Vol. 810 Monday No. 190 22 February 2021

PARLIAMENTARYDEBATES (HANSARD) OFFICIAL REPORT

ORDEROFBUSINESS

Retirements of Members...... 603 Questions Education: Supply Teachers ...... 603 Questions for Written Answer ...... 607 Political Parties: Expenditure Limits ...... 610 Food-related Crime ...... 613 Covid-19: Surplus Vaccine Doses Private Notice Question ...... 617 Clerk of the Parliaments Announcement of Successor ...... 621 Building Safety Statement...... 622 Ministerial and other Maternity Allowances Bill Second Reading...... 635 Procedure and Privileges Motion to Agree...... 692 Hereditary Peers: By-elections Motion to Agree...... 708 Cessation of Membership Motion to Approve ...... 708

Grand Committee Financial Services Bill Committee (1st Day) ...... GC 99 Lords wishing to be supplied with these Daily Reports should give notice to this effect to the Printed Paper Office. No proofs of Daily Reports are provided. Corrections for the bound volume which Lords wish to suggest to the report of their speeches should be clearly indicated in a copy of the Daily Report, which, with the column numbers concerned shown on the front cover, should be sent to the Editor of Debates, House of Lords, within 14 days of the date of the Daily Report. This issue of the Official Report is also available on the Internet at https://hansard.parliament.uk/lords/2021-02-22

In Hybrid sittings, [V] after a Member’s name indicates that they contributed by video call.

The following abbreviations are used to show a Member’s party affiliation: Abbreviation Party/Group CB Cross Bench Con Conservative DUP Democratic Unionist Party GP Green Party Ind Lab Independent Labour Ind LD Independent Liberal Democrat Ind SD Independent Social Democrat Ind UU Independent Ulster Unionist Lab Labour Lab Co-op Labour and Co-operative Party LD Liberal Democrat LD Ind Liberal Democrat Independent Non-afl Non-affiliated PC Plaid Cymru UKIP UK Independence Party UUP Ulster Unionist Party

No party affiliation is given for Members serving the House in a formal capacity, the Lords spiritual, Members on leave of absence or Members who are otherwise disqualified from sitting in the House. © Parliamentary Copyright House of Lords 2021, this publication may be reproduced under the terms of the Open Parliament licence, which is published at www.parliament.uk/site-information/copyright/. 603 Retirements of Members [22 FEBRUARY 2021] Education: Supply Teachers 604

House of Lords Baroness Berridge (Con) [V]: My Lords, the Government are investing £2.6 billion in school budgets Monday 22 February 2021 this year. In relation to supply teachers, the Government The House met in a hybrid proceeding. have entered into an arrangement, involving the , to help schools to use teacher 1 pm agencies and to make the fees transparent. It is clear that any teacher from an agency regulated by BEIS Prayers—read by the Lord Bishop of Newcastle. who is employed for 12 weeks becomes a permanent member of staff with all the entitlements that that Retirements of Members gives them. Announcement Lord Lucas (Con) [V]: My Lords, I am grateful that 1.07 pm my noble friend acknowledges the role that the flexible The (Lord Fowler): My Lords, the workforce has played during the pandemic, but I echo Hybrid Sitting of the House will now begin. Some the request from the noble Viscount, Lord Hanworth, Members are here in the Chamber,others are participating that we set out to make sure that these people are well remotely, but all Members will be treated equally. treated, that their rights are protected and that, in I should like to notify the House of the retirements, offering an efficient and value-for-money service, we with effect from 12 February, of the noble Lord, build for them a good career structure. Lord Wilson of Tillyorn, and, with effect from Baroness Berridge (Con) [V]: My Lords, indeed, this 19 February, of the noble Baroness, Lady Tonge, is a regulated sector. Employers—namely, schools—and pursuant to Section 1 of the House of Lords Reform agency workers make use of this arrangement, and Act 2014. On behalf of the House, I should like to many teaching staff who are coming to the end of thank the noble Lord and noble Baroness for their their career and who want to work in this flexible way very much-valued service to this House. take advantage of it. It is an advantage to the agency Oral Questions will now commence. Please can staff that they can choose to work one day or one those asking supplementary questions keep them short week out of three and, as I said, it is particularly and confined to two points? I ask that Ministers’ attractive to those ending their career, but of course answers are also brief. there are protections to balance the advantages for the employee and those for the employer. Education: Supply Teachers Question The Earl of Clancarty (CB): My Lords, the noble Baroness will be aware of what said 1.08 pm yesterday about vaccinating teachers. If the Government Asked by Viscount Hanworth reconsider, will they ensure that supply teachers are not overlooked? Moving around, they are in a particularly To ask Her Majesty’s Government what estimate vulnerable position, which is one very good reason they have made of the proportion of teaching posts why teachers should be vaccinated before any full in (1) London, and (2) elsewhere in , which return. are currently being filled by supply teacher agencies. Baroness Berridge (Con) [V]: My Lords, the Joint TheParliamentaryUnder-Secretaryof State,Department Committee on Vaccination and Immunisation asked for Education and Department for International Trade for a cross-governmental response on occupational (Baroness Berridge) (Con) [V]: [Inaudible]—perform a vaccination and the department responded to that. I valuable role and make an important contribution to can assure the noble Earl that that was for the entire the running of schools by covering temporary staff education workforce and that representation included absences. The department does not hold data on the all people, temporary and permanent, including those proportion of teaching posts provided by supply teacher in early years. agencies. School leaders have autonomy over workforce planning, including how they manage absences. The Baroness Blower (Lab) [V]: My Lords, the school department has provided guidance to schools on ways workforce census for the 2016 cohort shows that more to manage absences, including the use of supply staff. than a quarter of teachers left teaching in the early years of their career. The loss of one in four teachers Viscount Hanworth (Lab): I thank the Minister for within three years speaks volumes about the difficulty that Answer. Teaching is becoming part of the gig and problems involved in retaining teachers. What economy. Head teachers and school governors faced plans do the Government have to address this workforce with limited budgets are unwilling to employ new recruitment problem—looking at workload, among teachers on a permanent basis. By recruiting teachers other things—to ensure that we have enough teachers from agencies,they can avoid paying pension contributions to fill all the posts in schools on a permanent basis and sickness benefits and they can more easily dismiss rather than relying on supply teachers, who already the teachers when faced with financial difficulties. The have an important role to play providing short-term agencies typically take fees of at least £100 per week cover? from teachers’ pay. These circumstances are making teaching an unattractive career choice and threaten to Baroness Berridge (Con) [V]: The noble Baroness is undermine the standards of teaching. What, if anything, correct that we want to retain the talented teachers are the Government doing to address them? whom we recruit each year. We are delighted that there 605 Education: Supply Teachers[LORDS] Education: Supply Teachers 606

[BARONESS BERRIDGE] Lord Randall of Uxbridge (Con) [V]: My Lords, has been an increase in recruitment this year of 23%. does my noble friend agree that the teacher shortages The early career framework should address the issues in London are in large part due to the cost of housing that she outlined: a one-year initial teacher training in the capital? Does she consider that the pandemic followed by two years of professional development will be a factor in making the situation worse? support. That begins in September this year. Schools will be required to deliver that to put teaching on a par Baroness Berridge (Con) [V]: My Lords, certain with the professional development that is offered by areas of the country have shortages of teachers, professions such as law and medicine. It will enable particularly in some subjects. If those shortages relate new teachers to have mentoring and time out of the to maths, chemistry, physics or computing, substantial classroom and to be introduced in a gradual way and bursaries of £24,000 are available to meet that shortfall. supported into the workforce. We are aware of population movement due to the pandemic and I assure the noble Lord that we are Baroness Garden of Frognal (LD): My Lords, the working as quickly as we can to see where this has substantial increase in teacher workload means that taken place to ensure adequate school places. many schools have to have recourse to supply teachers. Unlike the old local authority system, under which I had some of my most taxing supply teaching experiences, Baroness Coussins (CB): My Lords, given the finding private supply agencies are creaming off teachers and of the Migration Advisory Committee that modern scarce school funds. What plans do the Government foreign language teaching is a shortage occupation, have to rectify this, to ensure better pay and conditions will the Government commission research and data for supply teachers while making sure that schools collection to show whether there is a disproportionate retain money for essential use? recourse to supply teachers for MFL, what level of difficulty is experienced by agencies in providing them Baroness Berridge (Con) [V]: My Lords, we trust and what impact this has on the take-up of teaching school leaders to make workforce arrangements. Some and learning languages? schools, particularly multi-academy trusts, choose to employ supply teachers and some local authorities still Baroness Berridge (Con) [V]: My Lords, the noble run a pool supply service. As I have outlined, the Baroness is correct. A shortage has been identified in agency supply deal means that there is transparency of modern foreign languages, but we are seeking to address fees and the arrangements are clear to schools,particularly it by recruiting more permanent modern foreign language when a teacher goes from a 12-week period of being teachers. There are 1,687 new modern foreign language temporary to being entitled to be permanent. So there teachers in the new cohort. A bursary of £10,000 is is transparency—113 agencies have signed up to this available in shortage areas, as well as other arrangements. deal, which we have made available to schools to help We have identified 25 local authority areas where them to buy well and ensure the necessary transparency. modern foreign language teachers can reclaim student loan repayments as part of a way of encouraging them Lord Watson of Invergowrie (Lab) [V]: My Lords, to work in those areas. the DfE has issued advice to schools not to lay off supply staff and to ensure that safety arrangements allow them to continue to be employed where needed. Baroness Blackstone (Ind Lab): My Lords, given This has not prevented some schools from dispensing their commitment to a recovery programme to try to with supply teachers, placing additional pressure on reduce the number of children who may never catch permanent staff to cover for absent colleagues. The up following the school closures, will the Government DfE advice is aimed equally at schools that engage ensure that supply teachers are available to contribute, staff directly and those that engage via agencies. The given the pressures that there will be on permanent principle is the same—they should continue to employ teaching staff? Will the Minister tell the House whether and continue to pay—but there is no means of the necessary online training will be provided for enforcement. Will the DfE now re-emphasise its advice supply teachers taking part in this programme and to schools not to lay off supply staff? how such training might be resourced?

Baroness Berridge (Con) [V]: The noble Lord is Baroness Berridge (Con) [V]: My Lords, the guidance correct that the school budgets that have been paid to schools helps them in this time of fluctuating staff regardless of the opening or closing of schools mean absences to address their workforce issues. In particular, that those supply staff who are direct employees should it draws attention to the use of supply teachers. Many continue to be employed during this period. However, resources are available, including teacher resources on for those who are employed by agencies, the guidance the Oak National Academy, the remote platform with is for schools to try to continue to use those supply video lessons for all teaching staff. We are encouraging teachers, but of course the employer is the agency. If school leaders to make use of agency staff as and those supply teachers are not used, there is the possibility when they are needed to ensure the appropriate level of furlough, but that is obviously a decision for the of workforce in their schools. employers. We have made a wide range of support available for agency supply teachers, but the arrangements obviously depend on whether they are a direct employee The Lord Speaker (Lord Fowler): My Lords, the of the school or from an agency. The guidance helps time allowed for this Question has elapsed. We now schools to treat their workforce fairly. come to the second Oral Question. 607 Questions for Written Answers[22 FEBRUARY 2021] Questions for Written Answers 608

Questions for Written Answers Lord Taylor of Warwick (Non-Afl) [V]: My Lords, a Question timely answer can be a strong enhancer of government policy. Will the Government further commit to using 1.19 pm Written Answers as one of the important messages to counter any myths that anti-Covid vaccinations are Asked by Baroness Doocey dangerous to health, especially since these myths exist To ask the Leader of the House what steps she is in certain sections of the BAME communities? taking to ensure that Her Majesty’s Government provide timely answers to questions for written Earl Howe (Con): The noble Lord raises a very answer. important point. I can tell him that Ministers use a number of vehicles to dispel myths about the Covid Earl Howe (Con): My Lords, Ministers take their emergency and the vaccination programme in particular. obligations to Parliament seriously.In the past 12 months, I thank him for his question, which I am sure will the Government have answered more Questions for resonate with colleagues in the Department of Health Written Answer than in any equivalent period going and more widely. back to at least 2015. Since the onset of the pandemic, some departments—not least the Department of Health Lord O’Shaughnessy (Con): My Lords, there are a and Social Care—have quite understandably been asked number of Ministers and former Ministers in this significantly more Written Questions than usual. All House. We all know how seriously they and their departments are working hard to answer Written officials took and take the prompt and thorough answering Questions as quickly as possible. of Written Questions. Surely, delays would have taken place only if there were more pressing matters at hand, and we have had to deal with the pandemic. While Baroness Doocey (LD): My Lords, Written Questions perhaps upbraiding them on their tardiness, should we should be a critical tool for us, but responses, when not also recognise the service that our Ministers and they eventually arrive—one of mine took four months— officials have given during this time and the outstanding just give information that is available elsewhere and do job they have been doing? not answer the questions. Peers get just 30 seconds to ask an Oral Question and do not have the right of Earl Howe (Con): My Lords, I am grateful to my reply even when Ministers give incorrect information. noble friend. It is worth noting that, in the Session to This is no way to hold the Government to account. date, Ministers for the Department of Health and Does the Minister agree that this situation is just not Social Care—principally my noble friend Lord Bethell— fit for purpose and needs radical reform? have answered 100 Oral Questions and 22 Private Notice Questions, as well as handling more than Earl Howe (Con): My Lords, it is clearly far from 40 Statements. In this House, we have also debated ideal that some Members of this House, including the 56 sets of health protection regulations. It is not just noble Baroness, have waited as long as they have for through Written Answers that the DHSC has been Written Answers. In ordinary circumstances, it would accountable to this House. be completely unacceptable. I am sorry that it has happened. All departments have been under pressure Lord Jones of Cheltenham (LD) [V]: I received a during the Covid emergency; even so, I can tell the written response on 4 February, within the time limit, House that in January this year 84% of Written Questions saying that from your Lordships were answered on time. It is “The Department for Work and Pensions plans to respond perhaps worth my saying that it is open to any noble shortly on this issue,” Lord who is unsatisfied with an Answer they receive to which felt like a fob-off. Since then, nothing. What is ask a follow-up Question. the Government’s interpretation of the word “shortly”?

Lord Reid of Cardowan (Lab) [V]: My Lords, I Earl Howe (Con): My Lords, we have debated this thank the Minister, but this is not just an isolated matter a number of times in this Chamber. Clearly, the complaint; it has become more of an established pattern noble Lord is entitled to expect a substantive answer that is not confined to Written Questions, important within the space of a few days of the Answer he though they are. Select Committee reports are now received. I shall follow up the matter he has raised but, routinely overdue. I am afraid it cannot all be blamed as I said earlier, Ministers take their obligations to on Covid-19; complaints about delays in Questions Parliament very seriously. My noble friend the Leader predate it, as do the consistent overruns in responses of the House regularly speaks to members of the to Select Committee reports, from as far back as the Government Front Bench about the importance of 2015-17 Session. This is now a systemic problem. Will timely responses to Written Questions, and her office the Minister institute a thorough review into this actively chases late Answers. matter and report back to your Lordships’ House? Baroness Rawlings (Con) [V]: What has the DHSC Earl Howe (Con): My Lords, I am grateful to the done to expand the number of people in its parliamentary noble Lord and shall certainly take his comments on branch to deal with the large increase in Questions board and transmit them to members of my Front tabled for Written Answer? I must admit, I put down a Bench and the usual channels. I am aware that there is Written Question quite recently which was promptly concern about the matters he raised, which run more answered, very impressively, by my noble friend widely than simply Questions for Written Answer. Lord Wolfson. 609 Questions for Written Answers[LORDS] Political Parties: Expenditure Limits 610

Earl Howe (Con): My Lords, the Department of a devastating policy failure? What assurance can the Health and Social Care has done so: the parliamentary noble Earl give on ensuring rapid publication of data team has expanded from nine civil servants to 17 and in future? its ministerial correspondence team has more than doubled in size to 111 members of staff. The effort has Earl Howe (Con): My Lords, I have asked the been huge. I am happy to report that it is making a Department of Health and Social Care specifically difference. Four or five months ago, the average about very long-delayed Answers, which I agree are turnaround time for a Question in the department was deeply regrettable. The number is coming down; I 23 days; it is now seven days. understand that there are only a handful. Often the reason for such a delay is either the practical difficulty Viscount Waverley (CB): My Lords, this situation of gathering data or the rapidity with which the policy goes back a long while; I understand that Mr Speaker environment is moving, precluding an accurate answer has also expressed concern. While agreeing that timeliness being formulated. is important—there is little point in belabouring that it took one year to answer a Question of mine— The Lord Speaker (Lord Fowler): My Lords, the meaningful content would also be helpful. Does the time allowed for this Question has elapsed. Deputy Leader concur that it might be preferable if officials presented for ministerial sign-off the answer to a Question, rather than seemingly avoiding doing Political Parties: Expenditure Limits so? An example was the Question “Which francophone Question countries has the Trade Minister responsible visited to extol the undeniable virtues of British goods and 1.30 pm services?”, to which the Answer was “Our Minister Asked by Lord Rennard has visited Moscow, amongst other destinations”. To ask Her Majesty’s Government, further to the Written Ministerial Statement by Lord True on Earl Howe (Con): My Lords, I am sure the noble 3 December 2020 (HLWS610), what representations Viscount’s question will be noted in the relevant they have received in support of their plans to department. I endorse his general point; your Lordships’ increase the permitted expenditure limits for political House has resolved that: parties at general elections; and what will be the “It is of paramount importance that Ministers should give uprating in line with inflation for national spending accurate and truthful information to Parliament” limits. and that they should be “as open as possible” in answering questions. The , (Lord True) (Con): My Lords, the Government engaged with political Baroness Smith of Basildon (Lab) [V]: My Lords, parties on spending limits last year. A range of views the noble Earl has been clear that he agrees it is were received and, following that engagement, we fundamental to our democracy that all government uprated candidate spending limits at local elections in Ministers be accountable to Parliament, which is the England. We have committed to reviewing candidate reason for these concerns. I put it to him that the noble and party spending limits at reserved polls this year Lord, Lord Frost, has been appointed to the Cabinet with a view to uprating them in line with inflation. We but is currently on leave of absence from this House will not comment on specific figures until after this and that three months’ notice is needed to return. The planned review has been carried out. noble Earl will know that I have raised previously how helpful it would be for your Lordships’ House to hear Lord Rennard (LD): The Minister knows that this from the noble Lord directly,and I have been disappointed Question does not relate to candidate spending or to that he was not here to do so. When will he return to local election spending. It relates specifically to national the House? Can arrangements be made for him, at the election spending. Perhaps I can help him. The figure very least, to answer Written Questions? Given the for inflation since 2000 is approximately 69%. The backlogs we have heard about, perhaps an extra pair figures published by the Electoral Commission show of hands would be very welcome. that increasing national party expenditure limits would benefit only the Conservative Party across Great Britain. Earl Howe (Con): My Lords, I am advised that an Taking these together with other proposals under exception has been made in the case of the noble consideration, but not widely known, to allow national Lord, Lord Frost, to enable him to return to full duties party spending to be targeted more easily at marginal in this House at an early date. constituencies, are the Government not now ending any concept of the level playing field in elections? Lord Willis of Knaresborough (LD) [V]: My Lords, on 25 September last year I tabled a Question concerning Lord True (Con): No, my Lords. I am not certain deaths from Covid-19 in care homes. It was answered whether the noble Lord speaks for his party in his 131 days later, on 2 February. It revealed that in one Question or in the rather intemperate letter that he six-week period some 11,155 elderly patients died, the sent to the Minister for the Constitution on this matter. equivalent of a small town such as Wetherby in Yorkshire. Spending limits have been unchanged for national Was there a delay because the Government were not elections since 2000. Failing to update them is actually compiling statistics for care home deaths at the time, changing policy by steadily reducing spending limits or was it a policy decision to delay publication of such in real terms. 611 Political Parties: Expenditure Limits[22 FEBRUARY 2021] Political Parties: Expenditure Limits 612

Lord Foulkes of Cumnock (Lab Co-op) [V]: My limits for elections and donation-reporting thresholds Lords, with respect, the Minister did not answer the at arm’s length from Ministers, which would provide Question. What representations has he received in protection for the Government and reassurance to support of increasing national spending? Will he now others? try to answer that Question? Lord True (Con): My Lords, we think it important Lord True (Con): My Lords, I did reply to the to engage with the political parties, and we do so. Question, saying that we were undertaking a consultation Obviously, the reporting of donations has to be and is and that a range of views were received from different transparent; I strongly agree with the noble Lord on parties. When the time comes to make an announcement, that. That is the situation that obtains presently. So far we will be able to provide more details to the House. as his broader question is concerned, I reiterate that cross-party discussion of these matters is important Lord Tyler (LD) [V]: My Lords, given that the and we appreciate the input of the Labour Party on friend and family recipients of Covid crony contracts them. have already poured more than £8 million into Conservative Party coffers,does the Minister acknowledge Lord Roberts of Llandudno (LD) [V]: My Lords, that this huge increase in permissive spending will why is £12,000 per constituency with an average of encourage more millionaires to think that they can buy 70,000 electors not sufficient? Why is more money government favours, including nomination to this House? needed? What is it going to be spent on—or is it just that inflation has reached such levels under this Lord True (Con): No, my Lords. I strongly disagree; Conservative Government that money is absolutely the noble Lord should think carefully before spreading essential? such charges. If one looks at the record of donations that the Liberal Democrats have received, including Lord True (Con): My Lords, in our judgment, it those from convicted criminals, it is clear that charges cannot be right that the limits for parliamentary of that kind should not be cast in that manner. The by-elections have not been updated in more than Government are reviewing the matter; local election 20 years. By updating for inflation, as is currently limits were put up by the coalition Government, in under consideration, the limits would remain in line which Liberal Democrats served, in 2014. with the original intent of Parliament in 2000 when they were introduced. Lord Leigh of Hurley (Con) [V]: My Lords, as a party treasurer, I know that in 2000 the cost of a Lord Truscott (Non-Afl) [V]: My Lords, this Question second-class stamp was 19p and it is now 66p. Therefore, reminds me of my time as a political organiser in the does the Minister agree that the rules need to reflect 1980s. Of course, campaigning has changed a lot over reality? Given that all parties were fined after the 2015 the last decade or so: President Obama was one of the election, there is clearly a need to simplify the rules. first politicians to use social media extensively to get Perhaps he might point out to the Liberal Democrats elected in 2008. The use of social media, including that election spending is not necessarily the only issue: Facebook, bots, online ads and political consultancies late filing of accounts six months after the 2019 election such as the defunct Cambridge Analytica, which accessed was also reprehensible. 87 million Facebook users, is currently unregulated. How do the Minister and Her Majesty’s Government Lord True (Con): My Lords, I agree, but I would intend to include social media use and abuse in election not want to give the House the impression that the spending in the future? Government do not think that there are matters that needtobeaddressedandconsidered.Notionalexpenditure Lord True (Con): My Lords, the noble Lord touches is obviously one of them. I am grateful for the support on an important point in relation to digital campaigning. that we received from the Labour Party on examining We have said that we will introduce a digital imprints the rules on notional expenditure. regime and we published a consultation on the proposed regime in August 2020 that closed in November. We Lord Singh of Wimbledon (CB) [V]: My Lords, as are taking forward a programme of work on electoral we come out of the Covid-19 pandemic, it is important integrity that will ensure that it is fit for the modern for all political parties to look to new priorities for age. It will address some of the issues to which he recovery and for meeting the new imperatives of referred. sustainable development. Does the Minister agree that any increase in political funding limits should not Lord Lancaster of Kimbolton (Con): My Lords, is it unduly disadvantage smaller parties committed to new not time to end the outdated distinction between and necessary forward thinking? borough and county constituencies? The latter attract a 50% premium for expenditure purposes per elector. Lord True (Con): My Lords, I certainly agree that In the age of modern campaigning, when people no any consideration of electoral law and, indeed, electoral longer walk the streets as much as use social media, practice needs to reflect on the position of smaller should we not apply a single formula across every parties. The Government have been considering that constituency in the ? specifically in relation to the May elections. Lord True (Con): That is an interesting suggestion. Lord Kennedy of Southwark (Lab Co-op): My Lords, As a former leader of a London borough, I am not have the Government considered introducing a mechanism sure where I should go in responding to it. It is to allow for the uprating of local and national spending certainly true that modes of campaigning are changing 613 Political Parties: Expenditure Limits[LORDS] Food-related Crime 614

[LORD TRUE] Lord Rooker (Lab) [V]: My Lords, does the Minister and may well continue to change. On my noble friend’s accept that the National Food Crime Unit is operating specific point, I will take it on advice and refer it to the against organised crime with its hands tied? Investigations Minister for the Constitution. are being hampered. Does the Minister agree that investigation powers should be strengthened to include The Lord Speaker (Lord Fowler): I call the noble powers to collect the necessary evidence to a higher Baroness, Lady Bennett of Manor Castle. standard? In other words, will the Government agree that the Police and Criminal Evidence Act powers Baroness Bennett of Manor Castle (GP) [V]: [Inaudible.] should be granted to the National Food Crime Unit? The National Police Chiefs’ Council agrees to this to Lord Ashton of Hyde (Con): The noble Baroness is remove the burden from local police forces, which muted at the moment. actually agree that food crime is not a high priority.

Baroness Bennett of Manor Castle (GP) [V]: Apologies, Lord Bethell (Con): The noble Lord entirely has a my Lords—I will try again. In recent general elections, point. I completely agree with him that the National the wealthiest and largest political parties have used Food Crime Unit has a formidable task ahead of it their very generous national party spending limits—in and that its investigatory powers could be enhanced 2019, it was close to £19 million—to cover a variety of and its impact improved. That is the view of the non-national costs, including targeting a lot of individual Government, industry and the police, and that is why constituencies with generic leaflets, billboards, et cetera. we are committed to the dialogue, first suggested by Independent candidates and smaller rising parties do the Kenworthy review, on the enhancement to which not have this additional spending option. Will the the noble Lord refers. Government be open to consider rebalancing the two types Baroness Jones of Moulsecoomb (GP): One of the of spending limit in the interests of fairness as well as food crimes I am told is increasing is that of stealing to prevent swing seats being barraged with messaging? market-ready lambs. The people stealing them do not Will they put far tighter limits on individual contributions just load them on to a trailer and take them away—they to political fundraising, so that we do not all get the butcher them in the fields and leave the debris, guts, politics a few people pay for directed towards a small blood and heads. I wonder whether the police have percentage of the population? enough powers to deal with that particular crime, which is increasing. Lord True (Con): My Lords, I have not noticed the Green Party fail to target its efforts on specific Lord Bethell (Con): The noble Baroness is entirely constituencies, but the noble Baroness may be able to right: this is a very distressing crime. I was pleased to advise me otherwise. I do not think it would be sensible note the convictions and custodial sentences in March practice to seek to reduce donations to levels that last year under Operation Stock, led by Northamptonshire might be achieved by the least popular parties in the Police, of three men for a string of such offences in the country. The truth is that many individuals—whether Midlands. The NFCU remains alert to the entry of trade unionists or others—contribute a great deal of meat from these offences into the food chain and money to the larger parties, and I think their contributions works with policing rural crime networks to actively should be welcomed and esteemed. counter this practice. The Lord Speaker (Lord Fowler): My Lords, the The Earl of Caithness (Con): My Lords, the better time allowed for this Question has elapsed. We now the NFCU does, the more cases will be reported to it. come to the fourth Oral Question. Could my noble friend tell me what the budget for the NFCU will be over the next three years? Could he also confirm, as the opportunity for reporting to the NFCU Food-related Crime improves, whether there is enough anonymity for people, Question particularly those within the food business, to be able to make complaints without exposing themselves to 1.41 pm retribution by criminal gangs? Asked by Lord Rooker Lord Bethell (Con): My Lords, the NFCU’s head Toask Her Majesty’sGovernment what assessment count is just over 80 staff in England, and they have made of (1) the level of food-related , and its budget is £5.7 million. The crime, and (2) the resources available to address NFCU has an anonymous reporting route available such crime. via the phone and the FSA website, and it welcomes contact from public-spirited people within the industry TheParliamentaryUnder-Secretaryof State,Department on wrongdoing. The unit also encourages engagement of Health and Social Care (Lord Bethell) (Con): My with industry through more overt routes,and I particularly Lords, food crime is of rising importance to the public, thank the Food Industry Intelligence Network, whose our trade, our farmers and our climate. That is why the members share over 50,000 anonymised authenticity Food Standards Agency constituted the National Food sampling results with the unit each year. Crime Unit in 2014; why the National Food Crime Unit published its assessment in September; and why Baroness Meacher (CB) [V]: My Lords, in the 1970s Ministers have a dialogue with the NFCU, industry I wrote a book based on a survey on the consequences and the police about increasing its powers. of benefit withdrawal and found that, typically,claimants 615 Food-related Crime [22 FEBRUARY 2021] Food-related Crime 616 were driven to crime. Have Her Majesty’s Government the food safety and surveillance system and why this undertaken any recent research into the consequences outbreak was perhaps not detected during the import of the very low universal credit rates, the sanctions of this meat into the UK? regime and the deductions taken from benefits to repay loans early on in the claim? If not, would the Minister be good enough to ask the DWP to undertake Lord Bethell (Con): My Lords, I am across the such research into the crime effects—if you like—of recent outbreak of chicken nugget salmonella poisoning the benefits system? across the UK. However, I point to the work of the European distribution fraud unit, which is very much Lord Bethell (Con): My Lords, I bow to the noble focused on this kind of cross-border food crime. I will Baroness’s great expertise on the correlation between take back to the department the noble Baroness’s poverty and crime. But that makes no excuse for the recommendation and will write to her if there is any kind of crimes we are talking about here. Many are update that I can provide her with. either brutal—as the noble Baroness, Lady Jones, referred to—or crimes of fraud, for which there is no Baroness Thornton (Lab): I will be very quick because excuse. I am very keen that the noble Lord, Lord Krebs, is able to get in on this Question. Can the Minister commit to briefing parliamentary counsel to advise Lord Clark of Windermere (Lab) [V]: My Lords, I and bring forward these changes, and when can that am encouraged by the Minister’s response today, and I happen? We on these Benches would welcome this am sure that many Members of the House will wish commitment and would give appropriate support to him well in persuading his colleagues to give more the resulting legislative process. power to the NFCU. As he does so, will he ensure that the new system is integrated completely with the more Lord Bethell (Con): I am enormously grateful to the established direct farm-related food regulations and noble Baroness for her support in this matter. I reassure crimes? her that we are focused and working on it, and I will bring forward an update as soon as I reasonably can. Lord Bethell (Con): My Lords, the NFCU has done an enormous amount in working with stakeholders. Lord Krebs (CB) [V]: My Lords, detecting food Although it is a relatively small unit, with just crime often depends on trading standards officers and 80 individuals, it works extremely closely with trading public analysts. Does the Minister consider that the standards officers in local authorities and with policing current number of trading standards officers and public authorities up and down the country. It leverages its analysts is adequate to give the public confidence that expertise, and we hope to be able to augment that food crime is being detected in a timely and comprehensive expertise with investigatory powers so that it can relieve way? Could he also tell us what progress has been police forces from some of the application of justice in made on detecting honey fraud? It is estimated that this area. about 15% of honey on sale in Europe is adulterated, and it is now over a year since Defra held a seminar on detection methods. Baroness Bakewell of Hardington Mandeville (LD) [V]: My Lords, a steady supply of nutritious food is Lord Bethell (Con): The noble Lord undoubtedly essential, not only for those recovering from Covid but knows that, since January 2021, the FSA has been for those who are struggling due to losing their job or running a 12-month pilot of the new model of working having been furloughed. Queues at food banks are with local authorities on trading standards in order to extensive. Food crime is very serious, so can the Minister improve the work between the FSA and trading standards provide assurance that it will not affect the supply of to address any gaps there may be in that collaboration. food to those who are most in need? On the noble Lord’s question about honey fraud, I completely endorse his shock and outrage that the Lord Bethell (Con): My Lords, the focus of the unit honey that we buy in the supermarket may be adulterated. tends to be on either food that is unfit for human It is sometimes said that there is 10 times the amount consumption, such as in the horsemeat scandal of of manuka honey on sale than could ever be possibly 2013, which the noble Baroness will remember, or on made by the bees of New Zealand. There are challenges the passing off of low-quality food with a higher-quality on nuclear magnetic resonance spectroscopy allocations, label. It is not involved in addressing the theft of food. as the noble Lord undoubtedly knows. We are working However, I agree with the noble Baroness that getting extremely hard with both Defra and the Laboratory of good-quality food to all the population is a priority, the Government Chemist to put pressure on international and that is one of the Government’s priorities. authorities to align the data needed in order to investigate honey more closely. Baroness McIntosh of Pickering (Con) [V]: My Lords, I applaud the work of the National Food Crime Unit. The Lord Speaker (Lord Fowler): My Lords, the The main function of the Food Standards Agency is time allowed for this Question has elapsed. That brings food safety and surveillance. We are currently in the Question Time to an end. midst of a salmonella outbreak through the import of 1.52 pm chicken nuggets from Poland. Does my noble friend share my concern that this raises serious issues about Sitting suspended. 617 Covid-19: Surplus Vaccine Doses[LORDS] Covid-19: Surplus Vaccine Doses 618

