Financial Guidance and Claims Bill [HL]

Lord Holmes of Richmond Excerpts

Committee: 4th sitting (Hansard): House of Lords
Wednesday 13th September 2017 Lords Chamber

Moved by

[Lord Holmes of Richmond]

70: After Clause 16, insert the following new Clause—
“Regulatory principles to be applied in respect of claims management services
(1) In relation to the regulation of claims management services, the FCA must act according to the principles that—(a) where appropriate, authorised persons should act honestly, fairly and professionally in accordance with the best interests of consumers who are their clients; and(b) where appropriate, authorised persons should manage conflicts of interest fairly, both between themselves and their clients, and between clients.(2) In this section, “authorised person” has the same meaning as in the Financial Services and Markets Act 2000, and “authorised persons” shall be construed accordingly.”

[Lord Holmes of Richmond (Con)]

My Lords, I am pleased to bring forward this amendment, and in doing so I express thanks to all the organisations that have offered me advice and guidance on preparing it. Perhaps, in the light of the Bill we are discussing, I should not have used either term, advice or guidance, but just thanked them for the briefing in the spirit in which it was offered. Not least among those organisations was Macmillan Cancer Support, which demonstrates brilliantly how a charity can operate in 21st-century Britain not only by offering superb palliative care, nursing services and the like, as we would expect, but by fundamentally understanding just how important financial services are and how people are affected when they get a cancer diagnosis.

I am pleased to speak to Amendment 70 not least because we have gone over the ground of the SFGB at Second Reading—which takes me back to a previous life, when SFGB stood for the Swimming Federation of Great Britain. Bearing in mind my previous life, it seems only appropriate that I should dive straight in.

The purpose of Amendment 70 is to create a duty of care on claims management services to act for all customers, not least those who find themselves in a vulnerable situation. My desire in Committee was to bring forward an amendment that would impose a duty of care across the whole financial services sector but, sadly, that was deemed to be outside the scope of the Bill, so this amendment is far more limited and relates just to claims management services. However, I hope that, within that, noble Lords can see the potential and the need for wider application and an amendment at a future date that will address duty of care across the whole financial services sector, not least when we look at where financial services came from.

At one stage there was truly a sense of a relationship between customer and provider. In many ways we need to get back to that, not least because there is so much that financial institutions can do to assist people. Indeed, many financial institutions and claims management services may well do things to assist people, particularly when they find themselves in a vulnerable situation—not least if they have had that most awful news of a cancer diagnosis. But when we look at the evidence, only one in nine people who receive a cancer diagnosis reveals it to whichever financial institution they are dealing with. The reasons for that are pretty clear. But if that were not enough evidence, survey data illustrate that of the small number who did declare to their financial provider, 23% said that they had a wholly unsatisfactory experience. We can deduce from that that there is a really low level of declaration but, even within that small number, almost one-quarter have a negative experience after declaring.

I believe that Amendment 70 will go some way, in the specific claims management arena, to demonstrating the need for such an amendment and the benefit it can have on claims management services. There is a lot more for the Financial Conduct Authority to consider in terms of this duty and, indeed, the general duty of care. We know that the FCA is considering putting out a consultation paper on a duty of care across financial services, but we also know that it has stated that there will be no change at least until 2019. Consultation could last until 2019, then there would be a proposal, then pre-legislative scrutiny and then the process of implementation. I think we can all agree that there has been more than enough delay already in making sure that vulnerable consumers get the level of service that they should expect to receive from claims management services and the entire financial services industry.

I ask the Minister to support Amendment 70. Will he also say something about the Government’s view on placing a general duty of care on the FCA across the whole financial services sector? This would bring benefits not only to consumers but to financial institutions and the nation. Amendment 70 and a general duty would both in their own way clearly help to deliver a financial services sector and a nation that work for everybody. I beg to move.

[Baroness Meacher (CB)]

My Lords, I support Amendment 70 tabled by the noble Lord, Lord Holmes. As he indicated, what we really need is a wider power, but it is outside the scope of this Bill. I want to challenge that, at least for the moment. I refer to Clause 2(3), which makes it clear that:

“The single financial guidance body may do anything that is incidental or conducive to the exercise of its functions”.


