Financial Services and Markets Bill [HL]

Lord Mackinlay of Richborough Excerpts

Report stage
Monday 7th September 2026 Lords Chamber

[Baroness Lawlor (Con)]

My Lords, I support my noble friend Lady Neville-Rolfe’s amendment, which would leave out Clause 3. I very much agree with the noble, Lord Vaux, and other noble Lords who have spoken.

I support these amendments on constitutional grounds, because of the importance of the separation of powers and the role of Parliament in checking executive power, as my noble friend Lord Massey mentioned. How can we hold the Government to account if we have no knowledge of the powers proposed? Clause 3 allows the Treasury the power to make any regulations it considers appropriate. We have no knowledge of what they are. Clause 3 also gives the Treasury power to delegate powers to the FCA. It allows the FCA to “make rules”,

“amend an Act of Parliament”

or

“make different provision for different purposes”.

There are many concerns about the regulators. I will mention two. First, the regulators do not supervise or explore predictably in accordance with their own rules. You will find different interpretations given to their rules in their rulings. We must ensure that their decisions are consistent between firms which operate businesses of similar sizes. Secondly, formal decisions by the regulators do not necessarily include sufficient explanation to serve as precedents to allow the application of the relevant rules.

I am very pleased to welcome the Minister to the Front Bench and to say how much we miss the noble Lord, Lord Stockwood, but I wish the Minister well. It is on constitutional grounds that I ask him to think very carefully about these amendments.

[Lord Mackinlay of Richborough (Con)]

My Lords, I will say a couple of words on Amendment 10 in the name of my noble friend Lady Neville-Rolfe, which I fully support. The phrase:

“The Treasury may by regulations make such provision as they consider appropriate in connection with providing access to banking services”,


is not just wide; it is ocean-wide. It is far too wide, and it is without parliamentary consent or any investigation as to what our democratic processes consider to be the right level of banking services and access to banking across this country.

I will also say a few words on Amendment 8. I am very pleased that the noble Baroness, Lady Hoey, spoke about the Post Office. When I was a constituency MP, I faced—as anyone who lives in any part of this country faced—the closure of banking services, which always caused concern, particularly to older residents. I purposely kept my father, now deceased, away from digital banking because of the risk of scams and of those dodgy emails coming in. He was of perfectly sound mind and very capable, but he perhaps was not as scam aware as younger people are, so I wanted him a long way away from digital banking services—and why should he not stay away from digital banking services?

We were always told by the banks that were closing, “Fear not: we have a Post Office network for all that your constituents and customers need to do in terms of access to cash, banking cheques and that more standard stuff”. I do not know about other noble Lords, but I use digital banking—of course I do. However, when faced with cheques, which are a little bit rarer these days than they used to be, I struggle—for obvious reasons—to hold the camera and go up a bit, left a bit, right a bit, down a bit, get told, “It’s not all in the picture yet”, and press the button. I am sure we all share that frustration. Let me leave your Lordships with this about the Post Office: it is not the panacea of everything. Over the last few months, Lloyds Bank has stopped the use of Post Office services to its customers. I do not know why. This is a two-way street: at the banks’ discretion, they can have a relationship with the Post Office or not. For reasons known only to itself, Lloyds has decided not to use the services of the Post Office. For those reasons, I sympathise massively with the noble Lord, Lord Vaux, who now has to make a 100-mile round trip to a bank. No doubt there is a post office nearer than that, but if you are a Lloyds customer, hard luck: 100 miles.

This is not about the quantity and texture of tomato sauce in a can of beans, which might lead to officials and statutory instruments; these are fundamentals of life that everybody faces on a daily basis. To allow the extent of this power is a power too far. We see far too much Henry VIII in all legislation, not just from this Government but from the Government I was with over the years. There has been a temptation for this creep to happen, and it must not enter the Bill.

[Baroness Neville-Rolfe (Con)]

My Lords, I thank the noble Baroness, Lady Hoey, and my noble friends Lord Holmes and Lord Mackinlay, for reminding us of the value of post offices and the importance of banking hubs, especially in this ever-expanding digital world. There are serious issues here across the country.

I will speak to my Amendment 10, which would do a very simple thing: remove Clause 3 from the Bill. My argument for it is equally simple: Clause 3 contains no detail about what the Government intend to do. Instead, as the noble Baroness, Lady Kramer, explained, it grants Ministers extraordinarily broad powers, including the power to amend primary legislation on access to banking.

