Financial Services and Markets Bill [HL]

Lord Bishop of Manchester Excerpts

2nd reading
Monday 8th June 2026 Lords Chamber

[The Lord Bishop of Manchester]

My Lords, I declare my interests as set out in the register. As with all my colleagues on these Benches—not that there seem to be many of them here today—my stipend, pension contributions, housing and working costs are provided by the Church Commissioners for England. As an issuer of bonds, something we started when I was chairing, it is a regulated body.

I welcome the intention behind the Bill to modernise our financial services and to support economic growth. However, our aim must be to enable economic opportunity for all communities. Amid what is still a cost of living crisis, we must measure economic success not only by the growth of the economy itself but by how it promotes the dignity of those most in need and protects individuals at times when the system fails. It is a large Bill, so I will focus on just a few main aspects: access to credit, credit unions, consumer protection, and access to wider banking services. These are probably the issues that are most appropriate for one who is a bishop, not a banker.

Access to fair and affordable credit is not simply a financial issue but a matter of dignity, equal opportunity and participation in community life. Deepening poverty across the UK is making it more difficult for people to break free from debt. Almost everybody needs to borrow money at some point in their life, yet too often it is those with the least who end up paying the most. They face a poverty premium; they have fewer options. Christians Against Poverty, a wonderful charity, has found that its clients are now borrowing money simply to pay for food, clothing, rent and utility bills. For many, credit has ceased to be a tool for flexibility; it has become a necessity for meeting basic needs, and that drives them deeper into debt.

Debt fosters feelings of shame, fear and hopelessness, which often prevent families from then reaching out for support. Christians Against Poverty states that 46% of clients it surveyed had gone as far as considering ending their own life because of debt-related pressures. We cannot overlook the emotional toll of financial insecurity on real lives. The inaccessibility of credit for underserved communities creates a significant gap in financial policy, where these effects could be alleviated. As such, I strongly welcome measures in the Bill aimed at addressing the problem. These efforts must be sustained and targeted, and we must ensure that those facing the greatest barriers are not left behind.

I was first involved in setting up a credit union almost 40 years ago. It astonished me just how small the sector was in England. It has grown a bit since then: 2.16 million people in Great Britain are now members of a credit union, and we have a credit union for Church of England and other clergy. But Britain still compares poorly with other similar economies in what is, across many nations, a network of trusted, community-based saving and borrowing solutions, particularly for those communities least well served by conventional banking. Hence, I strongly welcome the measures in the Bill to promote the expansion of credit unions, including, critically, the broadening of common bonds to increase the number of people able to access this kind of credit.

This measure is particularly important for serving those in more deprived areas, where they may not previously have had access to banks or similar opportunities. While expanding credit unions will go a long way towards improving access for many customers, it remains the case that certain communities, such as migrants or individuals with less financial literacy, remain excluded from the credit opportunities offered by the mainstream banks. What might the Government consider doing further to improve transparency and accountability among mainstream lenders in how they serve marginalised groups alongside an expanded credit union sector?

I turn to financial protections. Increasing credit availability is an important step forward, but it must be met with adequate protections to prevent mis-selling or overborrowing and to ensure proper redress when things go wrong. While I understand that the proposed changes to the Financial Ombudsman Service are designed to streamline the process, I am concerned that stricter criteria there may make the whole process more inaccessible and less robust. Some proposals, such as stricter time limits on making complaints, may present barriers to certain consumers making claims in the first place, particularly when they discover the issue only after many years.

I also echo concerns expressed by the noble Lord, Lord Sharkey, on the proposed reforms to the Consumer Credit Act. While modernisation is clearly needed, the shift away from detailed legal protections towards regulator-led rules may, as others have said, reduce parliamentary scrutiny and weaken established routes to redress. It may also reduce certainty for consumers, making it less clear when they are entitled to redress and how they can secure it. Again, that is likely to have the greatest impact on those who are less financially literate and who may struggle to navigate complex financial systems alone.

Furthermore, existing protections, such as those offered by the consumer duty, do not provide protection to communities which are excluded from credit access in the first place. Without real efforts from mainstream providers to incorporate underserved groups in credit opportunities, those most in need of support will continue to fall through the cracks. Therefore, it is essential that protections evolve alongside access, ensuring that increased participation in financial services does not come at the expense of security. I will follow with interest the debate about how much ought to be in the Bill and how much can safely be left for later regulation. I welcome the Government’s proposed scheme to improve financial literacy in schools by 2028, but that is no replacement for adequate routes to redress, democratic accountability, and fair and equal access to credit for everyone who needs it.

