Health and Care Bill

Baroness McIntosh of Pickering Excerpts

Lords Hansard - Part 2 & Report stage
Monday 7th March 2022 Lords Chamber

Moved by

[Baroness McIntosh of Pickering]

156: Clause 163, page 133, line 34, at end insert—
“(10) The Secretary of State may not exercise the powers provided by virtue of—(a) this section to request a water undertaker to enter into arrangements to increase the fluoride content of the water, or(b) section 164 to request modifications to old English fluoridation arrangements,until an impact assessment has been published setting out the impact on health and the environment, including a cost-benefit analysis.”

[Baroness McIntosh of Pickering (Con)]

My Lords, Amendment 156 is in my name, and I declare at the outset that I am co-chairman of the All-Party Parliamentary Water Group. This is a simple amendment, and I would like to cover ground that has possibly not been covered at earlier stages of the Bill.

I understand from the Bill and, more particularly, its Explanatory Notes that the purpose of the clause to which this amendment relates is to transfer from local authorities the power, which they have had since 2013 through the Water Industry Act 1991, to propose and consult on new fluoridation schemes and variations to or terminations of existing schemes. It transfers that authority to the department, the reason being that local authorities and the NHS, which previously had responsibility for water fluoridation schemes, have faced difficulty in implementing them. This includes, most recently, the fact that local authority boundaries are not coterminous with water flows, which requires the involvement of several authorities in such schemes in a complex and burdensome way.

The first question, to which I will return later is: if this authority is passing from the local authorities to the Secretary of State for Health and Social Care, where in the scheme of things do water companies fit? Presumably, it is the water companies themselves that will perform the act. In Amendment 156, I therefore ask simply that the Secretary of State does not exercise the powers within the Bill until such time as

“an impact assessment has been published setting out the impact on health and the environment, including a cost-benefit analysis”.

I was very grateful to my noble friend the Minister for arranging a teach-in, if you like, with the officials in the department and my noble friend Lord Reay. We both benefited from that and were very grateful for it. Subsequently, I also thank the officials for providing, in the first instance, a number of responses to my questions. In particular, I query with my noble friend the level of expenditure, which is significant. We know that we are facing a time of additional pressures—not just an energy crisis but a cost-of-living crisis—and the expenditure incurred by each fluoridating local authority in the financial year 2020-21 is not insignificant.

I will pick out those councils that relate to the largest area, broadly speaking: the West Midlands. I will round the figures up, rather than giving each individual figure. Birmingham City Council spent over £290,000 in that calendar—or, presumably, financial—year. Coventry City Council spent over £206,000. Dudley Metropolitan Borough Council spent over £198,000. Sandwell Metropolitan Borough Council spent over £188,000. Solihull Metropolitan Borough Council spent over £56,000. Walsall Metropolitan Borough Council spent over £167,000. Finally, the City of Wolverhampton Council spent over £121,000. How is this financing passed on to the consumers in those local councils? If adding fluoride to the water supply is passed in the Bill, it is for the Department of Health and Social Care to pick up the cost, so how will it do so? From which part of the budget will this come? Perhaps I have missed it, but I do not see anything in the Bill or the Explanatory Notes that says how water companies have been consulted and how they are expected to enter fluoride into the water supply.

Clearly, the debate on which I have not reached agreement with my noble friend the Minister and the department is on the extent to which it is legal to add fluoride to the water supply. In the court case that I was involved in in my training for the Scottish Bar, in preparation for joining the Faculty of Advocates, I sat through pretty much the whole of the McColl v Strathclyde Regional Council case. The petitioner could see no benefit from fluoride being added to her water supply because she had dentures and was not in need of fluoride for that reason. In fact, it was deemed ultra vires. I shall quote the relevant passage of the judgment:

“In my view the word ‘wholesome’ falls properly to be construed in the more restricted sense advocated by the petitioner as relating to water which was free from contamination and pleasant to drink. It follows that fluoridation which in no way facilitates nor is incidental to the supply of such water is outwith the powers of the respondents. The petitioner therefore succeeds on this branch of her case.”


If my recollection is correct, although they lost on the ultra vires point, the Scottish Government—I cannot remember whether it was in the UK Parliament or the Scottish Parliament—reintroduced a water Act that made legal provision in Scotland that gave them the authority. However, and as my noble friend Lord Reay rehearsed in Committee, I understand that Scotland has chosen not to go down that path. I will come on to that in a moment.

--- Later in debate ---

Finally, any future public consultation on expansion would also include information on the impact of any proposals on health, the environment and cost-benefit analysis. I hope that these reassurances will satisfy my noble friend, at least in part, and that she will feel able to withdraw her amendment.

[Baroness McIntosh of Pickering (Con)]

My Lords, I am most grateful to all those who have spoken and to my noble friend for the reassurances that he has given. I am particularly grateful to the noble Baroness, Lady Bennett, for pointing out the importance of the cost-benefit analysis. It is disappointing that we have not been told the relative cost-benefit of supervised toothbrushing, particularly since a number of experts, including the adviser to the Select Committee in the other place, have argued that it would be a much better route to go down. I take great comfort from my noble friend saying that the situation will be kept under constant review and that this will continue as more evidence emerges from Sweden, the US and other places outside the UK. I shall, obviously, watch very carefully the secondary legislation to which my noble friend referred. With those few remarks, I beg leave to withdraw my amendment at this stage.

Amendment 156 withdrawn.

Health and Care Bill

Baroness McIntosh of Pickering Excerpts

Committee stage
Friday 4th February 2022 Lords Chamber

[Lord Krebs (CB)]

My Lords, on the one hand, I am strongly in favour of the government proposals in Schedule 17 to bring in further curbs on the promotion and advertising of junk food by introducing a 9 pm watershed and a ban on paid-for advertising online. I also support the amendments in the names of my noble friends Lady Boycott and Lady Finlay of Llandaff. On the other hand, I strongly oppose a raft of amendments in this grouping that we have heard a lot about in the last half an hour or so that seek to dilute or delay the measures in various ways. I do not have time to go through each one in detail, but if the Government were to accept any of them, it would be children, particularly those from disadvantaged backgrounds, who would suffer the consequences.

Before I move on, I want to try to find an area of common ground with the noble Lords, Lord Vaizey, Lord Clement-Jones and Lord Moylan. I agree with the implication of what they have said that this is not a single-fix magic bullet. Promotion and advertising of food makes a contribution to the obesity crisis, but there are many other factors, whether education, school meals or in-store promotions, which the noble Lord, Lord Clement-Jones, just referred to. I do not think anybody would claim that this is going to solve the crisis, but the question is: would it make any difference at all? We have heard various arguments that it would not, but I want to refer back to the evidence.

I first came across this nearly 20 years ago when I was chairman of the Food Standards Agency. We commissioned an independent review by Professor Gerard Hastings of the University of Strathclyde on the impact of the promotion and advertising of food on children’s diets. It showed incontrovertibly, with the range of evidence available, which was partly observational and partly experimental, that, yes, it does affect children’s diets. It affects not just brand loyalty but preferences for categories of food—chocolate versus apples, for example. In a way, that is blindingly obvious because, if it had no effect, why on earth would the food industry spend so much money doing it? We do not really need to have research to show it, but nevertheless the research is absolutely clear cut. Other reviews since then have supported the Hastings findings.

The second point I want to make is about the various objections that come from the food and advertising industries that this will have a negative impact on revenues and broadcasting. If noble Lords want to look at the analysis on this, I suggest they read pages 39 to 42 of Henry Dimbleby’s National Food Strategy Part One, where he thoroughly debunks the arguments we have heard. I will read a quote from the report, from John Hegarty, founder of the leading brand agency, Bartle Bogle Hegarty—I gather it created the Audi slogan “Vorsprung durch Technik” and is very well known. He said:

“Advertising junk food … is no longer a decent thing to do. Instead of fighting the new 9pm watershed rule, the advertising industry should be using its power to help fight the health crisis. We all have our part to play in encouraging food companies to invest in healthier meals, and encouraging the public to buy them.


No one is against profit – but profiting from illness and misery is not a sustainable business model.”


