Financial Services and Markets Bill

Debate between Lord Thomas of Cwmgiedd and Lord Tunnicliffe

Committee stage
Thursday 23rd March 2023 Grand Committee

[Lord Thomas of Cwmgiedd (CB)]

My Lords, I too support these amendments. I cannot usefully add anything in relation to the super-affirmative procedure. It seems that this an admirable proposal—but I want to say a few words about the proposed new subsection in Amendment 241G, introduced by the noble Lord, Lord Sharkey.

To begin with, it seems that, if Parliament authorises the alteration, as Parliament can do anything—as one is taught from one’s earliest days—it must be able to do something as minor, in theory, as this. Furthermore, as she always does, the noble Baroness, Lady Noakes, made a very good point that this is a very important step, but why is this not the Bill to start? There are three reasons. First, the financial services industry is of vital concern to the UK. Secondly, these instruments are drafted not by parliamentary counsel but by no doubt very competent lawyers in the Treasury—but there is a difference. Thirdly, it seems that, if the draftsman knows that bits can be corrected, that is a very good supervision of the drafting process.

However, although this is in theory a minor step, it is surprising to say that Parliament can amend statutory instruments and there are obviously consequences for our procedures. It might be appropriate for this Committee or someone—I am not sure how it is done—to say, “The appropriate committees and the clerkly authorities in this House should report on the practicality of doing this”. If it is a procedure, how likely is it to be used? More importantly, we can always find an excuse to say, “Let’s push it down the road”. This is the admirable place to start an important reform for our most important industry.

[Lord Tunnicliffe (Lab)]

My Lords, I do not formally have a view on these amendments. It seems that they would have wide-ranging implications, and I shall consult with colleagues throughout Parliament about how we should come back to this issue. If a piece of legislation is proposed and supported by the noble Lord, Lord Sharkey, the noble Baroness, Lady Noakes, and the noble Viscount, Lord Trenchard, you have to think that it is pretty wide-ranging—in fact, close to impossible. Whether this is the right place to address this issue is a much bigger question than whether it is a good idea. It seems a pretty good idea, but I shall listen to the Minister’s response to the key point about the right place and the right mechanism.

Financial Services and Markets Bill

Debate between Lord Thomas of Cwmgiedd and Lord Tunnicliffe

Committee stage
Monday 30th January 2023 Grand Committee

[Lord Thomas of Cwmgiedd (CB)]

I will make one brief observation and declare my interest as chairman of the Financial Markets Law Committee. It seems to me that the real problem, which both amendments rightly seek to address, is to give SMEs an effective remedy. The courts system—for various reasons—and the costs that lawyers charge make it almost impossible for SMEs to take on the banks. Therefore, there seems a good deal of force in the arguments that have been put forward. I would be grateful if the Minister were able to tell us what the attitude of the regulators, particularly the FCA, would be to extending the position in this way. It is very important for the Committee to know what they think of this amendment. Really, the object of it is to cure a deficiency in the way in which our legal system functions.

[Lord Tunnicliffe (Lab)]

My Lords, once again, the arguments for these amendments seem quite persuasive, and I look forward to the Minister’s reply. Having probably been responsible for this legislation in the past—since I failed to duck most of it—I cannot remember for the life of me why SMEs are excluded. Before addressing the amendments, I would be grateful if the Minister could explain the thinking behind the law as it stands.

UK Infrastructure Bank Bill [HL]

Debate between Lord Thomas of Cwmgiedd and Lord Tunnicliffe

Committee stage & Lords Hansard - Part 2
Tuesday 14th June 2022 Lords Chamber

[Lord Thomas of Cwmgiedd (CB)]

My Lords, I have just three brief observations. The first is that I think the clause of the framework agreement to which the noble Baroness, Lady Kramer, referred is wholly inconsistent with the Bill. The Bill requires the directions to be published; the framework says they can be made confidential. It is plain that the two are inconsistent, and the Bill must prevail. It seems to me that that emphasises the need to go through the framework to actually update it—it is part of the editing process that is needed.

My second observation is that I can see that, to some extent, as the Minister said at Second Reading, there may be circumstances of necessity or urgency. If there are—and, as the noble Lord, Lord Vaux, said, please can we have some illustrations?—those words need to go into this clause, because it seems to me, if I may respectfully agree, that we may need to cut down this power: we cannot use it, as is suggested in article 15, to resolve a dispute. That is not its purpose; its purpose is for something exceptional.

Thirdly, it seems to me that, if those illustrations cannot be provided, then the obvious answer is that it should be a recommendation that should be published. Of course, we all know that if the Government were to publish something sensible for a body like the bank, it would have no option but to comply with it. But it means you give effectiveness to operational independence, but you actually have the steel fist behind the velvet.

[Lord Tunnicliffe (Lab)]

My Lords, there seem to be ideas all through this Bill, and the drafters have gone to one edge—to take all the power. That is the sense I get from a lot of our discussions tonight. I even had a slight tendency to want to agree with the noble Baroness, Lady Noakes—she should not get carried away; it was very slight. Once again, we have to find the centre to this, which must be something to do with Parliament. I do not have an answer, but I share the concerns. I headed a public body, and I do not remember a clause such as this ever being there; having said that, the Treasury quite openly had a clause under which it could give me directions on achieving things. It did it only once, and the results were so bizarre that it did not do so again.

The amendments tabled by the noble Baroness, Lady Kramer, are incredibly important. Several speakers raised questions about the bank’s operational independence at Second Reading and it is right that we explore the topic in more depth today. In recent weeks, the Chancellor has been quick to point to the independence of another bank—the Bank of England—as justification for a lack of action on the cost of living crisis. Of course, the UK Infrastructure Bank is not dealing with monetary policy. However, if it is acting according to its mandate, why would the Treasury need to intervene? The Government may seek to play this down by claiming the word “direction” is standard terminology, but I think many reasonable observers would be troubled by its connotations. I hope the Minister can provide a meaningful response to the noble Baroness, Lady Kramer, and that we can continue discussing this important matter in the run-up to Report.

My Amendment 36 was put in this group. It has a slightly different intent from that of the noble Baroness, Lady Kramer, and the clause stand part notice of the noble Lord, Lord Vaux, but it does relate to operational independence. This is not intended as an attempt at party-political point-scoring, but in recent times we have witnessed a number of cases and accusations relating to the misapplication of procurement and other regulations. We know that, during the Covid crisis, some Ministers took a personal interest in the awarding of contracts. I am in no way wedded to the form of words used in Amendment 36, but there is room for a prohibition on these kinds of interventions in relation to the bank’s work.