Finally, while I suspect that, nowadays, many of us in your Lordships’ House access all our banking services electronically—I cannot remember when I last went into a bank or even rang one up—there are those in our communities who need access to in-person banking services beyond mere cash. Financial exclusion fosters real-world isolation. Many of the communities that the Church supports, such as elderly and disabled populations, face greater barriers to financial independence in an increasingly digital age. I am not sure that we are doing quite as much as we should in the Bill to ensure that in-person services, beyond cash, are available in both urban and rural settings.

The Bill presents an important opportunity, not only to modernise our financial system but to ensure that it serves the common good. We must reflect not only on how the Bill will enable growth but on how it might promote justice, equality of opportunity, and dignity for the communities that are the most in need. I look forward to engaging with its progress through your Lordships’ House.

Financial Services and Markets Bill [HL]

Lord Bishop of Manchester Excerpts

Committee stage
Monday 22nd June 2026 Grand Committee

Everyone will have their own view of what that tighter definition, which I think is needed and is what my amendment is all about, should include. For me, the minimum would be not only access to accounts for payments and transfer, but support when fraud or scams happen and for registrations of death, probate inquiries and powers of attorney. There must still be some access to face-to-face services for those sorts of things.

[The Lord Bishop of Manchester]

My Lords, it is a great honour to follow the noble Baroness., Lady Tyler. As I listened to her speech, I was crossing off most of the things that I was going to say, because she said them much more eloquently than I could have, and I am thankful for that. We need to be able to provide everybody with the best possible services, locally available. As the noble Baroness said, when people are at their most vulnerable, at the most crucial moments of their lives and taking the big decisions, being face to face makes all the difference.

I gather that an article in the Spectator says that Bishops do not mention the word Jesus enough when we are speaking in your Lordships’ House—well, I have just covered that one, for Hansard’s benefit. In my theology, when God had something really important to do, He did not send an email or text message or put writing in the sky. He sent a person, in Jesus Christ, to meet other human beings face to face. We lose face-to-face services at our peril.

Occasionally, yes, I am involved with the closing of a church. But very few churches, certainly Anglican ones, have been closed in England over the past 40 or 50 years, because we recognise the importance of providing face-to-face encounters for people to meet other people. While I appreciate that we do not want to overregulate, I feel that, as I said at Second Reading, making face-to-face banking services available to people when that is what they need, because they have a big decision and are feeling vulnerable, gains priority over the convenience of the banks. They might pass some small costs on to the rest of us, and it might affect the bonuses that some bankers get and the shareholders’ dividends at the end of the day, but that is a price to pay for seeing that everybody is included in the banking world.

[Lord Davies of Brixton (Lab)]

I shall speak to Amendment 23 in the name of my noble friend Lord Sikka. He very much regrets not being able to be here, but I hope that the Minister will still respond to the point that it raises.

The key issue is that there is a public service element in banking. It goes beyond commercialism; it is reasonable to ask that the review which is taking place should consider that issue, and specifically whether it requires an amendment to the Bill to effectively pre-empt the issue and say that villages, towns and districts need some form of banking services. I think there could well be broad agreement on that—the issue is that banks are competitive commercial organisations and so are not going to do it. They will do it only if there is some sort of collective scheme, funded by a levy, that provides good services for people where they live. I very much enjoyed the contribution of the right reverend Prelate, and indeed churches have closed down far less frequently than banks and post offices. I hope my noble friend will respond positively to that point on the public service element.

--- Later in debate ---

[Lord Massey of Hampstead (Con)]

My Lords, I declare my interests as a shareholder and a director of financial services companies in asset management and wealth management.

I have considerable sympathy with the objectives that the noble Baroness, Lady Kramer, is seeking to advance. Access to affordable credit is a genuine problem in this country, as in many others, and the Committee is right to view financial exclusion as a problem. However, I am unable to support Amendments 28 and 29 on the grounds that the proposed solution will not solve the problem and may in fact exacerbate the issue that the Bill is partly designed to alleviate: excessive and complex regulatory demands on our financial institutions, which are making us less competitive.

My first concern is one of basic commercial economics. Banks and building societies are not lending to certain sections of the community, however deserving they might be, not because of a lack of understanding of the opportunity or a lack of data; they are not serving those clients at scale because the risk-adjusted returns of lending to higher-risk borrowers at affordable interest rates, and indeed the compliance risk of so doing, do not work commercially. A rating framework published by the FCA will not change that calculus, but it creates yet another compliance exercise, another box to be ticked and another issue to be managed without addressing the underlying economic reality that makes such lending unworkable.

