Financial Services Bill

Lord Rooker Excerpts

2nd reading & 2nd reading (Hansard) & 2nd reading (Hansard): House of Lords
Thursday 28th January 2021 Lords Chamber

[Lord Rooker (Lab) [V]]

My Lords, I pay a real and sincere tribute to the two maiden speakers, the noble Lord, Lord Hammond of Runnymede, and the noble Baroness, Lady Shafik. I found their speeches really useful and interesting, and they will make major contributions to the House in the future.

I shall be brief but I want to say a few words about three items. The first concerns Clause 34, on the debt respite scheme. This is much welcomed and we can leave the detail for Committee. It was useful to hear the Minister confirm that priority debts include council tax arrears, energy arrears and benefit overpayments—in other words, broadly speaking, public sector government debts.

Such debts can be a nightmare for people and get worse when, with the best of intentions, attempts are made to repay and are then frustrated because the odd creditor or two believes that more should be repaid quicker. I certainly had experience of that when I advised constituents in the 1970s and 1980s. I got their debt sorted out, but then either a creditor that I did not know about or one of the existing creditors decided that they wanted to speed things up. The Money Advice Trust has provided a really useful and supportive brief on Clause 34.

We now have Covid in play, which, by common consent, has affected poorer families financially more than others, besides the million self-employed people who have not received any help from the Government, many of whom will have taken on debts. Will such debts be covered by Clause 34?

An affordable timeframe is the one element that can give people hope, so this clause is a very big incentive for people to enter into agreements to repay debts in full and not simply ignore them, letting them build up and hoping that something will turn up. It can prevent an escalation of the problem, which of course is a worse nightmare. The key, according to the Money Advice Trust, is the timetable. The mental pressure on people with debts is enormous. Having a timetable which is affordable is key. My question is whether this is a priority for the Treasury, as it is needed as soon as possible.

Secondly, I would like to touch on the issue of economic crime. The Bill—I wrote my speech before my noble friend Lord Reid spoke—appears to be a parliamentary Christmas tree, on which we can hang new bits of legislation. The one I would cite is that regarding the prevention of economic crime. Spotlight on Corruption has made it clear that there is problem. The rules for holding large companies and financial institutions to account for economic crime are unfair and ineffective, and they undermine good corporate governance.

Prosecutors have requested that laws on fraud, false accounting and money laundering be strengthened in line with the laws on bribery and tax evasion. The Commons Treasury Select Committee is in favour of that, and over 70% of those responding to a consultation —last year, I think, or the year before—said that current rules inhibit holding companies to account. It is also in line with previous Conservative Party manifestos, and I am sure, although I have not gone back to check the text today, that it is consistent with the seminal speech that David Cameron made on the issue. I will leave it there, as it is a detail for Committee.

In a way, my final point follows what the right reverend Prelate the Bishop of St Albans said. I have never favoured Gibraltar becoming a brass-plate economy. It is true that we more or less passed it over to Spain after Brexit, so it might well now be a bigger income generator. I have no interest to declare—I had two private holidays there in 1977 and 1979 as a gesture of solidarity when the Spanish closed the border—but the fact is that there are some serious issues to debate given the amount of the Bill that relates to Gibraltar and the fact that it is becoming a bigger brass-plate economy than it has been in the past. This will need further exploration in Committee.