Economic Activity of Public Bodies (Overseas Matters) Bill

Lord Leigh of Hurley Excerpts

Committee stage
Wednesday 20th March 2024 Lords Chamber

[Lord Leigh of Hurley (Con)]

My Lords—

[Lord Verdirame (Non-Afl)]

My Lords, Amendments 3 to 5 are in my name. All the amendments in this group have the same objective, which is to find some ways of mitigating the rather unusual and perhaps slightly sinister language of

“political or moral disapproval of foreign state conduct”—

the language that gives the provision its title. Amendments 1 and 2 seek to achieve that objective by retaining that concept but raising the bar for its application. I agree that this approach may be sensible, and it is one that I encourage the Government to consider very seriously.

My amendments go a little further. I tried to think of ways in which the main provision of the Bill—Clause 1 —could operate without the novel concept of a prohibition on

“being influenced by political or moral disapproval of foreign state conduct”.

I note that this is not an attempt to frustrate the Bill. As the Minister will recall, I spoke in support of the Bill at Second Reading and I support the Government’s intentions. I am suggesting this different way forward because I am not really persuaded that the policy objectives require us to introduce this concept in our legislation. I urge the Government to test more proportionate and more focused ways to achieve those objectives.

As I understand those objectives, the core purpose is to ensure that public bodies, when taking procurement or investment decisions, do not impose a de facto sanctions regime or a de facto ban or boycott on a foreign state on the basis of their own judgments about a territorial dispute, the status of a foreign territory or the presence of a foreign Government in a particular territory. It seems to me that that objective can be achieved equally effectively by focusing the duty in Clause 1 on not having regard to territorial considerations, rather than in the current formulation of a duty not to be influenced by political or moral disapproval of foreign state conduct. Subject to the exceptions, it would still be the case that if a public authority were to have regard to a territorial consideration, it would probably do so because of disapproval of a moral or political kind of the foreign state’s conduct in the territory. But it would be better if we can get to the result that the Government are pursuing without that language of political or moral disapproval of foreign state conduct.

I accept that a criticism of the proposals may be that if we remove that expression “moral or political disapproval” from Clause 1, as my amendments would do, and focus instead on territorial considerations, the main provision of the Bill would not substantially improve on Section 17 of the Local Government Act 1988.

The Bill would supersede the Local Government Act in the part where it prohibits local authorities from considering non-commercial matters in relation to decisions about public supply or works contracts, including

“the country or territory of origin of supplies to, or the location in any country or territory of the business activities or interests of, contractors”.

This part of Section 17 of the Local Government Act would be omitted by the effect of a separate clause in the Bill. But Clause 1, even with the amendment I propose, would still go further than Section 17. In particular, the duty not to have regard to foreign state conduct in relation to territorial considerations, such as the existence of a territorial dispute, would still be able to capture indirect bans or boycotts, which I understand is the Government’s main concern.

I look forward to what the Government have to say. Again, I stress that my main concern is to encourage them to think of ways of tightening the language in Clause 1, and mitigating or perhaps altogether removing this notion of

“political or moral disapproval of foreign state conduct”.

[Lord Leigh of Hurley (Con)]

My Lords, I apologise for my not being able to speak at Second Reading, although if I had, I would have agreed with my noble friend Lord Wolfson on much of what he had to say. I also apologise for slightly jumping the gun on the noble Lord, Lord Verdirame, particularly as what he said was so interesting and informative.

I just wanted to question Amendment 1. If one is seeking clarity and certainty, introducing the idea of having a

“primary or sole factor in the decision”

seems extremely difficult to prove, whereas showing that the decision was “influenced” is much easier and, as I understand it, a recognised legal term.

[Baroness Noakes (Con)]

My Lords, I have problems with all the amendments in this group. Amendment 1 in the name of the noble Lord, Lord Wallace of Saltaire, would elevate “political or moral disapproval” to be the sole or main factor, and the noble Lord, Lord Palmer of Childs Hill, wants to introduce the concept of materiality into influence. Both these would just create huge loopholes, which would allow public bodies to conceal their boycott activities within other factors. Clever lawyers would find ways of writing papers which support decision-making in, say, local authorities or other bodies affected by the Bill, by reference to a whole load of other factors, to support the claim that they were not “materially” influenced by their disapproval of a foreign state, or that it was not the sole or main factor. I genuinely have a problem with the watering-down implied by Amendments 1 and 2.

I listened very carefully to what the noble Lord, Lord Verdirame, said about his amendments. I understand that he is trying to find a way through by removing the reference to “political or moral disapproval”, but I am not convinced that his amendments work either. In particular, I am not sure what the restriction to “that territory” in his Amendment 4 will do. Let us suppose that the territorial consideration is Ukraine, because it has to relate to a particular foreign territory by virtue of subsection (3). Does that mean that the decision-maker must have no regard to what is happening in Ukraine itself? It seems to me that “that territory” can be related only to the territorial consideration referenced in subsection (2). In that case, it would be Ukraine. If, say, Russia is the foreign state you have a problem with, it seems that you can take account of its activities only in Ukraine. You could not take account of activities that were not in Ukraine—for example, attacks from other places, such as the Black Sea, or whether it takes children from Ukraine back to Russia. If you thought that Russia was the territory—still restricting it to one territory—you have the problem the other way around; you could take activities only in Russia, but not in Ukraine, which is the fundamental problem. That creates an interpretive problem.

