Children’s Wellbeing and Schools Bill
Debate between Baroness Blake of Leeds and Earl of Effingham(3 weeks, 1 day ago)
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The Earl of Effingham (Con)
My Lords, His Majesty’s loyal Opposition believe that we do, of course, need to pay careful attention to the barriers that prevent children from low-income backgrounds, young carers and others from attaining higher grades and better results in school. Ensuring that every child has a fair and equal chance is paramount, and it is entirely right that we should look for ways to mitigate these barriers wherever they arise. That may well be achieved in different ways —for some children, through home schooling, and for others, through specialist academies, as we have already argued on other clauses of the Bill.
It is also important that we look beyond structure and address the socioeconomic reasons that often lie behind underperformance. Disadvantage, low prior attainment and the additional burdens carried by some young people all need to be recognised. We hope the Minister will use this opportunity to set out clearly how the Government are working to level the playing field, ensuring that no group of pupils, regardless of background, is either favoured or disadvantaged and that even well-intentioned measures do not lead to any kind of positive discrimination. The principles of fairness and opportunity for all must remain central.
For that reason, while we would have stopped short of saying that a statutory national tutoring guarantee is the best or only approach, we welcome the spirit of Amendment 460, and we look forward to hearing how the Government intend to address the issues it highlights.
On Amendment 482, I thank the right reverend Prelate the Bishop of Chelmsford for raising this important issue. The children of parents who are in in prison are too often a hidden group, and yet they face particular challenges that can significantly affect their educational attainment and life chances.
We have had the opportunity to research the work that has been done by the charity Children Heard and Seen. That research suggests that schools were aware of just 30,000 children with a parent in prison, whereas the Ministry of Justice’s data estimates that the number of children with a parent in prison in England and Wales is more like 192,000.
This amendment rightly shines a light on these children’s needs and on our responsibility to ensure that they are not overlooked. We would be grateful if the Minister took this opportunity to set out what steps the Government are taking to address the barriers faced specifically by these children and whether they recognise them as a group that requires dedicated support and special help, in addition to helping schools identify those affected children who would indeed benefit from additional or tailored interventions in their place of learning. It is only by identifying and acknowledging such groups, not just children with parents in prison, that we can make sure that no child is left behind, whatever the circumstances of their family life.
Finally, we support the principle that lies behind Amendment 490. I thank the noble Lord, Lord Holmes, and the noble Baroness, Lady Grey-Thompson, for their tireless work in highlighting these challenges that are faced by children with special educational needs and disabilities. Their determination to improve outcomes for this group makes a huge difference, and we hope the Minister will recognise the strength of feeling across your Lordships’ Committee on this matter.
That said, we have reservations as to whether a royal commission is the best medium to close the attainment gap for people with special education needs and disabilities. Commissions can be lengthy and expensive, and sometimes produce recommendations that are overtaken by events before the findings themselves can be implemented.
Our goal is to ensure that we do everything we can to enable children with special educational needs to leave school with the skills, independence and confidence that will allow them to flourish and seize every opportunity available to them in the outside world. That requires schools and educational delivery to be formulated in ways that are genuinely tailored to children’s needs, not necessarily to meet a single uniform benchmark. For that reason, although we absolutely support the intent, allow me to suggest that another approach may be from the bottom up, focused on practice and provision on the ground and in the corridors, rather than launching a royal commission.
None the less, the underlying issue is of the greatest importance, and we hope that the Minister will take this opportunity to set out how the Government are addressing the attainment gap which has been made clear by noble Lords across your Lordships’ House, between those with special educational needs and those without, and to set out what more can be done to make sure that every child is given the best chance to succeed.
Baroness in Waiting/Government Whip (Baroness Blake of Leeds) (Lab)
My Lords, I thank all those who have contributed on this important group of amendments. First of all, it is not going to be possible to give the list that everyone has specifically asked for, but I want to start by making it absolutely clear that raising attainment for all children with inclusivity in mind and recognising the gaps wherever they occur is absolutely a top priority for the Government. This is such a complex area of work, as has been eloquently highlighted by the contributions that we have had on the three amendments.
