Tulip Siddiq MP: speeches

Speeches

• 25 Nov 2024 · Draft Financial Services and Markets Act 2000 (Ombudsman Scheme) (Fees) Regulations 2024 · Hansard source

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  I beg to move, That the Committee has considered the draft Financial Services and Markets Act 2000 (Ombudsman Scheme) (Fees) Regulations 2024. It is a pleasure to serve under your chairship, Mrs Harris. These regulations are made under powers in the Financial Services and Markets Act 2023. The Committee may be aware that the Secondary Legislation Scrutiny Committee raised this statutory instrument as an instrument of interest in its second report, which was published on 5 September. This instrument will enable the Financial Ombudsman Service—the FOS, as it is commonly known—to charge case fees to claims management companies and relevant legal professionals when they bring cases to the FOS on behalf of complainants. The FOS enables consumers and financial services firms to resolve disputes without having to go through the courts, which can be expensive and time consuming for both parties. To deliver a service that is cost-free to consumers, the FOS is funded by a combination of case fees paid by firms subject to complaints and an annual levy on industry. The FOS is designed to be an accessible service that consumers can use for free, and the majority of consumers raise their complaints directly with the FOS. However, some consumers choose to use claims management companies or legal professionals to bring claims to FOS on their behalf. Collectively, they are known as professional representatives. These professional representatives normally take a cut of any compensation awarded as payment for their services. This payment can be as much as 30% of the compensation awarded to a consumer. Currently, while these professional representatives can make money from bringing a case to the FOS, they cannot be charged for doing so. Many of these professional representatives act responsibly, but there is evidence that some are taking advantage of the cost-free nature of the service that the FOS provides. Rather than properly assessing complaints and taking forward those with merit, these representatives submit large numbers of complaints that are poorly evidenced. This behaviour is negatively impacting the ability of the FOS to promptly resolve other consumer complaints. As firms are required to pay a case fee of £650 regardless of whether or not a complaint is upheld against them, this practice also has significant costs for industry. Firms subject to large numbers of complaints from professional representatives can face significant bills in case fees, despite not being found to have committed any wrongdoing at all. The Government have also noted concerns that firms experiencing this treatment might feel pressured into settling claims early. In order to reduce the overall cost to a firm, they may simply offer to settle for an amount below the £650 case fee, even where they feel that the claim itself is without merit. In order to address those exploitative practices, the regulations will enable the FOS to charge a case fee to professional representatives for bringing complaints on behalf of claimants. This will ensure that there is a financial incentive for those professional representatives to carefully consider the merits of any cases that they are bringing. There will now be a cost to flooding the Financial Conduct Authority with templated complaints that have a low chance of success. Charities bringing complaints on behalf of consumers are not included in the instrument and will therefore not be charged by the FOS. Of course, the FOS remains completely free for consumers to access directly. The FOS will be responsible for determining exactly who is charged and any level of fee. This is in line with how the system already works for financial services firms subject to complaints. In anticipation of this instrument, the FOS consulted on its proposed detailed approach to charging fees to professional representatives. It published a statement on 15 November detailing the feedback it had received to the consultation, and its initial response. In that feedback statement, subject to Parliament approving this instrument, the FOS proposes that professional representatives will be charged a fee of £250 for each case they bring. When the FOS finds in favour of the claimant represented by the professional representative, the fee will be reduced to just £75. In addition, each professional representative will not be charged for the first 10 cases that they bring each year. In that way, we hope, the FOS has sought to disincentivise bad behaviour while ensuring minimal impact on those professional representatives bringing cases with merit. If this instrument is approved, the FOS will confirm its final plans, having considered the responses to its consultation. The approach taken through this SI ensures that the FOS will remain cost-free to consumers while ensuring that the poor behaviour of some professional representatives does not undermine the ability of the FOS to deal with consumer complaints properly. I therefore commend the regulations to the House.

• 25 Nov 2024 · Draft Financial Services and Markets Act 2000 (Ombudsman Scheme) (Fees) Regulations 2024 · Hansard source

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  I thank the shadow Minister for his support so far on all the SIs we have debated; long may it continue, but I have a feeling we may disagree on some things in the future. There was cross-party support for the enabling power behind the instrument when it was debated during the passage of the Financial Services and Markets Act 2023. He will remember that at the time, I also supported the then Government, because a lot of the legislation was fit and right for the sector. We are committed to tackling poor behaviour from professional representatives, as were the previous Government. We want to ensure that the FOS can focus on promptly resolving consumer complaints, as the shadow Minister said, and to reduce the impact of complaints on financial services firms when they are not appropriate. The shadow Minister asked how long it will take the FOS to implement these rules and how we will monitor them. If the SI is approved, we expect that the FOS will shortly announce when it will start to charge fees. We will then work closely with the FOS and the FCA to progress that important work. There is not really a deadline on it; we just have to see how it progresses after the SI. I guess those organisations are waiting for us to approve the SI before they take on the work, but as he can imagine, we work closely with the FCA and the FOS to monitor progress. I am afraid I will have to come back to the shadow Minister on his technical question, because I am not sure that we have any answers. It looks like my officials want me to write to him, if that is okay. I thank the Committee for its consideration of the draft regulations. They may sound simple, but they will have a huge impact on people bringing complaints and how much that costs them. They will play an important role in ensuring that the FOS can properly focus on resolving consumer complaints, a lot of which will come from people who live in our constituencies, and reduce the impact of spurious complaints on financial services firms. I thank all hon. Members for supporting me and for turning up on a Monday evening. Question put and agreed to.

