Grand Committee
Financial Services and Markets Bill [HL]
Monday 22nd June 2026
(1 month, 3 weeks ago)
Grand CommitteeRead Full debate Financial Services and Markets Bill [HL] 2026-27 View all Financial Services and Markets Bill [HL] 2026-27 Debates Read Hansard Text Read Debate Ministerial Extracts Amendment Paper: HL Bill 5-I(b) Amendments for Grand Committee (Supplementary to the Marshalled List) - (22 Jun 2026)
Lord in Waiting/Government Whip (Lord Wilson of Sedgefield) (Lab)
My Lords, before we start the debate on the first group, I remind the Committee of the rules on declaring interests. Noble Lords should declare any relevant financial interest the first time they speak at each stage of a Bill. This means that, in Committee, relevant financial interests should be declared during the first group on which a noble Lord speaks. Thereafter, the declaration does not need to be repeated in debates on later groups at this stage. Declarations should be specific and brief. Members should briefly indicate the nature of their financial interests, not simply refer to their entry in the Register of Lords’ Interests. I also remind noble Lords of guidance at paragraph 8.82 of the Companion: when withdrawing amendments, noble Lords should
“be brief and need not respond to all the points made during the debate”.
Clause 1: Consumer credit
Amendment 1
Baroness Neville-Rolfe
Member’s explanatory statement
This probing amendment, along with another in the name of Baroness Neville-Rolfe, seeks to allow for a debate on the Government’s intentions around a new regime to be laid down in the regulatory rule book in place of that established by the Consumer Credit Act and associated legislation.
Baroness Neville-Rolfe (Con)
My Lords, it is a pleasure to open our deliberations on the Financial Services and Markets Bill. I thank the Minister for his constructive engagement so far and I thank noble Lords across the House who have shared their initial views with us. These conversations have been very helpful and have underscored a shared objective: to improve financial services regulation in a way that promotes growth, attracts investment and supports innovation. Although there are differences between us, we all agree on the importance of the financial services industry across the United Kingdom: the contribution it makes to GDP, the 2.5 million jobs it supports and the £110 billion in tax it pays.
However, I think this first group of amendments will challenge the Minister on a very important issue that we will want to address at several points throughout Committee: oversight and parliamentary scrutiny. We have approached this with slightly different amendments, but I believe that the noble Baroness, Lady Bowles, shares the concern, which also applies to her amendments in group 2.
Clause 1 is short, but it is the gateway provision that introduces Schedule 1. It provides for the repeal and recasting of significant parts of the remaining Consumer Credit Act framework into FCA rules. The reasoning behind this desire for reform, as we said at Second Reading, is broadly understandable. The Treasury’s policy statement on CCA reform says that the current framework is increasingly out of date because it was designed for a paper-based credit market and now sits awkwardly alongside modern regulation. The Government say that the aim is to create a more “agile and proportionate” regime, and we do not disagree with that assessment. Certainly, that is the feedback we have been getting in our discussions with stakeholders.
However, identifying the right problem does not necessarily mean that the Government have chosen the right solution. Their approach has two serious consequences. First, Parliament will lose control and oversight of the core consumer protections currently contained in the CCA. Secondly, we are being asked to approve the repeal of these protections without being able to scrutinise the regime that will replace them. This sets a deeply concerning precedent. The purpose of your Lordships’ House is to scrutinise legislation, challenge the Government, ask questions and ensure that the law is workable, proportionate and effective. Yet there is nothing for us to scrutinise. The Government are dismantling the existing regime without showing Parliament what will take its place.
Both Houses contain a wealth of expertise—much of it is here today—including Members with extensive industry experience, who can identify unintended consequences and suggest more effective solutions. As we have frequently made clear, we want to work constructively with the Government on this Bill, but asking Parliament to surrender its powers to a regulator before it can examine the replacement regime is not meaningful scrutiny and it is not an approach that we can support.
Consumer credit in particular matters because it is woven into the everyday financial lives of millions of people. It allows households to spread the cost of major purchases, manage short-term cash-flow pressures and access funds when they are needed, all of which supports wider economic participation but needs to be done carefully and responsibly. This is a very important area and, as with the other parts of the Bill that delegate power, the Minister must take this opportunity to answer some key questions.
First, which core consumer rights and remedies do the Government intend to keep in primary legislation? By what principle have they decided which protections may safely be moved into the FCA rules? Secondly, when will Parliament be able to see the FCA’s replacement rules in draft? Will these rules be finalised before any repeal of the existing statutory protections is commenced? What transitional arrangements have the Government found? Thirdly, how do the Government intend Parliament to scrutinise future changes once the substance of consumer credit protection sits in the FCA rule book, rather than in statute? Finally, what assessment have the Government made of the effect of these reforms on smaller lenders, brokers and intermediaries, as well as on the availability of credit and related services more broadly? What effect is uncertainty on this point around the future regulatory regime having on economic activity and how much is that costing?
My amendment seeks to re-establish a basic constitutional principle that is being threatened by the Government’s approach in this part of the Bill. Parliament should not be asked to repeal important statutory protections before it knows what will replace them, how the new regime will operate and how it will be held to account. Modernisation and agility are worthwhile objectives, but they cannot justify Parliament legislating in the dark. Before Parliament agrees to transfer such significant powers, the Minister must show us not only that the destination is right but that the safeguards, accountability and route for getting there are right as well. I look forward to the Minister’s response and I beg to move.
Baroness Noakes (Con)
My Lords, as this is my first contribution in Committee, I declare my interests as recorded in the register, in particular that I hold listed shares in financial services companies and technology companies that may be affected by the Bill or amendments tabled to it.
I am going to use the opportunity of this first group of amendments to raise the issue of the accountability of the financial services regulators, which, as we have heard, are being given significant regulatory powers. This theme certainly applies to Clause 1 and Schedule 1, because of the vast new powers in relation to consumer credit being given to the FCA, but the theme is pervasive and we will debate it several times in Committee.
I should start by saying that I agree that consumer credit legislation needs a massive overhaul. The current legislation focuses on paperwork and processes. It was written in a pre-digital age and does not have a sophisticated approach to consumers—for example, it does not have the concept of a vulnerable customer. It is crying out for change. Indeed, when we scrutinised the Financial Services and Markets Bill in 2023, I tabled an amendment to give the Treasury significant powers to rewrite the legislation, including the ability to delegate to the FCA. My noble friend Lady Penn, who was the Treasury Minister at the time, convinced me that this was a step too far because of the many significant consultations that were needed. In withdrawing my amendment, I suggested that the extensive consultations sounded to me like an excuse for not making any progress. I am, therefore, supportive of the Government using this Bill as a vehicle to make some progress, although I regret that they still have not completed the task.
That support is qualified by issues that have become apparent since the 2023 Act was passed. At that time, I was a supporter of the FSMA model, which allowed Parliament to determine the overall principles of financial services regulation and left the detail to the regulators. Instead of challenging the huge burden being put on the FSMA model by the 2023 Act, which made provision for the repeal and replacement of retained EU law, a number of us focused on the accountability of the regulators. This was an error. I now believe that we failed to understand fully what that meant for democratic oversight of what the regulators do with the powers that they acquire. We also failed to appreciate the scale of the task of holding the regulators to account.
The FSMA model was set up by FSMA 2000 in an era when the most significant financial services regulation was set by the EU and either applied directly or incorporated by our own legislation. In either event, there was significant oversight through the processes of the European Parliament, particularly ECON, which was chaired by the noble Baroness, Lady Bowles of Berkhamsted. In addition, both Houses of Parliament had committees dedicated to oversight of the regulatory outpourings of the EU, and, in the case of your Lordships’ House, we had a Sub-Committee of the EU Select Committee dedicated to financial services.
The FSMA model was not designed to do the heavy lifting that it is now being asked to do, first via the 2023 Act and now via this Bill for consumer credit legislation. I do not advocate scrapping that model but I believe the time is right for re-examining Parliament’s oversight and the accountability of the regulators. The 2023 Bill initially provided for some additional oversight by the Treasury Select Committee in the other place but was amended during its passage to add what is now the Financial Services Regulation Committee of your Lordships’ House. I am a member of that committee, along with several other noble Lords present today, and I currently chair it.
These arrangements were designed to increase the accountability of the regulator, but I have to tell the Committee there remains a significant accountability deficit. Of more importance, committees of Parliament cannot and should not replace democratic oversight of the judgments made by the regulators. That is particularly important when we come to consumer credit law. The arrangement envisaged in the Bill passes to the FSA almost total responsibility for judging the complex balance between consumer protection and the need for innovation and competition in the market. Quite simply, that is not the right answer and Parliament needs more involvement.
The noble Baroness, Lady Bowles, has some amendments to Schedule 1 that we will be debating in the next group, and I believe they are designed to alter the balance between Parliament and the regulators. I look forward to that debate, but that measure alone would not be enough because any reasonable approach to modernising consumer credit legislation will still involve significant delegations to the regulators. That is why we need to use the Bill to revisit the mechanisms for the accountability of the regulators.
At a later stage in our Committee, we will be reaching some important amendments designed to tackle that: the noble Baroness, Lady Bowles, has a provision requiring a periodic independent review of the regulators, and my noble friend Lord Bridges of Headley has some amendments dealing with an office of financial regulatory accountability.
These issues of democratic oversight and regulatory accountability are unfinished business, and we must use the opportunity of the Bill to strengthen both and not sleepwalk into a situation where the regulators govern us rather than the other way around. We will be debating the accountability of the regulators again when we get to Clauses 16 and 17, when we reach the accountability amendments that I have just referenced.
Lord Goodman of Wycombe (Con)
My Lords, I will speak briefly as a member of the Delegated Powers Committee, which has produced a report on this Bill. That report concerns especially Clause 3, but it raises general issues that fall within the scope of the amendment that my noble friend has moved from the Front Bench. My noble friend is essentially asking what the purpose of the Bill is and what it will do.
On the committee we have heard again and again, where government Bills are introduced, quite correctly, that this is a fast-moving world, that the Government need the flexibility and room to move quickly, and that it is therefore appropriate to do these manner of things and those manner of things by regulation. That is far from being a contemptible argument. The Government have a good point, and I suspect that Ministers in other political parties have made the same point from the Dispatch Box in the past. However, there are some important general issues to consider.
First, as my noble friend indicated, it is not generally a good thing to bring in legislation if you do not know quite what the intention is and you propose to proceed by regulation. Secondly, Ministers at this point tend to say, “Trust us”, which is fine, but the Minister may change. Another Minister may come with a different approach, and we are about, I read, to have a change of Prime Minister, and the Government may decide that there is some alteration in their approach to these matters. Thirdly, you may have a change of political party, and quite another Government of a different complexion deciding what to do. I do not want to anticipate the debate on Clause 3, but, if I read the Bill rightly, as noble Lords will find when we get there, power is given to the Minister by regulation to pretty much close every bank account in the country.
Why is all this happening? The reason is that, down in the other place, things are changing. Members of the other place are besieged by WhatsApp messages all day in their groups and are drowning in constituency correspondence from people besieging them with matters that often would be better addressed by priests and psychiatrists. They are being drawn away from the Chamber by dealing with this on social media, at a time when, as my noble friend Lady Noakes has pointed out, the burden of what they consider has had to increase because of Brexit. Whether one is pro-Brexit or anti-Brexit is not the point here; the point is that there is simply more to do.
In short, there is a general attention deficit problem in our culture, which I am sure affects this House as much as anyone else but is particularly affecting the other place. Poorly drafted legislation is rushed through, it is then challenged successfully at judicial review, and then we all blame the judges. Why should we do that when the fault is literally and almost completely in our own House? I am grateful for the chance to raise these general issues and look forward to the Minister’s reply.
Lord Blackwell (Con)
My Lords, I declare my interests as a significant shareholder in Lloyd’s Banking Group, of which I was formerly chairman.
Although I recognise the concerns raised by my noble friends, it is important that we tackle the confusion caused by the dual roles of the courts and the regulator in the regulation of consumer credit. The regulation of consumer credit is not a black and white issue. A balance has to be made all the time between the level of protection offered to consumers and the costs of compliance borne by the institutions, and the risk that, if the courts are unpredictable in the way they interpret the Consumer Credit Act, suppliers will either withhold products or build an insurance premium into the costs.
We have had too many incidents over the past few years where what financial institutions thought was a settled issue, as determined by the regulator, has been altered retrospectively by decisions in the courts. We can have a choice one way or the other, but it is important that we tackle the confusion caused by the dual responsibility. As I see it, the Consumer Credit Act is an outdated piece of legislation, as the Government have set out. It was based on conditions that have changed radically. We have since set up the financial services regulator, with devolved responsibilities for regulation. We may or may not think that the regulator is doing well or want to increase supervision of it, but the Government should try to make it clear through these amendments to the Consumer Credit Act whether the result will be, as I hope, to make it clear that there is a single definitive source of regulation for the Consumer Credit Act, which is the balance struck by the Financial Conduct Authority, and that the courts, so far as possible, no longer have a role.
Baroness Bowles of Berkhamsted (LD)
My Lords, this and the following group dwell on the same territory; I will make my main intervention in the next group alongside my detailed amendments. I am sorry that I had to separate them out, but that was only because of the Chief Whip’s speaking-time restrictions on non-movers, which ironically mean that the debate will take longer overall. I have both general points and points on the substantive amendments. I agree very much with many other speakers, and in particular the noble Baronesses, Lady Neville-Rolfe and Lady Noakes. Overall, the Bill is extraordinary for the manner in which it does and undoes many things with questionable process.
My general approach on the point about the Consumer Credit Act is straightforward: I do not object to using the FCA to modernise and speed up redress mechanisms. We are already seeing that in practice with the motor finance commission cases, but that experience also contains a very clear warning. Here I depart from what the noble Lord, Lord Blackwell, would wish to have. In the first instance, the FCA made rules that were not in line with statute. It said that commission did not have to be disclosed unless asked about. We have ended up with a situation where firms which thought they were following the rules have been caught out because the statute said something different.
The moral lesson is simple: if you find yourself thinking, “Oh good, I don’t have to tell them about this nice little earner”, something is already unfair. In practice, some car salesmen discussed bonuses, quotas and commissions with customers, sometimes linking them to discounts. I have personal experience of that. But if the statute had not existed, what would have happened? The logic is that the old way, non-disclosure, might have continued because the FCA rules permitted it and it had not spotted the unfairness. For all that we have some very capable regulators, we have been shown that they are not infallible and they are not legislators—a point we will return to repeatedly as we go through the Bill. From time to time, they hit the barriers of their remits, perimeters and institutional roles.
Our system is not to delegate unconstrained power to regulators. Parliament sets the framework, regulators operate within it and, when necessary, the court interprets. Yet here, we are being asked to legislate for an automated substitution to set in train an unseen process that Parliament can no longer influence, that has no predetermined scope and whereby courts lose jurisdiction. That is constitutionally unsound and unsupportable. I will return to the detail in the next group but the principle is clear. As the noble Baroness, Lady Neville-Rolfe, said, Parliament should not sign away rights and protections without knowing what will replace them.
Baroness Kramer (LD)
It is a great privilege to wind up for the Lib Dems. People will know from Second Reading that I am very strongly of the same mind as the noble Baronesses, Lady Noakes and Lady Bowles, and I think the noble Baroness, Lady Neville-Rolfe, takes a very similar view on this first clause. The others speak with some sense of diplomacy; I will be slightly more direct, because, from my perspective, the Bill, by repealing the CCA, basically removes consumer credit protection from law and moves it to the FCA rulebook with no meaningful accountability and, frankly, little visibility.
Peers will remember that in 2021, many of us in this House and the other place were getting very frustrated with the FCA. It had some very good people but it was definitely neglecting consumer protection, and this House consequently passed an amendment to instruct the FCA to consult on a duty of care. The FCA chose not to consult on a duty of care, despite that direct instruction. It consulted instead on what it said was the equivalent, which was a consumer duty, the key difference being that a duty of care has a meaning in law, with a private right to action. In other words, an individual can turn to the courts if he or she believes that they have been wronged. This is a right that, as we heard from the noble Lord, Lord Blackwell, the FCA, at the behest of the industry, did not want the consumer to have, despite it being a long and very well-established tradition in English law.
The Bill now achieves the wholesale removal of credit protection from the law and into the rulebook of the FCA, and it is obviously an extension of that deliberate process to remove paths to redress for consumers. The Committee will be aware that consumers cannot take civil action against the FCA: it is immune. It is correct that it should be immune from action by those whom it regulates in the market, but it is also immune from action by consumers. As we go on through the Bill, will see that same process of undermining redress in future groups of amendments—very much so when we are dealing with the FOS.
When I have talked to members of the Government on this issue, they seem surprised at my comments because they see the FCA as a real champion of the consumer. Indeed, the industry will say the same thing. However, perhaps I have a longer memory, as does this Committee.
Do Members here remember the issue of payday lenders—the very widespread abuse of individuals who were entering into incredibly high-priced credit and were finding themselves continuously in debt trouble? When the issues were put to the FCA by Members of Parliament, by complainants and by whistleblowers, the only action that the FCA agreed to take was to make some minor adjustments to the rules on rollover. It argued that payday lenders had an important part to play within our credit system. It took action in this House in 2015, when a Minister broke with the Government’s perspective and decided to support a move that had been made from the Labour Benches by the noble Lord, Lord Mitchell. It was the noble Lord, Lord Sassoon, who spoke for the Government, and he decided that enough was enough and that the only way to deal with payday lenders was to shut them down. That action was put into law, and it improved the whole credit environment that we live in today and eliminated a really serious abuse. As I read the Bill, people will lose that opportunity. When people claim that the FCA is a champion of credit, and they cite the consumer duty, they do not realise that it does not incorporate that very traditional English right to turn to the courts.
Even if today one accepted that the FCA, in its currents design and with the relevant people in place, was indeed a consumer champion, that could easily change, because we are relying totally on FCA culture. In the 1990s—I often go back to that decade—the financial regulators demonstrated the most extraordinary degree of deference to the financial sector. Frankly, the 2007 crash could not have happened without that deference. Many of the lessons of that crash are being undermined by this Bill, throughout which there is a return to deference—this time in the name of growth.
Lord Ranger of Northwood (Con)
My Lords, I will make my first contribution to this Bill. This is also one of my first in Committee, so I beg noble Lords’ forgiveness for any errors I will make. I do not have vast experience in the banking sector, but I have spent almost 25 years in technology, during which I worked with a number of firms in the banking sector.
I support the comments from my Front-Bench colleague, my noble friend Lady Neville-Rolfe, and from the noble Lord, Lord Blackwell, on the impact of this broad-ranging Bill. Later, I will comment more on the technology aspect, but at this point I highlight that, as we move forward, a degree of regulatory burden is continuing to build, especially for the future of banking around fintech, innovators, start-ups and scale-ups, a world I have worked in significantly. I look at this Bill through that lens, seeking to understand what we are doing around the posture we are requesting from these new future banking institutions, as they see different requirements from different regulators based on a loose—or, sometimes, as in the case of this Bill, unclear—focus. I say that because we are hearing that from the industry.
The past couple of years have required significant consultation on start-ups and scale-ups, particularly in the area of digital assets. Regulators have undertaken extensive questioning of the industry, but there seems to be some gap between parliamentary oversight and regulatory direction. That has been fed back and has resulted in ad hoc approaches to intervention with regulators from parliamentarians, industry bodies and even parliamentary groups—I co-chair the APPG on Digital Markets and Digital Money—in order to provide a certain level of input about what the industry, particularly the digital asset industry and digital start-up banks, may be considering. There is a huge opportunity in this Bill to understand how we would like to set out frameworks and risk management for the future, but there is also considerable risk—as was mentioned by my noble friend Lady Neville-Rolfe—around where we lose oversight and potential control at this critical time.
Lord Davies of Brixton (Lab)
I will speak just briefly. I find myself in the unusual situation of agreeing with the noble Baroness, Lady Noakes, on the role and functioning of the Financial Services Regulation Committee, of which I am a member. The committee was created to undertake a particular task, and what is in the Bill makes that task virtually impossible. We very much hope that the Minister will listen to what the committee has said on this subject.
The Minister of State, Department for Business and Trade and HM Treasury (Lord Stockwood) (Lab)
I thank noble Lords for the opportunity to set out the Government’s position on this important set of issues and for the constructive nature of the debate so far. Before we start, my interests are set out in the ministerial register. I invest in a number of funds that are regulated by the FCA.
I start by addressing why Clause 1 and Schedule 1 should stand part of the Bill. The case for reform is straightforward. The Consumer Credit Act—the CCA—is more than 50 years old and was enacted long before the creation of the FCA. It no longer delivers as it should for today’s consumers, who engage with modern products in an increasingly digital world. It too often results in people being sent lengthy, complex documents that they do not read, do not understand and cannot use with confidence. It is important to say that one in seven adults has literacy skills at or below those expected of a 9 to 11 year-old and 34% of adults have poor or low levels of numeracy involving financial concepts, yet the CCA regime means that some of the information provided on credit cards requires a far higher reading age.
Debt advice charities have criticised the way in which the CCA requirements often result in borrowers being sent arrears notices even when they have agreed a repayment plan, causing confusion and alarm. To address the point raised by the noble Baroness in her amendments, this demonstrates that it is not just the content of the arrears notices that is the problem but the inflexible legislative triggers that mean they must be sent even when there is no clear purpose and they cause more harm than good. There are many more examples of where the CCA results in poor outcomes for consumers and anachronistic procedures for lenders.
That is why this Bill continues the work that began in 2012 of repealing this outdated legislation so that it can be replaced with updated rules that better meet the needs of consumers and are fit for the digital age. The Government strongly believe that those replacement rules should, in the main, reside in the FCA rulebook, not in primary legislation. The FCA has extensive experience in developing firm-facing rules for retail markets, including mortgages, insurance and investments. Its rule-making approach is underpinned by consultation and consumer testing so that protections remain robust, proportionate and relevant. The FCA’s new rules for buy now, pay later, which come into force next month, demonstrate what a modern, FCA rules-based regime can deliver for consumers.
I have heard the concerns of some noble Lords that the Bill does not set out how the repealed provisions of the CCA should be replaced and that this has been left to the FCA to determine at a future time. While I appreciate that concern, this is entirely consistent with the model of regulation established in the Financial Services and Markets Act 2000. These provisions sit in the CCA only because this model of regulation did not exist in 1974. Parliament has already vested the FCA with significant responsibilities in this space, objectives that include a primary consumer protection objective, powers to allow it to fulfil its role and a comprehensive system of transparency, governance and oversight.
Parliament will have a key role in scrutinising the FCA as it makes these replacement rules. The FCA is required to advance its objectives through its rules, including its consumer protection objective. The FCA is required to consult, to conduct a cost-benefit analysis on rule changes and to submit copies of those consultations to the relevant parliamentary committees. They include the Financial Services Regulation Committee, ably chaired by the noble Baroness, Lady Noakes.
The FCA has a comprehensive set of enforcement powers that will help it to ensure compliance with its rules and to act decisively where firms are failing to comply. As well as ensuring that an expert body with the right objectives, powers and resources can fulfil this function, this approach ensures that the rules can adapt as needed in the future to stay current and respond to future trends.
The noble Baroness, Lady Neville-Rolfe, asked when Parliament will see the replacement rules and how the transition period might work. The FCA will set out the detail of the new rules through its normal rule-making process. Repeal of legislation will be commenced only once the relevant FCA rules are in place. The Bill contains a power for HMT to allow for an orderly transition. In practice, Parliament, consumer groups and stakeholders will see the FCA rules at consultation stage before the new regime takes effect. I am aware that some noble Lords have tabled amendments to strengthen parliamentary scrutiny further. The Government believe that the current arrangements work effectively, but I look forward to debating them in more detail later. CCA reform is an important opportunity to create a clearer, more flexible and more accessible framework that better reflects today’s consumer credit landscape.
The noble Baroness asked what rights and protections will remain in legislation. Where rights and protections require legislation to work, they will remain in legislation. Criminal offences will remain, so canvassing to minors and doorstep selling will remain in legislation, along with other key protections such as Section 75.
The noble Baroness, Lady Neville-Rolfe, also asked about the impact on smaller firms, as the FCA replaces parts of the Consumer Credit Act. I can assure her that the aim of the reform is to create a more proportionate set of regulations for all firms, including smaller lenders. Everyone will benefit from this modernised regime.
I hope I have provided the Committee with some assurances that the CCA reforms are vital. I ask the noble Baroness, Lady Neville-Rolfe, to withdraw her amendment.
Baroness Neville-Rolfe (Con)
My Lords, I thank all noble Lords who have contributed to this debate and the Minister for his response. I particularly thank my noble friend Lady Noakes, the noble Baroness, Lady Kramer, and my noble friends Lord Goodman and Lord Ranger of Northwood, all of whom, I think, echoed the Opposition’s concern about overdelegation. In fact, I appreciated and enjoyed their interesting historical and contemporary perspectives, which brought the matter to light.
The discussion has demonstrated that the concern at the heart of these amendments extends well beyond the technical details of consumer credit regulation. It concerns a fundamental question about how Parliament performs its constitutional role, particularly when substantial powers are transferred from statute to regulators. I will not repeat all the points made by my noble friend Lady Noakes, but we need to look at Parliament’s oversight. There is a democratic deficit. We will no doubt debate her letter when we come to Clause 17. I noted the support of the noble Lord, Lord Davies of Brixton, for bottoming out the role of the committee and the points that he made.
We support the objective of modernising the consumer credit framework—I would like to emphasise that—but reform cannot mean that Parliament approves the removal of existing protections without seeing what will replace them. Nor should moving provisions into a regulator’s rulebook place it beyond meaningful parliamentary scrutiny. We will continue to apply these principles throughout our deliberations in this Committee. Wherever the Bill delegates new powers or expands the remit of the Treasury or the regulators, we will be asking the same essential questions. What safeguards will govern the exercise of these powers? Who will be accountable for the decisions taken? How will Parliament examine what is being proposed, assess whether it is working—because follow-up is important too—and intervene where it is not?
There must be a direct relationship between power and accountability, and when the authority, discretion or remit of a regulator is increased, the capacity for effective oversight must increase alongside it. It is constitutionally perverse for an expansion of regulatory power to be accompanied by a weakening of parliamentary scrutiny. The Government repeatedly invoke the need for agility, which I understand, and we recognise the value of a framework that can respond to changing markets and emerging technologies. My noble friend Lord Blackwell warned against the confusing dual responsibility that sometimes exists between the CCA and the courts and regulators, but the noble Baroness, Lady Bowles, pointed out that it is not as simple as delegating everything to the FCA, which is not a legislator. She was right to warn against automated substitution.
Agility cannot become a proxy for opaqueness and flexibility cannot become an excuse for removing important decisions from democratic oversight. The Government must demonstrate that each transfer of power is not merely convenient but necessary, proportionate and matched by effective accountability. If the Minister is willing to engage with us on this basis, we will do so constructively, but we will continue to challenge any provision that asks Parliament to surrender oversight without first showing how that oversight will be replaced. We will return to this issue on Report, unless we can find a better way of ensuring proper scrutiny, but for now I beg leave to withdraw my amendment.
Baroness Bowles of Berkhamsted (LD)
My Lords, I oppose Clause 1 and Schedule 1 standing part of the Bill. I shall speak also to my detailed amendments to the schedule, which appear as Amendments 4 to 17.
We all know how consumer agreements work, whether for credit or anything else. There is always an asymmetry of power between the provider and the consumer. Nowadays, it is often impossible to speak to a person rather than a bot. If you do get a person, it is a call centre with scripted questions and answers, often including a recital of terms and conditions faster than it is possible to understand. You cannot get to the next stage without saying, “Yes, I have understood and agreed”, when, in truth, you have not. You do not even see the terms and conditions until after you have clicked “Yes”, then you are given a time-limited right to withdraw. This back-to-front impatience to get boxes ticked first is now a feature of the modern consumer environment—one that I fear we have now replicated in the legislative procedures in the Bill, only here, once Parliament ticks the box, there is no cooling-off period and no right to withdraw.
The Bill repeals parts of the Consumer Credit Act. It gives the Government open-ended regulation-making powers before there has been any consultation and before we have seen the shape or operation of any FCA rules. I cannot support that. It goes too far, too fast and too unseen. That is not the way to make irrevocable changes. So I will not tick the box. I want to know what I am signing up to, just as the consumer must. I want to know that what are presented as rights are, in fact, rights.
Clause 1 repeals statutory rights before replacements exist. The Government take powers to make regulations before consultation. At the very least, that is a reason to take a great deal of notice of what is being said by Parliament. I also question whether this approach meets the Government’s own statutory duties under the Legislative and Regulatory Reform Act 2006, which requires regulation to be proportionate, accountable and transparent. Repealing rights before replacements exist does not seem to meet those tests. This is a fundamental change from the status quo, where rights are in statute and rules are made to assist in negotiating the statute.
Clause 1 reverses that. It removes statutory protections now and offers only a possibility of regulatory rules later. Rules are not rights. Rules can be changed by the rule-maker, whereas rights bind everyone, including the regulator. The Government’s approach is, therefore, constitutionally backwards. Parliament is being asked to repeal rights without knowing what will replace them. It is like signing a credit agreement without knowing the terms, and we are being asked to sign it on behalf of the public.
My solution would be to preserve a statutory floor, both now and in future, and not a temporary one that could be slowly eroded at the whim of the Government or a regulator. My amendments to Schedule 1 are intended to show how this can be done; I thank Which? for its assistance in preparing them. They aim to preserve important provisions in relation to notices of arrears and default sums, as well as the unenforceability sanctions attached to them in the Consumer Credit Act. These are the legal backstops—the protections that ensure that rights are real.
I shall explain what my amendments do and why they matter. First, they would preserve the requirement to serve notices of arrears and default sums and the statutory consequences of failing to do so. These provisions apply, for example, where a borrower has fallen behind on payments. A default notice must be served before a creditor can take certain drastic steps such as terminating the agreement, demanding early repayment or recovering goods and land. Default notices also play an important part in determining when debts become statute barred, because, once served, lenders have six years to take court action. Secondly, they would keep these protections in legislation but allow the FCA to modernise the form and content of the notices. That is the right balance. Technology changes, as does the way in which information is presented, but the underlying rights do not and should not.
The Government’s approach is to repeal the majority of the CCA provisions with the suggestion that they could be recast into FCA rules at some future point, subject to consultation. That means there will be no parliamentary scrutiny of what these protections might look like once they are repealed. My amendments would guarantee that the core protections remained mandatory legal requirements while allowing the FCA to update the way in which information is provided. That is what the legislation should have done from the start—modernise the form, not abolish the substance.
I turn to sanctions, which is where the Consumer Credit Act is at its strongest and where the Bill is at its weakest. The sanctions in the CCA were included in 1974 because Parliament recognised the significant imbalance of power between a consumer and a creditor. Parliament wanted proactive compliance with the law, not a system where an individual consumer must detect a breach, voice a complaint, and then pursue slow and time-consuming legal or ombudsman remedies, particularly when those consumers are likely to be vulnerable, stressed or in financial difficulty.
The sanctions ensure that a creditor cannot take steps against a debtor while the creditor is non-compliant with the law. They are automatic. They work because they require compliance up front, not after the harm has occurred, and they cannot be replicated in FCA rules. Without those sanctions, consumers may face new threats from being pursued for debts, particularly when debts are sold to unauthorised debt purchasers. The burden shifts on to the consumer to detect breaches and seek redress. Vulnerable consumers are disproportionately harmed, and the automatic reprieve that Parliament deliberately created is lost.
My amendments would ensure that those sanctions on arrears and default notices remained in legislation while allowing the FCA to modernise the way information was presented. That would preserve vital individual rights while recognising that flexibility is needed in a digital age. That is not an unusual approach. The CCA and the FCA’s existing consumer credit rules already operate in a complementary way.
The amendments I have tabled focus on arrears and default notices because that is where the greatest harm would arise if protections were removed, but they are only exemplary. They show the balanced approach that should have been taken across the whole reform of the Consumer Credit Act: move form and content to the FCA rules where appropriate but keep the substantive protections in legislation. I am looking for that complete reform.
There are other areas, such as the form and content of credit agreements, the duty to provide information under fixed-sum and running-account agreements, and the sanctions for improperly executed agreements, where the same balanced approach could and should be taken. I would be happy to meet to discuss those. The Government’s own consultation on CCA reform was meant to have two phases. Phase 1, on information requirements and sanctions, took place, but phase 2, on key consumer rights, was scrapped. That is not a sound basis for repealing rights now and promising rules later.
The CCA was ground-breaking for creating automatic protections, even if at times those protections have been bitten for trivialities. That is a reason for modification, not cancellation. Their purpose is still relevant: ensuring active compliance, preventing regulatory creep and protecting vulnerable consumers. They cannot be replaced with certainty in FCA rules. Their removal shifts the burden on to consumers. This is a regression in consumer protection at a time when modern communications already curtail the time for circumspection.
If the Government were bringing forward a coherent replacement for the Consumer Credit Act, it would look something like this: statutory principles of fairness, transparency, good faith and protection against unequal bargaining power. Those are not exotic ideas; they exist in other jurisdictions. Australia’s unconscionable conduct regime is one example. At the end of the day, businesses must think and exert conscience and play fair, but that is not what Clause 1 does. It removes rights without replacing them. Modernisation is possible but I will not tick the box on behalf of the public until I have seen the replacement and until I know that it preserves rights now and in the statute. I beg to move.
Baroness Altmann (Non-Afl)
My Lords, I must apologise: I was not in the country for Second Reading, so this is my first intervention on the Bill.
I support wholeheartedly the amendments in the name of the noble Baroness, Lady Bowles, and the rationale that she has just explained. I thank Which? for the work that it has been doing on the Bill and to try to help consumers.
I cannot support this leap in the dark for parliamentary scrutiny and I cannot support imposing this leap in the dark on consumers. At the end of the day, that is what the provisions in Schedule 1 are at risk of doing. I believe that the noble Baroness, Lady Bowles, with her amendments, and the amendments that we have seen from other noble Lords in the first group, are seeking to help the Government to achieve their aims more safely for consumers. I believe that what the Government are trying to do has the right motive; it is about whether the manner in which this is being done is safe for us to agree to—and I do not believe that it is.
If we think one step ahead, what protection will consumers have against the FCA making a significant error in its regulation? What protection will consumers have if the asymmetry of information and power that we know already exists in the financial services industry, especially for retail customers, continues along its current lines? I hope that the Government and the Committee will recognise that leaving consumer protection to the regulators is not a safe thing to do if you want to improve consumer protection—and, as I say, I believe that is what the Government would like to do.
The FCA has a peculiar regulatory style. For example, if it has discovered or suspected wrongdoing, it does not, as you might expect, do mystery shopping on behalf of consumers. It will ask firms generally to investigate how they behave and then to report to the FCA. That may work but it will not always work, and there is no fallback protection such as we have in the Consumer Credit Act if the consumer experience is not as it has been portrayed or as the FCA might have expected. There is a consumer panel as part of the FCA, but, in my experience with a number of financial scandals or problems that have arisen for consumers, the FCA consumer panel has little or no power. It is not listened to and does not form part of the FCA regulatory decision-making process that perhaps one would need to be confident that it represents in the case of passing on this protection to the FCA.
I hope that the Minister and the Government will listen carefully to the arguments that have been made so far in the first two groups and recognise the damage that could be done by pursuing the proposed actions.
Lord Blackwell (Con)
My Lords, I am more sympathetic to the approach that the Government are taking here. I think that we need to be careful what we ask for when we interpret parliamentary oversight as potentially meaning Parliament being involved in the drafting and redrafting of every detailed regulation. Not only is that time-consuming and likely to lead to long delays, but I fear that the political process will inevitably mean that it is weighted to the highest level of consumer protection regardless of the costs or the side consequences. There are other ways of having parliamentary oversight of the regulator. The Government can appoint the chairman, the chief executive and the board members. It does not have to be ex ante writing and approval of all the rules in primary legislation or committee. Parliament can excise oversight by holding the FCA ex post to account on whether it is fulfilling its remit in a sensible and proportionate manner.
We have chosen this system of having regulators. We should allow those regulators to operate properly and then hold them to account. When Members refer to the long list of protocols that consumers are led through in order to buy products, a lot of that is belt-and-braces protection that the financial institutions have been forced to put in place because of the complexity of the regulation and the risks of action against them if they do not ensure that the consumer has satisfied every detail of the consumer protection. The role of the regulators here is to exercise proportionate regulation. I think that we should hold them to account ex post rather than trying to insert Parliament in the process ex ante.
Baroness Noakes (Con)
My Lords, I disagree with what my noble friend Lord Blackwell has just said. He has fallen into the trap of believing that an accountability process can be effective within Parliament. The experience that I and my committee have had is that there are limits to what can be achieved in terms of parliamentary accountability. That is one of the reasons why there are other amendments later in this Bill to find other mechanisms for improving accountability.
It is important to differentiate between those areas where Parliament has a right to be democratically involved in the decisions and those areas that can safely be left to the regulators to carry out the detail and to be held accountable for that. It is the balance that we are concerned about. I would probably end up with a different decision on whether certain of the protections in the existing legislation need to be retained as well as on improving the way in which the legislation works by updating it to a modern digital age. There is genuinely a case for looking again at whether the sanctions that exist in the consumer credit legislation are right for today’s world. I believe that some of them are too severe or can be disproportionate to the issues that are involved in practice—for example, minor breaches in relation to enforcement notices.
I would not necessarily end up with the view that what is currently in the legislation must be preserved for all time, but I think that Parliament needs an involvement in some of those key decisions about the parameters of where liability exists and what sort of sanctions can be applied. That is why I think that we must constantly differentiate between democratic oversight and parliamentary accountability. They are complementary but different things.
Lord Carlile of Berriew (CB)
My Lords, I speak with diffidence on this matter, as I am not an expert on consumer credit. I have been involved in many cases over the years when consumers have been dissatisfied with the consumer credit arrangements that they have undertaken and have felt that there was a serious breach of contract. I am concerned that we are suggesting here that parliamentary process is the answer to many consumer credit complaints, even though parliamentary process is just about the least living instrument in our possession. It seems that the purpose of Clause 1 and Schedule 1 is to ensure that what is created is a living instrument that will modernise the consumer credit framework—not weaken consumer protection—and will become more effective because it sits in FCA rules rather than in primary legislation. It has been suggested that FCA rules are not subject to the courts, but there is already an elaborate system in place in the FCA rules.
In this debate so far, no one has mentioned the Consumer Duty, an extremely detailed document that has been in existence for three and a half years and that has, in my view, served the FCA well. If you look at the comments from law firms, which one can find all over the internet, the result is that there has been a much more informal resolution of difficulties than relying on the old system before the Consumer Duty was created. Therefore, I believe that FCA rules are part of a living instrument: they are binding, enforceable and subject to consultation and scrutiny. At the end of the day, if someone breaks the law, they are of course subject to the courts as well. That goes without saying and to suggest the contrary would be nonsense.
Baroness Lawlor (Con)
My Lords, I hesitate to follow the noble Lord, Lord Carlile, who, although he is not a specialist in this area, is a lawyer. I will speak in support of this group of amendments; I would have done the same for the first group, had I been here. It is important that businesses and consumers alike have the protection of a law that is predictable and transparent and where no doubt arises about its interpretation. Many doubts have arisen around the judgments and rulings of the FCA and its lack of consistency. Therefore, I am sympathetic to the wish of the noble Baroness, Lady Bowles, to have something done on paper, so that we can see something before putting it through.
Both businesses and consumers are used to having a legal surround for such transactions. They go back to the 1850s in the Bills of Sale Act 1854, which was modernised throughout the end of the 19th century and then followed by the Money-lenders Act 1900, obliging the registration of moneylending and allowing the courts to be involved. It is important that we have judicial oversight, not just by updating the process—although I agree with noble Lords on that—but with a legal framework that is transparent and consistent and that allows people to see what is expected.
I am also concerned about the impact of rushing through legislation to empower an as yet uncertain regime of rule-making, about which nothing of substance is known. The FCA appears to be as unprepared for this as others. In its response last month to the Treasury’s announcement of the reform of the Consumer Credit Act, the FCA said that such reform
“is an important step towards a more flexible regime that supports effective competition and innovation, while maintaining appropriate consumer protection both now and in the future”.
It acknowledged that it would put
“greater emphasis on FCA rules and guidance rather than prescriptive requirements set out in legislation”.
It states that it intends
“to consult on the key elements of the … framework … set out in legislation”.
One problem with being flexible—or moving to what the FCA calls
“a more flexible regime that supports effective competition and innovation, while maintaining appropriate consumer protection both now and in the future”—
is that flexibility can be inconsistent and lack transparency. What is appropriate for one firm may not be so for another. It brings doubts into the minds of businesses. We have heard of businesses being concerned about the arrangements run by the FCA. For example, given that many of the requirements to disclose information in the CCA and associated regulations are to be repealed, how transparent will the rules be? How consistently will they operate? Will the FCA’s rulings be published? If they are to be less prescriptive and more in line with the FCA’s consumer duty principle, how certain can businesses be about what counts as being in scope?
Before closing, I would like to mention another concern: the considerable compliance costs. Most of the disclosure of information obligations on the CCA, and in the linked regulations being repealed and replaced by FCA rules, will bring costs. I am grateful to Addleshaw Goddard LLP for its analysis, published on its website, which suggests:
“Reforms in relation to arrears, default notices & in-life information are likely to create major operational impact for collections and arrears handling. Given the high litigation risks attached to these requirements firms should carefully consider these changes and monitor how these requirements will be re-designed in FCA rules”.
Here, we should think of the start-up costs for this new system, along with the continuing compliance costs, which will be considerable. Take, for instance, the information requirements. How will they affect the estimated 30,000 firms that will have to amend documentation that does not align with the consumer duty?
With those thoughts, I support the thinking behind the stand part notice in the name of the noble Baroness, Lady Bowles, with its question mark around the wholesale transfer of such powers without any information on how they will be operated or regulated—or, indeed, what they will be now.
Lord Altrincham (Con)
My Lords, I declare my interest in South Molton Street Capital, which is regulated by the FCA.
The amendments in this group reflect concerns similar to those raised in our previous debate. As the noble Baroness, Lady Bowles, and my noble friend Lady Neville-Rolfe have argued, it is for the Government now to set out a compelling case for moving Consumer Credit Act provisions into the FCA rulebook. This is a serious new precedent and they must meet it with an equally serious explanation. Regulatory flexibility, or, as we have heard from my noble friends, the living instrument arguments, may be appropriate for matters of form, process and technical detail. However, that flexibility comes with risks. Consumers, firms and the courts all benefit when substantive rights and remedies are stated clearly in law. Notwithstanding the comments made by the Minister, moving them into regulatory rules may reduce their visibility, create uncertainty about their permanence and make their enforceability less clear. I hope that the Minister will be able to assure us further on how the proposal before us will avoid that issue.
There is an important constitutional principle at stake. If rights established by Parliament can, in effect, be rewritten through regulator-made rules, Parliament’s role in determining the proper balance between consumer protection and regulatory proportionality is diminished. More broadly, public confidence depends on protections being visible, accessible and readily understood. This is particularly important in consumer credit, where people may be making difficult or significant financial decisions while facing difficult or vulnerable circumstances. Rights are of limited value if consumers cannot identify or understand them and cannot be confident about how they will be enforced.
Fundamentally, we need a lot more clarity on this process and on what the Minister described as the orderly transition. We shall listen carefully to his response on this group, in addition to his previous reply.
Lord Stockwood (Lab)
My Lords, I thank noble Lords for the opportunity to set out the Government’s position on this important set of issues. I start by addressing why Clause 1 and Schedule 1 should stand part of the Bill. However, I do not want to duplicate what I said on the previous group, where I set out at length the Government’s policy for the CCA. Suffice it to say that the case for reform is straightforward. The Consumer Credit Act is more than 50 years old and was enacted long before the creation of the FCA. It no longer delivers as it should for today’s consumers, who engage with modern products in an increasingly digital world. That is why the Bill continues the work that began in 2012 of repealing this outdated legislation, such that it can be replaced with updated rules that better meet the needs of consumers and are fit for this digital age.
I understand the strength of feeling on the question of delegation, but I note that the noble Lord, Lord Blackwell, said that this is not a consensus. As I have said, this is entirely consistent with the model of regulation established by Parliament in the Financial Services and Markets Act 2000. The Government strongly believe that those replacement rules should, in the main, reside in the FCA rulebook, not in primary legislation.
The noble Baroness, Lady Bowles, expressed concern about how the FCA will replace some key protections, including information requirements. In the last group, I already explained the process that the FCA will follow. As I said, in practice, Parliament, the sector and consumer groups will see the FCA’s detailed proposals at the consultation stage, before the new regime takes place. I am happy to assure the noble Baroness that the FCA’s recent public statement confirmed that it aims to consult on key information requirements, rights and protections, including cancellation and withdrawal, the termination of agreements, including early settlement, and on looking across the consumer credit journey, with this approach being underpinned by the consumer duty. This will be supported by consultation and cost-benefit analysis, consumer research and stakeholder feedback.
Amendments 4, 5, 7, 8, 9, 10, 11, 12, 13, 14 and 16 would retain information requirements and related sanctions in legislation or limit the FCA to prescribing only the form and content of notices. That would preserve the rigidity we are seeking to address. I cannot accept these amendments, as the provisions are not fit for the digital age. The Bill repeals these rigid statutory requirements so that the FCA can develop a more effective, rules-based regime. This is not about reducing information but about improving its timing, its quality and its clarity. The aim of the regime is that it provides consumers with better information in a clearer form and at a time that is most useful to them.
The consequence of repealing these information requirements is that certain related sanctions will fall away. These sanctions were designed for a different era. The Office of Fair Trading had limited powers for supervision and enforcement, so the regime was designed to be draconian to act as a robust deterrent. The sanctions apply automatically, regardless of the seriousness of any breach or whether any consumer harm has arisen. For example, a lender that used the incorrect wording in an arrears notice is required to refund any interest and fees charged from the point at which that breach was originally made, even if the error was in no way harmful to the borrower. Much has changed over the years since these sanctions were designed, and this approach is poorly suited to the modern approach to regulation. The FCA has strong supervisory and enforcement powers, and under consumer duties firms must deliver good outcomes. Unlike when the CCA was enacted, any consumer who suffers harm can straightforwardly access redress through the Financial Ombudsman Service, the FOS.