My second concern is the risk of unintended consequences. A rule that would rate banks on their willingness to provide credit to financially-excluded populations—in some cases, very high-risk borrowers—could create an implicit incentive to lend more to people and companies who cannot really afford the loan. The amendment contains no credit quality safeguard and no minimum standard of affordability assessment, yet banks could be incentivised to lend just to improve their ratings. The pressure to improve ratings would not be cost free, of course. In practice, banks will not be carrying out this lending for solid financial reasons, so if they feel forced to extend credits into markets with reduced or zero margins, they will seek to restore those margins elsewhere, through higher charges on other products, reduced rates on savings or increased lending spreads in other parts of the business. The cost will not disappear; it will be redistributed invisibly to existing clients, who also deserve protection.

Moreover, I draw noble Lords’ attention to the stated purpose of the Bill, which is to reduce regulatory burden, not add to it. Yet here we are, being invited to add a new mandatory framework, new data collection requirements, new publication obligations and new performance ratings, all enshrined in primary legislation. This is precisely the regulatory ratchet: the cumulative, seemingly endless new measures that damage our competitiveness. The Financial Services Regulation Committee of this House, chaired by my noble friend Lady Noakes, concluded in its report last June that:

“The cumulative burden of regulatory compliance in the UK is perceived to be disproportionately high, diverting resources that could otherwise support … growth”.


As a serving practitioner in the sector, I strongly agree with this finding. Diverting lending from growing businesses to those effectively in financial need is not going to improve our economy. If anything, it will lead to loan losses for the banks and encourage excessive borrowing from those who cannot afford it, while piling even more costs and regulatory obligations on financial firms. We should resist the urge to reach for intervention every time a market imperfection is identified. Not every problem has a regulatory solution. Indeed, those solutions can often have unintended consequences that increase bureaucracy and undermine growth, so I cannot support the amendments.

[The Lord Bishop of Manchester]

My Lords, I support Amendment 28, to which I have added my name. As we have heard, the amendment would require the FCA to establish a framework assessing banks’ and building societies’ provision of affordable credit. I spoke at some length at Second Reading on the importance of equal access to credit. I welcome what is already in the Bill, as I did then, but we can and should do more.

We are witnessing a crisis of deepening economic inequality in this country. For the most vulnerable communities, it is worsened by a lack of choice. Struggling to meet their most basic day-to-day needs, long-term financial planning is not an option for many families today. Daily life is a battle to put food on the table and to keep the house warm in winter, though perhaps not today. It is often the most impoverished who are forced to accept riskier loans, to turn to loan sharks—many of those operate in my diocese of Manchester—or to enter credit agreements that they are unable to pay back. In doing so, they find that they are paying a poverty premium, which then exacerbates and ratchets the problem round and round, deepening the financial injustice.

As I said earlier, I am trying to be more overtly religious in my speeches on the Bill today, so I assure the Committee that this is not merely a modern phenomenon. I could point to specific places in the Hebrew and Christian scriptures where specific rules are set out to ban the most egregious practices around unfair credit arrangements—things like extortionate interest charges, or the taking of essential items like protective clothing or workers’ tools as a pledge for credit.

Yet the alternative to unfair credit cannot be no credit but instead must be fair and affordable credit. Across the country, in churches, food banks and charitable organisations, the impact of financial exclusion on human dignity—another important Biblical concept—and well-being is being made apparent. We also see how certain communities are at a particular disadvantage: this includes if you are a migrant without a long-standing credit history, or an adult with little financial literacy, unable to navigate complex financial systems on your own, or a family experiencing living pay cheque to pay cheque—and about 10 years ago we passed the point at which most families in poverty began to be working families, rather than families in which no person is in work. The services that community institutions provide to such communities are essential but are not enough. In order to truly flourish, individuals and households facing financial insecurity need access to credit which gives them choice and independence and creates opportunities for them to become full participants in economic life.

One thing I learned when I worked on responsible investment for the Church of England’s national investment bodies was the phrase “social licence to operate”. That is an important part of this conversation today, though I have not heard it mentioned yet. The banks—not only those which were bailed out so expensively to the taxpayer less than 20 years ago—are required to operate not simply as best turns a profit, but as fits the needs for the society in which they are working. That requires a willingness to provide social goods, not merely the most profitable products to the most eligible customers.

