Financial Services and Markets Bill [HL]

Lord Sikka Excerpts

2nd reading
Monday 8th June 2026 Lords Chamber

[Lord Sikka (Lab)]

My Lords, this is primarily an enabling Bill and much of the substance will follow later, through the FCA and PRA rule-making and secondary legislation. Parliament will not have a proper opportunity to amend whatever the FCA agrees with the industry lobby. Consumer protection and confidence in the finance industry will be the biggest casualties. There is much to agree with and support in the Bill, but alas, it also omits crucial issues. There is no reform of short-termism in the City of London, even though for nearly 30 years the UK has languished near or at the bottom of the G7 and the OECD’s investment league. The investment gap cannot be addressed without reform of corporate governance, accounting and executive pay, a law on dividends and the empowerment of stakeholders. I hope the Minister will tell us why these issues are not being addressed.

Shadow banking is now bigger than retail banking, but there is no plan to regulate that either, even though shadow banking is likely to be the epicentre of the next financial crash. In this vacuum, the Bill continues with a deregulatory agenda while more of the post-2008 crash reforms are being dismantled. The weakening of the senior managers and certification regime and accountability is one such example. Currently, complaints can be brought to the ombudsman indefinitely, provided they are brought within three years of the date when the complainant became aware of, or should have reasonably become aware of, the event being complained about. The 10-year limit proposed by Clause 6 is a regressive step. How exactly are people supposed to become aware of the trigger events when Governments and regulators seek to bury them? The Bank of Credit and Commerce International was closed in July 1991 and, to date, there has been no investigation, so how does the 10-year period affect the victims of that scandal?

On numerous occasions in this House, I have referred to the plight of the victims of HBOS frauds, which go back to 2002 and 2007. The senior bank managers fleeced SMEs of around £1 billion. The regulators did little, and the SFO, the FSA and the police passed the buck. In 2017, the Thames Valley Police and Crime Commissioner secured six criminal convictions. Still, the FCA, the SFO and the police did not fully investigate. The Government of the day left it to Lloyds Bank, which owns HBOS, which then appointed Dame Linda Dobbs in 2017 to investigate and issue a report in 2018. To date, there has been no report and victims are still awaiting compensation. Without an investigation and a report, victims of bank frauds cannot approach the ombudsman. Taking HBOS frauds as an example, can the Minister explain when this 10-year window might commence under the clause in the Bill? Clause 6, in my view, harms customer rights and allows banks to escape liability, and that is unacceptable.

I am also concerned about restructuring the Financial Ombudsman Service. It was created in 2001 by Gordon Brown to adjudicate on financial services relationships that are inherently unequal. You have lay persons on one side and giant corporations with billions at their disposal on the other.

Clause 8 severely narrows the right to seek redress by requiring the ombudsman to prioritise whether firms technically complied with FCA rules, rather than whether their actions were “fair and reasonable” in the circumstances. The ombudsman here is being asked to find in favour of the firms if they ticked the right boxes, not according to whether they took fair and reasonable action.

Clause 8 also adds the concept of “consumer responsibility” when things go wrong. So, even when a breach of rules has occurred and the firm has acted unfairly, the ombudsman would be required to consider the general principle that

“consumers should take responsibility for their decisions”.

There are many kinds of consumers: individual versus corporate, amateur versus professional, those with or without expert advice, and diversified or non-diversified. I do not know what kind of consumers this clause seeks to address. The entire clause needs to be deleted; it is unacceptable that, in this day and age, consumer protection is being diminished.

I welcome the absorption of the Payment Systems Regulator into the FCA. I also welcome Clause 14 and the transfer of the regulatory powers of 22 trade associations to the FCA. This will eliminate duplication, buck-passing and ineffectiveness. It was a huge mistake by the previous Government to make accountancy, law and other trade associations AML regulators. In its 2018 report, the Office for Professional Body Anti-Money Laundering Supervision, OPBAS, said:

“the accountancy sector and many smaller professional bodies focus more on representing their members rather than robustly supervising standards. Partly because they don’t believe – or don’t want to believe – that there is any money laundering in their sector. Partly because they believe that their memberships will walk if they come under scrutiny”.

