Madam Deputy Speaker (Dame Eleanor Laing) I must draw the House’s
attention to the fact that financial privilege is engaged by Lords
amendment 35. If Lords amendment 35 is agreed to, I will cause the
customary entry waiving Commons financial privilege to be entered
in the Journal. Clause 25 Regulatory principles: Net Zero emissions
target 17:58:00 The Economic Secretary to the Treasury (Andrew
Griffith) I beg to move, That this House disagrees with
Lords...Request free trial
Madam Deputy Speaker ( )
I must draw the House’s attention to the fact that financial
privilege is engaged by Lords amendment 35. If Lords amendment 35
is agreed to, I will cause the customary entry waiving Commons
financial privilege to be entered in the Journal.
Clause 25
Regulatory principles: Net Zero emissions target
17:58:00
The Economic Secretary to the Treasury ()
I beg to move, That this House disagrees with Lords amendment
7.
Madam Deputy Speaker ( )
With this it will be convenient to discuss:
Government amendments (a) to (c) in lieu of Lords
amendment 7.
Lords amendment 10, and Government motion to disagree.
Lords amendment 36, Government motion to disagree, and
Government amendment (a) in lieu of Lords amendment 36.
Lords amendments 1 to 6, 8, 9, 11 to 35 and 37 to 86.
I am delighted to speak again to the Bill, following its passage
through the other place. I thank my colleagues, and , for their expert stewardship
of the Bill, as well as the Opposition spokespeople for their
generally constructive tone.
Hon. and right hon. Members will be aware that the Bill is a
crucial next step in delivering the Government’s vision of an
open, sustainable and technologically advanced financial services
sector. Members will also recall that this sector is one of the
crown jewels of our economy, generating 12% of the UK’s economic
activity and employing 2.5 million people in financial and
related professional services. Few constituencies will be
untouched by those jobs and economic benefits. For example,
Scotland benefits from £13.9 billion of gross value added and an
estimated 136,000 jobs.
The Bill seizes the opportunities of Brexit, tailoring financial
services regulation to UK markets to bolster the competitiveness
of the UK as a global financial centre and deliver better
outcomes for consumers and businesses.
The Bill repeals hundreds of pieces of retained EU law relating
to financial services and gives the regulators significant new
rule-making responsibilities. These increased responsibilities
must be balanced with clear accountability, appropriate
democratic input, and transparent oversight. There has been much
debate in this House and in the other place about how to get that
balance right. As a result of the considered scrutiny, the
Government introduced a number of amendments in the Lords that
improved the Bill in this regard.
Lords amendments 32 to 34 require the regulators to set out how
they have considered representations from Parliament when
publishing their final rules. Lords amendments introduced by the
Government require the regulators to report annually on their
recruitment to the statutory panels, including the new
cost-benefit analysis panels created by the Bill. The amendments
also require the Financial Conduct Authority and the Prudential
Regulation Authority to appoint at least two members of
authorised firms to their CBA panels. This will ensure that their
work is informed by practical experience of how regulatory
requirements impact on firms. My hon. Friends the Members for
North East Bedfordshire (), for North Warwickshire
() and for Wimbledon () may recognise that
amendment and I thank them for their efforts to ensure that the
Bill delivers proper accountability.
Amendments from the Government also provide a power from the
Treasury to require statutory panels to produce annual reports.
The Treasury intends to use this power in the first instance to
direct the publication of annual reports by the CBA panels and
the FCA consumer panel. I hope the hon. Member for Blaenau Gwent
() will welcome this as he tabled
a similar amendment on Report.
Lords amendment 37 will enhance the role of the Financial
Regulators Complaints Commission, which is an important mechanism
for raising concerns about how the FCA, the PRA and the Bank of
England carry out their functions. The amendment requires the
Treasury, rather than the regulators themselves, to appoint the
complaints commissioner, significantly strengthening the
independence of the role.
In response to a debate in this House, the Government amended the
Bill to introduce a power in clause 37 for the Treasury to direct
the regulators to report on various performance metrics. On 9
May, I published a call for proposals, seeking views on what
additional metrics the regulators should publish to support
scrutiny of their work, focused on embedding their new secondary
growth and competitiveness objectives. We have already had a
number of helpful responses and we will come forward with
proposals at pace following the expiry of the deadline next week.
To further support that, Lords amendment 6 requires the FCA and
the PRA to publish two reports on how they have embedded those
new objectives within 12 and 24 months of the objectives coming
into force. Taken together, these are a significant package of
improvements to hold the regulators to account.
I know that access to cash is an issue of huge importance to many
Members on both sides of the House. Representing the rural
constituency of Arundel and South Downs, where the constituents
are older than the UK average, this has always been at the
forefront of my mind during the passage of the Bill. I also pay
tribute to the campaigning work done by the Daily Mail and the
Daily Telegraph on behalf of their readers as well as by groups
such as Age UK and the Royal National Institute of Blind
People.
Let me be clear: the Government’s position is that cash is here
to stay for the long term. It provides a reliable back-up to
digital payments, can be more convenient in some circumstances,
and many, particularly the vulnerable, rely on cash as a means to
manage their finances. The Bill already takes significant steps
forward in protecting the ability of people and businesses across
the UK to access cash deposit and withdrawal facilities for the
first time in UK law. I am pleased to report that we have gone
even further and introduced Lords amendments 72 to 77, which will
protect people’s ability to withdraw and deposit cash for free.
The amendments will require the FCA to seek to ensure reasonable
provision of free cash access services for current accounts of
personal customers. This will be informed by regard to a
Government policy statement, which I expect to publish no later
than the end of September.
Many Members are concerned about the separate issue of
face-to-face banking. The FCA already has guidance to firms
around the closure of bank branches and I hope that they and the
industry will listen to the concerns of Members on behalf of
their constituents on that issue.
Many Members across the House will have experienced the
disproportionate application of rules requiring enhanced due
diligence for politically exposed persons— PEPs. They and their
families should not face some of the challenges and behaviours by
banks that I have heard about. The Government are taking action
to ensure that PEPs are treated in a proportionate manner. Lords
amendment 38 requires the Treasury to amend the money laundering
regulations to explicitly distinguish between domestic and
foreign PEPs in law.
(Glenrothes) (SNP)
Will the Minister be more explicit as to what the close
associates of domestic PEPs might include? Will it include, for
example, somebody who has been elevated to the Lords by a former
Prime Minister against the advice of the security services?
In the interests of making progress on this substantial Bill, I
shall not be tempted to comment on this further other than to say
that I undertake, as I have to many other Members, to look very
closely at that issue. For example, if by “associates” we mean
either the adult children of people who have no real connection
to the business that happens in this House, or family businesses
that, again, are not directly connected to those who have put
themselves forward for public service, I shall look closely at
that. That is why we have tabled the amendments.
Lords amendment 39 requires the FCA to conduct a review into
whether financial institutions are adhering to its guidance on
the treatment of PEPs, and to assess the appropriateness of its
guidance in light of its findings. Together, the amendments will
lead to a change in how parliamentarians and their families
experience the regime, and I am confident that they will be
welcomed by all.
