Financial Services and Markets Bill

Olivia Blake Excerpts

Report stage
Wednesday 7th December 2022 Commons Chamber

[Olivia Blake (Sheffield, Hallam) (Lab)]

How does the Minister square the language that he has just used about how great the UK is with two major banks that are based here providing £107.44 billion to the top 50 companies expanding upstream oil and gas? Is that not exactly why we need some of the sustainable finance amendments that have been tabled?

[Andrew Griffith]

I beg to differ with the hon. Lady, because it is important to finance the transition to achieve a just green financial future. While we are making all these efforts and coming forward with things such as the taskforce on nature-related financial disclosures, we will therefore make sure that we are not defaulting to divestments and boycotts, because that is not our view of the way that the Government will finance the clean energy revolution.

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[Miriam Cates (Penistone and Stocksbridge) (Con)]

I rise to speak in support of new clause 27, tabled by my hon. Friend the Member for Hastings and Rye (Sally-Ann Hart). As she said, it would prohibit payment service providers from refusing to supply a customer based on the customer exercising their lawful right to freedom of expression.

On 15 September, PayPal notified the Free Speech Union that it had closed its account with immediate effect. The reason given was that the Free Speech Union had breached the company’s acceptable use policy, but no further information was forthcoming. The accounts of UsForThem, the Daily Sceptic and the journalist Toby Young were also terminated. It is still not entirely clear why PayPal closed the accounts, but the apparently common theme among those organisations and individuals is that they have each become prominent champions of free speech, expressing critical, non-conforming opinions and asking challenging questions.

The effect of PayPal’s decision was to temporarily disrupt the ability of those organisations to operate. In some cases, their accounts were frozen, thereby denying them access to their funds. In the light of that, 42 peers and MPs wrote to the then Business Secretary, my right hon. Friend the Member for North East Somerset (Mr Rees-Mogg), and to the Minister currently on the Front Bench. PayPal then restored the accounts of UsForThem and the Free Speech Union. Although PayPal’s actions may seem unjustifiable, payment providers and high street banks may terminate the accounts of groups on the basis of lawful speech, so long as adequate notice is given. As the law stands, the only thing that PayPal did wrong was not to give sufficient notice of the closure.

Sadly, the actions of PayPal in September were not a one-off. It also closed the accounts of the UK Medical Freedom Alliance and Law or Fiction, both of which are opposed to lockdowns, and it has not reopened either of them. It is therefore hard to avoid interpreting PayPal’s actions as an orchestrated, politically motivated move to restrict certain views within the UK. This is unacceptable.

In an increasingly cashless society—we have heard a lot about the merits of cash today—access to a digital payment system is not a luxury, but a basic requirement for participation in society. No campaigning organisation can function without the ability to perform financial transactions. Imagine if the suffragettes had not been allowed to have or use cash, or if those campaigning for Brexit had been refused a bank account. Freedom of speech and freedom of expression are foundational to democracy, and there can be no meaningful freedom of expression without the ability to conduct financial transactions.

It is of course right that in the UK private companies can choose which customers they do and do not want to do business with, but this is based on the assumption that there is a functional marketplace with healthy competition and that companies are regulated by, and compliant with, UK law and regulations. PayPal is eight times larger than its nearest competitor. It is a Californian company with its European headquarters in Luxembourg. Are we happy to delegate important powers relating to freedom of speech and expression to unaccountable global tech firms?

Of course, unlike socialists, conservatives want markets to operate freely, without unnecessary bureaucracy and state control. But as conservatives, unlike liberals or libertarians, we understand that there must be limits to this freedom, because without limits, human beings and organisations will sometimes—perhaps often—put their own interests before the best interests of customers and societies. As UK national conservatives, we believe that the proper bodies to set the bounds of free speech and political opinions in the UK are the UK Parliament and UK courts. That is why we must act to legally prevent payment providers from closing accounts of the basis of political beliefs, because if we do not, big global companies will put their own interests—financial, reputational and political—before any moral duty to act fairly.

The principle of using law to protect free speech is well established. The Equality Act 2010 prohibits discrimination on the grounds of religious or philosophical beliefs, but this protects individuals, not organisations, which is why it cannot be used in this case. The Government are also acting to protect free speech in universities, and the Higher Education (Freedom of Speech) Bill is today making its passage through the other place.

The PayPal saga identified a gap in our free speech protection that must be filled with appropriate legislation, which is why I support new clause 27. I thank the Minister for his engagement on this issue, which I know he takes very seriously—I was delighted by his opening remarks and commitment to work further on it. I very much hope that, following the evidence that he will gather, he will legislate if it is appropriate to do so. I appreciate his assurances on that.

