Replacement of the Chancellor of the Exchequer

Lord True Excerpts

Tuesday 18th October 2022 Lords Chamber

[The Lord Privy Seal (Lord True) (Con)]

My Lords, I think this was originally a Question asked of the Prime Minister. There has not been a Prime Minister in your Lordships’ House since 1963. I am not travelling in hope.

I will venture to make a comment on the matter. It is a central responsibility for any Government to do what is necessary for economic stability and the Prime Minister took the decision to appoint my right honourable friend Mr Jeremy Hunt, who is one of the longest-serving and most experienced parliamentarians and, I think, widely respected on all sides of your Lordships’ House, as her Chancellor. His overriding priority is to restore financial stability in the face of volatile global conditions.

[Baroness Smith of Basildon (Lab)]

My Lords, the Minister gave a much shorter answer than the one given in the House of Commons. I entirely agree with the first paragraph of his full Answer, which may surprise noble Lords. He said that,

“it is a central responsibility of any Government to do what is necessary for economic stability”.

Yet in the last few weeks this Government announced the biggest tax cuts since 1972 and then, within a matter of weeks, the biggest tax increases since 1993—hardly stability. The answer to this fiasco is apparently to have the fourth Chancellor of the Exchequer in under a year, with a threat of—and I quote the Chancellor—“eye-watering” further tax rises and public service cuts. Given that mortgage rates are higher today than they were yesterday, what does the noble Lord say to those who, because of the instability largely created by the Government, now face monthly mortgage increases of hundreds of pounds?

[Lord True (Con)]

My Lords, on the question of mortgages, everyone will be sensible to the position of those seeking to buy—I have a son seeking a mortgage at the moment—in conditions where interest rates are rising, which they are internationally. On the more general question, the Chancellor is clear that the Government will need to take some very difficult decisions on spending and tax to place the public finances on a sustainable footing. Sound public finances are the bedrock on which future economic growth will be built. There is no trade-off here; the mini-Budget moved further and faster than the market expected, but this Government remain committed to growth and supporting families and the most vulnerable in society. We will continue to seek to perform that duty.

[Baroness Kramer (LD)]

My Lords, the change of Chancellor may have mollified the financial markets slightly and temporarily but ordinary people, frankly, are on the verge of being utterly distraught. In addition to soaring food prices, mortgages and rents, they have no idea at all what their energy costs will be after April next year. When will people know what the cost of energy will be after next spring, because they have to plan and think it through? It is also crucial for businesses to know as they sign contracts. Also, how much will the typical individual be paying in bills and additional public service cuts to cover the costs of the permanent scarring and damage that the Government’s appalling handling of the last few weeks has caused to the UK economy?

[Lord True (Con)]

My Lords, apart from the rhetoric, the main part of the noble Baroness’s question was on energy prices. I hope that your Lordships have heard with delight that a Bill, for which I expect the support of both parties opposite, has been presented to the House on which we will debate these matters in some detail.

On the specifics, I say that continuing with the planned level of support between now and 2023 will remain a landmark policy. It will support millions of people through a difficult winter and means that they will not have to face bills as high as they would have been. A Treasury-led review has been announced into how we support energy bills beyond April next year; its objective is to design a new approach that will cost the taxpayer significantly less than planned while ensuring enough support for those in need, which I think all noble Lords would like to see. Equally, any support for businesses will be targeted to those most affected. This new approach will better incentivise energy efficiency. However, it is important to underline that the support with energy bills that my right honourable friend the Prime Minister so swiftly announced is going ahead, and what is being provided between now and next April will not change.

[Lord Forsyth of Drumlean (Con)]

My Lords, does my noble friend not think that this is a moment for Members of Parliament to pull together? We are facing a global crisis caused by living on printed money on an immense scale—£450 billion—to deal with Covid. Frankly, it does not matter which Benches are in power; interest rates will go up very considerably as a result. Therefore, it is necessary for us to focus on the policy changes needed to protect those who will be unable to pay their bills. Playing politics with this does no credit to Parliament and nothing to help those who will be affected.

[Lord True (Con)]

My Lords, my noble friend, with his enormous and widely respected knowledge as a former chairman of your Lordships’ Economic Affairs Committee, makes a very strong point about the international situation. However, His Majesty’s Government must deal with what they can do here at home. In offering protection, as we have discussed, we will also continue to seek to promote growth. We will launch investment zones—I hope that they will be widely supported by your Lordships—and shortly introduce minimum service levels for transport services in Great Britain, ensuring that militant strike action cannot derail economic growth and union bosses cannot hold working people to ransom.

[The Lord Bishop of Oxford]

My Lords, I welcome the new Chancellor, many of the measures announced yesterday, and the increased prospect of greater stability. I noticed that in his Statement yesterday he used the phrase “compassionate conservatism” several times. I wonder if the Minister would unpack that phrase a little, particularly on how the Chancellor will navigate to privilege the needs of the very poorest in society, perhaps especially in the outworking of the increase in benefits in line with price inflation, and in looking to see a decrease in the use of foodbanks in the coming years, which has escalated in major ways in the last decade.

