Financial Services and Markets Bill

Debate between Lord Naseby and Lord Stevenson of Balmacara

Committee stage
Wednesday 25th January 2023 Grand Committee

[Lord Stevenson of Balmacara (Lab)]

As usual, I have forgotten where I was in my perorations, so the Committee might get a few words that it has heard already, which can be ignored. I think I was talking about the requirement in the 1882 legislation that all bills of sale have to be completed on a particularly complex standard form, and then registered with the High Court, which, of course, uses a paper-based record system. The sanctions for failing to comply with any of its documental requirements would be out of scope if current consumer protections applied, and lenders are understandably loath to amend them.

It costs about £45 to register a bill of sale with the High Court, and another £50 to search it. That does not happen very often, because you cannot search by vehicle registration number or any other useful form; it is just a simple list of all the registered cases.

I think most people would agree that the Law Commission makes the case very well for the repeal of the Victorian bills of sale legislation. What is so disappointing about all this is that, originally, the Treasury seemed to share that view. In a Ministerial Statement in February 2017, the Government accepted

“the overarching thrust of the recommendations”,—[Official Report, Commons, 7/2/17; col. 6WS.]

albeit warning that they would not proceed until they had further reflected on some of them. The reflection took the form of a limited consultation with stakeholders, which received 25 responses, after which the Treasury decided not to take forward the draft Law Commission Bill. The principal reason given was that several of the 25 respondents felt that some of the consumer protection proposals in the draft Bill prepared by the Law Commission did not go far enough. It is almost difficult to believe that.

That remains the position. I have tried to keep the pressure on: I took over the Law Commission Bill as a Private Member’s Bill. I got 10th place in the ballot one year, but then lost the Bill because of a snap election called by, I think, Mrs May—I forget now who was Prime Minister. However, I have had meetings; in 2019 I was kindly joined by the noble Lord, Lord Young of Cookham, and the then Economic Secretary to the Treasury, John Glen, but to no avail. In his last letter to me, he accepted that there was consumer detriment taking place but, as numbers of logbook loans were falling, he said he believed

“that the rationale of the Government’s decision not to proceed with legislative reform in this area still stands”.

John Glen is now promoted and in the Cabinet, and I am where I am. However, I respectfully disagreed with him then and still do today. Only a few months ago, I was written to out of the blue—they must have got my name from the news about the Bill when it was first introduced—by people who had been scammed, aided by logbook loan legislation. An elderly couple had put all their hard-earned savings into a motor home, which they wanted to use for their retirement. Just when they had completed the purchase and the renovations, spending almost as much again as they had on buying the vehicle, they discovered that it had mysteriously acquired an outstanding logbook loan, and they lost the vehicle and their capital. This is the sort of thing that happens.

I look forward to the Minister’s response today, and I remain willing to attend further meetings if she thinks that might help move this issue forward. I know from discussions with StepChange that consumer detriment is still happening in this area. I agree with the FCA, which I spoke to earlier in the week, that the credit squeeze, inflation and the energy cost crisis is going to make the return of logbook loans—and, indeed, many other forms of high-cost credit—as inevitable as it is undesirable. If accepted, my amendment would give the FCA the tools it needs to assist the many people affected by this egregious legislation—albeit I still believe that the right solution is for the Government to commit now to repeal the Victorian legislation as soon as reasonably practicable.

[Lord Naseby (Con)]

My Lords, I am not going to repeat what my noble friends Lady Noakes and Lord Trenchard have said, but I certainly think that His Majesty’s Government—I am a very loyal member of the governing party—need to recognise that this is a once-in-a-lifetime opportunity in this Bill. Therefore, for me, the driving force should be to ensure that in doing what we are doing—I accept that it is important to mention designated activities—we should be driven by the need for growth for our economy, good competition and innovation. Those things are so key to the future of this country, the City and the whole of the financial services area that we need to be a little bit careful. I think that my noble friend Lady Noakes’ proposal is a perfectly valid one. The Government can have another look at it, but I do not think that it is necessary.

Financial Services Bill

Debate between Lord Naseby and Lord Stevenson of Balmacara

Report stage
Wednesday 14th April 2021 Lords Chamber

[Lord Stevenson of Balmacara (Lab) [V]]

My Lords, I will speak briefly on government Amendment 14 and say a few words in support of the noble Lord, Lord Holmes, because of his ongoing campaigns and successes in making us think harder about financial inclusion and the use that could and should be made of fintech, in reaching out to those who are not provided for by the financial system. Government Amendment 14 has our support because, as seems obvious from the Woolard review and other comments, there is an issue around this new-technology approach to purchasing.

Buy now, pay later has all the ring of a scam around it although, having talked to some providers and looked at their business plans in more detail, it seems to be a well worked-through and carefully crafted approach to the process of trying to buy goods, mainly. It may also apply to other services. Those on reasonable budgets who are unable to pay, with confidence, the amount for the goods that they are purchasing get the benefit of the opportunity to spread the payment over more than one month—the majority are for three months—largely at the expense of the retailer. The amounts are small and the sanctions applied by the providers are severe: you get dropped if you miss a payment or two.

