Oral Answers to Questions

Angela Eagle Excerpts

Tuesday 11th October 2022 Commons Chamber

[Andrew Griffith]

I thank my hon. Friend for his question. He is a passionate advocate in this place for his constituents. The Chancellor and I regularly meet the Bank of England and all the individual lending banks in the UK. My hon. Friend knows that interest rates have increased in every major economy, despite what the Opposition may claim. That is why it is so important that we provide help with energy costs and cutting taxes.

[Dame Angela Eagle (Wallasey) (Lab)]

Surely Ministers must now apologise for the chaos that their mini-Budget, with its £45 billion of unfunded spending commitments and tax cuts, caused to the bond markets. Is it not now a fact that there is a Tory premium on every interest rate rise for every borrower in this country? They are not going to forget that when the election comes.

[Andrew Griffith]

I think we all understand that there is a clear divide in this House. The Government are supporting growth, providing support for energy bills, giving the economy the confidence and certainty that it needs this winter, and bringing forward supply-side measures that will boost the economy, not being on the side of striking workers who are bringing this economy to a halt.

The Growth Plan

Angela Eagle Excerpts

Friday 23rd September 2022 Commons Chamber

[Kwasi Kwarteng]

My hon. Friend is absolutely right to say that bankers are concerned about the overall tax burden. That is why many of the bankers in the City of London are going to Paris: because they pay 30% tax there. That is a legitimate thing, and it is why we have reduced tax levels.

With respect to monetary and fiscal policy, my hon. Friend will know that monetary policy is the responsibility of the Bank and is targeted on inflation. The fiscal course that we have charted has absorbed two exogenous shocks, in the form of covid-19 and the Russian invasion of Ukraine. It is entirely appropriate in both those circumstances to have a looser fiscal policy to steer our path through those shocks. There is an entire logic to those positions.

[Dame Angela Eagle (Wallasey) (Lab)]

The Chancellor, without giving us any sign of the figures, has announced what is, in effect, a Budget with massive tax cuts, most of which go to those who are already well off. He has asserted that this will lead to growth, but he must now admit that there is no evidence whatsoever to suggest that large tax cuts for the already well-off lead to growth—in fact, the International Monetary Fund has said the opposite.

[Kwasi Kwarteng]

In response to that, I would say that there is plenty of evidence that high-tax, high-regulation socialism leads to a complete disaster as far as economic outcomes are concerned, and we are doing the opposite.

Financial Services and Markets Bill

Angela Eagle Excerpts

2nd reading
Wednesday 7th September 2022 Commons Chamber

[Richard Fuller]

I am grateful to my right hon. Friend for that addition to the debate. It is clear that there is interest in the House in debating the priority that is given to these particular issues, and I look forward to hearing the contributions of my right hon. Friend—and those of Opposition Members—in Committee, to establish whether we have got these matters right.

[Dame Angela Eagle (Wallasey) (Lab)]

Will the Minister give way?

[Richard Fuller]

I will give way one more time, and then I will make a little progress.

[Dame Angela Eagle]

There is much on the Bill for which I think there will be cross-party support, but there are some elements that worry me, and I wonder whether the Minister can reassure me about them. I refer to the Henry VIII powers, and the fact that a great deal of extra power will be given to the regulators and the Treasury. I worry about a lack of appropriate accountability to the House. Can the Minister give us some reassurances on the Henry VIII powers, and can he give us proper undertakings that he is not creating a system that will leave the House out?

[Richard Fuller]

Not surprisingly, the hon. Lady has put her finger on one of the most fundamental elements of the debate that we need to have on the Bill, which is the accountability of regulators, as expressed through the House and, if I may say so, through the Government. I can assure the hon. Lady that that will be a fundamental part of our debate throughout the Bill’s progress, and, indeed, I will say more about it later in my speech.

Economy Update

Angela Eagle Excerpts

Thursday 26th May 2022 Commons Chamber

[Dame Angela Eagle (Wallasey) (Lab)]

If the excess profits of the energy companies persist beyond this year, will the windfall tax persist? Will the Chancellor explain how the sunset clause works? Will he also explain why, when his super-deduction of 130% of investment has so far failed to spark the kind of investment he thought it would, he thinks a 90% investment allowance for the oil and gas companies will work?

[Rishi Sunak]

We will put a backstop sunset clause in the legislation with the energy profits levy. It will remain in place until prices return to a more normal level. In the past, that was specified specifically. We will take the time to get that right, but it will not be automatic in 12 months. It will depend on when prices return to a more normal level.

Tackling Short-term and Long-term Cost of Living Increases

Angela Eagle Excerpts

Tuesday 17th May 2022 Commons Chamber

[Rishi Sunak]

This Government have always acted to protect this country at times of challenge; we have done so through the past two years and we continue to do so now. As has been said, £9 billion of support on energy bills was announced in February at the same time as the price cap was increased, and it covered 50% of the rise in bills—accepting and being honest with the House, as we discussed at the time, that no Government could cover every pound of an increase when we are in a situation with global inflationary forces, and that it would be both irresponsible and misleading to pretend to the British people that that was possible.

But we are going further: in October, a further discount on energy bills worth £200 and, in just a few weeks’ time, a massive tax cut for workers when the national insurance threshold is increased to £12,500. That is a £6 billion tax cut for working people, the biggest increase in a personal tax threshold ever, and it will mean that everyone in this country can earn £12,500 without paying a penny of income tax or national insurance. That means, in contrast with what we have heard, that 70% of working people will pay less tax this year than they did last year.

Taken together, all the measures I have just mentioned equate to a £22 billion plan to help cut costs for families and help people with the cost of living. Of course, as the situation evolves, our response will also evolve. I have always been clear that we stand ready to do more.

That brings me to the topic of a windfall tax. Unlike the Labour party, we Conservatives do not believe that windfall taxes are the simple and easy answer to every problem. However, we are pragmatic, and we want to see our energy companies, which have made extraordinary profits at a time of acutely elevated prices, investing those profits back into British jobs, growth and energy security. I have made it clear and said repeatedly that, if that does not happen soon and at significant scale, no option is off the table.

Global economic forces are indeed hitting the British people hard, and that is why the Government are stepping in to help. Ultimately, however, over the long term we on the Conservative side know that the best way to raise living standards is to grow the economy. That is why our economic plan and this Queen’s Speech will create more jobs, more investment and, crucially, higher wages.

During the pandemic, we provided billions in support not only to the economy, but specifically to businesses. Because of schemes such as furlough we were able to keep millions and millions of people in work, and the success of our plan for jobs is clear. As we heard from my right hon. Friend the Member for Forest of Dean (Mr Harper), unemployment right now is the lowest it has been in almost half a century, job vacancies are the highest they have ever been, and total pay is rising in real terms and is more than 4% higher than before the pandemic, even adjusted for the inflation we are seeing.

