Financial Services Bill

Lord Leigh of Hurley Excerpts

2nd reading & 2nd reading (Hansard) & 2nd reading (Hansard): House of Lords
Thursday 28th January 2021 Lords Chamber

[Lord Leigh of Hurley (Con) [V]]

My Lords, I refer your Lordships to my registered interests and extend a very warm welcome to my noble friend Lord Hammond of Runnymede. I have sat through many of his speeches, including the famous one in which he described why “Spreadsheet Phil” is inappropriate, but this was exemplary. His maiden speech and that of the noble Baroness, Lady Shafik, were excellent.

The final EU withdrawal agreement was a success, but, as has been discussed in this House and elsewhere, it was light on financial services. Mark Carney, the former Governor of the Bank of England, said this time last year that the City of London must not be a “rule-taker” after Brexit, effectively outsourcing the regulation and supervision of our global financial centre. Therefore, while adopting the EU rulebook in the first instance has delivered much-needed continuity and stability, we must now think about what comes next. That must surely be an approach that sees the UK continue to set global standards in prudential regulation and consumer protection, without losing sight of our broader objectives of innovation and competition.

There are three initiatives worthy of mention that can reinforce the initial steps taken in the Bill. The first is the future regulatory framework review. The Government’s response to this will give us the clearest indication yet of the vision for financial services post Brexit. I note the stress placed on equivalence of outcome. This should give us more room for interpretation, and indeed the opportunity to revisit many areas of law which were effectively gold-plated into UK law when we were EU members.

The second is the productive finance review. This concerns the means to unlock more capital to increase productive capacity in the real economy. I mention it here because it should also look at the impact of regulation on institutional capital flows into key areas such as infrastructure and technology. EU directives IORP and Solvency II limit such capital flows with prohibitive capital charges and should be looked at immediately. There is £6 trillion in UK private pensions alone that could be unlocked for more productive purposes.

The third is the Kalifa review into UK fintech. The Chancellor and my noble friend Lord Gadhia recently spoke of the need to see a second big bang in the City. Fintech is a key part of that. I hope the review proposes reforms as transformational as the first big bang was for the City.

Turning to the specifics of the Bill, there are commendable measures that will advance the competitiveness of financial services within our current regulatory envelope. Asset management remains our most globally significant subsector. Therefore, the measures to update the regime for third-country investment firms is to be commended. Similarly, introducing a more proportionate prudential approach to regulating investment firms will lower their costs of doing business, and better reflect underlying risk. On the other side of the coin, there are important measures on supervision and consumer protection. In particular, I commend the review that former FCA director Chris Woolard is leading on “buy now, pay later” lenders, where there is mounting evidence of bad debt, mis-selling and very bad practice. However, on FCA enforcement, there is a balance to be struck, and this Bill is, I am afraid, another opportunity missed to strike that balance. I am referring to the FSCS levy, FCA enforcement and the endless ex-post powers of the Financial Ombudsman Service.

The FSCS levy is due to soar by a third, to over £1 billion, with one of the reasons given being the cost of compensating SIPP consumers. However, there is mounting evidence that the FOS has been overreaching itself in its decisions against those very same SIPP providers. For example, many SIPP providers provide execution-only services on behalf of a client—the clue in the phrase “self-invested”—and yet claims of mis-selling are upheld, even where no financial advice is proffered and no advisory permissions are even held.

Frankly, this has the appearance of a racket. Blessed by the FCA, the FOS adjudicates, the FSCS is jacked up accordingly, the FS industry is forced to pay, driving some literally to bankruptcy, and the money flows seamlessly back to the FCA. It is a system with no accountability before the law, and no right of appeal. In short, it is unjust, and at a time when the broader powers of the FCA are being debated. Will the Minister consent to revisiting this important issue? It is a shame that the Bill does not seek to rebalance the relationship between the FCA and FOS and bring some common sense into how FOS operates.

Members of this House might recall that I have been banging on about FOS for some time, and I have had the pleasure of meeting the City Minister to discuss it. Well, something fell into my lap this summer. I received an unsolicited credit card from a company called NewDay. I had not asked for a credit card. A day or so later, a neighbour spotted someone rummaging in my outdoor letter box. It was a scam. Someone had ordered a card in my name and was seeking to retrieve the PIN subsequently sent in the post. A simple remedy would be to require credit card recipients to confirm that they had ordered one before it is sent to them. I suggested that to the company; it refused, so I complained to the FOS and it took six months for the FOS to tell me it could not fix the issue as the FCA handbook, which, as we know, governs FOS, states that as I was not yet a customer, I was not an eligible complainant under the FCA dispute resolution—rule 2.7.2, if you are interested—so it would take it no further and, as a result, others will now get scammed in this way.

That shows a dramatic shortage of common sense. Does the Minister agree that it is not clear that FOS is fit for purpose, and that the Bill provides us with an opportunity to ensure that FOS and the FCA do the job Parliament had envisaged, or to let us change the way FOS and the FCA operate?

