Government Debt

Baroness Neville-Rolfe Excerpts

Wednesday 16th September 2026 Lords Chamber

Asked by

[Baroness Neville-Rolfe]

To ask His Majesty’s Government what plans they have to reduce the £110 billion annual interest bill for servicing Government debt.

[The Parliamentary Secretary, HM Treasury (Lord Pitt-Watson) (Lab)]

My Lords, this Question about the Government’s interest bill is a really good one: £1 in every £10 of government money is now spent paying interest. There are three elements causing this. One is the overall level of borrowing, and consistent, disciplined fiscal rules that are kept to are, we believe, the right answer. There is also the growth in global interest rates, for example following quantitative easing. We are also living in an extremely uncertain world, particularly in the Persian Gulf. The third element is the premium that the UK now pays over the G7 average—a premium that has been apparent since September 2022. Again, the best remedy for that is sustained fiscal discipline, including respecting the independence of the Bank of England in particular and, of course, the Office for Budget Responsibility.

[Baroness Neville-Rolfe (Con)]

My Lords, as most of us agreed in my noble friend Lord Bridges of Headley’s debate last week, we need to be honest about the trade-offs that we face, given the sheer scale of our national debt and the moron premium on our gilts, which the Minister mentioned. I believe that the only way to avoid a financial crisis is to reduce spending. Does the Minister agree?

[Lord Pitt-Watson (Lab)]

Overall fiscal discipline is the central question. Discipline is really important. The noble Baroness mentioned the moron premium. I do not know whether all noble Lords understand what that term refers to: it was a slight by an economist describing the behaviour of the team responsible for the September 2022 mini-Budget. To give a sense of the cost, it is £15 billion a year. I think we have learned lessons from that. When I spoke in the debate last week, speakers from across the House agreed that fiscal discipline, independent oversight and not moving the goalposts were critical. The balance of spending on tax might be something on which we disagree, but on fiscal discipline we agree entirely.

Financial Services and Markets Bill [HL]

Baroness Neville-Rolfe Excerpts

3rd reading
Tuesday 15th September 2026 Lords Chamber

[Baroness Kramer (LD)]

My Lords, my colleagues and noble friends Lady Sheehan and Lady Northover spoke eloquently on these issues on Report. If this amendment is pressed and the others are moved by the Government, we will support them.

[Baroness Neville-Rolfe (Con)]

My Lords, as this is Third Reading, I want to start by extending my warm thanks to the Minister and his team for their work on the Bill. I welcome the movement that the Government have shown on several of the issues that we have raised during the passage of this 137-page Bill, which in general we support.

Chief among them is proportionality, which will continue to apply to the regulators in the exercise of their day-to-day functions. That change reflects concerns on all sides of the House; my hope is that it will help to reduce the burden on SMEs, so I thank the Minister for this. I also welcome the movement we have seen on the important issue of financial education and look forward to engaging on that. It is becoming ever more important, whether you are a pupil, a student applying for a loan, or an adult managing your finances or thinking about retirement.

However, there remain important issues which the Government have not yet addressed sufficiently. Among them are the Henry VIII powers in Clause 3 and Clause 50 and the first use of the extensive new powers in the Bill. I understand the Government intend to reintroduce Clause 3 at a later stage in the Bill’s passage with further detail, and that is welcome, but it does not detract from the fundamental point at issue. One of Parliament’s principal functions is to scrutinise government legislation, and we simply cannot do so properly when Bills confer broad powers without setting out clearly how they are to be used.

A digital asset strategy to support faster action to stop further loss of digital entrepreneurs and less aggressive use of Section 166 are two areas where we believe the Government should go further, because we have heard consistent concerns from industry.

Turning to the amendments, I deeply regret the amendments the Government are introducing today on climate change. This represents a serious U-turn by the Government. Their original proposal was to move these considerations into five-year strategies. The existing requirements they dispensed with are largely superfluous and burdensome. There is little evidence that today’s amendments to restore them make any meaningful contribution, either to reducing climate change or to protecting the environment. At a time when businesses are already facing considerable pressure, and when our wider economic circumstances demand an unrelenting focus on growth, competitiveness and investment, imposing further needless regulatory burdens is the wrong direction of travel.

I would also suggest that, for an economy as dependent as ours on international investment, these amendments send entirely the wrong signal. We should be demonstrating to investors overseas that the UK is a predictable and attractive market. Instead, they reinforce the perception that doing business here means ever more regulation, additional cost and greater complexity for no clear practical benefit. At Second Reading, the then-Minister, the noble Lord, Lord Stockwood, who I am glad to see in his place, said that the purpose of the Bill was to

“modernise how the sector is regulated”

and

“enable it to grow”.—[Official Report, 8/6/26; col. 1146.]

These amendments seem to run directly contrary to that objective. I am deeply disappointed that the Government have abandoned that principle so quickly and with so little resistance. We on these Benches have been consistent in our opposition to this duty, which we have made clear in the House and in discussions with the Minister. I shall seek to divide the House when the amendments are called.

[Lord Pitt-Watson (Lab)]

My Lords, I think there is wide agreement that finance is essential for the running of our economy and that we want the British finance industry to be as successful as possible. I think that few of us would think that climate finance was not one of the most important areas to which the industry needs to contribute. I think all of us would feel proud that our country, particularly London, is rated as the number one centre of green finance in the world.

I understand the noble Baroness, Lady Neville-Rolfe, wanting to minimise regulation and thinking that this might be superfluous, but I note that climate is everywhere in the financial world. Why? It is because you are managing other people’s money. How does a fund manager, possibly with millions of people’s savings, think about appropriate investment? If you are responsible for the stewardship of a company, what is the sensible line to take in making sure it is as profitable as it can be but without risking the sustainability of the world? If you are an investment banker and somebody is issuing a bond, is it fair for it to be a green bond? Are you thinking about the reporting on the Stock Exchange? Should you have taken into account that the carbon assets you have will need to be written off and you will need to have a fund and tell your investors about that? Are you interested in impact investment? We were talking a lot about deforestation. How is it that we manage to get private money into deforestation? The noble Baroness, Lady Hayman, talked about insurance. Even in operations, look at the sort of thing that Bloomberg has done; all its electricity is now zero carbon. There is lots of stuff, and the UK is a leader. It is a growing area, and we should be proud of that.

Does regulation make a difference to this? That is a good question. If you were to look at the UK’s regulation on this and compare it with that of the United States—London versus New York—you would be in no doubt which was the better for promoting green finance. Frankly, I do not know of many financiers who would say that the United States now has more predictable regulation than we have in the United Kingdom. You could say that the regulator is already doing enough. Although I cannot respond to the noble Baroness, Lady Bennett, by having a national conversation, I did organise the FCA to do a drop-in to talk to noble Lords about what it was doing in this area. Every noble Lord I talked to afterwards thought that it would be a mistake to withdraw the “have regard” and that therefore this amendment was the right thing to do.

Whether noble Lords believe in the importance of climate and environmental issues or whether they want to be sure that Britain maintains its USP in this critical area of finance, I urge them to vote for these amendments.

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[Baroness Neville-Rolfe (Con)]

My Lords, I close by acknowledging the considerable degree of cross-party support and engagement that has underpinned most of our discussions on the Bill. I thank the Minister and his officials for their work, as well as the noble Lord, Lord Stockwood, for guiding the Bill through Second Reading and Report. I also thank the noble Lord, Lord Wilson, for his support. I agree with the Minister that the Bill has benefited from its passage through the House in major ways.

I am particularly grateful to the noble Baronesses, Lady Kramer and Lady Bowles, and the noble Lords, Lord Sharkey and Lord Vaux, for the constructive way in which they have worked with us on a number of shared priorities. Across the House, we have identified a number of targeted and largely non-partisan areas in which the Bill could be improved. Serious concerns have been raised, and serious, well-intentioned proposals have been brought forward in response; I hope that they will be progressed by the Government.

I also thank my noble friends Lady Noakes and Lord Bridges of Headley for the deeply constructive approach they have taken to the important question of accountability and oversight. I strongly urge the Government to continue working with my noble friends on this issue. As I am sure the Minister recognises, they have approached it throughout in the interests of good governance and effective parliamentary scrutiny and with the support of the excellent Financial Services Regulation Committee.

My noble friends Lord Ashcombe, Lord Ranger of Northwood, Lord Holmes of Richmond, Lord Massey of Hampstead, Lord Howard of Rising, Lord Mackinlay, Lord Hunt of Wirral and Lady Lawlor have all made important and valuable contributions to our discussions, and I am grateful for their work in raising important matters with the Minister.

This is, in many respects, a model of how your Lordships’ House can work at its best: identifying genuine concerns, drawing on expertise from across the House, and working constructively to make legislation more effective, more accountable and better. I hope the Government will take forward the amendments passed and suggestions made as the Bill progresses. Most of all, I thank my noble friends Lord Altrincham and Lord Reay and our team of officials for their support on this complex Bill. Their experience and expertise in this area have been invaluable.

Financial Services and Markets Bill [HL]

Baroness Neville-Rolfe Excerpts

Report stage
Wednesday 9th September 2026 Lords Chamber

[Baroness Bennett of Manor Castle (GP)]

My Lords, I rise with great pleasure to follow all the speakers thus far in this group and to support all these amendments. I have not attached my name specifically to any of them—some of the most prominent are fully subscribed and I wanted to leave space for the breadth of that subscription, noting in particular Amendment 90, which has also been signed by the noble Baroness, Lady Coffey, who is not currently in her place.

I want to take a second to reflect on the point where we are at now with the Bill overall. What we have before us is essentially the same Bill that was introduced under a different Prime Minister and a different Chancellor. I remain astonished that the approach to competitiveness and deregulation that was directed by Rachel Reeves is now being continued, although after hearing the new Chancellor’s speech two days ago, I am somewhat less surprised.

I will particularly reflect on all the environmental measures here, and we still have before us essentially the same Bill as under the previous Government. I note that our current Prime Minister supported the fossil fuel treaty in June 2025, when he was Mayor of Manchester, and that, when running for the Labour leadership in 2015, he said:

“Labour under my leadership will never turn our back on … our duty to tackle climate change”.