What is set out in Amendment 28 will not only enable us to measure where affordable credit is and is not reaching people but will lay the foundation to make targeted improvements. I am told that the banks already have much of that data and that it is simply a question of making it more available by providing and publishing it. With a clearer understanding of the barriers that minoritised communities face, we can work beyond this Bill toward financial policy which tackles financial exclusion at its very root, creates new opportunities for families in debt, and promotes economic growth on a wider scale.

[Baroness Noakes (Con)]

My Lords, I support what my noble friend Lord Massey said earlier on these amendments, and in particular on Amendment 28.

When people talk about affordable credit, what they mean is subsidised credit, because the terms on which financial institutions are prepared to advance money to the kinds of individuals and organisations which have been referenced so far are always provided on a risk-adjusted basis. That reflects the likelihood of default and the amount of loss given a default, which drives pricing and causes people to say that they cannot afford the prices at which a product is advanced to them. We must be clear on this: we are saying that some groups in society need to have access to credit at below a risk-adjusted rate. A fairly simple question is whether we think we should impose on banks the requirement to subsidise one way or another—whether through the vehicle of community finance organisations or directly by charging lower non-risk-adjusted rates to certain groups. My answer is that it should not be; the banks already have quite considerable costs imposed on them, such as the banking hubs which we discussed earlier and which would not be set up for pure economic reasons, or the provision of basic bank accounts. There must be a point at which we stop saying that the banks can just provide more things to groups of people who could not otherwise afford access to them, so I am very much opposed to Amendments 28 and 29, which are an unreasonable imposition.

On Amendment 30, in the name of the noble Baroness, Lady Bowles, I am very unclear as to how she sees her amendment relating to the consumer duty, which has been in existence only for a couple of years, and the full effect of which we have not yet seen. I assume the noble Baroness is trying to set up an actionable right for consumers, although she is not explicit in saying that. I think that would be taking regulation one step too far. We already have the complicated arrangements of the FCA overseeing consumer requirements with its enforcement powers to set up a parallel ability of giving individual consumers rights of action under a rather ill-defined fiduciary duty, and this amendment would be an unwise addition to the regulatory landscape.

Financial Services and Markets Bill [HL]

Lord Bishop of Manchester Excerpts

Committee stage
Monday 29th June 2026 Grand Committee

Before closing, I add that I support all amendments in this group, in particular Amendments 103 and 140. I give notice that I lend strong support to the Clause 17 stand part notice in the name of my noble friend Lady Bowles of Berkhamsted. Her Second Reading speech was outstandingly clear and compelling.

[The Lord Bishop of Manchester]

My Lords, I, too, support all the amendments in this group, but I will limit my remarks to Amendment 80, to which I have added my name. I note that I appear to be the only man to have signed any of the amendments in this group. I hope that does not mean that climate concern is now becoming divided on gender lines; climate risks are not sex specific. Perhaps I might encourage some other men to rise and support amendments in this group.

We have heard that Clause 17 will remove the requirement that the FCA and the PRA have regard to certain regulatory principles, including those relating to environmental obligations. As the climate crisis grows and public services are forced to adapt to a growing range of climate-related challenges, weakening such regulations is neither environmentally nor economically sustainable. The regulatory principles of the previous Financial Services and Markets Act 2023 were intended to ensure that climate risks were incorporated into regulators’ day-to-day decision-making. I am afraid that the evidence is not very good that they have been sufficiently incorporated in practice.

We have just heard from the noble Baroness, Lady Sheehan, about deforestation. In 2022, a report from the Make My Money Matter campaign found that over 30% of UK pension fund public equity and corporate bond investments were in institutions with a high risk of causing deforestation. When I was chair of the board of the Church Commissioners, I was very proud that it was one of the major investors in sustainable forestry across the world and was constantly seeking to increase our investment in that sector as something that was doing climate good at the same time as making the returns we needed as an investment institution.

Deforestation is already a priority in the Government’s net zero strategy, but weak regulation has enabled the UK financial system to fuel climate destruction directly. If we weaken the existing framework, it will only move us further in the wrong direction. As the climate crisis deepens, we have a responsibility to exercise wise stewardship over our planet to ensure that the consequences of environmental degradation are not simply passed on to future generations. That, for me, is a theological point as much as a practical one. It can be done only if we embed climate and nature implications in financial decision-making at every level.