Once the Richard Lloyd review has concluded, the Government may legislate for whatever they subsequently decide is necessary. That could include anything on banking services, with huge implications for consumers, banks, other financial services and the high street. As the noble Lord, Lord Vaux, said, the Government will have the power to amend any Act of Parliament. That is a huge power grab by the Treasury and a very significant delegation of power to ask Parliament to approve in advance. We do not know what problems these powers will ultimately be used to address, what regulations the Government envisage making, or which Acts of Parliament they wish to amend. Yet Parliament is nevertheless now being asked to hand over the power to do all these things.

We should be very cautious about giving any Government powers of this breadth on the basis that they will decide later, in good faith, how they wish to use them. Parliament should not be asked to give Ministers carte blanche, particularly where the powers include the ability to amend primary legislation with minimal parliamentary scrutiny. That would set a terrible precedent.

The right course is straightforward: Clause 3 should come out. Once the Government have completed the review of access to banking and know what they wish to do, they can return to Parliament with legislation setting out the policy, the powers required to deliver it and the appropriate safeguards.

I am very grateful to the noble Baronesses, Lady Kramer and Lady Altmann, the noble Lord, Lord Vaux, and my noble friends Lord Massey, Lord Mackinlay and Lady Lawlor for supporting this amendment. The Minister has a problem: we have a lot of concern across this House, not only among those engaged on the Bill. The amendment reflects the concerns of the Secondary Legislation Scrutiny Committee, with its very expert membership. The committee has also advised that Clause 3 be removed; I say to the Minister that that is usually a killer argument. For these reasons, I do not believe that Clause 3 can remain in the Bill. When Amendment 10 is called, I intend to test the opinion of the House.

--- Later in debate ---

[Lord Holmes of Richmond (Con)]

My Lords, it is a pleasure to speak in this group and, indeed, to follow the noble Baroness, Lady Kramer. There is a thread which unites all the amendments in this group: they all make sense, they are all clear and the Government should accept them.

Before I talk about the amendments in my name and the ones I have signed, I echo the points made by the noble Baroness, Lady Kramer, around child trust funds and follow her in acknowledging the great work that the noble Lords, Lord Blunkett and Lord Young of Cookham, in particular have done for years on this issue. The words of the noble Lord, Lord Blunkett, are particularly pertinent to this point. He was the Minister in charge at the time, in a Labour Government, and he has said things on numerous occasions in this House along the lines that this was never the intention. If this was never intended government policy from a Labour Government, then we now have a Labour Government. Would this not be the ideal opportunity to stop this being government policy and to make the changes set out in this amendment—and, if not to make the changes along the lines of these words, for the department to come up with some words of its own to make this change?

A review is not the solution. We know the issues; they have been well set out over years. We have the opportunity, with this Bill, to resolve the issue and to make such a difference, not just to the 80,000 or so individuals who have those trust funds but to the hundreds of thousands of family members, friends and communities who are adversely affected by this current position for want of government action, which could make this change and, through that, make such a difference.

I turn to my amendments on financial inclusion and the role of the various regulators. The regulators have a lot of obligations put upon them. I suggest just this: how can we have, in the United Kingdom, a financial services regulator which does not have clear responsibility for financial inclusion and a clear obligation to report on what it has done to advance it, specifying in detail all those affected? Financial inclusion—and, indeed, the adverse, financial exclusion—is not just a matter of the same people having the same effects and suffering the same exclusion. It is specific to older people, to disabled people, to those in certain socioeconomic groups and to those in certain geographies. Specific solutions and a strategy which incorporates all that and puts it into an operational road map are required if we are to get behind solving financial inclusion.

We have a Financial Stability Board, but I argue that you cannot have financial stability if you do not have effective, sustainable financial inclusion. It may not be measured, because the adverse impacts are often in other government departments and other parts of the state. But be in no doubt: when you gross up all the costs, implications and consequences of financial exclusion, that is financial instability, not just for individuals but for communities and for our country.

The financial regulators, among others, should take a leading role to get after this pernicious problem of financial exclusion, which has dogged our society for decades, blighted lives, impacted individuals and had an impact, when all put together, on what the Government constantly—and rightly—go on about in terms of growth. Well, if they want growth then financially including individuals right across this country would be a fine place to start.

[Lord Mackinlay of Richborough (Con)]

My Lords, I have only put forward one amendment to this entire Bill, Amendment 70. I spoke at great length in Committee and highlighted then, as I will highlight now, that I am a chartered accountant and chartered tax adviser, and have conducted probate work over many years.