In its follow-up report in 2024, OPBAS said that it

“has not seen any material improvement”

in its professional body supervisors. That is bad. This consolidation is totally justified and I will support it. I hope that Ministers extend this to the regulation of insolvency and auditing as well. I look forward to the Minister’s reply.

Royal Mail

Lord Sikka Excerpts

Monday 8th June 2026 Lords Chamber

Asked by

[Lord Sikka]

To ask His Majesty’s Government in which years since its privatisation Royal Mail has fully met its first class and second class letter delivery targets; and what assessment they have made of its performance in this period.

[The Minister of State, Department for Business and Trade and HM Treasury (Lord Stockwood) (Lab)]

My Lords, Ofcom sets and monitors the Royal Mail’s quality of service targets and publishes annual performance data. Following its privatisation in 2013, Royal Mail fully met its first-class and second-class delivery targets in 2013-14, 2014-15, 2016-17 and 2019-20. Royal Mail met its second-class target, but not its first-class target, in 2015-16, 2017-18 and 2018-19. Royal Mail failed to meet both targets in all years from 2021-22 to 2025-26. The Government’s assessment is that performance has been unacceptable and must improve, and we will continue to engage with Ofcom and Royal Mail accordingly.

[Lord Sikka (Lab)]

My Lords, Royal Mail is another disastrous privatisation. Since privatisation, the price of a first-class letter has increased by 200% and second-class by 89%. As the Minister just said, Royal Mail has not met its delivery targets for years, and Ofcom continues to lower the targets; second-class mail is now to be delivered only every other day and not at all on Saturdays. Ofcom has clearly failed. It seems that the Government have two options: either to restructure Ofcom or to bring Royal Mail into common ownership. Which option will the Government exercise?

[Lord Stockwood (Lab)]

In preparation for this Question, I spoke to both the CEO of Royal Mail and directors of Ofcom. For context, it is worth stating that letter volumes have halved in the last 10 years, while the number of addresses has increased significantly. While I agree with my noble friend that performance has not been where it needs to be, there is a quality of service plan that has been negotiated between Ofcom and Royal Mail, and indeed, this year, Royal Mail is above the targets that it set for itself to meet those aggressive performance targets by March of next year. Some £500 million of additional investment has been committed, and there was an agreement with the CWU to ensure that the employment practices are sustainable for the commitments to improvements and services. So, while I agree with my noble friend that the current performance is not where it could be, the CEO of Royal Mail made commitments early last week that he is confident that it will meet the targets by April of next year.

Business Hiring

Lord Sikka Excerpts

Monday 1st June 2026 Lords Chamber

[Baroness Lloyd of Effra (Lab)]

The Employment Rights Act will benefit 18 million workers. Having secure employment where you know that you have the right to sick pay and that you can take leave when you have a family is an attribute of a modern functioning labour market.

[Lord Sikka (Lab)]

My Lords, I am surprised that the Minister did not remind the Opposition that youth unemployment was 1.25 million in 1984. They are keeping quiet about that. What assessment have the Government made of the possibility that a freeze or a reversal of the state pension age could release jobs for younger adults?

[Baroness Lloyd of Effra (Lab)]

That is a question that I personally have not put my mind to. I am happy to discuss it with my colleagues.

British Industrial Competitiveness Scheme

Lord Sikka Excerpts

Wednesday 22nd April 2026 Lords Chamber

[Baroness Lloyd of Effra (Lab)]

On support for the transition, we have set out a lot of detail on the energy transition with the Clean Energy Jobs Plan. On the North Sea specifically, the North Sea Future Plan sets out how we will scale up our North Sea clean energy industries, such as the government-backed Acorn, Viking and East Coast carbon capture clusters, the UK’s first regional hydrogen network and our plan to host the world’s biggest offshore wind farm. We are very supportive of places and industries as they transition from fossil fuel economies to the clean power agenda.

[Lord Sikka (Lab)]

My Lords, all businesses and households deserve lower energy bills. This can be done by cutting the profit margins of energy companies. Since 2020, they have made £125.7 billion in profit, which is roughly £4,400 per household, and inflicted enormous pain on businesses and households. I am sure the Minister knows that countries with significant public ownership of energy have lower energy bills. When and how will the Government eliminate profiteering in the energy sector and build a resilient economy?

