National Insurance Contributions (Secondary Class 1 Contributions) Bill

Lord Randall of Uxbridge Excerpts

Committee stage
Tuesday 21st January 2025 Grand Committee

[Lord Scriven (LD)]

My Lords, I rise to speak to Amendments 1, 16 and 19, which stand in my name and are supported by my noble friend Lady Kramer and the noble Lord, Lord Randall of Uxbridge. These amendments address the implications of the national insurance contribution increase on independent contractors, small businesses and charitable providers of health and social care. The purpose of the amendments is clear: it is to exempt essential providers from the impact of the national insurance contribution hike.

Let us first consider what this increase means for a sector that forms the backbone of community healthcare: pharmacy, dentistry, optometry, hospices, GP surgeries and social care providers. These vital services, already under immense financial pressure, are struggling to meet the growing needs of our community. By imposing additional financial burdens, the Government risk undermining their ability to deliver care, with potentially devastating consequences for both providers and the people they serve.

Research by my party reveals some stark issues. For GP practices, the national insurance contribution will cost an estimated £125.5 million annually, equivalent to more than 2 million lost GP appointments each year. At a time when some people already endure long waiting times, this is simply unacceptable. In social care, the Nuffield Trust estimates an annual cost increase of £900 million due to the national insurance contribution increase, yet the recent Budget allocated only £600 million per annum to this sector, leaving a £300 million funding gap. This financial black hole threatens to push some providers towards collapse, reducing access to support keeping individuals independent and out of NHS care.

Hospices, which provide compassionate care to terminally ill individuals and their families, face an additional annual cost of £30 million. Some hospices will need to raise as much as an extra £200,000 each year. With many already heavily dependent on donations, such increases could force them to scale back services, lay off staff or even shut down some services entirely.

Community pharmacists, already operating on razor-thin margins, will incur an average additional cost of £12,000 per pharmacy annually. These pharmacists are vital lifelines for millions, yet the national insurance increase threatens the very survival of some of them.

Dentists facing rising costs could lead to higher patient charges and reduce access to NHS care. At a time when NHS dentistry care accessibility is already in crisis, the Government’s decision will exacerbate the problem, potentially creating further dental deserts across the country.

It is worth noting that the noble Baroness, Lady Neville-Rolfe, and the noble Lord, Lord Altrincham, have tabled Amendments 45 and 61, which are not in this group, proposing to increase the employer allowance for dental practices and requiring a review of the impact on certain sectors, including dentistry. However, the employment allowance, regardless of its level, is unavailable to dental practices that derive more than half their income from NHS services. Without a targeted exemption for the national insurance contribution hikes, NHS dental practices may be forced to reduce their NHS commitment to below 50% to qualify for support, with dire consequences for patient access. It is patients who will ultimately pay the price if the Government fail to act.

When we weaken our health and social care providers, the consequences are felt by individuals and communities. Fewer GPs, or fewer GP services, mean more crowded A&E departments. A reduction in social care providers leaves vulnerable individuals without support to live independently. Cuts to hospice services deprive families of the comfort and dignity they need during their most difficult moments.

The Government’s national insurance increase treats commissioned non-state providers of NHS and social care as though they were just ordinary businesses rather than essential public service partners. It fails to recognise their unique role in safeguarding the health and well-being of our nation. The economic rationale for this policy is flawed. By burdening health and social care providers with additional costs, the Government risk reducing services or, in extreme cases, forcing closures. This in turn will increase pressure on already overstretched NHS emergency services, leading to longer delays, worse health outcomes and higher long-term costs for the taxpayer.

This national insurance contribution increase on health and social care providers is penny-wise and pound-foolish policy-making at its worst. The solution is straightforward: reverse the national insurance contribution increase for health and social care providers that are commissioned by the state. This is not just a financial necessity; it is a moral imperative. These providers are already planning staff redundancies, service reductions and potential closures. They need certainty that their funding will be adequate from April, and fully funded, and that it will cover the additional costs. It would be deeply disingenuous for Ministers to suggest that the providers can absorb these costs or deal with the uncertainty if the Minister cannot guarantee that they will be funded. They will have significant effects on the ability of these providers to provide business continuity.

The Treasury may conduct abstract modelling, but the reality on the ground is stark. Front-line health and social care providers are directly affected and making plans now. These service providers are making plans today to reduce staff numbers and reduce access to services. The thousands of small businesses, independent contractors and charities need certainty that the money will be there from April and fully funded. Hollow and shallow words to the effect that this is all part of the normal contract negotiation, or part of the wash-up of next year’s funding settlement, will not stop the notices of reduced hours or redundancies going out. It will not stop the changes in opening hours or reduced access to services that are now being implemented.

We need to ask: why the two-tier system? If the direct state providers of NHS care that provide services can be treated in a different way—in that, where normally they would be told it is part of a contract negotiation, they have been told with certainty that this provision will be funded—why not provide the same certainty now for non-state providers? After all, they treat the same people and patients, providing care and support in our community.

The cost of exempting these providers can and should be through a fairer taxation system. My party has proposed raising the money required by reforming taxes on large, profitable corporations, particularly in the technology, financial and gambling sectors. For example, a modest increase in the digital services tax would generate significant revenue while not placing essential services at risk. The national insurance hike that the Government are proposing undermines the very providers who care for our sick and elderly and our most vulnerable. If implemented, they will jeopardise community health and social care and endanger the futures of countless essential services.