All these amendments are therefore putting the Bill back on the track that it should be on—a track that the Government are apparently signed up to.

I will focus very briefly on Amendment 90 and the forest risk commodities. As with pretty well everyone who has already spoken, I think we remember the long wrestle to get not the strong thing we were looking for but at least the promise of Schedule 17 into the Environment Act 2021. There is a real problem here in terms of members of the public. They heard and saw that fight and saw the law put down by the Government, and they expect it to be delivered. Yet, five years later, we still do not have that provision.

After listening very carefully to the noble Baroness, Lady Young of Old Scone, I have a constructive suggestion. The timetable coming from Defra suggested that, within 12 to 18 months, we will finally see the delivery of what was promised in 2021. I am sure the Minister will say that he cannot accept Amendment 90. However, it would be very positive if, perhaps at Third Reading, the Government could table an amendment committing to these regulations in, say, 18 months’ time, which would be a minor adaptation to the amendment put down by the noble Baroness, Lady Sheehan, and others. The noble Baroness, Lady Young, has that promise and pledge in a letter; let us go a little further and put it in the Bill.

[Baroness Neville-Rolfe (Con)]

My Lords, we have a lot to cover today, so I will be brief.

We do not believe that imposing additional reporting duties, transition plan requirements and regulatory processes on financial services firms is the right way to address the concerns that have been addressed in these amendments this evening. One of the merits of the Bill is the way it cuts out needless and repetitive operational requirements on financial services firms and regulators and instead introduces a more effective approach based on five-year strategies. As we heard on Monday, stakeholders’ views will be sought in the course of establishing those strategies. Of course, climate change and environmental objectives already remain an important statutory regulatory principle, intended to contribute to the UK’s net-zero target under the Climate Change Act and to the environmental targets established under the Environment Act.

However, requiring banks, other financial institutions and the regulators themselves to fill in forms, tick boxes and produce more and more reports about climate change will not have a meaningful effect on global temperatures; it will simply add costs. We need a regulatory environment which supports growth, enterprise and investment. That means cutting down on the red tape and extra requirements that are putting our international competitiveness at risk. These amendments would add a further layer of process and obligation without a sufficiently clear demonstration that the burdens would advance the environmental objectives being pursued.

This is a time when we should be seeking to streamline regulations and be careful about new requirements, however well-intentioned, because of the need to get the economic growth that we lack. These amendments risk taking us a step backwards, so we cannot support them and will be voting against them if noble Lords press them to a vote.

[The Parliamentary Secretary, HM Treasury (Lord Pitt-Watson) (Lab)]

My Lords, I am grateful to the noble Baronesses for these amendments and for the wider debate on sustainable finance and adapting to climate change. These amendments address a number of important issues: climate transition planning, tackling deforestation, how the regulators consider climate risk and the products commonly known as green mortgages. As several noble Lords have argued today, both climate-related and nature-related risks can have significant implications for the economy, for financial markets and their ability to deliver for customers, and for long-term prosperity.

As many noble Lords may know, it is a topic close to my heart, including through my past chairing of the United Nations Environment Programme’s Finance Initiative at the Paris climate talks. UNEPFI is a voluntary organisation of more than 500 financial organisations from the North and the South, with funds of more than £100 trillion under management. It has established some of the world’s foremost sustainability frameworks for finance, including involvement with the REDD+ project, reducing emissions from deforestation in degradation, which I believe is now preserving many millions of square miles of forest.

I share the underlying objectives behind these amendments. The question before us is, therefore, not whether action is needed but how best to deliver that action in a way that is effective, proportionate and aligned with the wider framework we are putting in place.

Let me come to Amendments 34 and 55, which raise important points regarding how the regulators consider and report on climate and environment-related issues. I have spoken to the noble Baroness, Lady Hayman, and members of Peers for the Planet throughout the week on this important issue. I also hosted a drop-in session for Peers with the FCA. During that session, I heard a number of concerns about the absence of climate and environmental targets have-regard operating at a day-to-day level, and I have, of course, heard the issues raised in this debate today.

While I still believe that there is significant value in streamlining the regulators’ have-regards, I appreciate that it is important that the regulators continue to focus on the vital issue of the sector’s contribution to climate change at a day-to-day level, and I appreciate the importance of regular reporting on this issue to aid parliamentary scrutiny. While I cannot do anything today, I am prepared to return to this issue at Third Reading and would be prepared and undertake to table amendments to Clause 17 that would require the PRA and FCA to continue to consider their existing climate change and environmental targets have-regard at a day-to-day level and to maintain appropriate notification and reporting requirements.

Amendments 34 and 55 introduce a new have-regard and reporting requirement on climate-related financial stability issues. I therefore ask the noble Baronesses, Lady Northover and Lady Hayman, not to press Amendments 34 and 55 on that basis, and I will return at Third Reading with the amendments I have described.

Amendment 65 concerns transition plan requirements. The Government remain committed to this area. We consulted in 2025 on options for implementing transition plan requirements and are considering responses alongside wider work on sustainability and corporate reporting reform. In February, we finalised the UK sustainability reporting standards for voluntary use. The FCA has also consulted on aligning listed company disclosure requirements with these standards. The FCA aims to publish final rules this autumn with requirements expected to take effect from January 2027. This amendment would place a statutory timetable on an area where policy development remains under active consideration across government. We believe in the importance of finalising this work before imposing an arbitrary road map.

On Amendments 90 and 97A, I recognise the strength of feeling on deforestation and agree that urgent action is needed. I am therefore pleased to report that this work is moving forward. As the noble Baroness, Lady Young, said, Defra has confirmed that they will consult later this year on Great Britain’s approach to tackling deforestation in domestic supply chains and the next steps for the forest risk commodities regime. My officials have spoken to Defra, which has confirmed that it plans to consult during the autumn and that legislation will be delivered in 2027. The responsibility for enforcing the regime will be determined by Defra when it designs the regulations.

We share the objective of progress being made as quickly as possible. However, a six-month statutory deadline risks prioritising speed over effectiveness. The Government believe the better approach is to ensure that any resulting regime is robust, proportionate and capable of decoupling supply chains from global deforestation. The Government have already committed, through the Financial Services and Markets Act 2023, to review the regulatory framework for tackling deforestation-linked finance within nine months of Defra’s legislation on domestic supply chains. Furthermore, the principle that I committed to reapply today to day-to-day activities also explicitly covers consideration of environmental targets in the Environment Act 2021, so this will remain part of the regulators’ day-to-day work.

On Amendment 91, the Government support high-quality green mortgage products that can help households to finance energy efficiency improvements and improve resilience to climate-related risks. However, the amendment risks duplicating efforts by regulators, departments and existing frameworks. FCA rules already require clear disclosure and the FCA is considering disclosure further through its mortgage rule review. The Green Home Finance Strategic Partnership also has a dedicated working group focused on consumer protection and standards. With over 90 green mortgage products now available compared with fewer than 10 in 2019, the Government consider that imposing a statutory timetable would be premature while policy and the market continue to develop. The current approach provides the flexibility to develop clear, proportionate standards while maintaining consumer protections.

In conclusion, the Government support the objectives that sit behind these amendments. We have listened to the House and will, at Third Reading, table amendments to Clause 17 requiring the PRA and FCA to continue to consider that their existing climate change and environmental targets have regard at a day-to-day level and to maintain appropriate notification and reporting requirements. More broadly, we support credible transition planning. We support action to address deforestation and forest risk commodities, and we support the development of high-quality green mortgages. The Government are already taking forward substantial work in these areas and will continue to do so in a co-ordinated and proportionate way. I therefore ask the noble Baroness to withdraw the amendment.

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[Baroness Kramer (LD)]

My Lords, fairly early on in Committee I said to the noble Lord, Lord Stockwood, who was then in charge of bringing the Bill through, that, when a common opinion was held by the noble Baroness, Lady Noakes, the noble Lord, Lord Vaux, and my noble friend Lady Bowles, he ought to listen. Those are the three real experts that we have in the House on markets, regulation and the financial services industry, and all of them set aside political ideology when they come forward with recommendations. They look to the common good and to good functioning, both for markets and for consumers. So I am very glad that on proportionality—which of all the issues was the most serious in the downgrading of principles, quite frankly—that the Minister is now amending that.

I am also appreciative that there is going to be movement on climate change because, as colleagues have said, this is a crisis that is on our doorstep. We have no choice but to act, and it means we need to focus all our strengths on dealing with that crisis. I am very conscious of the impact of financial stability and how it crept up on us, because we only looked at it through a very narrow lens instead of looking across the piece and recognising how holistic and interconnected so many issues are.

I have Amendment 67 in this group. I have to confess that it is an odd place for this amendment, and I shall deal with it briefly. Amendment 67 arose because a number of banks have been refusing to take small businesses and SMEs generally in the defence industry as their customers, usually because they are concerned about reputational risk. That has made it very difficult for those SMEs to raise credit, and it is seriously undermining the UK’s plans to build up its defence forces, which I think we all agree is not acceptable. Some Members may not be aware that the most innovative defence firms are SMEs. It is not just about the big players—the SMEs are critical, particularly at a time when so much is changing in the strategic and defence sector. These small SMEs already face high regulatory hurdles, and they often face slow procurement processes when they work with the Ministry of Defence. The absolutely killer blow is then not to be able to finance the projects, no matter the quality of the contract that they have.

The FCA has said its rules present no obstacle to lending to SMEs and considers that to be a green light, but that is not having very much impact. My amendment essentially attempts to put some welly behind the FCA in dealing with these issues. It would require it to conduct and publish a review at least once every three years, including identifying any barriers. I would have thought that a report like that might get the Government going as well. I know that the Government are aware of the problem, but I emphasise that knowing about it is not enough; they actually need to act and change minds.