I will now set out the Government’s response to the
non-Government amendments made in the Lords. The Bill introduces
a new regulatory principle requiring the regulators to have
regard to the Government’s net zero emissions target. Lords
amendment 7 seeks to add conservation and the enhancement of the
natural environment and other targets to this regulatory
principle. The Government cannot accept the amendment as drafted,
which is very broad and open to interpretation. The regulators
must balance their objectives carefully, and they have a very
important job to do. At a time when the Bank of England is
rightly occupied by getting a grip on inflation, and the FCA is
dealing with a range of challenges including working with lenders
to ensure that there is support in place for those experiencing
increases in mortgage interest rates, we must not overburden them
with other considerations, particularly when they are vague or of
uncertain relevance.
(Ludlow) (Con)
My hon. Friend is making a very clear exposition of the
Government’s position on the Lords amendments. On replacing Lords
amendment 7 with a Government amendment, will he make it clear,
for the benefit of the House and the other place, that his
proposal is both effective in law and will give effect to the
substance of what their lordships were seeking, which is that
nature should be a key responsibility under the Bill?
I give my right hon. Friend that assurance. This is not about a
different destination; the Government have a proud record of
action on net zero, on nature and, as we will come on to talk
about, on deforestation. This is simply the best mechanism by
which we can get from here to there. It builds upon the
well-defined targets set in the groundbreaking Environment Act
2021, and in so doing produces something that we think regulators
can advance while giving the right clarity to those
objectives.
Lords amendment 36 seeks, laudably, to require financial services
firms to introduce a due diligence regime to ensure that they do
not support illegal deforestation in their activities. I see no
fundamental conflict between having a vibrant, competitive,
world-leading financial services sector and taking the very
toughest approach on deforestation. The House considered a
similar amendment from my right hon. Friend the Member for Epsom
and Ewell () on Report. As I set out
then, the Government fully support the intention behind the
amendment, but further work is needed to ensure that a practical
regulatory framework can adequately address this important
topic.
I am grateful for the work of the Global Resource Initiative and
in particular for its May 2022 finance report, which directly
addresses these issues. The GRI talked about the need to take a
staged approach and said that further work would be needed to
come forward with a set of detailed standards and due diligence
requirements to prevent the financing of forest risk commodities.
Any intervention must therefore be scoped in detail and ensure
that the UK moves in lockstep with international partners to
ensure the true effectiveness of the regime in tackling the
scourge of financing illegal deforestation.
The GRI report acknowledged that the well-developed work of the
task force for nature-related financial disclosures, TNFD, will
be increasingly important, especially as it has now included
recommendations on deforestation in its draft standards. That is
an organisation that the UK Government support and have provided
finance to, and it is supported by the finance leaders of both
the G7 and G20.
My hon. Friend is being very generous with his time. Without
wanting to pre-empt the work of the Environmental Audit
Committee, which is doing an inquiry into the whole subject of
financing deforestation and what this country can do, I
congratulate him on the amendment he has tabled in lieu of the
Lords amendment. I think his amendment will do precisely what our
Committee is likely to call for when we report in a few weeks’
time.
I thank my right hon. Friend for his work and the work of his
Committee, and for being so kind as to suggest that we may be
anticipating his conclusions—not that I had prior knowledge of
them. The important thing, a point made well by my right hon.
Friend the Member for Epsom and Ewell, is that we get on and do
this from a practical perspective. We have committed to convening
a series of roundtables during the remainder of 2023, which will
form the basis of a taskforce to drive forward the work of that
important review and support the development of clear due
diligence standards.
(Epsom and Ewell) (Con)
I am grateful for how my hon. Friend the Minister has picked up
the agenda and moved forward, following pressure both in this
House and in the other place. The key to the taskforce that he is
establishing is that it delivers not just a direction of travel
but tangible recommendations on monitoring a system of due
diligence, in a form that is actionable by the Government and by
Parliament. Will he give that mandate to those he puts in to the
taskforce for the job that he expects them to do?
I would love if it “Action” were my middle name. Certainly, my
right hon. Friend has that commitment from me and from , who leads on green finance.
The whole purpose of the taskforce is to drive forward action and
support the development of clear due diligence standards. That is
the important unlocking that we seek. We commit to doing that
against a genuinely ambitious timeframe of just nine months
following the first relevant regulations under the Environment
Act 2021 being made. Those are important, as they are the
starting point, but we will not sit idly by; once the Bill
receives Royal Assent, that work can happen quickly. I pay
tribute to him for his consistent work in this area and for
raising the matter throughout these debates, and I hope he
recognises the Government’s dedication to tackling illegal
deforestation through our amendment.
18:15:00
Finally, I will speak to Lords amendment 10. The Government of
course support targeted action on financial inclusion, such as
the unprecedented action we have taken in this Bill to protect
free access to cash. However, we do not feel we can support this
amendment. It would not be appropriate to change the regulators’
objectives, which are central to the way financial services
operate in the UK, at short notice—this amendment came late in
the stages of the Bill—and without the appropriate consultation.
Doing so would expose the firms regulated by the FCA to
uncertainty.
Financial inclusion is a much broader social policy issue, and
the FCA confirmed in its evidence to the Bill Committee, on which
I and the hon. Member for Hampstead and Kilburn () sat, that it feels it is
already able to take action to promote financial inclusion, where
appropriate, within its existing remit. Furthermore, the FCA’s
new consumer duty comes into force in just a few weeks’ time, on
31 July. The duty seeks to set a higher and clearer standard of
care that firms owe their customers, and includes a new principle
requiring firms to act to deliver good outcomes for customers. It
is important that the sector is given the opportunity to embed
those profound new requirements and that time is taken to
consider their effectiveness. I therefore ask the Opposition to
join me in giving the sector that time, and I and hope that the
House will accept the Government’s motion to overturn Lords
amendment 10.
This Bill and the Government’s amendments made in the Lords make
important changes to ensure that the legislation delivers the
Government’s ambitious vision for the future of the UK’s
financial services sector and reflects the comprehensive scrutiny
of the Bill in both Houses. I hope the House will approve the
Government’s motions.
(Hampstead and Kilburn)
(Lab)
I thank the Lords for their work in considering this important
Bill. In particular, I thank , and , who led for the
Opposition in the relevant debates. I also put on record my
thanks to the Minister and his office for briefing me and my
office in good time on the Government amendments.
The Labour Party supports the various amendments tabled by the
Government in the other place; they represent an important step
in supporting the City to take advantage of opportunities outside
the EU, whether that is creating a welcoming environment for
fintech or unlocking capital in the insurance industry for
investment in infrastructure through the reform of Solvency II.
In particular, we welcome Lords amendments 6, 11 and 16 to 25,
which strengthen the accountability of the FCA and the PRA.
This Bill facilitates an unprecedented transfer of
responsibilities and powers from retained EU law to the
regulators. We recognise that in this new context it has never
been more important that the FCA and the PRA are appropriately
held to account by democratically elected politicians. That is
why Lords amendments 16 to 23 are so important to ensure that
Parliament can take full advantage of the expertise in the other
place when assessing the effectiveness of regulators.
However, accountability cannot be left to Parliament alone. That
is why we support the principle behind Lords amendment 11, which
will require the regulators to set out the process for how
consumer groups and industry can make representation to review a
rule that they believe is not working. We must ensure that
regulation works for both consumers and the financial services
sector. We also support Lords amendment 6, which will require the
FCA and the PRA to report after 12 and 24 months on how they have
complied with their duty to advance the secondary competitiveness
and growth objective. However, as I am sure the Minister will
agree, that new requirement must not detract from the regulator’s
primary duties of promoting financial stability and consumer
protection. As the banking turbulence of recent months has
reminded us all, the success of the City depends on the UK’s
reputation for strong regulatory standards.