I recognise the concern behind Amendment 2, which seeks to ensure that FCA rules can supplement but not replace or diminish rights and remedies in the CCA. However, the Bill already preserves statutory rights that need to remain in legislation. Because FCA rules are not capable of eroding such rights, the amendment is not necessary.
I have already set out, in the last group, several examples of protections that remain in primary legislation, including Section 75 and provisions connected to criminal offences, which must of course remain in legislation. Amendments 6 and 15 would retain withdrawal, cancellation and early settlement rights in the CCA rather than allowing them to be recast into FCA rules. These rights are an important feature of consumer credit products that ought to be preserved. However, the current framework is complex and outdated and, as a result, not always well understood by consumers. The purpose of reform is to ensure that these protections work better for consumers, which is why the FCA has committed to consider cancellation rights alongside other rights including withdrawal, termination of agreements and early settlement, as part of its future framework. The amendments would prevent the FCA taking forward this vital work.
Lastly, Amendment 17 covers certain important rights, such as time orders, and seeks to retain these provisions within legislation without changes. However, changes to these provisions are necessary to ensure that they work together with the new information requirements recast into FCA rules.
I hope that I have been able to reassure noble Lords that the Government are taking forward these changes for the benefit of consumers, and convince them that the changes the Bill makes are necessary to modernise our protections and ensure that they are serving their intended purpose of protecting consumers. I acknowledge that we will come to the scrutiny of the regulators, especially the FCA, in future groups. I therefore propose that Clause 1 and Schedule 1 stand part of the Bill and respectfully ask the noble Baroness not to press her opposition to them.
Baroness Bowles of Berkhamsted (LD)
My Lords, I thank the Minister and all who have spoken in this debate. I am sorry that, to some extent, having it in two separate bits has made it more awkward. We are at a kind of impasse here. The Minister replies as though we are saying that nothing in the Consumer Credit Act can be changed and it will all have to stay there. In fact, all I am saying is that there are some basic core rights in statute, similar to the sorts of core rights that exist in many other Commonwealth countries, that should remain, because you do not have rights with the regulator. As my noble friend Lord Sharkey explained, the consumer duty does not give you any rights. It is about the opinion of the FCA, and it can change how it will apply it.
The main thing that we are objecting to is that the Bill is shoot first, ask questions later: “Give us all the power now and we’ll consult and tell you what we’re actually going to do later”. That is not the way to make legislation right—it is not how you would hire a telly, for heaven’s sake. We are being asked to tick the box on behalf of the public for something that is fundamentally unseen. The Bill does not retain core rights. It says that some things will change and gives an open-ended power to change everything else automatically when the Government want to. The fact that the Government are not taking rights away now does not mean that they cannot take them away later.
That is the impasse that we are at. We need some core rights that stay. The rest can all be simplified, streamlined and handled by the FCA and made more modern. The two should be able to work together, but it is not a simple fix. This has been pushed through without that second consultation, and that is why it is now falling apart as unsatisfactory. I will return to this when we come to Report, but, for now, I will not press my opposition to Clause 1 standing part of the Bill.
Baroness Neville-Rolfe
“38A In section 140A (unfair relationships between creditors and debtors), after subsection (4) insert—“(4A) An application under section 140B(2)(a) shall not be made, and no action for an order under section 140B shall be brought, after the expiration of six years from the date on which the relationship between the creditor and the debtor ends.””Member's explanatory statement
This amendment would retain the six-year limitation period, running from the end of the creditor-debtor relationship, for applications or actions seeking relief under sections 140A and 140B of the Consumer Credit Act 1974 in respect of an unfair relationship.
Baroness Neville-Rolfe (Con)
My Lords, before I turn to the detail of these amendments, I should briefly set the scene. Noble Lords will be aware that last week the Conservative Party announced a new policy in relation to the Financial Ombudsman Service. An amendment on our proposal for an alternative approach, a financial adjudication service, is currently being discussed with the Table Office, and I do not intend to pre-empt that discussion. We will have the opportunity to debate that proposal at a later stage of the Bill.
The clauses before us, by contrast, change the landscape of dispute resolution in financial services in the immediate term. Our policy announcement does not prevent us engaging properly with the provisions before us now. Indeed, it makes it more important that we do so. We want whatever system Parliament agrees on now to work as well as it can. The amendments in this group are concerned with certainty, timeliness and fairness. They are intended to ensure that the framework being created by the Bill does not introduce unnecessary uncertainty for firms, does not allow yet further delay to become embedded in the system and does not create open-ended liabilities or an undesirable degree of retrospection.
I turn first to Amendment 17A, which relates to unfair relationships under Sections 140A and 140B of the Consumer Credit Act 1974. Its purpose is to retain the six-year limitation period running from the end—I emphasise “end”—of the creditor-debtor relationship for applications or actions seeking relief in respect of an unfair relationship. These can of course go back many years. This reflects a concern that has been raised with us following the Supreme Court ruling in THG plc v Zedra Trust Company (Jersey) Ltd, which found that unfair prejudice petitions under Section 994 of the Companies Act 2006 are not subject to statutory limitation periods. I appreciate that that judgment arose in a different statutory context, but it has prompted a serious and practical question. Does that reasoning have any implications for applications or actions seeking relief under Sections 140A and 140B of the Consumer Credit Act?
If there is any doubt about the applicable limitation period, the consequences could be significant. Credit agreements, and the relationships arising from them, may have ended many years earlier. Banks and other lenders do not keep records indefinitely. They cannot reasonably be expected to defend claims on the basis of files, communications, systems and decision-making processes from an indefinite period in the past. That is why limitation periods matter. They reflect a basic principle of fairness: that after a certain period evidence may be lost, as memories fade and documents are no longer available. Without a clear time limit, firms could be exposed to open-ended liability and a significant increase in vexatious or speculative claims, often fired up by claims management companies.
Amendment 17A therefore seeks to preserve the existing position that, where relief is sought under Sections 140A and 140B in respect of an unfair relationship, the relevant limitation period should be six years from the date on which the relationship between the creditor and the debtor ends. I would be grateful if the Minister could give some clear answers here. As my noble friend Lady Lawlor said in the previous group, it is important to have predictability. Does the Government’s understanding remain that the six-year period applies? Has the position been affected in any way by the Supreme Court’s reasoning in THG v Zedra? If the Government consider the position is already clear, will the Minister set that out on the record? If there is any doubt, will he commit to preserving the current six-year period?
I turn next to Amendment 36, which concerns referrals from the Financial Ombudsman to the FCA. The Bill creates a new mechanism by which the Financial Ombudsman may refer matters to the FCA where there is an issue of wider significance or where FCA rules may be ambiguous. In principle, that is sensible and an important mechanism, but one of the recurring criticisms of the current system is that firms can find themselves judged against interpretations or expectations that were not clear at the time.
A route for the FCA to provide clarity is therefore welcome. However, that mechanism will work only if it operates at pace. If a complaint is referred to the FCA and then sits there for months, the result will be uncertainty for everyone. The consumer is left waiting, the firm is left with a live and unresolved complaint and the ombudsman cannot proceed. The wider market may be left in doubt about the meaning or application of the rules.
Baroness Bowles of Berkhamsted (LD)
I would like to join in this discussion because it is probing thoughts. I shall make a few comments on Amendment 17A, because the issue overlaps with an amendment of mine that comes later in the main FOS group.
Amendment 17A raises an important point about limitation periods and the concept of when a relationship ends. It seeks to preserve the six-year limitation period for unfair relationship claims, running from the end of the creditor-debtor relationship. I understand the intention, but it exposes a deeper difficulty. The end of a relationship is not, or may not be, the same as the end of rights and it is certainly not the same as the end of enforcement powers. In many cases, firms retain continuing benefits or enforcement rights long after the consumer’s remedies have expired. Debts can be sold, pursued, securitised or enforced years after the practical relationship has ended, yet the consumer’s ability to challenge an unfair relationship may already have fallen away. That is an asymmetry.
As I said at Second Reading, while I understand the industry’s desire to get a grip on long-tail risk and liabilities, especially where regulators are interested in it, that cannot be done off the back of consumers. If we are to move parts of the Consumer Credit Act into the FCA rules, at the very least those rules must be required to secure, as far as reasonably practicable, symmetry between the duration of rights, remedies and redress available to consumers and the duration of rights, remedies, enforcement powers or continuing benefits to firms arising from the same act, omission or relationship. Without that symmetry, we risk creating a regime where firms retain long-tail powers but consumers lose long-tail protections. Limitation periods cannot be considered in isolation from the underlying rights. The two must move together or we distort the balance that Parliament intended. That is why the statutory framework has a place.
The FCA has already announced, a year or so back, a shift in emphasis to allow more risk in the interests of growth, which is a recurring theme. That was an important statement by the FCA and it feeds into the need for proportionate regulation and acceptance that there may be more failures, which Parliament must accept, but it cannot mean a bias advantage towards business in ways where firms retain recourse against consumers while consumers lose recourse against firms.
Under that process, companies may enjoy growth by escaping the consequences of some bad actions, but that gain is extracted from consumers and effectively added to the cost of living. Fleecing consumers is not growth, but I fear that this may be the consequence of the asymmetry in rights that could arise under Amendment 17A. I may return to this issue with my own amendment on Report.
Lord Davies of Brixton (Lab)
I just wanted to say that I have a lot to say on the Financial Ombudsman Service but I shall save it all for group 6.
Baroness Altmann (Non-Afl)
My Lords, first, I declare an interest, which perhaps I should have done at the beginning. I am a director of a pension company that is regulated by the FCA. I apologise for not having declared that earlier.
I will reflect on an issue that could arise because the Financial Ombudsman Service is in charge of complaints about pensions. We know that many people who are taking out pensions products may have problems that do not become apparent to them for six or 10 years or beyond. Perhaps we could consider an amendment that would carve out the extent to which the Financial Ombudsman Service deals with a pension complaint in relation to this element of the Bill.
Baroness Kramer (LD)
My Lords, I have only a few comments on this group. As I listened to the comments on Amendment 17A, particularly those of my noble friend Lady Bowles and the noble Baroness, Lady Altmann, I understood what reminded them of mortgage prisoners. In that case, people who held mortgages with banks that failed, and who were rescued by the Treasury, were then sold on to private holders who were not themselves lenders of mortgages. In effect, they lost the ability to refinance, and so they remained imprisoned in very high-rate mortgages at a time when everyone else was able to remortgage. We can see echoes of that in some of the limitations that would be introduced by these amendments. I am therefore always concerned about those time limitations, particularly in situations where assets can be sold on, as they often and increasingly are today.
Amendment 44, from the noble Baroness, Lady Neville-Rolfe, seeks to deal with the issue of consumer redress. If a consumer has been abused in some way and has a moral right to redress—a right in law—should that be lost simply because we have a regulator that fails to act promptly and within a reasonable time? I understand that it is tough for the industry, because it leaves it with uncertainty, but some of these products are life-changing for individual consumers and have life consequences. That is what made me think of mortgage prisoners; their lives were completely ruined by that process.
Where there are such consequences for the individual, it is very concerning to take away the right to redress because there was a delay in the functioning of the regulator. I understand that it means that the industry has to live with uncertainty, but my advice to it is to behave well to your customers. That really is the very best way not to get into these issues.
Lord Stockwood (Lab)
My Lords, I begin by considering Amendments 17A and 44. The Government’s reforms to the FOS are aimed at ensuring that the legislative framework in which it operates supports it to perform effectively the role that it was established to do, providing quick, informal and impartial dispute resolution between financial services firms and their customers.
Given the nature of the FOS and the way it operates, it can be effective at resolving the majority of disputes between customers and financial services firms, but it cannot do everything, and some things are more suited to other routes. The alternative routes include the courts and a consumer redress scheme established by the FCA. These routes are more appropriate when addressing systemic issues, such as widespread mis-selling. The reforms that the Bill makes to Section 404 of the Financial Services and Markets Act 2000 are designed to enable the FCA to act quickly to prevent disruption and uncertainty when it finds that a mass redress event has occurred.
Turning to Amendment 17A, I thank the noble Baroness for raising this important issue. I recognise that there have been questions about the time limits that apply to claims brought under Sections 140A to 140C of the Consumer Credit Act 1974 in the light of the Zedra ruling. The Government understand that there is an interest in and desire for clarity in this area. The noble Baroness, Lady Neville-Rolfe, asked me about the Government’s position following the Zedra ruling and its implications for the Consumer Credit Act 1974. The Government’s position remains that the limitation period runs from the end of the credit agreement. That approach provides legal certainty and reflects the nature of these claims. That understanding is consistent with existing case law, including the Supreme Court’s judgment in Smith v RBS.
Baroness Neville-Rolfe (Con)
My Lords, I am grateful to all noble Lords who have contributed to this brief debate and to the Minister for his response and clarification of THG v Zedra, which I will certainly consider.
My central point is that a redress and complaints system must be fair in operation. It must be capable of delivering justice for consumers, but it must also give firms a reasonable degree of certainty about the liabilities they face, the standards against which they are judged and the timeframes within which matters will be resolved. If we create a system in which liabilities are open-ended, where regulatory redress powers can go beyond ordinary limitation principles, and where referrals can remain unresolved for an indefinite period, I do not think it will produce a better system for consumers.
I agree that we must look after consumers—this is obviously a very important part of consumer law—but I worry that we will produce a slower, more uncertain and more contested system for everyone if we do not get these judgments right. I do not accept a bias towards business, as the noble Baroness, Lady Bowles, suggested. Actually, we are seeing a shift the other way in some of these areas, which is why I have had the representations I have had on these points and why I think is it is very important to find clarity.
I note what my noble friend Lady Altmann said about pensions. The Minister has answered and explained that he sees pensions in a slightly different way. I am not sure what the limitation rules are there.
I hope that the Minister will reflect further on the thrust of these amendments. In particular, I hope that he will consider whether the Government can provide a clearer statutory safeguard on limitation—clarity is certainly important—as well as a firmer timetable for FCA opinions. I worry that just delegating it to the FCA will mean it being in charge of its own timetable. If there were an enormous problem in the financial services industry that required the diversion of staff elsewhere, for example, things could slip, and redress for the consumer could then slip as well.
All of these amendments go in the same direction: towards fair, timely and certain decision-making, with predictability for both consumers and the businesses involved. For now, I beg leave to withdraw my amendment.
Baroness Noakes
“(1A) Before making regulations under this section the Treasury must consult persons which provide banking services and such other persons as the Treasury consider may be affected by the regulations.”Member’s explanatory statement
This amendment requires the Treasury to consult banks and others who might be affected by regulations on access to banking services.
Baroness Noakes (Con)
My Lords, in moving Amendment 18, I will also speak to my Amendments 19, 20 and 25 in this group; I am grateful to the noble Lord, Lord Vaux, for adding his name to them.
We now move on to Clause 3, which gives a very wide power for the Treasury to make pretty well any provision it feels like about providing access to banking services. It is a fact of life that major banks in the UK have been reducing their branch footprints for several years, in response to the massive shift from in-person banking to online and mobile banking. Branch visits have fallen by more than 90% since the 1980s, and debit cards overtook cash transactions in the 2010s. In 2024, only 9% of transactions were made in cash, while 93% of adults used online or mobile banking. At the same time, the activity that banks could conduct safely via branches diminished. Some might think nostalgically of the era of autonomous bank managers making lending decisions and offering investment advice, but those days have been largely risk-managed out of retail banking.
Noble Lords will be aware that the 2023 Act gave the FCA powers to protect access to cash services. I did not think that those powers were necessary, because I could see that cash was definitely on its way out, but I accept that banks have to continue to provide cash until cash-only users drop to an insignificant number. The banks have agreements with the Post Office and have voluntarily signed up to the provision of 350 joint banking hubs that provide not only cash services but, to a more limited extent, the services of community bankers.
I know that some consumer lobby groups have had statutory protections for more than cash services in their sights for some time, but it is far from clear whether more needs to be done beyond the banking hubs, which are still being rolled out. I have never seen a clear exposition of what services are missing, so I have no idea whether they are realistic in terms of continuing provision, hence I am unconvinced about the case for either statutory intervention or further regulatory powers.
The case may be made when the review being undertaken by Mr Richard Lloyd reports, but that is the time for the Government and Parliament to decide whether a statutory remedy is necessary. Frankly, it is bizarre that the Government set up the Lloyd review in the very month when they announced in the King’s Speech that they intended to legislate. Normally, we consider matters then determine whether legislation is necessary, but not in this case. Even if Mr Lloyd’s review finds that further banking services are needed, that does not inevitably lead to the need for further laws. The banking hub arrangements that I referred to are not in existence as a result of the 2023 Act, as the banks had already started to set them up. The banks are generally well aware that they are an essential part of the fabric of our society and that responsibilities go with that.
I turn to my amendments. Amendments 18 and 19 are straightforward. Amendment 18 says that the Treasury would have to consult the banks and anyone else who might be affected before making regulations. I am quite sure that Mr Lloyd will be diligent in discussing the issue of banking service provision with the banks during his review, but that is no substitute for the Treasury itself being required to consult the banks before any regulations are made. Whatever Mr Lloyd’s review concludes, it is the Treasury in the first instance that needs to decide what, if any, burdens to impose on banks, hence it is absolutely necessary that they are consulted. Amendment 19 would require the Treasury to be satisfied that the banking services which might be covered by regulations would not be provided voluntarily. There is no need to create regulatory burdens where the desired outcomes can be achieved by other means.
As I have already said, retail banks are aware of their societal responsibilities; they will also be aware of the Treasury’s power under Clause 3 to require them to do things. Hence it is highly likely that, if Mr Lloyd comes up with reasonable recommendations, there will be a voluntary agreement. That would in effect leave the power in Clause 3 to make regulations in place to make less than reasonable recommendations into law, which is particularly why Amendment 18, which requires consultation, would be essential.
My other amendments in this group, Amendments 20 and 25, are intended to ensure that any use of the regulation-making power in Clause 3 is rooted in the findings of independent reviews. At present, the regulation-making power is unlimited and its only restriction is to have regard to the findings of the Lloyd review. It does not even have to follow the findings of the Lloyd review. That review might make recommendations which the Treasury does not wish to pursue at this time. Amendment 25 would ensure that if the Treasury wished to resuscitate such recommendations at a later date, or indeed to pursue other approaches to the provision of banking services, then it would have to have another independent review to validate the necessity for using the power.
Amendment 24 in the name of the noble Baroness, Lady Bowles of Berkhamsted, would tie the use of the Clause 3 power to the Lloyd review. I see the rationale for that, but I wonder whether her amendment might ossify the concept of banking service provision into mid-2026. I am sure that the need for in-person banking services will carry on changing long after Mr Lloyd has submitted his report.
I predict that we will end up with only a very small number of bank customers who actually need in-person services. The last thing that we want to do is to make the banks carry on providing them if those services are not generally needed, because the costs would be borne not by the banks but by all bank customers, so we would be shifting burdens from one small set of consumers to another.
The noble Lord, Lord Vaux of Harrowden, has tabled a Clause 3 stand part notice, with which I have very much sympathy. The Government have stated in the Explanatory Notes, and the Minister repeated at the Dispatch Box at Second Reading, that the Government intend to narrow the power during the Bill’s passage. My own view is that it is unacceptable for the power to leave your Lordships’ House in its current wide form. The Government must narrow the power while we are scrutinising it in your Lordships’ House, since it is unacceptably wide as it stands. I beg to move.
Lord Vaux of Harrowden (CB)
My Lords, as this is the first time I have spoken on the Bill, I would normally apologise for not taking part in Second Reading but—how I can put this—I was enjoying my temporary retirement from the House.
Lord Vaux of Harrowden (CB)
It is very nice to be back to do another Financial Services and Markets Bill. As it is the first time I have spoken, I should declare a registered interest in Fidelity National Information Services, Inc., which is a large American company that provides services and software to a wide range of financial services companies around the world.
I have tabled Amendment 26 and given notice of my intention to oppose that Clause 3 stand part of the Bill. I have also added my name to a number of amendments in the name of the noble Baroness, Lady Noakes.
I have another interest to declare. I lost my local bank branch in my village some years ago, and I have just been informed that the last remaining bank in my nearest town is also about to close. To visit a bank branch for me will now involve a 100-mile round trip, so I am sympathetic to the idea that we need to do something to ensure continuation of access to banking services, especially in rural areas such as mine. At the same time, I am conscious that I probably visit a bank branch less than a couple of times a year, so I understand why banks feel it necessary to close them. They are not economic. We need to find a sensible balance to this. I accept that we may need to do something, but what?
There is the old joke: “We need to do something; this is something, so let’s do it”, but Clause 3 is not even something. It is just a vague—I was going to say promise, but it is not even that—intention to do something completely unspecified at an unspecified time, or indeed times, in the future. This Government have an unfortunate track record of putting sweeping powers into legislation before deciding what they actually intend to do with them, and this is yet another example. As the Delegated Powers and Regulatory Reform Committee pointed out really strongly, this is a very sweeping power with no meaningful limitations at all other than, as we have heard, the need to have regard, and only to have regard, to the independent review currently being undertaken by Richard Lloyd.
Clause 3(3), which has only examples rather than limitations, is one of the widest I have seen. It includes the express ability to make changes to any Act of Parliament, a really strong Henry VIII power. It starts by saying:
“Regulations under subsection (1) may (among other things)”
do the things listed below that. Will the Minister explain what these other things might be? Am I being old-fashioned to suggest that this is not the right way to create law? It would surely be better to wait until after the review has been undertaken, decide what is needed and then legislate—if legislation is actually necessary, since, as the noble Baroness, Lady Noakes, says, we got these banking hubs without legislation—and have the legislation subject to proper scrutiny by Parliament, which it will not be if we go down this route.
The Minister will no doubt try to reassure us about how this power will be used. Of course I—and, I am sure, everybody else in this Room—will have complete faith that the Minister would not try to misuse the power, but he will not always be the Minister. That may be a comment that has particular resonance today. Who knows? It is even possible that this Government may not always be the Government, but this power is unlimited and will be the law for the foreseeable future. Who knows what a future Government might wish to do with such an unlimited power? Indeed, as written, they could even use it to reduce the rights of access to banking.
I have a few specific questions for the Minister. First, will he explain in more detail how the Government currently expect, subject of course to the review, to use this power? What do they expect to do with it and when? Secondly, will he explain which Acts of Parliament he has in mind that might be changed under Clause 3(3)(b) and what changes he would expect to make to them? I put on record now that if I do not get a very convincing answer as to why this wide Henry VIII power is required, I will push Amendment 26, which would remove the power to amend primary legislation, to a Division on Report.
Finally, the Explanatory Memorandum recognises that this is a broad power. It says it is “necessarily broad”. At the same time, and in contrast to that, it also seems to recognise that it is broader than really needed, as it goes on to say,
“the Government would expect to narrow it once the review has concluded”.
I am somewhat baffled by that. We are in Grand Committee now, and the timetable for the Bill seems pretty tight. Will the Minister explain how it would be possible to narrow it, given that the Bill is likely to have completed all its stages before the review is completed and they have worked out what they want to do with it? Once the Bill has become law, the power cannot be narrowed.
This is another example of the Government trying to show they are doing something before they have decided what they want to do, and therefore giving themselves inappropriately broad powers that avoid proper scrutiny when they do finally decide. It is not the right way to make laws that will outlast this Government, and I do not believe this clause should stand part of the Bill without at least very significant narrowing and safeguards.
Baroness Bowles of Berkhamsted (LD)
My Lords, I will speak briefly to Amendments 24 and 27 in my name. I support what has just been said by the noble Lord, Lord Vaux. To some extent, we are again fishing in the same constitutional pond that regulators are not Parliament. Parliament should not give away powers it cannot get back, and it should not make decisions before we know what we are deciding about.
Amendment 24 would ensure that any regulations made under this clause can only make provision that arises directly from the statutory review. A review is not a blank cheque. If Parliament asks for a review of access to banking services, the regulation-making power should be, if not confined to, at least in some way related to what the review identifies and not what a future Minister or regulator might wish to do. That is my real target. It may be that I have drafted he amendment a little too tightly but, as has been explained, this is a very open-ended power to do anything. Looked at constitutionally, the fact that the consultation has not yet been completed and assessed more than stretches proper procedure.
Amendment 27 addresses a different but related concern. As drafted, the Bill creates machinery in which FCA rules effectively drive changes to legislation, including primary legislation. The FCA pulls the lever, the Treasury presses the button and the law moves to reflect the regulator’s rulebook. The Government will no doubt say that Parliament can always reject the regulations, but we all know how that plays out: Parliament is presented with take-it-or-leave-it unamendable statutory instruments, and if it dares to reject them, we are told we are precipitating a constitutional crisis. That is not meaningful parliamentary control.
I am not opposed to the FCA modernising rules or streamlining processes—far from it—but where those rules have the effect of altering rights or obligations that were created by Parliament, the change must meaningfully come back to Parliament. Otherwise, we risk creating a system where the regulator can, in substance, rewrite Acts of Parliament by changing its rulebook. That is not proportionate regulation; it is law-making without accountability. Again, this seems not to be the sort of thing expected under the Legislative and Regulatory Reform Act. These amendments do not prevent modernisation; they simply ensure that modernisation happens within a statutory framework, with Parliament retaining oversight of the rights it has created. It does not mean going into the detail, but it does mean monitoring the rights. I hope the Minister will recognise that these are modest but important constitutional guardrails.
Baroness Tyler of Enfield (LD)
My Lords, I shall speak to Amendment 22 in my name. I apologise for not being able to speak at Second Reading, as I was overseas on a parliamentary delegation. I declare an interest as a member of the Financial Inclusion Commission and president of the Money Advice Trust.
My amendment is specifically about banking hubs, a subject I have been very interested in ever since they came on the scene. There is a need, as I see it, for a far clearer definition of what constitutes a banking hub. Looking at the range of other amendments in this group, I am pleased that we are having a broader and much-needed debate on access to banking and, in particular, in-person services than we managed to have on the 2023 Act, despite my best efforts, which did not really get us anywhere.
To explain why a definition of “banking hubs” is so important, I will briefly look at the context. As we all know, over the past decade banking in the UK has changed profoundly. More than 6,700 high street bank branches have closed since 2015. Of course, at the same time, the way that people pay for goods and services has shifted dramatically: 10 years ago, more than half of all payments were made in cash, and today that figure is closer to one in 10.
For many people, that transition has been quite manageable, and indeed welcome, if they like the convenience of digital banking online, apps or card payments. But, for others, the shift away from local branches and cash-based services has created real barriers. For someone who cannot use online banking, the closure of a local bank branch can mean losing independent access to their own money. For someone who is blind or partially sighted, inaccessible digital systems can make everyday banking difficult or, frankly, impossible. For an older person without reliable transport, the nearest banking services may simply be out of reach. For those who use cash to budget—a proportion of people still do—or to pay carers, support relatives and retain control over household spending, the disappearance of in-person banking is not just a minor inconvenience; it can affect that feeling of control, autonomy and financial security.
Banking hubs emerged as a response to this new reality, providing shared in-person access to basic banking services, including cash withdrawals and deposits, as well as a limited amount of face-to-face support. I welcome banking hubs, as I have throughout this debate. I have been pleased to visit one and see what it involved. The Government have committed to rolling out 350 hubs by 2029. For me, the questions around banking hubs are: what do they actually do? Are they doing enough and being rolled out quickly enough? Are they addressing the needs of the people who need them most? These questions are ever more pressing following the announcement, which I very much welcome, of an independent review into the impact of bank branch closures, looking at what further interventions might be needed to protect access to in-person banking services.
The noble Baroness, Lady Noakes, raised whether this is all about nostalgia and looking back to how it was in the old days—a sort of “Dad’s Army” view of banking—but we really need to recognise that it is not a question of nostalgia for traditional banking. Banking services have and will continue to evolve, and digital services will remain central, in my view, to the future of financial services, but inclusion has to be built into that transition. At the moment, we have not seen quite enough emphasis on inclusion. That key gap remained and was baked into the 2023 legislation, which is why it is so important that the independent review looks at this and comes up with good recommendations, so that the FCA can specify what a banking hub is and what qualifies as one.
Frankly, at the moment, the industry could meet all the terms of regulation without a single banking hub. It can offer services virtually, in theory—namely, through video conferencing—which might have some merit in setting out the minimum requirements for a hub and holding the industry to them in the long term. The FCA might also choose to define hubs to suit rural areas. It might be a lighter-touch model. We have to make sure that this does not impact on the Post Office and that it allows further rollout. All the evidence I have seen so far has pointed to the importance of sustainability for the Post Office and the basic banking services that it provides under the framework agreement.
Moving forward, there are big challenges. At a recent meeting of the All-Party Group on Fair Banking, there were strong calls for the FCA to prevent closures of banks—the last branch in town—until replacement access is in place. There was a feeling that the current approach is frankly too reactive, with a response often coming only after the closure occurs, and there were questions of whether communities losing their final branch should automatically receive a hub, so that there should not have to be a review. The Post Office was very much recognised as a key national asset in supporting access to cash and basic banking services.
The Lord Bishop of Manchester
My Lords, it is a great honour to follow the noble Baroness., Lady Tyler. As I listened to her speech, I was crossing off most of the things that I was going to say, because she said them much more eloquently than I could have, and I am thankful for that. We need to be able to provide everybody with the best possible services, locally available. As the noble Baroness said, when people are at their most vulnerable, at the most crucial moments of their lives and taking the big decisions, being face to face makes all the difference.
I gather that an article in the Spectator says that Bishops do not mention the word Jesus enough when we are speaking in your Lordships’ House—well, I have just covered that one, for Hansard’s benefit. In my theology, when God had something really important to do, He did not send an email or text message or put writing in the sky. He sent a person, in Jesus Christ, to meet other human beings face to face. We lose face-to-face services at our peril.
Occasionally, yes, I am involved with the closing of a church. But very few churches, certainly Anglican ones, have been closed in England over the past 40 or 50 years, because we recognise the importance of providing face-to-face encounters for people to meet other people. While I appreciate that we do not want to overregulate, I feel that, as I said at Second Reading, making face-to-face banking services available to people when that is what they need, because they have a big decision and are feeling vulnerable, gains priority over the convenience of the banks. They might pass some small costs on to the rest of us, and it might affect the bonuses that some bankers get and the shareholders’ dividends at the end of the day, but that is a price to pay for seeing that everybody is included in the banking world.
Lord Davies of Brixton (Lab)
I shall speak to Amendment 23 in the name of my noble friend Lord Sikka. He very much regrets not being able to be here, but I hope that the Minister will still respond to the point that it raises.
The key issue is that there is a public service element in banking. It goes beyond commercialism; it is reasonable to ask that the review which is taking place should consider that issue, and specifically whether it requires an amendment to the Bill to effectively pre-empt the issue and say that villages, towns and districts need some form of banking services. I think there could well be broad agreement on that—the issue is that banks are competitive commercial organisations and so are not going to do it. They will do it only if there is some sort of collective scheme, funded by a levy, that provides good services for people where they live. I very much enjoyed the contribution of the right reverend Prelate, and indeed churches have closed down far less frequently than banks and post offices. I hope my noble friend will respond positively to that point on the public service element.
Baroness Bennett of Manor Castle (GP)
My Lords, I speak for the first time in Committee on my third Financial Services and Markets Bill. I reflect on the curious circumstances in which we find ourselves and offer reassurances to those who do not like Clause 3 in particular. Surely under the new regime, which we expect to see in a month or so, we are unlikely to see the Bill in anything like its current form given that it aims overall to deliver the so-called Leeds reforms of Chancellor Reeves. Those intend to give the financial sector a boost of growth, at an inevitable cost to the real economy—a boost to London and the tax havens at a cost to the rest of the country—and to reduce the regulations which were brought in as protections for all our security after the last financial crash. However, there is still a point in all of us going through the Bill in detail as we are doing now, because we are also making bids for what a future Government will look like.
On that basis, I will speak in particular to Amendment 22, in the name of the noble Baroness, Lady Tyler, and Amendment 23, in the name of the noble Lord, Lord Sikka. We are expressing very important issues, as the right reverend Prelate put so well. He was speaking about religion but also about humanity and human need, which these amendments particularly address. Your Lordships do not need to listen to me with my radical voice; reading around this, I found an article in March from the Civil Service Pensioners Alliance. It quoted figures which state that about 53 bank branches close each month, and pointed out that this was forcing older people in particular into digital exclusion, stripping away their independence and leaving them highly vulnerable to scams. No one has yet brought that up, but speaking to local persons in a local branch can be an important prevention against scams, and there is also the premium on having to pay more for things because you are poor.
Picking up the point made by the noble Baroness, Lady Tyler, the pensioners alliance talks about circumstances of bereavement or the need for a power of attorney, which are circumstances that can happen to any of us. They will continue to happen, and technology cannot make them disappear. On that, I take issue with a couple of points made by the noble Baroness, Lady Noakes. The noble Baroness said that we can get rid of branches when cash users drop to an insignificant number. First, we should not be treating anyone in our society as insignificant, but more broadly, that assumes that we are heading—both as individuals and collectively—only in one direction. You may, at a certain age, be able to cope very well with digital banking and be perfectly comfortable with it, but that is not to say that later in life you might not want to use a different system. You might not be able to see the screen of your phone or manipulate its buttons, or you might not be able to hear on the telephone anymore. At that point, cash being available is an absolutely crucial thing.
Finally, I will pick up a point from the noble Baroness, Lady Noakes, which the right reverend Prelate also discussed. It is not the case that customers have to pay for the provision of these services. I point out that the big four UK lenders made £14 billion total profit in the first quarter of this year, and their profits last year were £46 billion. The financial sector depends on government support to survive. That is a licence, and we can comment on the conditions under which that licence is held. If this legislation goes forward, surely we can add a provision on local banking services—having a person to speak to when you really need it. Whatever future legislation comes in, there clearly needs to be action in this area.
Baroness Kramer (LD)
My Lords, there seem to have been two themes in today’s discussion; I will address both because I agree with them both.
The first is on whether we value banking hubs. There have been so many voices that say that we value them, but they are calling for a much-improved framework, including the noble Baronesses, Lady Tyler and Lady Bennett, the noble Lord, Lord Davies, and the right reverend Prelate the Bishop of Manchester. I suspect that there is a universal consensus that we need to think through this issue, which is exactly why the Richard Lloyd review is now anticipated. I think that most people who see the value of banking hubs in their community—most MPs have been asking for banking hubs in their constituencies—very much appreciate the direction of the Lloyd review. On the background and evidence for the need for banking hubs, I will address some of those issues much more when I discuss community development financial institutions in a later group, so I will not repeat all that.
That does not take away from the fact that we have a constitutional issue here. According to its report, the Delegated Powers and Regulatory Reform Committee is very concerned that the problem has not been clearly identified and that a power as extensive as the one provided for here in the Bill severely compromises effective parliamentary scrutiny. The Select Committee asks for the power to be removed from the Bill. I say to the Government that it is important that there will be some real clarity before this hits the Commons—otherwise, this clause will be very much in trouble.
I support banking hubs. I suspect that I will be very pleased when I read the Lloyd review. What is sauce for the goose is sauce for the gander. I cannot just say to Parliament that, if it is something that I like, we do not need oversight, scrutiny and a proper process and that we do not need to consider the role of the regulator versus the democratic decision-making that should be happening in Parliament. This is a very good instance where I suspect that I would be very much in favour of the Lloyd review, but I would be very sad if that is not brought before Parliament for discussion, scrutiny and proper oversight. It is unfortunate that the Bill follows a procedure and process that seems to be completely unnecessary and that does not allow for that oversight. Oversight is valid, whether or not you think you will like what the regulator will do.
Baroness Neville-Rolfe (Con)
My Lords, Amendment 21, in my name and that of my noble friend Lady Noakes, would ensure that any government intervention in the provision of in-person banking services is evidence-based, proportionate and properly balanced. It would require Ministers to consider not only the needs of consumers but the legitimate commercial reasons why firms may reduce their physical banking provision.
More widely, Clause 3 raises two distinct but closely related concerns. Our amendment speaks to the first: banks do not close branches simply on a whim. Consumer behaviour has changed profoundly, more banking is conducted digitally, and maintaining a physical network carries substantial costs. The Government may decide that wider social considerations justify intervention, but they cannot responsibly make that decision while ignoring the commercial realities facing the firms they intend to regulate.
Lord Stockwood (Lab)
My Lords, I will begin by setting out why Clause 3 should stand part of the Bill. The way that UK citizens bank has changed significantly in recent years, with many customers choosing to use digital channels such as mobile banking. As such, we have seen many firms reviewing how best to meet these changing needs, and banks are closing branches in response.
However, for some people who require access to in-person banking services, these changes may have resulted in detriment. The Government are committed to ensuring that people who need in-person banking, including vulnerable customers and those with specific needs, can continue to access essential services. Last month, as mentioned, the Government launched an independent review into access to banking services led by Richard Lloyd, former executive director at Which? and a former board member of the FCA. I encourage noble Lords to engage with him. As they have noted, he conducts this critical work. I am glad to hear much agreement from many noble Lords today as this is a critical issue and the Government are right to be exploring it.
Clause 3 ensures that we can act swiftly and proportionately if the evidence from the Access to Banking Services review supports intervention. Once the Access to Banking Services review has concluded and made its recommendations, the Government will assess whether any further legislative change may be required. I appreciate that the power is broad and that many of the amendments in this group are aimed at scrutinising or reducing the breadth of that power. I also recognise that the Delegated Powers and Regulatory Reform Committee has drawn Clause 3 to the attention of the House and recommended that the power be removed from the Bill. The Government have considered that report and will be responding in writing in the normal way before Report.
We accept that this is a broad power, but we consider that it is needed now so that, once the independent review reports, the Government can respond promptly and proportionately in light of the evidence and recommendations that it provides. As the review is still ongoing, it is not yet known what detriment exists, which customer segments are most affected, whether further intervention is needed or what form it should take. The Government are committed to keeping all aspects of this power under review as the independent review completes its work.
I pass on my personal welcome back to the noble Lord, Lord Vaux. His comments about Ministers changing is indeed pertinent on a day such as today. I am not casting too far in the future; indeed, I keep checking my phone just to see whether I make it through Committee stage.
The noble Lord whether this power could be narrowed. I can confirm that the Government expect to narrow the power once the review has concluded in October and we have had the opportunity to consider the recommendations. This will provide further clarity on any appropriate interventions that will allow the power to be refined.
Lord Vaux of Harrowden (CB)
If the review is going to be completed in October, presumably there will then be a period of time when the Government will consider it. In my experience, that usually takes several months, by which time the Bill will be law. I struggle to understand how the power can be narrowed, given that we are probably at the end of the year before proposals have come forward.
Lord Stockwood (Lab)
I was coming on to that point. The noble Lord asked what the power can do and how that scrutiny can take place. It allows the Government to introduce targeted secondary legislation or to confer functions on the FCA, including the power to make rules in the future. When using this power, the Treasury must have regard to the recommendation made by the Lloyd review.
I think the noble Lord made a point about what legislation could be amended. I can only answer this in part at this time: the Treasury expects to use the power if needed to amend relevant legislation, for example, financial services legislation.
Baroness Kramer (LD)
I would just like to clarify this. Is the Minister saying in effect these powers are going to be one time only? Is that the implication?
Baroness Noakes (Con)
My Lords, the Minister said that they may need the power to change financial services legislation. Since financial services legislation is in the hands of the Treasury, I think we are entitled to a slightly more specific explanation of how the power might be used to change primary legislation. Can he be more specific about which bits of financial services legislation the Treasury will likely use the power for?
Lord Stockwood (Lab)
With all these examples, I will have to come back in some detail at a later stage. The idea of narrowing the powers means that we can take into consideration the conversation and debate, while acknowledging that there will be some work to do in the intervening period. We believe we have the time to do that before the Lloyd review comes into play, allowing us to make the amendments necessary.
On Amendment 18, from the noble Baroness, Lady Noakes, I reassure noble Lords that the Treasury engages very regularly with the retail banking sector as part of its policy-making process. In addition to the Treasury’s ongoing regular engagement, the Access to Banking Services review will engage closely with as wide a range of stakeholders as possible, including the industry, consumers, local authorities, small and medium-sized businesses, and trade bodies. Furthermore, if regulations are made under this power to confer functions on the FCA, the Government would expect the regulator to follow its usual processes and to fulfil its statutory duty to consult before it imposes any new requirements.
Amendment 21, in the name of the noble Baroness, Lady Neville-Rolfe, contains a similar requirement for the Treasury to consult before making any regulations. It would require the Treasury to have regard to other sources of evidence, including the burdens that any regulations would place on banks, and for the Treasury to publish a statement alongside any draft regulation summarising its consideration of the evidence. The review will consider these sources of evidence, and, in considering the review’s recommendations, the Treasury will naturally take into account the impacts on banks and other relevant businesses. If the Treasury brings forward regulations under this clause, it will publish an impact assessment that will consider the impact on firms, as well as the proportionality of regulation.
Similarly, Amendment 23—in the name of my noble friend Lord Sikka and spoken to by my noble friend Lord Davies of Brixton—would require the Treasury to have regard to the need for local banking services when making regulations under Clause 3. I reassure my noble friends that the review will consider the need for in-person banking services and the impact on any specific cohorts or demographics. Funding will be considered once the review has identified the scale and nature of the consumer detriment and once the Government have considered how to respond.
Likewise, Amendment 22, in the name of the noble Baroness, Lady Tyler of Enfield, seeks to require the Treasury to have regard to several matters relating to the existing provision of banking services, including through banking hubs and the Post Office. The review will consider these sources of evidence when forming its recommendations. On her specific point on the time between bank branch closures and the opening of a banking hub, I reassure her that, if a banking hub is recommended, FCA rules already require banks not to close existing cash-access services, such as branches, until the recommended solution is in place.
Amendments 20 and 25 would require the Treasury to commission further independent reviews if it wishes to make subsequent regulations after first exercising the power in this clause. There is an existing requirement in Clause 3 for the Treasury to have regard to the recommendations of the current review when making regulations. The review was commissioned to bring together proactively the evidence from across the UK and to look at the trajectory for access to in-person banking services, not just the position as it currently stands. If the Government consider it necessary to make further provision in future, they would envisage this to follow the usual process of consultation and impact assessment, beginning from the baseline of evidence provided by the ongoing review. Further wide-ranging independent reviews are likely to be disproportionate.
Amendment 24, in the name of the noble Baroness, Lady Bowles of Berkhamsted, is similar: it would limit the power to be used only to implement matters arising directly from the independent Access to Banking Services review. As I have made clear, the Government’s intention is for the power to be used to implement the recommendations of the review. However, it is important that the power is not limited solely for this purpose, in case further relevant evidence outside the scope of the review comes to light as Ministers consider the review’s recommendations. The Government should be able to consider all relevant evidence, not just the review itself, before making any regulations.
Amendment 19 would require the power to be used to make regulations only if the relevant banking services would not be provided on a voluntary basis. The Treasury welcomes action taken by industry to support customers and welcomes the voluntary commitments, such as services provided in banking hubs, that the industry has taken forward. The Treasury will consider relevant information in determining any regulations to take forward following this Bill, including any relevant voluntary arrangements already in place.
Baroness Noakes (Con)
My Lords, I thank all noble Lords who took part in this debate. A number of noble Lords expressed their views on what kinds of services should be made available, but we have the Lloyd review and we now await its outcome. That may or may not answer questions to all noble Lords’ satisfaction, but at least we will have a starting point.
That brings me to one of the key issues that arise from our debate: sequencing. It is normal to identify a problem, then decide whether legislation is required to deal with it, and then legislate. That has been how we have done business through Parliament for time immemorial. Not just in this case but in other cases as well, the Government are starting to flip that on its head: “Let’s take some powers. Then let’s see if we’ve got a problem and then see if we can use the powers to solve the problem”. That is not responsible legislation.
The Minister acknowledged the breadth of the powers but he has failed to articulate in a way that will satisfy the Committee the reasons or the rationale for having such a broad power. He referred to the DPRRC report, which gave a clear finding. The Minister will find that the House will generally take a lot of persuading not to follow such an explicit finding of the Delegated Powers Committee.
This will not rest here; the Minister will be aware of that. This power is being taken at the wrong time, without sufficient evidence or definition. In consequence of it being taken at the wrong time and without any evidence, it is being drafted in a way that is deeply offensive constitutionally. The only thing I need to say in closing is that we will return to this on Report. I beg leave to withdraw.
Baroness Kramer
“Access to affordable credit(1) The Financial Conduct Authority must—(a) within 12 months of the passing of this Act, establish, publish and maintain a framework for assessing and rating the performance of relevant deposit takers in providing access to affordable credit, and(b) annually publish updated ratings and scores produced by the Authority under the framework.(2) The framework must—(a) assess the extent to which relevant deposit takers serve the credit needs of individuals, households and small businesses, including those who are underserved by mainstream financial services, and(b) enable comparisons to be made between relevant deposit takers.(3) In developing the framework, the Authority must have regard to—(a) the distribution of lending across income groups, geographic areas and customer characteristics,(b) the availability of affordable credit to consumers who may otherwise be at risk of financial exclusion,(c) the provision of affordable credit to small and medium-sized enterprises, and social enterprises,(d) the extent to which a bank supports access to affordable credit through partnerships, referral arrangements and funding agreements, with credit unions, Community Development Finance Institutions or other community-based lenders, and(e) such other matters as the Authority considers relevant to the objective of promoting access to affordable credit.(4) For the purposes of subsection (2), the Authority may—(a) make use of regulatory data already collected by it, including product sales data,(b) require relevant deposit takers to provide such information as it reasonably considers necessary for the purposes of the framework, and(c) make different and proportionate provision for different sizes of business.(5) For the purposes of this section, “relevant deposit takers” are—(a) banks, within the meaning given of section 2 of the Banking Act 2009;(b) building societies, with the meaning of section 119 of the Building Societies Act 1986;which meet an Authority-set threshold for the total volume of personal and small and medium business lending.”Member’s explanatory statement
This amendment requires the FCA to establish a framework assessing banks’ and building societies’ provision of affordable credit, including via partnerships with credit unions and CDFIs. It uses existing regulatory data where possible, with proportionate requirements for firms of different sizes.
Baroness Kramer (LD)
My Lords, Amendments 28 and 29 are in my name. Amendment 30 is in the name of my noble friend Lady Bowles and I am very supportive of it, but I am going to focus my remarks on Amendments 28 and 29.
