Financial Services and Markets Bill [Lords]

John Healey Excerpts

Tuesday 10th November 2026 Commons Chamber

[The Chancellor of the Exchequer (John Healey)]

I beg to move, That the Bill be now read a Second time.

Two weeks ago at this Dispatch Box, I set out a Budget to provide breathing space now and fresh hope for the future. It was a Budget to steer Britain through the global economic storms and a Budget built on fiscal discipline, which now more than ever underwrites every promise that this Government make to the British people. But as I said then, the only way for British families and for Britain’s finances to be secure in the long term is to have an economy that is growing more strongly. That means we must raise investment, back wealth creation, support innovation and help to create good jobs in all parts of the UK.

I welcome the constructive spirit in which the Opposition in the other place have approached this Bill, and let me also pay tribute to our Treasury Minister, Lord Pitt-Watson, for the way in which he led the Bill in the upper House and for the expertise he brought to the debates. It was during those debates that the Opposition Front Bench declared that this Bill was

“moving in the right direction”.—[Official Report, House of Lords, 8 July 2026; Vol. 858, c. GC122.]

I hope we can continue in this House in a similar spirit of cross-party support.

Let us take the example of child trust funds. Back in 2003, I was with the then Chancellor, Gordon Brown, when he promised that the funds would

“enable all young people to have more of the choices that were once available only to some.”—[Official Report, 9 April 2003; Vol. 403, c. 286.]

Around 6.3 million of these accounts were then opened, but then, regrettably, they were closed in 2011 when the child trust fund was abolished under the Conservative-led coalition. For some families, accessing that money since has not been straightforward. Where a young person lacks the mental capacity to manage their own financial affairs, their parents or carers generally have to obtain formal legal authority through the Court of Protection before they can access a matured child trust fund on their behalf. That can be lengthy and confusing, and up to 126,000 young people have struggled to get and benefit from the money that was set aside for them. I am grateful to the right hon. Member for Kingston and Surbiton (Ed Davey) and the hon. Member for Horsham (John Milne)—who I had expected to see in this place, but he is not—and others for their work on highlighting this issue. The Government have listened, and we will amend this Bill in Committee to deal with this frustration and unfairness.

There is also strong cross-party recognition that the financial services sector is a growth powerhouse for Britain, not only in London but across the rest of the UK, where nearly two thirds of the jobs in this sector are based: in Leeds, Manchester and Birmingham, for example. In Scotland, 94,000 people work in financial services, alongside 36,000 in Wales and 20,000 in Northern Ireland. This one sector generates 8% of the UK’s entire economic output, exports to all corners of the globe, and every year backs thousands of British firms to start and succeed here in Britain.

[Jim Shannon (Strangford) (DUP)]

In relation to Belfast, the Chancellor mentions those 20,000 jobs. The sector gives young people in Northern Ireland an opportunity to gain an exceptional job with good remuneration, and to travel, should the opportunity arise, within their companies. What has he done to increase the number of jobs and give more such opportunities to young people in Northern Ireland in the future?

[John Healey]

The short answer is more investment—encouraged by the UK Government, but decided, often, by the financial services sector itself. My right hon. and learned Friend the Economic Secretary was in Belfast recently to mark the opening of new Bank of America offices—a sign to the hon. Gentleman, I hope, of a flourishing financial services sector in Northern Ireland, and one with a good, strong future.

[Graham Stuart (Beverley and Holderness) (Con)]

Has the Chancellor made an assessment of the investment and wider economic benefits that would arise from these deregulatory measures? If so, can he share it now? If not now, will he publish it and share it with the House?

[John Healey]

We have indeed. As the right hon. Gentleman would expect, an economic impact assessment, which he may see in the Vote Office, has been published alongside the Bill. In rough terms—this is probably a conservative estimate—we think that the benefit of the measures in the Bill as it stands will have a value of about £1.6 billion over the next 10 years.

The UK is home not only to some of the deepest and most liquid capital markets in the world, but to some of the largest global banks, the world’s premier insurance market—Lloyd’s of London—and huge digital success stories such as Revolut and Wise. That is why I will always talk up the immense contribution that the sector makes to our economy and to the services that underpin everyday life: funding for the small firm looking to expand, mortgage finance for the first-time buyer and investment for the saver planning for the future. That comes not only from our world-leading banks, insurers and asset managers, but from our mutuals, building societies and credit unions, which are all essential parts of the UK financial system. Just last week, I was pleased to appoint my hon. Friend the Member for Peterborough (Andrew Pakes) as the first ever co-operatives and mutuals champion in Government. He will help to fulfil our aim of doubling the size of the co-operative and mutual sector.