Let us just lay out a little the framework of where we got to in the provision of IHT423, because it will not be familiar to everyone in this House, I am sure. The IHT423 arrangement was first rolled out in 2003 and applied only to banks and building societies, or cash-based liquid accounts. It allowed for the breaking of the Catch-22 situation which executors find themselves in when they administer an estate. An estate is often in two parts, one of which is called the free estate, which is your cash and liquid investments. The IHT on that has to be paid six months after the end of the month of death. The other part of the estate is property and often unquoted securities, where there is a non-liquid market; an instalment basis can apply over 10 years. Given that the new rate of IHT interest chargeable on unpaid tax, following Rachel Reeves’s first Budget, is now 4% above base, so currently 7.75%, then no matter whether it is free estate, payable immediately, or part of the estate that can be paid over 10 years, given the 7.75% interest rate, which is truly penal, most executors would like to pay the tax as soon as they possibly can, and certainly by the due date of six months after the date of death.

In the old days, the IHT423 procedure, which is a means by which a financial institution can release funds before probate, was working, because very few estates were hit by IHT. But because of fiscal drag—I will admit as much as anybody else that a lot of it occurred over our Government—the levels of free amounts for IHT have remained unchanged since 2009, which has meant that more and more estates are dragged into the IHT pot. So the IHT423 arrangement, of getting funds out of an estate before probate can be obtained—as I say, a Catch-22 of chasing one’s tail of having to pay the tax before probate can be obtained—was widened to any types of investment. That was negotiated by HMRC in 2024, so fairly recently, in recognition of the huge number of estates that now face IHT.

UK Electricity Prices

Lord Mackinlay of Richborough Excerpts

Thursday 4th June 2026 Grand Committee

[Lord Mackinlay of Richborough (Con)]

My Lords, I put on record my registered interest as the director of the Global Warming Policy Foundation.

Let me restate what Labour’s manifesto said. It promised to get power bills down by £300. The latest price cap is £294 higher than in those lofty days of July 2024, and even that has been fiddled because the average has shrunk from the previous average, as households are using less because they simply cannot afford to use more. So, like for like, it would be even higher. We are now more than £600 adrift from that manifesto promise. I have always brought to politics the principle that a promise made is a promise to be kept, but that promise is simply not being kept.

I do not want to pre-empt what the Minister might say, but I guess it will be something along the lines of, “Gas is the problem”. The answer should be, “Thank heavens for gas, even better if it is domestically derived”. The price cap for gas is 5.74p. For electricity, it is 24.67p, so gas is just 20% of the price of electricity. As I attempt to heat my home, gas is infinitely preferable on price, as it is for many. Gas sets the price, which I am sure the Minister will say is an indication that the market no longer works. Gas is used as the last resort after renewables have failed to provide the required electricity and after interconnectors are at full tilt—and after the wood-burning fiasco that is the Drax formula of energy generation, using imported wood pellets that have come across the Atlantic. That is the sham of the net-zero fairy tale, as the noble Lord, Lord Lilley, said very clearly.

The nature of renewables is in their intermittencies. Some might say that I do not know very much, but I do know one thing: the sun does not shine at night, so solar does not work very well at night. At our latitude in the UK, somewhat north and with Atlantic-influenced weather, it is not particularly good even on the best of days. Wind is similarly unreliable. In every energy debate, I try to get in the wonderful German word Dunkelflaute, which refers to long periods, usually in the middle of winter, when there is an anticyclone, no wind and—obviously, in the winter—very little solar. As we bulk up on renewables, we simply bulk up on cost, as we are seeing on an annual basis. We have a choice: either create loads more renewables, then create storage systems so that we have enough energy to get us across those Dunkelflaute periods, or use batteries and elevated reservoirs for gravity hydro, or we consider hydrogen. All are abject failures on the thermodynamic pathway. They are all poor. They lose energy at every step and all are horribly expensive.

We are now trying to recreate a perfectly good grid around this low-density electricity production. We are making redundant the perfectly good grid that we used to serve our high-density, high-inertia power stations. That new grid requires steel, aluminium, copper, concrete and transformers, and it simply destroys our beautiful countryside—all to chase the pipe dream of net zero. Surely this Government are aware that more industry will close and household budgets will be further squeezed as we perpetuate high prices for energy. This madness must stop.