I thank the Fair Banking for All campaign, a coalition of 38 organisations co-ordinated by Finance Innovation Lab, bringing together civil society organisations, anti-poverty groups, community development financial institutions, fintech researchers and people with lived experience of financial exclusion. Their work on drafting Amendments 28 and 29 assures that these amendments work in law and in practice.
Access to affordable credit, which is the subject of these two amendments, is now one of the biggest challenges we face in the UK. Millions of individuals and businesses are excluded from fair and affordable credit despite being financially viable. More than 3.5 million people are handling this by taking out high-cost credit. The consumer duty on banks does not result in any attempt by banks to fill this market failure, nor have they been directed to do so by the FCA.
My focus has been very much on SMEs, which need credit to grow as the backbone of our communities and the source of new jobs. The Federation of Small Businesses records that more than half of all small businesses rate the availability of affordable credit as poor. When I talk to conventional banks about these customers, they say to me that they are very open to lending to small businesses, then I quickly find that they mean they will offer high-priced loans backed by property, not cash flow, and they want personal guarantees from the owners of the SME. It is a consequence of a change in the business model of the high street banks, as, in many ways, the noble Baroness, Lady Noakes, acknowledged earlier. Local banking as we once knew it has disappeared. Decisions are made by bankers or algorithms which do not know the customers or the businesses except on paper. They do not know that Jo has a convincing expansion plan or that Jane always repays her debts. They are detached from the reality of individual banking that is able to take individual proposals into consideration.
Adding to that, small businesses have become suspicious of the banks. The way the banks behaved to customers following the 2008 financial crisis—I mean small customers—shocked many people. They seized assets even when loans were being paid on time and in full, because various property-to-value or loan-to-value ratios had changed with the fall in property values in that era. Paying on time and in full would seem to me to suggest that you are a viable customer, and finding that your loan was called in and the asset seized was really destructive.
Many people thought that challenger banks and new fintechs would be willing to provide credit where conventional high street banks failed. That has not turned out to be true. The new players market themselves primarily to the same pool of SME businesses that the banks seek to service. Indeed, they have now taken a 60% share of that market, because new challenger banks and fintechs typically offer better products and efficiency. However, the access to finance problem has remained and indeed worsened. It has not been resolved by the entry of these new players.
I am pleased that the Bill makes some small moves to improve the situation by expanding the role of credit unions and mutuals and strengthening open banking but, frankly, it does not begin to touch the scale of the problem. My Amendments 28 and 29 follow the pattern of the United States, which dealt with the issue of exclusion head on with the Community Reinvestment Act 1977. In effect, the Act led to the creation of a layer of community development financial institutions, mostly CDFI banks and credit unions, which tackle the problems of exclusion by the big banks.
In the USA, there are now 1,400 CDFIs extending across the whole nation, which manage more than $450 billion in loans, both to small businesses and to individuals. They provide advice, financial education, patient lending and individual assessment. They are also the backbone of economic success in the United States by providing stability in any economic crisis, making sure that disadvantaged communities, including rural areas, are not ignored and growing the businesses of the future. The big American banks, which so opposed the scheme originally because they were required to fund it to remedy exclusion, are now strong supporters, realising that the CDFIs develop their customers of the future.
We have CDFIs in the UK and the British Business Bank, which is an enthusiast, has an ENABLE fund from the Government of £150 million over two years to expand the sector and an ENABLE growth guarantee scheme to reduce borrowing costs. But we still have only some 60 CDFIs in the UK, lending by different estimates something between £250 million and £400 million a year. That is an important contribution, as CDFIs report that 94% of the businesses receiving their loans have previously been rejected by a bank, but, frankly, it is a pathetic number compared to the US.
The Government have set up a UK community finance partnership taskforce to develop partnerships between banks and CDFIs. It is chaired by Bob Annibale, the former director of inclusive finance at Citibank who is a very strong advocate for this agenda, but frankly, I am fed to the teeth of small steps. My Amendment 28 follows the US pattern and would require the FCA to set up a rating system to measure the performance of banks and building societies in providing affordable credit to individuals, households and small businesses, and rating it against appropriate measures to test for exclusion. Rating systems such as this are not a US invention. Similar set-ups are used in the UK by the care inspectorate and the food and health inspectorate.
Amendment 28 would set up the framework of the rating system. Amendment 29 goes beyond that and would enable the FCA to require a proportionate remedy where any bank or building society falls below the threshold required by the FCA. Benchmarking is critical: the language permits the banks to avoid changing their business model. This speaks in a sense to something that the noble Baroness, Lady Neville-Rolfe, raised earlier, which is that banks have changed fundamentally and we are not asking them to change back. What we are doing with this system is giving them the opportunity to find another way to deal with the exclusion, so the language permits the banks to avoid changing their business model and instead allows them to support other arrangements for affordable credit, including credit unions and CDFIs. As I have said, the model is tried and tested in the United States and is understood by every major bank.
I anticipate that some people will say that this proposal is a burdensome data-gathering exercise for the banks, but it is not. In 2013, this House passed an amendment, drafted by me and my noble friend Lord Sharkey, to set up a voluntary scheme for banks to report most of the relevant data—and by postcode, so it was very granular—to UK Finance. With a few tweaks, the relevant data for the rating scheme proposed in Amendment 28 is already available and in usable format. The problem is that the data has not been used to create a remedy: another example of the way the FCA does nothing in the face of market failure without being dragged kicking and screaming, usually by this House. That is why the remedy amendment, Amendment 29, is so important.
At Second Reading, a number of Peers spoke out in support of CDFIs and credit unions. Many of us recognise that the high street banks will never return to their local roots and that dragging them to lend when it does not fit their business model means poor service. New challenger banks and fintechs have not filled the gap. The Government are committed to a growth agenda. I can think of few measures that would drive growth more rapidly and sustainably across all parts of the country to fix the loss of local and community banking than these amendments. I beg to move.
Amendment 29 (to Amendment 28)
Baroness Kramer
“(4A) Where a relevant deposit taker receives a score or rating below a minimum threshold prescribed by rules made under this section, the Authority must require the deposit taker to take proportionate remedial action to improve its rating.(4B) The Authority may—(a) make such rules or issue such guidance applying to designated persons as appear to the Authority to be necessary or expedient, and(b) give a direction under this section to a designated person if it considers that it is desirable to give the direction;for the purpose mentioned in subsection (4A).”Member’s explanatory statement
This amendment to Baroness Kramer’s amendment gives the FCA a duty to ensure, through rules and guidance, that relevant banks and building societies which fall short of a minimum threshold performance in providing access to affordable credit are required to take proportionate steps to remedy the situation.
Baroness Bowles of Berkhamsted (LD)
My Lords, I shall speak briefly to Amendment 30 in my name, which would introduce a fiduciary-style duty on firms in their dealings with consumers and small businesses.
This group is about affordable credit and consumer protection. The problem that we see time and again is not that firms set out to behave badly but that good intentions drift under pressure to increase revenue, under pressure from internal incentives and, sometimes, under pressure from government to deliver growth. When that drift occurs, the cost is pushed on to consumers and, as I said earlier, passing costs on to the people is not growth in any meaningful, national sense.
Motor finance, the example that keeps on giving, shows this clearly. The FCA did not intend to create misalignment, firms did not intend to breach the law, but because the rules were not anchored in a well-understood legal framework, the system drifted. The FCA’s rules permitted the non-disclosure of commission unless asked. The statute required disclosure. The gap widened over time and nobody noticed until the consequences were enormous.
We see similar patterns in insurance add-ons and premium finance arrangements. These products did not begin as bad faith practices, they began as convenience, but over time, margins accumulated, incentives shifted and the products drifted into a place where the consumer’s interests were no longer the anchor. That is not malice but drift, the same drift that we saw in motor finance, and it happens when rules are not anchored in well-understood legal principles. This is what happens in a rules-based system—that is what we have, however we may pretend—rather than a principles-based system.
Parliament has been here before. As the noble Baroness, Lady Kramer, has already explained, when this House supported my noble friend Lord Sharkey’s proposal of a duty of care, the intention was to create a principle, a relationship-based obligation, that firms must not exploit unequal bargaining power or information asymmetry. What emerged instead was the FCA’s consumer duty. Is it valuable? I suppose so, but fundamentally it is a rules-based construct, shaped in part by industry pressure for something that their compliance departments could tick. Rules can be changed, narrowed or reinterpreted. Principles such as duty of care and fiduciary duty are legally understood, durable and resistant to drift.
My amendment does not attempt to rewrite the consumer duty. It would simply provide a well-understood statutory anchor—a benchmark against which to assess products and detect the kinds that end up exploiting imbalance. The test becomes, “Is it fair?”, and not merely, “Is it the next step on a path that might already have drifted?” In other words, it is about fairness versus incrementalism.
Lord Massey of Hampstead (Con)
My Lords, I declare my interests as a shareholder and a director of financial services companies in asset management and wealth management.
I have considerable sympathy with the objectives that the noble Baroness, Lady Kramer, is seeking to advance. Access to affordable credit is a genuine problem in this country, as in many others, and the Committee is right to view financial exclusion as a problem. However, I am unable to support Amendments 28 and 29 on the grounds that the proposed solution will not solve the problem and may in fact exacerbate the issue that the Bill is partly designed to alleviate: excessive and complex regulatory demands on our financial institutions, which are making us less competitive.
My first concern is one of basic commercial economics. Banks and building societies are not lending to certain sections of the community, however deserving they might be, not because of a lack of understanding of the opportunity or a lack of data; they are not serving those clients at scale because the risk-adjusted returns of lending to higher-risk borrowers at affordable interest rates, and indeed the compliance risk of so doing, do not work commercially. A rating framework published by the FCA will not change that calculus, but it creates yet another compliance exercise, another box to be ticked and another issue to be managed without addressing the underlying economic reality that makes such lending unworkable.
My second concern is the risk of unintended consequences. A rule that would rate banks on their willingness to provide credit to financially-excluded populations—in some cases, very high-risk borrowers—could create an implicit incentive to lend more to people and companies who cannot really afford the loan. The amendment contains no credit quality safeguard and no minimum standard of affordability assessment, yet banks could be incentivised to lend just to improve their ratings. The pressure to improve ratings would not be cost free, of course. In practice, banks will not be carrying out this lending for solid financial reasons, so if they feel forced to extend credits into markets with reduced or zero margins, they will seek to restore those margins elsewhere, through higher charges on other products, reduced rates on savings or increased lending spreads in other parts of the business. The cost will not disappear; it will be redistributed invisibly to existing clients, who also deserve protection.
Moreover, I draw noble Lords’ attention to the stated purpose of the Bill, which is to reduce regulatory burden, not add to it. Yet here we are, being invited to add a new mandatory framework, new data collection requirements, new publication obligations and new performance ratings, all enshrined in primary legislation. This is precisely the regulatory ratchet: the cumulative, seemingly endless new measures that damage our competitiveness. The Financial Services Regulation Committee of this House, chaired by my noble friend Lady Noakes, concluded in its report last June that:
“The cumulative burden of regulatory compliance in the UK is perceived to be disproportionately high, diverting resources that could otherwise support … growth”.
As a serving practitioner in the sector, I strongly agree with this finding. Diverting lending from growing businesses to those effectively in financial need is not going to improve our economy. If anything, it will lead to loan losses for the banks and encourage excessive borrowing from those who cannot afford it, while piling even more costs and regulatory obligations on financial firms. We should resist the urge to reach for intervention every time a market imperfection is identified. Not every problem has a regulatory solution. Indeed, those solutions can often have unintended consequences that increase bureaucracy and undermine growth, so I cannot support the amendments.
The Lord Bishop of Manchester
My Lords, I support Amendment 28, to which I have added my name. As we have heard, the amendment would require the FCA to establish a framework assessing banks’ and building societies’ provision of affordable credit. I spoke at some length at Second Reading on the importance of equal access to credit. I welcome what is already in the Bill, as I did then, but we can and should do more.
We are witnessing a crisis of deepening economic inequality in this country. For the most vulnerable communities, it is worsened by a lack of choice. Struggling to meet their most basic day-to-day needs, long-term financial planning is not an option for many families today. Daily life is a battle to put food on the table and to keep the house warm in winter, though perhaps not today. It is often the most impoverished who are forced to accept riskier loans, to turn to loan sharks—many of those operate in my diocese of Manchester—or to enter credit agreements that they are unable to pay back. In doing so, they find that they are paying a poverty premium, which then exacerbates and ratchets the problem round and round, deepening the financial injustice.
As I said earlier, I am trying to be more overtly religious in my speeches on the Bill today, so I assure the Committee that this is not merely a modern phenomenon. I could point to specific places in the Hebrew and Christian scriptures where specific rules are set out to ban the most egregious practices around unfair credit arrangements—things like extortionate interest charges, or the taking of essential items like protective clothing or workers’ tools as a pledge for credit.
Yet the alternative to unfair credit cannot be no credit but instead must be fair and affordable credit. Across the country, in churches, food banks and charitable organisations, the impact of financial exclusion on human dignity—another important Biblical concept—and well-being is being made apparent. We also see how certain communities are at a particular disadvantage: this includes if you are a migrant without a long-standing credit history, or an adult with little financial literacy, unable to navigate complex financial systems on your own, or a family experiencing living pay cheque to pay cheque—and about 10 years ago we passed the point at which most families in poverty began to be working families, rather than families in which no person is in work. The services that community institutions provide to such communities are essential but are not enough. In order to truly flourish, individuals and households facing financial insecurity need access to credit which gives them choice and independence and creates opportunities for them to become full participants in economic life.
One thing I learned when I worked on responsible investment for the Church of England’s national investment bodies was the phrase “social licence to operate”. That is an important part of this conversation today, though I have not heard it mentioned yet. The banks—not only those which were bailed out so expensively to the taxpayer less than 20 years ago—are required to operate not simply as best turns a profit, but as fits the needs for the society in which they are working. That requires a willingness to provide social goods, not merely the most profitable products to the most eligible customers.
What is set out in Amendment 28 will not only enable us to measure where affordable credit is and is not reaching people but will lay the foundation to make targeted improvements. I am told that the banks already have much of that data and that it is simply a question of making it more available by providing and publishing it. With a clearer understanding of the barriers that minoritised communities face, we can work beyond this Bill toward financial policy which tackles financial exclusion at its very root, creates new opportunities for families in debt, and promotes economic growth on a wider scale.
Baroness Noakes (Con)
My Lords, I support what my noble friend Lord Massey said earlier on these amendments, and in particular on Amendment 28.
When people talk about affordable credit, what they mean is subsidised credit, because the terms on which financial institutions are prepared to advance money to the kinds of individuals and organisations which have been referenced so far are always provided on a risk-adjusted basis. That reflects the likelihood of default and the amount of loss given a default, which drives pricing and causes people to say that they cannot afford the prices at which a product is advanced to them. We must be clear on this: we are saying that some groups in society need to have access to credit at below a risk-adjusted rate. A fairly simple question is whether we think we should impose on banks the requirement to subsidise one way or another—whether through the vehicle of community finance organisations or directly by charging lower non-risk-adjusted rates to certain groups. My answer is that it should not be; the banks already have quite considerable costs imposed on them, such as the banking hubs which we discussed earlier and which would not be set up for pure economic reasons, or the provision of basic bank accounts. There must be a point at which we stop saying that the banks can just provide more things to groups of people who could not otherwise afford access to them, so I am very much opposed to Amendments 28 and 29, which are an unreasonable imposition.
On Amendment 30, in the name of the noble Baroness, Lady Bowles, I am very unclear as to how she sees her amendment relating to the consumer duty, which has been in existence only for a couple of years, and the full effect of which we have not yet seen. I assume the noble Baroness is trying to set up an actionable right for consumers, although she is not explicit in saying that. I think that would be taking regulation one step too far. We already have the complicated arrangements of the FCA overseeing consumer requirements with its enforcement powers to set up a parallel ability of giving individual consumers rights of action under a rather ill-defined fiduciary duty, and this amendment would be an unwise addition to the regulatory landscape.
Lord Altrincham (Con)
My Lords, I am grateful to the noble Baronesses, Lady Kramer and Lady Bowles, for bringing these amendments—and to the right reverend Prelate for his reference to scripture. They raise important questions and will facilitate a useful debate about access to finance, the responsibilities of financial institutions and the right way to support small businesses and underserved communities.
I will begin with Amendments 28 and 29 in the name of the noble Baroness, Lady Kramer, and in the case of Amendment 28 also in the name of the right reverend Prelate the Bishop of Manchester. These amendments seek to require the FCA to establish and maintain a framework for assessing and rating banks’ and building societies’ performance in providing access to affordable credit, including for underserved groups. Amendment 29 would go further and require firms falling below a minimum performance threshold to take proportionate remedial action.
Access to financial services and appropriate credit is of course extremely important. That is particularly true for small and medium-sized businesses, micro-businesses and those parts of the country where access to finance can be more difficult. If we can improve the flow of capital to productive businesses, we can simulate growth, increase employment, allow firms to develop and generally improve the health of our economy. Many of the most successful businesses in this country began as small enterprises. They require confidence, access to working capital and a banking system willing to support their growth. When credit is unavailable or available only on unreasonable terms, good businesses can be held back, investment delayed and opportunities for employment and innovation lost.
However, my concern is with the mechanism proposed. I am not convinced that this can or should be done from a centrally mandated position. Banks and building societies have to make lending decisions on the basis of risk, affordability, regulatory capital, commercial judgment and the circumstances of the borrower. They are complex assessments, not straightforward public policy levers that can simply be pulled from the centre. If banks are going to make these decisions on the basis of their commercial interests, in many cases they will already have done so. Where lending is not happening to the extent that the noble Baroness would like, there is a reason for that. It may relate to risk appetite, capital requirements, information gaps, the lack of security, regulatory burdens, compliance costs or wider economic uncertainty, but the answer, it seems to me, is to work out why that is the case and then address those underlying barriers.
The answer should not be to move towards a system in which the Government through statute begin to direct the lending priorities of banks from the centre. Once we go down that road, we risk blurring the line between commercial banking and public policy allocation of credit. That is not a small step. It could have unintended consequences for financial stability, risk management, and ultimately for consumers and taxpayers. This would also send a worrying signal that the UK is a jurisdiction in which private interests are essentially subordinate to political objectives.
I support efforts to promote investment into SMEs, micro-businesses and underserved communities, but I do not think the right mechanism is one enforced by the Government in statute through ratings, thresholds and mandatory remedial action. I would therefore be grateful if the Minister could explain what work the Government are doing with banks and financial service providers to improve access to affordable credit, particularly for SMEs and underserved groups. I hope he can reassure the Committee that this work is being done with those organisations rather than over them.
I turn briefly to Amendment 30, in the name of the noble Baroness, Lady Bowles, and follow the words of my noble friend Lady Noakes. This amendment would introduce a fiduciary duty requiring firms to act in the best interests of retail customers, including small businesses. It would include duties around avoiding exploitative practices, ensuring suitability and fairness and taking reasonable steps to prevent foreseeable harm.
I understand the concern that sits behind this amendment. We all want financial services to treat customers fairly, we all want to prevent exploitative practices and we all want suitable products, clear terms and proper regard to foreseeable harm. Those are important principles. However, I am against imposing a broad fiduciary duty of this kind across regulated financial services. The concept of fiduciary duty carries with it a particular legal character and a potentially very wide set of implications. If applied broadly to all retail customer relationships, including small business relationships, it could create significant uncertainty about the legal obligations of firms, the interaction with existing FCA rules and the extent to which ordinary commercial relationships are being recast as fiduciary ones.
We are also concerned that this step could lead to a serious increase in the regulatory and compliance burden, which would fall on firms that are already struggling. Indeed, there is already a substantial framework governing conduct, consumer protection, fairness, suitability and foreseeable harm. The question for the Government and the FCA should be whether that existing framework is operating properly and proportionately, not necessarily whether a new overarching fiduciary duty should be imposed on top of it.
My concern is that such a duty could invite litigation, uncertainty and defensive behaviour. It might also make firms more reluctant to serve marginal or higher-risk customers if they fear that any adverse outcome could later be characterised as a breach of fiduciary duty. That would be the opposite of what many of us want to achieve in this group, which is broader and better access to financial services. Indeed, it would make providers and regulators more risk-averse.
These amendments raise an important debate about access to credit, the treatment of customers and the role of financial institutions in supporting growth. I support the objective of improving access to finance for SMEs, micro-businesses and underserved communities and hope to hear support for this from the Minister, but we should not seek to achieve that by central direction of lending decisions or imposing broad new legal duties whose consequences would be uncertain and work against the Government’s broad objective of simplifying regulation and reducing burdens.
Lord Stockwood (Lab)
My Lords, Amendments 28, 29 and 30 are aimed at increasing access to finance and ensuring that the customers of financial services firms are protected. I recognise the intention behind these amendments. However, I do not believe that either solution is workable.
On Amendments 28 and 29, I agree that data on access to finance and holding the sector to account are important. However, these proposals would introduce a new, prescriptive and burdensome framework on the FCA and firms that I am not persuaded would deliver the desired output.
Amendment 28 would require the FCA to establish a framework to monitor, assess and publicly report on certain banks’ and building societies’ performance in providing access to affordable credit. Amendment 29 would require the FCA to take action against firms that do not meet a minimum standard. As the noble Baroness, Lady Kramer, said, this approach resembles the United States’ Community Reinvestment Act 1977, but we should not assume that it would have the same effect here. Our starting point is different: we are working nearly 50 years later, in a digital age, with a far more diversified credit market. In any case, lenders already publish significant data. Chapter 7 of the FCA’s Conduct of Business Sourcebook requires extensive disclosure on personal and business current accounts. We also have the FCA’s Financial Lives Survey, the SME Finance Monitor and the British Business Bank’s annual SME finance publications, among others.
Amendment 29 would require the FCA to act against firms that do not meet a minimum lending standard. Striking the right balance on access to credit has long been a challenge. We want consumers to be able to access credit where it supports financial resilience and businesses to secure the finance needed to grow, but inappropriate credit can lead to overindebtedness, with serious consequences. The amendment could, in effect, compel lending to more vulnerable groups or SMEs. Even a well-designed regime could be a blunt instrument, with a risk of unintended outcomes. It would also represent a significant intrusion into firms’ commercial decisions.
More fundamentally, it is difficult to see how firms could increase lending and take on greater risk without raising prices to reflect that greater risk. If firms do not price risk appropriately, it opens us up to financial stability risks. The FCA would be placed in the invidious position of having to mandate affordable credit, while the mechanism required to expand provision could increase costs and potentially increase risk for the borrower and the firm. That runs directly counter to the intended objective for vulnerable customers and SMEs.
Although I cannot accept these amendments, I stress to noble Lords that the Government are not complacent about financial inclusion or the availability of SME finance. The noble Lord, Lord Altrincham, asked me to set out what the Government are doing, and I am happy that noble Baroness, Lady Kramer, mentioned several of these interventions already. The Government published their Financial Inclusion Strategy last autumn, and we are supporting practical interventions for consumers, including a small sum credit pilot enabling mainstream lenders to test lending to customers outside their usual risk appetite. Monzo was announced as the first participant in the scheme earlier this month.
We have launched a transformation fund for credit unions, alongside common bond reforms in this Bill, to strengthen their lending capacity. We are also advancing targeted SME finance measures to improve competition and supply, including enhancing the consumer credit data sharing scheme through Clauses 41 and 43 of this Bill. We are supporting up to £150 million of lending through the Community ENABLE funding programme over the next two years. We are establishing a CDFI taskforce and working with industry to improve bank referrals. Indeed, tomorrow I am meeting several large asset managers as chair of the place-based impact investment scheme. We will set out next steps on open finance later this summer. This has significant potential to support SME lending across a wide range of providers, alongside broader work with the Bank of England on capital and ring-fencing.
I highlight community development finance institutions, which I know are a priority for the noble Baroness, Lady Kramer. In addition to the CDFI taskforce and the Community ENABLE funding programme that this Government have funded, the sector benefits from Fair4All Finance’s affordable credit scale-up programme, which has committed more than £40 million in social investment in England to date. The financial inclusion strategy further includes measures to strengthen community finance, including promoting partnerships with mainstream lenders. Taken together, these measures support access to finance in the UK in an appropriate and responsible way.
Amendment 30 would introduce a new fiduciary duty on firms when carrying out FCA-regulated activities. It would place specific legally binding requirements on firms. I agree with the noble Baroness that it is vital for firms to act in a way that delivers good outcomes for consumers. However, I believe that FCA regulation is able to achieve this, and I am concerned that this new duty would risk creating overlapping requirements, causing confusion and reducing consumers’ access to finance.
The FCA’s consumer duty is designed to set a high standard of protection for retail customers by requiring firms to act to deliver good outcomes in line with the outcome sought by this amendment. It requires firms to put consumers’ needs at the heart of their business, including by acting in good faith, avoiding foreseeable harm and supporting consumers to pursue their financial objectives. In practice, this means that firms must design products and services that meet consumers’ needs, provide fair value, communicate clearly and offer effective support.
I am concerned that the requirements set out in this amendment would risk making more vulnerable customers more expensive and risky to serve, which would reduce their access to products such as credit and insurance. Introducing a novel statutory fiduciary duty, the precise scope of which would fall to be settled through litigation over a number of years, would create significant legal uncertainty. That uncertainty would carry a cost, which firms would be likely to manage by withdrawing from, or repricing, services for higher-risk customers. I recognise that there is some precedent for a fiduciary duty in trust-based pension schemes. However, the dynamics of the market are very different from wider consumer financial services. Typically, employer pension schemes do not choose which individual customers to serve, and the fiduciary duty applies at the membership level.
I genuinely understand the importance of lending for all parts of the economy, and I understand the need for borrowers to be protected, but I am convinced that the Government are taking the right set of actions, and I am afraid that Amendments 28, 29 and 30 would bring significant unintended consequences. I therefore ask the noble Baroness to withdraw her amendment.
Baroness Kramer (LD)
I thank the right reverend Prelate the Bishop of Manchester for signing Amendment 28 and for speaking so eloquently in this debate. The noble Lord, Lord Massey, and the noble Baroness, Lady Noakes, are both involved in the world of finance and meet international financiers. I will give them a challenge. When they meet American financiers and bankers, whether here or in the United States, will they please raise CDFIs? The noble Lord, Lord Massey, will find that basically everything he said flies completely in the face of the US experience, and I say the same thing to the noble Baroness, Lady Noakes.
Lord Davies of Brixton
(1B) Among other things, rules made under sub-paragraph 13(1) must provide in specified circumstances for the applicable time limit to end at a later time where—(a) in the opinion of the Financial Ombudsman, the failure to comply with that time limit was due to exceptional circumstances;(b) the complainant only became aware (or ought reasonably to have become aware) of material facts or detriment to them relating to the act or omission complained of after the expiry of that time limit.”Member’s explanatory statement
This amendment amends Clause 6 to ensure that the ten-year longstop is the default position for Financial Ombudsman complaints, in line with the preferred option in the Impact Assessment and as opposed to the six-year provision in current FCA rules (DISP 2.8).
Lord Davies of Brixton (Lab)
This extensive group of amendments is focused on the role and functioning of the Financial Ombudsman Service—the FOS. We have already had a taste of that debate with group 2, but I am concerned that there is not going to be enough time for me in my 15 minutes—perhaps the Whip is already thinking that I should get on with it—and I will not be able to finish it all. I have said that I will take the opportunity, if I have not been able to ask my noble friend the Minister all the questions that I want within my allotted time, to ask further questions when we get to Clause 8 stand part.
This group of amendments deals with three issues: time limits for taking cases to FOS, the proposed system for the referral of issues to the FCA and, significantly, the changes to the “fair and reasonable” test. This is a lot to deal with, and in fact it is about the interaction between these three different changes. They might appear separate, but their overall impact has led to real concern that the interests of consumers are not being given sufficient attention.
I must pay tribute to the support that I have received from the All-Party Parliamentary Group on Investment Fraud and Fairer Financial Services, of which I am vice-chair, as well as Which? Money and Fairer Finance. They have all expressed concerns that consumers’ interests are being adversely affected, and those concerns most definitely need to be addressed.
Starting with Clause 6 and my Amendment 31, I am concerned about the changes to the 10-year longstop on complaints to the Financial Ombudsman Service. The case for some kind of time limit is not unreasonable in itself. Firms do not wish to face indefinite exposure to complaints about events that happened decades earlier, and I understand why the Treasury wants certainty on that point. But Clause 6, as drafted, creates a hard structural barrier that applies regardless of when the consumer could reasonably have known they had grounds to complain. That is the flaw. It is not that a longstop exists; it is that it takes no account of discoverability. That matters most for long-term products such as pensions and mortgages, areas where I have personal and professional experience and where consumers often do not find out for years, sometimes decades, that they have been poorly advised or missold something.
The Explanatory Notes accompanying the Bill suggest that allowing complaints years later creates problems with data retention. I do not think that holds up. The appropriate rule, rule 9.5.2 in the FCA’s Conduct of Business Sourcebook, sets out the record-keeping requirements for firms that give personal recommendations on certain pension-related transactions. The rule as it stands requires firms to retain their records that were the basis of a personal recommendation indefinitely in cases of pension transfers, pension conversions, pension opt-outs and FSAVCs—which, for those who are not up on the jargon, are free-standing additional voluntary contributions. For other types of advice, COBS sets shorter retention periods, but these four pension categories are singled out precisely because of the long-term nature of the harm that can arise and, originally, because of the personal pensions misselling scandal of the late 1980s and early 1990s, a scandal that is too often forgotten but that led to £13 billion being paid in compensation.
The practical significance for the Clause 6 argument is that the justification for 10 years does not stand up. Firms advising on pension decisions are already legally required to hold the records, so the 10-year rule does not serve that data problem. The “indefinitely” formulation is worth noting. Most compliance obligations come with a defined shelf life, so the fact that the FCA made an exception here reflects a considered regulatory judgment that pension transfer advice is different from other forms of pensions advice. The consequences can take many years to materialise, and records need to be available when the problems are eventually seen.
Of course, I am most familiar with the issue in relation to pensions, but it is not just about pensions: endowment mortgages are a good past example where problems that arose for which compensation had to be paid were found outside the 10-year period. For the very products most exposed to long-delayed discovery of harm, firms already have the data that they need to defend themselves—they have to have the information that is being required.
It is worth asking how this is being played out against real cases. I believe, and I would be interested in a response from the Minister on this, that if a strict 10-year limit without proper exceptions had been in place during the PPI scandal, it would have blocked the mass redress exercise altogether. The worst mis-selling happened between 1998 and 2005, but public awareness did not peak until after 2011.
This was not a case of deliberate concealment; it was total misunderstanding and wishful thinking on the part of the people being sold to, but compensation was still due. A rigid longstop could well have disqualified millions of older claims in law before most of the consumers involved would have known that they were affected. I would be grateful if the Minister could say how these new arrangements will affect such cases and, as I mentioned, endowment insurances, appropriate personal pensions and the discretionary commission scandal in car finance, which is more recent.
As it stands, Clause 6 gives the FCA a power to create exceptions to the 10-year limit, but the legislation does not say what those exceptions must be at a minimum, so there is no statutory obligation on the regulator to build in protection for the consumers most likely to need it.
My amendment goes further than that in the name of the noble Lord, Lord Sharkey, by writing two specific circumstances into primary legislation itself, rather than leaving them to be worked out later in the FCA rules. First, it is just cases where the consumer faced exceptional circumstances, such as serious ill health or other incapacity, so people will know that they have a special claim in those circumstances. Secondly, there are cases where the consumer could not reasonably have known about the financial detriment within the 10-year window. These could be exercised on a discretionary basis, but my argument essentially is that those cases should be laid down in statute. It does not preclude the possibility of other exceptions being made, but for consumers it is a question of trust, and that trust requires consumers to know that those exceptions will be available. Putting these exceptions in the Bill removes the ambiguity, gives firms the certainty that they are after and makes sure that deserving consumers are not shut out of redress by an accident of drafting rather than a deliberate policy choice.
On Clause 8 and the powers of the ombudsman, I want there to be a proper debate about what is actually being changed here, and I look forward to guidance from my noble friend the Minister. The question underneath this debate is a simple one. What is the ombudsman for, and why do we have one, instead of just relying on the courts for people to get good tests? For the FOS, the “fair and reasonable” test is not something that has been put in and invented by the FOS itself; it comes from Section 228 of the Financial Services and Markets Act 2000 and provides that:
“A complaint is to be determined by reference to what is, in the opinion of the ombudsman, fair and reasonable in all the circumstances of the case”.
What the test displaces is important. The court applies the law strictly: the relevant statute, regulations, contract terms and case law. That is what the courts do. The ombudsman is not bound to decide a case the way a court would. That is the whole point of having the ombudsman—it is not a court that is able to take a view as to what in the overall circumstances is fair and reasonable.
The Deputy Chairman of Committees (Baroness Barker) (LD)
I have to advise noble Lords that if Amendment 31 is agreed, I cannot call Amendments 32 or 33 because of pre-emption.
Lord Sharkey (LD)
My Lords, I will speak to my Amendments 33, 35, 37, 42 and 43 in this group. All these amendments, and my Clause 7 not-stand-part question, relate to the FOS and its regime. I will try very hard not to repeat too much of what the noble Lord, Lord Davies, was saying a moment ago. The proposed reforms of the FOS regime are extensive and fundamental, but there is nowhere a clear and convincing explanation of why such fundamental changes are necessary. In fact, I see no real evidence at all of the need for reform on the scale being proposed here.
What we see, looking at the far-reaching proposals in the Bill, is an assault on the four key pillars designed into the FOS by Parliament: independence, speed and simplicity, time limits on bringing complaints, and the “fair and reasonable” test for determining those complaints. Taken together, Part 2 replaces each of those pillars with subordination to the FCA, a rather undefined change to time limits, and a heavy qualification of the “fair and reasonable” test amounting to its entire abandonment. This raises the question of why such a radical reform can be seen as necessary and/or beneficial. At Second Reading, I asked the Minister what evidence there was of systemic failure in the current operation of the FOS, and for evidence, for example, that the FOS was acting as a quasi-regulator. I have had no reply.
The obvious question in all this is: who benefits? The answer is: not the ordinary consumer. My amendments are aimed at eliminating, or at least reducing, the weakening of consumer protection. To that end, my Amendments 33 and 35, to Clause 6, address the time limits for complaints to the FOS, which the noble Lord, Lord Davies, has dealt with extensively; I agree with most of what he said. What my amendments offer as an alternative to his is that they are perhaps not quite as strong—that might be their virtue. It is often very difficult to get things written into a Bill; it is sometimes easier to deal with them via secondary legislation, as I do rather obliquely.
In Part 2, the Bill proposes other very substantive changes to the way in which the FOS operates. One of these changes, in Clause 7, sets out the circumstances under which the FOS must notify the FCA of a matter relating to a complaint, under which the FOS must request an opinion from the FCA as to the interpretation of FCA rules. It then sets out in detail how consultation should take place on the matter. There really is detail: five whole pages of the Bill set out in great detail the various stages required in the referral process. It adds complexity for no obvious gain and subordinates the FOS’s judgments to the FCA’s. I have no doubt that the byzantine array of subclauses or qualifications will, overall, introduce greater complexity for no foreseeable benefits and will greatly increase the workload of the FCA. The FCA is already under pressure and is planning to absorb the PSR. The last thing we need is the creation of new systems, rules and powers that show no clear promise of benefit, or at least no benefit to the retail complainant.
On necessity, we have to take into consideration whether the current FOS methods are faulty or unproductive. I have seen no compelling evidence that this is the case, only a rather unconvincing summary of the consultation responses. The FOS received 214,000 new complaints in 2025-26. It is projecting a resolution of 207,000 complaints in the coming year, of which 206,000 concern banking and consumer credit companies. It has a target of 70% of cases being resolved within three months and 90% within six. It does not seem as though it is having difficulty operating, and I am not aware of any significant problems for the average consumer. I hear from the industry that the FOS acts inconsistently and that it has strayed into becoming a quasi-regulator, but I have seen no evidence of that, and I am unconvinced by the simple assertion. Taken as a whole, Clause 7 in effect subordinates the FOS to the FCA, removing yet another foundational pillar: independence. We should remove Clause 7.
I turn now to the proposed amendments to Clause 8. I will speak to Amendments 37, 42 and 43, which deal with how a complaint to the FOS is to be determined. This is a controversial matter; the Bill proposes very significant changes. This has already provoked calls to have the whole clause removed from the Bill, and I recognise the strength of feeling behind that.
How the FOS decides on complaints is absolutely critical to its operations and to their general acceptability. At the moment and historically, the FOS rules on complaints on the basis of what is fair and reasonable under all circumstances. The Bill changes that. It says:
“A complaint may be determined in favour of the complainant only if, in the opinion of the Financial Ombudsman … at the time the disputed act or omission occurred, either … the act or omission did not comply with an FCA rule applying to the respondent, or … there was no FCA rule applying to the respondent that related to the act or omission, and the disputed act or omission was not fair and reasonable in all the circumstances of the case”.
This adds one of two requirements not present now, in addition to the “fair and reasonable” test. In essence, it removes the FOS’s current and critical independent status and reduces the FOS’s scope to a subset of FCA rules. If you ask who benefits from all this, the answer, it seems to me, is not likely to be the consumer.
The small print of the Bill makes the situation for the complainant even less attractive. The Bill specifies a long list of other requirements to be considered in making a determination, most of them tilting the scales in favour of FCA rule-based compliance. This long list includes
“any other matters specified in regulations made by the Treasury”
and the general principle that consumers should take responsibility for their decisions. Here, we are a very long way from the “fair and reasonable under all circumstances” test.
The net effect for the Bill’s proposals will inevitably be to increase bureaucracy and to increase a remoteness from practical circumstances and a reliance on box-ticking procedures. It will convert the independent FOS into a compliant subsidiary of the FCA. We have not seen spelled out any evidenced justification for such a radical narrowing of the FCA’s reach and independence. I ask the Minister again to provide the evidence that supports these radical changes. By “evidence”, I mean hard data, not simply a headcount of consultees’ opinions, as interpreted by HMT.
As I noted at Second Reading, the UK’s financial sector thrives not merely because it is competitive but because it is trusted. For it to be trusted, consumers must have confidence that, when things go wrong, there is an independent, accessible and effective route to redress. We have one of those already: the FOS. My Amendments 37, 42 and 43 would remove the new bureaucratic and complex restrictions, qualifications and subordinations in the Bill. In their place, the amendments would restore a simple and clear operating framework. They would restore the primacy of the “fair and reasonable” test, and they would update the list of things that the ombudsman must or may take into account.
Baroness Bowles of Berkhamsted (LD)
My Lords, my Amendment 34 again concerns symmetry of enforcement and redress periods. The Bill introduces a 10-year hard stop on complaints to the Financial Ombudsman Service, but the problem is that the 10-year figure is already riddled with exemptions: for long-dated instruments, for latent harms, for products with extended maturities and for situations where the consumer could not reasonably have known they had a claim. The Government have already conceded that the 10-year period cannot sensibly apply in a wide range of cases. I have a concern that, once Parliament writes “10 years” into statute, that becomes the headline. Consumers may assume they have 10 years, even when they are in one of the many categories where the long stop does not apply. That creates a real risk that people will time themselves out because they believe the headline rather than the detail.
Then there is the deeper structural issue that I have referenced before: firms’ enforcement rights do not end at 10 years. They can enforce debts, pursue arrears, securitise portfolios and benefit from long-tail revenue streams well beyond that period. Yet the consumer’s ability to challenge an unfair relationship or to bring a complaint may fall away far earlier. That is the same kind of asymmetry that I raised before. My solution is that at least the starting point should be that the duration of rights, remedies and enforcement powers for firms must be aligned with the duration of rights and remedies for consumers arising from the same act or relationship.
I have addressed only that aspect of asymmetry in my amendment; I have not attacked the 10-year hard stop and the impact that that might have on consumer perception. My amendment would not interfere with the exemptions that the Government have already accepted. It would simply ensure that, where a firm retains enforcement rights beyond 10 years, in various circumstances, the consumer retains the corresponding right to challenge the fairness of that relationship for the same period—in other words, symmetry. I need not say any more, as we have been around this loop, but it is the same argument in a different place.
Baroness Neville-Rolfe (Con)
My Lords, I am grateful to noble Lords across the Committee. I have noted the variety of concerns expressed on this part of the Bill. As noble Lords have heard, my party has announced proposals to remove the Financial Ombudsman Service and replace it with a new financial adjudication service. That proposal is not before the Committee in this group, but we have an agreed amendment; we will have the opportunity to debate it properly at a future stage.
I start by speaking to Amendment 32 in my name and that of my noble friend Lord Altrincham. The amendment would retain the existing six-year longstop rather than extending it to 10 years, as Clause 6 would do. As I have already said, I am concerned about this move, albeit for different reasons to some other Peers who have spoken. I accept that there is a balance to be struck here: consumers must have access to proper, effective and fair redress mechanisms. Where a consumer has suffered detriment because of misconduct, poor practice or a failure by a firm, there should be a clear route through which a complaint can be considered and, where appropriate, redress can be provided. However, this does not mean that time limits are unimportant. On the contrary, time limits are an essential part of a fair system. Claims can be heard fairly only when sufficient information is available to both sides to allow them to mount a proper case. That means records, correspondence, product documents, internal decision-making, staff recollections and the wider factual context in which the relevant decision was made.
The further back in time a complaint goes, the more difficult this becomes. Evidence may be incomplete and documents may no longer exist. The people involved may have left the organisation, systems may have changed, products may no longer be offered and the regulatory context may have moved on. A complaint may still be sincerely brought, but the ability of the firm to respond fairly and fully may be materially impaired. That is why limitation periods exist: they reflect the basic principle of justice that, after a certain period, it becomes harder to determine matters fairly and reliably. That principle applies in the courts, and I believe that it should continue to be properly reflected in the ombudsman’s framework. I am concerned that extending the longstop from six years to 10 years risks pushing the system beyond that fair balance.
I have noted the comments made by the noble Lord, Lord Davies of Brixton, in particular his references to pensions and endowment mortgages. I will be interested in the Minister’s response on how those products are dealt with and whether the exemptions are intended to cover that area.
On this occasion, I do not agree with the noble Lord, Lord Sharkey—although we often agree on other matters—because there is a genuine concern in the industry about vexatious or speculative claims. We should not be naive about this. There is a whole claims management industry dedicated to identifying and pursuing potential claims. Some of those claims may be legitimate, and consumers should not be denied redress where redress is due, but others may be weak, opportunistic or based on limited evidence. If the period is extended significantly, the volume of such claims may increase, so firms will have to devote more resource to investigating and defending matters from many years ago.
All this has a cost and makes all concerned more risk-averse, so it becomes more difficult for providers to accept customers at the margin. This matters for not only firms but the wider economy. We cannot stimulate growth, support lending, encourage investment and improve productivity if banks and financial services firms are pouring ever more resources into fighting historic claims, rather than serving customers, lending to businesses, supporting economic activity and innovating. There is a real opportunity cost here.
My noble friend Lord Roborough is unable to be here today, but I understand that his Amendments 38 to 41 are intended to probe whether the reforms in the Bill provide sufficient certainty for regulated firms that, where they have complied with the relevant rules and requirements, the Financial Ombudsman Service will not be able to go substantially beyond that framework in finding fault or imposing redress. This is not to question the proper role of the ombudsman in cases such as car finance commissions, where the courts have confirmed the relevance of undisclosed conflicts of interest; rather, it is to test whether the current “fair and reasonable” jurisdiction risks giving the FOS a quasi-regulatory role, including through inconsistent interpretation, the retrospective application of standards or decisions that go beyond the rules in force at the time. This is the core issue that has been raised time and again: the FOS needs to be reined in, but does the Bill do it?
At the same time, I recognise the number of views on this question. It is for the Minister to show that the proposed changes do not weaken the ability of consumers, including vulnerable consumers—particularly those in serious circumstances, such as terminal illness—to obtain fair redress. I have been told, for example, that there is a variance between companies over acceptance rates in such cases. The Minister might want to look into that.
Serious concerns have been raised. I look forward to hearing the Minister’s response to this group. My own concern remains that, as drafted, the Bill shifts the balance too far. It extends exposure to firms in a way that may appear consumer-friendly at first sight but risks generating delay, uncertainty and large volumes of contested claims. The six-year longstop strikes the right balance, so why 10 years? What evidence has led the Government to conclude that six years is insufficient? Can the Minister break that down by product or financial services type? What assessment has been made of the impact on firms, on complaint volumes, on the claims management sector and on the resources of the ombudsman itself? How will the Government ensure that extending the longstop does not simply create a larger backlog of older and more difficult cases?
I would be grateful if the Minister could also address the practical point about record-keeping. Do the Government now expect banks and other firms to retain detailed customer records for 10 years in anticipation of potential FOS complaints? If so, what assessment has been made of the cost and operational burden of doing so? I speak as a former company secretary in a large company; I know about the problems in keeping data. Indeed, what about doing it retrospectively?
I hope that the Minister will reflect carefully on the points I have made on the possibility of retaining the six-year longstop. I very much look forward to his response.
Lord Stockwood (Lab)
My Lords, as we have heard today, the Financial Ombudsman Service—the FOS—plays a vital role in providing quick, informal and impartial dispute resolution between customers and their financial services providers. It offers an accessible route for dealing with complaints that is designed to act as an alternative to resolving cases through the courts, which can be costly, lengthy and a process that often does not work for firms and consumers. The Government are clear that an effective ombudsman provides consumers with confidence in our financial services sector and is a key element of an effective system.
The Government’s review of the FOS found that, although the FOS fulfils its role in the majority of cases, in a small but impactful minority of cases, it has acted as a quasi-regulator. That conclusion was supported by the Financial Services Regulation Committee, chaired by the noble Baroness, Lady Noakes, in its report, Growing Pains: Clarity and Culture Change Required, which was published in June 2025. It recognised that the FOS’s
“actions have regulatory impacts by creating precedents that the FCA requires firms to follow”,
and that this
“generates an unacceptable level of uncertainty for firms, stakeholders, and investors”.
I want to be clear that the review was not suggesting that the FOS was acting improperly; rather, it concluded that the way in which the legislative framework operates made such issues unavoidable by creating a disconnect between the FCA’s rules and the FOS’s decisions, giving rise to unpredictability and a lack of certainty across the regulatory environment. That unpredictability is damaging for everyone and harms consumers’ confidence in the financial services products and services they rely on, as well as firms’ confidence to invest and innovate in the UK.
