Levelling-up and Regeneration Bill

Baroness Jones of Whitchurch Excerpts

3rd reading
Thursday 21st September 2023 Lords Chamber

[Lord Randall of Uxbridge (Con)]

My Lords, I want to thank the Government and in particular my noble friend Lord Howe, the Minister. It is an interesting symmetry that he is the one proposing the amendment on areas of outstanding natural beauty in national parks, as my forebears came from the Chilterns—although I have a feeling that we were more tenant farmers than anything else. So we share a common love of these areas.

I give grateful thanks that this has been a cross-party campaign, with a lot of help from Wildlife and Countryside Link—and, of course, the Glover review. I pay particular tribute to the noble Baronesses, Lady Jones of Whitchurch and Lady Willis of Summertown, for helping me by moving some of the amendments earlier, when I was still ill, and I thank the Government for seeing sense on this. There is more to do on preserving our wonderful landscapes—we will be talking about protection of SSSIs in more depth whenever I get the opportunity. But I am going to stick there and thank the Government, and everybody else, very much indeed for making this happen.

[Baroness Jones of Whitchurch (Lab)]

My Lords, first, I remind noble Lords of my interest in the South Downs National Park. I add my welcome to that of the noble Lord, Lord Randall, for government Amendment 9, which fulfils the commitment that was made on Report to take the rather weak phraseology of public bodies “having regard to”, which we knew in practice was not working, to a much stronger phraseology —that public bodies should “further the interests and statutory purposes” of national parks. It sounds technical, but it makes a big difference in practice. The fact that that is linked to management plans and the targets and so on really helps make sure that those processes will work in tandem and will be in force.

Of course, the new government amendment changes the wording that we had in our amendment on Report, which said that the Secretary of State “must” make regulations—and now we have the normal government fall-back phrase of “may” make regulations. I take it in good heart from the Minister that the government intent is here, and we do not need to worry too much about “must” being replaced by “may”. I hope that the Government’s intent is properly made in good faith.

The Minister talked about the timing of the regulations and doing this in a timely manner—and that could hide a thousand sins. So I shall not be the first person to push him a little bit and say, “What is this timely manner? Can we expect something this side of Christmas, or will it drift on beyond that?” Any further light he could shed on that would be much appreciated.

The noble Lord, Lord Randall, made reference to the Glover review. There are other issues that are outstanding from that review. I hope that the Minister can give some commitment to continuing to look again at those recommendations and find ways in which to roll out those recommendations so that we have a complete picture and substance from Glover, which, as the noble Lord, Lord Randall, said, was widely praised across all parties.

There continues to be a weakness in legislation relating to national parks, in terms of their power of competence, which prevents national parks operating outside their borders. This matters, because national parks increasingly operate in partnerships across wider landscapes than their own borders. The current legislation prevents many of the opportunities that they would have to work in broader partnerships and to take up opportunities.

To take one example of that, in the South Downs we are leading on the development of the green finance initiative, but the legal limits on our scope and powers prevent us providing green finance support to our neighbouring areas of outstanding natural beauty. There is a problem with the terminology and phraseology of the current legislation. I do not suppose that the Minister will feel able to give any commitments on this now, but I hope that he will continue the dialogue to look at ways to address this. Everybody would accept that more—and broader—partnerships, particularly in terms of the local landscape review, would be really effective.

In the meantime, I very much welcome Amendment 9 and I am pleased to support it.

[Baroness Bakewell of Hardington Mandeville (LD)]

My Lords, I also thank the Minister for his introductory comments. Amendments 1 and 2 on chalk streams are to be welcomed and I thank the noble Viscount, Lord Trenchard, for his work on this and for pursuing it to make absolutely certain that the Government saw its importance. I am sure that if my late noble friend Lord Chidgey were here, he would also welcome this, as he was a great champion of chalk streams.

The amendments on national parks give security to protected landscapes and assist those who run them in ensuring that they are preserved for generations to enjoy. I support the comments of the noble Baroness, Lady Jones of Whitchurch, on national parks not being able to work outside their boundaries. I hope that the Government will look at this and perhaps reconsider.

Amendments 3, 10, 11 and 16 to 24 on the nutrients issue are all consequential tidying-up amendments, but they are to be welcomed. I thank the Minister and the Government for their work on this and for what seems a sensible way forward.

Levelling-up and Regeneration Bill

Baroness Jones of Whitchurch Excerpts

Report stage
Wednesday 13th September 2023 Lords Chamber

[Lord Randall of Uxbridge (Con)]

My Lords, I should first declare some interests. When I spoke on the swift bricks amendment in the name of my noble friend Lord Goldsmith the other night, I was so excited that I forgot to declare them. I hope I can make an apology. I have many conservation interests, including as a councilman with the RSPB—particularly relevant to the swift bricks—and, for consideration later today, as a member of the advisory board of River Action, which might give noble Lords an indication of where my interests will lie this afternoon.

