Financial Services and Markets Bill

Debate between Lord Tunnicliffe and Baroness Altmann

Committee stage
Monday 30th January 2023 Grand Committee

[Lord Tunnicliffe (Lab)]

My Lords, I shall speak to both the amendments in this group. I was not going to speak on the amendment of the noble Baroness, Lady Noakes, because, frankly, I did not understand it as well as it was just explained. The key point she is making is that there is a whole series of things about credit. It is complex, and that allows the Government to go behind the screen of saying, “We need this review; we need more time to think about it”, and so on. The gripping words she used were that society needs this stuff up to date as quickly as is reasonably practicable. There is no area where that could be more true than buy now, pay later. We are in a period of enormous stress for poor people. They desperately need reasonably priced credit because they just do not have any reserves.

In this area, there is this wonderful illusion that the credit is free. People do not lend money for free, except, perhaps, foolish parents. Buy now, pay later depends, as far as I can see, on the borrower failing to obey the rules, and companies make their money out of the default situation. They also make some money out of what they charge to retailers, but it is a very uncomfortable area.

I recognise that buy now, pay later can be a lower-interest borrowing option for some consumers, and that it is an area where a lot of innovation takes place, but neither of these points means that it should not be properly regulated. The Government have again and again committed to bring in regulation. Indeed, we are talking about 18 months since we got the first assurances from the Government that this would be subject to proper regulation. The Government have not acted, and harm is happening all the time. For example, Citizens Advice research has found that nearly two in five buy now, pay later customers do not fully comprehend the nature of the loan they are signing up to and often vulnerable shoppers are signing up to financial products that they do not fully get. What are the Government doing and which buy now, pay later companies are they meeting to ensure greater transparency?

We need to act in this area. I cannot understand how the Government can expect the assurances they give on these sorts of legislation to be taken seriously in future with the delays that have appeared in this area.

[Baroness Altmann (Con)]

My Lords, I support both amendments in this group. I think my noble friend Lady Noakes’ Amendment 43, which she so eloquently explained, is very much needed within our financial services system. I agree that it is possible that we should consider introducing into the wording greater parliamentary scrutiny rather than the discretion that may otherwise be given wholly to the Treasury, but I think the explanation by the noble Lord, Lord Tunnicliffe, of the situation with buy now, pay later is a good example of the kind of amendment that my noble friend wants to put in which would have facilitated some faster action had it been put in. I am not sure, but with the Bill we are going back time and again to the asymmetry of information and power between those transacting with financial services in general and the financial services industry that is putting products out to those customers. I think these amendments would be very useful additions, and I look forward to hearing from my noble friend.

Official Listing of Securities, Prospectus and Transparency (Amendment etc.) (EU Exit) Regulations 2019

Debate between Lord Tunnicliffe and Baroness Altmann

Monday 18th February 2019 Lords Chamber

[Baroness Altmann (Con)]

My Lords, I rise briefly to express my concern from these Benches that we may set some dangerous precedents in the processes that we are adopting in discussing and passing these SIs. I understand the difference between consultation and engagement on these issues but I have significant concerns. If the SI was indeed ready on 21 November, there has been time for a proper consultation, which does not seem to have occurred. It would be helpful to the House if we had more information on what engagement has taken place.

I fully accept that, as my noble friend Lord Leigh has said, industry is in favour of adopting these regulations, should we enter a no-deal scenario. However, there are reasons for us to be concerned across the House at the procedures taking place. We are being asked to approve legislation based on evidence that we perhaps feel is incomplete. I will not vote against the Government but I would like to express my concerns.

[Lord Tunnicliffe]

My Lords, in trying to take my role seriously, I staggered my way through the Explanatory Memorandum to try to understand this SI. It all seemed pretty straightforward. Basically, at the moment if you have a prospectus approved by an EEA regulator, it can be used in the UK. We are foolishly—no, that is not the party line, is it?—considering crashing out of the EU and we need some substitute regulation. It seems that the bulk of this statutory instrument is saying that whereas before you would have it approved anywhere in Europe, now if you want to market it in the UK it has to be approved in the UK. That seems to be a consequence of leaving the club. I regret that we have not had the level of consultation that Members would have liked but I find it extraordinarily difficult to believe that the alternative—not approving this SI—is anything like as consequential as the intrinsic costs. No matter how much consulting we did, we would still have come to the conclusion that we should approve the SI.