Covid-19: Surplus Vaccine Doses committing to it. This is aimed at the 92 most vulnerable Private Notice Question countries and will help to vaccinate more than 1.3 billion people. 2 pm Baroness Northover (LD): My Lords, is the Minister Asked by Baroness Sugg aware that significant ODA funding to Oxford which To ask Her Majesty’s Government, further to initially paid for the Ebola vaccine gave us a head start the Prime Minister’s statement at the G7 Leaders in the development of the Oxford-AstraZeneca vaccine? Meeting on 19 February, (1) how, and (2) when, Will the Government reconsider their short-sighted they plan to donate surplus COVID-19 vaccine policy of cutting ODA funding? doses to low-income countries. Lord Ahmad of Wimbledon (Con): My Lords, on The Minister of State, Foreign, Commonwealth and the noble Baroness’s second point, the Government Development Office (Lord Ahmad of Wimbledon) (Con): have made their position clear. It was a difficult decision, My Lords, the United Kingdom has committed to but a necessary one. Nevertheless, it still guarantees equitable access to safe and effective vaccines through £10 billion of support this year. On support to Oxford multilateral collaboration. COVAX is the best way to University, our commitment to UK science has been a deliver this. By pooling global resources, it enables the major contribution to being where we are on the development, purchase and distribution of vaccines. global stage when it comes to vaccine distribution and We will be able to offer vaccines to COVAX only when research. we are certain that we have doses surplus to the needs Lord Crisp (CB) [V]: My Lords, I congratulate the of the UK population. That will be a decision for the Government on this initiative and on their positive Health Secretary. support for COVAX. I note that other countries are making their own unilateral offers. Will the Government, Baroness Sugg (Con): My Lords, I am grateful to with their influence as president of the G7, take two my noble friend the Minister for that update. The further initiatives? Will they seek a commitment from Prime Minister rightly got credit after his announcement G7 countries, and others if possible, to offer a vaccination at the G7 meeting that the UK would donate its to all vulnerable people and health and care workers in surplus vaccines. We know that one of the main issues those 92 countries by a target date of, say, July 2022? is supply, but of course it is also cost. I appreciate the Will they seek an agreement to waive parts of the Government’s generous funding to COVAX, Gavi and TRIPS agreement on intellectual property so that other organisations, but I have just one question for there are no barriers restricting access to Covid-19 the Minister. Can he confirm that the cost of the medicines, tools, devices and vaccines? surplus doses for low-income countries will be met by the UK and that we are not just transferring the ability Lord Ahmad of Wimbledon (Con): My Lords, on to buy the vaccine to COVAX? the noble Lord’s second point, Oxford and AstraZeneca have worked very closely on intellectual property.Indeed, Lord Ahmad of Wimbledon (Con): My Lords, the close collaboration with the Serum Institute of India details of how and when the vaccines will be shared has allowed it to produce exactly the same vaccine in are still being confirmed, but there are further discussions India. On his earlier point about COVAX and other to be had on the point my noble friend raises with countries, he will have noted that UK leadership—we COVAX and vaccine manufacturers. She will be aware used the first G7 summit led by the Prime Minister— that we are contributing £548 million for global equitable resulted in major contributions to COVAX, not least access through the COVAX AMC. That remains the $4 billion from the United States as well as from the primary area of UK support. European Commission and Germany. Lord McConnell of Glenscorrodale (Lab): My Lords, Lord Polak (Con): We are a charitable and generous given the Government’s plan to reduce overseas country, but we can do more than just hand over our development assistance by £4 billion—two-sevenths spare vaccines to save lives in the developing world. of the budget—there is a real worry that the Government Perhaps the reduction, which has been mentioned, might allow access to the vaccine without actually from 0.7% to 0.5% should be put on hold, with that making any contribution to help developing countries £4 billion used in 2021 to buy vaccines to save lives in provide it. For example, Malawi is already suffering low-income countries. Can the Minister confirm whether from an education crisis and an economic crisis as a the 0.2% reduction began in January or will begin in result of the lockdowns and the virus. Surely we April at the start of the financial year? Will he also should be helping such countries to deliver that vaccine confirm that there will be a vote in both Houses before if it becomes available and making sure that they can the 0.7%, which is enshrined in law, is cut? afford it, not just aiming for it and hoping for it but actually delivering it. Lord Ahmad of Wimbledon (Con): My Lords, I am all too aware of the strong sentiments about the Lord Ahmad of Wimbledon (Con): My Lords, I Government’s announcement on ODA spending. Of assure the noble Lord that that is exactly the objective course, the Government are working through, and we of the COVAX AMC commitment, and it is why the have previously said we will come back to your Lordships’ UK Government have led on it. Not only have we led House on the provisions we need to make in legislation. on it but the noble Lord will have seen the Prime On my noble friend’s earlier point, I totally agree with Minister’s statement which led to other countries also him, but I assure him that it is not just our funding of 619 Covid-19: Surplus Vaccine Doses[22 FEBRUARY 2021] Covid-19: Surplus Vaccine Doses 620

COVAX and the AMC facility. My noble friend will systems bilaterally remains a key priority, but there are also be aware of the commitment we have given to challenges ahead with the reduced spending on ODA. Gavi, CEPI and the World Health Organization to They are currently under review at the FCDO. ensure equitable access not just in our fight against Covid-19 but in other pandemics as well. Lord Bilimoria (CB) [V]: My Lords, we welcome the Prime Minister’s announcement at the G7 that we will The Lord Bishop of St Albans [V]: My Lords, provide surplus vaccines to other countries. Is the approaches are developing that enable individuals to Minister aware that India has already supplied over give into the COVAX fund in gratitude for having 10 million vaccines to other countries, including, in received their vaccination against Covid-19. How are the announcement last week, the supply of 200,000 doses Her Majesty’sGovernment encouraging the development to UN peacekeepers worldwide? They are being of such initiatives? Will they support such approaches manufactured by the world’slargest vaccine manufacturer, through match funding from the Foreign, Commonwealth the Serum Institute of India, owned by the Poonawalla and Development Office? family. Does the Minister also agree that, when we increase our inoculations from 500,000 to 1 million a Lord Ahmad of Wimbledon (Con): My Lords, our day, we can commence our own vaccine diplomacy as initial funding of the AMC was very much based on global Britain? match funding. We have seen that coming through and there are valuable contributions that other key partners Lord Ahmad of Wimbledon (Con): My Lords, on can make. We are working very closely with the Gates the noble Lord’s first point about vaccine distribution, Foundation among others to ensure that support for we welcome all countries that are helping to meet the Gavi, the AMC and, particularly,for those most vulnerable challenge of the pandemic. The noble Lord will be is something not just for Governments but for the aware of the central role that the United Kingdom private sector as well. played in facilitating early engagement between the Serum Institute and the United Kingdom, and between Lord Collins of Highbury (Lab): My Lords, I must AstraZeneca and Oxford University, in ensuring the admit that I am a bit disappointed that the Minister scaling-up of production that we now see in India. was unable to give a straight answer to the question India is the pharmacy of the world, which is reflected asked by the noble Baroness, Lady Sugg, in relation to in its mass production. The Prime Minister made it what donation means. In the G7 statement made by very clear that the UK’s excess vaccine will be aimed the Prime Minister there was a welcome commitment primarily at the COVAX facility, because we believe to sharing technology. Can the Minister give us a bit that it guarantees the most equitable distribution. more detail on what that means and, particularly, will Lord Dobbs (Con) [V]: I also warmly welcome the the Government support the WHO Covid-19 Technology Prime Minister’s commitment, which he gave at the Access Pool? G7. I think we can take some gentle pride in Britain leading by example, but can my noble friend say Lord Ahmad of Wimbledon (Con): First, and foremost, whether all our vaccine effort for poorer countries will I am surprised that the noble Lord expresses go through COVAX or whether any of it will be disappointment. If anyone has led on this, particularly direct? What preparations does COVAX have in place with the World Health Organization, within Gavi and to ensure that the vaccines are distributed fairly and on COVAX, it is the United Kingdom, and that is do not fall into the hands of elites and middlemen, resulting in other countries stepping up. The reason I with all the corruption that foreign aid has sadly, and did not answer specifically is that we are having discussions all too often, entailed? in that respect. On the noble Lord’s general point, I assure him that we are very much committed to ensuring Lord Ahmad of Wimbledon (Con): My Lords, I the success of the rollout and equitable access. As the welcome my noble friend’s support. On his specific COVAX facility makes further announcements in the questions, we are not at the point where we can make coming few weeks, that will become all the more clear. specific pledges about excess vaccines, but I note what my noble friend said about support for particular Lord Purvis of Tweed (LD): My Lords, one of the countries. We will support primarily the AMC facility core elements of the COVAX approach is to strengthen at COVAX, which we have led, to ensure the most health systems in developing countries. Key to that is equitable access. He makes an important point about the bilateral support that countries such as the UK distribution, which we will be monitoring closely with will provide them. Given that the Government’sintention our key partners, including UNICEF, which is a key is to breach the law and the undertaking to meet agency in the distribution of these vaccines. 0.7% support, there could now be cuts of up to 50% to the UK’s bilateral support for these countries. Instead Lord Harris of Haringey (Lab) [V]: The Minister of moving ahead with this, could the Government continues to be suspiciously vague about whether the consider a moratorium on the cuts and guarantee that Government will simply transfer the right to buy UK support to strengthen health systems in developing vaccine supplies rather than pay for them themselves. countries to distribute the vaccine will not be cut? No doubt this will be seen as an instrument of British foreign policy, so will the UK be claiming credit for its Lord Ahmad of Wimbledon (Con): My Lords, on generosity in the recipient countries, if it does turn out the noble Lord’s first point, I have already made the to be generous, and will we be content to see these Government’s position clear. On the noble Lord’s vaccines going to countries whose Governments are second point, of course supporting countries’ health engaging, for example,in genocide or human rights abuses? 621 Covid-19: Surplus Vaccine Doses [LORDS] Building Safety 622

Lord Ahmad of Wimbledon (Con): My Lords, on The unanimous recommendation of the board was the noble Lord’s second point, by working with key that Simon Burton should succeed Ed as Clerk of the partners we will ensure that the most vulnerable Parliaments. His appointment follows an open and communities receive the vaccine irrespective of where external competition, supported by employment they are within countries. I am sorry if there are consultants Saxton Bampfylde, which attracted a wide specifics that I cannot go into, because they are matters field of high-calibre candidates. A number of internal for discussion, and no Minister would provide that and external applicants were interviewed by a board detail if it is yet to be determined. However, I challenge consisting of me, the Lord Speaker, the Leader of the him. The UK Government have been leading the Opposition, the leader of the Liberal Democrats, the charge in our response to this global pandemic. The Convenor of the Cross Benches, and Dame Sue Owen—a British Government, under this Prime Minister, have former Permanent Secretary at the DCMS and Civil ensured that the facility that we now have, through the Service diversity and inclusion champion. I am sure COVAX AMC, will provide for the most vulnerable that all noble Lords will join me in congratulating around the world. That is something not to be proud Simon on his appointment, and I very much look of, but to recognise. forward to working with him. We will have an opportunity to pay tribute to Ed’s Lord Berkeley of Knighton (CB) [V]: My Lords, I career in the House nearer the point of his retirement, am proud of and recognise the initiative,and I congratulate when I will table a Motion in the usual way, enabling the Government on it. However, to reinforce slightly us to record our appreciation for his distinguished what I think the noble Baroness, Lady Sugg, was service. With Simon’s appointment, the post of Clerk trying to say, given that we have had a cut in overseas Assistant will fall vacant, so an open recruitment development aid, it would be wonderful if we could process will now begin. make this a real gift and not one that needs to be underwritten by anybody else. Baroness Hayter of Kentish Town (Lab): My Lords, Lord Ahmad of Wimbledon (Con): My Lords, I have it is a particular pleasure to welcome in due course already said where we are on ODA. As ever, I make and to congratulate Simon Burton on his appointment note of the strong sentiments in your Lordships’ House. as Clerk of the Parliaments, which, as the current incumbent knows, is a demanding job. All of us who Lord Lansley (Con) [V]: My Lords, I join in applauding have worked with Simon over the years know of his the Government’s leadership in its support for the calm sense, tolerance of our foibles, expertise in the COVAX facility, but does the Minister recognise that ways and means of this unique Chamber, knowledge only today the World Health Organization’s director- of legislation and procedure, and wisdom in his advice. general expressed concern that COVAX is having problems But it is not just us who think this: as the noble trying to source early supply of vaccine, while at the Baroness has said, those attributes were tested, for the same time some of the richest countries in the world first time, against external, and I gather very impressive, continue to contract for early delivery of vaccine? We candidates. It was a challenging hurdle for our new need to take an initiative to enable the rich countries Clerk of the Parliaments to jump, but he did so with to secure early vaccine supply to COVAX. I wonder if flying colours. the Government can use their leadership in COVAX We welcome him to his new role and wish him well. to secure that kind of initiative. Life is always challenging in this place, but with Covid, R&R and no doubt other surprises to come, he will Lord Ahmad of Wimbledon (Con): My Lords, I hear never be bored. my noble friend, who speaks with great experience of the health sector. As he is aware, COVAX is explicitly designed to work for high-income, low-income and middle-income countries. That is why the Government Building Safety led the AMC facility to ensure equitable access to the Statement 92 most vulnerable countries. Wecontinue to collaborate with other key partners through our influence at the The following Statement was made in the House of World Health Organization, GAVI and CEPI to ensure Commons on Wednesday 10 February. that the COVAX AMC facility is fully supported “With permission, Mr Speaker, I want to make a by all. statement on housing and building safety. Beyond the Covid-19 pandemic, the Government want to build The Lord Speaker (Lord Fowler): My Lords, all back better—better homes, better infrastructure and supplementary questions have been asked. better communities. The foundation of those ambitions, and the mission of my department, is safety and Clerk of the Parliaments fairness. We have all been moved by the stories we have Announcement of Successor heard and the people we have met—home owners placed in difficult and sometimes impossible situations 2.17 pm through no fault of their own. I appreciate the frustration, The (Baroness Evans of Bowes Park) the worry and the despair that at times they feel. I (Con): My Lords, on 30 September I informed the House share their anger at the errors, the omissions, the false of Ed Ollard’s intention to retire from the office of Clerk promises and even the outright dishonesty, which were oftheParliaments,witheffectfrom1April.Therecruitment built up over many decades but which this Government process for his successor has now concluded. are determined to tackle. 623 Building Safety [22 FEBRUARY 2021] Building Safety 624

That is why today I am announcing an unprecedented long-term low-interest scheme, no leaseholder will intervention—a clear plan to remove unsafe cladding, ever pay more than £50 a month towards the removal to provide certainty to leaseholders, to make the industry of unsafe cladding, many far less. pay for its faults of the past, to create a world-class Taken together, this means the Government are building safety regime and to inject confidence and providing more than £5 billion, including a further certainty back into this part of the housing market. £3.5 billion announced today, plus the significant cost First, we will finish the job we have started on remediating of the very generous financing scheme, which will run unsafe cladding. After the tragedy of Grenfell Tower, for many years to come, to ensure that all leaseholders the expert advice that this Government received identified in medium and high-rise blocks face no costs or very aluminium composite cladding, or ACM—the material low costs if cladding remediation is needed. Where it on the tower—as by far the most unsafe form of is needed, costs can still be significant for leaseholders, cladding. It should never have been used, and our which is why we want to take these important steps. independent expert advisory panel recommended that We want to ensure that the Government develop this it should be the focus of our remediation work. long-term scheme, which will protect leaseholders with Thanks to a considerable effort, including during financial support. Taken together, this means that the the pandemic, almost 95% of all high-rise buildings Government are helping leaseholders to move forwards with unsafe ACM cladding identified by the beginning with greater certainty and more confidence about of last year have been remediated, or workers are on the future. site now doing the job. That rises to 100% in social Thirdly, while the problem is not one of leaseholders’ housing. Guided by expert advice, the work to remove making, it also cannot be right that the costs of other types of cladding that are also unsafe—albeit addressing these issues fall solely on taxpayers, many less so than ACM—where they pose a genuine risk to of whom are not themselves home owners and can life is also under way. only dream of getting on the housing ladder. The It has always been our expectation—our demand—that Government have always expected the industry to building owners and developers should step up to contribute towards these costs, and some have done meet the cost of this work. Where they have not, or so. Today, I am announcing that we will introduce a where they no longer exist, the Government have gateway 2 developer levy, which will be implemented stepped in, providing £1.6 billion to remediate unsafe through the forthcoming Building Safety Bill. The cladding. However, it is clear that without further proposed levy will be targeted and will apply only government intervention many building owners will when developers seek permission to develop certain simply seek to pass these potentially very significant high-rise buildings in England, helping to ensure that costs on to leaseholders, as this is often the legal the industry takes collective responsibility for historical position in the leases that they signed. That would risk building safety defects. In introducing the levy, we will punishing those who have worked hard and bought continue to ensure that the homes our country needs their own home, but who have, through no fault of get built and that our small and medium-sized builders their own, found themselves caught in an invidious are protected. situation. Importantly, it would also risk slowing down In addition, a new tax will be introduced for the the critical works to make these homes safer. UK residential property development sector in 2022. I am therefore making an exceptional intervention This will raise at least £2 billion over a decade to help today on behalf of the Government and providing to pay for cladding remediation costs. The tax will certainty that leaseholders in high-rise residential buildings ensure that the largest property developers make a fair will face no cost for cladding remediation works. We contribution to the remediation programme in relation will make further funding available to pay for the to the money they make from residential property, removal and replacement of unsafe cladding for all reflecting the benefit that they will derive from restoring leaseholders in high-rise residential buildings of 18 metres confidence to the UK housing market. The Government and above, or above six storeys, in England. Wecontinue will consult on the policy design in due course. to take a safety-led approach, and this funding will Fourthly, I know there are many people across the focus on the higher-rise buildings, where the independent country who are concerned about the safety of their expert advisory panel tells us time and again the home. In the actions we have taken and those we take overwhelming majority of the safety risk lies, in line today, we have already very clearly prioritised public with the existing building safety fund and the anticipated safety. However, it is also important that we put the scope of the new building safety regulator that we are risk of a fire, and in particular the risk of a fatal fire, in establishing and will shortly be legislating for. This context—it is low. Last year, the number of people will ensure that we end the cladding scandal in a way who died in fires in blocks of flats over 11 metres was that is fair and generous to leaseholders. 10—an all-time low—and fire-related fatalities in dwellings Secondly, for lower and medium-rise blocks of flats, in England have fallen by 29% over the past decade. the risks are significantly lower and the remediation of By way of comparison, more than 1,700 fatalities were cladding is less likely to be needed; in many cases, it reported on our roads in 2019. will not be needed at all, but where it is, costs can still Of course, any death is one too many, and the be significant for leaseholders. That is why I am tragedy of Grenfell Tower lingers with us and demands announcing today that the Government will develop a action. That is why it is right that we address safety long-term scheme to protect leaseholders in this situation issues where they exist and are a threat to life, but we with financial support for cladding remediation on must do so proportionately, guided at all times by buildings of between four and six storeys. Under a expert advice. That is the approach that we are taking 625 Building Safety [LORDS] Building Safety 626

[BARONESS HAYTER OF KENTISH TOWN] Can the Minister tell the House how many buildings through the Building Safety Bill, the new building are unsafe, where they are and what danger they pose? safety regulator, the Fire Safety Bill and the new Until the Government have credible answers to these national regulator for construction products, which I basic questions, there will continue to be mistakes and announced in January. I am determined that we will the offering of piecemeal solutions that must be updated have a world-class building safety regime. when they do not deliver. Can the noble Lord, Weneed everyone to follow this sensible, proportionate Lord Greenhalgh, update the House and guarantee approach so that this part of the housing market can that the funding provided will cover all buildings over move forward and home owners are not disproportionately 18 metres high? impacted. The Royal Institution of Chartered Surveyors Will the Government set up an independent task has consulted on new guidance for valuers on when an force to prioritise buildings according to risk, with EWS1 form should be required. The Government powers to get the funds out of the door and the ability endorse its work to ensure that assessors have a stronger to go after building owners when they fail to get the basis on which to make good, proportionate judgments work done? That has been a consistent problem that about valuation risk. Lenders have welcomed the progress we have raised again and again. Ministers have now on that guidance, which will help to ensure that more promised 17 times—yes, 17 times—that leaseholders than half a million leaseholders in blocks of flats over will not bear the cost of fixing a problem they did not 11 metres will not need a separate EWS1 assessment cause; these were the promises made to the innocent to get a mortgage. That builds on the interventions we victims of this scandal. But the Government have have already made to create and train many more betrayed their promise that leaseholders will not pay assessors, and we are doing more so that they can for the building safety crisis. Three and a half years on access professional indemnity insurance to get on with from the Grenfell Tower disaster,hundreds of thousands the job. of people cannot sleep at night because their homes Today, in addition to providing certainty to are unsafe. On top of that, the Government have leaseholders, we are providing confidence to lenders. decided to pile financial misery on them. This is Following discussions that my right honourable friend wrong; it is an injustice, and it is unacceptable. the Chancellor and I have had with lenders, we expect Can the Minister tell the House why this arbitrary all the major banks and building societies to strongly 18-metre height limit means the difference between a support today’s intervention, which will provide greater safe home and, potentially, financial ruin? What are certainty to the market and help to restore the effective the terms of the loan? What will the interest be? Will lending, purchasing and selling of properties as soon leaseholders be required to pay the interest as well as as possible. the main costs? On the point that the leaseholder will Taken together,this exceptional intervention amounts not pay more than £50 a month, if they sell the to the largest-ever government investment in building property, does the loan have to be paid at that point? safety. We believe in home ownership, and today we Does it go with the former owner, or does it stay with firmly support the hundreds of thousands of home the current owner? We need to know where we stand. owners who need our help now.I commend this Statement How long will the scheme run for? Will it go up by the to the House.” rate of inflation each year? What will the Government do if these homes remain unsaleable? How will they 2.20 pm ensure that freeholders take up the loans? How will the Government speed up remediation, given that the Lord Kennedy of Southwark (Lab Co-op): My Lords, current stalemate cannot continue? I declare my relevant interests as a vice-president of Other properties do not have dangerous cladding, the Local Government Association, chair of Heart of but these people have been charged thousands of Medway Housing Association and a non-executive pounds per flat to fix other safety issues.The Government director of MHS Homes Ltd. should focus on securing our economy and rebuilding Three and a half years on from the Grenfell tragedy, after Covid, not saddling homeowners with further in which 72 people lost their lives, decisions made by debt. The Government should pursue those responsible the Government have left thousands of people trapped for payment and prevent leaseholders and taxpayers in unsafe homes and many more unable to move. The carrying the can. The Government have announced a Government’s announcement has come far too late for levy and a tax, which I welcome, but those responsible many and is, sadly, a repeat of undelivered promises. It should bear the cost. How much do the Government backtracks on a key promise that no leaseholders anticipate the levy will raise? Will they pursue others, should have to pay for the cost of this scandal, which such as the cladding manufacturers, responsible for is not of their making. On 11 March 2020, nearly a putting the dangerous cladding on in the first place? year ago, the Chancellor of the Exchequer said that The Government have missed every target for removing “all unsafe combustible cladding will be removed from every ACM cladding and 50,000 people are still living in private and social residential building above 18 metres high.”—[Official flats wrapped in it. This is the same cladding that was Report, Commons, 11/3/20; col. 291.] found on Grenfell Tower, and thousands more have But that has not happened. other dangerous cladding on their buildings. When The funds set up have been dogged with problems. will this all be removed? It would be helpful if the Minister could tell the House What about the skyrocketing insurance costs that how much of the money available has been spent so innocent victims are being forced to pay? Can the far. I believe there has been a major underestimation noble Lord, Lord Greenhalgh, tell the House what he of this scandal—this problem—by the Government. expects, on average, a leaseholder to pay? People cannot 627 Building Safety [22 FEBRUARY 2021] Building Safety 628 continue to live in unsafe, unsellable homes. Homeowners It will make these flats less attractive to buyers and should not be faced with financial ruin—bankruptcy, they will almost certainly command a lower value. even—to fix a problem they did not cause. Unfortunately, How is it fair to require leaseholders to pay for building these proposals, instead of providing justice, will still remediation which is not in any way of their making? leave too many people struggling and facing loans. One of the roles of government is to ensure that This is a very poor Statement from the Government—they safety regulations are appropriate to the task and that will have to come back to the table and do what they there is an inspection regime. The Government have promised in the first place: ensure that no victim of failed to do this, so they are partly culpable, must bear this scandal will have to bear the cost of fixing a the cost and recoup it from those who share culpability. problem they were not responsible for. Then there is the question of building regulations. It is alleged that some of the buildings affected by this Baroness Pinnock (LD) [V]: My Lords, I thank the scandal failed to comply with building regulations at Minister for the repeat of this important Statement on the time of construction. Can the Minister confirm the Government’s response to the cladding crisis. I this and provide some estimate of the numbers involved? remind the House of my interests, recorded in the Where breaches of regulation are involved, will the register, as a member of Kirklees Council and a vice- Government require full remediation costs to be met president of the Local Government Association. by the developer? This is what happens with the I was pleased when I read the heading of the manufacturers of cars and white goods, for example. Statement, “Building Safety”, and the opening paragraph, Surely it should also apply in these instances. Does the which refers to the mission of the Secretary of State Minister agree? being that of “safety and fairness”. Unfortunately, the Next, I turn to the total funding package. The Statement then fails to live up to those laudable words. additional funding provided by the Government is a The first issue I have with it is that throughout, there is start, but this £5 billion needs to be put into context. reference only to “unsafe cladding”. In fact, what has During the debate on the Fire Safety Bill, the Minister become clear, as the vast scale of the problem that the confirmed that the total cost of remediation was likely Grenfell tragedy exposed, is that the building safety to be in the region of £16 billion. Does that imply that failings go far beyond “unsafe cladding”. As flammable £10 billion or more will be paid for by leaseholders cladding is removed, in some buildings further significant through the loan scheme? Perhaps the Minister will let construction failings are revealed: flammable insulation us know whether this is what the Government have has been used; firebreaks have not been built into the calculated. structure as a way of slowing the spread of a fire; It is proposed to recoup some of these costs from balconies are not made of fire-retardant material; and developers by raising £200 million per annum via a tax spandrel panels are also seen as a potential safety on the sector. The cost of the minority of the remediation concern. to be recouped from developers is pathetically small. How do I know this? In January 2020 the Ministry During the last four years, the five largest developers of Housing, Communities and Local Government made profits of around £16 billion, which rather puts issued guidance note 23, relating to the seven building the proposed figure into context. Will the Government components under review, requiring building owners reconsider the level of this tax to make it fairer? and managers to take urgent action on these. The Finally, I hope that the Government do not need to question for the Minister,therefore, is: will the additional be reminded of the terrible, personal cost of the government funding pay for all the defects revealed cladding scandal. For instance, Laurel and Jonathan when the unsafe cladding is removed? If, for instance, in Manchester are seriously considering bankruptcy it becomes evident that there is an absence of firebreaks, as the only way out of their predicament. Hayley in will the funding cover the costs of installing them? If Leeds has already been forced into bankruptcy. In an not, the leaseholders will still be faced with large bills Inside Housing survey last year, 23% of respondents to pay for failings in the construction. said that they had considered suicide. Such is the stress The next fundamental question that I hope the of living in an unsafe home and being forced to pay Minister can answer is: why has 18 metres been chosen huge increases in insurance and service charges. For as the bar above which cladding removal is funded by leaseholders and tenants, this building safety crisis is the Government and below which the leaseholders not in any way of their making, yet they are expected and tenants are required to pay? Is the 18-metre figure to pay the price while those who created it are not an historic one that needs to be reassessed? Serious being similarly expected to pay in any significant way. fires can occur in blocks of varying heights: for instance, Can the Minister explain how this adheres to the the fire in a block called The Cube, in Bolton, was very department’s mission of fairness? Will he press for a serious—although fortunately, there was no loss of review of the current proposals as more information life—but the building was lower than 18 metres. comes to light? That leads me to the question of fairness. As noble Lords will recall, this is the mission of the department The Minister of State, Home Office and Ministry in respect of building safety. Can the Minister explain of Housing, Communities and Local Government how it is fair for leaseholders in blocks below 18 metres (Lord Greenhalgh) (Con): My Lords, around £3.5 billion high to have to pay for remediation? I recognise that in direct, additional grant has been committed. This is low-interest loans are available and that the currently asignificantamountof moneywhichdwarfsthe£1.6billion anticipated maximum payment is £50 per month. This previously promised. More than £5 billion has been will, no doubt, be added to the service charge and will committed to support the ending of the cladding crisis. be one of the costs that potential buyers will consider. Theplansgoalongwaytowardsensuringthataffordability 629 Building Safety [LORDS] Building Safety 630