That is from the advertising industry itself.

I have talked about evidence and the impact on industry. My third point is really about inequality. Two days ago, we had the levelling-up White Paper, which contains a number of missions. One of the missions is to reduce health inequalities by 2030, and as we know, they are absolutely staggering. According to the King’s Fund’s latest analysis, males from the least deprived areas in the United Kingdom have a healthy life expectancy of 71 years; from the most deprived areas, they have a healthy life expectancy of 52 years. The White Paper states:

“we will act now to deal with one of the biggest contributors to ill health: poor diet and obesity.”

Whatever one thinks the average effect of these measures might be across the country, we must bear in mind that those effects will not be borne equally by different parts of society. The people who will bear the brunt if we do not implement these measures will be the poorest and most disadvantaged children in the country.

I thank the noble Lord, Lord Bethell, who, a week ago last Monday, organised a moving and interesting session with an organisation called Bite Back 2030. I hope he will not mind me quoting a little from that session. The facts and figures are absolutely mind-boggling. The raw statistics are that, in the UK, 15 billion junk food adverts are pumped out every year—in other words, 500 adverts per second—targeted mainly at young people. That is one of those numbers that is so outlandish that it is hard to grasp. That is why I found that the personal accounts of the young people and teenagers we heard from told a richer story. I will give your Lordships an example.

Dev Sharma, who I think is a 16 year-old boy, said:

“junk food advertising is part of my life”.

It is on bus tickets, Spotify, Instagram, YouTube, et cetera. Particularly chilling for me was the fact that Domino’s Pizza sends him an advert every day at 4 pm, just as he is leaving school and is really hungry, like any teenage boy. That is when he is at his most vulnerable, and he is being persuaded to buy calorie dense junk food then. Another witness, Becky Odoi, talked about “subliminal conditioning” of young people, and Yumna Hussen said that food companies are preying on young people when they are most vulnerable.

These are not my ideas; they are the ideas of the young people on the receiving end. I could go on at greater length, but I think I have made my point. I strongly disagree with the amendments that would dilute these measures, and I strongly support the measures. I regret that the Government’s own amendments introduce the possibility of delaying implementing the measures, and I ask the Minister to confirm that the Government do not intend such a delay. They will not be the total solution, but they will play a significant part in tackling the obesity crisis in this country, which, in the longer run, is a far bigger health crisis than Covid. We must not get distracted by the short term from looking at the long term.

[Baroness McIntosh of Pickering (Con)]

My Lords, I am delighted to follow the noble Lord, Lord Krebs, and pay tribute to the work he has done in this area. I shall speak to Amendment 257C, but I shall first make just one general comment on something to which he alluded, and which follows from the earlier remarks of the noble Baroness, Lady Boycott. We are working in a vacuum at the moment, and it would be extremely helpful if the Government could say when they will publish their food strategy, drawing on the excellent work done by Henry Dimbleby, who is the main adviser to the Government on this.

I support and have appended my name to Amendment 257C in the name of the noble and learned Lord, Lord Hope of Craighead. He is unable to be here today, which he regrets greatly. The offending part of the Bill in this regard is on page 241, in proposed new Section 368Z18 on the guidance the Government intend to draw up from time to time. Subsection (2) states:

“The appropriate regulatory authority must consult the Secretary of State before drawing up or revising the guidance.”


Subsection (3) states:

“The appropriate regulatory authority must publish the guidance and any revised guidance in such manner as they consider appropriate for bringing it to the attention of the persons who, in their opinion, are likely to be affected by it.”


I draw the Committee’s attention to the Constitution Committee’s report on the Bill, and the following statement on Clause 144:

“This is a Henry VIII clause, enabling the Secretary of State to modify an Act of Parliament, an Act of the Scottish Parliament, a Measure or an Act of the Senedd Cymru, or Northern Ireland legislation. The Secretary of State is required to consult those he or she considers appropriate before making regulations via the affirmative resolution procedure.”


The Constitution Committee concludes:

“The House should consider amending Schedule 17 to require either the consultation of the relevant devolved administration or the consent of the relevant devolved legislature if the Secretary of State were to use this power to enact regulations modifying devolved legislation.”


I speak as a non-practising member of the Faculty of Advocates and must say that it is a source of concern to all of us who have an interest north of the border, west of the border in Wales or in Northern Ireland that, sadly, the Government are developing a history of not consulting the devolved Administrations where appropriate.

Regarding Amendment 257C, which is, in my view, a probing amendment, I put it to the Minister that the clause gives the Secretary of State the power to alter the legislation of devolved Administrations by regulations, as set out in the guidance to which I referred. The Committee will be aware that the Sewell convention does not apply to the exercise of delegated powers, so there is no obligation on the Government to seek consent. In its very helpful report on the Bill, the Constitution Committee suggests that, given the nature and extent of this power, consent should nevertheless be sought. There is nothing in the Bill to respect the spirit of the convention, not even a duty to consult. How do the Government square that with the respect they should give to the devolved Administrations, especially in view of my right honourable friend Minister Gove’s initiative on intergovernmental relations and the levelling-up agenda, to which the noble Lord, Lord Krebs, referred and which I, for one, support?

I conclude by asking my noble friend what precisely the Government intend to do, or what action they would be willing to take, to address this issue when the power in the guidance is being exercised.

[Viscount Colville of Culross (CB)]

My Lords, I declare an interest as a freelance television producer. I speak in support of Amendments 253ZA, 255A, 255B and 257B, which all attempt to give some parity in HFSS advertising restrictions between broadcasters and platforms. I apologise for having not been able to speak on Second Reading.

The noble Lord, Lord Clement-Jones, has already spoken about the reduction in broadcasters’ advertising revenue as the platforms take an ever-increasing share of the market. The restriction in the Bill on television advertising further tilts the playing field in their favour. What concerns me is that this part of Schedule 17 is about the media which disseminate HFSS advertising taking responsibility for it, yet once again the platforms are allowed off scot free. My concern is the complete absence of tech companies’ responsibility for the content of ads appearing on their video-sharing platforms—mainly YouTube, but also Facebook video and Snapchat’s vertical video service. This is the media to which children are migrating. Enders Analysis estimates that by 2027, children will spend more than half their viewing time looking at content on these platforms—an average of 85 minutes per day per child. Clearly, this is where advertisers and brands are going to push HFSS products.

Yet, as noble Lords know, the digital space is the Wild West. Last year, the digital task force produced its excoriating report on the near-monopoly control of digital advertising by the big platforms. The report also mentioned the opacity of the programmatic interface, which allows advertisers to target products at specific users. Of course advertisers are themselves responsible for where they place their ads. This marketplace is the basis of the platforms’ wealth, but it is where they shirk any possibility for the content of ads. I am sure that, if platforms were made legally responsible for imposing restrictions on HFSS advertising, they would soon insert filters—or, better still, humans—into the process, much in the same way as we are seeing them do in content mediation.

Health and Social Care

Baroness McIntosh of Pickering Excerpts

Thursday 9th September 2021 Lords Chamber

[Baroness Evans of Bowes Park (Con)]

I said at the outset that only a broad-based tax such as VAT, income tax or NICs could raise the sums needed for this kind of investment, and we believe that NICs is the fairest way to do that.

[Baroness McIntosh of Pickering (Con)]

My Lords, historically, no Government have imposed a percentage increase on national insurance contributions because it hits the very people—the NHS and local government—who are delivering health and social care. For what reason have the Government changed the position on this?

[Baroness Evans of Bowes Park (Con)]

As I have said, the reason we went to NICs is that we believe that is the fairest, as the higher your earnings, the more you contribute; I gave some figures to show that. As I said, the highest-earning 14% of people will pay around half of revenues, and 6.2 million of the lowest earners will be kept out of the levy.

Financial Services Bill

Baroness McIntosh of Pickering Excerpts

3rd reading & Report stage
Monday 19th April 2021 Lords Chamber

[The Deputy Speaker (Lord Haskel) (Lab)]

I call the noble Lord, Lord Davies of Brixton. Lord Davies? I call the noble Baroness, Lady McIntosh of Pickering.

