King’s Speech

Lord Cromwell Excerpts

Monday 13th November 2023 Lords Chamber

[Lord Cromwell (CB)]

My Lords, I add my congratulations to today’s two maiden speakers for their eloquent, thought-provoking, even lyrical contributions.

Many today are speaking about the environment. Environmental issues have become an increasing concern as we consume this planet’s resources and bring ourselves closer to a climate tipping point. In his most gracious Speech, His Majesty referred to

“long-term decisions in the interests of future generations”.

He has often personally been ahead of many others in his concern for the environment. That concern is not only for terrestrial life but now includes the space that surrounds this planet. Today we need not just to look at life on earth but to look up and address what we are doing around our planet, in space.

Space is no longer accessible only to state agencies. Both state and private actors are firing more and more material into the limited orbits available around our planet. Such launches now often release numerous small satellites in their wake, making orbits ever more crowded.

There are many positive sides to space technology, of course—communications, climate observation and navigation systems, to name but three—but this new space race has negative consequences too. There are now millions, indeed tens of millions, of fragments, many of them simply untrackable, orbiting our planet at very high speeds in these limited orbit zones. Not only do they collide with other equipment in orbit, but astronauts—this is insufficiently publicised—have to take cover inside their spacecraft in order to avoid being hit. Even a fleck of paint hitting an astronaut at such speeds would likely be fatal. States, in acts of bravado, have used missiles to shoot down and explode redundant satellites, creating thousands more fragments circling our planet in blizzards of flying metal. Where overcrowding causes one item to smash into another, that creates a cascade of yet more debris that in turn hits other objects, and so on—known as the Kessler effect.

New frontiers are pretty lawless places. History shows that mankind explores new frontiers, then exploits and, in doing so, despoils them, and then looks for new opportunities to repeat that process. Space is no exception. As a student of space law, I quickly realised how limited and often out of date the regulation of space is. That is compounded by the fact that enforcement is extraordinary difficult. For example, imagine trying to prove liability, or even jurisdiction, when an astronaut is cut in half by a flying fragment of unidentified metal thousands of miles above the surface of the earth.

Furthermore, I was astonished to learn that 85% of the satellites circling this planet today have no insurance. Can you imagine airlines or vehicle fleets being allowed to run on that basis? Unless proper regulation, backed by effective detection and enforcement, is put in place, we will see a repeat of the pattern that we have seen on this planet: a scramble by those who can afford it to take control of the frontier—by force if necessary—pollute it for their own gain and leave our grandchildren with the consequences.

There are some causes for hope. His Majesty has again led the way with his support for Astra Carta—a kind of Magna Carta for space. With others, the Department for Science, Innovation and Technology is working on standards for space activity that it hopes will become the norm for space projects seeking investor finance, for example. I was sad to learn today of the resignation of George Freeman as the Minister for this department, as he has been a great champion of these standards.

There are also companies—I know of three in the UK—developing ways to remove space junk or extend the life of items in orbit. I note that, last week, the UK Space Agency announced a bid process—albeit a modest one—of £2 million for research into this area. But until there are effective regulatory and commercial incentives to do these things, they face an uphill struggle to realise a market for their services. Success will need both international buy-in and global enforcement. If the UK is going to lead on this, continuity of effort beyond the impending election will be needed.

In short, humans have always looked up at space and felt its seeming vastness and mystery, but today the orbits around this planet are limited and are becoming overcrowded by state actors, the military and commercial operations. Can we do better in space than we have on this planet? As a first step, the Government should publicly and clearly recognise that space is an inevitable and integral part of our environment. As such, proper regulation and management of this so-called new frontier requires urgent and co-ordinated action every bit as much as addressing the environmental issues on the surface of this planet. Will the Minister undertake tonight to follow up on this?

Financial Services and Markets Bill

Lord Cromwell Excerpts

2nd reading
Tuesday 10th January 2023 Lords Chamber

[Lord Cromwell (CB)]

My Lords, how do I follow that? It is always a pleasure to follow the noble Baroness, Lady Bowles, with her knowledge and her forensic contributions. I also look forward to the three maiden speeches we are going to hear this evening.

In the time available, I will speak about two things—including, perhaps perversely, one that is not yet in the Bill—and then say a few words about crypto. I saw in the Financial Times today that the new chair of the Treasury Select Committee rather humorously described crypto as:

“The freedom for people to do silly things with their money”.


The absent area is the urgent need to tackle the use of dirty money to prevent public interest investigations into market participants. It is widely recognised that the UK legal system is used, often with money very questionably obtained and possibly laundered in UK markets, to suppress the publication of matters in the public interest. We discussed these activities—which have become known as SLAPPs or lawfare—during the passage of the economic crime Act, so I do not propose to repeat what was said then. Nevertheless, the use of such intimidation to suppress, in the context of this Bill, matters of keen investor need-to-know interest is a distortion of the information and accountability that should underpin efficient financial markets in the UK.

The Bill seeks to address the senior managers regime standards and conduct rules. It should also address this area of coercion, which prevents markets and investors being properly informed about the activities of some leading business figures, illegal activities, market abuse and corruption. For example, there are newspapers which today will not publish stories about so-called oligarchs for fear of the lawfare that will then be waged against them. The consultation following the economic crime Act resulted in a statement from the Secretary of State on 20 July last year that primary legislation would be introduced at the earliest opportunity to enable an early dismissal of such cases. This was recently and vigorously reiterated in response to an Oral Question in this House.

