Business of the House

Debate between Lord Newby and Baroness Hayter of Kentish Town

Thursday 4th June 2020 Lords Chamber

[Baroness Hayter of Kentish Town (Lab)]

I start by thanking the noble Baroness for introducing this and ask her to pass on our good wishes for a speedy recovery to her Cabinet colleague, the Business Secretary, whom we just hope does not have the virus. Even the thought of that is testimony to the good sense of the Leader’s Motion and the work behind it, which will enable this House to continue to function with all our Members able to participate, whether or not they are having to shield or isolate for any reason. It is vital for the work of Parliament. As I know the noble Baroness agrees, it really would not be fair to exclude any Peer on the basis that their age, their caring or other responsibilities, their or their family’s disability or other risk factors or the demands of public transport made it difficult or dangerous for them. In fact, maybe we have a lesson for the Commons in this respect.

Of course, the hybrid system cannot match our normal practice. That is one of the many fallouts from the virus, though less serious in its effects than others. In particular, we will miss spontaneous interventions—that might perhaps be a relief to Ministers—which is why, I am afraid, I have a specific plea to make to the Leader of the House.

As it will not be possible to press a Minister who has failed to respond to a point, there is an extra responsibility on every Minister to respond to the points made—something, I am sad to say, we have not always seen of late. Perhaps because there will be no comeback, we have seen some Ministers brush aside questions or concerns in a way that undermines our scrutiny function. Perhaps the noble Baroness could use her good offices to ensure that Ministers always address the points made or, if they really cannot at that moment, follow up with a letter—as indeed some Ministers do. It is a time of national crisis and we have seen information given to journalists, before Parliament and sometimes even straight to camera with no chance for questions. That is not a healthy way to proceed and, vitally at this time, does not make for good decisions. That is why what we do here remains of great importance.

We welcome the Motion and the ability to vote as well as speak remotely. I hope that the spirit of debate, accountability and questioning will be welcomed by the Government and that Ministers will take their responsibility to the House seriously.

Finally, I take this opportunity to thank the staff, and the Peers on the committees mentioned who have been involved in these changes, for all their work in making it possible. It seems they have thought of everything, even remembering to allow a Speaker to take Committee from the Woolsack rather than having to move—I love that level of detail. Careful marshalling is going on outside the Chamber in the walkways and facilities. All that does not happen by accident; it takes planning, but it also takes boots on the ground. I am very conscious that the staff I have seen here this morning—from the cleaning and facilities staff to the clerks and the PPO—have to travel by public transport to come here in order that we can continue to meet. Our thanks are due to them all and to the Government Whips’ Office, as the noble Baroness mentioned. I hope our thanks can be passed on to them all.

[Lord Newby (LD)]

My Lords, I also thank the Leader of the House for moving the Motion. There are lots of details in it, but I want to make just four general points. First, I join other noble Lords who have spoken in thanking the staff for their work in getting us to this position. Change in your Lordships’ House is not readily embraced as a matter of principle, but over the last couple of months the degree of change has been phenomenal. That has been possible only because a large number of staff have worked extraordinarily hard, not least during the recesses, and I pay tribute to them for that.

I also thank them for their customary good humour in dealing with the frustrations that Members have sometimes felt about the way things have worked, which have sometimes boiled over on to them. It has been very much welcomed by me and everyone else. It has been a stressful time for a lot of people, not least for Members who are at home with the peculiar stresses of not being able to go out and desperately keen to play their normal role in your Lordships’ House.

This brings me to my second point. Having got this hybrid system up and running—which I am sure will be done smoothly—I hope that we retain it until all noble Lords who wish to attend can attend and are no longer subject to advice that, for health reasons, they should remain at home. Obviously, given the age profile of your Lordships’ House, there are more people in that category here than in another place, but it should be a matter of principle that all noble Lords who wish to participate can participate, and that we have a system that enables them to do so, even if, in some cases, they cannot be here for a considerable number of months.

Thirdly, the rules that we are agreeing today are extremely tight and prescriptive. That is inevitable, because we need a system that we can make work from next week. However, I suspect that as we use it—just as has happened a bit with Oral Questions—we can ease some of these restrictions so that we can get back to a position where debate in your Lordships’ House takes place in a relatively flexible manner. The obvious thing about this is the circumstances in which people can make interventions. Obviously, it is not going to be possible to have the normal interventions when you have tens of people watching distantly, but I hope that we can begin to move, in the light of experience, towards a slightly less rigid approach, because that is the essence of debate, and until we do, we will still be suffering some constraints.

Finally, the one outstanding issue which must be resolved is that of allowances, which I realise is an extremely vexed question. The only point I wish to make is that it is unacceptable to me that we should have a system which leads to a position whereby only those with resources, those who are retired and those who live in London can regularly come to your Lordships’ House. I think that this is common ground, but getting back to a system in which people are paid an allowance that allows everybody to participate fully is a top priority. We have agreed in the commission to come forward with revised proposals on allowances. We are beginning those discussions and have said that we will do so by the end of the month. Given that Members are already asking on what basis they will come if they are travelling several hundred miles, I hope that we can get a resolution to that question well before the end of the month, so that we can give a degree of certainty to Peers on what basis they can participate. Having said that, I repeat that I support these proposals, and I thank the staff and all those involved in getting us to this position so speedily.

Business of the House (Virtual Proceedings and Topical Questions for Written Answer)

Debate between Lord Newby and Baroness Hayter of Kentish Town

Tuesday 21st April 2020 Lords Chamber

[Baroness Hayter of Kentish Town (Lab)]

My Lords, in supporting this Motion, I shall say two things. The first is that the seriousness of this issue was brought home to us by the loss of one of our own, my noble friend Lord Gordon of Strathblane, last month, but many others have lost family and friends and some of us have lost icons. Everyone is aware of the dedication and care of the NHS, and also of those in food supply and transport who enable life to continue, and we would be remiss if we did not pay tribute to them.

As the Minister said, at 3 pm we will see, we hope, the introduction of a wholly new and innovative way of working to meet the needs of Parliament to question the Government, pass legislation and continue with our democratic role. It is important that that continues. The work that there has been to enable us to achieve that is extraordinary and our thanks are due to the Chief Whip, the Lord Speaker, the party leaders, the Members on the Cross Benches and the Bishops who have been involved, and particularly to the technical and procedural staff, those in the Chamber and the cleaning staff who have done everything to get us here. It may not be perfect and there may be more to do, but, astonishingly, it is here and we are happy to support it.

[Lord Newby (LD)]

My Lords, I join the Chief Whip and the noble Baroness, Lady Hayter, in thanking all those who have worked so hard to make this possible. A number of them will know that I have been quite impatient about some of the changes and in some cases do not feel that they have necessarily gone far enough—but, frankly, if we look at where we were a fortnight ago and compare it to where we are today, which is that from next week we will be having a wholly virtual House of Lords, it is by most tests, and certainly by House of Lords tests, a very quick rate of progress. We have achieved a position in which every Member will be able to continue to participate in the business of your Lordships’ House, however vulnerable they might be in terms of their health, and that is very welcome.

I, too, thank everybody who has made all this possible. It is a work in progress to a certain extent. Those of us who have been participating in practices for various bits of virtual activity later in the day know that it will not go totally smoothly on the first day—but I am sure it will do so quite quickly, so I again thank all those involved.

Leaving the European Union

Debate between Lord Newby and Baroness Hayter of Kentish Town

Wednesday 22nd May 2019 Lords Chamber

[Baroness Hayter of Kentish Town (Lab)]

I thank the Minister, but with some sadness—worse, alarm—at the Statement. It is not simply that it is Groundhog Day all over again. It is not even that it is a cut and paste job on earlier versions, with the faux descriptor of being a “new deal”—which I think would make Roosevelt gag. No, it is that this Government have lost the ability to govern. In truth, that was evident right from the start, from the 10 December cancellation of the meaningful vote—and then, more obviously, with the 230 defeat, followed by the embarrassing 149 defeat on a second try, and then by 58. One wonders what it takes for the Prime Minister to hear.

In truth, after that first 230 defeat, the worst for any Government in modern parliamentary history, the Prime Minister should have resigned or been visited by those apocryphal men in grey suits. When a leader loses their flagship policy by such a margin, and loses the support of the Commons, normal parliamentary custom requires a change at the top—particularly because that defeat was of the Prime Minister’s own making.

When she moved to No. 10, many of us imagined that she would try to implement the referendum by crafting a departure deal that was as good as it could be for the country and had the approval of the Commons. Just in case that did not happen, we ensured that any departure agreement would need Commons approval—good in itself, but vital with the country so divided on this issue. Perhaps innocently—especially when Keir Starmer was made a Privy Counsellor—I imagined that the Government would engage with the Opposition to shape the sort of deal that would be acceptable across the House.

After she lost her majority in 2017, I was even more sure that Mrs May would work on something to win over a divided House—and we were always clear about what that would take. Indeed, my right honourable friend Keir Starmer spent many hours in Brussels discussing the parameters of what might be acceptable to the EU 27, so that none of our demands would be unacceptable to them. In speeches and interviews, he offered up options to bring Parliament and the country together. They were all ignored, including in last night’s last-minute letter to my right honourable friend Jeremy Corbyn. They were ignored by a Government who cannot even hold their own party together, never mind the country or Parliament.

