Mortgage and Rental Costs

Debate between Andrew Griffith and Nigel Evans

Tuesday 27th June 2023 Commons Chamber

[Andrew Griffith]

I always make a point of not commenting on the markets, in whichever direction they move. The responsibility of Government is to act and the responsibility of this Government is to deliver. We will control what we can control and the markets will do what they do.

The mortgage charter lays out that there will be a minimum 12-month period—I believe that is double the Opposition proposal, but I am happy to take an intervention on that—from any first missed payments before any repossession action is taken. It is important that our constituents understand that these measures offer comfort to those who are understandably anxious about the impact of higher rates on their mortgages and provide support for those who would get into financial difficulties. More broadly, the mortgage market itself remains robust and, because of the actions the Government have taken over the past 13 years, the average homeowner remortgaging in the past year had close to 50% loan to value, indicating that most have considerable equity in their homes.

Help for mortgage holders, but help for savers too: this Government are committed to ensuring that people are supported to save and can access a wide range of competitive savings products. The current range of options available to savers includes some of the highest rates that we have seen in recent years on both instant access accounts and the more relevant fixed-term products, which represent a better apples-to-apples comparison with fixed-term mortgage rates. The top instant access savings rates currently on the market offer around 4.2% and the top one-year fixed rate is much closer to the mortgage rate at about 5.8% annual equivalent rate.

Tackling inflation remains the Prime Minister’s and this Government’s No. 1 priority, and it will remain so until it is tamed. Allowing inflation to go on at the current rate or to grow higher would be the biggest threat to our collective economic security. While we continue on our fight to fight inflation, we will also do what British public expect; we will look at how we can grow the economy over the long term, improve productivity and ensure that no communities are left behind. We continue to take forward supply-side policies to increase the productive capacity of this economy and encourage workers back into work, including rolling out the largest ever expansion of free childcare. All that will set us up for greater productivity.

Let us contrast that with the Lib Dem plan to pile on to inflationary pressures an unfunded £3 billion a year. That is eclipsed only by Labour’s £28 billion a year—Interruption.] Labour Members do not want to hear it; they are talking among themselves. The IFS said that Labour’s £28 billion plan would cause interest rates and inflation to rise. Paul Johnson said that

“additional borrowing both pumps more money into the economy, potentially increasing inflation, and also drives up interest rates.”

That really would be a Labour mortgage bombshell.

In this barmy weather, those thinking of taking a summer holiday should remember that Labour’s economic policy has more flip-flops than the average surf shop: national insurance, corporation tax, the pensions cap, North sea gas, and, yesterday, shelving reform of high street business rates. The fact is that no Labour Government have ever left office with unemployment lower than when they came to power. As my hon. Friend the Member for Stourbridge (Suzanne Webb) reminded us, the note left by Labour’s Chief Secretary to the Treasury in 2010 said, correctly: “I’m afraid to tell you there is no money left.”

This Government are taking action on the economy. We are taking the tough decisions to bear down on inflation, we are supporting the vulnerable, we are helping the economy to grow, and, as the amendment states, we are helping mortgage holders with our new mortgage charter.

[Mr Deputy Speaker (Mr Nigel Evans)]

To inform the House, I shall put the main Question first. Should it be negatived, I will then put the Question on the amendment.

Question put (Standing Order No. 31(2)), That the original words stand part of the Question.

Silicon Valley Bank

Debate between Andrew Griffith and Nigel Evans

Monday 13th March 2023 Commons Chamber

[Andrew Griffith]

Yes, I can give my hon. Friend and the House that commitment. We will learn lessons if there are lessons that need to be learned, but we should not look past the fact that today we have protected customers, protected the taxpayer and protected the security of the financial system. That is so important to our businesses. Many, many people will go home from work today much more confident, with the jeopardy of the weekend having been removed as a result of the decisive action that this Government have taken.

[Mr Deputy Speaker (Mr Nigel Evans)]

I thank the Minister for his statement and for responding to questions for more than three quarters of an hour.

Digital Pound

Debate between Andrew Griffith and Nigel Evans

Tuesday 7th February 2023 Commons Chamber

[Andrew Griffith]

I thank the hon. Member for those points; her point about safeguards against coercive control in particular is well made. This is where something like a digital pound can have utility: unlike existing banking relationships, but like cash, it is not subject to the caprices of a particular commercial entity that may apply its own policies. I commend our payment services industry—the UK is blessed with a strong, healthy and competitive banking sector—but for the safeguards that the hon. Member seeks, the digital pound would be additive to the current situation.

[Mr Deputy Speaker (Mr Nigel Evans)]

I thank the Minister for his statement and for responding to hon. Members’ questions.

Financial Services and Markets Bill

Debate between Andrew Griffith and Nigel Evans

Report stage
Wednesday 7th December 2022 Commons Chamber

[The Economic Secretary to the Treasury (Andrew Griffith)]

I beg to move, That the clause be read a Second time.

[Mr Deputy Speaker (Mr Nigel Evans)]

With this it will be convenient to discuss the following:

Amendment (a) to new clause 17, after “mentioned in paragraphs (a) to (ia) of paragraph 11(1);” insert—

“(aa) the effect of the Financial Services and Markets Act 2023 on financial stability, and potential risks to financial stability, in the UK;

(ab) an assessment of the delivery of the FCA’s objectives in the previous year;

(ac) an assessment of measures which could improve the delivery of the FCA’s objectives in the next year;”

Amendment (b) to new clause 17, after “mentioned in paragraphs (a) to (f) of paragraph 19(1);” insert—

“(aa) the effect of the Financial Services and Markets Act 2023 on financial stability, and potential risks to financial stability, in the UK;

(ab) an assessment of the delivery of the PRA’s objectives in the previous year;

(ac) an assessment of measures which could improve the delivery of the PRA’s objectives in the next year;”

Government new clause 18—Composition of panels.

Government new clause 19—Consultation on rules.

Government new clause 20—Unauthorised co-ownership AIFs.

New clause 1—National strategy on financial fraud—

‘(1) The Treasury must lay before the House of Commons a national strategy for the purpose of detecting, preventing and investigating fraud and associated financial crime within six months of the passing of this Act.