[Chris Vince (Harlow) (Lab/Co-op)]

I was remiss not to mention my Harlow constituency earlier, so I will make up for that now. Will the Chancellor join me in paying tribute to Harlowsave, a brilliant credit union in my constituency of Harlow—I think that is three times—which supports residents in Harlow to save over the long and medium term?

[John Healey]

I had not come across the Harlowsave Credit Union, but I am sure that my hon. Friend will be encouraged by the provisions in the Bill, and will tell the members and trustees of the credit union about them. Its provisions, as well as those we will introduce in Committee, are designed to reinforce the strength of credit unions, their ability to extend membership and the common bond that binds them.

[Gareth Thomas (Harrow West) (Lab/Co-op)]

My right hon. Friend rightly mentions our commitment to double the size of the co-op and mutual sector. One key measure that is needed to achieve that aim is allowing financial co-operatives and mutuals to have better access to our capital markets. I understand that the Law Commission has completed the work to prepare the legislation to enable that to happen, but those proposals are yet to emerge into the sunlight. Does he have any indication of when those proposals might be made public?

[John Healey]

I cannot tell my hon. Friend exactly when our response will be brought into the sunlight and made public, as he puts it, but I can reassure him that we have followed closely the Law Commission’s work. My right hon. and learned Friend the Economic Secretary has the commission’s report, and we are giving it due consideration, as my hon. Friend would hope and expect.

Britain is in the midst of global economic storms and uncertainties. The conflict in Iran is driving up energy costs, inflation and the cost of borrowing. At the Budget, I rejected broad-based tax rises—keeping the promises made in our manifesto—and crude cuts to public services, but there were difficult decisions to meet our fiscal discipline, to fully fund the new policies I set out, and to provide some breathing space for families. Those included asking banks, through the bank surcharge, to help to pay for the energy help for households this winter. This is time limited and will end in March 2028. The time limitation is set out in the Finance Bill.

The ask that we made of banks at the Budget goes hand in hand with support. On my second full day as Chancellor, I convened a roundtable discussion with leading executives in the City, because I wanted to confirm my fullest commitment to the Government’s financial services and growth strategy and to this Bill.

[Michelle Scrogham (Barrow and Furness) (Lab)]

I welcome the commitment to make changes to the financial sector, but I have deepening concerns over security and cyber-attacks. The banks’ rush to go digital and pull out of our high streets has left a huge vulnerability for people, particularly in rural areas. What work is being done to ensure that cash services and face-to-face services remain in our towns and high streets, given that such attacks may occur in future?

[John Healey]

As a very active member of the Defence Committee, my hon. Friend probably knows better than many about the threats to our computer and cyber-systems from cyber-attacks. She will be aware that Richard Lloyd has recently completed a report on access to banking, which the Government have just received. In Committee, we will look to reinsert a provision that will allow us to respond to the recommendations of Richard Lloyd’s report. I aim to publish that report and the Government’s response shortly.

The Bill does four key things. First, it streamlines regulation and reduces administrative burdens on business while maintaining high standards.

[Rupert Lowe (Great Yarmouth) (Restore Britain)]

Why does the Chancellor not go the whole hog by, rather than reforming regulation, scrapping the Financial Conduct Authority and the Prudential Regulation Authority, which since 2000 have held back London as a risk-taking centre? That would allow people to return to the concept of caveat emptor, which is what our success was built on, and release the UK economy from the manacles that are holding it back.

[John Healey]

I think that most would regard the total removal of consumer protection or regulation as a reckless move. I hope the hon. Gentleman accepts that the Bill will reduce and remove unnecessary and duplicative regulation. I also hope that, where he has constructive, practical suggestions to offer, he will offer them as part of the House’s scrutiny of the Bill.

[Vikki Slade (Mid Dorset and North Poole) (LD)]

I am grateful to the Chancellor for talking about consumer protection, but one group of consumers is missing from the Bill: people who have been victims of economic abuse. They are trapped with financial products through no market failure or fault of their own, even if they want to move to something that is cheaper and therefore a smaller risk to their joint borrower. The Bill does not do anything for those people. Will the Chancellor consider some amendments to help them?