[Baroness Neville-Rolfe (Con)]

My Lords, we welcome the Government’s decision to retain proportionality as an express statutory consideration for both the FCA and the PRA when they exercise their general functions. This responds to productive discussions in and outside Committee, for which I thank the Minister and indeed the noble Lord, Lord Stockwood, who I am delighted to welcome back to the discussion of the Bill, and I thank him for his efforts to improve it. I also thank my noble friend Lady Noakes, the noble Baroness, Lady Bowles, and the noble Lord, Lord Vaux, for their constructive and flexible approach to the substantial problems on these clauses.

Time and again, one of the concerns we hear from business is that regulation can be disproportionate to the risk it is intended to address. That is particularly true for the small and medium-sized firms that we rely on so heavily for competition, innovation and economic growth, right across this country. The proportionality changes help to address this and we will not therefore be pressing our Amendment 62 on SMEs to a vote—even though it is my favourite amendment and I have the support of the noble Lord, Lord Vaux. The noble Baroness, Lady Kramer, is right to focus on lending to small defence companies as well.

The requirement for the FCA and PRA to explain in their annual reports how they have taken these proportionality principles into account, alongside the requirements relating to consultation and parliamentary committees, creates an important mechanism through which Parliament can examine whether the principle is actually being applied in practice, with concrete examples, as the noble Baroness, Lady Bowles, suggested. This is important because the ultimate test of these amendments will not simply be whether “proportionality” appears in statute. It will be whether firms see a genuine difference in the way regulation is developed and applied, particularly by the regulators. We hope that the Government’s amendments will prove to be a meaningful mechanism through which regulation can become easier to comply with, less costly and ultimately more successful in achieving the objectives that Parliament has set for the regulators—of course, the proof will be in their implementation.

The Government have listened to concerns raised during the passage of the Bill and we support the amendments that the Minister has tabled in response. This is good House of Lords practice. Like my noble friend Lady Noakes, I do not intend to pursue the other amendments today.

[Lord Pitt-Watson (Lab)]

My Lords, I thank noble Lords for this debate. I hope it demonstrates that the Government have listened carefully to the arguments made by noble Lords during Committee and recognise the strength of feeling and the logic around addressing Clause 17. In Committee, noble Lords made it clear that they had concerns with that clause, which removes the requirement to consider regulatory principles each time they exercise a general function in favour of considering them just at a strategic level. These points were made particularly strongly with regard to proportionality; in response, we have tabled Amendments 37 and 43 in my name. These amendments will ensure that the two proportionality regulatory principles will continue to apply to the regulators’ day-to-day actions.

There was also a rich debate in Committee about the different facets of proportionality and the factors that regulators should consider. Here, again, the Government have listened. Amendment 44 makes changes to the existing principles to explicitly include that the regulators should recognise the differing abilities of firms to engage and comply with regulation owing to their size—a point raised by both the noble Baroness, Lady Neville-Rolfe, and the noble Lord, Lord Vaux. This means that regulators will need to consider the specific impact of their proposals on SMEs.

It was also clear that a number of noble Lords had concerns about the possible effects of Clause 17 on Parliament’s ability to effectively scrutinise the regulators. In response, Amendments 40 and 46 to 50 will ensure that existing reporting requirements on the proportionality regulatory principles will remain in place, including as part of the consultation on annual reports. The Government are therefore retaining the majority of existing transparency and reporting requirements, including through panel reports, consultation requirements and annual reports.

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I welcome the increased engagement with industry from the Government, but we now need a consistent drumbeat, stronger leadership and a clear plan of targets and delivery so that industry can plan alongside government and regulators. That is why this amendment is important, and I press the Minister and the Government to give it further consideration. It asks for a strategy that sets out where we want to go, what barriers we need to remove, what infrastructure and standards we need, how we remain internationally competitive and what success looks like. Woolard’s work is an important part of that, but we need to be more ambitious than a single workstream. Other countries are moving quickly. The UK should not simply seek to regulate the digital assets economy of tomorrow; we should build it and help write the international rules for it here in the United Kingdom.

[Baroness Neville-Rolfe (Con)]

My Lords, this is an important and forward-looking group of amendments, covering open finance, digital market infrastructure and the future of digital assets. I am very grateful to my noble friend Lord Holmes of Richmond for his amendments, and for explaining the scale of the digital tide and the AI wave and the lack of specific signals in the Bill on these opportunities.

I will focus my remarks on Amendment 88, standing in my name and those of my noble friend Lord Altrincham and the noble Baroness, Lady Kramer, who I thank for her support. We debated these issues in Committee, but the central concern remains. Digital assets are becoming an accelerating part of our financial and economic landscape, yet policy is still developing too often issue by issue, product by product and regulator by regulator.

What is missing is a comprehensive strategy. This matters. Industry is telling us that the most basic building blocks of a comprehensive regulatory regime, such as legal definitions, do not exist. This uncertainty is translating into a lack of confidence, which is driving wealth creators away.

Amendment 88 asks the Treasury to step back and set out a coherent strategy for the regulation and development of digital assets and related financial market infrastructure in the UK. It asks the Treasury to establish its objectives, consult properly with industry and other interested parties, and explain how the different strands of policy fit together. This can build on the work of the Bank of England and of Chris Woolard, the new Wholesale Digital Markets Champion at the Treasury. We are most grateful for yesterday’s briefing, at which Chris set out his forthcoming plans for another report due to be published next year.

The opportunity for the UK is considerable. We have the legal system, deep capital markets and an extensive professional services ecosystem, but firms need to know which regulator is responsible for which part of the system, what rules will apply, how different regimes will interact, and how quickly decisions will be made. We are seeing the effects of current ambiguity in reports of firms wishing to offer digital asset products being debanked, a point to which my amendment refers.

Other financial centres are moving rapidly to establish their own frameworks for digital assets and tokenised markets, as my noble friend Lord Ranger explained from his position of great expertise. If businesses conclude that another jurisdiction offers greater regulatory certainty or a clearer strategic direction, they can quickly go elsewhere.

Amendment 88 therefore offers the Government an opportunity to bring those different strands together. The work of Chris Woolard is welcome, but our amendment encompasses a wider range of concerns raised with us. I hope the Government will engage with the amendment, but if I am not satisfied with the Minister’s response I will seek to test the opinion of the House.

[Lord Pitt-Watson (Lab)]

My Lords, I thank the noble Baronesses, Lady Neville-Rolfe and Lady Kramer, and the noble Lords, Lord Altrincham and Lord Holmes, for their amendments relating to the adoption of technology in the financial services sector and for their contributions to this debate. Technological change is already having a significant impact on the sector and there are huge opportunities for the UK alongside risks to be managed.

Amendment 71 seeks to require the FCA to create and maintain a framework for open finance. However, the Government already have powers to create a framework for open finance under the Data (Use and Access) Act 2025. Parliament has therefore already legislated here, and that legislation includes the power to require the FCA to regulate for open finance and includes appropriate safeguards and scrutiny. The Treasury also confirmed at Mansion House in July 2026 its commitment to open finance and said it will consult on open finance next year.

Amendments 88 and 89 are both focused on digitalisation. Amendment 88 seeks to support the UK’s approach to digital assets by requiring the Government to publish a digital assets strategy. It sets out a number of important issues that such a strategy should consider. Amendment 89 similarly seeks to support digitalisation by requiring the Government to make regulations establishing an issuer digitalisation council, composed of representatives from issuers, intermediaries, the FCA, the PRA, the Bank of England and the Treasury.

As noted in the debate in Committee, the Government strongly support digital assets and see them as a key strategic priority. As such, the Government have been very active on this agenda and have a comprehensive strategy to drive forward the digitalisation of wholesale markets through the wholesale financial markets digital strategy published in July 2025. The Government have been taking forward the actions of the strategy at speed. There has been progress even since this issue was debated in Committee.

Chris Woolard CBE published his first report as the Government’s Wholesale Digital Markets Champion in July, setting out a comprehensive cross-sector approach to digital assets. The Economic Secretary to the Treasury and I hosted a drop-in session with Mr Woolard here in Parliament just yesterday so that Members of your Lordships’ House could hear more about his agenda. I think those noble Lords who were there would agree that we should be impressed by the scope and comprehensiveness of the work he is doing.

Mr Woolard outlined not one workstream but nine taskforce action groups that are taking forward the industry road map, including an action group focused on the primary issuance of digital securities, and with an initial focus on delivering an end-to-end use case. These groups and the overarching orchestration group represent a huge amount of work, expertise and industry input that Chris is leading. They include the industry, a strategy and 50 companies, to be joined by the head of Europe from BlackRock and the London Stock Exchange. It is absolutely great work, as the noble Lord, Lord Holmes, said.

At that meeting, Chris Woolard was asked whether there was any need for further primary legislation. I think that the noble Lord, Lord Ranger, was at the meeting and can confirm that he said that right now, he did not think there was. He could also confirm that I said that, should there be that need, I and the Economic Secretary to the Treasury would be listening to that. There will be a real threat to UK competitiveness if we fail to act in this area, and a considerable opportunity if we get it right. I hope that the opportunity to engage Mr Woolard prior to this debate gave insight into the vast amount of constructive work that is already taking place to make sure that this happens.

There are many other actions being taken to support this work, such as the Bank of England and the Financial Conduct Authority’s call for input on tokenisation, which closed in July. They intend to publish a further road map in the autumn. In noble Lords’ speeches, I heard that they want momentum and a strategy involving industry. That is what is happening right now. The Government also highlighted progress on the digital securities sandbox, the digital gilt instrument, in Committee.

