Procedure and Privileges

Lord Duncan of Springbank Excerpts

Tuesday 13th July 2021 Lords Chamber

[Baroness Goudie (Lab) [V]]

My Lords, I welcome the opportunity to discuss the commission’s proposal for procedures for the workings of the House of Lords from 6 September. We, as a Government and a country, are moving forward as global Britain with modern ideas for the future.

I have enjoyed working with the hybrid system. I have had no difficulties and any small problems were quickly remedied. The technical team is excellent. What is the rush for us to come back fully in September? Many companies, whether FTSE 100, FTSE 350 or large family firms, are offering their staff to come back in their own way or not to come back at all. I am not suggesting that, however.

The Prime Minister recently said:

“We’re removing the Government instruction to work from home where you can but we don’t expect that the whole country will return to their desk as one … We’re setting out guidance for business for a gradual return to work”.


This is why I question yet again the rush for us to come back.

Further, what does the committee mean by “disability”? A number of members of staff and many Members of this House are extremely vulnerable or having treatment, or have compromised immune systems. The Prime Minister urged us to think of others and to consider the risk. I ask noble Lords to consider the risk to ourselves and to the staff and gradually, over the next 12 months, to keep the hybrid model.

This model could be improved even further. The wi-fi on the estate is not up to speed or to the standard of many firms or other institutions. Will we invest more in wi-fi and further connections to the estate? In certain parts of the estate the wi-fi does not work at all. Trying to vote on your phone in the House is impossible. It is impossible to make a phone call. Wi-fi may work for a small number of colleagues, but we know from experience that the function declines with more people in. What is being done to improve it? We have been asking for a number of years but nothing has happened.

Card readers do not always function well when it comes to opening doors. They need to be looked at again and a fuller report given.

How are we going to circulate and filter the air in the Chamber, Committee Rooms and other rooms? Will further work be done on that? It is almost impossible to open windows. Is the House being fitted with proper air ducts to ensure safety for Members, staff and those who come in to give evidence? Social distancing should still be paramount, in particular in the Chamber and Committee Rooms. I can see Members looking very bored with this, but we have to do it. Social distancing is vital, as we know.

Experts warn of the inherent risks of rushing back. I will vote this afternoon in favour of the amendment moved by my noble friend Lord Adonis about starting earlier. We have to give further consideration to our working practices and we should not rush back on 6 September and throw everything away.

[The Deputy Speaker (Lord Duncan of Springbank) (Con)]

The noble Viscount, Lord Trenchard, has scratched, so I call the noble Lord, Lord Elder.

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[Baroness Evans of Bowes Park (Con)]

The noble Baroness keeps cutting out so it is probably best that we move to the next speaker.

[The Deputy Speaker (Lord Duncan of Springbank) (Con)]

Yes, the next speaker is the noble and learned Lord, Lord Judge, who is present.

[A noble Lord]

Do not cut out!

Financial Services Bill

Lord Duncan of Springbank Excerpts

Report stage
Wednesday 24th March 2021 Lords Chamber

Given all that I have said, I contend that the requirement proposed by this amendment to hold such wide-ranging reviews every two or three years would place a significant time and cost burden on the regulators. I equally contend that this would be disproportionate, given the mechanisms and processes that already exist to hold the regulators to account and ensure that relevant information is in the public domain. I hope that the noble Baroness, on reflection, will agree with that assessment. Skilled oversight can take a number of forms, as she rightly observed in Grand Committee. I listed those that I think are key, not the least of which, as I mentioned, is the added degree of transparency, to which the new CEO of the FCA has committed himself in response to the Gloster report. In the light of all that I have said, I hope that the noble Baroness will feel sufficiently comfortable to withdraw her amendment.

[The Deputy Speaker (Lord Duncan of Springbank) (Con)]

My Lords, I have received no requests to speak after the Minister, so we will go straight back to the noble Baroness, Lady Bowles.

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Amendment 2 withdrawn.

[The Deputy Speaker (Lord Duncan of Springbank) (Con)]

We now come to the group beginning with Amendment 3. Anyone wishing to press this or anything else in this group to a Division must make that clear in the debate.

Amendment 3

Moved by

Financial Services Bill

Lord Duncan of Springbank Excerpts

Committee stage
Wednesday 10th March 2021 Grand Committee

The amendment would be a modest but important step forward. I do not necessarily expect acceptance from the Government today—although one can always live in hope—but I hope that they will at least go away and think seriously about this and other upgrading measures proposed in this Committee.

