Financial Services and Markets Bill [HL]

Debate between Lord Vaux of Harrowden and Baroness Young of Old Scone

Report stage
Wednesday 9th September 2026 Lords Chamber

[Lord Vaux of Harrowden (CB)]

My Lords, while they do not go quite as far as I would have preferred, I welcome the Government’s amendments that will bring the essential regulatory principle of proportionality back into the discharge of the regulators’ general functions. I think it is a reasonable compromise to have met.

I have added my name to Amendment 62, tabled by the noble Baroness, Lady Neville-Rolfe, which emphasises the particular importance of proportionality to small and medium-sized enterprises, on which the regulatory burden can have a much greater impact than on large companies with dedicated compliance departments. I raised this on Monday in relation to the concern that the transfer of AML supervision to the FCA might disproportionately impact smaller firms.

I very much hope that the Minister can say something that will give us comfort that the regulators will take size, as well as other factors, into consideration when deciding what is proportionate regulation and supervision.

[Baroness Young of Old Scone (Lab)]

My Lords, I welcome the Minister’s statement that he was committed to bringing forward amendments at Third Reading. I think it is relevant to this group of amendments. I simply want to draw the House’s attention to two sessions we have had in the last three or four days with the FCA. The Minister very kindly organised a session with the FCA about its role in climate and environment. To be honest, the kindest thing I can say is that I was underwhelmed. I think that it is doing a lot more than it displayed that day. The defensiveness that it demonstrated in front of a bunch of really friendly, helpful and not at all terrifying Baronesses, was a bit of worry to me, to be honest, because I felt there was real defensiveness and push-back against a responsibility. I thought perhaps we had just given it a hard time and it was having a bad day—but we had another session with it yesterday, organised by Peers for the Planet, and I was horrified.

I have the quote here because I wrote it down and then went home and wept. A fairly senior representative of the FCA said, in terms: “The FCA does not have a mandate to tell businesses what they should do on climate and the environment”. I would like the House to know that and the Minister to bear that in mind when he comes forward with his Third Reading amendments, because there is a real need for a stronger line in guidance than we might otherwise imagine.