a scale already observed in many developing countries, it would find itself with a smaller and less educated workforce. Such changes would coincide with a more rapidly ageing population due to the fact that emigrants tend to be younger adults.

For a long time, the UK has taken the cream of the skills from developing countries with absolutely no compensation. This brain drain retards the development of local economies and social infrastructure. It results in a huge transfer of wealth from poorer countries to the UK, while they suffer from a lack of sufficiently skilled personnel in both the public and private sectors. With a loss of skilled labour, poorer countries cannot offer universal healthcare to their citizens. That is just one example. The only appropriate redress is a bilaterally managed scheme of direct reimbursement of the value lost to each of the countries affected by migration of skilled labour. I sincerely hope that the Minister will give such an undertaking and, in due course, bring legislation to provide further details and make the compensation to developing countries a reality.

Financial Services Bill

Debate between Baroness Noakes and Lord Sikka
Baroness Noakes Portrait Baroness Noakes (Con)
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My Lords, we simply do not need another body set up to look at the financial services industry. It is already in effect a core function of the Treasury and if the Treasury thought that it needed some help in identifying the issues that the proposer of this amendment identifies, it does not need the cover of primary legislation to set one up. In addition, Parliament itself has always taken a keen interest in the financial services industry. The long-standing Treasury Select Committee of the other place examines regulators as well as key emerging themes in relation to financial services and your Lordships’ House has recently created an Industry and Regulators Committee, which is having its first meeting as we speak. Indeed, the noble Lord, Lord Eatwell, the noble Baroness, Lady Bowles of Berkhamsted, my noble friend Lord Blackwell and I are members of the new committee. Therefore, it should not surprise the House if in due course there is a focus on matters relating to the financial services sector.

I suspect that the subtext of this amendment is a belief that the financial services sector is wicked and has a negative impact on the UK economy. I do not believe that belief is widely shared in your Lordships’ House. On the other hand, there are few—if any—Members of your Lordships’ House who think that the financial services sector is perfect, and that includes me. The important point is that we already have the scrutiny mechanisms that I have described to give a proper focus to the activities and the impact of the financial services sector. I agree with the noble Baroness, Lady Bennett of Manor Castle, that this amendment should not be pressed to a vote.

Lord Sikka Portrait Lord Sikka (Lab) [V]
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My Lords, it is always a pleasure to speak after the noble Baroness, Lady Bennett of Manor Castle. The key issue, which has been touched on by a number of speakers, has been how to secure effective, responsible and accountable regulation. This amendment presents another model. We have already heard about a number of models.

Numerous aspects of life have been financialised, and the finance industry affects every household and almost every walk of life—all the more reason to examine its effects on the economy and daily life. The last 50 years have been littered with examples of mis-sold financial products. We have had a banking crisis in every decade since the 1970s, but still the finance lobby is too powerful for Governments to resist. We need structures and policies that can mitigate the negative effects of the finance industry.

Financial Services Bill

Debate between Baroness Noakes and Lord Sikka
Baroness Noakes Portrait Baroness Noakes (Con)
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My Lords, this is the first time that I have spoken on the Bill on Report and I draw the attention of the House to my interests as set out in the register—in particular, shares that I hold in listed financial services companies.

I have considerable sympathy for the amendment because the financial regulators are not very accountable. At the moment, there are set-piece appearances before the Treasury Select Committee in the other place and occasional appearances before committees of your Lordships’ House but these do not amount to a systematic and comprehensive examination. The Government often rely on the fact that annual reports are laid before Parliament but the annual reports of regulators get no more attention paid to them than the annual reports of companies. With rare exceptions, they provide few insights of value. By their very nature, annual reports accentuate the positive and shy away from the negative.

The problem of the accountability of regulators is not confined to financial services regulators. I could say much the same about Ofcom, Ofgem and other regulators, but we cannot solve the problems of the world in this Bill. The accountability of the PRA and the FCA is covered in the future regulatory framework, the consultation that has recently been completed. We discussed this a little on our first day in Committee and I hope that my noble friend the Minister will provide some information on the next steps when he responds to the amendment. The consultation closed over a month ago and the Treasury must have some idea on what it will be doing next and when.