I turn now to Lords amendments 72 to 77. I am delighted that,
after months of voting against Labour’s amendments to protect
free access to cash, the Government have finally U-turned. I
congratulate in particular my hon. Friend the Member for Mitcham
and Morden () on all her tireless
campaigning on that topic. It was her determination that got us
over the line.
If you will indulge me for a minute, Madam Deputy Speaker, I wish
to send my condolences to my hon. Friend. I pay tribute to her
sister, who was the first female secretary-general of the Labour
party and an inspiration to many young women across the
party.
Lords amendments 72 to 77 are especially important because they
will ensure that millions of people across the country who rely
on free access to cash will not be cut off from the goods and
services that they need. However—the Minister will have
anticipated this—I am disappointed that the amendments will do
nothing to protect essential face-to-face services. Analysis
published by consumer group Which? found that over half of the
UK’s bank and building society branches have closed since January
2015—a shocking rate of about 54 closures each month—which risks
excluding millions of people who rely on in-person services for
help with opening new accounts, applying for loans, making or
receiving payments, and standing orders.
(Glasgow Central)
(SNP)
The hon. Lady is making an excellent point on bank closures. Even
in urban constituencies such as mine, banking closures are
forcing people into the city centre to get their cash. The Albert
Drive branch in Pollokshields is the latest closure proposed by
the Bank of Scotland. Does she agree that such closures are very
difficult for many communities to bear?
It is a similar story across my constituency. A Labour Government
would give the FCA the powers it needs to protect essential
in-person banking services, which would help a lot of the
constituents the hon. Lady is talking about.
To be clear to the Minister, Labour is not calling for banks to
be prevented from closing branches that are no longer needed. We
recognise that access to face-to-face services could and should
be provided increasingly through banking hubs, be they delivered
at the post office, in shared bank branches or by other models of
community provision. But so far, only four hubs—I repeat: only
four—have been delivered. [Interruption.] The Minister is
indicating that there are six, which I do not think is a massive
improvement, but I will take it. Six banking hubs have been
delivered, about which he seems very proud. Figures from LINK
reveal that only a further 52 hubs are in the pipeline. On top of
that, many of those planned banking hubs will not even provide
the essential in-person services that I am speaking about, so
although we welcome the progress made in Lords amendments 72 to
77, there is a lot more to do to ensure that no one is left
behind.
I am disappointed that the Government have decided not to back
Lords amendment 10 on financial inclusion, for which my hon.
Friend the Member for Kingston upon Hull West and Hessle () has been a powerful advocate.
The amendment is an important opportunity to rethink
fundamentally how financial resilience, inclusion and wellbeing
issues are tackled in the UK, and to empower the FCA to confront
issues such as the poverty premium—the extra costs that poorer
people pay for essential services such as insurance, loans or
credit cards.
Although I agree with the Minister that financial inclusion is a
broader social policy issue, I do not believe that that is a
legitimate argument for rejecting the Lords amendment fully. As
the Treasury Committee found it its report last year:
“The regulations made by the FCA, and the manner in which it
supervises and enforces those regulations, could have a
significant impact on financial inclusion”,
such as restricting the practice of charging the poorest in
society more for paying insurance in monthly instalments. That is
why the Labour party will vote for Lords amendment 10.
Finally, I will address Lords amendment 5 on sustainability
disclosure requirements, and the Government amendments tabled in
lieu of Lords amendment 7 on expanding the regulatory principle
on net zero emissions, and in lieu of Lords amendment 36 on
forest risk commodities. We welcome once again that the
Government have finally U-turned and acknowledged concerns that
our regulatory system must play a role in protecting nature and
ending deforestation. However, as I am sure the Minister will
agree, that can only be the first step in ensuring that the
transition to net zero and the protection of nature are primary
considerations across the financial system. The Treasury’s review
of deforestation must be meaningful and put forward concrete
proposals. The Government cannot continue to kick the can down
the road.
Similarly, although we welcome the new requirements in Lords
amendment 5 for the FCA and PRA to have regard to the Treasury’s
sustainability and disclosure requirements policy statement, we
have been calling on the Government to move on that for months.
Even now, the Government have yet to confirm the date on which
the sustainability disclosure requirements will be introduced. We
need clear timing and direction so that we give businesses the
confidence to invest and do not undermine their certainty.
The Labour party will support the amendments. As I am sure the
Minister knows, I will continue to hold him to account on his
actions regarding green finance, financial inclusion and
in-person banking services.
Dame (South Northamptonshire)
(Con)
May I start by sending my condolences to my fellow Treasury
Committee member, the hon. Member for Mitcham and Morden ()? Her sister will be
greatly missed by Members across all parties.
I am delighted at the Bill’s progress. I congratulate my hon.
Friend the Minister on all his work in taking into account the
views expressed across the House. Of course, the existence of the
Bill is a huge Brexit dividend in itself, enabling us to
deregulate while strengthening financial services in the UK,
which is in the top two financial services sectors in the world
and creates up to 2 million jobs right across the UK.
So far, the Treasury Committee has proven to be a good overview
body for the financial services and markets regulation that is
coming back to the UK. That Committee has done a great job, and I
can say that without appearing to boast because I was not on the
Committee when it did that scrutiny. We have done a good job, and
the Treasury Committee will continue to be the right place to
provide the scrutiny and checks and balances that will always be
needed in the financial services sector.
I point out, however, that their lordships need carefully to
consider their approach to the Bill. Far from enabling us to
seize the opportunity and recapture the initiative, they seem to
be trying to over-burden the regulators, pinning them down with
reports and further obligations and duties that would militate
against the UK continuing to be one of the most successful places
on earth for financial services.
As a counter to that point, is the right hon. Lady as concerned
as I am about the fact that, as well as being a successful
breeding ground for financial services businesses, the United
Kingdom is now seen worldwide as one of the best places to commit
financial fraud?
Dame
The hon. Gentleman raises an extremely important issue. He will
know that huge efforts are being made to clamp down on financial
fraud. It has been an insoluble issue over many decades, and of
course, with advances with technology and so on, scammers and
financial fraud continue to be a big problem, but that does not
detract from the fact that the UK is hugely successful in
financial services. I predict that the UK will also be hugely
successful in green financial services around the world, enabling
the net zero transition to take place using UK expertise and
exports in that crucial area.
I was delighted to see the new competitiveness and growth
objective, and that the PRA and FCA will be required to provide
reports on how well it is being addressed. The Treasury Committee
has taken evidence from both organisations, which welcome the
opportunity to focus not just on stability but on how it affects
our competitiveness around the world. That is important and
represents a big opportunity for UK plc.
The complaints function is a great initiative that will
definitely address the absolutely valid concerns of so many
constituents across the UK about the poor behaviour in some of
the responses to inquiries led by the FCA or the PRA. That
independent, Treasury-led complaints function will be very
important.
It is vital that my constituents in South Northamptonshire can
have access to cash, so I am delighted that an obligation to
ensure that that remains the case will be enshrined in this
legislation. I share the concerns of the hon. Member for
Hampstead and Kilburn () about the closure of banks.