On the amendment from the noble Lord, Lord Storey, he reminded us of the place we were in during those very dark days of Covid, and of the response to try to recognise that so many vulnerable young people in particular were being left behind as a result of their absence from the school system. I fully appreciate his concern and the concerns expressed by others, and particularly his interest in this and his understanding from his background of how this works locally. But I emphasise that it was a programme that was time limited for obvious reasons and has served its place.
I am very conscious of the comments of the noble Lord, Lord Gove, about how we target the resource we have. One of the best resources we have is our schools and those involved in the system, and I believe it is much better to go to those schools and let them identify the best way forward. It could be that a tutoring programme has worked brilliantly for them specifically, but we know that this is not the case all over. We should have confidence in those schools to determine the best way that they can reach young people who really need that additional support.
As I say, schools can choose to continue to provide tutoring through the use of funds such as pupil premium, for example, and to support the disadvantaged pupils identified in this amendment. Also, the Department for Education has published evaluations of the National Tutoring Programme; therefore we do not believe that it would be good value to have further reporting on it.
I thank the noble Lord, Lord Weir, for his comments. I am very interested in the work that he highlighted. If he could send me a link to the report that he mentioned, I would be grateful. It is of course critical that we listen to experience from our devolved regions and make sure we learn from all the experience that we have. As has been said, gathering information from across so many comments is one part of the issue. How we analyse that information and make it worthwhile and useful is another serious part.
My response to the noble Lord, Lord Storey, is that we do not believe that it is necessary to set out the complete requirements and framework in statute. We have confidence in schools to take this forward.
Moving on to Amendment 482, I thank the right reverend Prelate the Bishop of Chelmsford for stepping in and raising this whole important area. I of course recognise the concerns that have been expressed across the House. I am very grateful to her for raising such an important issue. Having a parent in prison can have a lasting detrimental effect on children’s life chances, including increasing their risk of low educational attainment, as we have heard. I appreciate that a supportive school environment can help to act as a buffer against these risks, and teachers can help children to navigate a challenging time and aspire towards further education.
The Government have committed to identifying and supporting all children affected by parental imprisonment. This is not a simple or straightforward task. It is extremely difficult. We have to be aware of the gaps in our knowledge and perhaps try to understand why we have some of those gaps. We are considering how to support this cohort as part of the Government’s opportunity mission. Obviously, the theme running through all this is about making sure that educational attainment is at the centre, but there are many other factors that we need to bring in relating to the well-being of children and young people, and how that can have an impact.
While the request is welcome, it would risk duplicating efforts that are already being made to identify this cohort sensitively, ensuring that they are offered appropriate support. As the noble Lord, Lord Gove, said, the Ministry of Justice is stepping up in this space. The Department for Education is working closely with the Ministry of Justice to ensure that all children affected by parental imprisonment, including those not of compulsory school age, are recognised and receive the support they need to achieve and thrive alongside their peers.
I say that this is sensitive because we cannot assume that all children whose parents are in prison have the same experience. Indeed, the difference in experience between siblings can be stark. It is a complex area. Some children who have a parent in custody might never have lived with that parent. We must be careful not to make assumptions about their experience. Our approach is looking at all children, recognising that their specific experiences can be very different indeed. Sensitivity is paramount in this area.
I turn to Amendment 490, in the name of the noble Lord, Lord Holmes, and thank him again for the way in which he expresses his concern around these issues. I extend those sentiments to everyone who has contributed to this area.
Again, I have to agree that establishing a royal commission on this subject may not be the way forward. As a Government, we have recognised that the whole area around special educational needs needs serious attention. Just to pick up on the comments of the noble Baroness, Lady Grey-Thompson, recognising the complexity of all this is why we are looking at that review. I know that we will go on in the next group of amendments after the dinner break to look into some of these issues in more detail, so I do not want to cover too much of the ground that will be raised then.