[LORD GREENHALGH] the noble Lord, Lord Kennedy, and the noble Baroness, is not an issue for any leaseholders in medium-rise Lady Pinnock. That is something that we can look at properties.It also ensures that, where there is no warranty in due course. outstandingorinsuranceavailabletoprotecttheleaseholder, This is a five-point plan looking at significant sums the taxpayer—through the Government’s additional of money to support the removal of the external grant—will step up and provide the funding necessary cladding systems. It is those systems that have accelerated to ensure that the cladding system is removed. the spread of fire and their removal makes it far more The noble Lord, Lord Kennedy,asked about progress. unlikely that Grenfell will ever happen again. We Despite Covid, we saw 50% more starts in 2020 than in know that the future building safety regime will be any other year. Workers were on site and, by the end of focused on ensuring that the new buildings will be of the year, 95% of high-rise buildings with the same sort far greater quality and then provide the greater confidence of cladding as at Grenfell had either started or completed that is required in the housing market to ensure that it remediation. We know exactly where these buildings begins to function properly in future years. are. The vast majority of the remaining cladding will have been removed from them by the end of this The Deputy Speaker (Baroness Barker) (LD): We calendar year. now come to the 20 minutes allocated to Back-Bench The main thrust of the questions was around the questions. Questions and answers must be brief. scope of the fund. It is important to recognise that height is a huge factor when it comes to safety and the 2.40 pm risk to life. The higher the building, the more risk there Lord Young of Cookham (Con): My Lords, in is to the residents. People who live in buildings between welcoming the extra support for leaseholders, I commend 18 and 30 metres high are four times more likely to my noble friend on the role that I know he personally have a fire involving a fatality or the need for hospital played in shifting the Government’s position. On the treatment. In buildings above 30 metres, this rises to developer levy, which I called for last year, can he 35 times more likely. We know that height is a factor. explain why it is going to be levied on future Eighteen metres is the cut-off point for the definition developments—which, as he has just explained, will of a high-rise building. This has been part of building not have the same problems, and where indeed the regulations for a considerable number of years. The developers may be new to the market—rather than on definition that we are using for scope is above six those developers that are responsible for the defects storeys, so The Cube would fall within the remit of a and that did very well on the proceeds? building where an application could be made to the building safety fund to remove its cladding. The threshold Lord Greenhalgh (Con): I thank my noble friend for is six or more storeys or a height greater than 18 metres. recognising that this announcement includes a developer The long-term safety advice makes it clear that the levy, which he was lobbying for. It will be on future external cladding system acts as accelerant, helping buildings, but at the same time we recognise the role the fire to spread. This is why the government money that a number of developers have played in creating is focused on the removal of external cladding systems. the cladding crisis. That is why the Secretary of State Internal compartmentation, firebreaks and fire doors also announced that a new tax would be introduced are designed to stop the spread of fire. It is right that for the UK residential property development sector taxpayers’ money should focus on the material that that will ensure that the largest property developers accelerates the spread of fire. also make a fair contribution to the remediation The £3.5 billion and the finance scheme will together programme. Wethink that these measures taken together help hundreds of thousands of leaseholders. For those will ensure that the industry does more to contribute in medium-rise properties, it will cover a significant to the remediation of historical cladding defects and part of their costs. For those in high-rise buildings, will play its part in dealing with this crisis. there will be no cost. To date, 13,000 leaseholders in ACM buildings have been supported by the government Baroness Finlay of Llandaff (CB) [V]: To grant scheme. Between 70,000 and 90,000 leaseholders “make the industry pay for its faults of the past”, in buildings with non-ACM cladding systems will not how will the Government recoup the full cost from bear any cost. A further 150,000 leaseholders in buildings those resistant to undertaking remedial work before between 11 and 18 metres high will also be helped. they close their companies? Are those who deliberately It is important, however, that building owners step concealed evidence of the flammability of ACM panels to up to the plate to support remediation where the be subject to corporate manslaughter investigations? government grant is not available. We do not expect this cost to fall entirely on leaseholders. With the Lord Greenhalgh (Con): My Lords, we will continue ACM fund, more than 50% of owners did the right to push very hard to ensure that developers make their thing and ensured that the cost did not fall on leaseholders. contribution. As I pointed out, historically we have We expect to see that with the non-ACM buildings as seen developers and building owners step forward and well. Here, warranty schemes can often still be drawn pay for the remediation and removal of unsafe cladding on and protect leaseholders. that is on their buildings, and we will continue to push It is worth looking at the cladding manufacturers. I developers to do the right thing. However, the levy and will take that point away because, as well as the the new tax are set to raise significant sums of money. developers, they are culpable for the situation that we The tax itself is estimated to raise £2 billion over find ourselves in—a point that has been made by both 10 years. 631 Building Safety [22 FEBRUARY 2021] Building Safety 632

The Lord Bishop of Newcastle [V]: My Lords, many material that accelerates the spread of fire in buildings leaseholders in high-rise and medium-rise buildings that in and of themselves, through height and being of are currently receiving insurance premium quotes for residential use, are at greater risk of causing fatalities. many times the previous annual cost. Much of the additional premium is a consequence not of cladding Lord Best (CB) [V]: My Lords, following the question directly but of wider concerns regarding fire risk in from the noble Baroness, Lady Warwick, I understand their building, so removing and replacing deficient that housing associations can apply for support from cladding will not in itself return premiums to a level of the extra £3.5 billion of additional funding for the normality. Can the Minister tell us of any plans to rectification of these appalling building defects in make the representatives of leaseholders and the insurance high-rise blocks, but that help will be available only for industry agree a joint approach to alleviating this flats sold to leaseholders for defects in housing association unacceptable burden? flats that are retained for letting. All the costs will fall on the housing association itself, requiring the diversion Lord Greenhalgh (Con): My Lords, I can say that of funds intended for other purposes, particularly we are meeting with representatives of the insurance building new homes. Can the Minister give an estimate industry and of the cladding groups to work on precisely of how many new, desperately-needed social rented that—a solution to make sure that there is a proportionate, homes will be lost because of this? common-sense approach to building insurance.I underline that increasing the pace of remediation is likely to see Lord Greenhalgh (Con): My Lords, I am not in a a return to more sensible policies regarding the setting position to give an estimate of that kind, but I recognise of building insurance. that social landlords have significant resources that they can put into making sure that their buildings are safe, and many are proceeding to do precisely that. I Baroness Warwick of Undercliffe (Lab) [V]: My do not think we can easily estimate the impact on new Lords, I declare an interest as chair of the National build, but we can say that the funds support those Housing Federation. Can the Minister explain why leaseholders who would face costs without access to this very welcome new funding will not be made grant funding or the financing scheme. available to remediate the homes of people living in social housing? Housing associations do not have profits to draw on and local councils cannot simply Lord Lancaster of Kimbolton (Con) [V]: The deplete their reserves, so to make homes safe they will Government have secured a welcome agreement on have to divert rental income that would have been EWS1 forms that will benefit thousands of home spent on the upkeep of tenants’ homes, investment in owners. Many other home owners, however, still need theircommunitiesorbuildingmuch-needednewaffordable to secure such a form before they can move on with homes. Does the Minister accept that the only way to their lives. Can my noble friend outline what steps the resolve this problem once and for all is for the Government Government are taking to make securing such forms to provide up-front funding for the remediation of easier? homes of all tenures and then claw back as much as possible from those responsible for creating these Lord Greenhalgh (Con): My Lords, I thank my inadequate buildings in the first place? noble friend for raising this significant issue. We are looking at how we can increase the supply of the professionals needed to carry out those EWS1 assessments, Lord Greenhalgh (Con): My Lords, I point out that and we have provided £700,000 worth of funding to the priority of this Government is to protect leaseholders the Royal Institution of Chartered Surveyors, and that from facing the costs of the removal of unsafe cladding, is looking to upskill around 2,000 building surveyors whether they are in social sector buildings or in private to be in a position to do that after about a month’s buildings. Where registered social landlords feel that training. As well as increasing the supply, we are they need to impose costs on leaseholders, access to working closely with RICS and other parties to narrow grant funding is available as well as the new financing the scope of when EWS1 is required. You should not scheme. That protects the leaseholders in those properties, need to have an assessment of an external wall system which is the priority of this Government. in buildings under 11 metres. There is less latitude in buildings above 18 metres, and a number of buildings Lord Shipley (LD) [V]: My Lords, I remind the between 11 metres and 18 metres will also not require House that I am a vice-president of the Local Government an EWS1. It is only in the event that they are covered Association. Those in a flat 19 metres high will have with some kind of external cladding system to a great unsafe cladding replaced at no cost, and that is welcome. degree—let us say, more than 25%. Those in a flat 17 metres high will have to pay up to £50 a month for an unknown period. Why do the Lord Campbell-Savours (Lab) [V]: Why do the Government think that is fair? Government not require every local authority to publish the addresses of all buildings falling under cladding Lord Greenhalgh (Con): My Lords, I pointed out fire risk categories? Is the FOI response from the that height is a marker for risk. Those buildings greater DCLG of 12 March last year refusing such information than 18 metres are four times more likely to result in a still valid where it spuriously states that fire-related fatality or someone needing to go to hospital “disclosing it would be likely to endanger the safety of individuals” for treatment. Above 30 metres, that rises to 35 times and more likely. So the focus needs to be on removing the “could enable someone to identify particular buildings”, 633 Building Safety [LORDS] Building Safety 634

[LORD CAMPBELL-SAVOURS] Lord Greenhalgh (Con): I did refer to the fact that usable by “those with malicious intent”? That could other building safety issues, beyond the external cladding apply to any inflammable building, a chalet or indeed system, were breaks on whether a fire continues to any temporary building. spread—they are not accelerants. The scope of our intervention is designed to deal with the biggest contributor Lord Greenhalgh (Con): My Lords, it is sensible to to the life safety risk. We would look to building be very careful about the dissemination of information owners to step up where possible and help with the about the precise locations of buildings with flammable remediation of faulty building works. We have focused material. We need to recognise that there are potentially the additional grant funding on precisely that which is people out there with malicious intent. It is right and going to protect and save lives. proper that we keep information that would enable people to identify those buildings confidential as far Lord Taylor of Goss Moor (LD) [V]: My Lords, it is as possible. certainly welcome that the Government have taken action on properties over 18 metres, but the great Lord McNally (LD) [V]: My Lords, much of the majority of tenants are in properties under that height. effectiveness of this legislation will depend on the I refer to my declared interests, primarily that I am a power and vigour of the building safety regulator. former chair of the National Housing Federation, Will that be a named individual or a committee? If it is which represents housing providers. It has huge numbers a named individual, will he or she have the same of tenants who have bought shared ownership properties, powers as an ombudsman and receive complaints who are not well off and are currently in enormous from individuals and groups who have difficulties. This is because, despite what has been said often complained and warned but never had access to by the Government and RICS about EWS1 inspections a decision-maker? and the flexibility around them, lenders are continuing to insist on EWS1 inspections in practice. These home Lord Greenhalgh (Con): I share the noble Lord’s owners are not well off, and inspections everywhere scepticism about the value of committeeism. I am are getting valuations of £0, serious delays and uncertainty. pleased to announce that the leader of the new building Will the Minister speak to lenders about resolving this safety regulator, the chief inspector of buildings, has issue? Would he also accept that a bill of £50 a month been announced. I am delighted that Peter Baker, the is unaffordable for those in shared ownership, given acting chief inspector, has been confirmed as taking that the reason they are in these properties in the first up the reins and ensuring that this new regime works. place is that they are not able to afford a home He will be accountable to ensure that that happens. otherwise? Baroness Altmann (Con): My Lords, I welcome the Lord Greenhalgh (Con): My Lords, we have spoken gateway 2 developer levy and the new tax on residential to lenders and there were positive statements by building developers. I echo the calls for my noble and the chief executive of Nationwide in the friend to look carefully at recouping costs of remediation announcements. They welcomed this and recognised work from developers of past projects and not just that the additional £3.5 billion helps to provide certainty, those in the future, especially those who failed to admittedly in high rises. The financing scheme remains comply with building regulations or cut corners at the open to all, both social sector and private sector time of construction, and the manufacturers of the leaseholders, to ensure that they would not have to pay cladding materials including ACM. more than £50 a month towards the remediation of unsafe cladding. In the round, the announcements we Lord Greenhalgh (Con): I thank my noble friend for have made will give confidence to the market to be making the point. It would be fair to say that the new more sensible on valuation in future, I hope. tax on developers, details of which will be announced shortly, will include a number of the major developers Lord Moynihan (Con) [V]: My Lords, this Statement historically responsible for high rises. She makes an is welcome as an important contribution to the absolute important point that we should also consider the role priority of safety in our housing stock and building of cladding manufacturers in this crisis. It is fair to say back better. Will my noble friend consider expanding that, while developers have made good solid profits in the remit of the building safety regulator to whom he recent years, the cladding manufactures have had healthy has just referred to take into consideration the need to profit margins too. It is important that they are made continue to upgrade the least efficient social housing to contribute to the resolution of the cladding crisis. stock, reduce carbon emissions and bills, tackle fuel poverty and save the budget to help 600,000 households Baroness Young of Old Scone (Lab) [V]: The Minister reduce carbon emissions by subsidising the costs of did not answer the question raised by the noble Baroness, energy efficiency? All these have an impact on safety. Lady Pinnock. Post-Grenfell surveys have revealed other fire-related defects such as flawed fire separation. Lord Greenhalgh (Con): I thank my noble friend for The leaseholders in these properties suffer the same raising the issue of how we can ensure that we achieve problems of the inability to sell, high remediation our zero-carbon commitment. The building safety costs and rocketing or no insurance. Yet the Government regulator has oversight of building control bodies and seem to be leaving it to leaseholders, building owners monitors their performance. We hope that oversight or somebody unspecified to pursue action against will improve the efficacy of building regulations across those who made the errors and omissions in the past. the board. I point out that climate change mitigation This is not good enough. What will the Government and adaptation are intrinsic components of building do to help these non-cladding victims? regulations and will remain so. 635 Building Safety [22 FEBRUARY 2021] Maternity Allowances Bill 636

Baroness Whitaker (Lab) [V]: My Lords, some people to take maternity leave, but this workaround—which need a different kind of safety guarantee. Will the several Members of the other place have used—relies Minister condemn recent death threats, including a on another Minister taking on additional responsibilities. petrol can left next to a property belonging to a We need to go further, and I will return to this issue Romany Gypsy mother of two going through cancer later, as I know it is of importance to the House. treatment and in the process of applying for planning Clearly, this approach is simply unworkable for permission for new housing? Secretaries of State or other holders of individual offices, such as the law officers or the , Lord Greenhalgh (Con): I will join the noble Baroness owing to their constitutional role and the volume and in condemning all such abhorrent incidences of hate complexity of their workload, which gives rise to a crime. Hate crimes like that are completely unacceptable pressing need for posts to be filled. The current law and will not be tolerated under any circumstances. My does not allow the Government to take on and pay department has been informed that both the local another Cabinet Minister, or equivalent, as maternity authority and local police are dealing with the incident. cover, as happens in workplaces up and down the As the police are investigating the specific matter she country. No fewer than three Acts of Parliament raised, it would be inappropriate for me to comment govern the issue of ministerial appointments and pay, any further at this point. I am sure that she will and the restrictions on them. It is worth underlining understand that, as I would not want to prejudice the constitutional importance of these Acts, as they their work. manage part of the delicate balance between the legislature 2.58 pm and the Executive, ensuring that the payroll vote is kept in proportion to the overall size of the Commons. Sitting suspended. This is a serious consideration, and a balance that should not be adjusted lightly. However, we propose modest changes to prevent putting some women off Ministerial and other Maternity holding high office for lack of adequate maternity Allowances Bill provision. Second Reading Until now, for someone to be appointed to cover a 3.03 pm Minister at this level, or one of the opposition officeholders covered by the Bill, and for that individual to be paid, Moved by Lord True the pregnant Minister would normally have to resign. That the Bill be now read a second time. The Bill ends this anachronistic and wholly unacceptable situation by providing six months’ paid maternity The Minister of State, Cabinet Office (Lord True) leave for all eligible Ministers and opposition officeholders. (Con): My Lords, the Bill before the House today will Turning to the content of the Bill, Clause 1 allows for the first time enable Ministers to take paid maternity the Prime Minister to designate a Minister who wishes leave from their job for an extended period. Women to take maternity leave as a “Minister on leave” who who aspire to, and hold, high office will no longer be remains part of the Government—able to be briefed disadvantaged against other women in this respect. I on matters and to keep in touch with work, but not am sure that representatives of all three parties that responsible for exercising the functions of the office have been in government in the last 20 years will agree from which they are on leave. It makes clear the that this is long overdue. conditions applicable to designation as a Minister on It is well known that the occasion of the Bill—and leave. It also sets out how the designation comes to an the cross-party agreement to accelerate it, for which end, either automatically, six months after the Minister the Government are grateful—is the pregnancy of my has been so designated, or earlier, should the Minister right honourable friend the Attorney-General. I am cease to hold that office—for example,due to appointment sure that the whole House will join me in sending best to a new ministerial role, resignation or dismissal. wishes to her and her family. Clause 2 sets out the methodology for calculating This should not be a reproach to anyone, least of all the amount of the allowance for the period of maternity to my right honourable friend. Sometimes it is an leave, and how it is to be paid. It sets the allowance at individual case, and the perception of injustice arising, six times the monthly salary of the Minister on leave’s that propels social advance, and let it be so here. The previous ministerial office. The effect is that a Minister Bill sends out a vital message to encourage more on leave continues to receive the same monthly amount women from every walk of life to enter politics, and to in maternity allowance as they would have received seek promotion in government without the fear of had they still occupied their previous ministerial role. having later to choose between career and family. It will come from the same source, usually the relevant I repeat how grateful I am to Her Majesty’sOpposition department in line with money provided for by Parliament. for their constructive engagement in the preparation Finally, Clause 2 also sets out the arrangements that of the Bill. Jointly, we have affirmed—and do here apply when the designation as a Minister on leave ends affirm again—that this will be the beginning, not the before the automatic expiry after six months, providing end, of a journey of reform. To date, within government for a lump sum payment of the remainder of the structures, insufficient attention has been paid to the allowance. That applies in all situations where needs of pregnant Ministers, and there has been only the designation terminates earlier than the end of the limited progress to date. Yes, the Ministerial Code was six months, unless the Minister is appointed to another changed in 2019 to confirm the ability of junior Ministers ministerial role, or has died. 637 Maternity Allowances Bill [LORDS] Maternity Allowances Bill 638

[LORD TRUE] I turn to some issues which the Bill has given rise to In order to prevent double payment of a ministerial in the other place and outside. First, on future work to salary, Clause 3 provides that a Minister on leave broaden this reform, I have already made clear that cannot receive the maternity allowance provided for in the Government recognise that the Bill does not go as this Bill at the same time as any salary set out under far as most will desire. There will understandably be the Ministerial and other Salaries Act 1975. It also many who would have wanted to see a Bill to resolve makes clear that, where they are a Member of this wider issues of parental leave such as paternity,adoption House, a Minister on leave cannot receive the so-called and shared parental leave. The Bill also does not Lords officeholder allowance under Section 5(1) of address absences for sickness and other reasons, or the the Ministerial and other Pensions and Salaries Act 1991. question of unpaid roles, which I know is an issue of In addition, Clause 3 clarifies that, for the duration of particular interest to Members of this House. These the designation, a Minister on leave does not count are complex issues that require careful further towards the limit under the House of Commons consideration, taking into account modern working Disqualification Act 1975 on the number of Ministers practices and the wider constitutional context. who can come from the House of Commons at any one time. However, once the designation ends, the The House will be aware that the Government Minister once again counts for those purposes. recently consulted on parental leave and payfor employees, and they are due to respond to that consultation in the Clauses 4 to 6 make provision for certain opposition near future. This work will provide us with a valuable officeholders, namely those listed in the Ministerial perspective, and any future proposals for Ministers and other Salaries Act 1975, to take up to six months’ will be developed with those conclusions in mind. As paid maternity leave. The arrangements contained are my right honourable friend the Prime Minister has similar to those relating to Ministers in terms of said, the Government have undertaken to look into duration, eligibility criteria, amount of allowance and broader proposals, both in the round and in detail. source of the allowance.However,in contrast to Ministers, The Government also welcome IPSA’s recent an opposition officeholder who is to take maternity announcement that it will be consulting on some of leave would stay in post. The Bill authorises a payment these issues. We look forward to working with them, to a nominated individual who, at the discretion of the and with Members across both Houses, on this work. Leader of the Opposition in the relevant House, is to The Government are committed to building more cover the officeholder’s role, on similar terms as those widely on the progress this Bill represents and will for Ministers. present an update to Parliament by the Summer Recess. This difference in approach reflects the fact that Several Members of the other place raised concerns opposition officeholders are not appointed by the about the use of the word “person” in this Bill in Prime Minister and do not have statutory functions in referring to pregnant women. I know that a number of the same way as a Secretary of State. It is therefore noble Lords share that concern, and I have, of course, possible for an individual to provide the necessary noted the amendment from my noble friend Lady Noakes, maternity leave cover while the original officeholder who I look forward to hearing shortly. I understand remains in post. Only one person can be appointed to the strength of this feeling, but I will come back to this cover an officeholder’s post at any point during the point in my closing speech in more detail so as to period of leave. However, should the Leader of the respond more completely to the points raised by all Opposition wish to change the appointment, he or she noble Lords on this issue in the course of the debate. may do so. As is the case with a Minister on leave, where the Briefly, I should point out that the language used in opposition officeholder is a Member of the House of the Bill is in line with current drafting convention and Lords, she is not eligible to claim the so-called Lords guidance; it is legally accurate and achieves the aim of officeholder allowance provided under the Ministerial ensuring that female Ministers can take paid maternity and other Pensions and Salaries Act 1991 while on leave. Of this there is no doubt. The Bill’s drafting also maternity leave. However, the individual appointed as provides flexibility in the event that the future work maternity cover, by virtue of these provisions, is entitled programme that I have just spoken of gives rise to the to claim that allowance for the duration of their need to revisit its provisions.Nevertheless,the Government appointment. This is because the allowance is paid to have already responded to the concerns from both reflect work undertaken in the House. Houses that this drafting could be misinterpreted, and have updated the Explanatory Notes to the Bill, which The Constitutional Reform and Governance Act 2010 now detail how the Bill is intended to support women, makes provision for both MPs’ and Ministers’ pension and explains the drafting practice. It will continue to schemes. Both Ministers and opposition officeholders be the policy of this Government to refer to “pregnant are entitled to pensions under the Ministers’ pension women” in government publications. As I said, I will scheme. The original officeholder’s salary remains reply to the amendment in full in my closing speech, pensionable during their maternity leave. However, the when I have listened to all Members of this House, but Bill provides that the individual appointed to cover the I wanted to make this point clear at the outset, and to post is entitled to the Ministers’ pension scheme for make clear that the Government are listening to the the period of their appointment, in relation to the strength of feeling in this House on this matter. allowance paid to them for this role. The Bill comes into force on , and thus will be of immediate For the reasons outlined above, I commend this benefit and effect. reforming Bill to the House. 639 Maternity Allowances Bill [22 FEBRUARY 2021] Maternity Allowances Bill 640

3.17 pm and the lived experience of women, which includes menstruation, childbirth and menopause. That view Amendment to the Motion happily coexists with respect and concern for transgender people. I am proud of my own record on LGBT issues, Moved by Baroness Noakes both in your Lordships’ House and in the organisations At end insert “but that this House regrets that with which I have been involved, but I am not prepared the bill is drafted in a way which does not respect to be erased as a woman. the fact that only women can be pregnant.” Let me turn now to the drafting of this Bill. Clause 1(3) uses the language of “the person is pregnant” and Baroness Noakes (Con): My Lords, I beg to move “the person has given birth to a child”. the amendment standing in my name on the Order It is a biological fact that only women can be pregnant Paper. This regrets that the drafting of the Bill does and give birth. That is why laws that relate to maternity not respect the fact that only women can be pregnant. issues have in the past routinely been drafted using the Before speaking to my amendment, I would like to words “woman”, “she” and “her”. It is not good assure my noble friend the Minister that, while I enough to just say that we have gender-neutral drafting deplore the language of the Bill, I fully support its now. When Jack Straw, as Lord Chancellor, announced proximate aim, which is to allow my right honourable in 2007 that the Government would use gender-neutral friend the Attorney-General to take paid maternity drafting, the context was the long-standing interpretation leave. I join my noble friend Lord True in wishing the rule that words referring to the masculine gender Attorney-General well and that her baby is safely include the feminine. This was thought to be demeaning delivered. to women, although I personally never felt demeaned I had expected to be given an advisory speaking by it. The Statement made it clear that this was not time of more than six minutes in view of my regret intended to outlaw the use of particular genders where Motion, but this is not a time-limited debate, so I shall only one is involved. It was not intended to prevent be taking a little extra time anyway. I shall, of course, women from being mothers. It is ironic that Jack comply with the Companion. My noble friend Lady Scott Straw’s generous gesture towards equality has now need not bother to do that Whip thing of head swivelling been turned against women. and jumping up and down when I do go over six minutes. Just three years after the 2007 Statement, the Equality My Motion is about the drafting of this Bill, but it Act 2010 was passed. That clearly uses female terminology is set within a broader context of the erasure of to define the protected characteristics of sex and women in society. Those of us who care about the pregnancy. On 12 December 2013, your Lordships’ position of women have been increasingly concerned House had a debate on gender-neutral drafting. The about the dilution of the 2010 Equality Act with its Minister, my noble friend Lord Gardiner of Kimble, protected characteristic of sex, not gender, which should said: “The guidance”— that is, the guidance from protect women. Some organisations, deliberately or parliamentary counsel— carelessly, conflate sex and gender. The Office for “also recognises that there must be some flexibility and that there National Statistics, for example, has dug itself into will be some Acts where only gender-specific drafting can be this hole for the upcoming census, with the likely usefully applied. In a case where a person has to be of a particular result that inaccurate statistical data about women will gender—male or female—gender-neutral drafting does not require drafters to avoid referring to the gender. I think your Lordships come from that. would agree that that would be the case for legislation about The Equality and Human Rights Commission, which maternity.”—[Official Report, 12/12/13; col. 1014.] should have been vigilant in guarding all the protected I say “hear, hear” to that. characteristics of the 2010 Act, has itself caused problems, and its guidance has led directly to a loss of single-sex As far as I can tell, there has not been a ministerial spaces. The NHS, which in the past had to be forced to Statement since 2013 that reversed the clear understanding abandon mixed-sex wards, now routinely admits to of what gender-neutral drafting was about. The Minister women’s wards on the basis of self-identification, may well cite some more recent primary and secondary regardless of the needs or wishes of women. Prisons legislation that has departed from that clear understanding, operate like this, too. And do not get me started on but, as far as I am concerned, that has slipped through so-called gender-neutral toilets. below the radar. We have to put a stop to the practice. There is an increasing use of language that eliminates If this Bill passes unamended, there will be yet another women, such as the ludicrous use by the World Health precedent on the statute book for the elimination of Organization of “people who menstruate”. Only two women. weeks ago, the Brighton and Sussex University Hospitals When this Bill was considered in the other place, NHS Trust declared that “breastfeeding” was to be the Minister asserted: replaced with “chestfeeding”, and “mother”with “birthing “It is not the case that we could legally and correctly use the parent.” That might go down well in woke Brighton, word “woman” in this piece of legislation”.—[Official Report, but it will appal men and women in mainstream 11/2/21; col. 594.] Britain. I respectfully say to the Minister that this is garbage. People who challenge this in public are often labelled There is nothing illegal or incorrect about using the transphobic, as JK Rowling discovered when she poked word “women’ in relation to pregnancy. The only fun at the WHO and its use of “people who menstruate” thing that appears to prevent the use of the word and was then publicly vilified. There is no malice in “woman”is a reinterpretation, by stealth, of the gender- wishing to maintain the biological facts of womanhood neutral drafting guidance. In my view, it would be 641 Maternity Allowances Bill [LORDS] Maternity Allowances Bill 642

[BARONESS NOAKES] As Rachel Reeves also noted in the Commons, the entirely legal and certainly correct to use the word first four female Labour Cabinet Ministers—Margaret “woman” in this Bill. Parliamentary counsel should be Bondfield, Ellen Wilkinson, Florence Horsbrugh and reminded that at the end of the day it is Parliament, Barbara Castle—were childless. Indeed, that was often and not civil servants, that decides how our laws are the choice for women: have a career or have a child, written. but not both. Of course, many did succeed and heroically I have spoken before about your Lordships’ House combined both. In my generation, apart from the being seen from the outside as a metropolitan bubble. noble Baroness,I think particularly of This Bill speaks the language of a metropolitan elite Harriet Harman and the late Barbara Mills QC, who who is unconcerned about its impact on the majority set up a nursery in her basement to solve her childcare of our society, who are women, or about the view of problem. Under the last Labour Government, first the overwhelming majority of our citizens that women Yvette Cooper, some 20 years ago, then Ruth Kelly exist. and Meg Hillier had babies while serving as Ministers, although with no formal provision for maternity leave This is not a party-political issue, but it grieves me and with other Ministers having to cover for them; that a Conservative Government, who are bravely I assume that there was some pairing. Luckily, Yvette standing against all sorts of nonsense that has infested Cooper had chosen to live with the person now our public life, are abandoning women. officially recognised as the “Celebrity Best Home I beg to move. Cook”—Ed Balls. Here in this House, we have mostly arrived past 3.26 pm childbearing age, although I am delighted that this is Baroness Hayter of Kentish Town (Lab): I thank the no longer the case. However, the amendment I want to Minister for introducing this welcome Bill, and I take see would add grandmother leave to the Bill. I am the opportunity to welcome my noble friend Baroness delighted that Lords Ministers will be covered—as is Hayman of Ullock to her first outing winding for the my noble friend Lady Smith of Basildon, although she Opposition on a Bill. I also look forward to hearing has warned me off thinking I might step into her shoes from the first noble Baroness, Lady Hayman. for six months as the lovely Nigel has firmly put his My honourable friend Rachel Reeves MP paid tribute foot down on that. to the noble Baroness last week, recalling that, back in This Bill makes it clear that there need be no choice 1976, she was first woman MP to have a baby while between motherhood and a career—at least in Parliament. serving in Parliament. However, just 10 days after she However, elsewhere, most working women face a very gave birth, she had to turn up in the House to vote, as different situation. While statutory maternity pay can pairing had been suspended. Had the noble Baroness, be for 39 weeks, it is only for the first six weeks, not six Lady Hayman, realised, 45 years ago, how long we months, that it is paid at 90% of average weekly would have to wait for this first step, I do wonder earnings. For the remaining 33 weeks, it is just £151.20 or whether she might have given up the will to fight, less. This leaves household incomes well down for a although knowing her, I think not. Where the noble lengthy period, and that is before parents must start Baroness led, others followed, and today we take saving to meet the cost of childcare for when the another, albeit tiny, step forward. mother returns to work. For many of us, it is hard to believe it has taken so It is true that many employers pay more than the long to come even this far. When I published my first statutory minimum, but it is in no way universal. article on maternity leave—I think in spring 1971—in Fewer than one in 10 private sector bodies sampled the industrial relations review and report, virtually no offered the same as in the Bill. Labour will hold the one apart from some very few in the public sector was Government to their word to work on a cross-party able to get paid time off. Thas was 50 years ago. Thirty basis to introduce comprehensive legislation in the years ago today, my godson was born. Happy birthday, coming months to extend this Bill’s coverage to all of Freddy. Soon after, he became “famous for a day”, Parliament, but we also want to press for the rights of when we launched a campaign for maternity leave, women councillors and mayors—indeed, all working contrasting the situation in the UK with that in the women—so that maternity rights become the norm, EU, showing how two pregnant MEPs—Carole Tongue not the exception. We also want paternity leave for from the UK and Kirsten Jensen from Denmark—had men to be similarly extended. very different maternity rights. Young Freddy, I have As we heard from the noble Baroness, Lady Noakes, to say, was just a PR prop, cradled by the then Shadow there is one unusual choice of words in this Bill: the Employment Minister, a certain , but he reference to a “person”, rather than a “woman”, being given star billing in the Times. pregnant. The Minister has provided assurances that So 50 years on from that first article, 30 years from this is a drafting issue and does not signal any change when I launched that particular Labour campaign, I of policy, but there is no doubt that it seems at odds am, needless to say, delighted to support this Bill, even with other legislation on maternity rights and protection, though it is a small, weak thing and fails to cover despite Friday’s letter from the noble Lord, Lord True. paternity leave, adoption or, more importantly, every More surprising, as we heard from the noble Baroness— working woman. But it does mean that the Attorney- she actually called it garbage—was the statement made General will be the first Cabinet Minister in UK by his colleague in the Commons: history to take maternity leave with proper pay and “It is not the case that we could legally and correctly use the cover. Where the Attorney-General leads, others will, word ‘woman’ in this piece of legislation”.—[Official Report, and must, follow. Commons, 11/2/21; col. 594.] 643 Maternity Allowances Bill [22 FEBRUARY 2021] Maternity Allowances Bill 644