The Government strongly believe in the need to digitalise financial markets, and I hope that the measures the Government are taking forward and the further updates that noble Lords received from Chris Woolard, as wholesale digital markets champion, show that the Government are working with the sector and the regulators to deliver a strategic approach to digitalisation—

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Moved by

[Baroness Neville-Rolfe]

88: After Clause 46, insert the following new Clause—
“Digital assets strategy(1) Within 12 months of the day on which this Act is passed, the Treasury must prepare, publish and consult on a strategy for the regulation and development of digital assets and related digital financial market infrastructure in the United Kingdom.(2) A strategy under subsection (1) must consider, in particular—(a) the Government’s approach to the regulation of digital assets, including cryptoassets, qualifying stablecoins, Central Bank Digital Currencies, tokenised securities and other digital and tokenised financial assets,(b) the practical operation of digital asset businesses and activities under current legal, regulatory and market conditions in the United Kingdom,(c) the extent to which firms carrying on, or seeking to carry on, digital asset activities in the United Kingdom are able to obtain and maintain appropriate access to banking, payment and settlement services,(d) the risks to competition, innovation and lawful market participation arising from the withdrawal or denial of such services, including where this is done on a blanket or insufficiently risk-sensitive basis,(e) developments in the law, regulation and supervisory practice of other jurisdictions so far as relevant to the safe regulation of new asset classes and digital financial market infrastructure, including digital currency exchanges,(f) the interaction between the regulation of digital assets and the development of related regimes and initiatives, including in relation to tokenisation, stablecoins, digital settlement assets and other digital payment or settlement arrangements relevant to financial markets,(g) the implications of the current and proposed framework for consumer protection, market integrity, financial stability and the international competitiveness of the United Kingdom, and(h) any legislative or regulatory changes which the Treasury considers may be required.(3) In preparing a strategy under subsection (1), the Treasury must consult—(a) the Bank of England,(b) the Prudential Regulation Authority,(c) the Financial Conduct Authority,(d) representatives from industry forums, and(e) such other persons as the Treasury considers appropriate.”Member’s explanatory statement
This amendment seeks to require the Treasury to prepare and consult on a strategy for digital assets, including regulation, tokenisation, practical operating conditions, access to banking and payment services, and international regulatory developments.

[Baroness Neville-Rolfe (Con)]

Amendment 88 addresses a simple problem: digital assets are developing rapidly, but UK policy remains fragmented and uncertain relative to international competitors. Despite the good work being done by Chris Woolard and the Bank of England, I beg leave to test the opinion of the House on my amendment.

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Moved by

[Baroness Neville-Rolfe]

93: After Clause 47, insert the following new clause—
“Use of powersThe Treasury must publish and lay before Parliament a report setting out how the powers conferred by the following provisions are expected to be used—(a) section 1;(b) Schedule 1;(c) section 13;(d) Schedule 2;(e) section 14;(f) section 37;(g) section 46.”Member's explanatory statement
This amendment and others in the name of Baroness Neville-Rolfe would require the Treasury to provide Parliament with information on the intended use of certain significant delegated powers before bringing them into force for the first time, including powers relating to consumer credit, payment systems regulation, anti-money laundering supervision, overseas recognition regimes and cryptoassets.

[Baroness Neville-Rolfe (Con)]

Amendment 93 and its consequentials are intended as a compromise with the Government. I do not feel that the Government have fully engaged with the practical proposal that we put forward on Monday, and I therefore wish to test the opinion of the House on Amendment 93.

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Moved by

[Baroness Neville-Rolfe]

98: Leave out Clause 50

[Baroness Neville-Rolfe (Con)]

My Lords, Amendment 98 would remove Clause 50, thus returning us to the broad principle that we raised in our discussions on Clause 3, which led to a majority of 81 in a vote on its deletion. Clause 50 will allow the Treasury to amend or repeal primary legislation without introducing another Bill, which is another Henry VIII power. We need clarity from the Minister about how the Government envisage the power will be used. Our concern is that it goes further than technical housekeeping, as the text of the clause gives Ministers a broad and potentially permanent power to amend or repeal primary legislation, including devolved legislation, without the full scrutiny afforded to a Bill. I am grateful for the support of the noble Baroness, Lady Bowles. In the absence of a satisfactory reply, I am minded to test the opinion of the House.

[Baroness Bowles of Berkhamsted (LD)]

My Lords, I have signed this amendment because there are bad things in this Bill and I do not want any more of them.

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[Lord Pitt-Watson (Lab)]

My Lords, Amendment 98 would remove the consequential power contained in Clause 50. The Government understand the concern that delegated powers should be used appropriately and should not become a vehicle for making substantive policy changes without parliamentary scrutiny. Indeed, I think that, on Monday, in response to issues to do with Henry VIII powers, I gave some sympathy to that argument. However, the power in Clause 50 is not a power to introduce new policy, nor is it a power to revisit the policy that Parliament will have approved by passage of the Bill; it is a narrow, regulation-making power limited to dealing with matters that arise as a consequence of the provision that Parliament has already approved within the Bill.

It is common and often necessary for legislation of this scale and complexity to require consequential adjustments elsewhere on the statute book, so that provisions operate as intended. Without such a power, relatively minor or technical changes would require further primary legislation, creating unnecessary delay and complexity. For these reasons, the Government do not believe that removing this clause would improve the Bill. I would also note that this was not a point raised by the Delegated Powers Committee about the Bill.

Finally, I assure the noble Baroness that parliamentary committees will of course be able to call the Government to appear in front of them and account for the use of consequential power or, indeed, any other power in the Bill. I therefore ask the noble Baroness to withdraw this amendment.

[Baroness Neville-Rolfe (Con)]

My Lords, the fact is that Clause 50 gives Ministers a broad and potentially permanent power to amend or appeal primary legislation, including devolved legislation, without the full scrutiny afforded to a Bill. Unlike other Bills, this is a Bill with many new, unspecified powers, so I seek to test the opinion of the House.

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Moved by

[Baroness Neville-Rolfe]

100: Clause 52, page 55, line 31, leave out subsection (1) and insert—
“(1) The following provisions cannot come into force until the requirement set out in section (Use of powers) has been met—(a) section 1;(b) Schedule 1;(c) section 13;(d) Schedule 2;(e) section 14;(f) section 37;(g) section 46.”Member’s explanatory statement
This amendment and others in the name of Baroness Neville-Rolfe would require the Treasury to provide Parliament with information on the intended use of certain significant delegated powers before bringing them into force for the first time, including powers relating to consumer credit, payment systems regulation, anti-money laundering supervision, overseas recognition regimes and cryptoassets.

Financial Services and Markets Bill [HL]

Baroness Neville-Rolfe Excerpts

Report stage
Monday 7th September 2026 Lords Chamber

[Baroness Bennett of Manor Castle (GP)]

My Lords, I speak to Amendment 97, which appears in this group in my name. I commend the noble Baroness, Lady Kramer, and the noble Lord, Lord Vaux, for providing us with powerful arguments, particularly for Amendment 17. I echo the noble Lord’s comments as, if the noble Baroness wishes to put this to the vote, the Green Party will certainly support it. We need to see the tech companies being made to pay for the huge profits they are collecting while continuing to allow illegality to operate in their spaces.

However, I will primarily speak to Amendment 97. I begin by acknowledging the work of Joshua Tjeransen, who is my King’s College London intern. He has identified this issue for me and done a great deal of work on this amendment. This amendment is about a different sort of fraud from that covered by the amendment from the noble Baroness, Lady Kramer; it is about ransomware. I am sure noble Lords have come across many cases of this; it is a great concern to businesspeople, individuals and institutions, particularly the NHS. It is where a computer system or database is locked and access is prevented. The ransomware takes it over, and companies are told, “Pay up or you will never get this back”.

It is worth thinking about the circumstances of this. Very often, payment is demanded in cryptocurrency. People are told, “If you don’t do this in the next hour, the figure will double and double again” and so on, through alerts appearing on someone’s computer screen. These are tremendously frightening, difficult, challenging circumstances to face.

The figures we have for this come from Report Fraud. In the year from April 2025, 323 UK organisations reported such an attack. More than half of them were small and medium-sized enterprises, and the average loss was £270,000, which for SMEs is a huge sum of money. I said “reported” because it is generally acknowledged by experts in the field that there is a real issue of stigma here. Companies and organisations do not want to admit that they have fallen victim to such a fraud, and it is generally agreed that those figures are the tip of the iceberg. The accepted advice from law enforcement is “Don’t pay”, but it is generally acknowledged, although it is very hard to put figures on it, that a lot of people are paying right now, and this must be very lucrative for some very nasty criminals.

I come to the amendment, which would insert a new clause that would place a duty on the Financial Conduct Authority to make rules within 12 months of Royal Assent prohibiting the firms it regulates from

“making, offering, authorising or facilitating a ransom payment”

and would prevent the insuring or indemnifying of anyone against such a ransom payment. Firms would have to notify the FCA within 72 hours of becoming aware of a ransom demand. The only exception provided is where the payment is needed to prevent an imminent risk to life or serious injury, and then only with the prior approval of the Secretary of State. It covers authorised persons and firms supervised by the FCA under the Payment Services Regulations and the Electronic Money Regulations.

I think it is worth going back over how we have got to the point where we still do not have any action. In January 2025, the Home Office consulted on three proposed measures on ransomware: a targeted ban on ransom payments by public sector bodies and operators of critical national infrastructure; a payment prevention regime under which other organisations would have to notify the Government before paying; and mandatory incident reporting. The response was reported on 22 July 2025 and recorded 72% support for a targeted ban. There was an announcement that all public sector bodies and CNI operators would be banned from paying, and there would be a notification requirement.

On 14 October 2025, answering a Question from the noble Lord, Lord Fox, on the Jaguar Land Rover attack, the noble Lord, Lord Leong, told the House:

“The Home Office is progressing a new package of measures to protect UK businesses, and we will update the House accordingly”.—[Official Report, 14/10/25; col. 169.]


In December 2025, the Security Minister said that the ban remained a priority and would progress—noble Lords know the dreaded phrase—when parliamentary time allowed. You might think that there would be coverage of this in the Cyber Security and Resilience (Network and Information Systems) Bill, but my understanding is that there is no coverage of such issues.

Why does this amendment work? Why can we do this through the Financial Services and Markets Bill? Nearly every payment will pass through a financial company. If there is any kind of scale to this at all, whoever the victim is, the money will go through a firm that the FCA supervises. A rule on these firms therefore reaches most payments made from the UK, not just payments by financial firms themselves. I think the amendment is elegant. It would not create a new offence or a general ban on businesses as the Public Bill Office said that that would be outside the scope of the Bill. Instead, it would place a duty on the FCA to create the rules within 12 months. This is a step forward in dealing with a critical issue that is affecting businesses and organisations right now and on which the Government have promised to act. It follows the Government’s own design.

