Financial Services and Markets Bill

Lord Vaux of Harrowden Excerpts

Committee stage
Wednesday 1st March 2023 Grand Committee

[Lord Naseby (Con)]

My Lords, I have added my name to this amendment, which in my judgment is absolutely vital. On 8 February, I listened to the chairman of the City of London Corporation’s policy and resources committee; I will quote a couple of points that he made on that evening. He said:

“Faced with increasing global competition”


the UK needs

“a long-term sense of direction, a programme for government, regulators, and industry to act and sustain our global powerhouse status. As a country we need a renewed focus, to adjust our compass, to be the destination that incentivises investment, thrives with talent, and commands the competition. And we need ambition and focus to achieve these goals.”

He finished by saying that we need “the courage to change” in three areas. I will quote two, which are relevant to this amendment:

“Firstly, we need to reduce frictions. That means strengthening UK policy and regulation with an effective and coherent sustainable finance framework. Secondly, we need to nurture innovation. More creativity in the market will inspire better products, which will help attract capital, firms, and customers.”


The City wants confidence in scrutiny and the supervision of the regulator. I hope that my noble friend on the Front Bench will take note of the feelings of the City. I am sure that it would be more than happy to communicate directly with my noble friend and put some flesh on the summary that I have given.

[Lord Vaux of Harrowden (CB)]

My Lords, I, too, have added my name to the amendments in the name of the noble Lord, Lord Bridges. The noble Lord explained in detail the need for the amendments far better than I can, so I will be brief. I support the noble Lord’s every word but, rather than repeating what has been said, I will comment specifically on how this would complement rather than replace the parliamentary scrutiny that is also required.

We have had a lot of discussion so far in Committee about the need for strengthened parliamentary scrutiny and accountability of the performance of the regulators, with an extraordinary level of agreement on all sides— I hope that the Minister listened to that. I strongly supported the idea of creating a bicameral committee specifically for that purpose, as proposed by the noble Baroness, Lady Noakes. Having an independent office for financial regulatory accountability would greatly assist such a committee in carrying out its work. We heard on a previous day in Committee from the noble Baroness, Lady Bowles, who is probably the expert in such matters, and from others about the enormous volume of work that scrutiny of the financial regulators will involve. That is one reason why we need a parliamentary committee focused solely on this subject. Having available independently prepared and, importantly, non-political analysis of both the performance of the regulators and the regulations themselves would make the work of the parliamentary scrutiny committee, or committees, that much more effective, enabling the focus to be on areas where shortcomings were identified, rather than wading through unmanageable volumes of information trying to find those areas.

I therefore make the point that the Minister should not be tempted to see these amendments as an alternative to the enhancements to parliamentary scrutiny that we have already discussed. Rather, she should understand that they are an important element within the three legs required for effective scrutiny and accountability, which the noble Lord, Lord Bridges, has previously explained as being reporting, independent analysis and parliamentary accountability. All three aspects should be embraced. These amendments cover the second, but please do not think that they would replace the others.

--- Later in debate ---

[Baroness Penn (Con)]

My Lords, I believe that I have already made the offer to noble Lords to meet to discuss the issue of accountability, both parliamentary accountability and the proposals such as those put forward in the amendments today. That still stands. I am afraid that I cannot—

[Lord Vaux of Harrowden (CB)]

I apologise for interrupting. The Minister is quite right that she has made that offer. We were grateful for it, but it is of fairly limited use if there is no recognition on the part of the Government that there is a gap here in terms of parliamentary accountability and scrutiny. She has not actually said yet that she recognises that there is a gap. I have to say that she should look around her: it is pretty clear that it is there.

[Baroness Penn (Con)]

What I have tried to say to noble Lords is that, in bringing forward the proposals in this Bill, we absolutely recognise that, with the increased responsibilities that go to the regulator, we need to ensure that there is proper accountability and scrutiny. We have put forward the proposals in the Bill to attempt to do that.