The Government have the power to change course. By reversing the national insurance increase for these vital providers and adopting a fairer, more sustainable approach to raising revenue, they can protect the thousands of small businesses, independent contractors and charities that safeguard our nation’s health and well-being. I urge the Government to act now and I beg to move.

[Lord Randall of Uxbridge (Con)]

My Lords, I have added my name to the amendments tabled by the noble Lord, Lord Scriven, and the noble Baroness, Lady Kramer. Over 30 years ago, as an MP I went to see my predecessor, complaining that Governments do not understand small businesses. At that time there was a Conservative Government, who did some things to rectify that position. Ten years ago, the family business, of which I was the chairman, closed. I am grateful that I closed it when I did; we did not have to put up with Covid, Brexit or this type of thing.

I am saying this because I am not sure that Governments understand small businesses. The pharmacies, dentists and GPs we are talking about here are small businesses. I have always described the Treasury as being like your parents, who do not let you have the things that you want because they say you cannot afford them, but the damage that it could do with this increase in national insurance contributions will be devastating for pharmacies, GP practices, hospices and others.

In the other place, when Members of Parliament want to get beneath the skin of people on the other side, they occasionally say such things as, “What about the sick and dying?” I have heard that quite a few times. In this case, I have to say that those are the people who will suffer because of this increase. I do not have the financial wisdom to know whether the suggestion put forward by the noble Lord, Lord Scriven, about how to raise the money is viable. However, I have to say that this measure being put forward is not the correct one, because it will have such an adverse effect not just on those businesses but on the people served by them.

I know that Governments never give way on these things—I have been around long enough to know that that is the last thing they would do—but I urge the Government to have another look. I do not expect them to accept the amendments today—they may come back with an improved version—but they must look at this seriously, because it is a mistake. We will come on later to charities, which is another big issue, but for the moment we are talking about what is contained in these amendments and I urge the Government to think long and hard about what they are doing.

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[Baroness Smith of Newnham (LD)]

The noble Baroness is trying to encourage the Liberal Democrats to be in agreement with the Conservatives, rather as her noble friend Lord Forsyth suggested at one point that he was in favour of the amendment from my noble friend Lord Scriven. We need to be a little bit careful not to agree with each other too often. But she is absolutely right. The Government have a large majority in the other place and it is not the business of this House to go against the Salisbury/Addison convention. However, I do not remember this being a manifesto commitment.

[Lord Randall of Uxbridge (Con)]

My Lords, I find myself again being somewhat like a bully standing behind the Lib Dems urging them on. But, of course, they are not bullying but providing a good service. I should also say, with regards to this Lib Dem-Conservative coalition, I was actually Deputy Chief Whip during the coalition period and I have to say that the Lib Dems, certainly in the Whips’ Office, were extremely good partners and very sensible. So I have great sympathy for the amendment.

I thank the noble Baroness, Lady Smith or Newnham, for her speech and express sympathy for the situation she finds herself in with her father. We all will have sympathy, even if we have not gone through similar things ourselves. As with the previous group, I can understand why the noble Lord, Lord Eatwell, said what he did, and I would prefer that we did not have all these exemptions. But the fact is that there are exemptions. That is what happens. I also say that, with regard to the veterans, the noble Baroness, Lady Smith of Newnham, has done us a great service in showing how many different sectors can be affected by this.

We all have a debt of gratitude to veterans. If there was an exemption, as put down in the amendment, that might be an inducement for employers to hire those people. There could be no greater service to those people, who have given everything. As the noble Baroness said, they are very skilled and have a lot to offer. One could go on down the exemption line, but I do not want to incur the ire of the noble Lord, Lord Eatwell, any further. One could apply this to people who have come out of prison, because we want to encourage rehabilitation, and so forth.

However, the point is—here I reiterate—that there must be alternative ways of raising this tax. I have not got them. I could, probably, upset most people in Committee today by saying that we should perhaps have looked at introducing national insurance contributions for those over the pension age. There may be quite a few people who would come into that category who could well afford it. There again, however, I will have to watch my back on the Metropolitan line on my way home today, in case I am taken out by a couple of sticks and so forth.

I understand the difficulties the Government face, but I reiterate that we are having a deleterious effect on some vulnerable sectors—we have not got on to charities yet, so I will hold my fire on that. However, this is something we should be taking very seriously.

With regard to the point about the large majority in the Commons, there is part of me—not the nice part or the Deputy Chief Whip part—that would be very keen to see some Labour Members vote against measures that will affect their local charities and veterans, and so on. We should do a service to the gallant men and women who have taken this up in the other place by making their lives a little easier.

[Lord Davies of Brixton (Lab)]

My Lords, this is such a contrast to previous years’ versions of this debate, when there would be myself and the noble Baroness, Lady Kramer, sat over there, and a handful on this side. It is really quite enjoyable to have a debate like this, but whether it is actually productive in any way I am not sure.

The problem we have is that veterans are like motherhood and apple pie. How can anyone oppose measures to assist veterans? Well, I can. There is a strange sense of déjà vu, because we had this debate in this Room two or three years ago when the last Government put forward proposals to exempt veterans. I cannot remember the details—you cannot remember everything we talk about here. However, we had the debate and discussion, and I expressed reservations about special measures for veterans. Do we have any information about what impact this has? I suspect it is a bit of tokenism.

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[The Earl of Kinnoull (CB)]

I had really come to the end but I will repeat my final couple of sentences. I ask the Minister whether there might be some room, given that the net gain to the Treasury in the situation for Culture Perth and Kinross would be very small at best, and that I suspect that for similar circumstances the story would be the same, for an exemption or carve-out for either the increase in rate or the increase in the starting limit for smaller charities, or indeed simply a delay for one year. We are simply not flexible enough to try to attend to the funding requirements for that.

