Financial Services and Markets Bill [HL]

Lord Stockwood Excerpts

2nd reading
Monday 8th June 2026 Lords Chamber

Moved by

[Lord Stockwood]

That the Bill be now read a second time.

Northern Ireland and Scottish legislative consent sought.

[The Minister of State, Department for Business and Trade and HM Treasury (Lord Stockwood) (Lab)]

My Lords, the financial services sector is one of the UK’s greatest economic success stories: we are the world’s largest net exporter of financial services, and it makes up around 20% of UK exports. The sector made 8% of UK GVA in 2025, totalling £224 billion. It plays a vital role in our economy, underpinning services that households and businesses rely on every day. It provides high-quality jobs throughout the country. It was in recognition of this that the Chancellor announced a significant set of reforms in her speech to the sector in Leeds.

I am very happy to take this Bill because I worked in the sector in the past. I was the CEO of an insurance technology firm offering protections to small businesses, and I have been on several boards of businesses in the financial services sector. While I no longer hold these roles, perhaps this is the right moment to declare my interests as set out in the ministerial register, in particular, a number of my investments in funds that are managed by FCA-regulated firms. In my role as Investment Minister, I see and hear first-hand just how far our financial services sector reaches and the extent to which our institutions, regulation and rule of law are respected overseas.

The Financial Services and Markets Bill will modernise how the sector is regulated, enable it to grow and lend more to businesses and make consumer protections fit for the digital age. It will achieve these objectives while maintaining high standards of regulation and oversight, ensuring that consumers and businesses continue to engage with the sector with confidence and that it will meet their needs. I am pleased that the Bill has been welcomed by a range of stakeholders operating across and alongside the sector. There is general recognition, as there was in an All-Peers meeting that I hosted last week, that it is a question of the balance we are trying to achieve.

As noble Lords would expect, this is a large, technical Bill, so I will briefly set out its purposes and why the Government have adopted the measures they have, and why we believe they strike that balance of promoting innovation and growth while managing and mitigating risk and, of course, protecting consumers.

Turning first to consumer protections and redress arrangements, Clause 1 and Schedule 1 repeal large parts of the remaining provisions of the Consumer Credit Act 1974 so that many of them can be recast into the rulebook of the Financial Conduct Authority, known as the FCA, continuing the changes introduced as part of the Financial Services Act 2012. The Consumer Credit Act was designed for the pre-digital age where everything was done on paper forms. It predates the smartphone by more than 30 years. Research shows that parts of the Consumer Credit Act can be harmful to potentially vulnerable customers, as lenders are often required to send complex communications that result in individuals feeling disempowered, confused and reluctant to seek help. This shows how bad regulation can harm consumers. The FCA is already responsible for making rules that protect consumers and has already made rules to replace some parts of the Consumer Credit Act. It has the expertise needed to perform this role and the powers needed appropriately to police compliance within the rules. Repealing more provisions of the Consumer Credit Act will ensure that it can make rules fit for the digital age.

Moving on, Clauses 4 to 12 reform the operation of the Financial Ombudsman Service, known as the FOS, to improve the consistency and predictability of its decision-making. At the moment, in a small but significant minority of cases, the FOS is acting as a quasi-regulator, by which I mean that rather than simply resolving individual complaints between consumers and firms as intended, its decisions have the effect of setting minimum standards for firms. This can lead to uncertain and inconsistent expectations and outcomes for consumers and firms, which undermines confidence. The Bill is reforming the “fair and reasonable” test as well, which guides FOS decision-making, introducing a mechanism to ensure greater coherence between the FOS and the FCA, and makes a number of other reforms to allow the FOS to successfully fulfil its original role as a quick and informal dispute resolution service.

Clauses 23 to 28 improve protections for consumers who purchase financial products through an “appointed representative”, for example, when purchasing insurance from a retailer acting on behalf of an authorised firm. The Bill will require the FCA to check that an authorised firm is up to the job of ensuring that its appointed representatives operate with high standards of conduct. When something goes wrong, the Bill will ensure that consumers of appointed representatives will be able to bring a complaint to the FOS, which is not always the case at the moment.

Now let me turn to the regulatory framework. I thank all Members of the House of Lords Financial Services Regulation Committee for their Growing Pains report that I read over the weekend. There is a strong alignment between the committee’s conclusions in the report and the Government’s perspective and actions. The Bill will consolidate the regulatory framework to deliver stronger co-ordination and clearer responsibilities.

Clause 13 and Schedule 2 will abolish the Payment Systems Regulator, known as the PSR, and consolidate its functions within the FCA. The PSR has been effective in driving competition and innovation among payments firms, but the current framework is too fragmented. The Bill will reduce the number of regulators that firms need to engage with.

The Bill also makes a number of reforms to support effective operation of the two largest financial services regulators, the Prudential Regulation Authority—PRA—and the FCA. The actions of the FCA and the PRA are absolutely critical to ensure that the UK has the right regulatory environment, as a key part of the Government’s financial services growth and competitiveness strategy. Clause 21 speeds up the regulators’ decision-making by reducing the statutory deadlines for determining a number of key applications, including authorising new firms. Clauses 29 and 30 create a new provisional licence regime, which will support innovative new firms by allowing them to begin operations on a temporary and limited basis while they apply for full authorisation.

The Bill also makes a number of changes to the internal operations of the regulators, to ensure that they are focused on their activities in the right places, and to support effective oversight and scrutiny of their work. The Government have looked at the wide variety of requirements currently applying to firms—some overlapping, some obscure and some simply of low value. Clause 16 requires the regulators to develop and publish long-term strategies. Clause 17 requires them to consider their existing eight regulatory principles when preparing or revising their long-term strategies, while removing the requirement to consider them every time they exercise one of their functions. Clause 18 removes a number of requirements on the regulators that are duplicative or impose a burden on them that is disproportionate to any transparency benefits that they bring.

Collectively, these changes are designed to ensure that government and Parliament can give clear direction to the regulators at a strategic level and support scrutiny of their broader approach in a way that is meaningful and impactful, rather than focusing on the minutiae or clogging up the regulators with process that adds no value. The Bill also supports the international competitiveness of our world-leading financial services sector, including through Clause 37, which enables the Treasury to create overseas recognition regimes to make business across borders easier without compromising consumer or financial protections.

I turn to the section relating to administrative burdens on firms. I have said the Bill ensures that the administrative burden that regulation puts on firms is proportionate, without compromising on core consumer, prudential and market protections. At the core of this objective are reforms to the senior managers and certification regime in Clauses 31 to 36. This regime holds senior leaders in financial services firms personally accountable for their actions. It is a vital regime that was introduced after the failures of the financial crisis, following the report of the 2012 Parliamentary Commission on Banking Standards. Many Members of the House were on that commission, including the noble Baroness, Lady Kramer, who I look forward to hearing from today. This regime has vastly improved the standards of governance and conduct across the financial services sector, and we have the noble Baroness and others to thank for that.

However, the way that the regime operates in 2026 results in significant regulatory burdens, costs and operational inflexibility. Following careful consideration, the Bill will reduce those burdens while retaining the core guardrails that the regime introduced. The Bill gives the FCA and PRA flexibility in how senior manager appointments are overseen and removes the certification regime which applies to roles below senior manager level. In its place, regulators will be able to make appropriate rules in their rulebooks.

Last week, I met many noble Lords, including the noble Lord, Lord Sharkey, the noble Baroness, Lady Bowles of Berkhamsted, and my noble friends Lord Davies of Brixton and Lord Pitt-Watson. They asked me for assurances that the Bill does not weaken the core protections of this regime. I am happy to give those reassurances. Firms will remain responsible for ensuring that those they appoint are fit and proper, and individuals will remain individually accountable for their decisions. This is not about deregulation but about ensuring that the rules operate in a more proportionate and targeted way.

I will now speak to the opportunities for credit unions. The Bill will enable credit unions to serve more people and communities, something I know will be strongly welcomed by many in this House. The Government are committed to supporting the growth of the mutual and co-operative sector, recognising the important role that credit unions play in promoting financial inclusion and providing affordable credit.

Clause 2 expands the common bond requirements for credit unions. It enables credit unions to reflect modern arrangements in our living conditions, allowing them to admit relatives of existing members who live outside the same household and members of the same household who are not relatives. It enables credit unions to permit retirees to remain as fully qualifying members, and to join after retirement. It also enables credit unions to admit students as eligible members under the locality bond, even where they do not live or work in the same place as they study. This delivers on a long-standing ask of the credit union movement, which the Chancellor is proud to be able to deliver, and is part of the Government’s ambition to double the size of the co-operative sector.

On lending and investment, Clauses 39 and 40 update the statutory framework underpinning the ring-fencing regime. This regime requires major banks to separate their UK retail services from riskier investment banking activities. I pay tribute to the Parliamentary Commission on Banking Standards, whose work was instrumental in establishing this regime. I want to be clear: ring-fencing has played a central role in strengthening the resilience of the UK retail banking sector since the financial crisis, but it is also true that the wider prudential and resolution regime has developed significantly since then. In particular, the UK now has extensive resolution powers to protect depositors and taxpayers in the event of future failure. The UK is therefore now in a much stronger position to respond to banking failure than during the global financial crisis.

The 2022 independent Skeoch review concluded that ring-fencing should be retained but identified areas of rigidity and recommended better alignment with the resolution framework. At Mansion House last year, the Chancellor announced a further review of the ring-fencing regime, and last month the Government set out a package of reforms designed to support growth while maintaining financial stability. The Bill makes changes to deliver the outcomes. It clarifies that the regulator need not duplicate rules where protections are delivered elsewhere, and it updates the statutory purposes to reflect how banks could fail today. Overall, these changes create a more coherent and adaptable regime that supports a more efficient environment for banks to lend and invest in the UK economy, while upholding financial stability and protecting depositors.

The Bill will also enable the Treasury to update existing legislation to help small and medium-sized enterprises, known as SMEs, to access lending through a wider range of lenders. Legislation already requires certain banks designated by HM Treasury to share credit information about their SME customers—subject to consent—with designated credit reference agencies to encourage greater lending. Since that regime was introduced, the probability of SMEs establishing new borrowing relationships has increased by over 25%.

However, almost 70% of new lending to SMEs now comes from outside those core designated banks, including from newer challenger banks and fintechs. Clauses 41 to 43 allow the Treasury to expand the scheme to a wider variety of lenders. For the first time, the Government are also extending the scheme to support the provision of credit to the charity sector.

Clause 44 advances the Government’s ambition to make the UK the location of choice for specialist and complex insurance by enabling the PRA to set more appropriate funding requirements for specialist insurance undertakings, known as transformer vehicles. Clause 45 advances the Government’s ambition to establish a new, globally competitive captive insurance framework.

I turn to anti-money laundering. I have spoken about the importance of maintaining the UK’s pre-eminent global position as a global financial centre. However, being a financial hub means that we now face heightened vulnerability to illicit finance. Money laundering firms harm legitimate businesses by distorting competition, increasing costs and enabling organised crime. The UK has a robust set of anti-money laundering rules, but the supervision of those rules is not consistent. So, in October 2025, the Government announced their intention to reform the supervision framework, with the FCA becoming the supervisor of compliance with anti-money laundering and counterterrorism financing rules for professional service firms. The detailed implementation will be through secondary legislation.

Clause 14 will allow the FCA to take responsibility for supervising anti-money laundering and counterterrorism financing among these professions. This will mean more consistent and effective supervision and improved collaboration with law enforcement. Financial crime increasingly takes place via crypto assets, which are increasingly held outside the UK. Several pieces of legislation enable the Government to seize illicit crypto assets with a connection to the UK. However, these powers have not been working effectively. The Bill enables the Government to ensure that they work as intended and can be modified as criminal practices evolve.

