Bank of England and Financial Services Bill [HL]
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Lord Bridges of Headley
The Parliamentary Secretary, Cabinet Office (Lord Bridges of Headley) (Con)
My Lords, this is an amendment to Clause 30, which in effect will require certain individuals with annuities valued above a threshold to take advice before selling an annuity on the secondary market. Clause 30(3) gives the Treasury the power to make regulations to exempt some individuals from mandatory advice. The amendment changes the nature of that power so that the regulations are made under the affirmative, rather than the negative, parliamentary procedure.
On Report, the Delegated Powers and Regulatory Reform Committee recommended that the power to exempt some individuals from mandatory advice should be subject to the affirmative procedure. The Government agree that this is an important part of the consumer support package and that your Lordships should have the opportunity to debate this issue before it is set in legislation. That is why an amendment is being brought forward to change the power so that it is subject to the affirmative resolution procedure.
Along with the power to specify certain individuals who will be exempt from the advice requirement, Clause 30 gives the Treasury the power to specify which annuities will be subject to the advice requirement, including the specification of any threshold annuity value, and a further power to specify what type of advice individuals must have received. Ahead of laying the appropriate secondary legislation, the Government will be consulting later in the year on our proposals for the details of the advice requirement allowed for in these delegated powers. I beg to move.
Lord Wallace of Tankerness (LD)
My Lords, I had not at all intended to intervene until the Minister mentioned the affirmative resolution procedure, which of course means that the order will come to your Lordships’ House for approval. Does the Minister really mean that—and, if he seeks the approval of the House, is he willing to accept that the House might not approve it?
Lord Bridges of Headley
My Lords, I am sure that the Government will see sense and will wish to acknowledge the views of the House.
Lord Bridges of Headley
“( ) In section 429(2B) (regulations subject to affirmative procedure)—(a) after paragraph (a) (inserted by section 21) insert—“(b) provision made under section 137FBA(3);”;(b) the words from “provision made under section 410A,” to the end become paragraph (c).”
Lord Bridges of Headley
Lord Bridges of Headley
My Lords, the amendments in this group make minor and technical changes to correct oversights in the Bill. Amendments 3 to 6 deal with the use of the terms “institution” and “group entity” in the new Section 57B inserted by Clause 32. This section requires the Bank to provide information related to resolution plans for institutions and group entities. Subsection (5), which allows the Treasury to direct the Bank not to provide this information in relation to specified institutions, omits group entities. These changes correct this and make consequential amendments to the rest of the clause.
Amendment 7 alters Schedule 2 to ensure that the definition of “banking group company”, found in Section 189(1B) of the Financial Services and Markets Act 2000, applies to the use of that term in the new subsection (1ZB) of that section, which is inserted by this part of the Bill, and not just to its use in subsection (1A), as is the case now.
On Amendment 8, as we are ending the PRA’s status as a subsidiary of the Bank, Schedule 2 of the Bill removes a series of requirements in existing legislation for consultation between the Bank and the PRA that are no longer necessary. One such requirement, in Section 129A of the Banking Act 2009, was overlooked, and this amendment removes it.
Amendment 8 also reinstates a requirement for the Bank and the FCA to inform each other that they are satisfied that the conditions for application for a bank insolvency order for which they are respectively responsible are satisfied before either can make such an application. The amendment made by paragraph 56 of Schedule 2 to the Bill to Section 96 of the Banking Act 2009 inadvertently removed this requirement.
Finally, Amendment 9 corrects the reference to the Financial Services (Banking Reform) Act 2013 in paragraph 69 of Schedule 2. I beg to move.
Lord Davies of Oldham (Lab)
My Lords, I am grateful to the Minister for explaining these amendments, which he has assured the Opposition are purely technical. I would not doubt the word of a Minister in such circumstances at any time, but certainly not at a time when, as will be recognised, the Bill is being considered first in this House. Therefore, if there were any failure to meet the criterion of technical amendments, I have no doubt that my colleagues in the other place would light upon it with some alacrity, so I am happy to support these amendments.
Lord Bridges of Headley
Lord Bridges of Headley
“(a) for “subsection (1A)” substitute “subsections (1A) and (1ZB)”;(b) omit the definition of “bank”;(c) in the definition of “banking group company” for “that Act” substitute “the Banking Act 2009”.”
Lord Bridges of Headley
My Lords, I believe it is customary at this stage to thank all those who have helped ease the passage of this Bill through the House. It is fair to say that at times, the passage has not been entirely easy. The list of those I have to thank is therefore long but noble Lords will be glad to hear that I will refrain from an Oscaresque thank you, complete with thanking my mother and bursting into tears, and will simply thank a few people. I thank the Bill team of course, for their excellent guidance and advice, and my excellent Whip and noble friend Lord Ashton, who helped keep me on the straight and narrow throughout. I thank the Governor of the Bank of England, as well as Andrew Bailey and the officials there, and Sir Amyas Morse and officials at the NAO for all the work they did on various parts of the Bill and the negotiations over that.
Those Peers on all sides of the House who were members of the PCBS also deserve my thanks, especially the noble Lord, Lord McFall, and the most reverend Primate the Archbishop of Canterbury, and those on the Cross Benches who made excellent contributions on a range of possible technical issues during the Bill and spared the time to explain to me their thoughts and concerns, especially on the NAO and Bank issue. In particular I thank the noble Lord, Lord Bichard, as well as the noble Lords, Lord Burns, Lord O’Donnell and Lord Turnbull. At one stage in proceedings, one of your Lordships asked for a collective noun to describe three former Permanent Secretaries. The answer is, of course, “a Humphrey”.
I thank my noble friend Lord Naseby for his contribution regarding mutuals, and the noble Baroness, Lady Worthington, for her thoughts on the Green Investment Bank and auditing issues.
Finally, of course, I thank especially both of the Front Benches—the noble Lords, Lord Tunnicliffe, Lord Davies and Lord Sharkey, and the noble Baroness, Lady Kramer—for all the time they spent meeting me and discussing detailed aspects of the Bill. Sometimes we agreed and sometimes we did not. But the discussion was always amiable, civilised and, above all, thanks to their efforts, we did what this House is meant to do, which is to scrutinise and test the legislation.
I said at the start of the Bill that I see this process as a form of legislative acupuncture. At times it was undoubtedly a bit painful, but, thanks to the contributions of your Lordships, the Bill leaves this place in better shape than when it began, and for that I am thankful.
Baroness Kramer (LD)
I very much join in the thanks, particularly to the noble Lord, Lord Bridges, for the way in which he conducted the work of the ministerial Front Bench. He was always open to meeting and kept us incredibly well informed—frankly, above and beyond the usual. I extend those thanks to the noble Lord, Lord Ashton of Hyde, and to the whole of his Bill team for the generous way in which they handled this piece of legislation. The Government listened, particularly on one key issue which these Benches were concerned about—oversight of the Bank of England —and the Bill will now be stronger for that.
I have to say, very briefly, that there were areas where the Government did not listen, and we will all live to regret two of them. One is the decision to end the reversal of the burden of proof, which would have had a big impact on the culture of banking, and for the better, and the other is the concern we raised over the independence of the FCA. Both those concerns have been very much underscored by the recent disclosure that the FCA has cancelled its review of the culture of banks and by the timing of the way it did so, just a few weeks after the Bank of England parachuted an executive director into the FCA to supervise this area. So we have concerns, which I am sure will be picked up in another place and by the Treasury Select Committee. But I very much thank those who worked on the Bill and who did so with great graciousness.