So we have this sorry sight today: a speech made first not to MPs but to PwC—whose strapline, by the way, is:

“To build trust in society and solve important problems”.


Perhaps it should have given some advice to the Prime Minister, for her speech yesterday was rejected within minutes by her own side before the Opposition had even seen the text—and now we hear that some of her own Ministers will not vote for it. Indeed, I gather that there are letters going in to try to oust her straight away, while the ConHome website is urging people not to vote Tory tomorrow if she is not on her way out by the end of today—the day before an election.

So my question to the Leader is: where do the Government go from here? Why do they not have the confidence to put their deal to the public if they believe it is so good? Will she confirm that the Government will heed the Commons vote of 13 March, categorically rejecting no deal in any circumstances, as referred to in the Statement? Will she take back to the Cabinet this House’s vote against any no-deal exit and remind her colleagues of the strength of that view? Will she personally undertake to respect the view of this House—the House that she leads—on that, and vote against any such no-deal proposal within Cabinet, whether it is one led by Mrs May or by anyone else?

[Lord Newby (LD)]

My Lords, this is now the 16th time that we have debated the Prime Minister’s deal and what to do with it. Each time we have done so, the Prime Minister has claimed that she has made some new, bold, improved offer for which she begs our support. But each time she does this—and this time is no exception—she is simply putting lipstick on a pig. It remains a pig and everybody can see it is a pig. That is why, as is clear from the comments of DUP and Tory MPs, this latest attempt is doomed to failure like the rest—almost certainly by a bigger margin than the third time that she failed to get it through the Commons. This is hardly surprising.

I will not weary the House by taking your Lordships through all 10 of the Prime Minister’s points; I will take just two. First, there is the legal duty to try to conclude alternative arrangements to replace the Irish backstop by December next year. This refers to technical means to ensure that there are no physical checks on the Irish border. But we know that no such technological solution exists—and certainly nothing that could even remotely be put in place within 18 months. So this promise cannot be fulfilled, as the Prime Minister herself must know. It is a straightforward deceit, and one of the many reasons why her proposals will be rejected by the Commons.

Secondly, there is the promise of a vote on a confirmatory referendum. I am obviously delighted that the Prime Minister now sees a referendum coming down the track. But the idea that she has made a new concession by saying that MPs will be allowed to put down an amendment on the issue, which presumably she will oppose, is neither new nor a concession. When we put down an amendment to the withdrawal Bill calling for such a referendum, we did not ask for the permission of the Leader of the House or the Government. We just did it, and the Commons has the ability to do it to the withdrawal agreement Bill, with or without government approval. So this alleged concession is a nothing, like all the rest.

Tomorrow, we are having a proxy poll on Brexit. We obviously do not know the results but we can be pretty confident that those parties which are clearly advocating leaving the EU, on either hard or soft terms, will not get a majority of the votes. I am sure that the Leader of the House will be grateful that it is a secret ballot. That way, we will never know how many Members on her own Benches vote for other parties. We know that it will be a considerable number.

This election will demonstrate the state of public opinion on Brexit, but it will also dispel the scare stories that having a national public debate on the issue would lead to civil unrest and possibly violence. A couple of milkshakes have indeed been thrown, but this campaign has been conducted like all campaigns in this country. It has been very largely civil, respectful and thoughtful. Yes, there are many people on both sides who are angry, and I have met a fair number of them in recent weeks. But they recognise that the way to deal with this issue and their anger is to vote and not to punch somebody on the nose. There is no evidence whatever that a further referendum would lead to any different method of proceeding. To suggest that it might is both irresponsible and desperate. I therefore invite the Leader of the House to disassociate herself from the Statement by the Prime Minister today about such a referendum unleashing “forces”—not specified, but clearly designed to make our flesh creep. They do not make my flesh creep, because they are simply another attempt to scare people into denying the electorate another say.

Just as the Prime Minister’s deal has not changed over months, neither have the options facing the country. There are only three. It could accept the deal and leave the EU on that basis; it could leave the EU without a deal; or it could decide to retain our membership, prosperity, security and influence by remaining in the EU, by asking the people to confirm that way forward.

It is now six months since the Prime Minister reached the current deal, and it is increasingly clear that failing to get a decision is a very costly exercise. It is not just the ridiculous £4 billion wasted on no-deal planning. Ask steelworkers in Scunthorpe today whether this delay, this inability to get an agreement in the Commons and this failure to give people a say are having an impact on people’s lives.

We can wait no longer—not for another improved, new, shiny, meaningless offer from the Prime Minister, not for a leadership election in the Tory party and not for a general election. Tomorrow’s vote will demonstrate that the country remains starkly divided on Brexit, but it will also demonstrate that there is no majority for Brexit on any terms and that the demand for a people’s vote to get us out of this Brexit nightmare cannot now be stopped.

Business of the House

Debate between Lord Newby and Baroness Hayter of Kentish Town

Thursday 4th April 2019 Lords Chamber

[Baroness Hayter of Kentish Town]

My Lords, we are actually dealing with the amendment on whether we should have a committee report. I draw the attention of the House to the speech Mr Steve Baker gave late last night in the Commons. I do not know why I should pick on him at this particular moment—

[Lord Newby]

He is here.

[Baroness Hayter of Kentish Town]

Oh! I had not noticed. Mr Baker was looking forward to the Bill coming to your Lordships’ House, in the,

“fervent hope that their Lordships will examine this Bill line by line”,—[Official Report, Commons, 3/4/19; col. 1217.]

and give it good attention. The hope was that we would get on and deal with the Bill, and that is what this Motion is about.

However, I speak now to only the amendment in the name of the noble Lord, Lord True. He asked me why I did not take an intervention from the noble Lord, Lord Strathclyde. I was moving a Motion: normally, you move a Motion, then people stand up and ask questions and points of order, and at the end one comes back with the clarification. That seems to be the correct way to do it.

On the particular issue of whether we should have a committee, we have a committee report on this Bill. Even if we did not, the point of committees is to assist this House, not to stand in the way when something needs doing. Their members are also Members of this House, and can therefore give their very wise—and often learned, in the case of the Constitution Committee —advice directly to the House. We can do it then.

The important thing I want to raise, because I was not able to on the last amendment, is the idea of how awful it was that we were moving this, rather than the Government. As I said at the beginning, it should have been the Government who brought the Bill to the House, because that was what the House had passed before. We are doing it because that was not done. The noble Baroness the Leader of the House said that it is normally the Government who table Private Members’ Bills. Yes, but they failed to do so. We will do it when they do not. The Leader of the House is obviously in a difficult position—

European Council

Debate between Lord Newby and Baroness Hayter of Kentish Town

Monday 25th March 2019 Lords Chamber

[Baroness Hayter of Kentish Town (Lab)]

My Lords, as we are about to have a debate, I think it would be useful for me to keep my comments for when I speak in that debate.

[Lord Newby (LD)]

My Lords, the same applies to me.

Leaving the European Union

Debate between Lord Newby and Baroness Hayter of Kentish Town

Tuesday 26th February 2019 Lords Chamber

[Baroness Hayter of Kentish Town (Lab)]

My Lords, I thank the noble Baroness for repeating the Statement on Brexit, which is clearly high on everyone’s agenda. I have sat beside my noble friend Lady Smith of Basildon on previous occasions when she has rightly described the Government as, “living in the moment ... managing to get through another week …providing less clarity rather than more … failing to give any confidence that the PM knows where this is going or, more worryingly, ploughing on towards the cliff edge”. Indeed, as my noble friend has said, it seems that each week MPs are told to expect a meaningful vote the following week, only for it to be delayed again and again. Today, 31 days until our planned departure, this is even more true.

In fact, the most significant of the Prime Minister’s words were those briefed to journalists on her plane to the summit; namely, that there would be no meaningful vote in the Commons tomorrow but that again it would be delayed until 12 March, 17 days before 29 March, and even then with no guarantee that her deal would pass muster there. So, on 27 February, more than a month after the 21 January date in the withdrawal Act by which the Government should respond in the event of a deal not being possible or not being ratified, Mrs May still has not allowed the Commons a meaningful say on the next steps. It is the Prime Minister’s new date, that of 12 March, which changes the dynamic of Parliament and Government. That is because the Government seem to have given up their ability to govern and, as we heard over the weekend and last night, there are Cabinet and other Ministers who are prepared to resign or defy the Whip to end this footsie with a no-deal threat. They are right to insist that Parliament has to put an end to this reckless nonsense of threatening our own economic future—a sudden departure from a massive trading bloc into the unknown territory of WTO terms of trade with new tariffs and formalities as well as costs to industry—simply so that the Prime Minister can try and pull her recalcitrant ERGers into the government Lobby.

It was perhaps the threat from these Ministers and the likely success of the Cooper-Boles-Letwin amendment that forced today’s undertaking to ensure a vote such that we could,

“only leave without a deal on 29 March if there is explicit”,

consent in the Commons. However, the undertaking is only to exclude departure on 29 March without a deal. It does not rule out the continued threat of a no-deal departure altogether. Indeed, the Prime Minister explicitly said that a subsequent Article 50 extension,

“cannot take no deal off the table”.

