Financial Services and Markets Bill

Debate between Stella Creasy and Richard Fuller

2nd reading
Wednesday 7th September 2022 Commons Chamber

[Richard Fuller]

The hon. Lady tempts me to talk beyond what is really the responsibility of the Government. She is raising questions that are correctly and appropriately for the parliamentary authorities to respond to. On her more general point about whether the system is correct to rely on the regulatory framework that was established in 2000, I think the answer is absolutely yes. As I have just mentioned, it provides the ability for an agile, pro-growth, competitive set of financial services regulations, and I believe that Parliament itself is capable of providing that democratic oversight over the regulators. If she is concerned about that, I encourage her to take it up with the parliamentary authorities in the usual way.

So I welcome the Treasury Sub-Committee. I have said that ultimately it is for Parliament to determine the best structure for the ongoing scrutiny of financial services regulators. The Bill also includes a new power for the Treasury to require the regulators to review their rules when that is in the public interest. Following any such review, the final decision on potential action would be for the regulators to make.

Following the repeal of retained EU law, the Government will have no formal mechanism to bring public policy considerations directly into rule-making. It is right for the democratically elected Government of the day to be able to intervene in a matter of financial services regulation where there are matters of significant public interest. The Government’s intention is therefore to bring forward an intervention power that will enable Her Majesty’s Treasury to direct a regulator to make, amend or revoke rules where there are matters of significant public interest. The Chancellor will take a final decision on the precise mechanics of the power and the Government will table an amendment in Committee.

Let me now turn to the Bill’s second objective: bolstering the competitiveness of UK markets and promoting the effective use of capital. I have already spoken about the improvements to the UK’s regulation of secondary markets in this Bill through reforms to the MIFID framework in the wholesale markets review. These changes will lower costs for firms and align our approach with that of other international financial centres such as the United States. To improve the smooth functioning of markets, we will introduce a senior managers and certification regime for key financial market infrastructure firms. We will expand the resolution regime for central counterparties to align with international standards, and enhance the powers to manage insurers in financial distress.

The next objective of the Bill is to strengthen the UK’s position as an open and global financial hub. Outside the EU, the UK is able to negotiate our own international trade agreements, including mutual recognition agreements—MRAs—in the area of financial services. The Government are currently negotiating an ambitious financial services MRA with Switzerland. Clause 23 enables the introduction of any necessary changes through secondary legislation to give effective to this and to any future financial services MRAs. Schedule 2 contains measures that enable the United Kingdom to recognise overseas jurisdictions that have equivalent regulatory systems for securitisations classed as simple, transparent and standardised, allowing UK investors to diversify their portfolio while maintaining the level of protections they currently enjoy.

The Bill takes the UK further forward as a centre for financial markets technology. Clause 21 and schedule 6 extend existing payments legislation to include payments systems and service providers who use digital settlement assets that include forms of crypto-assets used for payments, such as stablecoin, backed by fiat currency. This brings such payments systems within the regulatory remit of the Bank of England and the payments system regulator, allowing for their supervision in relation to financial stability, promoting competition and encouraging innovation.

To foster innovation, clauses 13 to 17 and schedule 4 enable the delivery of a financial markets infrastructure sandbox by next year, allowing firms to test the use of new and potentially transformative technologies and practices that underpin financial markets, such as distributed ledger technology. In parallel, the Bill promotes the finance sector’s resilience by allowing the financial service regulators to oversee the services that critical third parties provide to the sector.

Let me turn to the Bill’s final objective, which I know will have the commendable focus of colleagues throughout the House: the promotion of financial inclusion and consumer protection. The Government will continue to foster an industry that supports everyone so that individuals do not feel left behind by the rapid advancement in financial technology. There is an extensive programme of ongoing work related to consumer protection, especially in the areas that were legislated for in the Financial Services Act 2021, such as buy now, pay later agreements and the FCA’s rules on the consumer duty.

[Stella Creasy (Walthamstow) (Lab/Co-op)]

The Minister is relatively new to his role, but he cannot help but be aware that it is now almost two years since this House recognised the real threat to our constituents’ bank balances posed by buy now, pay later and its lack of regulation. There is agreement throughout the House that these legal loan sharks must be regulated. The Minister may say that this is a complex policy area, but political will and the cost of living crisis demand fast action. Why is the necessary regulation not in the Bill? It could have been the perfect vehicle, ahead of Christmas, when these companies will profit again, to act to protect our constituents.