Resident Doctors: Industrial Action
Debate between Baroness Blake of Leeds and Earl of Effingham
Baroness Blake of Leeds (Lab)
The noble Baroness is certainly up to date as the report was published only this morning. If I am honest, asking such detailed questions at this stage is possibly slightly premature. We have committed to bringing in an implementation plan, which will be published in the autumn. The government-commissioned work has been very detailed. Professor Gillian Leng led the review, and the report sets out 18 recommendations that will give much-needed certainty and clarity to staff and patients. The Government are accepting these recommendations in full. By doing this, the Government have demonstrated their commitment to evidence-based policy informed by expert clinical advice, listening to patients and professionals.
I look forward to the implementation plan coming forward to make sure that we get some clarity. One of the most dangerous things is the lack of clarity that has surrounded these positions. The debate had, quite frankly, become polarised and in some cases toxic. That is not in anyone’s interest. Of course, there will be conversations between all interested parties following the report’s publication today and I look forward to discussions. I am sure it will come back to this place at the appropriate time.
The Earl of Effingham (Con)
My Lords, the Secretary of State said that resident doctors
“should start to experience an improvement in their working conditions on everything from the availability of nutritious food and drink”—[Official Report, Commons, 10/7/25; col. 1150.]
to other items. I would be interested to know: how exactly are the Government intending to achieve nutritious food and drink for these resident doctors?
Baroness Blake of Leeds (Lab)
I do not want to take that lightly, but resident doctors work extraordinary hours and put themselves on the line every time they go into work. Making sure that their employers provide them with the support they need is a fundamental job that they should all do, and I suspect that in some cases that has not been the case. There are so many other ways that all medical staff need supporting. Unfortunately, many medical staff meet violence in the workplace and meet discrimination and all sorts of challenges, and they need to feel that they have support. Making sure that they have access to nutritious food is fundamental and important, and I think we all know, looking back over the last decade, that the conditions that we have expected those wonderful professionals to work in have simply not been good enough. We will do everything we can to ensure that whatever aspect is causing concern is picked up and taken very seriously.
Combined Authorities (Adult Education Functions) (Amendment) Order 2025
Debate between Baroness Blake of Leeds and Earl of Effingham
Baroness in Waiting/Government Whip (Baroness Blake of Leeds) (Lab)
My Lords, I thank the Secondary Legislation Scrutiny Committee and the Joint Committee on Statutory Instruments for the scrutiny provided on this draft statutory instrument, which was laid in Parliament on 19 May 2025. If this order is approved, the Department for Education will transfer an additional funding power to nine existing combined authorities to enable them to use their adult skills fund allocation to fund new technical qualifications that have been approved for adults from the academic year on 1 August 2025.
The function being transferred to these combined authorities is under Section 100(1B) of the Apprenticeships, Skills, Children and Learning Act 2009—namely, the power to
“secure the provision of financial resources … in connection with approved technical education qualifications or approved steps towards occupational competence”.
This power will be carried out by each of the combined authorities, in respect of their area, concurrently with the Secretary of State. This will enable combined authorities to fund new technical qualifications for adults approved for funding at level 2 and level 3 from 1 August 2025.
The new technical qualifications are of high quality, are aligned with occupational standards and offer learners clear routes into skilled employment. One hundred and ten reformed technical qualifications at levels 2 and 3 have been approved to be first taught in the next academic year. These qualifications have been co-designed with employers to ensure that the skills needs of business and industry are better served and that clear progression pathways are created, delivering the outcomes that learners need, either to enter a skilled job or progress within a skilled career.
Learners deserve high-quality qualifications that meet their needs. If this order is approved, these nine combined authorities with existing adult education powers will have the freedom to fund these qualifications in order to meet the local needs of learners and employers. Transferring this power is key to reducing regional disparities, by ensuring that all authorities have access to reformed, high-quality qualifications.
If this draft order is approved, the nine combined authorities can choose to fund new technical qualifications available for delivery from August 2025 onwards, if they wish. It is a statutory requirement for public consultation to take place before changes are made to a combined authority’s existing arrangements. The Department for Education carried out a public consultation in November last year, and 85% of respondents agreed that the Secretary of State should transfer this additional power to the existing combined authorities. Each of the combined authorities affected, and all their constituent councils, have consented to the transfer of this power and the making of this order.
