Defence Sector Banking Services: Environmental, Social and Governance Rules

Debate between Lord Fox and Lord Pitt-Watson

Monday 26th October 2026 Lords Chamber

[Lord Pitt-Watson (Lab)]

The FCA is saying—and I agree with it—that there are no rules that exclude financial services from a company solely because it operates in the defence sector. If an individual company wishes to take that into account, it should do so proportionately and consistently, and those rules should be clear to those who are approaching it. If any noble Lords would like me to send them a copy of what the FCA is asking to be done, drop me an email and I will make sure my office sends it to them. This is a significant step forward on what has been an important issue, and I again thank the Members of this House who have been raising it. This is the right response, and a solid one.

[Lord Fox (LD)]

My Lords, I am glad the Minister mentioned the RUSI report, because I attended the discussion on it. He is exactly right that it found that ESG constraints in banks was not a specific issue, but it is also suggested that perceived public affairs and public relations issues in the management of those banks was driving these behaviours. There is more than simply a regulatory issue here; there is a cultural one. Can the Minister explain how we might go about addressing that?

[Lord Pitt-Watson (Lab)]

Please ask for a copy of the FCA report, because it specifically addresses the issue that banks must be responsible for making sure that they are consistent and proportionate and that defence is not a reason, ipso facto, for refusing funding for companies. I would be happy to send the noble Lord that report.

Hospitality Industry: VAT

Debate between Lord Fox and Lord Pitt-Watson

Monday 14th September 2026 Lords Chamber

[Lord Pitt-Watson (Lab)]

The assessment is that this should be in the power of the local authority. It will be devolved. On any cost-benefit analysis that has been done, given that I was alerted to this Question only two hours ago, I do not have that with me. If I could write to the noble Baroness, I would be happy so to do.

[Lord Fox (LD)]

My Lords, I do not believe the Minister had the pleasure of participating in the Employment Rights Bill, and I will not relitigate the entire debate, but the legislation undertakes to substantially change the zero-hours regulations that affect many of the businesses that the noble Lord, Lord Hunt, mentioned. Does the Minister acknowledge that the consultation now and the decisions that will be made as a result of that consultation—how those changes are applied, and in particular the threshold at which they are applied—will materially affect these businesses and existentially affect some of them? Does he undertake to make sure that when those regulations are published, they take into consideration the health of this sector?

[Lord Pitt-Watson (Lab)]

I will try to answer more broadly about employment. The UK employment rate is in the top half of OECD economies. It is above the G7 average. Unemployment is in the bottom half of the OECD. Participation among 16 to 64 year-olds is higher than the average participation rate in every year but one of the last 50 years. The Government are increasing funding for employment support to more than £4 billion a year, including £2.5 billion investment in the youth guarantee and the growth and skills levy in the next three years, supporting 500,000 opportunities to earn and learn in the hospitality industry and all other industries. As I say, we are faced with many challenges ahead of us, but I believe that what the Government are doing in this area is correct.