[Richard Fuller]

The hon. Lady is right to talk about the urgency and complexity of the issue. She understands that it is complex and will invigorate us all to move as quickly as possible. I note that even as recently as 19 August the FCA has followed up with the buy now, pay later companies to remind them of the rules that they have to operate under, and that the Government have committed to bring forward the consultation on the draft legislation before the end of the year. I look forward to discussing matters further with the hon. Lady.

The 2021 Act made legislative changes to support the widespread offering of cashback without a purchase by shops and other businesses. Clause 47 and schedule 8 go further and give the FCA the responsibility to ensure reasonable access to cash across the UK. The FCA will have regard to local access issues and a Government policy statement on access more generally. The Treasury will designate banks, building societies and cash co-ordination arrangements to be subject to FCA oversight on this matter.

Immigration Detention

Debate between Stella Creasy and Richard Fuller

Thursday 10th September 2015 Commons Chamber

[Richard Fuller (Bedford) (Con)]

In my first speech to the House as a Member of Parliament, I said that I wanted to be able to speak on behalf of those whose voices were small and might not be heard. In this debate, I want to speak up on behalf of the women who are detained at the Yarl’s Wood removal centre, which is on the outskirts of my constituency. Those women have to deal every day with a sense of despair, a sense of uncertainty about their future and, most crushingly, a sense of disbelief about all the encounters that they have, because from the point of view of the state they have no right to be here.

It was inspirational of Sarah Teather to set up this inquiry, and I am so grateful to her for the work that she put into it and for enabling me to be part of the review that we are debating today. In my view, it is also a great benefit to us that the Minister for Immigration, my right hon. Friend the Member for Old Bexley and Sidcup (James Brokenshire) is responsible for immigration issues, including detention. It is fair to say that he has inherited a mess when it comes to the use of detention. This goes all the way back to the 1970s, when the process of administrative detention was put in place. That led to a massive growth in the detention estate and introduced the principle of indefinite detention, and has led us to incarcerating children again. Those are the results of the way in which policy on the detention of people who have no right to be here has evolved over the past 30 or 40 years, and it is entirely correct that Parliament, ahead of any Home Office review, should express a demand for change by the Government.

We know that the current system is a mess not only because the Home Office is undertaking a review of the extension of the detention estate but because it has set up the Shaw review of the healthcare and wellbeing of people in the detention system. One of the administrators of the system, Serco, is carrying out its own review under Kate Lampard into the role of immigration detention and the quality of the services provided to the people in Yarl’s Wood. Her Majesty’s inspector of prisons has said that Yarl’s Wood is a place of “national concern” and the independent monitoring board of the detention estate has expressed concern not just about the practice of immigration detention but about the policy, which is the direct responsibility of this Government.

It is almost beyond question that the current process of immigration detention is costly, ineffective and too often unjust for too many of the people involved. How on earth can I justify to my taxpayers the expenditure of £100 a night to incarcerate someone in a prison, only then to put them back where they came from in the first place? How can the Minister defend a policy that results in 50% of the people who are put into detention centres being put straight back into the community rather than being removed? Why on earth will he not take the advice of the all-party parliamentary groups and look into the proposed alternative case management systems, which would offer a lower-cost solution for the taxpayer?

[Stella Creasy]

The hon. Gentleman and I have shared a platform before to express our concerns about Yarl’s Wood. The fact that two thirds of the women in Yarl’s Wood are released back into the community demonstrates the futility of that place. Does he agree that it is time to move on and close it down?

[Richard Fuller]

Absolutely: it is time to close down Yarl’s Wood. I say that not just because it would be a satisfactory end to the policy, but because it would be an emblem, a sign, that this Minister has decided that it is time to call an end to the extensive use of immigration detention. Closing Yarl’s Wood is exactly what we should do.

Finance (No. 3) Bill

Debate between Stella Creasy and Richard Fuller

Monday 4th July 2011 Commons Chamber

[Stella Creasy]

I am interested in the hon. Lady’s impression that consumer credit is a bad thing, because I do not agree. I would also be interested in her views on research by the Office for Budget Responsibility, which shows that as a direct consequence of the Government’s Budgets an extra £10,000 of debt is being put on to households. Perhaps she would like to comment on the implications of that for family finances. No? Then I will continue.