An order can be made only if the appropriate consent is given and the Secretary of State considers that the statutory tests are met. Those tests are that making the order is: first,
“likely to improve the economic, social and environmental well-being of … the people who live or work in the areas to which this Order relates”;
and, secondly, is
“appropriate having regard to the need to secure effective and convenient local government, and to reflect the identities and interests of local communities”.
These combined authorities have already demonstrated effective administration of the adult skills fund allocated to them. They have a detailed understanding of the skills challenges facing their areas, and their strategic plans reflect the interests and identities of their local communities. Making the order will enable the combined authorities to provide the full range of technical qualifications that have been approved for adults. Therefore, I confirm that we have concluded that the statutory tests are met.
I take this opportunity to thank all our partner organisations and colleagues and the relevant combined authorities for their time, expertise and input. To conclude, this order will give nine combined authorities the ability to fund new technical qualifications delivery from August 2025 onwards, to meet local skills needs, to enhance economic growth and to bring greater prosperity to their regions. I beg to move.
The Earl of Effingham (Con)
My Lords, I thank the Minister for introducing this order. The adult skills fund plays a vital role in helping adult learners gain the practical skills and qualifications needed for meaningful employment across key sectors. The fund was introduced by the previous Government to support adult learners. Tailored learning helps to equip them with essential vocational skills such as English, maths and digital literacy, as well as covering a range of sectors from business management to health and social care.
Children’s Wellbeing and Schools Bill
Debate between Baroness Blake of Leeds and Earl of Effingham(3 months, 3 weeks ago)
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The Earl of Effingham (Con)
My Lords, I shall speak to Amendment 79, in the name of my noble friend Lady Barran and the right reverend Prelate the Bishop of Manchester, and Amendment 80, in the name of my noble friend Lady Stedman-Scott. While we are of course positive towards efforts that support children with a social worker, those currently and previously looked after and those in kinship care, we question why adopted children are excluded from His Majesty’s Government’s plans to strengthen the role of the virtual school head.
Our Amendment 79 would clarify the role of the virtual school head to ensure that those children in the care of the local authority who are then adopted receive the same support as children with a social worker or those in kinship care. Section 23ZZA of the Children Act 1989 puts a duty on local authorities to
“make advice and information available in accordance with this section for the purpose of promoting the educational achievement of each relevant child educated in their area”.
Clause 6 of the Bill introduces a duty on a local authority to take
“such steps as it considers appropriate”,
which is a much broader role but one that currently does not appear to include adopted children.
As the helpful briefing from Adoption UK sets out, almost half of adoptive parents surveyed for its 2024 Adoption Barometer had sought advice from their local virtual school in the preceding year. The report highlighted the variability in support that they received and the value they placed on the advocacy that a virtual school head could provide with their child’s school. Their exclusion from the Bill appears inconsistent, and we would be grateful if the Minister could confirm either that adopted children will be included or, if they will not be, why not.
Amendment 80 seeks to include career and employment opportunities for children as part of educational achievement. The number of young people who are unable to find employment or further training when they finish their education is alarmingly high. The ONS estimates that 923,000 individuals aged 16 to 24—12.5%—were not in education, employment or training in the period January to March 2025. Although that is down on the previous quarter, I think all noble Lords would agree that the number is way too high and we must act to reduce it.
Amendments 78 and 81, in the name of the noble Lord, Lord Lucas, seek to require that authorities publish the steps they have taken to promote the process undertaken that has resulted in the educational achievement of the children in need or in kinship care, and that the Secretary of State may specify how this is reported. It is important for successful practices to be shared, and the amendment would ensure that performance can be more accurately measured.
Amendment 82, in the names of the noble Lords, Lord Agnew and Lord Farmer, seeks to provide boarding school places to children in kinship care. The noble Lords raise a most interesting point. It clearly worked very well for the noble Lord, Lord Farmer. Where it works for a child—and that is obviously critically important—it can be a hugely positive experience. That child may have the ability to immerse themselves in education, sports, arts or drama, away from the distractions or dangers that they have previously experienced in their outside school life. It would lessen the time pressures on kinship carers, who we know do an amazing job but often find there are simply not enough hours in the day. We would welcome the opportunity to learn more about the work done by Norfolk County Council, the issues it encountered and how it addressed them. We look forward to discussing this further, and hope the Minister will do so also.