I also have some good news. My noble friend the Minister has given me some, which I will come back to, but mine is this: I am losing my voice. I think that will be generally approved of on all sides of the House.

I know my noble friend has been working tirelessly and I thank all those members of the Government in the two departments—the Secretaries of State and the Ministers, as well as many others—who have got us to where we are today. In particular, apart from thanking Julian Glover, who, as my noble friend said, did this excellent review, I thank two strong allies on this from across the Chamber: the noble Baroness, Lady Jones of Whitchurch, who tabled the original amendment in Committee when I was elsewhere, occupied in hospital, and the noble Baroness, Lady Willis of Summertown. Their support has kept me going.

I know that I have begun to sound like a record with a needle stuck in it, but I think it has paid off. I thank everybody concerned with this. National parks and areas of outstanding natural beauty are what we are about, and biodiversity in those areas is depleted. I am pleased that the Government have recognised this and the need for legislation.

[Baroness Jones of Whitchurch (Lab)]

My Lords, I will speak very briefly. I declare an interest as a member of the South Downs National Park Authority. I thank the Minister and the noble Lord, Lord Randall. It has taken a long time coming, but I will not be churlish at this point; I am glad that, eventually, the very sensible, common-sense arguments that the national parks have put forward on this issue have been listened to. I have read the Written Ministerial Statement on this. The Minister has echoed that, more or less, in technical terms, our amendment has been accepted and they will just tweak it somewhat. Obviously, we would like to see the final version of it, but I am sure it will appear in good faith. I thank him for that.

Financial Services Bill

Baroness Jones of Whitchurch Excerpts

Report stage
Wednesday 24th March 2021 Lords Chamber

[Baroness Kramer (LD)]

My Lords, I will follow my practice of trying to be brief and selective on Report. We have had absolutely brilliant speeches and I do not intend to repeat them.

Perhaps I can start by being helpful to the noble Baroness, Lady Noakes, and I speak as a fairly weather-worn commercial banker who dealt extensively with loans and risk. She will understand, therefore, that the PRA, as the regulator, in dealing with capital adequacy issues, looks at the loans that sit as assets on the bank’s books, but of course it does not stop there. It looks through that to the operational activities—to the activities and investment of the company to which the loan is made. That is why the terminology “investment” pins exactly what this amendment is intended to do, which is to make sure that the PRA does that look-through to investment. I do not think that any member of the PRA would have the slightest difficulty in understanding what this amendment is guiding them to carry out. They would see that it has genuine precision in it. I do not have a problem with the wording; the wording says what it should, it says what it means and it says what the PRA would understand and follow through.

Very briefly, I thank the Minister for the two “have regard” amendments that he has embedded in this group. To “have regard” to the climate change target of 2050 is a step forward, but we have to recognise that it is very light-touch and will not scare the horses. The noble Baroness, Lady Noakes, captured that rather well when she said that the two “have regard” amendments will do no harm. I do not think they change the landscape, but they give a little hint of a change in direction and I welcome that change in direction.

Like others, I am very frustrated that we have a PRA that is going to do stress tests to test the sufficiency of banks’ capital buffers to deal with the financial instability caused by climate change, but then seems to have taken almost the equivalent of a vow of passivity and will not then follow through and implement the consequential adjustments to capital adequacy ratios that would come from that exploration and examination of the buffers. I really do not understand going through the process and then saying, “But we will not learn from or implement the consequences of that work”.

I sometimes think, as I listen to the speeches, that there is a sense that this requirement to look at capital adequacy ratios is somehow novel or revolutionary. I sit on the Economic Affairs Committee and last week, we were privileged to hear from the noble Lord, Lord Turner of Ecchinswell. I hope I have pronounced that correctly. We were looking at quantitative easing issues and therefore it was a discussion of central banks, but the issue of climate change came up. I thought what he said was quite helpful in understanding how normalised the approach of challenging this issue through capital adequacy ratios is now becoming. He said that any role of central banks in relation to climate change is very much secondary to the fiscal and regulatory authorities—the same issue that I think was raised with reference to quotes from the noble Lord, Lord King—but that is an important statement. It is secondary to the fiscal and regulatory authorities because, of course, the relevant regulatory authority is the PRA. He went on to give an illustration by referring to coal:

“If banks go on lending to coal companies, they may end up with stranded assets on which they will make a loss. That will be bad for their capital ratio. I think that it is reasonable for the PRA to set higher capital ratios for anybody who is still lending to coal.”


