Financial Services and Markets Bill

Lord Mountevans Excerpts

2nd reading
Tuesday 10th January 2023 Lords Chamber

[Lord Mountevans (CB)]

My Lords, it has been a great pleasure to hear the three maiden speeches this evening. The noble Lord, Lord Remnant, was a fellow alderman in the City of London; I remember we all thought that he was first-rate material to be lord mayor, but unfortunately the City assumed him and took him away from us. We have seen tonight just how valuable his contribution will be. I equally congratulate his colleagues. Our House has been enriched this evening.

This is an important Bill, which I welcome and support. There is much that is valuable in it, such as enshrining that regulators exercise their new powers in the service of public policy objectives, set by Parliament, which maximise the industry’s contribution to society. I warmly welcome moves to build a robust regulatory regime for digital assets and to support digital innovation in distribution ledger technology, employing the sandbox technology that has been so successful in fintech. The introduction of references to economic growth and competitiveness has long been on the industry wish list.

Bringing the marketing of crypto assets under the existing financial promotion rules is highly desirable, as are the introduction of a new regulatory principle for the FCA and the PRA to have regard to the need to contribute towards achieving the UK’s net-zero obligations and steps to ensure that domestic legislation is amended to ensure that mutual recognition agreements can be fully implemented. This should reduce the cost of doing business and facilitate more competitive client service and offerings.

Some noble Lords have regretted that the Bill is not more proscriptive and wider ranging. However, the UK’s regulatory regime is a key factor in its perceived attraction as a global financial centre. With respect, profound changes are unappreciated and unhelpful. As we saw as recently as last autumn, it is important to be perceived as predictable, stable and strategic. Profound changes are to be avoided.

I am not an expert in regulation and have not worked in banking, insurance or, for example, the LSE. I was elected 11 years ago in the City and worked there for 45 years. From my contacts there, I think there is contentment with the Bill and its contents. These are steps in the right direction. It is a very important sector; as I and others have said, from research, it is critical that financial services flourish in this country.

I too would have liked to see more action on fraud and regulatory accountability, and opportunities for consumers have been missed. Hopefully, the Government can address this. The principal concern is the speed at which reform is proceeding. We have suffered the negative impacts of leaving the EU but are not succeeding in enhancing and improving our offer fast enough to compensate. Can the Minister say in summing up whether the regulatory organisations, with their immensely demanding and complex responsibilities, are fully equipped with the staff and resources required for the discharge of their duties and functions? This is more critical than ever at this time, as underlined most eloquently by the noble Lord, Lord Grimstone.