[Baroness Lloyd of Effra (Lab)]

The noble Lord raises the question of the business environment and electricity prices. One of the most important things for businesses around energy prices, business confidence and investment capability is the fiscal situation. Last week, the IMF welcomed the UK’s notable improvement in our public finances, with the economy growing by 0.5% in the three months to February. Taking long-term steps to create a stable economy will enable sound finances, lower prices and enable investment in energy over time, which will bring prices down.

Companies: Online AGMs

Lord Sikka Excerpts

Monday 23rd March 2026 Lords Chamber

[Baroness Lloyd of Effra (Lab)]

What we are doing through the consultation on modernising corporate reporting is delivering on our commitment to provide legal clarity on the grey area of whether companies can hold fully virtual AGMs. It would be up to shareholders and businesses to decide whether to take that forward. The proposals that we put forward will be accompanied by appropriate shareholder safeguards.

[Lord Sikka (Lab)]

My Lords, there is nothing in the Companies Act to say that shareholders own companies. They may have controlling rights, but that is not the same as ownership. Besides, shareholders may have short-term interests in companies; therefore, is it somewhat foolish to leave them with the control to direct companies. It is workers and customers who have lifelong interests in companies, and it is time that the Government empowered those stakeholders to promote growth and the welfare of our whole society.

[Baroness Lloyd of Effra (Lab)]

If my noble friend is referring to Section 172 of the Companies Act, which already requires directors to have regard in their decision-making to employee interests and

“the impact of the company’s operations on the community and the environment”,

that is a very important principle.

UK-India: Comprehensive Economic and Trade Agreement

Lord Sikka Excerpts

Wednesday 4th March 2026 Grand Committee

[Lord Sikka (Lab)]

My Lords, I thank the International Agreements Committee for its thorough and insightful report. I welcome the UK-India trade treaty and congratulate the Government on securing this agreement in a very short time. Inevitably when sovereign states negotiate, there is give and take and compromises, and this treaty is no exception. Some may scoff at the possible 0.13% increase in UK GDP but, in a world marked by Trumpian trade wars and tariffs, nations need to diversify trade as a buffer against emerging imperialism.

The trade deal is not comprehensive, as has been pointed out, but I support the Government’s step-by-step approach, which will be more productive in the long run. Inevitably, at the moment, both India and the UK want to protect certain segments of their economies and I hope that in time the scope of this treaty will expand. A huge positive for UK-based companies is that they can now have better access to Indian public procurement and government contracts, especially as India is expanding its infrastructure investment and its Government are heavily investing in semiconductors, rare earth minerals and other supply chains.

However, I have a number of questions for the Minister, whom I thank for the briefing earlier in the week. I have searched the various chapters of the treaty but could not find anything about the currency in which the trade between the two countries is to be settled. Will it be in the local currencies or in US dollars? The answer matters. If the trade is financed in local currencies, there is a potential for saving considerable transaction costs and greater potential for expansion of trade, as BRICS countries have already shown.

Since the Second World War, the US dollar has functioned as international currency, which skews world trade because countries undertaking international trade, even though they are not dealing with the US, have to spend money on currency hedging, so countries incur hedging costs and US financial institutions profit from every single trade. Is it free trade? Forget it: it is free money for US financial institutions. The dollarisation of world trade allows the US Government to impose arbitrary financial sanctions on trade that they do not approve. We have seen President Trump exercise that power. Is the UK-India trade agreement unintentionally increasing risks to countries such as India, which has already been bullied for buying Russian oil? Can the Minister shed some light on the discussions about the new financial risks that might be created as a result of this treaty and how much profit will be made by US financial institutions as a result of this trade treaty?

Questions have already been raised about the sanctity of intellectual property rights, and I hope the Minister will explain how the treaty will protect the intellectual property rights of pharmaceutical, technology and other businesses.

There are always issues about non-tariff barriers, which any sovereign state can create at any time, in the form of licensing, various bureaucratic rules and other practical procedures.