[Lord True (Con)]

I welcome the opportunity to follow the right reverend Prelate on that point. As I tried to say in my earlier answers, the position of those in need will be at the forefront of the Government’s consideration. We know that people across the United Kingdom are worried about the cost of living; that is why the Government have announced £37 billion of support for the cost of living this financial year. In addition, the energy price guarantee and energy bill relief scheme are supporting households and businesses. We are also supporting millions of the most vulnerable households with £1,200 of on-off support. So far as specific decisions on benefits are concerned, they will have to wait for my right honourable friend’s Statement.

[Lord Anderson of Swansea (Lab)]

Is not the word “replacement” in the Question a euphemism for being ignominiously and publicly sacked? Was it really fair, just and moral to sack someone who was simply carrying out a jointly agreed policy with the Prime Minister?

[Lord True (Con)]

My Lords, I explained the reasons for the appointment of my right honourable friend, and I believe that it was a good appointment.

[Lord Walney (CB)]

Has not the Chancellor effectively announced a comprehensive spending review? Would it not be helpful and transparent to treat it as such across Parliament?

[Lord True (Con)]

There will be a Statement by my right honourable friend; I believe that 31 October is still the date suggested. Work is proceeding at pace and I assure your Lordships that they will receive full information on that in the same way as the other House.

[Lord Cormack (Con)]

My Lords, does my noble friend agree that we now have a wholly credible Chancellor who fully deserves our support, and that it is important that we have a wholly credible Government as well?

[Lord True (Con)]

My Lords, I believe that we have such a Government.

[Lord Hain (Lab)]

My Lords, was not the Chancellor’s Statement yesterday just a bonfire of Truss economic insanities?

--- Later in debate ---

[Lord True (Con)]

No. A number of very important steps have been taken by my right honourable friend the Prime Minister to which your Lordships are invited to assent. Yesterday, for example, I was very grateful for your Lordships’ support for the Bill that was passed that concerned reversing the national insurance levy, and I am hoping for equal support for my right honourable friend’s initiative in relation to the Energy Prices Bill.

[Lord Sikka (Lab)]

My Lords, the Government’s austerity policies have already caused over 334,000 deaths. Why is the Government looking for further cuts in public spending?

[Lord True (Con)]

My Lords, I realise the economic stable from which the noble Lord came, but the central responsibility for any Government is to do what is necessary for economic stability, and that means that there will need to be reflection on levels of both spending and taxation. As my right honourable friend has made clear, there will be difficult decisions, there will need to be spending restraint, and departments will need to find further efficiencies, but more details will be set out in the medium-term fiscal plan, as I said earlier.

Business of the House

Lord True Excerpts

Wednesday 12th October 2022 Lords Chamber

Moved by

[Lord True]

That, in the event of the Health and Social Care Levy (Repeal) Bill having been brought from the House of Commons, Standing Order 44 (No two stages of a Bill to be taken on one day) be dispensed with on Monday 17 October to allow the Bill to be taken through all its remaining stages that day.

Motion agreed.

Business of the House

Lord True Excerpts

Monday 10th October 2022 Lords Chamber

Moved by

[Lord True]

That Standing Order 73 (Affirmative Instruments) be dispensed with on Wednesday 12 October to enable a motion to approve the Russia (Sanctions) (EU Exit) (Amendment) (No. 14) Regulations 2022 to be moved, notwithstanding that the Joint Committee on Statutory Instruments has not yet reported on the instrument.

Motion agreed.

Her Late Majesty Queen Elizabeth II

Lord True Excerpts

Saturday 10th September 2022 Lords Chamber

Moved by

[Lord True]

That an Humble Address be presented to His Majesty to convey to His Majesty the deep sympathy felt by this House in the grief His Majesty has sustained by the death of our late beloved Queen, His Majesty’s Mother, of blessed and glorious memory;

To extend to all the Royal Family the deep sympathy of this House in their grief, which is shared by all its Members;

To assure His Majesty that the example of selfless public service which our late Sovereign displayed over Her reign of 70 years, Her untiring endeavours for the welfare of Her peoples and Her fortitude in adversity will ever be held in reverent, affectionate, and grateful remembrance; and

To express to His Majesty our loyalty to His Majesty’s Royal Person, and our firm conviction that, under the blessing of Divine Providence, His Majesty will, throughout His Reign, further the happiness and protect the liberties of all His peoples in all His Realms.

[The Lord Privy Seal (Lord True) (Con)]

My Lords, we have all now had an opportunity to offer our tributes to Her late Majesty, so we come to the formal business of agreeing an Humble Address expressing the House’s collective sympathy and loyalty to His Majesty. I beg to move.

