Amendments of the Law (Resolution of Silicon Valley Bank UK Limited) Order 2023

Debate between Baroness Noakes and Lord Tunnicliffe

Wednesday 19th April 2023 Grand Committee

[Baroness Noakes (Con)]

Before my noble friend leaves this point, I do not think she has addressed the question of why the ring-fence resources had to be used to do this. HSBC is very large and has very large UK operations that are not within the ring-fence, so I have been probing—and I know that the noble Baroness, Lady Kramer, is also interested in this—why the ring-fence has to be used. Why did the ring-fence exemption have to be used, because it is clearly not necessary in any absolute sense for HSBC to provide liquidity support to Silicon Valley Bank out of the ring-fence?

[Lord Tunnicliffe (Lab)]

In bringing this back to us, as the Minister will have to do for the second SI, and responding to these questions, can we have some analysis of the competitive advantage that HSBC will get out of this transaction?

Financial Services and Markets Bill

Debate between Baroness Noakes and Lord Tunnicliffe

Committee stage
Monday 20th February 2023 Grand Committee

[Baroness Noakes (Con)]

My Lords, I support Clause 27 and, in particular, its new Clause 3RC of FSMA, which allows the Treasury to require the regulators to review their rules. As the noble Baroness, Lady Bowles of Berkhamsted, said, I have added my name to her Amendment 78 because it is important to widen out the scope of the reviews which the regulators will have to carry out. I also support her Amendment 145 for the same reason and should have added my name to it as well, so that we cover both the PRA and the FCA.

A lot of the things that regulators do are grounded in the specific rules that they apply, which is the focus of new Clause 3RC, but it should also be possible for the Treasury to tell the regulators to review, for example, the cumulative impact of rules as they affect innovation or new market entrants or any particular segments of the financial services industry. The Bill as drafted simply does not give the Treasury that power.

My Amendment 79A in this group seeks to involve more parties in the review-initiation process. At the moment, it involves only the Treasury and the regulators. My amendment is designed for other voices to be heard and responded to by the Treasury; it would require the Treasury to “consider any representations made” by various sources. I have included all the statutory panels attached to the regulators, including those created by the Bill. These panels ought to have good insights into how the rules work in practice and their opinions on which should be reviewed should be heard, so my amendment says that the Treasury must consider representations from representative bodies, which would include all trade and consumer bodies involved in the sector.

My noble friend the Minister may well say that the Treasury will of course consider any representations made to it in respect of the review of rules and that it is quite unnecessary to put that into statute. I accept that, but only up to a point. The relationship between regulators and their sponsoring departments is often much too close and certainly has the potential to shut out anything that might be uncomfortable for either the regulators or the sponsoring department, or both. That is why the second leg of my amendment requires the Treasury to “inform the body” making the representations if it decides not to require a review.

I do not believe there should be any power for outside bodies to tell the Treasury what it should do, but there needs to be something to counteract the imbalance of power that the Treasury has. Transparency is often the best remedy and it is, in effect, what I propose in my amendment by requiring the Treasury to respond with reasons for not pursuing a particular review. If Ministers do not like the idea of transparency by the Treasury, my noble friend will need to be very persuasive when winding up this debate.

[Lord Tunnicliffe (Lab)]

My Lords, I will not make any specific comments on this group but I will comment on all that we are doing today—certainly the first three groups, all of which seem to me to have a common theme: the accountability of the Executive to Parliament. The degree of consensus between the amendments is almost historic. I said to my researcher, “I think I am in support of all today’s amendments.” She said, “You mean other than ours?”