If the outcome of that review, so far as accountability is concerned, is a well-developed form of parliamentary scrutiny, either jointly between both Houses of Parliament or within each House, the need for an independent review clause such as that contained in Amendment 2 would recede. Parliamentary committees can look at issues in depth but only if they are properly focused and well resourced. On that basis, the noble Baroness, Lady Bowles of Berkhamsted, might want to await the legislation implementing the outcome of that review rather than tackle the issue in this legislation, because action could be set in a broader, more holistic context regarding how the regulators will operate overall in due course.

If the noble Baroness, Lady Bowles, wishes to pursue her amendment—I thought I heard her say that it was more of a probing amendment for today—it would be wise to look again at its drafting because it calls for one review covering four regulators, but they are all different in what they do and how they do it. I am not convinced that there would be sufficient focus if one review tried to cover all the regulators—the two major ones and the two smaller units with regulatory responsibilities, one in the Bank of England and the other being the Payment Systems Regulator in the FCA.

In addition, I, like the ABI, wonder whether a review every two or three years is too frequent for the kind of in-depth review that the noble Baroness, Lady Bowles, has in mind. A rolling series of reviews, perhaps carried out over five years but concentrating on individual regulators, would provide more information of value to those seeking to hold them to account. However, the noble Baroness, Lady Bowles, has the right ideas in the amendment, although it may not be right for this Bill.

Lord Sikka Portrait Lord Sikka (Lab) [V]
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My Lords, it is a great pleasure to support Amendment 2. Throughout the earlier stages of the Bill, a number of noble Lords have drawn attention to the failures of financial regulators. Essentially, it was argued that they are captured by the finance industry and therefore advance its interests. They are too slow to protect people from malpractices. Over the years, numerous financial products have been fraudulently sold, including pensions, endowment mortgages, precipice bonds, split capital investment trusts, interest rate swaps, payment protection insurance and much more. The names of the products change from the aforementioned to mini-bonds and supply chain finance, but the basic problems are still the same and the regulators have failed to secure positive change in the culture of financial services enterprises.

During debates, Ministers have emphasised the tax contribution of the finance industry but have been silent on the costs imposed by that industry on society. Scholarly research shows that between 1995 and 2015 the oversized and scandal-ridden finance industry made a negative contribution of £4,500 billion to the UK economy, equivalent to around £67,500 for every woman, man and child in the UK. Of the £4,500 billion, £2,700 billion is accounted for by misallocation, whereby resources, skills and investments are diverted away from productive non-financial activities to the financial sector. The other £1,800 billion arises from the 2007-08 banking crisis that ushered in never-ending austerity. The economy and most people are yet to recover from that. That £4,500 billion is a massive cost and we simply cannot afford it. The status quo is not tenable and it is too expensive. The cost of the financial curse for the UK cannot be reduced by carrying on the regulatory business as usual, which is what the Government seemed to indicate in Committee.

Our regulators need to be effective and proactive but they seem to neglect their duty to the people. This is well documented in the reports on London Capital & Finance and the Connaught Income Fund. The FCA knew that mini-bonds were a problem but was slow to act at London Capital & Finance, and the same pattern has now been repeated at Blackmore Bond. The FCA does not welcome public scrutiny. Just look at the excuses it concocted to conceal the report on frauds at HBOS. The saga is still not resolved and same goes for frauds at RBS.

It is well documented that thousands of people are trapped in the £3.7 billion collapse of Woodford Investment Management. The Woodford Equity Income Fund was first authorised by the FCA in 2014. In 2015, the FCA was informed about the fund’s precarious existence as it was investing excessively in unlisted securities that affected its liquidity, but the FCA ignored the information until at least 2017.

Financial Services Bill

Debate between Baroness Noakes and Lord Sikka
Baroness Noakes Portrait Baroness Noakes (Con)
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My Lords, I am struggling with Amendment 74 because I think that it is aiming at a target that does not really exist, and it confuses capital and profits and losses.

The amendment would require what are quaintly called the “accounting numbers” to be adjusted to align with regulatory capital. Apart from anything else, that would result in accounts that do not comply with the Companies Act 2006, which requires, under Section 393, that accounts show

“a true and fair view of the assets, liabilities, financial position and profit or loss”.

The amendment seems to suggest that adjustments would be made to the accounts other than for the purposes of compliance with international accounting standards or to show a “true and fair view”, and, in that case, I believe that the resulting accounts would not comply with the Companies Act. We have to emphasise that these are international accounting standards, to which all countries that sign up follow, so this would be a major departure for accounting by banks and other institutions in this country.