National Insurance Contributions (Employer Pensions Contributions) Bill

Lord Mackinlay of Richborough Excerpts

Report stage
Thursday 5th March 2026 Lords Chamber

If we are to be consistent within the canon of the tax system and avoid gaps, clearly a three-year carry-forward for salary sacrifice must come into it for equity and consistency. This is otherwise just another tax policy that is damaging the national economy and growth while benighting incentives for individual employees and the companies for which they work. It makes it more difficult to work hard and climb the ladder, and it makes it harder to save for a secure retirement; it harms incentives for employers to attract the best talent. It is the worst possible message at the worst possible time. I beg to move.

[Lord Mackinlay of Richborough (Con)]

My Lords, I am pleased to support my noble friend Lord Fuller, who has similarly reciprocated his enthusiasm for one of my amendments. Quite a few things come to mind in the amendment from my noble friend. One is the normality across other parts of the tax system. It is very normal, because life does not fit into a timeline of 6 April to 5 April every year. We could have a discussion about why we on earth we have 6 April to 5 April, but life does not fit within those dates completely cleanly. It changes on an annual basis: one might have a good year, then one might have a bad year. That is reflected in pension contributions for tax purposes. One is allowed to carry forward three years’ worth of unused allowance. Currently, £60,000 of pension contribution is allowable if relevant earnings are sufficient. In year 4, one could technically pay £240,000. It seems very normal, therefore, that we should apply a similar carry-forward of unused prior-year benefits, as my noble friend Lord Fuller has explained so eloquently.

The reason I have laid my Amendment 6 and Amendment 22, which is the mirror for Northern Ireland, is the total ambiguity that we heard in Committee last week. If this legislation has some flagship numbers and ideas, £2,000 comes to light as a key one. After the Minister was unable last week to assure the Committee whether this £2,000 was per employment or per employee, to manage for themselves, I have laid a very simple “beyond doubt” amendment so that we can perhaps flush out from the Minister what is intended. It will not be sufficient today merely to say that it will be sorted through regulation, advice and guidance in the future. We need this on the face of this Bill, because it is what the Bill is all about.

There are numerous thresholds in the national insurance regulations. We have the primary threshold; we have then the secondary thresholds; we have upper earnings limits; we have special thresholds for under-21s, for apprentices up to 25, for employees in freeports and for employers and employees in investment zones, and special exemptions for veterans. The employee need not worry about the complexity of those arrangements because they are all worked out by the employer on a per-employment basis. If an employee is in multiple employments, which is not uncommon these days—the circumstances might be, for example, that one was getting paid at the lower limit—the accumulation of benefits of national insurance payments, even though they may be at 0%, would apply across each of those employments, so, technically, no national insurance might be paid in certain circumstances. Surely, then, something similar will need to apply for these regulations and the £2,000 threshold. If it does not, we will have some extreme complications, which the Minister explained and said he wanted to avoid in respect of Amendment 1 on which we have just voted in favour. In opposing that amendment, his claim was about the complexity across employments and the employer not knowing whether the employee in question would be a basic rate taxpayer or a higher rate taxpayer. Similar complexity seems to be an ambiguity within this Bill, which I am now trying to solve. It surely must be per employment.

There is also an issue of GDPR. Why should a primary, secondary or tertiary employer have the right to know what an employee is earning elsewhere? That is a matter of secrecy, of privacy, of confidentiality and certainly of GDPR. If the idea within this legislation is that this is £2,000 per employee, I struggle to understand how the confidentiality that the employee is entitled to can possibly be allowed to stand. Perhaps this will come out in the rules and guidance later.

My amendment is one of ease, of getting this into the open now so that the complexity that would apply across multiple employments does not come to pass. We may otherwise be left with the grave fear that national insurance is going to become yet another tax. Many of us have thought for a long time that it really is a little bit of another tax, but its operation is very different, which makes it not a tax. We need to get this rounded down, because otherwise we will start to wonder whether the next stage, across all those different rates that I have described within the national insurance administration rules, is then going to apply for multiple employments, so national insurance becomes cumulative, a little bit like tax. That will be the fear: that to take national insurance as a new tax is the Government’s new plan.

As a chartered accountant and chartered tax adviser who is still practising, I could go on about this for some time. In brief, however, this legislation is a sledgehammer to crack a nut that does not even exist. As was so ably mentioned by the noble Lord, Lord Altrincham, why are we considering this today, on the basis of 51 replies out of 250,000 employers? Surely leave this a year or so, get a better sample—rather more than 51—so that we can base government ideas on some facts rather than on guesswork.