This is an attempt to build on the powers that that subsection suggests.

The fact is that the prevention of debt is even more important than helping people once they fall into debt. In terms of preventing debts arising, the duty of care is particularly important to people with serious health conditions and disabilities, for whom financial problems can quickly become overwhelming, as the noble Lord, Lord Holmes, has indicated. I want to concentrate on the particular plight of sick and disabled people. For example, 400,000 people in the UK with cancer struggle to pay their household bills because of their diagnosis. Banks and building societies have a vital role to play in helping such people; it makes a huge difference if a bank or building society offers flexibility in mortgage and other payments or interest freezes on credit cards and other loans. Although the Bill highlights the importance of early help, there is a growing consensus that greater leadership is needed from the Government to make it clear that providing this support to vulnerable customers must be a priority for financial institutions.

--- Later in debate ---

[Lord Young of Cookham]

My Lords, this amendment, tabled by my noble friend Lord Holmes of Richmond and the noble Baronesses, Lady Meacher and Lady Greengross, seeks to include in the Bill a set of regulatory principles to be applied by the FCA in respect of claims management services. It has reopened one of the discussions which have run through the debates on the Bill about the interface between the SFGB and the FCA and the overall responsibilities of the FCA so far as the consumer is concerned.

I am grateful to my noble friend for the way he proposed his amendment, which would require that authorised persons act and manage conflicts of interests honestly, fairly and professionally. I do not think that anybody who has spoken in this debate—I am grateful to all noble Lords who have taken part—would disagree that these are worthy principles for the FCA to adhere to. I am sure that my noble friend is aware that the FCA already applies these principles in the way it regulates the conduct of business.

The FCA will give careful consideration to the appropriate design of the precise rules that apply to claims management services and how they fit together as an overall regime. Noble Lords may have looked up the FCA’s principles for businesses. They already include the requirements to act with integrity, to,

“pay due regard to the interests of its customers and treat them fairly”,

and to,

“manage conflicts of interests fairly”.

There is a degree of overlap between those and the principles set out in my noble friend’s proposed new clause. If one drills down and looks at the conduct of business rules, they say:

“A firm must act honestly, fairly and professionally in accordance with the best interests of its client”.


Those three adverbs are exactly the same as the ones in my noble friend’s proposed new clause.

When designing new rules for claims management companies, the FCA must take into account its statutory operational objectives, including its objective of securing an appropriate degree of protection for consumers. The FCA will consult publicly on the proposed rules for claims management companies. Here, I may get into trouble with air traffic control. I am not quite sure whether there was an implication that it was going to wait until after we had left the EU before consulting publicly on the rules for claims management companies. As far as I am concerned, there is no need to wait at all: it should get on with it—“Lights touchpaper and retires”.

I therefore hope that I have allayed concerns that there will be an unreasonable delay. The FCA will consult, and when it does, I am sure that it will take on board the points made in this debate. I noticed that the words “duty of care” do not appear in the proposed new clause, but I hope they can be embraced in some of the principles that we have been discussing.

We have every expectation that the FCA will create appropriate rules for claims management companies that will extend existing principles in FCA rules regarding integrity and the interests of customers to claims management companies. I touched on those principles a moment ago. Therefore, our debate this afternoon is not so much about the destination—on which we agree—but about the vehicle. The Government’s view is that there is an existing framework for the FCA to set out its principles—I referred to that. As there is an existing framework for conveying its objectives and its principles for businesses, the regulatory principles do not need to be enshrined in the Bill, which is what my noble friend suggested. The Government are sympathetic —they always are—but this is not a necessary way forward. For that reason, I hope that I can persuade my noble friend to withdraw his amendment.

[Lord Holmes of Richmond]

I thank my noble friend for that response. It would certainly be a courageous Back-Bencher who sought to push an amendment this afternoon when his Whip is on the Front Bench. But I thank all noble Lords who participated in the debate.