UK Infrastructure Bank Bill [HL]

Debate between Baroness Noakes and Lord Tunnicliffe

Committee stage & Lords Hansard - Part 2
Tuesday 14th June 2022 Lords Chamber

[Baroness Noakes (Con)]

My Lords, I shall make just a couple of comments. I support the noble Baroness, Lady Kramer, on her Amendment 45, which requires there to be a majority of non-executives on the board. My noble friend the Minister will doubtless say that the UK Infrastructure Bank will have to comply with the UK governance code, and therefore it has to have a majority of non-executive directors. But any public body that is set up always has the provision that there is at least a majority of non-executive directors on the board. It would be good practice to replicate that for the appointments here, given that we are dealing with those appointments in statute anyway.

I am not attracted by having odd numbers on the board. If there had been a problem, it would have surfaced in the UK Corporate Governance Code before now. The plain fact is that if there ever is a situation where a board is split, no chairman will use a casting vote to push something through. Boards simply cannot operate on that sort of basis. Normally something is withdrawn, people regroup and compromise is reached. It is just not a problem in practice, so we do not need to reflect it in the Bill.

One thing I really want to do, I am afraid, is to disagree with the noble Lord, Lord Vaux of Harrowden, on giving appointment rights to First Ministers in the devolved Administrations. I completely accept that the devolved Administrations will want to feel involved but I prefer the formulation in the amendment of the noble and learned Lord, Lord Thomas of Cwmgiedd, which is about recognising that a knowledge base is important to have on the board. Another and more normal way of doing it is to have a consultation option available to take the views of the devolved Administrations.

However, it is really important to avoid having representatives on boards. It will destroy the collective nature of the board if you have people parachuted in from outside with their only virtue being that they were a political appointment. It is really important to preserve the nature of the board as being an area—picking up what is in these other amendments—to bring together the skills and experience necessary to have the right decision-making processes.

[Lord Tunnicliffe (Lab)]

My Lords, I have two interests in this group, having tabled Amendments 48 and 51, but I shall take them out of order as one is general and the other more specific. Amendment 51 is linked to the one tabled by the noble Baroness, Lady Kramer. It seeks to ensure that the bank’s board comprises individuals with knowledge and experience relevant to its objectives.

The second strand of the amendment is arguably more important as it suggests that the board should have knowledge and experience of the nations and regions of the United Kingdom. This is a slightly different proposition from those of the noble Lord, Lord Vaux, and the noble and learned Lord, Lord Thomas. It is vital that the nations of the United Kingdom are properly involved in this process. However, it is equally important that the bank appreciates the very different needs of England’s regions. The Bill sets the objective of achieving regional growth, yet there is no mechanism within it to ensure either a fair split of investment activity across the nations and regions or to address entrenched regional imbalances. Appointing the right board members may not directly address those concerns, but it would at least move things in the right direction.

Returning to the theme of jobs, my Amendment 48 proposes that at least one member of the bank’s board should be a workers’ representative. From previous debates, we know that the Government’s ambition is for jobs created through UKIB funding to be well-paid, secure, and so on. Surely the most effective way of ensuring that the bank supports the right forms of employment is for its board to have somebody with a track record of representing working people.

The Minister will resist the amendment, but in doing so, can she tell me precisely what alternative mechanisms are in place to ensure a voice for workers? I suspect there is none, once again calling into question the Government’s commitment to improving employment practices and rights. Labour wants the bank to be a force for good in all nations and regions of the United Kingdom, creating the highly skilled, secure jobs of the future. The Chancellor talks a good game, but he is falling back on his rhetoric in the Bill. I hope the Minister will reconsider.

UK Infrastructure Bank Bill [HL]

Debate between Baroness Noakes and Lord Tunnicliffe

Committee stage & Lords Hansard - Part 1
Tuesday 14th June 2022 Lords Chamber

[Lord Tunnicliffe (Lab)]

My Lords, I rise to speak to these amendments, but I will make a general point about my approach to today’s debate. I find myself agreeing with a very high proportion of the amendments. We obviously want to hear from the Minister the extent to which the Government agree with them, but it seems that the issues we will face on Report will be about which of these amendments need to go into the Bill, rather than whether they are intrinsically sensible, which I think most of them are. I even venture into uneasy territory in this group by finding myself almost agreeing with the noble Baroness, Lady Noakes, again. I put it in slightly guarded terms—

[Baroness Noakes (Con)]

I have no problem with that.