It is not just an environmental imperative; it is an economic one as well. Climate change presents significant challenges to the Bank of England in meeting its primary objectives of controlling inflation and ensuring financial stability. As we have heard from the Energy and Climate Intelligence Unit, climate change was responsible for a third of the UK’s high street food price inflation in 2023. Meanwhile, the UK recently experienced its worst inflationary crisis in four decades due to the price volatility of fossil fuels bought on the global market. Without action, vulnerable communities, including those in my own diocese of Manchester, will tend to bear the greatest weight of fluctuating prices and economic insecurity. I have just come from the launch earlier today of a new inquiry by the Trussell Trust into the need for food banks and why that, sadly, continues to be a growth area in our community. Why are people finding it harder and harder to afford to feed their households week on week, year on year?

The General Synod of the Church of England has set out ambitious targets for attaining net zero, recognising our responsibilities as God’s stewards of the planet. I note that similar robust targets have been set by the former mayor of Greater Manchester, where much of my diocese lies. I wonder whether the honourable Member for Makerfield will have, and indeed express, a view in the other place. In the meantime, we need to use every lever we have to bring human-made climate change under control—including this Bill. We should not make any legislative changes that act in a contrary manner. What is set out in Amendment 80 would not only remove the deregulatory changes in Clause 17 but strengthen regulatory responsibilities by embedding climate considerations in decision-making and making environmental responsibilities clearer. I hope the Minister will set out how climate risks will remain central to the decisions that regulators make, should this clause remain in the Bill.

[Baroness Coffey (Con)]

My Lords, I will speak to Amendment 142, which I have signed, and Amendment 172, which I strongly support.

The whole concept of the TNFD follows on from the TCFD, but it has been driven and particularly supported by Defra over the past several years. As such, David Craig, who has been tremendous in promoting the TNFD, has started, just after another session of London Climate Action Week, to share the frustration of many that we already have the ISSB, which has made progress: at its April meeting, I think it agreed a way forward for its IFRS practice statement to start to be included automatically in accounting standards around the world. Indeed, we know that investors are now asking boards what they are doing about understanding their risk if certain things in nature start to change. That is, in effect, what the TNFD is about: it is not saying that you cannot do this, that or the other but about making sure that you think ahead. Why does it matter? Well, nature is at the very heart of the food we eat and pretty much every pharmaceutical we use. That is why it matters to start having this as a regular, ongoing way for the board of every business in this country to think about it.

I appreciate that there have been various difficulties over recent years when it comes to the subject of Amendment 172. I nearly got the regulations through, but then it was held up because of the issue involving Northern Ireland having to follow EU law and the then Administration finally deciding that they did not want, at the time, to try to work out a way for the two to be managed within the United Kingdom. That issue has been ongoing, and I appreciate that the Minister, Mary Creagh, announced a policy paper last week. I think it is fair to share with the Committee that the European Parliament itself voted to delay the implementation of the EUDR—which is about the forest risk commodities—and to start to restrict some of the elements that were being applied. Mary Creagh suggested that we would perhaps go further than our original suggestions on which commodities we would focus on to get these regulations into place.

Why does it matter? In values, the UK is second only to China in the importation of the products—the commodities—that risk deforestation. We took a pragmatic approach in the UK, in that we were not looking to do what the EU was trying to do, which was trying to make every product “deforestation free”. We took an approach of basically saying that you have to show that your products are not a result of illegal deforestation—at the time I thought that that was a pragmatic move, and I still do.

Again, it shows that we need to recognise the implications of what some of my noble friends may think unnecessary: we actually have responsibilities in a variety of conventions to which we have signed up, over the years, to recognise our role in supporting free trade around the world, while making sure that free trade is done in a responsible way. This is about trying to make sure that supply chains understand where their products have come from and to address that, if necessary, to make sure that their products are not, in effect, being sourced illegally.

On the basis of the two amendments tabled, I hope the Government will consider this further. Mary Creagh made an announcement last week about the Great British version of the EUDR, but apparently no regulation is due in your Lordships’ House until 2027. It is disappointing to hear about the slow work, especially as regulations were pretty much drafted three years ago. With that, I will support this amendment in Committee and if it is put to the test in the House on Report, I will support it then too.