That does not happen by accident. It is the result of a responsible Conservative Government delivering a stronger economy—an economy that grew faster last year than any of our competitors. That strong recovery is making a difference to people’s finances. Taken together, the combination of policy measures the Government have announced and the growth in the economy offset around half the shock to incomes caused by higher global energy and goods prices. Half of that shock has been offset by the result of our actions to grow the economy and support people directly.

Of course we need to do more to create further economic growth. That is why this Queen’s Speech includes measures to do exactly that.

[Dame Angela Eagle (Wallasey) (Lab)]

Given that the right hon. Gentleman was just talking about growth in the economy, he will be aware that the Governor of the Bank of England and the Monetary Policy Committee told the Treasury Committee yesterday that growth would be negative in the fourth quarter of this year. Growth is slowing, unemployment is rising and inflation is soaring—is that not correct?

[Rishi Sunak]

I think the hon. Lady said unemployment is rising. No—it just fell this morning to the lowest level in almost half a century. I will come on to our growth figures in just a second, but we have had a strong recovery and are forecast to continue growing strongly relative to peers.

We do need to do more, and that is why the Queen’s Speech includes measures to boost our national infrastructure, to level up, to back financial services—one of our biggest and most successful sectors, employing millions of people across the country—to cut red tape, to use our new Brexit freedoms, to back British businesses, to reform higher education and to strengthen our energy security. We on the Conservative side know that over the longer term, the best way to create growth is to have an economy where businesses can invest more, train more and innovate more.

--- Later in debate ---

[Dame Angela Eagle (Wallasey) (Lab)]

Can we judge this Queen’s Speech to be successful in addressing the cost of living crisis? The Governor of the Bank of England warned at the Treasury Committee yesterday of an “apocalyptic” situation with food supplies and therefore with rising prices. The Bank of England’s Monetary Policy Committee’s May report warned that inflation would soon reach 10%. It also signalled lower growth than previously predicted, with a contraction in quarter 4 of this year. It also expects higher unemployment. It predicts that inflation will not return to its target of 2% for nearly three years. The squeeze in what the economists call real incomes, which take account of inflation, is the most ferocious we have seen in generations, not least because the rapid rise in inflation is being driven by soaring prices for necessities: food and energy.

These higher costs cannot be avoided or easily minimised and, as my right hon. Friend the Member for East Ham (Stephen Timms) pointed out in his effective speech, it is well known that they cause most hardship to the poorest, who are least able to cope and have no savings. Despite what some Government Ministers seem to think, the poorest have little practical opportunity to increase their hours or their pay, at least in the short term.

Thus, after 13 years of Conservative rule, we see soaring poverty levels, millions relying on food banks just to get by, and the lowest level of benefits since Lloyd George was Prime Minister. It means that the social safety net created to prevent destitution has been deliberately shredded by this Government, leaving many to cope with the intensifying cost of living squeeze without effective help. And we have a Tory Chancellor who has said that it would be “silly” to add any extra help until the autumn.

Against that background, the Government’s abject refusal to alleviate suffering and use the powers at their disposal to assist those in real need is a disgraceful dereliction of their duty. Their indifference to real suffering will not be forgotten; it will be remembered as the hard times get even tougher for millions of our fellow citizens.

Labour has suggested a one-off windfall tax on the huge unearned profits currently flooding the energy companies’ coffers, which would help alleviate some of the suffering, yet the Government refuse to enact it. Instead, we have a hotchpotch of a Queen’s Speech, with 38 Bills with no focus and no connection to the realities millions of people in this country are facing. It shows just how out of touch the Government are that they prefer to press ahead with new, repressive laws against “noisy” protests while ignoring the collapse in law enforcement and prosecution levels on their watch, hoping we will forget the shamefully low numbers of crimes that are currently prosecuted and the even lower numbers which result in convictions.

This Government have let fraud run riot even as they under-resource and fragment any serious police response to it, while millions of our fellow citizens fall victim to scams and con merchants. This is a Government who prefer to campaign than to govern, and a Government who think that policy delivery is issuing a press release. We have a weak Primer Minister who runs No. 10 like he ran the Spectator office—as one long, chaotic, bacchanalian, irresponsible party.

So we have today’s threat to legislate to tear up the Northern Ireland protocol, and damn the consequences for the Good Friday agreement, or for our international reputation as a country whose word can be relied upon and that respects the rule of law. This is the Northern Ireland protocol that the Prime Minister negotiated, which he hailed as an “oven-ready” triumph, and which he asserted in the 2019 general election “got Brexit done.” Only this Government could be so irresponsible as to contemplate starting a trade war with the EU in the middle of the most ferocious cost of living crisis in generations. No previous UK Government have ever regarded breaking international treaties and breaking their own solemn undertakings as a negotiating tactic, sullying our international reputation in the process, and our country will rue the day that this one did.

This is a Government who look after their own, allowing a bonanza in dodgy covid contracts for their mates, and passing laws to wreck independent judicial oversight and clamp down on protests. The sooner they are gone, the better.

--- Later in debate ---

[Dame Angela Eagle]

It was.

[John Cryer]

And she was there.

I discovered these stark figures only the other day: only 12 years ago, the number of people using food banks was fewer than 30,000. It is now in excess of 2.5 million. Those figures illustrate what is happening in the country, if no other figures do. They should be sprayed on people’s eyeballs. More than 2.5 million people have been forced into using food banks.

This is an economic situation without precedent, certainly in living memory. I had hoped we had learned that at times of national catastrophe, full-scale Government intervention is always the answer. We should have learned that from covid, when it was clear, but the lesson has not been learned, and clearly not by the Chancellor. Full-scale state intervention is the only way to respond in times of national catastrophe. Sadly, the Chancellor is not in his place. Perhaps he has gone for a long lie down to think about the advantages of a windfall tax. We have a desiccated Chancellor who is wedded to the idea that the free market will deliver all, but it will not. We should not really be surprised by that when we have a Minister, the honourable—I use the word in its broadest possible sense—Member for Redditch (Rachel Maclean), who said, very clearly, “If you’ve got problems, just work a few more hours.” We are sent here to represent people, not attack them. She attacked British workers.

In the same vein, a few years ago, leading members of this Government produced a book called “Britannia Unchained”, which some of us might remember. It said, in very clear terms,

“the British are among the worst idlers in the world. We work among the lowest hours”

and

“we retire early.”

That is just factually incorrect. We work among the longest hours in Europe, and we very often retire later than people in other European countries. That historical contempt for British workers is behind the laissez-faire attitude to the current situation, and if it does not change quickly, we are heading for catastrophe.

DRAFT MONEY LAUNDERING AND TERRORIST FINANCING (AMENDMENT) REGULATIONS 2022

Angela Eagle Excerpts

Monday 7th February 2022 General Committees

[Dame Angela Eagle (Wallasey) (Lab)]

It is a pleasure to serve under your chairmanship, Mr Robertson.