I do not want to suggest that he was willing to go further than coal, but he was using it as an illustration. I think most of this House would very happily accept that that language needs to be extended across the full range of fossil fuels, certainly in requiring the PRA to do a review. So, I wanted to underscore that this is a normalised approach; this is where we will go, and where we will end up. Given that we have described climate change, absolutely correctly, as an emergency, a delay in getting to that appropriate application of capital adequacy is really serious.

I wanted to pick up the point made by the noble Baroness, Lady Noakes—that most loans are short or medium term. They are, but they are supporting longer-term projects. Of course, the duration of financing the project itself—the project they enable, the project they empower, the project they drive—has a much longer-term application. So, the fact that the loan itself is short term does not mean that it can be set aside as though it had no longer-term implications. It is merely the first step in an ongoing process, and once the process is started it is almost impossible to stop. Loans might be short term because people think they might get better terms and conditions or pricing in the future. The short-term issue is not applicable here; the urgency issue is.

We know that we face an emergency and that how we act in the future will have to be more draconian and dramatic, and have far greater collateral damage, than if we act early. It is crucial that the issues raised in Amendment 3—getting in place the plan, pattern and process for using capital adequacy ratios to tackle the financial instability that will come from allowing climate change-related activities to continue and grow—be dealt with now, and rapidly. If the Government do not recognise what we have been describing here and commit to this review of the whole issue of capital adequacy and climate change, I very much hope that my noble friend Lord Oates will press his amendment. The message is absolutely critical.

[Baroness Jones of Whitchurch (Lab) [V]]

My Lords, I am grateful to the noble Lord, Lord Oates, for leading this debate this afternoon, and to all noble Lords who have spoken. We had a detailed debate in Committee on the need for the regulators to take a more systematic and urgent approach to their climate change obligations. I do not intend to repeat the general arguments, not least because the Minister accepted the need to embed our climate change goals in the financial services sector. The point of difference remained, how deep and how fast. Since that time, we have had a useful meeting with the Minister and we were pleased to hear that he had accepted our arguments concerning the need for the regulators to have regard to the Climate Change Act. The Government’s amendments, tabled today, reflect that concession and we consider this to be a considerable step forward. I thank him for his work in making that happen.

Since then, the Minister has also facilitated the sending of two letters from the PRA and FCA setting out their work on sustainable finance, to which a number of noble Lords have referred. It is useful to have their current commitments restated in this way and we are pleased that they have engaged with us on the subject. It is also helpful that they have set their work in an international context, as we know that we cannot solve this issue alone. However, I would say to the regulators, and indeed to the Treasury, that what is lacking in these letters is the urgency and reprioritisation that the climate change emergency demands. As we discussed in Committee, many individual financial institutions are already ahead of the game and are implementing dynamic green initiatives. We have heard great speeches from the Chancellor and others on the importance of the issue, but why are the regulators not being more ambitious, to ensure that everybody meets the standard of the best? As a result, today we have tabled further amendments to spell out in more detail how systemic finance-related climate risks should be embedded in the policy agenda going forward.

I have added my name to Amendment 3 in the name of the noble Lord, Lord Oates. It addresses the need for the PRA to review the risk weighting applied to investments in existing and new fossil fuel exploitation and production. The noble Lord has explained the case for that amendment extremely well today. We agree that the current regime does not adequately reflect the high-risk exposure of such investments. Clearly, institutions with over-exposure to carbon-intensive investments are not acting prudentially and their capital requirements should reflect this. As we discussed before, as the policy agenda moves rapidly away from fossil fuels and towards renewables, there is a considerable risk of the assets being stranded. The capital adequacy requirements need to reflect this risk more accurately.

The Minister will know that the Basel Committee conducted a survey of regulators in April of last year to stocktake their supervisory initiatives on climate change financial risk. This seems to run counter to the point that the noble Baroness, Lady Noakes, was making—I listened carefully to what she was saying about the comparative responsibilities of regulators and banks—because the Bank of England and the PRA were both respondents to the survey. In fact, only six out of the 27 replies factored the mitigation of climate-related risk in to their prudential capital requirements so far, but there was some criticism in the conclusions of the survey as a result of that. So, were the UK regulators in the good minority or the bad majority in the outcome of that survey, and are their responses to it in the public domain? Does he also accept that, without the necessary adjustments made in Amendment 3, investments will continue to focus disproportionately on outdated oil and gas activities that run counter not only to investments but to the interests of the UK economy as a whole? This point was well illustrated by the noble Baroness, Lady Sheehan. This is why we would particularly welcome the involvement of the Climate Change Committee, in order to provide the wider perspective of the longer-term UK interests, rather than the narrow short-term interests on which investment decisions are too often made. I therefore hope that the Minister will be able to give us the assurances we seek in this regard.