The problem is not just the high-cost credit industry but the nature of the industry and the way in which it operates, which is causing so many problems. What most worries many Opposition Members is that so many families are struggling. Indeed, we know that 46% of families say that they do not earn enough in a month to pay all their bills. Crucially, of that 46%, 10% say that the reason they are struggling is the repayments on high-cost credit. It is those very products that are pushing them into financial difficulty.

For the avoidance of doubt, I say clearly that I am not trying to put Wonga and the other companies out of business. I do not hold with the constituent of mine who argued that we should learn a lesson from Dante and put them in the seventh circle of hell, but we can make the credit market fairer for all concerned. It is important to set out, therefore, the kind of companies we are talking about and just how quickly this industry is growing in the light of recent economic circumstances.

Many people know about payday lending—the form of credit whereby a borrower gives a creditor a cheque or an authorisation to make an automatic withdrawal from their bank account. That is used as security for a short-term loan to be repaid, supposedly on the next payday. It is a long-established form of credit in other countries, but it is relatively new to the UK—and it is growing rapidly. By 2009, the payday lending industry was worth more than £1.2 billion, and the figures I have gathered from the Department for Business, Innovation and Skills, which were released under a freedom of information request rather than being put in the public domain, show that it is now worth £1.9 billion. Indeed, in its “Keeping the Plates Spinning” report, Consumer Focus estimates that payday lenders are expected to quadruple the scale of their operations in the UK in the next few years alone.

[Richard Fuller]

The hon. Lady says that the payday lending market was £1.2 billion in 2009. According to the Office of Fair Trading review of the payday loan market, it was £600 million. To clarify the situation, and for my education, will she explain the difference between the two numbers?

[Stella Creasy]

I will happily explain the difference between the two numbers. The hon. Gentleman might have heard me say that I made a freedom of information request to obtain the most up-to-date data from the Department, and it is a source of concern that Ministers did not share the information with MPs. Research shows clearly that the market has grown to £1.9 billion. If I tell the hon. Gentleman that 5% of the population have taken out a payday loan in the last year, representing 2 million, perhaps he will understand the discrepancy. Perhaps he might like to account for why the Government did not want to put that information in the public domain.

[Richard Fuller]

I just wish to point out to the hon. Lady that I think there is a lot of consensus, which I hope she does not destroy in her passion for this issue.

As a point of clarification, the 5% figure in the OFT’s analysis came not from the payday loan market but from participation in the high-cost credit market, which includes credit unions and credit cards. Given that my source is the OFT, perhaps she will clarify that point too.

[Stella Creasy]

I am happy to share the figures with the hon. Gentleman, although I am afraid to say that his interpretation is incorrect. One of the things that I have done—perhaps I am getting a reputation for it in the House—is my homework on this market, and I have sought as much accurate information as possible. That was why I made the freedom of information request, and I would be happy to share the data with him. One of the challenges is that the Government have information about how quickly this market is growing, but they are timid about confirming it.

Big Society

Debate between Stella Creasy and Richard Fuller

Monday 28th February 2011 Commons Chamber

[Stella Creasy]

I am going to press on, because I do not have much time.

We on the left have always understood that for any organisation to work, it needs a sense of purpose and a common goal. It needs to know what it is trying to achieve, not just how it will try to achieve it. People can then be brought together around that current goal.

That leads me to my second point about why purpose is so important in the big society. It seems to me that in the points that are being made about it, a whole series of objectives are conflated, whether democratic engagement or increasing volunteering. We all understand that volunteering is not the same as voice, but the conflation of more meetings at a local level with encouraging more people to volunteer and looking to commission more within the voluntary sector seems to reflect a lack of purpose.

[Richard Fuller]

rose—

[Stella Creasy]

I am not going to give way, because the clock is ticking. I do apologise.

Either the big society is a programme about the devolution of power, with single, double or treble participation, or it is about encouraging more people to be involved in running services. A lack of purpose comes from not having a mechanism to ensure that the purpose of those processes is fair and balanced. We on these Benches are very clear that all the purposes of Government should be about achieving a more equal, fairer society.

Equally, there is no mechanism in a process-driven purpose for judging value for money. As a member of the Public Accounts Committee, I look forward to seeing some of the reports that will come to us. Above all, there can be no clarity about the tough choices that any Government or any public may have to make about the type of services that they want if there is no sense of what those services are intended to achieve. Why are free schools and encouraging people in the voluntary sector to work together more seen as the same thing? It seems like apples and pears.