I know that the Minister is at the centre of the Government’s efforts to deal with economic fraud and money laundering. I hope that, if he has not read it yet, he will take a close look at the report on economic crime that the Treasury Committee issued last week. It includes many recommendations, which I will not go into now because that would be out of order.

Economic crime, money laundering and the kind of activity that this statutory instrument has been designed to bear down on are complex and require a lot of determined action from many different angles, and I hope the regulations are just a small part of that. Perhaps the Minister could reaffirm that the statutory instrument is just a small part of the Government’s efforts to tackle the sad fact that we, with a very large financial centre in the UK, are now regarded as a centre of money laundering. The “London laundromat” is a phrase that came out of the Intelligence and Security Committee’s report. It is not one that I have made up and it has not been conjured out of thin air. It is used because of the real threats that our open financial system has been put under by those who, as the Minister said in his opening remarks, wish to cause problems for our open and fair economy. If those threats are allowed to progress and fester, they will have bad effects on social and economic wellbeing in this country. We are all on the same side in that we want to minimise the chances of that happening.

Does the statutory instrument go far enough? There are some doubts about it, although it is good to see it here. I hope that the Minister will say in his response to the debate whether we will get an economic crime Bill to deal with some of the rest of the problem. When Lord Agnew resigned so dramatically from the Dispatch Box in the Lords a couple of weeks ago, he appeared to do so, at least in part, because he had learned that there was not going to be an economic crime Bill. The Minister and all Opposition Members know very well that we need some major changes in the law to accompany such statutory instruments if we are to begin to close some of the loopholes that are used by those who wish our society ill, those who aggrandise themselves, terrorists, organised criminals and those who wish to hide the sources of money that they have stolen from elsewhere in the world and launder it through companies, trusts and property in this country.

Is the Minister worried that the fact that we will have a regime that is more lax than that being developed in the European Union might paradoxically make us more of a target for more of this sort of money? The fact that the statutory instrument has been changed in certain ways might make us more attractive when it is compared with similar instruments that are being promulgated in the European Union. I am worried about that.

Will the Minister say a little bit about transparency? As both Opposition Front Benchers mentioned, organisations have said that the statutory instrument as drafted does not leave sufficient scope for private sector and civil society actors to investigate suspected money laundering. They effectively have to prove it before they are given sight of the trusts. That is a much tougher area than we are expecting to be the case as the European Union moves to put its own directives into being. Of course, the European law is the law from which these regulations have sprung, albeit we are now outside the European Union.

Can the Minister say something about the trust registration service? There have been delays, which he mentioned were something to do with IT problems. Is he convinced and confident that the IT problems in the trust registration service have been properly dealt with, so that when this system comes into being it will be robust in future? Can he say a few words about law enforcement, because the Treasury Committee’s report last week commented particularly on the fragmented nature of the fight against organised crime and money laundering? The way it goes across so many different Departments, is very fragmented and is not the main source of action for many of the enforcement authorities. It seems to fall between the stools of many different Departments with very few enforcement authorities being primarily responsible for doing that work. Can the Minister reassure me that he has sorted that issue out and he is convinced that the enforcement of the new regulation will be robust enough to ensure that we can crack down on some of these nefarious money laundering activities?

--- Later in debate ---

[Dame Angela Eagle]

I thank the hon. Gentleman for giving way on that point. It was absolutely remarkable that when we took evidence from the Minister, and from his Home Office colleague who was responsible for trying to crack on money laundering, how dissatisfied both of them were with the current state of affairs. I wish him well in attempting to get his business managers to realise what everybody else realises, which is that this should be an absolute priority.

[John Glen]

I welcome the hon. Lady’s intervention on this subject. I am happy to recognise her characterisation of the diffused responsibilities in the report. There are observations and questions about many interactions. That is something for the Government to reflect on, as we will do in our response.

The hon. Member for Glenrothes referred to parliamentary time. Fixing some of these things will take a bit more than a few hours, but the point he is making is that there is a will to do this, and I recognise that.

This is a modest set of changes to deal with an administrative problem with one part of this Government’s response to a challenge. We are one of the most open jurisdictions for financial services. We employ 2.3 million people in financial services and 7.4% of jobs in the UK are in financial services. We have got to get that balance right, but I recognise the challenges outstanding. On a broader canvas, at a later point, I will address those points. I hope that the Committee has found this debate informative and will support the regulations. I commend the regulations to the Committee.

Question put and agreed to.

Resolved,

That the Committee has considered the draft Money Laundering and Terrorist Financing (Amendment) Regulations 2022.

Tackling Fraud and Preventing Government Waste

Angela Eagle Excerpts

Tuesday 1st February 2022 Commons Chamber

[Rachel Reeves (Leeds West) (Lab)]

I beg to move,

That this House agrees with the remarks of Lord Agnew of Oulton in his resignation letter that the Government’s record on tackling fraud is lamentable; recognises the vast amount of taxpayers’ money that has been lost to waste and fraud since the start of the coronavirus pandemic, including the estimated £4.3 billion recently written off from Treasury-backed Covid business support schemes; notes the Government’s unacceptable record of poor procurement over the last decade, including £13 billion wasted on defence projects; further notes the warnings the Chancellor received in 2020 regarding the serious weaknesses allowing for public funds to be diverted to criminal enterprises; calls on the Government to set out a strategy to recover all taxpayers’ money obtained by criminal groups and to fully engage with a thorough National Crime Agency investigation into all issues related to the fraudulent exploitation of the covid-19 support schemes; and further calls on the Chancellor of the Exchequer to make a statement to this House before 31 March 2022 detailing how much taxpayers’ money has been successfully retrieved.

Millions across our country are facing a cost of living crisis, but while many are worried about soaring energy and food bills, the Government are preparing to hike taxes for working people and businesses. It will be the biggest tax burden in 70 years, yet while the Government are delving into people’s pockets for their hard-earned cash with one hand, they are throwing it away with the other. With endemic waste and fraud, taxpayers’ money is being poured down the drain. We see billions of pounds of waste on vanity projects, crony contracts and poor procurement. Basic checks and measures on who was handed covid support are completely ignored. We have had £4.3 billion in fraud written off by the Chancellor—that is a third of the tax hike that the Conservatives are about to impose on working people and the businesses that employ them.

The truth is, that is only the tip of the iceberg. That is why Labour has brought this motion before the House, calling on the Government to come back by 31 March with a clear answer on the true extent of fraud in their covid support schemes and to report back on how much taxpayers’ money has been clawed back from the criminals. It is because the Chancellor has lost a grip—and he seems to have fled the scene—that the motion calls on the Government to allow the National Crime Agency full access to investigate all aspects of fraud within covid support, not just the mere 13 cases that the Chancellor suggested they are looking at.

[Dame Angela Eagle (Wallasey) (Lab)]

Was my hon. Friend as surprised as me not only by the terms with which Lord Agnew, the Minister in the Lords, resigned—the “schoolboy errors” made—but to learn that the National Crime Agency was shooed away by the Treasury when it offered help to try to get back some of the fraudulently taken money?