Amendment 83, in the name of the noble Lord, Lord Bellingham, seeks to review virtual school heads and their role in improving educational outcomes for previously looked-after children. There is not yet sufficient evidence to fully analyse the extent of the improvement from the introduction of virtual school heads. As such, this review would certainly help to understand the impact that virtual school heads have had before full implementation. We very much look forward to hearing from the Minister.
In line with what the noble Lord, Lord Storey, said, these all seem entirely sensible and well thought out amendments.
Baroness in Waiting/Government Whip (Baroness Blake of Leeds) (Lab)
I thank noble Lords for their thoughtful contributions to this important area of the Bill. I think, hand on heart, we all know that children who need a social worker and children in kinship care experience significant difficulties. Many of them have poorer educational outcomes than their peers as a result, across all key stages. The noble Lord, Lord Storey, is absolutely right that it is important that everyone shares their experience. In Leeds, we always made sure that the scrutiny of children’s services was held by an opposition member; that seems to make absolute sense. We all want the best for these young people, and we must make sure that every area is fully scrutinised.
Clause 6 aims to confer statutory duties on local authorities to promote the educational achievement of such children, increasing their visibility, as we have heard from many noble Lords, and ensuring that they receive consistent expert support to improve their outcomes. In practice, these duties will be discharged by the virtual school head, who will have strategic oversight of the outcomes of these children, raising awareness and improving visibility of their needs—for example, through the delivery of training to schools in effective strategies for improving outcomes. We have just received more information about why this information is so important. For example, it will mean having a real understanding of the numbers of young people who experience school instability, placement instability or social work instability—all of which contribute to their experience in learning and their ability to achieve going forward. As well as this, virtual school heads will have a duty to provide information and advice, upon request, to kinship carers with special guardianship or child arrangements orders, regardless of whether their child spent time in care. We know that virtual heads were first introduced on a non-statutory basis, and we recognise the need for a much stronger basis. I echo the noble Earl, Lord Dundee, about the importance of local authorities in making sure that this moves forward successfully.
As I say, I welcome the spirit of the amendments tabled, which would ensure that virtual school heads work on behalf of all children, while ensuring that local authorities are rightly held accountable for the delivery of their duties. They would also ensure that previously looked-after children adopted from state care are not inadvertently disadvantaged as a result—I will come back to say more on that later. We are confident that the measures in this clause meet these aims and that, as a result, these amendments are not necessary. I will go into more detail later.
Amendment 77, in the name of the noble Lord, Lord Lucas, seeks to enable discussion on which children are eligible for local authority support and how virtual school heads will promote their educational outcomes. Providing clarity on the children to whom the virtual school head role is extended is important. New Section 23ZZZA(2), to be inserted by Clause 6, provides a clear definition of these children. Specifically, they are children for whom the local authority is
“providing or has provided services”
under Section 17(10)(a) or (b) of the Children Act 1989, as well as children
“in the authority’s area who live in kinship care”.
Amendments 78 and 81 from the noble Lord, Lord Lucas, seek to place a statutory duty on local authorities to publish a report on how they perform in promoting the educational outcomes of these children, and to specify through regulations what local authorities must report on. Transparency and consistency in local authority support are essential for driving improvements, and for ensuring that decisions are made in the child’s best interests and that every child receives support, wherever they live or are educated.
Statutory guidance already requires virtual school heads to publish an annual report summarising strategies for supporting children in their care, while local authorities are held to account through inspections of local authority children’s services. It is vital that we continue to ensure local authorities are held accountable for all children they are responsible for, and that this support is transparent. We will reinforce this accountability by updating statutory guidance to include reporting on strategies for supporting educational outcomes of children in need and children in kinship care. This will ensure greater consistency across all local authorities, enabling continuous improvement in the support provided while allowing for local and regional variations. This Government are committed to ensuring that previously looked-after children who have left care through adoption are supported to succeed in education.
