Financial Services Bill

Baroness Garden of Frognal Excerpts

Report stage
Wednesday 14th April 2021 Lords Chamber

[The Deputy Speaker (Baroness Garden of Frognal) (LD)]

My Lords, I will call Members to speak in the order listed. Short questions of elucidation after the Minister’s response are discouraged, but any Member wishing to ask such a question must email the clerk. The groupings are binding. A participant who might wish to press an amendment other than the lead amendment in a group to a Division must give notice in debate or by emailing the clerk. Leave should be given to withdraw amendments. When putting the question, I will collect voices in the Chamber only. If a Member taking part remotely wants their voice accounted for if the question is put, they must make that clear when speaking on the group.

Amendment 14

Moved by

--- Later in debate ---

The second problem that I have with the amendment is that it asks for a report from the Treasury on progress made by the Bank of England on offering basic bank accounts. As far as I am aware, the Bank of England does not itself offer any bank accounts. In fact, I believe that it closed the last bank accounts that it offered about five years ago. I was very proud to have a Bank of England bank account, which I acquired when I was a member of court. It had an extremely grand cheque-book and I was very unhappy when the Bank of England closed the account. It did that because it was a relatively small operation, and it simply could not keep up with the online technology that one needs nowadays to make a retail offering. It closed them down and does not have the capacity to do it now, so it would be completely wrong to expect the Bank of England to step back into retail banking, having consciously stepped out of it.

[The Deputy Speaker (Baroness Garden of Frognal) (LD)]

The noble Baroness, Lady Tyler of Enfield, has withdrawn, as she is speaking in Grand Committee, so I now call the noble Baroness, Lady Bennett of Manor Castle.

[Baroness Bennett of Manor Castle (GP) [V]]

My Lords, I welcome the government amendment in this group. We are seeing regulations catching up with financial innovation. As ever, it seems that the regulator is being forced to chase after advances that are screaming into the future with potentially very disturbing results.

However, I chiefly wish to speak to Amendment 35, in the name of the noble Lord, Lord Holmes of Richmond, and to offer my support for it, or at least for its principles. As the noble Lord said, we are talking about innovation, but innovation that is actually for the common good—innovation that works for people, and particularly, innovation that works for the most vulnerable in our society. The figures really are deeply shocking: estimates of 1 million unbanked people; 8 million people with debt problems; 9 million people with no access to mainstream credit. One thing that is not adequately recognised is the poverty premium: the fact that not having a bank account or access to mainstream credit means much higher costs for everything from utility bills to borrowing and very well documented impacts on health and wellbeing.

This seems like an apt time to ask the Government whether they have given further consideration to the recommendation from the Select Committee on Financial Exclusion, which reported in March 2017. It called for a Minister responsible for financial exclusion. Is this something that the Government are really going to focus on by means of this Bill? The noble Baroness, Lady Noakes, may have concerns about the structure of this, but the intentions of the noble Lord, Lord Holmes, are very clear. Are the Government going to take action?

Financial Services Bill

Baroness Garden of Frognal Excerpts

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

[Baroness Bennett of Manor Castle (GP) [V]]

My Lords, it is a pleasure to follow the reflections of the noble Viscount, Lord Trenchard, on how oversight of this Bill has been truncated, despite all the hard work put in, and the fact that we still do not have a clear picture of what the Government propose, as the noble Baroness, Lady Kramer, said in introducing Amendment 37F.

As this is the last amendment, and we have already covered this ground extensively, I will be brief. I wanted to speak on this group to offer my support for the amendment in the names of the noble Baronesses, Lady Kramer and Lady Bowles of Berkhamsted, both of whom have done extraordinary, sterling work on this Bill.

We have a real problem of oversight, which has been seen and expressed on many sides of your Lordships’ House. Looking at the real-world situation, the circumstances now and the headlines coming out, we have huge problems with our financial sector, and any independent outside observer would see that clearly. Although we know that this amendment will not be put to a vote, it would ensure that there is a chance to properly question and scrutinise the work of the regulators, which has to be at the heart of the system, and of trying to fix our broken system.

It has been a long debate, if often cut up into different stages and occurring at odd intervals, and we have a long way to go. The Government tell us we are to expect many more financial Bills coming down the track. We will have to keep coming back to these issues again and again, until we finally see progress.

[The Deputy Speaker (Baroness Garden of Frognal) (LD)]

The noble Baroness, Lady Bowles of Berkhamsted, has withdrawn, so I now call the noble Lord, Lord Tunnicliffe.

[Lord Tunnicliffe (Lab) [V]]

My Lords, we had a fruitful debate on the issue of parliamentary scrutiny and the regulator’s rule-making powers last Wednesday. Since this amendment was tabled, I have viewed it as an opportunity to tie up any loose ends, rather than being likely to result in a Division.

It is fair to say that nobody is particularly happy with the current arrangements, particularly given the loss of European Parliament scrutiny of new prudential rules, and the glut that will come once the Bill becomes an Act. However, there is little sense in repeating the arguments made in previous debates. I recognise that the Minister was able to make some important additional commitments in his response to last week’s group of amendments. Since this amendment was tabled, we have seen correspondence from the Economic Secretary to the heads of the FCA and PRA, asserting that Parliament, as we have all said in recent months, has and must enjoy a special role in overseeing the regulators’ output. The letter provided what my noble friend Lord Eatwell has long referred to as the final component of a three-legged stool.

Having reached agreement that Parliament should be treated as a significant stakeholder, the key is to now put in place a mechanism for meaningful scrutiny to take place. Our Amendments 45 and 48 envisage the establishment of a dedicated committee of each House, or a Joint Committee of both, and that remains an attractive prospect to us. Therefore, as we move into a new Session, I hope the Minister can assure me that the Treasury and business managers in both Houses will look at making it a reality. We await the outcomes of the future regulatory framework review, which I hope will represent a significant step forward for all strands of oversight. Once we have digested the findings, our task will be to scrutinise a successor to FiSMA, and I repeat our call for legislation to receive the detailed pre-legislative scrutiny it deserves.

Scrutiny has been the central theme of the Bill. The noble Baroness, Lady Kramer, said that we must look forward, and she commented that, in many ways, the theme of scrutiny has crossed parties as an apolitical discussion. I hope it will not be a matter of conflict between regulators and Parliament, and that the opposite will be true, as they must work together to make this scrutiny work. I also hope it will mean that we can have real confidence in the work of the regulators, and a real sense that their actions are fully understood by responsible politicians.