(2) In preparing the strategy, the Treasury must consult—

(a) the Secretary of State for the Home Office,

(b) the National Economic Crime Centre,

(c) law enforcement bodies which the Treasury considers relevant to the strategy,

(d) relevant regulators,

(e) financial services stakeholders,

(f) digital platforms, telecommunications companies, financial technology companies, and social media companies.

(3) The strategy must include arrangements for a data-sharing agreement involving—

(a) relevant law enforcement agencies,

(b) relevant regulators,

(c) financial services stakeholders,

(d) telecommunications stakeholders, and

(e) technology-based communication platforms,

for the purposes of detecting, preventing and investigating fraud and associated financial crime and, in particular, tracking stolen money which may pass through mule bank accounts or platforms operated by other financial services stakeholders.

(4) In this section “fraud and associated financial crime” includes, but is not limited to authorised push payment fraud, unauthorised facility takeover fraud, and online and offline identity fraud.

(5) In this section, “financial services stakeholders” includes banks, building societies, credit unions, investment firms, Electric Money Institutions, virtual asset providers and exchanges, and payment system operators.’

This new clause would require the Treasury to publish a national strategy for the detection, prevention and investigation of fraud and associated financial crime, after having consulted relevant stakeholders. The strategy must include arrangements for a data sharing agreement between law enforcement agencies, regulators and others to track stolen money.

New clause 2—Local community access to essential in-person banking services—

‘(1) The Treasury and the FCA must jointly undertake a review of the state of access to essential in-person banking services for local communities in the United Kingdom, and jointly prepare a report on the outcome of the review.

(2) “Essential in-person banking services” include services which are delivered face-to-face and which local communities require regular access to. These may include services provided in banks, banking hubs, or other service models.

(3) The report mentioned in subsection (1) must be laid before the House of Commons as soon as practicable after the review has been undertaken.

(4) The report mentioned in subsection (1) must propose a minimum level of access to essential in-person banking services which must be provided by banks and building societies in applicable local authority areas in the United Kingdom, for the purpose of ensuring local communities have adequate access to essential in-person banking services.

(5) The applicable local authority areas mentioned in subsection (4) are local authority areas in which, in the opinion of the FCA, local communities have a particular need for the provision of essential in-person banking services.

(6) In any applicable local authority area which, according to the results of the review undertaken under subsection (1) falls below the minimum level of access mentioned in subsection (4), the FCA may give directions for the purpose of ensuring essential in-person banking services meet the minimum level of access required by subsection (4).

(7) A direction under subsection (6) may require a minimum level of provision of essential in-person banking services through mandating, for example—

(a) a specified number of essential in-person banking services within a geographical area, or

(b) essential in-person banking services to operate specific opening hours.’

This new clause would require the Treasury and FCA to conduct and publish a review of community need for, and access to, essential in-person banking services, and enable the FCA to ensure areas in need of essential in-person banking service have a minimum level of access to such services.

New clause 3—Essential banking services access policy statement—

‘(1) The Treasury must lay before the House of Commons an essential banking services access policy statement within six months of the passing of this Act.

(2) An “essential banking services access policy statement” is a statement of the policies of His Majesty’s Government in relation to the provision of adequate levels of access to essential in-person banking services in the United Kingdom.

(3) “Essential in-person banking services” include services which are delivered face-to-face, and may include those provided in banks, banking hubs, or other service models.

(4) The policies mentioned in sub-section (2) may include those which relate to—

(a) ensuring adequate availability of essential in-person banking services;

(b) ensuring adequate provision of support for online banking training and internet access, for the purposes of ensuring access to online banking; and

(c) expectations of maximum geographical distances service users should be expected to travel to access essential in-person banking services in rural areas.

(5) The FCA must have regard to the essential banking services access policy statement when fulfilling its functions.’

This new clause would require the Treasury to publish a policy statement setting out its policies in relation to the provision of essential in-person banking services, including policies relating to availability of essential in-person banking services, support for online banking, and maximum distances people can expect to travel to access services.

New clause 4—FCA duty to report on mutual and co-operative business models—

‘(1) The FCA must lay before Parliament a report as soon as practicable after the end of—

(a) the period of 12 months beginning with the day on which this Act is passed, and

(b) every subsequent 12-month period,

on how it considers the specific needs of mutual and co-operative financial services providers and other relevant business models when discharging its regulatory functions.

(2) The “specific needs” referred to in subsection (1) must include the needs of mutual and co-operative financial services providers to have a level playing field with financial services providers which are not mutuals or co-operatives.

(3) The “mutual and co-operative financial services providers and other relevant business models” referred to in subsection (1) may include—

(a) credit unions,

(b) building societies,

(c) mutual banks,

(d) co-operative banks, and

(e) regional banks.’

This new clause would require the FCA to report annually on how they have considered the specific needs of mutual and co-operative financial services.

New clause 5—PRA duty to report on mutual and co-operative business models—

‘(1) The FCA must lay before Parliament a report as soon as practicable after the end of—

(a) the period of 12 months beginning with the day on which this Act is passed, and

(b) every subsequent 12-month period,

on how it considers the specific needs of mutual and co-operative financial services providers and other relevant business models when discharging its regulatory functions.

(2) The “specific needs” referred to in subsection (1) must include the needs of mutual and co-operative financial services providers to have a level playing field with financial services providers which are not mutuals or co-operatives.

(3) The “mutual and co-operative financial services providers and other relevant business models” referred to in subsection (1) may include—

(a) credit unions,

(b) building societies,

(c) mutual banks,

(d) co-operative banks, and

(e) regional banks.’

This new clause would require the FCA to report annually on how they have considered the specific needs of mutual and co-operative financial services.

New clause 6—Updated Green Finance Strategy—

‘(1) The Treasury must lay before the House of Commons an updated Green Finance Strategy within three months of the passing of this Act.

(2) The strategy must include—

(a) a Green Taxonomy, and

(b) Sustainability Disclosure Requirements.

(3) In preparing the strategy, the Treasury must consult—

(a) financial services stakeholders,

(b) businesses in the wider economy,

(c) the Secretary of State for Business, Energy and Industrial Strategy, and

(d) the Secretary of State for Work and Pensions.