There is a large number of amendments before us. I will start with Amendment 31. This proposal would substantially extend the timeframe for bringing complaints to the FOS and would require the FOS to spend even more of its time and resources investigating, considering and attempting to resolve historic cases than it does today. We know from current experience that this would substantially increase costs while delivering comparatively limited increases in redress awarded. Further extending the timeframe beyond 10 years in an open-ended way to accommodate a complainant’s reasonable awareness of an issue would increase uncertainty for firms around historic liabilities, reducing appetite to invest in the UK’s financial services businesses.
The Treasury’s analysis of data from the FOS on historic cases is clear: they are more likely to be withdrawn or abandoned and have lower success rates than the average, often due to limited evidence and information being available. The Government’s analysis concluded that complaints to the FOS that are over 10 years old cost firms, on average, more than £18 million per year in case fees but deliver only £600,000 per year in redress for consumers. This is not a proportionate or balanced approach, nor is it consistent with the FOS’s quick and simple purpose. Extending the timeframes would slow down the FOS’s resolution of cases that are more recent and have a higher chance of being upheld, delaying consumers access to the redress they are owed.
Turning to Amendment 32, the Government considered carefully the options for different time limits to be set in legislation, including a six-year limit, and published their analysis in the impact assessment. Although this is a matter of judgment, the Government concluded that a 10-year time limit would strike the appropriate balance between consumer protection and providing certainty to firms, with a six-year limit resulting in too many people losing access to redress. However, I assure the noble Baroness and the noble Lord that the new limit introduced by the Bill is designed to act as a backstop to the existing limits set in rules made by the FCA. In most cases, the time limit will remain at the existing six years, with the 10-year backstop kicking in for cases where the customer could only reasonably have become aware of the problem at a later date.
On Amendments 33 and 35, the Government agree that, where the cause for complaint may take longer to come to light, such as with pensions, it is important that complaints can continue to be brought to the FOS. This is why the Bill gives the FCA discretion to make exceptions to the time limit in specified circumstances, where it is appropriate to do so. The Government carefully considered their approach to defining these exceptions and determined that the FCA is best equipped to develop proportionate and fair exceptions and to define these in its rules, given the FCA’s supervisory role and oversight of the sector and the level of technical detail that is required for the definitions.
The noble Lord is right to recognise the careful balance needed between ensuring that we do not undermine the certainty that this reform is intended to deliver while maintaining consumers’ trust and confidence that they will have access to redress when things go wrong. The Government are working closely with the FCA as it develops these exceptions and the FCA will set out its proposals in due course.
Amendment 34 relates to cases where there is an ongoing relationship between the consumer and a firm. Some complaints may be about acts or omissions that continue to occur or have effect in the context of an ongoing relationship between a consumer and a firm. The Financial Services and Markets Act 2000 does not place a restrictive definition on “acts” or “omissions”, so there is no reason why such an ongoing act or omission could not be the basis for a complaint within the time limit. The Government’s reforms in the Bill will not change the FOS’s discretion to identify the act or omission to which a complaint relates for the purposes of applying relevant time limits. It will continue to be for the FOS to make those judgments, based on the circumstances of the case and in line with the rules set by the FCA.
I will now explain the Government’s purpose behind Clause 8 and why it should stand part of the Bill. The noble Lords, Lord Davies of Brixton and Lord Sharkey, asked about the evidence base behind the Government’s policy. The Government’s review found that, in a small but significant minority of cases, the FOS has acted as a quasi-regulator. This means that, in some cases, the FOS has held firms to a standard that is different from those set by the FCA. The majority of responses to the Government’s consultation on the proposals to reform the legislative framework in which the FOS operates were broadly supportive of aligning the FOS’s fair and reasonable test with the FCA rules.
Baroness Kramer (LD)
Can the Minister clarify something? Is he saying that, provided you comply with an FCA rule, you are then always fair and reasonable? That is what I am taking away from this. I can list so many examples, such as Libor and mini-bonds—all kinds of things—where the perpetrators ticked every single compliance box. I am curious to know.
Lord Stockwood (Lab)
I apologise for taking a moment to ask my officials a question; I want to make sure that I give the right answer. Where the FOS has complied with the FCA rules, it still has the discretion to make judgments, as long as it believes them to be fair and reasonable.
Lord Stockwood (Lab)
Certainly. We are trying to align the FOS’s “fair and reasonable” test with the FCA rules, but it retains some discretion.
I apologise for taking another moment to consult my officials. For clarity, where the FOS has aligned with the FCA rules, it has to believe that that is the case, and that determination has to be upheld.
Baroness Kramer (LD)
For absolute clarification, “fair and reasonable” must be interpreted by the FOS as a standard that is met if there is compliance with FCA rules. I just want to understand because we can then go back historically and see where FCA rules might not have been perceived as fair and reasonable. It is interesting.
Lord Davies of Brixton (Lab)
To pursue that, are we being misled by the use of the word “rules” here? There is guidance as well as rules. The principles are not rules, but the principles have to be followed, and they include things such as treating the customer properly. Is that right? There are some general principles within what the FCA lays down—
Baroness Kramer (LD)
I am not sure that is what the legislation says; I think it says “rules”.
Lord Sharkey (LD)
Looking at the legislation itself, it seems clear that if the act or omission is in breach of the FCA’s rules or the consumer duty that absolutely qualifies it as being okay. There is no subordinate reference to “fair and reasonable”.
Lord Stockwood (Lab)
I will take the opportunity to write because this definitely needs clarification. The note that I have says that in cases where the omission being complained about is governed by FCA rules, if the firm has met its obligations under those rules, the FOS will be required to find that it acted fairly and reasonably. All the FCA’s handbook is relevant here, including the principles for businesses and, therefore, the consumer duty. There will be coherence between those determinations but only when the FOS believes that the fair test has not been met can it challenge the FCA. I will write to noble Lords because this is an important point that needs a definitive answer. I apologise for that.
On Amendments 37, 42 and 43, as I have set out, the reforms to the FOS’s fair and reasonable test are designed to preserve the FOS’s existing discretion in areas not covered by FCA rules. The Bill specifies the matters that the FOS must take into account when making determinations, taking this out of FCA rules and making it subject to parliamentary oversight. The matters listed include the law, relevant guidance, codes of practice and further materials published by the FCA or other regulators. This provides greater clarity around how the FOS makes its decisions. As I explained earlier, the Government’s view is that where there are relevant FCA rules, there are benefits from ensuring that FOS decisions are consistent with them. I will write to clarify further in case I have created confusion in this conversation.
On Amendments 38 and 41, the Government recognise the important role the FOS plays within the wider financial services regulatory environment. The reforms included in the Bill are about making sure that the FOS and the FCA are able to carry out their respective roles effectively, co-operating where necessary but maintaining their separate responsibilities. These amendments would go further and require the FCA to become involved in the determination of individual complaints. This is a role that the FCA is not designed or equipped to undertake. It is, and should continue to be, the role of the FOS as the independent, impartial dispute resolution service.
Turning to Amendments 39 and 40, the Government’s review of the FOS concluded that the “fair and reasonable” test works well in the majority of cases to enable a quick and fair resolution of complaints. Removing the “fair and reasonable test”, as proposed by these amendments would undermine the FOS’s quick and informal role and put in its place a more legalistic approach based on strict adherence to the FCA’s rules. This could introduce additional costs and delays, and reduce the FOS’s effectiveness as an accessible and simple alternative to the courts.
I turn to Clause 7 and the new referral mechanism, which will require the FOS to seek a view from the FCA where it considers that a matter relating to a complaint may indicate ambiguity in the FCA’s rules or have wider implications for consumers and firms. As well as enabling the FOS to make decisions that are consistent with FCA rules, the referral process will ensure that systemic questions and issues are identified at an early stage and the FCA can consider whether a regulatory or supervisory intervention may be appropriate, rather than continuing to consider each individual complaint separately. Alongside the new reporting requirements provided for in Clause 9, this will improve understanding of the FCA’s rules and the standards expected of firms, in turn improving confidence in financial services and ultimately reducing the number of consumers who experience poor treatment, which all noble Lords will agree is preferable to providing redress after the fact.
Given the important role that the FOS plays, this is a clearly a matter of huge interest, and there is a range of views on exactly what the best system would look like. Notwithstanding that, I will write on the specific things that I might have caused confusion about.
I have listened carefully to the representations. The Government’s view is that the reforms set out in the Bill strike an appropriate balance, improving the clarity and consistency of redress arrangements while allowing the FOS to continue to make fact-specific decisions on individual complaints. They ensure that both the FOS and the FCA are equipped to fulfil their respective roles and responsibilities so that consumers can have confidence in the key financial services on which they rely, and so that firms understand what is expected of them and can act on it. I therefore ask the noble Lord to withdraw the amendment.
Lord Davies of Brixton (Lab)
As one always says in this situation, I will read what the Minister said with care. I have to admit that I was a little disappointed on the “fair and reasonable” test, but on close analysis it may prove to be better. In particular, I hope I will have a copy of the letter. It is clear that the rules include the principles, such as:
“A firm must observe proper standards of market conduct”.
Is it the ombudsman who would decide what was the proper standard of market conduct, or is that one of the issues that will have to be referred to the FCA? I am not expecting an answer now, particularly as—
Baroness Kramer (LD)
I have a question for the noble Lord, Lord Davies. My understanding of the principles is that they sit at the top, and the rules are derived from them. But this is a focus on the rules, so it is only as derived. I do not know, and we will get an answer.
Lord Davies of Brixton (Lab)
That is what the Minister will need to make clear in the letter. I urge him to make that point clear. Who decides whether the principles have been followed—or is that one of the issues that have to be referred to the FCA under Clause 7?
On time limits, I am disappointed that the Minister did not address the specific cases that I addressed. Some figures were provided—I will start a war on people providing figures in this sort of debate, because they whistle past your ear and it is very difficult to make a quick assessment. The problem is the counterfactual: if the existing system did not exist, would those same figures apply? The Minister has effectively said that, under this change of rules, some people who previously would have received compensation will not do so. That is absolutely clear from the Minister’s statement, and that is reasonable because the providers will save an even larger sum of money. But of course that is under the existing system. We have to think about what those figures would be under the new system.
Again, I hope the Minister will write to me about the specific examples, which could be large sums of compensation—in the case of inappropriate personal pensions, £13 billion was paid in compensation. Would that have been possible under the revised rules? I say that because £13 billion is quite a figure to miss out on for ordinary policyholders. I beg leave to withdraw the amendment.
Lord Wilson of Sedgefield (Lab)
We are about to move on to the last group of amendments and we have 35 minutes to go. I hope we can finish this group before we finish at 8.45 pm. If we do not, unfortunately we will have to break mid-group and reconvene on the same group on Wednesday, so it is in noble Lords’ hands what we do.
Amendment 46
Baroness Kramer
“Reimbursement of fraud: liability of technology companies(1) The FCA must make rules providing that, where a person is to be reimbursed in respect of losses arising from an authorised push payment fraud, the cost of that reimbursement is to be borne, in whole or in part, by any relevant technology company on whose service the fraud was initiated, facilitated or communicated.(2) Rules under subsection (1) must provide for—(a) the apportionment of the cost of reimbursement between relevant technology companies and payment service providers, by reference to the extent to which each contributed to the fraud occurring,(b) a process by which a payment service provider that has reimbursed a victim may recover the apportioned cost from a relevant technology company, and(c) the information that a relevant technology company must provide to the FCA and to payment service providers for the purposes of the rules.(3) In making rules under this section, the FCA must have regard to the principle that the cost of reimbursing victims of fraud should fall, so far as is reasonable, on the persons best able to prevent the fraud.(4) In this section—“authorised push payment fraud” means a transfer of funds executed by a payment service provider on the instruction of a payer, where the payer was deceived into giving that instruction;“relevant technology company” means a person who provides—(a) a user-to-user service or a search service within the meaning of the Online Safety Act 2023,(b) an electronic communications service, or(c) any other online service by means of which an authorised push payment fraud may be initiated, facilitated or communicated.”Member’s explanatory statement
This new Clause would require the FCA to make rules placing liability for the cost of reimbursing victims of authorised push payment fraud, in whole or in part, on the technology companies on whose platforms the fraud originates, rather than solely on payment service providers, and to apportion that cost according to who is best able to prevent the fraud.
Baroness Kramer (LD)
My Lords, I will take that as an encouragement to speak only to my amendment, so I shall just say that the other amendments in the group from the noble Lords, Lord Faulks and Lord Hunt, make a great deal of sense to me, but mine is slightly different. They are dealing with the issues of reporting, review duties and requirements; I am addressing the same underlying issue of authorised push-payment fraud, coming from the perspective of who needs to act to prevent that and be on the hook when there is abuse.
The tech firms—and it is primarily the US tech giants—are now major players in the payments system. They are not merely an inanimate part of the plumbing; the way that they set up and police their systems, or fail to, makes them significantly responsible when their platforms are used to initiate, facilitate or communicate fraud. With AI, the risks become yet greater for ordinary people unless proper guardrails are put in place, so we have to look ahead, not just put in place protections for current circumstances and the past.
The financial incentive for tech firms to ignore fraud is huge. Some analysts have estimated that in 2025, in the UK alone, scam ads generated income of £3.8 billion for the tech companies. My amendment dealing with authorised push-payment fraud deals with a sector of that, but a huge one: authorised push-payment fraud in the UK exceeds £576 million a year. Under present legislation, victims are reimbursed most of that money by the banks, but the techs who have provided the mechanisms are off the hook. I think that is preposterous, because the techs are typically best placed to prevent the fraud.
Amendment 46 would require the FCA to apportion reimbursement by reference to which part each player contributed to the fraud occurring. I strongly suggest that, if passed, this amendment would lead to the tech companies suddenly finding that it is in their interest to prevent APP fraud. As I said, I have great respect for the other amendments in this group, but the payment system is a complex one. There are now many new participants and everybody, not just the banks, should be playing their appropriate role in providing both protection and reimbursement. I beg to move.
Lord Vaux of Harrowden (CB)
My Lords, I have a number of amendments in this group on the subject of fraud and scams. I have also added my support to the lead amendment, which was tabled by the noble Baroness, Lady Kramer, and to which she has just spoken. Most of my amendments arise, at least in part, from the abolition of the PSR and the absorption of its activities into the FCA; I will quickly run through each of them.
The noble Baroness, Lady Kramer, has already explained the need for her Amendment 46, which would require the FCA to make rules to ensure that the tech or communications company on whose platform or service the fraud arises is responsible for a proportion of the cost of reimbursing the victims. Whether or not the mechanism in her amendment is the right one, the principle here is obvious. At the moment, it is the banks that must compulsorily fully refund victims of fraud. There is some sense in the banks having to reimburse victims, because almost every fraud goes through some sort of bank account to allow the fraudsters to cash out. It is clear that the mandatory reimbursement requirement has incentivised banks to do more to protect customers. However, we also know that fraud does not originate from banks’ services. According to UK Finance’s latest report, some 66% of scams arise on online services and a further 17% originate via telecoms. Let us be clear: the highest proportion of that arises on Meta platforms.
Despite voluntary charters, this is not improving at all. Your Lordships’ Fraud Act 2006 and Digital Fraud Committee, of which I was a member, recognised this in its report nearly four years ago; if the Minister has not read it, I recommend it as some bedtime reading. It said:
“Until all fraud-enabling industries fear significant financial, legal and reputational risk for their failure to prevent fraud, they will not act”.
We were right. Nothing has changed since then to change that conclusion. If anything, matters continue to worsen as technology such as AI starts being used by criminals. It is time that the platforms were at last forced to step up and take financial responsibility for the losses that arise from their platforms, not just leaving it to the banks to pick up the full liability. I say this to the Minister: in your answer, please do not tell us that the Online Safety Act will solve this. It is too limited; it covers only directly paid-for advertising and is unlikely to make much difference.
The Government’s fraud strategy recognises all this. It says that,
“if industry partnership and market incentives alone remain insufficient to drive improvements, the Government will take legislative action within this Parliament”.
This has been going on for years. The voluntary online fraud charter was signed three years ago. Nothing material has improved. Fraud is still around 45% of all crime, and the percentage arising on tech platforms has not fallen; if anything, it has risen. The Bill is the perfect opportunity finally to take action on this and not leave it until thousands more people have fallen victim. We know that tech companies will not take action unless they have to—they continue to prove that—which is why the Government are at last taking action in respect of child protection. This is no different. It is now time to act without further delay.
My Amendment 47 would introduce a requirement for the mandatory reimbursement rules for APP fraud, which came into force in October 2024, to be reviewed after three years of operation. It is unlikely that we got everything right at the first attempt, so a review of how effective they have been in meeting their objectives of protecting consumers and incentivising the banks to improve protections—as well as, importantly, whether there have been any unintended consequences—must make sense.
I have tried to set out in the amendment—I will not go through all the detail—the key matters that were discussed when the requirement was introduced in 2022-23 as the matters that ought to be reviewed. I would have also included the tech platforms, but I did not want to duplicate the amendment that we have just discussed.
I completely agree with the noble Lord, Lord Holmes, who sadly is not with us at the moment, on his Amendment 58, which would add specific fraud prevention duties on payment service providers. I also have a lot of sympathy with the principle behind his Amendment 125, which would introduce a financial fraud prevention secondary objective to the FCA, although I caveat that by saying that I am not sure that adding yet more objectives to the regulators is necessarily the right way to go.
My Amendment 59 is designed to ensure that the FCA continues to collate and to publish the fraud data that the PSR has been collating and publishing for the past few years. This has been extremely valuable. It has identified several PSPs that were clearly not taking their fraud prevention duties seriously and led to action being taken against them. The pressure of shining a light on some of the bigger players has clearly incentivised them to step up and improve their systems. The information identifies very clearly which PSPs are protecting their customers best and which are doing it worst, which is important information for consumers when choosing a bank or payment provider.
To give just one example to show the value of this reporting, the last report by the PSR identified that, for every 1 million transactions received by Guavapay, 109,744 were APP scam payments—that is more than 10%. As a result of that information, the company has been forced to close by the FCA. In the meantime, consumers would have been able to see that this was an unsafe operator if the report had been issued in a timely manner—an issue that I will come to in a second.
This reporting was started as a result of efforts by Members of the House during the passage of FSMA 2023, and it followed undertakings by the then Minister. But there are already signs that, since moving the PSR’s activities into the FCA, this has started to slip. As I said, the last report of this nature was for the period up to 7 October 2024, when the mandatory reimbursement requirement was introduced. That was not published until February 2026, some 16 months later. My amendment would add a time limit of three months for the publication of these reports. No further report has been published since, so I hope that the Minister will recognise the value of this reporting, and that he will confirm that it should continue and that this amendment—which does not create any new burdens at all but just continues the status quo—should be accepted.
Amendment 64 would reverse the deletion of Clause 72 from FSMA 2023—it was the clause that introduced the requirement to introduce a mandatory reimbursement requirement. In the Explanatory Memorandum, the Government explain that this is being removed because it has already happened. But Clause 72 does not only introduce the requirement; subsection (9) also includes the ability
“to vary or revoke a relevant requirement”
or
“to impose further relevant requirements”.
So I am not sure that deleting it in full works—that is something to look at. Most importantly, can the Minister confirm that the mandatory reimbursement requirement is intended to continue, even if reviewed and amended in the future—particularly in relation to tech companies, which we have talked about—and that this Bill is not intended to change anything in that respect?
Baroness Neville-Rolfe (Con)
My Lords, for reasons that will become apparent, I start by referring to my register of interests, including my shareholding in Meta.
I am grateful to the noble Baroness, Lady Kramer, the noble Lord, Lord Vaux, and my noble friend noble Lord Holmes, who is absent, for bringing forward this important group of amendments. I am sorry that this debate is so late and that the Grand Committee is so thin under the new five-hour arrangements—of which I am not a fan—because, collectively, these amendments raise an important and timely point. As online retail platforms and digital marketplaces become more popular and AI makes fraud easier, there has been a concurrent increase in the risk that people face from online fraud, as we have heard from the noble Lord, Lord Vaux.
We have seen concerning figures suggesting that Facebook Marketplace is now the single most scammed UK consumer platform. Very large sums are stolen through it every day in the UK, and a very high proportion of UK purchase fraud begins there. We have also seen banks such as Santander taking active steps to block suspected Marketplace transfers to protect customers. Those examples raise very important questions: how easy is it for consumers to obtain redress when they are defrauded in this way? Who holds ultimate responsibility when a fraud is facilitated through an online platform, and how can the regulatory framework ensure that the firms best placed to prevent the fraud have a real incentive to do so? It is also important to consider how changes can be made without introducing new rafts of regulation that put up costs and prices.
Banks and payment service providers have significant responsibilities, and rightly so. They process the payment, have duties to their customers, and have tools available to detect and prevent suspicious transactions. Yet they are often not the place where the fraud originated, and may see only the final payment instruction, by which point much of the harm has already been set in motion. By contrast, technology companies and online marketplaces may be much closer to the source of the problem. They host the listings, provide the communications infrastructure, enable the interaction between buyer and seller, and in many cases have access to data which could help identify suspicious behaviour before money ever leaves a consumer’s account.
Amendment 46 is based on the principle that fraud should be paid for by those best placed to prevent it, not simply those who happen to process the payment at the end of the chain. If platforms know that they may share liability where fraud is facilitated through their systems, they will have a much stronger incentive to identify fraudulent listings, remove scam accounts, improve verification, share data and co-operate with banks and regulators, and indeed help consumers to avoid fraud, as we can do a lot ourselves as consumers. This is not about saying that technology firms should always be liable in every case, nor is it about absolving banks of responsibility. Yet it recognises that the current model may place too much of the burden on one part of the system, while allowing other actors, including very large and profitable tech companies, to avoid the financial consequences of fraud which often begins on their platforms.
The goal should be to stop fraud before it happens, which means better consumer warnings, transaction monitoring, real-time data sharing, and use of technology by all relevant firms. It also means transparency. If particular platforms, channels or types of transaction are consistently associated with fraud, that information should be visible. Sunlight is an important tool of accountability, which is why Amendment 59 is valuable in principle. As the experienced noble Lord, Lord Vaux, has explained, regular publication of data on APP fraud performance, including where fraud originates, would help Parliament, regulators, firms and consumers to understand the real shape of the problem. It would put pressure on firms whose systems are repeatedly linked to fraud to improve their performance.
Before we take a definitive view on these amendments, I would be grateful if the Minister could address several questions. First, what is the Government’s view on the principle of shared liability for APP fraud across the wider ecosystem, including technology companies and online marketplaces? Secondly, is there a place for greater transparency on APP fraud performance? Thirdly, what discussions have the Government had with tech platforms about fraud originating on their services, and what more does the Minister believe those firms should be required to do? Fourthly, does the Minister accept that online platforms should have stronger incentives to prevent fraud where they host the marketplace, the listing or the communication through which the scam takes place? Finally, how do the Government envisage tackling this problem? Do they have plans to introduce legislation on this issue, or do they believe that changes within the existing framework will be sufficient?
APP fraud causes real harm to individuals, families and businesses. It can undermine confidence in digital payments and online commerce, which is increasingly the direction of travel. It also imposes costs on the wider financial system. I recognise that this may go even wider than our Bill, but this is an important group and I look forward to the Minister’s responses, and to seeing how we can improve this important area.
Lord Stockwood (Lab)
My Lords, I am grateful to the noble Baroness, Lady Kramer, and to noble Lords for tabling these amendments and to all noble Lords who have contributed to this important debate. The scale of fraud and the devastating impact of that crime on victims remains a concern for this Government. The Government take the issue of fraud very seriously and are dedicated to protecting the public and businesses from this appalling crime.
Baroness Kramer (LD)
My Lords, the noble Lord, Lord Vaux, and the noble Baroness, Lady Neville-Rolfe, both gave far better speeches then I could, and covered the whole area substantially. I am grateful to them, but this gives me a few moments to reply.
Did the Minister say that the financial responsibility that will fall on tech platforms is the cost of prevention, detection and removal, and does he consider that all they need to do? He did not answer the question on shared liability or full reimbursement, and I find that reasonably preposterous, to tell you the truth. If these firms were effectively putting in place prevention, detection and removal, we would not have very much APP fraud, and therefore they would not be making very much reimbursement. We are not asking them to double up what they pay but to pay effectively.
There is a lot more that the Government need to take note of on this. They must also remember that the victims are among the most vulnerable people in our society, as well as others who think of themselves as capable and then find they have fallen for a scam.
I suggest that something far more vigorous is required, and it must be effective in making the tech companies respond, because, as the noble Lord, Lord Vaux, said, the history is that tech companies simply absorb the various requirements on them and make little move to act, because of the income that comes when they simply look the other way.
House of Lords
Oaths and Affirmations
HS2 Ltd: Consultants
(1 month, 3 weeks ago)
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Lord Berkeley
To ask His Majesty’s Government how much HS2 Limited paid consultants in the last year; and on which aspects of the project they worked.
The Minister of State, Department for Transport (Lord Hendy of Richmond Hill) (Lab)
My Lords, HS2 Ltd spent £77.8 million on consultancy in 2025-2026. This targeted advice was used to support the fundamental reset and its scope and cost. This is a significant undertaking in terms of complexity, pace and scale, and could not all be done in-house. Under new leadership, HS2 Ltd is being transformed into a simplified, more cost-effective company, with more than 300 back-office roles already removed and an absolute focus on delivery.
Lord Berkeley (Lab)
My Lords, first, I express my condolences to the family of the train driver who died in the accident last Friday, and, of course, to the relatives of those who were injured. I am not going to say any more, because that is for another day.
I am grateful to my noble friend for his Answer, but my figure for how much the Government have spent on consultants is £22 million, with a further £18 million to £19 million over the next 12 months. I have to ask my noble friend, what are they doing for their money? They are on a cost-plus contract, and the design has long since been since been finalised. What are they getting for their money apart from wasting taxpayers’ money?
Lord Hendy of Richmond Hill (Lab)
I should say from this Dispatch Box that the Government, too, are immensely saddened by the events in Bedford last Friday. Our sympathies are wholly with the relatives of the deceased driver and all those affected by the accident. The Secretary of State for Transport will be making a Statement later in the other place.
In respect of the spend on consultants, the spend in the 2025-26 financial year is for a fundamentally different purpose than any money previously spent on consultancy for HS2. The company was not in control of the contracts it had let or of what work had been done. The effort to find out what work had been done for the money that has been spent—roughly two-thirds of the original budget has been spent and only one-third of the work has been done—is testimony to the way in which the project was managed. Getting control of it means finding out what was done, and that is what this money has been spent on.
Lord Redwood (Con)
When will we have a realistic timetable and budget to complete the works on this much-delayed railway line?
Lord Hendy of Richmond Hill (Lab)
The recent Statement by the Secretary of State for Transport in the other place said that the project—with Mark Wild as the new chief executive and Mike Brown as the new chair of the new board—is now expected to cost between £87.7 billion and £102.7 billion. The first trains are now expected to run between Old Oak Common and Birmingham Curzon Street sometime between May 2036 and October 2039, and the full scheme, including Euston Station and the connection to the west coast main line at Handsacre Junction, is expected to open between May 2040 and December 2043.
Lord Shamash (Lab)
My Lords, may I invite my noble friend the Minister and everyone else in the House to join me in 2037—I repeat: 2037—at the opening of HS2 to save 30 minutes getting to Birmingham? At the moment, that has cost us, as we have heard from the Minister, £102 billion. To cancel it would be £58 billion. To save further money, they are reducing the top speed by 25 miles per hour. Frankly, you could not make this up. It seems that the potential saving of some £50 billion could be better spent, not least on a few submarines. I invite my noble friend the Minister to think very seriously about cancelling this white elephant.
Lord Hendy of Richmond Hill (Lab)
Right. My noble friend has come into this long-running play hopefully after the intermission but certainly after the first act. The point of HS2—you could say it is badly named—is to produce a serial improvement in train capacity between London, the West Midlands, the north of England and Scotland. That is the purpose of the scheme, and the result will be far more capacity, both on the new line and released on the old line in places such as Milton Keynes, to allow the economy of Britain outside London to reach its full potential in Birmingham, the north of England and stretching as far as Scotland. It is not just a high-speed line. You cannot judge the value of the expenditure merely on the elapsed journey time, though it is handy that the line is faster. Having started it, in whatever position it is in—we inherited it in a very bad position—the best thing to do is to finish it.
Lord Wallace of Saltaire (LD)
My Lords, as someone who has spent most of my life living in the north of England, I strongly agree with the Minister that we need very considerably to improve the capacity of railway lines to the whole of the north of England, north-west Yorkshire and the north-east. That clearly justifies completing the line, to Yorkshire as well as Manchester. The Minister has explained that the circumstance in which these consultants were brought in was entirely exceptional. May I tempt him, however, to talk about the Government’s use of consultants, which has expanded over the last 15 years? Does there not come a point, in dealing with outsourcing contractors and public procurement, when the Government should be insourcing some its capacity to examine what outside contractors provide, and not so often outsource it to consultants, who charge a good deal more than civil servants do?
Lord Hendy of Richmond Hill (Lab)
I certainly thank the noble Lord for his clarity about the purpose of HS2. I am not the best person to stand here and talk about consultancy expenditure in government in general, but I sympathise with him about getting long-term work done, because the cheapest way of getting it done is to get people to do it on an employment basis. However, if we look at what has had to be done by Mark Wild, under the supervision of Mike Brown and the new board, we see that a company that does not know how it spent its own money and what work was done for it, in circumstances where there are currently cost-plus contracts, is in need of serious help. That serious help, frankly, can be established in the short term only with the use of consultants.
Lord Moylan (Con)
My Lords, on behalf of these Benches, I also express my condolences to the family of the driver who lost his life in the tragedy on Friday—happily, a very rare event on Britain’s railways. On HS2, one of its principal contractors has warned that the Government’s steel tariffs are “ill-timed and unhelpful” and will “exacerbate” existing challenges facing HS2. Why have the Government chosen to make HS2 even more expensive by putting these tariffs on imported steel?
Lord Hendy of Richmond Hill (Lab)
Fortunately, nearly all the steel for HS2 has already been purchased so, although it suffers from many things, it will not suffer from changes in steel prices going forward. If the noble Lord looks at either social media or at pictures, or even goes to see the route, he will see that a vast amount of steel has already been erected on the route to Birmingham.
Lord Hope of Craighead (CB)
My Lords, given the purpose of HS2, why was phase 2a, running to Crewe, cancelled? It was a very short section—some 30 miles or so—and would have provided a very valuable link to the west coast main line.
Lord Hendy of Richmond Hill (Lab)
The noble and learned Lord needs to look at the Benches across from me, because phase 2a of HS2, which would have run from Handsacre to Crewe and then on to Manchester, was cancelled peremptorily by one of the previous Conservative Prime Ministers at virtually no notice and without some of the consequences being either foreseen or requested afterwards. This Government are keeping the land that has already been purchased, and we are thinking carefully about what needs to be done north of Birmingham to Crewe and to Manchester.
Lord McLoughlin (Con)
My Lords, first and foremost, as some who uses the railway line from St Pancras to Derby, I say to the Minister that everyone shares the thoughts of the Government, and I am sure the Minister will come to the House as soon as he has any interim information on what the Rail Accident Investigation Branch reveals.
As far as HS2 is concerned, the Minister is absolutely right to say that it is more about capacity than speed, as has always been the case. However, there is no doubt that there is a huge number of lessons to be learned about how these contracts are dealt with, from some of the things that have gone terribly wrong. Bearing in mind reports in the Times last week about how much more infrastructure costs in this country than in the rest of Europe, will the Government look at those reports in detail and see what lessons can be learned?
Lord Hendy of Richmond Hill (Lab)
I have the greatest respect for the noble Lord and his knowledge, and I know that he travels regularly on the Midland Main Line. I am sure that I will be standing here as soon as there are some concrete facts on the accident.
The noble Lord is right: the reports suggest that we certainly do not build major projects very cheaply. I say to him—I hope he is familiar with this anyway—that we can do large projects. The Transpennine Route Upgrade—which nobody talks about, which will cost at least £13 billion to £14 billion and is in hand now on a railway that is operating every day—is on time and on budget. It is worth reflecting that the claims that this country can no longer do these things are not correct. We can do them, but they need to be thought about and planned properly—you do not start the job until you know what you are buying—and then managed cleverly by people who know what they are doing, in partnership with contractors. The result will be that we will show that we can do a big project on the railway in the north of England.
NHS: Dementia Treatment Trials
(1 month, 3 weeks ago)
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Baroness Murphy
To ask His Majesty’s Government what steps they are taking to assess and prioritise investment in trials of new dementia treatments in the NHS.
The Parliamentary Under-Secretary of State, Department of Health and Social Care (Baroness Merron) (Lab)
My Lords, across the last five financial years, the Government have spent more than £555 million on dementia research, including into dementia diagnostics and trials of potential treatments. We are working for Britain to be at the forefront of transforming treatments and a world leader in dementia trials expertise. We are prioritising that through investment in the UK Dementia Trials Network and the Dementia Trials Accelerator.
Baroness Murphy (CB)
I am very grateful to the Minister for that update. Dementia is now the most prevalent mental disorder in the country and the leading cause of death in women. I think she will agree with me that, at the moment, only 30% of dementia cases ever get diagnosed. If we are to benefit from some of the new developments in treatments, which I recognise are not yet as efficacious as we would like, there has to be some more investment in ensuring that people get an early diagnosis, so that patients can not only be linked into trials as they come up but get the help and social support that they—and their families, of course—will need. Does the Minister have any plans to increase the dementia diagnosis rate?
Baroness Merron (Lab)
We do indeed, and I certainly agree with the noble Baroness. A timely diagnosis is absolutely vital to make sure that people with dementia can access everything they need, live well and remain independent for as long as possible. We are committed to recovering the dementia diagnosis rate to the national figure of 66.7%, and as of 31 March the figure stood at 66.3%. That is an increase from the time before and we will continue, through developing the modern service framework, to drive that upwards.
Baroness Pidgeon (LD)
My Lords, dementia is projected to reach 1.4 million people by 2040, yet Alzheimer’s Research UK reports that up to 45% of dementia cases could be prevented or delayed. Will the Government commit to a national dementia public awareness campaign to support risk reduction and healthier ageing?
Baroness Merron (Lab)
Encouraging people to age well and healthily is indeed part of our whole drive in terms of prevention and moving away from sickness. As part of this, it is absolutely crucial that we have the NIHR and UKRI, which are the relevant arms of our health service where we are investing in that dementia research. Causes, diagnostics and prevention in order to get treatment, care and support, as the noble Baroness says, are absolutely crucial. I would include carers in that too.
Baroness Pitkeathley (Lab)
My Lords, while accepting the importance of early diagnosis and the improvements that are being made, does my noble friend agree that families—and she has mentioned carers—are often reluctant to seek a diagnosis? They think that these are only small symptoms of confusion and do not want to go for the full diagnosis on dementia. Would the public awareness campaign, mentioned from the other Benches, also include encouragement to families and carers to seek that diagnosis?
Baroness Merron (Lab)
My noble friend is right: we want to encourage people to come forward for diagnosis and care. On the point that my noble friend and the noble Baroness, Lady Pidgeon, made about an awareness campaign, I will raise that with the Minister for Care.
Lord Harper (Con)
My Lords, NHS England has said that implementing some of the new, promising drugs that exist, when they get clearance from NICE, is going to be one of the biggest challenges the NHS has faced in its 75 years. Is the Minister confident that the steps that she has set out for improving diagnosis are up to that challenge, so that we can reduce the proportion of dementia patients who do not receive a diagnosis—around a third—to much smaller levels?
Baroness Merron (Lab)
Yes, indeed. I am feeling positive about the way we are moving forward, about increasing research and about developing a frailty and dementia modern service framework by the end of this year, as the noble Baroness, Lady Casey, has called for. On the question of drugs, to which the noble Lord has referred, I can confirm that NICE is currently evaluating two licensed disease-modifying treatments for Alzheimer’s disease; it will meet to consider that on 8 July.
Lord Patel (CB)
My Lords, if our intention is to increase the diagnosis rate of early dementia, normally what we would do is to find a screening test that would identify people at risk of any disease. There is one called Mini-Cog; it takes three minutes to administer and uses word registration and recall and a clock to diagnose early dementia. Why do we not use that as a screening test, easily implemented by trained people to increase the rate of diagnosis of dementia?
Baroness Merron (Lab)
That will be considered. We have the Dame Barbara Windsor dementia goals programme, which very much aims to speed up the development of new treatments for dementia and neurodegenerative conditions by accelerating innovations, including in clinical trials. I agree that we need diagnosis that is effective and thorough, and the point that the noble Lord raises will of course be considered in all that.
The Earl of Effingham (Con)
My Lords, Wes Streeting was absolutely right when he said that prevention is better than cure. The onset of dementia can be delayed by regular exercise and eating healthily, but the facts are that one in three adults is not taking the recommended NHS guidelines for exercise. Ultra-processed foods provide more than half the total energy intake in UK adults, and the National Institute on Aging has suggested that what we eat, such as fruit, vegetables and whole grains,
“affects the aging brain’s ability to think and remember”.
Fixing this will not only make the population healthier, saving the NHS tens of billions of pounds, but prevent the onset of dementia. Surely it is time to act at pace.
Baroness Merron (Lab)
I believe that we have upped the pace. It is very important, as I know the noble Earl is aware, to go with evidence-based solutions. Indeed, when I speak to the point about an evidence base, that is why we have several research initiatives, including, as I mentioned, the dementia trials network and the trials accelerator. Both of those are speeding up the set-up of early and late-phase clinical trials. We have already gone well under our ambition of 150 days to set up, at 122. We are positioning ourselves well to be a global leader in a way that I am sure the noble Earl would want us to be.
Lord Winston (Lab)
My Lords, does the Minister agree with me that, while the noble Lord, Lord Patel, is quite keen on screening tests, we can both agree that screening tests have all sorts of major disadvantages, such as false diagnosis or unclear diagnosis? If we are not careful and do not have a test that is really reliable, we could end up with much more unnecessary worry for people who, for all sorts of reasons, believe that they have dementia when actually they are simply being a bit forgetful. That is important for health.
Baroness Merron (Lab)
My noble friend makes a very fair observation that probably applies to many situations. When we talk about diagnosis, we are talking about getting the right people diagnosed, and quickly. That is why the modern service framework, as I mentioned earlier, will be developed and is being developed with partners and those with a particular interest. That will make sure that any interventions not only improve dementia care but improve diagnosis and the waiting times for diagnosis.
Lord Weir of Ballyholme (DUP)
My Lords, it is welcome that the Government seem to be setting national targets for dementia diagnosis. But targets are valuable only if they are accompanied by timeframes, not simply for diagnosis but for a treatment plan. Will the Government consider proposals such as from Alzheimer’s Research UK, which talks about an 18-week target for diagnosis and the development of a treatment plan for each patient?
Baroness Merron (Lab)
We will indeed consider that, and we are very grateful to Alzheimer’s Research UK and other organisations for working with us to get to the right place.
Master’s Level History Scholarships
(1 month, 3 weeks ago)
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Lord Barber of Chittlehampton
To ask His Majesty’s Government what assessment they have made of the decline in the number of scholarships available for the study of history at master’s level.
The Minister of State, Department for Education and Department for Work and Pensions (Baroness Smith of Malvern) (Lab)
My Lords, the study of history is of immense value, as it helps students to understand Britain’s past and that of the wider world. It also equips students to think critically, weigh evidence, sift arguments and develop perspective and judgment—all vital skills. Decisions on scholarships, bursaries or other financial awards are matters for individual providers and relevant funding bodies, but the Government provide support for postgraduate master’s study across all subjects, including history, through the postgraduate master’s loan.
Lord Barber of Chittlehampton (Lab)
I thank my noble friend the Minister for her constructive reply. I should declare an interest as the founder of the accomplishment scholarship in history at Queen’s College, Oxford. This year is the 250th anniversary of one of the huge achievements of the Enlightenment. This anniversary does not require a party in Washington or a new ballroom at the White House, and it is British. I am talking about the publication of the first volume of The History of the Decline and Fall of the Roman Empire, Edward Gibbon’s masterpiece. Since then, Britain has produced a succession of brilliant, world-leading historians: Macaulay, Carlyle, Trevelyan, AJP Taylor, CV Wedgwood, Eric Hobsbawm, Simon Schama, Bettany Hughes, Antony Beevor, Peter Frankopan and our esteemed colleague on the Benches opposite, the noble Lord, Lord Roberts, to name but a few. The educational pipeline to this greatness has come under severe pressure for funding reasons in the last few years, and it is essential that we steward history as a discipline through these challenging times. Does the Minister agree that history is a foundational subject? I think she does. Does she agree that it is the cornerstone of a civilised and democratic society, and will she ensure that government actively promotes the study of history in UK universities so that it can and will stand on the sunlit uplands—I am thinking of the Malverns on a summer’s day—as a beacon to the world for decades to come?
Baroness Smith of Malvern (Lab)
Yes, I agree with my noble friend, and I congratulate him on the personal commitment that he has made to supporting studentships in history at his former college. I feel confident that noble Lords across the House will be rushing to their copies of Gibbon to brush up on that bit of history. He is right. As I said in my opening response, history has a fundamental place at all levels of education, because it provides us with the ability to understand the history of our nation and of the world and the context in which we are operating now, and it develops critical skills, all of which are fundamentally important in our complex and contested modern world. I look forward to working alongside my noble friend to ensure that Britain’s leading position in the study and development of history scholarship is maintained.
Lord Mohammed of Tinsley (LD)
My Lords, does the Minister share my concern that the decline in scholarships will disproportionately affect people from lower-income backgrounds? If she does, what steps will His Majesty’s Government take to make sure that people get to study based on talent and not their ability to pay?
Baroness Smith of Malvern (Lab)
If the noble Lord is making the case that it is not just at undergraduate level in universities that we need to promote wider access but at postgraduate level, I strongly agree with him. We made that point in the Post-16 Education and Skills White Paper, and we have already begun work to support, for example, the promulgation of successful best practice in opening up access to postgraduate study. We want to do more on that issue.
The Earl of Clancarty (CB)
My Lords, the wider, hugely worrying trend is the loss of humanities and arts courses more generally at the higher education level, one effect of which, as has been said, has been to widen the class divide in the study of those subjects. Do the Government have a strategy to reverse those long-term trends?
Baroness Smith of Malvern (Lab)
It is important, first, to ensure the financial sustainability of our higher education sector, which this Government have taken action to do by increasing the maximum tuition fee cap. It is also important, as we set out in our White Paper, that universities are able to think carefully about what they want to specialise in and the way in which they collaborate—something that has not happened enough in our higher education sector—to maintain access to important subjects such as history and humanities. In doing that, we will make it more likely that access to these important subjects can be maintained for students at all levels.
Baroness Cash (Con)
My Lords, I join from these Benches in congratulating noble Lord, Lord Barber of Chittlehampton, on all his work to support the study of history. Higher education resources, however, are under strain, and the IFS has reported independently that some courses have persistently poor outcomes and very high student loan write-off, of up to 70%—not history, but some other creative courses. What steps will the Minister take to ensure any future cuts are made first to those courses, rather than to the core disciplines and humanities, such as history?
Baroness Smith of Malvern (Lab)
I am sure the noble Baroness will be very pleased to know that we made an announcement this morning—which, for some unknown reason, did not get quite the attention I would have hoped—precisely about her point. For a vast majority of students, going to university is worth while for their learning and lifetime earnings, but there are some courses which are not providing that opportunity. We have already enabled the Office for Students to investigate and challenge where provision is not of a high enough quality; we will link any future increase in tuition fees to quality and we will take further action to enable the Office for Students to limit the availability of courses which are not providing students with what they deserve in the future. We will have more to say about that when, perhaps, more people are listening.
Lord Watts (Lab)
My Lords, under the last Government, social mobility went backwards. Does the Minister agree that we have to reverse that policy if we are not to see the tragedy of lost talent?
Baroness Smith of Malvern (Lab)
Yes, I agree with my noble friend, and that is why, throughout our education system, we have to tackle the elements that prevent children and young people fmaximising their potential in life from the very early stages. This is why we are investing in early years; it is why we have set a target to ensure more children are ready to benefit from school when they get there; and it is why we have focused on getting children back into school. It is why we are taking action to improve access to all routes of learning for young people post-16, and why we are widening access and participation in higher education for all students who can benefit from it.
Lord Hannan of Kingsclere (Non-Afl)
My Lords, I was very encouraged by the Minister’s excellent Answer to the excellent Question from the noble Lord, Lord Barber. We do indeed need to remember where we are from, and history is a manual of what works and what does not. Can the Minister think of a single example—anywhere in human history—of where a wealth tax has raised more revenue than it has driven away, or where rent controls have ever failed to reduce the amount of rental properties, or where tariffs have ever made an economy more competitive?
Baroness Smith of Malvern (Lab)
My study was rather more in the area of economics than in history There are some interesting examples of where some of those have worked, but I am not going to rise to the noble Lord’s challenge. On the whole, I agree with his analysis about most of those proposals.
Baroness Northover (LD)
My Lords, we have rightly been very proud of our universities, but we have to secure their future, as the noble Baroness said. How are we supporting universities in this new era? What are we doing to ensure that we encourage those from overseas to come to study and research here, that they are not put off by an unwelcoming environment, as is so often the case, and that they are not counted in the immigration figures? We do not want the United Kingdom to decline and fall.
Baroness Smith of Malvern (Lab)
On the subject of history, it is well worth noting that today is the Windrush anniversary, and we should recognise the significance of that element of our history. We remain in this country and in our higher education system welcoming to international students. That is why we have many universities in the top flight of international universities. We are continuing to see and welcome students who want to come to this country to study and, in doing that, to make a contribution to our universities and those they study alongside.
Home Ownership: First-time Buyers
(1 month, 3 weeks ago)
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Lord Young of Cookham
To ask His Majesty’s Government what plans they have to promote home ownership for first time buyers.
The Parliamentary Under-Secretary of State, Ministry of Housing, Communities and Local Government (Baroness Taylor of Stevenage) (Lab)
My Lords, the Government are reforming the broken home-buying and home-selling system to slash delays, cuts costs and stop sales falling through. Last week—it was on Friday, so it may not have got the attention it deserved, like my noble friend’s announcement—we published a road map setting out actions the Government are taking. Our new changes will cut home-buying times by around four weeks and save first-time buyers an average of £650.We are supporting first-time buyers through a range of routes, including shared ownership and the lifetime ISA, while addressing the root causes of unaffordability by increasing house supply and investing in affordable homes.