I am grateful to the Minister for taking us through some of the rules set out in the handbook. Indeed, much in there is worthy of note. I wish to put on the record in Hansard that I believe that the FCA does an extraordinary job in a number of ways, not least—departing slightly from this issue—in its regulation of fintech, which leads globally in London and the UK and is always worth a mention in your Lordships’ House.

Having said that, despite what was read from the handbook, it is pretty clear that there is a need to consider a duty of care. On the specific issue of claims management services, which we are discussing this afternoon, and indeed in general terms, I am grateful to my noble friend for, as he put it, lighting the blue touch paper. I hope that it does indeed burn bright and that there is action on a consultation on these points by the FCA sooner rather than later, in 2019.

The Minister says that it is not about the destination; we are merely discussing the vehicle. It seems clear that from his point of view, the vehicle would be an aeroplane. However, we are probably not just talking about the vehicle but discussing the timetable and having a timely duty of care in respect of claims management services and generally across all financial services. It would be excellent for the FCA to have that additional remit, which would sit alongside all its other services.

I am grateful to my noble friend the Minister but I will certainly look at what we can potentially bring back on Report. However, for the time being—certainly as he was formerly a Chief Whip in the other place and, even more significantly, as he is my Whip in this place—I beg leave to withdraw the amendment.

Amendment 70 withdrawn.

Higher Education and Research Bill

Lord Holmes of Richmond Excerpts

Report: 3rd sitting (Hansard): House of Lords
Monday 13th March 2017 Lords Chamber

[Lord Judd (Lab)]

My Lords, I feel compelled to respond to the comments of the noble Lord, Lord Smith. I am a long-standing governor at the LSE, where I am now an emeritus governor. Recently, we have been rated second in the world as the most prestigious centre of higher education learning in the social sciences, and as the highest rated such place within the United Kingdom. I do not go much on league tables myself but I cannot help being proud of that statistic. The evidence speaks for itself. A very high proportion of our student community comes from overseas. Of course, it is a case not just of the atmosphere of a centre but of the quality of the education which benefits from the input of people with different insights from different parts of the world.

I fervently believe that a centre of higher education worthy of its name should be part of the international community and should recognise that Britain is inseparable from the rest of the world and cannot operate in higher learning without an international community and, indeed, international staff. They are a very important part of the LSE as well. What worries me is that it does not take very long for an impression to grow. We are hearing too much anecdotal evidence that people elsewhere in the world are beginning to wonder whether the UK is the place they want to come and pursue their studies. Indeed, one hears of academics who question whether they want to go on developing their careers in the United Kingdom because they are not certain that it is the sort of place in which they want to live and bring up their families. We have a huge challenge here and we have a great opportunity this evening to put it right.

[Lord Holmes of Richmond (Con)]

My Lords, I rise to support Amendment 150 in the name of the noble Lord, Lord Hannay, and, in doing so, declare my interest as set out in the register. When, many years ago, I went from a Midlands comprehensive school to Cambridge University, in many ways I felt that I was a foreign student. That aside, there is no social, economic, political, moral or legal reason not to support this amendment.

I wish to add the following comments to those made by noble Lords, with which I wholeheartedly agree. “You want our trade, you don’t want our children”, said the Prime Minister of India, Mr Modi. If that is the impression being received in India and other nations around the world, how can we possibly expect to attract the brightest and the best to come to study in the United Kingdom? That is what we need and want. Our doors and our arms should be wide open to the brightest and the best to come to study here because there is no downside to that. International students come, pay and study. If they stay, they work and contribute. If they go home, they are the best advocates for soft power. The GREAT campaign is indeed, as its name suggests, great, but it is as nothing compared with the advocacy of international students who have had that experience in the UK. British higher education is the most gleaming jewel in our soft power crown.

There is absolutely no reason not to support Amendment 150. I urge every noble Lord to do so because it is in the interest of international students and of the United Kingdom. We would want this at the best of times, but given what is ahead of us, we should not just want this, we absolutely need it. We should absolutely pass this amendment this evening.