All she is promising is a temporary parliamentary block on no deal prior to reinstating it as a continuing threat during the months ahead. This will not do. Both this House and the other place have made it clear that this should never be our departure route. It is damaging and madness to contemplate otherwise, as many of her ministerial colleagues in this House and in the Commons know full well.

Moreover, businesses are clear: whatever the end outcome, they need time to plan and adjust. A no-deal outcome with no transition period simply does not allow for that. The cost to our citizens living in the EU could be enormous as their driving licences could be worthless in months, their health cover end, and their residency and employment status change. As the government analysis released at 5 pm this evening makes clear, a significant proportion of critical no-deal projects are not on track. It also says that despite the publication of no-deal guidance, a large proportion of businesses and citizens are not adequately prepared. In particular, food businesses are unprepared, with concerns that consumer panic will exacerbate any shortages. There will be a more severe impact in Northern Ireland than in Great Britain and potential gaps in data flows without an adequacy decision. The report’s conclusion is damning, saying that,

“the short time remaining before 29 March 2019 does not allow Government to unilaterally mitigate the effects of no deal.”

I have to say that the word “irresponsible” is too mild a term for the Prime Minister’s refusal to take no deal completely off the table.

Such is the stalemate—and worse, the crisis—in government over Brexit that tomorrow Labour will ask the Commons to vote on our alternative for a deal. We will remind the Government that of the 432 votes cast against the deal, only a minority were Conservative, focusing on the backstop. The Opposition’s 300 votes against the deal were about the political framework’s inadequacies. Yet the Prime Minister has sought only to buy off the Tory rebels, dismissing these other major concerns about our future relationship with the EU. So we will seek to do what the Government have failed to: win cross-party support for a closer relationship with the EU after Brexit. Should that fail, when the Government return to Parliament, be that on 12 March or next week, Labour will support a call for a public vote on Mrs May’s deal since in its unamended form it risks our country’s economic prosperity, internal security and global influence in a way that Parliament by itself must not be given the freedom to allow to happen.

Your Lordships will know that we preferred Parliament to oversee the Article 50 process and for the Government to craft a future relationship with the EU to maintain growth and prosperity which could command support in the Commons and the country. They have spectacularly failed to do so. And if the Government cannot command the confidence of Parliament on this issue, they should go back for a new public mandate.

We face testing times. Whatever the outcome in the Commons—to accept or to block no deal—legislation will, as has been said, be required with great speed, at the very least to change by SI the exit date to allow for an Article 50 extension. But more than that, other legislation is likely which, because of its importance, demands careful unhurried scrutiny. Will the Leader of the House therefore give her support to an extension of Article 50? We know that Cabinet responsibility seems to have broken down, so let her break free and give us that understanding. For the sake of business as well as for our own sake, will she allow that extension, and guarantee that there will be no attempt to fast-track vital Bills to make up for the shameful delay caused by the Government’s own failure in negotiation?

Will the noble Baroness also commit to allowing proper time for scrutiny and debate, and for consultation with relevant stakeholders on the detail of legislation? And will she take back to the Prime Minister our view that until no deal is ruled out, not just for 29 March but permanently, we will have little faith that she is putting our country ahead of her party.

[Lord Newby (LD)]

My Lords, I thank the Leader of the House for repeating the Statement. The first interesting thing about it is the insight it gives us into the state of the negotiations between the UK the EU. We are told that they are “focused”, and “making good progress”, that they are “constructive” and “positive”, and finally that they are “continuing”—which is all sort of mildly encouraging. But following the passage of the Brady amendment a couple of weeks ago, the Government went back to Brussels to try to get amendments to the provisions relating to the backstop in one of three ways. The first was a time limit, the second a right for the UK unilaterally to withdraw from it, and the third was the development of so-called “alternative arrangements”, which would render the backstop unnecessary.

Of these, the EU made it clear from the start that Nos. 1 and 2 were non-negotiable, which left only No. 3 —alternative arrangements. The Statement is very clear about where negotiations on alternative arrangements have got to. The Prime Minister says that we have,

“agreed to consider a joint work stream to develop alternative arrangements … This work will be done in parallel with the future relationship negotiations … Our aim is to ensure that, even if the full future relationship is not in place by the end of the implementation period, the backstop is not needed because we have a set of alternative arrangements ready to go”.

The Prime Minister has therefore accepted that no concrete progress whatever will have been made on defining any alternative arrangements before 29 March. This means that, of the three possible ways of dealing with the backstop in a manner that would be acceptable to the Conservative Party and the DUP, none will have been achieved when the next meaningful vote takes place in a couple of weeks’ time. The only logical conclusion, given this failure to achieve anything, is that the Government will again lose a vote on their deal. It is against this background that the remainder of the Prime Minister’s statement needs to be judged.

It is crystal clear that the Prime Minister’s hope was to get to mid-March and, despite having failed to make substantive changes to the backstop, attempt to scare MPs into voting for a deal they do not support, by threatening them with crashing out of the EU a mere fortnight later if they rejected it. Faced with the Cooper-Letwin proposal, which would in those circumstances defer the withdrawal date, and a rebellion of Cabinet and more junior Ministers, she has today bowed to the inevitable and said that if the Commons voted against her deal and against no deal, she would put a further Motion to the House of Commons providing for an extension to Article 50.

The Prime Minister has said that the key votes will be on the 12 and 13 March at the latest. Why “at the latest”? Does the Prime Minister think there is any chance whatever of having an agreement with the EU that she would be able to bring back to the Commons next week? Whatever the exact timing, and whatever our concerns about the somewhat convoluted approach being proposed by the Prime Minister, that is a welcome recognition by her that the Cooper-Letwin Bill would otherwise pass, and that there is a majority in the Commons to extend Article 50. The challenge with which our colleagues in another place have to grapple is whether they trust the Prime Minister’s word or whether they want the assurance that the Bill would have provided. I believe that Oliver Letwin is happy to accept the Prime Minister’s assurance, but I am a bit unclear as to where Yvette Cooper has got to on that. We will just have to see how events pan out.

In any event, the Prime Minister’s principal argument —indeed, her only argument—against such a Bill is that it would tie the Government’s hands and have far-reaching constitutional implications. By this she means that the Commons would take back some control of the way in which it organises its business. Will the Leader of the House accept that for many of us, this seems a positive development, not a constitutional outrage?

If there is no Cooper Bill, it is highly likely that the Prime Minister’s Motion to defer Article 50 will pass on 13 March, but this is only phase 1 of getting out of the mess we are in. As Sarah Wollaston put it earlier today in responding to the Statement, we are only talking about:

“a short gangplank added to the cliff edge”.

Phase 2, and the only way of breaking the deadlock, is to put the Government’s deal to the people for their final decision, with an option to remain in the EU if they believe that that would be better for our economy, security and influence. Today the Prime Minister did a U-turn on extending Article 50. We now wait with eager anticipation for her next U-turn: to give the people a vote.

European Union (Withdrawal) Bill

Debate between Lord Newby and Baroness Hayter of Kentish Town

Ping Pong (Hansard): House of Lords
Wednesday 20th June 2018 Lords Chamber

[Baroness Hayter of Kentish Town (Lab)]

My Lords, the House of Commons has done what we had hoped: they have considered and debated our meaningful vote amendment. They have not done what some of us hoped and agreed with it, but I think we should celebrate how far we have come on this issue since the Bill arrived in this House. At that stage, there was absolutely nothing in the Bill about a vote, meaningful or otherwise, on the withdrawal deal and there was no mention of no deal. All the Prime Minister had said was that there would be a vote in both Houses on a deal. There was no commitment to that in law and the result of such a vote would have had no legislative consequence. The vote would have simply been on a Motion, which could be ignored—I will not go into whether it would have been amendable. Any such vote in this Chamber would have been particularly meaningless, as either we would have felt obliged to vote the same way as the Commons, whatever our view, or we would have voted differently and then been ignored, both of those, of course, being meaningless for this House, because as my noble friend Lord Grocott rightly feared, if there were two votes, one in each House, it would raise the question of the primacy of the House of Commons.

So that was all we had: the promise of a Motion but untied to any legislation. What we now have in the Bill is that the withdrawal agreement, including the framework for the future relationship, can be ratified only if it has been approved by the Commons and debated here. That is a legislative requirement akin to the Article 50 requirement for a vote in the European Parliament. That is a major concession. It would not have been there without the hard work of the noble Viscount, Lord Hailsham, without your Lordships’ commitment to ensuring that this matter was in the Bill, and without us sending the amendment back on Monday.

However, I have a query about what would happen if there was no deal, as to my mind the rather extraordinary last-minute Written Ministerial Statement, as a result of which Dominic Grieve seems to have felt that he could support the Government this afternoon, does not really clarify things. I am not sure what it means. Will the Motion be amendable? Liam Fox is already out and about, briefing that actually there is no change as a result of that. To me, it reads that it still leaves it to the Speaker to decide whether or not it is sufficiently neutral to be amendable. So it is not actually an undertaking that such a Motion will be amendable. Perhaps the Leader could shed a bit of light on the significance of what made such a difference to the right honourable Dominic Grieve.