Motion agreed nemine dissentiente.

Her Late Majesty Queen Elizabeth II

Lord True Excerpts

Friday 9th September 2022 Lords Chamber

[The Lord Speaker (Lord McFall of Alcluith)]

My Lords, in a moment, the Leader of the House will begin today’s solemn business and lead the House of Lords in making tributes to Her late Majesty Queen Elizabeth II. I will first offer a short contribution from the Woolsack.

Her late Majesty, whom we mourn today, was, for over 70 years, a loyal and steadfast presence in the national life of the United Kingdom. Her strong sense of public duty and her devotion to the welfare and happiness of her people served to bind our nation together during an epoch of unprecedented societal and technological change. Her unique record of public service, deep sense of faith and commitment to her role ensure that she will be regarded as a supreme example of a constitutional monarch.

Today, my thoughts, and indeed those of the whole House, go out to members of her family, especially His Majesty the King, for whom this feeling of loss will be profound. I offer my devoted sympathy, as well as the thoughts, prayers, commitment and dedication of this House and its Members.

[The Lord Privy Seal (Lord True) (Con)]

My Lords, this is an appropriately dark and dreary day, and one we prayed would never come. These are words that I hoped never to hear spoken, let alone to have to speak.

I ask myself how people will conceive of life without Her Majesty Queen Elizabeth II, the heart and focus of our nation’s love and loyalty. For millions of people, she was the mother of our nation and the literal embodiment of the United Kingdom, which she so cherished. The shock will be immense and the grief unmeasured—as we already see. Even people in their 70s have never known life without her. She was our anchor of stability in a changing world and our exemplar of conduct and courtesy—one who, from the highest position in the land, showed us day by day the virtues of dignity, civility, humility, truthfulness and service.

“The Queen”: two little words that identified her instantly in seven continents and 100 languages. Can we conceive never again hearing that voice—that kindly, gentle voice, as we heard it from that very Throne at our State Openings—giving, in her royal broadcasts at Christmas or lately during lockdown, her unvarying message of faith and hope? Her voice was warmly encouraging to so many people on her myriad daily visits to hospitals, schools and factories and all the public places in cities, towns and villages here and across all her realms and territories—indeed the whole world. No one ever questioned her work ethic; she was Queen for everyone, every place and every generation.

In a moving and unusually public remark—because Her Majesty had that diamond among virtues, discretion—Her Majesty said of the husband that she so loved, our late lamented Prince Philip, that he was quite simply her

“strength and stay all these years”.

So was she to us, and to all the countries and peoples of the great Commonwealth that she herself, beyond all others, nurtured, and to which she was devoted. She was our strength and stay for 70 years—firm in her duty, wise in her counsel, reassuring in her smile and gracious in her every act, whether in stretching out the hand of reconciliation in Ireland or encouraging a timorous child hovering with a bouquet that he dared not present.

How many tens of millions of people over 70 long years have travelled, sometimes hundreds of miles, to see her, the most famous woman in the world—although that was the very last thing she would ever have sought to be? Having seen her, they were touched by her warmth and went home with joy in their hearts, secure that there was a sparkle of goodness and a spirit of good humour in the world—and, my goodness, Her Majesty had humour and wit. People were just glad that she had come to their little corner of the world; frankly, people were just glad that she was there. For as they loved the public Queen, they also loved the private Queen, with her dogs and horses and her joy in Scotland’s countryside, wherein she died. Many who came to see her were from other nations, not her subjects, on her state visits or on their visits to this country. She was our nation’s greatest magnet and our finest diplomat. None will ever have forgotten that day when they saw her, however long it was ago.

All of us, whether we knew her or not, felt that we knew her and were glad that we knew her. Of all the different things we felt we knew, the one thing we all surely knew lies in that one word: duty. Hers was a life given to duty, to the service of her peoples, service to others: unceasing, utterly selfless service given with resilience and forbearance even in the difficult times. From that moment in her 21st birthday broadcast when she declared that her whole life would be devoted to our service, through her sacred coronation oath, to what we witnessed this last week, when this quite extraordinary woman summoned the last drops of her strength to say farewell to her 14th Prime Minister and appoint her 15th, it was duty, my Lords—duty. Many of us make many promises, and we all fall short of them. In 1947 and 1953, Her Majesty made one great and solemn vow of lifelong service, and she honoured it without flinch or blemish for 75 years.

Therein was another quality of Her Majesty: constancy and courage—the courage that we saw when, at Trooping the Colour, a demented man fired shots at her that no one then knew were blanks. That consummate horsewoman steadied her horse and just got on with it, as her generation did. She displayed that courage this last week too, even unto the threshold of death.

Arrangement of Business

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Thursday 8th September 2022 Lords Chamber

[Lord Kennedy of Southwark (Lab Co-op)]

My Lords, it is my understanding that in the other place the Prime Minister is leading a debate on the energy crisis and her proposals. As it is a debate and not a Statement, can the Government give some thought and hold discussions in the usual channels to arrange for a debate in government time in this House to discuss this most pressing issue?

