All Baroness Tyler of Enfield contributions to the Financial Services Act 2021

Wed 24th March 2021
3 interactions (202 words)

Financial Services Bill Debate

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Department: Leader of the House

Financial Services Bill

(Report stage)
Baroness Tyler of Enfield Excerpts
Wednesday 24th March 2021

(6 months, 3 weeks ago)

Lords Chamber

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Leader of the House
Baroness McIntosh of Hudnall Portrait The Deputy Speaker (Baroness McIntosh of Hudnall) (Lab)
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The noble Lord, Lord McNicol of West Kilbride, has withdrawn from the debate, so I call the next speaker, the noble Baroness, Lady Tyler of Enfield.

Baroness Tyler of Enfield Portrait Baroness Tyler of Enfield (LD) [V]
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My Lords, I am pleased to speak in support of Amendment 1. First, I must apologise to the House that I have been unable to participate in earlier stages of the Bill—a matter of real regret to me—but I have been following proceedings closely. I declare an interest as a member of the Financial Inclusion Commission and president of the Money Advice Trust.

I am very keen to support this amendment, which takes forward a very important recommendation from the report of the Financial Exclusion Select Committee, which I chaired, in 2017. That report recommended an expansion of the remit of the Financial Conduct Authority to include both a statutory duty to promote financial inclusion, and a statutory duty of care. In my view, the two are closely linked, but I will obviously focus now on this very important duty of care amendment.

At the Liaison Committee’s follow-up inquiry on financial exclusion, held only last week, powerful evidence was received from charities and others active in the sector that the commercial model only goes so far, and that legislation is required to put an obligation on banks and other financial service providers to provide appropriate services to customers and have proper regard to inclusion.

The regulatory principle at present that firms should treat customers fairly only, in my view, enshrines a weak duty to the consumer. This is further weakened by the principle in the Financial Services and Markets Act that consumers should take responsibility for their decisions. We have already heard examples today of how treating customers fairly does not remove conflicts of interest and or provide sufficient deterrents to firms from mis-selling products and services. Bluntly put, the consumer responsibility principle fails to take into account the imbalance in market power between firms and their customers. Overdraft charges are a good example. It was clear that these were disproportionately falling on more financially vulnerable customers, and banks could and should have known that and done something about it. They did not act by themselves so regulation was introduced. That is why I support a duty of care on firms to act in their customers’ best interests.