[The Deputy Chairman of Committees (Lord Duncan of Springbank) (Con)]

I call the next speaker, the Lord Bishop of St Albans, but I cannot hear anything. I wonder whether he might be on mute.

[The Lord Bishop of St Albans [V]]

My Lords, I apologise; I am so sorry.

I am glad to speak in support of Amendment 107 in the names of the noble Lord, Lord Sikka, and the noble Baroness, Lady Bennett of Manor Castle. Throughout the course of this debate, there have been a number of comments on the current functioning of the FCA, the scope of its remit and whether it is properly undertaking its duties.

As the noble Lord, Lord Sikka, pointed out, there have been occasions when financial misconduct has not been fully disclosed, and it is worrying that this may have been due to interventions from those within government. As we establish our new position in the world following Brexit and seek to build on our financial services sector, it is vital that we are known for our honesty and transparency throughout the world. Our future will depend on this. So surely the amendment is entirely uncontroversial. The FCA is meant to be an independent regulator, not a direct arm of the Government. Hence, if Ministers have sought to intervene in any sort of FCA work or investigation, it should be a matter of transparency and disclosed.

Recently, the FCA dropped its investigation into Lookers, arguing it had instead made its concerns clear relating to the

“historic culture, systems and controls”

of the group. Why the investigation was not carried out to the full remains unclear—certainly to me, despite trying to find out. I imagine that many, including me, find the FCA’s answer unsatisfactory. It does not give us the assurances that we would hope an independent regulator would give.

Some commentators have noted that the dropping of this investigation seemed to coincide rather conveniently with the FCA’s new rules relating to car finance, brought in at the end of January 2021. Yet even these changes fell short of a mis-sell, which would undoubtedly have cost the providers of finance billions—strongly hinted at by the FCA’s 2019 report into car finance.

How the FCA came to its decision was in-house, even if it was sometimes perplexing to those of us outside. Nevertheless, in this instance, for example—and in many others—what we do not know is whether there has been any direct ministerial intervention to steer the FCA into any specific course of action. Many people would like reassurances that any intervention should be made in the interests of all and for the common good, particularly in customers’ best interests.

The amendment, in shining a light on what happens behind the FCA’s closed doors, would be a valuable addition to the Financial Services Bill. It would help in a mission that I know many in this House share to create a more transparent, robust and, dare I even say, moral financial system that in the long run will benefit all of us. I hope that the Government will look closely at either the amendment or something similar as we return to the matter later during the passage of the Bill through your Lordships’ House.

[Baroness Kramer (LD)]

My Lords, I need to spend more time, frankly, trying to understand the amendment. I would be genuinely shocked if Ministers interfered with an investigation of any of the regulators—certainly the FCA, the body at the centre of the amendment. I am not sufficiently familiar, I confess, with the Ministerial Code, but if the code does not make that clear, it would seem absolutely necessary that it does.

I perfectly understand concerns about the effectiveness of the FCA as a regulator in dealing with wrongful behaviour. It needs to be much more aggressive and transparent. We have talked earlier in Grand Committee about the HBOS Reading fraud scandal. The FCA was finally pressured into commissioning a report from Promontory, then did not publish it—only a summary that did not reflect in any significant way the actual conclusions of the report. That was extremely disturbing. We have also talked about the FCA’s actions under the senior managers and certification regime against Jes Staley, chief executive of Barclays—

[The Deputy Chairman of Committees (Lord Duncan of Springbank) (Con)]

My Lords, there is a Division, so we shall adjourn for five minutes and reconvene thereafter.

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[Lord Sikka (Lab) [V]]

I am grateful to all noble Lords for their contributions, but somewhat disappointed by the Minister’s response. The examples I gave—if I had time, I could add another dozen—all inevitably relate to the past, when, despite government efforts, things have come to public attention. At no point have Ministers ever volunteered information or made statements that they have stymied investigations.