In the meantime, with the catalogue of changes to the Bill outlined by my noble friend Lady Smith on Monday and the insertion of parliamentary approval of the withdrawal deal agreed today, I hope even the Government will recognise the vital role played by your Lordships’ House, and that our detractors, particularly in parts of the press, will realise that it is our role to ask the Government, and the Commons, to think again. We have done that, and to quite a large extent we have been heard.

[Lord Newby (LD)]

My Lords, it seems rather hard to believe but this really will be the last time we debate the withdrawal Bill in your Lordships’ House.

As we did on Monday, we are focusing on only one issue—indeed, the significance of just two words in relation to a Motion that the Government would bring forward in the event of reaching no agreement with the EU on Brexit terms. The two words are “neutral terms”—a phrase, incidentally, which most of us have never heard before. The argument which won the day in the Lords was that “neutral terms” would preclude the Commons having the opportunity to express a view on the merits of the Government reaching no deal in the Brexit negotiations and on what should be done next. The Government argued that their formulation was necessary to preserve the constitutional role of Parliament and that the Grieve amendment would mandate the Government in completely unacceptable ways and they would not countenance it. Your Lordships’ House took a different view and that is why we are still here today.

Between the Bill leaving your Lordships’ House on Monday evening and this afternoon, the Government have clearly thought deeply about this matter and realised that their understanding of parliamentary procedure on Monday was flawed. They produced the Written Ministerial Statement—which, unless I missed it, the Leader did not refer to at all, yet that has been the crucial thing in the debates today—which, in lay man’s terms, says that it will be up to the Speaker to decide whether or not any government Motion in the event of no deal would be amendable, and that, in any event, there is nothing to stop the Commons debating any Motion that they want to on this issue, and that time would be found for them to do it.

There is now a battle of spin as to whether this represents a significant climbdown by the Government or whether winning the vote represents a victory. I wish that the right honourable Member for Beaconsfield had supported his own amendment this afternoon. But if I am disappointed, neither the Government nor Parliament can take any satisfaction from what has happened today. This week’s events demonstrate the contempt in which the Government hold Parliament. First, they try to muzzle it by putting “neutral terms” into the Bill. Then, fearing defeat, they publish a Written Ministerial Statement just minutes before the debate in the Commons which rips up their earlier justification for using the “neutral terms” ploy. At every turn they have demonstrated their only consistent characteristic: the determination to survive to another day. If there were a World Cup in kicking the can down the road, the Government would win it hands-down. But the can cannot be kicked down the road for ever.

European Union (Withdrawal) Bill

Debate between Lord Newby and Baroness Hayter of Kentish Town

Monday 18th June 2018 Lords Chamber

[Lord Newby]

My Lords, I am sorry that the Government did not feel able to accept the amendment that your Lordships’ House passed on this issue, but at least we now have a workable amendment.

I have just one question for the Leader. She said that she was confident that the committees would be able to respond “at pace” to the flow of statutory instruments coming before them. I am absolutely confident that they can respond at pace, but can the Government produce the statutory instruments at pace? Furthermore, if 1,000 statutory instruments will be required to implement this Bill when enacted, and given the probability of a transition phase, how many of those 1,000 statutory instruments have to be enacted before 29 March 2019?

[Baroness Hayter of Kentish Town]

My Lords, I can be very brief, because the noble Lord, Lord Newby, has noted exactly the same words as I have—“at pace”. These words alarmed me, because although some of us feel that we worked very hard on this Bill, it is as nothing to what the people on those committees will be doing. I wish them luck.

My question is related to that: when are we expecting the first of these SIs? Now that we have this, we need to move fairly fast to set that up. I very much hope that the colleagues sitting on the other side of the Leader will accept the Motion that we passed today. In that case this would be our last meeting on this Bill. We have already thanked the Bill team again, but it would be wonderful if they did not have to come back. In the meantime, they have at least another day’s work. For the members of these committees, however, their work has just started.

European Union (Withdrawal) Bill

Debate between Lord Newby and Baroness Hayter of Kentish Town

Report: 3rd sitting (Hansard): House of Lords
Wednesday 25th April 2018 Lords Chamber

[Lord Newby (LD)]

My Lords, I too thank the Minister—I fear that that will not necessarily be very common, so I am pleased to be able to do so now. I am sure he will agree with me that these amendments are sensible, appropriate and necessary.

[Baroness Hayter of Kentish Town (Lab)]

My Lords, I commend the Government for these amendments, which respond to and accept the arguments made in Committee. As I argued then, and there is a reason for me repeating this, the very way that we set up quangos—how they are appointed, funded and run, and particularly their reporting structures and independence from both government and any other organisation they happen to be regulating—is key to how they work, hence the need for primary legislation so that we can interrogate all these things. That is why I very much welcome what has been said.

I am afraid, however, that I am led to make one comment, which is aimed not at the Minister but at friends of his in another place. After the vote last week on the customs union, we read in the Sun that the Government were going to remove those Conservative Peers who had voted for a customs union from their various positions on public bodies. I am absolutely certain that those threats, although mere briefings, did not emanate from anyone in this House. That is simply not the way that I have seen those on the Government Benches here work. They recognise the role of the Lords and that it is our job, on occasion, to ask the Commons to think again, even if sometimes that is a bit inconvenient when it comes from their own side. However, it was rather disturbing to learn that there are certain people around No. 10 who could, even for a moment, think that it would be right to undermine the independence and arm’s-length nature of such bodies, as is often written into their statutes, simply because Members of the House of Lords voted in a certain way. Everything I know about Ministers in this House means I know that not only were they not involved in this but they were probably as shocked as I was. Perhaps the Minister would like to take the opportunity to distance himself from such threats and reaffirm what I know to be government policy: that any appointment to such bodies is done without fear or favour and nobody would be taken off them for a choice that they made in this House.

On the essence of the amendment, and particularly given the role of the Minister and his officials, we are happy to support the government amendments.

The Process for Triggering Article 50

Debate between Lord Newby and Baroness Hayter of Kentish Town

Tuesday 24th January 2017 Lords Chamber

[Baroness Hayter of Kentish Town (Lab)]

I thank the Minister for repeating the Statement. I thank also the Supreme Court judges for doing their constitutional job: as they made clear, not commenting on the wisdom or timing of Brexit, but on how UK law—our law—requires the Government to act.

So here we have it. The Government failed to make the referendum binding, leaving it advisory, which helped to fuel the uncertainty that has ended only today. Once we knew the outcome of the referendum, the Government failed to take the sensible route: to get Parliament, effectively, to ratify the outcome by agreeing to trigger Article 50. Then the Government failed to heed the High Court view that it was for Parliament, not Ministers, to take this step. So the Supreme Court has ruled—as we expected—that Parliament must authorise the Prime Minister to start the exit negotiations by invoking Article 50.

So we are today where we should have been on 24 June: with Parliament to take the decision, albeit with the Government determining the timetable. The court has ended the uncertainty over the process for triggering Article 50. However, there is still one large, outstanding matter—the remaining uncertainty. What is the plan? What is the framework which the Government intend should guide their negotiations on our relationship with the EU 27 post exit? What is the plan for how we leave and for our future trading and other relationships with the EU 27?

It is no good saying that the plan is a speech that the Prime Minister gave, not even in Parliament but to ambassadors at Lancaster House. That is not sufficient for Parliament—for this House, the Commons or indeed the Select Committee—to be able to scrutinise whether the Government’s objectives are the right ones for the UK and whether their negotiations are achieving those objectives.

We need to know how the emerging post-Brexit relationship will promote jobs and the economy; how it will protect environmental, social and consumer rights; how it will ensure that all parts of our nation—rural areas as well as cities—will benefit; and how the Government will ensure that our trade with the EU—and beyond—can be free of tariff and non-tariff barriers.

This House needs to examine the Government’s exit plan. Our EU Committees are doing splendid work on the detail of available options. We need to measure the Government against the evidence that they are producing on costs and benefits.

Today simply says how the exit process should be started. Will the Minister say when the Article 50 Bill will be published and whether it will include a plan for how we exit the EU? We will be watching the Government from now on, to ensure that they negotiate in the interests of all our people, and with the consent of this House and the other place.

[Lord Newby (LD)]

My Lords, I thank the Minister for repeating the Statement.

We should at least be grateful for the clarity of today’s ruling. This was, however, a completely unnecessary legal procedure. If the Government had brought forward shortly after the referendum the Bill which the court has now forced upon them, it would now be safely enacted and much time, effort and cost saved. It is a sign of the robustness of our constitutional arrangements that a private citizen can require the Government, against their will, to play by the rules, but it is greatly to the Government’s discredit that this was ever necessary.

Now we have the Bill, I should make clear what the stance of these Benches will be. On 23 June, the British people did not vote for a particular version of Brexit, and the majority of people certainly did not support leaving the single market—a course on which the Government are now firmly set. We will therefore seek to amend the Bill to provide for a referendum to be held when we know the terms the Government have been able to negotiate. The Government may have a mandate to start Brexit negotiations; they certainly do not have a mandate to impose harsh Brexit terms on the country.