As ever, I tried to look at the Explanatory Memorandum in the context of the basic assumption of the withdrawal Act: everything is transferred and no new concepts are introduced. The one area where I have some questions is on a very narrow point, which is the exemption for certain government and local authority securities. The memorandum says:

“Under the current Prospectus Directive rules, certain public bodies are exempt from the requirement to produce a prospectus when they undertake to offer securities to the public or request the admission of securities to trading on a regulated market. This includes EEA States, EEA local authorities, EEA central banks, and public international bodies of which one or more EEA States are a member”.


The dilemma is whether we continue that exemption. There is an argument that we should but, in order not to recognise EEA states, there then comes the decision to extend that exemption.

There are two ways that that exemption is described. The third bullet point of paragraph 2.5 of the Explanatory Memorandum states:

“Extending the existing exemption from the requirement to produce a prospectus and certain exemptions under the Transparency Directive that currently apply to certain EEA public bodies, to certain third country public bodies”.


That would seem to be a controlled extension of the exemption, which took account of the countries to which the exemption was applied, whereas paragraph 7.22 says:

“To address this deficiency, the government will extend these types of public bodies exemptions to the same types of public sector bodies of all third countries”.


I think Venezuela is a third country, and the idea that the public offers of securities in Venezuela should be treated the same as those in other EEA states would seem somewhat anomalous.

European Union (Withdrawal) Bill

Debate between Lord Tunnicliffe and Baroness Altmann

Committee: 6th sitting (Hansard - continued): House of Lords
Monday 12th March 2018 Lords Chamber

[Lord Tunnicliffe (Lab)]

My Lords, I shall be brief. I spent 22 years in the airline industry from the mid-1960s onwards as everything from co-pilot to number two in the marketing department. I learned two things from that. One was that aeroplanes are very dangerous. When I first joined the industry, we would crash a jet aircraft about every two years in the United Kingdom, and it has been a long, hard slog. That slog has not been all UK—it was the UK, the US, Canada and France, working together through international co-operation, producing the safety we take for granted today. It is crucial that those mechanisms stay in place to achieve that.

The other thing I remember is what air services agreements are. They are treaties, and if you are not part of one of these more modern situations, such as the European one, there are country-by-country treaties between pairs of countries—all of which would have to be renegotiated. Falling out of the present situation would create enormous problems. I am very sorry that the Minister did not like my suggestion of contact between interested Peers and senior transport people on these three groups. I hope that perhaps that could be reconsidered—I am glad they are nodding now on the Front Bench, but the Minister said nothing in either of his two speeches to suggest that. Obviously in all parts of the House there is a genuine concern that progress is not being made in these very important areas. I do not want to have that concern; I want to share the Government’s optimism. At the moment, given the responses we have had, I do not.

[Baroness Altmann]

I rise briefly to explain why I have added my name to these important amendments. One thing that has not been mentioned in Committee so far is the idea that the arrangements we have with Europe also protect the safety, maintenance and repair facilities around our country for our aviation and aerospace industries. We must maintain alignment of regulation. We have 100 airports and 172 maintenance and repair facilities, and if we jeopardise the standards of safety, if we are not in the open skies agreement and not in EASA, then the US apparently is already planning to send its own inspectors to make sure that our standards are up to scratch. If we cannot reassure people that we will maintain those standards, we will not have a functioning aerospace and aviation industry.

Another important element that must not be forgotten is that if we do not maintain our membership of the open skies agreement and EASA, the flights taken by ordinary citizens will increase in price. One estimate from the consultancy Oxera is that if all flights operated by third country airlines were removed, air fares for UK passengers would rise by between 15% and 30%—a Brexit surcharge which people were never told to expect to pay when they voted to leave the EU. These restrictions cannot be overcome simply by airlines setting up subsidiaries in Europe, because ownership restrictions do not allow non-EU investors to own a controlling interest in EU airlines.

I urge my noble friend the Minister to make a commitment to the Committee that we intend to maintain membership of EASA and the open skies agreement, notwithstanding the jurisdiction of the European Court of Justice.