I have also added my name to Amendment 22, in the name of the noble Baroness, Lady Hayman, for which she made a very powerful case. We believe it essential that the Government set out how they will actively ensure that climate change considerations are reflected in the regulators’ statutory objectives. This amendment would provide a framework for systematically assessing and reporting on climate change financial risk. It would ensure that all government guidance is linked in order to provide a coherent and entire picture on managing climate change—an improvement on the current piecemeal reporting structure. I therefore hope that the Minister will be able to give us the assurances we seek on this issue. It would also be helpful if he could spell out what future formal reporting mechanisms would be put in place to achieve this.

Moving on to Amendment 23, at Committee and again today, the noble Baroness, Lady Hayman, has made a compelling case that the FCA needs a senior executive to oversee and deliver the climate change agenda. Like her, we were pleased to see in the FCA’s letter that a dedicated director of environmental and social governance standards is being recruited to lead on this work. We welcome this appointment and believe it represents a real step forward.

Financial Services Bill

Baroness Jones of Whitchurch Excerpts

Committee stage
Monday 1st March 2021 Grand Committee

[Baroness Jones of Whitchurch (Lab) [V]]

My Lords, I am grateful to the noble Lords, Lord Oates and Lord Holmes, for tabling these amendments and for their helpful contributions. They provided a welcome extra clarity as to how we can deliver the UK’s climate change obligations across the financial services sector.

In an earlier debate, we identified the important principles which should underpin the application of climate change principles by the regulators and how they should be reported. A number of noble Lords then made strong and compelling cases for changes to the regulatory regime in advance of the Government’s consultation and implementation of the Basel standards because of the urgency of the climate change threat that we all acknowledged in that debate.

These amendments go one step further. Amendment 28 would add a specific requirement on the PRA to take the level of exposure to climate-related financial risk into account in setting capital adequacy requirements. We believe this is right, given the increasing evidence that institutions with overexposure to carbon-intensive investments are not acting prudentially.

In the debate last week, the Minister said:

“There is no evidence that ‘greener’ means ‘prudentially safer’, at least not yet”.—[Official Report, 24/2/21; col. GC 224.]


Although we accept that evidence in this field is still being collected, we believe that there is already a sufficiently strong evidence base on which to act. This has been confirmed by the Bank of England, which is already planning to tighten the supervisory expectations on climate-related risk for banks and insurers. As the Governor of the Bank of England said—and we all seem to be quoting the governors or the bank in different guises in this debate, but all roads lead to the same conclusion—in a recent speech:

“Investments that look safe on a backward look may be existentially risky given climate change. And investments that might have looked speculative in the past could look much safer in the context of a transition to net zero.”


Therefore, let us face it: high-level thinking is changing fast, whether it is by the Chancellor or the Governor of the Bank of England or, indeed, in the quotes from BlackRock that we looked at in the previous debate. There are big changes and big thinking going on. We now need to turn that recognition by all those leadership characters into practical policies for the future, and that is what we are attempting to do. We identify the urgent need to revisit investment assumptions and near-term capital requirements, and that is what Amendment 28 is trying to do.

Amendments 31 and 32 focus on the specific risk weight of investment in fossil fuels, which remain a major contributor to carbon emissions and are inevitably high-risk. We welcome the debate on these amendments and the specific risk weights that are proposed. I listened carefully to what the noble Lord, Lord Oates, and other noble Lords, had to say on this. We feel that the noble Lord was making a very valid point. As other noble Lords have said, the wording of these amendments might not be perfect, but they are certainly worthy of further exploration. On that basis, I look forward to the Minister’s response.

[Earl Howe (Con)]

My Lords, I am grateful to the noble Lord, Lord Oates, for his clear and succinct introduction to these amendments, and to other noble Lords who have spoken in his support, as well as to those who have sounded a more critical note.

I have already spoken about some of the broader questions relating to climate change and financial services in a previous debate and, in response to the noble Baroness, Lady Ritchie, in particular, I set out last Wednesday the significant action the Government are taking in this area. I also indicated that I have heard and understand the well-argued concerns of noble Lords about the manifold risks arising from climate change. I stand ready to discuss those concerns in the context of this Bill as constructively as I can between now and Report.

To add one more assurance in reply to the noble Lord, Lord Oates, who spoke about the risk of stranded assets and asked specifically about a transition plan, the Government are committed to a managed transition that puts new jobs in the clean energy sector at the heart of our strategy. My right honourable friend the Prime Minister set out details of this in his 10-point plan; further detail will be included in the forthcoming net zero review.