[Rachel Reeves]

It was nice to see a Government Minister with a bit of integrity doing the right thing and resigning because of the errors that the Government are making.

Let us look at the details. On 12 January, the following details were published on gov.uk: £5.8 billion of fraud, with—yes—£500 million already retrieved and up to £1 billion to be clawed back by the end of 2023. That leaves an outstanding £4.3 billion of fraud written off by the Government. The grants number refers to the assessment of the losses made by Her Majesty’s Revenue and Customs from just three schemes: the coronavirus job retention scheme, which was £5.3 billion; the self-employment income support scheme, which was £493 million; and eat out to help out, which was £71 million. That fraud adds up to a combined £5.8 billion. In addition, page 121 of the Department for Business, Energy and Industrial Strategy’s annual report states that bounce back loan fraud is estimated to be 11% of the total. When the Minister comes to the Dispatch Box, will he tell us whether he recognises those figures? Does he understand what an affront that is to taxpayers and to those who were excluded from Government support during the pandemic?

Downing Street Garden Event

Angela Eagle Excerpts

Tuesday 11th January 2022 Commons Chamber

[Michael Ellis]

The Prime Minister did ask for the investigation to be conducted swiftly, and I think that is on the record. As to how long it lasts, I do not know, because we have not stipulated a time. Sue Gray is conducting the investigation independently of the Executive’s directions, as my hon. Friend and the House would expect. We hope to have a result swiftly, but that will be a matter for her.

[Dame Angela Eagle (Wallasey) (Lab)]

Perhaps it would be faster if Sue Gray were to investigate the days when there were not parties—[Laughter.] I have sympathy for the Minister, because he has been sent with his “gatherings” excuse to defend the utterly indefensible. We know, do we not, that an invitation to a “bring your own booze” party was sent out for 20 May, when 268 people died in hospital that day? We know that it was illegal to meet anyone outside one’s own household, except one person overnight. So what is there to wait for? The Prime Minister should come here now, fess up and tell us what happened.

[Michael Ellis]

If I may say so, the hon. Lady has an excellent reputation in this House for, among other things, fairness. I know that she would want a fair investigation to take place before any comment is made. All that we are asking is for the House to wait a swift period of time for the investigation to conclude. That is in the natural order of justice and fair play.

Co-operatives and Mutual Societies

Angela Eagle Excerpts

Tuesday 14th December 2021 Westminster Hall

[Dame Angela Eagle (in the Chair)]

Before we begin, I remind Members that they are expected to wear face coverings when they are not speaking in the debate. This is in line with current Government and House of Commons Commission guidance. I remind Members that they are asked by the House to have a covid lateral flow test twice a week if coming on to the parliamentary estate. This can be done either at the testing centre in the House or at home. Colleagues may wish to know that I have just had a negative one, so I think I, at least, am safe for now. Please also give each other and members of staff space when seated and when entering and leaving the room.

[Mr Steve Baker (Wycombe) (Con)]

I beg to move,

That this House has considered the contribution of co-operatives and mutual societies to the economy and public life.

I am delighted to serve with you in the Chair, Dame Angela, and I am very grateful to everybody who has attended. I am slightly conscious that today’s other business might have distracted some of my Conservative colleagues who signed up to the application. I lament the fact that they are not here, but there we are—I cannot think what else is going on at the moment. I am very grateful to Co-operatives UK for inspiring this debate and for providing an excellent brief, on which I will rely closely.

A free society—one based on a market economy—really must have within it a place for co-operatives, and the Conservative party might not always have embraced that idea as tightly as I might have liked. Given the length of time for which we have been in power, and given how long we will have been in power by the next general election, I hope that the Conservative party can champion and not merely embrace co-operatives as a really important part of a free society. Co-operatives can be harnessed as tools to expand opportunity, wealth, liberty, pride and aspiration more fairly in the UK, both geographically and socially. They are a powerful tool for funding and implementing the UK’s new net zero strategy.

The co-operative economy is diverse, resilient and growing. There are now more than 7,000 independent co-operative businesses in the UK, with a combined annual turnover of almost £40 billion and more than 250,000 employees. They trade in sectors as diverse as agriculture, renewable energy, retrofitting, the creative industries, manufacturing, distribution, wholesale, retail and finance. In 2020, the turnover of the co-operative economy grew by £1.1 billion, and twice as many co-operatives were created as dissolved. Most co-operatives in the UK are consumer-owned, but in recent years we have seen a marked growth in community ownership, worker co-operatives and freelancer co-operatives. Many of the UK’s largest co-operatives comprise other businesses, such as farmers co-operatives.

By international comparison, though, the UK co-operative economy is small and growing slowly. Less than 1% of businesses in the UK are co-operatives. Germany’s co-operative economy is four times bigger than the UK’s, and France’s is six times larger. That might well derive from history, but I say to the Government that now is a moment when we can choose positively to take a path that makes it more possible for co-operatives in the UK to grow. The UK’s co-operative start-up rate is also comparatively low. In recent years, South Koreans have created 12 times more co-operatives per head of population than we in the UK have. Perhaps the co-operative model is underused and is something of a best-kept secret in our society and economy.

Co-operatives are great vehicles for creating and sustaining decent, rewarding and empowering livelihoods. For example, after five years of trading, the average worker co-operative in the UK supports six times more livelihoods and is almost twice as likely still to be trading as start-ups generally. According to a multi-country study, although they are currently far fewer in number than businesses generally, worker co-operatives are on average larger and employ more people. There are examples of co-operative entrepreneurship, for example the taxi drivers in Cardiff who clubbed together to set up their taxi-hailing co-operative, and of participation in existing freelancer co-operatives, such as the new co-operative mutual aid platform, We-Guild, or the creatives’ co-operative Chapel Street Studio.

--- Later in debate ---

[Mr Baker]

I am grateful to the hon. Gentleman for his intervention. I hope to make a few remarks about mutuals, but I am focusing first on co-operatives. I have been involved in the inquiry into LV= by the all-party parliamentary group for mutuals. LV= made quite a compelling case, but the point is that, as he said, it is up to the members what they do. In a free society, we make progress through trial and error. It might well be that that members have made a mistake in rejecting the bid, but it is their right to do so; it is their right to choose.

I am a huge fan of mutuals, because I can see that they are bound to create a set of incentives that support the people whom the business serves. I remember in my youth being very disappointed that so much carpetbagging was going on, with people taking £500 in exchange for demutualising. I was very disappointed at the time, and even as a teenager I could see that it was not a good idea. In the case of LV=, I fear that things are not going where they should. I very much hope that my hon. Friend the Minister will ensure there is a good quality inquiry into what is going on, and into how regulation can better support people’s desire to support the mutual spirit in the future. I think he would agree that we cannot afford to be romantic and exempt co-operatives and mutuals from the realities of commercial life, or the exigencies of things such as competition law.