European Union (Future Relationship) Bill

Lord Leigh of Hurley Excerpts

3rd reading & 2nd reading & Committee negatived & 2nd reading (Hansard) & 2nd reading (Hansard): House of Lords & 3rd reading (Hansard) & 3rd reading (Hansard): House of Lords & Committee negatived (Hansard) & Committee negatived (Hansard): House of Lords
Wednesday 30th December 2020 Lords Chamber

[Lord Leigh of Hurley (Con) [V]]

My Lords, I start by complimenting my noble friend Lord Cavendish of Furness on his valedictory speech, which was typically eloquent and clear. I know the whole House will join me in thanking him for over 30 years of service to this House. His warm and friendly camaraderie will be missed by all of us. He has not sought to be safe through caution, but if anything he has been more than forthright in his illustrious time here, and he can retire safe in the knowledge that the Government have achieved in the Bill all and maybe more than he and I could have expected. He knows why I get a particular thrill every time I refer to him and that he will be greatly missed by all the House. I am also delighted to see that the noble Lord, Lord Austin of Dudley, is giving his maiden speech here. His proud stand against historic and current anti-Semitism makes him a particular hero of mine.

I have supported the Government at every step of their negotiations and it is true that I would have settled for a lesser deal, so I can only thank and praise our negotiating team, led by my noble friend Lord Frost, for its achievement. Mark my words: this will go down in history as a masterclass of negotiating success.

In this huge Bill I will pick out one area: namely, technical barriers to trade. Perhaps the Minister can answer this question in his summing up later. The Bill very helpfully allows for conformity of product legislation, codes, clarification and status. For example, the Soil Association needs to change and co-ordinate with the EU to enable trade to continue. The plea I hear from manufacturers now is to allow a grace period for the new systems to kick in and for guarantees that their customers in the EU will not remove the products from their shelves, as they are currently threatening to do, because after tomorrow, those products may not be EU compliant. Accordingly, there needs to be a grace period.

Finally, on financial services, as a practitioner in that field, I disagree strongly with the noble Baroness, Lady Kramer. Those threats and worries were raised at the time of the referendum and they proved not to be true. I am convinced that the EU will look carefully at our negotiation through this agreement and will see that there can be a win-win between us on financial services. I have spoken about equivalence a number of times in this House, and I look forward to the Government achieving a more than satisfactory solution in this vital area soon.

Covid-19: Public Wealth Investment Fund

Lord Leigh of Hurley Excerpts

Tuesday 9th June 2020 Lords Chamber

[Lord Agnew of Oulton [V]]

I agree with the noble Lord on the role of the British Business Bank, which has played an extremely important part in the economy over the last few years. It has given some £7 billion of finance to almost 95,000 SMEs and has been part of the distribution for much of the support over the last few months. We will continue to review the greater part that it can play.

[Lord Leigh of Hurley (Con) [V]]

My Lords, I refer to my register of interests. There is no question that we need some sort of public wealth investment bank to replace CBILS—perhaps using the old model that 3i had. However, the BBB is not the answer. It does not have the mechanics, the experience or the expertise to make the direct investments in SMEs that are badly needed. Would my noble friend meet me and other practitioners to discuss the mechanics of how we can get relatively small equity investments into SMEs in the very near future?

[Lord Agnew of Oulton [V]]

I am very happy to meet my noble friend to discuss that, but I stress that we expect the private sector to step up to the mark in investing in these small businesses in future. We have the EIS and the SEIS, and we will continue to review them.

Budget Statement

Lord Leigh of Hurley Excerpts

Wednesday 18th March 2020 Lords Chamber

[Lord Leigh of Hurley (Con)]

My Lords, I welcome my noble friend to his new role. I was one of those who called out in private discussions with previous Chancellors and in public for this House to have a Treasury Minister, and it is appropriate that the Treasury has a direct line to the wealth of experience and expertise in this House, as this debate shows.

This Budget and subsequent statements needed to be about two things. First and foremost, it was about survival. Our economy, our businesses and our people were threatened as they have not been since the Second World War. Fear stalks the market even as it does the supermarket aisles, so now is not the time to talk about missed fiscal targets. This was a moment for the Chancellor to do whatever it takes to get us through this crisis. He could do so because our economy is in so much better shape than it was in 2010, given the mistakes made before then.

It is true that this crisis is unlike financial crashes that I have witnessed from 1972 to 2008, in that it is not driven by an endemic and systemic failure of our economic system. This could mean that the recovery is rapid. However, that depends on what is left once Covid-19 has passed. I am talking in particular about small businesses. We are confident that this will run for months, not years, but those will be long months for many businesses short on working capital, supplies and customers. Whole swathes of our economic and social life are being shut down in the name of prevention and control. In every one of those businesses, jobs are under threat, and many will not survive. On all sides of the House, we hope that the measures announced will be successful, and we are so grateful to see such a competent person in the role at this time.