• 20 Nov 2024 · Financial Assistance to Ukraine Bill · Hansard source

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  It is a pleasure to close this debate on what remains a very important and pressing issue. As Ukraine enters yet another difficult winter, I am proud of the consistent support that this Government have shown through not just our £2.26 billion ERA contribution, but the long-term commitments we have made to supporting Ukraine’s capacity for self-defence. I join the Opposition spokesperson, the hon. Member for North Bedfordshire (Richard Fuller), and my right hon. Friend the Chief Secretary to the Treasury, along with my hon. Friends the Member for Burton and Uttoxeter (Jacob Collier) and for Gateshead Central and Whickham (Mark Ferguson) in saying how proud I am that there is unity across the House in standing shoulder to shoulder with Ukraine at this very difficult time. This is a complex issue, and I will try to answer the questions posed by the Opposition and my hon. Friends. If I have missed out anything, I am happy to write to Members. Before I get into the nitty-gritty of the Bill, I pay tribute to my hon. Friend the Member for Amber Valley (Linsey Farnsworth) for making such a powerful maiden speech. I think I am right in saying that her late mother Margaret, David, Martin and all her children would be extremely proud of their extraordinary daughter, mother, stepmother and wife. I very much welcome this “vicious dictator” to the House. We need more of them in the women’s parliamentary Labour party, so I am pleased to have her here. The hon. Member for North Bedfordshire asked about the timing of the release of the funds. We intend to begin spending the funds early next year to ensure that the funding supports our Ukrainian allies as soon as possible. We intend to do so in three equal tranches over three financial years, starting in 2024-25, and the G7 has agreed that all ERA funds will be given out by the end of 2027. He also asked about how the UK will be repaid. We are providing the funding as part of the wider G7’s extraordinary revenue acceleration loan initiative, which means that the UK will be repaid via the extraordinary profits generated from immobilised Russian sovereign assets in the EU. The EU has already enacted the necessary regulations to operationalise the Ukraine loan co-operation mechanism, which will distribute the profits. That came into effect on 29 October, as he is probably aware. The hon. Member asked about what will happen to the UK if the loan is not repaid. The repayment will rely on profits continuing to flow from immobilised RSAs into the EU over multiple years. The UK and the wider G7 have committed to ensuring that Russian sovereign assets remain immobilised across our jurisdictions until Russia ceases its war of aggression and pays for the damage that it has caused to Ukraine, and G7 lenders have worked closely together to design the ERA in a way that allows for repayment in a scenario in which profits cease and Russia pays Ukraine. I hope that answers his question, but I can write to him if he wants more detail. On NATO’s spending target, there is a clear commitment from the Government to spend 2.5% of our GDP on defence, which has categorically not changed. The hon. Member will have seen in our manifesto that we will set up a path towards spending 2.5% of GDP on defence, and this will be done at a future fiscal event. The hon. Member asked about the total value of assets and private assets. Between February 2022 and October 2023, £22.7 billion-worth of Russian assets were frozen due to UK financial sanctions regulations—a marked increase on the figure of £18.39 billion that was provided in the Office of Financial Sanctions Implementation’s annual report in 2021-22. OFSI is currently analysing data on immobilised assets, and on the type and value of the assets. Like many Members, the hon. Member for Lewes (James MacCleary) asked about the involvement of the ERA in asset seizure. I have to make it clear that the G7’s ERA scheme does not represent the seizure of Russian sovereign assets in any way; it is about using the extraordinary profits that the EU has set aside to pay a series of loans to Ukraine. He and the hon. Member for Honiton and Sidmouth (Richard Foord) asked about seizing Russian sovereign assets in the UK. Russia’s obligation under international law is clear: it must pay for the damage it has caused to Ukraine. The G7 agreement to use the profits from immobilised Russian sovereign assets for the loan is an important step towards ensuring that Russia pays. Although we continue to consider all lawful avenues by which Russia is made to meet its obligation to Ukraine under international law, it is important that the UK and the G7 remain focused on delivering the ERA and the benefit that it will give to Ukraine right now, because we are very conscious of the situation in which the country finds itself. A few other Members, including my hon. Friend the Member for Leeds Central and Headingley (Alex Sobel), asked about the proceeds from the sale of Chelsea FC. The Government are working hard to ensure that the proceeds from the sale of Chelsea reach humanitarian causes in Ukraine as quickly as possible. My hon. Friend might know that the proceeds are currently frozen in a UK bank account while a new independent foundation is established to manage and distribute the money, but this is something that we are working on and we are trying to move it along as quickly as possible. My hon. Friend the Member for Halesowen (Alex Ballinger) asked whether this was an unlimited resource loan. The negotiations remain ongoing on the details of the loan terms, but I am focused on ensuring that there is limited impact on Ukraine’s balance sheet. My hon. Friend the Member for Macclesfield (Tim Roca) talked about the implications of the Trump victory for Ukraine. I cannot speculate on any policy decisions that the incoming Administration of President-elect Trump may make, but we have welcomed bipartisan US support for Ukraine, which has been key in the international effort. I feel that Ukraine’s security is vital for global security. If there are any other questions that I have not answered, I will write to Members. I am conscious of the time and I want to finish by thanking hon. Members across the Chamber for their contributions to the debate.

