Defence Sector Banking Services: Environmental, Social and Governance Rules

Baroness Kramer Excerpts

Monday 26th October 2026 Lords Chamber

[Lord Pitt-Watson (Lab)]

Again, I am in total agreement on this. The FCA did this, and we encouraged it to do so, for precisely for that reason. In particular, we want to make sure that new start-up companies and small and medium-sized enterprises in the defence sector have access to the financial services they need to carry out their business and help protect the nation. I thoroughly agree with the comments made by the noble Baroness.

[Baroness Kramer (LD)]

My Lords, I asked that this action be taken in an amendment to the financial services Bill, so I am very pleased that we are going to get more vigour from the FCA. I join others in insisting that that vigour be sustained. There was a second, equally important issue: the public procurement process for small defence businesses, including the Government’s failure to protect SMEs’ intellectual property. Given that these small businesses are vital for innovation in the defence sector, as other noble Lords have said, will the Government look seriously at this issue, which is also undermining development in this area?

[Lord Pitt-Watson (Lab)]

The Government are sympathetic and are putting their money where their mouth is. For example, the British Business Bank’s growth guarantee scheme, which is specifically focused on defence and other SMEs, provides £3.5 billion a year. One example is Kraken Technology, in marine defence, which aims not to be the sole lender but to crowd in private finance as well. The national security strategic investment fund, for start-up companies like the one we were talking about earlier, will invest £100 million by 2029-30. So, again, we have a full consensus and considerable action is taking place on the issues being raised by this Question today.