Financial Services Bill

Debate between Viscount Trenchard and Lord Judd

Report stage
Wednesday 24th March 2021 Lords Chamber

[Viscount Trenchard (Con)]

My Lords, the noble Lord, Lord Oates, and the noble Baroness, Lady Hayman, eloquently introduced Amendment 3. There was much discussion on this matter in Committee but I still consider that such a review would place too heavy a burden, and a disproportionate one at that, on the PRA. I thank my noble friend the Minister for the diligent manner in which he has responded to noble Lords’ concerns about raising the importance of climate-change issues in the list of factors to which our regulators must have regard in making rules.

The Government’s credentials as global leaders in the movement away from reliance on fossil fuels are well established and will, I hope, be further enhanced by the G7 meetings and the COP 26 conference later this year. However, this should be kept in perspective and balanced against the need for economic recovery and the needs of industry. There is no point in pricing what remains of our steel industry out of the market if the result would be an increase in imports from countries which have not adopted energy policies as green as ours, especially if the impact on global emissions is negligible.

When I first read my noble friend Earl Howe’s amendments I was puzzled, because it seemed that he was giving with one hand and taking away with the other. I look forward to his clarification of how Amendments 43, 46, 47 and 49 net off against each other.

I am loath to saddle the regulators with increased obligations which go beyond the practices that they have already adopted. The letter from Sam Woods makes it clear that climate change is already an important consideration in the PRA’s supervision and regulation of banks and insurers, under its existing statutory objectives. Similarly, the letter from Nikhil Rathi makes it clear that the FCA is committed to helping market participants manage the risks in moving to a low-carbon economy and supports the commitment to match, at least, the ambition of the EU sustainable finance action plan in the UK. Since the FCA has already decided to recruit a director with specific responsibility for ESG matters, I do not think that Amendment 23, in the name of the noble Baroness, Lady Hayman, is necessary. The remit of the senior manager whom she suggests should be appointed would clash with that of the new director who is already in the process of being recruited.

Amendment 22, in the name of the noble Baroness, Lady Hayman, also goes too far and is too prescriptive. My noble friend the Minister was right when he said to the Committee, on 24 February, that

“it is important that we act carefully and rationally, consult appropriately with interested parties and therefore make progress in the right way.”

He was also right in stating that

“the changes the Bill enables serve to implement a number of vital reforms following the financial crisis. These reforms reinforce the safety and soundness of the UK financial system.”—[Official Report, 24/2/21; col. GC 224.]

Surely we should not amend the Bill in any way that might prevent us giving effect to updated prudential rules. I also agree that there is no evidence that greener means prudentially safer, at least not yet. Therefore, it is not clear that a regulator, whose primary objective is the safety and soundness of financial institutions, should be burdened with disproportionate climate obligations now, especially at a time when it is essential to maintain and enhance the competitiveness and attractiveness of the UK’s financial markets. With regard to individual regulators’ objectives and rule-making powers on climate change-related risks, the ABI recommends the need for holistic debate across stakeholders before adding new objectives to the remit of regulators, given the need to balance the various priorities. I believe that my noble friend’s amendments strike the right balance, and I will support them.

While I agree with the noble Baroness, Lady Bennett of Manor Castle, that biodiversity is important, I believe she wants to go a step too far in her Amendment 44 in adding this to the FCA’s “have regard to.” There are countless other policies that could be added, but too many will muddy the waters and distract the FCA from its efficient operation in performing its core duties and objectives.

[Lord Judd (Lab) [V]]

My Lords, these amendments, and this Bill, are crucial to the future of the United Kingdom. We have heard repeatedly in the arguments deployed of an interaction. There is the need for financial services to be successful and effective because they play such an important part in ensuring the well-being on which the rest of our society depends. That is beyond question. However, we know that they have implications, socially and beyond, for which they need regulation, and this has been well spelled out.

I shall focus on Amendments 3, 22, 23 and 44 in particular. Fossil fuels inevitably have considerable and extensive risks for the climate. There can be no argument about that. They have great implications in terms of climate change, and I am glad to see that Amendment 3 is grappling with this.

