Mark Garnier MP: speeches 2025

Speeches

• 2 Sept 2025 · Pension Schemes Bill (Second sitting) · Hansard source

  More

  Q Michelle, you run the compensation scheme. Do you see any risk in surplus extraction? I know that by definition, it is surplus and therefore you should be able to take it out, but at the moment, a lot of funds are in surplus. We went through a period of low interest rates, where it was a bit tricky, but now interest rates have gone up, and suddenly those funds are in a lot of surplus. We are probably not going to see interest rates come down to super-low levels anytime soon—well, who knows? If the economy does particularly badly, they may well do. My first question is, do you see any increased risk as a result of this? You are presumably looking at the risk of having to pay out. Secondly, should the benchmark be slightly higher for surplus distribution? Michelle Osterma n n: Obviously, just as you describe, because we backstop the entire industry, what we are watching most closely is the fundedness of schemes, combined with the credit quality or the covenant, and the financial stability of the organisation itself. Those two combined are what help us to assess industry-wide risk and determine how much reserve we need to set aside for future claims on the PPF. There is a spectrum of schemes out there, clearly—some that are very well funded, which you have been speaking of, and several that are not as well funded. On that spectrum, our focus is on the left side tail—the ones that are most underfunded, or nearing the potential to be underfunded. Given the measures that are being discussed for the release of surplus, we at the PPF feel comfortable with it not imposing a material amount of risk to us, as it is currently defined. It seems to find a nice prudent balance between allowing some flexibility for sponsors to use that money in hopefully a productive way, combined with the test to make sure they do not fall below a certain level, which would bring risk upon the industry and the PPF. We have been a constant participant in that conversation, and we would like to suggest that we will continue to play that role as a surveyor of the net residual impact to the industry.

• 2 Sept 2025 · Pension Schemes Bill (Second sitting) · Hansard source

  More

  That is very helpful; thank you very much.

• 2 Sept 2025 · Pension Schemes Bill (Second sitting) · Hansard source

  More

  Q Ian, can I start with you? One of the problems with auto-enrolment is where individuals move from one job to the next, not with a small pot under £1,000 but with a slightly bigger pot that is none the less still administratively tricky. Do you think that the Bill sufficiently tackles that problem? Ian Cornelius: I do not think that the Bill particularly focuses on that problem, but the question is whether it is a problem. The pensions dashboard will help to provide more visibility of where people’s money is and help them to manage that more effectively. I think it is right to focus on small pots, because they are inefficient. It is much harder for consumers to track lots of small pots, and it is driving costs in the industry, so I think that that is the right initial focus.

• 2 Sept 2025 · Pension Schemes Bill (Second sitting) · Hansard source

  More

  That is very helpful; thank you.

• 2 Sept 2025 · Pension Schemes Bill (Second sitting) · Hansard source

  More

  Q I have one very last question, if I may, going back to the mandation piece and the evidence that we heard from Helen Forrest Hall. The mandation piece is a reserved power, with a sunset clause in, I think, 2035. I have discussed with another member of this Committee how that reserved power will encourage pension funds to take action and potentially invest more into the UK, which is a good thing—we all agree with that. However, interestingly, Helen Forrest Hall made the point that because there are potentially 10 years in which this could happen, it may cause a reluctance to do the right thing. Actually, the right thing could be to invest in other countries. If we are having a fundamental problem here and there is growth in the economies of, say, the Asia-Pacific rim, the right thing might be to invest there. Investing there might support British businesses, by the way, although it would not necessarily benefit the UK economy. There could be perverse outcomes in investment management behaviour because that reserve power is something in reserve, even if it is never used. Have you thought that through? Torsten Bell: I understand the point you are making. I think you have to step back to the big picture, which is a consensus right across the industry that savers’ interests would be better served by change. It does not make sense that the UK industry is a complete outlier compared with other pensions systems around the world when it comes to exposure to wider ranges of assets. What comes with that exposure to a wider range of assets? The nature of assets, where you are likely to see a larger home bias in that more of them would be in the UK. There is a wider point: is there a good reason why the UK DC pension landscape has a particularly large exposure to equities rather than to a wider range of assets that we see around the rest of the world? No. That is why you have seen the Mansion House accord coming forward—because it is in savers’ interests to change how we are operating. The scale and value-for-money measures, and a lot of the other approaches that we are taking, will facilitate that, but the industry is saying that that is in savers’ interests, and it is right to do so. Ultimately, we have to step back and say that we are not in the business of just making individual random decisions about the pensions system. The question is: what is there a consensus on about the world we need to move to that has a better equilibrium? One of the strong elements of that, along with larger scale, is investing in a wider range of assets because that is in savers’ interests. That is why there is a voluntary Mansion House accord, setting that out as the objective, with relatively low levels of target, particularly on domestic investment, compared with what we see in other countries. That is what is going on. What we are saying is that when you speak to the industry, particularly in private, it is very clear that there is a risk of a collective action problem. Under previous Conservative Chancellors, it signed up to commitments that it has not been delivering. Why has it not been delivering? Because of the collective action problem—the risk of being undercut by somebody else who is not making that change because of the nature of a market that is too focused on cost and not focused enough on returns. I make only one vaguely political point. It is easy to join people in being anxious, but we have to ask ourselves something. There is a reason why the first Mansion House compact was not delivered. Do we want to be here in 15 years saying, “Actually, we all signed up to it and said it needed to happen, but it hasn’t”? No—I am not prepared to do that. Change is going to come. Everybody says that change needs to come because it is in members’ interests. All the reserve power does is to say that it is going to happen.