Finally, Clause 3 gives the Government the power to act on access to banking services. The way people access banking services in the UK has changed significantly over recent years. More and more of us are banking online and banks are closing branches in response. The Government are committed to ensuring that those customers who need it retain sufficient access to essential banking services in person. Banking hubs play a critical role in this ambition, and we remain committed to supporting the financial services industry’s rollout of 350 banking hubs by the end of this Parliament.

Last month the Government launched an independent review into access to banking services led by Richard Lloyd, former Which? director and former board member of the FCA. This review is to better understand the impact of the current trajectory, including the scale of any detriment to consumers, particularly vulnerable groups. The Bill contains a power to take action on access to banking services, including implementing the outcomes of the review should the evidence demonstrate that this is necessary.

I have been able to touch only briefly on what is clearly a wide-ranging Bill; I look forward to discussing it all in more detail. This Bill will help the financial services sector to grow and lend more to businesses, and importantly, it will make consumer protections fit for the digital age. When I began my speech, I said that the Bill is a matter of balance. I hope noble Lords will agree that it achieves its modernising objectives while maintaining the UK’s high standards of regulation and oversight. I beg to move.

--- Later in debate ---

[Lord Stockwood (Lab)]

My Lords, I thank everyone who has spoken in the debate for their valuable contribution. It has been an incredibly well-informed and courteous debate that, overall, recognised the balance that needs to be found to ensure that consumers are protected and risks are appropriately managed while avoiding an ever-increasing burden of regulation. Noble Lords have a range of views on where exactly that balance might be. In the time that I have, I will try to respond to as many of the points raised as possible. I will not be able to do justice to all the points raised today, but I have meetings scheduled with many people who have spoken. I reiterate that I am happy to meet anyone who would find it helpful to discuss any of the issues ahead of Committee.

As I have said, the Financial Services and Markets Bill will modernise how the sector is regulated. It will help the sector grow and lend more to businesses, and it will make consumer protections fit for the digital age. It will achieve these objectives while maintaining high standards of regulation and oversight. I remind noble Lords that this is why, as I mentioned when I opened the debate, the financial services sector contributes 8% of total UK GVA—although I have been corrected that TheCityUK estimates that, when related to professional services, this rises to 11%. We can all agree it is a substantial part of the UK economy.

The industry is a direct source of jobs and tax revenue, but it is, of course, much more than that. It is a key enabler of growth in other sectors, and it is the provider of payments, credit, insurance and investment services to households and businesses across the UK. A successful financial services sector is one that meets the needs of the broader economy and society at large, and that is what the Bill aims to deliver.

Before I turn to some specifics, I will set out the Government’s position on some of the broader points raised in the debate. A number of Peers, including the noble Baronesses, Lady Neville-Rolfe and Lady Noakes, asked whether it was appropriate to pass more responsibility to the regulators. FSMA 2000 gives the financial services regulators responsibility for making the detailed rules that apply to firms. The regulators operate within this regime set by the Government and Parliament, including a set of statutory objectives that they need to advance. As the noble Lord, Lord Burns, reminded us, this is a long-established approach and the Government believe that the regulators remain the most appropriate entities to make rules for the sector. Both the IMF and the OECD support the principle of regulators making rules independently from government. The delegation in this Bill is entirely in line with the approach that Parliament has repeatedly affirmed. The Government are in full agreement with the noble Lord, Lord Eatwell, when he notes that the success of the UK’s financial sectors depends in part on a highly respected system of regulation and strong, effective regulators.

The noble Baronesses, Lady Neville-Rolfe and Lady Bowles, also asked about the Government’s use of delegated powers, especially the power related to the banking services in Clause 3. The Treasury has submitted to the DPRRC a full delegated powers memorandum, which sets out the justification for each power. On Clause 3 in particular, the Government are taking this power now to ensure that we can respond swiftly to the independent review of access to banking services once it concludes. The Government are committed to keeping all aspects of the power under review as the Bill progresses through Parliament and as the independent review completes its work. We expect to narrow this power once the review is concluded.

On the matter of regulatory complexity, the Chancellor has been clear that the UK needs to regulate for growth and that regulation must be proportionate while adequately protecting consumers and ensuring we maintain the high standards we are known for around the world. This Bill targets unnecessary, burdensome regulation while maintaining those high standards, and we are focused on speeding up regulator decision-making and removing administrative burdens. The Government are committed to creating a regulatory environment that is proportionate and effective and supports growth. Good regulation also supports consumers. For example, the reform of the Consumer Credit Act is designed to ensure that consumers receive clearer and more useful information from lenders, empowering them to make better-informed choices on their finances.

The government framework is prescriptive and outdated. The literacy trust has found that one in seven adults has literacy skills at or below the level expected of nine to 11 year-olds, yet Fairer Finance has found that the reading age required for credit card providers’ materials is that of 11 to 20 year-olds. It is obvious that a simpler, more flexible regime, one focused on outcomes rather than rigid prescription, will enable firms to produce clearer, more accessible financial information, better meeting the needs of the significant proportion of consumers with lower levels of literacy or numeracy. The FSA has the experience to design the system to deliver this and the powers it needs to enforce compliance.

I have listened carefully to the concerns of the noble Baronesses, Lady Neville-Rolfe, Lady Noakes and Lady Gill, and others about changing the application of the regulators’ “have regards”, applying them to the long-term strategy rather than the day-to-day functions. It is vital that the regulators are subject to effective oversight and scrutiny so that Parliament can have confidence they are acting with the appropriate measures and achieving the outcomes required. Much like other areas of regulation that apply to firms, the reporting requirements on the regulator have developed over time and have sometimes laid on top of each other. What results is a detailed set of information, but there are also areas of overlap and duplication. To use a metaphor also used by the noble and learned Lord, Lord Thomas, at times it can be difficult to see the wood for the trees.

The changes will require the regulator to set out the regulation and supervision clearly, making it easier for Parliament and stakeholders to understand, engage with and challenge them. The “have regards” will remain in legislation. This will support the work of the Government and Parliament to hold the regulators to account, cutting out dense piecemeal reporting to focus on the bigger picture. The reforms will reduce unnecessary and duplicative burdens on the regulators, allowing them to speed up and focus on what is important while maintaining the important information needed for meaningful scrutiny. For example, the Bill will require the FCA and the PRA to continue to report annually on how they are advancing their competitiveness and growth strategies. This will support the Treasury’s biannual performance reviews held with the CEOs and the regulators, introduced as part of the Government’s wider regulation action plan.

I turn to reforms of the Financial Ombudsman Service—FOS. The Government are in full agreement with the noble Lord, Lord Sharkey, and my noble friend Lord Pitt-Watson about the importance of trust. It is essential that our regulatory system supports trust in the financial services sector and that people have confidence that they will be supported when things go wrong.

I can give my noble friend Lord Pitt-Watson the reassurance he asked for: when the FOS considers whether the firms have met their obligations under FCA rules, this will include principle-based rules, including the consumer duty. The new arrangements introduced by the Bill will bring in greater co-ordination between the FCA and the FOS and will mean that widespread issues can be spotted and addressed more quickly and effectively. For example, if the FCA spots that large numbers of firms are letting down their customers in a certain way, it can make the regulatory intervention to nip that issue in the bud, rather than waiting until consumers lose out.

I understand that some noble Lords have concerns about limiting claims to the FOS at 10 years. Concerns about potential long-term liabilities that are difficult to assess can hold back investment, making firms unwilling to invest or to serve certain consumer groups. However, historic complaints also pose significant practical challenges when we look at the lack of availability of relevant evidence on which to base a decision. The Government conducted a comprehensive cost-benefit analysis when designing this policy. Looking at recent history, only 11% of cases that are older than 10 years result in redress been paid, much lower than the overall rate. In order to assess these claims, the FOS has charged firms £18.1 million per year in case administration fees, while awarding only £600,000 to consumers, so the case fees are 30 times higher than the redress awarded.

However, I appreciate the point that some financial products are long-term by design, such as life insurance. Issues with these products may not come to light within the 10-year cut-off. so I am happy to assure my noble friends Lord Pitt-Watson and Lord Davies of Brixton that Clause 6 enables the FCA to make exceptions to time limit these types of products. This is aimed exactly at ensuring that holders of long-term products continue to be protected.

The noble Baroness, Lady Kramer, raised concerns that the Government are weakening the senior managers and certification regime. I assure noble Lords that this is not the case. These reforms are about improving how the regime operates in practice by removing unnecessary complexity to help increase efficiency and effectiveness while preserving the regime’s core focus on maintaining strong accountability standards. Firms will remain responsible for assessing the fitness and propriety of senior managers, and pre-approval by the regulators will still be required where regulators determine it necessary to advance their statutory objectives, targeting the regulators’ attention where it matters most. The regulators will continue to hold all senior individuals to account where standards fall short.

Where there is any tension between reducing the regulatory burden and maintaining high standards of senior-level individual accountability, regulators will be expected to prioritise the latter in accordance with their statutory objectives. Senior managers will remain responsible and accountable for the areas of their business that they oversee, including where they fail to take responsible steps to prevent regulatory breaches, regardless of whether they are approved or appointed.

My noble friends Lord Pitt-Watson and Lord Eatwell asked for assurances on the reforms to the ring-fencing regime. As I set out when I opened this debate, the independent review led by Sir Keith Skeoch in 2022 concluded that ring-fencing should be retained but recommended better alignment with the resolution framework. The Bill enables that alignment, meaning that the PRA will not need to duplicate efforts where protections are already delivered elsewhere, especially through the resolution regime. This fundamental safeguard—the separation of retail banking from riskier investment banking activities—is unchanged.

The Government will set out the wider reform programme in the ring-fence review, which will be published and will go beyond the measures in the Bill today. It focuses in particular on enabling ring-fenced banks to support growth, including consulting on a new growth allowance and expanding the range of products and services that they can provide to support UK businesses and the real economy.

My noble friend Lady Hodge asked a number of questions about the FCA’s new responsibilities for anti-money laundering, and I will try to answer them briefly. The Government are working closely with the FCA to ensure that it is ready and able to take on new responsibilities. On registration and legal privilege, the Treasury will shortly publish a response to the consultation on anti-money laundering supervision. This covers the FCA maintaining a register of supervised firms, access to legally privileged material and powers to ensure robust supervision during the transition period.

A duty of co-operation between anti-money laundering supervisors already exists in the money laundering regulations. OPBAS also has a censure power and can recommend that the Treasury strips PBSs of their supervisory role. The Bill provides authority to HMT to make payments to the FCA for proprietary work, therefore the FCA’s AML-CTF supervisory activities will be fully funded by fees paid by the supervised population. This funding for start-up costs will be fully ring-fenced for these purposes, and the Government intend for the FCA’s AML-CTF supervisory activities to be funded on a cost-recovery basis through its fee charges to supervised firms, consistent with the existing funding model. I expect the FCA to consult separately on the detailed structure and operating of these fees.

The noble Baronesses, Lady Young and Lady Hayman, and others raised sustainable finance. As they noted, the Government have clearly set out our ambition to position the UK as the leading hub for sustainable investment, leveraging our sustainable finance expertise to support transition and drive growth. The Government are working closely with the regulators to drive forward this ambition through work including the FCA’s recent consultation on aligning listed companies, sustainability disclosures with international standards, the launch of the Transition Finance Council and work to regulate ESG ratings. To answer the specific question of the noble Baroness, Lady Young, the Government consulted last year on how to implement our manifesto commitment to require financial services firms and listed companies to develop and implement credible transition plans. The Government are considering next steps and will respond to the consultation in due course.

I make the general point that noble Lords should not conclude that if something does not appear in the Bill, that means that the Government are not doing anything about it. The Government have a much broader programme of financial services work sitting alongside the measures in this primary legislation. I acknowledge the thoughtful questions from the noble Lord, Lord Kamall, the noble Baronesses, Lady Young of Old Scone, and my noble friend Lady MacLeod about business and community finance. In the interests of time, I will write to them following the debate. I will be happy to meet the noble Lord, Lord Holmes, to discuss the issues he raised related to technology and innovation. Finally, the noble Baroness, Lady Morgan, raised the important issue of economic abuse. Tackling economic abuse is a priority for the Government and a key theme of the financial inclusion strategy. Ministers will be happy to write to the noble Baroness with details of how we are working with industry, regulators and specialist organisations to tackle economic abuse and help victim survivors to regain financial independence.