I am not expecting the Minister to accept the amendment, and I am not going to put this to a vote because we have not had the time or capacity to work through the detail of exactly how this is written, but none the less I hope that we will hear from the Minister that there is going to be significant progress in this area very soon. I am really hoping not to hear the phrase “when parliamentary time allows” because the Government have done the consultation on this and have promised to act. We need to see protection in this fraud capital of the world—the UK—for firms. If ransoms cannot be paid, it will not be in the interests of criminals to put the effort in to try to get ransoms.

[Baroness Neville-Rolfe (Con)]

My Lords, we are concerned about the scale of fraud, and in particular by the continued growth of authorised push payment fraud and other forms of online economic crime. The Government and the banks have made progress, but the truth is that it is hard to keep up with the scammers, and the sums at stake are significant, as the noble Baroness, Lady Kramer, has explained. I therefore strongly welcome the proposal from the noble Lord, Lord Vaux, for an annual report.

My noble friend Lord Howard of Rising is right to be concerned about the future protection of commercially sensitive information as part of a competitive UK sector. I am glad he has brought his amendment back, and I hope the Minister will be able to provide an assurance that this will be addressed.

The amendments in this group raise important questions about transparency, monitoring and the practical steps that firms can take to identify scams earlier, warn consumers, share information more effectively and pay compensation where that is appropriate. Indeed, there has been considerable progress since the APP reimbursement regime was introduced in 2024. I always remember my card being used in Korea to buy £2,500 worth of Louis Vuitton luggage. That would not happen today, as banking procedures and scrutiny are so much better.

However, the proposal from the noble Baroness, Lady Kramer, is a difficult one, as it is not clear what the technology companies could do to stop fraud systematically. They are not passing money on in the same way as the banks do. That may have been what the noble Lord, Lord Stockwood, was getting at in Committee when he responded to this amendment at that stage. New regulations of this kind could also have a chilling effect on the supply of online services in the UK, so more analysis is needed before the FCA introduces new rules. We believe this is an area where the Government and the regulators should be prepared to make progress, but we also understand the constraints.

It is also important that people learn to avoid scams with simple procedures such as face ID, and to take care over what they buy online. This should be an important part of education, and indeed Ofcom, working with the FCA and the tech companies, should be able to make more progress here. I very much look forward to the Minister’s response on this important area and how he thinks we can best address this problem.

[Lord Pitt-Watson (Lab)]

My Lords, before I respond, I must start with a correction. In the third debate, I said that commercial credit data-sharing schemes improve bank referrals and strengthen personal lending. However, the CCDS and the bank referral scheme are different schemes. To correct the record, I meant that the Government are improving competition and supply through enhancements to commercial credit data sharing in this Bill and working with industry to strengthen bank referral arrangements. Both these schemes help to improve lending to SMEs. I apologise for that; I was speed-reading my way through my responses. I will try to be more careful in future.

I am grateful to the noble Baronesses and noble Lords for tabling these amendments and to all noble Lords who have contributed to this debate. On Amendment 17, fraud causes profound financial and emotional harm. As noble Lords know, this Government take the issue of fraud very seriously and are dedicated to protecting UK citizens. As my noble friend Lord Stockwood explained in Committee, the Online Safety Act requires tech companies to take proactive steps to prevent fraudulent content. The Government remain committed to ensuring that Ofcom makes full use of its powers to undertake fast and decisive action against illegal online harms, including fraud. At the request of the Secretary of State, Ofcom will share an annual update on its enforcement strategy for online safety with Parliament.

In July, Ofcom published the fraudulent advertising code consultation, proposing more than 40 new measures to tackle online fraud on the UK’s biggest digital services. Among these measures, Ofcom proposes the mandatory verification of financial services advertisers. This will support legitimate financial promotions from FCA-authorised firms while cracking down on illegal financial promotions such as scam investments and crypto ads.

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[Baroness Neville-Rolfe (Con)]

My Lords, we welcome these amendments and the movement from the Government on this important issue. I look forward to the Bank of England’s first report on its innovation objective and hope that it will help to drive much-needed growth in the economy. I am sure that the reports will also be useful to our specialist parliamentary committees.

Amendment 22 agreed.

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[Lord Bridges of Headley (Con)]

My Lords, I declare my interest as an adviser to and shareholder in Banco Santander. Your Lordships will be pleased to know that I will speak very briefly on Amendment 68. My noble friend Lady Noakes just covered the waterfront incredibly well, in her exemplary manner, and made all the key points.

I will briefly say this. The first leg of this amendment, about the FCA’s office for regulatory evaluation, is an extremely measured and well-constructed proposal from my noble friend, but I propose to set up something different: an office for financial regulatory accountability that stands outside all the regulators and looks at financial services regulation, consultations and proposals in the round. It would therefore provide an independent source for Parliament and everyone else to look at the impact of those actions, so that they could be analysed and, critically, the regulators and supervisors could be held to account.

Many said to me that they felt this office would become a back-seat driver for the regulators and supervisors, and that we would, essentially, have someone second-guessing their actions, potentially undermining the operational independence that they have been given. This proposal from my noble friend overcomes that very well. While I am very pleased that the Minister is making constructive noises about the need for greater accountability and scrutiny, I am somewhat disappointed that it seems that this proposal, which builds, as far as I can see, on the work of the cost-benefit panels within the FCA, would help Parliament hold the FCA to account with much greater independent analysis. When he sums up, I would like the Minister to give us a bit more argument about why this is a bad idea.

I turn to the second leg of this amendment, which relates to the Bank of England and the office for regulatory evaluation. It is rather sad that, at 10.05 pm, about 15 of us are debating one of the most important institutions in this country, how it is held to account and the means by which it evaluates its performance. This speaks volumes about how we in Parliament potentially need to up our game in how we hold the Bank of England to account. That criticism may be aimed at all of us rather than at the Government.

The independent evaluation office within the Bank performs, and has performed, a critical role. When you look back to see what various chairmen of the court have said about it, many of them have gone on the record over the past decade praising its work and saying that it provides valuable input to the court by analysing what the Bank is up to and making sure that the Bank is internally held to account. So when the Financial Times reported several weeks ago that the Bank of England was dismantling the IEO, I have to say that alarm bells started to ring.

When the Minister sums up, perhaps he can answer some simple questions. I realise that he is speaking on behalf of the Treasury, not the Bank of England, but what I am trying to understand is, first, what is the problem that this decision to dismantle the IEO is trying to solve? What is it that the Bank is trying to achieve? What is the progress it is trying to make by abolishing and dismantling the IEO, in particular given that so many chairmen of the court have spoken in favour of it?

The second point builds on what my noble friend Lady Noakes said. When the IEO is abolished and these external independent analysts are brought in, how many reviews does the court expect to commission? As my noble friend pointed out, the IEO has published only a relatively small handful of reviews. Is it going to be more or less? Next, if the court chooses the subjects, how will we ensure that the uncomfortable issues that the Bank needs to confront will be confronted? Finally, does the Minister think that this move will increase the accountability and scrutiny of the Bank? That is my litmus test: will it make sure that the Bank’s performance is held even more to account?

There are questions to answer here. I very much welcome what the Minister said about his wish to increase accountability and scrutiny. I think that we are disagreeing here on the means by which to do so, so I look forward to his answers.

[Baroness Neville-Rolfe (Con)]

My Lords, I begin by paying tribute to my noble friend Lady Noakes, to the Financial Services Regulation Committee, including the noble Baroness, Lady Bowles, and the noble Lord, Lord Vaux, and to my noble friend Lord Bridges of Headley for their persistent pursuit of a very simple but important principle. As regulators gain more power and their remit expands, so too should the scope and effectiveness of the oversight to which they are subject.

My noble friend Lady Noakes powerfully articulated the concern that the FSMA model has been stretched too far and that even our expert parliamentary committees are struggling with the volume and complexity of oversight. We need stronger, not weaker, democratic accountability, which is why we saw value in the office of regulatory evaluation and/or my noble friend Lord Bridges’s original model tabled in Committee. We also share his concern about the dismantling of the Bank of England’s IEO.

This is an area where the Opposition will continue to develop our thinking for future legislation and would welcome engagement. We are not comfortable with a system whose reaction seems to be to delegate every new or persistent problem to our regulators. We are very pleased that my noble friend Lady Noakes will continue to work with the Treasury and the regulators on improving parliamentary oversight through the relevant committees, and we look forward to working with her and others across the House, including the noble Baroness, Lady Bowles. What she has proposed represents a practical compromise that would allow us to move on. However, a positive response to Amendment 93 on first use of the new powers would also be important.

One practical way in which the accountability gap could be narrowed a little—and, indeed, trust in the FCA improved—would be to strengthen the remit of the cost-benefit analysis panels, which already sit within the regulators. Their remit could extend beyond rule changes to include guidance and enforcement activity. They could be given the ability to request an assessment of changes that the regulator has judged to be immaterial. This would strengthen internal challenge, improve confidence in the regulatory process and provide Parliament with more useful and more independent information. I have not brought back yet another amendment on this proposal, but I hope the Minister can commit to looking seriously at it as a follow-up to this useful debate.

I welcome the Government’s amendment on competitiveness and growth. I am only sorry that the name of the Financial Services Regulation Committee does not seem to have made its way into the statute.

[Lord Pitt-Watson (Lab)]

My Lords, I will not take up too much time because I responded to many of the points at the beginning of the debate. On the Independent Evaluation Office at the Bank of England, the Bank is committed to independent evaluation. It is strengthening the independence of the reviews that it commissions by moving to a model where it commissions external independent experts to lead the reviews.

I echo the noble Baroness, Lady Neville-Rolfe, in thanking the noble Baroness, Lady Noakes—and the noble Baroness, Lady Bowles, I should add—because we have a commitment from the FCA. If you want to be cynical about it, it may not be as fulsome a commitment as we might want, but it says that accountability, scrutiny and proportionality are central and it wants to support effective parliamentary scrutiny, which I think is where we are all coming from. I thank the noble Baroness and her committee for picking up the baton on this because we must all—Parliament and regulators, with the help of the Government where we can help—work together to have a regulatory environment that is effective and proportionate.