International trade also raises questions about transfer pricing, tax structuring and the implications of indirect taxes and customs duties. Again, I struggle to find anything about that in the treaty or in the committee’s report. The OECD convention on transfer pricing has become dysfunctional, and the BRICS countries have developed their own pragmatic rules. In other words, the rules applied across the globe are not consistent; they cannot be consistent because of the way the international economy is constructed. Can the Minister explain how difficulties arising from different transfer pricing regimes will be resolved? I hope the Minister will not say that some kind of obscure panel will look into it, because those kinds of panels do not carry any weight in these disputes.

Fair trade and competition also rest upon labour rights. As a founding member of the International Labour Organization, India has ratified the core conventions, including six of the eight fundamental conventions covering forced labour, child labour and non-discrimination, but it has not ratified Convention No. 87, which relates to freedom of association and the protection of the right to organise, or Convention No. 98, which relates to the right to organise and collective bargaining. Can the Minister explain what discussions have taken place between the two Governments about this and what their impact is on this treaty?

Several speakers have highlighted the absence of legal, accountancy and other services from the agreement. I am a bit more relaxed about this because, over the years, we have come across all kinds of evidence—literally running to hundreds and thousands of transactions—of sleaze relating to law and accountancy firms. These revelations have been made via the Panama papers, the Bahama leaks, the Paradise papers, the Pandora papers, the Swiss/HSBC leaks and any leaks you can think of. They show that UK-based and Crown dependency-based law and accounting firms are absolutely central to global sleaze, and I do not think that any emerging economy needs to import more sleaze via trade treaties. They have plenty of their own homegrown sleaze.

Will the Minister say what steps the Government are taking to cleanse these sectors so that they can be considered worthy candidates for expanded international trade? At the moment, the Government are deregulating. They expect regulators to promote the growth of law firms, accounting firms and the related sectors, which means there will be even less effective oversight. I hope the Minister can answer my question about what the Government are going to do to cleanse these sectors. We cannot be exporting corruption under the guise of trade treaties. Finally, I hope that this agreement between two countries with a shared history is a forerunner of something big in the not-too-distant future.

US Tariffs

Lord Sikka Excerpts

Monday 23rd February 2026 Lords Chamber

[Lord Stockwood (Lab)]

I am not aware that that is part of the negotiations.

[Lord Sikka (Lab)]

My Lords, is there a role for the World Trade Organization in this tariff-led turmoil?

[Lord Stockwood (Lab)]

At the moment, these are bilateral conversations. We are acting in good faith and hope that they will come to a successful resolution.

Mobile Phone and Broadband Prices

Lord Sikka Excerpts

Tuesday 9th December 2025 Lords Chamber

Asked by

[Lord Sikka]

To ask His Majesty’s Government what steps they are taking to ensure price increases by mobile phone and broadband companies are fair.

[The Parliamentary Under-Secretary of State, Department for Business and Trade and Department for Science, Innovation and Technology (Baroness Lloyd of Effra) (Lab)]

It is important that customers feel empowered in engaging in the telecoms market, and confident that they are getting a fair deal. We support Ofcom in taking action to protect fairness and transparency, and welcome its recent steps to remind consumers of their rights. The Chancellor and Secretary of State have written to the CEO of Ofcom and the CEOs of major telecoms companies urging further, faster action to ensure that consumers are treated fairly.

[Lord Sikka (Lab)]

My Lords, I thank the Minister for her Answer. Phone and broadband companies such as O2 have violated Ofcom’s voluntary code and imposed unjustified mid-contract price hikes on customers. The old and vulnerable are hit hard, as they are less likely to shop around. Inflation and poverty are baked into the system. As reducing the cost of living is a government objective, will the Minister enact legislation to ban mid-contract price rises? Statutory rights are the only effective antidote to corporate abuse of power.

[Baroness Lloyd of Effra (Lab)]

My noble friend is right to highlight the importance of the ability to have the right contract and of giving consumers the information they need. We have no plans to ban in-contract price rises, but consumers have the right to leave, penalty-free, for 30 days from when unexpected price rises are announced by a provider. The Chancellor and Secretary of State asked Ofcom to review the suitability of the current 30-day notice period, to ensure that it can be enacted by consumers who experience unexpected and unannounced mid-contract price rises.