If I may, I will focus my remarks more narrowly on the specific issues raised by these amendments. Noble Lords reflected in earlier debates on the importance of prudential regulation, which aims to ensure the safety and soundness of the financial system. Much of the UK’s existing prudential regulation was introduced as a result of the 2008 financial crisis, to protect our economy by ensuring that financial services firms are adequately capitalised and properly managed to limit the risk of failure and the impact that would have on the economy. We must therefore be careful when considering the use of prudential tools to deliver other policy objectives; my noble friend Lady Noakes was absolutely right to emphasise this.

Indeed, one of the key advantages of the approach taken in the Bill is that it allows the UK’s prudential regulator, the PRA, to react where necessary to changing market conditions and to developments in international work and research on climate risk, particularly the development of a global consensus on what role the financial sector should play in tackling climate change. I believe this is a better solution than the amendments we are discussing here.

Amendment 28 would require the PRA to set capital adequacy requirements of a credit institution while having regard to its exposure to climate-related financial risk. As I have said, I appreciate all the concerns around climate change—there is no question of the Government being complacent about them—but I cannot see how this amendment would deliver more than the PRA’s existing obligations under the Financial Services and Markets Act, which by definition requires it to consider risks to the safety and soundness of financial institutions. I say to my noble friend Lady Altmann in particular that this includes climate risks in the same way as any other risks. The regulators are very alive to climate-related risks and are already acting to make sure they are understood and addressed in the financial system. To prove the point, the PRA will undertake climate-related stress tests in June to ensure that the financial system remains resilient to climate-related risks.

Amendments 31 and 32 would require the PRA to set punitively high risk weights against exposure to existing and new fossil fuel production and exploitation. These risk weights would, in effect, make it more expensive to finance such activities, and thereby make them less attractive. However, the point of the Bill is to support a flexible regulatory system that can respond to changing circumstances and developments as they arise. This framework puts financial stability at its heart through the PRA’s primary objective of safety and soundness. Other relevant public policy considerations are dealt with through the system of “have regard” set out in the Bill. None of these is prescriptive in the way that these amendments are, and they are, quite importantly, subordinate to the PRA’s primary objective. I maintain that this is the most effective way in which to ensure appropriate prudential treatment for all assets. Putting other public policy issues on a par with safety and soundness could lead to decisions being taken that are not sufficiently focused on the core purpose of prudential regulation.

Amendment 42 would require the Treasury to make regulations requiring credit rating agencies to give due consideration in their ratings to the level of exposure of a credit institution to climate-related financial risk. The credit rating agencies regulation sets out the UK’s regulatory regime for credit rating agencies, which are supervised by the FCA. A key principle of the regulation is that the agencies are independent, and the credit ratings they produce are independent, objective and of adequate quality. In producing these ratings, credit rating agencies are required to use methodologies that are rigorous, systematic, continuous and subject to validation based on historical experience. However, the credit rating agencies regulation does not stipulate factors that must be included within the methodologies used by credit rating agencies. In line with this principle of independence, the regulation prohibits interference of public authorities in the content of credit ratings or methodologies when performing their supervisory functions. This is an important principle designed to ensure that ratings have not been unduly influenced.

However, the regulation places requirements on credit rating agencies clearly to disclose their methodologies and the key elements underlying the credit rating or the rating outlook. That ensures that those using the ratings can make an informed choice as to whether a rating gives due regard to the impact of a type of risk on the creditworthiness of the institution in question, including climate-related financial risk. In addition, EU guidance published in 2019 provides that, when a credit rating agency changes a rating, it must disclose whether environment, social and governance factors played a part in that decision. The FCA has publicly communicated that it considers all guidance published by European authorities before 31 December 2020 to be relevant to UK firms and, therefore, UK agencies are expected to continue to apply this principle. More generally, the Government have committed to implementing the requirements of the Task Force on Climate-Related Financial Disclosures in the UK, with a significant portion of mandatory requirements in place by 2023, and all relevant firms reporting in line with the requirements by 2025.

On the topic of disclosures, Amendment 136A would require the Government to introduce an obligation on fund managers to report to the FCA on how their funds are satisfying environmental, social and governance requirements. I have already spoken about the Government’s commitment to implementing the requirements of the Task Force on Climate-Related Financial Disclosures—TCFD—in the UK. Becoming the first major economy to commit to fully mandatory and public climate disclosures is even more ambitious than the proposed amendment, which requires FCA-regulated fund managers only to make disclosures to the FCA. But fund managers do not yet have sufficient information on environmental factors from the wider economy in which they invest. The mandatory TCFD road map set out by the Government will apply to funds and the wider economy in a co-ordinated timeline.

--- Later in debate ---

[The Deputy Chairman of Committees (Lord Russell of Liverpool) (CB)]

I understand that the noble Baroness, Lady Jones of Whitchurch, may not have completed her remarks before the Minister began. Does she have anything that she wishes to say?