As Opposition Chief Whip, I congratulate the noble Baroness on her appointment as Government Chief Whip. She is both a popular and a highly effective Member of your Lordships’ House. I look forward to working with her again.

I thank the noble Lord, Lord Ashton of Hyde, for his service as Government Chief Whip. I always enjoyed working with him; he was kind, courteous and straight in all our dealings. I always enjoyed our conversations that took place many times during the day and even sometimes into the night.

[The Lord Privy Seal (Lord True) (Con)]

My Lords, if I might—unusually—respond on a usual channels question, I should like to thank the noble Lord for his kind words about my noble friend Lord Ashton, which are widely shared, and about my noble friend Lady Williams. I think this poor old man will often need a helping hand to stop him stumbling and I cannot think of a securer colleague than the noble Baroness.

As for the fundamentally important question that the noble Lord poses, which perhaps goes a little wider than the energy question, my right honourable friend the Prime Minister indicated yesterday a set of what she considers the urgent requirements for the country. They may well eventuate in provisions being laid before Parliament, which it would be my duty to make sure your Lordships’ House has the opportunity to discuss. I fully take his point about the nature of the debate in the other place meaning that I am not standing here repeating a Statement on energy. This is a question of fundamental importance, and I can give an undertaking that we will take it away and have those discussions in the usual channels to see how we can accommodate your Lordships’ House.

Government: Ministerial Changes

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Wednesday 7th September 2022 Lords Chamber

[The Lord Privy Seal (Lord True) (Con)]

My Lords, of course I echo the tributes made so eloquently to my noble friend Lady Evans of Bowes Park, which I shall not be able to match. I wholeheartedly add my own, and am only sad that she is not here to hear the warmth of feeling towards her in the House—but I am sure that she knows that, and has known it, and will see it in Hansard.

My noble friend served your Lordships’ House as Leader for six years, and did so with determination, tenacity and always great good humour. I can bear out what was said—that she consistently and forcefully made the case for your Lordships’ House within government. I have to say that, having had the benefit of being on a Cabinet committee with her, I heard some pretty robust language there when she has been defending your Lordships’ House and its place in our national life. She always defended this place. On a personal level, as noble Lords have already said, she has been a source of great support not only to many of my noble friends but to people across the House. She has provided leadership and morale in difficult times.

Even from my noble friend’s earliest days in the House as a Government Whip, as has been alluded to, when she came leaping forward from being a junior Whip, she acted without fear or favour. I remember an occasion when the late Lord Ashdown of Norton-sub-Hamdon was not abiding by the speaking limit in debate. Despite his concerted attempts to continue, the noble Baroness finally quelled him. Anybody who knew the great Paddy Ashdown will know that it was not very easy to quieten him down.

My noble friend’s sheer dedication was very much the reason for her longevity in the role. She was the youngest Leader in modern times and, as the noble and learned Lord said, it was daunting. Imagine being so young and looking all this august and fearful company and having to lead. She was the first Leader to serve under two different Prime Ministers since Lord Shepherd and the longest-serving female Leader, as well as the longest-serving Leader of the House since the first Viscount Addison, who left office in 1951. Even Viscount Addison beat her by only 31 days. To think that she slogged away for six years and then missed that record by only 31 days—I wonder whether she will ever forgive me.

As other noble Lords have said, it has been a turbulent time, with Brexit and Covid and all the more recent events with the war. The House has lived through exceptional times. I totally agree with what the noble Lord, Lord Newby, said about the experience of Covid and the sudden and different ways in which we had to operate, which was not something that many Peers liked. The thing I hated most since I became a Minister was sitting at my table, trying to answer questions.

My noble friend led and she was instrumental in seeing that the work of the House should and must go on. The hybridisation of the House was one of the most dramatic and sudden changes in history. She led that and led the way in ensuring the House could function safely and embrace the technology and, while many of us were comfortable at home, she and her team were here in Parliament every single day that the House was sitting. For that continuity, I think we all owe a debt of gratitude.

My noble friend is always fun to be with, and that is a very important quality in politics. I hope we in this House never forget, for all the gravity and seriousness of the things we deal with, the importance of fun, fairness and respect. She is an exceptionally generous and kindly person, as has been said and as many can testify. I offer, with all others who have spoken, our thanks to her and best wishes for the next chapter of her life.

I would also like to take a moment, as others have, to pay tribute to the outgoing Government Chief Whip, my noble friend Lord Ashton of Hyde. He will hate this because he is not that sort of person, but the role of Chief Whip is not for the faint of heart and he has undertaken it with characteristic compassion and diligence. I know I speak for the whole House when I wish him the very best for the future. We look forward to seeing him around the House—especially on voting days, Henry.