Access to working capital is vital. I am, however, concerned about the ability of the British Business Bank and commercial lenders to combine quickly enough to provide the needed liquidity. It will take time—time we do not have. Each loan still has to be assessed by a bank official. Make no mistake: these loans will not be given and will not save the people who work in businesses which are just not able, in the opinion of the bank’s loan officers, to pay them back. Even if 80% of these loans are underwritten by government, the bank is not going to want to lose its 20%. Therefore, cruise businesses and those in travel, leisure and gaming and all their suppliers, and many others in a similar climate, will be deemed non-viable and will not get the loans.

I further suggest that the Chancellor considers more direct measures, as has been discussed here: emergency loans but delivered through the tax system via PAYE or VAT. This would be so much more direct for businesses which need it. If the directors of a business determine that it can survive, we need to help that business keep as many people as possible, so a PAYE holiday this month, to be recouped over the next six months, would save a lot of redundancies. We must also be aware that the £10,000 given as a grant to businesses which are eligible for small business rate relief, subject to the important point the Minister made, could be a rogues’ charter, but it is a price we will have to pay.

It is true that we have a significant package of measures designed to get us through the next year intact. However, our current insolvency laws are not helpful for this unique crisis. Currently, directors of limited companies, who must be mindful of their responsibilities to creditors and to avoid personal liability, are almost pushed to call in the administrators. This is a disaster when in fact a business has just a short-term liquidity crunch. Indeed, it may be that the Chancellor produces more rescue help in the next day or so, but that may be a day too late. A director does not know what is going on but he or she knows that administration will protect them. We urgently need a relaxation of the insolvency laws, which I gather Germany is doing right now, for some sort of Chapter 11 or other interim moratorium. It is needed immediately and it should last for the next few months. I cannot emphasise enough how urgent this is. I have been in touch directly with Ministers in BEIS but perhaps my noble friend and his colleagues can address this issue later today.

On the Budget itself, I am very glad that the Government will not pay for extra borrowing with changes to either business property relief or IHT, or by the mooted mansion tax, but I am very disappointed that they have chosen to reduce the lifetime limit for entrepreneurs’ relief from £10 million to £1 million. This flies in the face of what is otherwise a commendable Budget for innovation. The idea is that entrepreneurs who are not salaried but risk their own capital should keep more of the proceeds if they succeed. HM Treasury claims that this will net an extra £2 billion or so a year, but that assumes that entrepreneurs will not change their behaviour at all—of course they will. In my line of work—I disclose to your Lordships’ House my registered interests—I already know of entrepreneurs who are planning to start up their next business in Singapore or to emigrate to avoid, legally, capital gains tax. It was a short-sighted and counterproductive move. If we want entrepreneurs to take big risks, as we do, we have to allow them big returns. I know that people in the Treasury and the Resolution Foundation do not like it but I say to them: get over it. I hope in future Budgets the £1 million figure will be raised.

I ask my noble friend whether his officials will provide clarity on the extra funds to be provided to SMEs for apprenticeships to support an increase in the number of high-quality apprenticeships in the 16 to 18 range. Given the 47% drop in those apprenticeship starts, what plans are in place to recruit and fund 16 to 18 year-olds into apprenticeships? One start might be to ban MBAs from being covered by the levy.

I also repeat the plea made regularly by myself and my noble friend Lord Lucas for online marketplaces to be liable for the collection and remittance of VAT—Amazon being the prime example. This is taking place in most of the USA and many other countries. The UK’s competitors are cracking down on this evasion but we have not, thus making the UK increasingly attractive to VAT fraudsters. All we seem to have done is to pursue with a vengeance the one whistleblower who has revealed the scope of the problem: a Mr Richard Allen. This matter is costing our country substantially in lost VAT and really does need action from the Government.

All that I have said and asked for should not take away from a Budget from a Chancellor who has risen to the occasion. British businesses and citizens were crying out for an almighty show of fiscal force and that is exactly what they got.

Political Parties: Donation Rules

Lord Leigh of Hurley Excerpts

Wednesday 22nd May 2019 Lords Chamber

[Lord Young of Cookham]

That was a slightly less consensual approach from my noble friend than that from the noble Lord, Lord Kennedy. If we did go down that road, I doubt whether any legislation would be retrospective. I suspect my noble friend would agree. It would be for the Electoral Commission in the first place to put proposals forward for such legislation.

[Lord Leigh of Hurley (Con)]

My Lords, I refer to my interests as a senior treasurer of the Conservative Party. Does my noble friend the highly respected Minister agree that, unless we want political parties funded by taxpayers, there needs to be a sea change in the way that donors to all political parties are treated and respected? There should be no discrimination against them, and they should stop being vilified in the national press.

[Lord Young of Cookham]

I agree. Political parties are an essential part of our democratic system. They give people choice at election time; they incubate and nurture the politicians who will run the country; and they provide a forum for political discussion and policy development. If they were not going to be funded by volunteers, they would be funded by the taxpayer, which would be a deeply unpopular suggestion. I applaud all those who, out of their post-tax income, subscribe to the political party that most accurately reflects their values. They should be applauded rather than denigrated. I am particularly grateful to my noble friend for the generosity that he has shown to my party.