Child Sexual Abuse: Football Clubs

Lord Holmes of Richmond Excerpts

Thursday 15th December 2016 Lords Chamber

[Lord Holmes of Richmond (Con)]

My Lords, I thank the noble Lord, Lord Addington, for securing this debate and the noble Lord, Lord Goddard, for introducing it. In those thanks, I express incredible sadness at the reason why we have to have this debate. We have only one national sport in Great Britain and, for better or worse, at the moment that is football. The headlines in recent weeks have not been made by the top goal-scorer, promotion, or the relegation positions of particular clubs; it has been a far darker side of not just football or sport generally but society. Those statistics run like this: more than 1,700 calls so far have been made to the NSPCC helpline; 21 police forces are investigating, to date, 83 suspects, involving 98 clubs, at every level of football in every region of the United Kingdom. We have to ensure that every allegation is thoroughly and fully investigated. Everything must be out in the open, with no cover-ups and no smoothing away, no hush-ups this time around. Does the Minister believe that the Football Association and other football bodies have the competency to conduct an independent and thorough inquiry and fulfil their responsibilities in this respect?

That was then—what about now? I have serious concerns as to whether football is in shape, not just to investigate these horrific historic events but to deal with the potential abuse taking place today. Is the governance in place? What about values and culture? When you consider the rather pick-and-mix approach that football has taken to inclusion, equality and stadia, never mind this most fundamental issue of safety, does it have the right structures, attitude, approach and culture that we need from a modern organisation in sport today?

As other noble Lords have said, this obviously goes wider than the sport of football. Does my noble friend the Minister believe that all sports have the right governance, culture, systems and approaches in place to ensure not just that all historical events are fully and thoroughly investigated but that nobody today should have to suffer or experience the events that have come out over recent weeks—events that have shown the darker side not just of sport but of our society, which none of us can allow to continue for want of good governance and for want of the right culture?

Sport, the media, the health service—we are talking about society. The only way that we can ensure that people have a positive experience in sport—the fun, the enjoyment, the excitement, the reason why we all love sport—is if that is built on the bedrock of safety for all concerned. This has to be the first principle and the starting point. We can only reform this issue across society if every element plays its part, starting with sport. Does my noble friend believe that football is competent to investigate the historical cases and competent to go forward and ensure an exciting, fun experience for all who seek to enjoy it?

Deregulation Bill

Lord Holmes of Richmond Excerpts

Tuesday 4th November 2014 Grand Committee

[Lord Hunt of Chesterton (Lab)]

I think we may be about to have a dialogue. I used to be a councillor in Cambridge and we spent a lot of time stopping people driving over 30 miles an hour because of Mr Toad characters who wanted to go at 40 miles an hour.

If we go too far down this road we would have to have a little leaflet about every town that we visit about parking on the pavement or not parking on the pavement. In the country as a whole, we need to have some broad rules. If a city does not allow you to park on the pavement, that should be stated very clearly as you enter the city. It is very important to have broad rules in a country, otherwise we begin to be like countries several hundred years ago when every city had different rules. We should have a broad rule and then local authorities should have the power to exempt, but there needs to be some information.

[Lord Holmes of Richmond (Con)]

My Lords, I support the amendment tabled by the noble Lord, Lord Low, and already spoken to. I feel nervous about standing between two noble friends. Luckily, I am not right between them, so I feel safe at the end of the Table. Also, it is a pleasure to be speaking to my noble friend the Minister. Two hours ago we were speaking on sport and now we are on parking. We should all bow down in awe at the extent of his knowledge and the range of expertise demonstrated in just one afternoon.

We all know very well that there are three subjects never to be discussed in polite conversation. I would certainly add a fourth, parking, to that. It raises temperatures—sometimes justifiably and sometimes the solution is actually in the hands of the person holding the steering wheel at that particular moment. Looking at the amendment, the situation is clearly set out and has worked not just perfectly but incredibly well in London since 1974. It has not impacted on the economic, social or cultural success of this great city. I would never say that what is good enough in London is good enough everywhere, but it is a very useful case in point to consider.

