Financial Services and Markets Bill

Baroness Bryan of Partick Excerpts

2nd reading
Tuesday 10th January 2023 Lords Chamber

[Baroness Bryan of Partick (Lab)]

My Lords, the Second Reading of this Bill in the other place on 7 September was just one day after Liz Truss became Prime Minister, and just two weeks before her disastrous mini-Budget which has left millions of families facing frightening hikes in their mortgage payments. The reaction of the markets caused far more damage in one day than industrial action has over months. Markets are not democratic or accountable and, even before this Bill, are only lightly regulated.

The 50 leading economists who signed the letter to the now Prime Minister when he was Chancellor of the Exchequer in May 2022 warned that competitiveness is an inappropriate objective for regulators. They called it a recipe for excessive risk taking that could harm the real economy and reduce economic growth, and said that it was a poorly defined and confusing objective to give a regulator. The most worrying comment coming from across the spectrum of economists was that encouraging competitiveness as outlined in this Bill could result in the same conditions that led to the crisis of 2007.

The case for giving the FCA the task of ensuring competitiveness is at odds with its primary function of regulation. Few are convinced by the Government’s claim that this will not result in a race to the bottom. Evidence shows that lack of regulation results in bigger risk taking for short-term financial gain, at the expense of the rest of society. As Einstein warned us, insanity is doing the same thing over and over again and expecting a different result.

I move on to access to cash. The Government have stated that the Bill will ensure that people across the UK continue to be able to access their own cash with ease. However, there is no end in sight to bank branch closures and the removal of free-to-use ATMs. The seven big banks have already earmarked 193 branches for closure during 2023. There is overwhelming evidence, as has been cited from around this House, that the less well-off suffer most from difficulties in accessing cash.

So it was with dismay that I heard the then Economic Secretary to the Treasury, Richard Fuller, say at Second Reading:

“When I say ‘access to cash’ I mean access to cash. My hon. Friend raises the question of whether that access should be free … I cannot give him that assurance at this stage.”—[Official Report, Commons, 7/9/22; col. 285.]


That, together with the dismissive response from Sheldon Mills from the FCA to the Bill Committee on 19 October, when he was asked about having regard to inclusion, demonstrated a lack of understanding of the impact on people in more deprived areas. That is not acceptable. We expect a much greater commitment to free access to cash to be included in the Bill.

I am sure that, after today’s debate, the Minister will understand that there are some aspects of the Bill that are unacceptable and need to be substantially amended. I look forward to seeing these concerns addressed in Committee. I also look forward with interest to the maiden speeches today, particularly at this point to that of the noble Lord, Lord Remnant.