(4) In this section a “Green Taxonomy” means investment screening criteria which classify which activities can be defined as environmentally sustainable including, but not limited to—

(a) climate change mitigation and adaptation,

(b) sustainable use and protection of water and marine resources,

(c) transitions to a circular economy,

(d) pollution prevention and control, and

(e) protection and restoration of biodiversity and ecosystems.

(5) In this section “Sustainability Disclosure Requirements” are the requirements placed on companies, including listed issuers, asset managers and asset owners, to report on their sustainability risks, opportunities and impacts.’

This new clause would require the Treasury to publish an updated Green Finance Strategy. This must include a Green Taxonomy and Sustainability Disclosure Requirements.

New clause 7—Access to cash: Guaranteed minimum provision—

‘(1) The Treasury must, by regulations, make provision to guarantee a minimum level of access to free of charge cash access services for consumers across the United Kingdom.

(2) The minimum level of access referred to in subsection (1) must be included in the regulations.

(3) Regulations under this section shall be made by statutory instrument, and may not be made unless a draft has been laid before and approved by resolution of each House of Parliament.’

New clause 8—Stewardship reporting requirements for occupational pension schemes—

‘(1) Section 36 of the Pensions Act 1995 (Choosing investments) is amended as follows.

(2) In subsection (1) after “(4)” insert “and, for relevant schemes, (4A)”.

(3) After subsection (4), insert—

“(4A) The trustees of relevant schemes must publish information regarding their stewardship activities. In doing so they must have regard to, amongst other matters, the scheme’s—

(a) purpose, culture, values and strategy;

(b) governance structures and processes;

(c) conflicts of interest policy;

(d) engagement strategy, including escalation steps;

(e) aggregate statistics on total engagement activity;

(f) thematic engagement priorities; and

(g) engagement outcomes.”

(4) After subsection (6), insert—

“(6A) For the purposes of this section—

(a) a “relevant scheme” means a scheme with £5bn or more in relevant assets,

(b) “relevant assets” is to be calculated in accordance with methods and assumptions prescribed in regulations.”’

This new clause raises the baseline standard of stewardship for large institutional investors beyond the minimum standards set by the UK’s implementation of the Shareholder Rights Directive, drawing on the Financial Reporting Council’s Stewardship Code and ShareAction’s Best Practice Engagement Reporting Template.

New clause 9—Stewardship reporting requirements for certain investors—

‘(1) The FCA may make rules requiring some or all of those managing investments to publish information on their stewardship activities. In doing so they must have regard to, amongst other matters—

(a) purpose, culture, values, business model and strategy;

(b) governance structures and processes;

(c) conflicts of interest policy;

(d) engagement strategy, including escalation steps;

(e) aggregate statistics on total engagement activity;

(f) thematic engagement priorities; and

(g) engagement outcomes.

(2) The FCA may make rules to clarify the definition of “the most significant votes” in rule 3.4.6 of the systems and controls section of the FCA Handbook.’

This new clause would enable the FCA to make rules raising the baseline standard of stewardship for large institutional investors beyond the minimum standards set by the UK’s implementation of the Shareholder Rights Directive, drawing on the Financial Reporting Council’s Stewardship Code and ShareAction’s Best Practice Engagement Reporting Template. It would also allow the FCA to define and monitor “significant votes”.

New clause 10—Consumer Panel duty to report to Parliament—

‘(1) FSMA 2000, as amended by Section 6 of the Financial Services Act 2012 and Section 132 of the Financial Services (Banking Reform) Act 2013, is amended as follows.

(2) At the end of section 1Q, insert—

“(7) The Consumer Panel must lay an annual report before Parliament evaluating the FCA’s fulfilment of its statutory duty to protect consumers, including comments on—

(a) the adequacy and appropriateness of the FCA’s use of its regulatory powers;

(b) the measures the FCA has taken to protect vulnerable consumers, including pensioners, people with disabilities, and people receiving forms of income support; and

(c) the FCA’s receptiveness to the recommendations of the Consumer Panel.”’

This new clause would introduce a further level of Parliamentary scrutiny of the work of the FCA to protect consumers by requiring the Financial Services Consumer Panel to lay an annual report before Parliament outlining its views on the FCA’s fulfilment of its statutory duty to protect consumers.

New clause 11—Personalised financial guidance: power to make regulations—

‘(1) The Treasury may by regulations make provision for UK citizens to access personalised financial guidance from appropriately regulated financial services firms, for the purposes of supporting them to make decisions which improve their financial sustainability.

(2) The “UK citizens” referred to in sub-section (1) include, in particular, UK citizens who are unlikely to have access to financial advice (provided in accordance with Chapter 12 of the Financial Services and Markets Act 2000 (Regulated Activities) Order 2001).

(3) In this section, “personalised financial guidance” means a communication—

(a) that is made to a person in their capacity as an investor or potential investor, or in their capacity as agent for an investor or a potential investor;

(b) which constitutes a recommendation to them to do any of the following (whether as principal or agent)—

(i) buy, sell, subscribe for, exchange, redeem, hold or underwrite a particular investment which is a security, structured deposit or a relevant investment; or

(ii) exercise or not exercise any right conferred by such an investment to buy, sell, subscribe for, exchange or redeem such an investment; and

(c) that is—

(i) based on a consideration of the circumstances of that person; and

(ii) not explicitly presented as suitable for the person to whom it is made.

(4) The provision that may be made by regulations under this section includes provisions—

(a) relating to the provision of financial advice;

(b) relating to suitability requirements under MiFID;

(c) conferring powers, or imposing duties, on a relevant regulator (including a power to make rules or other instruments).

(5) The power to make regulations under this section includes power to modify legislation.

(6) The power under subsection (5) includes power to modify the definition of “personalised financial guidance” in subsection (2).

(7) Regulations made under this section, and which modify only the following kinds of legislation are subject to the negative procedure—

(a) EU tertiary legislation;

(b) subordinate legislation that was not subject to affirmative resolution on being made.

(8) Regulations under this section to which subsection (7) does not apply are subject to the affirmative procedure.

(9) Before making regulations under this section, the Treasury must consult the FCA.

(10) In this section—

“legislation” means primary legislation, subordinate legislation and retained direct EU legislation;

“MiFID” means Regulation (EU) 2017/565 supplementing Directive 2014/65/EU of the European Parliament and of the Council as regards organisational requirements and operating conditions for investment firms and defined terms for the purposes of that Directive.’

