Digital Markets, Competition and Consumers Bill

Baroness Sheehan Excerpts

Committee stage
Wednesday 7th February 2024 Grand Committee

I will not be pressing my amendment at this stage, but I hope I have convinced the Minister that there is something worth closer examination here. The current situation is unjustifiable and unsustainable. I would be grateful for a meeting with the Minister, although I am happy to be referred onwards to Treasury Ministers, where the power to resolve this impasse really sits. I look forward to his response to the questions that I have asked.

[Baroness Sheehan (LD)]

My Lords, I thank the noble Baroness, Lady Wheatcroft, for tabling this amendment, to which I have added my name, as I did to a similar amendment that she tabled to the Financial Services and Markets Bill. I apologise to the Committee for not being available to speak at Second Reading.

I put my name to this amendment because votes reporting is an important issue of openness and transparency that underpins good stewardship and good governance, without which the road to net zero and our nature goals becomes that much more chaotic. At this point I should declare my interest as a director of Peers for the Planet.

As things currently stand, at AGMs investment managers vote on behalf of the pension funds they manage on issues that pension savers may have concerns about. Some, if not most, savers would prefer to know what their money is signed up to, and they cannot easily find out what their money is supporting, nor can pension schemes. This is because there is zero meaningful onus on investment managers to report their actions in a full, timely and easily digestible format, and that is important as the noble Baroness, Lady Wheatcroft, highlighted. The outcome is that pension schemes do not have the information to inform their savers, and it is for this reason that the amendment has support from the Association of Member Nominated Trustees, which has £1 trillion of assets under management.

In the US, it is mandatory. There, voting at AGMs is a key tool in ensuring good corporate governance, good long-term investor returns and good economic outcomes more broadly. What assessment have the Government made of America’s way of including people in decisions made in their name about their money? Why is it that in a relatively light-touch regime that is doable, but here it is not? Why is it that UK investment managers can comply with US rules when they operate in the US but find it too burdensome to do it here? The Government say that they see the need for action, but we see no action year after year. This amendment would enable pension schemes and ultimately pension savers more effectively to hold their investment managers to account for action on climate and nature, as well as on other matters.

I fully support the noble Baroness, Lady Wheatcroft, in what she is aiming to do, and I add the support of the noble Baroness, Lady Altmann, who has put her name to the amendment. She asked me to convey her apologies to the Committee for not being present; she is not feeling well enough to have stayed to the current late hour.

I hope that once we hear from the Labour Party we will be able to say that the amendment has cross-party support.

[Lord Lucas (Con)]

My Lords, I very much support this amendment. We are a capitalist society, and capitalism relies on a return on capital being provided to the people who provide the capital. In that sense, our capital has become very concentrated in institutional hands. Decisions are taken by a cadre of fund managers, of whom I used to be one—well-paid people who thoroughly approve of people in industries being well paid, particularly senior managers. More and more of the profits of industry are diverted to the people running them and to the people running the investments in them, and the amount getting through to the individual investor becomes limited.

What is the force in any other direction? What is the motivation for people running a company to do more than please their fund managers? They do not have to have the interest of the individual owners at the end of this. In the end, this results in bad decisions being taken on the allocation of capital and on the flow of money within a corporation. These will not be in the interests of paying the pensions of the people whose money is invested in these companies.

Subsidy Control Bill

Baroness Sheehan Excerpts

2nd reading
Wednesday 19th January 2022 Lords Chamber

[Baroness Sheehan (LD)]

My Lords, the Bill raises a number of serious questions, for example, around lower transparency—as articulated in the Delegated Powers Committee’s report—around the strategy that will guide these subsidies, around what a “subsidy scheme” or a “streamlined subsidy scheme” is and around what is meant by “subsidy of interest” and “subsidy of particular interest”. Why are these terms not defined on the face of the Bill? As a significant example of the UK’s post-Brexit landscape, these details in the Bill are essential, so I support all noble Lords who have voiced their concerns on these issues.

It is not enough to have a line in the Explanatory Notes saying,

“The Government aims to deliver ... UK ... priorities such as levelling up and achieving net zero”,


especially because we are now without an industrial strategy, which for inexplicable reasons was done away with early last year. The report of the Commons BEIS Committee last June on the scrapping of the industrial strategy was scathing, calling the axing of the ISC, the Industrial Strategy Council, “a retrograde step”, removing valuable independent scrutiny, insight and expertise.

Business is crying out for long-term consistency and clarity, but instead it is presented with the nebulous “plan for growth”, which does nothing to address how policy statements will be shaped to meet the country’s objectives and provides no expert oversight on what Ministers have actually been able to deliver. This Bill could have put some meat on the bones of the Government’s stated policy aims and given a sense of which sectors will be prioritised to achieve those aims, but they have failed to grasp this opportunity.

I am going to focus on the Government’s aim of achieving net zero. The fact is that, despite the stated strategic approach, there are no climate provisions in the Bill that set out a narrative on how this will be achieved. The Government could have incorporated a robust and systemic approach to climate change mitigation and adaptation, as well as to their “30 by 30” pledge, the aim of which is to protect and conserve 30% of the world’s land and marine ecosystems by 2030 which, by the way, is conspicuously missing from their stated aims. They opted not to do this. Therefore, will the Minister address how the regime would facilitate the future-proofing of industries and promote growth and employment in new, green sectors to ensure a resilient and competitive economy?

It is vital that the overarching subsidies regime is aligned with the country’s climate and wider environmental goals and addresses market and systemic failures. However, this Bill gives us no clue as to how they will do that. Perhaps the Minister can enlighten us. How, for example, will they incentivise investment to help to scale up innovative, low-carbon technologies, industries and solutions across the economy, which will require measures that go beyond R&D investment?

My final point relates to the COP 26 Glasgow climate pact, which included an agreement to accelerate efforts towards the phase-out of inefficient fossil-fuel subsidies. The Government currently subsidise the production and use of fossil fuels in a number of ways, including through tax breaks for high-carbon activities. As an example, in 2019, for each barrel of oil, the UK received $1.72 in tax. In Norway, that sum was $21.35. The Government really need to get a grip on what is happening with regard to advantages that are conferred on the oil and gas industry. Do the Government intend to take a more robust approach to ending subsidies for fossil fuels?