[Lord Randall of Uxbridge (Con)]

My Lords, I support Amendments 4 and 5, to both of which I have added my name. I echo the excellent words of the noble Lord, Lord Storey, who introduced the issue of the childcare sector. I do not particularly need to add to those words, or indeed to what the noble Lord, Lord Sharkey, said about universities, except to say that I have a university that I can remember being built in my back garden, effectively—it is not really my back garden but I could see it rise. That is Brunel University, which is excellent and, like every other such institution, it has its problems. A few years ago, I suggested that it changed the name to “Uxbridge University”, hoping that some benefactors from across the United States might get confused with Uxbridge and Oxbridge and send lots of money across. Like so many of my cunning plans, that was rejected out of hand.

I also want to speak particularly to Amendment 5 about charities, although housing associations are an important issue, too. But the issue of charities is the one we should probably be most aware of. I have to declare that I am a trustee of several charities. I have stood down from a few more in the past year or so but a lot of these charities have approached me and told me of the huge costs. Although for some of the smaller ones the costs may not be the same, in relative terms they are just as difficult.

Earlier today, I wanted to get in on a Question about the National Trust, and there were many people on both sides, but particularly on the government and Liberal Democrat sides, saying that the National Trust is a great organisation, and I would echo that. But I wonder how many people who pay their subscriptions want to see them going not towards the landscape or the historic houses, or whatever, but being swallowed up by these increases.

One charity where I was a member of the council—a trustee—until earlier this year was the RSPB and it was the same thing. It was a huge amount; we are talking about it having to pay out a couple of million. The thing with charities—I think this was mentioned by the noble Earl, Lord Kinnoull, but I would like to reiterate it—is that it is not a matter of putting any prices up because they are supplying stuff. Their funding comes from either organisations, such as foundations or whatever, or individual donations. Charities are not charging for their services. They are performing lots of things which the state would otherwise have to pick up.

One thing which struck me when these organisations approached me, having seen that I put my name down to amendments, is when they told me how much they were going to have to pay they were reticent about me disclosing that, which I will stick to. I thought first, “Why are they so reticent? Is it that they do not want to upset the Government because they want to keep on-side?”. That is a perfectly logical position at this early stage of a Government. After a while, most organisations start to hate the Government rather than the political party who form that Government. Then I thought, “Maybe they do not want to because they have to rely on donations”. Whether it is somebody giving just a few pounds to the Dogs Trust or in a charity shop, if they think that that money is effectively going to the Treasury and not to the good cause that they want to support, they might be less keen. People sometimes do not need much of an excuse.

I am sure many noble Lords here today will have heard the excuse when people do not want to give to charities. They say, “Oh, it is not going to go directly to what I want it to go to”. This is something that charities will be nervous about saying publicly. I am sure that the Minister will have had representations from many charities, because they are extremely worried. This has really upset the whole sector, and it should be reconsidered.

As the noble Earl, Lord Kinnoull, said, there is another possibility. I do not want to give the Minister too many let-outs, but one possibility would be to delay it. Most of these organisations, particularly by this time of the year, have made their budgets. They have put in applications for funding from other organisations and put various amounts in. To suddenly find an increased cost that they were not expecting makes it very difficult for those budgets to be met. Although I have raised the point on other sectors, to me it is the charitable sector which is the most vulnerable. We should really be considering whether we want to impose this on it.

[Viscount Chandos (Lab)]

My Lords, I shall speak briefly on this group, particularly Amendments 4 and 5, but the arguments that I make really apply to many of these early groups because each one is a special plea. My noble friend Lord Davies of Brixton asked, “How can you speak out against an exemption in favour of veterans?”. The same could be said for small animals or whatever tugs at our heartstrings, but it comes back to the argument that my noble friend Lord Eatwell made so powerfully, which is that in an already complicated tax and national insurance system, we should avoid any further complexity if we can, and I think that the price which that may impose on different organisations is a price worth paying.

The noble Baroness, Lady Neville-Rolfe, talked about her involvement in attempts to achieve tax simplification when she was in government. It was the Conservative Government who introduced the Office of Tax Simplification and then abolished it, perhaps because it came up with the inconvenient truth that the agricultural and business relief regime should be reviewed and, implicitly, abolished.

At Second Reading, I made a declaration of interests which include being a trustee of two charities. One of them is a higher education institution, so it is covered doubly by Amendment 4 and Amendment 5. Many noble Lords who have spoken have referred to their personal experience of charities or different organisations. I have to say that I am struck by the fact that the organisations of which I am a trustee have, without any input from me, taken this philosophically as a cost that they must cope with. No increase in cost is welcome. Energy-led inflation was not. The insurance inflation that we are all suffering from, the wage inflation that we have seen and the overall increase in the cost of living are unwelcome costs for any organisation, large or small, to bear.

As I suggested at Second Reading, there is an understanding in many organisations, including commercial ones—I cited the comments of Mr James Daunt, as chief executive of Waterstones and his eponymous chain of bookshops—that the purpose of this revenue-raising from the changes to NI feeds into supporting the community from which organisations draw their employees, customers and donors. For this reason, although I do not welcome the increase in the cases of the organisations with which I am associated and of the many others that are similarly affected, I believe in the simplicity of applying the same rate to pretty much all organisations in the private and voluntary sectors. The arguments for simplicity outweigh those of the individual challenges that this measure will give organisations.

