Financial Services Bill

Debate between Baroness Neville-Rolfe and Lord Sharkey

Committee stage & Committee: 1st sitting (Hansard) & Committee: 1st sitting (Hansard): House of Lords
Monday 22nd February 2021 Grand Committee

[Baroness Neville-Rolfe (Con) [V]]

My Lords, I will speak to Amendments 6 and 7 in my name and that of my noble friend Lord Trenchard, who has a lifetime of experience in the financial services sector and understands the whole issue of competitiveness and UK influence from banking for many years in Japan. I am so sorry that because of procedural changes he is now unable to speak to these amendments.

I refer to my interests in the register, particularly as a non-executive director of Secure Trust Bank plc in Solihull and of Capita plc and as a member of this House’s EU Financial Affairs Sub-Committee. I was especially sorry to miss Second Reading of this very important Bill.

These amendments—like the one moved by my noble friend Lord Blackwell and those in the name of my noble friend Lord Bridges—introduce a competitiveness objective for the FCA and PRA. My Amendment 7 also applies to the Bank of England itself. My amendments differ because they spell out aspects of competitiveness that I know are important from a lifetime in business and from nearly three years as UK Minister attending the Competitiveness Council in Brussels.

Of course, consumer protection, stability and standards are important, but they are very well looked after in the structure of financial services regulation, even if the regulators do not always deliver or enforce properly, as we have heard from the noble Baroness, Lady Bowles. I come from a different perspective. Those of us with an understanding of economics know that needless red tape, inefficiency and lack of care for UK interests end up hurting UK consumers with prices that are higher than they need to be, delays that frustrate, and a failure to get things right first time. These also hamper innovation and productivity growth, two of the best ways to both benefit consumers—and I come from a consumer background—and stay ahead internationally.

This matters today even more than in the past. Financial services are the leading sector in the British economy, not only in London but in many other areas of the UK: Edinburgh, Cardiff, Newcastle and Birmingham, to name but a few. In the wake of coronavirus, Brexit and international competition, we need to treasure and enhance our leading position. France, the Netherlands, Germany, Ireland and Luxembourg are trying to steal our lead—but ineffectively, as this hurts their business and consumers and encourages investors and services to move to New York or Singapore. As Mr Barney Reynolds has argued, we must look again at the legacy of EU law, and I know my noble friend Lord Trenchard will have more to say on his ideas on another day.

We must not forget one point: small and entrepreneurial businesses are the backbone of this country. Everyone should remember that the big, powerful multinationals find it relatively easy to adapt to new regulations, rules and requirements, and to lobby for arrangements that suit their interests.

We must also create a benign climate for innovation, which is a vital part of improving efficiency. There is one great example: the Financial Conduct Authority’s so-called “sandbox”—clear, simple and easy regulation for fintech. Thanks for this are due to the current Governor of the Bank of England, but Mr Bailey and I were promoting this as good practice in India four years ago. It is dispiriting that there are not more such initiatives.

As my amendment states, we need “efficiency” and “competitiveness” in the interests of UK plc to feature in the purview of our regulators. A competition objective is not enough; indeed, it can sometimes harm smaller players, driving them bankrupt and causing problems for their customers, as bigger institutions mop up and take over their client base. Competitiveness is sometimes wrongly associated with bad aspects of globalisation. That is wrong: UK competitiveness is what this country now needs to strive for to support the UK base, rather than encouraging the sale of wonderful companies such as Arm to overseas interests. Alex Brummer has argued this forcefully in a series of books, and I agree with him.

While we come at the issue from different angles, I really do want my noble friend the Deputy Leader to listen to those of us who are seeking a change to the Bill to bring in considerations of “competitiveness”. So I will finish with the word’s dictionary definition:

“1. Possession of a strong desire to be more successful than others … 2. The quality of being as good as or better than others of a comparable nature.”


What could be better than that?

[Lord Sharkey (LD) [V]]

My Lords, Amendment 2, in the names of the noble Lords, Lord Bridges and Lord Blackwell, and the noble Viscount, Lord Trenchard, provides an opportunity to reopen an issue that was settled in 2012 by Parliament deciding against adopting a version of what their Lordships now propose.

Their amendment does not come as a surprise, not just because this Bill provides an obvious vehicle for its proposals but because it fits into the usual timescale of loss of institutional memory. Prior to 2012, we had a “have regard” on competitiveness built into FiSMA 2000; it required the FSA to have regard to

“the international character of financial services and markets and the desirability of maintaining the competitive position of the United Kingdom”.

This “have regard” was widely seen as contributing to the financial crash of 2007-08, which is why FiSMA was amended in 2012 to remove it.