New clause 12—Requirement to publish regulatory performance information on new authorisations—

‘(1) The FCA and PRA must each lay before Parliament a report on their regulatory performance as soon as practicable after the end of—

(a) the period of six months beginning with the day on which this Act receives Royal Assent, and

(b) each subsequent quarter.

(2) A report under this section must include analysis of data on—

(a) the number of new applications for authorisation made to each regulator during the reporting period, with a breakdown by authorisation type;

(b) the rates of approval for applications for authorisation by each regulator, with a breakdown by authorisation type;

(c) the average length of time taken from application to final authorisation decision by each regulator;

(d) the FCA or PRA‘s assessment of the time and cost incurred by applicants to comply with information requirements for authorisation; and

(a) such other matters as the Treasury considers appropriate.’

This new clause requires both regulators to publish regular reports to Parliament on their regulatory performance for new applicants for regulation.

New clause 13—Requirement to publish regulatory performance information on authorised firms—

‘(1) The FCA must lay before Parliament a report on its regulatory performance as soon as practicable after the end of—

(a) the period of six months beginning with the day on which this Act receives Royal Assent, and

(b) each subsequent quarter.

(2) A report under this section must include the average length of time taken from the initial submission of an application for authorisation by an applicant to the issuing of a final decision by the FCA for each of the following regulatory responsibilities—

(a) approved persons;

(b) change in control;

(c) variation of permission;

(d) waivers and modifications that alter compliance obligations.’

This new clause requires the FCA to publish regular reports to Parliament on its regulatory performance for existing authorised entities and persons.

New clause 14—Determination of applications—

‘(1) The Financial Services and Markets Act 2000 is amended as follows.

(2) After section 61(2) insert—

“(2ZA) In determining the application, the regulator must—

(a) assign a new application to a case handler within five working days of the application being received;

(b) complete an initial application review within ten working days of allocation to a case handler; and

(c) make no requests for additional information after a period of fifteen working days from the receipt of the application.

(2ZZA) The regulators must publish, on an annual basis, monitoring data relating to—

(a) the proportion of cases which require escalation to sponsoring firms, including summary trend data on the reasons for escalation;

(b) the average time taken to assign a case handler; and

(c) the average number of days it takes to complete determination of an application.’

This new clause would add to the regulators’ authorisation KPIs outlined in the Financial Services and Markets Act 2000 and require them to publish monitoring data related to the determination of authorisations.

New clause 15—Regulators’ duty to report on competitiveness and growth objective—

‘(1) The FCA and PRA must each lay before Parliament a report as soon as practicable after the end of—

(a) the period of 12 months beginning with the day on which this Act receives Royal Assent, and

(b) every subsequent 12-month period,

on how they consider that they have facilitated the international competitiveness of the economy of the United Kingdom and its growth in the medium to long term.

(2) Reports under this section must include analysis of data on the following—

(a) steps taken to simplify regulatory rulebooks and frameworks;

(b) the number of new market entrants to the UK;

(c) new regulations introduced in the previous twelve months;

(d) an assessment of the impact of the new regulations to UK competitiveness;

(e) comparative analysis of the number of new authorisations in the UK and other international jurisdictions in the previous twelve months;

(f) comparative analysis of product and service innovations introduced in the UK and other international jurisdictions in the previous twelve months; and

(g) such other matters as the Treasury may from time to time direct.’

This new clause would require both the FCA and PRA to each publish an annual report setting out how they have facilitated international competitiveness and growth against a range of data and analysis requirements.

New clause 16—Regulatory principles to be applied by both regulators: proportionality principle—

‘(1) The Financial Services and Markets Act 2000 is amended as follows.

(2) In section 3B(1)(b), leave out from “benefits,” to end and insert “taking into consideration the nature of the service or product being delivered, the nature of risk to the consumer, whether the cost of implementation is proportionate to that level of risk and whether the burden or restriction enhances UK international competitiveness.”’

This new clause would amend the existing regulatory principle for both regulators and require them nature of and risk to the consumer, and the service or product being delivered, must be taken into account when imposing a new burden or restriction.

New clause 21—Prudential capital requirements for specified financial institutions—

‘(1) Within six months of the passing of this Act, the Treasury must by regulations set prudential capital requirements for specified financial institutions.

(2) Regulations under this section must require financial institutions to hold in reserve £1 for every £1 used to finance assets connected with fossil fuel activities, which is liable for potential loss due to the climate risk exposure of the assets.

(3) In this section “fossil fuel activities” means the extraction, production, transportation, refining and marketing of crude oil, natural gas or thermal coal, as well as any fossil-fuel fired power plants, unless covered by an exemption.’

This new clause would give the Treasury the power to make regulations requiring financial institutions to hold capital in reserve to reflect the climate risk exposure of assets connected with fossil fuel activities.

New clause 22—FCA: Regard to financial inclusion in consumer protection objective—

‘(1) FSMA 2000 is amended as follows.

(2) In section 1C (The consumer protection objective), after subsection (2)(c) insert—

“(ca) financial inclusion;””.

New clause 23—FCA duty to report on financial inclusion—

“(1) The FCA must lay before Parliament a report, as soon as practicable after the end of—

(a) the period of 12 months beginning with the day on which this Act is passed, and

(b) every subsequent 12-month period,on financial inclusion in the UK.

(2) A report under this section must include—

(a) an assessment of the state of financial inclusion in the UK;

(b) details of any measures the FCA has taken, or is planning to take, to improve financial inclusion in the UK;

(c) developments which the FCA considers could significantly impact on financial inclusion in the UK; and

(d) any recommendations to the Treasury which the FCA considers may promote financial inclusion in the UK.’

New clause 24—Rules relating to forest risk commodities—

‘(1) FSMA 2000 is amended as follows.

(2) After section 19 (The general prohibition) insert—

“19A Specific requirements regarding forest risk commodities

(1) A person must not carry on a regulated activity in the United Kingdom that may directly or indirectly support a commercial activity in relation to a forest risk commodity or a product derived from a forest risk commodity, unless relevant local laws were complied with in relation to that commodity.

(2) A person that intends to carry on a regulated activity that may directly or indirectly support a commercial activity in relation to a forest risk commodity or a product derived from a forest risk commodity, shall establish and implement a due diligence system in relation to that regulated activity.