Financial Services and Markets Bill

Lord Randall of Uxbridge Excerpts

Consideration of Commons amendments
Tuesday 27th June 2023 Lords Chamber

[Baroness Boycott (CB)]

My Lords, I will speak to Amendment 36, which was in my name and those of the noble Baronesses, Lady Sheehan and Lady Chapman, and the noble Lord, Lord Randall. I echo the words of the noble Baroness, Lady Hayman, by thanking the Minister very much for the time she spent working with us on this amendment and trying to lay out exactly why it has not quite passed. I am super grateful for the efforts that were made. I support everything that the noble Baroness, Lady Hayman, just said. We have to make sure that nature runs through everything we do like a stick of Brighton rock. It is extremely important. We cannot survive without it.

Amendment 36 would have introduced mandatory checks to protect the UK financial sector from lending to or investing in companies that engage in illegal deforestation and land grabs against indigenous peoples. It passed a vote in our House, which was wonderful, but sadly it was defeated in the other place, so instead of a new law to stop finance flowing to companies that plunder the environment, I am afraid we have ended up with another review.

I say that with sadness, because we have only just finished the last review into how to stop deforestation finance. That was the three-year inquiry by the Government’s expert body, the Global Resource Initiative —GRI—task force. I suppose many people have said this, but I will say it again: just to commission another review until one of them churns out an acceptable policy is not great governing. The GRI task force was composed of finance and business leaders, as well as civil society. It was excellently put together. It was tasked to provide a cross-sector blueprint to reduce the UK’s contribution to deforestation. In May last year—just over a year ago—it recommended that UK financial services firms should be obliged to check for the risk of any deforestation, legal and illegal, as well as any human rights abuses. The GRI recommended a due diligence regime much more far reaching than the one we proposed under Amendment 36, which, I hasten to emphasise, was limited to illegal deforestation only. Even the financial sector itself does not want this approach, as evidenced by the fact that investors representing £2.7 trillion publicly supported our amendment.

I will not push this Motion to another vote but, given the strength of support we have seen and the consensus behind the introduction of mandatory due diligence, I will ask the Minister for three clarifications. First, can she confirm that the Treasury’s review will put forward a specific proposal for a comprehensive due diligence system to prevent the financing of deforestation rather than another re-evaluation of what type of intervention is needed? It is vital that we do not waste any more time or money repeating the work of Sir Ian Cheshire and his GRI task force. This is not an excuse to wriggle out of due diligence and derogate to more reporting under frameworks such as the TNFD, which we discussed extensively at our meeting last week. I really hope to see a much more ambitious plan.

Secondly, can the Minister confirm that all forest risk commodities will be regulated under Schedule 17 to the Environment Act? Thirdly and finally, can she confirm here today a final date for when the now extremely delayed secondary regulations under Schedule 17 to the Environment Act will be made? The Treasury’s review will be limited at the moment to an investigation of how the UK finances prohibited commodities. This is fraught with problems, not least the fact that these regulations are nearly two years delayed. It also means that if the Government choose not to cover all forest risk commodities in that regime, the review will not be worth anything. For example, Defra’s June 2022 consultation proposed covering only two commodities. There were 14,000 respondents, and 99% of responses said that the law should cover all forest risk commodities, including cattle, palm oil, soy, rubber, cocoa, coffee and maize. This is the approach that the EU has taken. We risk becoming a laughing stock if our apparently world-leading secondary regulations cover only cocoa and soy, for instance.

To sum up, I am thankful that the Minister and the Economic Secretary have adopted a sensible proposal to allow the country’s financial regulators to address the threat of biodiversity loss. Our regulators should pay attention to nature because it is the bedrock of all our systems, but there is an irony to accept that an amendment merely commissioning a review into deforestation is all we are going to do. I spoke last week to the head of science at Kew, Alex Antonelli, and asked him to give me the up-to-date data from Kew about the state of deforestation across the world. He told me that illegal logging is the most important resource crime in the world and is valued at between $52 billion and $157 billion a year. Illegally obtained timber accounts for between 10% and 30% of all global timber that we all use, but in south-east Asia, central Africa and South America, between 50% and 90% is illegally obtained, so I think that the Government’s efforts need to be speeded up. But I will not oppose Motion C, and I thank the Minister for her considerations.

[Lord Randall of Uxbridge (Con)]

My Lords, it is a great privilege to follow the noble Baronesses, Lady Boycott and Lady Hayman. I congratulate my noble friend the Minister on her diligence in trying to come to some solution to our demands. As we have just heard, it is not quite what we wanted but it is getting there, pretty much. Personally, I am sure that the Minister shares our concerns, but sometimes the Treasury is a bit like one’s parents in saying, “You can’t have it all at once; you have to wait and be ready for it”.

I reiterate the questions asked by the noble Baroness, Lady Boycott, regarding regulating all forest risk commodities under the secondary regulations, and ask also for a firm date. I am delighted that we have got as far as we have but I would say, not just to my noble friend the Minister but to all other noble friends and Ministers, that we will not rest here. As we have heard, deforestation is one of the biggest crimes going on in the world and a threat to us all. We shall continue with this.

[Baroness Bowles of Berkhamsted (LD)]

My Lords, I first pass on the apologies of my colleague and noble friend Lady Kramer, who is unable to be in her place; hence, you have me instead. I identify with the comments made by the noble Baronesses, Lady Hayman and Lady Boycott, and will not repeat them. Although the Government have given some territory, I do not feel that it is substantial enough.