• 2 Sept 2025 · Pension Schemes Bill (Second sitting) · Hansard source

  More

  Q I have one final question, if I may. You run a pool of 11 funds. This is taking 87 into six. Everybody seems to think that is a good idea. Are you included in the “everybody”? Rachel Elwell: I do think there is a fantastic opportunity for us to harness the benefits of scale that come from being one of the top 10 globally by size, but it is important, as we do that, that we maintain the link to local people who are the members of this.

• 2 Sept 2025 · Pension Schemes Bill (Second sitting) · Hansard source

  More

  Q Thank you very much for the work you are doing on behalf of pensioners—it is important. Mr Sainsbury, the PPF has some £14 billion in reserves. Could you share with us the main arguments for and against using that to benefit PPF and FAS scheme members? Roger Sainsbury: In the light of Terry’s extended life history, I will just add that I am a fellow of the Royal Academy of Engineering and a former president of the Institution of Civil Engineers. Before I come to your important question, I would like to feel sure that everybody in this room really understands the huge seriousness of the issue we are considering. This business of removing indexation from people who had pensionable service prior to 1997 has been going on for 20 years. Many of the people involved have seen the value of their payments eroded by maybe even more than 50% in that time. It is really very serious. The second thing I would like to mention is that the scale of the problem is actually greater than the Post Office managers scandal. Of course, I am not suggesting for a moment that any of our claimants is suffering in the appalling way the postmasters did, but the numbers of our people are so huge compared with the postmasters that the actual amount of money at stake is greater. We have 140,000 PPF members who are affected by this bizarre clause of limiting the indexation, 60,000 of whom are 80 and have zero indexation, so it is a truly serious thing. I would also like to mention one other dimension, which is timing. In our written submission to the Committee, we did not even bother to press the basic argument for why indexation should be awarded; we just focused on timing, because time is absolutely not on our side at all. Our claimants are dying, on average, at the rate of 15 a week—it is probably three while we have been holding this meeting this afternoon—or 5,500 a year. We have been told by the Department that the necessary amendment to the Pensions Act 2004 cannot be made by statutory instrument. There would have to be a new Bill and a new Act, and goodness knows how many years that might take or how many more thousands of people would have died. That is why we are pressing to get an amendment to this Bill to give a more timely answer. Now I come to your question: what are the main arguments for and against using the reserves to benefit the members? Well, the first argument is simple, but really rather powerful: it is the only purpose that, legally, the PPF is allowed to spend its money on. The Act is very clear: unless some legal judgment was made against them, which is not on the horizon at all at the moment, the only way they are allowed to spend money is either on their own overheads or on giving benefits to members, such as the indexation that we are now talking about. That is reason No. 1; reason No. 2, in my mind, is that expectations have not been met and promises have not been fulfilled. I go back to the Secretary of State who introduced the Second Reading debate on the 2004 Bill. He pledged that pension promises made, by the original schemes that people were in, must be met—that is, met by the PPF, which is the reason why the PPF was to be, by that Act, created. Yet that has not happened because, somehow, into schedule 7 to the Act came these dreadful words that have had the effect of not permitting the PPF to pay any indexation at all to people for time worked prior to 1997. The third reason—ultimately, this is the important reason—is that the 140,000 people need this money. They desperately do, some of them. I mean, obviously not everybody’s condition is the same, but a lot of people will be suffering real misery and hardship. They need this money. I ask myself: “Were this Government elected on promises of governing with humanity and compassion? Are this Government going to meet that need? Or are they going to walk by on the other side?” I do not myself believe that they are; I believe that they will come up to the mark and find a way through the perceived difficulties that they have. I think those are probably sufficient reasons to be going on with; as to the reasons against granting this, frankly, I cannot see any.