• 20 Nov 2024 · Financial Assistance to Ukraine Bill · Hansard source

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  I have listened closely to what the hon. Gentleman has said, especially with regard to other countries, and I am happy to have conversations with ministerial colleagues across different countries and find out what they are doing. This is our position for now, but this is an ongoing situation and things will move. I am happy to speak to Ministers from different countries who are using assets differently. The ERA is an innovative scheme. It will ensure that Ukraine receives vital support throughout 2025 and beyond. It will take the money generated from Russian sovereign assets and use it to support Ukraine in the best possible way. This is further proof for us that the G7’s support for Ukraine will not falter, and that the UK will stand shoulder to shoulder with Ukraine for as long as it takes. I echo the comments of my hon. Friends the Members for Lichfield (Dave Robertson) and for Rushcliffe (James Naish) in thanking the people of our country for all the support that they have shown Ukraine. Madam Deputy Speaker, I hope you will indulge me for one minute while I say that my own constituents of Hampstead and Highgate have opened their doors for Ukrainian refugees, giving them their homes, community spaces and education spaces, and I particularly pay tribute to my local synagogue, South Hampstead synagogue, which is providing free English lessons for Ukrainian refugees. I was very pleased to meet those people in Parliament last week. Question put and agreed to . B ill accordingly read a Second time. Financial Assistance to Ukraine Bill (Programme) Motion made, and Question put forthwith (Standing Order No. 83A(7)), That the following provisions shall apply to the Financial Assistance to Ukraine Bill: Committal (1) The Bill shall be committed to a Committee of the whole House. Proceedings in Committee, on Consideration and on Third Reading (2) Proceedings in Committee shall (so far as not previously concluded) be brought to a conclusion one hour after their commencement. (3) Any proceedings on Consideration and proceedings on Third Reading shall (so far as not previously concluded) be brought to a conclusion two hours after the commencement of proceedings in Committee of the whole House. (4) Standing Order No. 83B (Programming committees) shall not apply to proceedings in Committee of the whole House, to any proceedings on Consideration or to proceedings on Third Reading. Other proceedings (5) Any other proceedings on the Bill may be programmed. —(Anna McMorrin.) Question agreed to. Financial Assistance to Ukraine Bill (Money) King’s recommendation signified. Motion made, and Question put forthwith (Standing Order No. 52(1)(a)), That, for the purposes of any Act resulting from the Financial Assistance to Ukraine Bill, it is expedient to authorise the payment out of money provided by Parliament of any sums required by the Treasury or Secretary of State for the purpose of providing loans or other financial assistance to, or for the benefit of, the government of Ukraine as a result of— (a) the arrangements described as the Extraordinary Revenue Acceleration Loans for Ukraine announced on 14 June 2024 at the G7 summit in Apulia in Italy, or (b) any subsequent arrangements that are supplemental to or modify or replace those arrangements. —(Anna McMorrin.) Question agreed to. Speaker’s Committee for the Independent Parliamentary Standards Authority Ordered, That Marie Goldman, Leigh Ingham, Gordon McKee, Charlotte Nichols and Jesse Norman be appointed to the Speaker’s Committee for the Independent Parliamentary Standards Authority until the end of the present Parliament, in pursuance of paragraph 1(d) of Schedule 3 to the Parliamentary Standards Act 2009, as amended.— (Lucy Powell.) House of Commons Members’ Fund Ordered, That Holly Lynch, Sir Charles Walker and Peter Grant be removed as Trustees of the House of Commons Members’ Fund and Mark Tami, Chris Elmore and Dr Danny Chambers be appointed as Trustees in pursuance of section 2 of the House of Commons Members’ Fund Act 2016.— (Lucy Powell.)

• 19 Nov 2024 · Draft Collective Investment Schemes (Temporary Recognition) and Central Counterparties (Transitional Provision) (Amendment) Regulations 2024 Draft Insurance Distribution (Regulated Activities and Miscellaneous Amendments) Regulations 2024 · Hansard source