Why not, given that it is in the notes and the Minister good government; it takes most Ministers a year or assured us that more to master the full complexities of their portfolio. “it will continue to be the policy of the Government to refer to Yet we now have a Cabinet almost none of whose ‘pregnant women’ in broader Government publications”? members has held office for much more than a year. We look forward to what the Minister just promised The current Attorney-General is the third to hold that us: his explaining a little more when he winds up about office since 2015. She sits alongside the fourth Foreign why this language was used and whether there is any Secretary,the fourth Chancellor and the fourth Secretary chance of it conflicting with other relevant legislation. of State for Education, and the fifth Business Secretary, Clearly, the wording in no way detracts from the since 2015—and now there are rumours of a coming intention of the Bill; maternity leave will indeed be reshuffle.Will the Minister tell us whether his Government available to the AG from later this week. We would in intend to allow Ministers to stay in their posts long no way want to signify any lack of support for its enough to expect to return from six months’ leave to provision. We wish the Attorney-General well for the the same office? Ministerial churn at a rate of nine to future enlargement of her family and we look forward 18 months per office is the opposite of good governance. to working with the Government to ensure that maternity But my most fundamental criticism is that this provision is extended to all MPs and working women is the only constitutionally relevant Bill that we have so that it really does become the norm, not the exception. so far seen in this Parliament, apart from those on We hope that the Braverman Bill is, as the Minister . The Prime Minister promised in the 2019 manifesto just said, the beginning, not the end, of the reform and that we look forward to the rest of the debate on this “After Brexit we also need to look at the broader aspects of important Bill. our constitution”. That commitment was widely welcomed across the 3.35 pm political spectrum; think tanks even held meetings to Lord Wallace of Saltaire (LD) [V]: My Lords, we on discuss what this broad agenda should include. Instead, these Benches welcome the Bill and support its proposals. in the past year the Government have sacked senior It implements proposals made six years ago by the civil servants, broken the Ministerial Code, disregarded Women in Parliament APPG. As the Minister told us, therecommendationof theHouseof LordsAppointments the Ministerial Code was amended two years ago to Commission, attacked the Electoral Commission, accommodate ministerial maternity leave, so the Bill strengthened the Executive at the expense of Parliament, should have been introduced earlier—not rushed through and bypassed democratic local authorities in handling now. I accept its use of gender-neutral language, as the pandemic. The constitution commission which the recommended in the 2007 legislative guidance, but I Government promised to set up in less than 12 months note the sensitivity of language at stake here. This from the election has been shelved. The Minister has clearly needs further discussion but I suspect that it defended this slide from the manifesto commitment would not be helped by dividing the House at the end without hesitation. He has repeatedly told us that of this debate. Conservative victory in last December’s election represented the “will of the people”, on 43.5% of the The battle to improve maternity conditions for electorate. He has defended behaviour from this working mothers carries strong personal echoes for Government that —whom he served—would me.My wife was a lecturer at the University of Manchester never have contemplated as Prime Minister. Institute of Science and Technology when we were expecting our first child. At that time, there were no We have watched the US Republican Party slide older married women on the academic staff and no away from constitutional democracy towards pluto- arrangements for leave.Helen drove home every lunchtime populism—rich men claiming to represent the will of throughout a university term to breastfeed our daughter. the people, while breaking the spirit and the letter of Thankfully, conditions for women giving birth while constitutional democracy. We see the beginnings of a in work have improved immensely since then, particularly similar slide here. That is why we need to hold the in the . I welcome this further step in Government to the manifesto commitment they want liberal improvements in the status of women. to forget. However, this welcome comes with a number of While I welcome this Bill, I encourage colleagues critical reservations. As the Minister admitted, the across the House to hold the Government to account Government are rushing this through to deal with the on their neglect of larger constitutional issues, not least immediate situation that faces a particular Cabinet because the relationship between England, Minister. It is almost an ad personam Bill. It does not and Northern Ireland has been shaken by Brexit, and address parental leave for ministerial fathers. It does will not be resolved without further constitutional changes. not cover adoption. It does not address the issue of sick leave for Ministers, even though this arose for a 3.41 pm Cabinet Minister involved in one of the most delicate Lord Bourne of Aberystwyth (Con) [V]: My Lords, aspects of the Brexit negotiations—the Northern Ireland it is a great pleasure to follow the noble Lord, Lord issue—in 2018. I regret the absence of these elements Wallace of Saltaire, who made some interesting points. from the Bill. I thank the Minister for his pledge to set I thank the Minister for setting out the position in out the Government’s proposals for covering these relation to this Bill. I support this short, focused Bill, other dimensions soon. and believe that nothing should be done to delay or The Bill provides for maternity leave to enable a thwart it, although I have sympathy with the points Minister to return to their responsibilities six months raised by my noble friend Lady Noakes on the language later. Such continuity offers an excellent principle for in it. I wish my right honourable friend Suella Braverman 645 Maternity Allowances Bill [LORDS] Maternity Allowances Bill 646

[LORD BOURNE OF ABERYSTWYTH] to Ministers, and that it is being rushed through both well with her maternity, and I hope with her maternity Houses, meaning there is not enough time to scrutinise leave—as others have noted, this measure is long the Bill. overdue. Like others, I note the massive contribution I welcome the Bill, but even though it is very of the noble Baroness, Lady Hayman, who is speaking narrow there are some flaws. For example, there has later in this debate. She was indeed a trailblazer. been no equality impact assessment—why? Is it because With that said, there are wider interests which need it is being rushed though? to be considered, and I am grateful to my noble friend As the Government have recognised that women for admitting that these will be brought forward; the holding ministerial office should have paid maternity sooner, the better. Setting best practice for parental leave, this should be an opportunity to look at the leave across the board for other employers and wider case of improving paid maternity leave for all employments is something which has been neglected pregnant working women. I hope that there will be by successive Governments. We need to deal with another maternity Bill before us soon so that we can paternity leave, to consider the position of adopted look at improving the lot of all pregnant working and surrogate children, and indeed to look at shared women. The Bill should be an impetus to address low parental leave, as the Minister acknowledged. I am statutory maternity pay, which is around £151 per grateful that this is going to be part of the Government’s week, or lower in some cases—less than half of the agenda. Something on the timeline for this would be national minimum wage, so the pregnant woman’s welcome, as we do not want to lose the momentum as income is reduced at a time when she is preparing for we are taking this first welcome step in relation to the birth of her child. The Government have done the maternity leave. Good employers should be following right thing by the Attorney-General and women Cabinet practices set out by the Government and by Parliament, Ministers. I hope they will put things right for the rest so we need to step up to the plate, as has been noted of the pregnant women in the country. for sick leave, grandparental leave, carers, victims of It is surprising to me, and to many others, that the domestic abuse, and so on. All these can be considered, word “woman” is not used in this Bill but instead the I hope. word “person” is used, as the noble Baroness, With the indulgence of the House, notwithstanding Lady Noakes, explained so well. I certainly agree with the importance of those issues, I will touch on another her. Considering that only women can get pregnant matter which is long overdue, and particularly relates and give birth, I cannot see any reason why “woman” to people in your Lordships’ House. That is the subject cannot be used. I believe in using gender-neutral language of unpaid Ministers. I had the great pleasure of being where appropriate, but I do not believe it is appropriate a paid Minister, and I hope that gives me some latitude in this Bill. In his letter to Peers, the Minister explained to speak on this.It is said without in any way undermining that “person” our excellent Ministers, both paid and unpaid, but in “reflects modern drafting convention and guidance, in place since this day and age it must not be right that we expect 2007, and common across much of our legislation”. people to serve and not be paid. I certainly know of I note that the Minister says “much”, which I assume one potential Minister who was asked to serve but felt means “not all”. unable to do so because she was not going to be paid. Jack Straw, as Leader of the House of Commons, That was not under this Prime Minister, I add, but it in 2007 made a Written Statement to the House of seems wrong in principle. Eight of our 25 Ministers in Commons dealing with using gender-neutral language your Lordships’ House are unpaid, which is nearly a in legislation. It was not debated, but this has become third. We should not expect people to serve but not get the guidance, and in many respects was good, as no the rate of pay attached to the job. We would not longer in legislation would we see the male gender expect that in industry or elsewhere in the public used when it should have referred to men and women. service; it is not right in a modern democracy. It should not be a condition of the job that you are But there are examples, such as in the Bill, when the unpaid; I hope my noble friend will undertake that word “woman” should be used rather than “person”. I this will be looked at by the Government. give the example of the Equality Act 2010, which uses I recognise that there is a legislative impediment to “woman”, not “person”, throughout and in all sections increasing the number of paid Ministers, and that this related to pregnancy, maternity and lactation. I refer has impeded successive Governments of all colours; it again to the Minister’s letter: is not particular to this Government by any means. “We recognise that a drafting convention that was originally designed to avoid denigrating women should not result in the But it would be a relatively simple matter, and I erasure of women from our public discourse.” imagine non-controversial, to amend or repeal the As a result, the Explanatory Notes have been changed, measure. I cannot believe that it is right in the 21st century using “Minister” instead of “person” in several places. that we are not paying Ministers for doing the job. It I just wonder about that. The Minister recognised that seems like something which belongs to another age, it was not appropriate to use “person” and changed it such as quill pens or horse-drawn hansom cabs, perhaps to “Minister”, but why could it not have been changed more appropriate to the age of Trollope—Anthony, to “woman”? not Joanna—and it is high time that we moved on. On the issue of language, at Second Reading in the Commons the Paymaster-General, , 3.46 pm said that she would provide further explanation in Baroness Gale (Lab) [V]: My Lords, while I welcome Committee but that she understood this Bill, I think it a shame that it has taken so long to “how offensive the word ‘person’ or ‘persons’ can be in this acknowledge that maternity leave should be granted context”. 647 Maternity Allowances Bill [22 FEBRUARY 2021] Maternity Allowances Bill 648

Commenting further, she said: It is right that the Bill will change the law to allow “I hope that we can make some changes, if not to the legislation the Attorney-General to take maternity leave—I wish then to the explanatory notes, that will address some of” her well in the birth of her child—but I hope it will these ensure that the Government show commitment to “issues.” strengthening the employment rights of all pregnant However, she said that the Government could put the women and new parents across the UK. The Government word “Minister” in the Explanatory Notes and stated also need urgently to take a serious look at the that: unacceptably low basic rate of both statutory maternity pay and maternity allowance, which, as has been “Although that is still gender-neutral language, it is a much less jarring term than ‘person’.—[Official Report, Commons, mentioned, are a paltry £151.20 a week—less than the 11/2/21; cols. 559-94.] national minimum wage for a 35-hour week—especially When legislation is intended only for women and while thousands of pregnant women are losing their not for men, I hope that the Minister will accept jobs during this pandemic. that “woman” should always be used in place of The impressive speed with which the Government “person”. are acting to ensure that the Minister is able to take It is not too late for the Government to come paid maternity leave is in contrast with the failure to forward and amend the Bill to right a wrong. I hope act on previous commitments to enhance legal protections that the Minister will take note of the criticism and of for pregnant women and new parents in the workplace, how offensive it is to women, bearing in mind that this especially in the current climate. It is quite shameful is the second Bill before us in recent months in which that the United Kingdom ranks 22nd out of 24 European the word “woman”has been written out of the legislation, countries, lagging way behind many other countries. as in the Domestic Abuse Bill. Having said that, I The Government have yet to take action on their support every other aspect of the Bill and look forward commitment back in January 2017 to strengthen legal to the Minister’s response. protections against redundancy for pregnant women and new parents. When are these likely to be brought forward? It also remains an anomaly that the Bill 3.52 pm requires a pregnant Minister to seek the Prime Minister’s Baroness Hussein-Ece (LD) [V]: I, too, welcome the permission or discretion in order to take maternity Bill, which is long overdue in seeking to right a wrong leave. It does not create a right to maternity leave. I and an anomaly that has been ongoing for some time. would like some assurance that there will be concerted However, as has been acknowledged, it is extremely action to address questions around adoption, surrogacy narrowly focused. It ignores the lack of provisions for and other issues that may well arise in the future. all MPs and throws up wider implications concerning It is good and positive that the Government have the lack of protection for others. It is clear that it does found time for a Bill for one woman, but they should not go far enough. The timing and political urgency be able to find time to follow this up and bring have dictated that the Bill is rushed through, but there forward a Bill to help many thousands of others. This is disappointment that this opportunity was not used is particularly important in the current pandemic, to put right other wrongs and anomalies, and it has when pregnant women are not covered by the furlough highlighted the lack of protection for thousands of scheme, despite guidance that pregnant front-line staff, others. particularly in the NHS, are vulnerable to Covid-19 The lack of an equalities impact assessment, as beyond the 29th week of their pregnancy. It is reported mentioned by the noble Baroness, Lady Gale, is very that many thousands of pregnant women are unlawfully disappointing, given the subject of the Bill. This would being sent home on sick pay or unpaid leave. Last have allowed further consideration and a wider assessment October, the TUC, Maternity Action, the Royal College that could have included all MPs, parliamentary staff of Obstetricians and Gynaecologists and the Royal and, as has been mentioned, local councillors in the College of Midwives called on the Chancellor to adapt round. I look forward to that and the wider issues that the furlough scheme to protect working women who have been thrown up today being addressed when the are more than 28 weeks pregnant. It has been reported new legislation, which we have heard about, is introduced. that there has been no response, despite a reminder in It could also seek to address the need for greater and January. Will this be taken back and responded to as a better representation in public life than we have at matter of urgency? present. Concern has been expressed about the gender-neutral The Minister in the other place admitted that the language used in the Bill. I have received correspondence beneficiaries of the Bill are indeed very narrowly about it, and I am sure that other noble Lords have as defined. She went on to say that, although adoption well. People are raising their concerns with us. All leave and shared parental leave were important provisions, legislation is framed using gender-neutral language, as they had not been included in the Bill, as they is this Bill. The Minister’s letter said that the guidelines “require further consideration in the wider constitutional context.”— had been amended accordingly to refer to the Minister [Official Report, Commons, 11/2/21; col. 528.] in question and that “pregnant women”would continue That is disappointing. However, she said that the to be referred to in government publications alongside Government would swiftly bring back proposals to gender-neutral language, as appropriate. The noble address outstanding parental leave issues. I was going Baroness, Lady Noakes, said that that is not true, and to ask the Minister what “swiftly” meant, but he said others are also saying that that is not the case. There is in his introduction that such proposals would be brought some confusion over this, and I look forward to back by the Summer Recess, and I welcome that. clarification when the Minister responds. Given that 649 Maternity Allowances Bill [LORDS] Maternity Allowances Bill 650

[BARONESS HUSSEIN-ECE] assessment in advance, and scrutiny to which it should we expect gender-neutral language to be inclusive, I be subjected before its presentation and during its would be happy to be able to use “pregnant women”—we passage through Parliament. have used it throughout this debate—alongside other The fact that women parliamentarians have babies gender-neutral language as appropriate. has been apparent to my certain knowledge for 45 years. The Government have done the right thing for the The Attorney-General’s pregnancy has hardly been a Attorney-General and other Cabinet Ministers and state secret. We should record our concern at the opposition spokespeople. Now, they need to put right lack of foresight and planning by the Government the completely wrong and unequal situation experienced that has led to us having to deal with this Bill at by the rest of the women and new parents in this country. breakneck speed. That haste and lack of time for consideration has meant—as the Minister accepted in 3.58 pm his introduction—that we are in the uncomfortable Baroness Hayman (CB): My Lords, I declare an position of putting on to the statute book severely interest, although not a current one, as the prospects limited legislation which leaves many issues unanswered of my being offered ministerial office are as remote as and does not deal with important questions relating to the chances of my becoming pregnant again. However, paternity, shared parental and adoption leave, or the 45 years ago, I was pregnant and in Parliament when issues faced by non-ministerial parliamentarians. such a thing was, frankly, considered inconceivable, to I fear it also creates the impression that we can find coin a phrase. My son, Ben, was born when Jim time to legislate to address the needs of our own but Callaghan’s Government were hanging by a thread, not the needs of all the other pregnant women and with no majority in the Commons, running three-line new parents for whom current provision is far from Whips on Lords’ amendments, and with no pairing, adequate and for whom Covid has created its own following an incident involving Michael Heseltine—now problems, particularly in relation to furloughing, as the noble Lord, Lord Heseltine—and the Mace, which the noble Baroness, Lady Hussein-Ecce, said. Only if older Members might recall. Given the attitudes and this Bill is followed by comprehensive action in these circumstances of 45 years ago, it is perhaps not surprising areas will the Government have any credibility. I hope that no arrangements for maternity leave were in place, the noble Lord the Minister will be able to provide so I ended up bringing the baby into the House with reassurance on this point when he winds up. me two days after leaving hospital, as the noble Baroness, Finally, a word about language and the amendment Lady Hayter, referred to. in the name of the noble Baroness, Lady Noakes: I The day after the first vote in which I participated, believe the drafters of this Bill have quite simply got it which the Government won by a majority of one, the wrong in trying to Snopake the word “woman” from front page of the Daily Express read, “Held Together the legislative lexicon. The price of so-called gender by a Nappy Pin”, although I preferred the Sun’s neutrality in this Bill is an awkward and ugly distortion headline, “Little Ben strikes”. I thank my lucky stars of the English language and an affront to common that my experience predated social media, so my hate sense. Far from encouraging respect for language and mail was confined to those who put pen to paper and the recognition of diversity,to which I am fully committed, to those newspaper columnists who decided to accuse it risks bemusing and alienating the public and damaging me of neglecting my child, of exhibitionism or of that the very causes that passionate advocates of such terrible thing that women do—wanting to have it all. language espouse.I look forward to debates in Committee Like all noble Lords who have spoken, I wish the on this issue but, even more importantly, I profoundly Attorney-General well and applaud her decision to hope that this Bill can be the spur to do far better for embark on a substantial period of full maternity leave. pregnant women, new mothers and fathers, and their I welcome the provisions in this Bill to ensure that she babies in the future. can do so. But over the decades since 1976, many distinguished serving women Ministers and MPs have, 4.05 pm I am happy to say, given birth. It is no longer an Lord Randall of Uxbridge (Con) [V]: My Lords, it is affront, nor a novelty, and I suspect the current a great honour to follow the noble Baroness, doorkeepers in the House of Commons are no longer Lady Hayman. It is always so, but especially on this instructed by the Sergeant at Arms, as they were in Bill. As we have heard, she has a special place in the 1976, as to the degree of force to be used to stop a history of mothers in Parliament and as a pioneer of mother bringing a baby into the Chamber. what we are discussing today. After all those years and all that experience, I find it I welcome this Bill and will not detain your Lordships dispiriting that we need emergency legislation to ensure long. One may well argue that the measure is rather that appropriate arrangements are made to provide overdue, and it may come to many as a surprise that maternity leave for Suella Braverman. Even more worrying recent Governments have not acted on this issue before. and depressing was to hear the contributions of MPs As the noble Baroness, Lady Hayman, said, it is to the debate on the Bill in another place,their descriptions always interesting that, when Parliament has to act on of the continuing abuse received by pregnant MPs and things which seem to be in our own interests, we can the many serious unresolved issues regarding cover for do it in a hurry. I remember well an issue with election their constituency responsibilities. There is clearly much leaflets, when it was discovered that the then Home work still to be done. Secretary—Jack Straw, I think—had a whole stack of Today, we are faced with this emergency legislation, posters in his garage that were printed incorrectly. We whichuniversallyinthisHouseisconsideredunsatisfactory quickly put through a Bill to make sure that those because, by its nature, it lacks the consideration, equalities were not redundant. 651 Maternity Allowances Bill [22 FEBRUARY 2021] Maternity Allowances Bill 652

I am delighted that we are moving bit by bit to of pregnancy and the insecurities in the workplace. aligning Parliament with current workplace practices. The noble Lord, Lord True, acknowledged that the As we have heard, some may consider that this Bill Bill could have been so much more. It is a missed should have a wider remit, but as it is being brought opportunity. I accept what the Government have said forward to address a particular case, legislative time is about the work being done, but we are being asked to difficult to find. This is probably a wasted opportunity, set up a two-tier system for maternity leave in this but we are where we are, so let us go ahead with it. country and there is a feeling of discomfort about that. One employment issue that was raised consistently This has been a very good debate so far and I by a former constituent of mine was job-sharing for listened with great attention to the comments of the MPs. While I understand some of the reasons why noble Lord, Lord Randall. I must say I disagree with that may seem desirable or attractive to some—and as him about the issue of language; I do not see it as a much as I try to think how it might work, as it does in technical issue. Fundamentally, a much more important other workplaces—I was never able to resolve the set of principles lie behind the way language is used in particular problem of voting being shared. That said, the Bill. A colleague of mine counted the number of I am pleased that the Bill has a narrow remit and I times “women” was used in the Commons debate and hope that, as a result, it should have a relatively speedy it came to over 300, yet the Bill makes no mention of passage through Parliament. women. Instead, we heard the rather inelegant terms I am also aware—I could not be unaware—of the “person who is pregnant” and “person who has given concerns we have already heard about some of the birth to a child”, which do not seem to add to what we gender-neutral language in the Bill. I do not want to understand as good English. get into this controversial and complicated issue, nor I have supported trans rights and gay rights over do I think I am qualified to do so. I listened to my many years. I fought the iniquities of Section 28 and, noble friend Lady Noakes and share some of her as a Minister, I took the legislation through this House views on the excesses of language that we have seen to allow for gay adoption. I have to say to the noble recently, not least from Brighton. However, I fear that Baroness, Lady Noakes, whose speech I enjoyed, that, my natural inclination to avoid controversy may have working in London and living in Birmingham, I am a deserted me. In times past, I may well have shared fully paid up member of the metropolitan bubble and more of those concerns. On reflection, I have found proud of it. However, I have become increasingly myself to be always somewhat behind the curve and concerned that the hard-won rights of women over that the world has moved on, leaving me behind. Now, many decades are at risk of being watered down and somewhat counter-intuitively, I do not see a problem marginalised as the single-sex spaces enshrined in the with the language being used—language which has, Equality Act 2010 come under increasing attack. after all, as we have heard, been a convention for a That is why this language is so important. Many number of years. It is more inclusive and was originally public bodies are misinterpreting the Act, and many introduced to enhance the status of women. I am women’s sector organisations, especially those that satisfied that there is absolutely no intention on the seek to end violence against women and girls, fear loss Government’s part to write out the incredible role of of funding and commissioning if they want to provide women. single-sex exemptions.I am afraid that various government I thank my noble friend the Minister for his helpful departments have weaselled down the words of the letter to us, which I found reassuring, and for his Equality Act in the guidance they have issued to opening comments today. I shall listen carefully to his public bodies. Local authorities have misinterpreted closing remarks. All I will add is this: I find it quite the Act and are threatening many small charities trying common now when filling in forms and asked to put to provide these services at local level, and people down one’s gender that there is a box marked “Prefer there are frightened to speak up because they believe not to say”. I understand that some do not wish to that they will be attacked and, if they are not careful identify their gender. Perhaps this language will help on social media, accused of transphobia. The Government them. As I have said, I have no expertise at all in have remained silent because they themselves have a gender politics, but I am happy with the wording. lot of this philosophy embedded in their advisory However, I will listen carefully to other noble Lords system. That is why the wording of the Bill is so who, I am sure, will put forward a contrary view—we important. have already heard several today. This is a good and Work by Jane Clare Jones and Lisa Mackenzie has necessary Bill and I support it fully. described the pattern of erasing sex in data collection and other areas of public policy. The ONS has caved 4.09 pm into bullying—pathetic. The head of the ONS was Lord Hunt of Kings Heath (Lab): My Lords, I too interviewed, I think on the “Today” programme, and support the intent of the Bill and certainly wish the said that it was not going down the path it has now Attorney-General well. As other noble Lords have chosen. However, it has caved in, as many public said, it is disappointing that the Bill provides for only a bodies do, because they come under aggressive attack small number of what might be described as very on social media and are accused of transphobia. The privileged women when we know that in the workplace Government remain absolutely silent. many thousands of pregnant women or new mothers On the language, in her thoughtful contribution my face discrimination and risk losing their jobs. In fact, noble friend Lady Gale talked about the fact that one of the striking facets of the debate in the House of gender-neutral terms will often be appropriate. I agree Commons was the number of comments made by with that. However, do we really want to see demeaning Members of Parliament about the impact on women terms such as “menstruators”, “individuals with a 653 Maternity Allowances Bill [LORDS] Maternity Allowances Bill 654

[LORD HUNT OF KINGS HEATH] had been a normal Second Reading, the Minister cervix”, “birthing bodies” or even “chest feeders”? would have observed this debate, gone back and said, When the Brighton trust announced the use of the “We’re going to get an amendment and we’ve got to latter term, where was the Department of Health? It change it.” I know we have only four days to go but I was absolutely silent, because it is cowed and frightened urge him to think again. He should also say that this to speak up against this kind of absolute nonsense. will never be used as a future precedent in legislation. There are many parliamentarians who know that He should ensure that parliamentary counsel changes this is nonsense but they are frightened to speak up the guidance, because it is not up to the mark. because of the abuse they will receive. Look at my Finally, this is my great appeal. Please will the honourable friend Rosie Duffield. What support has Government defend women who speak up for the been given to her? Hardly anything, except from a few protection of women’s rights based on sex? I come brave, dedicated people. It is shameful that we have again to the outrageous abuse that some of my allowed this situation to arise. That is why the Bill and parliamentary colleagues have received by stating in its drafting are so important. perfectly reasonable terms that they are not transphobic, The justification was of course Jack Straw’s change just reasonable people seeking to do their job, yet they in the convention and revised guidance. However, as do not get support from the people who know that the noble Baroness, Lady Noakes, said, that was designed what is happening to them is wrong. Above all else, I to promote the rights of women because previously, hope the Minister will say something about that. “he”was always taken to mean “he and she”in legislation. For that to be used against women in this Bill is 4.19 pm extraordinary. Baroness Grey-Thompson (CB) [V]: My Lords, I am I have looked up the parliamentary counsel guidance. delighted that we have the chance to give this Bill its The latest version was produced by the Drafting Second Reading today. It is long overdue and I am Techniques Group in 2020. This is a most worthy body sure that there are many outside your Lordships’ but it is not one that should be at the heart of government Chamber who would be surprised that we do not decision-making. I noted the advice on page 2, which already have this in place. I congratulate the Government says: on bringing in this legislation but note the speed with “Clarity is helped by the use of short sentences … Tell your which it is required. story in a moderate, level tone. Legislation should speak firmly but not shout … While brevity may be good, brusqueness is not.” Reading the Library notes on this Bill reminded me That is good advice but is it slavishly followed in all of the shock I felt when my grandmother told me she legislation? I very much doubt it. We understand that had to leave work when she got married, because she six pieces of legislation since the original guidance was would be taking a job away from a man. That a issued have used the word “women”, including the Minister would have to resign her position to take seminal Equality Act 2010. maternity leave is ludicrous and not in keeping with I have to say that six minutes is a guide; it is not the world we live in. It is unacceptable that a woman something that can be enforced by anybody in your should have to choose between her job and career and Lordships’ House. having a family. As an athlete, having to fit the birth of my daughter Noble Lords: Oh! around my competition schedule because there were no maternity rights was not easy—that is still very Lord Hunt of Kings Heath (Lab): I will carry on. much ad hoc in sport today. There is a great deal of This is a Second Reading debate. We do not have time similarity between being an athlete and being in limits. Parliament. The reality is that many women have to take different decisions from men about how to make A noble Lord: Keep going. it work, and delay having children or walk away from a role they care passionately about and are good at Lord Hunt of Kings Heath (Lab): Thank you very because it is impossible to find the right balance and much—I do not usually get this support. After 23 years support. here it makes quite an unusual change. This Bill sends out a strong message. I would like to see provision for paternity,shared parental and adoption Baroness Scott of Bybrook (Con): My Lords, the leave, as well as wider issues of statutory maternity six-minute limit is advisory but we have to get through pay and leave for MPs and their staff, included in this debate in a certain time. other legislation. We should also consider your Lordships’ Chamber. Lord Hunt of Kings Heath (Lab): With respect, we As younger Peers are appointed, we must have increased do not have to take the privileges committee report flexibility. I agree with the noble Lord, Lord Bourne, tonight. This is a Second Reading debate and I am on paying Ministers. I remember one occasion a couple afraid that advisory guidance on a Second Reading of years ago when a returning Peer brought her baby debate is highly inappropriate. But I shall not go on to a Division, and because only a Peer can walk much longer. through the voting Lobby, the baby was passed down The noble Lord, Lord True, was very helpful in the line—fine for that one moment, but not a long-term arranging a meeting last week—we are meeting him solution to allow women to play a full part in political again—and I am grateful to him. He must know that life. I know from the experience of being a parent of a the Bill in the way it is worded is indefensible. If this young child in Parliament that, if you do not live in 655 Maternity Allowances Bill [22 FEBRUARY 2021] Maternity Allowances Bill 656

