King’s Speech

Lord Johnson of Lainston Excerpts

Thursday 14th May 2026 Lords Chamber

[Lord Johnson of Lainston (Con)]

My Lords, I will take a slightly different tack and praise the Government for some of the Bills put forward in the most gracious Speech. However, before I do, I want to admit to a slightly shady secret: I am a capitalist; I like making money, I am on the boards of companies, and I invest in businesses that will, I hope, be benefited if the Government actually get their act together and carry through on some of the wonderful things in this great Speech.

The first is the competition reform Bill, and we have had some extremely good interjections from my noble friends Lord Sharpe and Lord Hunt and other noble Lords, who have rightly pointed out the importance of making sure that the Competition and Markets Authority functions properly. However, my concern—I realise I am speaking on this subject with noble Lords surrounding me who probably created these legislative functions in the first place—is that we have it upside-down. Competition under the Thatcherite model used to be to try to break things up: to have as many smaller companies as possible in order to reduce prices and increase competition. But the reality is that now, in the AI age, we need super-companies. We need to go the other way, encouraging conglomeration and amalgamation to create companies that are big enough and which can become global super-champions, which will allow this country to stay at the centre of the AI arms race.

I say to the Government, and I hope they will take this into account, that competition reform is not simply about making the CMA work better—and, my goodness, it needs to—but about changing the very nature of how the competition process works, to enable us not to reduce competition through reducing the number of companies offering goods and services, but to make sure that we understand the nuances around creating the sorts of companies that will allow us to have power in what is now a winner-takes-all economy.

The second Bill I want to heap praise on is the regulating for growth Bill. I was the Minister for better regulation; rather like the title of the Bill, that is probably the greatest oxymoronic ministerial title in the western world. The idea that you can regulate for growth is slightly bizarre. The measures that the Government have outlined are good, and the last Conservative Government wholeheartedly supported this, and indeed introduced some of these principles in the regulatory reform White Paper: concepts such as sandbox powers; and, very importantly, strengthening the growth duty of regulators, holding them to account on that most important task, that their function is not to stop things from happening but to allow them to happen in an orderly fashion. However, one of the most serious issues I came across in government, which I think we still suffer from today, is around the layering of regulations and the conflict between different government bodies, departments and quangos that make it very difficult for businesses to navigate.

One good example was a company that came to me that was creating artificial dog food. I have a caramel-coloured, long-haired miniature dachshund called Daisy, and her health is of paramount importance to me, so I am the last person who would want her to consume anything that might be dangerous. But this innovative small company had to go to Defra. It was then sent to the Food Standards Agency, which then sent it back to the food administration, which sent it back to Defra. It went round and round, and no one Minister or agency would take responsibility for the universe in which it was operating. If we are going to design an economy for the future, and if these regulatory bodies are going to put growth and innovation at the centre, we have to have more rationalisation in terms of who takes responsibility for the areas that they govern or we will continue to have overlapping responsibilities.

The second part of the regulatory agenda that needs reforming is that around the environment. I am told by property developers and people who wish to build that the environmental controls are now a far more significant hindrance to their ability to do what we need—build infrastructure and houses—than the planning process itself. I declare another interest in that I am trying to build an outside study area. It is an old piggery. However, it is not that simple. Last November, I got planning permission, but I could not get full planning permission because I had to do a bat survey. I said, “Let’s send for the bat survey man”, but I could not send for him until May, as that is when the bats start to fall in love with each other. That is the romance season of the bats.

I waited until May, so we have already lost six months. The bat man comes. He is called Tristan. He wears a gilet. He turns up with an infrared camera. He sits night after night, for seven nights, trying to film my bats in an intimate embrace. This is not a joke but a true story. I almost imagine Sir David Attenborough, the great centenarian, crouched in a safari suit, talking about “Lord Johnson’s domestic bat environment” and then putting it in a nature film. That cost me thousands of pounds and took months. The outcome, the mitigation, was to put a bat box up outside my piggery.

We have lost the plot. The process has become the principle rather than the outcome. The bat box cost £60. I would have loved to put one up. I probably would have put one up anyway, so why not look at the outcomes rather than the process? If all that I had to do at the beginning was make a choice—put a bat box up or go through a torturous process—we would have had the same outcome. We have lost our way when understanding how we regulate and what we are regulating for—which, in this instance, is to protect bats.

The last Bill that I congratulate the Government on—and I am glad to see the noble Lord, Lord Livermore, back in his usual place—is the enhancing financial services Bill. A few months ago, I raised regulation in finance in a question. The Minister laughed. Well, he is not laughing now. He is taking it so seriously that he is pioneering a new Bill to help the financial services industry, which I am afraid our Government, as my noble friend Lord Bridges of Hedley pointed out, did nothing but denigrate from 2010.

Can the Minister take note of a few key points? The first is consumer duty. The bizarre idea that somehow we have to be responsible for so many parties down the chain makes it impossible for us to create proper financial products. All companies have a consumer duty. We all have a duty to the customer who uses our products. The idea that we have to regulate for that is just causing more problems and more complexity. It creates an ever more byzantine amount of paperwork. Consumers click “I accept” or “I agree”, thinking that they are protected when they are not.

The second thing that I would like the Government to look closely at is MiFID II. As a Minister, I used to offer a prize. I was not allowed to offer money for reasons of probity and integrity, so it was a bottle of wine. It was for any person who could name for me a benefit to humankind of MiFID II. One person put their hand up and said, “Lawyers”. I am sorry to say it to any noble Lords in this House who are lawyers, but I am afraid that they do not count. That prize still stands. It destroyed the research capabilities of small companies and with it the A market and the small company market.

I want to mention institution-to-institution sales. We are obsessed with compliance and regulation around how we sell to the retail market, as we should be. However, when it comes to institutions-to-institutions, we should allow 1,000 flowers to bloom. We should make it our ambition to ensure that if dealing inter-institution, where there is no risk for individuals to be mis-sold, we should be allowed to do almost whatever we like. That is how you create strong financial innovation.

My last comment on financial service regulation concerns a very worrying outcome from a report written by the Financial Services Regulation Committee in this House, which was presented a few months ago, about how the FCA had created a climate of fear in how it managed its affairs. I draw noble Lords’ attention to this because it is a very serious point. A regulator has created a culture of fear rather than one of innovation and growth. I wrote to the FCA asking for a response to this. It has not bothered to write back. I ask the Minister to impress upon the FCA that its job is not to create fear but to create a successful financial services sector that allows us all to have wealth.