Department for Science, Information and Technology: Abolition

Lord Ranger of Northwood Excerpts

Tuesday 21st July 2026 Lords Chamber

[Baroness Anderson of Stoke-on-Trent (Lab)]

My noble friend is absolutely right. The new Department for Business, Innovation, Science and Trade will focus on new and emerging sectors as part of our reindustrialisation agenda. This is about building on the foundations that we have already made so that we can move further and faster to deliver for the people of the United Kingdom, which is our responsibility.

[Lord Ranger of Northwood (Con)]

My Lords, there is much scratching of heads about the detachment of science and technology. We hear about an AI Minister who will now be in a new office at the Cabinet Office and, some are also saying, at DCMS reporting into it, but we were talking about movement in technology: quantum computing, cyber security and what is happening in terms of investment in all forms of technology. The challenge now is: where will technology sit as a focus for this Government?

[Baroness Anderson of Stoke-on-Trent (Lab)]

The noble Lord raises a genuinely valid point, but this is about how we mainstream everything and put this at the heart. Everything we are talking about is AI-enhanced reindustrialisation. I appreciate that there are many times when we use “AI” as shorthand for tech or science, just because of how quickly the technology is moving on. I reassure the noble Lord that we will continue to make sure that AI and science and technology are at the heart of the eight industrial priority sectors.

Financial Services and Markets Bill [HL]

Lord Ranger of Northwood Excerpts

Committee stage
Wednesday 8th July 2026 Grand Committee

Digital finance is developing very rapidly and there is a real opportunity for growth that could transform prospects for the City and the wider economy. The question is whether the UK will lead or follow. If we want to lead, we need a clear plan, a coherent framework, proper industry engagement and proportionate regulation. I hope the new Labour Government will look at this. I beg to move.

[Lord Ranger of Northwood (Con)]

My Lords, I support my noble friend’s Amendment 164 and will speak to Amendments 164A, 164B and 164C in my name. I declare my interest as a non-executive director of Ecila.Group—an R&D-focused firm in digital assets and payments infrastructure. I am also a member of the UKUS Crypto Alliance and, for completion, the co-chair of the Digital Markets and Digital Money APPG.

The amendments in my name go some way towards the underlying point, which is that, if the United Kingdom wants to be a serious global centre for digital assets, tokenisation and digital financial markets, we need a regulatory framework and, as my noble friend Lady Neville-Rolfe mentioned, a strategy that is clear, coherent, proportionate and capable of supporting innovation. We do not have that at the moment. We have a lack of clear regulatory direction, too many overlapping areas of responsibility, regulators with differing priorities and, in some cases, different and changing levels of appetite towards digital assets. We also have firms that are trying to understand whether the UK is genuinely open for innovation or whether it will remain a jurisdiction where uncertainty and delay make it harder to invest, scale and launch new products.

I say this because I have heard it directly from industry, particularly over the last 18 months. During that period, I have engaged extensively with businesses in the digital asset arena. I have also travelled to other jurisdictions such as the US—I have been to Washington four times in that period—and the UAE. I have spoken to the US SEC chair, Paul Atkins, I have met with Commissioner Hester Peirce several times and I have spoken to policymakers in these jurisdictions to understand their approach, as well as what they think we should be considering.

These are issues, as my noble friend Lady Neville-Rolfe said, because we are looking for growth. Firms are developing products, consumers are engaging with digital assets, and institutions are looking at tokenisation, digital collateral, new settlement systems and digital market infrastructure. The world is changing; it is already happening. Other jurisdictions are therefore moving fast. If we do not provide clarity, firms and—as has been said—jobs, growth and investment will move and move fast. This is very much a global market change.

The problem is not simply too little regulation. In some respects, a deeper problem is that the regulatory landscape is not yet properly constituted to support the market. If we simply layer new regulation on top of old regulation, without first clarifying who is responsible, what the objectives are, what the vision is and how the different regimes fit together, we risk creating an even more complex framework, with more duplication and confusion, than the one we have already.

That is why Amendment 164A is important. It would require the FCA and the PRA to establish and maintain a defined and representative digital assets industry forum. The forum would be co-chaired by senior regulatory representatives and a senior industry figure, and would bring together regulators, digital asset firms, tokenised businesses, banks, payment firms, market infrastructure providers and relevant trade bodies. The point is simple: the Government and regulators need a proper, structured mechanism for engagement with the industry if we are to take sensible steps in this area.

This is a fast-moving and highly technical area. Regulation cannot be developed in silos by separate regulators. Regulators need to understand how these products work, where the risks are, where innovation is taking place and where proposed rules may have unintended consequences. Industry needs to understand what regulators expect and where the UK intends to go, if not lead. At the moment, that dialogue is not sufficiently structured and there is not the sort of ongoing forum that a market of this complexity requires. Without that, we risk regulating by assumption, rather than by evidence, and we risk fragmentation.

My Amendment 164B addresses a related issue: access to banking, payment and settlement services for digital asset firms. This is a very real concern. A digital asset firm may be regulated or registered—it may have compliance systems, governance and legitimate commercial activity—but still struggle to obtain the basic banking and payment services that it needs to operate. This is a serious barrier to growth and market entry, which again I have heard many times from businesses in the sector.

