Financial Services Bill

Lord Davies of Brixton Excerpts

2nd reading & 2nd reading (Hansard) & 2nd reading (Hansard): House of Lords
Thursday 28th January 2021 Lords Chamber

[Lord Davies of Brixton (Lab) [V]]

My Lords, I congratulate the noble Lord, Lord Hammond, on his maiden speech. I particularly welcome his entry to the House because I am also an unapologetic fan of spreadsheets. The Bill is necessary, of course, consequent on leaving the European Union. To a large extent, it is intended simply to replace what we had before but it provides the opportunity to go further, as we have been promised. I shall mention a couple of points that I hope we can pursue in more detail in Committee.

First, there is the Financial Conduct Authority. I do not have enough time at this stage to go into any detail but I want to put down a marker, that the FCA has failed too often in the past and simply has to do better in future. In the Bill, Clause 39 deals with the appointment of the chief executive. What is required here is clearer and greater accountability, and I would argue that Parliament has a crucial role there.

Secondly, Clause 34 relates to the debt respite scheme. I support debt respite, particularly given the situation in which we find ourselves, and I support the remarks of the noble Baroness, Lady Coussins. However, the proposals in the Bill totally lack ambition, given the scale of the problems we face. We need to understand that while debt has a personal impact, ruining lives and leading to much misery, it also affects us all by acting as a drag on the economy and the recovery that is so desperately needed.

There should be a modern debt jubilee—that is, a comprehensive package of debt cancellations targeted at the household sector. We need, in effect, a debt write-off for households, broadly along the lines established for the financial sector 12 years ago. We were told then that some banks were too big to fail because of the harm that it would cause to the economy. I argue that the failure of individuals because of debt means as much, or even greater, harm for us all.

That is not such a radical proposal. The ancient kings, under the Mosaic law, would announce debt forgiveness for their people so that they could start anew. Traditionally, that would be every 50 years, hence the jubilee. It is crucial to understand that those rulers were not being idealistic or kind in forgiving debts; in fact, they were being very practical. If the economic imbalance was not reset, there was a danger that their kingdom would fall. The main argument for such a scheme, therefore, is that in addition to relieving much individual misery it would provide a direct and targeted macroeconomic boost to the economy, exactly where it is needed. Relieving household debt would generate economic growth in the same way as a tax cut would, but it would be better targeted, allowing people to keep more of their income as pounds in their pockets. The money would flow into consumption, savings or investment, rather than into debt repayment.

There will, of course, be concern that cancelling any debts, even those debts long-abandoned by the lender, will punish the prudent and reward the profligate. That is to misunderstand how the credit system functions and how retail financial markets operate. It is hard to believe that a debt write-off will cause greater harm to those who are unaffected by indebtedness than it will benefit those who are already struggling. The beneficial effects will come to us all. Abolishing household debt, starting with the most pernicious and harmful, will generate gains that are generalised and distributed across the people of the UK as a whole.

As noble Lords will be aware, plans are already being made to celebrate one jubilee next year. Let us also plan a jubilee that will assist not just those among us who are the hardest pressed in our society but all of us. How far we can go towards such an objective in the context of the Bill, I hope we can explore in Committee.

EU-UK Trade and Cooperation Agreement

Lord Davies of Brixton Excerpts

Friday 8th January 2021 Lords Chamber

[Lord Davies of Brixton (Lab) [V]]

My Lords, I would like to make two points to the Minister—first, a response to his wish to end the argument on our role in Europe and then a question. In his winding-up speech last week he said

“I agree with those who say that we should close the book … on 47 tempestuous years in which the European question bedevilled British politics.”—[Official Report, 30/12/20; col. 1920.]

I do not know which book he has been reading, but he is very much mistaken if he thinks the treaty has brought an end to our debates about the European question. My two daughters cried they heard the result of the referendum. They, along with millions of other young people, will not forget or forgive the wanton vandalism of the Brexiteers. Rest assured—the book is far from closed on this issue.