While these distinctions might not matter if we are talking about Russia and Ukraine, if you try and then relate it to a council or other public body trying to boycott Israel, and relate that to the complexities of the different parts of the territory around the State of Israel, you may end up finding some odd conclusions on how the reformulation might work in practice. I am aware that the noble Lord, Lord Verdirame, is a very clever lawyer and I am not, and I may well have completely misunderstood how his amendment is intended to work.

--- Later in debate ---

[Baroness Deech (CB)]

My Lords, I did not come prepared with examples about universities—my memory is not that good. However, there have been very many occasions where violence used by anti-Israel students has forced the university to cancel speakers or to charge Israeli and Jewish societies for their own security when an Israeli or a pro-Israeli speaker comes. There are manifold examples of this, and I have dealt with it over the years. If noble Lords do not know about this, they really should.

The comments that have been made by the noble Lords, Lord Mann and Lord Wallace, and the noble Baroness, Lady Fox, take us to the heart of the Bill and why the drafting is so difficult. What the Bill really means to do is clamp down on anti-Semitism in local authorities and universities, but it cannot say so in direct terms; therefore, it goes much more broadly than it needs to, because it is academically dancing around the subject. If I could rip it up and start again, I would have a couple of clauses saying that anti-Israel activity—anti-Zionist activity, if you want to call it that, or anti-Semitic activity—is prohibited in universities and public authorities, because there are no examples of universities and public authorities acting against Australia, to give a fanciful example. Is anyone banning Australian wine because of what happened to the Aborigines? Is anyone banning New Zealand lamb because of the way the Māoris were treated? Is anyone, anywhere, ceasing to use Chinese products? I need hardly go on.

[Lord Leigh of Hurley (Con)]

My Lords, I will add to this element of the debate, if I may, because I think it is relevant. The noble Lord, Lord Willetts, mentioned at Second Reading that he was on the council of Southampton University. I too am an alumnus of Southampton University.

In March 2015, the university procured the services of a speaker to host a debate questioning the right of Israel to exist. I do not know whether that would be caught by the Bill. I would hope that it is, but I suspect that it is not. I wrote to the vice-chancellor at the time—I had been a very modest donor to the university—and asked, going to the point made by the noble Baroness, Lady Deech, whether there had been any conference at Southampton University questioning the right to exist of any other country. He wrote back and said there had not. Eventually, the conference was cancelled—it received reprobation from the Communities Secretary at the time, now my noble friend Lord Pickles —only because the university claimed it could not go ahead on health and safety grounds. But that was a very thin excuse, and for a university to host a conference dedicated to questioning the right of the State of Israel to exist, and to procure the services of people to run it, is, I hope noble Lords would agree, what we should be addressing.

[Lord Johnson of Marylebone (Con)]

My Lords, my noble friend the Minister was asking whether I was reassured. I appreciate that that was largely a rhetorical question, but I have to say I am not yet totally reassured. But I would be if she were able to furnish us with examples of higher education institutions succumbing to pressure from student unions to undertake BDS-style actions in relation to their investment and procurement decisions. That is really important for us as we make progress with the Bill.

Gaza: Humanitarian Situation

Lord Leigh of Hurley Excerpts

Thursday 8th February 2024 Lords Chamber

[Lord Leigh of Hurley (Con)]

My Lords, the current situation in Gaza is of course horrific, but it could be resolved within hours, if Hamas wanted to, by releasing the hostages. Hamas does not want that and should be held liable for the terrible deaths, destruction and injury, as Israel has no choice but to try to protect and rescue its citizens. Gaza was a tragedy before 7 October, when Israel totally withdrew; it could have flourished, like Tel Aviv, but was prevented from so doing by Hamas and Hamas alone.

His Majesty’s Government have called for an independent state of Palestine. Can my noble friend confirm now or in writing: is it to be a democracy or an autocracy? Will a Palestinian state be required to ban Hamas and other terrorists? Will it have a military army, and will this mean the end of the discredited and corrupt UNRWA? Will it allow regular inspections to ensure there are no more tunnels? These difficult questions highlight why now may not be the right time to seek a two-state solution. The objective now must be to focus on peace and security for both Palestinians and Israelis.

House of Lords (Peerage Nominations) Bill [HL]

Lord Leigh of Hurley Excerpts

2nd reading
Friday 18th November 2022 Lords Chamber

[Lord Leigh of Hurley (Con)]

My Lords, I congratulate my noble friend Lord Norton of Louth on introducing his Private Member’s Bill. I am afraid that I cannot support it as drafted and would be disappointed to see it pass in its current form. However, let me confirm that I support reform and wholly agree that it is totally unacceptable that people are introduced to this House and then frankly fail to serve it in a way that anyone would regard as reasonable, in terms of time or other contributions.