With that in mind, the Government do not think that at this stage further legislative amendments are helpful. I beg to move Amendment 31.

Building Societies Act 1986 (Assimilation to Company Law and Changes to Funding Limit) Order 2026

Baroness Neville-Rolfe Excerpts

Wednesday 2nd September 2026 Grand Committee

[Baroness Kramer (LD)]

My Lords, the Minister is exactly right, of course. Building societies and mutually owned banks are absolutely crucial to our economy. They hold some 29% of all outstanding residential mortgages, and that figure is growing. They are especially significant for first-time buyers as conventional banks are less active in this market. So, as we try to solve the housing crisis and restore economic growth, both the capacity of the sector to grow and its lending matter—but so, too, does the stability of the sector.

As the Minister said, the Building Societies Act 1986 requires that a building society must raise at least 50% of its funds from individual member deposits, with the consequence that funding from wholesale markets cannot exceed 50%. However, this order changes the way in which the 50% is calculated to specify that certain funding sources will be excluded from the wholesale calculation. The examples given include specific Bank of England liquidity facilities, loss-absorbing instruments —we would typically cite MREL—and specific repo agreements. This is clearly of importance to the larger societies. It sets them on a more level playing field in competing against banks, as well as increasing their lending capacity. However, even though I support this change, I have two questions.

First, have the Government assessed the impact of increased wholesale funding in times of interest rate volatility? I point out to the Minister that there will be an increase in wholesale funding, if one is not going to be highly technical, because MREL, for example, is raised in the wholesale markets, as are the repos. A number of the instruments that are covered and will be excluded from the calculation are, in fact, wholesale market transactions.

Funding short—the characteristic of the wholesale funds—and lending long, at a fixed rate, was the curse of HBOS when it failed. Once, in a conversation with me that discussed such a situation, Warren Buffett’s number two, Charlie Munger, talked of funding short and lending long as living proof of the walking dead. It is a riskier strategy because of the duration mismatch. I am not suggesting that these changes are going to lead to those extreme outcomes, but it is clear that the squeeze on margins that comes from greater wholesale funding can end up inhibiting lending—and does so exactly at the time when the economy typically needs new liquidity and lending the most.

My second question is slightly different. Is there any risk of diluting the mutual identity by, in a sense, changing this weighting of wholesale versus membership funding? Building societies are much more community-driven than conventional banks. If that link were weakened by the need to respond to the pressures from wholesale lenders, we would all be losers, frankly. I would appreciate the Government’s comments on that.

The other issue in this statutory instrument, offering choice on how to execute documents, strikes me as simple common sense. Frankly, I had no idea that common seals are still in use. Indeed, I may be the only person in this building who has actually closed contracts by using a seal. That was under armed guard, because it had to be removed from the vaults and every movement was observed, because the seal was of such extraordinary value. I really thought that those days were over, and I am pleased that building societies are now going to be relieved of the burden.

[Baroness Neville-Rolfe (Con)]

My Lords, I am very grateful to the Minister for setting out the purpose and effect of the order. We on these Benches welcome it. It is a broadly deregulatory measure, and it should reduce unnecessary constraints on building societies and make their day-to-day operations easier.

Building societies play an important role in our financial system and in local communities, as the Minister said in his very clear introduction. Indeed, as the noble Baroness, Lady Kramer, said, they are also very important for first-time buyers. I certainly got my first mortgage from a building society: the Bedford Building Society. Building societies’ mutual model helps to promote diversity and competition, and they remain significant providers of mortgages and saving products. It is right that the law should preserve the distinctive character of building societies without requiring them to operate under legal and regulatory arrangements, which have failed to keep pace with developments elsewhere.

The first part of the order is a practical modernisation. It brings the rules governing common seals—not the seals I saw on the Norfolk coast during my recent holiday—and the execution of documents by building societies more closely into line with company law. In future, a building society may have a common seal, but it will no longer be required to have one. Documents will also be capable of execution using authorised signatories. The order also, interestingly, makes corresponding provision for deeds, powers of attorney, the position under Scots law and the use of official seals abroad.

The changes to the funding limits are, however, the more economically significant part of the order. The requirement that at least 50% of a building society’s funding liabilities should be derived from members’ shares is an important safeguard of mutuality. It distinguishes building societies from wholesale-funded banks and helps to ensure that they remain rooted in their members.

At the same time, the framework must recognise that modern prudential regulation imposes requirements which were not envisaged when the original funding limit was designed. It would make little sense for a building society to be pushed closer to that limit simply because it had used a Bank of England liquidity facility or issued debt in order to meet MREL requirements, or to comply with PRA liquidity rules. By excluding those liabilities from the wholesale funding limit calculation, this order should make it easier for societies to meet modern regulatory requirements, issue MREL-eligible debt and make appropriate use of liquidity facilities.

I would, however, be grateful if, in addition to answering the very good questions from the noble Baroness, Lady Kramer, the Minister could address some of mine. First, to what extent does the Treasury expect the changes to improve the competitiveness of building societies relative to banks? The Explanatory Note says that no significant impact is foreseen, and no full impact assessment has therefore been produced. That is disappointing, since the Treasury’s financial services impact assessments are usually very good and very helpful to us in this House. It would therefore be good to understand what practical or economic benefit the Treasury nevertheless expects the order to deliver and to know of any hidden costs to businesses.

Secondly, will the benefits be distributed evenly across the sector? The exclusion for secondary non-preference debt would appear particularly relevant to the larger societies, which are subject to MREL requirements. Does the Treasury expect smaller societies to benefit?

Thirdly, has the Treasury estimated whether the additional flexibility created by the order could support greater mortgage lending or investment by building societies? How will it monitor whether the reforms release capacity, which is then used to support customers and the wider economy?

Fourthly, Article 4 requires the Treasury to review the order within five years and at intervals of no more than five years thereafter. What metrics will be used? In particular, will it examine the effect on competitiveness?

Finally, does the Treasury regard this order as the final stage in implementing the reforms enabled by the 2024 Act, or are further measures being considered to modernise building society legislation?

Subject to these questions, we regard the order as a positive and proportionate measure. It removes outdated administrative rules, supports compliance with PRA and Bank of England requirements, and gives building societies greater flexibility without undermining the important principle of mutuality.

[Lord Pitt-Watson (Lab)]

I thank noble Lords for their consideration of this order. I have listened carefully to the interventions made and will try to respond to them, if I can.

One was on the interest in common seals. Until I read this SI, I also had not realised that building societies were so constrained. There was then a series of questions about borrowing short and lending long, which is of course central to building society and bank operations; that is why you can have a run on a building society or a bank and why we have the Bank of England to deal with that and give confidence so that a run does not take place. Clearly, in the changes that are being made, which are relatively small changes associated with highly liquid instruments, deposits and dealings with the Bank of England, there is not a huge difference in the duration risk that we see today and the duration risk that we will see in future. The aim is to make building societies more equivalent and similar to banks so that they can be more competitive.

As regards what the effects of this will be, the noble Baroness, Lady Neville-Rolfe, asked a good question about greater mortgage lending. I did in fact go back and ask whether a calculation had been made on that. The answer I got, which I thought was quite a good one, was that the reduction in constraint does not immediately mean that a building society will change what it does because there are many other considerations in how it expands its balance sheet. Therefore, there is not a number on that one. I feel quite comfortable that there is not a number, but we create a level playing field. As for a review in five years’ time, I do not know what would be included in such a review; I think that it might be impacted by events from now and going forward.

In terms of the impact of interest rate volatility, as raised by the noble Baroness, Lady Kramer, the changes have been designed to help with periods of market instability, including interest rate volatility. I did inquire about the additional mortgage lending. I did not get an answer, but I think that I did not get an answer for quite a good reason.

As I set out my opening speech, this order should make targeted and practical changes to the Building Societies Act, modernising requirements and specifying certain sources of funding to be exempt from the wholesale funding limit calculation. It should ensure that the legislative framework for building societies remains proportionate and aligned with wider company law and prudential regulation, while preserving their fundamental mutual model. I hope that I have answered the questions raised.

[Baroness Neville-Rolfe (Con)]

That is very helpful and I am grateful to the Minister for answering the questions about likely changes in mortgages and investment. There are a couple of strands I would like to emphasise. One is that I am very concerned that we should help smaller building societies as well as bigger ones, which I hope he agrees with, and that competitiveness is an important factor. The one thing he perhaps could answer, either now or in a letter, is whether this is the end of the road or whether there are more changes coming in SIs on building societies.

[Lord Pitt-Watson (Lab)]

On both those questions, may I write to the noble Baroness? My understanding is that this is the end of the road for this set of legislation, but I cannot predict whether further legislation may come forward. On small and big building societies, might I simply write to the noble Baroness?

Overseas Prudential Requirements Regime (Credit Institutions and Investment Firms) Regulations 2026

Baroness Neville-Rolfe Excerpts

Wednesday 2nd September 2026 Grand Committee

I am concerned that applying the FSMA model will take away accountability around these kinds of decision. I am not going to oppose this SI, since opposing SIs is fairly useless anyway and the issue is much bigger than a single SI. However, I believe that there is a BEPS element in this that I do not think was addressed by the Minister and it is one which the Treasury and the Government need to be cognisant of.

[Baroness Neville-Rolfe (Con)]

My Lords, I am grateful to the Minister for setting out the purpose and effect of these two instruments. Although both are technically dense, they share a common and quite straightforward purpose: they replace parts of the inherited or temporary post-EU framework with permanent UK arrangements. It gives us an opportunity to make the regime more proportionate and better suited to the UK market while preserving the prudential safeguards on which financial stability depends. We support both instruments in principle, but I have a few important, mainly technical, questions. I hope that the Minister will be able to answer them today; if not, perhaps he could write to the Committee by way of follow-up.

