Financial Services and Markets Bill

Lord Hunt of Wirral Excerpts

2nd reading
Tuesday 10th January 2023 Lords Chamber

[Lord Hunt of Wirral (Con)]

My Lords, I draw attention to my financial services and legal interests as set out in the register, and that I am co-chair of the All-Party Parliamentary Group for Insurance and Financial Services.

As many speakers have pointed out, this Bill represents a golden opportunity to adapt to the new reality of post-Brexit and, we hope, post-pandemic life. Financial services provide over a million jobs directly across the UK, amounting to 8% of GDP. It is a success story and vital to our welfare. However—we must stop deluding ourselves about this, if any of us still do—the UK is not pre-eminent in the world of financial services. Too much of the big reinsurance work in particular is going elsewhere. There is far too weak a partnership between government and the sector, if indeed there is any meaningful partnership at all. We still await a definitive sustainable financial services deal with the European Union. We also need the right infrastructure and the right tax system.

It is all about having a vision, but it is also about regulatory culture. I use “culture” advisedly. If this legislation fails to address not only the letter of regulatory law but the culture of the regulators, it will have failed. Effective, proportionate, efficient and good regulation is about having the confidence to strip away unnecessary redundant regulation as well as policing necessary regulation. That in turn is about having the right people and the right relationships. I refer not to cosy deals over the third cognac in the Reform Club but to brisk, efficient, timely, professional, mutually respectful regulation, with each side having a lively but robust appreciation of how the other operates.

I strongly welcome the new objectives on competitiveness and growth. Effective regulation should enable the sector to burnish its reputation for efficiency, innovation and integrity. It can also reduce costs, thereby improving access to goods and services. I hope that the necessary metrics can be crafted to provide reassurance that the regulators really do act on these new secondary objectives. I acknowledge and respect the concerns of those who feel that the commitment to growth feels a little bald and even old-fashioned in the light of climate change. I reassure the noble Baronesses, Lady Sheehan and Lady Hayman, that I am constantly struck by how seriously climate change is being taken by a sector that is literally, as well as figuratively, right in the eye of the storm. Financial services growth is increasingly, of necessity, green growth.

Finally, as senior independent director of LINK, I welcome the fact that for the first time ever the concept of access to cash and a right to access it will be enshrined in law. As the noble Baroness, Lady Twycross, pointed out, and the right reverend Prelate the Bishop of St Albans has just mentioned, for millions of people cash is a vital part of day-to-day life. Younger consumers may brush off credit card fraud and the panoply of pins and passwords as a necessary if tiresome aspect of modern life, but for many older citizens all that is an undiscovered country, and one that will remain undiscovered. Sadly, there is no such thing as a free cash withdrawal. The banking hubs have been slow to get moving, bank branches continue to close, and the economic situation squeezes the independent ATM providers more and more.

This Bill barely marks the end of the beginning for this task. I hope that it will be seen as an important milestone. I wish it safe passage and a successful arrival in port.