Queen’s Speech
Lord Bishop of Southwark Excerpts(8 years, 8 months ago)
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The Lord Bishop of Southwark
I will make a number of points which I hope will be of value to your Lordships’ House and respond appropriately to Her Majesty’s gracious Speech. It is clear to me that Ministers in this Government understand freedom, as did their predecessors, as freedom in security. We have heard in the Queen’s Speech that we may expect legislation,
“to prevent radicalisation, tackle extremism in all its forms, and promote … integration”.
This may be necessary, but I have concerns about our ready desire to legislate solutions to problems where other avenues present themselves. The recent lowering tone and content in public discourse is an example. It diminishes sympathy and challenges what constitutes legitimate and proper boundaries for political debate. I agree with the Chief Rabbi that:
“There has been nothing more disheartening ... than the suggestion that this is more about politics than about substance”.
I am bound to observe, for example, that there were lapses of judgment during the recent mayoral election in London.
We need a politics of generosity that transcends such divisiveness, a narrative that does not engender fear, and I applaud indications within major political parties that recognise this. It was fitting that the cathedral church of a diocese—my own, as it happens—proud of its unifying role in an area of great ethnic and religious diversity should play host to the swearing in of the new Mayor of London. It is not a party political point to say that I welcome Sadiq Khan’s decision to start his mayoralty with a symbolic move that was both positive and unifying.
A good deal of the difficulty in drafting the Bill to counter extremism appears to lie in defining what is extreme and extreme in relation to what. Hitherto, it has been in relation to British values, but a proper definition of these values and a narrative around them has been lacking for some years. No such definition appears in the Government’s Counter-Extremism Strategy of last October. It remains to be seen whether measures other than those already available in statute and common law are required. What is lacking is a positive, attractive narrative or narratives, without which aspirations to integration are futile.
I say “narratives” because I am aware that this country has been fed by more than one tradition and that some of these are noble traditions of dissent. It remains a concern that in a rush to exclude the hateful and inflammatory, we also deny these traditions full expression. For example, the answers of Ministers to questions about whether people in this country have a right not to be offended have received ambiguous answers. People should not seek to offend, as I have made clear, but I do not believe we have a blanket right not to be offended. Such a right, if conceded, may be a comfort to some but it is not a British value. Constraints should be few. Democratic institutions are best undergirded when people are free to speak their minds fearlessly.
The security apparatus which operates to keep us safe is extensive. It already has that most un-British of features: provisions whereby a defendant may not see evidence used against them. At a time of crisis for this country, when the very state was under grave threat, Parliament passed the Treason Act 1695, giving defendants the right to see indictments in cases of high treason and any evidence pleaded with them. I know that practitioners argue the exceptionalism of the times. That those officers and officials charged with our safety seek additional powers is understandable, but this is not and never has been, until recently, deemed a sufficient criterion for granting such requests. As legislators, we should remember our previous sense of restraint and judge all such requests accordingly.
I will add just a few observations arising from the five major prison establishments in my diocese, including Her Majesty’s Prison Wandsworth, which I have visited twice in recent months. It features in current proposals for reform and last week was subject to extensive and alarming news reports. These were accurate but incomplete, failing to acknowledge the success of staff where it happens, including in the chaplaincy. None the less, the service we seek there and elsewhere cannot be achieved without the resources to deliver it. Cuts of a third have left their mark.
Indeed, if I may end where I began in your Lordships’ House, with a caution from my maiden speech in January 2015, the background to current pressures on our institutions is one of cuts in the public sector. Pressure on the voluntary sector has grown considerably. If it is to be contested that the resources available are finite, it needs to be remembered that the remarkable resources of voluntary endeavour are also finite and it is morally wrong to push them to the limit. I hope these thoughts on aspects of the gracious Speech are of some value as this debate progresses.
Baroness Chisholm of Owlpen (Con)
My Lords, I remind your Lordships that the advisory speaking time today is five minutes. If your Lordships stick to this, we should be able to finish by 10 pm.
Bank of England and Financial Services Bill [HL]
Lord Bishop of Southwark Excerpts(9 years, 2 months ago)
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The Lord Bishop of Southwark
My Lords, I shall speak against Amendment 21. I confess that my expertise does not rival that of the most reverend Primate the Archbishop of Canterbury, who justly won plaudits for the seriousness and skill with which he served on the Parliamentary Commission on Banking Standards. Regrettably, he cannot be in his place today, but I am at one with him in supporting the Government’s intentions on the reverse burden of proof.
One of the important functions of the parliamentary commission was to consider the change of culture of banks and the standards of conduct of those working in them, particularly its senior managers. Anger, disbelief and misery was felt by so many following the crisis that engulfed the British economy in 2007-08, much of it directed at the banking industry. That anger and disbelief were compounded when those best remunerated within the banks seemed to demonstrate little or no accountability for their actions. Rather, the burden was borne by society as a whole and it was the poorest who suffered most and, arguably, continue to do so. The ability of well-funded senior managers in the banking sector to evade responsibility was considerable. My assessment is that the commission saw sufficient evidence that there was a balance to be redressed. Small wonder that the commission sought to protect the public, including the taxpayer, with a robust regulatory regime and suitable civil and criminal penalties. This included several provisions with a reverse burden of proof.