London, it can be very complicated. I know we choose was called handicapped or a crippled child; luckily, to do this role, but I really think that Parliament can there has been an evolution in that language. Perhaps do better. we need to find a new form of language to include The six-month time limit is fine, but we should not those who feel othered, but it must not be at the stop looking for a greater degree of flexibility if required. expense of the word “woman”. I would also prefer it not to be a discretionary power One thing I am certain of is that many in your for the Prime Minister to designate a Minister wishing Lordships’ Chamber, and those who have a different to take maternity leave as a “Minister on leave”. It view from mine on the use of language, want to stop should be automatic. I have been thinking about whether the denigration of women. Excluding the word “woman” they could be better described as a “Minister on from this Bill and other potential legislation does not maternity leave”, but I have concluded that I do not help the cause of equality for everyone or anyone. have a strong opinion on this form of language. Finally,I wish the right honourable Attorney-General However, like others, I will raise the language used all the best when she becomes the first “Minister on in this Bill. I support neutral language, and there are leave”. many benefits in terms of driving equality. Yet for so 4.25 pm many we do not live in an equal society. The Equality and Human Rights Commission recently said—this Lord Cormack (Con) [V]: My Lords, it has become relates to the pandemic—that pregnancy and maternity almost formulaic to say that it is an honour to follow discrimination is the “most urgent and immediate” the previous speaker, but it is an honour to follow the threat to equality. We should seek to correct this. The noble Baroness, Lady Grey-Thompson. She is a woman fact that we measure pay gap, employment gap, of quiet courage and total determination; she spoke educational attainment and a whole set of other metrics from the heart and I hope we will heed her. shows us that our society is not equal. We have all said, and meant it, that we wish the I have been contacted by women and men who Attorney-General well and a safe delivery of a healthy asked why the word “woman” is in the Explanatory child. It is totally fitting that we should be passing Notes and not the Bill. I will be clear: I think the word legislation that enables her not to have to worry about “woman” and variations of it should be used in this her job or future—unless the Prime Minister changes Bill. I know there will be many who will not agree with his mind about her appointment, but that is a wholly me raising this, but I see my role as a Member of your different issue—and we can all support the objectives Lordships’Chamber as being to raise issues that challenge. of this Bill, narrow and late as it is. I associate myself with all the comments made by the noble Baroness, I do not hate or want to dehumanise anyone. As a Lady Gale, and others on that. disabled woman, I have experienced discrimination and received a significant number of emails about the Apart from my noble friend Lord Randall of Uxbridge, many forms it takes. This is a contentious issue and in with whom I normally find myself in agreement, but this debate there will be many views; we are probably certainly and emphatically not tonight, we are all not all at the same point on the continuum. We need to concerned about the language, particularly the erasure be able to have an open discussion, without fear of of “woman”, “maternal” and “maternity”. We are retribution, of being cancelled or shouted down for very fortunate to have a glorious mother tongue—I discussing terminology or having a different view. use the words very deliberately. In our language there Mine may or may not be the majority view beyond the are some rich, marvellous and emotive words, none debate today, but that does not mean we should not more so than “maternal” and “mother”. There cannot debate it. be a Member of your Lordships’ House who does not have fond memories of a mother or grandmother. For I thought long and hard about joining the debate many—I include myself—a mother has been the most today and whether I could deal with any potential significant and important figure in their early life. I backlash that may come my way for saying that the still think of her very fondly. word “woman” should be in this Bill. Many from I believe it is completely wrong to have the ugly different viewpoints have said that I should be careful. insensitivity of “person” in the language in this Bill. This is not the time to debate the wider aspects of “Personhood and apple pie”—how wonderfully and what freedom of speech means; that is for another trippingly it comes off the tongue. I disagree with what time, but we must tackle the abuse that women face for has been implicit in many of the fine speeches we have having a public view on a whole range of issues. Being heard, led by my noble friend Lady Noakes: a sort of told what my opinion should be does not encourage recognition that we cannot really do anything about it sharing of views and is detrimental to the long-term this time. We can. We have a Committee stage on goal of equality. Thursday.If my noble friend the Minister really recognises Language is important. I have always said that this, as he does to a degree in the changed Explanatory language is the dress of thought. As we know, the Notes, and if we can have a translation of that recognition specific language used in legislation is incredibly important. into a free vote, which there should be—I believe all It has far-reaching consequences. It is about providing votes are free votes, but I know that is not a commonly rights and protection and it is our duty to find the held view—we should be able to change this Bill balance in that. without delay. I have spent most of my life fighting for inclusion If my right honourable friend the Attorney-General for everyone that society chooses to label as different. I is great with child and could produce a child very have spent most of my life being othered by language, soon, and this is one of the reasons for the hurry, we attitude and a lack of physical access. Growing up, I can forget that, because I shall introduce an amendment 657 Maternity Allowances Bill [LORDS] Maternity Allowances Bill 658

[LORD CORMACK] Lady Noakes, also made an interesting point about on Thursday which would make this possible for her, if the wording being at odds with other drafting. That the child is born between 22 February and the receiving seems a little bit strange these days, but that is something of Royal Assent. We can certainly deal with this and that I gather the Minister is going to expand on. make sure that the Bill emerges from our House, as so Most of the speeches in this Chamber today have many Bills do, improved—improved in its language been very, very concerned with the depiction of women and its recognition of the importance of maternity and how we are treated in our society. One thing that and motherhood. we can do is make misogyny a hate crime. That is I beg my noble friend to talk to his colleagues in something that we should do urgently, and we should government, because the amendments that we shall raise it at every single opportunity so that people who move do not alter by one jot or tittle the thrust and treat women in that sort of way are actually brought content of the Bill. All they do, by using the words to justice. “woman” and “mother”, is recognise properly that the On the wider aspects of the Bill, it is, of course, Bill is about maternity. If the Government were to utterly unfair. I can see why it is being brought in, but accept that, the passage of the Bill would not be why is it not for all women? It is absolutely appalling delayed by more than 24 hours at the very most. As I that this is only for a tiny section of very privileged, said, if the child were to be born in that period, and if elite women. It should be for all women. Why is there we accept the amendment that I will have tabled or discretionary power for the Prime Minister? That is something like it, then there is not a problem at all. awful, because the Prime Minister is most often a We are guardians of many things in your Lordships’ man, so it has to be a man’s discretionary power. House, and one of the things that we should guard In the other place, the MP Stella Creasy wrote to with most jealous fervour is the English language. I Penny Mordaunt, the Paymaster-General, and I will hope that we will strike a small blow for that as we read a few lines from that letter because it exemplifies strike a big blow for motherhood when we come to why this Bill is so inadequate. She wrote: dispose of this Bill in Committee. I accept the fact that “The Equality and Human Rights Commission recently described we do not normally vote on Second Reading, and I am instances of pregnancy and maternity discrimination as one of not calling for that. I know that my noble friend the most urgent and immediate threats to equality during the Lady Noakes, who made a very fine speech, is not pandemic. A survey by Pregnant Then Screwed found that 46% of calling for that either. I am, however,calling for common women who have been suspended from work because of their sense to triumph over the language of bureaucracy. I pregnancy have been suspended on incorrect terms, including 33% on furlough and another 13% on sick pay, or told to take hope that we will make progress in the right direction holiday or to start maternity pay.” here, just as we are making progress in acknowledging We do not have equality in Britain. We are meant to be motherhood. We should not do so with a Bill that does a foremost democracy in the world and we do not have not acknowledge motherhood. equality for 50% of our population. It strikes me that there must be many, many women who have been held 4.31 pm back by this because misogyny is so entrenched in our Baroness Jones of Moulsecoomb (GP): My Lords, I society that we do not even notice it; we do not see it am going to use the formula: “It is a pleasure to follow when it is happening. Many thousands of women— the noble Lord, Lord Cormack.” He always makes me millions—have been held back from doing all that smile. The Government have got themselves into a real they can to improve society. Again and again, we hear pickle on this one, have they not? The Minister might that when you have women on boards, for example, or be surprised to hear that I am going to give him a bit when you have women as part of work teams, the of wiggle room, because I very much support what the work is better. The thinking is better because it is a noble Baroness, Lady Noakes, is trying to say here. different perspective. The erasure of women in public life, in literature and Quite honestly, this Bill is perfectly acceptable in its in all sorts of ways has horrified me. The debate has very narrow, late way, and while we cannot blame the become so toxic and so unacceptable that many of us Minister for it being this late, we can perhaps blame keep our heads down and try not to engage at all. That him for it being so narrow, so that is a message that he is quite often what I do, simply because I work on so could take back. The noble Baroness, Lady Hayter, many issues, and that becomes difficult when I get said in her opening remarks that it is a tiny step. Dear distracted by the vileness and hate. me—it is a tiny step on the right path, but we really However, the noble Baroness, Lady Noakes, said need to see a few more giant steps. that only women get pregnant. Legally, that is not true 4.37 pm anymore because trans men have pregnancies and they have babies. I have held a baby by a trans man. Baroness Morris of Yardley (Lab) [V]: My Lords, Perhaps the Minister would like to put “women and my comments are going to follow those that have been trans men” into the Bill: that might be an acceptable made by the majority of Members before me. I am not way forward for all of us. The noble Baroness, sure that I have anything particularly new to add, but Lady Noakes, spoke about “woke Brighton”. I come this is an important issue. I very much hope that the from Brighton; when I was living there, in the 1950s weight of numbers will have some sort of influence on and 1960s, it was not woke. The whole thing about the Minister and the Government. chest feeding was absolutely ludicrous because, of I welcome the Bill and share the comments that course, men have breasts; they get breast cancer. The others have made. It is late and, to be honest, we whole thing is utter stupidity, and you have to wonder should be leading in this field, but we are very much who thinks these things up. The noble Baroness, lagging behind. I remember that, when I was first 659 Maternity Allowances Bill [22 FEBRUARY 2021] Maternity Allowances Bill 660 elected a Member of Parliament in 1992, and when I “headmaster” applied to head teachers of any gender. looked round at my fellow new MPs in the Labour That is what the legislation, in terms of gender-neutral group, it was amazing how disproportionately most of language, was trying to overcome. We must be clear on us did not have children. That is what it has been at that because we must defend it. We must not allow every stage: we have always been late at making it what was a good piece of legislation, or a good piece easier for women to be involved in politics and to have of advice, to muddy the waters on some of the key issues. a family as well. Nobody could have explained that The last point I make—and this really is my plea to more strongly than the noble Baroness, Lady Hayman, the Minister—is that I am not sure why the Government has done. Let us not stop here: it is with some humility have used “person” rather than “woman”. I was not that we should say that this is good legislation. It is sure having read the debate in the House of Commons, something to be proud of because the Government and I am not sure having listened to the Minister have got themselves out of a bit of a difficulty with today. I am pretty sure that the 2007 guidance did not one person, but it cannot rest here. I welcome the require the Government to use “person”. Is he saying comments that the Minister made about ensuring that that if he presented legislation to the House today we look at the other issues as well. which talked about “women who get pregnant”, the The main reason why I put my name down to speak Bill would not have the force of law? If he is saying in this debate was to offer support for the reasoned that, I would challenge it merely on the grounds that amendment that the noble Baroness, Lady Noakes, legislation has been passed since the 2007 guidance— very ably moved and that colleagues from across the whether they were Bills related to maternity, pensions House have spoken to as well. It might be argued that or equality of rights—that uses the term “woman”. If it does not matter: if you look at this Bill, what is it would have been legal to use “woman” rather than going to change if we have the word “woman” rather “person” in the Bill, why did he not do so? If it was not than “person”? However, it matters and it matters a compulsory, it had to be a matter of choice. If the lot. My noble friend Lord Hunt really pressed this Government chose to use “person”rather than “woman”, point and was right to do so. I hope that he will be able to explain that in his closing More than anything, it is just common sense. We remarks. are not here to pass legislation that does not make Other than that, I think the Minister has been sense to the public whom we represent. If we were to helpful, both in the meeting he had with some of us go out into the streets of our country and try to before this debate and with the open manner in explain to the electorate—to our citizens—that we which he introduced it. I hope he will continue to act have got ourselves into a position where we are not in that way as we take the Bill through the House of permitted to use the word “woman” in a Bill that deals Lords. with maternity, they would not know where we were coming from. Yet that is the argument that the Minister 4.43 pm in the House of Commons made, and it is the argument Lord Naseby (Con) [V]: My Lords, I agree I thought that the Minister here made today. Common wholeheartedly with the noble Baroness who has just sense and clarity must mean that legislation that we spoken on the way she discussed the word “woman”, pass makes sense in its language to the people whose and I was pleased that my noble friend moved her lives it will affect. amendment. I would go so far as to say that, if an Of course, this is even more important because of amendment is tabled in Committee, I will support it. I the wider cultural context in which this debate is am a very loyal Member—indeed, at least one of the taking place. There is a wider debate at the moment noble Baronesses sitting on the Opposition Benches which risks denying that biological sex exists. I cannot teases me about that. But on this issue I am quite sign up to that. It makes it far more difficult for clear: we should use the word “woman”. women-only spaces and for the protection of women I have had the privilege of being married for 60 years, in certain circumstances, which has been hard fought and my wife and I have three children. My wife trained for over the years, to actually be carried out. As my across the road at St Thomas’. The first child came noble friend Lord Hunt said, you can see public quickly, but the second and third were planned, because bodies and areas of public policy where there is now a my wife and I agreed when we were engaged that both struggle with how much or how little gender-specific of us would like to work in life and that she should pronouns can be used. This must be sorted out. Equality work on whatever form of medicine she chose. She of opportunity and gender-neutral language were never chose to be a full-time general practitioner for most of about making it difficult, embarrassing or awkward her working life and certainly when she had the third for us to use gender-specific pronouns when it is child. By then she was the senior partner and, as I appropriate to do so. I accept and understand that this recall, took only three or four weeks off after having debate can be difficult as social mores change. As the that baby. Of course, in those days there was no formal noble Baroness, Lady Grey-Thompson, said, it is about maternity allowance—it was a matter of individual finding a language where all feel comfortable—but it choice. The decision we made was that we would use was never meant to be a situation where women were our resources to appoint a nanny, child help and fearful of expressing a view they strongly held. childcare, and all muck in. Times have changed, and I think language does matter, and I welcome gender- that is good. neutral language where appropriate. I remember my My problem is to try to set aside the individual and first Bill in the House of Commons: I was involved in look at the strategy being followed. Here we have one legislation about teachers and was told that the term of the key offices of state. Every key office of state is “he” in it had to apply to female teachers as well, and probably very demanding and very important in its 661 Maternity Allowances Bill [LORDS] Maternity Allowances Bill 662

[LORD NASEBY] do not wish to behave in any way disrespectfully. He impact on our economy and our country. It happens very helpfully listened to our problems beforehand to be particularly important at this stage because of and I hope that will continue before the next stage of Brexit and the problems we all know about in its the Bill. implementation—particularly Northern Ireland and Rather like the noble Lord, Lord Cormack, I have the union. Somebody is leaving a key office for six months. to say that every single one of us in this Chamber, I do not know what plans the Government have made every single person outside in the street and every on two aspects, but I imagine that the Prime Minister citizen of the United Kingdom was born from a believes that the present incumbent is absolutely the mother’s uterus. We forgive the muddled biology that key person to do the job. They are not a second choice, we heard a little earlier in this debate. The fact is that but for those six months there will have to be a second only a woman can give rise to a baby. The environment choice. That is a pretty tough call on whoever that in the womb is critical to our development until we person may be because, under the Bill as drafted, they finally die at the age of 70 or 80, if we are lucky. That know they are out in six months. is important. That defines so much of what makes our But it goes deeper than that, does it not? The civil humanity.Michael Meaney, who is a very great biologist servants, who are key to implementing law, are put in a from Canada, showed very clearly in the studies he did difficult position because it is a challenge to their in Toronto and later in Singapore, where I have been management. I wonder what thought has been given somewhat associated, that what happens during pregnancy to that. This brings us back to one of the core criticisms at various stages affects the development of the baby, of the Bill: that it did not encompass a whole breadth including its cognitive ability, its functions and the of issues raised in the Commons. Therefore, it is a bad diseases that it might develop later on at the age of 40, stretch, in my view, to have emergency legislation 50 or 60, as have manyother scientists.That is fundamental caused by the situation of one person. Are we really and that depends on the woman, her health and the saying that, if the Chancellor of the Exchequer turns way she is protected, so we are extremely grateful for out to be a woman who has a child due somewhere the Bill. That the Attorney-General has this opportunity around Budget time, the woman can decide to take six is terrific. The problem is that that does not always months’ leave? In terms of the interests of the country, apply to some women who have stress with their I would submit that that is a bit of a challenge. It is a hormones and all sorts of other problems. bit of a conundrum, and I have some reservations Let me leave Singapore for a moment and come to about the way we are producing this emergency Bill domestic matters because this is critical. The noble when we have not, in my judgment, thought it all Lord, Lord True, might like to hear from me that, in through. 2018, 2,943 babies were stillborn, and for 60% of them I reflected a little further. I have the privilege to be a the cause was unknown. Birth defects were a very trustee of the pension fund. We work very hard to try minor problem. In many cases, it was poor medicine. to help pensioners of that fund who get into all sorts Sometimes this was avoidable, but in many cases the of “scrapes”. But we do not actually change the provisions reason for stillbirth is completely unknown. These of a Bill: we find methods to help them or advise women leave hospital absolutely bereft, and many of them, whatever it may be. Basically, we have a problem them never recover after that loss of a pregnancy. That here. loss of life within them is critical to that person. If that I asked my daughter, who is self-employed, “What is not enough, let me remind the House that something is the maternity provision for you, my darling?” The close to 200,000 women each year miscarry a pregnancy, answer came back: “None”. Then I did a bit of research. and some of them will miscarry several times. I think We are talking about 1.63 million women in our my record was a woman miscarrying 19 times before country who get nothing. Once again, I think somebody she finally gave up being pregnant. One of the commonest should have done a little bit of pre-thinking. things I heard during my professional career from I have thought very long and hard about the Bill, these women when they sat in front of me in tears and I am not going to oppose it. Nevertheless, two having had a miscarriage or a stillbirth was, “I do not things come to mind: first, the ones I have raised on feel that I am a proper woman.” That was a very the managerial side, if you like, of somebody taking common phrase in my clinic in the last 40 years. maternity leave from a very senior position in government, If that is not enough either, let me remind the and, secondly, the word “woman”. For me, as a man, House that about one in 20 women is infertile and they it is crystal clear that the word “woman” should strive hard to become women by being pregnant. That remain. The Government will have to wrestle with the is a goal like none other in their lives. It is for them the management dimensions, but if there is an amendment most important thing they can do. This is not some down on “woman” or “women” I—for once—will aberrant mentality. It is natural. It is born as a result of actually support it. our evolution as humans. It is part of our humanity, and it is essential. Most of them do not achieve it. For 4.51 pm example, figures in Europe show that, after six cycles Lord Winston (Lab): My Lords, let me declare an of in vitro fertilisation, only 43% of women get pregnant. interest: I am the chairman of the Genesis Research We tend to forget that there is no treatment for them. Trust, which deals with research into women’s diseases That is very important. and in particular with pregnancy problems, miscarriage, We are rushing this Bill through for a particular stillbirth and infertility among manyother things including reason, and nobody would doubt the need to get it cancers. I am grateful to the noble Lord, Lord True. thorough for the Attorney-General, but what message Should I have said “the noble person”? Perhaps not. I does it show to women who have lost babies or lost a 663 Maternity Allowances Bill [22 FEBRUARY 2021] Maternity Allowances Bill 664 pregnancy or lost the life within them? Most of them been given and I add one—Section 33(1) of the Human come from poorer, disadvantaged communities. That Fertilisation and Embryology Act 2008 defines a “mother” is true for most diseases that affect us, and it certainly as: applies to diseases of pregnancy. We have one of the “The woman who is carrying or has carried a child”. highest stillbirth rates in Europe. We still do not However, your Lordships should recognise that the understand why. noble Baroness, Lady Jones of Moulsecoomb, was Finally, if the noble Baroness, Lady Noakes, decides correct to point out that there are trans men, who were to press her amendment to the Motion to a vote, I will born female, who have given birth. One brought legal join her because I think it is important to consider proceedings in the Court of Appeal last year. A judgment this. I think the Minister will see that there is a was given, in which noble Lords may be interested, by growing head of steam. I know he was left carrying the Lord Chief Justice, the noble and learned Lord, the baby on this Bill. It was not something that he Lord Burnett of Maldon, in the McConnell case. It is desires and he had nothing to do with the drafting. We reported in the third volume of the Weekly Law Reports understand that very well, but it is still a problem. for 2020 at page 683. Why would I want to go through the Lobby? I would The Lord Chief Justice explained that the claimant go through the Lobby because I owe it to the hundreds had been registered at birth as female,but had transitioned of women who sat in front of me in tears saying, “I to live in the male gender and had received a gender don’t feel a proper woman.” recognition certificate under the Gender Recognition Act 2004, stating that his gender is male. He then 4.57 pm underwent artificial insemination, became pregnant and gave birth to a child. He brought legal proceedings Lord Pannick (CB) [V]: My Lords, it is always an complaining that the child’s birth certificate recorded education to listen to the noble Lord, Lord Winston. I him as the mother. He said that, because he had declare an interest as an expectant grandfather. One of transitioned, he should be recorded as the father or as my daughters, Shula Markeson, is expecting her second a parent. The Court of Appeal rejected his complaint child, my fourth grandchild, in a few weeks’ time. In and said that recording him as the mother was not a this expectant state, I find it extraordinary that until breach of his human rights. the pregnancy of the Attorney-General, to whom I The Lord Chief Justice said that, as a matter of send my best wishes, no one in Government seems to common law and under the legislation governing the have recognised that Ministers, like other women, get registration of births, the person who gave birth to a pregnant and are entitled to paid maternity leave. The child is the mother, and the Supreme Court dismissed fact that we are considering fast-track legislation today, an application for permission to appeal. In light of with all the defects in parliamentary scrutiny that that that judgment, I do not think that there are any legal involves—a point made by the noble Baroness, difficulties in referring to mothers or women in the Lady Gale—tells the House everything it needs to Bill. The mother of Parliaments, in doing that, would know about the low priority historically accorded by be showing no disrespect to trans men. successive Governments to issues of maternity. I agree with my noble friend Lady Hayman and others that 5.04 pm the Government need to give priority to more general Lord Dodds of Duncairn (DUP) [V]: My Lords, I reform. thank the Minister for his opening statement and for I also think it is regrettable that, in a Bill which clearly setting out the purpose of the Bill. It is narrow belatedly recognises the needs of female Ministers, in its application, and I am happy to support it through Clause 1 confers benefits only if the Prime Minister so all its stages in this House. I agree that it is wrong, in allows at his or her discretion—a point touched upon this day and age, that Cabinet Ministers who take by the noble Baroness, Lady Hussein-Ece. When he maternity leave are required to resign. I welcome the replies, can the Minister give an example of when the extension of provisions to cover the position of opposition Prime Minister might refuse to allow a pregnant Minister officeholders, as well. Women in Parliament and public to be designated in circumstances where she would be life generally have faced massive challenges, and our remaining in post but for her pregnancy? Why is this ways of working must be brought up to date as not a duty to pay maternity leave? quickly and comprehensively as possible. Also, can the Minister confirm that it is not intended However, like other noble Lords, it seems strange to by this discretionary benefit that the Prime Minister me that it takes the circumstances of an individual should ever be able to say to a pregnant Minister, case to prompt legislation of this nature. The public “Very sorry but, because you’re pregnant, I’m going to will find it very odd that this situation has not been sack you”? That is rightly unacceptable in all other legislated for long before now, rather than being rushed walks of life. In his opening speech, the Minister said through to accommodate specific circumstances. I also that the Bill sends out a “vital message” to women that take the opportunity to wish the Attorney-General they can pursue a political career, without needing to and her family well, at this time. choose between that career and their family. Does the I share the view that it would be far better for the Minister really think that the conferral of the benefits Government to bring forward more comprehensive on a discretionary basis is consistent with these laudable proposals than this legislation to cover paternity, shared aims? parental or adoption leave. I cannot think of any real On the language of the Bill, Parliament has often reason why they could not have included these. None referred to the person who gives birth to a child as a of them is covered in the current legislation; nor is the woman and, indeed, a mother. Examples have already situation of Cabinet Ministers who are affected by 665 Maternity Allowances Bill [LORDS] Maternity Allowances Bill 666

[LORD DODDS OF DUNCAIRN] that most members of the public will find utterly sickness and need to take leave. In recent years, we inexplicable. I hope that the Government listen to have had examples of Cabinet Ministers who have had what noble Lords have said in this House and move to to step down as a result of sickness. It would be good rectify the situation, as the Bill goes through its different if there was legislation to cover those circumstances, stages. as well. I welcome the commitment by the Minister and the 5.10 pm Government to give urgent consideration to issues Baroness Goudie (Lab) [V]: My Lords, I support all such as this and to bring forward proposals to address that my noble friends Lord Hunt of Kings Heath and outstanding parental leave issues in due course. I Lady Morris of Yardley have said, so I will not go over welcome what the Minister said about an update those arguments. If the noble Baroness, Lady Noakes, before the Summer Recess, and we look forward to wishes to press her amendment, I will go through the that. It would also be useful to know how the legislation Lobby with her, because it is awful that the word before us and the situation that has been presented “person” rather than “woman” is used in this Bill. compares to provision made in the devolved This Bill is either too little or too much. It is too Administrations. It is important to have consistency much in the sense that it is extraordinary that the across the United Kingdom. Government have found time to fast-track this measure There are a couple of specific issues that I want to while, at the same time, protesting that parliamentary highlight on the particular provisions of the Bill. The time cannot be found for other urgent measures. For first is the time limit of six months for paid leave and example, the Coronavirus Act allows local authority the second is the discretionary nature of the provisions, meetings to be held remotely. This is working well but, whereby the Prime Minister is vested with certain at the moment, operates only until 7 May.The provision powers that do not normally apply elsewhere—a matter should obviously be extended, but the Government just alluded to by the noble Lord, Lord Pannick. That say that this requires primary legislation, and Ministers are public officeholders, appointed by the parliamentary time cannot be found. sovereign on the advice of the Prime Minister using On this day, coronavirus is at the forefront of all of the royal prerogative, limits what can be put in statute. our minds. This Bill displays an odd sense of non-logical I recognise that. However, having to seek the permission thinking in relation to public administration. It is also of the Prime Minister of the day to take maternity inadequate as a maternity and paternal rights measure. leave, as provided for in the Bill, seems incredibly We have had maternity and adoption leave since 2002, anachronistic. It leaves open the rather bizarre possibility and shared paternal leave since 2015, yet the Bill omits that the Prime Minister could refuse such a request. any reference to these and confines itself to maternal Neither a Minister in such a position nor the Prime leave. The maternity leave period is far too short, and Minister of the day should ever be put in that position, the measure is merely discretionary in nature and has however theoretical. I think that the six-month period shortcomings that would have been exposed by an is too restrictive; there is no good reason why it should equality impact assessment. not be for up to 12 months. The current law on The Bill addresses the position only of Ministers statutory maternity leave is 52 weeks, after all, and it and other officeholders, not Peers and Members of would seem reasonable to extend the period to that. Parliament. It does not address the wider issues of It is also important that the Government address statutory maternity leave and pay and redundancy wider, general issues concerning maternity leave and protection. I welcome the letter that Stella Creasy MP statutory maternity pay.No one should face discrimination in the other place has sent to all of us today, in which or undue financial loss as a result of having a child she sets out how things should be. and no one should ever be in the position of having to The Bill is welcome in as far as it goes, but it is a give up their job. The low level of statutory maternity small, rushed step in an important area. I offer the pay or allowance generally in this country is cast into Attorney-General and her family all my best wishes, sharp relief by the provisions of this Bill, which allow and I hope that the Minister will come back to us at six months’maternity leave on full pay.As this legislation Third Reading with amendments. is brought forward today to deal with the position of Cabinet Ministers, it cannot be long before the 5.13 pm Government address wider issues affecting mothers and fathers across the board in this country. Baroness Gardner of Parkes (Con) [V]: My Lords, my father was the world’s first Minister for Health and Finally, I fully support the noble Baroness, Motherhood in the New South Wales State Parliament Lady Noakes, in her recent amendment. I wholeheartedly in Australia. He introduced a child endowment, a endorse the argument that she and other noble Lords form of family support, in the 1920s. I was a founding have advanced in advocating their support for that member of The 300 Group in 1980, with Lesley Abdela amendment to the Motion, and I will certainly support and others across the political spectrum, which encouraged her, if she presses it to a vote. equal representation of women in Parliament. I have great concerns, as expressed in the other It is disappointing to see that, irrespective of the place and by noble Lords, about the use of the word challenges women face getting into Parliament, we “person”, as opposed to “woman”, in the Bill. I have still have barriers such as these for women, should yet to hear a satisfactory explanation from the they choose to start or continue to have children once Government for why this is the case. It is baffling, and they are elected. Despite this, I welcome the intent not just to Members of Parliament—it is something behind the Bill, although I find it extraordinary that 667 Maternity Allowances Bill [22 FEBRUARY 2021] Maternity Allowances Bill 668 this issue is only being considered in the 21st century, “When I needed to take maternity leave as the Minister for with the Government lagging behind modern society. Public Health in 2001, I asked the Health Secretary what I should Most businesses adopted this approach long ago. do. He did not know, and said, ‘Ask the Prime Minister.’ He did not know, and said, ‘Ask the Cabinet Secretary.’ He had absolutely My concern runs deeper than merely timing, as the no idea, and as Ministers are Crown appointments, he said it was Bill does not go far or deep enough. The Minister really a matter for the Queen, but nobody thought we should be made this point in his opening speech—to asking Her Majesty”.—[Official Report, Commons, 11/2/21; col. 552.] “make clear that the Government are listening.” The fundamental problem is that the Bill benefits only I echo the view of Stella Creasy, MP for Walthamstow, a tiny number of women at a time when life is more that the right to maternity leave and maternity cover difficult for mothers with babies than at any time in should extend to all MPs, and I would go further and modern history. I wish to ask a series of questions, for say that it should also cover Ministers in the House of which I would be grateful to have a reply from the Lords. I am also sympathetic to calls for paternity, Minister. adoption and shared parental leave to be extended to Does this Bill mean that maternity leave is merely a both Houses—Ministers and MPs—so that they can, perk granted by an employer if only this legislation is if they wish, spend precious time with their families passed? Thousands of women right across the country while knowing that their jobs are being covered. are having to leave work to care for a child. Stella We all know the importance of family, and that Creasy MP has pointed out that during the pandemic, those early days are formative. Once gone, you cannot “one in four women who are pregnant or a new mum have said turn the clock back. It feels wrong that we should be that they have faced discrimination, and that they are losing their introducing a Bill at great speed for the benefit of one jobs or being furloughed”.—[Official Report, Commons, 11/2/21; senior Minister when, with a little more time and col. 542.] effort, we could be benefiting many more without Surely this Bill effectively establishes a two-tier using up more parliamentary time.I urge the Government system for maternity leave. Where does it leave women to give this benefit and choice to all parents in both MPs of childbearing age? Why does it not extend to Houses. them, or, for that matter, to all staff in this Parliament, as other speakers have said? Where does it leave women 5.15 pm who are self-employed and who take maternity leave, some of whom have had to take the Government to Lord Bhatia (Non-Afl) [V]: My Lords, Members of court to resolve the injustice of the predicament they the House of Commons voted to give Ministers formal, face? Where does it leave fathers over paternity leave, paid maternity leave for the first time, and it was especially those partnered by women who wish to hailed as an important and long-overdue change. The return to work straight after childbirth? Government pledged to bring forward more sweeping Surely we need a Bill to give at least every woman in maternity protections before the summer recess. Many the Palace of Westminster, if not in the country, the MPs made statements during the debate. Significantly, same rights that this Bill is giving to the Attorney-General. the Minister, Penny Mordaunt, said that the Bill will That being the case, can the Minister indicate whether put an end to the “wholly unacceptable situation” of any advice has been given about whether, once this Bill Ministers having to resign to take leave. is enacted, the Government could be vulnerable to Two significant points were made: that the Bill fails judicial review for not granting the same right more to address adoption, and that it fails to address shared widely? As the former Conservative Cabinet Minister, paternal leave. The most important statement was MP, argued during the Commons Second made by the mother of the House, Harriet Harman. Reading She said that the Bill should be an impetus to addressing “being forced to leave a job for being pregnant is exactly what low maternity pay, and that the Government have happens to thousands of pregnant women. In righting this wrong “done the right thing”. She went on to say that maternity for Government Ministers, will the Paymaster General also undertake pay is £152 per week—less than half what you would to right it for women throughout our country? Codifying the get on the minimum wage. The Bill was passed without protection of a pregnant woman’s job is exactly what thousands any opposition at Third Reading. I ask the Minister of women need now. The people we represent want to know that whether it might be wiser to see how private sector Ministers are being treated no differently from them. Routinely identifying pregnant women for redundancy is too familiar a companies have provided maternity leave to their problem … We cannot ignore the fact that for thousands, current employees and paternity leave to males. legislation provides protection only in theory but not in practice.”— [Official Report, Commons, 11/2/21; col. 544.] 5.17 pm That, in a nutshell, coming from a senior Conservative Lord Hain (Lab) [V]: My Lords, I am sure that we supporter of this Government, is exactly the issue that all wish Suella Braverman well in her forthcoming I ask the Minister to address in his response. maternity leave, and this Bill is welcome. It is notable for both ensuring her income is fully protected, and 5.22 pm for the actual cover it gives her, meaning that she can Lord Craig of Radley (CB) [V]: My Lords, I am not devote herself to caring for her child without worrying the only Member of this House to have been lobbied about being on demand 24/7, as is required for the about the wording of this Bill. I entirely approve of its post of Attorney-General. practical purpose, but I too question the use of the The Bill is also a big improvement on the predicament word “person”, when “lady”, “woman” or “mother” faced by my Government colleague Yvette Cooper would be normal usage in relation to maternity issues when she was a Minister, as she explained in the or pregnancy and childbirth. I understand the desire Commons on Second Reading: to avoid any insensitive use in legislation of gender-specific 669 Maternity Allowances Bill [LORDS] Maternity Allowances Bill 670