Finally, I thank those from across the House who have spoken to me, sent messages of support and been kind today about my appointment. However, I say emphatically that this is not a time to talk about me, and particularly not a time for me to talk about me—in any case, that is not something I am ever very keen on doing. I will do my utmost, I pledge to noble Lords, to uphold the ethos and traditions of this House that I love. I want this House, on all sides, to be a happy and comfortable place where, for all our differences—passionate and proper differences—every Peer feels that their views are valued. I look forward to working with noble Lords across the House to meet those responsibilities.

Financial Services Bill

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3rd reading & Report stage
Monday 19th April 2021 Lords Chamber

[Lord Tunnicliffe (Lab) [V]]

My Lords, we are grateful to the noble Lord, Lord Holmes of Richmond, for bringing forward these amendments, which would enable individuals to obtain cashback from retail settings without first having to make a purchase. We have not spent a huge deal of time discussing access to cash during the Bill’s passage, which is a surprise given the challenges we face in this area. It is beyond doubt that the Covid-19 pandemic has accelerated the transition to cashless payment, but this does not mean that cash is becoming obsolete. Many millions of people continue to feel most comfortable making physical payments. While small businesses have access to low-cost options for taking card payments, many will still prefer to deal with cash.

While we welcome this initiative, I hope the Minister can briefly touch on the Government’s response to the wider challenge we face with access to cash, such as the continued closure of bank branches. It is also worth noting that, while people may soon be able to access cash more easily, these amendments do not deal with the fact that some businesses have chosen no longer to accept it. That is their choice, of course, but acceptance is as important as access. I urge the Government to accept these amendments, which would be beneficial to an important part of society.

[The Minister of State, Cabinet Office (Lord True) (Con)]

My Lords, I join the expressions of sadness at the news of the death of the noble Lord, Lord Judd, such a tireless campaigner for all the causes he held dear. Even though we meet, of necessity, in an almost entirely empty House, it says everything about the noble Lord that one feels that one particular place over there is empty. Our thoughts go out not only to his family, particularly, but to all those in the Labour Party family who were inspired by his example and loved him as a man.

Amendments 37D and 40A seek to facilitate the provision of cashback without a purchase. I say at the outset to the noble Lord, Lord Tunnicliffe, my noble friend Lord Hunt of Wirral and others that the Government will support these amendments. The noble Baroness, Lady Kramer, is able to divine the language of draftsmen even better than I am.

These amendments introduce an exemption for cashback without a purchase, such that it will no longer be a regulated payment service. Under the current legislation, which derives from the EU’s second payment services directive, if a business or its agent, such as a corner shop or supermarket, wanted to offer you cashback without requiring you to make a purchase, it would have to be authorised or registered with the FCA to give you cash from your own accounts. That is a significant burden for even the largest of retailers, let alone small, local shops along the various high streets across the UK.

This amendment removes this requirement; it will take effect two months after Royal Assent. From that point, industry will have discretion to make the service available across the United Kingdom. Where the service is offered, customers will be able to walk into a local business that wishes to participate, such as a corner shop, café or pub, and withdraw cash without having to make an accompanying purchase.

As part of the community access-to-cash pilots, LINK—the UK’s main ATM cash machine network—and PayPoint are already testing a cashback without purchase service in a small number of local stores in Cambuslang, Hay-on-Wye, Burslem and Denny. Indications from this trial are positive, and the Government look forward to the outcomes. This amendment will allow for such initiatives to be rolled out across the UK more easily.

The Government recognise that, as my noble friend Lord Holmes of Richmond said, widespread access to cash remains and will remain extremely important to the daily lives of millions of people across the United Kingdom. Although it was not possible in time for this Bill, I can certainly assure the noble Baroness, Lady Kramer, that the Government have committed to legislate to protect access to cash and to ensure the cash infrastructure is sustainable in the longer term.

The Government published a call for evidence on access to cash in October 2020. This highlighted the potential benefit of facilitating cashback without a purchase through legislation. Cashback with a purchase was in 2019 the second most frequently used method of withdrawing cash in the UK, behind ATMs. As my noble friend Lord Holmes of Richmond told us, there were 123 million cashback transactions, amounting to a total amount withdrawn of £3.8 billion.

The Government’s view is that cashback without a purchase has the potential to be a valuable facility to cash users and to play an important role in the UK’s cash infrastructure. This legislative change, which is possible only now we have left the European Union, would help both to support the availability of cash withdrawal facilities across the United Kingdom, benefiting individuals’ access to cash, and to support local cash recycling. These amendments are therefore a welcome step towards protecting access to cash.

I am particularly grateful to my noble friend Lord Holmes of Richmond, who raised this important issue in Grand Committee, for the constructive way he has engaged with the Government and officials since then on this important issue. I am very pleased to be able to say that the Government are proud to support these amendments. Meanwhile, as I covered in my earlier remarks, the Government are considering responses to the call for evidence and look forward to setting out next steps on legislation to protect access to cash in due course.