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  It is a pleasure to serve under your chairmanship, Mr Efford. The regulations we are introducing today will ensure that the regulatory framework for financial services is aligned with the UK’s needs following our exit from the European Union. They ensure that UK businesses and individuals can continue to access the products and services that they need even when these originate from outside the UK and that UK authorities have appropriate control over which firms can access our markets. They also ensure that the statute book is clear, comprehensive and relevant to our domestic market. First, let me turn to the Collective Investment Schemes (Temporary Recognition) and Central Counterparties (Transitional Provision) (Amendment) Regulations 2024. UK investors and firms rely on a wide range of financial products and services to meet their needs, ranging from individuals saving for a rainy day, all the way to multinational corporations needing to settle multimillion-pound transactions. In a highly international industry, many of these products and services originate from outside the UK. Ensuring continued access for UK investors and businesses is therefore crucial to the continued functioning of our economy. This instrument deals with two such areas of global market access—the ability of collective investment schemes or funds to market to UK retail investors and the ability of overseas central counterparties to provide services to UK firms. I will speak to each of these areas in turn. The Government previously introduced a new route for overseas funds to become recognised for marketing to UK investors—the overseas funds regime, which the Committee will be familiar with. In July 2024, the first equivalence decision under that regime came into force. This means that certain retail schemes from the European economic area will be able to market to UK investors on an ongoing basis. Funds from the EEA had been able to passport freely into the UK prior to the UK’s exit from the European Union and a temporary regime was introduced to allow those funds to continue doing so. These temporary arrangements will end in December 2025. The overseas funds regime represents a more permanent solution. However, it will take time to transition the more than 8,000 funds with temporary access to the new regime. Therefore, this instrument extends the temporary regime for a further year, until 2026, to allow for a smooth transition and to avoid any cliff-edge risks. It is important that the temporary regime continues to work as intended for those funds still using it, namely those funds not in scope of the Government’s equivalence decision. At the same time, we are conscious that the temporary regime should wind down in an orderly fashion. This means that funds in scope of the equivalence decision should be directed towards the overseas funds regime. If they fail to apply or become recognised under that route, they should lose their ability to market freely to UK investors. The instrument also makes technical changes to ensure that is the case, and that sub-funds within the temporary regime are treated appropriately depending on their characteristics. The two changes combine to ensure that the Government’s decision under the overseas funds regime and the transition from the temporary arrangements will be implemented smoothly, without unintended consequences for investors or fund operators. Let me turn to the second set of changes delivered by this statutory instrument in relation to overseas central counterparties. Central counterparties, or CCPs, are vitally important market infrastructure firms that help make markets safer and more efficient. They sit between the buyers and sellers of certain financial instruments, providing assurance that contractual obligations will be fulfilled. The process of transacting through a CCP is known as “clearing”. During EU exit, the Government set up the temporary recognition regime, or TRR, which allowed overseas CCPs that were recognised by the EU before the end of the transition period, and therefore had market access to the UK, to continue to provide services to UK firms. This allowed UK authorities the time to start putting in place longer-term market access arrangements for those overseas CCPs after EU exit. The TRR has largely functioned well and ensured that EU exit did not disrupt the provision of clearing services into the UK. However, as it stands right now, a CCP within the TRR automatically loses its right to remain in the regime if its EU recognition is withdrawn. This has meant that, since EU exit, several CCPs have exited the TRR, and moved into the UK’s accompanying “run-off regime”, as a result of decisions taken by authorities outside the UK. There are a variety of circumstances that could lead to EU authorities withdrawing EU recognition from overseas CCPs, but these circumstances may not always be relevant to the UK. For instance, EU recognition has previously been withdrawn because co-operation arrangements have not been agreed between the European Securities and Markets Authority and the relevant national regulator of the overseas CCP. This statutory instrument therefore removes continued EU recognition as a condition for remaining in the TRR. This, combined with the Bank’s continued ability to move a CCP out of the TRR for financial stability reasons, ensures that our UK authorities have appropriate control over which overseas CCPs can provide services to UK firms. I now turn to the Insurance Distribution (Regulated Activities and Miscellaneous Amendments) Regulations 2024. The UK’s financial services sector is central to growing growth in the UK economy, as we discussed in the Chamber yesterday, and insurance is a fundamental contributor. Effective and proportionate regulation is key to this, we believe, and therefore we must ensure that domestic regulation is clear and not burdensome to understand. This statutory instrument makes technical legislative changes that remove or amend references to insurance-related EU directives. It is no longer necessary to refer to them now that the UK is not part of the EU and now that the regulatory regime for insurance distribution is set out entirely in UK law and regulator rules. This instrument amends the Terrorism Act 2000, the Proceeds of Crime Act 2002, the Counter-Terrorism Act 2008, and the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017. It replaces insurance distribution directive-related references with references to the equivalent provisions in the Financial Services and Markets Act 2000 (Regulated Activities) Order 2001. This instrument makes similar amendments to the Financial Services and Markets Act 2000 (Regulated Activities) Order 2001 itself. It also changes the monetary threshold in article 72B of that order below which a person whose main business is not insurance distribution is excluded from regulation by the Financial Conduct Authority. This instrument provides that the threshold will now be denominated in sterling rather than euro. The scope of the exclusion on the distribution of sterling-denominated insurance policies will no longer be dependent on changing exchange rates. Finally, this instrument removes references to regulations made under the insurance distribution directive from the Financial Services and Markets Act 2000 (Qualifying Provisions) Order 2013. These provisions gave the Financial Conduct Authority powers to investigate and remedy breaches relating to the insurance distribution directive —powers which are no longer required now that the directive no longer applies in the UK. The amendments made by this instrument may be technical, but they are important in bringing the statute book up to date. Failing to make them could cause confusion as to the relevance of EU law to domestic regulation. In closing, these statutory instruments make mostly technical changes, which are necessary to ensure that our statute book remains up to date and adequately reflects the UK’s exit from the EU. They also make important provision regarding the provision of services into the UK, either by ensuring that UK firms and investors can access the products and services that best suit their needs, or by giving UK authorities appropriate control over when certain services can be provided. I hope the Committee will join me in supporting these regulations, and I commend them to the Committee.