[LORD CRAIG OF RADLEY] The office of Attorney-General, which I had the words, but that convention is not inviolate. We do not privilege of holding, is unique in the constitution. stop using the word “Lords” to include all who are Shortly after taking office, I swore an ancient oath, Members of your Lordships’ House. The Government’s in full fig, in the Lord Chief Justice’s court—namely, justification in the other place was that the noble and learned Lord, Lord Woolf—that I “the convention that we are now operating under … was introduced would sue the Queen’s process “after our cunning.” I by Jack Straw in 2007. The intention of the guidance on using understand that to mean that I use my cunning in its gender-neutral language was to avoid demeaning women by implying better sense. that only men could undertake certain roles, and that drafting convention has remained.”—[Official Report, Commons, 11/2/21; The law officers perform a wide range of duties in col. 594.] the public interest. In those roles, they are independent Jack Straw used a ministerial Statement, and a future of the Government and are not bound by the doctrine Parliament is not committed to a convention; it is not of collective responsibility. Deploying my cunning, law. My personal experience of this was a ministerial acquired in the course of 11 years in public office, Statement by Jack Straw when he was Lord Chancellor from Cabinet down, I surmised, with the advent of a in 2008, specifically drafted to enable me to withdraw new Government in 1997, that there might be a gap in an annulment Motion, which has since been set aside. the Government’s legislative programme at that point. In December 2013, answering a short debate about In short, the Government might not have enough wording and grammar in legislation, the much-respected ready-made Bills to hand. As it happened, there was a noble Lord, Lord Gardiner of Kimble, said from the Bill gathering dust in the law officers’ chambers awaiting very Dispatch Box in front of the Minister—it is such an opportunity to allow the functions of the worth repeating in full: Attorney-General to be exercised by the Solicitor-General. “The guidance also recognises that there must be some flexibility The Law Officers Bill passed through both Houses and that there will be some Acts where only gender-specific without dissent and remains on the statute book as the drafting can be usefully applied. In a case where a person has to Law Officers Act 1997. be of a particular gender—male or female—gender-neutral drafting The Explanatory Notes to the present Bill state that does not require drafters to avoid referring to the gender. I think your Lordships would agree that that would be the case for the “legal exercise” of a very senior office, such as a legislation about maternity.”—[Official Report, 12/12/13; col. 1014.] Secretary of State, Does that clear statement not say it all? “cannot be ‘covered’ by another Minister”. Common sense, reflecting the biologically unique The Government argue that for these functions to be role of a mother who bears a child in her womb and executed, another Minister may have to be appointed brings it to term, says there is no conceivable discourtesy at the same rank. This is the ministerial ceiling problem or demeaning of a woman or womanhood by using that the Bill seeks to cure. That must be right for a the correct wording in Clause 1(3). Clearly the Secretary of State, but the Bill is of general application Government and the drafters of this sensible Bill have and the notes appear to be the same. Will the Minister anticipated the unease over the use of the word “person”. explain the necessity of the Bill for the role of the The Minister in the other place called the word “jarring”. Attorney-General? In short, my specific question is: Why introduce a jarring word, particularly in Clause 1(3), what is the practical effect—other than the payment of when a totally accurate phrase is to hand to clarify? I maternity allowance, which I strongly support —for thank the Minister for his letter, but I wonder whether the specific office of the Attorney-General, which I, he is able to produce any greater defensive explanation like others, understand to be the trigger for the Bill? than already mentioned, and whether he is prepared I hope the Minister will assure the House that there to gainsay the words of his ministerial colleague? is no intention to undermine the office of the Solicitor- Espousing the Explanatory Memorandum misses the General, which is also ancient, having been created in point. 1461. The Act that I shepherded through Parliament If Parliament wills it, a convention which may be in 1997 to enable the Solicitor-General to exercise all totally reasonable and sensible in other contexts does the functions of the Attorney corrected an anomaly in not have to be slavishly followed in this Bill. That the 1944 Act so that the Solicitor-General can now act would make it legally sound. How can there be any without the specific authority of the Attorney-General. grounds for legal challenge in the courts? As drafted, it I hope the Minister will agree that, other than the only invites ridicule of a delusional Parliament, apart payment of a maternity allowance to the Attorney- from the distress already expressed by many who General, there was no need for this hurriedly introduced object to so sensitive a condition as maternity being Bill to deal with the special needs of the Attorney-General. depersonalised in this way. I look forward to the I look forward to the Minister’s reply. It may well be Minister’s explanation and hope for a reconsideration, that the Act that I passed through Parliament was but failing that, this should be a matter for debate in forgotten. Committee. 5.31 pm 5.26 pm Baroness Hoey (Non-Afl): My Lords, I thank the Lord Morris of Aberavon (Lab) [V]: My Lords, noble Lord, Lord True, for the time that he has given given the number of speakers, I shall take very little of in speaking to many noble Lords on this issue in the your Lordships’ time. I welcome the Bill to allow past week. In my short period in this House, this is the Ministers to take paid maternity leave while remaining first debate that I have sat through where there has in Government. The catalyst for the Bill, as we have been so much agreement among all noble Lords— been told, is the pregnancy of the Attorney-General, agreement about the fact that we all accept that the and I join other noble Lords in wishing her well. Bill is being rushed through, and that perhaps it 671 Maternity Allowances Bill [22 FEBRUARY 2021] Maternity Allowances Bill 672 should have happened a lot earlier. Maybe Governments To the suggestion that this cannot be done in time, I of all complexions tend not to push things until sometimes am sure there are others around the House who, as I a particular incident makes that necessary. have, have spent time in the City or in similarly pressured It is of course a narrow Bill, which is understandable situations and have turned wording around overnight for the reasons that we have heard. We wish the and got it right. Indeed, I know there are people like Attorney-General great health and happiness in what that in government or we would not have managed she is going to be going through; I am sure she is Brexit. This is merely an application of the skills that looking forward to her maternity leave.There is something the Government have to this particular instance, and I to be said for the amendment from the noble Lord, urge my noble friend to get his friends to sort this out Lord Cormack. I doubt that it will now be taken, but rather than thinking that this is something that can be it would have meant that we would not have had to shuffled through as an oversight. have rushed quite so much to get this through in time In the matter of women’s equality, little things for the Attorney-General’s maternity leave. matter. Yes, there are big things and big occasions There have been some wonderful speeches today, and, yes, there have been through history and are now demonstrating great expertise. I agree 100% with women who have given their lives for this, particularly everything in the amendment moved by the noble now in Iran, but generally progress has been made in Baroness, Lady Noakes. I thought it was a well-crafted little things. Getting the MCC to admit women did speech that more or less said everything that I would not count for nothing. It is a grain of sand but one have liked to have been able to say, although I would that has landed on one side of the scales and will not not have been able to say it in quite such a good way. I come back. It is going to be a while—we have had feel strongly that this today is something that your about 150 years of progress and maybe it will be Lordships’ House has to show some genuine common another 150 before we get where we want to go—but sense over. I refer of course to the wording and the that does not mean we should flag, give up or let exclusion of the word “woman” from the Bill. Many things like this Bill pass. people out in the public watching or listening to this or Motherhood is, I hope, something on which the reading about it cannot understand how we in this next decade or so will see real progress. It is not an House of Lords could be suggesting a Bill about estate that we honour in this country in the way that maternity while avoiding the word “woman”. The we should. Yes, all of us are individually grateful for noble Lord, Lord Winston, made many really sensible our birth and I think we all recognise that the estate of points about this. motherhood is good for society,but those who undertake I thought the noble Lord, Lord Hunt, was right in it are treated miserably when they wish to come back what was almost a condemnation of Her Majesty’s into the world to take their place, having undertaken Government for not speaking out over the past years, that duty for all of us. Are they accorded equality? Are when now it has somehow become almost unacceptable they given the same chance and space as if they had to say certain things. As the noble Baroness, Lady stayed working? No. That will take a lot of change. It Jones of Moulsecoomb, said, it has become so that will not be easy and it will be argumentative, but it is many women and men—perhaps even more so for an issue on which we must push. men—do not want to speak out and say things that The status of motherhood in the Bill, its denigration would lead to them being trolled on social media or by the choice of the Bill’s wording, is not something treated as if they were somehow transphobic. that we should tolerate. As other speakers have said, If we in this Chamber and this Parliament cannot the attempt to erase the word “women”, to remove all start to make a stand then we are on a really slippery its meaning except to be human, is something that we slope. The Bill gives us that opportunity. Yes, it could should not tolerate. We have to stand firm against this. be in a much wider Bill and, yes, it could have brought I am hoping that the Minister will hear the call of in all sorts of other issues, but we are where we are, Millicent Fawcett, and we need to get it through. “Courage calls to courage everywhere”, I appeal to the Minister. I know he is not the gather his forces and get this Government to remedy Minister who will make the final decision, but I hope the wrong that has been done. Indeed, I hope they will that today’sdebate, showing unanimity on that particular go further than that and get themselves into a position aspect of the wording, means that we will see that where they are happy to make it clear that women, change. If we do not do that this time and we leave the women’s rights and single-sex rights have a place in wording as it is, that will send a signal that even here, society, and that that shall not be erased by the pressure in this wonderful House of Lords, we are not prepared group that must not be named. to stand up for what is right and decent and common sense. 5.39 pm Lord Triesman (Lab) [V]: My Lords, I will start 5.35 pm with what I hope is obvious. Among many others, I Lord Lucas (Con) [V]: My Lords, it is a great consistently supported feminists who campaigned for pleasure to follow the noble Baroness, Lady Hoey. a wide range of women’s rights including maternity Indeed, it is a great pleasure to be part of something rights. I always supported the rights demanded by the that happens occasionally but is always wonderful LGBT campaigners for same-sex marriage, adoption when it does, which is people around the House, with and many other entitlements to equality. I always their various experiences, intelligences and insights, abhorred and campaigned against Section 28. I am joining together to urge on the Government a really grateful for the education and clarity of all those sensible change in legislation. involved for my own political development. 673 Maternity Allowances Bill [LORDS] Maternity Allowances Bill 674

[LORD TRIESMAN] possible. There is no need for a word such as “chairman” It follows that I wholly support the purpose of the and it is sensible to use “police officer” or “firefighter” Bill, though I wish it were addressing wider issues. I or terms which cover both sexes and any gender am also very critical of the language in it for good choice. In these cases, there is no need or purpose for reason. I cannot accept the slurs levelled at women gendered language. That is what Jack Straw intended. such as Rosie Duffield MP or JK Rowling for simply However, the truth is that legislation on maternity acknowledging biological facts. I strongly agree with rights, employment data, healthcare provision and the noble Baroness, Lady Noakes, and I will back an many of the things the noble Lord, Lord Hunt, and amendment. The vitriol is ghastly and intended to others have spoken of, almost only ever refer to women stop proper debate, to bully and to impose cult thinking precisely because there is a specific need and specific on what can realistically be understood only through purpose. This is so that any normal person can read democratic dialogue. and understand the legislation. I trust that nobody will repeat what is sometimes I appeal to the Minister to be truthful about this. said, and is a slander—that those of us who take this Do not hide in the thickets of the Explanatory Notes. view are transphobic or in the pay of some ultra Our excellent Library has provided copious evidence right-wing organisation here or in the United States. in legislation—no metaphors, no similes, no foolish The Government should say today that they will speak figures of speech. We are not living in a regime which up for the people vilified for supporting women’s requires or writes its laws and explanations to obscure rights. My objections to erasing words such as “women” and confuse its citizens. Our sole aim here is to ensure and “female” from the description of an individual’s that senior women politicians have maternity rights, biological sex and their replacement with the tortured just like other women. Many other rights should have formulations of the Bill are simple. been in the Bill as well, but it at least does that. It does First, legislation must be intelligible and compelling so for their own well-being and that of their babies. It to the people who read it or are affected by it. As the is that simple. noble Lord, Lord Pannick, said, it is very good to 5.45 pm know that the Lord Chief Justice understood this. This Parliament is not a private theatre using a private Baroness Fox of Buckley (Non-Afl): My Lords, it is language intended to please a few zealous people. It is a pleasure to follow the noble Lord, Lord Triesman, a legislature, and legislation belongs to citizens, not to because that was a brilliant speech. I have found the a narrow circle of us. Citizens plainly know that it is speeches today humbling, articulate and wonderful, women who give birth to babies. Babies are not born and noble Lords will know that I do not often start my of euphemisms. speeches in this manner. I think we have captured that this is not just a matter of words. There is something Secondly, I think most people will find efforts to else going on and I hope that message comes through. erase “woman” or words relating to women or their When I was a teenager, my working mother excitedly biological sex laughable. We do ourselves no credit by told me about the Employment Protection Act 1975, using pretentious meaningless phrases, which nobody which introduced the first maternity leave legislation. would use in their own lives. It patronises people who She was thrilled that this would give me and my two use plain language about known facts. The Bill, with sisters choices about work and change everything for its laudable purpose, is easy to support. How absurd it future generations of women. In school, my radical would be if its language became a boilerplate for English teacher enthusiastically showed me trade union drafting subsequent legislation. and campaigning leaflets. She proclaimed that maternity Thirdly, it is an unavoidable and uncomfortable leave was a key step for women’s equal employment truth that when politicians start using words to describe rights. Her enthusiasm for political change was infectious real people as though they were simply objects—to and I have to confess that I caught the bug. We have to speak of them as though they are “it”—we erode our remember that, until then, every woman knew she sensitivity to the people involved. It was always the could get sacked for getting pregnant and faced open way of dictatorships and authoritarians. In our case, it discrimination, often related to maternity. I suspect is not what we intend. We probably all accept that it is that my mother and teacher would be delighted to women who have babies. They are the birth mothers, know that things have improved so much for women whoever brings the baby up. However, in this kind of that we can now focus on ensuring that women at the formulation in the Bill, the women and their specific top of government will not be expected to resign biology become devalued—expunging their recognisable because of pregnancy and will have six months’ leave human attributes. In this Bill, let us get rid of foolish on full pay. metaphors, similes and ill-crafted figures of speech As other noble Lords have noted, the Bill is rather and replace them with everyday English. Our laws and narrowly focused on the women in Westminster. I words must never treat people as non-human things. rather wish that Parliament would show such speed Finally, like many other noble Lords, I have read and a sense of urgency in tackling the ludicrously low the Commons debate and the Minister’s letter to us. I statutory maternity payand weak employment protections listened carefully to what the noble and gallant Lord, for ordinary working women on maternity leave. Despite Lord Craig, said today. I am sorry to say that the this, I see the Bill as a step forward for women’s rights. Government have been inaccurate in what they have But wait—as we have heard from so many today in told us. There was no new legislative edict from Jack the brilliant speeches, can we or the Government Straw, with whom I worked. I will bet no one has even claim that it is a gain for women’s rights when the talked to him. He wanted gender-neutral words where words “women”, “she” or “her” do not appear even 675 Maternity Allowances Bill [22 FEBRUARY 2021] Maternity Allowances Bill 676 once in the Bill? We are assured that this is merely a accurate statistics. Dr Debbie Hayton, a transgender technical drafting matter. If so, can the Minister organise woman, teacher and trade union officer, rightly points an urgent review of official drafting guidance so that out that we can explain that gender-neutral language is not “the gender-identity lobby has been working hard to obfuscate appropriate for sex-specific issues? the issue by mangling sex with gender identity”. The noble Lord, Lord Randall of Uxbridge, said This place is not a students’ union. On too many that he did not see a problem with the language used. campuses, mangling and obfuscating language and He implied that it was a bit like saying “chairperson”, linguistic policing are often used to undermine academic but giving birth is not like chairing a meeting. Erasing freedom and to smear and damage the reputation of women from public discourse on maternity is not feminist academics. Noble Lords should check out the ahead of the curve; it is regressive and demeaning. It is new website, GC Academia Network, to read some not people who get pregnant; it is women. It is women horrifying tales. In some ways, we might expect this to who give birth. It is women who benefit from maternity go on in a students’ union, but this Parliament should leave and it is women’s rights at work that we want to not be like student politics or,much worse, even consider protect. If we erase the word “women”, the danger is removing the word “woman” from this maternity Bill. that we erase the struggle for women’s rights that got We in this House—and even more so in the other us here. place—are answerable to millions of women, men and transgender people—that is, transgender people as I stress that, of course, not all women want to be distinct from transactivist lobbyists. Those millions mothers. Not all women can be mothers or are even would expect, in plain language, that legislation expanding good mothers. In my opinion, child rearing is well and maternity leave would benefit women’s equality.I suspect truly not a mother’s natural job, but the words “woman” that those millions of citizens would be horrified to and “mother” have specific meaning. It horrifies me think that any part of our legislative body was in thrall that it has become so contentious to say so. I have to the small—if loud—lobbying organisations which, been gratified in this debate by how supportive people make no mistake, are using language as a battering have been of the amendment. If anything shows that ram to march through the institutions and to eradicate this House is far removed from the rest of society, it is the crucial distinction between biological sex and that most of us would be cancelled if we said these subjectively-defined gender identity, and which bully things anywhere else but in this House. There is a and intimidate anyone who refuses to repeat the mandated toxic, nasty thrust to political life today. I would like correct terminology. to acknowledge the courage of the noble Baroness, I urge the Minister not to let the absence of one key Lady Noakes, and others for speaking out. This is word betray the embryonic gains of the 1975 maternity because, as the noble Lord, Lord Hunt, explained, leave legislation and the hopes of my mother, my people here will be labelled TERFs and transphobes teacher and my teenage self. It would mean something and will go on hate lists for speaking out. That is the for women’s freedom. Do not betray us now. reality. I say to the Government, please do not be either 5.54 pm naive or disingenuous. These language rows are not Baroness Brinton (LD) [V]: My Lords, I too support technical. As many noble Lords have articulated so this Bill, even though it does not go far enough in passionately, we have to consider the political context. giving Ministers who are parents the same rights that The day after the debate on the Bill in the other place, other workers have now come to expect. As others I watched a male Labour MP on BBC “Politics Live” have already said, these include adoption leave, sick repeatedly refuse to say whether maternity law should leave and shared parental leave. The last is particularly refer to the pregnant “person” or “woman”. Why was important and affects any Minister who becomes a it so hard for him to say that? I am not making a parent and who is still missing out on the rights to party-political point; we see this across the political share in the care of their new baby with their partner. I spectrum. hope the Minister will remedy this urgently. These new language codes and norms are mandating There is one other parental benefit that has not yet us to adopt doublespeak. Why do I need to describe been mentioned—statutory parental bereavement pay myself as “cis woman”? I am a woman; that is it—enough. and leave. I worked with the noble Lord, Lord Knight of I am not a uterus holder, nor a person with a vagina Weymouth, for a number of years to win this right for nor a chestfeeder. These are linguistic abominations, parents,but it is omitted from this legislation for Ministers. but they are not harmless. Ultimately, these body part I urge the Minister to ensure that it is added to the other descriptions demean women and are a linguistic assault formsof parentalallowanceandleaveforfuturediscussion. on the notion that biological sex exists at all. There are One hopes that it is never needed but it is vital to have consequences of this. For example, in medical challenges it in place to cover such awful circumstances. specific to biological females, how can healthcare workers My former colleagues, Jo Swinson and Jenny Willott, discuss the risks of mastitis infection if they have to both had their first babies while they were Ministers. replace “breast” with “chest”? No arrangements were made for them. They had to We can see how language is being weaponised in cover for each other without maternity pay at exactly other areas deemed technical. You cannot get more the time when they were working in government for technical than the census. As the noble Baroness, Lady better rights for women and parents in the workplace. Noakes, noted, there is now a huge furore about the I agree with my noble friend Lady Hussein-Ece politicised wording of the questions. The census is a about the lack of equality impact assessments. We hugely important inquiry to gather factual data and need to remedy this and to reflect on why, as a society, 677 Maternity Allowances Bill [LORDS] Maternity Allowances Bill 678

[BARONESS BRINTON] Lords have noted prolifically in this important debate, we have moved over the years to gender-neutral language. the drafting of the Bill has eliminated females from The gender-neutral language in this Bill is inclusive. the very act that only a female can carry out. Changing it, as many speakers have asked, would As a former Member of Parliament, of the European make it exclusive—perhaps not to many, but to some Parliament and of the Parliamentary Assembly of the people for whom it matters a great deal. No one is Council of Europe, I have fought all my political life trying to erase women but rather to accept that, over to bring females in to all aspects of politics and in to recent years, there have been advances in medicine. I all circles of political power and responsibility at all am grateful to the noble Baroness, Lady Jones of levels of society. As a former director of the world’s Moulsecoomb, for referring to trans men in Brighton. largest children’s charity, a senior consultant to another We also have to remember that non-binary and intersex six or seven of the world’s largest NGOs serving people who were born women would be excluded. children, and a former World Health Organization Both equality law and clinical care have kept pace with ambassador, I know well that the child to be trafficked, them and their circumstances. Medical care, in particular, abused, enslaved or sold is the one who has been has adapted in order to provide the best possible care successfully detached from its mother. In this Bill, this for them in rare and difficult circumstances. That is detachment begins before conception. why I would gently correct the noble Baroness, Lady Noakes, in her reporting of the Brighton hospital trust The knowledge that, both before and after birth, a introducing “chestfeeding” and “pregnant people” and mother is needed for the foetus to be safely developed removing “breastfeeding” and “women” from its in the womb and securely delivered with a safe birth, documentation. It is not. Snopes, that excellent debunker underpins the Children Act and all child’srights enshrined of myths, explains this carefully: in the United Nations Convention on the Rights of “A maternity department at a U.K. hospital announced in the Child, both of which were framed and intensively February 2021 that it was expanding terms it used in maternity discussed, debated and agreed by our former, late, care to include, for example, ‘chestfeeding’ and ‘pregnant people’, much lamented and loved colleague Baroness Faithfull, in order to be more inclusive of trans and nonbinary patients … whose work for children seemed eternally enshrined in To be clear, the NHS said that such language—like referencing British law. This Bill betrays her heritage, as much ‘pregnant women’ and ‘breastfeed’—will not change for those as it betrays that of Professor Bowlby, with his who identify as such … Adding terms like ‘chestfeeding’ and ‘birthing parent’was not intended to take away from women-oriented attachment theory for babies and children throughout language already in use. Rather, the move was meant to be their beginnings. additional support that offers more inclusion for trans and nonbinary This is something that successive British Governments individuals.” have always known about and supported. Article 10 of I was also moved by the remarks of the noble the International Covenant on Economic, Social and Baroness, Lady Grey-Thompson. Like her,I am disabled Cultural Rights, signed in 1976 and ratified by the UK and have been on the receiving end of some pretty in the same year, states that: despicable hate crimes and trolling. Just like her, I am “The States Parties to the present Covenant recognize that: concerned that the trolls will descend on me this The widest possible protection and assistance should be accorded evening, but they will be those from the other side of to the family, which is the natural and fundamental group unit of her argument. However, that is nothing as to the daily society”— abuse that trans and non-binary people suffer. that comes out of the European Convention on Human Over the years, your Lordships’ House has learned Rights, of course— how to disagree well. In this sensitive debate, I hope “particularly for its establishment and while it is responsible for that people who are not here with us in the Chamber the care and education of dependent children. Marriage must be will choose to watch and listen to those on both sides entered into with the free consent of the intending spouses. of the argument. I have heard from trans men that, Special protection should be accorded to mothers during a reasonable even though there are currently no trans Members in period before and after childbirth.” either the House of Lords or the House of Commons, The Government are right to put this Bill forward they think it is important that language used in legislation because, as Article 10 goes on to say: remains inclusive. Using the word “woman” excludes trans men and therefore removes their rights. “During such period working mothers should be accorded paid leave or leave with adequate social security benefits.” Finally, we must focus on the specific nature and the urgency of this Bill. I hope that the Minister can Nothing could be more suitable than that. However, reassure the House not only that the Bill will proceed we also have CEDAW, ratified by the UK in 1986 to but that all Ministers who are new parents will benefit “provide special protection to women during pregnancy in types from the same parental rights as workers across the of work proved to be harmful to them”, country. and to “ensure to women appropriate services in connection with pregnancy, 6 pm confinement and the post-natal period, granting free services Baroness Nicholson of Winterbourne (Con): My Lords, where necessary, as well as adequate nutrition during pregnancy I thank my noble friend Lady Noakes for her determined and lactation.” and timely action in flagging up the wording in this Nothing could be more appropriate for this Bill, which Bill. I thank the Minister for his sensitive and careful our Government have correctly put forward, save that acceptance of the comments that several noble Lords both those great statements mention women—mothers, have brought to his attention on the use of the word females, not persons. In the dictionary, “person” means “person”, as opposed to “female”. As other noble man, woman or child. 679 Maternity Allowances Bill [22 FEBRUARY 2021] Maternity Allowances Bill 680

Today this House is talking about a female activity. without being accused of transphobia. That would be I find it astounding that half a million years of human ironic because, as he and many other noble Lords said, knowledge, custom and practice is cast aside for the most of us have spent our adult lives fighting against sake of today’s unwillingness to recognise reality; to homophobia, racism, anti-Semitism and Section 28. discard “mother”, “female”, “woman” in favour of a We do not need to be taught lessons on tolerance and mythical being, the neutral “person”, the very neutrality being anti-discriminatory. No wonder there are mixed of the word negating females. Those successfully messages from the Government. The gender equality impregnated by males for conception are females. office takes advice from an organisation called Gendered Maternity is not a male activity, nor can it be hijacked Intelligence and carries its logo on its letterhead. by a change of wording. While wishful at all times of A number of noble Lords were right when they said supporting mothers at any stage of their responsibilities, that the Bill is less than perfect. In her moving contribution, I cannot sit silent while we wipe the female out of a the noble Baroness, Lady Grey-Thompson, demonstrated piece of maternity legislation which is designed for what it was like to experience discrimination; we felt her. for her. My noble friend Lord Winston showed how Of course, we want our laws to be understandable women struggle to achieve motherhood. The noble to the ordinary person. That means everyone who Lord, Lord Pannick, took the House through the legal votes and those who are not yet old enough to do so. minefield to arrive at the conclusion of women in the One of our most wonderful authors, Shakespeare, has role of motherhood. As I have said, the Bill is too a lot to say about motherhood and mothering. He narrow, and I hope that the Minister will give an refers to breastfeeding several times, for example in assurance that the Government will look at the wider “Romeo and Juliet”, “Macbeth” and “The Winter’s issues. Tale”, in which he presents the heavily pregnant Queen We do not normally vote on regret Motions in this Hermione. In “Pericles”, Queen Thaisa vividly gives House, and I think the noble Baroness, Lady Noakes, birth to a princess during a storm at sea. I will give an indicated that a vote was not her intention. This is example, from Shakespeare, of what happens when helpful, because it gives the Minister the opportunity you lose the word “mother” or “female” and replace it to consider the overwhelming feelings of this House. with “person”. It makes a very interesting distinction. The noble Lord, Lord Lucas, the noble Baronesses, This is from Sonnet III: Lady Fox and Lady Hoey, and a whole range of “Thou art thy mother’s glass and she in thee speakers from all the Benches demonstrated their support Calls back the lovely April of her prime;” for the amendments. I know the Minister is in a Now let me use the wording of the Bill: listening mode; he has agreed to a further meeting “Thou art thy person’s glass and it in thee with Peers, which I hope will enable him to reconsider Calls back”— his response to the amendment in Committee. what can it call back? It cannot be “the lovely April of its prime”. I suggest we can only offer that it calls back The noble Baroness, Lady Brinton, was wrong, I “the flat and gloomy February of our time”. feel, when she said that if we used the word “women,” it would discriminate against trans men, as was If, despite his kind words, the Minister is unable to demonstrated by the noble Lord, Lord Pannick. It is offer any real sweetness to salve our strong concerns, ironic that the recent decision by the Office for National would he be willing to accept a full debate on language Statistics to cave in to the demands to remove sex from used in legislative drafting, in other governmental the forthcoming census, and allow gender identification organisations and institutions, and in those which are instead, will actually work against ensuring that services sustained by funding from the Government, such as for transgender people will be provided. schools? The concerns of this House today about language cannot be easily ameliorated, as the present I end my contribution by thanking the House for debate so clearly shows. I deeply and profoundly regret having this debate in a rational logical way, where the drafting and the misgendering of women in Members did not worry about which party they would the Bill. normally, if you like, support but looked at the issue carefully and rationally. The overwhelming majority of people who contributed to this debate saw the need 6.06 pm for amendments. I hope that, in making his response, the Minister will recognise this strength of feeling. Lord Young of Norwood Green (Lab) [V]: My Lords, it is fascinating how such a small Bill has demonstrated 6.12 pm the ability of the House of Lords to rise to the occasion and scrutinise every word and line. I welcome Baroness Ritchie of Downpatrick (Non-Afl) [V]: My the Minister’s assurance that he was listening carefully Lords, I thank the Minister for providing the background to the debate. His recent letter gave some reassurance, to this short piece of legislation, and I wish the Attorney- but not enough. It did not deal with what most of the General well with her pregnancy leave and her speakers today regard as a misinterpretation of the confinement. guidance. There has been striking unanimity during this debate, The noble Baroness, Lady Noakes, started this and at the end of a long list of speakers certain themes debate with a bang. She used a colloquial term, “garbage”, have emerged, such as language and whether it is to describe the failure of the Bill to recognise the role better to use the word “person” or “woman”. In my of women in motherhood, and she was right. As the view, it is women who give birth, so I favour the use of noble Lord, Lord Hunt, reminded the House, we are the word “woman”. But I want to be clear that I am privileged to have this debate in a non-toxic atmosphere, not opposed to other gender-specific areas. 681 Maternity Allowances Bill [LORDS] Maternity Allowances Bill 682