There is both government and cross-party support for cleaning up this abuse of our financial markets and the associated legal system. I should inform the House also that the necessary clauses to give effect to this government commitment have already been drawn up by lawyers and could be included in the Bill. So far, so good. However, the noble Lord answering the Oral Question I referred to a moment ago described the selection of the right legislative vehicle to bring this into effect as “above my pay grade”. Therein lies the problem. It seems that everyone agrees that this legislation is needed, but where is the government impetus to get it done? The matter has become a legislative Cinderella, but the pantomime season is over and it is high time that the promised legislation was enacted. I therefore ask the Minister, when she winds up today’s discussions, whether she will agree to meet with me and others to review the clauses proposed, with a view to arriving at an appropriate amendment to the Bill.

I turn briefly to digital assets, and declare my membership of the APPG for crypto. Blockchain and digital assets are already here, and here to stay. I have long advocated UK regulators getting a better understanding of them, so it is encouraging to see the Bill making some steps in that direction. The Bill introduces a new term, “digital settlement assets”, and appears to put the regulator’s toe in the water with stablecoins, albeit only as a medium of exchange. However, it then makes provision for going far wider—and using secondary legislation—to enable engagement, seemingly with any other digital and crypto assets. Despite my interest in this area, I must sound a note of caution. The constant evolution of digital assets represents not just a financial revolution but a technological and conceptual one that will not fit simply into existing regulatory categories and approaches. Managing emerging innovation and opportunities while preventing abuse is going to pose serious capacity and structural challenges to the regulators. I say candidly that I have my doubts as to whether the FCA is really ready for this.

Today, in brief, I have just two questions for the Minister. First, stablecoins sound so inviting, do they not? However, in reality some have proved to be far from stable, and even those backed 100% by a fiat currency are subject to fluctuations in that underlying currency. I therefore ask the Minister to clarify whether the Treasury is concerned about this and, in particular, whether it has a clear definition of what tests an asset must pass to be truly worthy of branding itself to retail investors as a stablecoin. Finally, and more succinctly, the Treasury surprised us all some time ago by announcing that it was going to produce its own non-fungible token. Can the Minister confirm that this is still the case, and if so, why, or was it just a passing fancy of the Government to be down with the crypto bros?

Queen’s Speech

Lord Cromwell Excerpts

Wednesday 11th June 2014 Lords Chamber

[Lord Cromwell (CB)]

My Lords, I left this House in 1999 along with a number of others, as I am sure noble Lords will recall. I am very honoured to have been invited back as the result of a Cross-Bench by-election. As I am on my second innings, I will let the cricketers among noble Lords decide whether I am now doing a maiden, a second maiden, or whether is just a question of “maiden over”;—I am not quite sure myself. Either way, I am very grateful to have this chance to contribute, as far as I can, to the debate today.

I have listened to the whole debate and have heard a range of views on Ukraine and Russia, which is the subject I will address. I declare an interest as a director of the British East-West Centre, which provided the UK contingent of election monitors for the recent elections in Ukraine. Both Russia and Ukraine are economically and strategically important to us for reasons which I do not have time or probably the necessity to go into with this audience. The events of the past few months seem to have brought their relationships with “the West”—the revival of that cold war term is telling in itself—to a new low.

Ukraine became an independent state in 1991. Russia retains definite strategic, economic and other interests there. The West has tried to draw Ukraine ever closer to political involvement with Europe, and the population of more than 45 million have their own interests, loyalties and history. Recent events suggest that the West, either by misadventure or deliberately, got itself into a tug-of-war with Russia over Ukraine. Each side—and they became sides—offered multi-billion dollar bids for the country, gave come-hither promises, and accused each other of covert interference. It is very unwise to get into a tug-of-war with somebody who is likely to pull out a gun.

As the tension escalated between the EU and Russia, two things happened. First, Russia simply annexed Crimea militarily. That completely illegal action has been rightly condemned, but it is of little surprise to anyone who knows the historical or strategic background to that relationship. President Putin’s subsequent swaggering contrasted sharply with western battle fatigue. I was reminded very much of that old playground cry, “Oh yeah? You and whose army?”. As a number of speakers have mentioned, that has not gone unnoticed in areas of the world such as the South China Sea. Earlier a noble Lord suggested that economic sanctions were the way to go. They are one of the tools in the box, but do we wish to economically destabilise a country that should be one of the guarantors of peace in Europe?

Secondly, Donetsk and Luhansk, the two eastern regions of the country, have descended effectively into warlordism. Beyond the reach of the proper authorities, roadblocks in and out of towns there are manned by well armed but ill trained men. Torture and disappearances are not uncommon. The new president, Mr Poroshenko, lost no time in declaring that the Crimea and eastern Ukraine would be, to use his phrase, “recovered”. The response from the separatists in those regions has been fairly dismissive. However, as we sit here tonight, firefights and shelling are going on, and large numbers of those soon to become refugees are beginning to pour out of the region. Are we facing a civil war? Possibly. Will Ukraine have a war with Russia? That is unlikely. My concern, however, is that this is a mess created by external actors which the new Administration in Ukraine will have to try to sort out.

I emphatically do not suggest that NATO should have escalated matters into a military conflict, nor that Russia’s actions are defensible, if understandable. I have worked for more than 20 years with that region, and a robust approach is usually the way to conduct negotiations. However, my overall concern is how we got into this situation in the first place.

The depth and subtlety of understanding that is found in the Foreign and Commonwealth Office consistently impresses me. However, it seems to have been brushed aside by our partners in their enthusiasm to grab hold of the western end of the rope and tug.

In conclusion, in seeking stable relations with Russia and Ukraine, we really must do all that we can to help and guide our western partners into a more nuanced recognition that mutual interest is what will solve this problem, not indulging in cold war rivalry, which will find a very ready echo in Moscow.