Defence Sector Banking Services: Environmental, Social and Governance Rules

Debate between Baroness Hayter of Kentish Town and Lord Pitt-Watson

Monday 26th October 2026 Lords Chamber

[Lord Pitt-Watson (Lab)]

I am in entire agreement with the noble Lord, Lord Sharpe, on this. To be clear, no legitimate company should be excluded from financial services solely because it operates in the defence sector. I can confirm that, as a first step, the FCA will be writing to all financial firms today to make that expectation absolutely clear. Again, I thank him and the many other people from all political parties who have been campaigning on this important issue for some time.

[Baroness Hayter of Kentish Town (Lab)]

My Lords, I chair the Industry and Regulators Committee. We are looking at defence at the moment, and we have heard from small defence companies with this problem. I ask two things. The first is to make sure that the FCA enforce the guidance, which it does not do in the other area I deal with, as noble Lords know, of politically exposed persons. The second is that financial services be sympathetic to the sort of cases referred to. These are often new companies, so they will not have a long trading arm, and therefore help must be flexible.

[Lord Pitt-Watson (Lab)]

Again, I am in total agreement on this. The FCA did this, and we encouraged it to do so, for precisely for that reason. In particular, we want to make sure that new start-up companies and small and medium-sized enterprises in the defence sector have access to the financial services they need to carry out their business and help protect the nation. I thoroughly agree with the comments made by the noble Baroness.