[Baroness McIntosh of Pickering (Con)]

I am delighted to support my noble friends who have tabled amendments in this group, particularly my noble friends Lady Neville-Rolfe and Lord Holmes of Richmond; they are very timely contributions to this debate. I am delighted to lend my support by co-signing Amendment 28 in the name of my noble friend Lady Neville-Rolfe and co-signed by my noble friend Lord Holmes of Richmond. My starting point is with my interest in developing digital ID and proof of age through digital verification. I speak as chairman of the Proof of Age Standards Scheme board.

For the reasons that both my noble friends have so eloquently given to the House this afternoon, time is passing, and we are living in a digital age; it is extremely important that this is recognised by all departments affected. I pay tribute to the work of the working group, of which PASS is a member, which is, I think, set up under the auspices of the Home Office and the Department for Digital, Culture, Media and Sport. I hope that my noble friend the Minister will be able to confirm that the Treasury is also co-ordinating aspects of digital identification with these other departments. It is extremely important that, if it is the wish of my noble friend Lady Neville-Rolfe that we proceed initially with financial services, we co-ordinate with other aspects. It has been a huge success in terms of sales of alcohol and knives, as my noble friend expressed. In Scotland, where 16 year-olds are able to perform and purchase so many more services than 16 year-olds in the rest of the United Kingdom, the proof-of-age PASS card has been especially important in that jurisdiction.

With these few remarks, I hope that my noble friend will look favourably in particular on Amendment 28. It is important to proceed prudently but with some pace to make sure that we are ahead of the game. This is the time for digital identification—with the proviso that we have the ability to verify age. I absolutely agree with my noble friend Lady Neville-Rolfe that there is space for digital identification in the terms of the online harms Bill, but there is no reason to delay by not passing this amendment to the Financial Services Bill before us this afternoon.

His Royal Highness The Prince Philip, Duke of Edinburgh

Baroness McIntosh of Pickering Excerpts

Monday 12th April 2021 Lords Chamber

[Baroness McIntosh of Pickering (Con)]

I add my deepest condolences to Her Majesty the Queen and all the Royal Family on their loss. Today, it is a privilege to recognise and pay tribute to the lifelong service that His Royal Highness the Duke of Edinburgh gave to Her Majesty the Queen, the Crown, the country and the Commonwealth. He was a Prince of Denmark and one-time holder of a Danish passport. He was the most exemplary role model as liegeman and the most faithful follower of Her Majesty the Queen.

His Royal Highness was an early influence in my life, as chancellor of the University of Edinburgh, and even before that with his interest in the environment, expressing genuine passion and concern for wildlife and the environment long before it was fashionable to do so. He was the founder of the World Wildlife Fund and its first president. He made a huge contribution to running Her Majesty’s private estates at Sandringham and Balmoral, as well as Windsor Great Park and Home Park. His interest in the environment, wildlife and climate change was well ahead of its time. In 1970, the World Wildlife Fund established its highest conservation award in his name, the Duke of Edinburgh Conservation Award, to recognise and encourage significant achievement in the global environmental field. David Bellamy was another great influence where I grew up in Teesdale as a botanist and environmentalist, in particular in trying to protect the blue gentians. How fitting that His Royal Highness the Duke of Edinburgh organised the David Bellamy inaugural lecture in 2013 at Buckingham Palace.

His Royal Highness The Prince Philip firmly held a belief in safeguarding the planet and its resources for future generations. It is a belief we should all seek to emulate in his memory. May he rest in peace and, in the words of the Danish prayer, “Guds engel ham bevar”—may God’s angels protect him.

Financial Services Bill

Baroness McIntosh of Pickering Excerpts

Report stage
Wednesday 24th March 2021 Lords Chamber

[Baroness McIntosh of Pickering (Con) [V]]

My Lords, I am delighted to follow the noble Baroness and to contribute to this debate. I very much welcome the amendments in the name of the Minister, my noble friend Lord Howe, in this group, particularly Amendments 43, 46 and 47 onwards, requiring the FCA to have regard to the carbon target for 2050 when making part 9C rules, as set out.

I always listen to what the noble Lord, Lord Oates, says—we entered the House on the same day and are of the same vintage, so to speak—but I welcome the fact that the Government recognise the risks arising from climate change. The Minister addressed the issue of stranded assets, an issue on which I share his concern, and the transition plan out of them. I think that was addressed in Committee in so far as my noble friend said then that

“the point of the Bill is to support a flexible regulatory system that can respond to changing circumstances and developments as they arise.”— [Official Report, 1/3/21; col. 258GC.]

The noble Baroness, Lady Bennett, spoke about those technologies and forms of energy that can do harm. I am personally concerned that in Amendments 3, 22, 23 and 44, spoken to so eloquently by the noble Baronesses, Lady Hayman and Baroness Bennett, the focus is still very much on moving at the earliest possible opportunity and timetable away from fossil fuels. What worries me increasingly is our fixation on renewables, which on the face of it seem to be performing extremely well both onshore and offshore.

We on the EU Environment Sub-Committee have just completed our last piece of work, looking at the ecology of the North Sea. It is apparent from the evidence that we took that there is a lack of research on the impact of renewable energy offshore facilities on North Sea ecology, particularly marine life—dolphins, porpoises and whales—bird life and the whole sea biodiversity. A plea was made that the cumulative impact should be considered and that we should assess and value all the natural capital, not just the ability to create wind but what we are losing. In particular, it was put to us that we should consider the impact of these renewables, particularly offshore wind, on other users, such as, as in this case, fisheries and shipping.

Mention has also been made of the work going on in the Basel framework. I hope the Minister will give us an update on that. I am concerned that some of the amendments here, particularly Amendment 3, but others as well, may pre-empt and not have regard to the international work that will help us to understand how climate risk should be considered through the Basel framework and working with our international partners.

I pay very close regard to what those such as Mark Carney and the current deputy governor of the Bank of England say, but equally I was struck by the remarks of the noble Lord, Lord King of Lothbury, in the debate on the Budget Statement, where he expressed concern about the new remit requiring the Bank of England to

“reflect the importance of environmental sustainability and the transition to net zero”.—[Official Report, 12/3/21; col 1914.]

In the context of the Financial Services Bill we are seeking, as I understand it, to have a flexible regulatory system, as my noble friend explained, that will be able to respond to circumstances as they develop. I imagine that it is the role of the Government rather than the regulators to set the policy, but I stand to be corrected by my noble friend.

I welcome the opportunity to have this debate. When it comes to net zero, climate change and environmental sustainability, obviously there will be a move away from fossil fuels, but no one has yet explained to me how we are going to attempt to fulfil all our energy requirements in what will be virtually all electricity supplied to the market.

With those few remarks, I look forward to the Minister bringing together all the themes of this debate.

[Baroness Sheehan (LD) [V]]

My Lords, it is a pleasure to follow the noble Baroness, Lady McIntosh. I thank the Minister for some movement on this issue. His courtesy throughout has been an example to all of us. I thank him for his correspondence on the issues that I raised in Committee, some of which I will return to later in my contribution.

I congratulate the noble Lords who moved amendments on climate risk in Committee, without which we would not be where we are today. The amendments were cogently argued and evidently persuasive, if only partially so, which is why a number of them have been brought back, albeit slightly amended, on Report.

I support Amendment 3 in the name of my noble friend Lord Oates and the noble Baronesses, Lady Altmann, Lady Hayman and Lady Jones of Whitchurch. It makes a strong case, with support from across your Lordships’ House, for a PRA review of the risk weighting applied to investments in existing and new fossil fuel exploration, exploitation and production. Amendment 22, in the name of the noble Baroness, Lady Hayman, seeks to embed evaluation of climate-related financial risks, and consideration of the impact of such risks on the stability of the UK financial system, in the modus operandi of the FCA and the PRA. Amendment 23, also in the name of the noble Baroness, Lady Hayman, provides for the appointment of a senior manager within the FCA with responsibility for climate change—and movement on this by the regulator, as she outlined in her earlier contribution, is welcome. Amendment 44, in the name of the noble Baroness, Lady Bennett, makes huge sense in the context of the recent Dasgupta review. I hope that the Minister will give it sympathetic consideration.