I have rather breathlessly tried to answer as many questions as I can. I look forward to revisiting all these points in detail in Committee, and I beg to move.

Bill read a second time.

Moved by

[Lord Stockwood]

That the bill be committed to a Grand Committee, and that it be an instruction to the Grand Committee that they consider the bill in the following order:

Clause 1, Schedule 1, Clauses 2 to 13, Schedule 2, Clauses 14 to 31, Schedule 3, Clauses 32 to 53, Title.

Motion agreed.

Royal Mail

Lord Stockwood Excerpts

Monday 8th June 2026 Lords Chamber

[Lord Sikka]

To ask His Majesty’s Government in which years since its privatisation Royal Mail has fully met its first class and second class letter delivery targets; and what assessment they have made of its performance in this period.

[The Minister of State, Department for Business and Trade and HM Treasury (Lord Stockwood) (Lab)]

My Lords, Ofcom sets and monitors the Royal Mail’s quality of service targets and publishes annual performance data. Following its privatisation in 2013, Royal Mail fully met its first-class and second-class delivery targets in 2013-14, 2014-15, 2016-17 and 2019-20. Royal Mail met its second-class target, but not its first-class target, in 2015-16, 2017-18 and 2018-19. Royal Mail failed to meet both targets in all years from 2021-22 to 2025-26. The Government’s assessment is that performance has been unacceptable and must improve, and we will continue to engage with Ofcom and Royal Mail accordingly.

[Lord Sikka (Lab)]

My Lords, Royal Mail is another disastrous privatisation. Since privatisation, the price of a first-class letter has increased by 200% and second-class by 89%. As the Minister just said, Royal Mail has not met its delivery targets for years, and Ofcom continues to lower the targets; second-class mail is now to be delivered only every other day and not at all on Saturdays. Ofcom has clearly failed. It seems that the Government have two options: either to restructure Ofcom or to bring Royal Mail into common ownership. Which option will the Government exercise?

[Lord Stockwood (Lab)]

In preparation for this Question, I spoke to both the CEO of Royal Mail and directors of Ofcom. For context, it is worth stating that letter volumes have halved in the last 10 years, while the number of addresses has increased significantly. While I agree with my noble friend that performance has not been where it needs to be, there is a quality of service plan that has been negotiated between Ofcom and Royal Mail, and indeed, this year, Royal Mail is above the targets that it set for itself to meet those aggressive performance targets by March of next year. Some £500 million of additional investment has been committed, and there was an agreement with the CWU to ensure that the employment practices are sustainable for the commitments to improvements and services. So, while I agree with my noble friend that the current performance is not where it could be, the CEO of Royal Mail made commitments early last week that he is confident that it will meet the targets by April of next year.

[Lord Pack (LD)]

My Lords, one of the significant problems faced by Royal Mail staff in trying to reach those targets is the very large number of physical attacks by dogs on postal staff—over 2,000 incidents every year. This problem is, unfortunately, made worse by the very poor design of many letterboxes, which means that you cannot safely deliver a letter without putting your fingers at risk from an angry dog’s teeth. What work are the Government doing with the relevant interested parties to ensure that the standard of letterboxes is improved and that postal staff can do their work in safety in future?

[Lord Stockwood (Lab)]

I will have to refer this back to the Ofcom regulators. I had not prepared for a question on letterboxes, unfortunately, but I will write to the noble Lord giving him an update.

[Lord Redwood (Con)]

Is not the financial performance of Royal Mail so much better than that of the nationalised Post Office, with Royal Mail requiring no subsidy from taxpayers and the Post Office sending colossal bills for big losses and for damaging treatment of staff who require compensation?

[Lord Stockwood (Lab)]

These are early stages in the privatisation of Royal Mail. The new owner, EP Group, shows an encouraging commitment to improving the services and conditions of work for all employees, but it is too early to say. The Question was about performance of second-class and first-class mail, and that we can commit to. The investors are committed to an improvement programme to get us to where we need to be.

[Baroness Prosser (Lab)]

My Lords, I declare an interest as a former member of the board of Royal Mail. I understand people’s frustration and anger, but this is a global problem. Every developed country is suffering from a reduction in the number of pieces of mail being delivered and sent through the post while still requiring the infrastructure to deal with that smaller number and that smaller income. Do the Government have any plans to bring together Royal Mail and its foreign equivalents in other developed countries to see what answers can be found to this global problem?

[Lord Stockwood (Lab)]

Currently, we are focused on improving the performance of Royal Mail in the UK through Ofcom and through direct conversations with Royal Mail. My colleague, Minister McDougall, meets with his counterparts in Royal Mail and Ofcom on a regular basis. However, I take my noble friend’s question seriously. It is important that we encourage the provider to speak to its foreign counterparts to ensure that there is a solution that is met. We are currently engaging with the EU on a number of issues, but this is something that we should get to in short order as well.

[Lord Kirkhope of Harrogate (Con)]

My Lords, while there are delays in post being received, a considerable number of people are concerned at the amount of post that appears to be mislaid or lost or never even arrives at its destination. Has the Minister got any statistics on that which he can give us any information about?

[Lord Stockwood (Lab)]

There is regular analysis of overall delivery rates, including for mail that is waylaid. There are some innovative solutions within the universal service offering. For example, one of the questions that came up was about NHS letters, which are critical and must be delivered on time. There has been a technological solution involving barcodes that can ensure that those letters get prioritised when there is high demand and pressure on the service. I believe that the investor and Royal Mail are looking at innovative solutions to ensure that they meet their targets across the whole system.

[Lord Woodley (Lab)]

My Lords, I know from personal experience that urgent letters, particularly those associated with hospital appointments, are not getting through in time. Have the Government made any assessment of the devastating effect that this is having on healthcare in our country?

[Lord Stockwood (Lab)]

As I said in my previous answer, this was highlighted as an issue to the new investor. The Royal Mail has introduced a barcode system to optimise the delivery of NHS letters at times of local and national disruption, but it is beholden on all NHS bodies and providers to use this system. I ask all Members of the House to encourage their local NHS, where they interact with senior leadership, to take up this service. It is a technological solution that can prioritise those urgent and critical letters from the NHS, and this should provide certainty that the delivery will get there and not be in jeopardy.

[Lord Hunt of Wirral (Con)]

I will start by congratulating the Minister on the hard work he has carried out in preparing for this Question, and in particular the discussions he has been having with Royal Mail. However, does he not accept that, by increasing national insurance contributions, which I reckon adds around £120 million to the costs of one of Britain’s largest and most labour-intensive employers, the Government have made it significantly harder for Royal Mail to restore service standards, maintain the universal service obligation and invest in those improvements that customers and businesses expect?

[Lord Stockwood (Lab)]

I appreciate the comment on my hard work—it is now noted. I cannot agree with the noble Lord on that particular point. It is unfair to think about an individual tax application on the investment in this specific case. There is £500 million of committed capital from the new investor, EP Group, and that is a non-trivial undertaking that has been committed on an £8 billion business. At the moment, we are proud, as a Labour Government, that we are shoring up the fiscal rules and the economic prospects of this country, so that we can invest in the public services that we rightly believe we need to.

[Earl Russell (LD)]

My Lords, I want to ask the Minister about future access to Post Office counter services now contained in TGJones stores. What steps are the Government taking to ensure that those counters are not closed, particularly in deprived urban areas and rural areas, and are the Government considering requiring minimum coverage standards?

[Lord Stockwood (Lab)]

It is really important not to conflate Royal Mail delivery and the Post Office, but Ofcom is committed to the universal post offering and the targets, so I will have to write to the noble Lord on this particular question, because this was the extent of what I researched for this particular Answer.

[Baroness McIntosh of Pickering (Con)]

Does the noble Lord share my concern that perhaps the postal service and the Royal Mail are focusing too much on parcel delivery and not enough on a universal letters service that plays to elderly populations in rural areas? If we go fully digitalised and if we lose the postal service, it would be a very retrograde step for that group of people.

[Lord Stockwood (Lab)]

The noble Baroness raises a really important point about making sure the universal service offering is not to the detriment of people who are remote or not digital. Its CEO has confirmed that Royal Mail is focused on improving all aspects of its service across postage and parcels. The Government will be putting pressure on Ofcom to ensure that Royal Mail improves all its services without detriment to any particular user group.

Steel Sector

Lord Stockwood Excerpts

Thursday 23rd April 2026 Lords Chamber

[Lord Sharpe of Epsom]

To ask His Majesty’s Government what steps they are taking to incentivise investment in and strengthen the long-term competitiveness of the steel sector.

[The Minister of State, Department for Business and Trade and HM Treasury (Lord Stockwood) (Lab)]

My Lords, steel is a vital component of the UK economy. That is why the Government have published their first ever steel strategy, underpinned by up to £2.5 billion of funding, to create stable, competitive conditions and to secure the long-term future of British steel-making. The strategy will attract investment to strengthen long-term competitiveness. It will also introduce a robust new trade measure to counter the damaging effects of global overcapacity, and reflect the importance of steel for critical national infrastructure and defence. It will also lower barriers to investment, through energy, grid and planning reforms, and mobilise demand for UK-made steel.

[Lord Sharpe of Epsom (Con)]

I thank the Minister for his Answer but, on that “robust” trade measure, can he say what proportion of UK steel imports of finished steel will be covered by the proposed reduced quotas and increased tariffs? Is it the intention to exclude Tata Steel and other finishing mills from import tariffs on their semi-finished feedstocks?

[Lord Stockwood (Lab)]

I am grateful to the noble Lord for the advanced sight of his follow-up question; I also commend the forensic, technical nature of the Question. The trade measure to which he refers covers 20 categories of steel, including all steel that is made in the UK. That includes bright bar, wire and stainless steel. Categories that were not covered in the steel safeguard are all now in scope. This means that the measure protects 100% of steel production domestically in the UK, whereas the steel safeguard protected only 96%. We engaged extensively with industry when developing this measure, and have sought to balance the need to protect the domestic steel-making industry while maintaining secure, reliable supply chains for downstream businesses. We will continue to engage closely with industry as we implement the measure, and we have committed to reviewing it in the next 12 months to ensure that it is entirely fit for purpose.

[Lord Jones (Lab)]

My Lord, can my noble friend the Minister indicate what further helpful measures there may be for this beleaguered industry in terms of energy costs? Green taxes, which are necessary, have dealt severe blows to the long-term prospects for steel, and in Wales we have seen the erosion of tens of thousands of steel jobs. I also ask him to bear in mind that rail connections between steel producers are crucial: the giant steel plant at Port Talbot in south Wales, for instance, sends a daily steel train 150 miles to north-east Wales’s Shotton works. On that train, which is 26 huge wagons long, is hot-rolled coil. If the hot-rolled coil does not reach Shotton, there will be problems. I hope that he will bear that in mind.

[Lord Stockwood (Lab)]

On energy prices, the transition to green energy is absolutely critical for the sector. We remain as committed as always to sovereign energy supplies that can withstand the global shocks we are seeing through Iran and the war in Ukraine. We have that commitment and the only way we can bring down energy prices is with secure domestic supply. The noble Lord made a further point around the steel strategy in Wales. I refer him to the steel strategy; it is important that our steel industry is protected in the whole of the UK. The infrastructure he mentioned remains critical to ensuring that our steel industry can be competitive in the long term.

[Viscount Trenchard (Con)]

My Lords, would the Minister agree that steel produced by the electric arc furnace method cannot match the quality standards of steel produced in traditional blast furnaces? Therefore, British industry will still need to import a large proportion of its requirements from countries which still permit the operation of traditional blast furnaces. Can the Minister tell the House what proportion of British steel will need to be imported in that way?