A reverse burden of proof would mean that senior managers would have individual responsibility for proving that they had fulfilled their regulatory obligations, rather than regulators having to prove that they had not. This goes against the ancient common-law principle of “innocent until proven guilty”. The proposed reverse burden of proof seems to require senior managers in the sector to do something required in no other sphere of work, and that, from a philosophical perspective, causes concern. It is absolutely right that the individual is obligated to ensure that they take reasonable steps to prevent regulatory breaches in their financial institution but, as with other parts of society, it is right that the burden of proof should sit with the regulator to prove such breaches beyond reasonable doubt.
Secondly, I want to express my anxiety at the creation of a two-tier system of regulation in which deposit-taking institutions, including credit unions and building societies, are obligated to operate under the reverse burden of proof but other financial institutions are not. The need to ensure financial stability in the sector is vital, particularly among the largest institutions, but there seems to be a certain arbitrariness regarding who would be covered by the reverse burden of proof. I fear that a two-tier system would risk confusion or a loss of focus both within the banks and other financial institutions, and on the part of the regulators.
Well-funded individuals and corporations are capable of all manner of misdemeanours across our society, in all sectors of the economy. To introduce a reverse burden of proof only for senior managers in the financial services sector would set a grave precedent. What of those accused of pollution, negligence or failure to care? Where would it be extended next, further eroding the fundamental rights upon which our society is properly based? For the sake of all, not least those without the backing of considerable funds, we should continue to insist that the burden of proof must fall on regulators, prosecutors and those in authority who affirm that wrong is done. Better, as in the published Bill, to have a provision that contains a presumption to act reasonably and for regulators to prove that an individual has done otherwise. In view of these concerns, I humbly urge your Lordships’ House to reject the amendment.
Lord Garel-Jones (Con)
My Lords, I draw the House’s attention to my declaration of interests. Before coming to the reasons why I believe that the removal of the reverse burden of proof is a wise move in both practical and administrative terms, I want to say that its removal restores the principle of natural fairness—a fundamental principle of British law to which the right reverend Prelate has just referred, and, if I may be so bold, one to which even bankers are entitled. Also, as again the right reverend Prelate has said, the creation of a two-tier system would not be a very helpful situation to move towards.
The importance of the City of London to the British economy will be a given among your Lordships. If that position is to be retained, bearing in mind some of the abuses we have seen in recent years, it needs to be underpinned by a strict and proper regulatory framework. Under these proposals for senior management conduct, which are supported by the PRA, senior managers remain responsible for taking reasonable steps to oversee the areas for which they are responsible.
The revised disciplinary provisions in the Bill provide that regulators will be able to take action against senior managers on three grounds: first, a breach by the senior manager of the conduct rules; secondly, the senior manager being knowingly concerned in a breach by the firm of its regulatory obligations; thirdly, where there is a breach by the firm of its regulatory obligations in relation to the area for which the senior manager is responsible, a failure by that senior manager to take such steps as a person in his or her position could reasonably be expected to take to avoid a breach occurring or continuing.
The first of those two grounds would also be grounds for action against any other employee or director of the firm, while the third ground in effect replaces the reverse burden of proof. In all three cases the burden of proof now rests with the regulators. Importantly, the FCA’s reaction to these changes makes it clear that the regulators,
“remain committed to holding individuals to account where they fail to meet our standards”.
I therefore believe that the Government are right in claiming that senior managers will remain subject to the same tough underlying conditions. The statutory duty, together with the statement of responsibility, means that senior managers will no longer be able to plead ignorance in these matters.
I make one final point, which to many noble Lords may seem a mere footnote to the bigger issues we are discussing. One of the great attractions of London is that it is truly the most international city in the world. Not surprisingly, therefore, many of the most senior positions in the City are held by non-British citizens. If you are running a global business, in many instances you can just as easily manage that with your team from New York or some other financial centre. I am advised that, had the reverse burden of proof remained on the statute book, many senior managers may well have declined to be posted to London, and that some now here would have moved as soon as a suitable opportunity arose. I believe that we have here a rigorous regulatory framework of the type we need, which no longer carries within it what might well have proved to be a strong disincentive to senior non-British bankers to base themselves in London.
The Lord Bishop of Southwark
My Lords, I do not wish to interrupt the noble Lord in full flight but I should like to put on the record that the most reverend Primate the Archbishop of Canterbury signed up to the reverse burden of proof, having lost the argument in the PCBS that the reverse burden of proof was unjustifiable. I think that slightly puts in context the phraseology he used.
Lord McFall of Alcluith
The commission valued enormously the contribution of the most reverend Primate the Archbishop of Canterbury. However, if we feel strongly about something, it can be a matter of record. I take the point about the unanimity of the commission, and will come to an area where I disagreed with it. I did not get my way, but signed up to it. So it is a case of tit for tat and one for one with the most reverend Primate.