Two points in particular worry me. The first is with regard to the climate change targets and the wording that

“each regulator considers the exercise of its functions to be relevant to the making of such a contribution”.

The Minister emphasised in her introduction that the regulators have to consider that it fits in squarely with their major objectives. That is quite a discouragement to them to pursue these matters. The regulators do not have to follow every objective and principle anyway; so they do not have an objective or principle and this has now been further diluted by that wording. So, while it is good that there is something on the face of the Bill, a lot of following up will be needed to make sure that something happens.

When it comes to the forestry issues, yes, there will be another consultation—another delay—but why do we have to be in lockstep with our partners? I thought we wanted to be leaders. That means you have to be prepared to go out there and, if you are a leading financial centre, show that it can be done. To always tie ourselves down, to be in lockstep, means that there is a fear to move, there is trepidation, and that does not mark us out or distinguish us as a financial centre. I therefore hope for better, and I hope that comes out of the Treasury’s review.

Overall, the Bill has seen issues raised on all sides of the House and a lot of common thinking. Yes, there has been some yielding by the Government as a consequence—though in general I would say not enough —but this shows that the mood and understanding of this House and of the industry are that the size and momentum of what we are doing in delegating everything to regulators need to have a little more beefing up when it comes to accountability and how matters can be pursued if the regulators do not do things, if they do not do them quickly enough, and so on. In quite a lot of our amendments we have tried to pursue those issues but we have got nowhere. I think that means we will be coming back.

Financial Services and Markets Bill

Lord Randall of Uxbridge Excerpts

Report stage
Tuesday 6th June 2023 Lords Chamber

Most of what I wanted to say has already been said, so there is no need to repeat it. It is strange how often we hear the Government make all sorts of encouraging statements, but when it comes to putting them in the Bill they are reluctant to do so. There is an old adage: if it is not on the face of the Bill, it will not be implemented in the proper way. That is why Amendment 15 is important.

[Lord Randall of Uxbridge (Con)]

My Lords, I strongly support Amendment 15, so ably introduced and supported by others. I will speak principally to Amendment 91, to which I added my name. I tabled a similar amendment in Committee, but unfortunately ill health prevented me speaking then. I was grateful to the noble Baroness, Lady Boycott, for taking over the reins then and I am very happy to support her now.

I support the Government’s amendment in as far as it goes. As we have heard, the Government have made a lot of strides in this area through public finance commitments. Only last month the Prime Minister met with the President of Brazil, pledging £80 million to the Amazon Fund to help stop deforestation. There is more money coming through; at least £3 billion of our international climate finance is devoted to nature protection and restoration.

The question we must ask ourselves is: are we turning a blind eye to the private finance undoing all this good? Preventing private finance doing harm is just as important as the aid we provide. As we have heard, the Government have endorsed this conclusion by pioneering the Glasgow declaration on forests and land use, which includes a commitment to:

“Facilitate the alignment of financial flows with international goals to reverse forest loss and degradation”.


Now is the very time to make good on this pledge and get our own house in order.

This is a sensible proposal rooted in Schedule 17 to the Environment Act and limited to illegal deforestation for that very reason. The amendment itself has been publicly endorsed, as we have heard, by Sir Ian Cheshire, as well as financial institutions representing more than £1 trillion in assets under management and advice, including Rathbone Greenbank Investments, Federated Hermes Ltd and the Local Government Pension Scheme Central Ltd—so it is not just the usual suspects.

At the G7 last month, the UK committed to take steps to redirect finance away from activities causing biodiversity loss “without delay”. I am very grateful to the Minister. As we heard from my noble friend Lord Caithness, she has bent over backwards to try to help and is committed to this. She has not quite convinced me that the Government should not accept this sensible amendment. I hope that it will be accepted and that the Government will follow through here. As I have got older, I may have got mellower but I have got more impatient. I am fed up with hearing every time that it will be in the next Bill.

[Baroness Sheehan (LD)]

My Lords, I rise on behalf of our Benches in support of these amendments. In doing so, I declare my interest as a director of Peers for the Planet.

Before I move on to the bulk of the amendments in this group, I will address government Amendment 4. I agree with noble Lords across the House who have welcomed it but feel that it is deflective and a little weak. The policy statements required from the Treasury may be followed by the regulators, but it just does not go far enough. It certainly does not fulfil the spirit of Amendment 114 on SDRs, spoken to so ably by the noble Baroness, Lady Wheatcroft.

In the briefings I have received on this Bill to make provision about the regulation of financial services and markets, it struck me that the phrase “systemic risk” appears frequently. According to the Systemic Risk Centre, part of the London School of Economics and Political Science:

“Systemic risk refers to the risk of a breakdown of an entire system rather than simply the failure of individual parts. In a financial context, it captures the risk of a cascading failure in the financial sector, caused by interlinkages within the financial system, resulting in a severe economic downturn”.


I think we all recognise that scenario.

Therefore, the amendments in this group all aim to strengthen the Government’s hand either by aiming for better governance in financial services and markets or by pre-empting disastrous practices as financial services and markets transform and orientate towards a future that encompasses our net-zero ambitions. Deep change of this nature is a risky undertaking for the sector that the Government can act to mitigate. Indeed, the Government can act to enforce their own policy statements, as so many noble Lords across the Chamber have already mentioned.

