Financial Services and Markets Bill [HL]

Debate between Baroness Altmann and Lord Bishop of Manchester

Report stage
Monday 7th September 2026 Lords Chamber

[The Lord Bishop of Manchester]

My Lords, I support Amendment 2 in the name of the noble Baroness, Lady Bowles of Berkhamsted, to which I have added my name. As we have already heard, this amendment would ensure that, when provisions of the Consumer Credit Act are repealed or replaced by FCA rules, the overall level of consumer protection would not be diminished. The Consumer Credit Act has long provided established routes of redress to consumers; it has done so for decades. It provides a core of fundamental protections enshrined in primary legislation and developed through parliamentary scrutiny, and probably is fairly well known.

As financial services continue to evolve, the ways in which consumers are protected must be capable of adapting to change. Were we to open up the CCA to repeal by the Treasury and the FCA without putting significant statutory protections in place, it would risk reducing standards of consumer protection for all people. Indeed, in its own review of the Consumer Credit Act, the FCA stated that many of its provisions

“could not be replaced by FCA rules”

under its current powers

“without adversely affecting … consumer protection”.

I have spoken many times before about the importance of equal financial opportunity for underserved communities, especially those who have less financial literacy or who face language barriers. The Joseph Rowntree Foundation tells us that a record number of people in this country are currently living in “very deep poverty”. Without equal access to financial services, they are deprived of the tools that might help them to stay afloat. For many families, credit is a lifeline in the face of the cost of living crisis. It is what enables them to make ends meet, but accessibility must be accompanied by adequate protection.

Data from the last year shows that 25% of cases seen by the Financial Ombudsman involved vulnerable consumers. It is these groups who are least able to advocate for themselves when things go wrong or to navigate complex complaints processes on their own. To increase access to financial services of vulnerable groups while simultaneously hollowing out the protections from which they disproportionately benefit introduces greater risk for those who already stand to lose the most.

The protections of the Consumer Credit Act are to be opened up to repeal. We must be certain that consumers will enjoy protections that are at least as strong as those from which they benefited before. This amendment is essential to preserving the fundamental rights which enable vulnerable groups to participate fully in economic life and provide consumers with the confidence they need that they will be protected when things go wrong—as from time to time they do.

[Baroness Altmann (Non-Afl)]

My Lords, I support the amendments in this group, and I feel that this Bill has an opportunity to improve—or at least not diminish—the protections that are offered to consumers of financial services. We have long known that from a consumer perspective, the asymmetry of information and the asymmetry of understanding leaves ordinary consumers open to being taken advantage of by financial services companies. The law is supposed to protect them and currently we have legal protections in place—albeit they are out of date and need updating, as we have already discussed. However, I certainly hope that the Minister—who I warmly welcome to his place—would understand that the aims of these amendments are to ensure that the financial consumer is protected both at the retail level and against practices that have arisen in the past and will arise in the future.

I particularly feel that the amendments about non-diminution when it comes to consumer credit and student loans, in the name of the noble Baroness, Lady Bowles, are extremely important to the ordinary person in the street. I commend the noble Lord, Lord Sharkey, and the noble Baroness, Lady Bowles, on continuing the attempts to ensure that mortgage prisoners are treated much more fairly. We have another opportunity now to remove this stain on our financial services landscape, and I really hope that the Government will be able to agree and accept that capping, at the very least, the costs and interest rates that mortgage prisoners have had to pay—at such great cost and pain—will be a possibility within this Bill.

--- Later in debate ---

[Baroness Altmann (Non-Afl)]

My Lords, I fully echo the comments that the noble Lord, Lord Mackinlay, just made, having had personal experience, sadly, of just what he described. Amendment 70 would provide at least some relief to those executors who cannot access funds and who see the interest racking up while probate delays or other delays beyond their control are occurring to the estate.

I urge the Minister also to take back to his department that if inheritance tax is indeed levied on unused pension funds from next April, there is not even the allowance in the new system for a 10-year delay, as there is with property, so it will not just be interest that racks up; there will be penalties and so on. There is a real problem in that regard and, indeed, there is a real issue with the costs involved in probate for the executors who cannot have the money released because some institutions have decided that even though the money is going to be paid directly to HMRC to satisfy inheritance tax, it will still not release the money—and, of course, it will still be charging fees on the funds that it retains. So I hope that the Minister will take seriously the ideas in Amendment 70.