Can the Minister give us any further information about the planned timetable of the Bill through your Lordships’ House? It will clearly not be possible to maintain the normal minimum intervals between stages of the Bill if we are to deal with it by the end of March. We understand that but can the Minister give an assurance that the Government will not attempt to ram the Bill through in a few days, as appears to be the case in the Commons?

The Government say that the timetable for invoking Article 50 by 31 March,

“has given valuable certainty to citizens and businesses in the UK and across Europe”.

Can the Minister explain precisely what certainty has been given to the millions of EU citizens living in the UK, and those UK citizens living in the EU? The Government’s Statement says that they will,

“work closely with the people and Administrations of Wales, Scotland and Northern Ireland as we move forward”.

Can he tell the House exactly what form that commitment will take over the period between now and 31 March?

Finally, in view of the Government’s reluctance to involve Parliament in triggering Article 50, can the Minister confirm that as the negotiations unfold the UK Parliament will, as has been promised, receive information on their content and progress to at least the same extent as the European Parliament will be informed about progress by the EU Commission?

Financial Services: Cold Calling

Debate between Lord Newby and Baroness Hayter of Kentish Town

Monday 17th November 2014 Lords Chamber

[Lord Newby]

My Lords, the regulation of cold calling is split between the FCA, the Information Commissioner’s Office and Ofcom. The Nuisance Calls Action Plan was issued by the Government earlier in the year, one of the key parts of which is to bring these components together and to work with equivalent bodies in other parts of the world from where people make cold calls. In addition, a consultation is currently under way, which recommends that it should be much easier in future for the Information Commissioner’s Office to take action and to enforce penalties against people who are breaking the rules.

[Baroness Hayter of Kentish Town (Lab)]

My Lords, next week we will have our amendment to the Consumer Rights Bill to deal with nuisance calls. It would make it compulsory for every marketing call to reveal its number, either for blocking purposes or to enable action to be taken. Will the Minister ask his friends in BIS to support that amendment when it comes to the House next week?

[Lord Newby]

I will definitely relay the noble Baroness’s request to my noble friends. As she will know from Committee on the Bill, a number of examples were given which made it less straightforward than she suggests, not least in terms of family members having access to calls being made from organisations such as helplines.

Financial Services Bill

Debate between Lord Newby and Baroness Hayter of Kentish Town

Monday 26th November 2012 Lords Chamber

[Lord Newby]

And, my Lords, that is what it means.

[Baroness Hayter of Kentish Town]

My Lords, I thank the noble Lord, Lord Newby, for making my case. He said that who the lead regulator is will depend on the issue. The bodies will have to work closely together. The one thing that he did not explain was why on earth we should not write into the Bill that the two regulators should co-ordinate and have a memorandum of understanding. It seems a simple point.

I thank the noble Lords, Lord Trenchard and Lord Phillips, and my noble friends Lord Peston and Lord Barnett, for their support. I also thank my noble friend Lord Borrie, whose advice, given that he was director general of the OFT, I take seriously. The last of the three amendments does not touch on the difficult issue he raised, that is, laying down who does what. It basically says there should be a MoU between these two very important issues. The Minister says not to worry, that there is one and they are working on it, but in the interests of transparency, I would have preferred to see it statutory and therefore published. However he is clearly not going to give way on that, so I fear I must. I beg leave to withdraw the amendment.

Financial Services Bill

Debate between Lord Newby and Baroness Hayter of Kentish Town

Tuesday 20th November 2012 Lords Chamber

[Lord Newby]

I will check what I said, but it may have covered what the noble Lord is looking for. If it does not, I shall write to him with the relevant wording.

[Baroness Hayter of Kentish Town]

My Lords, I am sorry that the Minister did not listen to what I said, which was the reverse of passporting. It was about the passporting of our banks into EEA countries. I was interested in the protection of customers in those areas who are served by the UK banks that are being passported there but would be regulated here. Our regulator should therefore cover that. That is a different issue from the one that the Minister has answered. If he would check on that, I would be quite happy for us to revert to the matter at Third Reading. I am interested in consumers wherever they happen to dwell, such as the consumers in EEA areas being served by our banks. I am therefore worried about their lack of coverage by our compensation scheme, which should be brought to their attention. If I could leave the Minister to clarify that, at this stage I beg leave to withdraw the amendment.

--- Later in debate ---

[Baroness Hayter of Kentish Town]

My Lords, this amendment stands in the name of my noble friend Lord Eatwell as well as mine. It is about transparency and we have moved from passporting to prohibition orders, with a big jump to Clause 12. The amendment would ensure that, when a prohibition order is made, the regulator publishes its reasons and the individual's name appears on a list of people subject to prohibition orders on the Treasury website. The purpose of this is both to promote good practice, by making it clear what constitutes bad practice, and to enable investors and others easily to identify who has been subject to such an order.

As was clear in Committee, the issue did not really divide us. At that stage, I quoted Matthew Hancock as saying in another place,

“the principle that prohibition orders on people who are not fit and proper persons should be published is crucial … Prohibition must not only be a sanction for past irresponsible behaviour, but a deterrent for future irresponsible behaviour … the point of prohibition is not only … to stop the actions of those who have … committed acts that make them not fit and proper, but to demonstrate the bounds of behaviour that are deemed responsible and reasonable”.—[Official Report, Commons, Financial Services Bill Committee, 6/3/2012; col. 384.]

The then Minister, Mr Mark Hoban, agreed that prohibition is both a punishment and a deterrent.

When we discussed this in Committee, the noble Lord, Lord Newby, replied in this House along similar lines, saying that,

“regulators ought to give explanations of their actions and I do not think anyone would dispute the need for the identity of persons subject to prohibition orders … to be made known”.—[Official Report, 8/10/12; cols. 860-61.]

However, he felt that the existing duty on the FSA to maintain such a list was sufficient. We disagree with regard to the list of those prohibited. Investors and borrowers here and abroad would be more likely to see the Government as a source of such information, and we would therefore like HMT, via its website, to have a role in this.

With regard to the first part of our amendment, it is crucial, if the findings of a case are to help influence the future behaviour of other firms and authorised persons, that they can read and understand exactly what was alleged and why it was found to have transgressed acceptable behaviour. Hence there is the need to publish reasons. I beg to move.

[Lord Newby]

My Lords, as the noble Baroness says, we discussed this at some length in Committee and, to a certain extent, I am afraid I can only repeat what I said then. I repeat that FiSMA already requires the FSA to maintain a publicly available record of individuals subject to prohibition orders. The relevant subsection simply says that the register must include a record of every,

“individual to whom a prohibition order relates”.

and provides that the register must include the name of the individual and,

“details of the effect of the”,

prohibition order.

The FCA will keep these records in future and the Bill, in paragraph 17 of Schedule 12, also requires the PRA to assist the FCA in keeping the record up to date, including by notifying the FCA of every prohibition order that the PRA makes. The principal effect of the amendment would be to move these records from the FSA website on to the Treasury website. The noble Baroness said, in effect, that the Treasury website would almost command more respect or be more likely to be looked at for this purpose. We disagree with that. The Treasury website sets out government policy, not records of regulatory decisions. The logical place to go for a record of a regulatory decision is to the regulator. We think that it would be confusing if investors expected to go to the Treasury website rather than to the regulator’s website to get the relevant names and other information. In our view, it would be contrary to the noble Baroness’s stated objective of ensuring clarity and transparency. I am afraid I cannot give her much comfort. We believe that what we are doing meets her requirements and that those are better met by doing it via the regulator’s website rather than via the Treasury website.

[Baroness Hayter of Kentish Town]

I thank the Minister for that response. I have a query that is not so much on the website. I think he said that the list was kept along with details of the effects of the prohibition order, which I assume means that this person cannot do this, that, or the other. We were asking for the reasons. I hope that he will look at this, even if there is only a recommendation back to the regulator. It is really important that the allegation and the reason why it was found proven is there as guidance for others. I hope that he will look at that and reassure me that the reasons are there, not just the effects of the prohibition order. With those comments, I beg leave to withdraw the amendment.

--- Later in debate ---

[Baroness Hayter of Kentish Town]

My Lords, we reach the last amendment of the evening, which stands in the names of my noble friend Lord Eatwell and myself. It is short, sharp and clear. The Bill allows for FCA statements of policy relating to its use of disciplinary powers to be provided to anyone, for a fee if necessary; to be given to the Treasury, presumably for free; and to be published as appropriate. Noble Lords will have noticed that the one body not automatically to receive the statement is Parliament. This amendment would correct that oversight. I beg to move.

[Lord Newby]

My Lords, no one disagrees with the proposition that certain important reports and other documents that are produced under the new regime should be laid before Parliament. A good example of this view is to be found in Clause 80 under which, if the Treasury in future receives a report relating to an inquiry or investigation carried out under the provisions of Part 5 of the Bill, it must publish the report and lay what it publishes before Parliament. Since these reports concern inquiries or investigations in connection with possible regulatory failure or on other matters relating to the public interest, this is clearly the right approach. It enables Parliament to consider the matter and, where appropriate, call upon Ministers or the regulators themselves to give an account of their actions. Indeed, the Government are so committed to ensuring parliamentary accountability in this area that they have tabled Amendment 107D to ensure that any direction that the Treasury gives regarding these investigations is also laid before Parliament.