I need say no more about the content of these amendments, as I would only be repeating the excellent contributions of those who tabled them. Suffice to say that, if adopted, all three would send the right policy signals that the Government mean what they say when they speak of a climate emergency. Those signals are sorely needed because the signals presently being received by investors and, indeed, by all sectors of society, are confusing and misleading. We have a Government leading on ending the use of coal for power generation—the Powering Past Coal Alliance—who then toy with the idea of granting a licence to a new deep coal mine in Cumbria. The Government announced in December last year that they would end UK support for fossil-fuel projects overseas. Will the Minister say whether UK Export Finance’s support for the controversial east African crude oil pipeline—EACOP—which extends from Uganda to Tanzania, will be a done deal before the new March deadline just announced?

Just today, we have a garbled press release on supporting vulnerable communities in the north-east and Scotland, which will be affected by the transition away from fossil fuels. This is justified in the press release by an unexplained decrease in emissions by the oil and gas sector. These communities deserve better. In the same press release, we are told that this decrease in emissions will be achieved by a new regime to hand out new licences to explore for and exploit as yet undiscovered fields. I am confused. Can the Minister shed some light?

Is the Minister also able to shed any light on whether the Government will bring forward legislation to align the Oil and Gas Authority’s remit to our net-zero target, thus drawing a line under the current policy of maximising economic revenue, or MER? That might serve to remove some of the confusion. How can new licences be justified when extraction of the oil and gas in our existing fields will take us over our share of emissions under the Paris agreement? Surely the Government, in a climate emergency which they themselves declared, are not relying on reducing emissions via carbon capture, usage and storage, a technology which is unproven at scale?

Meanwhile, back in the real world, the NASA website tells us that 2020 was the hottest year since records began, while the World Meteorological Organization states that 2011-20 was the warmest decade on record. The warmest six years have all been since 2015—2016, 2019 and 2020 being the top three. The World Meteorological Organization’s secretary-general, Professor Taalas, said:

“It is remarkable that temperatures in 2020 were virtually on a par with 2016, when we saw one of the strongest El Niño warming events on record. This is a clear indication that the global signal from human-induced climate change is now as powerful as the force of nature.”


That is a chilling thought.

I will end with one last thought: temperature is just one of the indicators of climate change. The others are greenhouse gas concentrations, ocean heat content, ocean pH, global mean sea level, glacial mass, sea ice extent and extreme events. All are moving in the wrong direction. I hope that the Minister will be able to give a satisfactory commitment that climate risk in the financial sector will be satisfactorily legislated for. In the absence of such assurances, I will support amendments on the issue that are put to a Division.

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[Lord Holmes of Richmond (Con) [V]]

It is a pleasure to speak to this group of amendments, and I declare my interests as set out in the register. I congratulate the noble Lord, Lord Stevenson, on the way in which he introduced this group, and on all the work that he has done in this area, not least with StepChange. More than a step change, he has done more than many marathons around this subject. Not just your Lordships’ House, but the nation, is in his debt for the work he has done on debt.

I also thank the Minister for his engagement throughout the Bill. I know that he is completely committed to this area, and I congratulate him on the engagement and the time he has spent with me and other noble Lords. It is safe to say that this is an issue that will run longer than this Bill. As with so many other issues, Covid puts a new lens on debt, and enables more people to understand that it is not necessarily just for others. Potentially, with a slight twist of circumstance, we are but a heartbeat, or a breath, away from being in tough financial straits. I congratulate the noble Lord, Lord Stevenson, and I look forward to hearing the response from the Minister.

[Baroness McIntosh of Pickering (Con) [V]]

My Lords, like my noble friend Lord Holmes, who I am delighted to follow, I am grateful to the noble Lord, Lord Stevenson, and the noble Baroness, Lady Bennett, for giving us the opportunity, with what I consider to be probing amendments, to explore in more detail how the statutory debt management plans will work. I must say to my noble friend the Minister that I am deeply uneasy, because there is very little detail in the Bill about how these provisions will work.

I am a Scot by birth, and a non-practising member of the Faculty of Advocates. Noble Lords will recall that I started my legal career as a humble Bar apprentice, working in a rather Dickensian attic along Heriot Row in Edinburgh, looking at debt collection as part of my role.

I am grateful to the Centre for Responsible Credit for its impressive briefing. What concerns me is a lack of urgency on the part of the Government. According to the Financial Conduct Authority, the pandemic has negatively impacted the finances of 20 million people. Problems are, I understand, concentrated among the self-employed, who obviously have been particularly hard hit, especially those who became self-employed in the year before the lockdown restrictions came into effect. Also heavily impacted are those on incomes of less than £15,000 a year, and BAME communities. The FCA estimates that just under one in five adults is overindebted, with 8.5 million potentially needing debt advice. According to the previous National Audit Office methodology, we can, sadly, expect the knock-on impacts of overindebtedness, such as increased mental health problems and unemployment, to cost the taxpayer in the region of £9 billion a year.

I shall ask my noble friend a question about what we could do, rather than playing for time and our not seeing any detail, with no scheme in place beforehand. As the noble Lord, Lord Stevenson, said in moving his Amendment 11 so effectively, the scheme will not be in place in England until 2024. The question must be: if there is a tried and tested scheme in Scotland, which is working, could we not therefore adapt that scheme to operate in England in the next two years? That would be a great help, and would go to the heart of how we in the United Kingdom approach the issue of debt.

Amendment 12, too, has much to commend it, and I very much look forward to hearing what my noble friend will say in summing up this little debate.

Financial Services Bill

Baroness McIntosh of Pickering Excerpts

Committee stage
Wednesday 10th March 2021 Grand Committee

[Baroness McIntosh of Pickering (Con) [V]]

I am delighted to follow the noble Baroness, Lady Bennett, and find myself in agreement with much of what she said, especially on finding a balance between regulations and introducing more fintech into financial services. I am delighted to speak to this group of amendments and must apologise from dropping out of the previous group, which goes to the question that the noble Baroness raised about the number of participants. I was participating in the Domestic Abuse Bill in the Chamber; I am sure many will be in that position, because we cannot be in two places at once, unfortunately.

I say at the outset that I yield to no one in my admiration for my noble friend Lord Holmes’s knowledge, expertise, passion and commitment in the area of artificial intelligence and fintech. I pay tribute to the work he has done in bringing forward this wide-ranging group of amendments. I am delighted to have co-signed and to support Amendments 112 and 115 and, rather than go through all the points that my noble friend raised, I shall just put a question to the Minister, when she comes to wind up this small debate. If we accept that there is a role for fintech and artificial intelligence in financial services, and accepting the competitive market, the nature of which my noble friend Lord Holmes explained, will the Minister support the amendments, or will she be able to set out today in what regard she accepts that we would like to promote the wider use of technology and artificial intelligence in the financial services sector? Given that, as my noble friend said, we have a good story to tell and do not wish to fall behind, does the Minister accept that, given the increasing number of graduates in the field of artificial intelligence, we owe it to them and to the universities that set them on this path to ensure that they have opportunities in this country to put their academic knowledge to good use? Are we not missing a trick in this regard by not ensuring that we enhance those opportunities? With those few comments, I shall be delighted to hear the Minister’s response to the amendments when she sums up.

[The Deputy Chairman of Committees (Lord Faulkner of Worcester) (Lab)]

My Lords, the noble Baroness, Lady Neville-Rolfe, was inadvertently left off the list of speakers, and I call her now.

Financial Services Bill

Baroness McIntosh of Pickering Excerpts

Committee stage
Monday 8th March 2021 Grand Committee

Moved by

[Baroness McIntosh of Pickering]

78: After Clause 40, insert the following new Clause—
“Short selling review
(1) Within the period of six months beginning with the day on which this Act is passed, the Secretary of State must commission a review of legislation relating to short selling.(2) Following the conclusion of the review, the Secretary of State must lay a report before Parliament.”