As a guide dog user, I obviously have a particular interest in this. In many cities and towns that I go to, trying to walk along the pavement is impossible. One steps out to avoid one car then realises that there is a second, third and fourth car and one is walking down the centre of the road while the cars are on the pavement. What a curious world one has entered there. It is almost as if pink flamingos are used as mallets for croquet and we are all diving down rabbit holes when we have reached a change of roles to that extent.

It is not just about visually impaired people, though—it is about the very nature and essence of inclusion. If you have a pushchair or pram, or you are walking with friends or family, if you have toddlers or if you are on a mobility scooter, if you are a pedestrian you should be able to access and enjoy the environment on the pavement. The clue is really in the name, “pavement”; it is not a carriageway. The Americans get it quite well—it is a sidewalk, not a side road or a side car park. That is where we should aim to guarantee everybody free, unimpeded access along the pavements, not just of London but across the entire nation. As we have already heard, there is a very clear local element here. Politics is nothing if it not only listens but acts locally. This amendment offers the right local solution to enable unimpeded access of the pavements up and down this nation.

I turn to the economics of it. Pavements are not designed for cars. Unsurprisingly, they crack and the tarmac sinks and they become not only unsightly but dangerous for pedestrians. Between 2006 and 2010, £1 billion was spent on pavement repairs as a result of parking. That figure does not even cover the costs that we can all only think about of people who have had to bring claims against local authorities for having been injured on pavements that have broken down as a result of people parking on them. Again with reference to the local agenda, that is why it is hardly surprising that 78% of local councillors believe that there should be prevention of pavement parking, as is the case in Greater London.

There is an economic argument and a social argument, as well as a legal argument. It would be good if my noble friend could strongly consider the wording set out in this amendment.

[Lord McKenzie of Luton]

My Lords, this is an important amendment, and we should thank the noble Lord, Lord Tope, for moving it on behalf of the noble Lord, Lord Low. As the noble Lord, Lord Tope, said, we all signed up to the Private Member’s Bill, which has stalled at the other end but is due for a Second Reading in January.

Under the existing legislation, it is illegal to drive on pavements and footpaths, but there is no specific prohibition against pavement parking. The ambiguity in the law means that most local authorities struggle to enforce restrictions, in contrast to London, which has operated a separate system since 1974. I understand that there are also exemptions in place in Exeter and Worcester. As the campaigning charity, Living Streets, said in written evidence to the Transport Select Committee:

“Inconsiderate parking can cause a major barrier to many vulnerable road users. It is clear that the current legislative situation relying on police enforcement isn’t working”.

Of course, there are some areas where parking on the pavement is unavoidable, and there are other legitimate reasons why it might sometimes be necessary—but all too often parking on the pavement obstructs access to pedestrians, forcing them to navigate busy and dangerous roads instead. Some 74% of adults report being forced to walk on the road because the pavement was being obstructed by cars and other vehicles. For some, pavement parking can effectively extinguish their right of way altogether. I refer to elderly people, people with buggies and those with disabilities. For them, cars that block the pavement can be a serious restriction on their freedom of movement.

I know that the measure proposed today has the support of the Guide Dogs UK, Age UK and several other organisations referred to by the noble Lord, Lord Tope. Banks of parked cars can also force cyclists to swerve into dangerous traffic flows, which can be especially dangerous on narrow roads. Pavements are not designed to bear the weight of cars, as the noble Lord, Lord Holmes, just said, let alone heavier goods vehicles; over time, they can become degraded, posing additional challenges for pedestrians and costs for local authorities.

The reality of the problem is not in contention, I suggest. In 2006, the Transport Select Committee said that the then Government,

“must grip the problem of pavement parking once and for all and ensure that it is outlawed throughout the country … rather than relying on the use of individual Traffic Regulation Orders on specific streets and local Acts to impose”,

a fine. Last year, the Transport Select Committee called for reform to end,

“a confusing patchwork approach across the country”,

and for a clarification of the rules for loading and unloading by haulage companies, and action to rectify the long-standing problems over poor signage. It is important that, even as the Government try to move towards allowing more diverse road signs from local authorities, common national standards can be agreed on this issue.