Amendment 79, tabled by the noble Baroness, Lady Barran, seeks to ensure that children adopted from local authority care benefit from the same support that the clause extends to children in need and children in kinship care. I thank the noble Lord, Lord Hampton, for his statistics; it is always useful to have that level of granularity in our discussions.
To repeat, local authorities already have a statutory duty under Section 23ZZA of the Children Act 1989 to promote the educational achievements of all previously looked-after children who have left care through adoption, special guardianship or child arrangements orders. I hope that satisfies the questions that the noble Earl, Lord Effingham, raised on behalf of the noble Baroness, Lady Barran. In addition, subsection (3) of Section 23ZZA allows the local authority to
“do anything else that they consider appropriate with a view to promoting the educational achievement of relevant children educated in their area”.
I would suggest that that level of flexibility adds a great deal in the particular circumstances of each individual child.
The proposed amendment is therefore unnecessary, as the existing legislation sufficiently covers these children’s educational needs. However, we are committed to reviewing and revising the sections on promoting the educational outcomes of previously looked-after children in statutory guidance for virtual school heads. There is no room for complacency here; we have to keep revisiting, refreshing and relooking on behalf of all the children we are talking about. This will present an opportunity to further strengthen sections on support for adopted children, and we will work with the adoption sector on this, including by clarifying and reinforcing the interpretation of the duty and incorporating examples of good practice.
Children’s Wellbeing and Schools Bill
Debate between Baroness Blake of Leeds and Earl of Effingham(3 months, 4 weeks ago)
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Baroness Blake of Leeds (Lab)
I thank the noble Lord for his contribution and reassure him that I was not just reading out a script. I have put a lot of thought into this. I have been in the place of delivering on this agenda, so I do have the experience.
We have to be careful that we are not too prescriptive at every level, because that can absolutely confound and take up more resource. But I do acknowledge that statutory guidance has to be adhered to, monitored and dealt with with the same seriousness across the piece and, where it has not been adhered to, it has to be called out. The most important thing that all of us can do is make sure that there is an awareness of the rights and responsibilities of the different organisations involved and that they live up to them and, as we have said all the way through, put the needs of some of the most vulnerable children in our communities at the heart of everything we do.
The Earl of Effingham (Con)
My Lords, I thank all noble Lords who made valuable contributions to this group. The noble Lord, Lord Hampton, talked about improving the visibility of kinship care, and he is absolutely right. My noble friend Lady Sanderson talked about acknowledging the role of the whole family in terms of kinship families and gave us three live, worked examples of why this group is so important. The noble Lord, Lord Russell, reminded your Lordships’ Committee that there are 153,000 children in kinship care and that we are so lucky to have kinship carers—which I believe all noble Lords would agree with and which emphasises again why this group is critical. The noble Lord, Lord Storey, referred to kinship carers as a priceless asset and he is entirely correct. I believe several of these issues merit further discussion on Report, but, for the time being, I beg leave to withdraw the amendment standing in my name.
National Centre for Arts and Music Education
Debate between Baroness Blake of Leeds and Earl of Effingham
Baroness Blake of Leeds (Lab)
I know, from my experience of working with her over many years on the contribution of the creative industries to the economy and beyond, that my noble friend will continue to ensure that this is at the top of the agenda. I recognise the issues she raised, but at the moment we have a richness of reviews and plans coming together. We must ensure that all the key areas are talking to each other, taking full account of where we are now but also, as she quite rightly lays out, incorporating the potential of the tech sector and all the other areas to move forward and continue contributing to the economy of this country.
The Earl of Effingham (Con)
My Lords, the success of the hubs programme speaks for itself. We are talking about technology. The Prime Minister has clearly stated that his vision is to unleash AI across the UK. When will His Majesty’s Government reinstate the computing and science hubs, which were scrapped earlier this year? They saw the proportion of pupils receiving grade A or above in A-level computing rise by 35% and the number of people taking the subject almost double.
Baroness Blake of Leeds (Lab)
I thank the noble Earl for introducing this. I do not have the specific answers that he seeks. I am very happy to take this away and look at it in more detail. However, the most important thing is that all these areas are integrated across the piece, so that every aspect of work benefits from the skills that he has rightly raised to ensure that things are not put into a silo and that everyone can benefit.
