Financial Services and Markets Bill [Lords]

Gareth Davies Excerpts

Tuesday 10th November 2026 Commons Chamber

[Gareth Davies (Grantham and Bourne) (Con)]

It is a great pleasure to close this debate on behalf of the official Opposition, and to follow on from my very good friend, the shadow Economic Secretary—my hon. Friend the Member for Wyre Forest (Mark Garnier)—who has done excellent work both in this Chamber and behind the scenes to engage extensively with the industry. Indeed, I am sure there is not a lunch table in the City of London that has not been graced by my hon. Friend—all, of course, in the service of his great country.

I draw the House’s attention to my entry in the Register of Members’ Financial Interests, particularly my long career in asset management, my active involvement in the industry going back many years, and my current chairmanship of the APPG for blockchain, which is relevant to this Bill.

It has been a privilege to be joined by many Members from across the House who clearly have extensive industry experience. I firmly believe, as I have for a long time, that we need more people in Parliament who have worked specifically in this sector, and who understand its importance and its power to help and influence our economy and our communities.

I thank all Members from across the House for their contributions to the debate, but I will name a few in particular. The Chairman of the Treasury Committee, the hon. Member for Hackney South and Shoreditch (Dame Meg Hillier) who is not currently in her place, provided a typically detailed and very thoughtful contribution. She expressed concerns about whether the pendulum is swinging away from consumer protection, as well as outlining her concerns about the reforms to the FOS. I do not agree necessarily with everything she said, but the House is better for the scrutiny that she and her Committee provide.

Let me pay tribute to our country’s longest-serving Economic Secretary, my right hon. Friend the Member for Salisbury (John Glen), who moved with grace from museums to MiFID back in the day. He spoke about his mixed views of the FOS. He acknowledged that it is—in his words—an unreliable path to resolution, and helpfully warned us that we need to consider the challenges posed by AI to the financial services sector.

I congratulate the hon. Member for Peterborough (Andrew Pakes) on his appointment as the Government’s co-operatives and mutuals champion. I have to say it is an appointment that passed me by, but I very much welcome it. One person who has always been a champion of co-operatives and mutuals is, of course, the hon. Member for Harrow West (Gareth Thomas), who spoke of the high cost and burden of credit, especially for those in poverty.

We on the Conservative side of the House want sensible deregulation. We want less bureaucracy in our system. We want lower burdens and more growth. Where the Bill does that, we will welcome it and we will help make it happen. The Chancellor was right in his opening remarks when he said that it is important to recognise the cross-party work that has gone on already with the Bill. He rightly echoed the views of those us on the Conservative Benches when it was said in the other place that the Bill moves us all in the right direction. Having said that—I am loath to depart from the happy and collegiate atmosphere of the debate so far—I am reminded of what Disraeli once said:

“No Government can be long secure without a formidable Opposition.”

So, if Members will forgive me, I have a job to do tonight. In certain areas, as my hon. Friend the Member for Wyre Forest set out, we believe the Bill does not go far enough. I would like to highlight two areas in particular.

First, on digital assets, the United States has legislated for stablecoin. South Korea and even the European Union have their own regimes. Our competitors globally are moving ahead. That matters because stablecoins could revolutionise the way we pay for goods and services. Blockchain technologies could transform the way we interact with companies and the state. The Bill was our chance to set out a more advanced vision and policy agenda in those areas, but the Government chose not to.

Secondly, ringfencing forces our largest banks to separate retail banking from the rest of their business. That was right after the financial crisis, but the world has now moved on and our resolution regime has moved on with it, as my right hon. Friend the Member for Salisbury pointed out. If we look at our competitors from New York, Amsterdam, Frankfurt and Paris, not one imposes ringfencing like ours—not one. We believe that we should not either. The Bill gives a little and takes a little, but there is a simpler option. If true deregulation is the aim, we believe the Government should adopt the Conservatives’ plan to scrap ringfencing altogether.

No matter how well intentioned the measures in the Bill are—and I believe they are very well intended— I am afraid that I must point out that they are being brought in alongside a barrage of anti-growth taxation and regulatory burdens imposed on our financial services sector and British business more widely. This afternoon, the Chancellor praised Britain’s financial services sector, and I welcome his words; 13 days ago, he spoke similar words but then doubled the bank surcharge—a £1.5 billion hit to the very companies and people he says he supports.

It is all about choice. The Chancellor could have chosen to cut welfare, which is spiralling above £400 billion, but he chose the easier route for a Labour Chancellor, as my right hon. Friend the Member for Beverley and Holderness (Graham Stuart) said, and decided to tax one of our country’s most-important sectors. Be in no doubt that this will have an impact, and specifically, I fear it will lead to more bank branch closures on our high streets, which none of us in this House wants.

I have no doubt that the Economic Secretary will shortly reference banking hubs in her wind-up, speaking with pride about how the Government are rolling out more. She is right to welcome them—I welcome them too—but she should also be clear about who pays for them. Banking hubs are funded by the banks—every one of them. Cash Access UK is funded by the banks. The mobile libraries and the pop-ups in our communities are funded by the banks. We cannot celebrate banking hubs on a Tuesday and then the next day tax the companies that pay for them. I am in favour of banking hubs, but I would much rather the branches not be closed in the first place.

To her credit, the Economic Secretary understands the sector. She is respected in the City and she understands the importance of banks to our high streets, which makes it all the more disappointing for the sector that she did not act to prevent the latest tax raid. The high street bank tax is just one example, but we also have the hike to national insurance and higher taxes on carried interest. That all results in more jobs put at risk, more high street banks closing and investment and innovation heading elsewhere rather than contributing to growth here in Britain.

For the most part, the Conservatives of course welcome the Bill, and we have been clear about that. Sadly, however, it will do little to overcome the barriers and burdens that this Government have inflicted on the financial services sector over the past two years. Warm words cannot undo cold taxes. The world’s capital has a choice about where it goes, and the Government have not acted in our favour. The Chancellor has a choice: he can back the sector or tax it until it becomes uncompetitive, but he simply cannot do both.