Election Expenditure

Lord Leigh of Hurley Excerpts

Wednesday 13th February 2019 Lords Chamber

[Lord Young of Cookham]

Yes. Before we had the Electoral Commission many of its responsibilities were discharged by the Home Office, which was, of course, run by political animals; namely, Ministers. It enhances confidence in the democratic process to have an independent commission, such as the Electoral Commission, in charge of the rules. We have no intention of departing from the principles which underpin the Electoral Commission. I think I am right in saying, as the Opposition spokesman at the time, that my party supported its establishment.

[Lord Leigh of Hurley (Con)]

Despite my noble friend’s last answer, does he think that the Electoral Commission provides good value for money, with a budget of £17 million a year and 200 staff, which is more than most of the organisations it regulates?

[Lord Young of Cookham]

It is within my recollection that at the beginning of the coalition Government, when all public bodies were put under scrutiny, the Electoral Commission was asked to reduce its core expenditure by 30% in real terms—a very substantial target—so it had to make economies. I hope that, like all public bodies, it will seek efficiencies in every way possible. I note from its most recent annual report and accounts that it underspent by just over £1 million last year, and that money was returned to the taxpayer.

Economy: Personal Savings

Lord Leigh of Hurley Excerpts

Thursday 12th July 2018 Lords Chamber

Moved by

[Lord Leigh of Hurley]

That this House takes note of the measures being taken to promote personal savings and the role they can play in building a stronger and fairer economy.

[Lord Leigh of Hurley (Con)]

My Lords, first, I offer heartfelt thanks to those noble Lords who have chosen to speak today. I know that personally I normally allocate the night before a speech to prepare or finalise my words—yes, these words have been prepared—and that many of your Lordships do likewise. Given the competing demands last night, I am very grateful to those in this Chamber who have decided to speak today. I am looking forward to hearing from all speakers but perhaps I may say how much I am looking forward to hearing, in particular, from my noble friend Lord Lilley and how pleased I am that he has chosen this debate for his maiden. We very much look forward to it.

I also preface my remarks by reminding your Lordships of my interests as listed in the register. I am on the advisory board of Metro Bank plc, and am the senior partner of Cavendish Corporate Finance, which advises companies in the financial services sector, including those in areas that I will cover today.

Despite our relatively small numbers this morning, I notice and welcome the enormous expertise of all the other speakers in this debate. In passing, I observe that this is the beauty of having in your Lordships’ House active working Peers of sufficient number to bring expertise to a debate like this, and it is why I am not convinced of the merits of too big a cull from our numbers of those with constructive knowledge.

Despite many predictions to the contrary, certainly given by some two years ago, much of the economy remains in good shape: GDP growth is up to 0.3% in May, from 0.2% in the previous quarter; ONS figures show exports at a record high of £620 billion in the year to May; tax receipts are up; and unemployment is down. However, as we consider these upward trends, we must of course consider something else—no, noble Lords will be pleased to hear that it is not the “B” word. We must consider the fundamentals that underpin this growth. How sound and sustainable are they?

There is a tendency to assume that all our prospects are determined by our legal and regulatory relationship with the European Union. Important though that is, we must not lose sight of matters that fall directly within our gift: technology, innovation, investment, research and so on. To add to that list, we are here to discuss savings, and specifically its role in making sure that our growth is sustainable and our productivity increasing. Governments tend to view savings with a degree of ambiguity: it is always tempting to encourage consumption now to boost tax revenues. One thing is certain about the UK, though: we never seem to save enough, regardless of where we are in the economic cycle of savings and tax revenues. However, the lack of savings harms our productivity by ultimately curtailing investment and innovation, and so it is neither trivial nor a quirk of the UK—it needs to be addressed.

What savings we do have are often locked up in unproductive assets such as property, stoking inflation and denying home ownership for too many. What can be done about it? In its most recent Financial Stability Report, the Bank of England states that household debt is now back below pre-financial crisis levels. If ever there is a time to pull hard on whatever policy levers we have, it is now. The economy is still growing and we need savings buffers to be replenished now.

Unsurprisingly, it is the least well off who have the least savings, forcing them to rely on high-cost credit. Clamping down on high-cost credit is not the answer. The reason why people use such services is not usually due to predatory lending, and is certainly not due to irresponsibility on the part of the borrower. It is simply not having savings to finance rainy-day activities such as trips to visit loved ones, white goods repairs or home improvement. The Building Societies Association is carrying out specific research into this. The biggest problem is affordability. The Government’s decision to take anyone earning up to £11,500 out of tax altogether has created more opportunities to save. We now need good policy to ensure that these opportunities are taken up. That is why we should commend the Help to Save scheme—a better targeted scheme than its namesake, Help to Buy. Help to Save allows anyone entitled to working tax credit or child tax credit to deposit up to £50 a month and receive up to £1,200 in tax-free bonuses. In addition, auto-enrolment has changed the nature of pension savings for good, with millions now contributing, giving them a real economic stake in our economy for the first time. Indeed, the proportion of eligible people contributing to workplace pension has risen from a low of 42% in 2013 to 81% today.