(3) In this section, “due diligence system” means a system for—

(a) identifying and obtaining information about the commercial activities of any beneficiary of the regulated activity and of their group regarding the use of a forest risk commodity,

(b) assessing the risk that relevant local laws were not complied with in relation to that commodity, and

(c) mitigating that risk.

(4) A person that carries on a regulated activity in the United Kingdom that directly or indirectly supports a commercial activity in relation to a forest risk commodity or a product derived from a forest risk commodity shall be subject to—

(a) the reporting requirements under paragraph 4 of Schedule 17 of the Environment Act in relation to the due diligence system required under subsection (2) of this section, and

(b) Part 2 of Schedule 17 of the Environment Act as though they are a person to whom Part 1 of that Schedule applies.

(5) Terms used in this section that are defined in Schedule 17 of the Environment Act shall have the meaning given to them in that Schedule.”’

New clause 25—Long term economic resilience and prosperity objective—

‘(1) FSMA 2000 is amended as follows.

(2) In section 1B (FCA’s general duties)—

(a) in subsection (2) leave out “function well” and insert “deliver long term economic resilience and prosperity”;

(b) in subsection (3) for paragraph (c) substitute—

“(c) the climate safety objective (see section 1E);

(d) the nature protection objective (see section 1F).”

(3) For section 1E (The competition objective) substitute—

“1E The climate safety objective

The climate safety objective is: facilitating the net UK carbon emissions target in section 1 of the Climate Change Act 2008, and the 1.5 degrees temperature goal of the Paris Agreement.

1F The nature objective

The nature objective is: facilitating alignment with halting and reversing biodiversity loss by 2030.”’

This new clause would make the FCA’s strategic objective ensuring that the relevant markets deliver long term economic resilience and prosperity, remove the competition operational objective and introduce two new operational objectives; climate safety and nature protection.

New clause 26—Prohibited regulated activity: new fossil fuel developments—

‘(1) A UK bank, or person acting on behalf of a UK bank, may not carry on a regulated activity where the carrying out of the activity would have the effect of providing financial investment in, or facilitating the financing of, new fossil fuel developments.

(2) In this section—

(a) “new fossil fuel developments” includes—

(i) any activity, in the UK or elsewhere, which enables or contributes to the enabling of, the extraction, processing and distribution of fossil fuels, and

(ii) the construction, in the UK or elsewhere, of fossil fuel-powered electricity generation;

(b) “fossil fuels” has the same meaning as in section 32M (Interpretation of sections 32 to 32M) of the Electricity Act 1989;

(c) “UK bank” has the same meaning as in section 2 (Interpretation: “bank”) of the Banking Act 2009.

(3) The FCA may impose sanctions against the relevant bank, where the prohibition in subsection (1) is contravened.

(4) The sanctions mentioned in subsection (3) includes—

(a) the imposition of a penalty of such amount as the FCA considers appropriate;

(b) suspension of variable components of remuneration;

(c) suspension of dividend pay-outs;

(d) removal of access to central bank funding; and

(e) removal of permission to carry on regulated activities.

(5) This section shall come into force on 31 December 2023.’

This new clause would prohibit banks from conducting regulated activity which may enable new fossil fuel developments from December 2023 onwards, and give the FCA powers to impose certain sanctions for non-compliance.

New clause 27—Refusal to provide services for reasons connected with freedom of expression—

‘(1) No payment service provider providing a relevant service (the “provider”) may refuse to supply that service to any other person (the “customer”) in the United Kingdom if the reason for the refusal is significantly related to the customer exercising his or her right to freedom of expression.

(2) Where a customer has prominently and publicly exercised his or her right to freedom of expression, it is to be presumed that any refusal by a provider to supply a relevant service was significantly related to the customer exercising his or her right to freedom of expression unless the provider can provide a substantial basis for believing there was an alternative good and proper reason for the refusal.

(3) Where a customer has prominently and publicly exercised his or her right to freedom of expression and has been refused a relevant service by a provider on application by the customer, the FCA must within 5 working days issue an order to the provider immediately to recommence supply unless the FCA considers it clearly inappropriate to do so.

(4) An order issued pursuant to subsection (3) must last until the FCA is satisfied that there was or there has subsequently arisen an alternative good and proper reason for the refusal.

(5) Upon considering an application by the customer under subsection (3), where the FCA decides not to issue an order to the supplier, the FCA must give reasons in writing to the customer explaining its decision not to issue an order.

(6) Where the FCA is satisfied that there has been a breach by a provider of the obligation in subsection (1) or the failure to comply with an order issued pursuant to subsection (3), the FCA may impose a penalty on the provider of such an amount as it considers appropriate. The FCA may, instead of imposing a penalty on a provider, publish a statement censuring the provider.

(7) The FCA must within three months of the coming into force of this section prepare and arrange for publication of a statement of its policy with respect to—

(a) the circumstances the FCA will consider under subsection (3) in deciding whether it is clearly inappropriate to issue an order; and

(b) the imposition of penalties and statements of censure under subsection (6).

(8) A breach by a provider of the obligation in subsection (1) and the failure to comply with an order issued pursuant to subsection (3) are actionable at the suit of the customer, subject to the defences and other incidents applying to actions for breach of statutory duty.

(9) In this section—

(a) a “relevant service” means a service which is (in whole or in part) directed at users in the United Kingdom and constitutes—

(i) any service provided pursuant to any regulated activity; or

(ii) any service in relation to a payment system for the purposes of enabling the transfer of funds using the payment system as referred to in section 42(5) of the 2013 Act;

save for any service expressly excluded by regulations;

(b) a “payment service provider” has the same meaning as under section 42(5) of the 2013 Act;

(c) the right to freedom of expression has the same meaning as under Article 10 of the European Convention on Human Rights—

(i) save that it includes the right to campaign for or seek to protect the right to freedom of expression of others; and

(ii) save as excluded by regulations;

(d) “the 2013 Act” means the Financial Services (Banking Reform) Act 2013.

(10) Regulations under this section may be made pursuant to the provisions of section 428 of FSMA 2000 save that—

(a) before preparing regulations under this section, the Secretary of State must consult the FCA and such other persons as the Secretary of State considers appropriate; and

(b) they must be adopted using the affirmative procedure before Parliament.’