I will briefly address the amendments to which I have added my name. Amendment 7 addresses an essential element of openness and transparency and would require the FCA to make rules to mandate fund managers and insurers to give information to clients and beneficiaries on the exercise of all voting rights on their behalf by appointed investment managers. The noble Baroness, Lady Wheatcroft, in whose name the amendment appears, has already given us chapter and verse on why this would be a sensible move by the Government. Currently, it is difficult for underlying fund managers and insurers to access information about how voting rights in investee companies are being exercised on their behalf in a consistent and comparable format. I will give just two examples and, I hope, not repeat too much of what the noble Baroness, Lady Wheatcroft, has already said. This is very important.

Reporting is currently voluntary and contained in a single dense report across the whole of the fund manager or insurer’s operations. That is problematic, because in practice it means that pension funds will find it difficult or impossible to identify whether their pension fund is invested in that share. They cannot get at the information they need. That is one shortcoming; the other is that the reporting is non-standardised. Many investment managers disclose votes in a non-standardised way in long PDF reports—sometimes up to 10,000 pages—which makes it extremely difficult for pension funds to extract the data they need out of it.

The aim of Amendment 7 is to rectify these shortcomings and others that have already been mentioned, and requires the FCA to make rules requiring information on the exercise of voting rights to be disclosed on request and in a standard format. The US Securities and Exchange Commission has a regularly updated standard reporting template which managers must follow. The FCA should achieve parity with the USA on voter reporting and enable consistent and comprehensive vote disclosure. Voting at AGMs is a key tool in ensuring good corporate governance, good long-term investor returns and good economic outcomes more broadly, and is key to government realising its policy ambitions, not least its net-zero ambitions. Indeed, HMT has publicly acknowledged that good voting and good vote reporting are crucial to meeting net zero. Finally, as the Aldersgate Group identifies in its 2022 report, it is critical that financial institutions engage with systemic risks via stewardship—such as exercising voting rights—rather than managing portfolios by divesting from high-carbon assets.

Amendment 15, which adds nature to the new regulatory principle on net-zero emissions, is in the name of the noble Baroness, Lady Hayman, and was spoken to ably by her. We have only to gaze and wonder at the efficiency of bees and other pollinators in their role in providing us with good food. Various estimates have put a figure verging on £1 billion to pollinators’ contribution to the UK economy in terms of worth of crops they produce. However, if one inputs human labour in their stead, we know that their value is far greater than that.

The Government’s own green finance strategy, published just a few weeks ago, stated:

“Nature sustains economies and livelihoods, and protecting and restoring nature is inseparable from addressing climate change”,


which completely echoes what the noble Baroness, Lady Young of Old Scone, said. The funny thing is that those are the Government’s own words, so why do the Government balk at this amendment? In their response to the seminal Dasgupta review, The Economics of Biodiversity, which has already been mentioned, the Government committed to delivering a nature-positive future by reversing nature loss, and to

“leave the environment in a better state than we found it”.

This amendment is urgently needed. Current investments are working against nature and driving nature’s depletion. We have heard these figures before but they are worth reiterating. In 2019, financial institutions provided $2.6 trillion in loans and underwriting services to sectors identified as primary drivers of biodiversity loss and ecosystem disruption. Globally, Governments spend $500 billion per year that is potentially harmful to biodiversity.

Nature loss can be massively detrimental to investments and must be considered in assessing risks. I will give a couple of examples. First, shareholders lost billions when the European pharmaceutical company Bayer lost near 40% of its market capitalisation in less than a year after acquiring an agrochemical company accused of adversely affecting honeybee populations. Secondly, company shares in the Canadian gold-mining company Infinito Gold fell 50% when in 2012 the Costa Rican Government denied permission to develop a mine due to potential impacts on forests and endangered species.

In conclusion, we need investment in nature restoration to be commensurate with investment in net zero—here I disagree a little with what the noble Earl, Lord Caithness, said. In having similar amounts and similar resources deployed on net zero and climate change, we are able to protect our natural capital, which we must do if we are to meet our net-zero targets. Nature and climate change are two sides of the same coin. I hope that when the time comes, noble Lords will give this worthy amendment their full support, as we will from these Benches.

Financial Services and Markets Bill

Lord Randall of Uxbridge Excerpts

2nd reading
Tuesday 10th January 2023 Lords Chamber

[Lord Randall of Uxbridge (Con)]

My Lords, a few hours ago, before this debate started, one of my noble friends saw that I was down to speak and said something in terms similar to, “What on earth do you know about this?” He hit the nail on the head. That feeling has been only heightened by the quality of the speeches we have heard from noble Lords who really know what they are talking about, not least the three maiden speeches. I am delighted to have such erudite noble friends joining us on these Benches—I will probably have to keep quiet now, unless it is a subject that I know a little more about.

I say that I do not know much about this but, listening to some of the speeches, I realised that—as the noble Baroness, Lady Bennett, who is not in her place at the moment, said—I represent the man or woman in the street who does not understand these things but needs to because they are really important. As a former retailer, I have something to say on the subject of cash. Also, I say to my noble friend Lady Noakes, who is not here, and others that, if there is any spare cash she does not want, I have various charities—I will put a bucket outside and we can take it. That would solve that problem.

I declare an interest as a director of Peers for the Planet. I was going to emphasise the point about net zero and so on, but that has been amply discussed and there is no point in overdoing things. The noble Baronesses, Lady Sheehan and Lady Hayman, and others have mentioned this, so I will just add my voice to that. I can almost hear one or two of my noble friends in particular thinking that this will somehow be a burden, but it will not: these very institutions and businesses are asking for it to make sure that there is a level playing field.