• 2 Sept 2025 · Pension Schemes Bill (Second sitting) · Hansard source

  More

  Q So while we were all running around like headless chickens trying to figure out what was going on, you were saying, “We told you so. We knew that was going to happen.” Michelle Osterma n n: It is definitely something that was on our radar. When we build the investment strategy for an open DB scheme, such as those I described, it is quite different and less susceptible to that type of risk.

• 2 Sept 2025 · Pension Schemes Bill (Second sitting) · Hansard source

  More

  Q It is happening; that is very good, and it is good to hear that there is a pipeline being developed. It is certainly something that has been talked about for a number of years. When I was the investment Minister back in 2017-18, we were very keen to get foreign direct investment coming in to the UK, so there was the Office for Investment in No. 10 doing all that stuff. That begs the question that, as the Government at any time is trying to attract foreign direct investment into the UK, not least to try to sort out the current account deficit, you as pension fund managers will find yourselves in competition with, hopefully, foreign investors coming into the UK. What is the hierarchy of offer? Do you think UK pension funds should be offered exciting investment opportunities before foreign direct investors? Sophia Singleton: I do not think we should be interfering with the market; I think it needs to be a free market and, as trustees of pension schemes, we need to be exercising fiduciary duty to choose the right investments for our members and to give the returns.

• 2 Sept 2025 · Pension Schemes Bill (Second sitting) · Hansard source

  More

  Q 64 Thank you for coming to this afternoon’s session. Councillor Phillips, I will start with you on the big argument about mandation. Obviously, these are reserved powers, which will not necessarily be used. Local government pension schemes will not be forced to go into things that they do not want to, but in the last two or three weeks the hon. Member for Clacton (Nigel Farage) has spoken about potentially using local government pension fund money to bail out 50% of Thames Water. That would be £9 billion or £9.5 billion going into something that is not a productive asset. Does that type of talk from senior politicians make you worry about the potential misuse of mandation? Councillor Phillips: I think there is general concern within the sector when language like that is used, because we are talking about a considerable sum of money that belongs to 6.7 million pensioners. You therefore have to treat that with utter respect. You have a fiduciary duty to look after that money and ensure that the investment is wisely made. The fiduciary duty of the funds and pools is there—the funds own the pools—so there will be concern if somebody wants to politicise it. That is a very dangerous road to go down. When it comes to UK investment, the LGPS is already investing in the UK in a very big way. This is not a case where you use a stick and say, “You’ve got to invest in the United Kingdom.” It is about identifying risk, return and sometimes conflicts of interest. Certainly we should be investing where it is sensible to do so for the benefit of our pensioners and for the least obligation to our employers as well. That should be clearly understood by everyone.

• 2 Sept 2025 · Pension Schemes Bill (Second sitting) · Hansard source

  More

  Q So you could run into the same problems that we saw recently where the Financial Ombudsman Service was publishing who has been under investigation, which caused problems. That has now been changed, but we could be entering into that same problem. Tim Fassam: If you see very strong market or regulatory consequences for hitting an intermediate rating, the focus will be on not being intermediate rather than on being the best that you can be. We would like to see a focus on delivering the best value for money that you can.

• 2 Sept 2025 · Pension Schemes Bill (Second sitting) · Hansard source

  More

  Q Would you suggest a higher hurdle for valuations in terms of surplus distribution? Robert McInroy: That has been discussed on a fund-by-fund basis—whether the funding target should be increased from something like 100% to 120%, for example. That has been actively discussed.