National Insurance Contributions (Rate Ceilings) Bill

Debate between Lord Tunnicliffe and Baroness Altmann

Tuesday 10th November 2015 Lords Chamber

[Baroness Altmann]

My Lords, I thank noble Lords for the contributions they have made to this interesting debate and I am grateful to the noble Baroness, Lady Kramer, and the noble Lord, Lord Tunnicliffe, for their support for the Bill.

[Lord Tunnicliffe]

My Lords, I did not say that we support the Bill. I merely said we would not oppose it.

[Baroness Kramer]

If I might just confirm, we have no problems with the policy decision, but the decision that this needs to be encapsulated in binding legislation is a very troubling precedent.

[Baroness Altmann]

Then I thank the noble Lord and the noble Baroness for their support for the policy of this Bill, and also for supporting the £3,000 employment allowance and the abolition of national insurance contributions for apprentices.

Before I address the specific points raised by the noble Lords, it is important to put the Bill within the context of the significant action that the Government have already taken to reduce the burden of class 1 national insurance contributions on earnings and employment. These measures have all been strongly welcomed by business and have contributed to the current record levels of employment. I also emphasise that from April next year the Government will abolish employer class 1 national insurance contributions for apprentices under the age of 25, as I have said. Apprenticeships are at the heart of the Government’s drive to equip people of all ages with the skills most valued by employers. This is a very important move. It will help employers who provide apprenticeships to young people and provide a significant boost to youth employment rates more generally.

The Bill before us today introduces the final aspect of the Government’s five-year tax lock. This is further testament to the Government’s commitment to provide certainty on tax rates for the duration of this Parliament, and it delivers on the commitment to lower levels of taxation that was made in the Conservative manifesto.

On the question from the noble Lord, Lord Tunnicliffe, as to whether the taxes announced in the summer Budget have breached this lock, that is not the case. The Government have been clear that the tax lock will not prevent future changes to the tax system to make it fairer or to deal with avoidance—those were the measures in the Budget. Furthermore, the Government remain committed to lowering taxes and supporting hard-working people through increases in the personal allowance.

The noble Lord also asked about an update on the measures being considered by the Office of Tax Simplification. The Government are committed to simplifying tax and to transparency. The overall aim of the project is to build on earlier work undertaken in this area, to understand the steps that would be needed to achieve closer alignment of the taxes and the costs, benefits and impact of each step. The terms of reference were published on 21 July, and the Office of Tax Simplification will publish a final report ahead of Budget 2016.

As regards whether this Bill is a gimmick, I do not believe that it is. This was a Conservative manifesto pledge and, as I have said, there is the ability in secondary legislation to increase national insurance rates by 0.25% each year on class 1. This will give an added element of certainly to businesses and employees as to the maximum rates of national insurance that they might face.

The noble Baroness and the noble Lord are right that there could be circumstances in which tax revenues fall short and some contingency planning is required. However, future funding of contributory benefits, should national insurance contribution receipts prove insufficient, is a matter for the Chancellor, and that decision would need to be made at the relevant fiscal event based on the latest projections available at the time and taking into account the National Insurance Contributions (Rate Ceilings) Bill that we are introducing. Indeed, as the noble Baroness indicated, if there were an economic emergency, it would not normally be the economic policy of choice to increase national insurance contribution rates. The aim of this Government is to continue to drive growth and to create 2 million more jobs during this Parliament.

[Lord Tunnicliffe]

I think the noble Baroness is saying that I suggested that the Government had broken the triple lock in the summer Budget. I was not suggesting that they broke the triple lock but that the summer Budget had very significant tax increases—of the order of £4 billion-plus. I hope that she is not disagreeing with that assessment. If she is, perhaps she will write to me and set out the logic behind her disagreement.

[Baroness Altmann]

I was not assuming that the noble Lord was talking about the triple lock. Indeed, the Government are absolutely committed to the triple lock. I was talking about some of the other measures that do not breach this commitment.

I am grateful for the opportunity to explain the issues we have debated today. There are clearly a number of points that we might debate at greater length when the Bill moves to Committee. I commend the Bill and ask the House to give the Bill a Second Reading.