Packaged Retail and Insurance-based Investment Products (Retail Disclosure) (Amendment) Regulations 2024
Debate between Baroness Blake of Leeds and Earl of Effingham(10 months, 3 weeks ago)
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The Earl of Effingham (Con)
My Lords, I thank the Minister for bringing these statutory instruments before the Committee. I refer noble Lords to my entry in the register of interests. Some of these instruments were developed by the previous Government and some by the current Government. We welcome these measures. Together, they form part of His Majesty’s Treasury’s programme to deliver a smarter regulatory framework for financial services.
The first set of regulations governs packaged retail and insurance-based investment products, known as PRIIPs. This legislation concerns the vital area of retail investment disclosure, which is of great importance to not only the financial sector but everyday British people seeking to secure their financial futures.
The second set of regulations clarifies the interpretation of capital requirements regulation rules and adjusts the criteria for recognised exchanges. This change is essential, as it seeks to ensure that our prudential regulation, particularly in the light of evolving international standards, remains finely tuned to support our unique market parameters.
The third set of regulations refines the transparency, risk retention and reporting requirements for securitisation issuers. It should help bolster investor confidence and market stability, which we all desire. Securitisation, which packages assets together for sale to investors, plays a key role in supporting credit availability and economic growth.
Finally, the fourth set of regulations introduces new standards for consumer composite investment products—those that pull together multiple asset types such as stocks, bonds and other investments. This measure is a prudent step towards fostering trust and accessibility in the UK’s retail investment market.
Although His Majesty’s Official Opposition welcome these changes, we are conscious that we must be careful to avoid overregulation, which could stifle market participation and limit access to credit. Which key stakeholders in the industries affected by these changes have been consulted? In particular, what feedback have banks and insurance companies provided?
We on these Benches really want to see a marketplace that is both free and fair. We believe that consumers deserve clear, accurate and accessible information that empowers them to make informed choices and educated decisions. It is with this principle in mind that we approach these regulations.
Baroness Blake of Leeds (Lab)
My Lords, I thank all noble Lords for their contributions on these important SIs. I again emphasise that they represent an important step in ensuring that our approach to regulation of financial services is effective, proportionate and tailored to the UK.
I will pick up on some of the specific points raised. The noble Baroness, Lady Bowles, expressed concern about the FCA consultation. The FCA will consult on its proposals for the new CCI regime by the end of this year, as we have said; we look forward to its final rules being published in the first half of 2025. This will provide an opportunity for stakeholders to provide the necessary feedback on the new regime to ensure that it works as intended. Firms will transition to providing disclosure under the new CCI regime following an appropriate transition period, which the FCA will set out in due course.
Following on from that, I turn to why we are talking about investment trusts and not just shares. As we know, like open-ended funds but unlike other shares, investment trusts have an active investment strategy and associated fees. It is right that these costs should be disclosed to retail investors through tailored disclosure. Nevertheless, the Government recognise that the prescriptive cost disclosure methodology required by the PRIIPs regulation does not reflect the actual cost of investing in these closed-end funds. The proposed new CCI regime will provide more useful and relevant disclosure to retail investors, as well as more flexibility to tailor disclosure to clients, and will be less burdensome for firms to produce.
In response to the noble Baroness, Lady Bowles, on why investment trusts do not have zero costs, the Government recognise that the prescriptive cost disclosure methodology required by the PRIIPs regulation does not reflect the actual cost of investing in these closed-end funds. Nevertheless, it is right that investment trusts, like other products that directly market to retail investors, must provide tailored disclosure on costs, risks and performance for retail investors. This SI gives the FCA the rule-making powers to design a new regime, in consultation with industry, that works for firms and investors.
On why firms are not implementing forbearance now, I say to the noble Baronesses, Lady Bowles and Lady Altmann, that this SI gives legislative certainty to firms ahead of the implementation of the new CCI regime. Although I recognise that there may be some frustrations in the sector, as expressed, the operationalisation of the FCA’s forbearance is a matter for industry and the regulator.