Lord Young of Cookham (Con)
My Lords, I welcome the announcement on Friday. The Minister listed a number of schemes to help first-time buyers, but actually none of them has moved the dial, leaving many young people who are renting and want to be owner-occupiers paying more in rent than they would with a mortgage. Recently, the Prime Minister said:
“For my family growing up, the roof over our heads was everything. But for so many families today, home ownership is a distant dream. My Government will make it a reality once again”.
Would it not be a fitting part of his legacy if, within the next few weeks, he was able to make an announcement that brought those dreams closer?
Baroness Taylor of Stevenage (Lab)
We are already doing that. We made that announcement on Friday. From speaking to lenders, we know that many first-time buyers are not aware of all the innovative mortgage products that might help them, or that recent mortgage reforms may help them get on the housing ladder. I had a meeting with the Building Societies Association just a couple of weeks ago, and I met again with the round table that developed this road map last week. It is true that mortgage brokers can help potential homebuyers to find options that may be suitable for them. There are some fantastic new products coming forward. Anyone who read the Metro last week may have seen a wraparound from Lloyds saying it was introducing £5,000-deposit mortgages, back for the first time since 1996. So things are moving and changing, and the road map will help that even further.
The Lord Speaker (Lord Forsyth of Drumlean)
My Lords, the noble Lord, Lord Campbell-Savours, is taking part remotely. I invite the noble Lord to speak.
Lord Campbell-Savours (Lab) [V]
My Lords, I return to my previous contributions on building housing on land acquired at agricultural prices, which is of particular benefit to young buyers. Can we look at developments in Hammarby in Sweden and Nijmegen in Holland, where there have been major housing developments in both locations on land acquired at reduced cost? All I ask is that we look at these precedents and consider whether, with a review of land title on housing sold on such land, we could similarly build in the United Kingdom and help young buyers.
Baroness Taylor of Stevenage (Lab)
I am always happy to look at any innovative ideas, wherever they occur. If there are those in Europe, I am happy to have a further look at them. We are making sure that we work harder on land availability through our partners in this programme. Some young people are currently paying far more in rent than they would have to pay if they had a mortgage. So making sure that finance is accessible and that properties are accessible is very important to getting this moving.
Lord Best (CB)
My Lords, would the Minister agree that a rather surprising and paradoxical way of helping first-time buyers is through making it easier to build for last-time buyers: those who want to downsize or right-size? Then you get two for one: you are helping the elder person but also providing, through the chain of lettings and purchases that follow, something for first-time buyers as well.
Baroness Taylor of Stevenage (Lab)
I thank the noble Lord for all the work he did on the Older People’s Housing Taskforce, which we will be producing our response to. The Government are committed to enhancing provision and choice for older people in the housing market through freeing up other homes. The new home-buying and selling process will reduce the friction that sometimes occurs and creates barriers to moving. The better upfront information it provides will support households to ensure that the home meets accessibility needs, for example, and that hidden costs, which often really concern older buyers, will be transparent right from the start.
Baroness Thornhill (LD)
My Lords, shared ownership promised a real lifeline for first-time buyers to get them on to the property ladder, yet soaring service charges, crushing maintenance bills and toxic lease clauses are trapping families in unsaleable, unmortgageable nightmares: I exaggerate not. What urgent steps are the Government taking to rescue and reform this scheme and protect hard-working buyers from financial hardship?
Baroness Taylor of Stevenage (Lab)
The noble Baroness is quite right. The Government recognise that some people who entered shared ownership have faced real challenges. We have introduced new expectations for landlords to improve the customer experience, which include giving greater consideration to long-term customer affordability, making sure that there is greater transparency and fairness on costs, ensuring that fees do not generate a profit and giving customers the ability to opt out of fees for optional services, which often was not pointed out. We are continuing to consider what more can be done to improve that experience for all our shared owners.
Lord Jamieson (Con)
My Lords, despite a housing crisis, we are seeing housebuilding plummet as affordability collapses and first-time buyers are reluctant to extend themselves in a period of economic uncertainty. This is particularly the case in London, with an average house price of £661,000. The Minister talked about hidden costs; those houses attract a £23,000 stamp duty. Does she agree that we need to stimulate housebuilding and that removing the economically destructive stamp duty tax would be a good start?
Baroness Taylor of Stevenage (Lab)
There are exemptions from stamp duty for first-time buyers, so that is not the case for them. First-time buyers benefit from paying no stamp duty land tax up to £300,000 and are able to claim relief on purchases up to £500,000. The Government are working closely with the Mayor of London. I will meet the deputy mayor for housing this week to talk about what further steps we can take to help the building of homes in London. It is not true to say that no housebuilding is moving forward. We had an increase in growth in the first quarter of this year.
Baroness Warwick of Undercliffe (Lab)
My Lords, home ownership is important, but social housing must play a central role in meeting the housing needs of young people. Over the past year, government decisions have put the social housing sector in a much better financial position, so can the Minister confirm that enough funding will be made available in the first years of the social and affordable homes programme to match the ambitious bids that have been made to build the homes we so urgently need?
Baroness Taylor of Stevenage (Lab)
I thank my noble friend for her recognition of the huge amount of funding—£39 billion, which is the biggest in a generation—allocated by the Government for social and affordable homes to be built. At least 60% of those homes will be for social rent. On 28 January, we published the update to our five-step plan to deliver a decade of renewal. We have had a significant number of bids for the first round of that funding, which will give councils and social housing providers the certainty they need, with the rent convergence procedure we have also introduced. Bids closed on 15 April and we look forward to those houses being built.
Lord Londesborough (CB)
My Lords, the fact that the average age of first-time home buyers has shot up from 26 to 34 is not just bad news for mobility and well-being but very bad news for economic growth. Does the Minister agree that it is time to replace stamp duty with a less crude and transactional tax?
Baroness Taylor of Stevenage (Lab)
I have already set out the relief on stamp duty that is available for first-time buyers, but I agree with the noble Lord that it is important that we try to encourage more young people to purchase their first home, where they can afford to do so. The Building Societies Association is running a fantastic campaign called “Think again!” which explains to young people how they can do that. Financial institutions are making sure that young people understand that the mortgage rules have been changed. I urge anyone who thinks they may be able to afford it to go and see a mortgage broker. Lenders have changed, for example, how they deal with intermittent employment and so on, so it is much easier to get a mortgage, and people should understand that they can use a record of rent payment as a guarantee for their mortgage.
Hong Kong Economic and Trade Office
(1 month, 3 weeks ago)
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Baroness Hayter of Kentish Town
To ask His Majesty’s Government, following the sentencing of Peter Wai and Bill Yuen for assisting a foreign intelligence service, what plans they have to (1) protect Hong Kongers in the United Kingdom from transnational repression; and (2) to review the status, privileges and immunities of the Hong Kong Economic and Trade Office.
The Minister of State, Home Office (Lord Hanson of Flint) (Lab)
My Lords, I thank my noble friend for her Question. I assure her that any attempt by any foreign power to intimidate, harass or harm individuals or communities in the United Kingdom will not be tolerated. This trial has shown that anyone working to assist a foreign state to undermine our security will face the full force of the law. The Foreign Secretary has also made it clear to the Chinese Government and directly to the Hong Kong Economic and Trade Office that this activity is unacceptable and clearly counterproductive to our relationship.
Baroness Hayter of Kentish Town (Lab)
I thank my noble friend for that Answer, but given that one of those convicted under the National Security Act for spying on pro-democracy activists was an immigration officer and special constable, himself sentenced to 10 years, can my noble friend assure me that his Government will take greater steps to ensure that no such agents are working under such a guise? Can he also assure me that the Government are taking all possible action to protect Hong Kong citizens living in the UK, especially those with a bounty on their head, from harassment or even worse from the Chinese Government?
Lord Hanson of Flint (Lab)
As my noble friend indicated, the two individuals concerned received significant prison sentences of eight years and 10 years for their offences. Immediately following the arrest, officials in the Home Office took steps to bolster protections across Home Office systems. This has included further strengthening access management and monitoring of systems, expanding the use of enhanced integrity checks and reviewing conflicts of interest policies. In addition, the Prime Minister set out to the House in April that Sir Adrian Fulford will undertake a review of national security vetting, which will report in due course.
My noble friend asked about Hong Kongers generally and transnational repression. The Government take the safety of individuals who may be at risk from transnational repression extremely seriously. We have recently updated GOV.UK guidance on transnational repression for individuals, and counterterrorism policing in particular has rolled out training across all UK police forces, including upskilling of 999 call handlers to improve front-line identification and response.
Lord Alton of Liverpool (CB)
I welcome what the Minister just said about the updating of some of the guidelines but will he return to the report that the Joint Committee on Human Rights published exactly 10 months ago, which called for the highest enhanced tier of the foreign influence registration scheme to apply to the Chinese Communist Party regime, along with Russia and Iran, but also raised concerns about people such as Chloe Cheung, a young woman from Hong Kong who has a 1 million Hong Kong dollar bounty on her head? Surely, given what the noble Baroness, Lady Hayter, said about the Hong Kong Economic and Trade Office, this is a relic from the past and it is high time that this spy hub was simply closed down.
Lord Hanson of Flint (Lab)
The noble Lord has raised the foreign influence registration scheme. That was introduced less than a year ago. As he knows, we have designated initial nations accordingly. It is still a relatively new tool. We have not made any final decisions as to whether we will place other countries on the enhanced tier, but we keep that under close review at all times. The noble Lord would not expect me to announce any further reviews to this House at this time, but we will announce any changes to Parliament in the usual way. It is not acceptable for individuals to have bounties placed on their heads, and the Government, as I said, take the safety of individuals who may be at risk extremely seriously, and there is always support when there are threats tailored to specific circumstances, such as those that the noble Lord mentions.
The noble Lord has looked at the Hong Kong trade office. The purpose of that office is to promote trade with the Hong Kong special administrative region. It is a legitimate activity, which may continue. However, as has been shown in this case, where people conduct state threat activity we will hold them to account. My right honourable friend the Foreign Secretary summoned the Chinese ambassador on 8 May and explained that the behaviour was unacceptable, and we will continue to take action when required.
Lord Davies of Gower (Con)
My Lords, I hear what the Minister says. However, these convictions do not come in isolation; they follow a series of recent incidents involving alleged Chinese state-linked activity in the UK, including espionage prosecutions and reports of surveillance directed at dissidents and members of the Hong Kong community. At what point do the Government conclude that these incidents represent not isolated events but a systematic challenge to the United Kingdom’s national security, requiring perhaps a more robust response than has so far been forthcoming?
Lord Hanson of Flint (Lab)
With due respect to the noble Lord, we will take action, where required, against the Chinese authorities. We assess that China poses a significant threat in a number of areas, from cyber attacks to foreign interference, espionage targeting our democratic institutions and transnational repression, as mentioned by my noble friend Lady Hayter and the noble Lord, Lord Alton of Liverpool. We are also alive to the fact that there are common areas of interest with the Chinese Government on the international stage. China still presents the UK with opportunities as the world’s second-largest economy and the UK’s current third-largest trading partner. It is not inconsistent to challenge at the same time as examining where British interests lie as a whole.
Captain of the Honourable Corps of Gentlemen-at-Arms and Chief Whip (Lord Kennedy of Southwark) (Lab Co-op)
We will hear from the Lib Dem Benches then the Conservative Benches.
Lord Fox (LD)
My Lords, as the noble Baroness said, Peter Wai was a UK Border Force officer and a special constable, but it has also been reported that he was a director of a private security company. A third defendant, Matthew Trickett, who died before the trial, was an immigration officer and a director of a different security company. It seems to me that it is a conflict of interest to be both an immigration officer and running a private security company. Can the Minister explain what is now going on to make sure that we do not have these conflicts of interest in our important Border Force employees?
Lord Hanson of Flint (Lab)
The noble Lord has mentioned an important point. The former Security Minister, my right honourable friend Dan Jarvis—who held the post until he was appointed Defence Secretary a couple of weeks ago—commissioned Home Office officials to undertake a thorough examination of whether there is a case for further regulation of the sector under the Private Security Industry Act. Those working in private investigation do important work, but their specialist skill sets make them attractive targets for foreign states to exploit.
As I mentioned, we have bolstered our robust security vetting regime, which will protect assets and information as a top priority for government, and we have commissioned Sir Adrian Fulford to undertake a review of the vetting issues. I await his recommendations; it is important we have consideration of those things. I say again that eight- and 10-year sentences show that the National Security Act is working and that there are significant penalties for those who dare cross the legitimate line of their employment.
Lord Garnier (Con)
My Lords, will the Minister agree that the Question asked by the noble Baroness, Lady Hayter, reveals the other side of the coin in relation to a resident of Hong Kong who is a United Kingdom citizen, who has been “convicted” under the Chinese national security legislation—namely, Jimmy Lai? When was the last time that either the Minister’s department, or, if more relevant, the Foreign Office, let the Chinese ambassador in London or the Chinese Government in Beijing know that his improper incarceration is offensive and will have some bearing on the status of the Hong Kong trade office here in London?
Lord Hanson of Flint (Lab)
I am grateful for the question. As I mentioned in my initial replies, to my knowledge, the Foreign Secretary last had contact with the Chinese authorities through the embassy on 8 May, when she made significant representations. It is the role of the Foreign Secretary to make representations in relation to prisoners elsewhere. I will go back to the Foreign Office to inquire whether there has been further contact since 8 May, but that is my understanding of the last contact.
The Lord Bishop of Leicester
My Lords, while I am not aware that there was any religious element to the incidents referred to, we know that many Hong Kongers have come to this country seeking religious freedom and, indeed, many thousands have joined our churches. Can the Minister give reassurance to those people that the freedom of religion and belief will be honoured here?
Lord Hanson of Flint (Lab)
I certainly will give the right reverend Prelate the assurance that freedom of religion and expression is essential in the United Kingdom. Residents of this country should know that, whatever nationality they have, the Government take the safety of individuals extremely seriously; that we will not tolerate transnational repression; that we will use legislation to take action where it has surfaced; that the prison sentences, in this case for espionage, of eight and 10 years are significant; and that we keep all matters, such as the foreign influence registration scheme and all the other measures we have, under continuous review.
Baroness Ludford (LD)
My Lords, the Minister talks about things that are unacceptable and will not be tolerated, but the Chinese Communist Party is using the Hong Kong Economic and Trade Office as a tool for its repressive activities. The noble Lord, Lord Alton, referred to it as a relic of a time when it was a valid trade and economic office. The two front men have recently been caught, but there is a whole apparatus behind them. Why is the Hong Kong Economic and Trade Office still being allowed to exist as a smokescreen for those repressive activities?
Lord Hanson of Flint (Lab)
The Hong Kong Economic and Trade Office exists to promote trade with the Hong Kong special administrative region, and that is a legitimate activity. If there are allegations of criminality, or where there is proven criminality, the Government will take action, as has been the case with the two individuals who are now serving time in prison for their crimes. I can only reiterate that we take this matter seriously. The Foreign Secretary summoned the Chinese ambassador on 8 May. She explained quite clearly that that behaviour is unacceptable. We will continue to monitor it and, if need be, take action.
Lord Jackson of Peterborough (Con)
My Lords, I raised the issue of the new proposed Japanese super-embassy—
Lord Jackson of Peterborough (Con)
—sorry, the Chinese super-embassy—on 29 January 2025 and articulated the very serious concerns that a number of us had about the efficacy of the decision to let that go ahead. The Minister will know that since then, there are still very considerable concerns about the impact of the embassy with respect to financial infrastructure near the City of London. Despite that, the Secretary of State for Housing, Communities and Local Government, Steve Reed, allowed it. Is the Minister in a position to tell the House whether his view is that the Government will now resile from contesting the judicial review brought by the Royal Mint Court Residents’ Association and scrap the decision to build the new super-embassy, which is a threat to our national security?
Lord Hanson of Flint (Lab)
The security services were involved throughout in the advice given to independent authorities on the development of the embassy. The Secretary of State has taken his decision. The decision stands, but we are confident that the merger of embassies into one super-embassy and the advice we have taken from the security services mitigate against the threats that the noble Lord is concerned about.
Lord Bellingham (Con)
When it came to recent so-called spyware lawsuits, various Governments tried to claim state immunity. Can the Minister just update the House on the Government’s view on this?
Lord Hanson of Flint (Lab)
If proof is given and the state is taking action, the Government will consider what action we will take against that state. We have a number of potential tools at our disposal. The FIRS is one tool, which we can always examine and keep under review. The state threats Bill will be before the House tomorrow. When that is passed in due course, we will consider what action we can take. Our security services advise Ministers on every occasion about what the threats are and what action we can take. As has been proved in this case, the National Security Act provides a vehicle to take action against individuals who have committed offences. The two individuals are spending eight and 10 years in prison as a result of that action. We will not take any action that undermines the security of the United Kingdom.
Lord Kerr of Kinlochard (CB)
My Lords, I have not yet heard an answer to the question asked by the noble Lord, Lord Fox, on conflict of interest. Is it acceptable for a Crown servant—an immigration officer, a Border Force employee—to be a director of a private security firm? If not, will it now be stopped?
Lord Hanson of Flint (Lab)
I appreciate the way in which the noble Lord has put that question. As I said to the noble Lord, Lord Fox, we are keeping all matters under review. We have commissioned Sir Adrian Fulford to look at vetting. Let us wait for the responses to that review. They are very important points. We will reflect on them at all times, but I have set out to the House what I can today in response to my noble friend’s Private Notice Question.
Lord Murray of Blidworth (Con)
My Lords, I sit on the Joint Committee on Human Rights with the noble Lord, Lord Alton. In our report on transnational repression, published some 10 months ago, one of the recommendations was that those perceiving themselves to be the victims of transnational repression should have access to a dedicated reporting mechanism. The Government indicated that they were favourable to that, but we have not heard any further on what progress has been made. Perhaps the Minister could update the House.
Lord Hanson of Flint (Lab)
We have had a number of requests on that matter. We have considered carefully, in conjunction with counterterrorism police, how best to encourage reporting and ensure that reports are received and treated seriously. The existing functions have been found by the counterterrorism police to be effective and efficient. We are looking at how we can improve the training and support of call handlers and particularly trained officers dealing with crime reporting on a 24/7 basis. Translators and language support are embedded within the existing reporting mechanisms. We will keep things under review but, in essence, we are meeting the objectives of the review that the noble Lord and the noble Lord, Alton of Liverpool, requested.
Built Environment Committee
The Senior Deputy Speaker
Grooming Gangs: Independent Inquiry
(1 month, 3 weeks ago)
Lords ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Baroness Cash (Con)
My Lords, may I begin first by paying testament to the tireless advocacy of the noble Baroness, Lady Casey, on behalf of the victims of grooming gangs, and the tremendous courage and persistence that she displays in public service? She has warned again this week that fear of accusations of racism played a significant part in preventing professionals from protecting these girls—these children—from abuse and rape. One year on, her criticism is not about announcements or process or lists of things to do; it is that the Government have failed to grasp the cultural problems underlying all this. Will the Government finally heed the words of the noble Baroness, Lady Casey, and commit to legislate to make ethnicity data collection mandatory, first for police forces and secondly for children’s social care services dealing with child sexual exploitation? If not, why not?
The Minister of State, Home Office (Lord Hanson of Flint) (Lab)
My Lords, I apologise for the confusion—it is one of those days.
First, I welcome the noble Baroness, Lady Cash, to her new role. I wish her every success in holding the Government to account and raising those issues. I hope that she enjoys the new role and does it as successfully as possible. I also thank the noble Baroness, Lady Casey, for her report and for her continued interest and comments on this.
The central point that the noble Baroness, Lady Cash, has raised is around the ethnicity and nationality of grooming gang offenders. She is right that we have not yet got a reliable picture, because the underlying data has been incomplete and inconsistent. That is why the former Home Secretary, my right honourable friend Yvette Cooper, the Member for Pontefract, Castleford and Knottingley, has written to all chief constables setting clear expectation that suspect ethnicity data must be recorded. But the noble Baroness is right that we need to do more, and that is why we will legislate to mandate collection as soon as possible. The police reform White Paper that we published in January said that we would set out our intention to create a framework to mandate data, and this will be taken forward through the upcoming police reform Bill. I cannot give an introduction date for the police reform Bill, but when it comes—it has been announced for this Session of Parliament—that will be done as part of the Bill’s proposals.
Baroness Doocey (LD)
My Lords, the noble Baroness, Lady Casey, drew attention to the fact that victims may have had convictions for underage prostitution quashed yet they still remain criminalised for offences such as drug possession, which have been forced on them by their abusers. Will the Minister commit to broadening the Government’s approach to quashing convictions so that survivors are no longer haunted by criminal records that are a direct product of the despicable abuse and exploitation they have already suffered?
Lord Hanson of Flint (Lab)
The noble Baroness has a very strong point. It is horrific that the law has historically treated children, including victims of grooming, as capable of being child prostitutes when they were and are sexually exploited children. We have already legislated to introduce a disregard scheme for those who were cautioned or convicted of on-street prostitution offences as children, and we have also invested £100 million to tackle child sexual abuse. The independent Criminal Cases Review Commission recently referred its first grooming gang case to the courts. That is an important step, and obviously we will keep all these matters under review.
Baroness McIntosh of Pickering (Con)
My Lords, many of those convicted under the provisions of the grooming gangs were actually taxi drivers, and yet they are a category of people who have to pass all sorts of checks before they are able to pick up—particularly vulnerable young women. How did they escape those checks and how were they allowed to perpetrate these crimes over such a long period?
Lord Hanson of Flint (Lab)
It is an important point. I do not know the answer to why that was the case specifically, but it is an important point that people who are providing licensed taxi services are sufficiently vetted and have that level of scrutiny to ensure that they are appropriate people to undertake those roles. We have established, as the noble Baroness knows, the grooming gang inquiry under our noble friend Lady Longfield. That is currently working its way through its work and objectives, and I have no doubt that the type of issue that the noble Baroness has raised will be examined as part of that inquiry.
Baroness Royall of Blaisdon (Lab)
My Lords, the noble Baroness, Lady Doocey, raised a very important question to do with the quashing of convictions, and I am delighted and very proud that the Government are dealing with the quashing of convictions for prostitution. However, there are other offences which, in the view of many people, need to be quashed, because they are having a blighting effect on the future lives of these young people. I would be grateful if my noble friend could tell me that the Government are going to look at wider quashing of offences.
Lord Hanson of Flint (Lab)
It is an important issue that has been raised. I can give my noble friend the assurance that we will keep that matter under review. We have taken initial action in response to the initial inquiry, and we will continue to look at it in future.
Referring back to the question asked by the noble Baroness, Lady McIntosh, I may say that the Department for Transport will legislate to address the important issues raised in the report, tackling the inconsistent standards of taxi and private hire vehicles. The English Devolution and Community Empowerment Act 2026 includes the provision to set those national standards. I apologise for not giving her that answer immediately—it is not my direct brief—but I hope that helps the House.
Lord in Waiting/Government Whip (Lord Katz) (Lab)
My Lords, we have time for questions. We will hear from the Liberal Democrat Benches and then the Cross Benches.
Baroness Benjamin (LD)
My Lords, in 2011 or 2012, I asked a Question on behalf of Barnardo’s—and I declare an interest as vice-president—about child sexual exploitation and how children were encouraged by their abusers to delete the evidence on their mobile phones that could lead to prosecution and that the children were not believed by the authorities. What provisions are in place today to collect such evidence that could prosecute evil perpetrators of child sexual abuse?
Lord Hanson of Flint (Lab)
The point the noble Baroness has made is extremely important. In the 14 or 15 years since she asked that Question, the police’s ability to collect information and to analyse data in a way that can lead to prosecution has significantly improved. There is a range of mechanisms now where deleted data can be recovered. If there is an evidential trail, that can be looked at. I have just taken note of a range of government reviews about how we can manage and use particularly AI to improve the analysis of information, so that the manual element is still there at the end but there is a great deal of consideration of how we can collect that information and analyse it in a much better way. So I hope that, since she asked that Question, the situation has improved.
Baroness Falkner of Margravine (CB)
My Lords, this yet another inquiry is long overdue; I think we all accept that, but we understand that the noble Baroness, Lady Longfield, is committed to ensuring that it works as well as it can. Does the Minister agree that it is incredibly important, for social cohesion and for public confidence in our justice system, that the first public servants who were involved over that very long period a long time ago will be called to give evidence and to provide statements? Does she have the statutory powers to do that in the way that the inquiry is currently framed?
Lord Hanson of Flint (Lab)
The terms of reference for the inquiry are set out and the scope of the inquiry has been developed, and included in that are legal obligations to protect relevant information that was used by responsible individuals at the time. The conduct of the inquiry, with due respect, is a matter for my noble friend Lady Longfield to establish. It is not for Government to set out the terms of the inquiry. I have every confidence that she will address the issues that matter to this House. Self-evidently, the noble Baroness has raised an important issue to ensure that those who participated in issues that cause failings have an opportunity to explain and are held to account.
The Lord Bishop of Manchester
My Lords, does the Minister agree that some of the most vulnerable young people are those who are in care. Too often, we see young people put in care homes many hundreds of miles away from where their kinship relationships are, making them even more vulnerable. Will the Minster say what can be done to stop the practice of young people being moved to the poorest parts of the country, to the cheapest care homes, where they are made the most vulnerable of all?
Lord Hanson of Flint (Lab)
It is an important point. It is not directly within my gift to be able to answer that question, but I will make inquiries with my colleagues in the Department for Education for the right reverend Prelate. Whether people are moved to a poor area or a wealthy area, the issue of child sexual abuse is unacceptable, and the purpose of government policy is to ensure that sufficient safeguards are put in place, that criminal sanctions are there to be used, that the preventative measures that we have talked about today already are developed, and that the lessons from the inquiry conducted by my noble friend Lady Longfield are implemented as a matter of urgency. I will reflect on what he said, but the important point is that child sexual abuse is unacceptable wherever it comes from.
Sporting Events Bill [HL]
Monday 22nd June 2026
(1 month, 3 weeks ago)
Lords ChamberRead Full debate Sporting Events Bill [HL] 2026-27 View all Sporting Events Bill [HL] 2026-27 Debates Read Hansard Text Read Debate Ministerial Extracts Amendment Paper: HL Bill 3-I(a) Amendments for Committee (Supplementary to the Marshalled List) - (19 Jun 2026)
“(ca) Schedule (Industrial action provisions) (“the industrial action provisions”),”Member’s explanatory statement
This amendment inserts industrial action provisions, which would ban strikes by certain workers, including transport workers, when the sporting events framework is applied to a sporting event.
Lord Parkinson of Whitley Bay (Con)
My Lords, it is a pleasure to open this first group of amendments in our debates in Committee on the Bill, not least because I was unable to speak at Second Reading. I was physically present but mentally less so, as I had just arrived back on a red-eye flight from the United States—in part, visiting Miami—which was preparing for a major sporting event of its own. I am grateful to my noble friend Lord Markham, who spoke for these Benches at Second Reading. I am grateful to the Minister too for the discussions we have had about the Bill, including when I was overseas.
It is a pleasure to welcome the noble Baroness, Lady Grainger, to her place. She has joined your Lordships’ House since Second Reading. We look forward to her maiden speech in due course and to her adding her expertise to our scrutiny of sporting measures and much more.
I draw your Lordships’ attention to my register of interests, particularly the hospitality I have received attending sporting events over the past year.
In moving Amendment 1, I will also speak to Amendments 7, 54 and 57, which are also in my name and that of my noble friend Lord Markham. Taken together, these amendments seek to establish provisions relating to industrial action as a core part of the sporting events framework that the Bill ushers in, with the intent of preventing strikes taking place during a sporting event to which the framework conditions have been applied.
Amendment 1 is, very simply, an enabling amendment that would introduce the industrial action provisions. Amendment 7 would ensure that wherever an appropriate national authority applies one or more parts of the framework to a particular event by regulations made under Clause 2, it must at the same time apply the industrial action provisions. It is not an optional extra or something to be applied to some events and not others; rather, it is a mandatory part of the framework itself.
Amendment 54 would insert a new clause requiring that any such regulations specify a period during which these provisions should apply and that this period should be no shorter than the span of the sporting events framework for that particular event. That is to say, it must run from the day that any one of the framework provisions first takes effect to the day that the last provision ceases to have effect.
Amendment 57 would insert the substantive new schedule itself, creating offences for transport workers—covering airports, buses, light rail and passenger railway services—and relevant local authority workers who take strike action during the specified period, alongside offences for organising, permitting or inducing such action. The schedule would create an alternative civil route, allowing the appropriate national authority to impose a financial penalty rather than pursue a prosecution through the courts.
The Committee might ask why all this is necessary. The Government are seeking in the Bill to build a permanent framework so that the United Kingdom does not have to improvise, event by event, each time we play host to a major sporting event and welcome people from across the globe to these shores.
The Bill provides for the protection of ticketing arrangements, advertising rights, trading around venues and commercial rights against unauthorised association, but it does not at present provide protection against one of the most visible and damaging risks to any major event: the disruption caused by industrial action. Noble Lords will recall that the build-up to the London 2012 Olympic Games and Paralympic Games was repeatedly shadowed by the threat of strike action from the then general secretary of Unite, Len McCluskey. Even the then leader of the Labour Party, Ed Miliband, said:
“This is a celebration for the whole country and must not be disrupted”.
In 2022, when Birmingham hosted the Commonwealth Games, ASLEF and the RMT deliberately targeted those hoping to attend by announcing walkouts on the railways either side of the Games. In May this year, staff at Edinburgh and Glasgow airports similarly voted in favour of walking out during the Commonwealth Games, which are due to take place next month. We hope that that has been averted now by a hastily agreed pay deal but, as the unions involved well knew, such a walkout would have had a significant disruptive effect on the operation and commercial viability of those Games.
These are not abstract risks; they are, sadly, recurring features of recent experience under Governments of different compositions, both in the UK and in Scotland. A Bill which seeks to create a comprehensive framework for hosting major events, with a reduced role for Parliament in scrutinising them, simply cannot leave this to chance.
Some noble Lords might think the penalties suggested in our amendments too severe. There are fines without an upper limit on summary conviction in England and Wales, a maximum fine of £50,000 in Northern Ireland and of £20,000 on summary conviction in Scotland, and financial penalties of up to £20,000 under the civil route. I want to highlight that directly, because these are not arbitrary figures. These penalties have been deliberately aligned with those the Government have suggested for the ticket touting offence and the advertising and trading offences elsewhere in the Bill. If the Committee accepts that conduct which threatens the commercial integrity of a major sporting event merits fines of this order then I hope it will also agree that we should not treat conduct which threatens to close down the event entirely any less seriously.
I also draw the Committee’s attention to the safeguards built into Amendment 57. This is not a blanket or indefinite restriction on the right to strike. The prohibition applies only for the specified period tied to the duration of the new framework for a particular sporting event. It applies to transport workers nationally since they are, by definition, mobile, but to local authority workers only in the area where the event is being held. Of course, the ban applies only where the national authority has chosen to apply the sporting events framework at all. The schedule also provides a full enforcement code, notice of intention, the right to make representations, a final notice with reasons, and a right of appeal to the First-tier Tribunal, the sheriff or the county court, as appropriate, mirroring the safeguards attached to the ticket touting provisions already in the Bill.
My noble friend Lord Fuller has raised a very important issue about the ability of event organisers to staff these major events effectively. I have added my name to his amendment and look forward to hearing him outline it. I may return with further comments in winding up.
As we heard at Second Reading, this country competes hard and successfully for the privilege of hosting some of the world’s greatest sporting events. Having secured that privilege, we owe it to the athletes, spectators and the millions who tune in to ensure that the events can run smoothly and as planned. I beg to move.
Lord Fuller (Con)
My Lords, the premise behind this Bill is that we need to help the organisers of the really big events put on a really good show and ensure that the country itself sweeps away those showstoppers. It recognises that putting on these events requires a national effort. My amendment seeks to ensure that the organisers can be assured of an adequate supply of labour and human capital to make the games, or relevant tournament, a success in the few weeks every decade that the circus rolls into town.
I am reminded that sport is a game of chance. That is why we like it. The uncertainty makes it so alluring. Your favourite does not always win and often there is an upset. That is the whole point. Especially in tournament play, a team’s life can be measured in terms of hours, in the case of a stage 1 knock-out, or weeks if they make it all the way to the final. There are no guarantees in this game.
Back in 2012, one of the key resources for the Olympics was labour. There were 70,000 Games makers. The Minister for Sport at the time, Hugh Robertson, said:
“The 70,000 Games Makers made such a big contribution to London 2012 and the country as a whole. They helped showcase a modern, diverse and fun Britain and warmly welcomed visitors from all over the world”.
Quite.
It was not just the unpaid volunteers and their 8 million hours of effort that made the Games so memorable. On top of that was an army of others who contributed to that success—paid employees involved in broadcasting, catering, cleaning, merchandising, ticketing, security, bar work, selling ice cream and so forth. Shall we say that about 150,000 people in total were engaged to make that event a success over a staggered month, once the Paralympics are taken into account? It might even have been more. We celebrate that and, indeed, without their efforts, there would not have been a celebration at all. People worked around their normal lives to give what time they could, and it worked.
Lord Addington (LD)
My Lords, to intervene for the first time in Committee on this group of amendments is rather an odd one. I had not looked at it when we started out. I also feel that, if you are bringing a games into a country, you are going into an existing framework of laws and rights. If you bring something into a structure and you are going to bid for it, you should take into account whether you can deal with industrial relations. We have done it a couple of times.
As to the amendments from the noble Lord, Lord Fuller, I suggest that you know when you will be working at a games or a championship because you have a schedule of events. It is not a randomised thing. You might have extra time in a championship in one of the big team games, but it is a finite amount of time. We do not play until sudden death. With weather like this and rugby union at the moment, it probably would be death if we played too long.
These amendments are a good probe to get a feel of what is happening, but if you are taking on a project you are taking it on with the risk of industrial relations. Trade unions will flex their muscles, but do they have a right to flex their muscles? Do we have a right to say no? I suggest that there is a real question here. Although it is a valid question to ask, I suspect the answer is that you have to take a few knocks when you are doing this and accept a few uncertainties to get it. If you cannot take some action or make something that will accommodate this, you really are not fit to hold a games.
The Parliamentary Under-Secretary of State, Department for Culture, Media and Sport (Baroness Twycross) (Lab)
I thank the noble Lords, Lord Parkinson of Whitley Bay, Lord Markham and Lord Fuller, for these amendments, and the noble Lord, Lord Addington, for speaking to this group. I also join the noble Lord, Lord Parkinson, in welcoming the noble Baroness, Lady Grainger, to your Lordships’ House; I look forward to future conversations with her on this Bill and other related matters.
The amendments from the noble Lords, Lord Parkinson and Lord Markham, would have the combined effect of introducing a framework to prevent transport and local authority workers engaging in industrial action during specified periods linked to sporting events. This would include creating offences relating to participation in, and the organisation or inducement of, such action. In their manifesto, the Government committed to repeal the minimum service level legislation and other restrictions on the right to strike, and we did this in the Employment Rights Act 2025—so, as the noble Lord, Lord Addington, made clear, we have existing laws relating to industrial action.
These amendments seek to reintroduce significant restrictions on the ability of workers to take industrial action. As the period of disruption between 2022 and 2024 demonstrated, bureaucratic hurdles only make it harder for unions to engage in the bargaining and negotiation that settles disputes. Instead of banning strike action, the Government want to bring in a new era of industrial relations that is built on collaboration and co-operation across parties. We are committed to establishing a new model for industrial relations fit for the 21st century, including an industrial relations framework that establishes firm expectations on how workers and employers should conduct themselves. This includes engaging with one another and working together in the interests of the workforce, the economy and the wider public. Our industrial relations framework will build on our legislative agenda and provide guidance on how employers, workers and unions can work together to deliver positive and effective industrial relations, including during periods of industrial action.
Amendment 84, tabled by the noble Lord, Lord Fuller, would mean that the right to guaranteed hours, the right to reasonable notice and the right to payments for shifts moved, cancelled or curtailed at short notice do not apply at major sporting events to which the provisions of the Bill have been applied. The flexibility offered by zero-hours contracts and contracts with a minimum number of hours can benefit both workers and employers, but it is our view that without appropriate safeguards this flexibility can become one-sided. The zero-hours measures in the Employment Rights Act 2025 aim to end one-sided flexibility by ensuring that all jobs provide a baseline level of security and predictability.
I do not think the noble Lord will be surprised to hear that I disagree with him on this being an appropriate amendment. Any exclusions or exemptions at this stage would pre-empt the Government’s consultation on reforms relating to zero-hours and similar contracts, which is currently open. In this consultation, the Government seek to gather insight through the input of stakeholders, including on potential exclusions and exemptions. We need to ensure that the views of all stakeholders are first taken into account before any decisions on exclusions and exemptions are made. We intend to ensure that all jobs provide a baseline level of security and predictability so that workers can better plan their lives and finances. We would be keen for sporting event stakeholders to participate in the consultation on reforms relating to zero-hours and similar contracts to inform the development of the policy. On the basis of the points I have made, I hope the noble Lords, Lord Parkinson of Whitley Bay, Lord Markham and Lord Fuller, will not press their amendments.
Lord Parkinson of Whitley Bay (Con)
I am grateful to the Minister and the noble Lord, Lord Addington, for their comments. As the noble Lord said, there is an element of risk here, but, as we know, this is a proven risk. In 2012, 2022 and earlier this year, we saw the deliberate targeting of major sporting events by trade unions to exert some political pressure, and I was sorry not to hear criticism from the other two Benches about their doing so. We agree that trade unions have the right to make their protest, but I would hope that noble Lords reflect that targeting games such as these, which try to rise above politics—at a geopolitical level as well—should not be targeted in the way that we have seen in the past.
The risk balance has shifted a bit because of some of the changes the Minister outlined. The changes brought in by the Employment Rights Act 2025 do cause problems, which your Lordships’ House scrutinised well and highlighted as that legislation went through. I see that the noble and right reverend Lord, Lord Sentamu, is in his place; he made very strong points from the Cross Benches about some of the perverse effects that Act of Parliament may have. However, even if one accepts the argument the Government were making there, sporting events of this nature are very different. These are temporary, one-off events where people are able to work, as my noble friend Lord Fuller said, in a life-changing way for an event that comes and goes, for which the employment is not there any more.
If we do not make the sort of changes to the Bill we have suggested, we worry that the practical effect will be perverse. Rather than offering more secure work, organisers will simply offer less work and circumvent the guaranteed-hours duty by relying on short fixed-term contracts and outsourced or overseas suppliers, or on asking more of unpaid volunteers, rather than the flexible part-time and casual staff who have made the delivery of previous games such a success. We might return to this in some form on Report. I hope we can keep the discussions on this point going, but for now I beg leave to withdraw Amendment 1.
Lord Foster of Bath
“(f) Schedule (Sports rights provisions) (“the sports rights provisions”).”
Lord Foster of Bath (LD)
My Lords, in addition to moving Amendment 2, I will speak to the 11 other amendments in my name and that of my noble friend Lord Addington. I declare my interests as the chair of Peers for Gambling Reform and of Action on Gambling.
Together, my 12 amendments cover just two issues. The first is illegal gambling relating to events covered by the Bill, and the second is ensuring that venues hosting events covered by the Bill are free of gambling advertising, marketing and sponsorship. The Minister has been taking a very keen and welcome interest in tackling the gambling black market. My first group of amendments, relating to sports data, is, in fact, going to help her, because data is the new gold in sport. While still dwarfed by TV rights, the use and sale of data is increasing dramatically. It is currently estimated to be worth $5 billion globally—an estimate that is expected to increase threefold by 2031.
This data is used in a number of remarkably different ways—from sports teams wanting to understand their players’ performances to event organisers providing fans with knowledge to help them create and choose their fantasy football team, for instance. Crucially, however, it is also used by betting companies to help them manage their risk but also to provide their customers with in-game gambling options using real-time data—data that can, because of latency issues, arrive sooner than from a TV feed. This becomes increasingly important with the rise of gambling on the so-called prediction markets. Therefore, to monetise this value, organisers of events covered by the Bill already sell global data rights to organisations known as aggregators, which gather the data and then sell licences for it. They use things like AI camera systems in the gathering of that data. In the current World Cup, Stats Perform serves as FIFA’s first ever official and exclusive world betting data distributor.
These licences are voluntary and are difficult to enforce. At Second Reading I explained, for example, how relatively easy it is for data scouts to go into stadia where events are taking place, collect data and send it on without having permission. This leads to an economic loss to the sport and to those who have licensed the data to then sell on to betting companies, but it also has significant integrity implications. If data can be manipulated by unscrupulous data suppliers, so can the betting markets themselves. In the other licensing agreements such as broadcasting rights, we are used to understanding how and why we need to protect them and have introduced new legislation over the years to help reduce piracy, but this is less true of data piracy.
Baroness Taylor of Bolton (Lab)
My Lords, if no one else wants to follow the noble Lord, I will add my support to the case that he is making. Like him, I raised this at Second Reading, and I agree with every word he has said, so I do not want my noble friend the Minister to think that this a one-man show of someone who has specific views on gambling. We have to be aware of the significant pressure felt by those who get caught up in gambling. Predictive events and things of this kind are difficult to keep on top of, and it is hard to know what the next challenge might be. The amendments proposed by the noble Lord have a deal of validity, whether or not they are exactly what we should be doing, and I hope that the Minister can respond constructively to a genuine concern.
Baroness Bennett of Manor Castle (GP)
My Lords, I wanted to allow some time to raise and discuss the important issue of gambling advertising—I was hoping for more discussion of it. I note that I support Amendments 37, 41 and 44. The noble Lord, Lord Foster of Bath, has already made the case on gambling very strongly, and it was something I raised at Second Reading, so I will speak chiefly to my Amendments 42, 45, 49 and 52, which are about fossil fuel advertising. They seek to ensure that sporting events covered by the Bill are free from advertising and sponsorship by fossil fuel companies. We could hardly have picked a better day to be debating these amendments, given the heatwave that the UK is currently facing. One significant impact of that heatwave will be on many sporting events. Many people’s intention to do all sorts of physical activity will be, for very good reason, curtailed in the coming week.
In the Bill, we are talking about highly valued, important events, and they should not be used as platforms to boost the reputation of damaging industries whose products are driving the events that we are currently experiencing. Sponsorship is not philanthropy. Companies invest in sport because they know their association with trusted institutions improves their public image and strengthens their social licence. With this Bill, we have the opportunity to ensure that the biggest events in this country that we host do not become a vehicle for greenwashing. We note that young people are a significant part of the audience of many of these events, and that they are the people who will have to bear the consequences for the longest time.
As I raised at Second Reading—and it became very much a basis for these amendments—this is not something we are dreaming up. Britain would not be able to claim to be world-leading should the Minister say, “Yes, I entirely agree with you” and adopt all my amendments. France became the first European country to ban advertising for fossil fuel products in 2022. The Hague has introduced a legally binding ban on fossil fuel advertising in public spaces. As I said at Second Reading, a number of councils have already shown leadership. Today, we are seeing leadership arriving in Westminster from the rest of the country; this is a place where we could find some more leadership on that. The UN Secretary-General has called for restrictions on fossil fuel advertising similar to those applied to tobacco.
I move to my next set of amendments, which are related but different. Amendments 43, 46, 50 and 53 are about the advertising of less healthy food. There is a huge and similar kind of contradiction of promoting sport as a route to health and well-being while simultaneously allowing sponsorship from products that undermine those outcomes. These and other amendments seek to ensure that sporting events covered by the Bill are free from advertising and sponsorship for less healthy food and drinks. We are talking here about the major ultra-processed food and fast food brands, which are, sadly, major suppliers of the British diet; we are all paying the price for that.
The gap is that Ofcom does not regulate sports sponsorship deals; we have regulations about junk food advertising, but not about sponsorship. Therefore, Ofcom cannot do anything about watching a sporting event and being bombarded with advertising for McDonald’s, Coca-Cola, Budweiser and so-called sports drinks like Powerade. Those brands appear everywhere. We do not see adverts for tap water, though it would be quite nice if we did—let us put that down as a thought. This creates a health halo effect: products are conceived and often advertised as compatible with a healthy, active lifestyle when their nutritional profile is anything but.
Public health bodies and parliamentary research have consistently identified marketing as a key driver of childhood obesity. The Government already have policies on direct advertising to act in this area, and historically we saw the bans of cigarette advertising that had to be continually strengthened. We need to see the same thing for ultra-processed and other unhealthy foods. We have an accepted principle that the marketing of less healthy food to children is a legitimate public policy concern. These amendments address an inconsistency in public policy. Sport should be used to inspire healthy lives, not as a platform to promote the consumption of foods we know will shorten people’s lives and make them less healthy.
Lord Hayward (Con)
My Lords, in relation to these proposed amendments, I have sympathy with a number of points, particularly as they relate to gaming. The noble Lord, Lord Foster, made very clear the logic behind what he is asking for in these amendments.
Unfortunately, on the amendments tabled by the noble Baroness, Lady Bennett, while I am extremely sympathetic to the issue of climate change, and I will not buy all sorts of things in plastic or plastic bottles and the like, I worry because we are talking about adding things to an ever-extending list; every time we get to a major sporting event, we will look at whether we should add on other things that operate in other countries.
The noble Baroness, Lady Bennett, just spoke about an established principle, and I think that is a far better route by which we should operate in terms of these international sporting events. In other words, our established principles of advertising as they operate in this country should be the principles by which the major sporting events should operate. We cannot spend our time trying to run ahead of policies we have, whether in relation to age-related matters or food and drink-related products.
I have spoken critically on a number of occasions in this Chamber about Coca-Cola and its sponsorship of major sporting events. However, it is a very difficult road we will go down if we start adding on one thing after another—
Baroness Bennett of Manor Castle (GP)
To make it clear, when I was talking about an established principle, I was talking about the fact that we have restricted advertising of these products—particularly to children. Therefore, it is a question of how far that restriction goes; it is not about doing something new.
Lord Hayward (Con)
I thank the noble Baroness for her clarification; I was not absolutely clear on whether she was talking about the established principles or extending the limits in some form or another.
