Financial Services and Markets Bill [HL]

Debate between Baroness Barker and Lord Sharkey

Committee stage
Monday 22nd June 2026 Grand Committee

[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.

Medicines and Medical Devices Bill

Debate between Baroness Barker and Lord Sharkey

Committee stage & Committee: 3rd sitting (Hansard) & Committee: 3rd sitting (Hansard): House of Lords
Wednesday 28th October 2020 Grand Committee

[Lord Sharkey (LD) [V]]

My Lords, it is a pleasure to follow my noble friend Lord Stunell. As my noble friend Lady Sheehan so clearly and compellingly explained on Monday, this amendment deals with the key question of access to medicines and is particularly relevant as we find ourselves swept along by wave 2 of the global pandemic. It is clear that, at least initially and perhaps for much longer, supply of any Covid-19 vaccines will fall behind demand. This raises the urgent question of who should receive priority access to these vaccines. Who should get them first, here and internationally? How should equitable access be decided?

The Government appear to be adopting two contrasting approaches to this question. On the one hand, we have Gavin Williamson saying:

“It’s the right thing to be doing to be at the absolute front of the queue to make sure we’re in a position to get those vaccines first when they become available”—


and that does seem to be what we are doing. As of August, the United Kingdom was the world’s highest per caput buyer, as the noble Lord, Lord Alton, mentioned on Monday. The vaccine taskforce has placed orders for six unproven vaccines, taking its potential stockpile to 340 million doses. Of course, we do not yet know to what extent, if at all, these vaccines might work, so some duplication is obviously prudent. But on the other hand, and while securing our place at the front of the queue as Mr Williamson recommends, we are also involved in trying to work out, under the auspices of the WHO, an equitable access scheme. The rationale for that is pretty obvious. Unless we have such a scheme, rich countries will end up vaccinated well in front of poor countries. In the face of a global pandemic, that approach carries obvious risk. It also carries moral risk.

The Government have committed £60 million to the WHO COVAX facility—the Covid-19 Vaccine Global Access Facility mentioned by my noble friend Lady Sheehan on Monday. COVAX seeks to enable global collaboration and equitable access to vaccines. It views this model of pooled procurement as preferable to rich countries doing bilateral deals. We have also joined 150 countries in expressing an interest in participating in COVAX for our own vaccine purchases. But there is clearly a risk that the bilateral purchasing of vaccines by the United Kingdom and other rich nations could undermine the work of COVAX. Could I ask the Minister how we balance our Williamson approach with our COVAX approach? How are these approaches prioritised? How much should we try to secure for ourselves and how much should we share? What criteria will be used to decide what access means in practice? We know something of what people in the UK think about the issue. Some 96% of the UK public supported the idea that national Governments should work together to ensure that treatments and vaccines can be manufactured in as many countries as possible and distributed globally to everyone who needs them.

My noble friend’s amendment also raises the issue of Crown use licences. We have previously used or threatened to use these licences in our negotiations with pharma. Can the Government confirm their willingness to use these licences if price negotiations on Covid-19 vaccines fail to reach a satisfactory conclusion?

I urge the Minister to give very serious consideration to the issues raised by this amendment. I will listen to his reply with great interest.

[Baroness Barker (LD)]

I thank my noble friend Lady Sheehan for her introduction to this amendment and the noble Lord, Lord Alton, for the detail that he added to that.

My interest in this matter stems back to 2013, when I was part of the All-Party Parliamentary Group on HIV and AIDS, which produced a report called Access Denied. It was about barriers to access to antiretroviral drugs for HIV and AIDS in low and middle-income countries. In the course of our research work for that report, we held a number of hearings with all sorts of representatives from a number of international research groups based in the United Kingdom but which worked across Africa and Asia. We met user and patient groups and also included representatives from the pharmaceutical companies.

I vividly remember sitting in a room in Portcullis House during one of our question and answer sessions and putting a question to a representative of a pharmaceutical company that has cropped up in our discussions in the last couple of days. I asked him a simple question—whether there was a direct correlation between the R&D costs of a drug and the price. With disarming candour, he said, “No”. Once people’s jaws had ceased to drop, we had the revelation that actually there is no transparency about pricing in the pharmaceutical industry or about the extent to which public and private funding goes into the development of new medicines—and, in effect, an admission that the overstatement by pharmaceutical companies of the need to charge excessive prices in some markets to maintain their viability is not substantiated.

I am not an anti-pharma campaigner. I believe that human and animal welfare rests very much on the development of pharmaceutical knowledge and science, and I am all in favour of extension of research and development of new drugs. However, for far too long Governments of all sorts have been held over a barrel by pharmaceutical companies, and that should stop.

I say this as someone who has had a long-standing interest in HIV. To see some patient groups in some parts of the world continue to become infected and, perhaps, have threats to their lives that would not occur if they had simply been born in another country is devastating. For example, in the world of HIV, very little work is being done on development of antiretroviral drugs for paediatrics because there is very little call for that in western developed nations, whereas there is a very big need for it in sub-Saharan Africa. Our involvement in these matters has a direct bearing on the lives of people across the world and on our standing not only as one of the major governmental funders through the different international funds but as a country in which research into new and emerging transmissible diseases is second to none because of our long-standing history.

For all those reasons, I very much support my noble friend Lady Sheehan, and I await with interest the answer to the question that my noble friend Lord Stunell put, which was the one I was going to ask, about proposed new paragraph (d) in my noble friend’s amendment.