[Lord Stockwood (Lab)]

On the consultation with the industry, the industry clearly states that arc furnaces are the future. They have a lower cost of production and lower overheads in terms of manpower. I cannot give an exact number on steel production. We are trying to make sure that we have the right amount of trade barriers in place to protect our own industry while allowing business to be competitive and import the steel that they require. That balance will be critical, but we will remain in consultation with the industry and review that if it does not satisfactorily prop up the industry and make it fit for the future.

[Lord Newby (LD)]

My Lords, I return to energy prices, which are obviously one of the main constraints for the growth of the British steel industry. Earlier in the week, the Government announced that they are breaking the link between gas and electricity prices, with a view to reducing electricity prices. To what extent does this new measure impact the steel industry in a positive sense? To the extent that it will, how quickly does the noble Lord expect the measure to take effect?

--- Later in debate ---

[Lord Stockwood (Lab)]

Energy supply and the sovereignty of our energy supply remain critical. All departments are currently looking at measures where we need to intervene in the near term to protect those industries with high energy demands, and to come up with the right practical solutions for the long term, which is our transition to renewables. That is a live conversation. We have had many meetings in the past week, and I think we will hear something in the coming days.

[Baroness O’Grady of Upper Holloway (Lab)]

My Lords, both sides of the steel industry have welcomed government plans to speed up grid connections and make it easier for developers to build their own grid connections. All that will help to boost investment. Will my noble friend the Minister commit to regular updates on progress on those commitments so that we know that it is happening? Will he join me in congratulating the “Save our Steel” campaign for defending jobs and the progress it has made so far?

[Lord Stockwood (Lab)]

I thank my noble friend for her question. The issue of grid connections partly sits in my department; the House might be interested to know that we have 800 gigawatts of demand in new projects to 60 gigawatts of supply. Grid connections and making sure that the grid is fit for the future will be a massive part of what we do. We also have a prioritisation process that helps prioritise the highest value projects, not just economically but socially. I would be happy to update the House on that.

As to the “Save our Steel” campaign, it is worth stating that the steel factory in Scunthorpe is close to where I grew up and I have many friends who work in the industry. I commend that organisation and the work that it does in ensuring that we do not lose sight of the fact this is not just an economic story for the UK but about real lives and communities. The work it has done has been excellent.

[Lord Hunt of Wirral (Con)]

My Lords, the Government’s steel strategy and procurement guidance require all government departments to consult UK Steel’s digital catalogue and consider whether the national security exemption in Schedule 2 to the Procurement Act 2023 applies. However, at the same time, the Government are asking the Ministry of Defence to find £3.5 billion in savings, even as our Armed Forces are being asked to prepare for a far more dangerous world. In the circumstances, does the Minister agree that this is a wholly perverse bureaucratic requirement to place on the MoD? If the Government truly accept that national security must now come first, will they exempt the MoD from these domestic steel procurement requirements so that it can source steel rapidly?

[Lord Stockwood (Lab)]

The noble Lord raises a critical question around how we balance the national resilience of our steel industry with security concerns; that balance is paramount. We remain in conversation with the MoD about making sure that this does not have a prohibitive impact on its procurement and access to products. Equally, it is really important that we utilise the UK Government’s procurement processes to ensure that we are prioritising UK products and services to meet the demand of all our government departments. There are a number of initiatives working on procurement, but I agree that we need to make sure that that perverse incentive does not drive the wrong behaviours.

[Lord Redwood (Con)]

Will the Government make any payments to the Chinese owners of the Scunthorpe works, or take on any of their debts, bearing in mind that, to effect the transfer, there will be enormous continuing losses to the taxpayer?

[Lord Stockwood (Lab)]

The Government remain in positive and constructive conversations with Jingye. I know that the noble Lord would not expect me to comment on the specifics of that deal. All I can say is that we are hoping for a positive outcome. The real importance for us is ensuring that we have a steel industry that is fit for the future and for private investment. That is our target aim at the moment.

[Lord Hamilton of Epsom (Con)]

Following on from my noble friend’s question, has the Minister made provision for ever-increasing amounts of taxpayer’s money to be paid into the steel industry?

[Lord Stockwood (Lab)]

The UK Government’s £2.5 billion commitment is provisioned for.

Industry and Exports (Financial Assistance) Bill

Lord Stockwood Excerpts

2nd reading & 3rd reading & Order of Commitment discharged
Thursday 12th March 2026 Lords Chamber

Moved by

[Lord Stockwood]

That the Bill be now read a second time.

[The Minister of State, Department for Business and Trade and HM Treasury (Lord Stockwood) (Lab)]

My Lords, this is a simple Bill, which I am honoured to bring to the House today. The Bill has two main provisions. It raises the statutory limits in the Industrial Development Act 1982 and the Export and Investment Guarantees Act 1991. These provisions ensure that the Government can continue to support British industry and British exporters with financial assistance.

This matters because we know that exporting firms grow faster. They are more productive. They offer better jobs and higher wages than businesses that sell only domestically. Yet we know that access to finance can be a major headache for these same businesses. It is particularly tough for those that want to export millions of pounds’ worth of goods. Getting the necessary financial guarantees can be the biggest hurdle to exporting abroad, but noble Lords will know that these exports hold the key to a company’s growth. Just a single deal could be what makes or breaks a company.

Export finance is having a tremendous impact on our economy. Some £14.5 billion of UK Export Finance support last year is supporting up to 70,000 jobs, including across key industrial sectors such as clean energy, advanced manufacturing, life sciences and the automotive sector. Through existing provisions in the Industrial Development Act, the British Business Bank’s northern powerhouse investment fund II has directly invested £115 million-worth of capital into over 300 small businesses. Similarly, in the Midlands, the Midlands engine investment fund II has launched a £400 million fund to drive sustainable economic growth by supporting innovation and creating local opportunity for new and growing businesses.

We want to take this further, so that we can drive more growth across even more regions. With the Bill, we will ensure that transformational levels of government support will be there for industry tomorrow. The Bill contains some technical provisions, such as changing the currency from special drawing rights to pounds sterling, and it allows the delegation of future increases to UK Export Finance to secondary legislation. I am sure that noble Lords will champion the assistance provided through the Industrial Development Act and UK Export Finance that has helped businesses to grow through trade, creating jobs and fostering economic growth. It ensures that we can go faster and further, supporting more businesses to be pioneers in the sectors that are front and centre of the UK’s economy.

In tandem with the new trade strategy, more businesses than ever before will be empowered to export with the financial firepower of the Government behind them. The Bill can mean only better prospects for those businesses, our economy and the UK, and will boost economic growth in the coming years. I am thankful to colleagues in the other place for their scrutiny of the Bill so far and look forward to the wisdom and expertise that noble Lords will bring to this debate today. With that, I commend the Bill to the House.

--- Later in debate ---

[Lord Stockwood (Lab)]

I thank noble Lords for their contributions and feedback. I am also thankful for the general support for the provisions in this small but important Bill.

As aforementioned, the Bill will ensure that the financial assistance the Government have provided through UK Export Finance and the means available in the Industrial Development Act 1982 can continue. From the £1.5 million to support a Yorkshire manufacturer, to enabling Gloucestershire’s finest truffles to be exported across the world—and, indeed, to the Stockwood household—to £20 million in support of the aviation specialists in Surrey, all the way to over £8 million in support of a Scottish manufacturing SME, UK Export Finance is supporting growth and jobs across the whole country, and the Bill will enable it to go even further.

Additionally, financial assistance under the Industrial Development Act has provided £520 million of funding to generate private sector capital investments to support the continued growth of our life sciences sector via the life sciences innovative manufacturing fund. As I discussed in my opening remarks, these provisions ensure that the Government can continue to support British industry and British exporters, putting them on the strongest possible footing to contend in today’s increasingly competitive global landscape.

I now take the opportunity to address specific points raised in the debate, starting with my noble friend Lord Pitkeathley, who asked some important questions, and I am grateful for the advanced sight of his specific interests in today’s debate. On the issue of expanded capacity of UK Export Finance translating to wider access for smaller and new exports across the country, in 2024-25, that contribution to GDP was up to £5.4 billion, supporting 496 SMEs during that year. UKEF has also recently commissioned research from Oxford Economics, which showed that there are 115,000 businesses—predominantly SMEs, by the way—in the supply chains of the businesses which UKEF supports directly. These supply chains extend to all parts and regions of the UK.

Going even further in the support of SMEs, just in January, my right honourable friend the Secretary of State for Business and Trade announced a commitment from the UK’s top high street banks for a further £11 billion package to lend more to small businesses and medium-sized enterprises supported by UKEF’s guarantee. All of this will boost UK exports and economic growth.

On the question of providing Parliament with regular reporting, to which the noble Lord, Lord Fox, also referred, UK Export Finance reports to Parliament every year through its annual reports and accounts, which are both cleared through the National Audit Office, comprising details of all the transactions supported, their impact on the UK economy, and progress against the business plan targets. This also includes statutory obligations requiring reporting on spending levels under Section 7 of the Export and Investment Guarantees Act.

In relation to the Industrial Development Act, I can assure my noble friend that nothing in this Bill will change the existing reporting requirements around the use of support under the Industrial Development Act or the regular existing reporting arrangements. Sections 11 and 15 of the IDA require the Government to provide Parliament with annual reports setting out how they have discharged these functions under the Act, and that will continue. The annual report is presented to Parliament and includes detailed reporting on the provision of funding to support businesses through numerous different schemes and funds. This covers both expenditure and commitments for a given year, as well as the total commitment to date.

The noble Lord, Lord Sharp, noted broader concerns about the burdens on business of regulations, energy costs, et cetera. Before I fully answer, I would like to say that we largely agree that the role of government is not to de-risk businesses. It is largely to create confidence in our growth prospects and set the conditions of success for the private sector. It is one of the reasons I came into government: I believe firmly in that and took my own earning potential down to zero seven months ago in order to do that. As my noble friend Lady Alexander says, it is a place where we often find much common ground and it is one of the reasons I am proud to be part of this Government, because this Government firmly believe in it.

As part of that, we have a clear industrial strategy, a trade strategy, a plan for small and medium-sized businesses, and a plan to make work pay to address long-standing barriers to growth. These are underpinned by new policy co-creation approaches, with new initiatives being developed to respond to all businesses’ top concerns. I spend much of my time on round tables, speaking to CEOs, SMEs and businesses to ensure that we get the requisite feedback to ensure we are making the right decisions.

On energy prices, last month we concluded an eight-week consultation on the British Industrial Competitive Scheme—BICS, as it is called. This scheme will reduce electricity bills for eligible manufacturing businesses by up to 25%. We are keen to ensure we go further within the macro environment for energy prices. It is absolutely critical that we remain competitive, and we are trying to do as much as we can in that area.

To the question of balance between private capital and UKEF funds and project support, UKEF exists to help UK exporters win overseas contracts, deliver them and get paid for doing them. It does this by providing competitive finance terms to prospective buyers, supporting working capital and trade finance to help exporters develop, and insuring against buyer default. UKEF does not provide grants, state aid or equity support. I reiterate: it does not provide grants, state aid or equity support. It charges a premium for its products and UKEF complements rather than competes with the commercial sector and helps crowd in private investment. It is clear to say also that UKEF remains a hugely profitable part of UK P&L.

On the question of the steel strategy and when it is coming, I recognise the importance of that question from the noble Lord. The steel strategy is imminent.

[Noble Lords]

Oh!

[Lord Stockwood (Lab)]

Thank you for your vote of confidence. The strategy is imminent. We are hoping to announce something in the coming weeks. We recognise the importance of publishing the strategy for the industry. The Government are committed to putting the industry on a sustainable, long-term footing. It is vital for our broader strategic resilience as a country over the coming years.

