Financial Services and Markets Bill [HL]

Baroness Young of Old Scone Excerpts

2nd reading
Monday 8th June 2026 Lords Chamber

[Baroness Young of Old Scone (Lab)]

My Lords, I declare my environmental interests as listed in the register, and I thank the Minister for his engaging introduction. He obviously knows something about this, and I look forward to discussing amendments with him in Committee.

I want to draw the Minister’s and the House’s attention not to the specific things in the Bill but to the specific things that are not. The Minister very adequately outlined how important the UK is as a financial centre. It is home to the biggest share of international bank lending and borrowing, it is big in insurance, it is big in pensions, and it has developed a reputation for being big in sustainable finance. UK financial services have major further potential to accelerate the transition to a climate-positive and nature-positive economy and to unlock green growth. I will focus on that today. It is disappointing that the Bill does not move that agenda forward, and the Short Title gives a bit of wriggle room to get some good stuff in.

One of the Government’s stated goals is to make the UK the green finance capital of the world, so I do not think I am trying to press for something that has not already been endorsed by the Government. I am simply lending a helping hand to get us on the road and to make sure that the Bill is not a missed opportunity. Let me give two brief examples and one more substantial one of the issues that the Bill could have tackled. First, the 2024 manifesto and the financial services growth strategy said that the Government intended

“mandating UK-regulated financial institutions—including banks … pension funds, and insurers—and FTSE 100 companies to develop and implement … transition plans that align with the 1.5°C goal of the Paris Agreement”.

These plans would state how each of these institutions would reduce emissions, reshape investments and business activities and manage climate-related risks. The Government consulted in 2025 on taking forward these requirements, but since then there has been silence. The Bill could have introduced legislative action on mandation, and I would like to press for that.

The second example is that the Bill could have made progress on mandating nature-related disclosures. The Institute and Faculty of Actuaries warns that too many financial institutions insufficiently account for climate and nature-related risks in their decision-making and risk management. I think that the insurance industry is very rapidly waking up to those impacts. Reporting on climate-related financial disclosures, TCFD, is mandated for the 1,300 largest UK-registered companies, but TNFD, the nature-related financial disclosures, is not, though these are mandated in the rest of the European Union. Sorry—I should not say “the rest of the European Union”, since we are not in the European Union any more, but you know what I mean. If we do not get some movement in the Bill, can the Minister tell us when and how the Government intend to bring forward nature-related financial disclosures in any way other than voluntarily?

The missed opportunity I really want to focus on most today is the action that we need to tackle the financing of international deforestation. I declare an interest as chair of the Forestry Commission. Deforestation and nature loss pose material risks to financial systems, as nature-related risks could reduce UK GDP by 6% over the next decade, according to the Green Finance Institute. The World Economic Forum ranks biodiversity loss as the second-greatest long-term risk globally. In the Environment Act 2021, we committed to bringing into force secondary regulations, under Schedule 17, to prevent businesses using illegally produced forest goods and to require them to exercise due diligence systems and introduce reporting. Ministers, if pressed, continue to state that an approach on this will be set “in due course”—I love that phrase. This is strange, because at COP 26 the UK positively led and brokered a deal to end and reverse deforestation by 2030. It was a real piece of global leadership.

Since then, we have had the Government’s own security assessment that deforestation-driven biodiversity loss and ecosystem collapse are high-level threats to the UK’s national security. If noble Lords have not read the security report Global Biodiversity Loss, Ecosystem Collapse and National Security, do read it. It is short but devastating, and I would have a stiff gin by your side while you read it. It is an official UK Government security assessment, so it is not just us greenies being alarmist.

The Financial Services and Markets Act 2023 requires that the Treasury

“carry out a review to assess the extent to which regulation of the UK financial system is adequate for the purpose of eliminating the financing of the use of prohibited forest risk commodities”—

a commitment to make sure that we deal with the issue of forest products. I ask the Minister whether the review committed to in that Act is happening and, if not, why not and when it will be undertaken, because its results could have been in this Bill by now. I urge the Minister, at the very least, to persuade his colleagues in other government departments to lay the regulation under Schedule 17 to the Environment Act, which would make it illegal to use commodities in the UK that have been produced on illegally deforested land. This would at least be a step in the right direction.

I do not know about you, but if noble Lords read the Government’s security report, which talks about terrorism, state threats, pandemic risk, economic insecurity and everything else including fallen arches, I think they would be pretty scared by it. I certainly am. Let us not miss the opportunity of the Bill to deliver on the Government’s environmental commitments.

Digital Markets, Competition and Consumers Bill

Baroness Young of Old Scone Excerpts

Committee stage
Monday 5th February 2024 Grand Committee

[Lord Vaizey of Didcot (Con)]

My Lords, I support the amendment of the noble Lord, Lord Mendoza, as well and declare my interest as a trustee of Tate. Everything that has been said is absolutely accurate. This is one of those situations where we are all on the same page, in the sense that I think the Government recognise that this is an issue that needs some clarity. It is certainly not their intention at all to put charities in a position where they will lose access to gift aid based on subscriptions or donations that are given to them on a regular basis by the people who support them.