[Baroness McIntosh of Pickering (Con) [V]]

My Lords, I am delighted to have this opportunity to speak to and move Amendment 78, and to thank my noble friend Lord Holmes of Richmond for his support and for co-signing the amendment.

Clause 40 deals with subordinate legislation made under retained direct EU legislation. This is a probing amendment to look at what I consider to be a timely review of the practice of short selling. The background to this is that short selling is regulated now by the Short Selling (Amendment) (EU Exit) Regulations 2018, based on the earlier EU regulation 236 from 2012, also amended by the Technical Standards (Short Selling Regulation) (EU Exit) Instrument 2019. Clearly, there are powers for the UK to prohibit or restrict short selling or limit transactions when the price of various instruments admitted to trading on a UK trading venue, which includes shares, sovereign and corporate bonds and ETFs, has fallen more than the appropriate percentage threshold from the previous day’s closing price. In exceptional market conditions, there are also powers under these regulations to address adverse events or developments that pose a serious threat to financial stability or market confidence in the UK.

The powers are set out and include extending the scope of the notification disclosure regime to include additional financial instruments admitted to trading on a UK trading venue and requiring lenders of financial instruments admitted to trading on a UK trading venue to notify any significant change in their fees. There are other powers as well.

Most recently in the UK, the Bank for International Settlements conducted a study suggesting that fund providers offered lower-quality paper to fill redemption markets, as reported in the Financial Times, and that it was felt and alleged that bond ETFs might have short-changed market-makers during the 2020 panic—as if there was not enough going on with the Covid-19 pandemic. It is obviously deeply worrying that this happened in 2020, as confirmed by the Bank for International Settlements. This is a good opportunity to revisit this, as this is not supposed to happen. Obviously, this is a timely moment to look at this, after the collapse and then the surge in the US of the GameStop share fiasco in January and February.

I take this opportunity to ask my noble friend whether he is convinced that an event such as GameStop would not happen in the UK and that we have robust regulations, as I have set out. I am slightly concerned that they have not been tested enough and I believe that we should revisit them. If the ETFs performed in the way that was alleged and concluded by the Bank for International Settlements in 2020, that was deeply unhelpful at a very difficult time. Therefore, does my noble friend agree that this would be a good opportunity for the Government to look at this and undertake to conduct a review to ensure that the regulations, as I set out this afternoon, are fit for purpose? Are they robust enough in terms of Covid, as we saw in March 2020 in the UK, to prevent something like GameStop happening here?

I realise that anybody making an investment is taking a risk, and that we are always told that share prices can go down as well as up, but this is a very modest amendment, ensuring that, within six months of the Bill being enacted and coming into force, the Secretary of State will commission a review of the legislation relating to short selling and, at the conclusion of the review, lay a report before Parliament. I personally have deep misgivings about short selling and question whether the regulations in place are sufficient. As we have left the European Union, and were told that the United Kingdom Government would take every opportunity to revisit those regulations that we have now adopted as part of UK law, it would be a good opportunity to review them within six months of the Bill’s enactment. It gives me great pleasure to move this amendment today and look forward to the Minister’s response. I beg to move.

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[Baroness Penn (Con)]

My Lords, it is important to stress, as a number of noble Lords have done, that short selling is a legitimate investment technique that can contribute to orderly and open markets supporting many consumers. Taking short and long positions can ensure that investors are able to manage risk and volatility in their portfolio, particularly during uncertain times; for example, if a firm has purchased a large number of shares, that firm might want to short some of those shares if they have a volatile price.

As my noble friend Lady McIntosh of Pickering ably set out, the UK’s regulatory regime for short selling is predominantly set out in the short selling regulations, which were introduced in 2012 to regulate short selling practices while safeguarding companies and the financial system. Among other things, it requires persons to notify the FCA of the size of their short positions in shares traded on a UK trading venue. It also gives the FCA various powers to intervene in response to exceptional circumstances that pose a serious threat to financial stability or market confidence in the UK. These include requiring the notification or disclosure of short positions, as well as restricting short selling to periods of up to three months. Furthermore, the FCA can temporarily prohibit or restrict short selling when the price has fallen significantly during a single trading day relative to the closing price of that instrument on the previous trading day. This regime is working as intended, providing the necessary safeguards to allow the operation of a fair and effective market. The Government continue to work closely with the regulators and market participants to monitor the effectiveness of the entire regulatory regime to ensure that legislation continues to be fit for purpose and delivers on its objectives, in particular to support economic growth and maintain financial stability.

As my noble friend Lady McIntosh of Pickering noted on the example of GameStop, the UK short selling regime was not breached because it does not apply to shares admitted to trading on US trading venues. Furthermore, the regime that I have just set out that applies to short selling would mean that in such a scenario in the UK the FCA would have been able to identify short positions building up and would have been able effectively to engage with the firms holding the short positions in that case.

I am not sure that I recognise the characterisation of the Bank for International Settlements’ report set out by my noble friend Lady McIntosh of Pickering, but I will happily write to her on that matter.

A number of noble Lords have spoken, from different perspectives, in favour of a review of short selling. In response to a number of direct questions about what jurisdictions such a review would look at or whether it would look at relaxing or shoring up such regulations, at this point the Government do not see this issue as the most pressing area of financial services regulation to look at. We see no need to conduct a review of this legislation at this time, so I ask my noble friend Lady McIntosh to withdraw her amendment.

[Baroness McIntosh of Pickering (Con) [V]]

I am grateful to the Minister and to all those who have contributed. I recognise the role that the noble Baroness, Lady Bowles, played in the adoption of the current EU regulation. I am grateful to my noble friend and others who set out the arguments on one side or the other. I have a great deal of sympathy with my noble friend Lord Holmes of Richmond and his earlier amendment calling for a review of all financial regulations and regulators’ rules, and I note that my noble friend Lady Penn does not see the need for this at present.

This is something that I will personally continue to monitor. I have no doubt that my noble friend Lady Noakes, who speaks with great authority and expertise on these issues, and my noble friends Lord Sharpe and Lord Trenchard would prefer that many of the regulations would just go away, but I am rather pleased that they are not going away for the moment. My concerns have been addressed to a great extent. I will continue to support my noble friend Lord Holmes’s call for a further review of all these practices. I am grateful to have had the opportunity to debate these issues and I beg leave to withdraw the amendment at this stage.

Amendment 78 withdrawn.

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[Lord Naseby (Con) [V]]

My Lords, I am most grateful to the noble Lord, Lord Tunnicliffe, for putting down Amendment 79; I will address that first and then move on to Amendment 93.

I spoke earlier about the difference between home credit companies and payday firms, so I shall not go down that route again. Buy now, pay later reminds me of the old days of hire purchase and some of the challenges that arose then. In many ways, this is almost equivalent to gambling: it plays on people’s weaknesses, who then build up a cycle of debt, as so many noble Lords have said—and lingering in the shadows, ready to swoop, are the claims management companies. Frankly, I do not see why, in this scenario that we all know is happening and will get worse, not least with the huge temptation that will come after furlough is lifted, we cannot act earlier than the next financial year. I do not know the answer to this, but I begin to wonder whether all these payday loans are registered. If they are not, something should certainly be done about that. Finally in this area, we need to ensure that the FCA and the Financial Ombudsman Service are really watchful of the action of the claims management companies when it gets to that state.

Turning to Amendment 93 on access to cash, I thank my friend the noble Baroness, Lady Kramer. As has already been said, 1.3 million people have no access to a bank account. Cash is vital, particularly to the elderly in our society. Covid has made the whole thing even more difficult; the impression has been left that those who carry any notes in their wallet could be carrying Covid. It took some weeks for Her Majesty’s Government to put out clear statements that that cannot happen—it cannot transmit Covid; nevertheless, the rumour was out there and has stuck. The problem then comes down to the many outlets with a sign up in the door or on the cash till basically saying “Cards only”. Indeed, our own refreshment department is card only. The question in my mind is whether it is legal to trade and offer card only. I would have thought the very fact of being given a licence to trade ought to mean they can trade but must accept legal tender in whatever form it is offered.