However, the statement of policy issued by the FCA under new Section 88C is not a report of that kind. It is more like the guidance issued under FiSMA, although it is really guidance for the regulator itself rather than for regulated firms. This explains why the FCA must follow the procedure in Section 88D before it issues a statement, which is essentially the same as the procedure when the FCA issues guidance to firms set out in new Section 139A. The Treasury must be notified of any new FCA guidance or changes to existing guidance but it has never been thought necessary for the Treasury to lay that guidance before Parliament, although it will be available on the FCA website.

The approach that we are taking not only follows the general FiSMA model but it is the same approach that is taken in other regulatory legislation. For example, Section 38 of the Competition Act 1998 requires the OFT to prepare and publish guidance on the appropriate amount of any penalty imposed for abuse of a dominant position. It must get the Secretary of State’s approval for it but there is no obligation to lay it before Parliament. Equally, Section 392 of the Communications Act 2003 requires Ofcom to prepare and publish a statement containing guidelines on the penalties that it may impose under that Act or other legislation, except the Competition Act 1998. Again, though, Ofcom is not required to lay that before Parliament.

All we are doing is following normal procedure. We do not think that this kind of guidance should be laid before Parliament because it is guidance to the regulator and will be available on the regulator’s website. In those circumstances, I hope that the noble Baroness will feel able to withdraw her amendment.

[Baroness Hayter of Kentish Town]

My Lords, I thank the Minister for that answer and, via the Minister, I thank his Bill team because they have clearly done some interesting research for us in areas beyond HMT.

Ministers have probably not made the right call. There will be an increased requirement for transparency and Parliament is becoming more interested in questions of guidance, particularly in relation to disciplinary matters. My guess is that there will come a time when more of these will come to Parliament, because saying that it is normal practice and we can go on as before is not necessarily always the right view. We will get there, even if it is not in the Bill, but for the moment I beg leave to withdraw the amendment.

Financial Services Bill

Debate between Lord Newby and Baroness Hayter of Kentish Town

Monday 12th November 2012 Lords Chamber

[Lord Flight]

My Lords, I am delighted to see that my Amendment 37A has effectively been reproduced by the Government. I apologise as I note that my amendment states, “The FCA may appoint”, whereas it should refer to the PRA. I had taken the same wording for the PRA panel as for the FCA panel. It is healthy to have this structure, which will give people greater confidence to work with the PRA.

[Baroness Hayter of Kentish Town]

My Lords, as I said earlier today, it feels rather wrong to establish a PRA practitioner panel while excluding the views of those whose money and savings are at the heart of this industry and who depend on well regulated companies for their well-being. It also looks a bit too cosy a set-up between the regulator and the regulated community with no user-interest input. So, while we do not oppose these amendments, we do not think that they are a balanced response to the demand for the PRA to listen to those who work in financial services.

We know from the Treasury Select Committee report on RBS of the silos that existed even within the FSA between its prudential and conduct sections. With the move to two regulators, physically a mile apart, there is an even bigger risk of such silos. This will not be helped by having two separate practitioner panels, so that even within the industry there will be a split between those addressing one regulator and those focused on the other. This will be the case as regards numerous issues, including, for example, benchmarking. The proposal is for LIBOR to be overseen by the FCA, and therefore have input from the FCA practitioner panel, but how it is working out in practice, the inputs to it and the use made of it will be the preoccupation of that part of the regulated community represented by the PRA practitioner panel. This proposal might therefore not be the best that the Government could have come up with. It was not the first choice of the industry and it would not have been our first choice.

[Lord Newby]

I am grateful to the noble Lord, Lord Flight, for his support for what we are seeking to achieve. I am not surprised by the comments of the noble Baroness, Lady Hayter. However, I hope that the House will feel able to support these amendments.

--- Later in debate ---

[Lord Newby]

My Lords, no one would doubt the importance of stewardship and of ensuring the proper conduct of those authorised persons who manage investments on behalf of others, including in relation to the exercise of voting rights. Stewardship is also a matter for a wider range of authorities than the financial regulators—in particular, the Financial Reporting Council which has issued a stewardship code.

Amendment 46A would require the regulators to include in their MoU provision about the exercise of their functions relating to stewardship. This amendment is based on the premise that the PRA has a role in stewardship. I do not think that this is a correct premise. First, only the FCA will have any powers in relation to listed companies themselves. The PRA has no responsibilities in relation to listing. Secondly, the regulated activities which cover managing investments are not PRA-regulated activities. The PRA will need to regulate an authorised person who manages investments only if the firm also has a permission to carry on a PRA-regulated activity, such as accepting deposits or effecting or carrying out contracts of insurance. In those cases, the PRA will be the prudential supervisor and the MoU will already cover the co-ordination of FCA and PRA interests in these firms.

Amendment 79B would make clear that the FCA’s powers to make general rules include the ability to make rules relating to stewardship. I can assure the noble Baroness that the amendment is not needed. First, there is no doubt that the FCA’s general rule-making powers extend to making rules about stewardship. New Section 137A to be inserted into FiSMA 2000 under Clause 23 of the Bill is quite clear. It states:

“The FCA may make such rules applying to authorised persons … with respect to the carrying on by them of … activities … as appear to the FCA to be necessary or expedient for the purpose of advancing … its operational objectives”.

Secondly, the FCA’s powers essentially follow the existing FSA powers. The FSA has already made a rule which requires UK-authorised asset managers to put statements of commitment to the FRC’s stewardship code on its websites or, if an asset manager does not commit to the code, to provide its alternative investment strategy there. I expect the FCA to continue with this rule. Far from any suggestion that the responsibility will fall through the cracks between the two regulators, it is absolutely clear that the FCA will take on the FSA’s existing powers in respect of stewardship and ensure that they are properly implemented. I hope, therefore, that the noble Baroness will agree to withdraw her amendment.

[Baroness Hayter of Kentish Town]

I thank the noble Lord, Lord Newby, for that. Of course, he did not answer the point that I made. When research is done, it is found that details of the “the comply or explain” commitment are not on the web—neither what is being complied with in the code nor what is there instead.

However, I thank him for the clarity of his answer that it is an FCA responsibility. That rather begs a question that I asked in Committee, and to which I may return, that the code is the responsibility of the Financial Reporting Council, which gets no mention in this Bill. In Committee, the Government refused my suggestion that there should be an MoU between the FCA and the FRC, which is regrettable. The importance that the noble Lord has said about the code and the ability of the FCA to make rules, including the commitment to follow it, strengthens the case for a better connection between them. I at least thank him for clarity on that, but we may need to come back to look at the FCA aspects. For the moment, I beg leave to withdraw the amendment.

--- Later in debate ---

[Baroness Hayter of Kentish Town]

My Lords, we have spoken already about the need to have information from banks about their lending to different communities and sizes of business. The noble Lord, Lord Newby, said that the FCA will collect data about access to financial services. In the amendments we seek to obtain information to identify how well markets are working for lower-income communities. This is therefore broader than simply small businesses, and is about whether lower-income households can get credit, insurance, saving products and banking services. We know already, for example, that about 1.5 million people have no bank account, but we need to know more about what other groups are excluded from such services and products. We therefore ask for the FCA—which will be able to obtain the information—to research and assess whether such needs are being met and to include its findings together with any strategy for dealing with identified unmet need in its annual report. If the FCA is doing its job, it will do this anyway, but this is belt and braces so let us write down our expectations of it in this regard. I beg to move.

[Lord Newby]

My Lords, having agreed earlier today that we want to require the FCA to obtain and publish these data, obviously we have considerable sympathy with these amendments to the extent that they seek to flesh out how that remit should be undertaken. However, that is the end of the good news because we think that the amendments are in part unnecessary and in part inappropriate because they are too prescriptive.

We believe that there is no need for a specific provision relating to the annual report for the FCA because in paragraph 11(1)(b) of Schedule 3 we state that the annual report must cover,

“the extent to which, in its opinion, its operational objectives have been advanced”.

Given that in a series of amendments today we have strengthened the role of the FCA in looking at disadvantage and making that a new area where the FCA has a very specific responsibility, it will have to report in those areas in any respect.

Amendment 61B is very prescriptive. Our view is that with the FCA reporting on this, as with many other things that it will report on, the Bill itself should not have detailed prescription as to how the FCA should do its work. It has a legal requirement to report and it is up to the FCA to respond as it thinks fit. If there is any sense that it is falling down on its objectives, it will be reporting to Parliament and will be questioned by Parliament and Parliament will have the opportunity to raise with representatives of the FCA on a regular basis how it is meeting this and any other of its statutory objectives. I hope that the noble Baroness will feel that the outcomes that she seeks will be achieved in any event and that she can withdraw her amendment.

[Baroness Hayter of Kentish Town]

My Lords, I warmly thank the Minister because sympathy was much more than I got when I spoke on consumer input to the PRA. So I think that I will bank that one. I thank him, too, for endorsing the spirit of my amendments on the record so that when the report comes out people will be able to quote his very wise words that that was what we were looking to the FCA for. With that, I beg leave to withdraw the amendment.