[Lord Leigh of Hurley (Con)]

My Lords, I shall speak principally to my Amendment 20 in respect of optional alternative arrangements. I thank the Minister for his letter of last night setting out the position on optional remuneration arrangements. I think it is fair to say that was already in the public domain and raises questions on second reading. The letter does not provide any illumination on interpretation of what an optional remuneration arrangement is in certain scenarios; we have discussed those scenarios at previous readings. Perhaps the one to highlight is collective bargaining. It is disappointing that there are not many Labour Peers here with a union background as there were earlier this afternoon.

Imagine a collective bargaining situation where there are two options on the table. First, a 5% pay increase with employer pension contributions staying at 8%, and, secondly, a 4% pay increase—lower than 5%—but with an increased employer pension contribution of 10%. If the workers take the latter option, is this an optional remuneration arrangement? I think, by the definitions given, that it is. Are the unions ready for this? Be assured that, if the Bill goes through, we will pursue this, and unions will find, to their horror, that their members are paying national insurance, which they did not think would be the case.

--- Later in debate ---

[Lord Livermore (Lab)]

Yes, I believe it will, because it is per job.

I will make three main points in response to the amendments from the noble Lord, Lord Fuller. First, the changes proposed would impact only a minority of those in receipt of salary sacrifice. The vast majority of people using salary sacrifice undertake traditional employment on stable contracts: 85% have been in their job for over a year, 88% work full-time and 97% have a permanent contract.

Secondly, although the cap we are introducing will be based on each employment, the Government are committed to continuing to engage with stakeholders as we design the detailed operation of the cap and provide for it in secondary legislation. That engagement will enable us to test how different approaches affect those with uneven salary patterns and ensure that the policy is introduced in the least burdensome way.

Thirdly, on the point made in Amendments 2 and 18 on the pensions annual allowance, that allowance limits the amount of pension savings that can benefit from tax relief in any given year. It is set at £60,000 for the vast majority of individuals. The purpose of the allowance is to deal with exceptional or uneven patterns of pension saving, including one-off spikes or fluctuations in defined benefit accrual. It is specifically not designed to deal with day-to-day saving. The allowance also relies on individuals holding accurate records across multiple years in order to track eligibility and usage. That may be manageable in a pensions tax context, but it would be wholly unsuitable for a national insurance cap that must operate through real-time payroll systems. This also applies to other mechanisms proposed by these amendments that look to roll an allowance over multiple tax years.

For these reasons, the Government believe that introducing a carryover in this Bill would create significant complexity, and consequently administrative burdens, for individuals, employers and payroll providers.

I turn now to Amendments 4 and 20, tabled by the noble Lord, Lord Leigh of Hurley, and noble Baroness, Lady Altmann. I begin by setting out clearly that these provisions operate squarely within the existing framework of the optional remuneration arrangements, or OpRA rules, introduced in 2017. The Bill relies on that existing statutory concept rather than creating a new or expanded test. As a result, its reach is already constrained by well-understood boundaries that are routinely applied in both tax and national insurance contexts. Under that framework, the legislation is engaged only where remuneration is structured in a way that offers the employee a genuine alternative, typically between receiving cash earnings and receiving a pension contribution. It is that element of choice which brings an arrangement within scope. Where no such alternative is presented, for example, where pension contributions are made as a fixed and non-negotiable part of the remuneration package, those arrangements simply do not meet the statutory definition.

[Lord Mackinlay of Richborough (Con)]

This is an important point in many ways. The Minister will be aware that within an owner-managed director business, the director has absolute discretion about how he or she may take their overall package, whether that is dividends, usual PAYE employment or, quite normally, the company making a pension contribution. Would such a situation fall within these rules because the director is effectively the be-all and end-all making that option and discretion themselves? No other party is deciding whether thou shalt have this or that. Can the Minister give his early impressions about how that situation may be dealt with?

[Lord Livermore (Lab)]

It sounds to me, although I realise it is an odd phrase to use because you are negotiating with yourself, that that is established as a negotiated contract and, therefore, that is not an option that arises for you after that contract is negotiated. I think that in the example the noble Lord gives it would not be, but obviously that will be set out very clearly in guidance going forward.

The Government’s view is that the Bill already draws the appropriate and proportionate boundary. It addresses arrangements involving a choice between cash and pension provision, while leaving ordinary, non-optional employer pension contributions wholly outside scope.