There is also a debanking point here. If the regulatory environment is unclear, banks and payment providers may respond by taking the most conservative approach possible. They may decide that it is simply easier not to serve digital asset firms at all, rather than navigate regulatory uncertainty. Financial crime risk, supervisory expectations and reputational concerns all build a very strong defensive risk posture. That does not support innovation. It does not support competition. It entrenches incumbents, disadvantages new entrants and pushes activities to other jurisdictions. This is a consequence of the regulatory environment that we have right now. Yes, we must balance the risks that are out there, but we must also seek to encourage innovation and the market.

My amendment would require the Treasury to review how access to banking, payment and settlement services affects competition, innovation and market entry into the sector. It would also require consideration of whether the current and proposed framework risks conferring an advantage on incumbent firms over new entrants and firms developing new products. That is an important question. If the UK says it wants a thriving digital asset sector but firms cannot get bank accounts, access payments infrastructure or access settlement services, policy ambition will not be delivered in practice.

Amendment 164C concerns consumer redress. This is another area in which clarity is required. Digital assets do not always fit neatly into existing financial services redress frameworks. Consumers need to know what protections they have, where complaints should go, what remedies may be available and how responsibility is allocated when something goes wrong. Firms also need to know what standards apply to them and the liabilities they face. The amendment would require the Treasury to review whether the existing consumer redress framework can provide a clear, coherent, proportionate and internationally competitive basis for regulated digital asset markets. The key word is “proportionate”. We need consumer protection, but we must not create a redress environment that is so uncertain or open-ended that firms decide that the UK is not a viable place to operate. Equally, we must not leave consumers in a position where they do not understand their rights or where harmful conduct falls between regimes.

The wider concern behind all three amendments is that the UK risks falling behind because of a lack of clarity. Industry is not asking for no regulation; it is asking for clear, proportionate regulation that reflects the pace of technological change and the markets that are beginning to exist. My fear is that if we carry on regulating digital assets in a piecemeal way, we will end up with a regime that is consistently playing catch-up or that delivers unintended consequences. It will be unpredictable, overly burdensome and difficult for firms to navigate—even more so than it is already. That would be a bad outcome for innovation, for consumers and for the competitiveness of the United Kingdom.

I will therefore be listening carefully to the Minister’s response to my noble friend’s amendment that calls for a digital assets strategy, to which I have added my name. We should be trying to streamline, simplify and clarify the regime, not add more layers of uncertainty. I would be grateful if the Minister could also address the following three points. First, will the Government commit to establishing a proper representative industry forum for digital assets so that regulators and market participants can engage continuously and constructively? Secondly, what assessments have the Government made of the difficulties digital asset firms face in obtaining banking, payment and settlement services, and the effect this has on competition and market entry? Thirdly, how will the Government ensure that the consumer redress framework for digital assets is clear, coherent and proportionate without making the UK an unattractive place for responsible firms to operate?

As has been said, the UK has a real opportunity in digital assets and tokenised finance. The opportunity will not be realised unless firms know where they stand, so we need clarity, co-ordination and confidence. These amendments are designed to help the Government to provide that.

[Lord Holmes of Richmond (Con)]

My Lords, it is a pleasure to follow my noble friend Lord Ranger of Northwood. I agree with all the amendments that he has eloquently described. I support my noble friend Lady Neville-Rolfe, and particularly her Amendment 163, to which I have added my name. The Government rightly talk about growth. The reality is that digital assets, tokenisation and market dematerialisation are sources of growth in potentially a shorter time than some other sectors that have had greater focus.

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That is exactly what I have tried to do with these amendments: to go to the specific points and set out how they could become part of this statute—if you will, tokenised assets, market demat and clauses in a box from this set of amendments. I look forward to the Minister’s response. I beg to move Amendment 164E.

[Lord Ranger of Northwood (Con)]

My Lords, I support my noble friend Lord Holmes’s amendments across the alphabet, particularly because he is right about the detail and the need for us to look at the ambition and see whether we are really targeting changes that will help us fulfil the ambition. When it comes to the point about regulation and whether or not it has worked, in terms of KYC, AML and even PEP, we know that these fundamental versions of regulatory burdens do not succeed. We hear constantly of their failings, so how are we going to adopt and adapt as we move into the digital assets universe, as I have been calling it, rather than naming each different type?

Fundamentally, one of the elements here is the use cases. These amendments speak to specific points and changes that could be brought through, but we must look at the use cases in which these will apply. We talk about tokenisation or how stablecoins will be used. We must talk about how property and assets might be traded differently. We must look at how services will be adapted and the wholesale settlement that international markets are looking at. We must talk about and consider the use cases around retail e-commerce. With that, I support my noble friend’s amendments.

[Baroness Kramer (LD)]

My Lords, I am going to be brief again: these are very interesting amendments. The breadth of the amendments put before us by the noble Lord, Lord Holmes, gives us a sense of the extensive work that must be done, right across the plumbing of the entire financial services sector, to move and take advantage of the opportunities of the digital world. There is no discussion here of some of the risks, namely about the levers of power shifting to different hands and whether we should be concerned about that or whether there are monetary sovereignty issues. Those are crucial issues, and we cannot walk away from them. Plumbing seems boring, but it is crucial. It seems that every aspect of that plumbing has been raised here, something that I hoped we might hear about in greater detail from the Government. I am particularly focused on the first of the amendments tabled by the noble Lord, Lord Holmes, which is Amendment 164C. I apologise, I have the wrong one.