[BARONESS RITCHIE OF DOWNPATRICK] pay; the lack of employment protection for women on Other issues were raised, and it became evident that maternity leave; and the low level of take-up of parental the Bill is seen to be narrow in focus and needs to be leave by fathers because many cannot afford to take it. widened. Therefore, there is an opportunity for the I am happy to support the provisions in this Bill, as Minister, when he comes back later this week, to bring far as it goes. But I believe the remit and the strength forward amendments to widen the scope of this Bill. of this Bill will be in the Minister bringing forward Notwithstanding that, I support this Bill, because government amendments to widen the scope of the the Government are addressing the realities of wider Bill to ensure it covers a wider spectrum of women. society. Many people in senior responsible positions are women, and the Government are helping to ensure public life is being made more accessible. It is a 6.17 pm fundamental right to take time off to have a baby, and Lord Tyler (LD) [V]: My Lords, first and foremost, it is important there is financial protection to celebrate I am sure all Members of your Lordships’ House will motherhood. want to join me in offering our best wishes to the I support the general thrust of the legislation as a Members of Parliament for Fareham, Enfield North first step towards addressing working conditions for and Walthamstow.As we all now know,Suella Braverman, women in Parliament. It does, however, miss an Feryal Clark and Stella Creasy are expecting babies in opportunity to address pay and working conditions a few weeks’ time. Access to appropriate maternity for ordinary women who earn low incomes and are leave is equally important for all three. forced to work long hours in advance of pregnancy There has been a tendency for successive Governments and, often, to return to work a short period of time to inflate the importance of Ministers at the expense after the birth, endangering their health and preventing of Parliament, and this Government are certainly not a proper early bonding relationship with their child. immune. But under our constitution, Ministers are That issue requires urgent attention. As my noble accountable to MPs, who are themselves accountable friend Lord Hain said, in Covid conditions such situations to constituents—not all the other way around. It become that bit more acute. So I would like to hear follows that it is vital for MPs and their constituents to from the Minister how he and the Government intend be effectively reinforced for parental leave that they to address these issues for all working women who are encouraged to take. face motherhood. It happens that the Member for Fareham is to be Because Ministers and their opposition numbers fully supported in her ministerial role, throughout the are appointed, there is not security of tenure in the six months’ leave, by this Bill. What about her MP employment, and they should be financially protected, role? I am sure her constituency office staff would and theirs jobs secure, during their pregnancy leave. do an excellent job with her casework, and she would, The provisions in the Bill mean that Ministers and presumably, be able to nominate a proxy to vote those holding principal opposition offices will not for her. have to resign, and they create a discretionary power However, the electors of Fareham will be without a for the Prime Minister and the leader of the Opposition parliamentary voice for the period of leave, and that in the relevant House to grant certain office holders will also be true for the people of Enfield and six months’ maternity leave. But it is important that Walthamstow.When I was shadow Leader of the House this is extended to women MPs and MPs on paternity of Commons for the Liberal Democrats, I worked with leave, shared parental leave and adoption leave—to Robin Cook and Sir George Young—now the noble widen the scope and remit of provisions of this Bill. I Lord, Lord Young of Cookham—to seek ways to look forward to the Minister addressing these issues. strengthen the role of Members who did not seek Both the Minister and Penny Mordaunt, who ministerial advancement. That led, among other things, introduced the Bill in the other place,said the Government to improved status and influence for committee chairs. would bring forward proposals to address outstanding But the Bill provides the Government an opportunity parental leave issues. When will this happen? What to drive a further wedge between the treatment of will be the extent and remit of such proposals? Will Ministers and MPs. That cannot continue indefinitely. they be subject to legislative provision? Reference has As my noble friend Lord Wallace of Saltaire pointed been made to the fact that discussions have taken out, the gestation of this narrow Bill has been much place regarding this matter. With whom, and for how longer than a pregnancy. It is disappointing that the long, have they been going on? Do they involve the opportunity to develop a much wider reform has not Lords? Do they include provisions for maternity leave been taken. Indeed, as the noble Baroness, Lady Hayman, entitlement or for those seeking to adopt or those on pointed out, with her memories of the inconceivable shared parental leave? Will the new provisions include situation that arose in 1976, it is curious that this must the need for the Government to strengthen the be emergency legislation after decades of inadequate employment rights of pregnant women and new parents gestation. across the UK? Will it also include redundancy protection There are other ways in which this ad personam Bill for pregnant women and new mothers? must clearly be followed by more comprehensive The noble Baroness, Lady Brinton, referred to legislation, as my noble friends have been emphasising bereavement leave. I think that is a particularly important in this debate. There are serious inequalities to be issue, and maybe the Minister could advise us on that. addressed both inside Parliament and beyond. Better There is also the need to focus on: the wholly inadequate provision for all forms of parental leave has been a levels of maternity allowance and statutory maternity theme right through the debate. For all MPs would be 683 Maternity Allowances Bill [22 FEBRUARY 2021] Maternity Allowances Bill 684 a good start, but paternity, adoption, shared parental entitlement to Ministers—and in Clause 4, to a small and child bereavement leave all need to be addressed selection of Labour officeholders—without that firm urgently, not just for MPs but more widely. In that commitment to make progress for wider parental leave context, I was very moved by the contribution of the to both MPs and the nation which they serve. noble Lord, Lord Winston, whose professional evidence we all take so seriously. 6.25 pm The MP’s life is exceptionally demanding. I knew Baroness Hayman of Ullock (Lab) [V]: My Lords, that, but it has become even more so since I was a I welcome the Bill. A maternity Bill to support Member. My wife was expecting when I defended a parliamentarians has been too long in coming forward, tiny majority in October 1974, only to lose it by a few and I add my best wishes to the Attorney-General, hundred votes. In retrospect, we both agreed that this whose pregnancy has finally spurred the Government was a blessing in disguise, when the first months of into action. My noble friend Lady Hayter of Kentish 1975 were dominated by the arrival of our new son, to Town, who has spent so much of her exemplary career join a very lively two-year-old daughter. I do not think working to improve women’s rights, said in her speech that I would have been able to give good service to my that it is hard to believe that it has taken so long for us constituents then. If the constituents of Fareham, to have come this far. Enfield and Walthamstow—and many others in future— Repeatedly, the Government have insisted that are not to be discriminated against, the Bill is addressing reforming maternity rights would take time, so it is only a relatively minor problem. Ministerial duties can disappointing that the Bill is being rushed through be undertaken by others, with a huge back-up of civil with such a narrow remit. I have listened carefully to servants, but not so parliamentary duties. the debate today, and the many important contributions I have no doubt that the Minister will have at his as to how this Bill could be significantly improved. fingertips comparable maternity allowance provision, The Minister stated in his opening remarks that this is not just as recommended for MPs’ staff but for all the just the beginning of the journey of reform, so I hope employees of the two Houses of Parliament, to set that as well as listening he has heard, and that the beside what we are considering simply for Ministers Government will act on the well-needed improvements and a few others. If he does not, I am sure that in his without delay. A number of noble Lords, including my usual way he will have the courtesy to let us see noble friend Lord Hunt of Kings Heath in his passionate something to compare before the further stages of the speech in support of women, and my noble friend Bill. Meanwhile, as all my colleagues have urged, and Lord Winston, speaking from the heart about his other Members right across the House, if the Government extensive experience, have talked about the language mean what they say about the need for generous used in the Bill, and particularly the use of “person”. parental leave, then they cannot give up on the process As has been pointed out, this is at odds with other to provide it throughout the country once the Bill is legislation covering maternity rights and protection, passed. I hope that it will be passed—but words are including the Equality Act 2010, which uses “her” and significant, especially in legislation and especially in “woman”specifically.The noble Baroness, Lady Noakes, this place. Of course the semantic concerns expressed clearly explained why she is concerned about this in on all sides are important, and I do not envy the introducing her regret amendment. In his letter to Minister’s job in squaring the circle to achieve plain noble Lords on this issue, and in his introduction, the speaking and accessible language in the context of the Minister explained that the wording reflects modern Bill, as he has been asked to do. Personally,my bafflement drafting convention and guidance and looked forward is very simple: I do not really understand how “women” to discussing it further at this Second Reading. My is legislatively unacceptable but “maternity” can be noble friend Lady Morris of Yardley was particularly used throughout the Bill from its Title onwards. The informed on this issue, and I am interested to hear the dictionary definitions seem equally restrictive. Minister’s more detailed response in his closing speech. Above all, we note the promise from the Paymaster- There has been much discussion of the number of General, Penny Mordaunt. In the Commons Second omissions in the Bill as it stands. As I know the Reading, on 11 February,having acknowledged pressure Minister recognises, the proposals do not include any from all parties for a more comprehensive nationwide provision for paternity leave entitlement, premature approach to parental leave, with legislative proposals, baby leave, those seeking to adopt, or those on shared she said: parental leave. It is a shame that the Government have “I think we should be bringing this back to the House before not given more detailed consideration to a Bill which the summer recess in order to address those other issues.”—[Official has such importance to women parliamentarians, and Report, Commons, 11/2/21; col. 559.] which has the potential to encourage more young As the noble Baroness has just said, a lot of us are women to take up a parliamentary career. With more lookingforthat—andthePaymaster-Generalwasreferring thought and proper consultation, the Bill could have to legislation, not just consultation. That sounds to been so much better. me like an expectation of inclusion in an early summer We should be encouraging more fathers to take up Queen’s Speech. On behalf of my Liberal Democrat paternity and shared parental leave. The Bill sends out colleagues, I ask the Minister to reiterate that promise. the wrong message by failing to make those provisions, Our support for the Bill is not unconditional; we and as drafted helps only a small number of women. I support it but we hope that it leads to the much was especially interested to hear from my noble friend greater,more comprehensive improvements to all parental Lady Hayman about her experience of having a baby leave which we are looking for. It would be totally as a Member of Parliament in the 1970s, and how unacceptable for Parliament to give special maternity dispiriting it is that there has been so little real progress 685 Maternity Allowances Bill [LORDS] Maternity Allowances Bill 686

[BARONESS HAYMAN OF ULLOCK] that better legislation will be achieved by cross-party since then. Backbench MPs are able to take maternity working, will he confirm that the Government are leave, as we know, but have no guarantee that their committed to this so that we can properly reform the constituency responsibilities will be covered in their narrow Bill before us today? absence. Following the debates on the Bill in the other place, IPSA published a consultation on funding MP 6.34 pm parental leave and allowing MPs on parental leave Lord True (Con): My Lords, it is a privilege to to hire new staff to cover their constituency duties. respond to the debate, which I have listened to intently The consultation closes shortly, and I hope that the and with deep consideration for what everybody has Government will take swift action to bring in this said. If I may be allowed a personal comment, I too much-needed support for all Members of Parliament. was moved by what the noble Lord, Lord Winston, As my noble friend Lady Gale mentioned, it is concerning said, because the reason there were seven years between that no equalities impact assessment has been published. my late brother and me was that my mother was one of An EIA might have highlighted the Bill’smany deficiencies the women to whom he referred and, of course, never and brought a focus on wider paternity rights issues. forgot that. In my life, I have tried to follow the Can the Minister assure us that the promised improved example of that remarkable woman. Part of that Bill will include an EIA? example was always that you should listen to the other As other noble Lords have done, I now draw the person and that bullying and hatred have no place in Minister’s attention to maternity leave pay. The Bill personal life or public life. I echo very strongly what effectively provides for salaried Ministers and opposition the noble Baroness, Lady Grey-Thompson, said on officeholders to receive six months paid maternity that in her intervention. No one should have fear in leave. The Explanatory Notes explain that this is expressing any view. We have heard contrary views in comparable to maternity pay in the Civil Service and this debate—although there has been an overwhelming Armed Forces. However, as has been pointed out, this voice on one side, we have heard countervailing voices— is far more generous than the statutory rate of maternity and I assure the House that I respect all those. pay and maternity allowance, which can leave many I thank everybody who has taken part. The women in financial poverty. The Government need to contributions have been insightful if, from the address this—babies are very expensive. Government’s point of view, sometimes challenging. I Noble Lords have talked about the fact that the have rarely heard the House so unanimous, or near speed with which the Government are acting to make unanimous, in its expression of concern on the two sure that the Attorney-General can rightly take maternity main points that have come out of the debate: first, leave is in stark contrast to their failure to support what we do next in broadening the work, which I pregnant women, who have faced discrimination and spoke about in opening; and, secondly, the issue of hardship throughout the pandemic. The Minister will language, on which many have spoken. no doubt be aware of the recently published report by Before I come to that, I shall answer some of the the Women and Equalities Committee on the gendered other points raised in the debate. We could begin on economic impact of Covid-19. It specifically highlights one point on which I think we are all agreed: although the position of pregnant women who have been incorrectly the Bill is specific and limited, it is a significant reforming put on statutory sick pay instead of maternity pay and measure for women and points the way to wider those who have been denied furlough, even though reform. I welcome that that has been recognised by they were entitled to it, because they were pregnant. most of those who spoke. The Bill makes an important It is disappointing that the Government are yet to and long-overdue change to existing law by for the act on their commitment in the December 2019 Queen’s first time enabling senior Ministers to take paid maternity Speech to strengthen the legal protection against leave. The prior situation—that such a woman had to redundancy for pregnant women and new parents and resign—was unacceptable and, frankly, shameful in introduce leave for neonatal care. Will the Minister the 21st century. confirm that the Government will act on the committee’s I am grateful to my noble friend Lady Noakes for recommendations? Although it may be outside the her heartfelt contribution at the outset of the debate. noble Lord’s remit, will he provide an update on the The very fact that she has tabled an amendment Employment Bill, which could include provisions on demonstrates her feeling on the subject. If she and such things as miscarriage leave, and leave for parents other noble Lords will permit, I will address some of with a sick child? the other concerns first and come to the language later It is clear from today’s debate that there is much in this speech. work to be done to improve the Bill, but also that the I am grateful to the noble Baroness, Lady Hayter, proposals have strong cross-party support and a for her support for the Bill. She rightly highlighted the commitment to see improved legislation as soon as past injustice of women having to make a choice possible. It is vital that the areas that have been between having children and pursuing a career. That is omitted and other issues are addressed. As the noble entirely wrong. It is why the Bill and what I hope will Lord, Lord Tyler, just said, when the Bill was debated follow are so important. The Government acknowledge in the other place, the Minister said that we should that the Bill does not resolve wider issues, and we will bring this back to the House before the Summer present a report to Parliament. I shall say more about Recess to address those other issues. The Minister that later, setting out considerations and proposals. himself has referred to an update. Will he confirm that I turn to some other points raised in the course of the Government’s intention is indeed to bring the Bill the debate. On the constitutional aspects of the Bill, back before the Summer Recess? On the understanding particularly the royal prerogative and how the Bill 687 Maternity Allowances Bill [22 FEBRUARY 2021] Maternity Allowances Bill 688 operates in that space, several noble Lords, including my noble friend Lord Bourne and others, and I hope the noble Lords, Lord Wallace of Saltaire, Lord Hain to be able to update my noble friend and the House on and Lord Pannick, and the noble Baronesses, Lady the progress of that work by the Summer Recess, as Hussein-Ece, Lady Grey-Thompson, Lady Jones and was stated by my right honourable friend the Paymaster- Lady Hayman, asked why the Bill does not grant a General in the other place. right to maternity leave and why it remains within the I thank the noble Baroness, Lady Gale, who made a Prime Minister’s discretion to appoint a Minister as a powerful speech, and others for their points on equalities Minister on leave. As my right honourable friend the impact assessments. It is absolutely right that the Paymaster-General said in the other place during the Government should give proper consideration to the Bill’s passage, Ministers are not employees and therefore equalities impacts of a policy underlying any legislation. do not enjoy employment rights. They are officeholders Although the provisions of this Bill are of narrow appointed by the sovereign on the recommendation of scope, they apply to all ministerial offices and the the Prime Minister of the day. The Bill is careful to opposition officeholders who are paid under the ministerial ensure that the arrangements put in place to allow salary legislation to allow for maternity leave. This Ministers to take maternity leave do not interfere with means that, for those women who are Ministers or are that prerogative in relation to the appointment of considering accepting appointment to ministerial office, Ministers. there is now less of an impediment or barrier to doing Noble Lords, including the noble Baronesses, Lady so when considering starting a family at the same time. Hayter and Lady Grey-Thompson, and many others, This improves equality and removes an injustice. It is said that while the Bill is welcome, it does not go far part of the wider work that I have referred to before, enough. I agree, as I said in my opening speech and which will look at, among other things, parental leave, just now. The Prime Minister has acknowledged that adoption leave and the position of people in public life the Bill does not resolve wider issues such as ministerial who are not Ministers. The Government have undertaken adoption and parental leave, absences for sickness and that, as part of that, they will take into account the other measures—we heard about some in the debate—or equalities issues. The starting point will be to consider unpaid roles and that we should proceed to consider the impacts of the current legislation, as well as work them too. I will come to that in more detail later. from relevant Select Committees. Noble Lords, including the noble Baroness, Lady The noble and learned Lord, Lord Morris, raised Hussein-Ece, also raised maternity provision for Members the Law Officers Act 1997. He is of course right to say of the other place. I pay tribute to the noble Baroness’s that, by virtue of that Act, which he helped steward work as part of the APPG on Women in Parliament, throughParliament,thefunctionsof theAttorney-General which advocated paid cover for Ministers in 2014. In can be exercised by the Solicitor-General. That provides respect of Members of Parliament, it is a matter for important flexibility on a day-to-day basis. However, I IPSA, which is entirely independent of the Government, hope that the noble and learned Lord will recognise and for Parliament itself. I note and welcome the fact that that is not a solution for a planned and ongoing that IPSA has launched a consultation on funding for leave of absence. MP parental leave cover and I encourage all those with an interest to make their views known to IPSA. In addition, the office of Attorney-General, as chief law officer for England and Wales and chief Others raised wider issues affecting pregnant women legal adviser to the Crown, is an important part of our across the country. That was the gravamen of the constitution. Advice on the most serious and sensitive wind-up speech by the noble Baroness, Lady Hayman, issues is provided to the Cabinet by the Attorney-General, whom I welcome to her position on the Front Bench who attends Cabinet. In those circumstances, it is not opposite. Pregnancy and maternity discrimination is about the possibility of the Solicitor-General deputising already unlawful, but the Government have recognised but about ensuring that there is clarity about who that pregnant women and new mothers continue to discharges the role of Attorney-General. face challenges in the workplace. They have consulted on this issue previously and published their response I would now like to address the concerns raised in in the summer of 2019. We are looking to bring the other place and so strongly and repeatedly in this forward reforms to the current statutory framework, House today regarding the language used in this as was committed to in our manifesto. It will provide legislation. In the debate, almost all noble Lords raised security for expecting and new mothers, and flexibility the fact that the Bill refers to “persons”, rather than for employers. “women”, who are pregnant. What others see as neutral I thank noble Lords, particularly my noble friend language, many of your Lordships have perceived as Lord Bourne, for their advocacy on behalf of unpaid rejecting the special role of women in childbirth. Questions Ministers in your Lordships’ House. I recognise that have been raised about whether this is the application this is an issue, and, understandably, a number of of extreme gender ideology. It is not. The overriding noble Lords feel strongly about it. I am happy to drafting principle for all legislation is that we must confirm that the Written Ministerial Statement laid by create the legal conditions to deliver the policy intent. my right honourable friend the Prime Minister specifically I will address the specific issues directly and hope to envisages the use of unpaid roles as being within the be able to give the House some reassurance, but it is scope of further work that the Government have important to disentangle the broader issue of non-specific committed to, following the Bill. The Government will language on the one hand and how it is perceived and present a report to Parliament setting out considerations operates in the Bill. I submit that few would want to on this matter, alongside the other matters that I have go back to the situation before 2007, when, for example, explained. I paid careful attention to the remarks of “he” was regularly used in legislation to embrace 689 Maternity Allowances Bill [LORDS] Maternity Allowances Bill 690

[LORD TRUE] to discuss this matter further before Committee—I women. That, as many have argued, was seen as express my gratitude to those noble Lords who have demeaning. The changes introduced by the then Labour taken the time and engagement so far to enter into Government and supported by successive Governments discussions with the Government and me—I also state of all parties have sought to avoid gender-specific that the Government are open to further discussions pronouns and usages when drafting legislation. Whatever on this issue. I will reflect with colleagues whether we the concerns expressed in this debate—I heard them can commit to doing more on this wider issue as we and will come to them—I have not heard any call for approach the later stages of this Bill. the wholesale overthrow of the inclusive drafting Following my undertakings on this, many noble conventions used since 2007. The Government continue Lords expressed a wish to see reform go further to to believe that that change was right. resolve wider issues around ministerial parental leave. I will come to the specific context of the language The Government acknowledge that the Bill does not of this Bill. However, the Government do not—this resolve these wider issues. That is why we have committed reflects our discussions with the Official Opposition— to further consideration. These are complex issues propose to amend this Bill, for several reasons. First, which require careful further consideration, taking into the specific circumstances of the Attorney-General’s account modern working practices and the wider pregnancy mean that there is some urgency to secure constitutional context. While respecting the independence Royal Assent to allow her to go on maternity leave. of IPSA, the Government will present a report to Secondly, in that context, the current drafting achieves Parliament setting out considerations and proposals. its purpose in legal clarity and certainty. In answer to the noble Lord, Lord Tyler, the As I said in opening, the Government have committed Government’s work will consider how the issues are to return to the House with a report on furthering the resolved in other contexts, including for MPs, other reform begun in this Bill, looking into wider issues officeholders, workers and employees, to draw up including adoption and parental leave, sickness and proposals for how they can be made to work in the unpaid roles. If that review leads to this Bill being context of ministerial office. revisited, the way it is now constructed will facilitate I would say to the noble Baroness, Lady Hayman, further additions for other forms of ministerial leave. that as part of this work, the Prime Minister has asked the Cabinet Secretary to consult with the leader of the The Bill is legally accurate and will allow women to Opposition on the development of the proposals in take maternity leave. To disturb that by amendment advance of publication. The Government will continue now might lead to unfortunate delay or unintended the work following passage of this legislation with a confusion in drafting. I acknowledge, having heard view to laying the report before Parliament as soon as the debate, that this is not a satisfactory position for is practicable, and will in any event update Parliament this House, but we will return to these matters in due before the Summer Recess. course. I hope that I have been able to address some of the Although the drafting of this Bill in the context of issues raised by noble Lords, including those raised by maternity has been criticised by many, I repeat that it my noble friend Lady Noakes and others throughout was neither novel nor intended in any way to denigrate this debate. I urge her to consider withdrawing her women. I and the Government have heard today the amendment, and repeat my offer to have further concerns of both Houses on the “erasure of women” engagement between now and the next stages. from public discourse and legislation. It is not intended The Government agree that Parliament and to do this. The overriding drafting principle is that we Government should seek to lead from the front on must meet the legal requirements to deliver policy working practices, providing as much flexibility as intent. The use of “person” in relation to pregnancy or possible to officeholders to aid the effective discharge childbirth matters in legislation is in line with current of their duties. As my right honourable friend the drafting convention and guidance, but, having heard Prime Minister set out in his Written Statement on the debate today, I will make the following points in this topic two weeks ago, the Government have undertaken reassurance. to look into considerations and proposals, both in the First, I repeat that it will continue to be this round and in detail. Government’s policy to refer to pregnant women in Returning to the essential, this Bill will end the government publications. That point has been made unacceptable situation where a pregnant woman would very strongly by many who spoke. Secondly, the have to resign from Cabinet to recover from childbirth Government have already responded to concerns that and care for her new-born child. For this reason and this drafting could be misinterpreted, and have updated for the reasons outlined above, I again beg to move the Explanatory Notes, which now detail how the that the Bill be read a second time, and urge my noble Bill is intended to support women and explain the friend to withdraw her amendment. drafting practice. The Government recognise the continuing strength of feeling on this issue in both this House and the 6.51 pm other place. We are clear that the drafting is accurate Baroness Noakes (Con): My Lords, I thank all and effective, but we recognise the concern expressed noble Lords who have supported my amendment. today that meeting legal requirements in drafting There have been some wonderful, strong speeches legislation does not mean that there is only one today, far too many for me to refer to individually. The drafting approach available. In addition to committing Minister has been left in no doubt as to the strength of to make myself available to noble Lords who may wish feeling on the matters raised by my amendment. 691 Maternity Allowances Bill [22 FEBRUARY 2021] Procedure and Privileges 692

The vast majority of those taking part today supported Procedure and Privileges my amendment, and I have had a number of messages Motion to Agree during the course of this debate from other noble Lords offering their support. The Minister has absorbed the fact that many of us who have spoken have risked 8.01 pm being targeted by activists as a result. It is not easy to Moved by The Senior Deputy Speaker support women nowadays. We had 34 speakers on the list today, but I am sure That the Report from the Select Committee Further that more would have spoken had they been aware of temporary suspension of the Standing Orders relating the issues. The plain fact is that the expedited process, to hereditary peers’ by-elections, Terms of reference coupled with the recess, meant that the majority of the of the Secondary Legislation Scrutiny Committee, House was not even aware that I had tabled my House procedures and Court Injunctions, Cessation amendment, let alone seen the content of it, until well of Membership and Revision of Standing Orders after the speakers’ list had closed. That is not good for Relating to Public Business (6th Report, HL Paper 223) the health of debate in your Lordships’ House, and I be agreed to. hope that the usual channels will look carefully at this going forward. The Minister responded to the debate with his The Senior Deputy Speaker (Lord McFall of Alcluith) customary dignity, but I was disappointed on two [V]: My Lords, there are three Motions in my name on counts. First, he did not agree to bring forward the Order Paper today. Should the House agree to the Government amendments to Committee on Thursday; first Motion, which is to agree the recommendations I cannot say that I was surprised at that, but I was of the Procedure and Privileges Committee’s sixth disappointed. Secondly, he did not agree to ensure report, the further two Motions are resolutions which that the recent gender-neutral drafting guidance, which give effect to the report’s recommendations. has caused this problem, would be reviewed by Ministers Before we get any further, I express my gratitude to and then by Parliament. We can do nothing in this the Government Chief Whip for providing this time House about revising the drafting guidance, although promptly after the committee produced its report on I am sure that we will be seeking to debate that further 8 February. Such reports are usually presented to the in due course, and my noble friend Lady Nicholson of House as brief business after Questions in hybrid Winterbourne raised that specifically. proceedings, but given the interest that the issue of So far as the Bill is concerned, we do have Committee hereditary Peers’ by-elections has generated on previous on Thursday, and noble Lords across the House will occasions, and representations from a number of noble want to speak to amendments which have already Lords who have indicated that they might wish to take been tabled. Very little change to the Bill is required, part in a debate remotely and who would not currently and it would only add a day or so to the timetable for be able to do so, I was keen to find a slot which would getting Royal Assent if that course were pursued. I facilitate contributions as inclusively as possible. have not given up hope that the Government will work I now turn to the committee’s report. The first issue with us, and I look forward to meeting the Minister it considers is that of hereditary Peers’ by-elections. with other noble Lords later this week. Standing Order 10(6) states that by-elections must If the Government will not work with us to amend take place within three months of the vacancy occurring. the Bill—as I said, I hope they will—there is another On three occasions last year, the House agreed to potential obstacle to our ability to change the Bill in suspend these provisions for short periods, most recently your Lordships’ House, namely the question of whether on 14 December 2020. During the short debate on any vote would be whipped by our Front Benches.I cannot 14 December, I undertook to return to the House early speak for other parties, but my party, in the other place, in the new year once the committee had had the was given a free vote on this Bill, which is right and opportunity for a further discussion and to produce a proper for an issue such as this. I very much hope that further report. our Chief Whip will see the good sense of this on As the report before the House makes clear, there is Thursday. With that, I will not seek the opinion of the a range of views within the committee about the House today and I beg leave to withdraw the amendment. appropriate point to resume by-elections, given the Amendment withdrawn. continuing and unpredictable impact of the Covid-19 pandemic. However, on balance, and in line with the Bill read a second time and committed to a Committee previous recommendations the committee has made, of the Whole House. we agreed to ask the House to agree further to suspend Standing Order 10(6). 6.56 pm In making this recommendation, the committee is Sitting suspended. aware that it is technically possible for us to hold by-elections if we used electronic means to do so. But, Arrangement of Business overall, the sense of the committee is that it would be Announcement difficult for by-elections carried out in this way to be satisfactory. In particular, we felt it was undesirable to 8 pm restrict hustings to a virtual form when those candidates The Deputy Speaker (Lord McNicol of West Kilbride) who are largely unknown to the electorate might be at (Lab): My Lords, the Hybrid Sitting of the House will a significant disadvantage if they are restricted to now resume. I ask Members to respect social distancing. interacting virtually only. 693 Procedure and Privileges [LORDS] Procedure and Privileges 694