The noble Lord, Lord Mendoza, indicated that many charities depend on membership subscriptions; that is the vernacular used when you join an organisation such as the National Trust or take out a membership with Tate. Certainly, by my now being poacher turned gamekeeper, as it were, and being on the board of a large museum, I see at first hand just how important subscriptions are to Tate. They are a really important revenue generator; we are very successful in securing memberships. They are a way forward for a lot of our national charities to engage a wide community who may not be able physically to visit the museum or organisation. People who live abroad can also potentially become members, although I appreciate that they would not necessarily be able to give gift aid in that respect. This is a huge way forward and it would be a retrograde step if charities found themselves in a difficult situation.

I gather that the Government have made it absolutely clear that, if you take out a subscription and receive nothing in return, that will to all intents and purposes be an annual or monthly donation on which gift aid can be claimed. However, as the noble Lord, Lord Mendoza, indicated, a lot of ancillary benefits now come with membership as a way of attracting people to take it. Obviously, in the case of museums, that might be free entry to their paid exhibitions and a regular magazine. I was unaware until the noble Lord rose that silent discos are now part of the mix—although I gather that the Natural History Museum calls them dino discos, which makes them even more attractive and means that I will leave this Committee and immediately take out a subscription.

The reason that the amendment has been put forward is to provide clarity in the simplest way. Charities are exempt from VAT and can claim gift aid. This does not provide a Trojan horse, where a private company says “Okay, the way to get around the welcome consumer protections that the Government are bringing in is to claim that we are a charity”. Charities have to go through a lot of hoops to become a charity, so exempting them from Schedule 20 would provide exactly the clarity that is needed.

As I say, we are here to listen to the Government because we know that they recognise that this is—I was going to say “a problem”—an issue. The Government are therefore in a great position to tell us what their thinking is as this is a discussion between those of us who have concerns and the Government who recognise those concerns and want to allay them with either their own amendment or clarity from the Minister.

[Baroness Young of Old Scone (Lab)]

My Lords, I regret my inability to be present at Second Reading. I support Amendment 149 from the perspective of having been chief executive of two membership charities—the RSPB and Diabetes UK—and my current experience as chair of the Woodland Trust. All three of these charities, and many others about which noble Lords have heard tonight, rely significantly on membership subscriptions and the associated gift aid for their important works. There are big numbers of people involved. As noble Lords heard, the RSPB has more than 1 million members and the Woodland Trust is hotly pursuing it and increasing its membership.

However, I take a slightly different perspective from that of the noble Lord, Lord Mendoza, because it is important to understand that the relationship of membership charities with their members is not transactional. It is not about saying, “You give us this money and we will give you these services”. It is not like that at all. There are ancillary things that members get, but I would not have thought that there are many cases of people giving money to these charities simply in return for the services that they might receive. It is more of a relationship of trust, in which members become part of the charity’s family. The membership donation is unconditional and unrestricted. The member says, “I trust you, as an organisation, to continue to do good things with my money, as you have demonstrated in the past”.

As noble Lords have heard, eligibility for gift aid means that membership subscriptions cannot be cancelled, although they might not be renewed if members fall out with the organisation. The risk is that that very different non-transactional relationship is swept up with the idea of subscription contracts and that, somewhere along the line, these charities lose their valuable gift aid. I am sure that the Minister will assure the Committee that that is not intended but, as much as I trust his assurances, it would be safer if Amendment 149 were agreed and added to Schedule 20 to the Bill.

--- Later in debate ---

[Lord Offord of Garvel (Con)]

I thank both noble Lords for their interventions. To take the latter point first, it is absolutely the case that charities are required to live within the statute book generally and are not given exclusions. To take the point made by the noble Baroness, Lady Young, I accept that there are commercial elements to these donations. That may not be the primary purpose but they are commercial none the less, and there are examples where benefits are given to donors in return for donations.

[Baroness Young of Old Scone (Lab)]

That is the exact opposite of what I was trying to get across, so obviously I was not being very clear. The point is that the vast majority of donors give donations to an organisation for the good work that it carries out, rather than because it is a subscription to a particular service. It is therefore not a transactional relationship. It is not, “I will pay you to get this delivered”; it is, “I will pay you because you do really good stuff and I want you to keep doing it”. It is a non-transactional relationship, while subscription contracts are a very transactional relationship. That is the point I was trying to get across.

[Lord Bassam of Brighton (Lab)]

I have another point that the Minister might like to think about. Interestingly, the noble Lord, Lord Mott, was arguing for an exemption for micro-businesses. The Minister said earlier that he would be interested to discuss ways in which that might be practicable. Why can we not have a similar discussion on the point about an exemption for charities?