This measure sends out the wrong signal—that Parliament is unfairly on the side of the banks rather than on the side of the public. The Parliamentary Commission on Banking Standards was very clear on enforcement action. We described it as being,
“as rare as hens’ teeth”.
The public want effective reforms. They want senior managers to be personally culpable. They want fines on individuals, not companies, because when the fines are on companies it is the shareholders—ordinary members of the public—who pay them. So the public are being denied and punished twice. The public—I include the noble Lord, Lord Sharkey, and others—want a fair market where risk is rewarded but where failure is punished. That has not happened.
The point was made about the most reverend Primate the Archbishop of Canterbury. I pushed the concept of duty of care in the Parliamentary Commission on Banking Standards. It did not accept it as a recommendation, although it was in the report. If the Government were serious about this, they would adopt a duty of care, which would transform the financial services industry. My good friend John Kay, who has just written a book on that, Other People’s Money, agrees with me on this issue.
In the absence of the Government doing anything, when we come back to this on Report they will really have to think about how they can make senior executives personally responsible. Otherwise, the value of the Bill and the reforms, the expenditure and the time we have spent on the Parliamentary Commission on Banking Standards will count for naught. It is time for a reassessment by the Government between now and Report. I hope the Minister takes that seriously.
Constitutional Convention Bill [HL]
Lord Bishop of Southwark Excerpts(9 years, 6 months ago)
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The Lord Bishop of Southwark
My Lords, I congratulate the noble Lord, Lord Purvis, on securing time for this Bill—a Bill that, in making provision for a constitutional convention, I am happy to support. I note that a growing consensus is emerging for the constitutional questions that we face to be addressed. To use the terms of the noble Lord, Lord Hennessy, when he recently addressed the House of Bishops, we are faced with a constitutional building site and no blueprint of what it is we are trying to construct. A convention could at least help provide that blueprint.
It was in 2011-12, when the right reverend Prelate the Bishop of Leicester served on the Joint Committee on House of Lords Reform, that we on these Benches first made public calls for a convention. A sizeable number of members of that committee, from across the spectrum, decided that the problem with trying to address as serious an issue as House of Lords reform was that the process was fundamentally flawed, for it sought to address issues of form rather than function. No one had adequately set out for debate the question about what the House of Lords ought to be doing. Naturally, it makes greater sense to settle the question of powers and function before getting into issues of form. That basic question is easily extrapolated into other similar constitutional questions, such as devolution.
Turning to the substance of the Bill, the proposal that 50% of the members of the convention should not be employed in political roles is much to be welcomed. It was a point that the House of Bishops made in its pastoral letter ahead of the election, when we called for the wide involvement of the whole nation and community in discussions about the constitution. To focus equally on those who are not employed in formal political roles argues for strong representation from churches and other faiths as key components of civil society. I wonder whether the Bill might be strengthened by the naming of such groups as being specifically included in a convention. The established church, which has been involved in every constitutional discussion since Magna Carta, would clearly have a locus in any discussion around the future of the constitution. I can confirm the willingness and active desire of the Church of England to be involved in such work.
While welcoming the broader thrust of the Bill, I am cautious about some of its rather ambitious proposals. To seek to make recommendations on such a broad list of issues as the Bill requires is a mammoth task. To do this within 12 calendar months might be considered to be Herculean.
However, there is perhaps a greater problem here. It is widely noted that public trust in our political system and class is at a very low ebb. Much of this is based on the perceived self-interest of political parties and a sense that short-termism that gives political advantage is often a governing factor in proposals for change and reform. If we are adequately to engage the people of this nation in a conversation about the nature of our constitution, this surely is a much bigger challenge to overcome.
In the list of things that a convention would address, this Bill rather assumes that there are things, such as the voting system, that need to be fixed. Such suppositions betray an underlying political conviction, and we ought perhaps to be wary of them. The 2011 referendum on the voting system confirmed as an important part of our democratic system that an MP represents a defined geographical area and is accountable to his or her constituents. A general election is still a collection of 650 local polls with the aggregated result determining the Government. It is not a single national poll, no matter how much our media and political system have portrayed it as such at successive general elections.
So questions about reform need to begin with function, not form, rather than assuming that the voting system needs changing. We should begin with questions about what is important in terms of representation and the nature of the key relationship between those who are represented and those who represent them. The same question about function and form can, as I have suggested, be asked about other areas of the Bill, too.
I turn finally to one thing of which there is no mention in the Bill: the lack of remit to examine the relationship between church and state, or the monarchy’s position in relation to the church. It will not surprise your Lordships to learn that I believe this to be right, and I welcome it. If there were ever an appetite to address these questions, they ought really to be looked at separately. However, I note that one of the terms of reference in the Bill is to look at what ought to be matters for future conventions. I imagine that this could be an entry point to a debate on establishment, should there be pressure so to do. I would therefore be interested in the intentions of the noble Lord, Lord Purvis, in that regard.
While it will be clear that I believe that there are issues with the Bill, its call for a convention to address the constitutional issues we face is nevertheless much to be welcomed.