Financial Services and Markets Bill

Debate between Baroness Penn and Lord Thomas of Cwmgiedd

Committee stage
Wednesday 1st February 2023 Grand Committee

[Lord Thomas of Cwmgiedd (CB)]

Would the Minister be able to get the views of the FCA and the PRA on this matter? It would be interesting, in examining consistency and all these issues, to see if—hopefully—they could do that in no more than two pages.

[Baroness Penn (Con)]

Is the noble Lord referring to their views on the question of proportionality and efficiency, or on a specific case?

[Lord Thomas of Cwmgiedd (CB)]

On the specific question of drafting rules, what do they think their mandate is? Do they accept that the rules have to be proportionate and clear? It would just be very useful to know how they see their new approach to things. I think it can be done in two pages, but that is a good test.

[Baroness Penn (Con)]

I am sure that the regulators have provided some of those views already. For example, they gave evidence during the Commons Committee stage of this Bill. I do not want to speak for them but I absolutely undertake to the Committee to seek that from the regulators, and obviously it will be down to them as to how they wish to deal with the request. With that, I hope that noble Lords will not press their amendments.

UK Infrastructure Bank Bill [HL]

Debate between Baroness Penn and Lord Thomas of Cwmgiedd

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

[Baroness Penn (Con)]

My Lords, before turning to the detail of the amendments, I will give a short update on the bank’s recent appointments, as it has recently appointed its first non-executive directors, who all have extensive expertise in the bank’s areas of interest.

These include Bridget Rosewell CBE, who brings experience as a director, policymaker and economist, with roles in the M6toll company, Northumbrian Water Group and Network Rail, among others. Also appointed is Nigel Topping, who will bring a unique mix of experience across manufacturing businesses in the UK regions and industrial transformation to the zero-carbon economy. He was most recently appointed by the Prime Minister as the high-level climate action champion for COP 26, where he launched the Race to Zero and the 2030 climate breakthroughs.

The bank is also ensuring that it recruits the necessary technical expertise, including welcoming its first lead climate advisor, Professor Andy Gouldson, an internationally recognised expert on place-based climate action, who will work with the bank to shape its impact. Noble Lords may also be interested to know that the bank’s chief risk officer, Peter Knott, is a non-executive director at the Scottish National Investment Bank. I have no doubt that the board will be able to act in the interests of the whole United Kingdom when carrying out its duty.

I turn to the detail of Amendments 43, 44 and 45 in the name of the noble Baroness, Lady Kramer. As she said, Amendment 43 would change the maximum number of directors on the bank’s board from 14 to 13. I can see the logic for doing so, to prevent a tie in a board meeting vote. However, as set out in the articles of association and in line with market practice, quorum for board meetings is lower than the total number of directors and, in a scenario where there is a tie, it is the chair of the meeting who takes the deciding vote—again, as is standard market practice. This is set out in paragraph 92 of the bank’s articles of association. Furthermore, reducing the maximum board size to 13 limits the bank’s flexibility to have committees with separate membership. Amendment 44 would require the number of directors to be an odd number—again, with a similar intention to that of Amendment 43. On both these points, as my noble friend Lady Noakes said, there is nothing in the corporate governance code about these matters. The same arguments apply to what would happen in a tie for Amendment 44 as for Amendment 43, with the chair having the ability to cast the deciding vote.

Amendment 45 would require NEDs to hold a majority on the board. This is very sensible, and is in the framework document and the corporate governance code. When drafting this legislation, as we have discussed, we have sought to strike a balance between what is sufficient to be in the framework document and articles of association, and what needs to be in the Bill. The bank will report on compliance with the corporate governance code annually through its report and accounts, which are published in Parliament.

Amendments 46, 47, 48, 50 and 51 are all related to the experience of the board. Amendment 51, in the name of the noble Lord, Lord Tunnicliffe, and Amendment 50, in the name of the noble and learned Lord, Lord Thomas, would ensure that the bank has the right expertise to fulfil its objectives, and has appropriate regional experience. Amendment 46 from the noble Lord, Lord Vaux, is similar, although it allows the devolved Administrations to recommend their own nominee for the board. Amendment 47 from the noble Baroness, Lady Bennett, is a combination of the two, with recommendations on directors coming from the Climate Change Committee, the devolved Administrations, Natural England and relevant devolved bodies.

I understand that these amendments all seek to ensure that the board has adequate representation to meet its objectives. I reassure the Committee that non-executive directors are recruited in line with the guidelines set out by the Office of the Commissioner for Public Appointments and were selected based on the skills that they could bring to the board around UKIB’s mandate and objectives. I understand why the noble Lord, Lord Tunnicliffe, is minded to have a non-executive representative of workers, as set out in Amendment 48, but I hope that he will see with the appointments to date and the process that appointments must go through that this is not necessary.

The Government are committed to ensuring that the bank delivers for all four nations, and the Treasury has engaged with the devolved Administrations throughout the set-up of the bank, and will continue to do so to ensure that the bank delivers for all nations of the UK.