The Government initiative to create a new arrangement for post
offices to provide “the last bank in town” services was a good
one. I wonder whether over time we can expand that, because the
loss of banks continues to be a big issue.
18:30:00
Finally, I want to raise the issue of politically exposed
persons, which I am glad the Bill is addressing. There are enough
drawbacks to taking on a life of public service without them
being added to by finding that our adult children—as is the case
with my kids—struggle to open a bank account on the grounds of
having a mother who is in politics. That really is not fair. The
Government need to do everything possible to ensure that the very
real need to protect politically exposed persons does not extend
to their offspring, who have got absolutely nothing to do with
it. Overall, I think this is an excellent Bill, and I look
forward to supporting the Government.
Madam Deputy Speaker ( )
I call the SNP spokesman.
As has been said throughout the passage of the Bill, our chief
concern has always been that too many provisions in it do not go
far enough. I am pleased to say that the other place has
tightened up some aspects of the Bill. It is disappointing that
this evening the Government seem determined to oppose some
amendments that could have addressed more of our concerns and, in
at least one case, seem determined to make an amendment that
makes things even worse.
In the interests of brevity, I will not go through all the Lords
amendments that the Government are happy to accept; I ask Members
to take those as read. The first Government proposal that I have
some concern about is their motion to disagree with Lords
amendment 7. I appreciate that they have tabled alternative
amendments, which they might think say pretty much the same thing
or better, but Lords amendment 7 explicitly refers to targets set
by any of the UK’s national Parliaments. They are not mentioned
anywhere in the Government’s amendment (a) in lieu. I hope the
Minister can explain why the Government are opposed to giving
targets set by the devolved nations of this Union of equals the
same status as those set in this place, because some of those
targets and activities will relate to responsibilities that are
explicitly devolved to one or more of the other nations of the
United Kingdom. It does not seem very equal that some Parliaments
can have their targets effectively regulated and others
cannot.
I do not have any issue with Government amendments (b) and (c) in
lieu of Lords amendment 7, although it seems strange that they
have been tabled as alternatives, because they are entirely
compatible with it. In fact, the Government could quite easily
have tabled them in the Lords at the time.
As was said by the Opposition spokesperson, the hon. Member for
Hampstead and Kilburn (), Lords amendment 10 is a good
amendment. I do not understand why the Government want to take it
out. Are they against financial inclusion? If they think that
financial inclusion is a good idea but that this amendment is not
best way to pursue it, I would remind them that they have had
months to come up with a better amendment. “Take it back, don’t
agree it just now, and we promise to bring something back in the
near future.” However, we have been promised effective measures
on financial inclusion since before I was a Member of this place,
but it has not happened yet, and the problem is getting worse all
the time.
To answer the right hon. Member for South Northamptonshire (Dame
), it is all very well for
the Government to find ways to make post offices the last bank in
town, but they are being shut left, right and centre as well, so
there is no long-term protection for access to cash, especially
in our poorest and most deprived communities, of which I
represent more than my fair share. It is no comfort to them to be
told, “The bank has closed, but you can use the post office,” if,
as I have seen happen literally at the same time, the Post Office
is saying, “We’re going shut the post office, but you can still
use the bank.” That does not give any protection or comfort
whatsoever.
Lords Amendment 36, on illegal deforestation and so on, is also a
good amendment that we would have supported. We are willing to
accept the Government alternative as an improvement in some
regards. The biggest concern we have—it is one on which we would
very much want the opportunity to give the House the chance to
express its will this evening—is about one of the crazy ways in
which this place deals with things, especially once legislation
has been back and forth between here and the Lords. If this House
wanted to disagree with Lords amendment 38, as I think quite a
few of us will, we will not be allowed to do that unless the
debate finishes within three hours. The ability of the
democratically elected House of Commons to scrutinise and perhaps
overturn a decision taken by the undemocratic, unelected House of
Lords along the corridor therefore depends on how many people
want to speak, how long they want to speak for, and how fast they
want to talk.
Lords amendment 38 is about politically exposed persons and the
way they are risk-assessed in relation to money laundering. It
makes a very broad assumption about the amount of due diligence
that needs to be exercised to prevent money laundering in the
case of a politically exposed person from the UK—someone who, in
the words of the amendment, is
“entrusted with prominent public functions by the United
Kingdom”.
The assumption is that they are always less of a potential money
laundering risk, as are their family and “close associates”,
whatever that means. That is far too broad and sweeping an
assumption.
I do not have an issue with any regulation being worded in a way
that is proportionate to the risk, and I can understand the
attraction of being able to designate some individuals as less of
a risk than others, but this exemption is far too sweeping. What
do we mean by “entrusted with prominent public functions”? As we
all know, we have had very recent examples of people who were
entrusted with the most prominent public function of all—the
office of Prime Minister—turning out to be totally untrustworthy.
How do we define a “close associate”? Would, for example, Evgeny
Lebedev have been regarded as low risk simply because he could
accurately have been described as a close associate of the then
Prime Minister, who himself has turned out, as the House now
agrees, to have been untrustworthy? When is a close associate not
a close associate?
I want to probe a little on this. Would the hon. Gentleman
classify somebody who, for example, gave a parking space to a
camper van as a close associate?
Hon. Members
Aah!
I think that both that intervention and the muttering from a
sedentary position on the Treasury Bench give an indication of
just how seriously this Government take money laundering. Perhaps
we can all speculate as to the reasons why.
We are not against the idea that any regulation should be applied
proportionately, but it is too sweeping a generalisation to say
that, because of someone’s job or who they know, they somehow
become less of a risk. Let me give just one example. Would of PPE Medpro have been
regarded as being at low risk of anything because she was a
Member of the House of Lords and a one-time Government envoy?
Mr Deputy Speaker ( )
Order. I gently remind the hon. Member that we are not allowed to
directly criticise Members of the House of Lords by name.
I stand corrected, Mr Deputy Speaker. Unless I said more than I
intended to, I think I was asking a question; I was not
expressing an opinion.
Let us not forget that over the last 10 to 15 years a huge amount
of dirty money from Russia and other former Soviet republics has
been laundered into the United Kingdom by people who, at least
financially and in terms of their donations, were very closely
associated indeed with leading politicians. It has to be said
that, had Putin not carried out a second invasion of Ukraine last
year—if he had been satisfied with the original illegal activity
in Ukraine 2014—that money would probably still be coming in,
because the Government only moved in a big way on dirty Russian
money after the second invasion of Ukraine. They did not do
anything, or anything like enough, in 2014 or afterwards, so we
have to ask whether they are really serious about cutting off
this dirty Russian money at source and handing it back to the
people that it was originally stolen from.
I thought it was quite interesting that the Minister said that it
was a bad idea to agree Lords amendment 10, to improve financial
inclusion, at such a late stage, when the Government are happy to
accept Lords amendment 38, to weaken our defences against money
laundering, at the same late stage. That may give an indication
of what the priorities might be of people who wield a lot of
influence over the Government—maybe not the Minister’s own
priorities.