I turn first to the overseas prudential requirements regime regulations. The instrument carries across a substantial number of existing recognitions from the outset, for countries with sophisticated regulatory regimes, such as the US and Singapore, to some with newer and riskier ones. That is welcome because it should prevent a cliff edge for firms when the EU-derived framework is revoked. The separate treatment afforded to Gibraltar also reflects the particularly close relationship between our two financial systems.

It is important to be clear that designation does not make an exposure risk free, automatically give it a zero-risk weight or amount to a blanket finding that every aspect of an overseas regime is equivalent to our own. The Treasury can designate a jurisdiction for particular institutions or exposures and may attach conditions. The detailed prudential treatment will continue to depend on the PRA rulebook and the characteristics of the exposure concerned.

This, of course, places considerable responsibility on the Treasury when deciding which jurisdictions should be recognised and for what purpose. What evidence and methodology will the Treasury use when assessing an overseas regime? What formal role will the regulators play in this determination, and will the Treasury publish its assessment when making a new designation, so that Parliament and the market can understand the basis for the decision?

There is also the question of what happens after a designation has been made. Prudential standards, supervisory capacity and political circumstances can change. How will the Treasury monitor designated jurisdictions on an ongoing basis, and how frequently will their status be reviewed? If standards deteriorate, can a designation be suspended or withdrawn urgently during a period of financial stress, and how quickly could that decision take effect?

Future designation decisions will ordinarily be made under the negative procedure. Given that those decisions can affect the capital treatment of significant overseas exposures, will the Minister explain why that level of parliamentary scrutiny is considered sufficient? Will the Government at least commit to placing a clear assessment of the prudential case and the expected effect of each designation before Parliament?

Finally, on this instrument, Regulation 5 establishes a mechanism for recognising overseas eligible covered bonds, but the initial Schedule does not appear to designate any jurisdiction for that purpose. Can the Minister explain when the Treasury expects the power to be used?

I turn to the Over the Counter Derivatives (Intragroup Transactions) Regulations. These provide a permanent replacement for temporary post-Brexit arrangements, governing exemptions from the clearing and margin requirements in UK EMIR. This is targeted deregulation rather than the dismantling of the wider derivatives regime. It does not exempt ordinary transactions with unrelated third parties, and the FCA retains an important supervisory role. The hope is that the reforms will reduce duplication, release collateral and make it easier for international groups to manage risk centrally.

In considering this instrument, it would be helpful to know how things stand on derivative policy more generally. In particular, are the French still seeking to transfer valuable trade through protective EU regulation or have they seen sense, given the interests of their own companies and banks?

The Treasury says that no significant impact is expected. That is rather disappointing for a deregulatory measure, and it has consequently not produced a full impact assessment. What estimate has it made of the clearing, collateral and administrative costs that firms will avoid and the scale of any hidden costs? How, in practical terms, will the new notification system reduce the time and compliance work involved, compared with the present arrangements? Has Dr Felix Martin of the Cost Benefit Analysis Panel been given a chance to take a view? These are both serious measures, which is why they are subject to affirmative resolution, and I would like some reassurance on the deregulatory impact.

The Government present these reforms as supporting the competitiveness of the UK financial services sector, which is obviously an objective that we support. How does our new framework compare with the treatment of intragroup derivatives in the European Union, the United States or other major financial centres? Will the United Kingdom become a more attractive location for the treasury and risk management operations of international groups? If so, what indicators will the Treasury use to assess whether that benefit is realised?

The FCA’s role will be central. Is the Minister satisfied that it will have the information, expertise and capacity needed to assess potentially complex international group structures within the 30-day period? Where an exemption concerns two overseas entities, how will supervisory responsibility be co-ordinated with the relevant overseas authorities?

Conditions can also change, as the noble Baroness, Lady Kramer, explained. A jurisdiction may introduce capital controls, a local regulator may impose ring-fencing requirements or funds that once moved freely may become trapped during a crisis. What continuing obligation will firms have to notify the FCA of such changes? What power will the FCA have to suspend or withdraw an exemption? The central task in both cases is to ensure that greater flexibility and competitiveness are accompanied by robust supervision, continuing vigilance and appropriate parliamentary transparency. However, I am clear that these are important instruments and, subject to some sensible answers on these questions, we support them.

[Lord Pitt-Watson (Lab)]

My Lords, I thank the noble Baronesses for their comments, some of which go a little beyond what we are trying to address here with these statutory instruments. I understand the concern of the noble Baroness, Lady Kramer, about the FSMA regime, how it works, parliamentary oversight and the rest of it, but not relitigating it when we are talking about statutory instruments would be a better use of everybody’s time.

On concerns about decisions passed by regulators, no new responsibility is being passed to Parliament. These will stay decisions for Ministers and Parliament, not regulators. I specifically mentioned that the recognition of covered bonds would need to be approved by Parliament. Essentially, we are moving from one regulatory regime to a UK regulatory regime. I understand the questions about whether the UK regulatory regime is right, but we should probably not relitigate that now.

The noble Baroness, Lady Neville-Rolfe, asked what criteria would apply to future designations. The Treasury will assess whether recognition of an overseas jurisdiction is compatible with the relevant policy outcomes, which includes protecting the stability of the UK financial system, protecting the safety and soundness of UK banks and investment firms, promoting effective competition in financial services and markets and/or supporting the international competitiveness and medium to long-term growth of the UK economy.

The noble Baroness, Lady Neville-Rolfe, asked about covered bonds issued by other jurisdictions and whether they could receive preferential treatment without further parliamentary scrutiny. The answer to that is no. A specific designation of an overseas jurisdiction in relation to covered bonds would require a subsequent statutory instrument and parliamentary approval. This instrument does not designate any jurisdiction or confer preferential treatment on any particular covered bond markets. There are no current plans to use the power, but it is important that we have it available. I should write to her on the question on the bets. That is well beyond my pay grade.

How does the UK approach compare with that of the EU? The EU removed the previous dependent on third-country equivalence decisions for intergroup treatment through EMIR 3. The EU now uses restrictions linked to specified high-risk or non-co-operative jurisdictions with scope for additional jurisdictions to be identified. The UK instrument likewise delinks intragroup eligibility from Article 13 equivalence but has detailed safeguards and processes designed for the UK framework.

Finally, on why a full impact assessment has not been made, the instrument is not expected to impose significant ongoing direct costs. It largely preserves existing treatment and does not include new designations. A de minimis impact assessment has been prepared. It identifies negligible familiarisation costs and no expected annual direct costs to business. Any material future costs or benefits associated with detailed prudential treatment would arise principally from PRA rules and be assessed by the PRA through cost-benefit analysis.

Today, the Committee has considered two statutory instruments. Although covering different aspects of financial regulation, both support the Government’s objective of maintaining a regulatory framework that is proportionate, effective and supportive of growth, while safeguarding financial stability. The overseas prudential requirements regime supports the Government’s wider programme of reforming assimilated EU financial services law. It brings together currently fragmented provisions within a clearer and more coherent statutory framework, while supporting the transition of assimilated law to the FSMA model of regulation. The second instrument, the Over the Counter Derivatives (Intragroup Transactions) Regulations, replaces a temporary regime that expires at the end of this year with a permanent framework for qualifying intragroup transactions. It gives firms certainty, supports efficient risk management across international groups and avoids unnecessary disruption when TIGER expires.

At the same time, it does not remove the underlying condition that firms must meet to benefit from these exemptions. The Financial Conduct Authority will retain oversight across border exemptions and the ability to object when those conditions are not met. The Government therefore believe that the reforms strike the right balance between reducing unnecessary burdens and maintaining appropriate safeguards. Taken together, these instruments provide certainty, support the competitiveness of the UK’s financial services sector and ensure that our regulatory framework continues to operate effectively.

[Baroness Neville-Rolfe (Con)]

I have just one question. The Minister gave a very helpful reply. He seems to be saying that the second instrument is essentially carrying things over—that both instruments are carrying over from previous EU law, rushed through after Brexit—and putting them on a permanent basis. My questions were about assessment and the FCA, which he answered well. What happens when we have a new designation? Will there be a process of assessment and an impact assessment for that? I can understand where we are just moving things across, but it would be helpful to know what the Treasury’s plan is.

[Lord Pitt-Watson (Lab)]

It would come to Parliament for approval, with an assessment.

United Kingdom: Business Competitiveness

Baroness Neville-Rolfe Excerpts

Tuesday 1st September 2026 Lords Chamber

[Lord Pitt-Watson (Lab)]

I thank the noble Lord for that question. I have been trying to stay in the spirit of our new Prime Minister and to reach the greatest cross-party consensus that we can on this. What the Chancellor and the Prime Minister have said about being really careful about business costs, and making sure that business stays competitive, takes us some way in that direction. But every businessperson will tell you that you need to balance the books, and the comment from my Benches suggested that perhaps, three years ago, that was not taking place.

[Baroness Neville-Rolfe (Con)]

My Lords, I also very much welcome the Minister to his new role, and I thank the noble Lord, Lord Livermore, for his contribution in one of the more difficult Front-Bench jobs, as the Minister is discovering. I will focus on growth, which was the top priority when Labour was elected with a huge majority. Yet many of the measures introduced—higher taxes and an assault on business—have probably reduced growth and competitiveness. So what is the new Andy Burnham Government’s growth target, and when do they expect to achieve it?

[Lord Pitt-Watson (Lab)]

One swallow does not make a summer, but the UK’s growth was number one among G7 countries in the first half of this year and the previous year had record productivity. Dismissing that and saying that growth is not taking place misses the evidence that we are beginning to see. What do we intend to do on this? We intend to follow the policies that have been working: the industrial policy, the planning reforms, the new sources of finance, being sensible about government accounting so that capital is not discouraged, fiscal credibility and good trade deals.

Taxation (Energy and Vehicles) Bill

Baroness Neville-Rolfe Excerpts

2nd reading & Committee negatived & 3rd reading
Tuesday 14th July 2026 Lords Chamber

[Baroness Neville-Rolfe (Con)]

My Lords, this Bill is presented by the Government as a series of targeted measures designed to address a specific issue: the war in the Middle East. I thank the Minister for his full explanation. However, the truth is that what we are discussing is a series of sticking-plaster measures designed to curb some of the worst excesses of what can be described only as an economy seriously in trouble.