[Lord Thomas of Cwmgiedd (CB)]

I think that the Minister mentioned the appointment of someone with knowledge of Scotland, but what about Wales and Northern Ireland? Is the Treasury taking active steps to do something about representation on the board from someone with detailed knowledge of Northern Ireland and Wales?

[Baroness Penn (Con)]

My Lords, I believe that there are a number of different routes by which the bank can ensure that it works closely with the devolved Administrations.

[Lord Thomas of Cwmgiedd (CB)]

The reason why I asked the question was to do with public confidence from Northern Ireland, Wales and Scotland. That is critical at this stage of keeping the union together. I know that the Minister, who is very helpful on this Bill, may not be able to answer that tonight, but I shall return to this issue with detailed questions on Report, or press an amendment.

[Baroness Penn (Con)]

I understand the noble and learned Lord’s point, and recognise that I have been given notice that he will return to it at Report. All I was simply going to say was that I understand the point about confidence, which can be achieved in a number of different ways. His amendments suggest one of those, and I was seeking to describe some of the other ways in which UKIB has approached this in collaboration with the devolved Administrations and will continue to do so. I just note that we are seeking legislative consent for relevant aspects of this Bill.

United Kingdom Internal Market Bill

Debate between Baroness Penn and Lord Thomas of Cwmgiedd

Consideration of Commons amendments & Ping Pong (Hansard) & Ping Pong (Hansard): House of Lords
Wednesday 9th December 2020 Lords Chamber

[Baroness Penn (Con)]

My Lords, the Government made a number of commitments on the shared prosperity fund in the manifesto, both about the overall quantum of the fund and the funding that different parts of the UK can expect to receive. We set out in the spending review that that would ramp up to £1.5 billion per year as the structural funds tail off. Our approach will be guided by that but, as I say, more detail will be set out in advance of the operation of the fund in spring next year, with the multiyear settlement coming in the following year.

[Lord Thomas of Cwmgiedd (CB) [V]]

I thank all noble Lords who have spoken in this short but interesting debate. I will deal with the Minister’s points in turn.

First, it seems clear that these powers—the Minister actually said this in Committee—were being taken to give the UK Government power to spend across the United Kingdom. These powers would plainly not be needed unless they were encroaching on devolved powers. City deals can be done without them; the Government can spend without them. I say respectfully to the Minister and to those who say this is a financial matter that it is not. When powers are devolved, the spending power goes with them. The reason of financial privilege is not correct.

Secondly, on how the funding works, I find it difficult to understand why, in light of what the Minister has said, she cannot agree to the very short amendment I have put forward. It spells out the principles, deals with consultation and ensures that, within the areas of devolved spending only—the amendment is clear on this—there should be agreement so that funds are spent together. With respect, the importance of this amendment is to show that, as we go forward, we do so as a United Kingdom with the central UK Government and the devolved Governments working closely together. Putting this provision in the Bill, particularly the structure under which this is to be done in this area, would be an enormous reassurance. It would strengthen the union, not imperil it, by enabling inconsistent spending to occur in devolved areas. Having listened to the debate and heard what all noble Lords have said, I seek to take the opinion of the House on this issue.

United Kingdom Internal Market Bill

Debate between Baroness Penn and Lord Thomas of Cwmgiedd

Report stage & Report: 3rd sitting (Hansard) & Report: 3rd sitting (Hansard): House of Lords
Wednesday 25th November 2020 Lords Chamber

[Baroness Penn (Con)]

The Government are seeking the power under this Bill to spend across the whole of the United Kingdom in the areas set out in the Bill. The operation of the £220 million announced at the spending review will start from the next financial year and the full shared prosperity fund will begin the year after. More detail on how that will operate will be set out in due course.

[Lord Thomas of Cwmgiedd (CB) [V]]

I thank all noble Lords who have spoken in this interesting debate. I apologise to the noble Baroness, Lady Noakes, for referring to the document published today as the Red Book instead of its true colour which, as one sees on the screen, is blue. I was misled by the heading Google has for it, which is the Red Book.

However, Google had another use because it took up a point made by the noble Lord, Lord Naseby, and alerted me to the fact that the great and late Senator McCain had a member of staff who would go through Bills before Congress and find where there were pork-barrel provisions. He was known as the ferret, so ferrets do have great uses in politics.

To return to the points made, it is clear from the debate that we all share a number of objectives: first, to have a more prosperous United Kingdom; secondly, to spend the money wisely; and thirdly, to spend it in a way that is effective and goes to those areas that need it. We all believe that such spending and levelling up will benefit the union. However, there is profound disagreement as to the way in which this should work with our devolution settlement. It seems to me from the response given to my noble friend Lord Purvis of Tweed and from the Minister’s speech that only one conclusion can be drawn from what the Minister is saying and that these powers are needed not to spend the money outside the areas of devolved competence but to spend it in the areas of devolved competence. That is the aspect that fundamentally divides us and is fundamentally wrong about this clause. It seems to me that, given the Minister’s position and the clarity that comes through her statements, this is a direct attack on devolution under the guise of some other words. Therefore, I seek to press to a Division the amendment that I tabled to remove this clause, which is so destructive of our union.