[John Healey]

If the hon. Lady wishes to table amendments for debate and consideration, she should please do so. If she looks at the detail of the financial inclusion strategy that we have published, with some of the measures now being put in place, she will see a recognition of concern for that group of people and some of the measures that may help in the future.

I will return to the four headline purposes and definitions of the content of the Bill, the first of which is the streamlining of regulation, and the second is allowing credit unions to expand, enabling more people to benefit from membership. Thirdly, the Bill modernises consumer protections and access to redress. Fourthly, it supports business lending and investment here in Britain. I am grateful that the Bill has received support from across the sector. UK Finance has confirmed that the Bill supports

“growth and competitiveness while strengthening consumer outcomes”.

TheCityUK has reasonably and rightly said, “Get on with it” and that the priority now needs to be on fully delivering these reforms. Before I move on, I want to pay tribute to my right hon. and learned Friend the Economic Secretary to the Treasury for all her work in developing the policy in the Bill and on the issues ranging from financial inclusion to the digitisation of markets.

Let me take those four major sections briefly in turn. First, on regulation, good growth demands an active state that is willing to deliver better regulation and quicker decisions. The Bill does that by updating the regulatory framework to support innovation, speed up decision making and streamline processes that at the moment add little value. It does so in five ways. First, it reduces the number of regulators that firms need to engage with by abolishing the Payment Systems Regulator and consolidating its functions within the Financial Conduct Authority. Secondly, it speeds up regulators’ decision making with ambitious new deadlines, including when deciding to authorise a new firm. The Bill also creates a new provisional licence regime to support innovative new firms while they apply for full authorisation. Thirdly, it strengthens oversight of the regulators. The Financial Conduct Authority and the Prudential Regulation Authority will now be required to publish long-term strategies, so that regulated firms and consumers can better understand their priorities, and Government and Parliament can better hold them to account against delivery.

[Sam Carling (North West Cambridgeshire) (Lab)]

The Chancellor mentioned the importance of widening access to lending, which I value very much. On the topic he is talking about, does he agree that it would be great to see in some of the new strategies brought forward by the regulators a greater focus on access to credit for people who are perhaps disadvantaged, who have thin credit files or who have had adverse experiences, such as domestic abuse, as the hon. Member for Mid Dorset and North Poole (Vikki Slade) mentioned, such that we can get them back on to the credit ladder?

[John Healey]

One of the things I like about my hon. Friend is that he is a regular attendee of a range of different debates in this Chamber, and I welcome him here tonight. He may not have had a chance to study it, so after this debate I will send him our financial inclusion strategy, in which he, like the hon. Member for Mid Dorset and North Poole (Vikki Slade), will see set out some of the points of concern he raises. If not, then either I or my right hon. and learned Friend the Economic Secretary would be happy to discuss it with him further.

[Kirsty Blackman (Aberdeen North) (SNP)]

Will the Chancellor give way?

[John Healey]

Of course, and then I will make a bit more progress.

[Kirsty Blackman]

The financial inclusion strategy does indeed highlight the problems and areas where improvements could be made. However, the actual strategies for doing that, and the things that actually need to be put in place to ensure better access to credit across the board, for example, are not quite solid enough. Could the Chancellor commit to looking again at how to improve fair access to credit for everybody?

[John Healey]

As my right hon. and learned Friend the Economic Secretary has just said to me, the strategy and action plan are relatively new. In many ways—the hon. Lady will know this from her own nationalist Government in Scotland—government is always, in some ways, a work in progress, and where there are improvements and strengthening measures that we can take, we are certainly willing to consider those.

The fourth measure on deregulation is that the Bill will give the Bank of England a new secondary innovation objective when regulating systemic payment systems and digital settlement asset service providers. This will ensure that the UK remains at the forefront of innovation in payments and digital finance. Fifthly, it reforms the senior managers and certification regime, retaining its core guardrails while saving firms an estimated £240 million a year.

Turning to the second part of the Bill, credit unions expand access to affordable credit, encourage saving and strengthen financial resilience in communities right across Britain. At the heart of a credit union is its common bond—the connection that brings together its members, be that place, employer or sometimes occupation. Yet in too many areas, the rules that govern how credit unions operate have simply not kept pace with the way people live and work today. In many cases, moving home, retiring or studying somewhere can stand in the way of someone benefiting from credit union membership. The Bill therefore ensures that credit unions will be able to admit a wider range of relatives, to deal with retirement and to accommodate students, even when they do not live or work in the same place as they study.