I turn to performance and efficacy. The principle of mutual purpose and democratic governance is found in all co-operatives, and it has significant advantages. It is a proven way for people with a shared interest to collaborate effectively, achieving things together that they could not on their own. That is a great way to expand liberty.

Liberty is something that should be exercised in community. One of my favourite scholars said:

“Society is cooperation; it is community in action.”

We should remember that entrepreneurship is a great search to help other people; that is what entrepreneurs seek to do. If people make a profit justly, without breaking the rules or exploiting others, that is a good thing. It shows that those people have served others, according to their assessment of what has been produced. I believe that that combination of mutual interest and service to others through a market means that co-operatives should be a crucial part of our society.

I am conscious of time, so I will wrap up. The Co-operatives UK brief makes a number of suggestions to the Government, including that there could be more co-operatives, and some particular policy suggestions. There are three themes: to have better tailored business support and enterprise finance for existing co-operatives, co-operative entrepreneurs and the conversion of existing businesses to become co-operatives; to have legislative and non-legislative action to provide a more enabling corporate framework, through law, regulation and processes; and to have tax support for investment in co-operatives and co-operative development. I will not go through the full brief, but Co-operatives UK intends to publish it after the debate.

I appreciate this opportunity to hear from Members from all parts of the House about co-operatives. We can all enthuse about co-operatives, even as we remain, as I am sure the Treasury will do, robustly pragmatic rather than romantic. As the Conservative party softens and become more inclusive and society minded in the 21st century, we ought to say that co-operatives and mutual societies are an important part of our society that should be fostered in everyone’s interests, particularly as we come back from coronavirus. We need to build up the mutual relations of interdependence on which we all rely.

[Dame Angela Eagle (in the Chair)]

It is my intention to call the Front-Bench speakers from 10.30 am, so you can do the maths yourselves in order for everybody to get the chance to speak.

--- Later in debate ---

[Jim Shannon]

I thank my hon. Friend for that intervention. Yes, I do agree. When we look at the breadth of the market, and who these organisations represent, it indicates support that goes above and beyond. There are cattle market co-operatives, farmers’ co-operatives, fishermen’s co-operatives, plus a few reasonably sized credit unions. The agricultural co-operatives, the credit unions and the market traders co-operative—bringing all those people together, as my hon. Friend said—are examples of co-ops that help to sustain an independent rural community and a way of life. They are an essential component of these communities and a lifeline for them.

These organisations are undoubtedly able to do more, when we consider that the Financial Conduct Authority estimates that 28 million people—more than half of UK adults—have some element of financial vulnerability. In February 2020, up to a third of adults had less than £1,000 in savings, and one in 10—about 5.6 million people—had been paying a high-cost loan with an annual interest rate above 100% at some point in the preceding 12 months. What co-operatives, mutuals and credit unions do is enable their members to borrow at rates that they can afford to pay back. It is not like going to a payday loan company or others in the community who take advantage of people in their time of vulnerability. What these organisations offer is critical for the future.

Perhaps the Minister can give us some indication of any discussions he may have had with credit unions or co-operatives in Northern Ireland. I know I asked that earlier on, but it is always good to get a perspective here, in Westminster, where we are all under the great Union flag of the United Kingdom of Great Britain and Northern Ireland together—we are all part of that.

There is an issue with lending, and it is my firm belief that credit unions could be a way of dealing with this issue. Further, more investment and help should be given to allow credit unions to push their products and abilities into more communities as a viable savings and loans option. With that, I will conclude by thanking the hon. Member for Wycombe for introducing this debate, and I look forward to the comments from the shadow Ministers and the contribution from the hon. Member for Plymouth, Sutton and Devonport (Luke Pollard).

[Dame Angela Eagle (in the Chair)]

I intend to call the Front-Bench speakers no later 10.28 am.

--- Later in debate ---

[Luke Pollard]

I thank the hon. Gentleman for his intervention. I hope that it will be, but I fear it may not. The challenge is that the future is very uncertain, especially for smaller credit unions that do not have the financial backing of a larger credit union. The social benefit that they provide is considerable, and it is worth the Treasury looking at that.

My final point is a challenge to those people who speak about co-operatives and mutuals, like myself and everyone in this place. Often the debate around co-operatives and mutuals is an urban-themed one; as an MP for a city, most of my examples have been urban themed. However, there is enormous potential in telling the story of the success of the mutuals and co-operatives in our rural and coastal communities. In our rural communities, we see an amazing penetration of successful co-operative businesses, providing support at scale not only for rural housing and, in particular, agriculture, as we heard from the hon. Member for Strangford (Jim Shannon), but for fishing. Greenhook Fishing in Plymouth is our brand-new co-operative. It is pioneering sail-powered fishing in Plymouth, and is bringing back the Plymouth Hooker, a fantastic old-style fishing boat. It also provides opportunities for people who have left prison and veterans to be re-trained in new skills, not only in boat construction but in fishing.

Greenhook Fishing is following a model that is present in many other coastal communities and rural communities —of co-operatives being successful, getting on with it and never identifying as a co-operative. My challenge to those who speak about co-operatives is that we should talk up rural and coastal co-operatives as well. I am very pleased that the Co-operative party has started a new commission around rural co-operatives, to feed into Labour’s rural review, that will make the case for further investment in rural co-operatives as distinct from urban co-operatives and the challenges that they face. The future is bright for mutuals and co-operatives, and I look forward to hearing the Minister’s response.

[Dame Angela Eagle (in the Chair)]

I now call the Front-Benchers, beginning with Chris Stephens.

--- Later in debate ---

[Mr Baker]

I have immensely enjoyed this debate and everybody’s contributions to it. It is an honour to be the person who happened to have their name on the top of the application, so it is with some humility that I speak last. I particularly want to say how much I enjoyed the remarks of my hon. Friend—and on this issue, he certainly is my hon. Friend—the Member for Plymouth, Sutton and Devonport (Luke Pollard). The sheer enthusiasm he has for the contribution of co-operatives to his community said more than any number of statistics that any of us might have cited. That is the reality of co-operatives and mutuals in our society. They are deeply loved institutions, precisely because their members feel part of them: “It is my mutual. It is my co-operative. I am part of it.” I only hope that all of us might aspire to the degree of earnest and heartfelt support for those institutions that the hon. Gentleman has put on record, and I hope he will not mind me embarrassing him by expressing such gushing support.

I am very grateful to my hon. Friend the Minister for what he has said. He has been very clear that the Government want to support mutuals and co-operatives. I will write to him later today with the Co-operatives UK brief, which is quite extensive, and will specifically draw its recommendations to his attention, in the hope that he might be able to take up some that do not conflict with his justified pragmatism and his desire not to be too romantic. I know that my hon. Friend would not want to be accused of an excess of romanticism.

I am extremely grateful for this opportunity to sum up the debate, and to all hon. Members who have spoken. On a day like today, it is a treat to have spoken in unity rather than in division.