• 19 Nov 2024 · Draft Collective Investment Schemes (Temporary Recognition) and Central Counterparties (Transitional Provision) (Amendment) Regulations 2024 Draft Insurance Distribution (Regulated Activities and Miscellaneous Amendments) Regulations 2024 · Hansard source

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  I thank the Opposition spokesperson for his points. He knows this area well and I am glad he supports the work that we are doing. We will keep an eye on the timeline, as he says, but regulatory and supervisory frameworks of the UK and other jurisdictions can change over time, so it is important that the Government monitor that; we will be keeping an eye on it. We want to ensure that the changes that happen in the UK and regimes in the EU and other overseas regimes are compatible with the existing equivalence determinations with an outcomes-based approach. So he is right to say it is important for the growth of the financial services sector. I have already taken proportionate steps to monitor any changes over the timeframe pertinent to existing equivalence determinations, but I will keep an eye on the deadline and the wider growth. The FCA has made the process very clear for funds, and it is working closely with the firms as well. Further exact timings can be found on the FCA’s website. I am also happy to write to the hon. Gentleman if he would like. All UK equivalence decisions are taken on their own merits, following a technical, outcomes-based assessment of the other country or territory’s regulatory and supervisory regime. So the Government will make equivalence decisions when it is in the UK’s interests to make them—I am sure he is aware of that—but any decisions regarding the granting of equivalence decisions for the UK are a matter for the European Commission. However, I did meet Commissioner McGuinness, the outgoing Commissioner, and I have plans in the diary to meet the new Commissioner. I will raise this subject when I go, because I do think it is important, for the growth of financial services, as the hon. Gentleman says, and for the wider economy. I hope you found the debate informative, Mr Efford, and I hope hon. Members will join me in supporting the regulations.

• 19 Nov 2024 · Draft Collective Investment Schemes (Temporary Recognition) and Central Counterparties (Transitional Provision) (Amendment) Regulations 2024 Draft Insurance Distribution (Regulated Activities and Miscellaneous Amendments) Regulations 2024 · Hansard source

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  I beg to move, That the Committee has considered the draft Collective Investment Schemes (Temporary Recognition) and Central Counterparties (Transitional Provision) (Amendment) Regulations 2024.

• 18 Nov 2024 · Financial Services: Mansion House Speech · Hansard source

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  I know that my hon. Friend takes a keen interest in this area—she been talking about it for the 25 years that I have known her. We agree that it is important. The FCA and the PRA are required to have regard to the UK’s net zero emissions target, as set out in the Climate Change Act 2008. The Mansion House speech set out the Government’s next steps to deliver a world-leading sustainable finance framework. That will be a huge part of our financial services strategy, as part of the industrial strategy, next spring. I urge her to consult and feed in on that.

• 18 Nov 2024 · Financial Services: Mansion House Speech · Hansard source

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  I have already mentioned our first step with the two SIs laid on 14 October, which try to modernise the Building Societies Act, and I am happy to send my hon. Friend further information on that. The main thing we will do is carefully consider the findings of the Law Commission reviews to understand whether reform of the legislation is needed to ensure that businesses are better supported and grow more in the future. The response to the calls for evidence will be carefully considered by myself and others, and any potential reform will require formal consultation. I want to make sure that my hon. Friend knows that at the top of our agenda is trying to unlock the full potential of this important sector after 14 years of that not having happened.

• 18 Nov 2024 · Financial Services: Mansion House Speech · Hansard source

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  As my hon. Friend said, she stood on a ticket as a Labour and Co-operative Member of Parliament, and she has done a lot of work in that area. Last week, the Chancellor set out multiple new measures to unlock the full potential of the mutual sector, as we outlined in our manifesto. That included publishing a call for evidence and reforming the credit union common bond, and asking the PRA and the FCA to report on the current mutual landscape by the end of 2025.