I also note that, in proposed new paragraph (d), this is to apply to “profits for distribution purposes”, but that seems to misunderstand the fact that distributable profits are determined at the level of the parent entity solo accounts, whereas the adjustments that I believe are being targeted would be found in the accounts of subsidiary regulated entities or in the consolidated accounts, rather than those of the parent itself.

Regulatory capital already operates as a constraint on lending, so I fail to see what real-world impact any adjustments in the statutory accounts would have. While I understand the concept of regulatory capital, I do not understand the concept of “prudential” or “regulatory” profits or losses. I do not believe that “regulatory profits or losses” is a term that really exists, except to the extent that accumulated profits or losses form part of regulatory capital. It is difficult to see how proposed new paragraph (c) in Amendment 74 would work in relation to remuneration.

The noble Baroness, Lady Bowles of Berkhamsted, has explained the sorts of adjustments that are made for regulatory purposes and that, under her amendment, would be taken into the statutory accounts—for example, the treatment of intangible assets. It is not clear to me why the prudential treatment of these items should be imported into true and fair accounts. The treatment for regulatory capital is linked to loss absorbency, which is not an underlying principle of financial accounting, and it therefore cannot readily be accommodated within the structure of accounting standards.

Pillar 3 statements, which are required to be produced by all regulatory banks, set out the information required in much detail. If the noble Baroness is correct—I am not sure that she is—that analysts use and rely on Pillar 3 statements, not statutory accounts, they already have that information: all of it is in the public domain.

Amendment 77 is unnecessary. It is already open to the PRA to base regulatory capital on different numbers from those in the annual accounts. I have already mentioned intangible assets. It also ignores gains or losses or known liabilities, a very arcane bit of the accounting standards that makes companies recognise gains when their credit ratings reduce the fair value of their outstanding liabilities. The PRA has not needed any special statutory cover to eliminate that from regulatory capital.

Furthermore, it is unsound for the Bank of England to approach accounting for individual institutions on the basis of the impact that a standard may have on the economy of the UK, as if accounting were a mere plaything of policymakers. I hope that the noble Baroness, Lady Bowles, will not press these amendments.

Lord Sikka Portrait Lord Sikka (Lab) [V]
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My Lords, it is a great pleasure to follow the noble Baronesses, Lady Bowles of Berkhamsted and Lady Noakes. I will speak to Amendments 74 and 77 because they both raise some real, important and fundamental issues.

As the noble Baroness, Lady Bowles, indicated, vastly different numbers for bank capital and profits are communicated through conventional financial statements and by the regulators—because they are prepared on different assumptions, for different audiences and for different purposes. I hope that the Minister will tell us which of those numbers can considered true and fair. Can he also say whether the regulators are justified in relying on something that does not pass that test?

Financial Services Bill

Debate between Baroness Noakes and Lord Sikka
Baroness Noakes Portrait Baroness Noakes (Con)
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My Lords, having been a director of a regulated bank for most of the last decade and therefore on the receiving end of regulation, the idea of a skilled person review of the regulators is immensely attractive.

The concept of a skilled person review appears in FiSMA as one of the regulators’ tools to be used when investigating the organisations they regulate. It was not used a great deal by the FSA, but over recent years skilled person reviews have become the weapon of choice for the PRA and the FCA, as the statistics given by my noble friend Lord Trenchard bore out. They can be effective tools for the regulators to get to the bottom of issues in individual institutions, but they are also very expensive and usually incentivise the skilled person to extend the work into later stages and wider remits. They can also be highly contentious, especially when the selected “skilled person” turns out to be less skilled than is needed for the task.

If there are to be skilled person reviews of the regulators, one thing that should have been included in subsection (3) of the amendment of the noble Baroness, Lady Bowles, is the use by regulators of their powers under Section 166 of FiSMA and more generally the provisions under Part XI. That could usefully be added to the list of items she has set out in proposed new subsection (3).

I was concerned that “skilled person” is not defined in the amendment—it is in FiSMA, but not in a way that would read across to this amendment. There also seems to be some confusion over whether a skilled person is involved or a body set up for the purpose, as seems to be suggested in subsection (2).