[Lord Tunnicliffe (Lab)]

The noble Baroness should be uncomfortable as well.

UKIB is not an ordinary bank, but strong arguments have been made for subjecting it to at least some of the regulatory measures under the Financial Services and Markets Act. Of course, we will shortly see a new version of that legislation and it is difficult to know exactly what it will look like. Nevertheless, there seems merit in the suggestion made by the noble Lord, Lord Teverson, that UKIB staff should be passed as fit and proper persons. It may be that the Minister is able to offer assurances that that will be the case. If so, perhaps she could write to us and outline the process in more detail.

The noble Lord, Lord Holmes, talked about the bank’s lending and borrowing powers. These are important questions at this early stage of the bank’s existence and, once again, I look forward to the Minister’s response.

European Union (Withdrawal Agreement) Bill

Debate between Baroness Noakes and Lord Tunnicliffe

Committee: 3rd sitting (Hansard continued) & Committee stage & Committee: 3rd sitting (Hansard continued): House of Lords
Thursday 16th January 2020 Lords Chamber

[Baroness Noakes (Con)]

My Lords, like the noble Baroness, Lady Randerson, I served on the EU sub-committee, led very ably by the noble Lord, Lord Whitty, and took part in the preparation of the report to which the noble Lord referred.

It was very clear from the evidence we received in that committee that some serious issues remain to be resolved. In particular, I single out road haulage, with the issue of permitting. Not all the other sectors present the same degree of difficulty. However, in that committee we took evidence from the Minister in the Department for Transport. While there were no definitive answers, because at that time last year there was a range of possible Brexit outcomes, it is fair to say that the Minister demonstrated a full grasp of the issues involved. I have confidence that the Government are aware of the issues and know what needs to be addressed in order for there to be a successful outcome for all aspects of transport post Brexit: that is, post the implementation period, in effect, so this is not a burning-platform issue.

I cannot support the amendment in the name of the noble Lord, Lord Whitty, because I do not think that reports to Parliament are a particularly useful mechanism, especially in the context of what I believe was relatively clear evidence at the time that the Government were aware of the issues and determined to address them. I look forward to hearing my noble friend the Minister’s response and hope that she will be able to demonstrate to the House that the Government are indeed aware of the issues and committed to finding practical solutions to them.

[Lord Tunnicliffe (Lab)]

I do not normally have sympathy for the Government Front Bench, but I, like the noble Baroness, Lady Sugg, took part in many hours of, broadly speaking, good-natured debates preparing for a no-deal exit. That very action revealed to us the sheer complexity required to make international transport systems work effectively. We were dependent on what we could do for ourselves, because we were in no way able to demand reciprocal action from the EU. Indeed, the EU saw the sheer risks of a no-deal exit and in fact came some way towards providing interim arrangements. Those interim arrangements do not now exist. It is possible that they will emerge between now and the end of December, but given the sheer effort required to do these complex deals, where somehow it is subtly acceptable with our European friends but is not actually like Europe—roughly speaking, that is what the Government are saying—I fear it is impossible.

I do not want to leave the European Union. Most of the House before the election did not want to leave the European Union and probably does not now, but with the odd exception there is virtually acceptance in this House that we have to get Brexit done. We may not like it, but we accept it. However, the sheer practical difficulties the Government face are terrifying.

It also happens that they have picked the worst date of the year. I had a crisis when a permit to operate ran out on 31 December; the alternative was to stop London on 1 January. It was pretty terrifying, because Christmas happens all over the place. Frankly, the end of December is the 22nd if you are lucky. The problem is that everybody else thinks the end of December is the 31st. It turns out that it is not. People are not there—senior people to make decisions and last-minute scrambles, which are what deadlines produce. It becomes utterly chaotic. Anyway, we survived and London did not stop, but it got incredibly close.