[Lord Holmes of Richmond (Con)]

My Lords, I thank all noble Lords who have contributed to this debate on such an important issue. Cash still matters, and it matters materially to millions. I thank particularly my noble friend the Minister for the way in which he and all Treasury officials have engaged with this issue. It is a key part, but, as other noble Lords have rightly identified, only one part, of what it means to have a cash-enabled, easily accessed economy across the UK. It adds to financial inclusion. More than that, it adds to complete social inclusion.

We all need to think innovatively about how we can do more to enable, empower and unleash true financial inclusion across the UK. It matters economically, socially and psychologically. If we can enable it, it can address so many of the issues that have dogged our nations for decades.

Again, I thank all noble Lords who have contributed, and I thank particularly the Minister and Treasury officials.

Financial Services Bill

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Report stage
Wednesday 24th March 2021 Lords Chamber

[Lord Eatwell (Lab)]

My Lords, the measures in this Bill that refer to Gibraltar essentially create a single financial market, and an essential component of a single financial market should be a single registry standard. So I want to ask the Government about their approach to this. When they decided to promote the measures in the Bill in support of Gibraltar, did Her Majesty’s Treasury conduct a review of the Gibraltar registry, and could the Minister tell us the result of that review? For example, could he tell us whether the Gibraltar registry is as transparent as that of Companies House?

Noble Lords will be well aware, after Committee, that my opinion of the Companies House registry is pretty low, in particular regarding its inability to provide a verified register of beneficial ownership, which is at the foundation of the right reverend Prelate’s concern with tax issues. So could the Minister assure us that the Gibraltar registry has a verified register of beneficial ownership, as well as being transparent?

[The Minister of State, Cabinet Office (Lord True) (Con)]

My Lords, I certainly regret, along with others, that the right reverend Prelate was unable to be here to speak to his amendment, but we fully understand the reasons for that. Obviously, the House has great respect for his expertise in these financial matters. We are grateful to the noble Lord, Lord Sikka, for delivering aspects of his speech.

In response to the noble Lord, Lord Sikka, who raised an issue relating to state aid, I should say for the record that the issue he raised is a legacy state aid issue, relating entirely to the period when the UK was a member of the European Union. The Government of Gibraltar have already recovered some of the aid and continue to work to recover the outstanding aid, in compliance with the European Commission’s decision to bring this case to a satisfactory conclusion as fast as possible.

--- Later in debate ---

[Lord Tunnicliffe (Lab) [V]]

My Lords, we welcome the re-tabling of Amendment 11 by my noble friend Lord Stevenson, which provides the Minister with an opportunity to give more detail on the intention behind the Government’s introduction of the statutory debt management scheme. We are grateful to the Minister and his officials for the various meetings that have taken place in recent weeks. We hope that, even once the Bill has passed, there will be opportunities for further cross-party dialogue on issues relating to personal debt, financial resilience and so on.

There was a lively debate on this issue in Grand Committee, and various amendments were tabled by colleagues from across the Committee. Despite the number of amendments, almost all noble Lords were united in saying that the Government must get on with introducing the scheme. Amendment 12 from the noble Baroness, Lady Bennett, co-signed by the right reverend Prelate the Bishop of St Albans, deals with some slightly broader issues relating to problem debt. We hope that the Minister can provide a full response to those points, either now or in writing.

Looking at these amendments and the next group on BNPL and financial exclusion, I am struck by just how important it is to adopt a more holistic approach to personal finance, as proposed by my noble friend Lord Stevenson in his previous amendment on the concept of financial well-being. Helping people with debt has to be important. I have trouble understanding how people cope with that situation. It is the role of the state to provide structures to allow people to take on their debt problems in a managed way. I look forward to the Minister’s response to my noble friend’s amendment.

[Lord True (Con)]

My Lords, I am grateful for the opportunity to respond to the debate. I genuinely thank all noble Lords who spoke in Committee and who have spoken today and, indeed, those with whom I have had the privilege of meeting and discussing these matters of engagement. All the discussions have been useful, and the Government have certainly listened to them. I hope that in my letter which I have placed in the Library of the House and my remarks this evening, I will be able to assure noble Lords that that is the position.

What I have found most pleasing is a sense of unanimity, which is rare in this House, that we are on the right track as regards seeking a scheme of this kind. The SDRP is a new solution for those who are in problem debt. It will provide a revised, long-term agreement between the debtor and creditors. Debtors will be protected from most credit enforcement action and from certain interests and charges on debts in the plan. Following the Committee stage and the valuable discussions I have referred to, I wrote to the noble Lord, Lord Stevenson of Balmacara, the noble Baroness, Lady Coussins, and my noble friend Lord Lucas with further details. The noble Lord, Lord Stevenson, referred to aspects of that letter. However, the Library of your Lordships’ House is not open to everyone, particularly at this time. Given its importance to today’s debate, I hope that your Lordships will indulge me if I take some time to place on public record some of the key commitments set out in it because they are commitments which have been made on behalf of the Government. I also want to ensure that all noble Lords understand the timings the Government are working to.