To the question raised by the noble Lord, Lord Empey, about whether HMG have plans to provide information to businesses on import substitution, UKEF can provide support that is conducive to exports. Its overseas support is conditional on sourcing from the UK and shifting supply chains towards UK firms. UKEF’s customers support an estimated 115,000 UK businesses in the supply chain, which shows that, when UKEF promotes UK exports, the benefits cascade throughout the UK supply chain and throughout the UK economy. The Bill is not changing policy or the mandate underpinning this reality.

My noble friend Lady Alexander asked if I could write to her about the uptake of export support by the devolved Administrations. I will be happy to follow up with her on the specific statistics following this debate. On the further question on the UK’s success in delivering on its mandate, it operates at no net cost to the taxpayer over the economic cycle and has generated more than £850 million returned to the Exchequer over the past four years. Risk is carefully managed and monitored, with regular reporting to Parliament as part of its statutory obligation and HM Treasury oversight. I firmly believe that, as part of the portfolio of assets that we have supporting UK business, UKEF is one of our strongest and most prominent capabilities.

On the question from the noble Lord, Lord Fox, on whether the numbers he referred to are correct, I can confirm that they are. I am grateful to him for his role in advertising the great work that this legislation seeks to do in supporting UK businesses. On the question about the funding applications and the sector overlay that he mentioned, UKEF operates UK-wide, supporting exporters in every nation and region. Allocation is demand-led and based on commercial viability, as noble Lords would imagine, not on geography or sector. UKEF’s business plan includes an ambition that at least 80% of the businesses it supports will continue to be based outside London. That does not mean that London is not important, but regional development and support is critical to the whole of the UK’s success. On the question about the impending pressure of the “Made in Europe” policy, I firmly agree that it is critical and we are engaged on it with alacrity and pace.

In conclusion, I hope the arguments that I have set out satisfy colleagues that the provisions in the Bill are simple and straightforward. They are necessary to improve economic growth and will provide the Government with the means to give much-needed financial support to industry and businesses up and down the country. I thank noble Lords across the House for this informed debate and for their wisdom.

[Lord Baker of Dorking (Con)]

Before the noble Lord sits down, can I ask him about SMEs?

[Lord in Waiting/Government Whip (Lord Leong) (Lab)]

I am sorry, the noble Lord should not be intervening because he is not on the speakers’ list.

[Lord Stockwood (Lab)]

The question was well made. I can tell the noble Lord that it is important and that there is a whole strategy with UKEF and the Government to ensure that the opportunity that the Bill creates is articulated to the SME community as well.

With that in mind, I thank noble Lords from across the House for this informed debate. It is with great pleasure that I beg to move.

Bill read a second time. Committee negatived. Standing Order 44 having been dispensed with, the Bill was read a third time and passed.

Foreign Direct Investment

Lord Stockwood Excerpts

Tuesday 10th March 2026 Lords Chamber

[Lord Hunt of Wirral]

To ask His Majesty’s Government what steps they are taking to incentivise foreign direct investment into the United Kingdom.

[The Minister of State, Department for Business and Trade and HM Treasury (Lord Stockwood) (Lab)]

My Lords, this Government are firmly committed to ensuring that the UK remains a leading destination for foreign direct investment. We are strengthening stability and certainty for investors, advancing planning reforms to unlock growth and championing our globally competitive sectors. Working closely with partners across the nations and regions, we are developing a clear, investable opportunity, so that inward investment supports productivity, high-quality jobs and long-term sustainable economic growth throughout the United Kingdom.

[Lord Hunt of Wirral (Con)]

My Lords, we all want to see more inward investment, yet the figures on the Minister’s departmental website show a fall of about 12% over the last year. We hear from those businesses that are thinking about investing in the UK that they are very concerned about the £1 billion in additional costs that were imposed on business under the Employment Rights Act. There is now talk of the trade unions pressing for another employment rights Act, which would impose even more burdens on business. What is the Minister going to do about this?

[Lord Stockwood (Lab)]

The reason I have come into government is to try to balance the need to grow our economy with making sure that our economy works for all sectors and parts of our country. Creating an economy that delivers for businesses and for working people requires some changes. To put these into perspective, total annual employment costs in the UK were £1.4 trillion in 2024, and the costs associated with the Act that the noble Lord mentioned are equivalent to an increase of less than 0.1% of that. Those reforms are not about burdening businesses for the sake of it; many employers already offer good terms and conditions that go well beyond what the law requires, and will consequently be less impacted by this package. The Act is designed simply to help level the playing field, so that responsible businesses and employers cannot be undercut.

[Lord Fox (LD)]

My Lords, the Minister is no doubt aware of recent research published by King’s Business School late last year which estimates that foreign direct investment is 12% to 18% lower than it would have been had the United Kingdom not left the European Union. Does the Minister agree with me that the best way to make his job to attract investment into this country easier is for us to eliminate from our economy many of the bad things that Brexit brought, as quickly as possible? We could start by negotiating a customs union.

[Lord Stockwood (Lab)]

Hold that thought.

In the seven months I have been doing this job, the UK has clearly been redefining its position in the world, post Brexit and Covid. I am proud to be part of a Government who are out there doing trade deals, whether with India, the Gulf states or the US—ours is its first deal globally. Undoubtedly, renewed engagement with our closest trading partner, which represents 41% of exports from the UK and high figures for our direct investment, is critical to our long-term success. I would not go as far as the noble Lord suggests, but I agree that we are now in a position to have constructive and equitable conversations with our European partners.

[Viscount Hanworth (Lab)]

My Lords, the UK has been a premier destination for foreign investment. This has enriched the financial sector, which has mediated the inflows of capital. However, in the process, we have experienced a loss of economic sovereignty. We no longer own our airports, seaports, energy industry, water industry, rolling stock and much else besides. Moreover, the heightened demand for sterling has led to its overvaluation and to the collapse of our export industries. What can the Government do to lessen the detriment of foreign direct investment?

[Lord Stockwood (Lab)]

We are trying to balance the need for foreign direct investment to ensure that our industrial strategy is fully capitalised. One answer to the question is that we welcome foreign direct investment from partners around the world that are aligned to our strategic intention, but the greater opportunity is to access the reforms made through the Mansion House Accord and Sterling 20 to ensure that our pension capital is utilised in funding and capitalising our industrial strategy. I do not agree with the noble Viscount’s premise that foreign direct investment is inherently bad, but there is a huge opportunity in our pension services and providers to make sure that our pensions reap the benefits of not only the innovation that we are going through but the economic growth.

[Lord Wigley (PC)]

Is the Minister aware of the key role that was undertaken over a 25-year period by the Welsh Development Agency, which helped attract more than 200 businesses from the United States and more than 50 businesses from Japan to invest in Wales? If, following the coming election to the Senedd, the next Welsh Government take steps to establish a similar agency, will the UK Government co-operate fully with them in fulfilling those objectives?

[Lord Stockwood (Lab)]

What has been rewarding since I took this job on seven months ago is the ability to work with all the devolved nations, realising that every part of our country needs to benefit from the economic development that is coming through. We have members of our Office for Investment teams throughout the United Kingdom and the devolved nations, and I look forward to working with any partner that can encourage growth and innovation around our industrial strategy.

[Lord Redwood (Con)]

Banning investment in new diesel or petrol vehicles, putting on very high energy taxes and having very high energy prices are a massive turn off to large sectors of industry worldwide. Will the Government lift the bans and lower the taxes and then we will have much more investment?

[Lord Stockwood (Lab)]

If anything is clear from the past couple of weeks, it is that energy sovereignty and controlling our own destiny when it comes to energy is critical. The macro environment and geopolitics are regrettable and unfortunate. They bring pressures on our energy, but security and the commitment we have made to low-cost renewable energy for the long term is where this Government will stay the course. The call for new fossil fuel exploration misses the point somewhat, in that the near-term pressures that we are feeling will not be solved by new exploration licences in the near term. We are committed to the net-zero goals and renewable sovereign energy powers, and that is where we hold control and our own destiny.

[Baroness Winterton of Doncaster (Lab)]

My Lords, as the UK trade envoy for Bangladesh, I am very aware of the need for accurate information about and strong promotion of the opportunities for foreign investment in the UK. Our diplomatic missions across the world do brilliant work on this, which I have seen at first hand. Can my noble friend the Minister assure me that the Office for Investment will continue to support these diplomatic missions in the work that they do and make the Treasury aware that funding those diplomatic missions in this work is very good value for money?

[Lord Stockwood (Lab)]

I thank my noble friend for the question. It is incredibly important that people understand that we have partnerships and relationships that go deep around the globe and that they are critically important. The trading relationships act as the gateway to having diplomatic conversations—and conversations where we might disagree with partners. The trade deal we did with India had a number of conditions that allow us to have difficult conversations on areas where we might not always see eye to eye. I agree wholeheartedly that these roles need to be protected. I commend all the people who work in the regions and in the Foreign Office’s global network.

[Lord Sharpe of Epsom (Con)]

My Lords, a report from the CBI and Energy UK found that 40% of firms have reduced investment because of high electricity costs, going back to a question that was just asked. Does the Minister accept that funding contracts for difference—subsidies through electricity bills—is making Britain more expensive and that key industrial sectors are becoming increasingly unattractive for investment, both foreign and domestic?

[Lord Stockwood (Lab)]

It is undeniable that there is a challenge in trying to get the balance between the energy sovereignty that I previously mentioned and the need to make us attractive in the short term. This Government are taking practical steps to reduce barriers, including targeted regulatory simplification, faster grid connections, planning reforms and action on energy costs. The energy-intensive industries exemption scheme provides 85% relief on electricity policy costs for eligible energy-intensive industries. The British industrial competitiveness scheme makes eligible firms exempt from green energy levies, and 7,000 companies come under that scheme. Trying to balance our need for sovereignty and attractiveness for investment is something to which we give careful consideration day by day.

[Lord Roberts of Llandudno (LD)]

My Lords, how confident are we in our relationship with the United States when we have a President who seems to change his mind from day to day?

[Lord Stockwood (Lab)]

It is clear that we are trying to retain long-term stability and our own attractiveness as a place for investment. The US is clearly a key partner; it has been historically and it will be in the future. We are trying to make sure that our global reputation does not focus on one relationship. I am certain that the trade deal that we are negotiating should bear fruit over the coming months.

UK-India: Comprehensive Economic and Trade Agreement

Lord Stockwood Excerpts

Wednesday 4th March 2026 Grand Committee

[The Minister of State, Department for Business and Trade and HM Treasury (Lord Stockwood) (Lab)]

My Lords, I am pleased to respond for the Government. I am grateful to my noble and learned friend Lord Goldsmith and the International Agreements Committee for securing the debate today. I am pleased to echo the comments made about my noble and learned friend’s exemplary work as chair of the IAC. I also acknowledge the important work that went into the considered, robust recommendations of this report and the many comments that have encouraged the quality of that work by the team here today.

I begin my remarks by advising noble Lords, having spoken with the officials who negotiated this agreement, that now that they are leading its entry into force the focus has decisively shifted from signing to delivery, and that work is progressing apace. With that in mind, I should like to talk about why the deal discussed today is so important, and, more broadly, why the UK-India economic and trade relationship is so valuable, as many noble Lords have mentioned.

The UK did £47.2 billion in trade with India in the past year. That was up 15%, year on year, and India is now our 11th-largest trading partner. However, as many noble Lords mentioned, it is India’s future potential as an economic partner that stands out. India has the highest growth rate in the G20. It is likely to become the third-largest economy in the world by 2029 and, by 2050, it will be home to more than a quarter of a billion high-income consumers.

Demand for imports is due to grow as well, reaching £2.8 trillion by 2050. Assuming global FDI into India continues on its recent trajectory, it could grow to be worth £1 trillion by 2033. Noble Lords will understand why this has a particular resonance for me as the Minister for Investment. I thank the noble Lord, Lord Kerr, for referencing investment, and express my delight that investment sentiment has already increased since the deal was signed. However, the opportunity runs far deeper than statistics.