• 18 Nov 2024 · Financial Services: Mansion House Speech · Hansard source

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  I thank the Opposition spokesperson for his comments. I think he welcomed the news, although I am not quite sure. He spoke a lot about the ex-Chancellor, the right hon. Member for Godalming and Ash (Jeremy Hunt), who did a lot of work in this space. I remind the House that the ex-Chancellor said that there was “Much to welcome in the Chancellor’s Mansion House speech today.” The Opposition have said that these are “broadly” good reforms; I thought I would remind the Opposition spokesperson of that. I also remind him that we are not interested in sticking-plaster politics. We have a long-term vision for the economy, which is why we are looking at using the national wealth fund and the industrial strategy to ensure that we grow the economy. I will answer a few of the hon. Gentleman’s questions, but if I do not get to all his pension questions, the Minister with responsibility for pensions is happy to meet him. I point out that our public services are crumbling, and that we inherited a £22 billion fiscal black hole from the previous Government. We had to make difficult choices to fix the foundations of the country and restore desperately needed economic stability in order to allow businesses to thrive. He pointed out that hospitality businesses were contacting him. More than half of employers will see either a cut to or no change in their national insurance bills. To support the hospitality industry, we are permanently cutting business rates for retail, hospitality and leisure from 2026. That comes alongside a 40% relief on business rate bills next year for thousands of premises. We are committed to delivering economic growth by boosting investment and rebuilding Britain, which is exactly what our Budget did. The interim report of the pensions investment review, which the hon. Gentleman had a lot of questions about, put forward proposals to drive scale and consolidation in the defined contribution workplace market. The Local Government Pension Scheme is still consulting. The final version will come out in spring next year, but as I said, the Minister for pensions is happy to speak to him. There is international industry consensus that the scale and consolidation benefit investment and savers, and that these measures could unlock around £80 billion of productive investment. On the hon. Gentleman’s questions about the reforms taking autonomy away from local authorities, under the proposals in the consultation, each administrating authority would retain control over the most impactful decisions by setting their investment objectives and strategic asset allocation. The consultation proposes that implementation of the chosen strategy be delegated to investment experts in the asset pool, who are best placed to execute the investment objectives to meet the desired investment outcomes. I hope that reassures him that we will not take autonomy away from the authorities. The hon. Gentleman talked about the overall package of boosting UK economic growth and benefiting pension scheme members. The objectives are complementary. Driving consolidation and tackling waste in the pension system ensures that schemes can achieve the necessary economies of scale and efficiencies to pursue diversified investment strategies. I reassure him that assets such as infrastructure and private equity are seen as part of the balanced portfolio, and can enhance savers’ returns. They will boost economic growth, so he does not need to worry about that, and we will benefit the communities where pension savers live. The hon. Gentleman spoke a lot about what the previous Government did. They talked a lot about pensions, but they actually never did anything. We have shown in the first few months of a new Labour Government that we mean business, and we have our action ready to go. By next spring, he will see the full details in the Bill.

• 18 Nov 2024 · Financial Services: Mansion House Speech · Hansard source

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  We will build on the success of the pools that already exist. If the hon. Gentleman is not satisfied with my answer, the Minister for Pensions is happy to meet with him.

• 18 Nov 2024 · Financial Services: Mansion House Speech · Hansard source

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  I know that my hon. Friend is an active member of the co-operative and mutuals movement. The Government have already taken the first step, with two statutory instruments laid on 14 October. We are committed to progressing the remaining changes to the Building Societies Act 1986 following Royal Assent of the Building Societies Act 1986 (Amendment) Act 2024. I will look at further SIs to try to further the work here, but I want to support the industry-led council, and I welcome the opportunity to work with it and discuss and test policy proposals with representatives and experts from across the sector. I know that view is shared across the Treasury, including by the Chancellor, who asked about it this morning in our ministerial meeting.

• 18 Nov 2024 · Financial Services: Mansion House Speech · Hansard source

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  Our regulators do a very good job, and we are lucky to have them, but we will hold them to account. When the Chancellor talked about risk taking, she was saying that the post-financial crisis regulatory changes created a system that sought to eliminate risk, but which has gone too far and led to unintended consequences. For example, the certification regime has helped to improve standards and accountability, but some elements have become overly costly and administratively burdensome. That is what we are looking at. Getting rid of the regulators is not the way to grow the economy. Holding them to account, and considering how we increase risk taking in our system, is the way in which this Government will approach things.

• 18 Nov 2024 · Financial Services: Mansion House Speech · Hansard source

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  We are looking at a diverse portfolio of assets, and the pension funds mentioned by the right hon. Gentleman have already pooled and are investing in the UK.

• 18 Nov 2024 · Financial Services: Mansion House Speech · Hansard source

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  My hon. Friend will know that I can never resist an ice cream, so I probably will visit after all. Places such as JP Morgan, which employs 4,000 people in the financial services industry, are vital to us. One of the things that the Chancellor’s speech built on was the significant steps that the Government are already taking to enhance the competitiveness of our financial services sector. We want to look at the biggest changes to the UK’s listings regime in more than three decades and—my hon. Friend will be familiar with this—deliver the final stages of the post-crisis capital reforms to banks. With our financial services growth and competitiveness strategy, which I hope my hon. Friend will write to us on, we want to give the industry certainty and the confidence to invest. That is the main thing that the financial services sector wants right now, and people in Bournemouth will probably agree with that. I look forward to that ice cream.