Financial Services and Markets Bill [HL]

Lord Bishop of Manchester Excerpts

Report stage
Monday 7th September 2026 Lords Chamber

The amendment before us addresses the three failures that together created mortgage prisoners. The first is that statutory rights did not travel with the loan; this would be fixed by subsection (2) of the new clause proposed in the amendment. The second failure is that SPVs and inactive lenders have continued with predatory pricing, which would be fixed by subsection (3). The third failure is that SPVs claimed that they were not the creditor; subsection (4) would fix this. Subsection (3) would also place a limit, to be determined by reference to a market proxy determined by the FCA, on interest rates, fee structures or other pricing terms. All this is prospective; none of it is retrospective. It is time that the mortgage prisoner problem had some real help, and this amendment sets out how to do that for the future.

[The Lord Bishop of Manchester]

My Lords, I support Amendment 2 in the name of the noble Baroness, Lady Bowles of Berkhamsted, to which I have added my name. As we have already heard, this amendment would ensure that, when provisions of the Consumer Credit Act are repealed or replaced by FCA rules, the overall level of consumer protection would not be diminished. The Consumer Credit Act has long provided established routes of redress to consumers; it has done so for decades. It provides a core of fundamental protections enshrined in primary legislation and developed through parliamentary scrutiny, and probably is fairly well known.

As financial services continue to evolve, the ways in which consumers are protected must be capable of adapting to change. Were we to open up the CCA to repeal by the Treasury and the FCA without putting significant statutory protections in place, it would risk reducing standards of consumer protection for all people. Indeed, in its own review of the Consumer Credit Act, the FCA stated that many of its provisions

“could not be replaced by FCA rules”

under its current powers

“without adversely affecting … consumer protection”.

I have spoken many times before about the importance of equal financial opportunity for underserved communities, especially those who have less financial literacy or who face language barriers. The Joseph Rowntree Foundation tells us that a record number of people in this country are currently living in “very deep poverty”. Without equal access to financial services, they are deprived of the tools that might help them to stay afloat. For many families, credit is a lifeline in the face of the cost of living crisis. It is what enables them to make ends meet, but accessibility must be accompanied by adequate protection.

Data from the last year shows that 25% of cases seen by the Financial Ombudsman involved vulnerable consumers. It is these groups who are least able to advocate for themselves when things go wrong or to navigate complex complaints processes on their own. To increase access to financial services of vulnerable groups while simultaneously hollowing out the protections from which they disproportionately benefit introduces greater risk for those who already stand to lose the most.

The protections of the Consumer Credit Act are to be opened up to repeal. We must be certain that consumers will enjoy protections that are at least as strong as those from which they benefited before. This amendment is essential to preserving the fundamental rights which enable vulnerable groups to participate fully in economic life and provide consumers with the confidence they need that they will be protected when things go wrong—as from time to time they do.

[Baroness Altmann (Non-Afl)]

My Lords, I support the amendments in this group, and I feel that this Bill has an opportunity to improve—or at least not diminish—the protections that are offered to consumers of financial services. We have long known that from a consumer perspective, the asymmetry of information and the asymmetry of understanding leaves ordinary consumers open to being taken advantage of by financial services companies. The law is supposed to protect them and currently we have legal protections in place—albeit they are out of date and need updating, as we have already discussed. However, I certainly hope that the Minister—who I warmly welcome to his place—would understand that the aims of these amendments are to ensure that the financial consumer is protected both at the retail level and against practices that have arisen in the past and will arise in the future.

I particularly feel that the amendments about non-diminution when it comes to consumer credit and student loans, in the name of the noble Baroness, Lady Bowles, are extremely important to the ordinary person in the street. I commend the noble Lord, Lord Sharkey, and the noble Baroness, Lady Bowles, on continuing the attempts to ensure that mortgage prisoners are treated much more fairly. We have another opportunity now to remove this stain on our financial services landscape, and I really hope that the Government will be able to agree and accept that capping, at the very least, the costs and interest rates that mortgage prisoners have had to pay—at such great cost and pain—will be a possibility within this Bill.

--- Later in debate ---

[Baroness Altmann (Non-Afl)]

My Lords, I fully echo the comments that the noble Lord, Lord Mackinlay, just made, having had personal experience, sadly, of just what he described. Amendment 70 would provide at least some relief to those executors who cannot access funds and who see the interest racking up while probate delays or other delays beyond their control are occurring to the estate.