The United Kingdom and India share a unique historic relationship that many noble Lords have referenced—one built not only on institutions and commerce but on people, ideas and innovation. The Indian diaspora, as my noble friend Lady Gill mentioned, is one of the UK’s greatest strengths. It is a true living bridge that shapes our economy, public services and universities, and the character of modern Britain. Despite the strength of that relationship India’s market, as my noble and learned friend Lord Goldsmith rightly noted in his opening remarks, is also behind some of the highest barriers to trade in the world. In 2024, India was ranked by the OECD as the eighth most restricted service market and it has some of the highest tariff rates in the G20. Gin and whisky tariffs are at 150%, cars 110%, cosmetics 22%, and soft drinks, lamb, fish, chocolate and biscuits are all at 33%. That sounds like a menu in the Stockwood household, but I wanted to quote some of those tariffs.

It is worth noting that India’s protectionism is not just a matter of policy; it runs deep in its national story. At independence, the burning of foreign cloth became a symbol of economic self-determination. So, when India agrees a deal of this depth, it is not just a small adjustment; it is a significant shift marking progress in the relationship between our two countries. It is in this context that the agreement secured by this Government should be viewed as a momentous achievement. Others had been trying to get a deal like this one for years and failed, but this Prime Minister, along with the then Business Secretary and Trade Minister, has literally brought home the goods.

The agreement goes well beyond India’s precedent, opening the door for UK businesses. The Commons Business and Trade Select Committee said in its report that this deal

“is the UK’s most economically significant bilateral free trade agreement since leaving the European Union”.

It will boost UK GDP by £4.8 billion—approximately 0.13%—and wages by £2.2 billion and is predicted to boost bilateral trade by £25.5 billion by 2040. For those who says that 0.13% sounds modest, I simply ask: what other single, practical step on the table today could bring the same level of economic development?

I ask noble Lords to bear with me for a second as I have lost my place; as a technology entrepreneur trying to use technology, the irony here is not lost on me.

India will drop tariffs on 90% of its lines, covering 92% of current UK exports, giving the UK tariff savings of £400 million per year immediately on entry into force. This will rise to £900 million per year 10 years from now, even if there is no increase in trade. India’s average tariff will fall from 15% to 3%. Further, I emphasise that every region and nation will benefit from this deal, including a £210 million boost for the north-west, driven by aerospace and automotive wins, a £190 million boost for Scotland, supported by cuts on whisky and satellite tariffs, as well as financial services access, a £190 million boost for the east of England, generated through tariff cuts and improved rules for medical devices and clean energy products and a £50 million boost for Northern Ireland, supported by a reduction in the tariffs on industrial products for aerospace, medical technologies and electronics.

Of course, the deal will deliver these benefits only if it is used by UK businesses. This point was made by many noble Lords. We know that it will not always be plain sailing, thanks to varying rules in different states and provinces. The staging of tariff liberalisation will need some explaining, and non-tariff barriers can be just as important. This was alluded to by my noble friend Lord Sikka. That is why we are matching the agreement with practical export support, including stepped-up advice in market and the full range of UK Export Finance backing, so that firms—especially SMEs, which were mentioned—can turn preferential access into signed contracts.

I saw this at first hand during the trade visit with the Prime Minister in October, when we took a number of businesses—120 CEOs—to India. Two deals that had not been made previously were struck in negotiations during that week. A noble Lord committed on the impact on climate. One of those deals was on accessing technologies in the UK that could accelerate the climate transition for India.

Our department is committed to ensuring that businesses have all the support they need, which is why we have protected the DBT team in India. It is also why we have already engaged with more than 5,000 UK businesses through guidance, events and roadshows on how to exploit the CETA. Once we get to entry into force, we will monitor the operation of the CETA’s provisions, including through the regular reviews and the Joint Economic and Trade Committee—the JETCO —that are built into the agreement.

We will also try to resolve other market access barriers that are not covered in this FTA—many of them have been mentioned today—including legal services, recognition of qualifications and specific state-level barriers. The UK is clearly open to continuing negotiations on a bilateral investment treaty, as long as it works for UK businesses. As many noble Lords have said, this is the floor, not the ceiling. We will keep improving how the agreement works based on real feedback from UK firms.

This negotiation has never been about just the economic uplift that it delivers, substantial and important though that is. At a time when our global norms are under pressure, the UK is choosing to lead and to stand for open, fair and rules-based international trade. Agreements such as this are how we build resilience and prosperity for not just ourselves but our partners. This is how we build trusted economic relationships in a world that is changing fast, as evidenced by the past week’s circumstances.

The world is not the same as it was a decade ago—in fact, it is not the same as it was last week. In this new global order, strong bilateral partnerships that are rooted in shared interests and delivered through serious, detailed agreements are how we secure our long-term position. This is a proper, thorough, detailed, old-fashioned treaty. It has hundreds of pages—as we saw on the desk of the noble Lord, Lord Hunt, earlier today—with commitments negotiated line by line. It is real, serious work that shows that the UK is a credible partner on the world stage. It reflects this Labour Government’s approach more broadly: being committed to the hard graft needed to get these deals done.

As previously mentioned, this deal is more about shaping the standards of the future, building trusted economic relationships and ensuring that countries that believe in openness and fair competition can work together. We have secured India’s first ever chapters on anti-corruption, consumer protections, labour rights, gender and development. The agreement also includes the strongest environmental commitments that India has ever made in an FTA. As the noble Baroness, Lady Bennett, referenced in her remarks, this is the start of a conversation, and we need to go further. I also take this opportunity to flag that the deal was negotiated by two formidable female chief negotiators, Kate Thornley and Nidhi Tripathi, showing both side’s commitment to putting women at the top table.

In response to my noble friend Lord Sikka’s points on corruption, the deal includes an anti-corruption chapter that has obligations to maintain measures on the criminalisation of bribery and prohibiting fraudulent book-keeping practices; the prohibition of facilitation payments; the criminalisation of embezzlement and money laundering; and whistleblowing protections—all things that we take incredibly seriously. In drawing attention to these crucial social chapters, I am keen to emphasise the importance of these agreements in strengthening real partnerships between nations and facilitating important, frank conversation in matters beyond the economic things set out in an agreement.

Turning to the European Union, we understand that it has now reached a political agreement on its own FTA with India, as many noble Lords have mentioned, where it seems that the UK deal was used as a baseline. We should in fact take this as a massive compliment, and we will be going through that agreement line by line to check the mark-ups later on.

Crucially, the UK retains a first-mover advantage. I am hopeful that the deal will enter into force before the end of spring so that UK businesses can start exploiting these reduced tariffs this year, while the EU will take some time to achieve ratification. Only the UK has secured access to India’s £38 billion federal procurement market, as the noble Lord, Lord Frost, rightly acknowledged. I repeat that for impact: we are the only country in the world to secure that access. This is undeniably significant and a huge opportunity to a market that is growing at the rate India is growing.

[Lord Fox (LD)]

I really welcome the fact that the noble Lord’s department is doing that analysis. Can he undertake to publish it so that we can see what the comparisons are?

[Lord Stockwood (Lab)]

I thank the noble Lord; I was going to come on to that, but we can agree to that.

My noble and learned friend Lord Goldsmith, my noble friend Lord Anderson and the noble Lords, Lord Hunt and Lord Frost, all made reference to the EU-India deal. As champions of free trade, we welcome this agreement. In answer to the contention of the noble Lord, Lord Frost, that the EU secured a better deal—as well as the interest of the noble Lord, Lord Fox, in that question, as he just noted—I will push back and note that we struck the deal that was designed to be in the best interests of the UK, built on UK business priorities. However, we will come back and comment on the comparison between the deals as well.

As well as its unique procurement process and access, the UK secured proportionally better access to the cars market as compared to production levels. We also kept CBAM out of the deal, while the EU made a £500 million commitment on climate financing over the next two years. Further, the deal also has a mechanism to help us keep pace if India gives more to other partners.

I hope that noble Lords will agree that the CETA is a good deal for the UK. I am grateful for the contributions made in today’s debate. Before closing, I shall take the opportunity to respond to the outstanding points and questions that I have not mentioned already. I will be pleased to follow up with noble Lords after the debate on the specific questions asked and any areas that I miss.

My noble and learned friend Lord Goldsmith, the noble Lords, Lord Hunt, Lord Hannay and Lord Howell, and my noble friends Lord Anderson and Lady Gill rightly noted that the deal is a long-term strategic investment—a start, not an end. The Government strongly agree with this view and the need to energetically pursue the opportunities the deal presents. As I mentioned, we have already engaged nearly 6,000 businesses on the deal and are putting out guidance to SMEs, and we are already preparing for our first Joint Economic and Trade Committee and the multiple technical working groups that sit underneath it.

On the points raised about services, modelling estimates that, in the long term, services exports should increase by over £1.6 billion every year because of this deal. The deal binds in access to over 43 sectors, and key UK services firms such as EY and PwC have come out in support of the FTA.

The noble Lord, Lord Ahmad, asked about professional qualifications. I can tell him that the regulators will be supported by a professional services working group that will support engagement between the UK and Indian bodies. That work is already under way.

On specific sectors, the noble Lords, Lord Howell and Lord Kerr, and my noble friend Lord Anderson noted the importance of legal services. As already mentioned, it is worth recognising that the UK treats the law as a noble profession, making access incredibly difficult. Through the negotiations, we have strengthened our ties with India’s legal system, and we will continue to support British lawyers and law firms seeking to operate in the Indian market. As the deal progresses, we hope to enter into further negotiations about access, particularly around legal services, but we recognise that this is the start of the deal rather than the conclusion.

My noble friend Lady Gill and the noble Lord, Lord Johnson, rightly mentioned the importance of using this deal as a platform for innovation. We have set up an innovation working group, which will bring together government, business, research institutions and academia to ensure that this framework of trade is fit for the future and supports the commercialisation of new technologies, which India excels at, as well as our own reputation globally. This will cover numerous sectors, including AI, quantum, advanced manufacturing and many others as we develop and progress. Indeed, on my trip in October, I found the energy and innovation sectors incredibly impressive. Where India is leading in many of these sectors, we need to be a partner.

The noble Baroness, Lady Prashar, the noble Earl, Lord Dundee, and my noble friend Lord Stevenson raised India’s non-tariff barriers. We have addressed non-tariff barriers in the agreements, from frameworks for mutual recognition of conformity assessments right down to the practical benefits, such as streamlined labelling requirements and the use of stickers—something that businesses regularly raised. Again, this will be a work in progress, and we recognise that there is some way to go.

As mentioned by my noble and learned friend Lord Goldsmith and the noble Lord, Lord Fox, India has recently rescinded on a large number of quality control orders in the industrial space. We are keen to build on the momentum and are actively encouraging India to review its trade-restrictive barriers on other products, both bilaterally and through work at the WTO. As the noble Lord, Lord Fox, suggested, we will continue to work to reduce these barriers, at both federal and state level, within and outwith the FTA.

Turning to goods, the noble Lord, Lord, Fox, raised dairy. All our current food standard protections remain in place. India does not have an approved veterinary residue plan for dairy, so any dairy products originating in India cannot be imported. I thank the noble Lord for his points on agriculture across the FTAs more widely. I commit to taking them to my colleagues in Defra and will write to him on some of the specifics that he raised.

On protecting the goods industry more generally, this deal includes a bilateral safeguard mechanism that allows us to temporarily suspend or increase tariff concessions if an industry is suffering or facing the threat of serious injury because of reduced duties in the CETA.

The noble Lords, Lord Ahmad and Lord Fox, asked whether we could have secured a quicker and more balanced trade liberalisation. As I noted earlier, the UK maintains a significant first-mover advantage, and we have secured a greater share of tariffs eliminated on day one of our agreement than the EU—64% compared with 49.6% of tariff lines, as we currently understand it. We expect the deal to increase UK exports to nearly 60%, with imports expected to increase by only 25%.