The Post Office provides a really good service, and I pay full tribute to what it has done in these months of turmoil that we have faced. However, from the little work that I have done, I understand that the people behind the cash machines—those promoting them and the companies involved—state that they are becoming increasingly unviable. If that is the situation, it is very worrying, and I hope that Her Majesty’s Government will take this very seriously and make sure that, one way or another, cash machines are still available to the more than 1.3 million people who do not have bank accounts.

[Baroness McIntosh of Pickering (Con) [V]]

My Lords, this group of amendments has an underlying theme of identifying the need for greater consumer protection in this area. I support the noble Lords, Lord Tunnicliffe and Lord Eatwell, in the aims of the much-needed—it would appear—Amendment 79. If he is minded to say that there is no need for such an amendment, could the Minister, in responding to this debate, point to the consumer protection regulations for those using buy now, pay later services? Many of us have seen how the level of personal and household indebtedness has greatly increased due to the lack of regulation in the area identified by Amendment 79.

I will turn to Amendment 101 before coming back to the others. I entirely support the thrust of this amendment in the name of the noble Lord, Lord Stevenson of Balmacara, supported by my noble friend Lord Holmes of Richmond. It seems extraordinary that when consumer protections apply to hire purchase of a vehicle, they do not apply to the circumstances that have been set out and so eloquently identified by the noble Lord, Lord Stevenson, so the time has come for these two Victorian statutes to be replaced. I would like the Minister to give a very good reason why this could not happen and why we cannot simply rely on hire purchase schemes, which give greater protections to the owner and the existing user of a vehicle, for this form of purchase.

Amendments 92 and 93 from the noble Baroness, Lady Kramer and Amendment 136C from my noble friend Lord Holmes identify the need for access to cash. I find cashless societies highly regrettable, particularly for elderly and other vulnerable people; I know there are some in Europe; Sweden is well down this path and Denmark is going down it. On continuing access to cash, the noble Baroness, Lady Kramer, has set out, and my noble friend Lord Holmes set out in his Amendment 136C, why it is extremely important to have proper protections in these areas.

My noble friend Lord Holmes pointed out the role of cash in Covid and why it goes to the heart of financial inclusion. Without wishing to put words in his mouth, I will take his thoughts one step further: I am deeply concerned that the Government propose that the amount available in a contactless transaction will imminently be increased to a maximum of £100. This will possibly enable many people to lose control of their finances, and it will open the door to greater fraud, even where a debit or credit card has not left your possession.

I have been the victim of such fraud. I am delighted to say that the credit card company I was with at the time reimbursed me almost immediately for the loss. What that means is that we are all paying for that loss as credit card or debit card users. The existing limit of £45 is right at the moment; I would hesitate to increase it to £100. I do not know whether there is a bottomless pit for endless frauds or what it means if the limit goes up to £100 on a contactless transaction. Are there limitless reserves? Who pays for the fraud in this regard?

In Amendment 136F, the noble Baroness, Lady Meacher, has identified an area that is timely for review: the regulation of bailiffs and bailiff firms for the purpose of taking control of goods. I would be delighted to hear from the Minister that, even if the Government are not minded to accept this amendment, he will come forward with similar provisions as set out therein and recognise that there is a need for this to take place.

On Amendment 135 in the name of my noble friend Lord Leigh, I think all of us say, “There but for the grace of God go I”. Identity theft is a compelling crime. He set out some modest requirements that the Government would do well to follow.

I find that the amendments in this group have an underlying theme of the need for greater consumer protection. Although they are disparate in what they seek to achieve, each of them has merits to commend it. I very much look forward to hearing the Minister’s response to the excellent case that has been made for each amendment in this group.

[Baroness Ritchie of Downpatrick (Non-Afl) [V]]

My Lords, it is always a pleasure to follow the noble Baroness, Lady McIntosh of Pickering.

I wish to speak in support of Amendment 79 in the names of the noble Lords, Lord Eatwell and Lord Tunnicliffe. It seeks to protect people from buy now, pay later firms that, in many instances, financially abuse people. It is important that people who find themselves in this position are financially protected. In many ways, the amendments in this group seek to do what the noble Baroness said: they are all about consumer protection.

In his introduction, the noble Lord, Lord Tunnicliffe, referred to the Woolard review, part of which clearly states the need for customer harm to be minimised and to come under the purview of the Financial Conduct Authority. From doing some background reading, I thought I learned that the Government were receptive to the review’s findings. In this regard, I wonder whether the Government, through the Minister, will bring forward on Report amendments to deal with this issue if they are not prepared to accept Amendment 79 today. However, it may be that they will accept it in view of their acceptance of the Woolard review.

At Second Reading, I highlighted this area and asked whether the Government would bring forward in Committee amendments to ensure that buy now, pay later credit services are brought into the scope of the Financial Conduct Authority to protect people from spending more than they can afford. Indeed, many people in this net take out further debt to repay initial credit, then end up with their debt spiralling out of control.

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[Baroness Noakes (Con)]

My Lords, my noble friend Lord Blackwell’s Amendment 86 identifies a very real problem that has existed since the Government decided to abolish the Financial Services Authority and split responsibility for conduct and prudential regulation.

I was never in favour of splitting the FSA. It had certainly failed as a regulator, as the financial crisis laid bare, although it must be said that other regulators around the world, whether combined or separate, fared no better. The FSA had not managed to get the balance right between conduct and prudential regulation; it had an obsession with conduct matters and treating customers fairly, which often dominated its thinking, while banks in particular were allowed to run on wafer-thin capital ratios. It needed reform rather than a wrecking ball.

When they were separated by the Financial Services Act 2012, many concerns were expressed about the possibility of a lack of co-operation. As has been said, a number of mechanisms were put in place, including the statutory duty to co-operate, the memorandum of understanding and cross-membership of the boards of the PRA and the FCA. However, as my noble friend Lord Blackwell explained, it has not always worked well in practice. There are problems of overlap and overload. Some issues, such as cybersecurity, are of interest to both the PRA and the FCA. Such an overlap comes with the split between the two regulatory peaks, but often they focus on the issues in different ways, on different timescales and with different objectives. This is often inefficient from the perspective of regulated firms.

The cumulative impact of the requirements of the PRA and the FCA can lead to significant overload. There is no real prioritisation mechanism. Regulated firms can be bombarded by each regulator and, even if the individual regulator prioritises its own demands, which is not always the case, there is no real mechanism for the competing demands of the FCA and the PRA. For example, I recall in the middle of stress testing, which is led by the PRA and tends to absorb the resources of subject matter experts specialising in credit risk, the FCA produced big data demands in exactly the same area and requiring exactly the same subject matter experts. It would not have occurred to either regulator to see regulatory demands from the other regulator as more important than its own.

I support the aims of this amendment. Whether another committee would have any impact is another matter, especially if it met only once a year. We must remember that the tripartite arrangements that failed during the financial crisis looked good on paper. It was just that they were never taken seriously and were allowed to fall into disuse. The same could happen to a committee.

My noble friend might want to look at how his amendment could be improved by incorporating an element of reporting to Parliament. On the first day of Committee, we debated parliamentary accountability more widely in the context of the new rule-making powers that are being transferred to the FCA and the PRA. The new accountability arrangements, which some of us advocated, could include examining how well the regulators are working together and co-ordinating their activities; that should be strongly considered if my noble friend chooses to bring this issue back on Report.

[Baroness McIntosh of Pickering (Con) [V]]

My Lords, I am looking closely at Amendment 86, introduced so eloquently by my noble friend Lord Blackwell, and asking myself why it would be needed in view of the comments made by my noble friend Lady Noakes and the noble Baroness, Lady Bowles.

These are both deemed to be independent bodies. While my noble friend Lord Blackwell has rightly identified a number of shortcomings, I do not really understand why a joint co-ordinating committee, as my noble friend Lady Noakes pointed out and as it says in proposed new subsection (5), would meet only at least once every year—I presume it could meet more often.