In the parliamentary debate on the Banking Act 1987, which formally made the Bank of England the supervisor of banks, Ministers claimed that the Bank would be an independent regulator. Then we discovered that there was a whole process of cover-up—the BCCI case, for example. When the Bank of England ceased to be an independent regulator, the next one, the Financial Services Authority, came in. Again, it was claimed that that was independent. Well, under ministerial pressure, it did not intervene. It did not investigate HSBC’s misdemeanours in the UK, and indeed it was a party to cover-up in the US. The US House of Representatives committee report contains some correspondence showing how the Bank of England, the FSA and the Chancellor were pressuring the officials there to go easy on HSBC. The idea that somehow the FCA is some brand new version of independence which we ought to believe simply neglects what has happened in the past, and that is not really very helpful. Of course, Ministers can allay all public fears by simply saying, “Yes, we will embrace independence.” What is wrong with that?

I have visited the US on many occasions. I have met many academics, regulators and businesspeople, and I always ask them two questions when I deliver a seminar or after a meeting. The first question I ask is, “If you could commit financial crime, where would you like to commit it?” The response is always, “The US, because there is a lot of money to be made.” The next question I ask is, “If you are caught, where would you like to be prosecuted?” At that point, laughter sets in and they all say, “The UK.” Indeed, this country has become kind of a standing joke in regulatory circles. If I were referring to any other country and explaining how Ministers and regulators have colluded to protect organisations which, by their own admission, engage in criminal conduct, many Members of the House would say, “Well, that country is corrupt” or “It is a banana republic”. But I find it surprising that the ministerial response is basically “Well, we are good, and we don’t really need to take account of any of these events.” That is really the tip of a corrosive iceberg, because this corruption goes very deep.

I have asked Ministers a number of times to comment on the public statement of Anthony Stansfeld—the Thames Valley police and crime commissioner—that there is a “cover-up” at Cabinet level of the HBOS and RBS frauds. It is interesting that no Minister has denied it, and no Minister has confirmed it. I have quoted a statement from a very senior law enforcement officer—what could be a greater indictment of the UK’s regulation?

Finally, could the Minister please tell us why the Sandstorm report, which is sitting in 1,300 US libraries, is still a state secret in this country after 30 years? I do not know if it is appropriate for him to reply but I would not be opposed to that.

[The Deputy Chairman of Committees (Lord Duncan of Springbank) (Con)]

Does the Minister wish to respond?

[Earl Howe (Con)]

My Lords, the noble Lord has the advantage over me, because I am not personally privy to the case history that he cited, which is now 30 years or so old. However, I will consult my officials and write to him with an answer to his question.

[The Deputy Chairman of Committees (Lord Duncan of Springbank) (Con)]

Can I confirm with the noble Lord, Lord Sikka, that he does not wish to press his amendment?

[Lord Sikka (Lab) [V]]

I will withdraw the amendment for the time being.

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[The Deputy Chairman of Committees (Lord Duncan of Springbank) (Con)]

We now come to the group beginning with Amendment 112.

Amendment 112

Moved by

Financial Services Bill

Lord Duncan of Springbank Excerpts

Committee stage & Committee: 2nd sitting (Hansard) & Committee: 2nd sitting (Hansard): House of Lords
Wednesday 24th February 2021 Grand Committee

I have spoken at length, but I hope that what I have said has been helpful in setting out the Government’s position on these important issues. In particular, let there be no room for doubt that the Government take the question of parliamentary accountability in financial services rule-making very seriously. The noble Lord, Lord Eatwell, invited me to muse on what might be an appropriate set of scrutiny arrangements. It is the Government’s view, I say again, that the Bill allows for proper parliamentary scrutiny, and on that basis I ask my noble friend to withdraw her amendment and for the others in the group not to be moved. Having said that, I say to all noble Lords who have spoken in this debate that I recognise the strength of feeling expressed and I am very happy to continue this conversation with noble Lords between now and Report.

[The Deputy Chairman of Committees (Lord Duncan of Springbank) (Con)]

I have received a single request to speak after the Minister; I call the noble Lord, Lord Holmes of Richmond.

[Lord Holmes of Richmond (Con) [V]]

My Lords, I thank the Minister for his very clear and thoughtful response. I have three brief questions for clarification. First, what plans, if any, are there for a Financial Services (No. 2) Bill? Any information on that would be helpful to the deliberations of the Committee today, and to the approaches noble Lords may choose to take as we move through further stages of the Bill.

Secondly, will he say what the Government’s position is on the timeliness of such scrutiny? Does it err more towards rear-view rather than real-time? Thirdly, in the light of the debate that we have just had, will he consider discussions potentially to lead to government amendments coming forward on Report? I think that noble Lords would agree that, on scrutiny and accountability, if the Bill is passed as currently drafted that would be at least somewhat unfortunate.