Accompanying these new schemes is an improvement in the financial advice available, through the new single financial guidance body, chaired by Hector Sants. Sound advice is a necessary condition of embedding a savings culture so that we can empower a new generation to take control of their finances responsibly. With savings policy and the vehicles available becoming more dynamic, the advice needs to reflect this. Bringing the work of the commendable Money Advice Service, the Pensions Advisory Service and the DWP Pension Wise guidance into one place is essential. As people move from ISAs to LISAs to pensions saving, giving them a single point of contact will enable them to make better decisions.

I also commend the ABI, which has produced a guide for the industry on working with and providing products to vulnerable customers. After all, the industry should not and does not have to wait for the regulator to develop an approach to dealing with customers who need additional help and advice. Having a vulnerability policy in place should be its first act of leadership on this issue.

Turning to regulation, it is first important to give credit where credit is due. The FCA is developing a highly progressive, market-leading approach to regulating new products and services. The “sandbox” is being imitated the world over as the best way to allow fintech firms to test out their products in a live firing exercise, so that they can understand how they will be treated when they scale up to the mass market. For savings and investment, this dynamic approach is creating new opportunities in AI, machine learning, fraud prevention and cybersecurity, and opportunities for the firms themselves through so-called regtech, which actually reduces compliance costs for regulated firms.

More prosaically, there are areas where the FCA needs to do better, especially in its over-zealous approach to consumer protection, which does long-term damage to both providers and savers. For example, the funding of FSCS is becoming hugely problematic for smaller firms. This is being driven by the lack of a long stop on claims, which means that pay-outs can still be demanded on advice that was provided in the 1980s. That does not seem right. It also means that the burden of covering this liability, of course, falls on those currently seeking advice, which seems unfair and makes the process more expensive for all those concerned.

Similarly, there remains too much legal ambiguity around the Financial Ombudsman Service, its judgments and the role of the FCA. Your Lordships will recall my comments in regard to the ombudsman during the Second Reading of the Enterprise Bill.

A good example of the issues with the ombudsman is the case of SIPPs, self-invested personal pensions. These are tax wrappers that enable investment into a range of HMRC-approved investments. The FCA has rightly acknowledged that SIPP operators are not responsible for the investment advice given to SIPP members—the former is responsible for the wrapper only—and yet this was overruled by the Financial Ombudsman Service, which is of course complete nonsense. The result is huge legal uncertainty for all SIPP providers and, more besides, continuing uncertainty as to the role of the ombudsman and its relationship with the FCA and the FSCS.

It might be a sensible starting point always to look at these issues from the perspective of the consumer—I understand that—but this should not include making judgments that are outside any current legal precedent. Ultimately, this will come back to the consumer, with less choice, more expensive advice and, yes, lower rates of savings and investments. I ask my noble friend the Minister to confirm to me—possibly later in writing—that it is still the Government’s policy to allow savers to invest in unregulated investments of their choice through a SIPP, which is a huge attraction to many who want to make their own investments and savings choice. If that is the case, what steps will Her Majesty’s Government take to ensure that SIPP providers will not be liable when, as is inevitable, some of these investments go wrong? I have seen huge uncertainty and I am very concerned about the SIPP market.

However, two other dynamics are potentially more impactful than government policy and regulation, both of which can be a force for good for savings: technology and new attitudes to responsible investment. First, technology is creating new products that make saving easier and even—believe it or not—fun for savers. Products such as Moneybox allow people to round up everyday purchases into investment funds. You buy your cup of coffee, you pay through Moneybox and you have the opportunity to put your change straight into a savings product. Monzo allows a customer to ring-fence a current account in any way to create pots of savings for different purposes. This is a far cry from filling in forms, going to the post office and getting plain vanilla, low-interest savings accounts.

Technology also helps with tackling the financial inclusion challenge. In 2012, 2 million people took out some form of high-cost credit. If they had access to savings pools this might not be necessary. Research has shown that if households had just £1,000 in accessible savings their risk of debt would be reduced by 44%, which could prevent half a million families from falling into problem debt.

The desire to save is ubiquitous but higher barriers exist for the poorest. Tax-free incentives such as ISAs are aimed at those who can afford to save thousands of pounds a year, so new businesses looking to help the unbanked, such as Pockit, which Cavendish is helping, are to be welcomed. It has found that few high-incentive savings products currently exist for those who can afford to put away a few pounds every week or month.

I recognise that the Government are addressing this issue from different directions. Last night—before 7 o’clock—I went to a DCMS reception for the inclusive economy at No. 10 Downing Street, where I met Jerry During, a director of Money A+E, which has a government grant and is an award-winning social enterprise that provides money, advice and educational services to BAME, black, Asian and minority ethnic people, and seeks to reach out to other communities in London. As I mentioned earlier, the Help to Save scheme will begin to address this problem, but technology can help as well. Companies like Aire provide non-standard credit scoring tools that allow normally sub-prime or unbanked borrowers to access cheaper loans.