There is a problem at the moment, but it is not necessarily related to the size of the House. I discovered with the assistance of the Library, to which I am very grateful, that some 75 eligible Members have not spoken since December 2019 and 33 have not voted, with a core of 20 who have neither spoken nor voted in more than two years. This excludes those who are on leave of absence or disqualified, and of course the Lord Speaker. Figures I have obtained from the Library show that average participation in Divisions is only 42% of Members, with some consistency between participation and those taking a party Whip. It is as high as 65% for the Lib Dems, with the Conservatives at 56%. It goes down to 44% for Labour, with the Cross-Benchers achieving only 17% participation in Divisions in total. In arguing for more Cross-Benchers, one needs to understand the percentage of people attending on sitting days, which varies.

Perhaps the Bill goes to the heart of the misunderstanding of this House by so many, particularly those surveyed in polls. We are not meant to be full-time participants, nor were we ever intended to be. Unlike Commons Members, Peers are not full-time, salaried legislators. Only a portion of Peers attend on a full-time basis. One should perhaps focus on the number of Peers who attend and not just those eligible to sit. Restricting the number to the size of the Commons—now confirmed as 650, not 600—is to impose totally arbitrary limits on two very different Chambers with very different roles and duties. Yes, there are too many Peers who are effectively retired or too old to contribute properly, but the Bill does not address those points.

The Bill restricts the Prime Minister’s ability to appoint Peers with an effective size restriction, but it does not impose the same restraint on the commission, which could nominate unlimited numbers to the House, effectively restricting the Prime Minister’s capacity. Strangely, the Bill then excludes anyone from being nominated by the commission who has supported a party in the past two years. Why is that? Why is membership of a party an immediate block for someone whom the commission believes would otherwise be an excellent Member here?

Although I wholeheartedly approve of a mechanism to ensure that your Lordships’ House contains people who are committed to the House, I do not believe the Bill achieves that. All it requires is that nominees must show a “willingness and capacity” to contribute—as if anyone proposed would say, “I don’t have the willingness or capacity”. I would hope that Members do have other interests: we benefit from Members who are active elsewhere. That is not of itself an impediment. I am an employee of a financial services company, I chair a public company, I chair four charities, I am on the board of another five and I have served for 22 years as a senior treasurer of the party—so, under the Bill, I am sure I would be told that I do not have capacity, yet I have an 82% voting record. I did not get an LOL on my text.

I am also unhappy with the effective veto the commission would have over the PM’s choice—and, of course, nominees frequently come from opposition party leaders. There is one case which had been cited in the press which I happen to know more about than most and where, in my opinion, HOLAC was possibly ill-informed and possibly then gave an ill-judged view. I would feel very uncomfortable that a commission of unelected people, however eminent, could overrule the democratically elected Prime Minister of this country. Who are they to decide what is “conspicuous merit”? In principle, it is fine, but what does conspicuous merit mean? Then the Bill allows the commission itself to propose additional criteria without any approval from Parliament or government. This is a very dangerous open invitation to allow a private, secret, unelected group to determine who it thinks are the appropriate Members of this House, when clearly that should remain with our Prime Minister—and, of course, other political leaders.

As the noble Lord, Lord Kakkar, eloquently said, we should bear in mind that this route opens the door to judicial reviews, dragging the courts into a decision. I welcome reform, but I do not believe the Bill addresses the real issues we face in this House.

House of Lords Reform

Lord Leigh of Hurley Excerpts

Wednesday 30th June 2021 Lords Chamber

[Lord True (Con)]

My Lords, it is perfectly reasonable, given the House’s membership—not least the fact that its average age is 70—for it to be refreshed from time to time. I repeat an answer I gave before: neither the previous Prime Minister nor this one has accepted that the House of Lords should be able to impose a cap on its own size.

[Lord Leigh of Hurley (Con)]

First, does my noble friend the Minister agree with me that, now that the other place has agreed that it will stay at 650 Members, we can review our aspiration of 600 to 650? Secondly, we should recognise that unlike in the other place we are not salary men. We represent a wide pool of expertise and experience that needs to be deepened and strengthened. By admitting more Members to this House, we will counter the correct allegations of underrepresentation of minorities, women and businesspeople.

[Noble Lords]

Oh!

Finance Bill

Lord Leigh of Hurley Excerpts

2nd reading & Committee negatived & 3rd reading
Tuesday 8th June 2021 Lords Chamber

[Lord Leigh of Hurley (Con)]

My Lords, I join the congratulations to my noble friend Lord Bridges—under the excellent mentoring of my noble friend Lord Forsyth—and his committee on the report, which is most welcome. Of course, I first refer your Lordships to my register of interests.