New clause 28—Regulation of buy-now-pay-later firms—

‘(1) Within 28 days of the passing of this Act, the Secretary of State must by regulations make provision for—

(a) buy-now-pay-later credit services, and

(b) other lending services that have non-interest-bearing elements

to be regulated by the FCA.

(2) These regulations must include measures which—

(a) ensure all individuals accessing services mentioned in sub-section (1) have access to the Financial Services Ombudsman,

(b) ensure that individuals applying for services mentioned in sub-section (1) are subject to credit checks prior to the service being approved, and

(c) ensure that individuals accessing services mentioned in paragraph (1) are protected by Section 75 of the Consumer Credit Act.’

This new clause would bring the non-interest-bearing elements of bring buy-now-pay-later lending and similar services under the regulatory ambit of the FCA, as proposed by the Government consultation carried out in 2022.

New clause 29—Cost benefit analyses to include assessments of economic crime risks—

‘(1) FSMA 2000 is amended as follows.

(2) In section 138I(7), at end insert—

“(c) an assessment of economic crime risks posed by the proposed rules”’.

This new clause would require cost-benefit analyses to include assessments of the risk of economic crime arising from the proposed rules.

New clause 30—Establishment of Financial Regulator’s Supervision Council—

‘(1) The Secretary of State must, within six months of this Bill receiving Royal Assent, make provision for the establishment of a body to be known as the Financial Regulator’s Supervision Council (“FRSC”).

(2) The role of the body established under subsection (1) is to provide independent scrutiny and oversight of the work of the FCA and its fulfilment of its duties and responsibilities, particularly its consumer protection objective.

(3) The responsibilities of the body shall include, but not be limited to—

(a) overseeing the performance of the FCA from a consumer perspective, including undertaking annual appraisals and commissioning or undertaking periodic reviews as appropriate; and

(b) appointing, reviewing annually the performance of and, where appropriate, dismissing—

(i) the Chair and Chief Executive of the FCA (jointly with HM Treasury);

(ii) the non-Executive Directors of the FCA appointed by the Department for Business, Energy and Industrial Strategy;

(iii) Members and Chair of the Financial Services Consumer Panel;

(iv) the Financial Regulators’ Complaints Commissioner;

(v) the directors of the Financial Ombudsman Service and its Independent Assessor;

(vi) the directors of the Financial Services Compensation Scheme; and

(vii) such employees as the FRSC requires to perform its statutory role.

(4) The body is to be funded by a 1% levy on the FCA’s revenue.

(5) Membership of the body shall be selected through open competition and must include individuals representing the interests of financial services consumer groups.

(6) The Secretary of State may by regulations, following consultation with consumer groups, make further provision for the body’s responsibilities, powers, constitution and membership.

(7) Any reports published by the body must be laid before Parliament.’

New clause 31—Regulators’ duty of care—

‘(1) Individuals and organisations undertaking activities within the remit of the FCA and PRA shall owe a duty of care to consumers.

(2) The “duty of care” means an obligation to act towards consumers with a reasonable level of watchfulness, attention, caution and prudence.

(3) An individual or organisation in breach of this duty of care may be subject to legal claims for negligence.’

New clause 32—Regulators’ immunity from civil damages action—

‘(1) Relevant regulators may be the subject of civil damages actions in cases where—

(a) a consumer has suffered material financial loss,

(b) the loss has occurred since 1 December 2001,

(c) the activity in the course of which the consumer suffered material financial loss is within the remit of the relevant regulator, and

(d) the relevant regulator was aware, or could reasonably be expected to have been aware, that the consumer would have been at risk of suffering financial loss and negligently failed to take sufficient action to prevent the consumer from suffering such loss.

(2) Any recommendations made by the investigator appointed under section 84(1)(b) of the Financial Services Act 2012 following the upholding of a complaint made against a regulator by a consumer who has suffered financial loss, which may include the providing of material financial redress, shall be considered binding on the regulator.

(3) The Limitation Act 1980 shall not apply in relation to any civil actions brought under this section until six years after this section has come into force.’

New clause 33—Reporting requirement: Green agenda—

‘(1) Within six months of the passing of this Act, and every twelve months thereafter, the PRA and FCA must jointly lay before the House of Commons a report setting out their assessment of—

(a) the ways in which the PRA and FCA have incentivised and promoted green finance for the period covered by the report,

(b) the impact of the UK financial system in incentivising green investment for the period covered by the report, and

(c) the ways in which the PRA and FCA have supported the Secretary of State’s ability to meet the duty set out is section 1 of the Climate Change Act 2008.

(2) For the purposes of this section, “green finance” means financial products or services which aim to reduce emissions, and enhance sinks of greenhouse gases, and aim to reduce vulnerability of, and maintain and increase the resilience of, human and ecological systems to negative climate change impacts.’

This new clause would place a requirement on the PRA and FCA to report on ways in which they have promoted and incentivised green finance and green investment.

New clause 34—Investment duties of occupational pension schemes—

‘(1) Section 36 of the Pensions Act 1995 (Choosing investments) is amended as follows.

(2) In subsection (1) remove “(4)” and insert “(4A)”.

(3) After subsection (4), insert—

“(4A) The trustees must act in the way they consider, in good faith, would be most likely to be for the benefit of the beneficiaries as a whole and to be fair as between the beneficiaries, including as between present and future beneficiaries and in doing so have regard (amongst other matters) to—

(a) the likely consequences of any decision in the long term,

(b) the impact of their investments on society and the environment,

(c) environmental, social and governance risks and opportunities (including, but not limited to, climate change),

(d) the desirability of the trustees maintaining a reputation for high standards of business conduct,

(e) the need to act fairly as between beneficiaries and members of the scheme, and

(f) in relation to investments that provide money purchase benefits, the views of beneficiaries and members of the scheme.

(4B) The trustees shall publish a policy statement of its understanding of benefit as relevant to its beneficiaries and of how it has regard to the matters in subsection 4A(a) to (d). The Secretary of State may make regulations regarding such policy statements.

(4C) The trustees shall report to beneficiaries the performance of the portfolio in delivering the benefit as defined in the policy statement and shall do this at the same time as it reports on the financial performance of the portfolio.