I strongly support Amendment 60, and I would have added my name to it had I been more on the ball. It was so nobly spoken to by the noble Baroness, Lady Kramer. She spoke of the child trust fund issue, where parents and carers of children—who cannot make the decision for themselves—who are managing the money for those children, and have done so since the child’s birth in some cases, are being told that they must go through an enormously lengthy legal process just to be able to take a bit of money out of the money that the Government gave for those children, which was safeguarded until age 18. When they reached that age, they were unable to access the funds.

Child trust funds started in 2005 so this problem of people being unable to get money from the child trust fund has been going on since 2023. Indeed, there was a consultation in 2022, which recommended that a small payment scheme at least should be introduced, but in the meantime, nothing has happened. As the noble Baroness, Lady Kramer, said, the costs of going to court and obtaining an order to be able to take money out of a trust fund could use up most—or, even, in some cases, all—of the money in the fund. There is an issue that needs to be addressed. Amendment 60 would be a way of helping these families, and I hope that the Minister will take this back to the department and come back with some positive news on this issue.

[The Lord Bishop of Manchester]

My Lords, I have sympathy with all the amendments in the group, but I will focus my comments on Amendment 11 in the name of the noble Baroness, Lady Kramer, to which I added my name. As we have heard, this would require the FCA to establish a framework assessing banks’ and building societies’ provision of affordable credit.

Credit is a lifeline for families facing debt and financial hardship. According to a recent report, 60% of the clients of Christians Against Poverty—CAP—an organisation that is very active in my diocese, find that they have to borrow money to pay for household essentials and bills. They are not borrowing for luxuries: when credit is unavailable, they are left to delay essential spending and go without meeting their most basic needs. Sometimes, spending a little now will save you spending a lot more down the line.

I am extremely grateful for the remarks made by the noble Lord, Lord Holmes of Richmond. Credit inaccessibility has real consequences for those who are struggling the most. According to CAP, 47% of UK adults who currently have debt that they are struggling to manage have been unable to access their preferred credit option in the past two years.

This kind of financial exclusion means that we are locking vulnerable families into a cycle of poverty. We are depriving them of the tools they need to climb their way out. Unable to look beyond the pressing need to put dinner on the table, it is those with the most desperate need who are forced to sacrifice the most to get by. Left with limited choices, they are the ones most likely to enter riskier credit deals and to pay the greatest poverty premium. I have worked as a vicar in parishes where loans were enforced by men with baseball bats.

Since Committee, we have had the report of the Commons Treasury Committee on the Government’s financial inclusion strategy. The report highlights the need for

“proportionate firm-level financial inclusion metrics. These should focus on the largest providers and on markets where exclusion causes the greatest consumer harm”.

That specifically includes “affordable credit”. The report proposes that metrics

“should be designed to identify whether progress is being delivered consistently across firms and sectors”.

The committee also concluded:

“Voluntary action and pilots … cannot be the main driver of a national financial inclusion strategy unless there are clear routes to scale and clear consequences if voluntary action fails”.


What is proposed in this amendment clearly has much wider parliamentary backing than simply from the noble Baroness, Lady Kramer, and me. Indeed, several major lenders indicated to the Treasury Committee that they would be entirely happy to provide financial inclusion data as part of a statutory system.

This Bill, and this amendment to it, provide a sensible and practical solution to implement what the Treasury Committee advocated. Importantly, it will place responsibility for access to affordable credit on the lender, and introduce a clear framework by which banks and building societies can be assessed on how effectively they are meeting the financial needs of underserved communities. The new requirement for this framework to be kept constantly under review will ensure that those requirements remain open to scrutiny and adaptable to ever changing patterns of financial exclusion—patterns that could become more dynamic and entrenched as society rapidly changes. This amendment is an important step towards ensuring that our financial services meet the needs and uphold the dignity of real people, rather than expecting individuals to adapt to systems that too often exclude them from full participation in economic and community life. The only people who will not like it are the dodgy lenders who harass people in my diocese. I pray that we all support this amendment.