I want to finish with a recent example of what happens when free speech is threatened. I know we do not want to think back to covid, but we had lockdowns and school closures. In fact, UK schools were closed for longer than those in almost any other country in Europe, and our children missed more face-to-face learning than those in any country other than Italy. The effects on children have been absolutely horrendous and will last a generation. They include lost learning, an increase in eating disorders, self-harm, a loss of socialisation, exposure to domestic violence—I could go on and on. [Interruption.] But I will not, because you are clearly telling me not to, Madam Deputy Speaker.

The Government now say that doing that was a mistake and that there was not sufficient evidence, but one reason that schools were reopened and children were eventually protected was the effective campaigning of the group UsForThem, which—unlike so many—stood up for children and their welfare. Its views were unpopular and it was said to be spreading misinformation. Imagine if its bank account had been cancelled two years ago—where we would be now? We need this protection. I appreciate the Minister’s commitment and I look forward to working with him further.

[Olivia Blake]

The Bill is important because it presents an opportunity to set out a new, responsible and green vision for the City and financial services, but the Government are squandering that opportunity. That is why I rise to speak in support of amendments that would enshrine climate protections and harness the power of the City to act as a force for people and planet.

Let us look at the resources in that sector. Globally, privately invested financial assets are expected to reach $145.4 trillion by 2025—a 250% growth in less than 20 years. In the UK, pension assets amount to a staggering £2.7 trillion. The financial challenge for decarbonising the economy is significant. The UN has estimated that, globally, we require £90 trillion of infrastructure investment by 2030 alone. In the UK, private investment in carbon-cutting activities needs to grow by an extra £140 billion over the next five years to reach our net zero goals. We should mobilise the huge resources in the finance system to meet the existential challenge of the climate crisis. Instead, financial institutions are adding fuel to the fire, as I mentioned.

Britain is a financial giant and is the biggest net exporter of financial services in the world. I support new clause 6, tabled by my hon. Friend the Member for Hampstead and Kilburn (Tulip Siddiq), because we need a strategy for how we use that influence to reshape the system in accordance with climate priorities. However, those climate priorities are not the priorities in the Bill. Rather than making it a statutory aim of regulators to ensure compliance with our net zero aims and protect our natural environment, the Bill makes the main aim of regulation growth and competitiveness in the sector. In fact, although it is supposed to represent the Government’s vision for the future of financial services, it does not mention “nature” once. That is why I support new clause 25, which aims not for growth and competitiveness on its own, but for a regulatory regime designed for long-term economic resilience, climate safety and nature restoration.

The science is clear: complying with our net zero and Paris agreement obligations means keeping dirty fossil fuels in the ground, so we should encourage divestment in fossil fuels and put an end to fossil fuel extraction. New clauses 21 and 26 have my full support because they rightly restrict and provide disincentives for that kind of harmful investment. We need not only to incentivise fossil fuel divestment, but to ensure that investors make demands of companies on climate action.

I tabled new clauses 8 and 9 because we need to raise the bar on stewardship rules, putting ethical engagement with companies on the climate crisis and much more at the heart of investor activity. I support amendments 23 to 27 because they would reinstate the position limit rules on the kinds of awful things that we have seen relating to speculating on food and betting on hunger. We should stand firmly against that, especially given global heating.

I will finish by saying a few words about fraud. My constituents have been frustrated by the lack of accountability in the financial services sector. Some fraud victims are passed from pillar to post in trying to access justice, so I welcome new clause 1, which tasks the Government with creating a national strategy on preventing fraud. Although these will not be pressed to a separate vote, I draw the House’s attention to my new clause 26 and my amendment 20, which make clear the responsibility for reporting fraud and compensating victims. I also express my support for new clause 2, which would ensure that everyone has access to essential in-person banking services.

We need financial services that work for people and planet. As the clock ticks on climate action, now is the time to pull every lever and seize every opportunity to decarbonise our economy and society. However, the Bill has presented us with more of the same agenda—deregulation and lip service to climate goals. As the slogan goes, we need “system change not climate change.” I am afraid that without significant changes, the Bill will deliver the opposite.

[Craig Tracey (North Warwickshire) (Con)]

I declare an interest as chair of the insurance and financial services all-party parliamentary group. I welcome the Bill as a great opportunity to cement the UK’s position as a leading market for financial services.

The London insurance market alone is bigger than all its competitors combined. That is great news, but it also means that it is a target and that it has the most to lose, so it is really important that we get this key legislation right. I thank the Minister for his engagement at earlier stages; I know he is keen to make the Bill a big success, as I am, and I really appreciate the conversations that we have had.