• 2 Sept 2025 · Pension Schemes Bill (Second sitting) · Hansard source

  More

  Q Obviously, the most controversial part of the Bill is mandation—or rather, reserved powers for mandation; I am corrected by the Minister, who is flashing me interesting looks. Why do you think it is that Canadian pension funds are investing more into UK assets than British pension funds are—without being mandated? Chris Curry: We heard a little about that from the previous witness, who I think also has first-hand experience of the Canadian investment models, but there are a number of different reasons. First, there is the aggregation in the system that was talked about; the UK has a very fragmented pensions system. There are a number of different large sectors, but each large sector is not large internationally speaking. Scheme maturity, scheme size and scale generally are a factor. Very few individual schemes have the scale and the amount of assets to invest large-scale in some of the UK opportunities in the way that Canadian schemes have invested on a large scale—as has been said. Half a billion pounds to £1 billion in a single investment is very large by UK standards, compared with the size of schemes. There is also, because of that lack of scale, a lack of development of the expertise required by some of those specialists—sophistication has also been mentioned—across some of the different individual schemes that we have in the UK. If you are larger, you can afford to have those specialist management teams or specialists on the board. It is not such a proportionate cost as it would be to a relatively small scheme. Cost is another factor. As we heard from previous witnesses, in the UK a lot of focus on schemes has been on the cost of providing a scheme; in the workplace especially, by default a lot of competition is based on cost. With some of the opportunities we are talking about, especially in productive finance, in the UK space, investing in the UK would come at a high cost, so there is less scope for that cost to be absorbed in an overall larger fund. A lot of the things that the Bill is trying to address are probably some of the reasons why we have not seen that UK investment up until this point.

• 2 Sept 2025 · Pension Schemes Bill (Second sitting) · Hansard source

  More

  Q Very quickly, if you get an intermediate rating, is it published? Tim Fassam: Your value for money rating will be published.

• 2 Sept 2025 · Pension Schemes Bill (Second sitting) · Hansard source

  More

  Q I move on to value for money, something which, in the broadest sense, everybody seems to agree is a good thing, but I want to pick up on a couple of points. In the evidence given to us by Michelle Ostermann, she made the very interesting point that one problem we have in the UK is that we have not derisked our pension industry. People are still worried about the risks of the pension industry. But she did make the point, which I am sure you will agree with, that you can leverage growth of the economy through leveraging pension fund investment. I think that is something that we both agree with. It goes with the grain of the Bill, and we both want to do that. We heard some interesting evidence from Phoenix, who referred to clause 15 and the consequences of an intermediate performance rating. While we are going to have big arguments about mandation—that is something we fundamentally disagree on—one thing I hope we can both agree on, as we progress this, is that certain elements of the Bill could have unintended consequences. It seems that this one, the intermediate rating, could have the effect of maintaining the derisking of pension funds, because you are trying to avoid getting an intermediate rating and therefore you will avoid doing the slightly more progressed growth. Sorry; I am being incredibly inarticulate after rather a long day, but you know the point I am trying to make. Torsten Bell: I definitely get the point you are making. Let me say one thing about the big picture, and then I will talk about the specifics you raise with the intermediate rating. On the big picture, I absolutely agree that one thing we have done badly in the last 30 years is to think about how changes we make to our pension system, which exists to provide income in retirement for the vast majority of the population, also underpin our capitalism. That is a lesson we have learned painfully. On the substance of risk reduction, I would put it slightly differently, because you have different things going on in the DB and DC landscapes. In the DC landscape, we have been building up a new system. Understandably, because it was starting from small scale, we did not jump to trying to solve all the problems that came with that system, not least getting it to scale, not least what happens in retirement, and not least small pots and the rest. I see this Bill as doing that—taking the next step forward and saying, “Right, we are building this new system. We made big progress in the last 15 years with that, but now is the time to put the change in place.” On scale and on value for money, that will support the wider range of investments more broadly, not just in the UK, but with a wider range of assets. That is absolutely the right thing, in savers’ interests, to do. I also completely endorse your point on unintended consequences, and that is exactly why scrutiny of the Bill is important to make sure that we pick those up as we go. The last 40 years, not just in this country but in others, shows that that can be the case, for good and ill. Specifically on your point about the intermediate rating, we are very much aware of the issue. We are not aiming to replicate a hard metric: “fall one side of this line, and suddenly you are de-authorised from taking auto-enrolment contributions”. That is exactly what we need to avoid, which is what we will be doing. There is a reason behind the provision for more than one level of intermediate ranking, and my view would be that you would not expect people who fall into some of those levels being banned from taking further contributions. It is absolutely right that you do not want an absolute binary—just one metric, one division. The consultations that the FCA and TPR have taken forward are all about making sure that we have worked all those issues through. There are lessons, for example, from what happened in Australia.