[Baroness Jones of Whitchurch (Lab) [V]]

Obviously the Minister has now responded. I think I made the point in conclusion that the high-level leadership and thinking, including from the Chancellor and the Governor of the Bank of England, are moving in the same direction. Something more urgent is needed, and the Bill is the ideal mechanism for delivering these changes on the ground; otherwise, we are in danger of this becoming aspirational, when the urgency is more immediate.

I apologise to the Minister. I have just been trying to find out what happened, so I did not hear everything he said. Underpinning all this, I feel that the amendments are worth while and deserve further consideration, and that we need a mechanism to have more targets and better data, assumptions and methodology. We need the regulators to set that; otherwise, if we are not careful, we will end up with annual reports that, as we have said in the past, are just greenwashed and are not in any way held to account. I will finish there and I apologise to noble Lords if they did not hear all the things that I had to say.

[The Deputy Chairman of Committees (Lord Russell of Liverpool) (CB)]

Does the Minister wish to respond? No? In that case, I call the noble Lord, Lord Oates.

Financial Services Bill

Baroness Jones of Whitchurch Excerpts

Committee stage & Committee: 2nd sitting (Hansard) & Committee: 2nd sitting (Hansard): House of Lords
Wednesday 24th February 2021 Grand Committee

[Baroness Kramer (LD)]

My Lords, listening to today’s really outstanding speeches, I think most of us can agree that tackling climate change is not an optional extra. It is necessary to the survival of a liveable and civilised world, and it is urgent. The noble Lord, Lord Sharpe of Epsom, seemed rather the stand-out among the speeches. If I understand him correctly, he shares the general principles but would like them parked in some very long grass for a very long time. That fails to recognise the real urgency that we face. We are past the point where long grass is an appropriate place to put concerns.

This is a substantial group of amendments. It looks to the financial regulators, influencing the financial sector as they do, to become part of the solution. The amendments break roughly into three parts—a cluster of “have regards” and “considerations” that would influence the FCA and the PRA in shaping the rules to support the net-zero target; disclosure and reporting requirements; and the setting of a climate change objective for the FCA, together with appointment to the governing board of an individual responsible for climate change. Here, I disagree with the noble Baroness, Lady Noakes. I think there should be an individual with particular responsibility at the highest level to make sure that things happen in organisations.

I almost wonder that we are having to discuss disclosure, because, in American terminology, it seems to me a slam dunk. Andrew Bailey, in his Mansion House speech last November, called for “data and disclosure”, and repeated that time-honoured but real truism:

“What we cannot measure we cannot manage”.


The other measures proposed are equally straightforward —it is a very straightforward set of amendments. I have my name to many of them, but the range of names on various amendments underscores the cross-party nature of the concern and the determination of this House to use the Bill to leverage change. I join others in saying, that if you cannot tackle the issue of climate change in a financial services Bill, it is going to be hard to tackle it at all.

The hour moves on, so I do not want to repeat the brilliant discussion, except to say that speaker after speaker detailed the urgency of acting on climate change and the necessity that it become a priority for this sector. My message to the Government is carpe diem, because this House will if the Government will not. If the UK is to be a leader—and of all the years in which we wish to show leadership, it must be this one—it must break new ground.

There will be more to say on the next group of climate change amendments, which I consider more powerful and radical. They deal with risk and capital requirements. I very much hope that we receive a strong response from the Minister. I can understand that someone looking at the Bill and a template of previous financial services Bills may not have thought that climate change had a place. By now, Ministers surely must. Included among this group of amendments are so many that are exceedingly reasonable and, frankly, quite uncontroversial. I hope that the Government will begin to shape some amendments of their own, drawing on the content so very firmly placed before them.

[Baroness Jones of Whitchurch (Lab) [V]]

My Lords, I am pleased to respond to this substantial group of amendments, several of which are in my name and all of which address the need for better regulation to ensure financial services meet their climate change obligations and the associated financial risk. These amendments correct a fundamental failure of the Bill to address those obligations.

As was pointed out at Second Reading, we find ourselves entangled in an argument from the Minister that these issues are not covered in the Bill, and therefore amendments inserting climate change obligations are inappropriate for it. We reject that argument; it makes nonsense of the scrutiny and revising process that we are here to enact. If we find an omission, it is perfectly proper that we seek to correct it by tabling amendments to the Bill.

That is why we regret that the Government did not bring forward their own amendments, following the excellent arguments put forward by my shadow Minister colleague, Pat McFadden, and others in the Commons. As he pointed out there, and as others have pointed out today, the Chancellor set out green goals for the UK financial services industry back in November. Therefore, the Bill was an ideal vehicle to set out an accountability framework to underpin those goals. Every sector of our economy will have to play its part in delivering the climate change net-zero target—whether it is in energy, transport, housing or agriculture—and all these changes will require large-scale financial investment. Financial institutions will thus have to play a central role in delivering it, and it is right that we use this opportunity to spell out how it should be done in practice.