I want to make an observation on a comment the noble Lord, Lord Fuller, made on the last group of amendments. I think I heard him refer to sporting events as ones of “chance” on two occasions. There are a fair number of medallists in this Chamber today who may think, “Well, it wasn’t chance that got me a gold, silver or bronze medal”. Equally, when I refereed rugby, it was very rarely viewed as chance that one team or the other won—though there was the odd chance that the referee might have made an error at the time.
Lord Fuller (Con)
I reassure the noble Lord, Lord Hayward, that I did not mean chance as in random, because I accept that in sport the harder you work, the luckier you get.
Lord Addington (LD)
My Lords, my noble friend is a doughty warrior when it comes to showing us the harms of gambling—and not only the harms but some of the gambling which is, let us face it, a threat to the integrity of sport if it is not regulated very carefully. Nothing destroys a sporting event like not having faith that the outcome is a fair one. Let us remember that.
In the digital world the harms done to individuals by gambling reach further. This is something we cannot forget when we talk about this. I am pretty sure the Minister will not have done. Indeed, if her officials tried, I should imagine they would not last very long. We have to try to get to a situation where we have some understanding of what is happening here, and the difference that makes to the events themselves, even if we are looking only the sporting value.
The use of data in sport is a fascinating story unto itself, but gathering that data and using it is something that we are only just starting. Most of us are discovering a world that is developing, and then this comes up and we say, “Really? That is how you have done it?” Indeed, those with heavy training schedules, especially in the recent past, undoubtedly had a great deal of data controlling what they ate, how long they were out, and what they were doing. I can dimly remember somebody talking about it, and us ignoring it, but there we are—the world moves on.
I hope that when the Minister responds to these amendments, she gives us a full view of what the Government seek to do generally in this field, as well as specifically in this Bill. We have a series of considerations here. With advertising, smoking is the obvious case: it was an accepted part of advertising and it has been removed. How are we working that in? How are we going forward? Is it a general principle we are talking about or specifics? What are the limitations as we move forward? Let us face it: if you have the Olympics at moment, you have Coca-Cola. It is not a health product, I think anybody would agree. It might be much less damaging in some of its forms than others, but it is not a health product and nor are the other soft drinks that go with it.
I hope the Minister will give us some idea of what the Government’s thinking is and where they are going. They may save themselves a little time if they can say which other legislation will affect this. This is a big subject we are touching on with this Bill. An idea of what the overall picture is, and where the Government think they are going, would be an important thing to take away from all this.
Lord Parkinson of Whitley Bay (Con)
My Lords, this boils down to a question of balance and proportion. I thank the noble Lord, Lord Foster, and the noble Baroness, Lady Bennett of Manor Castle, for their amendments and for sparking this debate. I know they are sincere and consistent in raising concerns about each of the areas that they have highlighted through their amendments, but I think some of the remedies they are suggesting are disproportionate and too strict.
Not everyone feels the way that the noble Lord and the noble Baroness do about gambling, for instance. Indeed, many people find, without having any gambling problems, that it enhances their enjoyment of sporting events. Many people in this country gamble without developing gambling harms, and it is right that we have protections in place to maintain that. As the Gambling Commission found with its recent advertising campaign advising people on the dangers of a workplace sweepstake—which came across as a bit po-faced to many sports fans—that question of balance always has to be carefully looked at and struck, while maintaining the protections for more vulnerable people.
I veer more towards what my noble friend Lord Hayward outlined: looking for established principles, rather than a list that we would continue to add to as times and tastes change. I suppose this is one of the problems with a framework Bill, where we are trying to anticipate social mores and debates that might come. Previously, in generations past, we have been able to have these debates each time we have been lucky enough to host a major sporting event, and have had these discussions in the context of the social and political views across the country at the time. So it is a useful debate, but we are not attracted to the amendments that the noble Lord, Lord Foster, and the noble Baroness, Lady Bennett, have tabled in this group.
As we look at these issues, we would like to see greater attention paid to the illegal unlicensed market in gambling, which is a real and growing threat. The noble Lord, Lord Foster, touched on this. Staking with illegal operators is now estimated at £16.6 billion, more than three times its level in 2019 and roughly double what it was just two years ago. The Office for Budget Responsibility has warned that His Majesty’s Treasury could lose up to £500 million if recent tax changes push more consumers towards unlicensed sites. One in six gamblers—some 2.8 million people—says they are already aware of at least one unregulated brand. Among the under-25s, one in five has used an illegal site already and as many as 420,000 schoolchildren may be engaging with the illegal betting market. Advertising spending by unregulated operators is forecast to exceed £1 billion by 2028—more than half of all gambling advertising expenditure in this country and up from just 16% in 2019.
While we do not agree with all the amendments that the noble Lord, Lord Foster, has tabled, we would like to see greater action from the Government on this growing problem in the country. They have recognised this; in February, the Secretary of State announced plans to stop unlicensed operators sponsoring Premier League football clubs and to establish a cross-industry illegal gambling taskforce. The noble Baroness, Lady Twycross, who is the Gambling Minister, said at the time:
“We will not hesitate to act where we see people being put at risk”.
Since February, we have still not seen that consultation launched. The industry—including operators, which are asking for tougher action against their unlicensed rivals—is still waiting with bated breath. Can the Minister update us on the important work being done in connection with the major sporting events across the world that we will see this summer as well as for future sporting events that we are lucky enough to host here in the United Kingdom?
Baroness Twycross (Lab)
I thank the noble Lords, Lord Foster of Bath and Lord Addington, and the noble Baroness, Lady Bennett of Manor Castle, for tabling these amendments. I also thank the noble Lords who spoke to them.
Amendments 2, 5, 6, 61, 65 and 67, tabled by the noble Lords, Lord Foster of Bath and Lord Addington, seek to regulate sports rights provisions. Sporting bodies are free to enter into their own sponsorship and broadcast arrangements. In recent years, through these arrangements, the gambling sector has made a significant financial contribution to sports including football, rugby, horseracing and snooker. Of course, I recognise the strength of feeling in this area, which my noble friend Lady Taylor of Bolton spoke to and clearly shares. However, I hope noble Lords can appreciate the Government’s desire to balance the sport sector’s commercial freedom with our ongoing efforts to reduce both gambling harm and the shift towards illegal gambling highlighted by the noble Lord, Lord Parkinson. I agree with him that any action we take in this area should be proportionate.
We take the relationship between gambling and sport very seriously, particularly given its potential impact on children, young people and the vulnerable. I will come on to soft drinks later but, in response to the question from the noble Lord, Lord Addington, on what this Government are doing on gambling harm, since 2024 we have made a number of significant reforms to gambling regulation with a view to tackling gambling harm, building on the White Paper developed and published by the previous Government. We have introduced a statutory gambling levy, which will provide for the first time independent and sustainable funding for research into and the prevention and treatment of gambling-related harms. This has more than doubled the money from the previous voluntary levy. Each year, 20% of funding will be spent on research to strengthen the evidence base on gambling-related harms, as I believe the noble Lord, Lord Foster, is aware. This includes a research fellow within DCMS to look specifically at gambling advertising, bringing together the evidence to see what appropriate steps might be taken. Currently, as the noble Lord is aware, we have no plans to limit gambling advertising further than it is already—clearly, it is already regulated.
We have also introduced online slot stake limits and reforms to marketing rules and we will continue to press operators to improve their self-exclusion schemes. In relation to sport and advertising particularly, we welcome publication of sponsorship codes of conduct from all major sports, as well as the Premier League’s ban on front-of-shirt sponsorship from the start of the 2026-27 season. We have further confirmed that we will consult as soon as possible on the banning of unlicensed sponsorship within sports: in response to the question of the noble Lord, Lord Parkinson, I am very keen, as the Minister, for this to start as soon as possible. I will write to him if we can give further detail on when that will come.
The Government are committed to tackling gambling harm and clear that we must be evidence-led in our policy-making. We will consider next steps to further raise standards in consideration of the evolving evidence base.
In the same vein, moving to limit these commercial partnerships without considering the potential significant impact on the sports and broadcast sector would in our view be inappropriate. The existing regulatory framework for gambling advertising and sponsorship is robust. All operators advertising in Great Britain must hold a Gambling Commission licence and abide by advertising codes enforced by the Advertising Standards Authority. Operators found to be in breach of these codes can be referred to the Gambling Commission for further enforcement action, which may include licence reviews or fines. The Commission has taken a range of enforcement actions on the back of referrals from the ASA, including ones resulting in fines for a range of issues where the ASA has found that the behaviour was particularly egregious.
In relation to the point on the prediction market made by the noble Lord, Lord Foster, in order to operate in Britain, any prediction market requires a licence from the Gambling Commission. We monitor potential impacts of prediction markets carefully. I do not have a response on the extensive points that the noble Lord made on data, but I am happy to meet him to go through that. Therefore, with full respect for this important subject, I do not believe this amendment is necessary, or that this is the right vehicle for changes to gambling legislation. This is a narrowly defined Bill, aimed at attracting and delivering major sporting events.
I turn now to Amendment 37, tabled by the noble Lords, Lord Foster of Bath and Lord Addington, and the noble Lady Baroness, Lady Bennett of Manor Castle, which deals with the important issue of shielding children and vulnerable people from harmful or age-restricted advertising. This is a priority for this Government. Event owners will have to comply with existing legislation and other regulatory requirements in relation to advertising. While there is no specific definition of advertising that is harmful to children in the existing advertising codes, the codes require that children be protected from advertisements that could cause physical, mental or moral harm. The codes also set out the responsibilities of advertisers in relation to age-restricted advertising such as gambling and alcohol advertising. Both through work related to the statutory gambling levy and wider government efforts, my department will continue to work with a wide range of stakeholders to examine the evidence base on the impacts of young people’s exposure to age-restricted advertising such as alcohol and gambling advertising, taking into account the impact on the advertising, media and sports sectors.
Returning to the advertising provisions in the Bill, the advertising offence is designed primarily to protect event owners’ commercial rights by preventing businesses carrying out unauthorised advertising in a restricted zone. However, any activity by event sponsors must be in accordance with existing legislation and other regulatory requirements, including those regarding protection from harms.
I move on to amendments 41, 44, 47, 48 and 51, tabled by the noble Lords, Lord Foster of Bath and Lord Addington, and the noble Baroness, Lady Bennett. They would make it an offence to carry out gambling advertising activity in a restricted advertising zone created by regulations under the Bill. These amendments require a court to share certain information with the Gambling Commission following the conviction of a person who committed an offence under the Bill by carrying out gambling advertising activity. They would also prevent any authorisation under the Bill being granted in respect of gambling advertising.
Lord Foster of Bath (LD)
My Lords, I thank all noble Lords who have taken part. I thank the noble Baroness, Lady Taylor of Bolton, for her support for my remarks. I neither accuse her nor imply anything about who her support will be for the next leader of her party. I merely point out that almost everything she said is word for word what Mr Andy Burnham, now MP, said only two weeks ago.
I am also grateful to others who have spoken. I refer to the point made by the noble Lord, Lord Hayward, subsequently by the noble Lord, Lord Parkinson, and then picked up by the Minister, that we should be basing our decisions on principles: I entirely agree with that remark. But it seems to me there is one principle that we have accepted in this country for a very long time: that public health issues need to be dealt with at public level. The Government have accepted issues around unhealthy food, to put it like that, as a public health issue. They have also accepted, as the Minister has said from the Dispatch Box on a number of occasions, that gambling has to be treated as a public health issue. Therefore, I genuinely believe that we have got a principle that all noble Lords on all sides could get behind in relation to these amendments.
I genuinely accept that the Minister is keen to keep the Bill as narrow as possible, but she pointed out in her remarks that the Bill is about protecting the rights of the event organisers—her very words. I therefore do not understand why we are placing measures in the Bill to protect rights in terms of ticketing, advertising and so on, yet she is not prepared to put a similar protection for the rights of event organisers in relation to their sports data. It seems that there is an absolute equivalence with all the other rights that we are protecting. Failing to do that in the way I am proposing means that there is a real opportunity for the growth of the black market, which she is keen to prevent. I ask her to look again in detail at this particular issue. It has been very carefully thought through. A lot of people have been engaged in work on this, and I hope that we come back to it at a later stage in our deliberations.
On the black market, we need to be very careful to be alert to the fact that a lot of the growth in the black market is coming from people who have withdrawn themselves from gambling using a programme called GAMSTOP, and suddenly, because of all the advertising for a big event, they want to gamble again. They are not allowed to on the legal market, so they end up going to the black market, which is why we now have advertisements that say “not on GAMSTOP”. It is wrong to allow that to happen. I hope that the Minister will look at that. I beg leave to withdraw the amendment.
Lord Markham
“(f) Schedule (Delivery authority provisions) (“the delivery authority provisions”).”
Lord Markham (Con)
My Lords, I start by declaring that, further to the comments made by my noble friend Lord Hayward, if I was ever to win anything significant, it would definitely be by a massive stroke of luck.
The Government’s clearly stated intention for the Bill is to create an event-agnostic framework that can be applied to certain future sporting events without requiring new primary legislation. The Government have been very open in their belief that the Bill will cover all those possible scenarios. Our amendments seek to probe to see whether this is the case. The amendments are made in the spirit of helpfulness, as I know are the other amendments made by my noble friends and the noble Baroness, Lady Bonham-Carter.
By way of an example, say we wish to bid for one of the major and very large events, such as the Olympics or the World Cup. The delivery of those events requires significant cross-sector effort, bringing together national governing and representative bodies for the sports, such as the British Olympic Association or the Football Association; local government, including the host cities; and central government departments. We might need to construct new stadia or event spaces, purchase land and improve public transport links, for example.
Hosting such an event would potentially require the creation of a specific body to co-ordinate and oversee the event’s organisation. This is the approach that we are all very familiar with and something that we had to do with the London Olympic Games and Paralympic Games Act 2006, with which we created the Olympic Delivery Authority to work alongside the London Organising Committee of the Olympic and Paralympic Games. The ODA was responsible for the redevelopment of the Stratford area, the construction of the sporting ventures, and the infrastructure and transport planning—all things I was very familiar with as a previous chair of the London and Continental Railways, which developed a lot of that work.
The Bill, however, does not provide a mechanism for the Government to create a delivery authority for a sporting event, should it become necessary. If Ministers needed to establish such a body for future events they would require primary legislation. Of course, this is an outcome that we all wish to avoid and it is the Government’s stated intention. If it transpires that bespoke primary legislation is indeed required for a future sporting event, what is the purpose of the Bill that we are trying to pass?
Amendments 2A, 6A, 58A, 58B and 61A, in my name and that of my noble friend Lord Parkinson, seek to rectify this shortcoming by creating a mechanism for the Secretary of State to establish a delivery authority if they believe it necessary. In drafting these amendments, I have taken inspiration from the provisions in the 2006 Act, which established the Olympic Delivery Authority, and amended them so that they can be applied generally to any event to which the framework applies. Amendments 58A and 58B seek to allow the Secretary of State to establish transfer schemes to the delivery authority and for the authority to be dissolved by order.
Amendment 61A seeks to insert a new schedule into the Bill. The first part of this proposed new schedule would provide for the establishment of a delivery authority and sets out the authority’s general functions. Those are to
“prepare for the sporting event … make arrangements in preparation for or in connection with the use or management … of premises and other facilities acquired, constructed or adapted in preparation for the sporting event … ensure that adequate arrangements are made for the provision, management and control of facilities for transport in connection with the sporting event, and … ensure the safety of individuals participating in or attending the … event”.
Part 2 of the proposed new Schedule sets out the constitution of a delivery authority, including membership of between seven and 11 people, the appointment of a chair and chief executive, and the procedure for removing members. Part 3 would provide procedural rules of delegation by the authority and seeks for the Secretary of State to require the authority to submit a report on the authority’s progress, which must be laid before Parliament. Part 4 would allow the Secretary of State to provide the authority with financial assistance, if necessary, subject to the affirmative resolution of the Bill.
I am aware that other provisions may be needed in secondary legislation. I will not pretend that we have all the detail behind this right, but we are trying to set out likely scenarios in which we would have to set up such a delivery authority and the things that would need to be considered. We are trying to build those into the framework. We ask the Government to come back more thoroughly on the schedules that would be needed, but we hope these are helpful by way of example.
I hope that the Minister understands the point that I am trying to make. If the Government believe that this Bill, when passed, will never need further primary legislation then it needs to cover all the possible requirements for future events. If we hope to host some major sporting events in the future then we may well need a delivery authority to support such an event. These amendments would allow the Government to do just that. I beg to move.
Baroness Bonham-Carter of Yarnbury (LD)
My Lords, my amendment covers a slightly different area. It seeks to ensure that cultural events affiliated with a sporting event are part of the Bill’s scope. We on these Benches support the Bill’s aim to create a legislative framework. However, past experience has shown that cultural events such as the Cultural Olympiad were hard to include and very much seen as an afterthought. Those of us who witnessed and participated in the events in 2012 will argue that they were far from that; they were integral and magnificent—the opening and closing ceremonies, and the cultural coming together across the UK.
The Bill’s current wording refers to events “sporting or otherwise” and
“held in connection with the sporting event”.
This is a probing amendment that seeks assurance from the Minister that this is the case and asks her to consider making the reference to cultural events more explicit.
Baroness Evans of Bowes Park (Con)
My Lords, Amendments 3 and 4 are in my name. I am grateful for the support of the noble Baroness, Lady Grey-Thompson. Although it is a pro bono position, I declare my interest as a board member of the London Marathon Foundation.
The purpose of these amendments is very simple. They seek to give the appropriate national authorities, rather than just the Secretary of State, the power to apply the unauthorised association provisions and all the transport provisions that are included in this Bill. Appropriate national authorities, as defined in the Bill, are the Secretary of State or the devolved Administrations. These amendments would widen the scope to designate the five parts of the sporting events framework set out. Their aim is simply to future-proof the Bill so that powers can be conferred by the appropriate authority if there is a reasonable case to do so.
For example, if greater powers were devolved in relation to transport provision then the legislation would enable devolved authorities to apply these powers without needing to change primary legislation again. There simply is nothing more behind them than that. These amendments are part of a package of amendments that I have tabled or signed that seek to extend the scope of the Bill to include major, regular, UK-based events and to ensure greater flexibility in the potential use of the framework provisions. I will explain in more detail my arguments for doing this when we discuss group 6.
Lord Addington (LD)
My Lords, I congratulate the noble Lord on starting with a question that should be asked. When we have done the big games in the past, there were infrastructure measures that had to happen, but they do not seem to be in the Bill. So how do they fit in? It is that simple. I probably should have had my name down somewhere—my fault, sorry. But it is one of the things that we really must get out about how the Bill is going to work. Is it something we tag on to this, or is it something we expect to be smaller secondary legislation, or is it part of the whole that we are doing here?
As I said, we have always had to discuss this before—well, we have done it twice here; the other times, it was Scottish legislation. If we need a proper planning structure to build stuff, how is that fitting in? It does not seem to be that obvious. If the Government have a scheme coming, let us hear about it, because it is one of the things that has been of great benefit. In Birmingham, we learnt how to do it quickly; in London we learned how to do it well with lots of planning. Where do those two structures fit into what is going on here? It is a very reasonable series of questions that have been asked, and I hope the Minister has a very reasonable set of answers.
Most people who are taking part in this wish the project well. There is a lot of nodding going on here, so if we have got that going on, let us find out how that happens. If there are further questions, let us find out what inspires them, and let us see what we can do. This is something which might be very good. Let us confirm it is, or at least that it sounds like it is.
Baroness Grey-Thompson (CB)
My Lords, I apologise. I did not get in to speak before the noble Lord, Lord Addington, and I did not want to interrupt.
Baroness Grey-Thompson (CB)
I remind the Chamber of my interests. I am chair of Sport Wales, and I am also part of the Laureus World Sports Academy, which is a group of ex-athletes who come together to raise money to put back into sport.
I have my name on Amendments 3 and 4 but support others in this group. Like the noble Baroness, Lady Evans of Bowes Park, I think the Bill is too tightly defined. If we are going to bid for major games in the future, it would be useful to have in this Bill everything that we might possibly need. We have huge experience from various national bodies and organisations in this country—I have previously been a board member of the London Marathon, so I have seen that—and it would make sense to use the expertise that they have.
The noble Lord, Lord Markham, talked about transport. One of the massive successes of the 2012 Games was the transport. It was an incredible experience for disabled people. A huge number of staff were available at various train stations and interchanges. The planning for that started years ahead of the Games, thanks in no small part to the noble Lord, Lord Hendy, and the work he did when he was commissioner at TfL. These are the things that we have to get right. The world of bidding is going to change. If we get the Bill right, it sends a strong message to the international community that we take bidding for major games really seriously and it is something that we want to do.
I joined your Lordships’ Chamber in 2010 when we were considering the then London Olympic Games and Paralympic Games (Amendment) Bill. Although there was a lot of support for it at the time, that Bill was tidying up things that had happened earlier. It makes sense that if we could just slightly widen the scope and think about other measures that are needed, it would save us a lot of hassle and stress in the meantime, and it would make sure that the world knew that we are ready to bid for the biggest sporting events.
Lord Holmes of Richmond (Con)
My Lords, it is a pleasure to follow my friend the noble Baroness, Lady Grey-Thompson. As it is the first time I have spoken in Committee, I declare my technology interests as adviser to the Crown Estate, Endava plc and Simmons and Simmons LLP, and as non-executive director at Avalanche BVI Inc and the Avalanche Foundation. Like the noble Baroness, Lady Grey-Thompson, it seems that I am too slow to compete with the noble Lord, Lord Addington, who never moved that quick on a rugby field. Nevertheless, he still has some pace when it comes to putting down amendments.
Before I speak to my Amendments 90, 92 and 93 in this group, I commend the remarks of other noble Lords. If this Bill’s purpose is to have a situation where we are well set when we come to bids for mega events such as the Olympic and Paralympic Games, the FIFA men’s and women’s World Cup, and so on, we need to ensure that the Bill includes everything that we can know at this stage. If we take a principles-based approach throughout, that gives us the best opportunity. As my noble friend Lord Parkinson pointed out in the form of my noble friend Lord Markham, we know now that gaps exist because we understand from 2006 the need to put in place an ODA, as it was then. As my noble friend Lord Markham said, these amendments may not be word-for-word perfect, but the principle behind them is sound. We are either doing this Bill to have everything that we know at this stage covered to put us in that pole position to host these events, or we are not. There needs to be a distinction when we are going through the Bill between adding provisions—baubling as the Government might call it—and enabling it to be full to its stated purpose. I believe that much of the debate in this group of amendments goes to that second critical point: to make the Bill as fulsome as it can be to achieve its objectives.
Amendment 90 is very much in that vein. It would exclude registered charities from the provisions of the Bill when they are acting under the restrictions of their charitable status. The amendment clearly sets out that if a charity is engaged in a commercial activity or for commercial reasons has a connection with a third party, that obviously would not be included. It also sets out the potential for government to consider a limit. If it is a mega charity, perhaps the provisions of the Bill should apply. This was an issue which we faced very clearly when we were doing the London Olympic and Paralympic Games. It is a cardinal principle when you are involved with these mega events. You have to protect and defend the rights of the marketing partners without whose funding, support and value in kind these events could not happen. It is in no sense trespassing one centimetre on the right of charitable organisations, of which we have such a flourishing community across the UK, particularly local charities, to pursue their charitable objectives without transgressing the provisions of the Bill. I look forward to the Minister’s response on that point.
Similarly, Amendment 92 looks to a social value assessment. This is not extending the provisions of the Bill; it is merely intensifying the impact that these events can have. Again, at London 2012, we looked at everything through a social, economic, environmental and cultural lens. The provisions I have set out in proposed Amendment 92 give some illustrations of social value, but they are in no means an exhaustive list. In reality, it does not impose greater restrictions on an event; it enables it to state its value, through commercial and sporting, into that wider social, environmental and inclusion potential—all positive for the games themselves. I look forward to the Minister’s response to my three amendments.
Baroness Twycross (Lab)
I thank the noble Lords, Lord Parkinson of Whitley Bay, Lord Markham and Lord Holmes of Richmond, and the noble Baronesses, Lady Evans of Bowes Park, Lady Bonham-Carter of Yarnbury and Lady Grey-Thompson, for these amendments. Amendments 2A, 6A, 58A, 58B and 61A, tabled by the noble Lords, Lord Parkinson and Lord Markham, would allow for the establishment of a delivery authority to prepare for and manage the delivery of a sporting event. As the noble Lord, Lord Addington, said, this is question that is worth asking. I am grateful for the opportunity to reply, and I hope I can give the noble Lord some reassurance on this point.
Although we recognise the intent of these amendments, we do not believe they are necessary. The nature and scope of delivery models for major sporting events are determined based on what is appropriate and proportionate to the needs and requirements of each specific event, including funding and the set-up of governance to support oversight. Establishing a delivery authority is one way to do this. Indeed, it is a method that the UK has relied on before, including, as a number of noble Lords noted, for the London 2012 Olympic and Paralympic Games.
However, setting up a delivery authority with the proposed powers has typically been the exception, not the rule, when it comes to delivering the major sporting events that are likely to fall within the scope of the Bill. Similarly, it is rarely necessary for delivery models to be established on a statutory basis. For example, for Euro 2028, a special purpose incorporated company was established by the five relevant football associations to deliver the event—a proportionate approach, not least because Euro 2028 is relying overwhelmingly on existing stadia and infrastructure without the need for bespoke statutory powers.
However, where a different form of oversight is rightly required, the Government can establish an appropriate delivery body subject to appropriate additional parliamentary scrutiny, as the Olympic Delivery Authority regularly was. In the case of London 2012, the delivery authority was created to take on certain powers as a result of a specific set of requirements that it had to deliver. The hosting of those Games required dedicated oversight with powers to co-ordinate different authorities, given the scale of public expenditure required, including significant investment in the construction of infrastructure such as new venues. I understand that we have seen a shift in what the IOC requires. For example, it now encourages hosts to use existing infrastructure.
In the Government’s view, these amendments are not necessary given the very limited eventualities. The requisite ability to establish delivery bodies already exists to a sufficient degree.
Amendments 3 and 4, tabled by the noble Baronesses, Lady Evans of Bowes Park and Lady Grey-Thompson, would enable the devolved Governments to apply the unauthorised association and transport provisions in the Bill. I agree with the noble Baroness, Lady Grey-Thompson, that we need to get it right. However, I assure your Lordships’ Committee that we have worked closely with the devolved Governments on the provisions in the Bill. Where the provisions are within their devolved competence, we have ensured that they can be applied unilaterally, as is the case with the ticket touting, advertising and trading provisions.
The unauthorised association provisions are reserved and are not within the devolved Governments’ legislative competence. However, they extend UK-wide. The Secretary of State will be able to apply them to events taking place anywhere in the UK, including where no part of the event is taking place in England.
The transport provisions in the Bill relate specifically to transport in England and can be exercised only by the Secretary of State. Transport is devolved, with each Government responsible within their jurisdiction. We explored whether devolved Governments wished to apply the transport provisions in their jurisdictions, and it was confirmed that they were not required.
In England, the provisions are necessary to facilitate the co-ordinated delivery of certain large-scale sporting events that require integrated planning, clear responsibilities and co-ordinated action across boundaries. For UK-wide events, transport planning is co-ordinated through established intergovernmental and operational mechanisms.
Amendment 66, tabled by the noble Baroness, Lady Bonham-Carter of Yarnbury, and the noble Lord, Lord Addington, would insert into the Bill a definition of “sporting event” to include associated events such as qualifying rounds, ceremonies, fan zones, official viewing areas and cultural events. I completely agree with the spirit of this amendment in that major sporting events are often about much more than what happens on the field of play. I thank the noble Baroness and the noble Lord for meeting to discuss this.
Lord Markham (Con)
I am grateful for the contributions of all noble Lords and thank the Minister for her comments. I welcome the general support from noble Lords. I hope the Minister can see that this is all brought with the constructive view of making sure that this framework legislation can be comprehensive enough to work.
I must admit that I remain to be convinced. The points raised by my noble friends Lady Evans and Lord Holmes, and the noble Baroness, Lady Grey-Thompson, are quite serious and need to be covered. At the same time, I thank the noble Baroness, Lady Bonham-Carter, for widening it to include cultural events, which was done very successfully in the Commonwealth Games by Andy Street. It is definitely worth while trying to bring that into this.
I would like to challenge the Minister further, if I may. She said it was not required because it is possible that these delivery bodies will not be required and there are only two examples where they were. However, her very admission of the fact there have been two occasions where they have been required surely makes the point. Why would we not want to put it into enabling legislation? Why would we not have it in place so that it is possible? It is no problem; if you do not need it, you do not need it, so you ignore those bits. However, if we are in the circumstance, which has happened twice before, where you need a delivery body, all of a sudden you need primary legislation. That begs the question: what is the point of having this framework legislation at all?
The whole point is that we are trying to have enabling legislation to cover all those eventualities. Noble Lords must admit that these are very real eventualities as it has happened twice already. I would hope that, unless the Minister can say with absolute 100% certainty that we would not need such delivery bodies in the future, she will reflect on those points before Report and think about embracing such amendments. For now, I beg leave to withdraw.
Lord Moynihan
“(2A) Before making regulations under this section, the appropriate national authority must take all necessary steps to comply with any relevant host contract.”Member’s explanatory statement
This amendment seeks to ensure that the appropriate national authority will comply with a host city contract or a host nation contract before making regulations applying the sporting events framework.
Lord Moynihan (Con)
My Lords, I declare an interest as a member of the London Organising Committee of the Olympic and Paralympic Games, a former chairman of the British Olympic Association from 2005 through 2012, and, throughout those seven years, a member of the International Olympic Committee, which had oversight of the Games. I was very sorry not to be present at Second Reading. I was not a Member of your Lordships’ House at the time, but I am delighted and honoured to be back in a different capacity. I read the Second Reading debate with interest, as well as the Bill and the Explanatory Notes.
Let me say from the outset that I share with the Government the view that every possible assistance should be offered to bring major international sporting events to the United Kingdom, and this Bill can and will send a signal that we are keen to encourage international sporting events to come to the United Kingdom. However, this Bill is event-agnostic. It is seeking to provide a common legislative framework to assist that process, but it is very unclear which events are covered by that process: an issue that I know my noble friend Lady Evans of Bowes Park will address in future amendments.
I support the comments made by my noble friends during the debate on the earlier group of amendments and I contend that there will be a need for primary legislation. Because there will definitely be a need for primary legislation, should we ever bid for the Olympic and Paralympic Games to come to the United Kingdom, or hold a FIFA World Cup here, it is incumbent on the Government at least to accept the principle that there will need to be primary legislation at that time.
I will start with a very important point. There seems to be an underlying theme to the Bill: that it is for the Government to decide whether we host international events. Let us take the Olympic Games. It is for the British Olympic Association, as an independent organisation, to decide whether we will bid for the Olympic Games. On many occasions in the past, the association has held a competition between different cities to encourage one or a number to come forward before choosing the preferred city. Once the association has identified the city, it then sits down with the mayor, as it did with Ken Livingstone in the early years of this century.
There was a major debate about whether the Olympic Games should be in the West End or the East End of London. It was wisely decided—not least because Ken Livingstone urged this point and said it was conditional on his support—that the regeneration of the East End of London could be achieved by hosting the Olympic and Paralympic Games in 2012. That regeneration, which would have happened anyway at some stage in the future, was accelerated to 2012, because it had to be done by that date. At that point, there was a discussion with the then Government. With the Government’s support, those involved, particularly those from the British Olympic Association, were able to table a request to the International Olympic Committee to host the Games in London in 2012.
The first and most important point is that it should be recognised that the role of the Government in hosting international Olympic events, or international sporting events, is one of support for the bidders for those events. In tabling my amendments, I am reinforcing that point. This is a simple enabling measure. It provides a route for government support to be channelled through secondary legislation. I simply say to the Minister that if, when we host the Olympic Games in the future, the idea is that it is going to be debated on the Floor of your Lordships’ House for one hour, covering all the detail that will be required for what was, in 2012 figures, north of £10 billion of investment, it is inconceivable that Parliament would not sit back and accept that.
At the moment, I just remind the Minister that it would require a statutory instrument as per this Bill to be debated on a regret Motion, and that regret Motion would be limited, as it is at the present time, to an hour in your Lordships’ House. Therefore, if we are going to put all the framework in this Bill into regulations, I really do not believe that that is sufficient time for Parliament to consider all the many issues that will be required if we were to host the Olympic and Paralympic Games in the future.
Baroness Grey-Thompson (CB)
My Lords, I strongly support the amendments in the name of the noble Lord, Lord Moynihan. I think in the excitement of thinking we might have another Olympics and Paralympics, it is easy to forget the huge amount of work in—the reality of—bidding for these Games. For me, 2012 was the best eight weeks of my life, but it is easy to forget that the process of even getting to bidding was a massive risk. A lot of people put their careers on the line in saying that we should bid. Most of the way through bidding for 2012, we were told that there was no point in bothering because it was Paris’s turn; amazingly, we were able to turn that on its head.
When you go to Queen Elizabeth Olympic Park, it is easy to forget that legacy at that point was not defined as we look at it now. If a handout amendment is actually a real thing, I think one of the successes of Olympic Park was in looking at it as a mayoral development corporation—I had an amendment to the Localism Bill—and about having the foresight to see what was required and what the park would look like 10, 20 or 50 years beyond the Games. That is why we need to be quite bold with some of the things that we are doing in this Bill. We are way beyond sport for sport’s sake. Certainly, Amendment 20, where the noble Lord, Lord Moynihan, would change “is likely to bring” to “will bring”, is really important, because we can do so much through the power of sport.
Back in 2000 Nelson Mandela said:
“Sport has the power to change the world”—
that is quoted everywhere. The bit that gets forgotten is what he said afterwards: that sport inspires, unites the youth and breaks down racial and societal barriers—better than Governments, he said. We should not underestimate the power of sport. We should be thinking about legacy. If we are bidding for anything, we need to build in legacy right at the very beginning, when we are talking about bidding for the Games, because the value for money and the return you can get on it is significant. We should be thinking about schools programmes, which 2012 did brilliantly—coaching, clubs and facilities. An increase in participation is such a tiny part of what we are trying to do. We should be bold and say, “Yes, actually, we demand that there is a really strong legacy as part of anything that we bid for”, so that we stop having these spikes when everyone loves football for a bit or rugby for a bit, and it actually genuinely changes the way we participate.
This group of amendments covers this, with the amendments from the noble Baroness, Lady Evans of Bowes Park, in terms of who we are trying to get to, to be physically active. We should look at these amendments and maybe think of a slightly different form of wording but be really bold in what we want for the United Kingdom and beyond.
Lord Holmes of Richmond (Con)
It is a pleasure to follow my friend, the noble Baroness, Lady Grey-Thompson, and to support all the amendments in the name of my noble friend Lord Moynihan. It is such a pleasure to have him back in your Lordships’ House. The boat is now being steered again. He made so many points that were completely on point. It is worth reiterating that there is only one city on the planet which has hosted the Olympic Games three times in the modern era, from 1896, and that is London. Another city will equal us in two years’ time, and that is similarly impressive. There will be a need to consider future bids, be they in London or in other parts of the United Kingdom.
The points that my noble friend makes are exactly right. The scale of the funding, never mind all the other issues he raised, will be of parliamentary interest, to say the least. He cites some excellent examples from other parts of the world, and he is right to celebrate the sporting ambassador who has stridden across the world for decades: John Coates, who has done so much for sport, not just for Australian sport but for world sport. My noble friend’s points to that end were very well made.
Lord Addington (LD)
I managed to avoid false starting the two Paralympians this time. We are back to asking whether the Bill is wide enough to enable itself to do what it has to do within the known requirements of hosting an Olympic Games. It probably looks about right for a championship that is using existing infrastructure. Even if the Olympics or the Commonwealth Games want us to use that where we can, you may well have to construct something new and possibly something temporary. All these elements have been in both of those things and at very different scales. But if this is going to be something new, in the case of the Olympics particularly, it seems to change what it wants over time, because it is an evolving thing.
The London Olympics changed the expectation of how much change and benefit you could bring. It actually has been a solid thing, and that was based on many, many hours in Committee—I know because I was there—when the Government of the day said, “Let’s get this right, or at least get a framework, or at least ask, even, as a training exercise, what it would look like”. I think half the time the Government did not expect to have to implement it, but that is merely the observation of somebody who sat there through Committee. So there will have to be something new, and where in the current thinking does it fit in, if we have to do that?
I hope that the noble Lord, Lord Moynihan, enjoyed his little sabbatical, but it is better to have him back. I say that as one who dodged that. But where are we going to get that little bit of interaction? If it is needed, where is the space for it? You cannot know. You can hope and you can prepare the ground, but if we have to do something different, where is the flexibility? I think there would be, shall we say, around the House, a degree of sympathy if you had to change the Bill to bring a little bit of flexibility in here, if it was needed. I do not think too many people would object.
In this debate we are trying to find out whether we need to do something else. If the Olympics change, if the Commonwealth Games change or even if the World Cup changes and we want something else in there and still think it is worth doing, how do we accommodate that? In this Bill, where do the Government say that there is the flexibility to say that this bit will not apply and that we have to do something else? To future-proof the Bill, to an extent, we will have to do that. We got some of the answer to that in a previous debate, but I look forward to hearing how much more thought the Government have put into doing this. It is a real question that we need an answer for, and the Bill probably has to have a degree of flexibility put in at its heart. We want this to succeed. The Bill will have completely failed if we have to go back and redraft something else. We do not want to do that. What is the Minister doing to prevent that?
Lord Markham (Con)
My Lords, what an honour it is to follow such distinguished experts in this field: my noble friend Lord Moynihan—like other noble Lords, I am delighted to have him back—my noble friend Lord Holmes and the noble Baroness, Lady Grey-Thompson. It is yet another example, if ever we need it, of how lucky we are to have such a range of expertise in this Chamber.
The points in this debate are very similar to many of the points made on the last groupings. As the noble Lord, Lord Addington, said, while we want this framework agreement to work, is it possible to make it wide enough to cater for all the eventualities that we are talking about? As my noble friend Lord Moynihan mentioned, there is new technology coming along. They were mentioning AI in the Paris bid—think how much it has moved on from then. There are new rights that need to be taken on board, whether LGBT rights as it was last time or some new rights going forward. There are new funding arrangements that are very likely to be put in place.
I struggle to see how we can set this all up in an all-encompassing framework Bill, and I think I speak for all noble Lords when I say that an hour’s debate on some sort of secondary legislation will not be able to cut it in these instances. I do not believe I can add very much to the expertise that we have heard already but, as others have said, this must leave a sports legacy, so I am thoroughly behind the points that have been made. I look forward to hearing the Minister’s points, because there is a lot to consider here.
Baroness Twycross (Lab)
I thank the noble Lord, Lord Moynihan, for tabling these amendments. I am grateful to him for taking an interest in the Bill, and it is genuinely good to see the noble Lord back and elevated to the Opposition Front Bench, albeit in another department. How could the noble Lord go to another department? The contributions of the noble Lords, Lord Moynihan and Lord Holmes, and the noble Baroness, Lady Grey-Thompson, have been noted by a number of speakers today. We are privileged to have the expertise of the noble Lords and the noble Baroness, who have taken part in the process and been part of that work to define the vision required to win bids.
I hope I can give all noble Lords reassurance that legacy matters to this Government and, as a former London Assembly member, I am clear on the physical legacy that this city received from the 2012 Games. On the question from the noble Lord, Lord Addington, as to whether it is wide enough as a framework, we believe that it is and I will go through the amendments in turn. I hope I can give noble Lords some reassurance.
Amendments 8 and 13 seek to ensure that the appropriate national authority will comply with a host city contract or a host nation contract before regulations applying the sporting events framework can be made. There are numerous agreements and contracts to which this could apply and, in our view, it would not be appropriate or necessary to make the time that regulations would be made and brought into force contingent on compliance with them all. The framework is designed to bring into effect commitments made by national Governments at the point of bidding for an event. The regulations applying the sporting events framework are therefore the closest equivalent to complying with a host nation contract, in so far as one exists; they provide the means for Governments to meet their guarantees to event owners.
Compliance with a host nation contract and the creation of regulations to apply the framework are the same stage of the process, so one cannot come before the other. Host city contracts are made by a combination of local authorities and event delivery companies directly with event owners. These relate to local event needs and are signed in advance of the event. It would not be appropriate to make a national authority a signatory of that agreement, when the provisions contained within it are for local delivery and the national authority is not responsible for delivering them.
In some cases, the appropriate national authority may extend provisions in the framework to enable a local authority to fulfil its hosting agreement—for example, to enable the local authority to take enforcement action against unauthorised advertising and trading in a restricted zone. But, as with the host nation contract, any host city contract that relies on this framework would be complied with only at the point when the regulations are made, thereby making this amendment redundant.
On Amendments 18, 20 and 21, I understand that their intent is to further narrow the conditions for applying the framework, requiring an event to be of significant international interest, to bring economic but not social benefits and to have a sporting legacy in the United Kingdom. However, the Government do not agree with this approach. While major sporting events generate international interest and build the UK’s standing around the globe, they also deliver other significant and wide-ranging benefits, as was widely acknowledged during Second Reading. These are not restricted only to economic benefits, nor the sporting legacy of such events, although I agree that that is significant. They bring sport to different communities and demographics; they improve opportunities to increase participation in sport and physical activity; and they generate moments of collective experience that contribute directly to social cohesion and advance our national story.
The Bill is drafted to ensure that these kinds of major sporting events can still be captured by the Bill and that while international interest is one important factor, it is not the only factor on which an event could access these provisions. International interest is a broad category and may be shaped by many factors, including global and regional politics, changing media trends and the diplomatic ambitions of the Government. This amendment would need a highly specific definition of international interest for it to be required as applicable. Those thresholds would be entirely arbitrary, set at a point in time and potentially irrelevant or outdated soon after. What is deemed significant international interest can vary significantly. For instance, particular events may generate extremely high interest in certain parts of the world and relatively little in others. The test of international interest as currently framed provides flexibility to consider a range of factors on a case-by-case basis.
I am happy to talk to the noble Lord, Lord Moynihan, and other noble Lords further on the points raised in this debate. I know and appreciate that all noble Lords taking part in the debate want the Bill to deliver what we intend. However, for the reasons I have set out, I ask the noble Lord to withdraw his amendment.
Lord Moynihan (Con)
My Lords, I thank everybody who has participated in the debate, particularly my noble friends in sport, the noble Baroness, Lady Grey-Thompson, and the noble Lord, Lord Holmes. I did not live up to their expectations; I was first of the losers, getting only a silver medal at the Olympic Games while they had many gold medals to their names—albeit that I got a silver medal by 0.6 of a second behind the East German eight, who subsequently sued for the damage that the drugs they took during that event had done to them. But that did not prevent them retaining their gold medal. To be honest, all sports men and women know that it is the event on the day and the memory of that event that matter most.
“(5A) Regulations made by an appropriate national authority under this section may not have effect for a period that is longer than the specified period.(5B) In subsection (5A), the “specified period” means a period of time that must—(a) begin no earlier than the beginning of the period of 21 days ending immediately before the day on which the sporting event begins, and(b) end no later than the end of the period of 5 days beginning with the day after the day on which the sporting event ends.”Member's explanatory statement
This amendment would establish a maximum period in which the sporting events framework can be implemented in relation to a particular event.
Lord Parkinson of Whitley Bay (Con)
My Lords, I rise to move Amendment 9 and in doing so, I also speak to Amendments 10, 11 and 12, which stand in my name and that of my noble friend Lord Markham. These four amendments address two related but distinct concerns about the regulation-making powers conferred by Clause 2 of the Bill: first, how long those regulations can remain in force in relation to any particular sporting event; and, secondly, the parliamentary scrutiny to which all such regulations should be subject.
Clause 2 allows an appropriate national authority to make regulations to implement the sporting events framework for a particular event. What it does not do is place any limit on the period for which those regulations may be in effect. We believe that is a clear omission. The framework is designed to apply to specific and time-limited events, so it would be strange and, we submit, improper if regulations made for a particular event remained on the statute book indefinitely or for a period bearing no relation to the duration of the event.
Amendment 9 seeks to address this issue by applying the same temporal limit that Parliament has already judged appropriate in comparable legislation. The approach we have taken mirrors precisely the time periods used in the Birmingham Commonwealth Games Act 2020 and the UEFA European Championship (Scotland) Act 2020. That is a pre-event period beginning no earlier than 21 days before the event starts, and a post-event tail of no more than 5 days after it ends. Parliament has already, therefore, debated and endorsed this model; it is tried and tested, and I see no reason why we should not adopt it here today. I hope the Minister will agree.
Amendment 10 is a probing amendment to be looked at alongside Amendment 9. It proposes a single flat period of 50 days as an alternative limit. We have tabled this to invite the Committee to discuss whether a straightforward numerical limit would be a preferable way of proceeding. We think 50 days is a generous period; the London Olympic and Paralympic Games, between them, spanned 45 days, the UEFA European Championship runs for approximately one calendar month, and the FIFA World Cup takes 39 days from the first match to the final whistle. A limit of 50 days would therefore give Ministers considerably more time than any of these events actually require in practice; it gives a generous margin, while providing Parliament and the public with the reassurance that exceptional powers do not quietly become permanent fixtures of our regulatory landscape.
I imagine the Minister will cite the need for flexibility in her response, and I understand that this framework needs to be flexible for different types of events. If the sporting event framework cannot be applied, administered and wound down within 50 days, however, I would be interested in hearing what event she has in mind that might require a longer period than this. If flexibility is the key, then Amendment 9 provides the perfect solution.
Amendments 11 and 12 address parliamentary scrutiny of these regulations. As currently drafted, the Bill applies the affirmative procedure only to the first set of regulations which apply to the framework of a given event. Subsequent regulations that may amend, extend or otherwise modify the framework as applied are subject only to the negative procedure. Amendments 11 and 12 would remove that distinction and require all regulations made under Clause 2 to be subject to the affirmative procedure.
The rationale for this is straightforward: the regulations we are discussing will implement a framework which represents a quite significant infringement on the rights and obligations of businesses, organisers, local authorities and members of the public in connection with major sporting events—as my noble friend Lord Moynihan mentioned in the previous group in relation to the Olympic Games in Paris, where they took in expansive issues such as AI and facial recognition. Parliament should have the opportunity to properly debate and approve all such regulations, not merely the first wave of them. I hope by the time we get there, this experiment with time-limited guillotines on secondary legislation will not still be in place.