As I have said, we in the SNP continue to support the Bill. Our
concerns on almost all counts have been in areas that did not go
far enough, such as the accountability of the regulators—the
Financial Conduct Authority, for example. My issue is that the
regulators have not been held properly to account for the myriad
times they have failed to regulate and have simply not protected
the public and investors. Other authorities have not protected
pensioners. We can look at Blackmore Bond, London Capital and
Finance, Premier FX, the British Steel pension scheme, the AEA
Technology pension scheme, and hundreds of other financial
scandals that were allowed to happen—or certainly allowed to
happen as badly as they did—because the regulators did not do the
job they were set up to do. They should be held accountable to
this place and to the public for their failures to regulate. I am
concerned that if we tie them up with too much regulation about
how they regulate, and if they are worried about being dragged
into Parliament or politically overruled when they do regulate,
there is a danger that they will start to lose their independence
from political interference, without which no regulator on these
islands can ever be effective.
It is disappointing that the Government seem determined to reject
some Lords amendments that would have made the Bill better, and
to push through at least one that will significantly weaken it.
It would be sad indeed if this elected Chamber were not allowed
to express its will on whether amendment 38 makes the Bill better
or worse. I for one believe that it makes it worse, and I hope we
will be able to divide the House on it tonight.
I find it slightly ironic that I am following an SNP spokesman
demanding more action on financial fraud, but there is always a
place for a bit of amusement in the House. I will focus my
remarks on the issue of deforestation.
I am absolutely confident that the Scottish National party
Westminster group will submit clean audited accounts to the
Electoral Commission before the deadline. Is the right hon.
Gentleman aware that the Conservative party parliamentary group
will not?
I think I may have touched a slightly raw nerve there, Mr Deputy
Speaker.
First, I am personally grateful to the Minister, who has been
extremely responsive on an issue that is crucially important, not
just to the future of this country but the future of our planet.
The loss of forest cover around the world—cleared for the growing
of soy, the planting of palm oil plantations and beef cattle
ranching—has been ecologically disastrous for the planet. Of
course, in many of those areas, it has not created sustained
agricultural land, but land that has been used for a few years
and is now lying semi-derelict.
One of the great challenges for us as a planet is to restore some
of the land that has been lost and replant some of the forest
that has been lost, but we cannot tackle this problem unless we
bring it to a halt now, and in many parts of the world, there are
still real issues with illegal deforestation to produce those
products. As a Government, we have already taken steps that I
think are pathfinders: the introduction of the Environment Act
2021 has set a path for dealing with forest risk products,
particularly in the supply chain and our retailers. That was a
positive step that I think will make a real difference, and I
look forward to seeing that process completed through the
secondary legislation that identifies the individual products we
are tackling. Through his amendments, the Minister has clearly
set that as a starting point for financial services as well.
However, there is now a broadening consensus about the need to
extend the due diligence provisions that we have introduced for
the retail sector to financial services. The financial sector is
lending money to, investing in, and doing bond issues for
international businesses that have sometimes done a good job of
monitoring their supply chains, but other times simply do not do
enough to protect the products they are sourcing from the risk of
illegal deforestation. The Minister may reference the Global
Resource Initiative work led by Sir Ian Cheshire, who has been a
great champion of this issue, and the Minister was very right to
have been willing to pick up the initiatives set out in that
report.
It is also something that is increasingly backed by the financial
sector itself. I do not believe there is any contradiction
between a successful financial services sector and proper
responsibility in key areas such as deforestation, and we now see
that the GRI report and the direction of travel set out in Lords
amendment 7 is attracting support from institutions, including
well-known ones such as Aviva, that amount to nearly £3 trillion
of funds under management. The support is there, and I am
grateful to the Minister for picking up that initiative and being
willing to run with it. My request of him is not simply that we
get on with it; we need to ensure that what he has announced
today does not end up as just another review. Governments have
review after review—not all lead to action. I take the Minister
at his word that he will make this a process of action, rather
than simply a further stage of looking at the issues again.
18:45:00
In particular, we need two things. The first is a framework for
that due diligence: what do we expect the companies to actually
do? My view is that they already do due diligence when they make
investments. They check the solvency of the people they are
lending to and all the different issues around the terms of the
loan. This due diligence is an extra part of something they
already do, rather than a completely new departure, but we need
to set out in detail for the institutions that will be using the
rules exactly what is expected in that due diligence.
We also need to establish exactly how those institutions will be
held to account. I do not want a vast extra layer of bureaucracy;
I want simple mechanisms that do not penalise the good guys who
are doing the right thing, but that drive institutions to
identify and deal with those who are not. Often, rules and
regulations simply make life more complicated for the people who
are doing the right thing, rather than tackle the people who do
not do the right thing.
I very much welcome the amendments that are before the House
tonight. I would have been pleased to see Lords amendment 7,
which I tabled in the Commons on Report, included in the Bill as
well, but the Minister has responded very promptly, very well and
very thoughtfully on that issue. Taking all the steps that we can
to prevent illegal deforestation is something that should unite
us across the House. If we can create a financial services sector
in London and across the UK that is an exemplar for the world, I
think others will follow and we will make a real difference to
the planet. As such, I am grateful to the Minister, and I am
delighted to see these amendments before the House tonight.
(Blaenau Gwent) (Lab)
I rise in support of Lords amendment 27. First, I thank the
Ministers in this House and the other place for this important
concession. I also express gratitude to those Members from all
parties in this House and the other place who supported my
campaign on this matter. We are all glad that there will be a
mechanism for greater parliamentary oversight of our financial
services regulators. The specialist insight from statutory panels
on the performance of regulators will be invaluable, particularly
on the Financial Conduct Authority’s fulfilment of its
all-important consumer protection objective.
To help take things further, I hope to meet the chair of the FCA
consumer panel shortly. I will explain why the FCA’s handling of
the British Steel pension scheme in 2017 was so very
disappointing. It is simple: the FCA faced the City of London,
not the homes of vulnerable steelworkers in Ebbw Vale, Port
Talbot and Scunthorpe. As parliamentarians, we found it hard to
influence the dilatory regulator in support of our steelworker
constituents, who deserved much better protection against the
financial sharks.
Having said that, amendment 27—in addition to the FCA’s new
consumer duty—makes me a little bit hopeful that we will
encourage the FCA to become more outward looking and capable of
adapting to the changing needs of Britain’s consumers. I am more
optimistic that there will be a different way of working; that
oversight and scrutiny will be embraced; and that scandals such
as the British Steel pension scheme will not happen so easily
again.
However, our fight for the proper protection of consumers does
not stop there. I declare an interest: the Labour Treasury
spokesperson in the other place is my wife, . I will speak in support
of Lords amendment 10, which she moved in the other place.
Financial inclusion is crucial to the regulation of financial
services, so I urge the Government to reconsider their opposition
to that amendment. The design, marketing and administration of
financial products and the quality of financial advice have a
direct impact on whether vulnerable groups are properly included
in our financial system.
Just last week, I met steelworkers who, once bitten, were twice
shy about what to do next with their pension pots. They are smart
and highly skilled, yet understandably they do not have the
financial knowledge nor the right impartial support on their
investment needs. Across our country, there is still the danger
of millions like them being at risk of exploitation by bad actors
in the financial sector. Financial inclusion should therefore be
at the forefront of our regulatory framework. After all,
consumers are our financial services sector. They need to have
confidence in a regulatory framework that prioritises them and
faith in our financial sector.