I spoke in Committee in response to the noble Baroness, Lady Kramer, about the range of support being given by the Government to people at this difficult time, and she is quite right to refer to those difficulties. In the meantime, as we work on the SDRP, the Government are pushing ahead with the implementation of a breathing space scheme that will come into force on 4 May this year. Other voluntary and statutory debt solutions will continue to be available to debtors to consider in the meantime.

I return to the process which has been of interest to many noble Lords. The Treasury is currently drafting regulations for the SDRP and intends to consult on them as soon as possible after the Financial Services Bill receives Royal Assent. As well as preparing the regulations, the Treasury will also need to work with the Insolvency Service and others to implement new IT systems and develop scheme guidance to aid stakeholders in implementing the policy. It is also important, obviously, to give stakeholders adequate time to prepare so that the regime can be implemented properly. Given that, I can confirm that the Government expect the SDRP to be implemented in 2024. In order to achieve that, they will aim to lay the necessary regulations by the end of 2022.

I am sorry that the noble Lord, Lord Stevenson of Balmacara, is disappointed at the specifics of my letter on the timing and, indeed, that has been alluded to by others. However, I will repeat that it is the Government’s clear aim and intent, as the noble Baroness, Lady Coussins, was kind enough to say, to operate on that timetable with the most appropriate dispatch.

As to why the SDRP regulations might not be able to be laid until the end of 2022, the reality is that the Treasury is currently working on their drafting. I have explained that this is a complex undertaking and will require input from stakeholders both inside and outside the Government to finalise before a consultation on regulations can be published. That consultation will in turn need to give a reasonable length of time—we are often criticised for providing insufficient time for consultation—for stakeholders and members of the public to reflect and respond. We must allow sufficient time beyond that to consider the responses properly. Those views, as appropriate, will need to be reflected in the draft regulations before they are laid. The timetable will also need to accommodate the necessary clearances within Government and Parliament for publications and legislation. However, I know that noble Lords on all sides of the House, including on these Benches, wish for the SDRP to be progressed in a timely manner. The Government have certainly understood the strength of feeling among noble Lords on this matter.

I know that the noble Lord, Lord Stevenson of Balmacara, wished also to further understand some of the details of the regime; as he has made clear, that is what his probing Amendment 11 seeks to explore. So I repeat on the public record that the details of the SDRP regime will be set out in affirmative secondary legislation, so Parliament will be able to consider the exact details close to the time. I also reassure noble Lords that Section 7 of the Financial Guidance and Claims Act 2018, as amended by Clause 34 of the Bill, will contain powers to allow the Government to include such features in the SDRP as suggested in the amendment. However, in response to the noble Lord, Lord Stevenson, I will set out further detail on how the Government expect the regime to function.

--- Later in debate ---

Moved by

[Lord True]

13: Clause 34, page 40, line 31, leave out “subsection (5)” and insert “section 7(5) of that Act”
Member’s explanatory statement
See the explanatory statement for the Minister's amendment at page 40, line 14.

Financial Services Bill

Lord True Excerpts

Committee stage
Wednesday 10th March 2021 Grand Committee

[Lord Tunnicliffe (Lab) [V]]

My Lords, the case for reform in this area has been overwhelmingly made by my noble friends Lord Stevenson and Lord Griffiths, the noble Lord, Lord Sharkey, and the noble Baroness, Lady Kramer. I wish not to delay the Committee any longer, but simply to advise that the Labour Front Bench supports my noble friend Lord Stevenson’s amendment and the generality of those proposed by the noble Lord, Lord Sharkey.

[The Minister of State, Cabinet Office (Lord True) (Con)]

My Lords, I acknowledge that the Government have a great deal of sympathy for borrowers who are unable to switch their mortgage, and we are committed to finding practical ways to help them. That is why we have been working closely with the FCA, and I will set out the action that it has taken.

In 2019, the FCA introduced a modified affordability assessment, which allows active mortgage lenders to waive the normal affordability checks for borrowers with inactive lenders who meet certain criteria—for example, not being in arrears and not wishing to borrow more. As a result of this, inactive lenders have been contacting borrowers who have had difficulty with switching, setting out new options that may be available for them on the active market. I am pleased that a number of lenders, including Halifax, NatWest and Santander, have already come forward with options specifically for these borrowers.

More widely, we have taken steps to support those unable to make mortgage payments during the pandemic. Payment holidays have provided vital support for consumers, including those with inactive lenders, with over 2.75 million mortgage holidays granted since March 2020.