During the discussion around and preceding its removal, there were some very forceful observations; three deserve particular attention. The first was from the Treasury, which, in its 2010 report, A New Approach to Financial Regulation: Judgement, Focus and Stability, said that there was strong evidence that

“one of the reasons for regulatory failure leading up to the crisis was excessive concern for competitiveness leading to a generalised acceptance of a ‘light-touch’ orthodoxy, and that lack of sufficient consideration or understanding of … complex new financial transactions and products was facilitated by the view that financial innovation should be supported at all costs.”

Pension Schemes Bill [HL]

Debate between Baroness Neville-Rolfe and Lord Sharkey

Report stage & Report stage (Hansard) & Report stage (Hansard): House of Lords
Tuesday 30th June 2020 Lords Chamber

[Lord Sharkey [V]]

My Lords, I have put my name to Amendment 63 because it is vital to allow the MaPS dashboard the best possible chance of reaching a wide public and establishing MaPS as a trusted and independent operator. This amendment would provide the MaPS dashboard with a head start of about 12 months. Without that, I doubt that MaPS would be able to do any of those things very successfully. I doubt that it could establish a wide customer base. If it is competing from the start with rival commercial organisations and their dashboards, those rival dashboards, whose eventual presence I would welcome, would be provided by organisations that have more resources than MaPS does, more consumer-facing expertise and more experience and skill in communications with consumers. Many would also have a very large existing consumer contact base, firmly established brands and loyalty, whereas MaPS would find it very hard to establish itself as a distinct, recognised and trusted independent operator in the clamour of a vigorous competitive marketplace. You need market share, visibility and actual customer experience to do that. That is probably impossible for MaPS in a very busy, very fragmented and possibly very confusing marketplace.

To make the MaPS dashboard work, we need lots of people to know about it and lots of people to use it. If we are to generate trust, we must provide high levels of consumer satisfaction and embed the notion and value of independence in the MaPS brand. The only way to do this is to allow MaPS a head start, to properly fund its launch and its communication campaigns, and to give it time to use what it learns in its first year. That would enable it to offer a very high level of service by the time that the huge marketing expertise of its well-funded and contact-rich competitors arrives on the scene. That is why I support Amendment 63.

[Baroness Neville-Rolfe [V]]

I welcome my noble friend Lord Young’s probing amendments on verification and timing, and I look forward to hearing from the Minister. I was very struck by the summing-up on the previous amendment by my noble friend the Deputy Leader of the House, who showed just how strong the Bill is on consumer protection and to what lengths the Government have gone to meet the House’s concerns. But others have just tried to use the Bill to bring in yet more burdensome measures.

For me, Amendment 63 takes the biscuit, because the Government have agreed to bring in a Money and Pensions Service dashboard so that there is a government, public-funded version that includes people’s various pension pots and the old-age pension. The proponents of this amendment are then trying to exclude the trail-blazing commercial version, which was behind the Bill in the first place and is designed to help savers, building on the good practice that exists out there in the best pension funds and elsewhere. The amendment would lead to a delay of a year for those dashboards, yet they will all be properly regulated and monitored and MaPS would be in the lead. Competition from others will be an incentive to quality and speed, helping to identify the bugs that the noble Baroness, Lady Drake, who knows so much about pensions, referred to.

I cannot support this amendment. It is worrying that the Government are losing on a series of inappropriate amendments because noble Lords are not coming to the House to speak and listen, but can vote from their garden benches.

Pension Schemes Bill [HL]

Debate between Baroness Neville-Rolfe and Lord Sharkey

Committee stage & Committee: 2nd sitting (Hansard) & Committee: 2nd sitting (Hansard): House of Lords
Wednesday 26th February 2020 Grand Committee

[Baroness Neville-Rolfe]

I would also like to be involved in the further talks. We have to try to find a way of dealing with big risks between recovery plans without gungeing up the system for the regulator so that it cannot focus on what matters rather than on what does not matter with the bureaucracy overtaking the objective.

[Lord Sharkey]

I also want to be invited. A critical feature of the discussion is the effectiveness of TPR. When we have the meeting—to which almost everybody seems to be invited—it would be very helpful to have a detailed discussion on what assessment the Government have made of the performance of TPR against its three key principles, certainly in the past year and perhaps slightly longer. I know the Minister gave an example of TPR being effective, but that was one example and I would like to see more data on why we should have faith in TPR’s ability to police this scheme or any scheme.

European Union (Withdrawal) Bill

Debate between Baroness Neville-Rolfe and Lord Sharkey

Report: 6th sitting (Hansard): House of Lords
Tuesday 8th May 2018 Lords Chamber

[Lord Sharkey (LD)]

My Lords, I declare an interest as chair of the Hansard Society, whose work on delegated legislation will be familiar to many of your Lordships. I will speak briefly in support of Amendment 70—the sifting amendment—to which I have added my name. I will also speak briefly to introduce Amendment 71. The noble Lord, Lord Lisvane, has set out very powerfully the case for Amendment 70—for the sifting committees’ decisions to be binding on Ministers—as has the Delegated Powers Committee in its reports.