This is an important debate, as the Finance Bill and the powers of HMRC affect us all. I am therefore somewhat surprised to see how few Peers have put their name down for this debate. While I am delighted to see so many here physically—I think all but one are speaking in the Chamber—I am perplexed by why so few are speaking on this matter today. Of course, we do not have the power to amend the Bill, but this sort of Second Reading is exactly the place where we can interrogate government and, I hope, come up with some ideas which would be of assistance based on our expertise and experience. It also does not help those who argue for a smaller House if we cannot attract a strong number for such an important debate, and it means that people with knowledge and awareness of finance, tax and business should be recruited into the House. The Government do listen to these debates and to Peers’ comments on taxation, as I will elaborate later.

I start my comments on the Bill by congratulating my noble friend the Minister and his colleagues on the 132 clauses originally tabled, as physically displayed by my noble friend Lord Forsyth. They address so much that affects our daily life, from the rates of tax payable to capital incentives—which I believe will encourage greater investment in industrial plants and machinery—some nudging behaviour away from plastic packaging, and even encouraging cycling to work, with cycle equipment being written off. There really is much in here to be commended. I thought I would focus most of my remarks on what is not in the Bill, sometimes with good reason, and some matters which might be considered for future Budgets.

The first, which is not in the Bill, is an increase in the capital gains tax rate. Before the Budget there was a somewhat rogue report from the aforementioned Office of Tax Simplification. It is normally a sensible office producing sensible ideas, but on this occasion it proposed that it would be simpler to equalise income tax and capital gains tax—a somewhat unsophisticated thought, as it does not allow for the essential difference between income or salary and capital gain, which is a return on risk taken. Fortunately, after somewhat of a campaign—in which I confess I played a part—the Chancellor agreed that CGT rates should stay as they are. This Finance Bill does not change them, which is an eminently sensible and pragmatic decision.

My first question to my noble friend is, given all this wasted noise, effort and focus against raising CGT and that the Chancellor has clearly researched the subject and reached a conclusion, can we avoid all this palaver at every future Budget of this Government by announcing that the rate will stay fixed, as has been done for other taxes in the Conservative Party manifesto? This will provide much greater certainty to entrepreneurs, investors and businesspeople for the next few years. The cynic might argue that the Chancellor likes the uncertainty as it encourages people to realise assets when they would not otherwise do so, and thus send money to the Exchequer ahead of the anticipated date. However, we all know on this side of the House that the Chancellor is not that type of politician and is instead focused on making life easier and more predictable for taxpayers. By the way, the retention of the current rates proves my earlier point that the Government listen to people in this House and elsewhere and consider their arguments carefully.

In the debate on the Motion to Take Note of the Budget Statement in this Chamber, I asked my noble friend the following:

“I would be grateful if the Minister could tell us to what extent this Budget complies with pillar 1, and in particular pillar 2. What steps will HM Treasury be taking to ensure that we fully comply with pillar 2?”—[Official Report, 12/3/21; col. 1919.]


There were many speakers on that occasion, so I assumed that I did not get an answer because of other priorities. It turns out that the reason I did not get an answer was because the Government were busy hatching a plan with world leaders to do just that. This is another matter not in the Finance Bill, but I hope the Minister will allow me to comment on the historic announcement as it will fundamentally affect corporate taxation and is thus very germane to this Bill.

The Red Book estimates that only £40 billion will come from corporation tax this year but that the new rates proposed in the Bill will increase that by £2.3 billion in 2022-23, £11.9 billion the following year and £16 billion the year after that—those are just the increases—so a lot is riding on corporation tax yield increasing as the rates move up. Accordingly, it is very important that corporations pay their fair share. I have tracked the OECD proposals on base erosion and profit shifting for some time. Indeed, it was the subject of my maiden speech in 2013. I hope the Minister will allow this as an acceptable forum to raise this related issue, not least as no other forum other than today’s PNQ has been offered to Peers to discuss the OECD announcements —although, of course, he may want to answer some of my questions in writing at a later date. The UK really needs a deal on pillar 1, as much as we are seeing progress on pillar 2. At the moment, the details are somewhat vague. It is all very well for profits which are diverted into tax havens to be transferred into the HQ country, but the minimum rate of tax—be it 15% or 21%—does not of itself affect the amount of tax the FAANG or others will pay in the UK.

DST—digital services tax, which I will come on to again in a minute—was put in place to ensure that profits generated from UK customers were taxed here. Clearly, future tax should be based on user bases rather than sales made—not just customers, but user bases. As we know, sales to UK customers are currently often based in places such as Ireland, but the goods are delivered here. DST seeks to achieve proper taxation on this, but we need to know how pillar 1 will do so likewise, as the expectation is that DST will be dropped at some point. Perhaps the Minister can assure us on that point.

Meanwhile, the pillar 2 proposals are encouraging, but I urge some caution. The IPPR issued a report estimating that with a global minimum rate of 21%, our take could be £14.7 billion. That would be nice, but at a global rate of 15% now being suggested, our share would be much lower. Let us not forget that we already have controlled foreign corporation legislation in place—I think it may have been introduced by my noble and learned friend Lord Clarke, but it may have been before his time—and that this legislation seeks to equalise UK-headquartered corporations’ tax take. I am indebted to Glyn Fullelove, formerly president of the Chartered Institute of Taxation, for sharing with me his calculations, which suggest that a figure nearer to £2 billion or £3 billion could be the amount raised by the pillar 1 and 2 proposals. Perhaps HM Treasury could share its estimates with us at some point.