I also do not understand how he can say that the book is closed when many crucial issues are unresolved. Discussions will inevitably continue for many years. For example, as has just been mentioned, there is inadequate provision for mutual recognition of professional qualifications. The treaty simply provides a framework, with the practice to be agreed through the Joint Partnership Council along the lines of the CETA treaty. This really is not good enough. Judging by the slow process of recognition under CETA, it means years of uncertainty. This not only leaves UK professionals at a competitive disadvantage, but it will make matters worse for our hard-pressed health and education sectors, where EU nationals provide so much essential support. It also poses an additional challenge for delivering the world-class academic research that underpins much of the UK’s competitive advantage. Can the Minister and his colleagues offer any concrete hope of expediting action in this area?

European Union (Future Relationship) Bill

Lord Davies of Brixton Excerpts

3rd reading & 2nd reading & Committee negatived & 2nd reading (Hansard) & 2nd reading (Hansard): House of Lords & 3rd reading (Hansard) & 3rd reading (Hansard): House of Lords & Committee negatived (Hansard) & Committee negatived (Hansard): House of Lords
Wednesday 30th December 2020 Lords Chamber

[Lord Davies of Brixton (Lab) [V]]

My Lords, I support the regret amendment, but with the greatest reluctance will vote for the Bill. Leaving the EU on the Tory Government’s terms—with or without this Bill—will produce immense economic and social damage to the UK. But the option of having no legislation to implement the Government’s deal would be worse. I have three substantive points.

First, it is clearly nonsense to suggest that the treaty means that we take back control, as the Brexiteers claim, particularly if we mean democratic control. The Bill creates a whole panoply of joint regulation and control between the UK Government and the European Commission, with the partnership council, 19 specialised committees and four working groups. These bodies will reach agreements at the European level, without parliamentary scrutiny, which will apply directly in British domestic law. So the UK Government will be subject to next to no democratic scrutiny or oversight of what they negotiate with the EU. There will be less democratic oversight than we had as a member of the European Union. What we will see are truly the horrors of unaccountable power, with laws being made by administrative diktat.

Secondly, of the many unknowns left open by the treaty I want to highlight the inadequate provision for mutual recognition of professional qualifications. What we have here is simply a framework, with the practice to be agreed through the joint partnership council along the lines of the CETA treaty. What this means in practice is unknown, but, judging by the slow progress of recognition under CETA itself, this means years of uncertainty. This will not only affect UK professionals, who will be at a competitive disadvantage, but will make matters worse for our hard-pressed health and education sectors, where EU nationals have provided essential support. It also poses an additional challenge for delivering the world-class academic research that underpins so much of the UK’s competitive advantage.

This undercooked and ill-thought-out Bill presents not the solutions we need but simply a long list of undecided but vital UK links that have provided great advantage to the UK, its economy and its standing in the world.

Thirdly, and all too briefly, I must mention the failure to guarantee labour standards. We know that it is the Prime Minister’s ambition to weaken employment rights in a race to the bottom. This has not been forgotten and it is most certainly an issue to which we will return in future debates.

Spending Review 2020

Lord Davies of Brixton Excerpts

Thursday 3rd December 2020 Grand Committee

[Lord Davies of Brixton (Lab)]

I draw attention first to my entry in the register of interests. I simply want to focus on a single word in the spending review document. On page 20 the word “generous” appears, where the review states:

“Public service pensions are generous”.


Well, generosity has nothing to do with it. Pensions, like pay, are simply part of the terms and conditions of employment agreed between the employer and the worker. It is true that public service pensions are better than many found in the private sector, but the policy response should be to see improvements—levelling all up, one might say, at least to the levels suggested by the Pensions Commission and endorsed by my noble friend Lord Hutton in his review of public service pensions.

The choice of words is not a trivial matter, particularly at a time when public service pay is already under attack. I hope that the choice of the word does not betray any lack of commitment to the pensions deal that was reached with the many people who work so hard on behalf of the public services.