When we debated an equivalent amendment in Committee, the Government’s argument against the proposal relied chiefly on their assertion that they were in any case likely to accept the sifting committees’ decisions and that, as the noble Lord, Lord Lisvane, said, ignoring them would be, “hopefully, very rare”. This is a very weak argument. It is not based on principle. It is based on a suggestion of compliance, except in undefined, unexampled and no doubt exceptional circumstances. What it really means, of course, is that the Government, at their absolute discretion, will be able to impose the negative procedure on SIs, denying Parliament the more robust and intensive scrutiny provided by the affirmative procedure.

There is simply no case for allowing the Executive this unfettered and unqualified discretion. If Parliament is properly to exercise its scrutiny function in the face of the tsunami of SIs coming our way, it must be able to decide conclusively which SIs deserve higher levels of scrutiny and which do not. That is the whole raison d’être of the sifting committees: they allow Parliament itself to decide which SIs merit what level of scrutiny.

Not only have the Government demonstrated no real need for this override power, they have not even hinted at any harm that might be done by making the sifting committees’ decisions binding. In any case, throughout this Bill we must guard against the unnecessary transfer of power to the Executive. What the Government propose is such an unnecessary transfer of power. I hope that the noble Lord, Lord Lisvane, will press his amendment to a vote. If he does, we will support him.

I turn very briefly to Amendment 71, which is in my name and those of the noble Baroness, Lady Jay of Paddington, and the noble Lords, Lord Lisvane and Lord Norton of Louth. The Government expect this Bill to generate between 800 and 1,000 SIs. There will be many others generated by other Brexit Bills. As things stand, we have only two options for dealing with these SIs: we can accept them or we can reject them. A regret Motion has no practical effect.

In the past, this House has shown an understandable and very deep reluctance to reject affirmative SIs. We have rejected just six in the past 68 years. We have used our “nuclear option” very infrequently. This entirely understandable reluctance to reject will certainly continue for withdrawal SIs. But given the enormous volume of such SIs and the delicate and sensitive areas they will deal with, this proper reluctance to press the red button will almost certainly lead us to approve marginal cases or cases about which we retain serious misgivings. This would be an unsatisfactory outcome for the quality of created law and potentially damaging to the balance of power between the Executive and Parliament.

Amendment 71 proposes an additional method of dealing with affirmative SIs—and it is an additional method; it does not in any way affect our current powers. We would retain unaltered our powers to approve or reject, exactly as at present. Amendment 71 would simply allow us to do what we so frequently do: to ask the Commons to think again. Where we believe that asking the Commons to think again would be desirable, we simply co-ordinate scrutiny so that the Commons can pronounce first. If it rejects the SI, that is the end of the matter. If it approves, Amendment 71 would allow us to ask the Commons, with reasons, to think again. This mechanism would not frustrate the will of the Commons. If it chose not to reconsider within 10 days, the Lords would be deemed to have approved the instrument.

Amendment 71 would give Parliament more flexibility and room for more discussion in dealing with those SIs where real concern exists but where we are properly reluctant to reject. It simply allows a conversation with the Commons, after which the Commons will decide the matter. I commend it to the House.

[Baroness Neville-Rolfe (Con)]

My Lords, I rise to move Amendment 84 and I am grateful for the support of the noble Baroness, Lady D’Souza. During the passage of the Bill I have raised several issues, all of them designed to ensure that the SIs that will eventually be made under it when it becomes an Act will contain as few errors as possible. This may seem a modest aim, but we are in uncharted waters, and the amount of secondary legislation that will be needed, as has been mentioned, and the little time available to make many hundreds of instruments, taken together with the imperfect nature of human faculties, make error all too likely. One way to minimise this is to consult those with knowledge of and interests in the question at issue. This in turn necessitates publishing draft instruments that can be scrutinised by all. As is so often the case, openness is the best antidote for error.

We have made progress. The Minister has kindly arranged for me to meet officials concerned with agriculture, customs, intellectual property and financial services. It is clear to me that proper plans have been made. A few draft instruments have been published, but things are moving forward at a slow pace. We have made less progress on agriculture than I had hoped; I should declare an interest as chairman of Assured Food Standards Ltd, which operates the Red Tractor scheme. However, this is not the fault of Defra, which seems to be well resourced in this area. One of the serious problems for that department stems from recent rows over devolution, which affects draft SIs in the vital areas of agriculture and fisheries. Defra seems unable to publish drafts without the agreement of the devolved Administrations. This has proved to be an unfortunate state of affairs, which would have been better avoided—but in any case it would be better for everyone in the UK, including the devolved Administrations, if many more specimen drafts were published immediately.