There does not seem to be a sense of some of the fringe approaches that were available in other schemes that the House has looked at and which we have read about in the papers. In a sense, this may not be quite the scam and worry that we thought it was when the Woolard review came out, but the Government are right to ensure that the regulatory book is in order and that there is an opportunity to keep a close watch on this, and to act, as and when required.

Therefore, although it is unusual for the Opposition to offer powers to the Government in this way, we are reassured by the way that they have approached this, having brought us into the discussion and debate. We are aware that any regulations brought forward will, in practice, be under the affirmative basis and therefore open to scrutiny within your Lordships’ House and elsewhere in Parliament. We support this approach, even though to do so is slightly unusual. We think that doing it this way is a good move by the Government and hope that it will not be necessary, in the sense of some of the scare stories that we have read about. But if it is, at least the powers are banked.

[Lord Naseby (Con) [V]]

This is an important Bill and I record my formal thanks to my noble friends on the Front Bench for the way that they listened to the earlier debates. Here, we have evidence in this first set of amendments, certainly Amendment 14, that not only have they listened but we are getting a positive response.

Amendment 14 is good and I support it. I am delighted to hear that we will have a consultation with stakeholders. I wonder whether Her Majesty’s Government could produce a list of those whom they think they are going to consult, because a number of us know a fair amount about the fringes of the financial world and there may be a section missing.

On buy now, pay later, I remember that when I started buying things that I could not afford there was a technique called hire purchase. That was very similar and there were all sorts of arguments when I got into politics, while HP was still active, on the nuances of the HP world. The same applies now, so I say well done on Amendment 14. I look forward to seeing the consultation and hope to take part myself. As someone who has sat in the chair, I will welcome enormously having an affirmative resolution when it comes back. I also ask my noble friend the Minister to make sure that the Financial Ombudsman Service and claims management companies fall within the circumference of this consultation, because they are important to this large market. It is buy now, pay later, in a sense, but not the modern version; it was historically called home-collected credit.

United Kingdom Internal Market Bill

Debate between Lord Naseby and Lord Stevenson of Balmacara

Committee stage & Committee: 1st sitting (Hansard) & Committee: 1st sitting (Hansard): House of Lords
Monday 26th October 2020 Lords Chamber

[Lord Naseby (Con)]

My Lords, I shall resist the temptation to follow the noble Lord, Lord Purvis, in what he has said. However, I reflect that in the other place I was responsible for, and chaired most of, the Maastricht Bill, with 500 amendments and 24 days of debate. Even there, I think that I would have been really stretched to have enabled what is labelled here as a new clause to be put into the purpose of Part 1 on an introductory basis.

I understand the feelings of Scotland, Wales and Northern Ireland. I had the privilege of being Parliamentary Private Secretary in Northern Ireland, and I was a local government leader. Of course they feel strongly, as I do about local authorities and the Covid situation. Nevertheless, it is quite clear that the purpose of Part 1 is

“the continued functioning of the internal market for goods in the United Kingdom by establishing the United Kingdom market access principles.”

It then lists what the mutual recognition and non-discrimination principles should be.

If the Opposition and those who do not like what is in Part 1 want to make a point, there is a case for having a small amendment including just the words “and services”. I see merit in that because, as I said earlier, that seems to have some validity, but to suggest in the introductory part, under “Purpose of Part 1”, that we have to await a statutory instrument

“containing regulations under section 56(3)”,

et cetera, is extraordinary. I cannot believe that there have ever been many Bills where that sort of new clause has been inserted into the introductory part.

Therefore, I say to my noble friend on the Front Bench that there are valid questions arising from this alleged new clause to be asked in the right place, but this is certainly not the right place in this Bill.

[Lord Stevenson of Balmacara (Lab) [V]]

My Lords, as the noble Lord, Lord Dunlop, said, this debate is a sort of appetiser for the main course to come in later groups, when we will dig much deeper into the right approach to ensuring that our current well-functioning internal market continues after the transition period ends and that we can manage the necessary and inevitable policy divergences that we need across the United Kingdom and should welcome.

The noble Lord, Lord Bruce, said that the key questions are why we need the Bill at all, let alone now, why the Government are ignoring the evident successes of the co-operation and constructive progress which have been hallmarks of the common framework programme, why threaten the devolution settlement so directly, and what it is about the top-down approach that the Government wish to introduce that is so attractive, given the huge risks to devolution. Those are very important questions and I look forward to hearing what the Minister says when he comes to respond.

The noble Baroness, Lady Neville-Rolfe, said that she recognised the value of proposed new subsections (1) and (2) in the amendment but was worried that proposed new subsections (3) and (4) made it a wrecking amendment. I do not think that it is. Indeed, I make the same points about the need for a pause before we implement in my Amendment 178, which is in a later group.

I hope that the Government will think very hard about the clear message that seems to come from this debate. We need to carry on down the road well travelled in recent years, encouraging the devolved Administrations to continue to collaborate, to work together with mutual understanding until agreement is reached, and then to go further so that there is agreement on all the issues that need to be agreed and a way of resolving any issues that are left over. This is the way in which we make progress—not by imposing a top-down solution. Indeed, anything else risks destroying the complex but pretty successful devolution settlement that we currently enjoy.