• 2 Sept 2025 · Pension Schemes Bill (Second sitting) · Hansard source

  More

  Q This is tricky, though, is it not? Because there is no geographical definition of those six pools, Cornwall could, as I mentioned earlier, find itself investing in Leeds. That would be lovely for you in Leeds, but it would not be so great for people down in Penzance. Rachel Elwell: Border to Coast, if we do have those 18, will stretch from the Scottish border to the southern coast. Even today, we have partner funds who are right across England, which is brilliant because those are people who have actively chosen to come together, form a partnership and work together. Time permitting, if it is of interest to the Committee, we could talk a bit more about local investment and the way of getting investment that is truly local for each individual fund but also a way of crowding investment from other people into the slightly larger opportunities that might be in a region. Every investment we make is local—it impacts local people. You do not need to only have, for example, Durham council investing in Durham. You want all of the LGPS and all asset owners to feel that they can do that. Some of the ways that we are working through doing local investment with our partner funds have really got an eye to the different ways in which you can crowd in versus something very specific that needs to be addressed in the region or locality.

• 2 Sept 2025 · Pension Schemes Bill (Second sitting) · Hansard source

  More

  Q For trustees, the arrangement will be slightly different if it goes into a big pool, but to what extent do you think local authorities, if they are going to see mandation, would be keen to invest into their local areas, to support local investment? Councillor Phillips: Local investment is difficult because, again, I go back to this business of it being our duty to invest wisely, prudently and sensibly. That is important. With local investment, first of all, it depends on your definition of “local”, particularly given the current pooling arrangements. You could have a strategic mayoral authority that has three different pools, because the pools come from all over the geography of England and Wales, so that is a difficulty. Secondly, it is about return and making sure the pipeline of potential projects is there and that those projects are investable. If LGPS is going to invest in them, surely the rest of the investment industry will also want to invest in them, including the Canadian people. The other thing I would say, which I surely do not have to tell you as Members of Parliament, is that some local matters are controversial. You may think that a particular local investment is what an area needs, but actually a large part of your people do not. You have to show a little bit of discretion. You may invest in offshore wind, which is very popular, but getting the link to the grid, going across open countryside with massive pylons, is not popular. The LGPS will have to bear that in mind, because sometimes the members, the constituent authorities and the council tax payers will not appreciate it.

• 2 Sept 2025 · Pension Schemes Bill (Second sitting) · Hansard source

  More

  Q There is potential for surpluses to be paid back into the community. Is that not a good alternative for that type of more social investment as opposed to non-commercial investments? Councillor Phillips: We anticipate that the latest round of valuations will show a very good surplus for all the pensions. That is credit to the investments that have been made to date. That does pose some issues as to what you do with those surpluses, but we live in a very volatile situation, and circumstances can change. You have to be careful, because if you reduce contribution rates considerably, that is a great benefit at this moment in time, but if you then turn around and start to increase them again, that can be very difficult for all employers to deal with, including local government.

• 2 Sept 2025 · Pension Schemes Bill (Second sitting) · Hansard source

  More

  That is very helpful, thank you. I am very conscious that other Members will almost certainly have questions, but I must say that I entirely agree with you that a sum of money set aside for compensation should not be brought into the Government’s balance sheet.

• 2 Sept 2025 · Pension Schemes Bill (Second sitting) · Hansard source

  More

  Q The Bill provides for surplus extraction from funds. Do you see that as a good or a bad thing? Morten Nilsson: I see it as a good thing. I think it will change the pension industry quite a bit as a positive innovation. Closed DB schemes, which we focus on, might be seen more as an asset for sponsors, rather than a liability that they would like to get rid of as quickly as possible. I think that it will create quite a lot of innovation, and a lot of good things will come out of that.

• 2 Sept 2025 · Pension Schemes Bill (Second sitting) · Hansard source

  More

  Q Do you stress test the pensions industry in the same way as the Bank of England stress tests the banking system? Michelle Osterma n n: Yes—it is very similar.