Steel Industry

Lord Sikka Excerpts

2nd reading
Saturday 12th April 2025 Lords Chamber

[Lord Sikka (Lab)]

My Lords, the Minister said that the Government seek to take control of blast furnaces at Scunthorpe without taking control of British Steel. They are trying to avoid the words “nationalisation” and “public ownership”, but that is really where we are heading. British Steel’s most recent accounts show a falling turnover, increasing losses and a negative net worth. It is bankrupt and there should be very little compensation, if any.

Steel is essential for civil and defence industries. In a world of trade wars, we need to be self-sufficient. We need permanent public ownership of the steel industry. I do not support temporary nationalisation, under which the public purse revives the industry and the Government then hand it back to the private sector for more subsidies.

One of the reasons for the current crisis is that privatisation of essential industries has failed. The 1988 privatisation of steel by the Conservative Government was completely divorced from any industrial strategy, need for jobs and self-reliance. There are those who object to nationalisation but, at the same time, have been content for Governments to hand vast subsidies to the steel industry. This free money enables companies to acquire assets and income streams that enrich their shareholders, and they keep coming back for more.

Steel-making is in crisis because of the failure of other privatisations. Steel-making relies on extensive use of energy but our energy costs are absolutely extortionate. British businesses pay the highest price in the developed world for industrial electricity. It is twice the EU average, 2.6 times the Korean cost, four times the US cost and even more compared to China. In the last four years, the UK’s 20 biggest energy companies have made operating profits of £514 billion and, in doing so, have destroyed steel and other industries.

With the use of electric arc furnaces, UK steel would be even more expensive and uncompetitive. Some 34,000 gallons of water are used to produce one tonne of steel and water costs are extortionate too. No steel nationalisation or industrial strategy can succeed without control of the key costs. Can the Minister explain how the Government will control profiteering associated with energy and water industries?

Yesterday, the Prime Minister said that he will

“protect British jobs and British workers”

and added:

“Jobs. Investment. Growth. Our economic and national security are all on the line”.


Against this background, people in Scotland and Wales really deserve a straight answer. Grangemouth, Scotland’s only refinery, is set to close with the loss of thousands of jobs, but the Government have not sought to bring it into public ownership. Why? The Government did not prevent the closure of traditional steel-making at Port Talbot in Wales. Tata could have accompanied its electric arc furnace with another plant making direct reduced iron, as suggested by trade unions. Again, the Government did not support that strategy. Why not? The inevitable conclusion is that a London-based Government protect jobs in England but do not really care about job losses and decline in Scotland and Wales. Can the Minister please explain why the Government are willing to save the Scunthorpe plant but not Grangemouth or Port Talbot?

Scunthorpe Steelworks

Lord Sikka Excerpts

Monday 31st March 2025 Lords Chamber

[Baroness Jones of Whitchurch (Lab)]

The Government will simply not allow the end of steel-making in the UK. We are looking seriously at options for primary steel-making here. With the help of independent experts, we are reviewing the requirements and viabilities of technologies for the production of primary steel in the UK, including direct reduced iron. As I say, steel is an absolute priority for this Government, and we will be producing a steel strategy very soon.

[Lord Sikka (Lab)]

My Lords, it is good to hear the Minister talk about developing a steel-making strategy, but I am sure that she appreciates that it is impossible to have a successful steel-making strategy without controlling the cost of energy. The cost of industrial energy in the UK is about seven times that of China and three to four times that of France or Germany. I have met steel executives in this place, who are basically saying that their industry cannot survive unless the Government control the profiteering of energy companies. How are the Government going to control profiteering by energy companies?

[Baroness Jones of Whitchurch (Lab)]

My Lords, we continue to do everything that we can to protect the steel industry. That obviously includes looking at the costs concerned. If necessary, we are committed to providing £2.5 billion to help rebuild the steel industry over the next five years. This will be available through the National Wealth Fund and other routes. We are continuing to look at what further steps need to be taken to protect the steel industry in this country.