The delegated powers memorandum, published by the Department for Culture, Media and Sport, justifies the limited use of the affirmative procedure because it is assumed that subsequent regulations will
“contain operational or technical detail or provide for unforeseen changes in how an event is to be delivered. To ensure there is an efficient mechanism to apply or amend such provisions at a later stage of programme delivery, the government considers that the negative procedure is appropriate”.
However, as the Delegated Powers and Regulatory Reform Committee of your Lordships’ House has pointed out, there is no limitation placed on the scope of subsequent regulations. The first set of regulations may apply only one aspect of the sporting event framework to an event, but the Government may change their mind; the second set may simply apply the rest of the provisions. Given this, there is no logic in inviting Parliament to agree to the initial regulations applying the framework, while allowing the subsequent and potentially very significant modifications to pass without scrutiny.
If the Government’s argument here is simply one of administrative convenience, I gently suggest that that is not an adequate reason for reducing parliamentary oversight of powers of this nature. I look forward to hearing the Minister’s response, and I beg to move.
Lord Addington (LD)
My Lords, once again, if it comes to sporting events, I have a bit of reminiscing to do. I can remember a very good little row we had on the Birmingham Commonwealth Games Bill about changing local taxation; it was a bedroom tax that some people saw as a way of solving local government finance problems in Birmingham. It was then pointed out that there were only two weeks allowed for this process. I think it would have been quite a high surcharge that would have benefited the hoteliers of Wolverhampton and Coventry if it had been brought in.
If we get an idea about timescale, it becomes very important that it is adequately placed, and that is in the tradition of what we have done. Making sure that that continues to apply means we are taking a new piece of legislation and applying it to a tradition of what we have done in legislation: there are shorter periods needed for things, and these are exceptional circumstances. If we are going to do that, we are fine. Not allowing these things to become permanent is a fair point here, because they are very unusual things. Indeed, the entire premise of the Bill is that we are doing stuff for extraordinary circumstances.
I hope that the Government will give a reply that reassures the noble Lord that his amendment is not necessary, but I think it probably was worth while to give us the idea of the aim of it. These are short-term measures.
Baroness in Waiting/Government Whip (Baroness Blake of Leeds) (Lab)
My Lords, I thank the noble Lord, Lord Parkinson, for introducing this group of amendments, seconded by the noble Lord, Lord Markham. I express my gratitude to all noble Lords taking part today, and say to the noble Lord, Lord Moynihan, that I would have been very distraught if such an avid Leeds United supporter had been lost to the Chamber—to be continued, I am sure.
These amendments—which I think are probing, especially Amendments 9 and 10—relate to the maximum period that the framework provisions in the Bill can be applied to a sports event. Amendment 10 would limit to 50 days the maximum period that any regulations applying the framework provisions in the Bill could be in effect. Amendment 9 limits provisions in the Bill to being in effect no more than 21 days before an event begins and five days after an event concludes. We do not consider, as the noble Lord probably predicted, such a blanket approach to be workable in the context of an event-neutral Bill.
Application of the provisions must be considered on a case-by-case basis, taking into account the requirements of each event. These will inevitably have varying geographical and temporal application. The advertising and trading offences are heavily localised and will apply only to places which are used for, or in connection with, a sporting event, and the surrounding areas. The timing of these provisions will correspond with how and when venues are used during the competition period. None the less, where it is practicable to build in time limits—as these amendments seek to do, albeit in a less targeted way—we believe we have already done so. That is why, for example, the Bill already sets clear time limitations on the periods that the advertising and trading offences can be applied. These time limitations build on lessons learned from previous events. The advertising and trading offences in the Birmingham Commonwealth Games Act 2020 could apply for no more than 21 days before the event’s opening ceremony. Under Clauses 8(6) and 11(6), the advertising and trading offences under this Bill can be in place for no more than 10 days before the beginning of a sporting event and end no later than five days after the event concludes. For the majority of locations, we expect the offences will come into effect a day before a place is used for, or in connection with, an event and end on the day that any activity associated with that place finishes.
When it comes to the period during which the ticket touting offence or prohibition on unauthorised association can be applied, the Government do not consider it is appropriate in the context of a framework Bill to limit or prescribe this on the face of the Bill. This could mean that we are unable to deliver on our commitments to event owners and apply the provisions when they are genuinely required. For instance, application of the ticketing offence for each event will be driven predominantly by when tickets to the event are first expected to go on sale or be made available to the public. For some events, this is likely to be over a year in advance of the event taking place—I hope this specifically answers the point that the noble Lord made. As a principle, the Government expect provisions to be in place no longer than is necessary to protect commercial rights and the interests of fans. On top of that, we want to ensure that there is appropriate time to raise awareness of the offence before the event and be clear with the public about what it means for the sale and resale of tickets. The Government expect any prohibition on unauthorised association to be in place no longer than is necessary to prevent the commercial exploitation of an event. We expect this period would correspond with the awarding of host rights and delivery of the event but would be considered on a case-by-case basis in consultation with event owners taking into account lessons learned from previous events.
Finally, any temporary traffic regulation order made under Section 14 of the Road Traffic Regulation Act 1984 for the purposes set out in paragraph 2(1) of Schedule 5 to the Bill can be in place for no more than 28 days before the beginning of a sporting event and end no later than five days after the event concludes. Any temporary traffic regulation notices may remain in effect only for a maximum period of 21 days.
Lord Parkinson of Whitley Bay (Con)
My Lords, I am grateful to the Minister for her response, particularly the reassurances she has given and the explanation about ticketing powers, transport restrictions and so on. As she rightly said, these are probing amendments, but they are probing with a purpose. The Bill seeks to take some quite sweeping powers, in some cases restricting people’s liberties, the operation of commercial businesses and much more. We want to make sure that where those powers are taken, they are not on the statute book for longer than they need to be. As the noble Lord, Lord Addington, said, these are exceptional measures for extraordinary circumstances. That is important to get right, so we will take another look at the Bill in light of what the Minister has said and make sure we are satisfied that that is the case. We think we are being generous with a 50-day limit; if the Olympic and Paralympic Games can take place within that window, it is hard to envisage a major sporting event that might need longer. We will take that away and look at it further.
On Amendments 11 and 12 and the point about secondary legislation, I am grateful for what the Minister said about the Delegated Powers and Regulatory Reform Committee. I look forward to hearing what the Government say in detail, ahead of Report, on its concerns about the Bill here. I am not sure I quite agree that Parliament will have the opportunity for a full debate; at the moment, secondary legislation is limited to an hour, and we have heard repeatedly, even today, of the significant issues that need to be looked at each time we are legislating for the hosting of a major sporting event. So, we have some concerns there.
We certainly would be concerned if there was a two-tier structure of the first set of regulations and the subsequent ones, which could be very significant. I hope the Government will continue to look at that ahead of Report, because I am pretty sure we will return to that, certainly given the criticisms of the committee. With that, I thank the Minister for her reply, and I beg leave to withdraw Amendment 9.
Lord Addington
Member’s explanatory statement
This probing amendment, and others in the name of Lord Addington, seek to challenge the Government’s exclusion of certain sporting events, specifically those events which are regularly held in the UK, but may benefit from the provisions in this Bill.
Lord Addington (LD)
My Lords, we have a series of amendments here seeking to challenge the Government’s exclusion of certain sporting events at home from some of the benefits of this Bill. There are some good things here. We saw that they were beneficial—the traffic arrangements and other special things—but why not extend them to events happening only within the country, such as Wimbledon, if we want to make those changes, or to things that happen regularly? Six Nations rugby is an example where we are coping, but we would need new frameworks and structures for anything that would expand it. We also have half an eye on what happens with big cultural events.
We are taking short-term measures for short-term functions which could be expanded and could help. That is the essence of these amendments—trying to push a good idea a little further. The Government have got a good idea here. Let us do something more with it. Let us make sure that every big sporting event—and every cultural event, why not?—has access to the governmental changes that could help it be run better. I could expand on this for a long time, but I would end up repeating myself. It is a good idea. Let us make sure it touches more of the world. I beg to move.
Baroness Evans of Bowes Park (Con)
My Lords, I will speak to Amendments 17, 19 and 22 to 25 in my name, on which I am again grateful for the support of the noble Baroness, Lady Grey-Thompson, and support Amendments 14 and 16 from the noble Lord, Lord Addington, to which I have added my name. These amendments share a simple purpose: to correct what I believe is a significant gap in the Bill. They seek to widen the definition of events to which the framework provisions may apply so that major, regular, UK-based sporting events—those woven into the fabric of our national life—are not excluded from their potential benefits.
That is the problem before us. As drafted, the Bill risks overlooking the very events that define Britain as a global sporting nation and deliver exactly what Ministers say they want this legislation to achieve: economic growth, international prestige and community pride. As I set out at Second Reading, Wimbledon, the Open, the London Marathon and the British Grand Prix are among the most recognisable sporting events in the world, and they are ours. Yet, as things stand, they fall outside the Bill’s scope and the greater protections that it is looking to afford. This is not just surprising; it is a missed opportunity.
I am grateful to many of the major sports organisers across the sector, from cricket to golf and motor racing to tennis and running, that have engaged with me and other noble Lords on this issue and provided clear and compelling arguments as to why regular, established, UK-based events of national and international importance should not be placed at a competitive disadvantage or overlooked by what is supposed to be a framework piece of legislation designed to support the UK’s sports sector. Their message is consistent: while the Bill is welcome, its current scope is too narrow. My amendments attempt to address that gap carefully and proportionately. This is not about opening the floodgates. The extension I propose is explicitly limited to events that are large, regular, UK-based and, crucially, likely to be of “international or national interest” and
“likely to bring social or economic benefits to the United Kingdom or a part of it”.
Following my noble friend Lord Moynihan’s observations, perhaps “likely to” is not the right drafting, but I nevertheless believe they would be a sensible and targeted refinement.
Amendment 25 proposes a further criterion that the Government may wish to consider, recognising something equally important that the noble Baroness, Lady Grey-Thompson, touched on: the role of major UK events in driving participation and sporting legacy. It would require the Government to consider how an event contributes to increasing physical activity, particularly among underrepresented groups—women and girls, disabled people and ethnic minorities. That is not an add-on; it goes to the heart of what sport can and should achieve.
To be clear, these amendments would not place a specific obligation on the Government automatically to extend the provisions in the Bill. They would not create automatic entitlements. What they would do is provide the power to act through the framework set out for iconic homegrown major events where there is a public and agreed interest to do so. That is what future-proofing this Bill should look like.
Let me illustrate the case with one example: the British Grand Prix, which will take place in just a couple of weeks. It is the largest weekend sporting event in the United Kingdom, expected to attract around 570,000 spectators this year. It is the largest Grand Prix on the international calendar and, in 2025, generated £167 million in economic value over a weekend. By any reasonable measure, this is an event of national sporting significance. But we do not have guaranteed long-term security for it. We cannot and must not assume that we will retain this iconic race and all the wider economic benefits it brings. Silverstone has to work hard year after year to ensure it remains on the racing calendar. We must not forget that there have been moments when the British Grand Prix’s future at Silverstone has been in doubt. If that were to happen again, it would rightly be a matter of national concern—or certainly in my house.
The question is whether we equip the Government with the tools through the framework provisions set out in this Bill to act early or wait until the event is potentially lost and only then consider how we might be able to bring it back. As the Bill stands, I fear the position is closer to the latter. My amendments are strongly focused on allowing the former. I suggest that is the more prudent course.
We see similar issues elsewhere. This summer, we are staging the ICC Women’s T20 Cricket World Cup. We have already seen examples of ambush marketing and breaches of intellectual property and commercial rights for the ICC and its venues. These are not abstract concerns. They have real financial consequences and a real material impact on the current and future value of commercial rights, at the very time when the ECB is working hard to secure greater reinvestment and growth in the women’s game. Again, this is precisely the kind of challenge that the framework is designed to address, but it cannot do so effectively if key UK-based events fall outside its reach.
I am extremely grateful to the Minister and her officials for the constructive discussion we have had since Second Reading, and I welcome the continued engagement that I know they are having with the sector. I hope that, between now and Report, we can continue to work together to ensure that the Bill fully reflects the needs and realities of modern sport in this country. The underlying point is simple: our great homegrown sporting events are not just spectacles but strategic national assets. They contribute to our economy, our global standing and our shared sense of identity. This Bill gives us an opportunity to support them more effectively, but to do so we must ensure that they are not inadvertently left behind. These amendments offer a modest, proportionate and practical way to achieve that. I very much hope the Government will take that opportunity.
Baroness Grey-Thompson (CB)
My Lords, I will speak to Amendments 19 and 22 to 25 in the name of the noble Baroness, Lady Evans of Bowes Park, to which I have attached my name, and I thank the Minister for sparing time to discuss these. I said when we met that there are a number of sports organisations that are feeling a bit unloved at the moment. These are events that have a global reach and help cement our standing on the world stage.
The noble Baroness, Lady Evans, mentioned the London Marathon. I think I competed in 17 of them—it is quite hard to remember when you get to that many. I know I did one more than my husband. I also commentate on the wheelchair race for the BBC. The marathon is not just the race itself. Anyone who walks up the Embankment at 6.30 pm on the Sunday will see people valiantly keeping going, to try to make it to the finish line. On Westminster Bridge the next morning, you also see the hundreds of people who have competed standing there with their medals, wanting to take a photo in front of Big Ben.
Beyond that, the impact is quite significant. It puts London on the map as a city, and it brings a huge amount of tourism. People stay in London for days afterwards, thanks to the many good deals that the marathon has negotiated with various restaurants and different companies around the city. We need to think about this in a slightly different way. That is positive chemistry and association that you cannot buy. It is because people feel amazingly good about putting themselves through 26.2 miles around the city.
I will speak briefly to Amendment 25, because it is really important. Mostly, athletes will mention something they saw at another event that inspired them to do sport. That is probably because they are asked about it a lot. But we cannot underestimate this—it is not just about people seeing these moments in time and doing sport. They will do lots of other things, and 2012 was a brilliant example of that, such as people who have gone into the creative industries because of what they saw.
The Minister talked about wanting to change the health of our nation, which is incredibly important. To quote a bunch of statistics, Women in Sport has said that 80% of women in the UK are not fit enough to be healthy. That has a massive impact on jobs, pensions, life—everything. It means hitting frailty at an earlier age. ukactive has said that we have a generation of children who are more likely to die before their parents because of inactivity. This is really worrying, and we have to do something quite radical.
It is not necessarily the Bill’s responsibility to do that; we need some joined-up government. We need to look at physical literacy in primary schools and progression steps. We also need to look at the cost of the pathway for athletes who aspire to compete at the highest level. SportsAid data, which is probably a little bit out of date now, shows the average cost of the pathway for a teenage athlete is £10,000 a year. I imagine that is significantly higher now. There are a lot of families who cannot afford that, but what we can do is broaden the base of participation.
I am particularly interested in Amendment 25 and what we can do to encourage more disabled people to be active. Activity Alliance has said that disabled people not only find it hard to be physically active but that they are actually quite worried about how it is perceived if they are physically active, so we need to look at this in a different way. I was not a product of special education—thank goodness, because it meant I actually received an education, when a lot of children who went through special ed did not. As much as the world has moved on in many ways, that was actually really good for enabling disabled children to be physically active. Mainstreaming, which is much better for education, has actually made some of those things much harder. I receive emails at least monthly, often weekly, about how disabled children in schools are not able to take part in PE.
That is not a problem for this Bill—it is an issue for the Department for Education. But unless we are more explicit about what we are trying to do and how we are trying to change some of these stubborn inequalities, we are never going to move it on. In Wales we are incredibly lucky that we have the Well-being of Future Generations (Wales) Act, which gives us a very useful framing for what we are trying to do to encourage young people to be active. The Sport England campaign, This Girl Can, was ground-breaking. For the first time, it showed real women doing sport—as opposed to Olympians or Paralympians, who look slightly different. But we cannot expect just an advertising campaign to radically change what we do, so any way we can think differently about developing a fit and healthy nation that truly stays engaged in physical activity is really worth exploring in more detail.
Lord Hayward (Con)
My Lords, I echo the comments of my colleagues across the Chamber in relation to this set of amendments, although I tend to disagree—or will clarify—in relation to one of the amendments. This is an enabling Bill. Surely, therefore, it should provide the opportunity, as the noble Lord, Lord Addington, has said, for major sporting events which wish to make use of the Bill—whether it is the RFU, the LTA or whoever—to be able to come forward and say to a Government, “We wish to use this Bill for the following reasons”. Surely that is the objective of this legislation.
The point has been made a number of times already that sporting frameworks change, and we cannot guarantee that the Olympic Games, European Championships, et cetera, will be the same in 15 or 20 years’ time, or whenever it may happen to be. Structures of international competition change. If ever there was an example of one—and I am surprised that the noble Baroness, Lady Grey-Thompson, did not refer to it—it is the announcement in the last few days that the London Marathon is going to move from one day to two, with the objective of having 100,000 participants.
It is about the level of attraction from around the world. Most people look at the London Marathon and say, “Oh, it’s just the London Marathon”. It is not; it is part of an international body of marathons, a set group of them. If there are 100,000 participants next year, we are going to have many hundreds of thousands of visitors. There are transport and all sorts of other implications. Surely, if this legislation is anything, it should be available to that sort of sporting evolution, because it is so positive both for this nation and for fitness in general.
I wish to make a brief observation in relation to the amendments, where they cite certain categories of people. I just ask, for reasons most people in this Chamber would recognise and which I identified at Second Reading, that where there is specific identification of women, girls, the disabled and ethnic minorities, we either use the classifications of the Equality Act or just stop at
“removing barriers to physical activity”.
I speak, as I identified on previous occasions, as the founder chairman of the world’s first gay rugby club, a structure that now has 100 clubs around the world and an international structure where we compete on a regular basis. Certainly, I know only too well the difficulties and the challenges associated with bidding and with organising international competitions, with people coming from other parts of the world.
We had the European championships in Birmingham less than a year after the Commonwealth Games. The competition, the Union Cup, was the largest sporting competition in the Midlands after the Commonwealth Games over the following 12 months. There are international competitions all the way down—they restructure and they reorganise. But I ask that we remove barriers to physical activity for underrepresented groups and stop at that point, rather than trying to cite specific examples, because we risk excluding some groups or others, and I know that is not the intention of those who have proposed these amendments.
Lord Holmes of Richmond (Con)
My Lords, it is a pleasure to follow my noble friend Lord Hayward. Were I to imagine myself—as I never would—on the Bishops’ Bench, in approaching this set of amendments I would be very much reminded of the parable of the prodigal son.
The Bill rightly sets out a whole raft of provisions for mega sporting events that come to the United Kingdom on occasion. Events already listed by my noble friend Lady Evans, such as Wimbledon, the British Grand Prix, and so on, do their thing year in, year out, staging world-class events which are far greater than sporting celebrations and competitions, with economic, social and cultural benefit which goes far beyond, for example, Wimbledon, SW19.
In asserting the principles in the Bill that have to be in place when it comes to international bids, it seems odd that at least some of these provisions would not be available to those extraordinarily impactful sporting events that are the very fabric not only of our sporting nation but of our culture. I ask the Minister to consider, if not implementing these amendments, the essence behind them and to how it could be threaded into the Bill. Further to my noble friend Lord Hayward’s comments on frameworks, why would the Government not want that to be available to the sporting events that wish to avail themselves of some parts of it? Ambush marketing is ambush marketing, whether it is targeted at the London 2012 Olympic and Paralympic Games or the Wimbledon Championships every year.
Lord Fuller (Con)
My Lords, my noble friend Lady Evans and I have a lot in common—we both support Norwich City Football Club, and we show our allegiance to it—but I disagree with her in her amendments. I did not contribute to the last debate, but it is safe to say that it confirmed what I think we all know: that, while this may be an enabling Bill, if we actually capture one of these global events, we will need to have specific legislation anyway. If that is the case, we will not be doing any more than virtue signalling in the Bill. The conclusion that all the noble Lords have made is that the Bill is incomplete and half-full. I will not say that it is half-baked, but there is plenty more work to be done on it.
However, if the Bill is incomplete, I do not think that it is the right thing at all to extend it in scope to other events, because the mission creep brings politics into sport. Of course, it is very difficult to keep it there, but it brings politics into sport by law. It will prevent somebody who is interested in public discourse from having an opinion and gives them leverage over the event. It will sanitise so much of the activity that goes on around the game. It will make unlawful things that are part and parcel of what we do—certain trade, advertisements and things such as that; it stops innovation—for Wimbledon, the rugby union, the rugby league, the Grand Prix, the Open, the Test match, Premier League and, if we listen to the noble Lord, Lord Addington, cultural events such as the Proms and Taylor Swift. Where does this end?
I am concerned that, however well-intentioned it is, it could backfire. My noble friend Lady Evans talked about a gap to be filled. I see it a different way; I see this creating a chasm between the fans and the men in blazers, who want this for their own narrow purposes. We have grown the well-trusted and well-organised events of global repute that we host without the benefits of the Bill. While it is an enabling Bill and has very important new rules for traffic wardens, I am not sure that having more traffic wardens is enough in and of itself.
Lord Hayward (Con)
I thank my noble friend for giving way, but just for clarification, the noble Lord, Lord Addington, my noble friend Lady Evans, the noble Baroness, Lady Grey-Thompson, and I made absolutely clear that it is not a case of the Bill encompassing these competitions; it is the sporting authorities asking that they might make use of some of the facilities of the Bill.
Lord Fuller (Con)
We are ending up in a mission creep by introducing new offences for individuals—we will talk about ticketing later on.
I realise I have a minority view, but I want to express it, and I should do. There is a misdirection with all these amendments that by putting them on a list, the Government can keep them here. I just do not think that is a reasonable assertion. The organising bodies, such as the British Automobile Racing Club, the All England Lawn Tennis and Croquet Club at Wimbledon have to work hard, need to live off their wits and need to want to keep these events here. By putting them on a list and bringing them within scope, it will potentially upset the events that we know and love by bringing them into the political space. I just think that that is the wrong thing to do.
Lord Parkinson of Whitley Bay (Con)
My Lords, maybe I can set my noble friend Lord Fuller’s mind to rest. Along with colleagues in the shadow DCMS team, I have spoken to a number of the major sporting bodies, which are keen, as some of our noble friends said, to avail themselves of some of the opportunities of the Bill if the scope could be broadened to allow them to do so. That is the key test: where they wish to do so. My noble friends are right, as we have been throughout the Bill, to talk about some of the restrictions and burdens that come with it, but it is very clear that there is an appetite in the sporting world beyond the one-off events—such as the Olympic, Paralympic or Commonwealth Games, which we host from time to time—for some of our major sporting events that happen on a more regular basis to be included in the framework and for us not to be playing second fiddle.
At Second Reading, the noble Baroness, Lady Grey-Thompson, challenged us to be a bit bolder in the Bill, and this has been a very good group of amendments and debate that have encouraged us to do that. We heard a huge number of examples of the major sporting events, which bring delight to people across this country and across the world on a regular basis. I am grateful to the noble Lord, Lord Addington, and particularly my noble friend Lady Evans of Bowes Park, for bringing their amendments, with the support of the noble Baroness, Lady Grey-Thompson, to see if we can be bolder and give those advantages to many other sporting organisations as well. My noble friend Lady Evans described these events as the ones that that define Britain as a major sporting power. It would be unthinkable to imagine some of them disappearing from our calendars.
I pay tribute to my noble friend’s work with the London Marathon Foundation. As my noble friend Lord Hayward noted, it is marvellous to see that the London Marathon will extend to two days next year, including many more people. Of course, it is competing with so many other marathons around the world. People come to these shores because they want to run on the streets of London and because it is such a well-organised marathon, but we are competing constantly with the potential for people to go to other cities and parts of the world.
There would be consternation in my house if Formula 1 did not include a race in the United Kingdom. The UK is one of only two nations to have hosted a Grand Prix every year since Formula 1 began in 1950, and for that not to be the case is unthinkable. I am glad that Silverstone is secure through its current contract until at least 2034, but that requires hard work by the organisers. There is constant competition. This is a sport whose global popularity is increasing. We have to keep on our toes and make sure that we continue to deliver the brilliant events that people are expecting. As my noble friend said, the British Grand Prix attracts more than 500,000 people annually, generates £100 million in local economic impact each year and contributes to a wider Formula 1 ecosystem in the UK that is worth over £12 billion annually. When one thinks of how many of the teams are based in the United Kingdom, the supply chains and R&D that ripples from that, just to take one sport for as an example, we can see the benefits. The key question is how we can broaden the Bill, if possible, to allow those that wish to do so to take advantage of some of that boldness—
Lord Moynihan (Con)
I anticipate that the Minister may say that it is quite difficult to broaden this without being specific. I have one thought, having listened to this debate and been very supportive of what has been said. If, for example, the R&A for the Open golf wanted to avail itself of the benefits of the sporting events framework that we are putting into legislation, would it not be possible to distinguish between the international federations that recognise these events as international events on their calendars?
Take Wimbledon, the marathon or golf’s Open Championship. All are recognised by the relevant international federations and placed on their calendars. If we are looking for a way to put this into legislation, it might be worth considering defining it along those lines, overtly avoiding the problem that everybody might be able to apply for their own event. That would rule out, for example, the Boat Race. I can see significant problems with the transport provisions of the Bill if they were applied to the Boat Race and the whole west of London on Boat Race day. I give that as an example and a helpful contribution that I hope the Minister can take away and consider.
Lord Parkinson of Whitley Bay (Con)
I thank my noble friend, who has rowed in the Boat Race, for his constructive and very good challenge. We are looking for a way of broadening the Bill in a rational way. He is right to draw the distinction with events that are internationally renowned. As my noble friend Lady Evans says, these are the ones that define our well-earned sporting reputation for being able to host such major events on the global stage. Whether it is done through that or another metric, this is well worth looking at in greater detail as we head to Report.
My noble friend Lord Fuller asked where this all ends, but the question really is: where does this begin? We are promised a major events strategy from DCMS. I understand that the Government have taken the legislative slot that is available and proceeded with the Bill now. They are right to do so, but it is a shame that we did not have that strategy in advance of this Bill. It would have informed some of the debates here and answered some of the questions that noble Lords have raised on cultural events, music events and ticketing provisions that apply there as well. Perhaps the Minister can say a bit more about when we might see that major events strategy, how it is designed to feed into this framework and the thinking that has gone on in her department in drawing up this Bill in advance of that strategy. It is slightly unfortunate that we are discussing it this way around because of the legislative time available.
I thank noble Lords for their amendments in this group. If we can work constructively, as my noble friend Lord Moynihan and others suggest, we can take the opportunity to be a bit bolder and help the organisers of major sporting events—which do so much to enhance the soft power and renown of this country—to do so even better in the future.
Baroness Twycross (Lab)
I thank the noble Lord, Lord Addington, and the noble Baronesses, Lady Bonham-Carter of Yarnbury, Lady Evans of Bowes Park and Lady Grey-Thompson, for these amendments and for their time to discuss an important topic. Regarding the point raised by the noble Lord, Lord Addington, I genuinely appreciate the spirit in which he and others have tabled these amendments. The noble Baroness, Lady Evans, gave a remarkable list of recurring events that we have in this country and highlighted the value—including the economic value—of events such as Silverstone.
I assure your Lordships’ Committee that the Government are committed to supporting our domestic sports sector and the UK’s sporting calendar, building on the strong partnerships and existing frameworks already in place. This work will be underpinned by the UK-wide major events strategy, which—in response to the question from the noble Lord, Lord Parkinson—my department intends to publish within the next 12 months. This will set out our priorities for major events taking place across the UK, covering major events in all sectors—cultural, sporting and business. I hope that the process of undertaking this strategy makes some of those sporting organisations that the noble Baroness, Lady Grey-Thompson, says feel unloved now feel that this puts them front and centre of our minds and priorities at DCMS.
The time-limited provisions in the Bill are designed to attract specific one-off events that require the Government to make commitments to event owners during the bidding process. It is not possible to secure the hosting rights for these events without making such commitments. Global competition to secure these events is only increasing. For the UK to remain competitive against this global competition for the biggest international events, we need to show that we are event ready to meet event owner requirements.
The noble Baroness, Lady Evans, made a point around the Cricket World Cup. The nature of the framework means that we expect particular events to be considered on a case-by-case basis. However, the ICC Cricket World Cup is the type of event that could meet the conditions, depending on the exact circumstances of the event. In contrast, events that are hosted on a recurrent basis in the UK do not generally have the same externally set mandatory requirements as events that hold competitive international bid processes.
As the Bill was developed, we worked closely with some of the biggest recurrent sporting events to understand the demand for these provisions. While there was some interest in the advertising and trading provisions, we found that there was no clear or consistent evidence base on the negative economic impact of the status quo for the inclusion of a breadth of successfully recurring domestic events. Where interest was expressed, we also found that there was insufficient appetite from the sector to fund the enforcement action that would be required of local authorities should these provisions be extended to them. We are continuing the discussions with relevant bodies that have taken place since Second Reading.
No assessment was provided during the discussions prior to Second Reading of the likely enforcement burden. Given that these are criminal offences, enforcement by any organisation other than a public body would not be appropriate or proportionate. None the less, I am genuinely grateful for the constructive ways in which noble Lords have raised points regarding the potential for us going further and for highlighting the importance of recurrent sporting events. They have a significant, cherished and valuable role for the nation.
The point made by the noble Lord, Lord Hayward, about the London Marathon potentially having 100,000 athletes and accompanying visitors—I will not be taking part and am more likely to be an accompanying visitor—shows the scale of these domestic events. I would welcome further discussion with noble Lords on this matter and will continue to listen to views from the sports sector. Upon reviewing any new evidence, I will consider carefully what steps would be appropriate and practical.
On the points raised by the noble Baroness, Lady Grey-Thompson, around better facilities for women and girls, the Government’s £400 million investment into grass-roots facilities will continue to support increased participation for women and girls through a place-based approach across the UK over the next four years. We will more than double priority access to grass-roots football pitches for women and girls in England as part of plans to honour the Lionesses’ victory at UEFA Women’s Euro 2025, as well as dedicating flagship sites to the Lionesses. The Football Foundation has also launched the Lionesses HERe to Play fund, providing small grants to create welcoming, safe and accessible facilities for women and girls.
The noble Baroness, Lady Grey-Thompson, the noble Lord, Lord Hayward, and others also highlighted provision and access for people with disabilities or other protected characteristics, which I look forward to debating in a future group in Committee on Wednesday. I thank the noble Lord, Lord Moynihan, for his suggestion.
The noble Baroness, Lady Grey-Thompson, raised the point about how we encourage physical activity and, critically, make sure that we do not just have elites and then the rest who are not fit and healthy. The development of grass-roots sport outside school and how we encourage physical activity is critical for this Government. This year, we are already investing £85 million through the multisport grass-roots facility programme to build and upgrade high-quality grass-roots sports pitches and facilities in the communities across the UK that need them most. This is part of a total package of at least £400 million that will be invested in new and upgraded grass-roots sports facilities in communities right across the country.
Lord Addington (LD)
My Lords, it just goes to show that, if you are speaking on a lot of amendments, you should try to get your mind on the right one. I thank everybody who has taken part. This has actually been a very good debate in terms of the policy going forward, with possibly one exception, but I am sure the noble Lord, Lord Fuller, is getting to know his colleagues very well. We have established a consensus that there are a lot of good things proposed in the Bill, such as the idea you must preserve certain things because they are a good unto themselves economically, culturally and socially. I wish I had tried to match the noble Baroness, Lady Evans, with a list of events, because hers was pretty impressive—I have a few in there as well.
There are some very good ideas here, although possibly not the whole list. Certain things about traffic on a regular basis probably going through might be extremely useful. An event structure, if it comes up and if we eventually get round to it—and who knows what is coming in the next 12 months—might be an interesting thing to bring in. As the noble Baroness said, people are not saying this is a bad Bill. They are saying it is a good Bill and asking, “Can we actually take some of its benefits and push them out to somewhere else?”
The traffic issue is one that really catches my mind, getting people to and from events, and if you have traffic controls, making sure that there is something in place before the big events happen. This is probably happening in other ways, but this is a nice regular way of doing it. If the Government are prepared to engage on that, even on a long-term basis, and say they will use some of the capacity, that would be something which would make people’s lives easier, you would get more out of it and you would ensure economic potential. That is rough; there are variations.
The idea is that some sporting legacy and encouragement should go through. That is the thing the Olympics got wrong. We had a wonderful event but we had no physical sporting legacy, certainly not towards grass-roots level. There are a couple of veterans here of the committee that looked at it. It is the thing we failed to do. With all that success, this is what we failed to do, because we know it does not happen by osmosis. You have to have some actual involvement. I hope we will go back to this later on in the Bill. But that is one of the things that we have got wrong that we know about. I hope that the Minister, in further discussions on the Bill and going forward in this area, takes on board what has been said, because there is much here that we would like to expand on.
Irritating a Government by saying “Yes, we agree with you and can we have a bit more please?” is actually one of the nicer ways of irritating a Government. Every now and then, we manage to do it to all Governments—may this Government have more of it. This is something we are engaging in to get the best out of. Generally speaking, it has been a very positive debate, and I will withdraw my amendment. I hope we will address this again at a later stage, with more information. I beg leave to withdraw my amendment.
Member’s explanatory statement
This probing amendment, and others in the name of Baroness Bonham-Carter, adds a condition for Sporting Events to be covered by this Bill, to make the sporting event free to air.
Baroness Bonham-Carter of Yarnbury (LD)
In moving Amendment 15 I shall speak also to Amendments 26 and 79. We on these Benches think that we should consider events that are in scope of this Bill as part of the free-to-air listed events regime for audiences in the UK, so that those who wish to follow a sporting event but cannot obtain a ticket due to cost or availability can still follow the event without incurring extra costs and potentially having to pay for a subscription; and, secondly and really importantly, because it will encourage and expand the audience for such events. Watching a sport you do not know can spark interest and participation. There are more chances that this will happen if the event is not behind a paywall.
The Minister mentioned the Lionesses. Thanks to the BBC championing and broadcasting women’s football free to air, enabling the public to watch the Lionesses’ triumphant journey in both European and world tournaments, there are new audiences in stadiums, as well as on screens; and, most importantly, it has inspired women and girls to take up the sport. Similarly, there is the legacy of Channel 4 and the Paralympics, and I refer to what the noble Baroness, Lady Grey-Thompson, said earlier about encouraging and enabling disabled kids to get involved in sport.
It is in the power of the DCMS to review listed events—the “crown jewels”, as they are known. The amendment I am proposing would create an opportunity to revise the list, and this follows a concerning trend where fans’ rights to enjoy events on free-to-air television have been gradually eroded. For the first time, the finals of the Champions League—football is the sport of the day—Europa League and Conference League were all behind a paywall. If the Government intend to host such great sporting events in the UK, as we have been discussing today, the British public deserve the right to be able to watch them.
Baroness Bennett of Manor Castle (GP)
My Lords, I rise with great pleasure to follow the Baroness, Lady Bonham-Carter, who is very much the leader of your Lordships’ House in this space. I am here having signed Amendments 15 and 26 to show cross-party support, so I will be brief.
As the noble Baroness set out, we have seen a gradual erosion of people’s access. We often discuss access to the right to participate in sport, but there is also the access to being part of the whole sporting experience and to view major events live. Free-to-air broadcast is what keeps major sporting events genuinely public, rather than turning them into elite viewing that is available only to those who can afford subscription television or other sources. If access depends on payment, watching sport becomes unevenly distributed, with lower-income households at a clear disadvantage. In practice, that particularly excludes, or risks excluding, many children and young people from the shared experience of watching major sporting events with their peers and their communities. Free-to-air coverage ensures that money is not a barrier to participation in what is a common cultural space, where sport is experienced collectively rather than privately. That broad access is something that gives sport extra public value, and that is why it is important to protect it as something that belongs to everyone, not just those who can pay.
Lord Hayward (Con)
My Lords, I disagree with the proposed amendments for a number of different reasons; first, because the terminology “free to air” is a complete misdescription. You have to pay £180 for your TV licence. It therefore is not free—that is, for the 88% of the population who choose to pay for their TV licence. The number of people who choose not to pay for a TV licence has been rising for many years. I say 88% because the latest figures published say that 12.5% of all viewers do not pay for a television licence.
Secondly, there is the question of competition. The essence of sport is competition. It is a very odd state of affairs whereby one says that broadcasters can compete but, by the way, we will restrict the competition in certain fields. We were debating in the previous set of amendments the question of assisting people who face disadvantages in society. Again, it is a very odd state of affairs whereby one broadcaster might be willing to pay much larger sums to broadcast a particular event, and in that process guarantee substantial funds to the underrepresented groups, but they are not allowed to because the event concerned is a crown jewel. So not only do you lose out because the broadcasting may be inferior; the funding might be inferior as well.
Thirdly, my concern is that the crown jewels were a product of a different technological era. Sport is now broadcast on a whole range of different platforms, and none of us in this Chamber knows what the platforms are going to be in five or 10 years’ time. Therefore, to decree in this piece of legislation that you can have certain sporting events, and I noticed that it suggested that they might be extended only on—I will use the jargon although I have indicated that I do not agree with it—a free-to-air basis, when multiple levels of platforms will probably be available in a few years’ time does not recognise the changing technological world in which we live and which the sporting world will have to adapt to.
Baroness Grey-Thompson (CB)
My Lords, I will speak to Amendment 26. The noble Lord, Lord Hayward, makes an interesting reference to free-to-air. As well as not knowing what platforms are going to be available, we do not know even what events there are going to be. The Olympics and Paralympics are going to change radically in the next few cycles, not least because of the impact of global warming. In quite good timing, there was an article this morning online on the Broadcast Sport website which talked about the changing world of events. Rights holders have more choices about where to go to put their events on, and they can ask for more money. It has been estimated that FIFA is going to make about £3 billion from organising the World Cup. Where is that money going to go? If you look at something closer to home such as Wimbledon, it puts a considerable amount of money back into the grass roots, which is incredible.
How people watch is going to change as well. The same article on Broadcast Sport was saying that even if you are watching a live event, you are probably checking your phone at least 10 times during that event to see what else is going on and what other comments are being made. We should be looking at how we make available these major sporting events. A number of people are disappointed that the Commonwealth Games is not going to be readily available, certainly on BBC TV. Everything that Team Wales does is going to be shown on S4C. There will be two hours’ live coverage a day, which is amazing—in Welsh, which is really important in terms of continuing to develop the Welsh language. I am sure there will be lots of other home country athletes competing who will be seen within those time slots. I do not think we can underestimate the importance of being able to watch the Games.
If we look back through history—we have been talking about this today—when the BBC covered the Sydney Paralympics in 2000, one of the decisions behind putting the Games on at teatime was so that schoolchildren could watch the Games. That developed a much better understanding of disability and the Paralympics. It got an age group of children watching sport that they probably would not have been able to see before. Whether it is free to air or however we define that, it is important that the public in the widest possible sense are able to watch these events in real time without spending some quite significant sums sometimes on monthly fees.
Lord Holmes of Richmond (Con)
My Lords, it is a pleasure to follow my friend, the noble Baroness, Lady Grey-Thompson. Broadcasting is such a critical part of the sporting experience. For most people broadcast is the sporting experience. When Andy Murray was performing so fabulously on Centre Court at Wimbledon, I believe there were 15,000 seats available, yet millions could enjoy and experience that extraordinary event from the edge of their sofa. This is another area where the Bill is unfortunately silent when it comes to innovation. I believe there are solutions which can offer new paths forward to enable spectators to enjoy their favourite sport and these events through various media.
I will give two examples. I declare a previous interest in that I was deputy chair of Channel 4 Television at the time. When Emma Raducanu went all the way through to the final and won the US Open, we were able to do a deal at 24 hours’ notice with Amazon, which was the rights holder at the time, to have the US Open on Channel 4 free to air. But it is not free to air, as my noble friend Lord Hayward points out. It is a domestic UK broadcaster which was not a rights holder, but because of thinking differently, getting into discussions and a broader relationship with Amazon, it was able to secure those rights without in any sense cannibalising the rights that Amazon had paid for. A similar deal was done with England men’s cricket when it was in India that winter. I give just those two examples because they illustrate that there has to be flexibility and innovation in terms of both the deals that can potentially be done and the various media by which spectators are able to enjoy and support these tremendous events.
Lord Addington (LD)
My Lords, very briefly, after so many events going on, free-to-air means not hidden behind a paywall. It is something you do not have to make a very big payment to. Okay, there is the licence fee. To the noble Lord, Lord Hayward, I say, “Yes, touché. Well done, good point”. But the fact of the matter is that if you do not have to specifically pay to see them, people can get to these great sporting events and, as the noble Lord, Lord Holmes, has just pointed out, you create a national memory of them, something which you can refer back to. It is the water-cooler moment that does not go away. It is a point of bonding which you do not get anywhere else.
I hope that when the Minister responds she will give us some idea about how we are going to carry on with this, because it is a changing world. The first time I discussed this, we knew it was going to be on X number of channels, and Sky was only just starting to come into it. But we have been able to watch, at least in the form of highlights. What is the defence? It is a big deal. We must make sure, for these huge events, especially when national teams or the big games come up, that we respond across the board so that people can come down. I hope the Minister can say something reassuring on this because, let us face it, it is one of the reasons why it is worth bidding in the first place. It is now beyond those who go and buy tickets and has been for a long time.
Lord Parkinson of Whitley Bay (Con)
My Lords, my noble friend Lord Hayward issued a useful corrective. Just as there is no such thing as government money but only taxpayers’ money, there is no such thing as free-to-air broadcasting; we pay for it through some means or another. It is a timely reminder in a year when we look again at the BBC’s royal charter and the licence fee model, which pays not just for the BBC but is required for viewing any of our public service broadcasters.
We are in many senses overdue a debate about the listed events regime by which we try to pick those crown jewels of sporting events. We would have had one during the passage of what became the Media Act 2024, but because that was taken in wash-up, we did not have the debate that perhaps was needed then. I hope that as we look at the royal charter for the BBC, we can look at this in some detail. Maybe the Minister can say a bit about that either now or at subsequent stages on the Bill.
This was looked at at Second Reading by my noble friend Lady Davies of Devonport, who spoke powerfully about the fact that if public money—taxpayers’ money—is spent on hosting major sporting events, we want as many of those taxpayers as possible to be able to see, benefit and be inspired by them. The noble Baroness, Lady Grey-Thompson, was right about the importance of visibility and prominence, particularly of the Paralympic Games, which has done so much to change people’s perceptions of those with disabilities and brought so many broadcasters and commentators with disabilities on to our screens when so many people are watching with great pride and excitement.
Like the noble Baroness, I share some sadness that the Commonwealth Games will not be broadcast on the BBC this year, for the first time since the Games began in 1950. The live rights have gone to TNT Sports and only highlights will be available on a public service broadcaster—Channel 5. One thinks of seminal moments such as Roger Bannister’s “miracle mile” and the people who will not be able to be inspired by moments such as that.
I look forward to the Minister’s response. It links very much to the debates we need to have over the BBC’s royal charter and paying for our public service broadcasters. Again, this hits at the problem we have in the Bill. We are trying to set up a framework anticipating what the world will look like many years hence in many different ways that have a knock-on effect for sporting life in this country.
Baroness Twycross (Lab)
I thank the noble Baronesses, Lady Bonham-Carter of Yarnbury and Lady Bennett of Manor Castle, and the noble Lord, Lord Addington, for their amendments. Amendments 15 and 26 seek to add a further condition to the Bill’s framework, requiring any qualifying sporting event to make live coverage free of charge to the UK public. I agree with the noble Baroness, Lady Bonham-Carter, about the importance of having, for example, the Lionesses on the BBC and the Channel 4 coverage of the Paralympics.
I and the Government recognise the intent behind these amendments and are committed to ensuring that major sporting events are as accessible as possible to people across the UK, including where broadcasting is concerned. Indeed, during the debate on the football regulator, one of the discussions we had was about what made a spectator and what made a fan. For most people, it is not watching it live but instead watching it largely on television.
However, unfortunately, these amendments are not ones that the Government can support. The central issue is that they would make the application of this framework dependent on broadcasting arrangements having already been secured on free-to-air—I take the point made by the noble Lord, Lord Hayward, which was repeated by the noble Lords, Lord Holmes and Lord Parkinson, that it is not free-to-air but rather it is free-to-air once you have paid your licence fee or an equivalent free-access basis.
Decisions relating to the broadcast coverage of sporting events are commercial matters for broadcasters, event organisers and the holders of broadcasting rights. Those organisations are operationally independent of government, and rightly so. Broadcasting rights provide essential income for national governing bodies and sport broadcasting rights holders, which enables them to invest in their sports, future events and, as the noble Baroness, Lady Grey-Thompson, said, grass-roots sports. She cited the example of Wimbledon, but there are other examples from across the piece. This amendment would place tighter controls over their ability to generate much-needed broadcasting revenue for an indefinite period.
There is also a practical concern. The timelines for agreeing broadcasting rights will not always align with the bidding processes and other requirements that this framework is intended to support. Making the framework conditional on those agreements already being in place could therefore create delay, uncertainty and unnecessary rigidity. Other bidding nations may not be subject to such restrictions, potentially making the UK less competitive.
The Government are absolutely committed to ensuring that there is a breadth of free-to-air coverage of sporting events for licence fee payers. I agree with all noble Lords who stressed the importance of people seeing sport. The current listed events regime is designed to ensure that sporting events of national significance are available to as wide an audience as possible by prohibiting exclusive broadcasting of the event without prior consent from Ofcom.
In response to the point that the noble Baroness, Lady Bennett, made about people being potentially excluded by dint of their economic circumstances, the listing of events ensures that broadcast rights to that event, if offered, must be made available on fair and reasonable terms to the free-to-air channels received by 95% of the population.
The Government believe that the current listed events regime works well and strikes a perfect balance between encouraging free-to-air access to a number of sporting events for audiences and allowing sports to maximise broadcasting revenue to invest in the growth and development of those sports. I note the point made by the noble Lord, Lord Addington, that the ability to talk about having seen major sporting events is a bonding event, which can exclude people who are not able to take part in that. In any event, we would expect broadcasters and sporting rights holders for specific events to think carefully about the balance between generating much-needed revenue and ensuring access to sports coverage for viewers, ensuring the growth and development of the sport.