(North Norfolk) (Con)
I rise to support the Bill, and primarily to speak about access
to cash and, therefore, my support for Lords amendments 72 to
77.
I have spoken many times in this place about banking provisions.
I brought in a ten-minute rule Bill, the Banking Services (Post
Offices) Bill, which the Government did not in the end take up. I
have said time and again in this place that the UK is not ready
to go cashless. That is why I am particularly pleased with the
provisions in this Bill. The reasons for that are manifold. The
elderly, the vulnerable and particularly those living in rural
locations such as mine of North Norfolk simply rely on cash, and
I think I can speak for many Members in the Chamber on that. If
Members do not believe me, they have only to look at what the
access to cash group said in its research, which is that 5
million adults would struggle without access to cash, and those
are often the people on the lowest incomes and the tightest
budgets.
(Aberconwy) (Con)
My hon. Friend can add to that list residents in my constituency
of Aberconwy who have seen the banks withdraw, first from the
market towns and towards the coast, and then from coastal towns
along the coast—a withdrawal only matched by their move online.
Does he agree that this is a good move by the Government, and
that it will be welcomed by many people specifically because it
retains access to cash for those in societies, communities and
demographics for whom cash is a crucial part of their everyday
lives?
I am very happy to agree with my hon. Friend, but I want to go
even further. Particularly in the rural and coastal areas he
mentions, which is indeed the case with North Norfolk, access to
cash is just not good enough. Yes, there are the provisions in
the Bill, but we have to go even further. That is why I want to
talk about the disgraceful attitude of the banks and what we can
do about this through the advent of banking hubs.
Since 1988, some 14,000 bank branches have shut across the United
Kingdom. There are only approximately 6,000 left, and what is
even more worrying is the acceleration with which they are being
shut. We heard the shadow Minister, the hon. Member for Hampstead
and Kilburn (), say that 54 branches
continue to be closed every single month, and that accelerating
trend is a particular worry. In my view, there is an absolute
lack of corporate social responsibility from the big banks. Given
that the UK taxpayer bailed them out in 2008 with such a high
number that it is extremely difficult to ascertain what it is—in
some cases, it was up to £1 trillion—I think it is particularly
poor not to give a hoot about the people affected in these
communities.
In my constituency, Lloyds bank, which announced about a month
ago that it was going to embark on another wave of closures, is
going to close not just one bank branch, but two. I cannot even
begin to put into words how upset my constituents are about that,
and I have had countless emails. Both at Cromer, which is on the
north Norfolk coast and is visited by many thousands of tourists,
and further inland at North Walsham, people will suffer a Lloyds
bank closure and be left with one bank in the town.
(Hyndburn) (Con)
Does my hon. Friend agree that when we question why the banks are
closing and ask them for evidence, some banks supply evidence
from during the pandemic, when obviously banks were closed and
not many people were able to access them?
My hon. Friend makes an extremely important point. So much of
this research has been conducted during a window when, of course,
footfall was incredibly low because the pandemic meant we were
not able to go out and use our high streets in the same way. I
think they have used that data to help extrapolate the views and
opinions they want, and they then go on and close branches. That
goes to the root of what they are doing.
These branches are simply saying, “Don’t worry. You can go
online. Oh, there’ll be a community banker to help you. Of
course, you can then go and use your local post office.” We know
that, in so many communities up and down the land, that just is
not appropriate. To take my constituency, I have the oldest
cohort of individuals in the entire country: one third of people
are over the age of 65. In some coastal towns, the vast majority
of my constituents cannot go online, because in many cases they
are in their 70s or older and such suggestions are just not
appropriate. How can communities of 8,000 people in Cromer and of
13,000 people in North Walsham be left with one bank? The other
point not taken into consideration is the expansion of these
towns. Under the local plan, North Walsham will see at least
another 2,500 homes built over the next decade. The banks take no
account whatsoever of the increase in population, and therefore
do not factor that into their numbers.
Banking hubs are often given as one answer. Of course, there are
others. There is a notable case in Frome in Somerset, which is a
similar scheme to a banking hub but is slightly different, and
that was also reasonably successful. The big issue with all of
this is the regulations on how to get a banking hub. I think we
can already see that this is not working as well as it should if
only six have opened so far. The criteria include that people
have to wait until the last bank in town shuts before they are
eligible to have a hub. To me, the rigidity of that structure
does not work. We have different sized towns, different sized
populations, different age cohorts and towns that are miles away
from the nearest bank, so how on earth can certain towns be using
that rigid structure? It does not seem right to me. I ask the
Minister to keep under review how the banking hub solution, which
is being run in conjunction with Link, is being operated. It
seems that it is not working well.
The Minister is a really good man. He has met me many times to
talk about this issue, and he is certainly in listening mode. He
could do a lot worse than dusting off my old Banking Services
(Post Offices) Bill and having a look at it. The principle in
that Bill was to look at the post office network—it has an
11,500-strong footprint—which I do not think we invest in enough.
Instead of having a sweetheart deal between the Government and
the banking institutions, let us regulate this with proper
legislation saying that we will use our post office network and
invest in it as the real future for banking. So many post offices
could be banking hubs. It would give real solidity to the market
and help many hard-working postmasters know what their future
will be.
Finally, the Department for Levelling Up, Housing and Communities
is sitting on £150 million in the community ownership fund. Why
can we not have a special provision as part of that to give
planning permission to buildings that can be used as banking
hubs? Again, we could further accelerate the roll-out of these
hubs. There is a bit of food for thought there, but I now want to
close my remarks. I thank the Minister for listening, but please
will he look at our banking hubs and the way they are working? I
think we can do a much better job of it.
I agree with everything my hon. Friend the Member for North
Norfolk () said.
I rise to speak in favour of amendments 72 to 77 on provision for
access to cash. I, like many of my colleagues in this Chamber,
understand the need of my constituents to have continued access
to cash. This demand is concentrated in, although not exclusively
restricted to, more disadvantaged groups who may still use cash
for budgeting reasons or because they are not technologically
literate.
That is why I have campaigned on this. In my constituency of
Hyndburn and Haslingden, the number of free-to-use ATMs has
fallen by nearly 40% since January 2021. Also, some towns in my
constituency, including Great Harwood, have seen all their high
street banks close, severely limiting access to cash compared
with even a few years ago.
7 pm
We all understand the challenges. I have met with banks in my
constituency and companies like LINK, and I am well aware that
the long-term trends in digital payments and card payments are
only going one way. But I strongly believe that even in the face
of that evidence, we need to protect those individuals and
businesses that still use cash.
I was a local business owner in Oswaldtwistle and we had to run
between local businesses just to make sure we had the change we
needed to run them. This is therefore very important, especially
when the post offices close, which happened in Oswaldtwistle. We
must make sure that provision is still in place and is easily
accessible, especially for the older residents who live in all
our constituencies.
Recently, I have been talking to businesses in Great Harwood,
where all the high street banks have closed and the impact of the
lack of ATMs is severe, especially if a business is cash-only or
its card facilities are down. I am speaking to LINK and trying to
get a banking hub in Great Harwood, and I am feeding in the
issues facing local businesses, some of whom must travel out of
the constituency to Blackburn or to Mr Deputy Speaker’s patch of
wonderful Ribble Valley.