We introduced the digital services tax so that companies such as Amazon would pay their fair share. Unfortunately, it is not working as well as it should. First, Amazon, which clearly has monopoly-type power, has simply told its suppliers to pay. Secondly, it applies only to marketplace fees, not to direct sales. This is a very important difference. It is another area I was disappointed not to see mentioned in the Finance Bill, as we now have the situation where DST has made it harder for SME retailers to compete with Amazon.

The current DST legislation is defective in not taxing the user-created value arising from sales made by marketplace providers on their own account. Additionally, the application of DST to marketplace fees and commissions charged to third parties, without a corresponding charge arising on the value created when the provider uses the platform to make sales on its own account, is a distortion to competition. I and a number of others have proposed that the scope of DST be extended, so that when a marketplace provider uses the marketplace for its own sales—or uses a similar platform alongside the marketplace—an amount of digital services revenue, which can be taxed, arises.

As the Minister might be aware, I have discussed these ideas with the Financial Secretary, who is resistant to changing DST at this point. As a result, there is nothing in the Bill on this issue. I hope, however, that the Government will reconsider this matter, as we are quite a way from a final deal on a pillar 1 and 2 agreement and, in the interim, we are losing a very large amount of revenue.

Finally, on the enterprise initiative scheme, or EIS, Brexit gives us a chance to look again at restrictions placed on HM Treasury to avoid accusations of state aid. EU laws restrict the ability of the SEIS and EIS to provide entrepreneurs’ start-up capital quite dramatically. Will my noble friend the Minister agree to revisit this area?

Financial Services Bill

Lord Leigh of Hurley Excerpts

Report stage
Wednesday 14th April 2021 Lords Chamber

[Lord Leigh of Hurley (Con) [V]]

My Lords, I congratulate my noble friend the Minister on Amendment 14, as I raised that issue at Second Reading and it was very good to see it today. It shows that the Government are listening, which is very welcome. I thank him for his kind opening remarks on a number of Peers’ appearances: it was very perceptive of him. I will not repeat the sorry tale that he heard last time around, which is the reason for this amendment. He will recall that it was in response to an attempt to commit a fraud by sending me a credit card I had not requested, and that I was unable to progress matters with FOS because I was not a customer of the credit card company concerned. I had a letter from FOS, which says the following:

“The Financial Ombudsman Service must follow the rules stipulated by the Financial Conduct Authority handbook. The relevant section concerns dispute resolution—DISP—and DISP states that there are limitations to when FOS may investigate a complaint.”


This is the rule that stipulates that FOS may look at complaints only from “an eligible complainant”, and DISP 2.7.3 states:

“An eligible complainant must be a person that is … a consumer”.


The regulations go on to say that FOS may investigate a complaint from a consumer or “a potential consumer”, and that this consumer or potential consumer must have a relationship with the regulated busines. There is a full explanation set out in DISP 2.7.3 and 2.7.6 of the FCA handbook. As I did not genuinely attempt to make a credit application, I did not fit the description of consumer or potential consumer in the handbook. In his reply to me at Second Reading, the Minister said that

“it is already the case that potential customers of a firm can seek redress through the FOS scheme under the FCA’s existing rules, notably the FCA dispute resolution handbook rule. The relevant rule states that, to be an eligible complainant, a consumer must be, or have previously been, a potential customer, payment service user or electronic money holder of the firm that they are raising a complaint against”.—[Official Report, 8/3/21; col. GC 552.]

This is completely contrary to the email sent by FOS, and there is clearly misunderstanding and confusion.

My noble friend the Minister was kind enough to suggest that I could report this matter to Action Fraud, and reports received by Action Fraud are then considered by the National Fraud Intelligence Bureau. Frankly, none of that need have been necessary or would be necessary in future if my Amendment 26, the only amendment I will speak to, were adopted. I seek for it to be adopted so that, from here on in, FOS can take action against credit card companies which do not seek to verify recipients of credit cards before they are sent out. At the moment, there is no redress for anyone who receives a credit card and no one for them to complain to. I do not think they can complain to Action Fraud because the fraud was never consummated, as it were. I very much look forward to listening to his remarks at the Dispatch Box later this afternoon, given that the Government are in listening and action mode.

[The Lord Bishop of St Albans [V]]

My Lords, I shall speak to Amendment 16 and then address my own Amendment 27. The introduction of a regulatory body to oversee the rules governing the behaviour of bailiffs would greatly strengthen complaints handling for the victims of practices that fall outside the national guidelines. The FCA reported in its Financial Lives 2020 Survey that 3.8 million people in the UK are currently experiencing “financial difficulty”. It is a terrible situation that takes a significant toll on people’s health and relationships. This amendment seeks to address an important concern: the fair treatment of people by enforcement agents who collect debts, often from vulnerable people who are in grave financial distress.