(4D) A fiduciary investor shall take all reasonable steps to ensure that all of its delegates and advisers comply with this section.”’

This amendment broadens the investment duties of trust-based pension schemes and FCA-authorised personal pension providers to require specified investors to make investment decisions in the “best interests” of beneficiaries.

New clause 35—Investment duties of personal pension providers—

‘(1) The Financial Services and Markets Act 2000 is amended as follows.

(2) After section 137FD insert—

“137FE FCA general rules: pension investment

(1) The FCA must make general rules requiring managers of some or all relevant pension schemes to invest the assets in the best interests of members of the scheme and in the case of a potential conflict of interest, in the sole interest of members and survivors. In doing so they must have regard (amongst other matters) to—

(a) the likely consequences of any decision in the long term,

(b) the impact of their investments on society and the environment,

(c) the desirability of the managers maintaining a reputation for high standards of business conduct, and

(d) the need to act fairly as between members of the scheme.

(2) The FCA may make general rules requiring managers of relevant pension schemes to report publicly on how they have met the requirement in sub-section (1)

(3) In this section “relevant pension scheme” means—

(a) a personal pension scheme within the meaning of an order under section 22, or

(b) a stakeholder pension scheme within the meaning of such an order.”’

This amendment broadens the investment duties of trust-based pension schemes and FCA-authorised personal pension providers to require specified investors to make investment decisions in the “best interests” of beneficiaries.

New clause 36—Duty to report fraud—

‘(1) Financial services providers must, upon the detection of fraudulent activity or suspected fraudulent activity, report such activity to a relevant investigating authority.

(2) Financial services providers must publish an annual report which includes information on levels of identified fraudulent activity and steps taken, or planned to be taken, to reduce and prevent such or further fraudulent activity.’

Government amendments 8 to 11.

Amendment 19, in clause 29, page 41, line 12, at end insert

‘, and also to financial inclusion.

‘(2A) For the purposes of this section, “financial inclusion” means the impact on those who might be prevented from accessing financial services as a result of the new rules made by either regulator, or from accessing them on the same terms as existed before the making of the new rules.’

Government amendments 12 and 13.

Amendment 1, in clause 40, page 54, line 29, at end insert—

‘(c) be provided with any information or data that the Panel requires in order to fulfil its duties;

(d) publish the agendas and minutes of meetings of the Panel; and

(e) make publicly available its recommendations in full including, but not limited to, the evidence base and analysis it used to make its recommendations, the assessed costs and benefits of the FCA’s activities and the range of representations made by Panel members regarding those recommendations.’

Amendment 2, page 54, line 36, at end insert

“at least two of whom must be representatives of FCA authorised firms.”

Amendment 21, page 54, line 38, at end insert

“, at least three of whom must have experience and expertise in the field of economic crime, with one each drawn from the public, private and third sectors respectively”.

This amendment would require the FCA’s Cost Benefit Analysis Panel to include individuals with expertise in economic crime.

Government amendment 14.

Amendment 3, page 54, line 41, leave out from “must” to end of line 42 and insert

“within 30 days of the receipt of representations made to it by the FCA Cost Benefit Analysis Panel, publish a response to such representations, including a statement of actions it will take as a result of the representations.”

Amendment 4, page 55, line 20, at end insert—

“(c) be provided with any information or data that the Panel requires in order to fulfil its duties;

(d) publish the agendas and minutes of meetings of the Panel; and

(e) make publicly available its recommendations in full including, but not limited to, the evidence base and analysis it used to make its recommendations, the assessed costs and benefits of the PRA‘s activities and any dissenting representations made by Panel members regarding those recommendations.”

Amendment 5, page 55, line 2, at end insert

“at least two of whom must be representatives of PRA authorised firms”.

Amendment 22, page 55, line 29, at end insert

“, at least three of whom must have experience and expertise in the field of economic crime, with one each drawn from the public, private and third sectors respectively”.

This amendment would require the PRA’s Cost Benefit Analysis Panel to include individuals with expertise in economic crime.

Government amendment 15.

Amendment 6, page 55, line 32, leave out from “must” to end of line 33 and insert

“within 30 days of the receipt of representations made to it by the PRA Cost Benefit Analysis Panel, publish a response to such representations , including a statement of actions it will take as a result of the representations.”

Government amendment 16.

Amendment 7, in clause 64, page 78, line 20, at end insert—

“(5A) The relevant requirement referred to in subsection (5) must specify that reimbursement in qualifying cases cannot be refused on the basis that a victim, or victims, ought to have known that the payment order was executed subsequent to fraud or dishonesty.”

This amendment would prevent reimbursement for victims of fraudulent or dishonest payments being refused on the basis that that they should have known the payment was fraudulent or dishonest.

Amendment 20, page 78, line 20, at end insert—

“(5A) The relevant requirement mentioned in subsection (5) must set out clearly that—

(a) those to which the requirement applies have a duty to ensure that reimbursement is made in all qualifying cases, and

(b) the penalty imposed by the Payment Systems Regulator, under section 73 of the Financial Services (Banking Reform) Act 2013, for failure to comply with that duty, will be not less than £100,000 in each instance of failure.”

Amendment 23, in schedule 2, page 119, line 19, leave out sub-paragraphs (2) and (3).

This amendment would maintain the regulator’s duty to establish appropriate position limits in commodity speculation, to ensure the effective functioning of commodity markets and prevent potentially risky speculation.

Amendment 24, page 119, line 2, leave out “that paragraph” and insert “paragraph (1)”.

This amendment would maintain the regulator’s duty to establish appropriate position limits in commodity speculation, to ensure the effective functioning of commodity markets and prevent potentially risky speculation.

Amendment 25, page 119, line 32, leave out sub-paragraph (5).

This amendment would maintain the regulator’s duty to establish appropriate position limits in commodity speculation, to ensure the effective functioning of commodity markets and prevent potentially risky speculation.

Amendment 27, page 120, line 4, leave out paragraph 48.

This amendment would remove the proposed amendment to the FCA’s power to intervene, to maintain transparency in commodity markets and reduce the scope of so-called “dark pools”.

Amendment 26, page 120, line 10, leave out sub-paragraph (4).

This amendment would maintain the regulator’s duty to establish appropriate position limits in commodity speculation, to ensure the effective functioning of commodity markets and prevent potentially risky speculation.