The current Government—and, indeed, the one that is to come under the leadership of Andy Burnham—face a deeply serious situation. Last week, the Office for Budget Responsibility warned in its Fiscal Risks and Sustainability report that, without action, public debt is set to move on to an unsustainable upward path in the near future.

A key finding is that early action to head off difficult fiscal outcomes is much less costly than late action. This is partly due to the sheer scale of our national debt. Last year the Government borrowed £129 billion, 80% of which was spent on debt interest in an increasingly jumpy bond market. The OBR estimates that an additional £28 billion a year will be needed to meet the Government’s critical pledge to spend 3.5% of GDP on defence. At the same time, spending on the state pension and on health is projected to rise sharply in the next few years —one of the reasons why I called for a cap on expenditure on pensions as a percentage of GDP in my independent review of the state pension age as long ago as 2022 and why I deplore the failure to hold a full House of Lords debate on the 10-year plan for the NHS.

The Lords Economic Affairs Committee said much the same about the unsustainability of debt years ago in its report National Debt: It’s Time for Tough Decisions. The then chair, my noble and far-sighted friend Lord Bridges of Headley, was quoted at the time as saying that

“our national debt risks developing on an unsustainable path”.

Moreover, we are now spending more on welfare, £334 billion, than we collect in income tax, £331 billion. The new Prime Minister and Chancellor of the Exchequer face the choice of either significant tax rises or deep spending restraint if we are to stop debt spiralling further out of control. Yet the OBR has also made clear that tax rises cannot simply be treated as a limitless answer. Continually increasing taxes risks creating ever greater economic distortions, with the Laffer curve biting into receipts—for example, if the top rate of income tax goes up. Wealth taxes raise less than expected, as we know from overseas experience, and they certainly damage competitiveness. Further stealth taxes on earnings risk weakening work incentives and drag more people out of the labour market.

The key to squaring the circle, as I have discussed with the Minister on many occasions, is growth, particularly per capita growth or higher productivity. EU growth has been sluggish. Yet the Government want to get closer to the EU and agree to a package of changes that will certainly cost hundreds of millions a year, given the difficulties of negotiating with the EU, with no certainty that it will improve our economy to the extent hoped. I am also concerned about the impact on our legally binding obligations under CPTPP and our agreements with the US, particularly on vehicles, which I will come to later, and on pharma—agreements that are vital to UK growth. What is the nature of the legal advice that the Government are relying on in saying that they will continue to deliver such international obligations once a revised TCA is agreed?

The Government’s assault on business—rises in national insurance, business rates, and dividend and capital taxes, and the Employment Rights Act—is already having exactly the effect on business that we forecast, with employment squeezed and a crash in economic optimism and enterprise. A report this week from accountants BDO showed that business activity dropped sharply last month after a brief rebound earlier this year ran out of steam. The truth is that there is a deeply serious situation facing Mr Burnham, and we cannot divorce our discussions today from this backdrop.

That brings me on to today’s Bill. Increasing mileage payments to 55p for the first 10,000 business miles is a measure we support. It is right that workers who use their own vehicles for work, including carers, should not be left to absorb rising motoring costs. I know that the announcement was the early fruit of an ongoing review, as the Minister explained, but can he tell us about the logic behind the difference in treatment for hard-working carers and others who drive more than 10,000 miles a year?

I turn to the HGV excise duty holiday. HGV duty had been frozen since 2014 until Labour came into office. While reducing it to £1 for a year will provide some welcome relief to the sector, it does not solve the problem, and Ministers should not overstate the impact. More than 95% of road haulage firms are small businesses operating on tight margins. The Government say the measure will save around £600 for a typical lorry and £900 for the largest vehicles, yet, to put it into context, filling a single HGV at peak prices can cost more than £1,000. This does not offset the wider pressures that the Government have imposed through higher business rates, transport taxes and fuel duty, with duty and VAT receipts of course rising whenever petrol prices spike. If the Government are serious about supporting businesses in this country, and particularly small businesses, they must consider this policy as one of a series of changes they must make to create a tax and economic environment that backs business, especially small business, rather than penalising it.

I turn now to the electricity generator levy. This was introduced under the last Government as a temporary windfall tax and a short-term response to exceptional circumstances. It was due to end in 2028. However, we now see the Government proposing to increase the rate from 45% to 55% and to extend it beyond 2028 with no end date. The case put forward by the Government is that the increased rates will support the decoupling of gas prices by incentivising generators into voluntary wholesale contracts for difference. However, while the new higher levy applies from today, those new contracts are yet to be seen. I believe the proposed strike price is not known. The likelihood of generators accepting them is therefore unknown and in question, and the value for money for taxpayers is yet to be proven.

Moreover, the HMRC impact note for this Bill contains no figures for the Exchequer impact. We should have that, ideally now or at least during the consultations that the Minister referred to. Rather than acting to lower energy costs by taking sensible steps to increase the supply of energy, such as utilising our resources in the North Sea and moving forward with Jackdaw and Rosebank, the Government seem to be using tax as a long-term lever to alter the incentives faced by generators.

We introduced a short-term, emergency measure with a clear sunset date. Sunsetting is a responsible approach to temporary taxation and short-term regulation, and I think it can be very useful. It helps to avoid the accumulation of too much regulation, and I know the Minister worries about unjustified accumulation because it can have an adverse effect on productivity. Sunsetting has the merit of allowing periodic parliamentary scrutiny and of encouraging officials to think creatively about other routes to a desired end. Instead, the Government appear to be moving to a long-term, final answer when the relevant contracts for difference parameters are unknown and untested.

Before the Minister asks, as he sometimes does, what we would do, the Official Opposition have been clear that we would cut bills for businesses and consumers through our cheaper energy plan. We would take VAT off energy bills, axe the carbon tax and legacy subsidies, and again use our resources in the North Sea as the Norwegians are doing. Tax cannot and should not be the long-term solution to the problem of affordable energy.

At this juncture I might remind the Minister of the OBR’s warning. It also agrees that tax cannot be the solution to all this. As we can see on page 81 of its report, there is a significant fiscal cost to the commitment to reduce carbon emissions to net zero by 2050 due to the loss of revenues linked to such emissions. This is particularly true of fuel duty, with three-quarters of the decline in revenue due to the transition to electric vehicles. This is a good example of the difficulties the Government face in relying so heavily on taxation to finance spending.

This Bill contains measures that in isolation are not without merit, but they must be seen for what they are: limited interventions against a backdrop of rising costs, weakening confidence and increasingly strained public finances. Temporary relief has its place but is no substitute for a serious growth strategy, a competitive tax system, disciplined public spending and an energy policy that brings costs down by increasing supply rather than by reaching for higher taxes. That is the test by which this Bill should be judged.

Climate Change: Housing Insurability, Mortgage Lending and Financial Resilience

Baroness Neville-Rolfe Excerpts

Monday 13th July 2026 Lords Chamber

[Lord Livermore (Lab)]

The Government have already committed significant investment in the transition to net zero, including £2.6 billion to decarbonise transport, £1.4 billion to support the uptake of electric vehicles, £2.7 billion a year for sustainable farming and nature recovery, and £13.2 billion to support the rollout of heat pumps and other low-carbon technologies as part of the warm homes plan, so I do not accept what the noble Baroness has said.

[Baroness Neville-Rolfe (Con)]

My Lords, London is the world’s leading international centre for commercial insurance and reinsurance, which is a subject of this Question. Does the Minister agree that insurance companies, with their considerable long-term expertise, are best placed to determine how the effect of climate change is reflected in premiums? Does he agree that, going forward, that knowledge should influence those—not least our planners—determining where it makes sense to build, so that we get on with housing and infrastructure as we need to do?

[Lord Livermore (Lab)]

The noble Baroness is absolutely right about the importance of getting on with housing and infrastructure, and that is what this Government are seeking to achieve. She is absolutely right to say that a resilient and affordable insurance market is necessary for enabling businesses and households to recover quickly from climate events. The Climate Change Committee has assessed that the insurance gap is currently low relative to most countries. However, without sufficient adaptation, the number of properties that do not have the necessary insurance is expected to grow as climate risks increase. The Government are committed to ensuring that the long-term impacts of climate change are managed. The Government will strengthen the UK’s approach as part of the fourth national adaptation programme, which will set stronger adaptation objectives to improve preparedness for climate impacts.

Pension Access Rules: Impact on Terminally Ill

Baroness Neville-Rolfe Excerpts

Tuesday 30th June 2026 Lords Chamber

[Lord Livermore (Lab)]

Yes, I agree with my noble friend, and I am grateful to him for what he says about the review. As he says, individual private pension schemes have their own requirements for terminally ill people to access their pension savings. That does mean that, too often, individuals experience too many varying hurdles to access, depending on their scheme. The Government will examine the access options across these schemes and consider what changes may be needed to ensure people have appropriate access. To be clear, it is tax-free below the age of 75, up to a total sum of £1.073 million.

[Baroness Neville-Rolfe (Con)]

My Lords, The Pensions Review, along with a whole body of work done by organisations such as the Institute for Fiscal Studies, raises serious concerns about pension adequacy and retirement saving. What steps is the Minister taking to improve financial education and public understanding of the need to save adequately for retirement, particularly among groups such as the self-employed, who are less well served by the auto-enrolment system?

[Lord Livermore (Lab)]

I am grateful to the noble Baroness for her ongoing championing of financial education. I know it is something that she feels passionately about and we have discussed it before. As she knows, financial education now forms part of the school curriculum in all UK nations. In England, financial education forms a compulsory part of the curriculum in mathematics at key stages 1 to 4 and in citizenship at key stages 3 and 4. Together, these cover personal budgeting, saving for the future, financial risk, managing credit and debt, and calculating interest. In terms of the adult population that she refers to, and small and medium-sized enterprises in particular, the DBT is considering this as part of its small businesses work, and I will certainly look into it further in light of her question.