Queen’s Speech

Lord Hunt of Wirral Excerpts

Thursday 9th January 2020 Lords Chamber

[Lord Hunt of Wirral (Con)]

My Lords, first, I declare my interests, as detailed in the register—in particular, as a partner in the international commercial law firm DAC Beachcroft.

As a one-nation Conservative, I strongly welcome the Government’s renewed commitment to our public services, but those public services must necessarily be built upon the strong foundations that only a flourishing economy can provide. As we gird ourselves for the post-Brexit world, whatever our views might have been before the 2016 referendum, we now have to work together to ensure that our economy is as prepared as possible to flourish in this new world.

My specialist subject is financial services—a sector in which the UK excels. I say to the noble Lord, Lord Fox, who raised the issue at the start of the debate, that I believe that financial services are ready to strengthen their position if only the Government will take a number of key steps. It is a sector in which regulation plays an all-important role. The erstwhile Financial Services Authority was obliged to have regard to

“the desirability of maintaining the competitive position of the United Kingdom”.

When the FSA was superseded, however, no such obligation was retained. I therefore echo the excellent 11th report from the 2017-19 Session of our European Union Committee and its recommendation in paragraph 225, which says that

“it may become clear that regulators are unduly constrained by their current objectives. We recommend that the Government consider and consult on the desirability of adding a duty to promote international competitiveness to these objectives.”

That recommendation, preferably shorn of its caveats, could be vital for our future success. It was based upon a wealth of informed submissions—for instance, from the Association of British Insurers, which stated: “We believe both regulators”, meaning the Financial Conduct Authority and the Prudential Regulation Authority,

“should be equipped with a clear remit for UK competitiveness ... once we leave the EU.”

That view is widely expressed, with growing vehemence and intensity, right across the financial services industry. Regulators in our main rival territories, such as Bermuda, Switzerland and Singapore, are already subject to a similar obligation and it does not imply a dilution of standards. On the contrary, our competitive edge relies on a delicate balance between a hard-won reputation for integrity, quality and reliability and our ability to be flexible, to adapt and to innovate. I strongly press my noble friend the Minister to go back to the future by using the forthcoming financial services Bill to impose a similar obligation on the FCA and the PRA to restore that vital balance of objectives.

Something that would definitely serve to improve competitiveness would be a period of regulatory stability and, above all, proportionate regulation. In its last manifesto, the British Insurance Brokers’ Association, where I have just relinquished my role as chair, made that point eloquently and persuasively.

In summary, this legislative programme adumbrates measures that have the potential to heal the ugly rift that has opened up in this country between the haves and have-nots, between north and south, and between remainers and leavers. In my opinion, a party that now represents not only traditional strongholds such as Wells, Wimbledon and Wycombe but also those new bastions of Bassetlaw, Bishop Auckland and Blyth Valley has both a unique opportunity and a unique responsibility to rebuild one nation.