In any event, I imagine that these issues are dealt with to some degree by the Treasury Select Committee in the other place. My noble friend Lord Blackwell probably has identified issues but there are very good reasons—he set out the background to this—why the PRA and the FCA replaced the FSA. Each should be able to enjoy a degree of independence in its operation. My noble friend Lady Noakes rightly identified a number of areas of overlap and overload, but I think that this can be addressed through the functioning of the memorandum of understanding. I struggle to see why this amendment is required.

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[Lord Hodgson of Astley Abbotts (Con) [V]]

My Lords, I have Amendment 105 in this group, which is also a probing amendment, and seeks to insert a new clause in the Bill about regulatory co-operation with the EU. In her Amendment 90 the noble Baroness, Lady Bowles, called for actions. Amendment 105, as the explanatory statement makes clear, is a reporting mechanism to report on progress towards or completion of an MoU with the EU on regular co-operation measures, which were envisaged under the trade and co-operation agreement between the UK and EU as regards financial services. The amendment flows from my chairmanship of the Secondary Legislation Scrutiny Committee of your Lordships’ House.

Last autumn, the committee considered a number of statutory instruments, which have granted equivalence to oversight and regulatory arrangements in the EU in the area of financial services. Mostly they were laid by the Treasury but some were laid by another departments. It was not clear to our committee whether the SIs were all part of a potential agreement with the EU or whether they were unilateral individual decisions. We wrote to John Glen, the Economic Secretary to the Treasury, as follows:

“Equivalence in relation to the regulation of financial services is an important aspect of our future relationship with the EU. In several of the instruments that we have considered, the UK appears to have granted equivalence indefinitely, while the EU has not yet completed its assessment of the UK’s equivalence (for example in relation to the regulatory regime for auditors) or has granted only time-limited equivalence (for example limited to 18 months in the case of the supervisory arrangements for central counterparties).”


Against this background, we asked for further and better particulars on three points:

“A list of the equivalence decisions made by the UK Government in the different areas of financial services regulation. Whether the EU has reciprocated and granted equivalence to the UK and its regulatory arrangements in these areas. Whether equivalence by the UK and EU has been granted indefinitely or is time limited.”


The reply on 7 January, which I referred to in my speech at Second Reading, was not a model of clarity and precision. Phrases like

“a package of equivalence decisions”

and “the majority of decisions” do not help critical analysis. The correspondence between the noble Lord, Lord Butler, and my noble friend Lord Agnew at Second Reading, which followed this and circulated among all who participated in that debate, seemed to follow the same generalist approach.

However, John Glen’s letter did make one thing clear, that

“there are no decisions made by the EU that have not been reciprocated by the UK.”

As such, to date, it has been a one-way street. That is not necessarily a bad thing, but Parliament and the country are entitled to, and should, know about the development of our relationship with this most significant and geographically proximate market in a sector of particular importance to the United Kingdom—hence my tabling this amendment.

[Baroness McIntosh of Pickering (Con) [V]]

My Lords, I am delighted to follow my noble friend, and I thank him and the other authors of the amendments in this group.

This is a particularly appropriate moment to state that “taking back control” has possibly worked less successfully in the financial services sector than in any other since we left the European Union, with Amsterdam having overtaken us as the largest share-trading centre. There are generally understood to be four options for trade in financial services with the EU. First, there is passporting, which we enjoyed and was very beneficial not just to the London Stock Exchange but, I venture to add, other centres, such as Edinburgh, Leeds and other financial centres in the United Kingdom; it was the most seamless form of trade in financial services. Secondly, there is trade on World Trade Organization terms and, thirdly, free trade agreements, such as that agreed between the EU and Canada, although I am not convinced that it covers financial services or services as a whole. Finally, there is equivalence. If we are not able to revert to passporting, and I understand that we are not, that would be a good way forward. My understanding is that equivalence is where a decision is made by one state to recognise another state’s legal requirements for regulating a service, even though they may not be the same—so, clearly, it is not as good as passporting.

I very much enjoyed the introductory remarks of the noble Baroness, Lady Bowles, and I support each of the amendments in this group for differing reasons. Obviously we will not have the chance to hear from the noble Lord, Lord Tunnicliffe, until he speaks to his amendment, but all three of the amendments in this group would, I believe, further the case for equivalence with the European Union.

Time marches on, and we obviously realise that the trade and co-operation agreement with the European Union left out this major sector of financial services. So I take this opportunity to ask my noble friend the Minister to say, in summing up this debate, precisely where we are with the negotiations and whether we have any chance of reaching an agreement on equivalence under the circumstances and the further particulars as set out by my noble friend Lord Hodgson of Astley Abbotts. I find it deeply regrettable when our own Minister cannot answer three very simple questions in a letter so that our understanding is better. However, with those few remarks, I am minded to support Amendments 90, 100 and 105 for the reasons given.

Financial Services Bill

Baroness McIntosh of Pickering Excerpts

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

[Baroness Bennett of Manor Castle (GP) [V]]

My Lords, it is a great pleasure to follow the noble Baroness, Lady Hayman, who is such a champion of climate and other environmental issues in your Lordships’ House. As she said, it is astonishing that the Bill, in the year 2021, presented by the Government with the responsibility of chairing COP 26, who talk so often about being “world-leading” on climate, could have got so far without any mention of the climate emergency.

The noble Baroness and, in introducing the amendment, the noble Lord, Lord Oates, have set out extensively the detail of the range of climate amendments and the need for their incorporation in the Bill, so I shall focus the bulk of my words on Amendment 17 in my name. It is distinct in that, while all the others address the climate emergency, this is the only amendment that also brings in the crucial issue of our nature crisis, and the collapse in biodiversity and bio-abundance that is obviously of concern to the Treasury given its commissioning of the recently-released Dasgupta Review.

I doubt that many noble Lords taking part in the debate on this group need an outline of it, but it is important to highlight that the Dasgupta Review identifies nature as “our most precious asset”. It says that we need vastly more protection for our scant remaining natural world—on this, one of the planet’s most nature-depleted lands—which means making sure that money is not going into destructive actions. That should be of concern to the Financial Conduct Authority. It says too that we should begin to implement large-scale and widespread investments that address biodiversity loss—again, a matter for the Financial Conduct Authority.

While it is great to see in the Dasgupta Review these critical issues to all of our futures expressed in terms that even mainstream economics can understand, being comfortable for those whose philosophy is embedded in growth-orientated, 19th-century politics, it falls down in trying to apply the same unrealistic, abstract mathematical models, driven by financial calculations, to provide tools to guide what to do. We have so little left of biodiversity and bio-abundance, with 50% of our species in decline and 15% at imminent risk of extinction, that we cannot be calculating what we can afford to destroy or write off in this land. We have to preserve everything that is left, while acknowledging that the destruction that we have wrought has given us an insecure, poverty-stricken society that is frighteningly short on resilience, as the Covid-19 pandemic has demonstrated and, as we have just seen on the global scale in Texas, precious little ability to endure the climate shocks inevitably coming our way.

I point noble Lords and the Government to the recent, crucial United Nations Environment Programme report, Making Peace with Nature. In his foreword to it, the UN Secretary-General, António Guterres, says that

“our war on nature has left the planet broken”.

That is where we are. The often piecemeal response to the climate crisis, biodiversity loss and pollution is

“not going to get us to where we want”,

according to Inger Andersen, executive director of the United Nations Environment Programme.

Just considering the remit of our international climate obligations as a central part of the FCA’s responsibilities is not nearly enough, as crucial as that is. Adding our equally binding and important obligations through the Convention on Biological Diversity is a significant improvement, and I give notice to your Lordships’ House that this is an issue that I intend to pursue strongly at the next stage of the Bill. I will listen carefully to today’s debate, and any responses we get from the Government, and consider where best to place this amendment among the range of amendments, although I hope that the Government will pre-empt any need for me to do that.

Yet this is still not nearly enough, as the UNEP is highlighting. We also need to consider pollution as a key concern, and a circular economy, on which the European Union is leading. We need a systems thinking approach—a complete view of how we stop treating this planet as a mine and a dumping ground and treasure its immensely complex systems of life, of which we still have so little understanding. Of course, we also have to consider the billions of people—millions in the UK alone—whose basic needs are not being met while we trash our planet. As a species we are using the resources of 1.6 planets every year; in the UK, our share is three planets.