I urge the Minister also to take back to his department that if inheritance tax is indeed levied on unused pension funds from next April, there is not even the allowance in the new system for a 10-year delay, as there is with property, so it will not just be interest that racks up; there will be penalties and so on. There is a real problem in that regard and, indeed, there is a real issue with the costs involved in probate for the executors who cannot have the money released because some institutions have decided that even though the money is going to be paid directly to HMRC to satisfy inheritance tax, it will still not release the money—and, of course, it will still be charging fees on the funds that it retains. So I hope that the Minister will take seriously the ideas in Amendment 70.

I strongly support Amendment 60, and I would have added my name to it had I been more on the ball. It was so nobly spoken to by the noble Baroness, Lady Kramer. She spoke of the child trust fund issue, where parents and carers of children—who cannot make the decision for themselves—who are managing the money for those children, and have done so since the child’s birth in some cases, are being told that they must go through an enormously lengthy legal process just to be able to take a bit of money out of the money that the Government gave for those children, which was safeguarded until age 18. When they reached that age, they were unable to access the funds.

Child trust funds started in 2005 so this problem of people being unable to get money from the child trust fund has been going on since 2023. Indeed, there was a consultation in 2022, which recommended that a small payment scheme at least should be introduced, but in the meantime, nothing has happened. As the noble Baroness, Lady Kramer, said, the costs of going to court and obtaining an order to be able to take money out of a trust fund could use up most—or, even, in some cases, all—of the money in the fund. There is an issue that needs to be addressed. Amendment 60 would be a way of helping these families, and I hope that the Minister will take this back to the department and come back with some positive news on this issue.

[The Lord Bishop of Manchester]

My Lords, I have sympathy with all the amendments in the group, but I will focus my comments on Amendment 11 in the name of the noble Baroness, Lady Kramer, to which I added my name. As we have heard, this would require the FCA to establish a framework assessing banks’ and building societies’ provision of affordable credit.

Credit is a lifeline for families facing debt and financial hardship. According to a recent report, 60% of the clients of Christians Against Poverty—CAP—an organisation that is very active in my diocese, find that they have to borrow money to pay for household essentials and bills. They are not borrowing for luxuries: when credit is unavailable, they are left to delay essential spending and go without meeting their most basic needs. Sometimes, spending a little now will save you spending a lot more down the line.

I am extremely grateful for the remarks made by the noble Lord, Lord Holmes of Richmond. Credit inaccessibility has real consequences for those who are struggling the most. According to CAP, 47% of UK adults who currently have debt that they are struggling to manage have been unable to access their preferred credit option in the past two years.

This kind of financial exclusion means that we are locking vulnerable families into a cycle of poverty. We are depriving them of the tools they need to climb their way out. Unable to look beyond the pressing need to put dinner on the table, it is those with the most desperate need who are forced to sacrifice the most to get by. Left with limited choices, they are the ones most likely to enter riskier credit deals and to pay the greatest poverty premium. I have worked as a vicar in parishes where loans were enforced by men with baseball bats.

Since Committee, we have had the report of the Commons Treasury Committee on the Government’s financial inclusion strategy. The report highlights the need for

“proportionate firm-level financial inclusion metrics. These should focus on the largest providers and on markets where exclusion causes the greatest consumer harm”.

That specifically includes “affordable credit”. The report proposes that metrics

“should be designed to identify whether progress is being delivered consistently across firms and sectors”.

The committee also concluded:

“Voluntary action and pilots … cannot be the main driver of a national financial inclusion strategy unless there are clear routes to scale and clear consequences if voluntary action fails”.


What is proposed in this amendment clearly has much wider parliamentary backing than simply from the noble Baroness, Lady Kramer, and me. Indeed, several major lenders indicated to the Treasury Committee that they would be entirely happy to provide financial inclusion data as part of a statutory system.

This Bill, and this amendment to it, provide a sensible and practical solution to implement what the Treasury Committee advocated. Importantly, it will place responsibility for access to affordable credit on the lender, and introduce a clear framework by which banks and building societies can be assessed on how effectively they are meeting the financial needs of underserved communities. The new requirement for this framework to be kept constantly under review will ensure that those requirements remain open to scrutiny and adaptable to ever changing patterns of financial exclusion—patterns that could become more dynamic and entrenched as society rapidly changes. This amendment is an important step towards ensuring that our financial services meet the needs and uphold the dignity of real people, rather than expecting individuals to adapt to systems that too often exclude them from full participation in economic and community life. The only people who will not like it are the dodgy lenders who harass people in my diocese. I pray that we all support this amendment.