The absence of an independent regulator means that, when breaches of national standards occur, any complaints will be dealt with through the company or a trade association, before possibly being passed on to an ombudsman. This is an arduous process that prevents complaints from being adequately actioned. Furthermore, these national standards are not legally binding, which obscures the extent to which an individual can seek redress. No industry is exempt from poor practice. While most enforcement agents will probably abide by national standards, nevertheless we need to make sure that they are properly regulated.

Breaches do occur, and I will quote one example provided by the charity Christians Against Poverty of a single mother of two children. This woman was living under police protection and was a regular at a food bank, and her abusive former partner had taken out £20,000-worth of debt in her name. All of this was compounded by the fact that she was caring for her critically ill mother. When visited by a bailiff on account of a parking fine that had escalated, she attempted to contact CAP so that it could explain the situation to the bailiff. At this point the bailiff became intimidating, aggressive and threatening. That is a breach of rule 21 of the national guidelines, which states:

“Enforcement agents must not act in a threatening manner when visiting the debtor”.


We need to get a balance of powers that allows enforcement officers to undertake their tasks while also protecting debtors and ensuring they have significant mechanisms to air complaints impartially and without fear.

Debt charities are already reporting rising numbers of people in financial crisis and behind on household bills such as rent and council tax because of the Covid pandemic. Given the possible upturn in the number of individuals being referred to bailiffs in the near future, now is a suitable time to explore how we can introduce a regulatory body. I hope the Government will look closely at the content of this amendment and work to correct the current imbalance.

I now turn to Amendment 27 in my name. I am grateful to the noble Lord, Lord Sikka, and the noble Baroness, Lady Bennett of Manor Castle, who have also signed it. I tabled this amendment because I believe in the positive difference that gambling blockers can make in reducing gambling harms and empowering individuals to control their own addictions. The amendment would mandate the providers of debit and credit accounts to offer opt-in gambling blockers to block gambling transactions.

As things stand, gambling blockers have widened coverage over the past three years, currently reaching around 90% of current accounts and 40% of credit card accounts. This is an achievement in its own right and should be welcomed as a positive technological aid to reduce problem gambling. While there is a still a need to close that 10% in debit card coverage, the majority of which will come from smaller banks and building societies, it is of secondary concern to the far larger gap that exists in the credit account market, where 60% of accounts are not covered by blocking options.

In April 2020, the Gambling Commission banned the use of credit cards for gambling purposes, but this is only enforceable on licensed operators. The lack of gambling blockers on credit accounts is particularly problematic as it can provide a back door for individuals suffering from gambling-related harms to use credit cards on unlicensed sites. This undermines the Gambling Commission’s own rules and unfairly benefits unlicensed operators. Even more worryingly, this blind spot provides a direct avenue for the expansion of harmful and addictive behaviour, and the accumulation of gambling debt that would not ordinarily be allowed.

With the Government’s gambling review ongoing, the emphasis should be on preventing harm, and provisions for gambling blockers would be a welcome aid in achieving this goal. Admittedly, they are not perfect; they rely on accurate merchant categorisation codes to identify gambling transactions. But this should not discount the positive part they can play. Furthermore, through greater co-operation between account providers and payment processors, a robust and data-driven system of reporting could be developed to identify unlicensed operators hiding behind incorrect merchant categorisation codes to block future transactions. With no legal requirement to provide blockers and no obligation on payment processors to diligently review the merchant categorisation codes of unlicensed operators, gambling blockers will suffer from pitfalls that could be effectively remedied through either a legislative or regulatory approach.

There are also issues this amendment does not directly deal with but deserve highlighting. Due to the entirely optional provision of blockers, there are currently no minimum standards for functionality. This is an issue when it comes to the so-called “cooling-off” or “friction” period—the time between deactivating the blocker and once again being allowed to transact for gambling purposes. As a tool that assists those suffering from gambling addiction, the ability to activate and deactivate at will renders a blocker redundant.

Of the gambling blockers currently on offer, friction periods range from instant reactivation to 48 hours. The results offered by Monzo highlight the success of stricter cooling-off periods. Its blocker, with a 48-hour cooling-off period, block around 585,000 gambling transactions per month and is active on nearly 300,000 accounts. According to its data, once it is activated, fewer than 10% of customers deactivate it. Monzo, driven by its own success, has called upon the Government to mandate that banks provide blockers and would no doubt support this amendment. However, as I have shown, it is not merely their provision that renders them successful but their architecture. A minimum cooling-off period of 24 hours would make them far more effective tools to deal with addictions.

Finally, I will add that, in a data-driven world fuelled by digital payment systems rather than the cash we used in the past, individuals should have more autonomy over how they spend their money. Aside from their benefits in combating addiction and containing the unlicensed market, gambling blockers are an example of giving customers control over their own transactions. Actions and decisions are increasingly dictated by data that is controlled, analysed and dissected by global corporations and increasingly removed from the individual. Optional transaction blockers such as those related to gambling re-empower individuals and give them a stake in this new data-driven environment.