During consideration of the Haulage Permits and Trailer Registration Act, we debated the concerns of the freight industry at length. That industry is key to our trading with the EU 27, with millions of road goods vehicles travelling from Britain to the European mainland each year.

Since the passage of the Act, as part of its preparations for a no-deal exit, the Department for Transport began allocating permits via a lottery system, a system that was to be a fallback. Inevitably, because it is so overwhelmed, that became the main allocator. Figures show that less than 1,000 of more than 11,000 HGV operators' applications for annual permits were successful. With a deal now in place and a time-limited transition period running to the end of December, hauliers, drivers and users of other transport modes will be able to continue largely as normal.

However, as with other topics debated in recent days, there is no certainty about the post-December 2020 picture. Indeed, with the Government imposing hard deadlines for a new trade deal, transport operators face a renewed threat of suboptimal contingency measures. I lived in the transport industry. The lead time simply to have the right people in the right places to load the trains, drive the trains, fly the aeroplanes takes weeks and months. If you do not know what you are going to do in an industry that is so integrated, chaos reigns.

I welcome my noble friend Lord Whitty’s amendment and look forward to the Minister providing more up-to-date information. We have had precious little detail from the Government on their plans for future UK-EU transport arrangements, and while we accept that this will be subject to negotiation, I hope the Minister can indicate the type of arrangements that we will be seeking, and that the Government are successful.

Financial Services Bill

Debate between Baroness Noakes and Lord Tunnicliffe

Monday 12th November 2012 Lords Chamber

[Baroness Noakes]

Will the Minister elaborate on what he said about the role of this amendment in relation to the fostering of a successful financial services industry in this country? The UK is a service-led economy, and the largest sector within it is the financial services sector. If we are looking at sustainable growth in the UK economy in the medium term, and probably in the long term as well, we need to look to a successful financial services sector. I thought that I heard the Minister say something along the lines that this is really about the non-financial services sector and about underpinning economic growth outside it. It seems to me that the amendment enables the regulators to take into account the importance of a successful and sustainable financial services sector that is competitive internationally, because it is through that that we will produce growth in the UK economy. I will be interested in the Minister’s views.

[Lord Tunnicliffe]

It is not often that I rise to offer sympathy to the Minister. He was quite right to say that the generality of this amendment, which in my recollection came from all sides of the House, particularly from these Benches, was stressed by us in another place. Every now and then, one has to look at a massive Bill such as this and recognise that the final test of all legislation is that it contributes to the general good. I think that the two lines of this growth amendment produce the right reminder to the regulators that they have to contribute to the general good—I share the emphasis placed by the noble Baroness, Lady Kramer, on the medium and long term—and I warmly welcome it.

Financial Services Bill

Debate between Baroness Noakes and Lord Tunnicliffe

Wednesday 17th October 2012 Lords Chamber

[Baroness Noakes]

It might help those Members of the Committee who did not hear my opening remarks if I say that my amendment is designed to ensure that the power of direction can be used for all of the functions of the Bank of England not simply those listed in Clause 57(2). I also said that it probably ought to exclude the functions related to monetary policy.

[Lord Tunnicliffe]

I spent some years sitting on the Benches opposite facing the noble Baroness, Lady Noakes, and it comes as a refreshing new experience to find myself so frequently in agreement with her on this Bill. I am sure that will distress her as much as it is distressing me. Unfortunately, her caveating remarks are every bit as important as the lead remarks recommending the amendment.

We would not be able to support the amendment as drafted because, as she rightly points out, it could involve a direction to the MPC. This part of the Bill is a limiting list. The noble Baroness may want to consider either extending the list—we would look at that with great interest—or reversing it and extending the powers to the whole of the activity as her present amendment does and then caveating it with a number of areas where this power could not be used. This is a very useful amendment to develop the debate. I look forward to the Minister’s reply and thank the noble Baroness for proposing it.