The status quo brings challenges for drivers as well as pedestrians and cyclists. The British Parking Association and the RAC Foundation all support the calls for change. Inappropriately parking vehicles can interfere with traffic flows for other road users, causing jams and congestion, and drivers are often unsure about restrictions—and which, if any, are in place. Given the growth in congestion on many of our roads, these problems are likely to be magnified in the years ahead.

The Government also seem to be in agreement, on the principle at least, that pavement parking is a problem that needs to be addressed. The amendment gives the Minister and the Government ample opportunity to do so. I urge them to take it.

Voluntary and Charitable Sectors

Lord Holmes of Richmond Excerpts

Thursday 26th June 2014 Lords Chamber

[Lord Holmes of Richmond (Con)]

My Lords, I thank my noble friend Lady Scott of Needham Market for bringing to the House a debate of such significance. Its subject touches all our lives and communities. Imagine Britain without scouts and guides, youth clubs or sports clubs. Imagine our schools with no governors, our legal system without the magistracy and our coastline unpatrolled by the brave men and women of the RNLI. Britain without volunteers is not Britain.

When I started the bid for the Olympic and Paralympic Games in 2003, we knew that we had to get 70,000 volunteers to make our Games not just good but great. That number terrified many people: could we get them, could we get the quality and would they stick with us through the journey? Many of us knew, though, that there would be no difficulty. In fact, we would be heavily oversubscribed time and again. We had more than 250,000 applications, all from potentially great volunteers. We set up centres around the country to ensure that we would get the very best of the best. We thought, “Let’s not call them volunteers; let’s really emphasise the role that these people play”, so we came up with “Games makers”. These people would be the beating heart, the smiling face and the lifeblood of London 2012, and what a fantastic group of people we got together. If you came to the Games and wanted directions, wanted your ticket checked or wanted to know where to get food or how to find your seat, most likely it was a smiling, committed, trained, happy volunteer who gave you that information. They were what made London 2012 what it was, and they were mentioned by the media, the broadcasters and everyone who touched, experienced or witnessed 2012. It was all about the Games makers. Many people planned their retirement to start with a role as a Games maker. What a brilliant way to begin that next chapter of someone’s life, and how fantastic to have the Olympic and Paralympic Games as the first part of your retirement, that next stage of your career into the future. Many of them still cherish those shirts, those trainers and the lanyard. They became a very close family and showed Britain at its very best.

I should like to mention a charity that I am involved with. I am privileged to be one of the ambassadors of the Queen Elizabeth Diamond Jubilee Trust, a charity established to mark Her Majesty’s 60 years on the throne and effectively to raise £100 million to spend across the Commonwealth to make a massive step towards eradicating avoidable blindness and to put into youth projects across the Commonwealth. Tens of millions of people across the Commonwealth are blind but 80% of that blindness is avoidable. The Diamond Jubilee Trust, under the excellent leadership of Sir John Major, is aiming over the next five years to make a massive impact on helping to make avoidable blindness a thing of the past.

Similarly, we are investing in youth programmes across the Commonwealth. A big scheme is going to be launched in two weeks’ time as so many people across the Commonwealth—some 60%—are under the age of 30. This heightens all the issues around education, employment and social inclusion, particularly in some of the African nations. We are looking to make a massive impact to ensure that the future for all those young people is brighter than it otherwise might be had we not got involved.

As set out in the register, I am also a trustee of the Nick Webber Trust in Malawi—a trust we established after a friend of mine was killed while in Malawi doing pro bono work. I started at my law firm on the same day as Nick. We set up a trust to get involved in legal aid and education. It really demonstrates what can be done with few resources but massive commitment from volunteers. We established the first law library in Malawi. We educate street kids who otherwise would have no education. We were asked whether we could build a new school. Again, initially this terrified us until we realised that the costs were relatively tiny compared with what they might be in this country. It is the effort and the commitment of the trustees and volunteers that has made so much possible in that country. That is the crucial point. Charitable giving, charitable work and volunteering should not, in any sense, be seen as purely altruistic or a one-way street. It is mutually enriching.

In conclusion, I cannot think of a better place to end than with the words of Mahatma Gandhi—we find ourselves when we lose ourselves in the service of others.