[Baroness Neville-Rolfe (Con)]

My Lords, I am grateful to all noble Lords who have contributed to this interesting debate. I much look forward to the Minister’s response, particularly on child trust funds for those in that capacity. I agree with my noble friend Lord Mackinlay that we have a problem with HMRC administration of estates, with the risk of more chaos in prospect as IHT on pensions arrives. We should be finding a way to improve the system—for example, by widening the application of IHT423.

I will focus on Amendment 94 on financial education. This is an issue on which I have campaigned for a long time. It reflects my belief that financial capability is an essential life skill and, indeed, that it is essential if we are to have financial inclusion for those struggling to make ends meet. I will not repeat the strong case I made in Committee on 8 July which can be found in Hansard at column 149. Our revised amendment would require the FCA to take reasonable steps to work with the Money and Pensions Service, the Secretary of State for Education, relevant education bodies, providers of teacher training and professional development and industry bodies to support the effective delivery of financial education. It is good that I now have the support of the noble Baroness, Lady Kramer.

The financial decisions that people are expected to make are increasingly complex. Young people, as well as adults of all ages, need a working understanding of concepts such as compound interest, inflation, pensions, savings, taxation, borrowing and so on. My noble friend Lord Agnew was on the BBC this weekend. He has written about how 10 million adults in Britain right now have the numeracy of a primary school child, yet we are asking young people to make extremely significant financial decision—sometimes taking on tens of thousands of pounds of student debt—without necessarily giving them the grounding in financial concepts that would allow them to understand those decisions.

I was very grateful to the Minister for helping to arrange a meeting with the Money and Pensions Service. I recognise the work that it is doing. However, one concern I took away from that meeting was that a considerable amount of financial guidance focuses on moments when an individual has reached a major financial event, such as taking out a mortgage, dealing with a divorce, approaching retirement or experiencing financial difficulty. I believe we need to be more ambitious. Our objective should be to build financial capability throughout the population before people reach these moments and, indeed, to encourage sound investment and savings for a rainy day.

Financial Services and Markets Bill [HL]

Lord Bishop of Manchester Excerpts

Report stage
Wednesday 9th September 2026 Lords Chamber

[The Lord Bishop of Manchester]

My Lords, financial stability is crucial for sustainable growth. It is what allows people and families to plan for the future, to reliably hold savings, pensions and mortgages, and of course it supports businesses to create the jobs on which we depend. In the same way, financial growth and environmental stewardship are interdependent. Growth provides us with resources that allow us to invest in new sustainable fuels, clean infrastructure and new ways to tackle the climate crisis.

It goes both ways. The climate crisis, which many of us now call the climate emergency, also threatens financial stability. Increasing extreme weather events may well reduce access to insurance for both households and businesses, as the noble Baroness, Lady Hayman, has already reminded us. As we face the prospect that the heatwaves of this summer become the new normal, agricultural assets are already projected to be affected by drought, impacting on our farmers. Yet these risks have a disproportionate impact on the most vulnerable. Financial shocks hit hardest for those who have no savings to fall back on. Food shortages load further pressure on to those who are already going hungry.

The amendments in this group seek to recognise that interdependence between a stable environment and stable financial markets and services. A little bit later, we will hear about amendments from the noble Baroness, Lady Hayman, that would require financial institutions to develop credible transition plans consistent with the Paris Agreement’s 1.5-degree target—if it is not already too late for that. Prevention is of the utmost importance if we are to stop the worst impacts of global warming before opportunity lapses.

Prevention must go hand in hand with preparedness. We are already feeling the impact of climate change at home, and we must do all that we can to supplement preventive work with measures that allow us to adapt for this changing reality. As the then chair of the Church of England’s ethical investment advisory group and deputy chair of the Church Commissioners for England, it was my privilege to be present at the opening of the London Stock Exchange when we launched, with support from FTSE, the first index that was weighted towards environmental issues. These voluntary measures enable investors who need to track indices to take environmental factors into account.

I doubt that many of us here in your Lordships’ House today believe that voluntary action alone is going to solve the climate crisis. Amendment 34, to which I have added my name, would, as the noble Baroness has already said, create a responsibility for regulators to consider the effects of climate change in their decision-making, in the same way as they would any other significant financial risk. That is an important step towards ensuring that our financial institutions are resilient in the face of the growing risks posed by global warming, and that financial services continue to serve the needs of consumers as we pursue prevention on a wider scale.

If we are not to place the amendments in this group in the Bill, will the Minister please explain—as I know others have already asked—how the Government intend to ensure financial services and markets do not develop without regard to their environmental impact?