Government amendments 17 and 18.

Amendment 28, page 155, line 7, at end insert—

“(1A) When exercising its functions under this Part, the FCA may issue a direction to a designated person, for the purpose of establishing a banking hub.

(1B) A designated person must comply with a direction under subsection (1B).

(1C) A “banking hub” is a facility which—

(a) provides cash access services,

(b) is facilitated jointly by multiple providers of such services,

(c) contains private consultation spaces at for users of cash access services, and

(d) is established for the purpose of ensuring reasonable provision of cash access services where there would otherwise be a local deficiency of such provision.”

This amendment would require designated persons to comply with direction given by the FCA for the purposes of establishing banking hubs.

[Andrew Griffith]

The financial services sector is central to our Government’s ambition to bolster our global competitiveness and boost growth in all parts of the United Kingdom. This Bill delivers on our ambition by seizing the opportunities of our departure from the European Union, tailoring financial services regulation to UK markets and delivering better outcomes for the economy, consumers, victims of fraud and businesses. There are many amendments for consideration today, so I will be as succinct as possible, and I look forward to having time to respond to hon. Members’ contributions later.

In Committee, I heard from colleagues on both sides of the House about the importance of holding the operationally independent regulators to account regarding their performance—in particular, that there should be regular reporting on their performance to support scrutiny, beyond just the annual report. Regulation is about not just the contents of the rulebook, but how effectively and on how timely a basis those rules are enforced and implemented.

The Government and regulators are both committed to the highest standards of operational effectiveness. That is why last week we published an exchange of letters with the regulators, making clear the intention to publish more detailed performance data in relation to their authorisation processes on a more regular basis. However, I also noted the clear consensus in Committee on the need to enhance the existing statutory provisions. In particular, I thank my hon. Friends the Members for Wimbledon (Stephen Hammond) and for North Warwickshire (Craig Tracey) for raising this important issue.

As a result, new clause 17 provides a new power for the Treasury to require the regulators to publish additional information on a more regular basis, where that is necessary to support this House’s scrutiny of their performance in discharging their general functions.

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[Mr Deputy Speaker (Mr Nigel Evans)]

Order. I reiterate what the Minister said: a lot of Members wish to speak in the debate, and he has been on his feet for about half an hour. If we are to have time for the amendments and other contributions, we need to cut back on interventions.

[Andrew Griffith]

Thank you, Mr Deputy Speaker; you are as wise as my right hon. Friend the Member for North West Hampshire is flattering. We will make some progress and allow others to contribute.

Let me move on to access to banking and payment services. Just as we have said about cash, they are the essential ingredients of modern life and for many businesses. The new clause tabled by my hon. Friends the Members for Hastings and Rye (Sally-Ann Hart) and for Northampton South (Andrew Lewer) raised the important issue, to all of us in this House, of free speech, and the crucial role of payment service providers in delivering services without censorship. Since Committee stage, I have met with my hon. Friend the Member for Hastings and Rye, the FCA and PayPal regarding its recent temporary suspension of some accounts. I draw hon. Members’ attention to my letter deposited in the House, in which I set out the Government’s position on that important matter. I also circulated the letter from PayPal that sets out that it re-evaluated and reversed its decision in a number of the specific cases raised. It says that it was never its intention to be an arbiter of free speech, and that none of its actions was based on its customers’ political views.

I want to be extremely clear that the Government are committed to ensuring that the regulations respect the balance of rights between users and service providers’ obligations, including in respect of freedom of expression, whether of the Free Speech Union, the trade union movement, law-abiding environmental movements or anyone else expressing lawful views. To ensure that the existing regulatory regime is operating as it should in that respect, I will seek further evidence through the Government’s review of payment services regulation in January. To continue this transparent dialogue with colleagues on an important subject, I will provide an update to Parliament in the form of a written ministerial statement before the formal closure of that review, and table amendments to the relevant regulations using the powers in today’s Bill, if necessary.

We recognise the value that the mutuals sector brings to the UK economy in providing a door to affordable credit. The Government are committed to the health and prosperity of the mutuals sector, which is why we supported the private Member’s Bill of the hon. Member for Preston (Sir Mark Hendrick), which would allow co-operatives, mutual insurers and friendly societies further flexibility in determining for themselves the best strategies for their business. As I said in Committee in response to amendments tabled to today’s Bill by the hon. Member for Hampstead and Kilburn (Tulip Siddiq), the Government consider that the Financial Services and Markets Act 2000 already ensures that regulators consider mutual entities as they exercise their regulatory functions.

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[Caroline Lucas (Brighton, Pavilion) (Green)]

The Bank of England’s climate stress test, published in May, showed that banks need to take climate action immediately or face a hit to annual profits of up to 15%. This is not just about airy-fairy words about the transition, but about banks that, as we have just heard, are bankrolling the fossil fuel industry, which will bring real risks to the finance sector as well as to the rest of the world. Can the Minister say whether he will support new clause 25?

[Mr Deputy Speaker (Mr Nigel Evans)]

Before the Minister does, I will just say that he has been speaking for three quarters of an hour now. A lot of people want to contribute to the debate.

[Andrew Griffith]

On this side of the House, we are about action not words. I listened with great care to what the hon. Lady said, but action starts at home. In her constituency, the Green party leader flew on a jet aeroplane to COP and the level of recycling is half that of neighbouring West Sussex. People should get their own house in order before coming to virtue-signal about others’.

New clauses 8 and 9 in the name of the hon. Member for Sheffield, Hallam (Olivia Blake) raise the important issue of financial stewardship. The Department for Work and Pensions, which is responsible for that, has already made a public commitment to review stewardship disclosure requirements. That will be done during 2023.

Finally, the Government believe that effective commodities market regulation is key to ensuring that market speculation does not lead to economic harm. The current regime we have inherited from the EU is overly complicated and poorly designed. To ensure that this is calibrated correctly, the Bill delegates the setting of position limits from the FCA to trading venues themselves. The amendments in the name of the right hon. Member for Hayes and Harlington (John McDonnell) seek to reverse this. The Government’s position is that this would place unnecessary restrictions on investors, to the detriment of all market participants. It would place the UK at a disadvantage compared with other international financial centres, such as the EU, that apply restrictions only to contracts that genuinely pose a risk.