[Dame Angela Eagle (in the Chair)]

I think romance is always required in politics.

Question put and agreed to.

Resolved,

That this House has considered the contribution of co-operatives and mutual societies to the economy and public life.

Financial Services: UK Economy

Angela Eagle Excerpts

Thursday 9th December 2021 Commons Chamber

[Anthony Browne (South Cambridgeshire) (Con)]

I beg to move,

That this House recognises the importance of financial services to the UK economy; and calls on the Government to provide adequate support to help create the right regulatory and operational environment for that industry to ensure that the UK is able to retain its competitiveness on the world stage.

It is a pleasure to lead this debate on the future of the UK’s leading industry: financial services. The arguments about its importance are well known and well rehearsed. The financial services sector is the UK’s biggest export industry by far, with a £78 billion a year trade surplus. In fact, the UK is the biggest net exporter of financial services in the world; we export more financial services than any other country on the planet, including the US, Singapore and all of the EU combined. That means that, as a country, we can afford to import all the smartphones, flatscreen TVs and other manufactured goods that we are so keen on, particularly at this time of year.

The financial services sector adds £194 billion gross value added—that is, it contributes £10 in every £100 of all the UK’s economic output. One in 14 UK workers is in financial services. That is 2.3 million employees, two thirds of whom are outside London. Indeed, this industry really is spread across the country. Scotland has less than a tenth of the population of France, but exports about half the amount of financial services that France does. The financial services sector pays more tax in a year than any other sector—£76 billion in the last year. As the Chancellor pointed out in his Mansion House speech in the summer, that is enough to pay for the entire national police force and school system combined.

During this hideous pandemic, I am glad to say that the financial services sector stepped up to the plate and played a crucial role in keeping the economy going. It lent more than £75 billion in emergency finance to nearly 2 million businesses. Indeed, it lent £101 million to more than 2,000 businesses in my constituency of South Cambridgeshire. To help homeowners, lenders also gave nearly 3 million mortgage deferrals during the pandemic. The financial services sector certainly has played its part in ensuring that the economy has bounced back so quickly. Now, guided by the Government, it is also increasingly playing a critical role in ensuring that we reach net zero carbon dioxide emissions by 2050. From green bonds to climate-related financial disclosures to carbon markets, the financial services sector will help, rather than hinder, in the biggest challenge facing humankind: stopping climate change.

Although we all recognise the importance of financial services, it is not a popular sector. A leading German politician once said to me that it was the great British tragedy—that we do not like our most successful industry. It has often brought that unpopularity upon itself; we all know the reasons, so I will not rehearse them here. It is one of the few industries in which we are genuinely world leaders, but regular surveys of international financial centres show that our crown is starting to slip: London is now usually ranked second to New York; our lead over Singapore and Hong Kong shows signs of shrinking; and our global market share in some sectors, such as insurance and bank lending, is trending down. That is a cause for concern, but not alarm. We can turn the tide, but we need to have a clear strategic objective that the UK should be the world’s leading international financial centre.

The industry is at a major turning point. Financial services policy in the next decade will be very different from financial services policy in the last decade. We are at the beginning of a new era. There are two major reasons for this, and both represent major opportunities. The first is that the wide-ranging reform and reconstruction of the industry in the wake of the 2008 financial crisis has, by and large, been completed. Almost the entire regulation of the industry was rewritten in a tsunami of reforms from both the EU and UK. This absolutely needed to be done to ensure that the crisis could not happen again—to protect taxpayers and consumers—but that regulatory repair job is now largely behind us. We must not forget any of the lessons from it, but we can now pursue a more forward-looking agenda. The Government have set this out in their document, “A new chapter for financial services”, which was published earlier this year and which I very much welcome. It sets out a vision for the UK as a leading financial centre that is open, innovative, competitive, and green.

The second reason that we are at a turning point is that we have left the EU. Clearly, leaving the single market represented a major challenge for many financial services companies—and I think that I am right in saying that not everyone in the industry fully supported Brexit. But leaving the EU has created opportunities to ensure that regulation and legislation is tailored to our national circumstances. We do not have an equivalence deal with the EU, nor, indeed, that promised memorandum of understanding. I actually never thought that such a deal or memorandum was that necessary; it was more a “nice to have”, rather than a “must have”.

There are many other existing legal routes for UK-based financial services companies to sell to clients in the EU, as we are currently seeing. The no-deal scenario that we had in financial services does have the advantage of giving us full regulatory control. There are three fundamental problems with the EU financial services regulation, from a UK perspective. The first is that the necessity of getting agreement from 27 or 28 countries means that it is very inflexible; once a law is made, it is very difficult to change it. Secondly, the EU tends to focus on competition between its members rather than global competition. It is more worried about competition between London, Paris and Frankfurt than between London, New York and Singapore. Thirdly, the EU necessarily assumes a one-size-fits-all approach even though markets in different EU countries often have incredibly different dynamics. In contrast, when we had the chairman and chief executive of the Financial Conduct Authority in front of the Select Committee yesterday, they talked about how we can now have a very agile policy regime.

When we left the EU, the Government ensured legal continuity, as they had to, by incorporating all European financial services legislation wholesale into UK law. Now, though, we can take our time to consider what reforms we want both to EU-originated laws and to laws that we adopted unilaterally when we were part of the EU. We must of course abide by global regulatory principles, as set out by international bodies such as the Basel Committee on Banking Supervision, the Financial Stability Board, the International Organisation of Securities Commissions, and the Financial Action Task Force. However, those various principles are at a high level and below them lies an awful lot of detail—and we know where the devil lies. We must continue being a beacon of high regulatory standards and resist any temptation of a race to the bottom, but we should also get the details right and ensure that they are appropriate, proportionate, and do not have unintended consequences. There is no conflict between abiding by globally high standards and being globally competitive.

Reform of imported EU legislation will take many years, if not decades, but the Government have made a start. They have completed the Lord Hill review of stock market listings and the Kalifa review of financial technology and adopted their recommendations, which now need to be implemented. We need to ensure that the prospectus directive is made more proportionate. I personally support allowing two classes of shares to encourage investment in start-up companies. The Government are now consulting on regulatory reform of wholesale financial markets, particularly the second markets in financial instruments directive, MiFID II, and the rules on the capitalisation of the insurance market—Solvency II. If we get the reforms of Solvency II right, that promises to unleash productive investment across the UK, especially in high-growth firms. MiFID II and the European market infrastructure regulation are extraordinarily detailed and prescriptive, and could be simplified without harm. Excessive detail can prevent beneficial innovation. We should avoid gold-plating international standards, unless there are clear reasons to do so. Rules on pre-trade transparency can be counterproductive. The share trading obligation can be safely removed.