There have been several debates on subordinate legislation and I am glad that the Government have made some very important concessions on scrutiny. Indeed, this very evening they have done so on ambulatory references and arrangements in Scotland. However, the Government have also lost on an amendment in this area, which means that they will be looking at the arrangements again in the House of Commons. That is where I believe Amendment 84 might be useful. It is modest—much more modest than my earlier amendments and those of others—and asks the Government to make public their statutory instruments on GOV.UK 10 days before they are laid. That is all I ask. It would be any 10 days, including parliamentary recesses and festivals.

I would like the Minister to write this into law, perhaps as part of the review of Amendment 31, in the name of the noble Lord, Lord Lisvane, and its consequentials. But if that cannot be, I would like her to undertake to add this provision to government guidance on the making of statutory instruments. As an ex-Minister who has had the embarrassment of having to make new orders correcting past mistakes, I can assure her that future legislators and civil servants would thank her. I beg to move.

Savings (Government Contributions) Bill

Debate between Baroness Neville-Rolfe and Lord Sharkey

2nd reading (Hansard): House of Lords & 3rd reading (Hansard): House of Lords & Committee: 1st sitting (Hansard): House of Lords & Report stage (Hansard): House of Lords
Thursday 12th January 2017 Lords Chamber

[Baroness Neville-Rolfe]

I take note of the noble Baroness’s point. There is a balance here. I have set out why we have got to where we have got to. Indeed, I look forward to debates on the statutory instruments for this Bill in the fullness of time. I am sure nobody has ever said that before.

The noble Lord, Lord Sharkey, asked about other providers. He referenced a discussion in the other place about the involvement of credit unions. We have appointed NS&I as the scheme provider to remove significant administrative and compliance costs associated with allowing different providers to offer accounts. An option where we fund NS&I to provide accounts while allowing other providers to offer accounts on a voluntary basis would not provide value for money, but—this answers his question—we shall not rule out the option for a range of providers to offer accounts as long as they deliver national coverage. We felt that the credit union did not do that. That is why the Bill has been drafted to accommodate different models of account provision, although other models are not in the current plan.

[Lord Sharkey]

I am grateful to the noble Baroness for that answer and I understand the position the Government have taken. Are there ongoing conversations with credit unions and other commercial suppliers of both these schemes?

[Baroness Neville-Rolfe]

I believe that the Economic Secretary to the Treasury has had some discussions of which the noble Lord may be aware, but I should not want to suggest that we are about to change the situation. I have made it clear that the provision is written in an appropriately broad fashion. I can also confirm that the Government are not restricting the number of lifetime ISA providers. Provision will be open to any provider with the appropriate HMRC and FCA approvals.

When it comes down to it, this money Bill is all about supporting people who are trying to save, whether through increased support to those on low incomes through Help to Save or through the increased flexibility and choice for younger savers offered by the lifetime ISA. This is a Bill that supports people trying to do the right thing—those who want to save and to be financially prepared for the future. I am therefore pleased to commend this Bill and to ask the House to give it a Second Reading.

Cold Calls

Debate between Baroness Neville-Rolfe and Lord Sharkey

Thursday 29th October 2015 Lords Chamber

[Lord Sharkey]

To ask Her Majesty’s Government what action is being taken to reduce the number of cold calls made to households.

[The Parliamentary Under-Secretary of State, Department for Business, Innovation and Skills and Department for Culture, Media and Sport (Baroness Neville-Rolfe) (Con)]

My Lords, we have already increased the level of monetary penalties that regulators can issue and have made it easier for the Information Commissioner’s Office to take enforcement action. We are currently running a £1.5 million competition fund to encourage the development of more innovative, safe and cost-effective technology to block unwanted calls, and we will consult shortly on calling line identification, a subject close to my heart.

[Lord Sharkey (LD)]

Many cold calls are from companies that sell leads to debt management companies. The FCA said in June that debt management firms are still failing Britain’s most vulnerable consumers, and last November the FCA wrote to the Minister saying that the rules on cold calling in consumer credit needed review. It is a year on, and there is no review. Every day of delay means that more and more people are exposed to faulty debt management advice. But the real puzzle is this: cold calling for mortgages is banned, so why is it not banned for debt management?

[Baroness Neville-Rolfe]

The noble Lord makes a good point and the FCA has committed to undertake a proper review of its rules on unsolicited marketing calls, emails and text messages from consumer credit firms. As he says, that will include debt management firms and so-called lead generators, which are basically data brokers. It will take place early next year. It is delayed but we have already suggested that the FCA might meet the noble Lord to discuss his concerns and ensure that they are fast-tracked.