Amendment 79 seeks to ensure that where the Secretary of State gives financial assistance under Clause 25 in respect of a sporting event, she must require the recipient to take all reasonable steps to ensure that live coverage of that event is made available free of charge, either directly or on a platform accessible without subscription in the United Kingdom. The Government fully recognise the importance of broadcasting certain sporting events to attract significant audience interest and make events as accessible as possible. We appreciate the sentiment that, where public support is involved, sporting events should be as widely available to the public as possible. However, again, this amendment is not one that the Government can accept.
The first reason is one of principle. Clause 25 is a funding power, intended to support the effective delivery of sporting events. It is not a broadcasting regulation power, nor is it intended to be used to direct or shape the outcome of commercial negotiations over media rights. Broadcasting arrangements for sporting events are matters for broadcasters, event organisers or the holders of the broadcasting rights, all of whom are operationally independent of government. It would not be appropriate to use the Bill or this funding power to intervene in those negotiations indirectly through grant conditions.
Secondly, funding decisions, event planning and broadcast rights negotiations do not always proceed to the same timetable. As a result, the amendment could create delay, complication and uncertainty in the use of Clause 25 support.
Thirdly, there is a risk to workability. If organisers or recipients cannot be confident about satisfying such a condition at the relevant point in time, it may make financial assistance harder to administer and could reduce the flexibility that Clause 25 is designed to provide.
For those reasons, I respectfully ask the noble Baronesses, Lady Bonham-Carter of Yarnbury and Lady Bennett, and the noble Lord, Lord Addington, not to press their amendments.
Baroness Bonham-Carter of Yarnbury (LD)
I thank everyone for taking part in this debate—except possibly the noble Lord, Lord Hayward, who is making me have to think of a different way of saying “free to air”. I am, of course, disappointed but actually not surprised by the Minister’s response. She has given me valuable time but I hope we can explore this further.
To pick up on what the noble Lord, Lord Parkinson, said, the crown jewels debate got cut off at the knees. We have charter renewal coming up. I totally respect what everyone says about the future and things changing every day, but we need to discuss this because it is important that we share these things. I say to the noble Lord, Lord Hayward, that the paywall is the paywall and means that things become niche rather than shared; that is the thing we are really trying to overcome here. I beg leave to withdraw the amendment.
Lord Moynihan (Con)
My Lords, it may seem surprising that I oppose Clause 5 standing part of this Bill, given the fact that I have argued many times in your Lordships’ House for taking tough action against the abuse of the secondary market in ticketing. The reason I do is that I think this is in the wrong Bill. Going back to 19 November, just last year, the Government announced that they would introduce new rules to prohibit tickets for concerts, theatre, comedy, sports and other live events being resold for more than their original cost. They made a significant policy announcement that the British Government would introduce new rules to ban ticket touting. They then said they would introduce a Bill in this Session. They did not. They introduced a draft Bill that would make it illegal to resell a ticket at more than its original cost, cap service fees, make it illegal to resell more tickets than you are entitled to buy, place obligations on resale platforms, and empower the Competition and Markets Authority to impose tough fines. Whether we get the legislative timetable for that is yet to be seen.
In this Bill, for potentially three or four events in the next 10 years, there is very tough action, which I support in principle but it should apply to all sports, cultural, arts and music events, and it should be in primary legislation, as promised by the Government. It is simply inconsistent to put some extremely tough and onerous measures—which I fully support—in this Bill for three or four major sporting events that might take place over the next 10 or 15 years and not fulfil their clear obligation to the country to introduce primary legislation as soon as possible to cover this in detail.
We are in danger of having a series of different restrictions on secondary market sales. The original one covered football and was brought in for a completely different reason—it was about segregation of football fans. More recently, we have had further legislation in an excellent Private Member’s Bill, which was introduced in the last Session. There is no reference in this legislation as to how that would be implemented with major international events that we are trying to attract to this country.
Then there is the London 2012 Act, which had the full support of the House at the time. It looked specifically at relevant legislation for hosting the Olympic and Paralympic Games in this country and criminalised the abuse that we saw in the secondary market for the Olympic and Paralympic Games. I am in no doubt at all that the technology that will be used in ticket touting in years to come will change rapidly. By the time we next host the Olympic Games and Paralympic Games, we will need to consider in detail legislation that will be very different from this Bill.
It is inconsistent not to introduce primary legislation to cover this in detail for cultural events, music events and festivals, as well as the overwhelming majority of sporting events that are not covered by this Bill, but just for the three or four international events that we are trying to attract to this country over the next 10, 15 or 20 years. It is that inconsistency which concerns me most of all and is why I object to Clause 5 standing part of the Bill.
Very briefly, and less relevantly, because it would be appropriate for me to put my arguments forward on the significant abuse of the secondary market another time, it is sad that the CMA is the nominated enforcement agency here. I recommend that the Government seriously consider removing it. It has prosecuted no one. It has done very little. It has looked into all sorts of cases and achieved far less than National Trading Standards, whose work has led to people being jailed. National Trading Standards is on a £13 million budget—a very small budget—but has been particularly effective. It has taken down social websites and been really effective in this area. I regret that the Government feel that the CMA will be more appropriate.
Next, if we are talking about specific international events then I am concerned about FIFA. When it came to the World Cup that we are enjoying at present, FIFA decided not to take specific measures in the host nation contract with the US, Canada and Mexico, partially, no doubt, because of the interests of President Trump, who has no appetite to ban touting in the US. But at the same time, FIFA has now set up its own retail site and is taking 15% off the seller and 15% from the buyer. How that fits with this legislation is an interesting question, particularly if it changes its approach to ticket touting in the future. I have no doubt whatever that FIFA will want to protect that source of income post the current World Cup.
It is important that DCMS is seen to be very even-handed in considering this important issue. It is taking very tough action in this Bill but, as I have mentioned, for potentially three or four events and not for the world of sports and the world of music. Those involved in those industries are desperately keen to see tough action taken, as the Government promised, but there is little evidence that they are going to pursue that. Yet Eric Baker, CEO of StubHub and Viagogo, has been publicly professing how happy he is that he has kicked the can down the road and educated the Government, which is why the Bill is not currently before Parliament. I hope that is incorrect. I hope there is no evidence to that effect and that what he is saying publicly is erroneous. As I understand it, he has had five meetings with the department, yet there have been no meetings for those who, quite rightly and understandably, feel very strongly that very tough action should be taken against the abuse of the secondary market, which is what I am focused on here.
Finally, we should make sure that football is included in this. It is an Olympic sport and would need to be covered by this legislation, clearly. There could not be separate legislation for football if we were trying to attract an international sporting event, either a FIFA or IOC event. We should also be very cautious about how it applies to debentures and hospitality. Unpicking that for touting will be a significant challenge.
I want to state on record that I am absolutely in favour of the direction that the Government have taken in this Bill, but I think it is in the wrong place. It is in the wrong Bill at the wrong time, and it should be more appropriately introduced before Parliament as the Government promised. Parliament should be allowed to determine what that should look like, and then the decision of Parliament should be implemented in the context of this legislation moving forward.
Lord Fuller (Con)
My Lords, I will speak to my Amendment 31. I wish to associate myself with the words of my noble friend Lord Moynihan. This is an unnecessary provision in the wrong Bill. At Second Reading, I posed the question: what is so bad about somebody who has bought a ticket to the match but suddenly finds they cannot go and offers it for sale to friends on Facebook that justifies a 50 grand fine?
You have a spare ticket. Perhaps mum has fallen over at home so you cannot go. Perhaps the girlfriend you had planned to go with is now seeing somebody else. Perhaps you have gone down with some sort of food poisoning or perhaps even gramps, who you had planned to sit next to, has died. It happens. In all those circumstances, there are draconian penalties for moving on that ticket. The ticketing activities are enumerated in Schedule 1: selling an event ticket, offering for sale an event ticket, exposing for sale an event ticket or advertising that the ticket is available for purchase.
The £50,000 fine is a level of punishment that outweighs the typical criminal penalties for shoplifting, burglary and serious breaches of the Health and Safety at Work etc. Act. I am not sure there is an equivalence between passing on a ticket and negligently permitting an employee to fall to his death from height. How have we found ourselves in a situation where the state ranks the desire to cut your losses as worse than all these crimes? It is two-tier justice.
Why are we compounding the sadness of the girl whose boyfriend does not want to go to the game with her any more? We are going after the wrong people. Can we not just get a sense of perspective and materiality here and recognise that somebody who buys six tickets for them and their rellies is not a member of a crime family? My amendment would limit it to six tickets for an event and provide a carve-out to the penalties in the Bill—the abuses that my noble friend has referred to.
At Second Reading, I explained that the organisers and selected ticket agents have not done enough to stop the bots and their industrial hoovering up of the tickets. We all want to ensure that real fans get a fair shot at going to the game; that is common ground. The truth is that the sellers have not tried hard enough to stop this. The truth, as my noble friend has just alluded to, is that the status quo suits them just fine. They can carry on as they are, clutching pearls, pretending to be concerned by the bots while trousering all the cash and filling the cash box on day one. This Bill, if passed, means that they do not even have to try to fix this problem. We are letting them off the hook by law.
There are all sorts of technical ways of matching claimants to people. If we cannot authenticate individuals, the economic basis of society—whether for banking, passport applications or driving licences—cannot proceed. This is a problem that has been solved. Indeed, if it had not been, the hated ID card scheme would be even more dead in the water than it is today.
I went to a wedding last weekend, and a lady I met—I was with my wife, but there was another lady—told me that she had been banned from Tinder for having two profiles, an A one and a B one. She was banned for life. If Tinder can see through multiple personalities, it should not be so difficult for Ticketmaster. If Tinder can suss out the dupes and the fakes, why can agencies such Ticketmaster—others are available—not do so? It is a simple question and one that needs to be answered by the Government before they go after the jilted girlfriend or the grieving son.
My approach would be to ensure that the organisers go the extra mile to authenticate ticket purchasers in the secondary market. The Government’s solution is victim blaming, going after the little guy—the buyer whose mum fell over at home and has a black eye. The Bill has this the wrong way around. Why should we go to the millions of fans when the organisers have the tools to sort it out, if only they could be bothered? Instead, we are being asked to give them the legal cover not to bother to fix this scourge at source. It is just not good enough.
Lord Bassam of Brighton (Lab)
My Lords, I will speak to my Amendment 28A. The Bill usefully sets out that regulations in relation to ticket touting will be brought in for sporting events. But a number of organisations, including UK Music, are understandably asking the Government to completely fulfil their manifesto commitment. In this sense, I am coming to the issue from a similar place to the noble Lord, Lord Moynihan, although I disagree with his remedy. It is right that we should do this because we need to end exploitative ticket touting across all types of events. The noble Lord, Lord Moynihan, and I have been on the same side on this for many years.
Like many on these Benches, I am delighted at the progress that has been made on ticket touting for sports events, but I am puzzled about the wait for legislation covering music and other events. What makes it more puzzling is that music and sports events often take place in the same venues. This week, my wife will go to listen to Harry Styles; a few weeks ago, I could have gone to the same Wembley venue to watch the cup final. So I am sure that the Minister will understand why there is a measure of disappointment, particularly among music fans, event organisers and performers, none of whom derive any benefit from the current situation.
According to YouGov research commissioned by O2, online ticket touts are costing UK music fans at least £145 million a year. For some time, UK Music has been calling for legislation that includes a resale price cap to prohibit someone from reselling a ticket for more than the original ticket value, service fee limits to ensure that price caps cannot be undermined by inflated fees or hidden charges placed on consumers, and volume limits to make it unlawful to buy more tickets for an event than one individual is permitted to buy on the primary market. Taken together, those measures would create transparency for ticket purchasers and create a more level playing field for consumers.
My amendment 28A would simply require the Secretary of State to review the ticket touting provisions in Clauses 5 and 6 within 12 months of the Act coming into force and report to Parliament on their effectiveness. This review would provide an important opportunity to assess whether similar protections should be extended to the music sector and music events. I am conscious that a draft Bill is to be published in this Session, but I am also conscious that these things have a habit of slipping and falling foul of other priorities. We have yet to see the terms of the wider legislation, so can we better understand why sport has come forward first, and what makes the challenges of policing this area different or more complex for music?
Music fans face many of the same challenges as sports fans: tickets being acquired in bulk and resold at inflated prices, and genuine fans being priced out of events. The draft Bill, announced in the King’s Speech, means that music fans will continue to face inflated resale prices and unfair ticketing practices while they wait for reform. If the ticket touting provisions prove effective in the sporting context, the review should urgently consider whether comparable measures should be applied to music events, ensuring greater fairness and consumer confidence in protections. I have tabled this amendment to try to achieve a speedier route to having equity across all sporting, cultural and music events, because those who support those events—music fans, sports fans, or whatever—deserve that equality of consideration.
Lord Holmes of Richmond (Con)
My Lords, it is pleasure to follow my friend, the noble Lord, Lord Bassam, and to take part in this group. I am physically and actually right behind my noble friend Lord Moynihan on these issues: it is a good provision, but it is the wrong position. It offers a solution that is fine for those critically important but few events that it will cover, but, for the vast majority, it is a tantalisingly close yet elusive solution across the rest of sport, music, culture, et cetera.
“World in Motion”, 1990; “Football’s Coming Home”, Euro 96: music and sport have always been inextricably linked, yet the Bill has not only missed the opportunity to bind these together with effective ticket touting provisions, it has also unfortunately set out a solution for the very few—which, understandably, is extraordinarily frustrating for the many. The provision is also unfortunate because it is very analogue and does not seem to speak to ticketing, touting and abuse as they are today—never mind how they will be in five, 10, 15 or 20 years’ time, when thinking about an Olympic Games and Paralympic Games bid in the 2040s.
I will speak to Amendments 27, 89, and all the amendments in my name in this group. I will start with Amendment 89, which proposes an accessible ticketing duty on all these events. For this, I use “accessible” in the broadest sense of the word. This goes to discussions that we have had in earlier groups around ensuring that we get the right principles threaded into this legislation. When we were putting together the ticketing strategy for the London 2012 Olympic and Paralympic Games, all the weight of history was on us: all the rules, structures and expectations of what had gone before at all the previous 29 Olympic Games. Of course, there was a lot of good and a lot to follow in that, but, equally, we were the first people to be delivering an Olympic Games and a Paralympic Games in London in 2012. We not only took that incredibly seriously but took it for what it was: a once-in-a-generation opportunity. So we should seek to test, stretch and develop those principles that have been set out in all the documentation and history from previous Games.
Ticketing was a clear example of this, and it is one that I brought out in my amendment. We wanted hundreds of thousands of schoolchildren to have the opportunity to come to the Olympic Games and Paralympic Games and not pay a penny for their tickets, but we were also fundamentally committed to the value of the Games, the sports and the event. So we had a key principle: no free tickets. That is completely the way to structure these things. You do not drive engagement, fans and greater inclusion by thinking that you just need to give away free tickets. The way to structure it is to have tickets available to schoolchildren, as was the case in London 2012.
My amendment is broader. It would make tickets available to local organisations, to disabled people and to other groups—the list is not exhaustive—and have the face-value price of those tickets paid out of a portion of the most expensive tickets for those events. It worked effectively and inclusively at London 2012, and those people who were paying for the highest-priced tickets were delighted that part of what they were paying for was to enable hundreds of thousands of young people to come and experience Olympic and Paralympic sport, often for the first time in their lives, and certainly for the first time in their lives at London 2012. Taking a principle developed there, it would make sense to thread an accessible ticketing duty into this Bill.
On the tickets themselves, as I say, this is currently an extraordinarily analogue Bill at a time when tickets have become extraordinarily complex, more enabling and potentially exclusive in digital token form on digital ledger technologies. We have the ability to do so much more with tickets. First, we can drive out fraud and touting through having the tickets in an immutable form. Secondly, we can attach whatever we choose to that ticket. Say that somebody has particular access needs, food allergies or whatever it might be—you can put that in as part of the digital token representation of their ticket. We can make the ticket so much more powerful, inclusive and connected to the event. It could potentially drive fan engagement: tokens, merch, exclusive benefits, interviews with the players or interviews with the competitors. Whatever you choose, that is all available with ticketing technology that exists today, yet the Bill is silent on this.
Baroness Grey-Thompson (CB)
My Lords, I tried to add my name to Amendment 27, in the name of the noble Lord, Lord Holmes, but I was slightly too late for the printing of the Marshalled List. I think there is something important in this amendment in terms of thinking about who is able to have access to major games.
If you look at the 2012 programme, there was a massive commitment right from the start to no free tickets—the sponsors paid for them. It was not just the joy on the children’s faces when they got to go and experience the events, but it was something that they will remember for the rest of their lives. It was also tied into the school programmes that were being run at the same time. As I have said before, 2012 was also the only time that I have ever been able to go and watch a sporting event where I was able to sit with more than one member of my family. With the ticketing, if someone could not sit in a high stand or needed to be at the end of a row, they also thought about how they linked that up to accessible toilets; those are all really important things. I think Wembley Stadium is the only place I have ever visited that actually understood some of those issues as well. I think there are 147 accessible toilets at Wembley Stadium, which other venues should definitely aspire to. Other things that you could do include “Pay your age”, which 2012 did really well.
As a spectator who is a disabled person—the noble Lord, Lord Holmes, mentioned smarter ticketing—you are constantly having to explain what you need, where you want to sit and who you want to sit with or check whether you actually have a guaranteed accessible seat. Again, it is about showing the world what we do and what we care about. We should be looking at ticket touting wider than this, because it is an issue not just for the events that this Bill may cover.
Another issue in this group of amendments, which I also mentioned in my meeting with the noble Baroness the Minister, relates to thinking about disabled people not just as spectators. I was commentating on a major event in a new-build venue, and it turned out that the commentator’s position was not wheelchair accessible, so I was not able to do my job properly. I spent half the time commentating in a completely different position. As a commentator, it helps if you can have some interaction with the other people that you are commentating with, so we had to move to a venue quite a considerable distance away to be able to do the last event that I was commentating on. There should be something in here about a guarantee of what accessibility means—perhaps not necessarily on the face of the Bill but just an understanding that we can do so much better. If we are going to be building new venues, whether it is for the Olympics, the Paralympics or more football clubs, we should make sure that disabled people have the ability to access events in a fair and equitable way.
I support the other amendments of the noble Lord, Lord Holmes. He has more experience on this than anyone else in the Chamber from his work at LOCOG and beyond, and we should be listening to the things that he is asking for.
Lord Addington (LD)
My Lords, I have four amendments in this group, but the main thing about the amendments on ticket touting is that everybody agrees that something should be done. There is one principal disagreement going on here. The noble Lord, Lord Moynihan, is basically saying, “Do not do it here; do it properly somewhere else” and lots of the rest of us are saying, “No, do it here, get it done and carry it on”. The noble Lord, Lord Bassam, agreed with that. From my Benches, we tried to get an amendment down that included this and we did not actually hit the target; we were told that we were out of scope of the Bill, so I salute his drafting—I take it that it is his; if it is not, he can just take the compliment.
However, when we go through this, we have got a lot of other issues here, such as disability accessibility. I do not know how many dozen times I have discussed that, and we still do not have it right. I hope the Minister will be able to say something reassuring about an ongoing process for that.
Just to refer back to my amendments, I said to myself, “Oh yes, that was it—National Trading Standards, yes, good idea, I thought I had an original point there, but the noble Lord, Lord Moynihan, used it in his first sentence”. We have something here that says, “It isn’t working. Can we know what will be done?” The small series of options that we have in this Bill is actually managing to annoy people, oddly, because they are not big enough and they are not going far enough, and we do not have anything else that is immediately coming. We have a pocket of legislation around this Bill, which we have not seen even in draft, and that is one of the problems here. I hope that the Minister can start a process that could be finished by Report, when we get an idea of what we are going to get on ticket touting and where it is going to come in, if we are not going to do it here—and this would have been an opportunity to bring in everything under this Bill, so we had something that would actually work.
There are some other smaller amendments. A charity auction for a ticket is not ticket touting—yes, I would hope that that would be the case. But to have some clarity around some of the issues that we have raised, is the maximum penalty enough? One of the amendments in my name suggests
“leave out ‘£20,000’ and insert ‘an amount not exceeding 10% of the person’s annual global turnover’”.
Some of these organisations are so big that £20,000 would basically be the cost of doing business.
Could we have an idea of the whole picture? At the moment, the Government by doing a nice thing in this Bill are annoying everyone, oddly. I do not envy the Minister in her response. The Government may well have good intentions, but the old cliché that this might well be the thing that paves the road to hell might well be true with this.
Lord Markham (Con)
I thank my noble friend Lord Moynihan for introducing this group and thank noble Lords for their contributions. This whole debate shows that it is a complicated area and begs the question whether this is the right Bill for it to be in. At the very least, we need another Bill very quickly to cover all the complications that it brought up and apply it to music and cultural events as well as those brought up here.
The point about FIFA was a very good example, with the US World Cup. It shows how difficult it is to try to create a catch-all Bill when we know how fast the environment is moving, and that FIFA might change its rules, as it has done for this World Cup—let alone when you come to some of the technological advances that my noble friend Lord Holmes brings up, and trying to cater for those today in a Bill when we know just how quickly AI and other technological advances are going.
My own amendments are modest in nature, in terms of trying to enable the charitable resale of tickets. At the same time, I think that they introduce an interesting conundrum. If we are saying that we are very happy for a charity auction to get a good price—and generally we want it to get as good a price as possible—we are saying that we do not mind profiteering in principle as long as it is for a good cause. Again, that brings some interesting complications into this matter.
On our amendments around a genuine resale market, as our amendment tries to show and as that of my noble friend Lord Fuller tries to show, there are genuine and legitimate reasons to want to resell your ticket, and the legitimate platforms have a good role there. It should be legitimate that they charge a reasonable service fee—I think that the 10% mentioned by the noble Lord, Lord Addington, is probably a reasonable indicator there. But there is a proper function that they can play, and we would much rather that they played those roles rather than driving it under cover to the ticket touts, where you can get the real price gouging, for want of a better word.
Probably what this debate shows, like many of the others tonight, is that it is a very complicated area. To try to get it all into one catch-all Bill becomes more and more complicated. I look forward to hearing from the Minister how the Government are going to cater for this issue and for many of the others.
Baroness Twycross (Lab)
I thank the noble Lords, Lord Holmes of Richmond, Lord Parkinson of Whitley Bay, Lord Markham and Lord Addington, and my noble friends Lord Bassam of Brighton, Lord Stevenson of Balmacara and Lady Keeley for their amendments. I also thank the noble Lord, Lord Moynihan, for giving notice of his intention to oppose the question that Clause 5 stand part of the Bill. I count myself as among those who were slightly surprised at this, but I appreciate having heard the noble Lord that this is because of his consistent opposition to the many ills associated with the secondary ticket market. However, I do not accept that it is not appropriate for these measures to be in the Bill—but I shall go on to that later.
Amendments 27 and 89 tabled by the noble Lord, Lord Holmes of Richmond, would require the Secretary of State to introduce an accessible ticketing quota in regulations, and that related information must be included in a register held by authorised ticket sellers. We are determined that when the UK hosts major events, we lead by example in ensuring they are inclusive and accessible to the widest possible audience. That is why we have worked with UEFA on its approach for Euro 2028, which seeks to put fans first with transparent and accessible ticketing principles. It was interesting to hear the examples given by the noble Lord, Lord Holmes, on accessible ticketing. Noble Lords may be aware of another example, which is in my speaking notes, of UEFA’s track record in this regard for Euro 2024. UEFA partnered with the Kaizen Foundation in Germany for the 10,000 Smiles project, which provided free tickets through sponsorship to children in host cities from underprivileged backgrounds and for children and adults with disabilities up to 21 years old.
Amendment 28, tabled by the noble Lords, Lord Parkinson of Whitley Bay and Lord Markham, introduces an exception to the ticket touting offence for a person selling an event ticket as part of an auction provided that the proceeds go to charity. While I recognise the spirit, the framework approach calls for proportionality to be reconciled with the requirements of event owners and the guarantees provided by Governments. We will do this through introducing appropriate exceptions to the ticket touting offence in regulations on a case-by-case basis. It may not be appropriate to do so where an event has an official charity partner with an exclusive right to raise proceeds through the auction of event tickets. Where this is the case, charities looking to raise money for themselves would be able to apply for authorisation to auction tickets. This request would be considered on a case-by-case basis.
Amendment 28A, tabled by my noble friends Lord Bassam of Brighton, Lady Keeley and Lord Stevenson of Balmacara, would require a review of the impact and effectiveness of the ticket touting provisions within 12 months of Royal Assent. The first use of these provisions will be for Euro 2028, with tickets expected to go on sale after the final tournament draw in December 2027. We are committed to an evaluation of the application of provisions in the Bill within 12 to 18 months of Euro 2028. We therefore do not believe that this amendment is workable or necessary.
Lord Moynihan (Con)
My Lords, I thank the Minister for her quite extensive, albeit rapid-fire response. Many of us will read it in greater detail and come back with any questions after we have had that opportunity. I say to the noble Lord, Lord Bassam, that, while we might have disagreed on my recommendation that we oppose Clause 5 becoming part of the Bill, he at least recognises that it is effectively a probing amendment. The reason I put it down in those terms was that there were many good amendments that were already tabled on this subject. I wanted to highlight a really important point: by simply placing it on the face of this Bill, given the Government’s commitments, we lacked consistency across the country.
Lord Bassam of Brighton (Lab)
That is my point exactly, and that is why this is an important debate to have had this evening. I congratulate the noble Lord on his observations and comments.
Lord Moynihan (Con)
I am grateful for that intervention: I echo everything he said: everything he said, in terms of detail, is to be supported.
The second point is this: we have to be incredibly careful, in discussing this subject, about the autonomy of world sport. We are looking at major sporting events and we are seeking to encourage UEFA, FIFA or the IOC to award the right to host those events in this country. We are not telling UEFA, the IOC or FIFA what to do; that is not the way world sport works. I hear in the response from the Minister, “We expect them to do this”, “We expect them to do that” and “We expect them to do otherwise”. We can expect as much as we want: it is UEFA, or the event organiser, that decides.
What I was pleased to hear, in that context, was that this is clearly drafted with the agreement of UEFA for the Euros 2028, in the same way that there was unique legislation introduced for London 2012 to reflect what the IOC wanted. That is why the contribution from my noble friend Lord Holmes was so valid. The IOC listened carefully to what LOCOG—the London Organising Committee of the Olympic and Paralympic Games—had discussed in great detail. They had discussed the need to criminalise the secondary market from selling tickets, to criminalise touting, so they could totally control the ticketing operation for London 2012, which they did highly successfully, not least because it allowed them to make tickets available to schools as my noble friend Lord Holmes said. They looked holistically at the overall ticketing for that event, unlike FIFA for the World Cup in the United States at the present time.
It is incredibly important to recognise that, when we are talking about appropriate arrangements for ticketing in the Bill, we are talking about sitting down and listening to what the organisers of these major international events want, in association with the organising committee, and putting in place appropriate legislation for that. It would be very different if we hosted the Olympic Games in the future. We would need to come back with event-specific legislation—a point I keep making. It can be easily remedied on the face of the Bill, and all these issues could be put to one side if the Government recognised that, in addition to this framework, they will require, possibly, event-specific legislation to host major international events here—as I desperately hope they will—in the future.
My concern was that we are being tough on touting on the face of this Bill for a small number of events that the Bill relates to. We may have found a way, in government, to talk tough and do nothing for the vast majority of people who are really concerned in this country about the abuse of the secondary market, and about the need for the Government to legislate. To bring forward a draft Bill, having said they were definitely going to legislate, with no commitment to implement legislation in a future session of this Parliament is not what the arts world, the music world, the sporting world, and the likes of the noble Lord, Lord Bassam, and myself—
Baroness Twycross (Lab)
I would not normally intervene. However, I was clear that we are going to introduce a draft Bill and will introduce legislation in due course, so I feel the noble Lord is going slightly beyond my response. I am happy to sit down and talk to any noble Lord about the ticket touting measures coming up, but I cannot accept that we are not taking it seriously, as the noble Lord suggests.
Lord Moynihan (Con)
That is an extremely important and welcome intervention, but the Minister said “in due course”. Can she commit that that means during this Parliament?
Baroness Twycross (Lab)
I cannot commit to a timescale, but I have offered to have a meeting where we can discuss that in further detail.
Lord Moynihan (Con)
To fail to commit for the whole of this Parliament, when we have years to run, is disappointing, given the strength of the comments made by the Prime Minister and other Ministers in recent months. It is vital that the Government indicate by the time we get to Report whether they will legislate during this Parliament.
The public have longed to get legislation on to the statute book to protect people from being ripped off and turning up at many concerts, having paid a lot of money to bring their kids down from wherever they live, to find out that they have a forged ticket. That must be stopped. We must have tough legislation. That is why I share with the noble Lord, Lord Bassam, the need to legislate on this and why we were so pleased that the Government were willing to come forward with legislation that Parliament could consider. To know that this might not happen in the current Parliament would be deeply disappointing.
Lord Hayward (Con)
My noble friend emphasises the importance of tackling touts in a broad piece of legislation that does not cover just these events. Could he also emphasise, as my noble friend Lord Fuller raised, ensuring the obligation of those selling the tickets to maximise the controls to avoid touting?
Lord Moynihan (Con)
I absolutely endorse that comment. As my noble friend, who has sat with me on this subject many times over the past five years, will know, ever since the Waterson report and many others, I have sought to table and introduce legislation—sometimes successfully—to give far greater clarity and visibility on tickets and to make sure that when people sell tickets, they follow the conditions that the organiser of the event has brought forward. If the organiser has set the condition that it should not be sold on the secondary market, it should not be. We have needed legislation to be introduced in order to achieve that.
I am absolutely tough on this subject, as the noble Lord, Lord Bassam, knows. I have the privilege of co-chairing the All-Party Group on Ticket Abuse. We have to take action on this. I really hope that, following the Minister’s response, she will be able to go away and consider before Report an absolute commitment that this Government will honour their word and introduce legislation not during this Session but during this Parliament.
Lord Addington
“(5) Where the regulations designate a person to grant advertising authorisations in relation to a sporting event, the regulations must require that person, in determining whether to grant an authorisation, to have regard to—(a) the impact of any proposed exclusive authorisation on small and medium-sized enterprises trading in or near the restricted advertising zone,(b) the desirability of ensuring that local and small businesses have a reasonable opportunity to benefit from the sporting event,(c) whether any proposed exclusive arrangement is proportionate to the legitimate commercial interests of the event organiser, and(d) whether there has been reasonable and proportionate communication with small and medium-sized enterprises trading in or near the restricted advertising zones, of any exclusive authorisations.”Member’s explanatory statement
This amendment would ensure that, in the case of exclusive advertising rights for a certain sporting event, small and medium-sized companies are not unfairly harmed.
Lord Addington (LD)
My Lords, this is really a probing amendment to try to get at some of the hardy perennials, shall we say, when dealing with Bills that take on big sporting events. That is, when you have a big sporting event, you have a big advertising structure and restrictions being imposed on the local traders, which the local traders think are not fair. It sometimes gets slightly absurd. I cannot help but remember—but I am trying to forget—the Olympic kebab van that operated in the East End of London and which was restricted by the Olympic Games. It became a case of why they did not know and why there was not some smaller operation to lessen the impact on their business.
In the rest of the group, we have amendments dealing charitable situations. The situation here is about how we are going to make it a little easier for small and medium-sized businesses to operate properly within these structures. What are the duties on those organising the big events to let them know what is going to happen and mitigate any harms to them?
This amendment is a way of trying to find out the Government’s thinking on this, because it is one of those things that comes back and niggles again and again when you have a big event. I hope we can at least find out what the Government’s thinking is about how we are going to make sure that we make life a little bit easier for these small units, which should be beneficiaries, so that they actually get some benefit from this. That is all I am trying to do here. I beg to move.
Lord Holmes of Richmond (Con)
My Lords, it is a pleasure to take part in the debate on this group of amendments. I will speak to the two amendments in my name. The first, Amendment 39, is incredibly straightforward and simply seeks to exclude charities from the restricted advertisement zone, as set out in the Bill. It replicates the wording from the London 2012 Act of 2006. I am very interested in the Minister’s response to that wording.
My second amendment in this group, Amendment 63, seeks a retrospective on the enforcement action to assure it from an equality and inclusion perspective. It simply sets out equality enforcement assessments so that the data is there and can be reviewed, s actions can be taken where there are disparities, and there can be learnings in real time for that event and for other events that will be hosted across the country. I look forward to the Minister’s response.
Baroness Grey-Thompson (CB)
My Lords, I wonder whether I could briefly help out the noble Lord, Lord Addington. There was also a case in 2012 when a lady decided to do knitting patterns of the mascots and made a Games maker. It is incredibly important that the rights and brand of these major events are protected. I think I am right in saying that they issued her a warning for knitting one and trying to sell it at her local church. They then recognised the importance of stepping back from that, because they became hugely popular, were a lot of fun and did not impact anybody.
However, a line has to be drawn between what we are seeing quite a lot with FIFA in terms of ambush marketing versus somebody just doing something that is quite nice. There is some merit in these amendments to make sure that local businesses are protected and are able to carry out their day-to-day work without threat of legal action.
Lord Fuller (Con)
My Lords, I will speak briefly to my Amendment 56 in the group. The Bill unashamedly tries to snare and capture the large global events that can make a national impact in our country, but national impact and national scale also have local effects. One of the purposes of hosting these big events is to transform the local economies, drive investments and spread love and enjoyment in the local communities that act as hosts. It is naive to think that this is front and centre of the organisers’ minds. The promoters of the global events line up their sponsors, sports rights and big global brands, and there are pallet loads of merchandise to shift. We know that money follows sport, and the Bill makes sport all about the money by law. I am concerned about the powers to designate zones around stadiums or other undefined places—which might be fan zones, I suppose—where local trading will be made illegal.
At Second Reading, I gave the example—and it was on “Yesterday in Parliament” actually, which I was very pleased about; that was my first time—I gave the example of the 10-minute walk from Twickenham station to the Allianz Stadium down Whitton Road, where every type of food is available, from licensed food vans to stalls set up in front gardens, where the enterprising home owners have demolished their garden walls. There is not just food; there are old boys selling tat, and there is the little guy with his roadside kebab van and the youth club, with its pop-up gazebo, frying chicken wings. It is all part of the grittiness, but all these places have a licence. The way in which the Bill bans this trading means that little of the money will be assimilated in the local economy. That is not right, because the people who are hosting these events should have a right to expect that some of the benefits will be retained locally.
I accept there needs to be some sort of control, so that it does not become a scrum—Twickenham to one side—and we need to have minimum hygiene standards and sensible limits, so we do not get overwhelmed. That is why, over decades, a series of local licensing decisions by the local authority has evolved. It is tried and tested, it has public safety and hygiene at its heart and it has allowed an ecosystem of local traders to flourish. The Bill casts all that aside. Even if you have licence, you will be excluded from participating in a whole-community effort to host a big event. The local little doers will be cast to the wilderness. How does this help the local economy? Why have we got it in for the Cubs and Scouts who are trying to raise money for the jamboree?
My amendment is simple. It would protect the ability of the local council to ensure that at least some of the benefits of hosting an event are retained locally and are not outsourced to national firms or multinational burger corporates. I want to ensure that local flavours are part of the mix and that fans are not just force-fed cardboard burgers and gassy lager served in soulless stadium concourses. Under my proposal, it would be up to the council to strike the right balance between the local needs and the rights holders in exchange for issuing licences. In a local territory, the council will hold some of the cards. The Bill gives the organisers all the cards, and that is no good. It is an affront to the bloke who prefers a cheap kebab to an overpriced burger or a bucket hat to a baseball cap, or the fan who fancies ale rather than lager. If the council gets it wrong, there are elections to sort that out.
At Second Reading, I was grateful that the thoughtful noble Lord, Lord Mann—who is not in his place—supported the principle of locals being able to get in on the act. He was on the side of the working man, the local charity, the youth group and its pop-up gazebo. I say: let us empower them all. They collectively, over decades, have created so many different rituals and traditions associated with going to the game, more so than the game itself. Families, groups of fans, clubs and societies work with the community in a sort of foreplay that heightens the pleasure of the big event itself. I know that the Minister would not want to deny fans their pleasure, so I ask her to accept my amendment, so that everybody gets to enjoy themselves in the way that they want to, but, most importantly, so that some of the benefits are retained in the community, which is potentially so inconvenienced by the disruptions of hosting it. The economic benefits must be retained locally.
Lord Hayward (Con)
My Lords, I follow my noble friend Lord Fuller in his expression of concern about the impact on small businesses. Sadly, many noble Lords will know me as a statistician who spends all his time looking at opinion polls and numbers in one direction or another and then commenting on them. I have spent inadequate time looking at the impact assessment, to which no reference has been made yet in these debates. Despite my apparent facility for statistics, all I can say about the impact assessment is that my head hurts. I found it incredibly difficult to comprehend page after page of low-impact, central-impact and high-impact estimates.
I will comment on one section. I could comment on others, but I address my comments overall. I find it very difficult to understand the impact that each of the different events would have in terms of positives and negatives, because they are aggregated in a very odd way. Page 41 of the impact assessment refers to the impact on street traders. It says:
“The low estimate reflects that 50% of traders will be able to continue to trade due to potential mitigations”.
Therefore, 50% of the traders will not be able to continue trading—and that is the low estimate. It goes on to say:
“The central estimate reflects the likelihood that 75% of traders in the affected area will be unable to trade while the provisions are in place. The high estimate serves as an upper bound where all traders operating in areas where prohibitions apply are unable to trade”.
We are therefore talking about a very substantial impact on businesses. We debated earlier the duration under which these provisions would apply, but we are talking about potentially every single street trader in those relevant areas. There are pages identifying the numbers of traders affected, whether it be at the Everton stadium, the Tottenham Hotspur Stadium, at Hampden Park in Glasgow or wherever you choose to name. There are numbers and numbers of street traders. That is their livelihood. If these events are running for several weeks, which is likely to be the case, they are losing their livelihood for that period.
I therefore share my noble friend Lord Fuller’s concerns about the impact that is identified—but identified in such a complex way that it is incredibly difficult to understand what we are talking about.
Lord Fuller (Con)
My noble friend has painted a picture and enumerated it with examples of sports stadiums. Under the Bill, there is to be a zone cast around the stadium where trading will be banned. But there are other provisions that have other events; for example, fan zones. Has my noble friend considered that fan zones could be in town centres? Town centres could be sterilised from trading. Has he considered that the net may be cast much further than just street traders, to other organisations too?
Lord Hayward (Con)
I thank my noble friend for that intervention and for identifying other areas. I tried to make it clear that I had taken only one element of one page of an impact assessment. It was on page 41. The impact assessment is over 90 pages long, with central, low and high estimates in all sorts of different categorisations There is no overall assessment of cost potential for any small or large business or the impact on the economy.
There is lots of explanation that tells us how wonderful it is going to be week in, week out, because of the benefits of sport. That is right—we have all recognised that—but there is an indistinct identification of the potential costs to some small and very small businesses, and we really should recognise the potential implications for all concerned.
Lord Parkinson of Whitley Bay (Con)
My Lords, in many senses, we have outperformed a World Cup football squad tonight, because we have hit the target ahead of schedule for this first day in Committee, and we have done it without a hydration break.
Let me begin with the two amendments I have tabled in this group. It is an important group on which to end our debate, because it deals with the significant impact of the Bill on the restrictions on commercial interests, small as well as big, a point that my noble friends have rightly accentuated. My Amendment 40 seeks to create an exemption for charities from the advertising offences in the Bill, applying only where a charity is advertising wholly or partly for the purpose of promoting itself or a specified list of charitable services. I hope the Minister will be attracted to it. It is word for word taken from the provisions in the Birmingham Commonwealth Games (Advertising and Trading) Regulations 2021. If it was suitable then, why not for the new framework that we are seeking to set out?
Amendment 55 similarly relates to charitable exemptions. Paragraph 1(2)(d) of Schedule 3 to the Bill states that a “Trading activity” includes
“appealing for money or other property (whether for charitable or other purposes), with the exception of begging”.
That means that the offence of trading in a restricted trading zone applies to charitable fundraising but not to people who are begging. I wonder if the noble Baroness can explain why it has been drawn up in that way. Surely we do not want to restrict people from collecting for good causes where that can be done in a way that is consistent with the sporting event, particularly when we consider that charities historically have been exempted from the advertising offences when we have hosted sporting events of this nature in the past.
I have tried in doing that to follow the example that my noble friend Lord Holmes of Richmond has taken with his Amendment 39. As he said, that mirrors the approach taken in the London Olympic Games and Paralympic Games Act 2006, which provided carve-outs for community and educational uses, and I congratulate him on the way he set that one out.
I thought that the noble Lord, Lord Addington, undersold his Amendment 38 a little. It concerns the impact of exclusive advertising authorisations on small and medium-sized enterprises and, as my noble friend Lord Hayward has done, it is worth drawing the Committee’s attention to what the Government’s own impact assessment says about this, because it is rather revealing. The final stage impact assessment, published by the department, acknowledges candidly that the provisions most likely to affect small and micro-businesses are the trading provisions of this Bill, which could prevent established street and market traders operating as usual in and around restricted zones. It recognises that there may be
“small disproportionate impacts on local traders relative to the broader business community”.
Therefore, it acknowledges that the greatest potential impact will fall on street traders in affected areas—as my noble friend Lord Fuller said, the people who add to and enhance the enjoyment of many people going to sporting events. The impact assessment promises that
“careful consideration will be given to how best to mitigate these impacts when making regulations on a case-by-case basis”.
That is a candid admission, but candour in an impact assessment is not the same as a legal safeguard in the Bill. Amendment 38 from the noble Lord, Lord Addington, seeks to translate the Government’s own stated intentions from the impact assessment into an enforceable obligation. I think that one is worth the Minister looking at carefully in her response this evening but perhaps also as we consider all the issues we have looked at today between now and Report. I am grateful to noble Lords for all their amendments in this group.
Baroness Twycross (Lab)
I thank the noble Lords, Lord Addington, Lord Parkinson of Whitley Bay, Lord Markham, Lord Fuller and Lord Holmes of Richmond, for their amendments.
Amendment 38, tabled by the noble Lord, Lord Addington, would require a designated person to have regard to additional factors related to small and medium or local enterprises when determining whether to grant an advertising authorisation. We share the noble Lord’s intention to ensure that such businesses are not unfairly impacted and that they are able to benefit from the sporting event where appropriate.
In the interest of proportionality, we intend to minimise the impacts of the advertising provisions on existing businesses by introducing exceptions to the offences in regulations. These exceptions would be based on existing advertising controls to allow usual advertising on business premises. Businesses within a restricted zone wishing to display advertising that is not subject to an exception may be able to seek authorisation to do so—for example, from the event organiser or local authority. Where an authorisations process is in place and the proposed activity does not undermine commercial sponsors, businesses with an existing licence to advertise should be given precedence.
Before making regulations, the Secretary of State or devolved authority must consult with the relevant authority and any other persons. This could include local businesses. Guidance setting out the advertising restrictions that will be in place must also be made available.
Amendment 39, tabled by the noble Lord, Lord Holmes of Richmond, would create an exception to the advertising offence for certain non-commercial entities. We recognise the vital work each of these does for local communities. In most cases, they will not be affected by the advertising provisions in the Bill. I will say more on charities shortly, but I stress that the advertising offence will capture charities and other non-commercial entities only if they are advertising a business, product or service in a restricted zone. Where such entities could be affected, we will look to provide an appropriate exception in regulations. This will ensure that the interest of any charity partner in an event, if there is one, can be taken into account where necessary. Generally, this means providing exceptions in regulations on a case-by-case basis to ensure that they are proportionate, workable and event-specific. Again, guidance will be made available, making clear how non-commercial entities could be affected and the options available to them.
Amendment 40 tabled by the noble Lord, Lord Parkinson of Whitley Bay, and supported by the noble Lord, Lord Markham, creates an exception to the advertising offence for promoting charities and certain charitable services. We share the spirit of this amendment. However, as this is a UK-wide framework, exceptions must be workable across the four nations. These separate jurisdictions have differing laws defining and regulating charities. To ensure that exceptions related to charities can be applied effectively, these will need to be brought forward in regulations drafted in accordance with local laws, taking into account the interests of any charity partners. Charities will be captured by the offence only where they are promoting a product, business or service. As I stated in relation to a previous group, exceptions will always be provided for advertising certain charitable services—for example, crisis mental health support services such as a hotline. To highlight our intention in this area, the Bill explicitly states that exceptions to the advertising offence could be made for the purpose of promoting charities or services provided by charities.
Amendment 55, tabled by the noble Lords, Lord Parkinson and Lord Markham, would remove appealing for money or other property from the definition of “trading activity”. I believe it was this amendment that the noble Baroness, Lady Grey-Thompson, spoke to when she talked about knitted items and proportionality in relation to that. That was a good example and the type of example I have been putting to the Bill team to test. I understand that this amendment is looking to probe why charitable fundraising is within the scope of the trading offence. The trading offence is designed to regulate activity that could disrupt the easy and free movement of spectators and provide a mechanism to control the number of traders, including charity collectors, operating within a restricted zone. For this reason, a number of local authorities already regulate charity collections in public places. Although I am sympathetic to the spirit of this amendment, a blanket exception for charitable fundraising could undermine these objectives. For example, an event may have an official charity partner which may need to be given priority over a fundraising activity in a restricted trading zone.
Lord Addington (LD)
My Lords, it is nice to end on something like agreement. I thank the Minister for her reply. It seems to me that we are accepting that there is a potential problem here and just about finding a solution. I must admit that the impact assessment is the sort of document I look at, cower, then drop. So, I will possibly take the sage-like advice of the noble Lord, Lord Hayward, and buy him a beer to get a good interpretation of it next time.
There has been a problem here. I see that the Government are trying to move towards dealing with it. But it is also a case of trying to make sure that those people who are going to be affected by it know, so that they can start to take mitigating measures themselves. I am not absolutely sure whether the Minister covered that well enough in her reply. Okay, this is the start of a process, not the end, but I think that we should have a look at this, because it is an irritant: it is a bit of grit that is not producing pearls.
We should try to get rid of it and do the best we can. We have enough information and experience now to be able to do something better than what we have at the moment. Let us have a look and see how we can get round to it.
I look forward to having further discussions with the Minister on this in future because I think we can make something better than we have at the moment. With that caveat, I beg leave to withdraw my amendment.