Some retail legislation, such as on PRIIPS—packaged retail investment and insurance products—is applied to wholesale markets for little purpose. This week on the Treasury Committee, we heard from representatives of the commodities exchange, ICE Futures Europe, that they are required to produce countless retail key information documents for institutional investors who do not want them and will never read them. It was, they said, a pointless waste of time. Retail and wholesale markets are different and need to be treated differently. We should avoid making our rules extraterritorial unless there is a clear reason to do so. The EU often requires all EU-headquartered financial services companies to abide by EU rules wherever they operate in the world, in a deliberate attempt to set global regulation, but the UK should start with the presumption that UK-headquartered financial institutions need only abide by the rules in the markets where they are actually operating, as long as those markets operate by global standards. For example, when trading in the US, the presumption should be that UK financial services companies just need to abide by US rules.

The Government should also consider reforms to the capital requirements directive and regulation. These are the rules that implement the Basel capital rules for banks into EU and then into UK law. The Basel rules are designed for international banks operating across borders, not domestic banks operating just within one country, but the requirements of the single market meant that the EU ensured that the same capital rules were applied to domestic banks operating just in one country as were applied to international banks operating around the world. The UK should consider following the US rather than the EU and not require non-systemically-important domestic banks, such as challenger banks, to abide by inappropriate global capital rules. This could improve competition among banks without affecting prudential stability.

There is also domestic legislation that the UK could usefully revisit. The Treasury is currently reviewing the ringfencing rules separating retail and wholesale banks, which, in part, duplicates imported EU regulation on bank recovery and resolution. The ringfencing rules can lead to very complex and inappropriate governance structures for retail banks that do not have any significant investment banking operations, and it is certainly worth looking at whether that can be changed.

Critical to the continuing success of financial services will be the process by which we make new rules, which the Government are also reviewing. Our financial services rules will no longer go through the EU policy-making machinery. They will no longer be scrutinised in extraordinary depth and amended at length by the European Parliament’s formidable Committee on Economic and Monetary Affairs, which I wrestled with many times, and which was once admirably chaired by the UK’s own Baroness Bowles. There is no way that the UK Parliament has the capacity to replicate that function. Parliament must set the objectives and principles of future financial services regulation, but the details should be determined by the regulators, particularly the FCA and the Bank of England.

[Dame Angela Eagle (Wallasey) (Lab)]

I agree that, as we are currently set up, the UK Parliament could not even begin to replicate what the European Parliament did with regard to oversight of regulation, but surely, if we, as a Parliament, were properly geared up with appropriate support, we could.

[Anthony Browne]

I basically agree with the hon. Member, a fellow member of the Treasury Committee.

--- Later in debate ---

[Dame Angela Eagle (Wallasey) (Lab)]

It is a pleasure to follow the hon. Member for South Cambridgeshire (Anthony Browne), who has opened this Backbench Business debate and is a fellow member of the Treasury Committee. He has given us a grand tour of a large and diverse sector of the economy that is, as he pointed out, very important. He also pointed out that it is affected by a range of issues at the moment.

The hon. Gentleman gave us some of his ideas on what should be happening post Brexit with some of the more complex of the EU directives that have been onshored—in particular, MiFID—which have been against the grain of how the UK financial services and insurance industries have always tended to work. He hinted at the philosophical difference between EU regulation in these areas and how the UK more traditionally did it; it is the difference between having principles-based regulation, which is not so specific, and the EU way of doing regulation, which tends to be so specific and puts a lot of those specifics in legislation. When I was in the Treasury and in the Department for Work and Pensions as Pensions Minister, it was a battle that we constantly had with the EU in the Council of Ministers and with the Commission.

[The Economic Secretary to the Treasury (John Glen)]

indicated assent.

[Dame Angela Eagle]

I can see the Minister is nodding, possibly because he recognises some of those tensions, which always existed when we were in the EU.

When we were in the EU, because of the size of the influence of the UK financial services industry as part of that bloc, we had a very good and effective way of pulling at least a lot of the regulation that went on more towards our way of doing things. One of the worries I have post Brexit, which I suppose is a philosophical and practical worry, is that the EU will now go off and do a lot more of the things that we were able to persuade it not to do when we were a member. The divergence between how EU regulation works and how we may wish our future regulation of financial services to work is likely to grow larger.

It has not been a very friendly divorce to date, and there may well be implications to that, too, in terms of competition for business. We have seen some of that in the wholesale markets for euros and we will doubtless see more of it. The outcome of our way of leaving the EU will challenge some of the agreements that we came to and the influence we were able to have when we were inside the Council chambers, the European Parliament and the European Commission, rather than the situation we find ourselves in now. As the hon. Member for South Cambridgeshire said, that can be an advantage, but it can also be a disadvantage. It is an opportunity, but there are also threats and issues that we have to deal with. We have a sharp disjunction with the recent past, after 40 years of that kind of influence, that we will have to deal with in the coming period. We have the inadequacies of the non-existent deal on financial services, which was part of the EU-UK so-called trade agreement, and those are already having an effect.

The hon. Gentleman was right to say that we are in a period of rapid regulatory change, which would have been the case regardless of whether we left the European Union. The fact that we have, and the fact that we have onshored all this regulatory machinery, means that we now have to start looking at how we wish to change all of it.

Even thinking about the sheer weight of work and oversight that will have to be done by the Treasury Committee is quite overwhelming, as the hon. Gentleman acknowledged in the exchange we had during his speech. The Minister must go weak at the knees when he thinks of the detailed work that he will have to put in to deal with the onshoring in the aftermath of Brexit, and whether we want to move quickly or slowly to adapt the laws and regulations that we have imported.

Members of the Treasury Committee have also gone weak at the knees thinking about how they might have some oversight, because of the highly technical nature of much of that regulation. We certainly need to be significantly more tooled up than we have been if we are to have proper oversight of what the regulators are tasked with doing, what philosophical direction the Government wish to go in, and what the practical aspects of that method will mean for our financial services industry and, of course—they have not been mentioned much—for consumers in the UK and for financial stability.

We should not lose sight of those two basic reasons why we have to get regulation right. Consumer protection is a huge issue in financial services, as the hon. Gentleman touched on when he said that financial services are not always the most popular sector of our economy. Perhaps some of those who supply and form part of the industry ought to stop and think about why that is they case and do some self-reflection about it.

Clearly, financial stability is also crucial in an era when markets are becoming more rapid and more global. In the context of highly rapid technical change, financial stability becomes even more important, because innovation outruns the capacity of many regulators to keep up with what on earth is going on in some markets. Those two important issues have to underpin all regulation; the future of the entire financial services industry rests on them.

Regulatory change in a rapidly evolving situation with a lot of flux is inevitably difficult for those who participate in the market and for those who wish to regulate it. It is also difficult for those such as the Minister who want to see how it can be properly harnessed and allowed to be beneficial to our economy while being safe. It is a period of big uncertainty and flex. New technology has the capacity to change things and lead to innovation, some of which might be fantastic and some of which might be awful. That structural issue has hit us greatly through the innovations of digital currencies.