Secondly, responsible investment is becoming increasingly interesting to the next generation of savers. Some 77% of 22 to 29 year-olds in the private sector are now contributing to a workplace pension. As these pots are built up and technology allows better management and more transparency, where people’s money is invested is becoming more important. The United Nations sustainable development goals create opportunities for people to save more, but by investing in things that matter to them. Closer to home, in 2016 Swindon Council crowdfunded a green bond to allow local residents to invest in local solar energy projects, which is marvellous. Connecting local savers to investment opportunities that they themselves have a community stake in can be very powerful.

While saving rates are still low, there are reasons to be optimistic. Government policy is coming together through different departments with new technology and evolving social attitudes to create the best opportunity we will get to embed a savings culture in the UK. In doing so we will improve our productivity and, most importantly, reduce financial exclusion. That is why I am pleased to move a debate on this subject and I look forward very much to the contributions of noble Lords and of course to the response of my noble friend the Minister.

--- Later in debate ---

[Lord Leigh of Hurley]

My Lords, I thank all noble Lords who have taken part in this debate. One never knows quite what to expect in any debate, but I had not expected a debate on savings to include an extremely interesting lesson about eighth-century politics. I am extremely grateful to my noble friend Lord Lilley for that and for his welcome remarks in his maiden speech. The noble Lord, Lord Davies of Oldham, was typically gracious enough to compliment my noble friend Lady Altmann. We all benefit from my noble friend’s extremely detailed knowledge of the savings and pensions industries—I will always remember to differentiate between the two—but she does not have a monopoly of wisdom. The time that was kindly allotted to us enabled a number of very interesting arguments to be fully developed. It was a pleasure to hear those arguments taken forward and to have a short-lived break from Brexit, which I understand will change very shortly.

My noble friend the Minister was, as ever, most courteous in his response. There is a limit to what the Government can do in a low-rate environment, but one thing they can do is listen to good advice. For that, I am very grateful.

Motion agreed.

Immigration Statistics

Lord Leigh of Hurley Excerpts

Monday 12th March 2018 Lords Chamber

[Lord Young of Cookham]

I am sure that the noble Baroness is right. Speaking from memory, I think that tax revenue from the cohort that she mentioned exceeds the amount of benefits paid to those people. I do not have the exact statistics in front of me, but I am sure that one can make available the net contribution of migrants to this country to the labour market.

[Lord Leigh of Hurley (Con)]

My Lords, does my noble friend agree that reliance on the International Passenger Survey is totally inadequate? The chairman of the public administration committee said recently that the immigration figures are little better than a best guess, while the Royal Geographical Society has said that they are not fit for purpose. Asking less than 0.6% of people who arrive in this country about their intentions without any corroboration or follow-up is surely a wholly inadequate way to measure these statistics.

[Lord Young of Cookham]

The IPS interviews 800,000 people per year, which is quite a broad base for a sample. When I asked the ONS about this, it confirmed that the IPS survey continues to be the best source of information to measure long-term international migration. However, as I said in response to my noble friend, it will strengthen that information by accessing data from other government sources which it could not access before. That will enhance the credibility of these figures, and the ONS plans to use the system I have just outlined by the end of 2019 with regular updates. As I have said, this will produce a richer set of statistics.

Party Funding Reform

Lord Leigh of Hurley Excerpts

Thursday 3rd November 2016 Lords Chamber

[Lord Leigh of Hurley (Con)]

My Lords, first, I apologise to the House and to our friends in Hansard for my voice. It is not at its best, having completed a half marathon for Water Aid just a short while ago. I should also make a declaration of interests, not all of which are in the register of interests because they are not required to be so, but I am a senior treasurer of the Conservative Party, and I have been a treasurer of the party for some 16 years. I am also chairman of the aforementioned Conservative Leaders Group. I hope to remain in the job and that it does not become redundant. I congratulate the noble Lord, Lord Wallace, on securing the debate. Surprisingly, I agree with quite a lot of what he has said. Somewhat ironically, he and I both served on a committee to investigate aggressive fund-raising by charities. I hope that there is no need for a committee to look at aggressive fund-raising by political parties.

I start from the initial premise that parties ought to be self-sufficient and not reliant on state funding for their resources. I was lucky enough to be invited to the ACRE dinner this week at which the Edmund Burke award was presented to John Howard, the former Prime Minister of Australia. We were reminded that the source of political parties some 220 years ago, largely thanks to Edmund Burke, was created from a loose coalition of people who had roughly the same ideas. Since then the precise nature of a political party, its ownership, rules and structure, has changed and evolved over time, and unlike the emergence of limited companies or professional partnerships, they are complicated organisations which defy the normal textbook rules of ownership and governance.

While some countries have looked to the state to finance independent political parties, we in the UK have had a very proud history of ensuring that our political parties are just that: independent and not reliant on state financing. State funding, in my view, would be a dangerous road to take and could threaten the existence of political parties. It would be extremely unattractive and unacceptable to most people in the UK to see our political parties in any way dependent upon the state, which then might have influence, directly or indirectly, with direct or indirect threats, nudges, promises, hints—however subtly done—about the ongoing nature of that state funding.

