Financial Services and Markets Bill

Debate between Lord Tunnicliffe and Lord Jackson of Peterborough

Committee stage
Monday 13th March 2023 Grand Committee

[Lord Jackson of Peterborough (Con)]

I will speak very briefly in support of the amendment moved by my noble friend Lord Moylan and those spoken to by my noble friend Lady Noakes. All noble Lords have spoken very well, and there is clearly consensus here. The specific issue here has trundled on for 10 years. I remember that when I served as treasurer of the 1922 Committee, this was an issue taken up by both the then chairman and, as mentioned by the noble Baroness, Lady Hayter, by Sir Charles Walker. I naively believed that we had resolved this issue by about 2017-18; obviously, that is not what happened.

This is about the limits of a permissive regulatory regime. It is clear that the Treasury and the regulatory bodies involved have not taken a blind bit of notice of the cross-party support in Parliament. This is not a niche issue that affects just us. In my case, I was affected because I was told by my mortgage provider that I was not going to be permitted to make mortgage payments, let alone make any withdrawals from a bank account. But this is also an issue of the civil liberties of our family members and extended family members. On that basis, we must take a very tough stance.

I come back to the particular point from the noble Baroness, Lady Bowles, about what we have the ability to do now that we are outside the EU—although my noble friend Lord Kirkhope is right that we must not recapitulate the arguments about Brexit. The noble Baroness’s point was astute, in that there is no proper risk analysis and risk assessment of all of these individual cases. A generic policy is applied across all individuals.

Frankly, let us be honest: the UK is one of the most open and transparent political systems in the western world. The noble Baroness, Lady Fox, is absolutely right that people are not attracted to public service if the fallback position is, “You’re a liar, a cheat, a crook and a thief if you go into public service”. It is important that, after 10 years, we make that appropriate point.

If we do not adopt my noble friend Lord Moylan’s rather benign amendment, a future Government may well take a much more draconian approach to this, both for the regulators and for the individual financial institutions. On that basis, they have a vested interest in sorting this situation out because, when the Financial Action Task Force proposals were published in 2012, they were not about asking people like the noble Baroness, Lady Hayter, to produce a premium bond certificate from 1957—I scarcely believe that it was 1957; I thought it might be a lot later.

This is an opportunity, and I hope that my noble friend the Minister makes, or at least commits to, those changes. This is not the first time that I have been compared to a brothel keeper—although that is normally in the other House—but my noble friend Lord Moylan makes a good point. This is an opportunity to right this wrong. This is not about us and it is not a niche issue: it is about civil liberties, decency, honesty, openness and transparency. We need action from Ministers on this.

[Lord Tunnicliffe (Lab)]

My Lords, after so many very good speeches, I will be short. My personal experiences vary wildly. I remember a four or five-page document for a credit card, and I remember the bank that most of my money is in ringing me up and saying, “What’s this extraordinarily large amount of money that has just come into your account?” I said, “You’re not going to believe this, but it is my son paying me back a loan”, which he had. I heard nothing more from the bank. That gives an insight into the disproportionate ways in which various institutions react to this, and much of the problem is in that behaviour.

Let us not get away from the problem: money laundering is serious. If you believe all of the thoughtful reports on it, it is serious in our City. It is absolutely valid that we take it very seriously. I understand from the professionals who regulate us that it is very subtle: a lot of it is done with seemingly innocent accounts moving relatively modest amounts of money in a highly managed way. It is a profession that is, sadly and unfortunately, probably absorbing some good brains in an evil trade.

One has to accept that getting the regulations right is very challenging. I take the general view I hear today that the regulations need further improvement. Clearly, that has to go in law. Therefore, I urge those who have put forward amendments to try to address the problem and put together a common amendment that may attract support across this House and the other place. Of course, it would be much better if the Minister came forward with her own solution.

We have to think about the other agents here: the banks and financial institutions. Sadly, they seem to work like many large institutions do. They take views about spending money and about their duties; frankly, all too often their duties are not to their customers. The moment a piece of complexity is built in, they end up with algorithmic solutions and basic statements that some algorithm has been offended here or there, and they take draconian solutions: they close or block accounts. This is absolutely unreasonable.