However, there is one amendment I hope to table in Committee—unless I can persuade my noble friend the Minister that the Government need to take this on, which would save me the job of having to make a further speech on the Bill—and it is on deforestation. This amendment would echo one tabled by my right honourable friend Chris Grayling on Report in the other place, which had a great deal of cross-party support. My amendment would introduce a mandatory due diligence obligation for UK financial services to prevent the financing of commodities, businesses and activities that destroy climate-critical and biodiversity-rich forests, and indeed the lives of the local communities and indigenous peoples who depend on them. I tabled a similar amendment to the Environment Bill as it went through this House. It was a rather good amendment but, to my astonishment, the Government did not seem to agree with me entirely on it. I did cry myself to sleep that night, but I woke up again and thought, “There will be another opportunity”—and that is what I hope we will have in Committee, where I am sure the Government will realise the error of their ways and accept this, because it is incredibly important. I do not believe that Schedule 17 of the Environment Act is enough to stop the UK’s role in global deforestation.

I fully support the Bill but, like so many others have said, I am sure that there is room for improvement. It may not be down to me to do it; I think I have found the experts we need. I salute the Government for bringing this forward, and I salute my noble friend the Minister—not just because I want her to accept my amendment but because her stamina in sitting through this debate has been fantastic. With that, I think I will sit down.

Budget Resolutions and Economic Situation

Lord Randall of Uxbridge Excerpts

Friday 20th March 2015 Commons Chamber

[Sir John Randall (Uxbridge and South Ruislip) (Con)]

It is a pleasure to see you in the Chair, Mr Deputy Speaker, and to follow some of my right hon. and hon. Friends, particularly my right hon. Friend the Member for Somerton and Frome (Mr Heath). It is a shame to see another bearded gentleman and rugby fan leave the House—I hope that we will see some more bearded people returned in the next Parliament.

However, I hope that this will not be my final contribution in this House, because I have changed my mind and have an important announcement to make: I have now decided to try to speak in some debates next week. There are a couple of other contributions that I would like to make before taking that Metropolitan line train back to Uxbridge for one last time as an MP. In the words of Betjeman:

“Out into the outskirts’ edges

Where a few surviving hedges

Keep alive our lost Elysium—rural Middlesex again.”

Some of my earliest memories of politics revolve around Budgets and Budget day. I remember the bitter disappointment I felt as a young boy when children’s TV was taken off so that the Budget could be discussed by elderly gentlemen talking about things I did not understand. Well, nothing much changes, except that most of the people discussing the things that I do not really understand are now a lot younger than me. I probably understand the facts a little more, but not much.

I have a particularly long-lasting memory of one Budget. I remember that we were sitting in the family car on a wind-blown, rain-spattered promenade somewhere in north Wales for our spring holiday. My brother Philip was keeping very quiet because my father was getting more and more agitated as he heard the Budget announcements. It was from a Labour Government, of course, and I think they were introducing the selective employment tax. I do not know exactly what it was designed to do, but I should explain for those younger Members that basically it taxed businesses on the number of people they employed. It did not seem to me to be a particularly good way of getting people back into employment. However, I am sure they had a reason.

I think that the fundamental principle behind all these things was best expressed by Mr Micawber in Charles Dickens’s “David Copperfield”: “Annual income twenty pounds, annual expenditure nineteen pounds, nineteen shillings and sixpence, result happiness. Annual income twenty pounds, annual expenditure twenty pounds, ought and six, result misery.”

I am lucky enough to live in the London borough of Hillingdon. It has many delights, but one of the reasons we are so fortunate is that over the past four years we have been run by an excellent, Conservative-led local authority, under the guidance of Councillor Ray Puddifoot. It inherited a dire financial situation. Indeed, I remember that the headline on the Uxbridge Gazette simply read, “Bankrupt”, which the council effectively was. It has managed to turn the situation around, with prudent financial sense, because Ray Puddifoot is an accountant by background—despite what my right hon. Friend the Member for Somerton and Frome said, I think that good accountants have a lot to offer.

Our council tax has been frozen for the past seven years, or the past nine years for pensioners—obviously that interests me greatly. We have had 17 libraries refurbished, and they now have longer opening hours, three new youth centres and brand new sports facilities, including the first Olympic-sized swimming pool since the war, and all that while having to endure tough settlements from central Government, both Labour and Conservative. I mention that in order to demonstrate that once we balance the books we can really start to provide exactly what our residents, constituents and the people of this country want. That is why I applaud the efforts of my right hon. Friend the Chancellor.

Every Budget has a mass of detail hidden away in the Red Book, which is only provided after the statement. I was interested to read the details about the money that is to be provided to monitor seagulls and the disruption they cause in Bath. I do not know whether that will provide any job opportunities, but if it does I would like to get my application in, as I take a keen interest in gulls.

I also want to mention something that I think is very important—I think that it has been mentioned already—the designation of the Pitcairn marine reserve. It will be the world’s largest marine reserve, encompassing over 830,000 sq km, which is about three times the size of the UK. That is a tribute to many non-governmental organisations and right hon. and hon. Friends, particularly my hon. Friends the Members for Richmond Park (Zac Goldsmith), for Ruislip, Northwood and Pinner (Mr Hurd) and for Newbury (Richard Benyon) and my right hon. Friend the Member for Bexhill and Battle (Gregory Barker), who have worked tirelessly to ensure that the various Departments got that together so that it could be included in the Red Book. I just hope that similar reserves for Ascension Island and the South Sandwich Islands will follow.

I noticed in the Red Book £7.4 million for getting wi-fi into public libraries. These things are not mentioned while we talk about the big issues. There is £3.5 million for protecting vulnerable people from nuisance calls. That will probably not be in time for the telephone canvassing for the coming election, but I hope that at some stage it will save people a lot of inconvenience.