I thank the Government for their helpful work in encouraging the major banks to introduce gambling blockers—an endeavour that has been very successful in relation to debit cards. I know from discussions I have had with the Government that they see the benefits of blockers and continue to support a voluntary rollout. This is very encouraging and I hope that as they move forward with these efforts they will take on board some of the comments made here and find ways to promote greater data sharing between payment service providers and processors to tackle the unlicensed market. However, I remain of the opinion that for products as potentially harmful as gambling there should be not only a statutory obligation to provide opt-in blockers, as stated in this amendment, but minimum design requirements so that the positive results provided by Monzo can be emulated by other account providers.

Budget Statement

Lord Leigh of Hurley Excerpts

Friday 12th March 2021 Lords Chamber

[Lord Leigh of Hurley (Con)]

My Lords, I congratulate my noble friend Lord Cruddas on his excellent maiden speech and welcome him to your Lordships’ House. He is a role model to many. Like me, he started his business in 1989 and it has grown to be a global leader, employing 700 people and with a market value in excess of £1 billion. Mine is something of a work in progress by comparison. He has contributed enormously to many charities—some of which I know but many of which I do not—and of course to British public life. We look forward to his many future contributions to this House, which will draw on his great experience, and most importantly his business experience, which is badly needed in this House. I welcome all noble Lords making maiden speeches, in particular the noble Lord, Lord Khan of Burnley, and those from whom we look forward to hearing later on, my noble friends Lord Benyon and Lord Bellingham.

As it happens, my maiden speech was on taxation—specifically, the OECD taxation of multinationals on base cost erosion and profit shifting. Since then, the OECD has produced pillars 1 and 2. I would be grateful if the Minister could tell us to what extent this Budget complies with pillar 1, and in particular pillar 2. What steps will HM Treasury be taking to ensure that we fully comply with pillar 2?

Finally, I congratulate the Minister and in particular the Chancellor on an excellent Budget and on listening to the pleas of 2,500 entrepreneurs who co-signed a letter, written by me and Shalini Khemka of E2E, strongly advising against any rise in capital gains tax for entrepreneurs. Entrepreneurs are vital to the UK economy and we want to see many more of them. We want them to aspire to the success of our new noble friend, my noble friend Lord Cruddas.

Political Parties: Expenditure Limits

Lord Leigh of Hurley Excerpts

Monday 22nd February 2021 Lords Chamber

[Lord True (Con)]

No, my Lords. I strongly disagree; the noble Lord should think carefully before spreading such charges. If one looks at the record of donations that the Liberal Democrats have received, including those from convicted criminals, it is clear that charges of that kind should not be cast in that manner. The Government are reviewing the matter; local election limits were put up by the coalition Government, in which Liberal Democrats served, in 2014.

[Lord Leigh of Hurley (Con) [V]]

My Lords, as a party treasurer, I know that in 2000 the cost of a second-class stamp was 19p and it is now 66p. Therefore, does the Minister agree that the rules need to reflect reality? Given that all parties were fined after the 2015 election, there is clearly a need to simplify the rules. Perhaps he might point out to the Liberal Democrats that election spending is not necessarily the only issue: late filing of accounts six months after the 2019 election was also reprehensible.

[Lord True (Con)]

My Lords, I agree, but I would not want to give the House the impression that the Government do not think that there are matters that need to be addressed and considered. Notional expenditure is obviously one of them. I am grateful for the support that we received from the Labour Party on examining the rules on notional expenditure.

Financial Services Bill

Lord Leigh of Hurley Excerpts

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

[Lord Leigh of Hurley (Con) [V]]

My Lords, I refer your Lordships to my registered interests and extend a very warm welcome to my noble friend Lord Hammond of Runnymede. I have sat through many of his speeches, including the famous one in which he described why “Spreadsheet Phil” is inappropriate, but this was exemplary. His maiden speech and that of the noble Baroness, Lady Shafik, were excellent.

The final EU withdrawal agreement was a success, but, as has been discussed in this House and elsewhere, it was light on financial services. Mark Carney, the former Governor of the Bank of England, said this time last year that the City of London must not be a “rule-taker” after Brexit, effectively outsourcing the regulation and supervision of our global financial centre. Therefore, while adopting the EU rulebook in the first instance has delivered much-needed continuity and stability, we must now think about what comes next. That must surely be an approach that sees the UK continue to set global standards in prudential regulation and consumer protection, without losing sight of our broader objectives of innovation and competition.

There are three initiatives worthy of mention that can reinforce the initial steps taken in the Bill. The first is the future regulatory framework review. The Government’s response to this will give us the clearest indication yet of the vision for financial services post Brexit. I note the stress placed on equivalence of outcome. This should give us more room for interpretation, and indeed the opportunity to revisit many areas of law which were effectively gold-plated into UK law when we were EU members.

The second is the productive finance review. This concerns the means to unlock more capital to increase productive capacity in the real economy. I mention it here because it should also look at the impact of regulation on institutional capital flows into key areas such as infrastructure and technology. EU directives IORP and Solvency II limit such capital flows with prohibitive capital charges and should be looked at immediately. There is £6 trillion in UK private pensions alone that could be unlocked for more productive purposes.