Financial Services Bill

Debate between Lord Newby and Baroness Hayter of Kentish Town

Monday 12th November 2012 Lords Chamber

[Lord Newby]

My Lords, the Government obviously recognise that consumers have an interest in the outcome of the PRA’s actions and decisions. In particular, consumers will be beneficiaries of a safer and more stable financial system. However, the PRA will not focus on consumer protection as an end in itself. That will be the job of the FCA.

New Section 3D in the Bill requires the PRA and the FCA to co-ordinate their functions in areas of common regulatory interest where one may have relevant expertise or a material adverse impact on the objectives of the other. This means that while it is right that the PRA must focus on its safety and soundness objective, where its actions may impact adversely on consumer protection it will need to listen to the FCA, which obviously has the lead consumer protection objective. As the regulator with expertise and analytical capacity in relation to consumer protection, it is right that the FCA should consider stakeholder perspectives, including the views of the consumer panel, come to a balanced view and then communicate this view to the PRA. I do not think that it would be sensible to require the PRA, which will not have detailed expertise in general consumer issues, to consider separate consumer representations and potentially develop an alternative rival consumer view about the best way to deliver consumer protection.

For these reasons, I cannot support the amendment. I hope the noble Baroness will be satisfied that the system will enable all consumer concerns to be represented to the PRA, but that that will be done through the principal channel of the consumer panel that the FCA is to establish.

[Baroness Hayter of Kentish Town]

My Lords, I thank the noble Baroness, Lady Noakes, and my noble friend Lord McFall for their support. I am sorry the amendment does not find favour with the Minister. I think he misunderstands. If he thinks consumer protection is just about conduct, he does not understand the impact of things that the PRA will be doing. The FCA will put only a combined view to the PRA; it will not put the consumer viewpoint.

If we listen to the Minister, the PRA will still listen to consumers but through newspapers, through lobbying, through letters, and so on. I would like something different: a grown-up dialogue between the consumer panel and the PRA, rather than the sort of campaigning that the rest of us have done as lobbyists for many a year. I still hope for that. Therefore, I would like to test the opinion of the House.

Financial Services Bill

Debate between Lord Newby and Baroness Hayter of Kentish Town

Monday 15th October 2012 Lords Chamber

[Baroness Hayter of Kentish Town]

I shall deal with our own amendment in this group, Amendment 187RZA, which is virtually the same as Amendment 187T. We should clarify that our idea is not to cover everything that the FOS produces. The Financial Ombudsman Newsletter is one of the best publications I have seen; it beautifully describes the cases and gives a lot of guidance, with a small “g”. The intention of our amendment is that any guidance is fully consulted upon where such guidance could lead to a “safe harbour”, and should therefore take account of all relevant interests, including those of the industry and consumer groups.

I turn to some of the other amendments tabled by the noble Lord, Lord Flight. Two major changes are suggested that worry us. One would virtually make non-publication the default option, with the Financial Ombudsman Service having to justify in each “particular case” when it wants to publish, having given the respondent—but not, interestingly, the complainant—the right to argue for non-publication. In our view this is not in line with the Hunt report and would not amount to the transparency and openness to which consumers have a right.

The second issue is the one that my noble friend Lady Sherlock has just been talking about—cases that have wider implications, such as PPI, where it soon became evident to the ombudsman that the mischief went far wider than a particular provider. While we welcome an early alert from the Financial Ombudsman Service to the FCA that something is going amiss and that regulatory action or new guidance might be required, it seems to us quite wrong to put on hold an individual’s claim for compensation when they have clearly been mis-sold a product and might be out of pocket. We do not agree that the individual consumer’s justified complaint should be suspended while a large bureaucracy—I am afraid that that is what the FCA will be, with its need to consult and so on—gets its act together.

As we have heard, the ombudsman’s role is to resolve complaints—speedily, we hope—that have not been satisfactorily dealt with by the service provider, which is of course always the first and best option. If PPI is anything to go by, though, the banks could and should have refunded the money themselves pretty speedily and stopped selling the product unwisely. It is this that would have stopped the consumer detriment, and incidentally saved the banks a lot of money further down the track.

Other amendments from the noble Lord, Lord Flight, in this group seek to include the rationale for each published decision to be explained. However, our fear is that this would add considerably to the process for handling cases and undoubtedly to the costs, and we would be surprised if the industry were in favour of that since it funds all this.

By including “operations, policies and procedures”, Amendment 189P would appear to us, as my noble friend Lady Sherlock said, to risk undermining the independence of the ombudsman service. We hope that that was not the intent, but we have a similar concern about Amendment 187S, which would appear to give the regulator the power to decide not only which complaints the ombudsman can decide on but, worryingly, how the ombudsman should do so. That would undermine the very independence of the ombudsman, which is of course meant to serve as an informal alternative to the courts.

With regard to Amendment 187Q, as my noble friend Lady Sherlock also reminded us, the FSA—or, as it will be, the FCA—is already able to make a redress scheme under Section 4 of FiSMA, the effect of which is to bind the ombudsman, so there is probably no need for it.

[Lord Newby]

My Lords, I am very tempted to say that I agree with the noble Baroness, Lady Sherlock, and sit down.

[Lord Flight]

Quite right.

[Baroness Hayter of Kentish Town]

Hear, hear.

[Lord Newby]

Sadly, however, I ought to explain the Government’s view of these amendments. Amendment 187E would require the FOS to exercise its functions in a manner consistent with the FCA’s strategic and operational objectives and the regulatory principles. Obviously the FCA will have an important role making and approving the rules of the ombudsman scheme, and must comply with its regulatory objectives and principles in doing so, but I do not believe that the regulator and the FOS should share the same objectives or be held to the same regulatory principles.

The FOS is not a regulator and should not be expected to act like one. Its role is to provide an impartial alternative dispute resolution service for consumers and firms. It is not a consumer protection body, and I would be concerned that by giving the ombudsman consumer protection objectives we would put that impartiality at risk. Moreover, in practice such a duty would be burdensome and difficult to interpret.

Amendment 187P is similar to Amendment 187, in that it seeks to hold the FOS to the FCA’s objectives and principles. However, it goes further by giving the FCA a role in ensuring that the FOS complies with those objectives and principles, and in carrying out an annual review of the FOS operations, policies, and procedures. The FSA already has a role in overseeing the FOS, which the FCA will retain—appointing and removing the board of the scheme operator, for example. However, the FOS’s claim to impartiality, and hence its legitimacy in making determinations that are binding on firms, is credible only if it is operationally independent of the regulator. This does not mean that it should be unaccountable or free from scrutiny—this is why we have brought in provisions requiring the FOS to be audited by the NAO. Associated with these new powers, the NAO will be able to launch value-for-money studies of the FOS. However, to require the FCA to ensure that the FOS complies with its objectives would require detailed oversight and control of the FOS’s day-to-day operations, which in our view would not be compatible with the FOS’s independence.

Amendments 187F to 187L relate to the new transparency requirements for FOS, under which the ombudsman scheme operator will have a duty to publish a report of determinations unless, in the opinion of the ombudsman, it would be inappropriate to do so. Amendments 187F, 187G and 187H seek to reverse the proposed new provisions, leaving the scheme operator merely with a power to publish determinations if it decides that it is appropriate, and a duty to explain the rationale for publication in that case.

Previously, ombudsman decisions have been published by one or other of the parties involved, leading to a partial and sometimes misleading picture of the way in which the FOS made decisions. Now that the FOS is subject to the Freedom of Information Act, ombudsman decisions may also be published in response to requests for information under that Act, so there is clearly a need for change.

Amendment 187J seeks to modify the transparency arrangements to provide anonymity for the respondents except where they agree to be identified. However, in many cases it will not be possible to redact all the information by which a firm could be identified without thereby withholding key elements of the substance of the decision—for example, the content of a firm’s advertising material, policy wordings, and product names—and there is no reason to think a firm’s reputation should be unfairly tarnished by the publication of a decision. However, I entirely agree with my noble friend that there is a case for withholding genuinely commercially sensitive information. The FOS will have the power to do that, and has made it clear in its consultation on transparency earlier in the year that it intends to protect commercially sensitive information.

Amendments 187K and 187L would provide for a minimum period of 28 days between the scheme operator considering a determination for publication and its taking the decision to publish, during which the respondent may make representations. It is of course important that firms get a fair hearing but, as I have said, by the time a decision is published, firms have had many opportunities to explain their side of the case already, and the ombudsman scheme rules already provide for firms to be able to provide sensitive information to the ombudsman in confidence. Given that this route already exists for the firm to identify information that it would be inappropriate to make public, I would be concerned that firms may see a process to make further references, as the amendments propose, as an opportunity to appeal the substance of the decision itself. However, I reassure my noble friend that the FOS would be very open to listening to proposals from firms about how best to ensure that it does not publish sensitive material.