That is why I welcome the Chancellor accepting the Lords
amendments on free access to cash. Having spoken to people across
my constituency, I know how important that is. It is great to see
the Government standing up for those who would struggle were the
stark decline in cash access to continue.
I thank the Minister for his engagement throughout the process. I
warmly welcome Lords amendments 72 to 77.
(Vale of Glamorgan) (Con)
It is a privilege to have an opportunity to contribute on the
amendments made in the other place. I want to speak briefly about
the accountability and scrutiny of the regulators, and the crypto
and digital assets recognition in the Bill.
Chapter 3 refers in general to the accountability of the
regulators and amendments 6 to 9 refer to the obligation to
promote growth. The amendments are extremely important and I
welcome the Government’s response to them and their setting the
tone in accepting and working with such changes early on.
International competitiveness is important for all our
constituents. As Members have said, it is inevitable that
consumer-focused elements in social media drive campaigns that
rightly receive attention in the broader media, forcing change
from regulators and established institutions, but the regulator
must also strike a balance to ensure that businesses and the
industry itself are internationally competitive. This is an
important sector to the UK economy. As the Minister said in his
introductory remarks, all constituencies will be affected by the
Bill. There will be hardly a constituency that does not have
someone employed in the sector, so amendments 6 to 9 on
international competitiveness are important in striking the right
balance between consumer demands for cash and ensuring that the
sector is competitive so as to be sustainable over the long
term.
Scrutiny and accountability of the regulators are also important.
My right hon. Friend the Member for South Northamptonshire (Dame
) complimented the Treasury
Committee, and it is important to do so, but Select Committees
have limited capacity to scrutinise the role of all regulators on
all occasions. I should probably declare an interest as a member
of the regulatory reform group that is working to reform the
approach that regulators take, hence my comments on the
international competitiveness of sectors in general. The
regulatory reform group has highlighted that there could be a
role within Parliament for a Joint Committee to scrutinise the
activities of regulators, to ensure that measures such as the
clauses on international competitiveness are lived up to and
met.
Has the Minister formed a view about how the scrutiny referred to
in the Bill can best be achieved, because clearly that will be
not in the Bill but in regulations thereafter? It is up to the
House to decide on how best to scrutinise this, but the Joint
Committee as suggested by the regulatory reform group is a good
starting point for the debate. Does the Minister recognise that
there is a strong need for additional parliamentary scrutiny of
the regulators, and not only in financial services, although this
Bill enables him to comment on that sector? It is good to see
that my hon. Friend the Member for Wimbledon (), who also sits on the
regulatory reform group, is present. Brexit has provided a great
opportunity to deliver for many of our constituents, but it can
only do so if the regulators take a different, more proactive and
positive approach to supporting industries, rather than, as some
might say, restricting them, in addition to the excellent work
done by the Treasury Committee and other Select Committees
thereafter.
I turn to chapter 2 generally and clauses 21 and 22 and clause 65
referring to cryptoassets and digital assets and distributed
ledger technology, or stablecoins as others would refer to them.
The Minister will be aware that I have raised cryptoassets and
digital assets on a number of occasions and called for strong
direction. I pay tribute to the Government, as the Bill gives the
framework for a clear policy direction so that regulators can
rightly support and offer confidence to those getting involved in
the sector. This is also an opportunity to start delivering on
some of the calls made in the Kalifa review and to provide the
certainty that many seek as they research cryptoassets, digital
assets and distributed ledger technology. When can we look
forward to the strong policy direction that we need to ensure
that the UK is ahead of the curve in this sector and repeats the
fantastic success that the fintech sector has had as a result of
the clear policy direction and framework given in the past?
(Wimbledon) (Con)
As many colleagues across the House have said, the Bill addresses
one of our most important industries and therefore is one of the
most important Bills we will be considering in this Session. At
the outset the Government said their aim with the Bill was to
make UK regulation appropriate and proportionate, to be
internationally competitive, to boost growth and to enable better
outcomes for consumers and business, and those themes come
through strongly in the Lords amendments. I should have said at
the outset that I refer the House to my entry in the Register of
Members’ Financial Interests.
It was a pleasure to serve on the Bill Committee, which the
Minister conducted in a constructive way, listening to a number
of comments about accountability and transparency, which I shall
come on to later. In Committee we spent a lot of time discussing
financial inclusion, and the hon. Member for Glenrothes () was critical of the Minister
and rejected the proposal for having arrived late. Actually, that
guard for financial inclusion is already in the substance of the
consumer duty being digested and implemented by the FCA. Much as
I am sometimes cautious about what a regulator says, the fact of
the matter is that the regulator says that it has those powers
already.
I will not detain the House on the work that the Minister has
done on deforestation, because my right hon. Friend the Member
for Epsom and Ewell () has spoken about that more
eloquently. I ask the House to think carefully and to support the
Government’s amendments in lieu on the net zero objective,
because the amendments in lieu sensibly ensure not only that the
Bill builds on the Climate Change Act 2008 and the Environment
Act 2021, but that regulators consider the exercise of their
functions “relevant” to the making of such contributions. At I
said at the outset, the Government intended the Bill to be both
appropriate and proportionate, and for regulators conducting
functions in this area, “relevant” seems to be a key point.
The Minister will know that throughout Committee, I was keen to
discuss the secondary competitive objective and ensuring
transparency and accountability. Throughout Committee, my hon.
Friend the Member for North Warwickshire () and I raised issues about
membership of panels, metrics and the need for reports, and I
congratulate the Minister on listening, because, with some of the
amendments that he proposed on Report and the tranche of
Government amendments coming from the Lords, the Bill has a lot
of good. Much as I agree with my right hon. Friend the Member for
Vale of Glamorgan () that a Joint Committee of the
House to scrutinise and hold the regulator transparent would be
the perfect solution, I do not think we should let perfect get in
the way of good, and there is a lot of good in this Bill,
particularly with a number of the amendments that create a need
for a report. I also congratulate the Minister on looking at the
membership of panels. Far too often, there is a temptation of
regulators to mark their own homework, and we must ensure that
does not happen if the regulator is to be accountable and,
therefore, regarded as effective.
It is clear that the secondary objective is a secondary
objective, but if we are to have a thriving financial services
industry in the future, this jurisdiction must enjoy
international confidence and be internationally competitive. It
has been said any number of times, but the costs of becoming a
new entrant—with new applications, in some cases—are 14 times
more than in other jurisdictions. That cannot be right. The
movement in this Bill to sort that out and place a burden on the
regulator for international competitiveness is key.
My final point, the Minister will not be surprised to hear, is
that I am pleased to see what amendments 37 and 38 do. They seem
utterly sensible and in line with the need, first, to be
transparent, as in amendment 37, and secondly, to be appropriate
and proportionate, as in amendment 38. When the Government
produce the secondary legislation, I am keen that they define
carefully the metrics for how the reports that the regulator
produces are judged, to consist of operational effectiveness, the
health of the market and the regulatory burden, as well as
international comparisons, because that will be the key test of
the Bill. I know he will take those things on board in future
discussions. I look forward to supporting the Government this
evening.
(Southend West) (Con)
I rise to speak in support of Lords amendments 72 to 77, which
seek to protect the right to free cash access services for
customers. I thank the Minister very much for his hard work in
preserving this valuable resource and also for listening to and
engaging with Back Benchers from all parts of the House.