I turn to the third part of the Bill: consumer protections and redress. The Consumer Credit Act 1974 was designed and passed over 50 years ago. Research from the debt charity StepChange shows that parts of the Act can be harmful, resulting in many consumers feeling scared, depressed and overwhelmed by what they face. In part, that is because currently much of the information sent to consumers about their credit product is tightly specified by this 50-year-old Act—down in some cases to specific words and even which letters must be capitalised in the advice given. It requires the reading age of an undergraduate, when at least one in seven adults have the literacy skills expected of a nine to 11-year-old. The Bill repeals many of the prescriptive provisions in the 1974 Act, enabling the FCA to develop new rules around the information that consumers will receive, allowing this to be more flexible and tailored to the particular needs of different consumers.

[Josh Babarinde (Eastbourne) (LD)]

I have raised previously in this Chamber the situation of my constituent Pam Beevers, who had a cheque cashed in and misread, which meant she lost out on £125,000—down to a bank error. We are talking about punctuation being the real killer. What is in this Bill to help constituents such as Pam to find redress when a bank admits an error and the ombudsman says there is a problem, but they fail to properly compensate people?

[John Healey]

If the hon. Member would write to me or the Economic Secretary, she would be willing to take another look at that. I was not quite certain whether he was saying that Ms Beevers’s cheque was misread by a human or a machine, but it sounds in any case like there is an established error and that some form of redress and recognition is required. If he writes to us with the details, we will certainly take a look at it.

Alongside these measures, we are reforming the legal framework governing the Financial Ombudsman Service to improve the consistency and predictability of its decision making. Currently, decisions made by the ombudsman are not required to align with FCA rules. That has the potential to cause, and indeed has caused, delays in redress for consumers. It has caused uncertainty among firms on what standards they should apply. The Bill takes measures to ensure that all decisions taken by the ombudsman apply FCA rules, including the FCA consumer duty. That should deliver a more consistent set of standards across the board, both for firms and for consumers.

[Dr Sam Rushworth (Bishop Auckland) (Lab)]

The FCA failed to protect many people—mostly pensioners—who invested in legal investment scams. Does the Chancellor feel that the FCA’s current mandate and remit is broad enough to protect people from scams such as London Capital & Finance in future?

[John Healey]

The straight answer to my hon. Friend is, yes, I do regard it as sufficient. If he has a stronger case to make to the contrary, I encourage him to make it. To answer his question directly, as things stand, I do regard it as sufficiently robust and strong.

[Dame Meg Hillier (Hackney South and Shoreditch) (Lab/Co-op)]

The Financial Ombudsman Service is much loved by consumers because it provides an impartial fairness test. The Chancellor can correct me if I am misunderstanding this, but under the new proposed rules there is a presumption that the firm is right, and the consumer therefore has to go through more hoops to raise a concern. Is that really fair on consumers?

[John Healey]

My hon. Friend is so expert and well read in this area. In fact, her assertion about an assumption that the firm is always right is incorrect. At the heart of what is proposed in the Bill is the consumer duty of the FCA, with a single, clear set of standards that firms must meet and that consumers who feel their service has fallen short are able to use as reference for challenge, redress and appeal to the ombudsman. Instead of the ombudsman having its own set of standards and criteria and the FCA having its own, which has led to confusion and inconsistency, we will have a single set of standards that are clear and consistent for both the consumer and firms.

Turning to the fourth and final area, we must do more to increase lending and encourage firms to start and succeed here in Britain, as I did with measures in the Budget.

[Graham Stuart]

Will the Chancellor give way?

[John Healey]

The right hon. Gentleman has had one go. Quite a few Members wish to speak, and it is beginning to get into the evening, so I am going to make a bit more progress and let others come in. But if he wants to sit on the Bill Committee, he would be welcome— I am sure the Whips on his Front Bench will have noticed his keen interest in the debate. If that does not put him off, I don’t know what will!