Amendment 22 deals with the point I have just made in that climate change poses risks to financial services. Therefore, it is essential to have the right arrangements in place to ensure that those risks are, if not eliminated, minimised.

Amendment 23 makes the point I have often felt strongly about in legislation: it is sometimes crucial to have a specific person carrying a specific responsibility for bringing together the various threads in the policy for which we are aiming and ensure their delivery. It is a good amendment.

I do not share the rather dismissive approach of the noble Viscount, Lord Trenchard, to Amendment 44. My view is that the noble Baroness, Lady Bennett of Manor Castle, deserves considerable commendation for having tabled this amendment. We have happily joined these UN conventions, and our diplomats have usually played a large part in bringing them about, but we sometimes lack the discipline to follow through with what they require of us. At this point in our consideration of the Bill, it is appropriate to talk about the convention and the undertakings we have thereby committed ourselves to on biodiversity. On that issue, I find myself dismayed by the position of the noble Viscount, Lord Trenchard, because we are surrounded by a major crisis. The biodiversity of the world is in danger of collapse, and the consequences have direct implications for the survival of humanity itself. There is urgency about this situation.

In conclusion, I simply make this point: I said that we wanted the financial services sector to be successful and effective, because we recognise its indispensability, but we also must recognise that on climate change, we are long past the age of rhetorical language and theoretical commitment. We have to demonstrate that we have the leverage and the arrangements in place to ensure delivery; if we do not ensure delivery on the measures we want to see to protect the climate, we will be party to a cruise towards catastrophe for the global community. It is vital to have these disciplines, and these amendments spell out how we can bring those disciplines to bear.

Agriculture Bill

Debate between Viscount Trenchard and Lord Judd

Committee stage & Committee: 4th sitting (Hansard) & Committee: 4th sitting (Hansard): House of Lords
Thursday 16th July 2020 Lords Chamber

[Lord Judd [V]]

My Lords, I am very glad to support this amendment. It seems to me absolutely crucial that at this juncture, of all times, we should be committing ourselves to making sure that proper funding is available for agriculture. It is one of these difficult situations: for quite a long time in Parliament I have been concerned about it. We have a Minister in our midst who takes these issues very seriously, but he will not necessarily be there for ever—alas—and that means that we do not know what lies ahead; nor do we know how far the Treasury and other key members of the Government share the commitment and aspirations that we know he has.

It seems to me, therefore, very wise of my noble friend to table this amendment, because it is saying that we must not allow circumstances, inadvertently or deliberately, to create situations in which the amount of funding available for agriculture decreases. This is the very time that this should not happen, and I believe that this amendment relates to other amendments, not least those by my noble friend Lord Whitty which are coming up in a moment—or at least this evening, we hope—in which he talks about smallholdings and the rest. The point here is that I think we are entering an economic phase in which land and the opportunities it offers for productive, constructive and creative activity will become necessarily more available and more important than ever. I am very glad that my noble friend has wisely tabled this amendment.

[Viscount Trenchard]

My Lords, I have heard it said many times by Ministers that the total amount of agricultural subsidy to be paid in 2021 will be no lower than the amount to be paid in the current year. I look forward to hearing the Minister’s confirmation of this. However, I am not sure that the noble Lord, Lord Grantchester, is quite right in his drafting of Amendment 105, because “the total amount provided” under Section 1 in 2020 is obviously zero. I think that what the noble Lord wanted to say was that the amount to be paid is no less than the total amount, including amounts provided under the direct payment scheme and other existing schemes.

I am not sure that it is fair to limit the proportion of financial support spent on administration or consultancy. A farmer might spend a high proportion on consultancy in one year and then nothing for several years. Different farmers categorise spending on administration in different ways, and if a farmer spends all his financial support on unnecessary administration, it follows that he will not be achieving the approved purposes and will not therefore qualify to continue to receive support. I am therefore unable to support Amendments 107 and 123, but I would support Amendment 112, permitting carry- over of unspent funds—but probably only to the next year, which I think is reasonable. Amendment 128, proposed by my noble friend Lady Rock, achieves the same purpose, although, again, I suggest limiting the right to carry over to the following year only.