19:15:00
The amendments will be welcomed by my constituents in Southend
West, where more than a fifth of the people I represent are over
65—that is well over 10,000 people—and more than 6% are over 80,
which is significantly higher than the national average. I have a
huge number of old people in my constituency who are heavily
reliant on cash, which is why I have spoken up repeatedly on this
issue. They are not unusual, however. We have heard other
evidence, but if I may add some more, the FCA found in its 2022
“Financial Lives” survey that 6% of all adults in the UK used
cash to pay for everything or most things over the 12 months from
May 2021. That figure increases to 9% for the most
vulnerable.
The most telling thing is that more than a fifth of over-65s used
cash for almost all their payments, and 40% of over-65s did not
bank online. It is vital that we protect this resource, which is
fundamental to their daily lives. Cash is also important for
businesses and charities across Southend West. Only this weekend
I was at the brilliant Leigh folk festival—Glastonbury, eat your
heart out; Members are all welcome next year—where people were
brandishing their buckets for many charities and stalls, and
people were putting cash in them.
My second and final point is on the loss of banking services,
which underpins the need for Lords amendments 72 to 77. As the
Minister knows, I have spoken many times about the loss of
banking services and bank closures in Southend West. We have now
lost every single one of our high street banks over the past four
years. We are now left with just a Nationwide. There are none in
Westcliff, none in Belfairs and none in Eastwood. People have to
go five miles to the Metro in Southend. That is why we need
access to cash, but we must recognise that banks are taking
advantage of customers.
The interbank rate now is 5%. According to the Bank of England,
instant access accounts, which are the ones that old people tend
to use the most, are at 1.4%. That is a huge spread, and that is
money that the banks are making and putting in their pockets when
they could be returning it to their customers. The last time
rates went to 5%, banks were paying 3%—double what they are
paying now. Estimates for what banks are stealing from customers
who, through the Government, supported them during the financial
crisis range from £15 billion up to £23 billion. That is an
absolute outrage that I have spoken about many times. I hope the
banks are listening and doing something about it. They should
pass the rates through to savers. It is because of these
developments in banking that it is so vital we put these Lords
amendments on to the statute book to enshrine the right to
deposit and withdraw cash for free. That must be protected.
The cash system is an essential piece of infrastructure, like
utilities such as the post and broadband. These Lords amendments
will help not only millions of citizens of all ages who risk
otherwise being excluded if cash is allowed to die, but
businesses, charities and many residents in Southend West.
I am grateful to all hon. and right hon. Members who have
contributed to this debate. I welcome my hon. Friend the Member
for North East Bedfordshire (), who together with my right
hon. Friend the Member for Salisbury () started this Bill’s progress
through the House. I spoke at length and tried to cover as many
topics as possible in my opening remarks, so I will be brief.
I extend my thoughts to the hon. Member for Mitcham and Morden
(). I have never actually
made it to the cash machine promised in her constituency, but her
words echo whenever we talk about access to cash. I did make it
to the constituency of the hon. Member for Ealing Central and
Acton (Dr Huq), one of the lucky constituencies to have one of
the six hubs, of which we seek to see many more.
I welcome hon. Members’ acknowledgement of the substantial steps
that the Government have taken to further enhance regulatory
accountability through the passage of the Bill. The hon. Members
for Blaenau Gwent () and for Glenrothes (), my hon. Friend the Member
for Wimbledon () and my right hon. Friends
the Members for South Northamptonshire (Dame ) and for Vale of Glamorgan
() all talked about that.
The largest part of the debate was about the importance of access
to cash, and the Government have introduced Lords amendments for
precisely that. I wish my hon. Friend the Member for Hyndburn
() good luck with procuring
a hub for Great Harwood. My hon. Friend the Member for Aberconwy
() spoke about access to cash,
as did the Member with the most formidable knowledge of the
important role played by the Post Office, my hon. Friend the
Member for North Norfolk (), and my hon. Friend the
Member for Southend West (). I and, I hope, the banks have
heard the debate. It is important that they have been listening
to the strong points made about not just access to cash but
access to face-to-face branch facilities.
We heard from the hon. Member for Glenrothes about why Lords
amendment 7 does not cover the devolved Administrations. I
understand that this is not necessarily his desired outcome, but
financial services legislation is a reserved matter. As an
outcome, I hope to deliver a Brexit dividend—he may not
particularly welcome that—for citizens in all parts of the
country to protect those 140,000 jobs that, as we heard, Scotland
relies on.
Just to be clear, the Minister is saying that if the Scottish
Government set a higher target for something than the UK
Government do on behalf of England, the regulators will go with
the UK Government’s low target, and if the UK Government set a
higher target than the Scottish Government feel comfortable with,
the regulator will go with the UK Government’s higher target,
even in areas where an activity is devolved.
We are always happy to listen to the hon. Member, but we are in
danger of repeating ourselves.
Let me briefly give my right hon. Friend the Member for Epsom and
Ewell () the assurance he seeks that
we will not just have another review. We seek action. We will be
looking for a framework for due diligence and for how we can hold
the financial sector to account. Both he and my right hon. Friend
the Member for South Northamptonshire talked about how we can
make the UK financial sector an exemplar on deforestation and
support for nature. That is my aspiration, and I believe that it
is shared across the House. The Government’s amendment in lieu of
Lords amendment 36 will do that.
Government amendments made throughout the passage of the Bill
reflect the comprehensive scrutiny and engagement of both sides
of the House, just as we have heard tonight, and the Bill is the
better for it as a result. I hope that their lordships will
listen to the voice of this House. It is now time to pass the
Bill and begin the really important work of tailoring our
financial services regulation to serve the interests of the UK,
bolster our competitiveness as a global financial centre, power
growth in every part of the country and every part of the economy
and, above all else, deliver better outcomes for the consumers
and residents we represent.
Question put, That this House disagrees with Lords amendment
7.
Division 268
26/06/2023 19:23:00
The House divided:
Ayes: 301
Noes: 48
Question accordingly agreed to.
Lords amendment 7 disagreed to.
Government amendments (a) to (c) made in lieu of Lords amendment
7.Question put, That this House disagrees with Lords amendment
10.
Division 269
26/06/2023 19:38:00
The House divided:
Ayes: 303
Noes: 201
Question accordingly agreed to.
Lords amendment 10 disagreed to.
Lords amendment 36 disagreed to.
Government amendment (a) made in lieu of Lords amendment 36.
Lords amendment 1 to 6, 8, 9, 11 to 35, and 37 agreed to, with
Commons financial privileges waived in respect of Lords amendment
35.
After Clause 71
Politically exposed persons: money laundering and terrorist
financing
Question put, That this House agrees with Lords amendment 38.
Division 270
26/06/2023 19:50:00
The House divided:
Ayes: 303
Noes: 36
Question accordingly agreed to.
Lords amendment 38 agreed to.
Lords amendments 39 to 86 agreed to.
Ordered, That a Committee be appointed to draw up Reasons to be
assigned to the Lords for disagreeing with their amendment
10;
That , , , , , and be members of the
Committee;
That be the Chair of the
Committee;
That three be the quorum of the Committee.
That the Committee do withdraw immediately.—(.)
Committee to withdraw immediately; reasons to be reported and
communicated to the Lords.
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