The systems that control financial services have to deal with the practical and philosophical issues that arise, such as whether digital coins are ever stable, what central banks ought to be doing to deal with that, and whether the wild west of Bitcoin and the rest should be left as a gambling thing on the side. Those markets can be volatile—the wild west—but the capacity of software such as open registers and blockchain, and their potential for transparency and in-time and open trading of all sorts of things, could be harnessed for good purposes as well as for the more nefarious ones that feature on the darker edges of the net. On top of that, the demands of climate change will cause a systemic change in the way that things are valued, priced and assessed for value.

That structural change will completely change the context in which the financial services industry has to exist. In the UK, which is one of the most open economies in the world and always has been, we know how important the financial services sector is, and not only to London as a global centre. In 2020, it was worth £164 billion to the UK economy, which is the third-largest sector by size in the OECD. That is 8.6% of economic output, half of which is generated in London but half of which is generated across our regions. Of the 1.1 million jobs, 91,000 are in my region of the north-west. As the hon. Member for South Cambridgeshire pointed out, it is one of the few sectors where we have a healthy trade surplus—£46 billion in 2020. It is the fifth-largest economic sector in our economy, and all the more important for that.

As the hon. Gentleman also pointed out, the sector is important for taxation, with £28.8 billion in tax taken from it. According to PwC, it makes up £75.6 billion, or 10% of the total receipts. In the face of such change—technological, structural or the disjunction of Brexit—any Government would want to see how they could remake the environment in which the financial sector can operate and flourish to benefit and protect the sector so that it can benefit and protect our economy. We certainly all have a stake in ensuring that that is the case.

In that area of flux, we have to remember that the regulators, although they could be powerful, are struggling with an increasingly complex and fast-moving environment that they are not always geared up to deal with in detail or to keep on top of. We have seen the travails of the Financial Conduct Authority and how it manages the perimeter, and philosophically the view of caveat emptor—that the buyer should beware in all circumstances. When things go wrong, the reputation of the entire financial services sector is at stake, so it is a difficult balance.

The Financial Conduct Authority gave evidence to the Treasury Committee yesterday, some of which reflected how difficult it is to try to remake a regulator after scandals such as London Capital & Finance, at the same time as operating within all the extra complexity and uncertainty. It has a formidable task. I suspect that being chair of the FCA is one of those jobs where people are told that, if they do a stint, they will get the diplomatic equivalent of the Washington embassy as a reward. The current Governor of the Bank of England is one example of that.

The FCA needs to be strengthened. We as policy makers, and the Minister in particular, have to think about how it can practically do the job. The job cannot be so big and complex that it is undoable. Sometimes, the way that the FCA has to cope means it is difficult for it to achieve a balance and be given a job that it can sensibly do. We know there is a big turnover of staff at the FCA at the moment, and that there is workplace stress and unrest. We know that the head of the FCA is trying to transform that organisation into what he calls a lean organisation that can respond very quickly to what is going on in the market and in the areas it has to regulate. I am not convinced that it has that balance right yet, and I am not even convinced that that job can sensibly be done without more support.

I want to deal with a couple of areas that the hon. Member for South Cambridgeshire did not touch on. These are what I would call threats to the reputation of the financial services industry in this country. First, I want to talk about economic crime, which I think poses a threat to the entire sector and its integrity if it is allowed to get out of hand. We know that there are rising levels of economic crime, fraud and scams that have been turbocharged during the lockdown. The sector itself has survived covid and the lockdown pretty well so far, because it could manage remotely—it does a lot of its work remotely in the first place—but one of the things we have all seen, unfortunately, is the rise in fraud and scams. We have also seen, and perhaps it is inevitable when it is one of the biggest global centres of financial services, that London has attracted the attention of international criminals and fraudsters who wish to launder their money through cities like London. We know that, as a major financial centre, it is a target for all of these kinds of people.

The Intelligence and Security Committee, in its Russia report, which was suppressed for far too long and was finally published after the 2019 general election, said that London is considered the “laundromat” for corrupt money. We have seen that kind of magnet effect, which is extremely disturbing, and I do not think that we have yet really got a handle on it. There are regulatory failings, there are legislative failings with the structures we have to try to deal with this, and there are certainly enforcement failings of the laws that we do have.

[Sir Robert Neill]

The hon. Lady makes some very important points, particularly that last one. Does she agree that now we have left the EU and therefore, regrettably, left some of the justice co-operation measures we had, it is all the more important that we seek, bilaterally and in a broader sphere, to improve and strengthen international judicial and legal co-operation on the admissibility of evidence, rendering of suspects and, above all, dealing with digital evidence being obtained in other jurisdictions and then made available to prosecutors and the courts in the United Kingdom?

[Dame Angela Eagle]

I could not agree more with the hon. Gentleman, who is a distinguished Chair of the Select Committee on Justice. He is also a practitioner himself, so he knows about the practicalities of these issues. It is hard, in contemplating the extra work that has to be done because of Brexit, to know quite where one starts, but if we do not get it right and if we do not get on with it, this terrible reputation of London having become a laundromat for dirty money will only persist and perhaps get stronger, which will do us untold damage. I urge the Minister responding to this debate to give us some words of comfort that he is getting on with the economic crime strategy. We have an economic crime strategy—

[Madam Deputy Speaker (Dame Eleanor Laing)]

Order. I hesitate to interrupt the hon. Lady, but I have been very lenient on timekeeping this afternoon because we have plenty of time and not very many speakers, and I have been particularly lenient because she is the only representative of the Opposition Back Benches. However, she is in danger of taking a very large chunk of time: she has spoken for about 20 minutes, which is longer than the person who introduced the debate. I wanted to keep such a balance, so I am not stopping her, but I am hoping, in the interests of being fair to everyone, that she will soon draw her remarks to a close.

[Dame Angela Eagle]

Madam Deputy Speaker, I am delighted to do so. I suppose that, when one gets let off the leash away from debates with three-minute limits, all the words just come tumbling out, but I would not want to take more than my allotted time.

I hope the Minister will be able to give us some words of comfort, particularly that he will be taking fast action to establish a beneficial ownership register and bring some transparency to what is going on in respect of financial crime.

Finally, I want to mention the issue of the model all too often pursued by some of our financial services, and this is a final philosophical point perhaps. All too often, complexity is seen as an end in itself in our financial services, and as a proxy for competition and a proxy for innovation, when in fact it is merely an excuse for opaque pricing. That makes it difficult for average consumers who want to put their money somewhere, make money, protect their money, or get a reasonable return on their money, and who find it too complex to do so. I do not believe that this is serving customers well, catering, as it does increasingly, for just a few at the top of the earnings distribution rather than the many who have smaller pots of money. I hope that the Minister will reflect in his response about what might be done to reverse that trend. With that final observation, Madam Deputy Speaker, I am happy to draw my remarks to a close.

[Madam Deputy Speaker]

Thank you. I hope that we do not have to have a time limit this afternoon. If everyone takes about eight minutes, there will be no need for one. If that does not happen, I will have to put on a time limit.