I will address the points made about human rights by the noble Earl, Lord Dundee. The UK is clearly a leading advocate for human rights around the world and, as I mentioned earlier, having secure and growing trading relationships benefits the UK’s ability to influence our partners and helps us to have open and frank conversations on a range of issues, including human rights. We are hopeful that the trade deal we have set out here allows us to encourage those conversations.

With reference to the DCC and the IAC’s request for an impact assessment, I again thank the noble Lord, Lord Johnson, for advance sight of this question. Foremost, the net impact on the Exchequer and the British economy of this agreement is significantly positive. The Office for Budget Responsibility will certify the impact of the CETA, including the DCC, in the usual way at the next fiscal event, once the deals have been finalised and ratified. We believe this is sufficient in reviewing the economic impacts of this convention.

The noble and learned Lord, Lord Goldsmith, asked about the impact on developing countries. I draw his attention to the trade and development co-operation chapter, which includes a commitment to monitoring the effects of trade agreements on developing countries, allowing risks to be identified and opportunities for development to be supported. Long-term analysis set out by the UK Department for Business and Trade’s Global Trade Outlook still shows that we expect growth in countries across south Asia and the region.

The noble Lord, Lord Howell, asked about climate and emissions. I answer by saying that UK businesses have a lot to offer through trade, innovation and procurement, and the access secured in the FTA, to assist in the transition to a greener economy. I saw this first-hand, as I mentioned, in a couple of innovative businesses that we took out to India, generating contracts that can significantly impact the transmission profile of India itself.

I come now to the parliamentary scrutiny process of FTAs, raised by the noble Lord, Lord Hannay, and others. I note that, alongside updates to the House after negotiating rounds, DBT regularly updated both committees privately to ensure that they were fully appraised of the sensitive negotiations. We take the feedback on the robustness of that process seriously and will debate some of the considerations further in the coming weeks. I note that the FTA and its impact assessment were published in full and laid in the House on the day of its signature in July last year. We also provided extensive evidence to the BTC and IAC to inform their committee reports and we published our Section 42 report in November.

Furthermore, we proactively sought a debate in both Houses on this deal to recognise the relevant committees’ respective inquiries and our commitment to transparency. As one of the Ministers accountable, I can firmly commit to taking the feedback and enhancing that process as we go further as well.

I want to respond on the geopolitical points raised by several noble Lords this afternoon, which are particularly salient considering the events of the last few days. We continue to see unprecedented turbulence and challenges to economic growth, alongside wider systemic issues, both domestically and internationally. We need to go back to growth and, to do so, businesses need certainty and stability. As part of this Government’s commitment to growth, we published our trade, industrial and small businesses strategies last year. We set out a broader vision and need to keep strengthening our trade partnerships and ensure the agreements that we have signed deliver clear economic benefits. That is one of the reasons I came into government: signing the India deal is only the start. We now need to make sure that it delivers.

In conclusion, this is a historic agreement that marks a major milestone in the UK-India relationship economically, strategically and geopolitically. It demonstrates that, when the UK engages with its partners, we engage seriously with credibility, detail and respect. It builds on the unique historic relationship between our two countries, showing how we can move forward together rapidly in an ever-changing world.

I am particularly grateful to the noble Lord, Lord Bates, for his contribution about the story of Dr Mahalanabis —my apologies if I got that name wrong. In closing, I make the point that I agree wholeheartedly that the dominant human trait that drives our species is indeed optimism. While there is much work to do in making this deal work for the UK, there is much reason to be optimistic about it in its current form. I look forward to continuing constructive engagement as we move forward towards entry in force, hopefully in the spring.

Digital Markets, Competition and Consumers Act 2024 (Alternative Dispute Resolution) (Conferral of Functions) Regulations 2026

Lord Stockwood Excerpts

Monday 2nd March 2026 Lords Chamber

Moved by

[Lord Stockwood]

That the draft Regulations laid before the House on 26 January be approved.

Considered in Grand Committee on 25 February.

Motions agreed.

Digital Markets, Competition and Consumers Act 2024 (Alternative Dispute Resolution) (Conferral of Functions) Regulations 2026

Lord Stockwood Excerpts

Wednesday 25th February 2026 Grand Committee

Moved by

[Lord Stockwood]

That the Grand Committee do consider the Digital Markets, Competition and Consumers Act 2024 (Alternative Dispute Resolution) (Conferral of Functions) Regulations 2026.

[The Minister of State, Department for Business and Trade and HM Treasury (Lord Stockwood) (Lab)]

My Lords, I will speak also to the Digital Markets, Competition and Consumers Act 2024 (Alternative Dispute Resolution) (Consequential Amendments) Regulations 2026.

These instruments relate to the alternative dispute resolution, or ADR, chapter in the Digital Markets, Competition and Consumers Act 2024—the Act—which received Royal Assent in May 2024. The Act repeals the Alternative Dispute Resolution for Consumer Disputes (Competent Authorities and Information) Regulations 2015 and replaces it with a strengthened framework in Chapter 4 of Part 4.

In most instances, disputes between consumers and businesses can be resolved without the need for any formal action. But when consumers and the trader cannot come to a resolution, ADR is an effective means to secure redress for the consumer without resorting to litigation. All ADR providers are independent third parties offering dispute resolution that is usually less confrontational to the consumers and businesses involved. But not all ADR providers have the same accreditations and standards, so consumers can experience inconsistent quality of services.

For ADR to be effective, it must be of high quality and meet certain standards. The Act aims to strengthen the quality of ADR available to consumers by: introducing a mandatory accreditation framework for ADR providers for consumer contract disputes; providing a robust set of accreditation criteria to ascertain ADR providers’ expertise, transparency, independence and accessibility prior to their being accredited; and providing ongoing monitoring and review to ensure that accredited ADR providers continue to meet those high standards. The Act includes the power to revoke or suspend accreditation, limit accreditation, or impose further conditions if a provider is found to be non-compliant.

The intention of mandating accreditation of ADR providers is to strengthen the ADR framework in the UK. The Government believe that these changes will help deliver a trustworthy, timely and fair service that consumers and businesses can trust to resolve consumer disputes, with improved oversight to monitor standards and ensure consistency.

Section 307 of the Act allows certain ADR functions to be conferred on another person. The regulations before the Committee confer on the Chartered Trading Standards Institute—CTSI—responsibility for managing the provision of ADR in consumer contract disputes in non-regulated sectors, including the functions of accreditation, monitoring and reporting on the operation and effectiveness of ADR provision.

This includes upholding the standards of ADR providers in the UK through powers to compel or sanction ADR providers to improve performance in the event that they do not meet their obligations. It also requires the CTSI to prepare quarterly and annual reports for the Secretary of State for the Department for Business and Trade.

The reports will contain information and metrics on the performance of the CTSI, ADR providers, and the ADR landscape in the UK to ensure accountability and transparency and enable the Secretary of State to maintain oversight of the operation of the system of accreditation and the provision and quality of ADR carried out in the UK. The decision to confer these functions on the CTSI has been taken in recognition of the CTSI’s authority, track record and expertise in this area, including its long-standing and constructive relationships with ADR providers.

Separately, the Digital Markets, Competition and Consumers Act 2024 (Alternative Dispute Resolution) (Consequential Amendments) Regulations 2026 make amendments to primary and secondary legislation in consequence of Chapter 4, Part 4 of the Act coming into force, and the revocation of the Alternative Dispute Resolution for Consumer Disputes (Competent Authorities and Information) Regulations 2015.

The consequential amendments deal with the redundant references to the 2015 alternative dispute resolution regulations and, in some cases, replace them with a reference to Chapter 4 of Part 4 of the Act. These amendments do not materially change the policy or affect the underlying law; they simply keep the statute book up to date in the usual way.

As I hope is clear from these remarks, the intention of both sets of regulations is to support and strengthen the ADR framework in the UK. They will put it on a stronger footing that provides a consistent, trustworthy, timely and fair service that consumers and businesses can trust to resolve disputes amicably, with improved oversight to monitor the service standards. I invite noble Lords to support the passage of these instruments.

--- Later in debate ---

[Lord Stockwood (Lab)]

I thank noble Lords for their contributions to the debate. As I stated in opening, the purpose of these instruments is to place the UK’s ADR framework on a stronger footing and to provide a more effective service for consumers and businesses alike. This feeds into the broader work of the DMCCA to bring greater fairness to digital markets and to bolster consumer protections.

I will try to respond to the questions raised by noble Lords today. The most important question, raised by the noble Lords, Lord Stevenson and Lord Sharpe, was about durable mediums. I am reliably informed that this includes digital. We do not have to go as far as stone tablets, as the noble Lord, Lord Fox, suggested. The digital medium is included in that, so that is the acceptable format.

The noble Lord, Lord Stevenson, raised an important question around extra burdens on consumers. Accredited ADR providers can charge a fee only if provisions for doing so are agreed by the CTSI and published. The purpose is to limit fees that consumers may be charged, thereby incentivising the use of ADR. At the same time, this is intended to discourage frivolous claims. Those fees should be up front and should be clear. There is a balance to be struck between ensuring that consumers have adequate access to ADR and that the core costs of the service are covered. We hope that this addresses that balance.

The noble Lord, Lord Stevenson, also mentioned reviewing the regulations. The Government have no specific plans to conduct a post-implementation review of this instrument or the reforms to which it relates, but we will continue to monitor and evaluate the operation of the system of ADR accreditation under the 2024 Act and the provision of the quality of ADR carried out in the UK through the quarterly and annual reports that this instrument requires the CTSI to provide.

The noble Lord, Lord Fox, asked about the capacity of the CTSI, the number of practitioners, how many will have to reregister, the processes and the costs. Those currently registered will go through a light-touch process to transfer their original registration across to the new system. We recognise that this transition period will place some burden on the ADR providers and aim to minimise this. The transition period will be in the region of six months, when ADR providers can continue to operate without the accreditation. In part, this will ensure that current providers and cases can continue without disruption. It will also give the CTSI time to manage the transition. We recognise that this will cause some extra elements of burden, but this seems like the lightest-touch way of transitioning to the improved system.

The noble Lord, Lord Fox, also asked about the CTSI register and about promoting the process. The CTSI currently hosts a list of accredited providers on its website. This will be maintained under the new regime so will remain in place. On the question about how the CTSI is monitored, it is required to provide reports to the DBT SoS on a quarterly and an annual basis. We hope that will be sufficient, but we will be happy to review that if it proves not to be an adequate way of keeping an eye on how things are going.

To conclude, I am grateful for the Committee’s support for this instrument. I beg to move.

[Lord Fox (LD)]

Before the Minister sits down, perhaps he could take this away: simply putting something up on the website—the “If we build it, they will come” approach—is probably not the best way for consumers to know that they have this service. You have to know it exists before you can find it. I suggest that the Minister takes away and discusses with the CTSI and others whether there is some sort of consumer marketing process that can follow once the capacity for ADR is there, so that people actually know it exists. I suspect that nobody knows the organisation exists—or very few people do—and certainly very few people know that ADR is a service on which they can call.

[Lord Stockwood (Lab)]

The noble Lord makes a really important point. Let me take that away and consult with the team and I will come back to him with a response on that.

[Lord Stevenson of Balmacara (Lab)]

The Minister answered very fully the question about the fees and how they would be monitored, but those were the fees to the consumers. I asked a separate question about why it did not seem to be a cost to the provider of the services, who would also benefit from the ADR. If he does not have the answer, perhaps he could write to me.

[Lord Stockwood (Lab)]

I think I did cover that but, if I did not, I will come back. The accredited providers will charge only a fee that is agreed already with the CTSI. That will be agreed up front and that will be published so that consumers know the charges they will be subject to. Perhaps we can pick this up afterwards. If that is not sufficient, I am happy to take further questions and to come back with a more detailed answer.

Motion agreed.