• 18 Nov 2024 · Financial Services: Mansion House Speech · Hansard source

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  I apologise on behalf of the Chancellor for the fact that she could not be here. If there are any specific questions for her, I will ensure that she knows what they are, and that she personally writes to Members. With permission, Madam Deputy Speaker, I will update the House on the Government’s work to support the growth of the UK economy. The financial services sector is the jewel in the crown of the UK economy, as I am sure everyone across the House will agree. It is one of our largest and most successful sectors, employing 1.2 million people and making up 9% of gross value added, and the UK is the second largest exporter of financial services in the G7. On Thursday night at Mansion House, the Chancellor placed the sector at the heart of the Government’s growth mission and, building on the economic stability and public investment that the Budget provided earlier this year, she set out a plan for investment and reform of the sector. The plan builds on the rapid work that the Government have already done to support the growth of the sector. One week into office, the Government welcomed the biggest changes in the UK’s listings regime in more than three decades; in our first month we launched the landmark pensions review and in September we delivered the final stage of the post-crisis capital reforms for banks, working closely with the Bank of England, strengthening our banking system while also protecting lending to the wider economy. The package that the Chancellor set out at Mansion House builds on those steps, beginning with a commitment to develop a comprehensive plan to grow our financial services sector. In spring next year, the Government will publish the first ever financial services growth and competitiveness strategy, giving the financial services sector the confidence it needs to invest in the long term by setting out our plans for the sector over the next 10 years. Published alongside our modern industrial strategy, it will be clear-eyed about our strengths, proposing five priority growth opportunities: fintech, sustainable finance, asset management and wholesale services, insurance and reinsurance markets, and capital markets, co-designed with voices across the financial services sector. From the base of long-term stability, the Chancellor also laid the foundations for getting even more investment into our country. The Government have already confirmed our plans to capitalise our flagship investment vehicle, the National Wealth Fund, to invest in the industries of the future. To support investment in our green industries, the Chancellor’s speech confirmed the Government’s next steps to deliver a world-leading sustainable finance framework. The Chancellor also set out our plans in another key area that I know has generated interest across the House: pension funds. The UK has one of the largest pension markets in the world, but pension capital is often not used enough to drive investment and growth in our economy. Thanks to the excellent work taken forward by the Under-Secretary of State for Work and Pensions, my hon. Friend the Member for Wycombe (Emma Reynolds), the Chancellor announced the interim report of the pensions investment review. The report sets out our plans to harness the collective size of our pension funds to create larger pools of capital for investment, supporting pension funds to invest at scale. To do that, we will deliver a significant consolidation of the defined contribution market and the Local Government Pension Scheme in England and Wales, providing better outcomes for savers while supporting investment for growth. Indeed, we could unlock around £80 billion-worth for investment in private equity and infrastructure through those actions alone, according to domestic and international comparisons. Alongside economic stability and higher levels of investment, the Chancellor’s Mansion House speech put reform at the heart of the Government’s growth agenda. The Government’s approach to regulation is a core part of that. Across our economy, we will upgrade our regulatory regime, reviewing the guidance we give to the Competition and Markets Authority and other major regulators to underline the importance of growth. That includes our financial services regulators. While it was right that successive Governments made regulatory changes after the global financial crisis to ensure that regulation kept pace with the global economy of the time, it is also important that we learn lessons from the past. Those changes have resulted in a system that sought to eliminate risk taking, and in some cases they have had unintended consequences that we as a new Government must now address. Regulation has costs as well as benefits. It has costs for firms when they are spending large sums on compliance and not using that money to innovate and to grow, and it can have costs for consumers, for example by restricting access to financial advice that could help them to plan for the future. While maintaining important consumer protections and upholding international standards of regulation, we therefore feel that now is the moment to rebalance our approach and take forward the next stage of reforms needed to drive growth, competitiveness and investment. To support that aim, the Government issued new growth-focused remit letters to the financial services regulators to make clear that the Chancellor and I fully expect them to support the Government’s missions on economic growth. The Financial Ombudsman Service plays a vital role for consumers in getting redress. That will not change, but reform is needed to create a sure environment. We will work closely with the Financial Conduct Authority and the FOS to develop a new agreement between the two institutions, with clear expectations on how they co-operate, including on historic market practice and mass redress events. The Government welcome the call for input that asks for views on how to improve the rules governing how the FOS operates. The Government’s ambitions for reform are much wider than regulation. Building on our work to improve the UK’s listing regimes, we are unlocking funding for our capital markets and legislating to establish, by 2025, PISCES—the private intermittent securities and capital exchange system—which is an innovative new stock market to support companies to scale and grow. We are also supporting innovation in the financial services sector by launching a pilot to deliver a digital gilt instrument using distributed ledger technology, as my written statement sets out. Insurance markets are pivotal to supporting growth and creating resilience by helping us to manage risk. The Government have launched a consultation on captive insurance, where a new approach could cement the UK’s position as a leading financial services centre. As the House will know, this Government prioritise the growth of the mutuals sector. We have launched a call for evidence on the credit union common bond, asking regulators to report on their mutuals landscape to support their growth, and welcoming the establishment of an industry-led mutual and co-operative business council. The Chancellor also published the national payments vision to set out the Government’s ambition for this vital sector, ensuring that our approach to regulation allows firms to grow and innovate, and including decisive action to progress open banking and to support our fantastic fintech businesses. Finally, we are working with tech platforms and telco networks to reduce the scale of fraud originating on their platforms. The Chancellor, the Home Secretary, and the Secretary of State for Science, Innovation and Technology, have written to leading tech and telecom companies, calling on them to go further and faster, with clear action to reduce the level of fraudulent activity that exploits their platforms and networks. We will be monitoring that closely in the coming months. This is a significant package to support the growth of the financial services sector and invest in the wider economy. I have heard lots of murmuring from Opposition Members while I have been speaking, which I hope shows their approval for our overall package. I look forward to working across the House to deliver these important reforms from the first Labour Mansion House speech in 14 years.