During the Commons debate, the Minister, John Glen, also argued that this issue would be dealt with elsewhere as part of a separate review—again, reference was made to this today. This cannot wait for another review or consultation. We are already falling dangerously behind, and as the climate change committee has made clear, we are not on track to meet the net-zero 2050 target. We need action now to galvanise both public and private finance to step up to the mark and to be accountable for the promises made. The noble Lord, Lord Sharpe, said that we were in danger of complicating regulation, but I do not think our asks do anything like that. Our asks are simple: they set out core principles that we expect the regulators to embrace, but we leave them to sort out the detail of how to follow that through and enact it. That is the right way to go about it.

Press Regulation

Baroness Jones of Whitchurch Excerpts

Wednesday 2nd April 2014 Lords Chamber

[Lord Gardiner of Kimble]

Your Lordships may be able to crystal-ball gaze but I certainly cannot. As I say, I very much hope that the self-regulatory body will apply for recognition. There is nothing to stop another self-regulator being formed, as the royal charter caters for a further self-regulatory body coming forward for recognition.

[Baroness Jones of Whitchurch (Lab)]

My Lords—

[Lord Dykes (LD)]

My Lords—

--- Later in debate ---

[The Chancellor of the Duchy of Lancaster (Lord Hill of Oareford) (Con)]

My Lords, it is the turn of the Labour Party.

[Baroness Jones of Whitchurch]

My Lords, thank you. Has the Minister seen the Media Standards Trust report, published late last year, which assessed how the IPSO proposals measured up to the Leveson recommendations? It found that IPSO failed to meet 26 of the 38 recommendations. Has the Secretary of State pointed out to the IPSO representatives that their model is a very long way from complying with Leveson? At what stage is the Secretary of State going to intervene to put the Leveson proposals and the royal charter back centre stage going forward, which is where they ought to be?

[Lord Gardiner of Kimble]

My Lords, I have, of course, studied the Media Standards Trust report. The whole basis of the design of Lord Justice Leveson’s report is precisely for the independent Recognition Panel to opine on whether the criteria in Schedule 3 of the royal charter have been adhered to. That is the key point of the independence: it is for the Recognition Panel to decide. The idea that the Secretary of State should intervene misses the point about the independent arrangements that we have put in place to ensure that we get a decision that is independent of Parliament and government.

House of Lords: Working Practices

Baroness Jones of Whitchurch Excerpts

Monday 12th July 2010 Lords Chamber

[Baroness Jones of Whitchurch]

My Lords, I am grateful to the Leader of the House for facilitating this debate and very much welcome the tone in which he set out the issues and raised the prospect of real reform.

I am contributing to this discussion conscious that I am still, relatively speaking, a new girl, having joined your Lordships’ House only four years ago. I am also very much aware that greater minds than mine, many of whom are speaking today, were working away on these issues for a considerable period prior to my arrival. Nevertheless, in the hope that I could at least bring something of a fresh perspective, I agreed to join the small working group on procedural reform established by the Labour Peers and chaired most ably by my noble friend Lord Grocott. Our discussions ranged widely but ultimately focused narrowly on some practical recommendations for reform that could complement the incremental changes that have already been made and which could be introduced quickly. I commend the recommendations to your Lordships.

It seems to me that any procedural reforms should meet two key criteria. First, they should enable wider participation in the work of this House to take maximum advantage of the wealth of wisdom and experience that undoubtedly exists here. Secondly, they should help the outside world better to understand our processes so that we become more accountable, more accessible and more transparent.

In that respect, I have to confess to having been mystified and occasionally alienated by some of the more arcane procedures with which I had to come to terms when I first joined this House. Since then I have become quite affectionate towards some of the rituals and ceremony that distinguish our work. I suppose some might say I have gone native. A key objective should still be to deliver proper respect for our history and traditions, but not when they get in the way of effective participation and scrutiny. In this context, I highlight the following recommendations from our report.

First, it is true that Question Time is, in many ways, very popular and it is certainly well attended. However, it is far from inclusive and sometimes downright scary. It has the capacity to hold Ministers to account, yet many of the noble Peers best able to do so would not dream of participating in what sometimes degenerates into an undignified shouting match. I am grateful for the research provided by my noble friend Lord Campbell-Savours, which unearthed that in the previous Session, of the 3,039 supplementary questions asked, almost half were asked by the same 57 Peers. There appears to be no tradition of giving way to those who speak less often and, as a result, questions can be repetitive and predictable. At the same time, as the Leader of the House acknowledged, there is inevitable pressure on the Front-Benchers responsible for order to demonstrate that they are not being partisan—which, frankly, some achieve better than others—while, at the same time, they have their back to half the Chamber.