Digital Markets, Competition and Consumers Act 2024 (Alternative Dispute Resolution) (Consequential Amendments) Regulations 2026

Lord Stockwood Excerpts

Wednesday 25th February 2026 Grand Committee

Moved by

[Lord Stockwood]

That the Grand Committee do consider the Digital Markets, Competition and Consumers Act 2024 (Alternative Dispute Resolution) (Consequential Amendments) Regulations 2026.

Motion agreed.

US Tariffs

Lord Stockwood Excerpts

Monday 23rd February 2026 Lords Chamber

[Lord Lamont of Lerwick]

To ask His Majesty’s Government what assessment they have made of the impact on the UK economy of the announcement by President Donald Trump of increased tariffs, and what representations they plan to make to the government of the United States.

[The Minister of State, Department for Business and Trade and HM Treasury (Lord Stockwood) (Lab)]

My Lords, the Supreme Court ruling does not affect the majority of trade under the economic prosperity deal, including the sectoral tariffs agreed on steel, pharmaceuticals and automotives. The Business Secretary spoke to his counterpart at the weekend and underlined his concerns about uncertainty for businesses and reinforced the need to honour the UK-US trade deal. We continue to engage with the Administration at all levels. Our priority remains to secure the best possible outcome for British businesses.

[Lord Lamont of Lerwick (Con)]

I thank the Minister for that helpful reply. Does he agree that, following the Supreme Court judgment, the decision of the United States President to impose, even on a temporary basis, tariffs of up to 15% is deeply damaging to confidence, both in this economy and in that of the United States? Can the Minister say a little more about what now remains of the trade deal negotiated by the Government less than a year ago, which was supposed to give us a preferential advantage over other European countries, but now we all face a universal global tariff of 10%?

Has the Minister also seen the warning over the weekend from the United States trade representative that, in order to assess what tariffs are necessary for the future, “most major trading partners” of America will face accelerated investigations into trading practices, which, of course, could include things such as pharmaceutical pricing, which were excluded from the agreement before? Will the Government undertake not just to defend Britain’s actions and Britain’s interests vigorously but also to ensure that the outcome of these discussions leaves us no worse off than we were before these unfortunate announcements?

[Lord Stockwood (Lab)]

The noble Lord raises a number of challenging and fast-moving issues, and I will try to respond as fully as I can. It is worth stating that the UK secured that preferential deal last year, driven by the Prime Minister’s direct engagement with President Trump. That was trying to give British businesses certainty and competitive advantages. The ruling at the weekend does not affect our preferential treatment in the key sectors such as pharma, cars and steel that the noble Lord mentioned.

The Business Secretary spoke to US trade representative Jamieson Greer this weekend, making clear our concerns about uncertainty and our degree of confidence in the honouring of those agreements that we needed, and he had those reassurances. UK officials across Whitehall and Washington are engaging intensively with the US as we speak, and those discussions will continue all of this week, at which time we can update the House. It is worth stating that we have always had a cool-headed and pragmatic approach to trade deals, and while I would not comment on other Governments’ policies, we do have a competitive advantage globally in the sectors we set out in the original negotiation. The biggest beneficiaries of this weekend’s announcements are those trade barriers coming down for other countries, but we still have the best deal globally, and we continue to negotiate to retain that preferential position.

[Lord Hannay of Chiswick (CB)]

My Lords, would the Minister say whether the Government’s information leads them to suppose that the President’s choice of 15% and its differential impact on countries was deliberate or inadvertent?

[Lord Stockwood (Lab)]

As a Minister only six months into the job, I have uncertainty in my own mind sometimes; I am certainly not going to comment on the US President. What I can say is that we remain the only country that has secured a 10% tariff on auto, securing hundreds of thousands of jobs; we are the only country in the world with a 0% tariff on pharmaceuticals; and we are the only country in the world to benefit from a 25% tariff on steel, aluminium and other derivatives. We believe that we will retain those competitive positions, but our position is to control the controllables that we have today and negotiate to retain those benefits for UK businesses.

[Lord Fox (LD)]

My Lords, I am sure that industry is grateful for the sympathy the Minister has expressed from the Dispatch Box, and we are all encouraged by the hopes that the Government have expressed. But we all know that the opinions of trade officials often differ from those of the President. The uncertainty that is now surrounding all of British manufacturing is huge. What advice are the Government now giving to manufacturing businesses? What conversations have been had with the manufacturers, and how should they behave in the light of this huge uncertainty?

[Lord Stockwood (Lab)]

The question of certainty, raised by the noble Lords, Lord Lamont and Lord Fox, is critical to business. We live in a world that is changing rapidly and evolving minute by minute—I just checked my BBC feed on my way into the Chamber this afternoon. What I can say is that this Government have a plan: for the first time since the 1960s, we have an industrial strategy that focuses on our competitive advantage in automotive, technology and pharmaceuticals. It remains important to have clarity on our comparative advantage, and we remain in negotiation with all those key sectors; indeed, the pharmaceutical sector has the most preferential deal globally. I was due to have a meeting at 3 pm today with the pharmaceutical sector, and this has overridden that. These are fast-moving events. We remain cool-headed, trying to negotiate on behalf of UK businesses, and we are confident that our preferential relationship with the US will bear dividends as things develop this week.

[Lord Howell of Guildford (Con)]

My Lords, I know that history does not always repeat itself, but would it be a kindness at this stage to remind President Donald Trump that the American tariff protections of the 1930s by Smoot and Hawley played a major part in accelerating the onset of the Second World War?

[Lord Stockwood (Lab)]

Yes, I thank the noble Lord for that.

[Lord Wigley (PC)]

My Lords, the Minister quite rightly referred to pharmaceuticals and their importance. Can he clarify whether the derogation regarding pharmaceuticals will include the equipment and technology used for testing the need for and application of pharmaceuticals?

[Lord Stockwood (Lab)]

I will have to come back to the noble Lord on that question. The pharmaceuticals deal was for medical exports to the US for at least three years.

[Baroness Royall of Blaisdon (Lab)]

My Lords, while we welcome the industrial strategy that was mentioned by my noble friend the Minister, does he agree that, in these deeply uncertain times when there is much instability, the reset with the European Union on which our Government have embarked grows in importance by the day?

[Lord Stockwood (Lab)]

As I mentioned, the cool-headed approach that the Government are taking includes many of our global trading partners. It is worth reminding the House that, while the US is a critical trading partner, with £330 billion of bilateral trade, the EU makes up 40% of our global trade and is an incredibly important partner, so those negotiations are ongoing. We have to redefine our position in the world, not just with the EU but as we have done with our trade deal with India and as we are doing with the Gulf states et al. It is undeniable that our relationship with Europe will be critical to our economic growth over the coming decades.

[Lord Londesborough (CB)]

My Lords, somewhat bizarrely, the trading partners of the US that are the greatest beneficiaries of President Trump’s new regime are Brazil, China and India, which are currently looking at net falls in their tariffs of 5% to 13%, while the UK, in spite of our preferential status, will see a net average tariff increase of 2.1%. That is the highest rate in Europe and compares with the eurozone’s 0.8%. I am quoting figures from Global Trade Alert, a trade monitoring service. Does the Minister recognise these figures, and what is his reaction to them?

[Lord Stockwood (Lab)]

I recognise the figures quoted, but they are speculation at this stage. The deals on preferential rates for farmers, automotive, et cetera were agreed terms, but that was the beginning of the negotiations, not the end. The preferential deal that was secured was brought about by direct engagement between the Prime Minister and President Trump. The EPD negotiations remain ongoing, and we will look to further protect the UK’s interests with further announcements over the coming weeks. It is worth reminding the House that the UK was the first country to see tariffs removed for civil aerospace goods, and we remain the only country to retain those secured 10% tariffs on automotive, steel and aluminium. We are prepared to fight for British businesses from here on in as well.

[Lord Wallace of Saltaire (LD)]

My Lords, we all know that President Trump is extremely transactional in his international relations and respects only those who bargain hard with him. Are His Majesty’s Government considering imposing a new and hard tax on foreign-owned golf courses?

[Lord Stockwood (Lab)]

I am not aware that that is part of the negotiations.

[Lord Sikka (Lab)]

My Lords, is there a role for the World Trade Organization in this tariff-led turmoil?

[Lord Stockwood (Lab)]

At the moment, these are bilateral conversations. We are acting in good faith and hope that they will come to a successful resolution.

[Lord Hunt of Wirral (Con)]

My Lords, the Government are trying to reassure the nation that they do not expect the ruling to affect the majority of trade under the economic prosperity deal, but as the noble Lord, Lord Fox, pointed out, there is huge uncertainty. Can the Minister clarify precisely what proportion of UK exports to the United States that represents and which sectors now fall outside that protection?

[Lord Stockwood (Lab)]

The confidence that I am trying to relay is not unfounded. As we saw from last week’s announcements, part of the macroeconomic situation that we are trying to turn around has seen inflation fall and the largest recorded government surplus since the 1990s. That is the overall message that we are trying to relay. In terms of specific industries, the negotiations are ongoing. I do not have the specific numbers to hand, but I remind the House that, globally, we have the most preferential deal with the rates that we have secured for industries, and we will continue to fight on behalf of British business.

[Lord McNicol of West Kilbride (Lab)]

My Lords, one way to deal with this issue is by the acceleration of the free trade agreements. Under the last Government, we had agreements with New Zealand, Australia and then the CPTPP. Under this Government, we have accelerated those agreements. The Minister mentioned the six Gulf states and the GCC free trade agreement. Is there any update on the GCC FTA negotiations and what comes next?

[Lord Stockwood (Lab)]

My noble friend raises a really important question about our current trading relationship based on the new world order that we find ourselves in. I do not have a specific update on the GCC deal; my noble friend knows that I was out there a couple of weeks ago, and we are incredibly close to an agreement. I should like to reassure the House that, in my travels around the globe, I find that we are still seen as a major place for investment globally. We have competitive advantage in our industrial strategy, in our rule of law and in our talent base. The trade deal that we did with India was significant, and the trade deal with the US remains the first and best trade deal that the US has negotiated. While this weekend has thrown up some bumps in the road, we remain confident. The negotiation with the Gulf states is ongoing but remains very positive, and we hope to have some good news in the coming weeks.

[Lord Johnson of Lainston (Con)]

My Lords, I read somewhere that the Department for International Trade is going to be reducing the number of experts in the field from 1,600 to 1,000. Is now really the time to be reducing our global staff by a third when our businesses need all the support they can get at this time of tariff turmoil?

[Lord Stockwood (Lab)]

I thank my noble predecessor for the question. We are trying to balance the pressure from the public world to right-size our Civil Service more broadly to make it more effective—technology and information are tools that can help us with that. We are also trying to balance the public purse to ensure that we have the right quality of people to address the significant challenges that we have as a Government. It is not a zero-sum game. We have very talented people; I addressed the team in the Gulf when I was out there a couple of weeks ago, and I remain impressed by the quality of the people that we have in this sector. But it is undeniable that we must make sure, based on the advantages that we have in technology and information flows these days, that we also have the right number of people in markets at the same time.

[Lord Skidelsky (CB)]

My Lords, is there anyone in the Government thinking about alternatives to trade wars or trade deals as a way of organising the economic affairs of the world? The noble Lord, Lord Howell, is quite right: historically, tariffs tend to set the ground for war. That was also true before 1914, when there was a big increase in world tariffs. Who in the Government is thinking about alternative ways of organising the trade relations of the world? I am asking this not as a matter of policy but as a matter of thinking about the world we seem to be drifting into.

[Lord Stockwood (Lab)]

The noble Lord raises a really important philosophical question. From my personal experience during the last six months, we are trying to readjust to both a post-Brexit world and a new world order with what we are seeing in the US, China and the EU in particular. We have to make sure that we are protecting our own economic interests. I am seeing a high regard still for our soft power in the world. We play that card particularly well, whether it is the institutional base of our universities, our talent base or our research. We are trying to make sure that we play to the assets and capabilities that we have. Trade remains important, but we also have to react to the new world order and be responsive to it in order to make sure that we are not left behind.