More substantively, I do not believe that a person nominated by your Lordships’ House and the other place should have any part in the conduct of such a review. I am not suggesting that there are no Members of either House who would have the skill to contribute to such a review; rather, I do not believe that Parliament should get involved in carrying out a review. Parliament should concentrate on its outcome, not its execution. I am also concerned that such a review could end up being a political football, given that proposed new subsection (3)(i) allows Parliament to request the inclusion of any matter in the review. The amendment is also silent on whom any report is to be made to and how it would interface with Parliament and its processes; for example, whether it is to be laid before Parliament or considered in any particular way.

I am sure my noble friend the Minister will not accept this amendment. However, if he does not, I invite him to explain to the Committee how the Government are satisfied that the PRA and the FCA are effective and fit for purpose, as it is not obvious that they are. If they are not, this makes a bigger case for bringing in some mechanism for an external review of the regulators to inform Parliament’s understanding of how well they discharge their responsibilities.

Lord Sikka Portrait Lord Sikka (Lab) [V]
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My Lords, I congratulate the noble Baronesses, Lady Bowles of Berkhamsted and Lady Kramer. I am delighted to support their suggestion for reform.

Last week, a number of proposals for arresting regulatory failures were put forward, each offering to help the regulator—what I call “acting as a guide dog for the watchdog”. This is another proposal which has considerable merit. It builds on the notion of an independent skilled person review, a practice that is already well established to some extent. However, in the details of the amendment, it differs from the conventional notion of a skilled person review in focusing on systemic factors rather than individual cases. These include matters relating to internal controls and operations, regulatory parameters, effectiveness, treatment of whistleblowers, public policy objectives and, more importantly, matters of public concern.

Although the amendment does not explicitly say so, I am sure that the noble Baronesses, Lady Bowles and Lady Kramer, would not be opposed to the independent skilled person review being conducted by a panel of retired judges; that could be feasible. The review in any case should be in the open, take evidence on oath and require the production of key documents from producers, consumers, intermediaries and other key parties in the finance industry. The panel could travel to different parts of the UK to take evidence and report within a specified period, like the Australian royal commission that we heard about earlier.

The main aim of the inquiry would be to focus on systemic problems, get to the bottom of the recurring and unresolved scandals in the industry, enable consumers to share their experiences with the industry and its regulators, and facilitate the legislative changes needed to secure confidence in the industry. The proposed review would be a necessary step to bring about a much-needed change in organisational culture and a sense of personal responsibility and accountability in the regulatory bodies, as well as the industry.

The proposed review and its specified headings of “regulatory perimeters”, “public concerns” and “effectiveness of relevant legislation” can also focus on neglected and emerging issues. A good example of issues totally neglected in the Bill, and by the FCA and PRA, are those about the impact of shadow banking. The shadow banking sector is intertwined with retail and investment banks, insurance companies, pension funds and others, and any crisis there is bound to have a huge impact on the rest of the economy. The sector could be worth nearly $117 trillion, far bigger than the world’s GDP; it is lightly regulated, and normal prudential rules do not apply to it. I remind the Committee that the 2007-08 financial crash was triggered not by mass withdrawals of bank deposits by savers but by the inability of Lehman Brothers and Bear Stearns, key players in the shadow banking system, to meet their contractual obligations arising out of speculative gambles. So there is an urgent need for an independent review; that is what we should be aiming for.

I want to reply to a couple of comments made earlier. The noble Viscount, Lord Trenchard, and the noble Baroness, Lady Noakes, referred to the issue of costs. As the noble Lord, Lord Desai, pointed out, the biggest cost is associated with the status quo, which has never been cost free. Over the months and years I have spoken to many victims of bank frauds who have lost their homes, businesses, savings, investments and pensions. All that any review panel or committee has to do is talk to them, and they will soon understand that there is a cost associated with the status quo.

The second point was the question of where on earth we would find these skilled persons. It is a sobering thought that it is not the skilled persons who told the world about any of the frauds or scandals. Journalists and ordinary people have been far more aware of what is wrong, and I am quite happy to trust their judgment to tell us what is wrong with the system, rather than having a very legalistic explanation.

I hope that in his response the Minister will now tell us how the Government have weighed up the evidence of systemic failures of the FCA and what assessment they have made of the impact of such failures on people’s lives. So far, Ministers have not supported any proposals for assisting the regulators or put forward any suggestions. Maybe the Government plan to appoint a royal commission or an independent public inquiry under the Inquiries Act 2005, or something else. It would be very helpful to know whether the Government are content or not content with the current state of affairs in the finance industry.