However, policy should be based on clear evidence. The FCA’s analysis found that customers with inactive lenders paid, on average, just 0.4% more than customers in the active market with similar characteristics. There has been comment in Committee on that figure. The FCA’s analysis also found that, of the 250,000 borrowers with inactive lenders, half were in a position to switch to a new mortgage even before any action from the Government. That illustrates one aspect of the diversity of this group.

On the 0.4%, I am aware that there are other estimates out there, including in a recent report, which has been referred to, published by the UK Mortgage Prisoners action group on 8 March, just a few days ago. Treasury officials have reviewed this analysis and noted that these figures seem to be based on surveys with small sample sizes. The comparisons are often inappropriate—for example, contrasting rates that many borrowers with active lenders would not even be offered. I hope that noble Lords will appreciate that this is a complex topic. We are, as I have said, committed to finding practical ways to help.

Amendment 99 seeks to cap standard variable rate mortgages for some customers. Data from the FCA suggest that the majority of borrowers with inactive lenders pay less than 3.5% interest. As I have already said, compared to those with similar lending characteristics, consumers with inactive lenders pay on average only 0.4% more than those with an active lender. This was also backed by the London School of Economics recent report on mortgage prisoners, noting that it does not recommend capping standard variable rates at a low rate. Capping mortgages with inactive lenders could have an impact on their financial stability, as it would restrict lenders’ ability to vary rates in line with market conditions. That would also be unfair to borrowers in the active lending sector, particularly those in arrears, who are paying a higher standard variable rate.

Amendment 116 seeks to provide new fixed interest rate deals for certain mortgage customers with inactive lenders. I have already set out the FCA’s work in introducing a modified affordability assessment and that a number of active lenders—household names—have come forward with offers. The FCA estimates that up to 55,000 borrowers could be eligible to benefit from the new modified affordability assessments. The Government will continue to monitor the situation and hope to see even more options available over the coming months. Enabling people to switch into the active market is the best way to help consumers secure new deals, and that is what we have been doing.

Amendment 117 would require active lenders to seek a borrower’s permission before transferring their regulated mortgage contract to an inactive lender. There are already a number of protections in place for borrowers, meaning that their mortgage cannot be sold on to an unregulated servicer and their terms and conditions cannot change as a result of the sale, so the benefit of explicitly seeking permission from the borrower is unlikely to help them any further.

It is required that all loans within the UK must be administered by a regulated entity, meaning that all customers will be able to benefit from consumer protections —for example, access to the FOS. The terms and conditions of a loan do not change upon sale, meaning that consumers will be treated in line with their original agreement even if their loan was sold to an unregulated entity.

As my noble friend Lady Noakes pointed out, the amendment would also risk disrupting the residential mortgage-backed securities market as it may prevent the effective securitisation of mortgages, where beneficial ownership of a portfolio of mortgages is transferred to a special purpose vehicle. Securitisation is a common way for active lenders to fund themselves, and disrupting the securitisation market would likely have a negative impact on the availability and cost of mortgage credit in the United Kingdom. For those reasons, I ask that the amendment be withdrawn.

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

My Lords, I thank those who have contributed to this debate for the various points they have raised. The noble Lord, Lord Griffiths, has it right: this is a complex and detailed issue and it delves down way beyond most people’s experience of how markets of this type operate. In those circumstances, we have a difficult choice as a Committee on how one might want to take this forward.

On the one hand, my noble friend Lord Griffiths is right that the end of the story is what is happening on the ground to people who have ended up in this situation through no fault of their own but as a result of government action. The Government therefore have to explain to the people of this country why, having created this problem, they do not feel that they have more than just a moral responsibility to see it resolved. On the other hand, I take absolutely the Minister’s point that, it being a complex issue and the Government having seen some action already happening, they remain committed to what he called finding a practical plan forward; I hold on to that. However, the complexity and the fact that this affects a relatively small number of people—although 250,000 people is not a small number in my terms—do not mean that we should simply allow the market to find the right balance between the commercial pressures of offering loans and the ability to service those loans and make a profit out of them from those who have limited resource. There is no doubt at all that, having said all that, there is obviously a pandemic issue as well.

Where does that leave us? I take hope from the fact that the Minister said that there is work on the way to try to take this forward. I recognise that it is a complex issue—indeed, I said so in my opening remarks. However, he must accept that the arguments made by myself but made in much more detail and with a much wider range of evidence by the noble Lord, Lord Sharkey, supported by the noble Lord, Lord Holmes of Richmond, suggest that this is more than just a complicated problem which needs to be bottomed out by working with the market. We need convincing that there is work going on that will result in a workable solution of benefit to those affected by this within a reasonable timescale, otherwise we will come back on Report with a better-drafted amendment—perhaps covering some of the points made by the noble Baroness, Lady Noakes, but not all of them—in a way that makes it clear that the Government cannot continue to let this settle itself. It has to be taken forward in policy terms otherwise too much damage will be caused. In the meantime, I beg leave to withdraw the amendment.