The third is the Kalifa review into UK fintech. The Chancellor and my noble friend Lord Gadhia recently spoke of the need to see a second big bang in the City. Fintech is a key part of that. I hope the review proposes reforms as transformational as the first big bang was for the City.

Turning to the specifics of the Bill, there are commendable measures that will advance the competitiveness of financial services within our current regulatory envelope. Asset management remains our most globally significant subsector. Therefore, the measures to update the regime for third-country investment firms is to be commended. Similarly, introducing a more proportionate prudential approach to regulating investment firms will lower their costs of doing business, and better reflect underlying risk. On the other side of the coin, there are important measures on supervision and consumer protection. In particular, I commend the review that former FCA director Chris Woolard is leading on “buy now, pay later” lenders, where there is mounting evidence of bad debt, mis-selling and very bad practice. However, on FCA enforcement, there is a balance to be struck, and this Bill is, I am afraid, another opportunity missed to strike that balance. I am referring to the FSCS levy, FCA enforcement and the endless ex-post powers of the Financial Ombudsman Service.

The FSCS levy is due to soar by a third, to over £1 billion, with one of the reasons given being the cost of compensating SIPP consumers. However, there is mounting evidence that the FOS has been overreaching itself in its decisions against those very same SIPP providers. For example, many SIPP providers provide execution-only services on behalf of a client—the clue in the phrase “self-invested”—and yet claims of mis-selling are upheld, even where no financial advice is proffered and no advisory permissions are even held.

Frankly, this has the appearance of a racket. Blessed by the FCA, the FOS adjudicates, the FSCS is jacked up accordingly, the FS industry is forced to pay, driving some literally to bankruptcy, and the money flows seamlessly back to the FCA. It is a system with no accountability before the law, and no right of appeal. In short, it is unjust, and at a time when the broader powers of the FCA are being debated. Will the Minister consent to revisiting this important issue? It is a shame that the Bill does not seek to rebalance the relationship between the FCA and FOS and bring some common sense into how FOS operates.

Members of this House might recall that I have been banging on about FOS for some time, and I have had the pleasure of meeting the City Minister to discuss it. Well, something fell into my lap this summer. I received an unsolicited credit card from a company called NewDay. I had not asked for a credit card. A day or so later, a neighbour spotted someone rummaging in my outdoor letter box. It was a scam. Someone had ordered a card in my name and was seeking to retrieve the PIN subsequently sent in the post. A simple remedy would be to require credit card recipients to confirm that they had ordered one before it is sent to them. I suggested that to the company; it refused, so I complained to the FOS and it took six months for the FOS to tell me it could not fix the issue as the FCA handbook, which, as we know, governs FOS, states that as I was not yet a customer, I was not an eligible complainant under the FCA dispute resolution—rule 2.7.2, if you are interested—so it would take it no further and, as a result, others will now get scammed in this way.

That shows a dramatic shortage of common sense. Does the Minister agree that it is not clear that FOS is fit for purpose, and that the Bill provides us with an opportunity to ensure that FOS and the FCA do the job Parliament had envisaged, or to let us change the way FOS and the FCA operate?

European Union (Future Relationship) Bill

Lord Leigh of Hurley 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 Leigh of Hurley (Con) [V]]

My Lords, I start by complimenting my noble friend Lord Cavendish of Furness on his valedictory speech, which was typically eloquent and clear. I know the whole House will join me in thanking him for over 30 years of service to this House. His warm and friendly camaraderie will be missed by all of us. He has not sought to be safe through caution, but if anything he has been more than forthright in his illustrious time here, and he can retire safe in the knowledge that the Government have achieved in the Bill all and maybe more than he and I could have expected. He knows why I get a particular thrill every time I refer to him and that he will be greatly missed by all the House. I am also delighted to see that the noble Lord, Lord Austin of Dudley, is giving his maiden speech here. His proud stand against historic and current anti-Semitism makes him a particular hero of mine.

I have supported the Government at every step of their negotiations and it is true that I would have settled for a lesser deal, so I can only thank and praise our negotiating team, led by my noble friend Lord Frost, for its achievement. Mark my words: this will go down in history as a masterclass of negotiating success.

In this huge Bill I will pick out one area: namely, technical barriers to trade. Perhaps the Minister can answer this question in his summing up later. The Bill very helpfully allows for conformity of product legislation, codes, clarification and status. For example, the Soil Association needs to change and co-ordinate with the EU to enable trade to continue. The plea I hear from manufacturers now is to allow a grace period for the new systems to kick in and for guarantees that their customers in the EU will not remove the products from their shelves, as they are currently threatening to do, because after tomorrow, those products may not be EU compliant. Accordingly, there needs to be a grace period.

Finally, on financial services, as a practitioner in that field, I disagree strongly with the noble Baroness, Lady Kramer. Those threats and worries were raised at the time of the referendum and they proved not to be true. I am convinced that the EU will look carefully at our negotiation through this agreement and will see that there can be a win-win between us on financial services. I have spoken about equivalence a number of times in this House, and I look forward to the Government achieving a more than satisfactory solution in this vital area soon.