• 1 Sept 2025 · Pension Credit Uptake · Hansard source

  More

  Thanks to our Conservative winter fuel payments campaign, thousands of pensioners have signed up to pension credit, and millions more pensioners will receive winter fuel allowance, now that the Labour party has admitted that its policy on winter fuel payments was wrong. However, the Social Security Advisory Committee recently concluded that the Government’s winter fuel plans fall short of delivering their objectives of fairness, administrative simplicity and targeted support. It seems that the Government have prioritised civil service bureaucracy over helping frozen pensioners. Does the Minister agree with the Social Security Advisory Committee’s conclusion about their policies?

• 16 Jul 2025 · Credit Unions · Hansard source

  More

  Thank goodness I was called to speak after all. I congratulate the hon. Member for Cumbernauld and Kirkintilloch (Katrina Murray) on securing this debate. It has been fascinating to listen to all the great words used to describe credit unions. We have heard them described as lifeline services, community builders and financial educators that help to get people on to the road to financial stability, and as engines of economic inclusion. There is no doubt about it: credit unions are truly remarkable institutions. At their heart, they represent, in its simplest form, how and why the financial sector drives growth. They are the first rung on the ladder in the financial system. They take the savings entrusted by members, brought together by a common bond, pool those funds and turn them into everything from very simple loans, to pay for school uniforms, as we have heard, all the way up to mortgages. Those loans often go to individuals and families who would otherwise find the doors to mainstream financial institutions closed. Credit unions’ commitment to financial inclusion and community values are an example that many parts of the wider financial sector could definitely learn from. I am pleased to note that over the past decade, under the previous Government, credit unions have consolidated and grown. In Great Britain, the number of members rose by a third between 2014 and 2024. More than 2.3 million people are members, up from 1.5 million in 2014, so while the number of credit unions in operation has decreased, that reflects strategic mergers that have created larger, more resilient and more professional institutions. Their asset base has also expanded—it now totals nearly £5 billion in the UK—and their lending book stands at £1.83 billion as of the fourth quarter of 2024. The impact of credit unions stretches far beyond the balance sheet. Studies show that £1 invested into a credit union can translate to between £11 and £19 of value generated in the wider community, yet despite these strengths, it is clear that further growth is being held back. A major barrier to growth is a geographical common bond, as we have heard one or two Members mention. That prevents credit unions from serving large city regions such as London, the west midlands or Greater Manchester as a single entity. I welcome the Government’s publication of a call for evidence last year on common bond reform. However, the call for evidence is unclear about the Government’s position on expanding the geographical common bond, so I would definitely welcome the Minister’s views on raising the cap from 3 million to at least 10 million people, as called for by the Building Societies Association and others. That would not only unblock the growth of credit unions in major urban areas, but allow for strategic mergers and expansions, helping the sector to respond to local need at scale. From my own meetings with the credit union industry, I know that consolidation has improved professionalism, resilience and standards across the board. However, to truly unlock growth potential, we must enable greater investment into credit union service organisations. It is positive that the Prudential Regulation Authority recently clarified that credit unions can own these service organisations. However, further Government support, especially relaxing ownership and capital restrictions, could unleash digital transformation and help credit unions to modernise their services. I note and appreciate that the Minister has also asked the Financial Conduct Authority and the PRA to publish a report on the mutuals landscape by the end of this year. That is a welcome intervention, but can the Minister confirm whether it will deliver a root and branch review of credit union legislation, and in particular the Credit Union Act 1979? As we have heard, credit unions in the USA, Ireland and Canada have flourished under a very different legal framework, which I hope the Government will scrutinise and learn from. I also hope the review can look at central facilities. By pooling liquidity through a central facility, credit unions could manage risk more effectively and provide an even stronger backbone for local lenders. Similarly, do the Government have appetite to allow credit unions to access Bank of England reserve accounts and the sterling monetary framework, bringing them into line with other financial institutions of a similar size? I will draw my words to a close in a second, but first I gently remind the Minister that the Government were elected last year—quite wholeheartedly—on a pledge to double the size of the co-operative and mutual sector. It is the morning after the night before, when members of the Treasury team are no doubt nursing hangovers from a fantastic dinner last night at the Mansion House. It is notable that during the Chancellor’s Mansion House speech, which I think was very much welcomed by the City of London, the co-operative and mutual sector was not mentioned. I would be grateful if the Minister put that wrong right by addressing these points. All the evidence suggests that credit unions are a potential growth engine for communities. By introducing a modern legal framework, progressive common bond reform and investment into service organisations, we can help this sector to continue to flourish.

