Financial Services and Markets Bill [HL]

Lord Sahota Excerpts

2nd reading
Monday 8th June 2026 Lords Chamber

[Lord Sahota (Lab)]

My Lords, I welcome the opportunity to contribute to the debate on the Financial Services and Markets Bill, in particular to consider the implications for local authorities, local communities and the people who we are here to serve. At a time when high streets continue to face significant challenges, there are aspects of the Bill that deserve recognition and support.

One of the most important is the effort to preserve access to essential banking services. For many people, particularly older residents, small businesses and those who are less confident using digital services, access to physical bank branches remains vital. The closure of bank branches over the years has had a profound impact on communities across our country. A local bank is not merely a place to deposit money or seek financial advice, but often an anchor institution that helps sustain footfall, support local businesses and contribute to the vitality of the high street. In many of the communities that I have visited, the loss of local bank branches has been felt just as keenly as the loss of local post offices. Measures that seek to maintain access to cash and banking facilities therefore have benefits that extend far beyond the financial sector itself. They help to keep our town centres active, accessible and economically resilient.

The Bill also contains provisions aimed at strengthening consumer protection and promoting a more competitive financial services sector. If implemented effectively, these measures could improve access to affordable financial products, encourage innovation and help to ensure that customers receive fair treatment. Such outcomes would be welcomed by households facing continued cost of living pressures and by small businesses seeking access to finance and investment.

However, while there is much to commend in this Bill, there are also important questions that deserve careful consideration. Local authorities have long played a crucial role in supporting vulnerable residents, promoting financial inclusion and responding to local economic needs. They possess local, detailed knowledge of the challenges faced by their communities and are frequently the first to identify emerging problems. Will the Minister clarify how local authorities will be consulted as new regulatory frameworks and powers are implemented? What mechanism will exist to ensure that local knowledge will be used in decision-making? How will the council be able to raise concerns when changes in banking provision, financial services or regulatory practice have unintended consequences for local residents?

I would also welcome clarification of how the Government intend to measure the impact of these reforms on financial exclusion. What assessment has been made of the effects on rural communities, deprived urban areas and those who continue to rely heavily on face-to-face services? Furthermore, what safeguards will be put in place to ensure that the transition towards digital financial services does not leave behind those who are least able to access them? Finally, can the Minister explain how the Government will balance this regulatory efficiency with the equally important need for local accountability and community engagement?

The success of this Bill should ultimately be judged not on its effect on markets and institutions but on its impact on ordinary people. If it helps to maintain a vibrant high street, protect access to essential services and strengthen financial inclusion, it will make a valuable contribution. However, we must also ensure that local authorities retain a meaningful voice in shaping the outcome for the communities that they know best.