That leads me to the second problem with the big society, which is that it does not show an understanding of the voluntary sector as it is currently constructed. The focus on processes obscures as much of the work as it illuminates and shows a misreading of the fact that civil society is intricately connected with the public sector as much as it works with the private sector. Many charities are little different from businesses, as I believe the hon. Member for Stourbridge (Margot James) set out earlier, and many people who work in the public sector do so with an ethos of care and concern for their communities. Taking the argument for reform of the state and using it to call for its abolition like cutting off one’s nose to spite one’s face.

The history of the co-operative movement proves that. It was set up as a form of protection against the absence of publicly provided services—to fill a gap rather than to replace those services. The modern voluntary sector is intricately interconnected with the state, whether through the funding that it receives or the people with whom it works. The voluntary sector organisations that many Members have mentioned having in their communities will struggle without a sense of purpose to draw people together.

We have to be clear that the voluntary sector in itself is not a panacea. Some voluntary sector organisations work well and others do not work so well, so there needs to be a sense of purpose and a series of tests to set against it. We must also consider the type of volunteering that people are prepared to do. We are seeing a rise in what people call “episodic volunteering”, and there are many questions about whether such volunteering can deliver the purported goals of the big society. There are questions about whether there will be the sustained involvement and participation that people wish to see, or whether people will be willing to turn up for a day to volunteer on a stall but not to volunteer in the long term.

That leads me to my third concern about the big society, which is that it shows a misreading of the nature of community. Basing our view of community on the “little platoons” that people are so fond of talking about makes little sense in a contemporary era when we can know and feel the consequences of riots on the streets of Libya, poverty in Asia or earthquakes in New Zealand. Connectedness happens in many different ways around the world, locally, nationally and internationally, and through many different life stages.

I appeal to Conservative Members to learn the lessons that we on these Benches did about the danger of reading too much into communitarianism and the work of Etzioni. I found it fascinating to find out over the weekend that Robert Putnam and Colonel Gaddafi had once met to talk about whether there was a connection between “The Green Book” and social capital.

If we are to secure change in contemporary society, we need a better way of understanding how and why people connect. We also need a better reading of how and why people are connecting in their current societies, given that nearly 40% of people already currently volunteer through formal organisations and a further 56% volunteer in informal ways. The idea that Britain is broken or a nation of people who are alienated from their communities is simply not true. Furthermore, there is a danger in forcing our vision of what community looks like on communities that may have many social networks but are not connected to the public sector. The big society needs a better analysis of the nature of community and community bonds than it currently offers.

That leads to my fourth concern about the big society, which is that it does not show an understanding of the resources that communities have to give to volunteering and public service. We can learn not least from the experience of the big society ambassador himself, who found that he did not have the time to be involved in the way that he wished to be.

Anyone who has worked in the voluntary sector knows that time, money and confidence are critical factors in securing the contribution that anybody can make. The big society needs a better articulation of how that time, money and confidence will be shared out more equitably among society, so that we can unlock the potential that many people have. Asking people to do so much in such a short period does not allow for the time and effort that is required to allow that potential to grow.

I urge Members to look again at a case such as Porto Alegre and see that it took 20 years for people to be involved in the delivery of public services in Brazil in the way that many now want here. Perhaps they should learn from New Harmony, a colony set up by Robert Owen in Indiana that for 20 years developed libraries, community centres and hospitals, and then fell apart because all the people involved decided that they hated each other. That is the reality of trying to get people to work together—it is complex, messy and difficult, and without a sense of purpose it is destined to fail.

That is why I urge the hon. Member for Hereford and South Herefordshire (Jesse Norman) to read a little less Burke and a little more William Morris, who understood that fellowship is life and a lack of fellowship is death. We on the left understand from Morris’s work that fellowship was about not just asking people to work together but about the conditions under which they worked. He understood the tyranny of inequality and the ability to bring people together to work in co-ops.

I also encourage the hon. Gentleman to read Tawney, who talked about fellowship being expressed not only through relationships between people but through institutions. We see the national health service as the best social insurance policy that the nation can have, and we work together at many different levels to achieve such goals. We look to the purpose first, and then to the different models for delivering it, rather than starting with the process of volunteering and asking what it can do. I hope that in this short time I have set out some alternative suggestions, and I would be happy to discuss the matter further.