• 16 Jul 2025 · Credit Unions · Hansard source

  More

  It is always a great pleasure to serve under you, Mr Twigg, and I apologise for nearly knocking you over on my bicycle first thing this morning.

• 16 Jul 2025 · Financial Services Reform · Hansard source

  More

  I am very grateful to the Minister for advance sight of her statement. There is much in these Leeds reforms—many of which were formerly known as the Edinburgh reforms—that can be welcomed, and some of the details were laid out by the Chancellor in her Mansion House speech last night. The Conservatives will always support reforms to our financial sector that ensure that the City of London remains a global powerhouse, but the Chancellor’s rhetoric last night about growth and stability obscures the truth of this Government’s record of delivery. Inflation is now at 3.6%—the highest in the G7—and growth has all but stalled. Despite yesterday’s fanfare for reform, the reality is that having run short on other ideas, the Government are now forced to turn once again to the City of London for inspiration—a last throw of the dice, hoping that it will provide an engine for the growth that their policies are stifling. Last night the Chancellor described her Government as a “beacon of stability”, but let us not forget the actual legacy that was handed over to her. We enjoyed near record levels of employment. Unemployment was at historic lows, and inflation was under control. That is the stable foundation on which this Government were handed the keys, yet they now preside over instability. The Office for Budget Responsibility, the OECD and the Bank of England have all sounded the alarm that our growth prospects have collapsed. The Government claim to be cutting red tape for industry, but let us remember that their plan to make work pay would in fact burden employers with over 70 new regulations, reminiscent of the 1970s. The Chancellor’s talk of unleashing the power of the City comes even as her party threatens to smother businesses in paperwork and expense. When it comes to proposals for financial services, the Conservatives welcome much that gives the sector confidence and clarity, but warm words must be matched by careful delivery. On reforms to the Financial Ombudsman Service, there is agreement that it should return to its impartial roots as a fast and effective dispute resolution service, not a quasi-regulator, but so many business and consumers are awaiting clarity, so can the Minister confirm whether these changes will limit the FOS’s power to make backdated legal determinations, and what impact will the reforms have on ongoing legal proceedings, such as the crucial car finance case before the Supreme Court? Streamlining the approach of the FCA and the PRA may remove unnecessary friction, but we must ensure that this does not become window dressing while critical challenges remain. The FCA and the PRA must accept that stability in the markets is not the only way to deliver growth. Both their objectives must be aligned and equally ambitious in their drive for reform. The Chancellor trumpeted reforms to ISAs, including new rules for long-term asset funds, which we welcome if that broadens access to higher-return assets for ordinary savers, but there is still no certainty on the future of the cash ISA. Without clarity, the Government risk undermining their own ambition to promote home ownership and inclusive investment, which again was trumpeted by the Chancellor during her Mansion House speech last night. On capital investment policy, we welcome MREL reform, which was a change I championed during the recent passage of the Bank Resolution (Recapitalisation) Act 2025. This will help challenger banks to compete and expand lending. We cautiously welcome the Government’s review of ringfencing rules, but will they confirm that all options are being considered, including alignment with the US and the EU, which, as the Minister knows, never implemented ringfencing rules? More broadly, the history of the last Labour Government reminds us that good intentions are never enough. The Financial Services and Markets Act 2000, introduced by the then Chancellor, along with the tripartite system, was well conceived but badly implemented, contributing to the events of the 2008 financial crisis. It falls to this Government now to demonstrate that they will not repeat those mistakes. Finally, at Mansion House last night the Chancellor missed a crucial opportunity to be straight with the British people and rule out further tax rises. Will the Minister guarantee that working families and businesses will not face more tax increases? Will she rule out any further surprise raids on the British taxpayer? Britain’s financial services sector has always thrived when reforms are clear. The test of these reforms will come when the full details emerge, but ultimately growth will come only when the Chancellor realises that hard-working people and businesses across the country are the real engines of economic growth.