Amendment 187N would require the FOS to suspend cases and refer the matter to the FCA when it encounters an issue with wider implications. Obviously the FOS will encounter issues that demand a response from the regulator, and there need to be clear duties and routes for the FOS to raise these issues with the FCA. I draw my noble friend’s attention to the measures in the Bill that provide for this. In future the FOS will be required to share information with the FCA that it considers relevant to the FCA’s objectives. The FCA is in turn required to take account of this information. In addition, the Bill introduces a mechanism whereby the FOS and the firms concerned can refer issues of mass detriment to the FCA, and the FCA will have to publish a response within 90 days, which is a very much improved procedure over what has obtained in the past. The response from the FCA might set out a timetable for regulatory action that would allow the FOS to consider whether or not to place a hold, or stay, on complaints. I reassure my noble friend that the Government share his concerns, and we think that we have taken measures in the Bill to address them.

Amendment 187Q seeks to require a clarification procedure for regulatory matters arising from complaints to be resolved by the FCA or for the FCA to provide guidance. While supporting the spirit of these amendments, my concern about the clarification procedure proposed is that it would be overly bureaucratic and could blur the distinct remits of the regulator and the ombudsman. The FOS’s role is to provide swift and low-cost dispute resolution. In doing so it must of course take into account, among other things, the relevant law and the regulators’ rules and guidance. It cannot, in practical terms, be expected to refer an issue to the regulator every time it encounters regulatory matters, any more than it could be expected to refer a matter to the courts every time it encountered a legal matter. We have included a package of measures in the Bill to improve co-ordination and co-operation between the FCA and the FOS. These include the new information-sharing and co-ordination provisions, as well as a new mechanism for the FOS and firms concerned to refer issues of mass detriment to the FCA.

Amendment 187S would require the FCA to make the detailed procedural rules for the ombudsman scheme rather than approve rules made by the FOS itself as at present; and to define the factors the FOS must take into account in its “fair and reasonable” test in legislation. On the first part of the amendment, the FSA already makes rules concerning key elements of the FOS’s compulsory jurisdiction. The more detailed rules of the ombudsman’s procedures are made by the FOS itself with the FSA’s consent. This strikes the right balance. As part of its operational independence, the FOS is responsible for preparing the detailed procedural rules which the regulator must approve. The alternative would be for the regulator to be directly responsible for running the ombudsman.

--- Later in debate ---

[Baroness Hayter of Kentish Town]

My Lords, in addition to all the comments made by my noble friend Lord Whitty, which we obviously support, I would like to speak for a few moments to Amendment 189BC, which stands in my name. Had that been in place, it would also have provided a route for small firms that were sold totally unsuitable interest rate swaps to have reached a speedy cross-industry solution.

The committee will know that many SMEs took out loan agreements, having been told that they also needed to take out an interest rate swap. Those SMEs, usually with no professional legal or accountancy staff, are sitting targets for financial services companies out to make a fast buck. They need the protection that this amendment could provide. I hope that the Minister will accept it, or a suitable alternative, to ensure that small and medium-sized companies, on whom we all depend to kick start our economy, get easy access to complaint resolution where their interests are damaged.

The amendment would give small firms the ability to complain and bring proceedings—court proceedings if necessary—to ensure that they could get proper adjudication on whether they were indeed mis-sold a particular product. As we have heard, the amendment would require the Government to introduce proposals within three months of Royal Assent to make it easier for groups of small firms to bring collective proceedings before the courts in respect of financial services claims, with the right to opt out for companies not wanting to be party to the outcome of the cases.

The amendment would also empower SMEs to complain to the regulators and to give their representative bodies the right to complain about market failures to the FCA, in the same way in which individual consumers can.

There is a gap in the legislation for small firms wanting to make complaints in their role as consumers of financial products. A case can be made for the representative bodies of small firms being able to take civil complaints. On 22 May this year, the Minister in the Commons, Mr Hoban, said that,

“the provisions in the Bill will not prevent bodies representing small and medium-sized enterprises which fit the relevant definition of consumers from making super-complaints”.

We therefore seek clarity in the Bill to that effect through the amendment.

Mr Hoban also said that:

“what type of consumer body should have access to super-complaints is complex and will require more detailed criteria than can be set out in the Bill.”—[Official Report, Commons, 15/10/12; col. 1031.]

He announced that the Treasury would publish draft criteria “later in the year”.

I might have missed it, but it is now later in the year and I think it is yet to appear. Perhaps the Minister could provide those further details.

[Lord Newby]

The Government believe that collective proceedings, in the appropriate circumstances, can deliver access to redress and a potential deterrent effect. That is why the Government have been consulting on a range of proposals to make it easier for consumers and small businesses to bring private actions in competition law—including whether to extend to businesses the current right of consumers to bring a collective action following a breach of competition law, and whether to make it easier to bring such actions. The Government are considering the consultation responses and hope to publish their response before the end of the year. We want to take the opportunity to learn from the outcome of that consultation and reflect on the implications for the financial services sector before proceeding to legislation.

The noble Baroness may say that her amendment would provide adequate time for consultation. However, her amendment specifies that small businesses should be able to bring collective proceedings on an opt-out basis. The type of persons who might bring collective actions, whether on an opt-in or opt-out basis, are substantive questions on which BIS has been consulting. We think that it is a lot better to await the outcome of the BIS consultation and reflect on the implications for financial services than to seek to pre-empt that process and require a particular model now. If the Government were to conclude from this exercise that it would be appropriate to bring forward legislation on collective proceedings for the financial services sector, any proposals should then be subject to proper consultation.

As an addendum to the second part of Amendment 189BC, I note that the Bill would not prevent bodies representing small and medium-sized enterprises that fit the relevant definition of “consumers” from making super-complaints. As was explained in another place, the issue of what type of consumer body should have access to super-complaints is complex and will require more detailed criteria than can be set out in the Bill.

We have considered this matter carefully, and I can inform the House that the consultation document that the Government will shortly publish covering this issue will include the proposal that the Treasury should be able to designate bodies that primarily represent the interests of small to medium-sized enterprises as super-complainants and that this will be reflected in the draft criteria.

I hope that, with the reassurance that the Government will consider proposals on collective proceedings carefully and that they will shortly consult on allowing SME representatives to make super-complaints, the noble Lord and the noble Baroness will feel able to withdraw their amendments.

Financial Services Bill

Debate between Lord Newby and Baroness Hayter of Kentish Town

Monday 15th October 2012 Lords Chamber

[Lord Newby]

My Lords, it is extremely helpful—and it will be done over the coming months. First, it is a single-market measure, not a eurozone measure. The aim is to establish a level playing field for consumers across the EU that is funded not by the state but by the financial services sector wherever the scheme is in operation. This means that as people move around the EU, as they increasingly do, they will know that they will get broadly the same degree of consumer protection wherever they are. That is a good idea, not a bad one. However, whether it is a good or a bad idea, this is the framework within which the deposit protection level operates in the EU, and therefore in the UK. Within the discussions about the directive that are going on at the moment, the level of compensation and the bodies that are eligible for it are being considered.

I say to the noble Baroness that we have listened very carefully to her concerns, and that the Government will consider whether it is appropriate to review the eligible limit to charities in the context of our overall negotiating priorities on this proposal. This is just one of a number of issues that we are considering in the round and as part of the negotiating posture we will take up. I assure her that we will give careful consideration to whether this is the way of achieving what she wants to achieve.

I move on to Amendment 187CA in the name of the noble Lord, Lord Hodgson of Astley Abbotts. This amendment would amend FiSMA to require the regulators to ensure that levies imposed on a particular class of firm reflect the claims made, or likely to be made, on that class. Before I address this amendment directly I would like to use this opportunity to draw noble Lords’ attention to the fact that a draft of the statutory instrument allocating rule-making responsibility for the FSCS between the two regulators will be published on the Treasury’s website this week as part of a broader consultation on draft secondary legislation required by the Bill. I will place copies of this paper in the Library of the House.

I am not entirely convinced by the case for Amendment 187CA. FiSMA already requires the regulators, as the noble Lord, Lord Hodgson, said, to take account of the desirability of ensuring that the amount of levies imposed on a particular class reflects, so far as practicable, the amount of claims made, or likely to be made, in respect of that class. Ensuring that classes are levied in a way that fully reflects claims, or likely claims, as proposed in the amendment is likely to be an impractical and disproportionate approach to evaluating how the fund should be funded. The current drafting in FiSMA reflects my noble friend’s concern but also leaves sufficient flexibility for the expert regulators to use their judgment.

The FSA’s recent consultation document on its funding model in the new regulatory system gives a good indication of the complexity involved in determining the funding model of the FSCS. I have it here, and its 100-odd pages demonstrate that this issue is somewhat more complex than might immediately be apparent. It demonstrates, among other things, how difficult it would be to ensure, in any strict sense, that levies fully reflect claims, or likely claims, on a particular class while delivering a fair and equitable scheme.

I suggest to the noble Baroness that the correct way to address her concerns is to contribute to the consultation on this document, which is open until 25 October. On that basis I would ask her to withdraw her amendment.

[Baroness Hayter of Kentish Town]

I thank the Minister rather more positively than I did his colleague on the previous amendment. It appears clear that he and the Government have understood the problem and I thank him for agreeing to look at this again. Charities of course, unlike people, do not move around; British charities are only in this country. I thank the Minister for saying that they will look at that. If it is not possible by that method, perhaps he could ask others in the Government if there is another way to assist. That would be extremely helpful. On the basis of that offer I beg leave to withdraw this amendment.