Retained EU Law (Revocation and Reform) Act 2023 (Revocation and Sunset Disapplication) Regulations 2023

Baroness Young of Old Scone Excerpts

Tuesday 17th October 2023 Lords Chamber

[Lord Offord of Garvel (Con)]

I thank noble Lords for their contributions to this debate, which has obviously had a lot of airtime in this House. I turn to some of the points raised. The noble and learned Lord, Lord Hope of Craighead, made many contributions to the Act. The point about the devolved Administrations is well made, in particular in relation to the Scottish and Welsh consents that are required for this, both of which have now been received. The timing of this is that it has to be through these Houses by 31 October, with limited time to seek agreement with the devolved Governments, but these agreements have now been sought and given by the Welsh Government and the Scottish Government. This completes the suite of amendments in this parliamentary time, so this is going on the statute book. We will then go forward in the new Session of Parliament as the need arises, as and when reform is required and as and when revocation is required. As far as this process is concerned, the devolved Governments have been consulted properly.

In relation to some of the specifics, and there are a lot of specifics with 93 Bills being dealt with here, I take the very specific point raised by the noble Lord, Lord Hacking, on alcohol, as one point of many. With all these laws one can access the GOV.UK website where there is a line-by-line explainer for each one. This particular one is the Alcoholic Liquor Duties Act 1979. It restricts the carrying on of certain other trades by a distiller or rectifier within three kilometres of a distillery or rectifying house. Prior to August 1992 that restriction was within two miles. This legislation is now inoperative as it amends provisions that were revoked in 1979.

It is an example of quite a lot of Acts that were on the statute book and have indeed been updated, not least the Companies Act, revoking previous Acts. This is literally a tidying-up exercise. It falls within the remit of REUL, and is one of the benefits of the wider process that we are going through.

I turn to the general principle on which the noble Baroness, Lady Suttie, has requested further detail. It is clearly to do with the fact that this comes across all departments, and all departments are required to give their views. In fact, taking the 93 revocations, we already have 11 departments contributing to that. The Government have already reformed or revoked over 1,000 pieces of REUL. In addition to the list of 587 in the REUL Act, we have the Financial Services and Markets Act 2023 and the Procurement Bill, which will repeal around 500. All told, this comes to more than 2,000 revocations and reforms already completed or under way, of the original estimate of 6,000—this work is well under way.

[Baroness Young of Old Scone (Lab)]

I thank the Minister for giving way. He highlights an issue that was absolutely centre stage during the REUL Bill discussions: that this is a very complicated situation with a lot of pieces of legislation. It is very heavily dependent on individual departments spotting the right things and not forgetting things that should be retained or got rid of. The original dashboard is not much help in that, quite frankly; it should be the common hymn sheet that we are all singing from.

With that in mind, would it not be advisable in future, if further statutory instruments come forward, that there is more general consultation in advance of the statutory instrument being laid, because by that time it is too late? Apart from that, most people could not find the explainer; it was not terrifically visible—you had to work hard to get your hands on it. I just think it is too risky.

With this vast range of legislation—which has to be scrutinised and decisions made on whether it is “snog, marry, avoid”, as I typified it in the last debate—it would be better to have lots of eyes focusing on it in the form of a public consultation; it could be very brief, just to make sure that we do not drop any balls as this goes through. It is very nice for the Government to say that they have looked at all this and it is undoable, no longer required or obsolete, but, if we cannot have proper scrutiny, we have only their word for that.

[Lord Offord of Garvel (Con)]

I thank the noble Baroness for her contribution. This is a complicated area—there is no question about it. The dashboard is continually updated and has just been updated again. There is, therefore, full transparency on this matter, but, as was referenced by the noble Lord, Lord Hacking, one can go through each one of these and their detail each time, and there is no question that it is a complicated process. However, we have embarked upon the process and it is under way, and I think the revision that we came to is sensible and pragmatic.

I point out that, at the end of the day, with these revisions, we are talking about the preservation of four out of 587. I would say that that is a pretty good result, looking back to see that the original assessment was correct. During the debate—and in particular regarding the amendment in the name of the noble and learned Lord, Lord Hope of Craighead—assurances were given that this process would be done in full consultation with the House. Within those protections, we now have a road map.

I turn to the final point raised by the noble Lord, Lord Leong, in relation to the overall process around the issue of leaving the EU. There were two points in particular. First, on the Northern Ireland Civil Service, we all regret the fact that there is no Executive in place at the moment, but, again, this is referring to only three situations. There is constant dialogue with the Northern Ireland Civil Service, and that is working well, so we can continue the process as is. However, we all hope that the Executive will come back into being as soon as possible.

Secondly, on the issue of divergence, there is no concept of divergence for its own sake. There is to be no diminution in our trading standards, our employment law standards or how we feel about the environment and so on within these rules, but we have the opportunity to modernise, revoke, get rid and tidy up, and that major process is going ahead. On the face of it, with the Brexit deal that we did, we have a free trade agreement with Europe and we continue to trade strongly with Europe. There is no diminution in our business ability effectively to trade with Europe, and I do not envisage that that will be the case. This is part of an ongoing process that will now run through in the normal course of business through each parliamentary Session, where government departments will, as a matter of the ordinary course of business, review these laws and regulations and, when required, they will come back to the House by means of the SI process.

With that, I believe I have addressed all the questions posed by noble Lords. I hope I can look forward to the House’s commendation of the regulations.