We can be proud that in the UK we have a plethora of parties at the moment, all of which exist because people with passion and vision have helped to create them and have invested both their time and their personal financial resources to make them what they are. I accept that there is some sort of soft state funding in the form of Short money, and I note that the other place has voted for greater transparency in this source of funding. Perhaps we could see the same for Cranborne money, all of which is, of course, taxpayers’ cash. Disclosure and transparency is the key. The Conservative Party is unique in that every member of the Conservative Leaders Group—[Interruption]. I will carry on.

As I say, there is some soft state funding through the Short and Cranborne money, and there has been a move in the other place for greater transparency. I think that the Conservative Party is unique in that members of the Conservative Leaders Group who attend dinners with Prime Ministers all have those names disclosed on a quarterly basis. That is not a legal requirement, it was something that David Cameron proposed voluntarily and it continues to this day. Again, I believe that disclosure and transparency is the key against any undue influence.

In my opinion, party funding is not, in the nature of the world, big money. Big money does not go to the parties and is not needed by the parties. I know that the noble Lord, Lord Wallace, will not agree, but the sums involved are small and they are decreasing. In the 2015 election, the total spending by all parties was £37.25 million as opposed to £31.5 million in 2010. All the candidates combined spent a further £11.7 million in 2015 in the short period as opposed to a much higher £14 million in the corresponding 2010 short period. Additionally, if one looks at the long period in 2015, the spend was £10.7 million as opposed to £11.2 million in 2010. Overall, the important numbers are as follows: £59.8 million was spent in the whole of the 2015 election as compared to £56.8 million in 2010. The whole of that increase is explained by the Labour Party’s spend in 2015 of £12 million, as opposed to £8 million in 2010, so congratulations must be extended to the new Labour Party treasurers on doing a great job, more on which anon.

Let us put these sums into context. To run your Lordships’ House alone costs some £100 million a year, just on day-to-day expenditure, excluding capital costs. Each and every year this House spends more on running costs than the whole amount spent in a general election in the UK by every political party combined, and that is only once every five years. Looking across the pond at the topical American elections, which the noble Lord, Lord Wallace, invited us to do, the figures are extraordinary and give us some perspective. As of last week, the disclosed figures are that the Democrat party had raised $1.3 billion and the Republicans some $800 million for the 2016 election alone. The predictions have been for a total spend in the US elections of some $5 billion, which is quite some distance from our £57 million.

It is perfectly true to point out that the Conservative Party manifesto made a commitment to,

“continue to seek agreement on a comprehensive package of party funding reform”,

but the key word in this sentence is “agreement” rather than “reform”. It is worth pointing out that on the same page of the manifesto is a pledge to,

“cut the cost of politics”,

which seems to rule out any state funding. We are therefore left looking only at existing donors to parties. I wonder whether my noble friend the Minister would agree that we need to do more to encourage individuals to be donors to political parties, and that people will be so encouraged only if they feel a sense of pride in their contribution to British public life through these donations. At the moment there is a very unhealthy and unsatisfactory tendency for people who choose to donate money to political parties to be castigated for so doing. Currently the press uses the adjective “party donor” as a pejorative term. In reality, of course, the reverse is true.

All of us who have had any involvement with campaigning on the ground, as I think nearly every Peer speaking will have done, come across those who give their time tirelessly to a political party. I disclose my interest in this as president of the Westminster North Conservative Association.

[Lord Taylor of Holbeach (Con)]

I must remind my noble friend that this is a time-limited debate. He is limited to eight minutes and he has now had eight minutes.

[Lord Leigh of Hurley]

I am most grateful to my noble friend. I apologise. There was a disruption in the middle of my speech.

I conclude by saying there is room for further progress on party funding reform, which will be to the benefit of all parties, to be achieved through agreement between them around a table—perhaps with the people here tonight—rather than elsewhere. But what is paramount is that we encourage citizens to step up to the plate and be proud of their role in helping UK political parties, of whatever colour, and that the Government take their part in achieving this ambition.

Trade Union Bill

Lord Leigh of Hurley Excerpts

Tuesday 3rd May 2016 Lords Chamber

[Lord Sherbourne of Didsbury (Con)]

My Lords, I think my noble friend Lord Forsyth has unravelled a puzzle. I, too, am disappointed by what has happened. I assumed that when the Conservative Party put in its manifesto the commitment to move from opt-out to opt-in, it thought it was the right thing to do. When it appeared in the Bill, I thought it was the right thing to do. I thought the party thought it was the right policy, and I think it was the right policy.

I have heard the word “compromise” used today. The noble Lord, Lord Whitty, used it several times. I understand that we are at the end of the Session. I understand the need for compromise, concession and deals. But this is none of these things. This is the abandonment of a Conservative manifesto pledge, and we should say that. I notice that my honourable friend in the other place, Mr Nick Boles, turned what was a manifesto commitment into what he called a suggestion in the manifesto. It was not a suggestion; it was a promise. When we debated this last time, my noble friend the Minister said it was right for Governments to honour their commitments.

