Financial Services and Markets Bill

Lord Naseby Excerpts

2nd reading
Tuesday 10th January 2023 Lords Chamber

[Lord Naseby (Con)]

My Lords, I too congratulate my noble friend Lord Remnant on his maiden speech and, in particular, on the depth of that speech in relation to the Bill we have before us this evening. I hope he will contribute in Committee.

My primary congratulations go to His Majesty’s Government. I have had the privilege of serving in the other place and here for 48 and a half years, and I do not think there has been a Bill as helpful to the City of London as this Bill has the ability to be. I say to my noble friend on the Front Bench, and to the whole of her team, well done on actually producing a Bill that is going to help the City of London. There have been a whole lot of positive reactions from the financial services market and from the City itself. I shall pick out just two that I received. First, “The City welcomes the creation of a more nimble, agile and proportionate regulatory regime for the implementation of the FCA’s and PRA’s growth and competitive secondary objective, alongside improving the speed of FCA authorisation turnaround times”. That is a bit mechanical, but it is very important. Equally, and even more important, probably—the noble Baroness, Lady Hayman referred to this—on the issue of the green area, “The world’s financial system through engaging internationally has to facilitate international standards and global alignment, ensuring that the ESG taxonomies are interoperable”. That seems to me absolutely vital. So much for the congratulations.

The other dimension that I noted the other day is the 30 Edinburgh reforms that the Chancellor has brought forward, almost—but not—on the sly. There is no doubt that they are important. One will drive investment into UK growth companies, in particular the new guidance for asset pooling of local government pension schemes—I declare an interest as a trustee of the parliamentary pension scheme. I can assure my noble friend that it is much needed and to be welcomed. I noticed that the leaders involved in this have got together and set up an organisation called the UK Capital Markets Industry Taskforce. That in itself is enormously welcome.

I want primarily to comment on an area that nobody has mentioned to date, thankfully. For some 25 years, I have been involved in the mutual movement. I had the privilege of being the chairman of the Tunbridge Wells Equitable Friendly Society for just over 10 years. As my noble friend on the Front Bench knows, at the moment a Private Member’s Bill from Sir Mark Hendrick, the Co-operatives, Mutuals and Friendly Societies Bill, is going through the Commons. It is there to deal with the scandal, frankly, of the demutualisation of mainly our building societies, which was not to the benefit of investors in the building societies but for somebody else to turn a penny—or several pounds. In its present form, that Bill will match the best legislation that exists in many other countries. It also introduces a voluntary power to enable a mutual to choose a constitutional change so that its legacy assets would be non-distributable, details precisely the destination of any capital surplus on a solvent winding up, and outlines the procedures in the mutual’s moves. That is a major step forward, and I very much hope His Majesty’s Government get it on the statute book. It will certainly have my support.

Secondly, there is the position of raising capital for the mutual movement. I had a Bill, which is on the statute book as the Mutuals’ Deferred Shares Act 2015. It was welcomed by all parties but unfortunately has been bogged down somewhere in the system and very little capital, if any, has been raised by the mutual movement. I understand that the Government are thinking of asking the Law Commission to look at that. I say to my noble friend that that is kicking it into the long grass a bit. I hope we can look at it again.

Finally, we come to the regulatory dimension. It seems to me, as one who sat on the Public Accounts Committee in the other place for some 12 years, that the reason that succeeds is that it is basically backed up by a government body providing the evidence. Maybe that framework is something we should look at. Something certainly needs to be done. We have listened enough this evening to know that movement in that area is absolutely vital.