Part of the solution to this problem requires a change in culture rather than procedure. Perhaps, for example, if we issued a questionnaire to those in the Visitors’ Gallery, asking what they thought of the spectacle, the outcome might shock us into a change of behaviour. In the mean time, I hope noble Lords will take on board the more practical solution in the Grocott report—to take advantage of the Lord Speaker’s undoubted authority by transferring responsibility for order and conduct to that position for a trial period. This has the added advantage that the outside world already believes that this is the Lord Speaker’s role.

Secondly, there is an urgent need to streamline the Committee stages of Bills. As a relative newcomer it has been a struggle for me to distinguish on occasion between the Committee and Report stages, with their endless opportunities for repetitiveness and near identical speeches, whereas the legislative stages in the other place appear much more transparent. This repetition is most marked when both the Committee and Report stages take place in the main Chamber. As our report pointed out, there are physical and deliberative reasons why the Committee stages of a Bill are better suited to debate in Grand Committee. The layout allows better communication and is less partisan, and the slightly more informal style allows Ministers and participants to get to the heart of the issue and work through solutions.

As the Leader of the House recognised, it has previously been recommended that all but the most important government Bills should be dealt with in Grand Committee and I very much endorse this view. I also endorse the view that using rooms other than the Moses Room for Committee stages of a Bill—and even allowing morning sittings—should be considered. Interestingly, one of the facts that came to light as we were debating these issues was that the Commons currently spend up to a third more time scrutinising and revising individual Bills than we do. If we are to justify the added value of a second, revising Chamber, we have to set aside the necessary amount of time to deliver effective scrutiny, use the right facilities and use that time wisely.

Finally, I add my voice to the campaign for the Lords to carry out post-legislative scrutiny. There is currently no authoritative process for reviewing the effectiveness of legislation. Did it achieve what we had intended? Were there any unforeseen consequences? Did those at whom it was aimed really understand what was required of them? Were the resources made available for the legislation to be properly enacted? I could go on, but I am sure noble Lords will have their own list of questions they would like to be probed in a follow-up to legislation being passed. One small example quoted in our discussions is that we always seem to require new bodies which we set up to produce an annual report as a way of holding them to account. What is the cost of those reports? Are they actually produced and, if so, who reads them?

The point is that we are too quick to pile on new layers of legislation without taking stock and learning the lessons from the Bills which have already been passed. I know that some will point the finger at the previous Government as a sinner in this regard, but we were not the only culprits. You have only to look at the forthcoming Bills listed in the Queen’s Speech to realise that nothing much has changed.

Your Lordships' House is ideally placed to carry out a post-legislative function with the aim of improving the quality of legislation in the future. Obviously, this would need to be taken up proportionately; for example, it would not be possible to subject all Acts of Parliament to this process. But a suitable process of scrutiny by a post-legislative committee could provide real learning benefits for both Houses. I hope that it will be given serious consideration.

These are relatively modest but practical examples of the changes that could help to modernise our procedures and, in so doing, make us more relevant and effective. As I said at the outset, we should measure reform against the need to widen the participation of Peers and increase public understanding. I believe that these proposals, as well as those contained in the report of my noble friend Lord Filkin, would achieve this.

From the debate so far, there appears to be a growing consensus for reform. I hope therefore that the outcome of this debate will be more than congratulatory words and that, in summing up, the Minister will be able to set out a precise route map, with timescales, for taking these issues forward.

Broadcasting: Digital Radio

Baroness Jones of Whitchurch Excerpts

Wednesday 30th June 2010 Lords Chamber

[Lord Shutt of Greetland]

My Lords, I understand that many cars cannot receive digital radio and that it will be 2013 before most cars, as they are manufactured, have digital radio sets built into them. There is the possibility—the Government are working with the industry on this—of having switchover sets placed in motor cars.

[Baroness Jones of Whitchurch]

My Lords, is the Minister aware that the latest issue of the digital radio newsletter recognised that reception still needs to be improved both in its reach and in the signal strength? What steps are the Government taking independently to validate the industry’s stated coverage, and what contact is currently taking place with the consumer expert group to ensure that the concerns of consumers continue to be taken seriously?

[Lord Shutt of Greetland]

My Lords, there are many groups that the Government are involved with at DCMS in working up the way forward. I shall not cite all the discussion groups that are taking place, but lots of work must be done before there is a switchover. For example, I said that 24 per cent are presently listening; that must be at least 50 per cent before there is a switchover. Nearly 90 per cent are able to receive the signal; that must be nearer 98 per cent before there is a switchover.