Of course I accept the decision of the other place. My noble friend Lord Forsyth has given his explanation of why this manifesto commitment was abandoned. I say only that junior Ministers in this Government, who are extremely able and good, often have a very hard task.

[Lord Leigh of Hurley (Con)]

My Lords, I will not speak for long because we have discussed this at length. I think we have all reached agreement as to why, as my noble friend Lord Sherbourne said, we are going from opt-out to opt-in. We have been through some people’s perception that there has been legislation in the past that has affected political disclosure, if not donations, and have discussed PPERA. But we have now reached a point where we have something before us. This time, unlike on previous occasions, I find myself agreeing with the noble Lord, Lord Cormack, on where we are.

I am grateful to the noble Lord, Lord Forsyth, for crystallising my mind: clearly I am not an influential Conservative Peer because my suggestions have not been adopted.

[Lord Forsyth of Drumlean]

My noble friend is extremely influential. It was Mr Boles who did not think to include him.

[Lord Leigh of Hurley]

I am grateful for that clarification. The noble Lord, Lord Robathan, has explained how Ministers approach these problems. Sadly, again, I have never had the honour of being a Minister. That is most unlikely. I come from more of a business background and in business when one wants to get things done invariably there has to be an element of compromise. Like the rest of the House, I congratulate the noble Lord, Lord Burns, on achieving a compromise. How and why it was achieved we will perhaps never know but it has been achieved. We will end up with an opt-in. It will take longer than other people thought appropriate but it will happen. The suggestion of the noble Lord, Lord Burns, of the publication of the opt-in levels achieved is excellent and to be welcomed. On all those grounds, I welcome these amendments.

[Lord King of Bridgwater]

My Lords, I think we are in for a pretty bad couple of months, in which conspiracy theories will abound and suspicions of motives will arise in every possible circumstance as we approach an interesting referendum. I notice the good humour in the Chamber today. I think that if these amendments had not been tabled, there might be a very different atmosphere indeed. I agree very much with what my noble friend Lord Forsyth and the noble Lord, Lord Cormack, have said.

Democratic power has to be used with discretion and responsibility. The noble Lord, Lord Whitty, referred to this, and I agree with aspects of what he said. I was worried about the way that the Bill, as originally drafted, was going to go. Whatever discussions there were in government and in another place when the amendments came forward and were considered, I hope that there was a bit of historical memory in them—I think that there was—because we have been here before.

I was there in 1984, when it was proposed that we would do something about opting-in. I do not think that I am breaking a great confidence if I tell the House that the noble Lord, Lord Jopling, who was then the Chief Whip, had an interesting discussion with the Labour Chief Whip of that time, Michael Cox, who some may remember. They were arranging the business, as Chief Whips do, in those awful usual channels. There was agreement and compromise at that time in the Session. Then the issue came up about opting in—and the message was delivered quite simply and clearly: “If you do that, there will be war”. That was because it is an essential problem of political funding, with which all parties have problems, that the trade union contribution is massively important to the Labour Party. A sudden change in that would have significantly affected the balance and would have seemed, to many eyes, to have been a pretty unfair action and maybe an abuse of majority political power at that time.

It was against that background that such a proposal was put forward. When we considered it in the Bill that became the Trade Union Act 1984, Mr Len Murray came to see me for the trade unions and we discussed the issue. He had previously had discussions with my predecessor and noble friend Lord Tebbit, who one could not call a soft touch on these matters. But my noble friend made it clear that if the Trades Union Congress wished to put forward alternative proposals, he would be prepared to consider them. It fell to my lot to consider those proposals. We agreed that we would not proceed with the opting-in proposals, on the strict understanding that actions would be taken by the TUC and all affiliated unions at that time. That is why I agree very much with the last comment of the noble Lord, Lord Burns, because we are where we are now. I support the actions in respect of new members coming in. That is an important step forward which did not exist before. We were not able to arrange it or go forward on it in my time; maybe we should have done.

I would like to read part of the statement that Len Murray—Lord Murray, as he was subsequently—gave when he came to see me and exchanged correspondence. He gave me a copy of the statement of guidance to the trade unions. It said:

“Following discussions between the TUC and the Secretary of State for Employment, the General Council have prepared the following Statement of Guidance on good trade union practice in respect of political fund arrangements and related matters for use by affiliated unions. Unions are asked to review their existing procedures as soon as possible to ensure that this guidance is acted upon”.

That guidance was satisfactory to me and to the Government because it made it clear that every affiliated union had given an undertaking that it would make sure that all its members were properly informed of what their rights were in these matters. The guidance ended with the statement:

“It is particularly important that unions’ procedures avoid the possibility of members being unaware of their rights in relation to the political fund or being unable to exercise them freely”.

On that understanding and on behalf of the Government, I agreed not to proceed with introducing changes to the situation on opting-out or opting-in.

The disappointment for me in the discussions on this Bill is to discover that only a very small number of the unions which were affiliated to the TUC ensured that the undertaking given to me on behalf of them all was actually carried out.