This morning I was present at a briefing about New Zealand’s modern, 21st-century living standards framework, on which there has been wide public and expert consultation. It provides a guide for Treasury decision-making on all government spending. That is truly world-leading, and I hope that the UK Treasury is looking urgently at developing a similar system. In the meantime, however, the inclusion in this Bill of our climate emergency and nature crisis—the understanding that our financial sector is 100% contained within it—is at least progress.

The other place has before it the Climate and Ecological Emergency Bill, which could help to create a framework for such a structure. Given that it is “oven-ready”—to quote a once-familiar phrase—and the continuing delays to the Environment Bill, the Government should be looking at a rapid delivery of whatever emergency steps could be taken—as many as have been taken over Covid.

I revert to the Bill before us. I was told that the 2020 Pension Schemes Bill was the first financial legislation in British history to contain a reference to climate change—no doubt the first to refer to the natural world. Listening closely to the briefing that I referred to earlier, I sense that the Government are at least prepared not to step backwards in this 2021 Bill, and to include some reference to climate change. But if it is to progress it also needs to include biodiversity.

In concluding this section of my comments, I ask the Committee to listen to a short quote:

“Obviously it is right to focus on climate change, obviously it is right to cut CO₂ emissions, but we will not achieve a real balance with our planet unless we protect nature as well”.


That was a quote from Prime Minister Boris Johnson’s speech of 11 January as he announced that £3 billion of UK climate finance was to be spent on supporting nature. I ask the Minister how, given the Prime Minister’s words, he could not have included an amendment such as Amendment 17, in addition to one or more climate change amendments.

Allowing money to pump the systems that are wrecking the natural world is, to put it mildly, not a good idea. It is something that should be considered in every action and every regulation of every government body, particularly the Financial Conduct Authority, given the extreme financialisation of our economy, whereby almost every element is now regarded as a potential profit source. Those profits, which go to the few, must not be at the expense of the living future of all of us.

I turn briefly to the other amendments to which I have attached my name, the first of which is Amendment 23, in the name of the noble Lord, Lord Oates, also signed by the noble Baronesses, Lady Kramer and Lady Hayman. This amendment simply ensures that regulation is compliant with the amended Climate Change Act and the Government’s much-trumpeted 2050 net-zero target. That is a bare, indeed inadequate, minimum, because it fails to acknowledge the need for urgent action now to achieve major cuts in emissions in the 2020s. Not waiting but acting now should be at the forefront of every government action.

I backed Amendment 75, in the name of the noble Baroness, Lady Hayman, and supported by the noble Baroness, Lady Altmann, because of the need for expertise in these issues within the FCA. Its many failings in traditional areas were powerfully outlined earlier by the noble Lord, Lord Sikka. It certainly needs a specialist, expert voice at its heart to address environmental issues.

I also attached my name to Amendment 98, in the name of the noble Baroness, Lady Hayman, and also signed by the noble Baroness, Lady Jones of Whitchurch, which focuses particularly on climate risk. I would suggest that this falls, in the terms of the Paris climate agreement, in the areas of both climate mitigation and adaptation. The need for mitigation is a risk in itself. We heard the astonishing news this week that local government pension funds still hold £10 billion in fossil fuel investments, despite large numbers of local councils having declared climate emergencies. That is astonishing in terms of money being invested in trashing the climate in ways already hitting close to home—flooding, heatwaves and biodiversity damage—but it is also as though the term “carbon bubble” had never been invented. Perhaps we cannot blame local government for the oversight when our current Government have continued to put money into fossil fuel assets and to subsidise the operation of existing ones to the tune of billions. These are issues that certainly need to be considered.

However, there is also adaptation. I do not feel like I need to stress so much—as the Green Party has for years—that the climate emergency is a current reality, not a problem for future generations. I think, finally, the Government and even parts of industry and finance have got that fact. I note that, today, Fitch Ratings warned that the rising cost of natural catastrophes arising from climate change could mean that insurers withdraw from the market, leaving it to Governments to pick up the pieces. Amendment 98 would be a modest step towards ensuring that the FCA has rules fit for operating in such an environment.

[Baroness McIntosh of Pickering (Con) [V]]

My Lords, I am delighted to follow the noble Baroness, Lady Bennett of Manor Castle, and pay tribute to her green credentials and the work that she and her colleague, the noble Baroness, Lady Jones of Moulsecoomb—both my friends—have done, as have so many others who have contributed to this debate so far today. I look forward to the other contributions.

This group of amendments has much to commend itself, as do many of the individual amendments. It helps to green-proof, if I may say that, the provisions of the Bill. I am sure that my noble friend Lord Howe will tell me if I am wrong when he comes to reply, but I cannot find anything else in the Bill that covers the provisions set out in these amendments. I pay tribute to the noble Lord, Lord Oates—I celebrate, again, the fact that we joined the House together; I always look forward to debates in which he and I contribute—and to the noble Baronesses, Lady Hayman and Lady Bennett. My slight concern with this group is that while the focus and main thrust of their amendments is on climate change I am slightly confused that they have chosen that form of words—as they also have in other amendments—because so much progress has been made in investment generally. I personally believe that that should extend to banking and financial services as well as other investments, but there is general recognition now of ESG investments. The Wikipedia encyclopaedia tells us that:

“Environmental, Social, and Corporate Governance”


are generally recognised as measuring

“the sustainability and societal impact of an investment in a company or business.”

It goes on to say that:

“Threat of climate change and the depletion of resources has grown, so investors may choose to factor sustainability issues into their investment choices.”


We are increasingly seeing a move in general investments towards individual small shareholders buying very small, limited shareholdings in a company precisely for the purpose of raising these issues at the AGM. I think we will see this trend continue. This must extend, as I said earlier, to banking and financial services as well. I believe that there should be a place for ESG provisions and regulation by the FSA in the Bill, and these amendments identify where they should go.

However, I am mindful of the fact that ESG covers all sorts of possibilities, such as climate change, greenhouse gas emissions, biodiversity, waste management and water management, so I put to the authors and to my noble friend the Minister that ESG provisions would encapsulate this and would perhaps be a neater—and recognised—way of introducing this into the Bill.

In many instances, particularly in all the work that we have done on rural affairs, we rural-proof legislation as it goes through and I am very keen that we green-proof new legislation as it comes online. I therefore welcome the main thrust of these amendments. I repeat to my noble friend the Minister that if this is an omission, these amendments, or something along the lines of ESG terminology, should find a place in the Bill and a role for the regulators specified in it to follow. If these amendments do not fit the Government’s thinking or should we follow more of an ESG terminology, will he consider coming forward with amendments of his own at the next stage?

Covid-19: Road Map

Baroness McIntosh of Pickering Excerpts

Tuesday 23rd February 2021 Lords Chamber

[Baroness Evans of Bowes Park (Con)]

As I have said in response to a number of other questions, we have the Budget next week. We have been clear that we will provide support to the country through Covid, and our actions speak as much as our words. Details of the next phase of the plan for jobs and support for businesses will be announced. I can assure my noble friend that the announcements in the Budget will reflect the steps in the road map, so that businesses will be supported as we move through the steps. Obviously, some businesses will perhaps be able to welcome people in sooner than others. That is clear from our discussions today.

[Baroness McIntosh of Pickering (Con)]

My Lords, the aviation sector has taken a bigger hit than even the hospitality sector and I applaud the help that the Government have given to hospitality. IATA is preparing a Covid travel pass that is expected to be operational within weeks. Is that something that the Government would encourage those of us who wish to travel within Europe to use, once it is available?

[Baroness Evans of Bowes Park (Con)]

I can say to my noble friend that there will be a review on international travel. The Department for Transport will be leading a successor to the Global Travel Taskforce, working with the industry to develop a framework that can facilitate greater travel while still managing the risk from imported cases. That taskforce will report on 12 April with recommendations aimed at facilitating travel as soon as possible, although not before 17 May, while still managing the risk from imported cases and variants.