The ringfencing regime requires major banks to separate their UK retail banking services from riskier investment banking activities. This regime has strengthened the resilience of UK retail banking since the financial crisis, but the independent Skeoch review identified areas where the ringfencing regime and the resolution regime could be better aligned. That is why we are introducing a series of reforms, such as the new growth allowance, to give ringfenced banks greater flexibility to provide growing businesses with the support they need as they grow. The measures in the Bill go a stage further, including allowing the Prudential Regulation Authority to remove unnecessary duplication in its rules, and we are introducing new powers to expand the commercial credit data-sharing scheme.

[Graham Stuart]

In lieu of other people seeking to intervene, would the Chancellor allow me to?

--- Later in debate ---

[John Healey]

The right hon. Gentleman makes an irresistible plea.

[Graham Stuart]

I am grateful to the Chancellor, who is being typically generous. On the subject of lending, he will be aware that the doubling of the bank tax, which was red meat for his Back Benchers, will raise £1.5 billion in just 15 months. The regulatory rules suggest that that could reduce the lending pot by a maximum of perhaps £25 billion. Is it not fair to say that that dwarfs any of the benefits of this Bill? My final question is, can he commit that it will be 15 months and 15 months only before this credit-reducing measure is brought back again?

[John Healey]

Two questions in one intervention—that really will be the last time I give way to the right hon. Gentleman. The answer to his first question is that, as I have said already, this is time limited. It will end in March 2028. If he looks at clause 7 of the Finance Bill, he will see that set out.

On the question of hitting investment, I have to tell the right hon. Gentleman that none of the discussions I have had with banking and financial sector leaders before or subsequent to the Budget suggests they want to do anything other than raise their levels of investment into British firms. I understand the reaction to and view of the temporary 3% additional surcharge that I put on banks to help pay for household energy help this winter. I certainly would not describe it as welcomed by the banks. I do believe it is manageable. I do not believe, and I have seen no evidence, that it is going to hit the levels of investment or the commitment they make to this country. As I said earlier, I will miss no opportunity to talk up the importance of the financial services sector to the UK.

[John Glen (Salisbury) (Con)]

Will the Chancellor give way?

[John Healey]

Given that the right hon. Gentleman has served with such distinction in the Cabinet Office and the Treasury, I will give way one last time.

[John Glen]

I am extremely grateful. Of course, one way of mitigating the anxieties of the banking sector is to ensure that the capital requirements directed by the PRA are significantly reformed. I understand from what the Chancellor has said that there is provision for that possibility, but what instinct does he have about the space that exists for the PRA to move decisively to signal to the banks that there is room for more capital to be lent by British banks in London, as a way of countering the concerns about the tax?

[John Healey]

I think I can do better than answer about my instinct on the scope for that. I would point the right hon. Gentleman to the measures in the Bill. I would also point him to my exchange of letters with the Governor of the Bank of England about capital requirements and the expectation to see material change, bearing in mind the importance of the internationally competitive position of UK banks. He will know that the Bank is undertaking its own review of this area at the moment, and I hope we will get the results and any consequent changes before too long.

Finally, I have spoken about the importance of maintaining the UK’s pre-eminent position as a global financial centre. That requires maintaining the very highest standards in tackling illicit finance. We have in the UK a strong set of anti-money laundering rules, but the supervision of compliance with those rules is currently fragmented and inconsistent. Last year, the Government announced that the Financial Conduct Authority will take on responsibility for the anti-money laundering supervision of legal and accounting service providers, as well as trust and company service providers.

The Bill enables the FCA to take on those new responsibilities, meaning that we can reduce the number of bodies that have a role in anti-money laundering supervision from 25 to three. Additionally, as financial crime increasingly involves cryptoassets held outside the UK, the Bill will enable the Government to update existing cryptoasset recovery powers through secondary legislation. [Interruption.] Madam Deputy Speaker, you are encouraging me to conclude, so I will, but I hope you appreciate that I have taken a large number of interventions.

I believe there is a shared determination in this House to ensure that the UK remains the global location of choice for financial services firms to invest, innovate and grow. This Bill is a necessary step to strengthen that leading UK position on financial services: streamlining regulation and reducing the burden on businesses, supporting financial resilience through our credit unions, reforming consumer protection so that it is fit for this digital age, and raising levels of investment in our high-growth firms, all while maintaining our high standards of regulation and oversight. It is a Bill to generate good growth in every postcode and provide fresh hope for the future. I commend this Bill to the House.

[Madam Deputy Speaker (Ms Nusrat Ghani)]

I call the shadow Minister.