• 18 Nov 2024 · Financial Services: Mansion House Speech · Hansard source

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  I reassure the hon. Gentleman that boosting return for savers is at the very heart of this agenda, which is why we are pursuing this pensions review. We want these reforms to increase security and boost people’s pension pots, and we want to unlock about £80 billion of productive investment. The Government’s reforms are already in the pension schemes Bill, and they could boost a typical defined contribution saver’s lifetime pension pot by £11,000. I do not want the hon. Gentleman to worry, because we have our eye on how to protect pensioners and savers.

• 18 Nov 2024 · Financial Services: Mansion House Speech · Hansard source

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  My hon. Friend knows this area well, having worked in the Treasury in a former life. We will absolutely make sure that we avoid the mistakes of a certain Liz Truss and work very closely with the TPR and the FCA to deliver all our reforms and ensure that we do not make any decisions that shake the stability of the economy, because we want to have a stable financial services sector and a stable economy to encourage investment and ultimately deliver on our growth mission.

• 18 Nov 2024 · Financial Services: Mansion House Speech · Hansard source

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  I know that the right hon. Member did a huge amount of work in the financial services sector while he was in office. The civil servants still talk about how amazing he was—much to my dismay sometimes! We agree that there needs to be a change in appetite in this place. Transparency is top of the list, as the Minister for Pensions just whispered in my ear. We thank the right hon. Member for his constructive approach on the review, and urge him to tell the people he knows in the sector to respond to and feed in to the consultation.

• 18 Nov 2024 · Financial Services: Mansion House Speech · Hansard source

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  The Government will consult on replacing the certification regime, and will seek the views of industry and all interested stakeholders in doing so. We are working closely with the PRA and the FCA on that. If the hon. Lady meant certification of the senior managers regime, we are keeping that under review at the moment, but it was not mentioned in the way that she thinks it was.

• 18 Nov 2024 · Financial Services: Mansion House Speech · Hansard source

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  Consumer protection is at the heart of anything that we do in financial services. As well as being a Minister, I am a constituency MP; every time I have one of my surgeries, I hear about people who have been either a victim of fraud or taken out a buy now, pay later product without realising the consequences. We want to give enhanced consumer protections to people through the Financial Ombudsman Service, but we are very aware that it needs to be reformed, which is why the Chancellor mentioned it over and over in her speech. We plan to introduce legislation on that as soon as possible, because we want to deliver better protection for millions of consumers after years of uncertainty. I am also making progress on financial inclusion at the moment, and I can send my hon. Friend more information on that if she wants. We are setting up a financial inclusion committee, which is meeting next week, and I am happy to let my hon. Friend know what we are doing in that to protect consumers.

• 18 Nov 2024 · Financial Services: Mansion House Speech · Hansard source

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  I thank my hon. Friend for her question. She has done an enormous amount of work in this area, and I applaud her for that. She was instrumental in the Government taking our initial steps to regulate the “buy now, pay later” sector. There is a need for “buy now, pay later” during a cost of living crisis, and people will access those companies’ products, but I have brought this under FCA control so far, and have regulated to ensure that it is safer, and that people do not store up a huge amount of debt that they cannot pay back. The consultation is open until 29 November, and I ask her to urge others to feed into it to ensure that we get this policy right; that was not done by the previous Government. I will bring forward legislation as quickly as possible, but I thought it was important to hear what people and the industry had to say, because we want to regulate properly. She is being patient, and I ask her to be a bit more patient; our intention is to make the sector as well regulated as possible under the FCA.

• 18 Nov 2024 · Financial Services: Mansion House Speech · Hansard source

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  I thank my hon. Friend for that question. On pension funds, we are not looking at taking that action right now, but I will let her know when we take further action. On the remit letters, we are committed to financial inclusion and to ensuring that consumers are looked after. That is why, in their remit letters, I have asked regulators to have regard to that, and why I have made it clear that our top priority is to promote growth and international competitiveness. The laser focus, in the remit letters, is on growth, but they are not intended to encompass the entire scope of the Government’s vision for the sector. She should be in no doubt that consumer outcomes are top of our agenda. I have made that clear in every meeting I have had with the regulators.

• 18 Nov 2024 · Financial Services: Mansion House Speech · Hansard source

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  As my hon. Friend knows, the Mansion House speech set out multiple new measures to unlock the full potential of the mutual sector. As he says, we welcome the establishment of an industry mutuals and co-operative business council, alongside our delivery of legislation to support the building societies sector last month. We want to ensure, through those measures, that the sector can grow, and to support inclusive growth across the UK. In the few months that I have held this position, the main complaint in the mutual and co-operative sector seems to be that it is difficult to operate within the current regulatory framework, as it is not set up to support mutuals and co-ops in the way it supports other businesses, so I am looking at that. I am very happy to continue that conversation, but this is about considering the regulatory framework to ensure that it is for fit for purpose in doubling the mutual sector, which was a commitment in our manifesto.