On “talking buses”, I saw that:

“The government will continue to work with the Transport Systems Catapult and industry to develop a solution to ensure bus travel remains accessible to blind and deaf users.”

Disability issues on transport must be tackled. The hon. Member for Hayes and Harlington (John McDonnell) and I have been discussing step-free access into various of our stations and so forth in the London borough of Hillingdon, but also in London. The Government should look at that. If I were a curmudgeonly old soul, which thank goodness I am not, I would say that perhaps some of the money going into HS2 could have gone there instead. But I will not go down that line, as I think there is an opportunity to discuss it in Westminster Hall next week.

If we can get the economy into good shape—and we are going the right way—we can achieve so much as a country. There can be only one solution in the coming weeks, and that is to make sure that the current economic policy is continued. I do not think I need to spell out what is the best way to achieve that.

Civil List

Lord Randall of Uxbridge Excerpts

Thursday 30th June 2011 Commons Chamber

[Justine Greening]

The right hon. Gentleman is absolutely right to raise that issue. Of course, the Treasury will be accountable for the sovereign grant.

As for accountability to Parliament, sovereign grant expenditure will be audited annually by the Comptroller and Auditor General and those reports will be laid before Parliament. Should it wish to do so, the Committee of Public Accounts will also be able to scrutinise grant expenditure and will be able to invite the royal household to give evidence. As we heard from the right hon. Member for Barking, her Committee is already looking at how it may wish to fulfil its role in the accountability of the sovereign grant. In fact, that was one of the main things that Parliament argued for before the Civil List Act 1972. It was not implemented at that time, but it is right to do so now.

I very much welcome the valuable contributions of Members on both sides of the House—those of the right hon. Member for Rotherham (Mr MacShane), the hon. Members for North Durham (Mr Jones) and for Newport West (Paul Flynn), and my hon. Friends the Member for Caithness, Sutherland and Easter Ross (John Thurso), for Bristol West (Stephen Williams) and for Cheltenham (Martin Horwood). They set the context for the debate that we will have on Second Reading of the Bill, which I will shortly present. Once that Bill is before the House, Members on both sides of the House will have a better chance of understanding the proposals and how they will impact on the sovereign grant.

As I have said, this is only the first debate. There will be an opportunity to debate the matter in more detail on Second Reading and in Committee, which will be a Committee of the whole House. I am pleased that we have had a good discussion this afternoon, and that there is agreement on a number of fundamental issues.

Her Majesty the Queen has given exemplary service to the country throughout her 60-year reign. She, and other members of the royal family who support her in her official capacity, will continue to play a vital role in representing and promoting the UK and the Commonwealth. I know that my hon. Friend the Member for North East Somerset (Jacob Rees-Mogg) would agree wholeheartedly that it is right to provide the royal household with stable and sufficient support in those duties.

As I have pointed out, the royal household has significantly reduced its expenditure. As the Chancellor said, total spending by the royal household has reduced by almost £10 million over the past two decades. That is a real-terms cut of more than 50% in 20 years, which no other Department can claim to have achieved. It is also right that we ensure that that provision is transparent and accountable. In fact, on current assumptions, we expect the sovereign grant to be between £34 million and £36 million for 2013-14 and 2014-15. Such a level of support is lower than it would have been under the old system. As we have heard, in cash terms, that is broadly in line with the current level of spending, but in real terms, there is a cut of 9% over the course of this Parliament. As I said, that is lower in real terms than royal household expenditure in any of the past 20 years. The cost amounts to 51p per person per year in the UK. That is a remarkably low price to pay for the royal family’s profound contribution to public life.

The sovereign grant Bill will put that funding on an efficient, sustainable footing, and provide for it to be fully accountable to Parliament and the public. These are necessary reforms and I commend the Bill to the House.

Question put and agreed to.

Resolved,

That—

(1) new provision be made for, or in connection with, the financial support of the Sovereign and of the heir to the throne;

(2) any sums payable in respect of provision so made should be payable out of money provided by Parliament;

(3) provision be made enabling the continuation, in the reigns of Her Majesty’s successors, of the payment of the hereditary revenues of the Crown as directed under section 1 of the Civil List Act 1952;

(4) provision be made about allowances and pensions under the Civil List Acts of 1837 and 1952;

(5) any sums payable in respect of such allowances and pensions by virtue of any provision so made should be charged on the Consolidated Fund;

(6) it is expedient to amend the law relating to the financial support of members of the Royal Household.

Ordered, That a Bill be brought in upon the foregoing Resolution;

That the Chairman of Ways and Means, the Prime Minister, the Deputy Prime Minister, Mr Chancellor of the Exchequer, Mr Secretary Clarke, Mr Secretary Hammond, Mr Secretary Hunt, Danny Alexander, Mr Mark Hoban, Mr David Gauke and Justine Greening bring in the Bill.

[The Treasurer of Her Majesty's Household (Mr John Randall)]

The Prince of Wales, having been informed of the subject matter of the Bill so far as it relates to the Duchy of Cornwall, recommends it to the consideration of the House.

Sovereign Grant Bill

Presentation and First Reading

Justine Greening accordingly presented a Bill to make provision for the honour and dignity of the Crown and the Royal Family; make provision about allowances and pensions under the Civil List Acts of 1837 and 1952; and for connected purposes.

Bill read the First time; to be read a Second time tomorrow, and to be printed (Bill 213).