[LORD MCFALL OF ALCLUITH] of the next Session. This provision does not apply to In making this recommendation, which would be noble Lords who were suspended or disqualified from implemented if the House agreed to the second Motion sitting or voting for the whole of the Session in question on the Order Paper, the committee was very mindful or to noble Lords on leave of absence for the whole or of the legal position. This question attracted attention part of that Session. The Act defines a Member of the from a number of noble Lords on 14 December and I House as a person entitled to receive writs of summons will take this opportunity to set out the position in a to attend. This therefore includes new Members, and bit more detail. the committee was concerned that any new Members We are clear that the House of Lords Act 1999 who receive their writs towards the end of the Session requires by-elections as a matter of law. Any suspension and are not introduced by the end of the Session could can therefore be only temporary, and at this time it is a be caught by the provision inadvertently and would response to the ongoing national pandemic. In discussion, cease to be Members of the House. This issue was not we agreed that to reflect this position it was important raised during the passage of the Act in either House. that the suspension must continue to be subject to However, Section 2(3)(b) of the Act states that the regular review and decision by the committee and the non-attendance provision does not apply to a Member House, to ensure that the suspension remains if the House resolves that it should not proportionate and necessary in the situation to reflect “by reason of special circumstances.” the circumstances presented by the ongoing pandemic. We believe that the situation of new Members who With that level of caution, we have recommended only have not, for any reason, been introduced, falls within a short further suspension until after Easter 2021, at the “special circumstances” envisaged by the Act. The which point the position will need to be reviewed third Motion in my name would allow the House to again. clarify that provision and avoid an unintended I am of course aware that the noble Lord, Lord consequence. Trefgarne, has tabled an amendment which calls for Lastly, the report asks the House to agree to an by-elections to be resumed forthwith. I will not pre-empt updated edition of our Standing Orders, reflecting the noble Lord, who will be asked to move his amendment changes agreed since the last edition was published when I conclude, but I hope that in setting out the nearly five years ago, as well as some stylistic changes. position in some detail I have at least explained why I look forward to contributions in the short debate the suggestion from the committee is as it is. ahead and I beg to move. The report makes recommendations in four further separate areas. The first of these is to adjust the terms 8.09 pm of reference of the Secondary Legislation Scrutiny Committee to allow it to fulfil the same important role in “sifting”any proposed negative statutory instruments Amendment to the Motion laid under the European Union (Future Relationship) Tabled by Lord Trefgarne Act 2020. It has performed the same role with equivalent instruments under the European Union (Withdrawal) At end insert “but that this House regrets the Act 2018. This is, I hope, an uncontroversial suggestion, further suspension of hereditary peers’ by-elections, and raising it gives me the opportunity to put on and calls for such by-elections to resume forthwith.” record my thanks to the noble Lord, Lord Hodgson of Astley Abbotts, and his colleagues on the committee Lord Trefgarne (Con): My Lords, I think I owe your for the outstanding work they continue to do for the Lordships an apology, as I have caused some confusion House at a time when the parliamentary scrutiny of by my decision not to move the amendment standing statutory instruments continues to be of critical in my name on the Order Paper. I listened carefully to importance. the noble Lord, Lord McFall—the Senior Deputy The report also recommends a change to the Speaker—and have had discussions with the Chief Companion reminding all noble Lords of their Whip, and I think it would be wrong to impose a tense responsibilities in exercising their rights under debate on your Lordships this evening. For that reason, parliamentary privilege, in particular that in exercising I have decided not to move the amendment I tabled. our undoubted right to free speech we have due regard Of course I remain of the view that the by-elections to the relationship between Parliament and the courts. are important and hope they will be resumed very This change recognises that, although the Companion soon. I hope that the noble Lord, Lord McFall, will gives clear guidance on the application of the sub take the matter back to the Procedure Committee judice resolution, it has not done the same for Members immediately after Easter and that the by-elections will proposing to raise issues subject to court orders and resume immediately thereafter. injunctions. We hope that increased clarity will be helpful to noble Lords. Amendment to the Motion not moved. The report also invites the House to address an issue which could potentially cause confusion arising The Deputy Speaker (Lord McNicol of West Kilbride) out of the House of Lords Reform Act 2014 and the (Lab): No apology needed, Lord Trefgarne. We have cessation of membership of this House. Noble Lords had a number of scratches so, to give everyone an will be aware that the Act provides that a Member opportunity to be ready, I will name the speakers who does not attend the House during a session of six who have scratched: the noble Lords, Lord Strathclyde months or longer ceases to be a Member at the beginning and Lord Hunt of Kings Heath, the noble Earl, 695 Procedure and Privileges [22 FEBRUARY 2021] Procedure and Privileges 696

Lord Shrewsbury, the noble Lords, Lord Cormack “Some Members are here in the Chamber,others are participating and Lord Snape, and the noble Baronesses, Lady Fox remotely, but all Members will be treated equally.” of Buckley, Lady Altmann and Lady Hoey. I call the Thirdly, the rule can give rise to the highly undesirable next speaker,the noble Lord, Lord Faulkner of Worcester. situation where Members are denied the opportunity to participate in a debate on a Commons amendment which has not been discussed in your Lordships’ House 8.11 pm previously. I cite the proceedings on the Fisheries Act 2020 last year as evidence of that. The Bill started in Lord Faulkner of Worcester (Lab) [V]: My Lords, I your Lordships’ House on 29 January 2020. It received congratulate the Senior Deputy Speaker on the way in our normal thorough scrutiny, with four days in which he introduced the sixth report from the Procedure Committee in March and two on Report in June. At and Privileges Committee. Although I am listed as a some point, the Government decided that they wished member of the committee, I shall not attend my first to add a permissive extent clause—a PEC—which meeting of it until next Tuesday, 2 March, so I can would give them the power to overrule the wishes of claim no part in the authorship of this report—although the democratically elected Governments of the Channel I am 100% supportive of the proposals in it. Islands on fisheries matters if they wished to. This was I will concentrate on just two subjects. First, the hugely controversial and caused great concern in debate is an opportunity to congratulate all our brilliant and . There is no need to go into the detail of staff on the extraordinarily successful way in which that today as the arguments were extensively aired in they have steered us through the implementation of all our ping-pong debate on 12 November. the new rules relating to the management of the The crucial point as far as our procedures are hybrid House. Like most noble Lords, I cannot wait concerned is that any Member who had not signed the for us to return to normal times, but everyone concerned amendment tabled by the noble Lord, Lord Beith, or with getting us to where we are now deserves our who was not physically present in the Chamber, was heartfelt thanks for being able to help us keep the not able to take part. This was even though there had show on the road. been no reference to the new clause on the PEC tabled Recognition of what the House has achieved came by the Government throughout any Lords stage on this morning, rather unexpectedly, in a whole-page the Bill and indeed, during the Commons consideration article in the Guardian entitled “Peer pressure: Lords at Second Reading and in Committee. embrace lockdown technology and set the pace for It is particularly regrettable that a Member who virtual reform”. I know we should not regard the was most upset at being prevented from taking part—she other place as our rival, but the paper’s political was following medical advice and isolating at home—was correspondent offered the view that, compared with my noble friend Lady Pitkeathley,the only Guernsey-born the Commons, Member of your Lordships’ House. She was able to “it is the Lords—with an average age of 70—that has seemingly send me her views and I included them in a speech I embraced the modern era more thoroughly”. made in the debate. It would have been much better Paraphrasing the Senior Deputy Speaker, the article had the House been able to hear from my noble friend says herself. That is why this one aspect of the hybrid “the chamber has a commitment to inclusive participation, and procedure really needs to change. the option to speak remotely assists this”. That is a commitment he repeated in his opening speech this evening. 8.17 pm This brings me to my second point: how we handle Baroness Miller of Chilthorne Domer (LD) [V]: consideration of Commons amendments—ping-pong. My Lords, it is a pleasure to follow the noble Lord, The guidance note from the Procedure Committee Lord Faulkner of Worcester, and I certainly associate says: myself with his comments on the ability we have now “When the hybrid House considers Commons Amendments of being a virtual House. I appreciate being able to and there are no counter propositions to the Minister’s motion or take part virtually, and the staff certainly need to the Commons message, the only speakers will be the mover of congratulating on getting us to understand the technology the original Lords amendment, or another sponsor of that amendment and enabling it. with the mover’s agreement, followed by frontbenchers and a Crossbencher nominated by the Convenor. They can participate I want to speak on a narrow point this evening. physically or remotely … When there are counter propositions to This Motion talks about the revision of Standing the Minister’s motion or to the Commons message, in addition to Orders, and I want to ask about Standing Order 1(2). the members above, the movers of counter propositions may This defines who may sit in the Chamber, besides participate either physically or remotely. Any other member may Peers, when Her Majesty addresses the House. They participate physically, subject to usual seating arrangements and include diplomats and, as the Standing Order says at the capacity of the Chamber.” the moment, “Peeresses”. I suggest that this has escaped It is therefore not possible for Members who have not revision and has not kept pace with all the modern signed the amendment, but wish to speak remotely, to equality legislation that it should have,because “Peeresses” do so. are defined as a woman who is the wife of a Peer. By I believe that this guidance should now be reviewed definition, it excludes men who are husbands of Peers. for three reasons. First, it conflicts with the House’s It excludes men who are in marriages with a same-sex advice to Members to work from home. Secondly, it partner—although, interestingly, it possibly does not contradicts the statement made every day from the exclude the wife of a female Peer should they be in a Woolsack by the Lord Speaker or one of his deputies: same-sex marriage. 697 Procedure and Privileges [LORDS] Procedure and Privileges 698

[BARONESS MILLER OF CHILTHORNE DOMER] Meanwhile, we can at the very least postpone any At the very least, this Standing Order needs to be more by-elections while we are suffering this awful urgently amended to be inclusive and reflect current pandemic, which I hope will allow us time to consider equality legislation that should govern your Lordships’ ending them permanently. House as well as the rest of the country. Maybe we will Finally, I raise another issue while we are on the still have a lot of distancing when Her Majesty addresses report from the Procedure and Privileges Committee. the House for the next Session, but maybe we will have My good friend, the noble Baroness, Lady Miller, has reverted to normal. I hope that, whichever way it is, just referred to the Queen’s Speech, and I ask whether this Standing Order can be amended so that our the Senior Deputy Speaker will take this opportunity House will reflect the sort of equality we have come to to inform the House as to whether the committee is expect the rest of society to follow. now considering the arrangements for the end of the current Session and the start of the new one, including The Deputy Speaker (Lord McNicol of West Kilbride) the Queen’s Speech, and what arrangements there (Lab): We have had one further scratch, from the might be, given the current circumstances? It is a very noble Lord, Lord Mancroft, so after the noble Lord, important issue; I would expect the Procedure and Lord Foulkes of Cumnock, we will hear from the Privileges Committee to be considering it, and I hope noble Lord, Lord Northbrook. that the Senior Deputy Speaker will confirm that and will be able to tell the House tonight what the current 8.20 pm situation is. Lord Foulkes of Cumnock (Lab Co-op) [V]: My Meanwhile, I say once again that I welcome this Lords, I am really grateful to my noble friend Lord report, I hope it will be approved and I am most grateful McFall, the Senior Deputy Speaker, for arranging this —I have never said this before—to the noble Lord, debate today in a manner in which we can all Lord Trefgarne, for agreeing not to move his amendment. participate—virtually, if we wish. I do hope that, given the announcement in the other place today, it will not 8.24 pm be long before we are all able to come into the House Lord Northbrook (Con) [V]: My Lords, I listened and participate properly. I look forward to that carefully to the introduction from the noble Lord, opportunity. I must say I find it very strange today Lord McFall, and his summary of the reasons of the that speakers are dropping out; we have just had Procedure and Privileges Committee, but I found them another. They seem to be falling out quicker than the unsatisfactory. The committee’s recommended delay English cricket team; it is really quite astonishing. in reinstating these by-elections has gone on long I greatly welcome this report, particularly in relation enough. Whatever some noble Lords may think of to the by-elections, and I hope it will be approved. them, even some of their fiercest critics, such as my Notwithstanding the article in the Guardian today that noble friend Lady Noakes, believe that, as long as they my noble friend Lord Faulkner referred to, I am afraid are clearly set down in statute, they should still be that the House of Lords has not had a good press held. There are now four vacancies and thus four seats recently.The explosion in the number of Members—which in the House unfilled for no apparent reason, while the results from the Prime Minister being eager to use, or number of new life Peers—as the noble Lord, Lord maybe abuse, his patronage—when the Lords had Foulkes of Cumnock, wisely said—has expanded much agreed, as Members will recall, to cut our numbers, more proportionately. has given our critics plenty of ammunition to start Last month, local council elections were reinstated with. When our new Members include one rejected by for May, so there is no reason why we cannot go ahead the Appointments Commission, the son of a KGB with our by-elections in a Covid-secure way. With agent and nearly all the renegades who backed the respect, I disagree with the Procedure Committee and Tory Vote Leave campaign, and our numbers increase the noble Lord, Lord Grocott, about their views on again to over 800, there are very few arguments with holding them, but first I congratulate the noble Lord which we can mount a defence at the moment. on reaching his 80th birthday last November. He said, We in the Labour Party plead not guilty on this in last December’s debate: issue of numbers, in that we have been able to stick to “How on earth do you arrange Covid-safe hustings with the formula agreed to cut our numbers. Our new 27 candidates and a potential audience of 800?”—[Official Report, appointments number fewer than half the sad deaths 14/12/20; col. 1427.] and retirements among Labour Peers over the last There is no requirement for hustings in the legislation, couple of years, and our appointments are all new the House of Lords Act 1999. Each candidate could working Peers. These are anachronisms, but the greatest quite easily present himself on Zoom; the hustings anachronism of all is the system of by-elections for have never had an audience of 800. Even if all the hereditary Peers. It is bad enough that the hereditaries audience could not hear them at once, the proceedings have a substantial place in the second Chamber, but could still be recorded. In summary, technology could the fact that they are the only group—now all men—able easily be used to solve the problem of hustings and the to automatically renew their membership through this voting system could be made entirely postal. At his discredited and farcical procedure rubs salt into an young age, the noble Lord, Lord Grocott, still has already open wound. plenty of time to pursue his abolition Bill. The House is in urgent need of reform and we If the Procedure Committee continues to recommend could and should start with ending this farce, as my unnecessary delay, I see no reason why legal advice noble friend Lord Grocott, who will be speaking later should not be taken on statute lawbeing broken—namely, in the debate, regularly and rightly urges us to do. Section 2 of the House of Lords Act 1999. 699 Procedure and Privileges [22 FEBRUARY 2021] Procedure and Privileges 700

Finally, I fully support the comments of the noble 8.33 pm Lord, Lord Faulkner of Worcester, on revision to the The Earl of Caithness (Con): My Lords, I thank the consideration of Commons amendments. Senior Deputy Speaker for his introduction to the debate. I had hoped that he might lift the lid a little 8.27 pm more on the arguments going on in the Procedure Committee, but he followed his report almost word for Lord Clark of Windermere (Lab) [V]: My Lords, word. I hope that when he sums up he will go into a I am delighted to play my part in this debate and I little more depth. admire the way that the Senior Deputy Speaker, the noble Lord, Lord McFall, introduced it in a cautious, There has been considerable concern in the last concise and clear manner. It is a potentially quite 12 months or so about our ability to hold the Government divisive debate and there will be disagreements. I disagree to account. Equally, there is concern about how the with my immediate predecessor, the noble Lord, Lord House is run and the role played by those who try to Northbrook, but I cannot disagree with the way in help us to run ourselves. The commission has come in which he put forward his argument, and I appreciate for severe criticism, and is possibly an institution no his argument. I was similarly impressed by the noble longer fit for purpose. The Procedure and Privileges Lord, Lord Trefgarne, not moving his amendment. Committee is again urging your Lordships to suspend Again, that was a good example of the House at its the law for reasons that are weak and rather poorly set best. out. That is something that we will need to return to and seriously consider in future. I declare my interests, as recorded in the register. I I cannot help but feel sympathy for my old friend am a member of the House of Lords Appointments the noble Lord, Lord Foulkes of Cumnock, with his Commission, but I do not speak on behalf of that concern about the House of Lords Act 1999. Many of commission in any way. It is right and proper to draw us disliked the Labour legislation but he was a member that to the attention of colleagues. of the Labour Party, as was the noble Lord, Lord Before I continue, I pay tribute to my noble friend Grocott—and, as the noble Lord, Lord Grocott, was Lord Grocott for his tireless campaign to abolish the the Prime Minister’s bag carrier, they had it in their by-election of hereditaries in this House. Anybody power to make the Bill better than they are now saying who listens to his speeches cannot help but smile. He it was. speaks with humour, charm and a completely non- When one comes to consider the reasons why the offensive manner. I look forward to his contribution Procedure and Privileges Committee is urging your to this debate, because he has already declared his Lordships to suspend hereditary Peers’ by-elections position and expertise on the subject. again, I wonder whether the Senior Deputy Speaker realises that, in the City and all around this country We all come into this House from various sources. and in every other country, interviews are being held Some of us are prime ministerial appointments to remotely to appoint people to company boards or jobs become Ministers. Others are nominated from a political where they do not know anybody. The report, which party or are Cross-Benchers. Then of course there are was quoted by the Senior Deputy Speaker, states that the people’s Peers, and, finally, that group of people “it is unsatisfactory to restrict hustings to a virtual form where who have been here—or their families have—before candidates largely unknown to the electorate might be at a any of us: the hereditary Peers. I happen to agree with disadvantage.” my noble friend Lord Grocott, but I shall put forward Companies are choosing people they do not know by a suggestion that might help us a little along the way. Zoom. I spoke to a director of a company two days Four of the groups of people who have entered this ago, and he had not met a single other director of that House have done so in a similar way.Their backgrounds, company when he was appointed. If the City and credentials and suitability—not in a political or a other companies can do it, why can the House of Lords personal sense or anything like that, but purely on the not? Are we that incapable? The reasons set out in the grounds of probity—are basically examined by the sixth report are—I shall use a phrase that the Senior House of Lords Appointments Commission, and we Deputy Speaker will understand—just peely-wally. very rarely disagree with the suggestion of a nominee I support what the noble Lord, Lord Faulkner of that is put to us, usually by the Prime Minister. Worcester, said about consideration of Commons It is not a real disadvantage to those of us who have amendments. I have raised this with the Senior Deputy come in and been adjudged clean; at least we know Speaker on the Floor of the House before. What that our backgrounds have been checked as to whether further discussions has he had with the Lord Speaker we pay taxes in the UK, whether we are a threat to about this? His committee gives us one lot of advice national security and so on. It is important that such and the Lord Speaker writes letters to us telling us to things are closely examined. However, there is one stay away and abide by the rules. You cannot do both group of people who enter this House who do not go if you wish to speak on consideration of Commons through that process: the hereditary Peers. We should amendments. be moving along the route of making sure that at some When one stands back and looks at the legal aspect stage individual hereditary Peers, when they have their of this, it makes one wonder whether the committee by-elections, go before the House of Lords Appointments has not been swayed by the hegemony of those who Commission. That that is not for us; it is something are against hereditary Peers’ by-elections. The decision that the hereditary Peers themselves could do, and it this time is not sensible but more of a political decision. would make their standing stronger with people who Having said that, I was grateful for some of the words might be a little doubtful. that the Senior Deputy Speaker used, and I hope that 701 Procedure and Privileges [LORDS] Procedure and Privileges 702

[THE EARL OF CAITHNESS] or to the public. I noticed that none of the three Peers he will use his persuasive powers to get the rest of the who have spoken this evening in favour of the by-elections committee to agree a change at the next meeting soon returning had anything to say on this. The truth is that after Easter. there have been no downsides whatever to the suspension, and we all know why. These elections are ridiculous; 8.38 pm they are absurd; they are supported by no one, either Lord Grocott (Lab) [V]: My Lords, I would certainly in Parliament or outside, except for a handful of like to add my thanks to my noble friend Lord McFall Members of this House. That fact, of course, is the for the way in which he has introduced this debate and elephant in the room in today’s debate: that without for arranging for it to be at a time when we do not the opposition of a couple of Members—the noble delay the normal proceedings of the House earlier in Lord, Lord Trefgarne, and the noble Earl, Lord Caithness the day. I also thank my noble friends Lord Clark of —who have used every procedural trick in the book to Windermere and Lord Foulkes, who said such kind block any reform, these by-elections would have been words about my Bill to abolish the hereditary Peers’ scrapped years ago. by-elections, for their continued support for that objective. Three times in three Sessions of Parliament I have I need to correct the speech made by the noble Earl, introduced a Bill to scrap these by-elections. Whenever Lord Caithness, in two respects. First, he said that we votes have taken place, the majorities in favour of the were suspending the law on these by-elections. We are Bill have been huge, with support from Members in all not suspending the law at all; we are suspending our parties and in all parts of the House. If only the Standing Orders. He also said that the Procedure massive majority in favour had been respected, we Committee’s report made a political recommendation. would not have been having this debate today: the That is strange when the recommendation about the by-elections would be history. Now we have before us hereditary Peers’ by-elections made in December was the report from the Procedure Committee. The only carried by 13 votes from all parties in favour of their criticism that I would make is that the suspension until continued suspension to four votes against. That is Easter is too short. I would have suspended the pretty conclusive that there is widespread support for by-elections at least until July. By the way, that would the suspension across the House. also give the House sufficient time to consider my Bill, which received its Second Reading on 23 March last That does not surprise me because it will soon be a year. year since the Leader of the House moved a Motion—it was the Leader who did it—to suspend the hereditary I emphasise again that a further extension would Peers’ by-elections. She did so for the persuasive and not require any change in the law. All that it requires is common-sense reason that we were experiencing huge a decision by the Procedure Committee to recommend challenges in operating the House and keeping people to the House a further suspension of Standing Order 10(6). safe during the coronavirus crisis. The Leader This is entirely within our legitimate powers to do. recommended that the suspension should last for almost Like the Commons, we are unchallenged masters, and six months—quite a long suspension—from 23 March rightly so, of our own Standing Orders. As for today, I to 8 September. Since then, we have had two further simply hope that the House will support the Motion in suspensions, bringing us to today’s Motion—which I the name of the Senior Deputy Speaker. fully support—which further suspends the by-elections until after Easter. It implicitly repeats the same message 8.44 pm that we heard from the Leader: that we are not out of Lord Balfe (Con): My Lords, I thank the Senior the coronavirus woods; that holding by-elections requires Deputy Speaker for producing this report, and for hustings, which would clearly be impossible, unwise or being the Senior Deputy Speaker who is regularly both; and that the time and energies of our clerks’ criticised for not going as far as we would like but department are far more thoroughly engaged in dealing probably not as far as he can go anyway. with rather more pressing issues than the restoration As usual, I will make myself somewhat unpopular of by-elections for four hereditary Peers. with this side of the House, because I fundamentally Let us, therefore, take stock of what has been the agree with the noble Lords, Lord Grocott and Lord effect of a 12-month suspension. Has anyone suffered Foulkes. I do so on a very good, historical basis. Our as a result of it? The answer is no. Has it cost any noble friends the hereditary Peers have said that this money? The answer is no: in fact, it has saved several was part of the 1999 settlement, and it cannot be hundred pounds, which the elections cost to run. Has undone until there is a final settlement, but there will the suspension affected the workings of the House? never be a final settlement. We had the Lloyd George/ The answer is no: if anything, it has helped us, because Asquith reforms, the Attlee reforms, the Macmillan the House authorities have been able to concentrate reforms of hereditary peerages, and the Blair reform. on more pressing matters. What about the world outside Let us not kid ourselves: the 90 hereditary Peers—we Westminster? Has the press been chasing the story of can discount the extra two who are royal warrant why there have been no by-elections? The answer, of holders—were part of a deal which, if I remember course, is no. Have the public been demanding, “Bring rightly, cost the then Leader of the Conservative group back the by-elections”? The answer is no. If anyone his job. He fell out with , who was then has had any correspondence on this, electronic or the leader of the Opposition, because the latter felt otherwise, please send any copies to me. that the deal should not have been done in the way The noble Lord, Lord Trefgarne, gave no evidence that it was, but it was done, and we have now moved whatever to suggest that restarting the by-elections on 20-odd years. To my mind, it is now time for some would bring any benefit to the Lords, to the constitution more reform. 703 Procedure and Privileges [22 FEBRUARY 2021] Procedure and Privileges 704

In the run-up to the last election, after it had been long we can get around to doing what we should be called, I spoke to a very senior member of the Labour doing. A self-regulating House should be a “self-sort Party in the other House about the Grocott Bill. I it out a bit better” House. asked, “Do you think you’ll support it?” This person said, “We don’t need to support it. They’ll be gone 8.51 pm within three months. It’ll be a great idea because we could even up the numbers of the House by cutting Lord Stoneham of Droxford (LD) [V]: I thank the down the number of Peers in the Conservative Party, Senior Deputy Speaker for introducing this debate. and no one is going to get up to defend the Lords. The hour is late. Fortunately, the arguments on all five We’ll be popular all round.” issues in this report were properly discussed by the Procedure Committee, of which I am a member. Tonight, We need to step back. We keep going on about we have only discussed one issue, but I am not going to being a self-regulating House, yet we cannot even delay the House by raising the other four, which I manage to get Bruce’s Bill debated. That is how self- agree with. regulating we are, and we need to look at that. It I agree too that the hereditary Peers’ by-elections would be easy to abolish the 90, and to reform the should be delayed, as is recommended by this report; Lords. The one thing I can project and predict is that the answer is that public elections in the country at this side of the House would not like it. We would be large have been postponed, and it would be perverse the ones who would lose out, because if we do not get for us to call elections for us in the House of Lords down to reforming the institution in such a way that when the country cannot have its elections. By April it broadly commands support, we will find it thrust should be clear whether we will have elections or not, upon us, and there will be no hereditary Peers. As my and I know it is currently the Government’s intention friend—I still have the odd friend in the Labour Party— to do so. said, “We’ll have them all out within three months”. The only issue we have discussed, then, is hereditary elections, but there were two good swerves during the I hope that the Senior Deputy Speaker continues debate, by the noble Lord, Lord Faulkner, raising the with his zeal for reform, and I would make a practical issue of ping-pong procedures, and by my noble friend suggestion. The Grocott Bill has never really been Lady Miller raising the issue of Peeresses in clause tested. I suggest that the Senior Deputy Speaker put it 1(2). I support both of them in hoping that we will to the committee that by-elections be suspended until look further at those issues in the Procedure Committee, the Grocott Bill has been disposed of. It is as simple as particularly ping-pong. My noble friend’s point on that, and it is a challenge to the Government Front equality seems long overdue for reform. Bench to make it possible. We all know that it could be made possible. What have we been doing this afternoon? I hope that, in the coming months, we will also We have been debating the Suella Braverman maternity learn from the best features of the hybrid system of Bill, which came out of nowhere, because it is needed. this House to see how might improve our procedures If the devil drives, you can find solutions. That solution going forwards, when the pandemic and lockdown could be found. If we look at the numbers, we see that finally end. There have been some good features; the for the first full-House selection of an hereditary Peer staff deserve due credit for taking us down the route on 27 March 2003 there were 661 eligible voters. By they have. A year ago, none of us would have believed March 2017, the figure had gone up to 803. It then what we achieved over the last year in the most trying went down in January 2019 to 785 because of the circumstances. restraint of , but we are now back to 840. As the time is short, I thank the noble Lord, Lord Trefgarne, for withdrawing his amendment. I welcome There has got to be reform, and it will have to go this report, and hope the House will approve it, and much further than hereditary Peers. We must find a give my thanks to the Senior Deputy Speaker for way of reducing the size of the House without stopping encouraging this debate and leading it. new people coming in. I see my noble friend Lord Hannan sitting next to me, and he is going to play a 8.53 pm valuable role in this House, and we have to have a series of reforms which enable retirements so that the Baroness Hayter of Kentish Town (Lab): My Lords, Benches can be refreshed. It is no good pulling up the I start with three thanks. First, I echo the thanks of drawbridge and saying that no one else can come in. my noble friend Lord Faulkner to all the people who have been involved—including the staff and back-up— If we are a self-regulating House, let us get down to who have allowed this hybrid House to continue and, doing it, and let the Senior Deputy Speaker and his indeed, to improve each time. It is working well, as are committee look at some creative ways of doing it. I the votes. Secondly, I thank the Senior Deputy Speaker have already pointed out to him that I have been given and the Procedures and Privileges Committee for their some very good legal advice that we could ration the work in bringing us this report. Thirdly, I thank the entry of Members into the House. The Queen creates noble Lord, Lord Trefgarne, who has made a wise and Peers, on the recommendation of the Prime Minister, good decision not to press his amendment. He probably but it is the House that seats new Peers. Let us explore realises that it would be fairly inappropriate for us to it. It was done in Victorian England, incidentally, take a view on that, when we have heard from the which is where the legal precedent comes from. I ask Prime Minister today that there may be a cautious for some creative thinking. I applaud the Senior Deputy staged way out of lockdown but it is still some way off. Speaker and all his work, and I hope that before too When there are still 120,000 families feeling the loss of 705 Procedure and Privileges [LORDS] Procedure and Privileges 706

[BARONESS HAYTER OF KENTISH TOWN] They have done a terrific job on the hybrid House. I a loved one, our talk of returning to normal would know from the feedback I have received from Members seem a little foreign to them. It was a correct decision, how generous the staff have been with their time and and was helpful to the House. in their engagement with people. I shall certainly take As the noble Lord, Lord Stoneham, just said, we these remarks back. are still focusing on how on earth we make the May On ping-pong, the next meeting of the Procedure elections work and making sure that every voter can Committee is on 2 March. I have had quite a few take part. These are highly significant votes. exchanges with different Members on ping-pong; that The noble Earl, Lord Caithness, is undermining his will be an issue for consideration on 2 March. The own position if he thinks that electing someone to this noble Earl, Lord Caithness, the noble Baroness, House is anything like electing someone to the board Lady Miller, and the noble Lords, Lord Faulkner and of a company.Frankly, electing someone to a legislature Lord Northbrook, all brought that up, so I will put for the rest of their life is a serious matter. It does not that issue forward. strengthen the argument to compare it with what it is On the issue of Standing Order 1 from the noble possible to do on Zoom for a company board. Baroness, Lady Miller, regarding equality and I wish to make two or three other points. It is inclusiveness, the committee intends to do a wholesale interesting that the noble Baroness, Lady Miller, talked review at some stage in the hopefully near future as about our maybe needing to alter our language to well as updating the Standing Orders. I heard what she allow wives to sit here for the State Opening. Husbands has said tonight and will put that to the committee. already do, albeit that this is not in the wording. This would open the House up to more equality, whereas The noble Lord, Lord Foulkes, made the point these by-elections are for men only; they bring only about arrangements for State Opening during the men into this House. It is questionable whether we are pandemic. The Procedure Committee may need to complying with equal opportunities legislation when consider that and certainly will, but the timing of we are able to take a view of appointing only men to a Prorogation is not within our remit or understanding. position of such importance. It lies elsewhere, so I cannot satisfy him on that point. Unlike some of my more radical friends to whom The noble Lord, Lord Northbrook, made a point the noble Lord, Lord Balfe, referred, I have not wanted about the unfilled seats; yes, we have four unfilled to get rid of the existing hereditaries. We love them. seats—two whole-House seats, one Conservative My noble friend Lord Grantchester was here until a and one Labour. I have already taken legal advice on moment or two ago. We are talking only about not that and, if I remember correctly, the noble Lord, having any more. We do not have an open door and a Lord Strathclyde, asked for it in the last debate. I sent taxi waiting outside. him a copy of that letter and I think a copy was put in My noble friend Lord Clark of Windermere made the Library, but for the sake of Members I will repeat the point that anyone standing in a hereditary by-election it: under the Life Peerages Act, Her Majesty has the should be subject to the same scrutiny as other noble power to confer a peerage for life. That peerage entitles Lords. This should be looked at. The suggestion for the holder reform made by the noble Lord, Lord Balfe, should go “to receive writs of summons to attend the House of Lords and quickly to the committee or to the House authorities sit and vote therein accordingly”, to see if it could be taken forward. so it cannot refuse to accept someone as a Member of I do not like our second guessing a committee that the House by stopping their introduction. we set up to do the work for us. It hears many more The noble Lord, Lord Clark, made very good points views; its members can talk in confidence and have a about the House of Lords Appointments Commission. to and fro on the ideas. We asked the Procedure and I know he is a distinguished member of that commission, Privileges Committee to carry on that work for us—to along with others. I will refer to what he said here but, look at the ups and downs, the pros and cons, and to again, that issue is outwith the Procedure Committee exercise its judgment on our behalf on choices that the agenda. House needs to make. We would be ungrateful if we tried to second guess and undermine its wisdom and The noble Earl, Lord Caithness, also made the thought and to substitute our judgment for that of its point about the Procedure Committee, and the noble members. I may not like everything they come up Baroness, Lady Hayter, said that a lot of debate goes with, but they would have to take leave of their senses on in the committee. I can assure Members that the to want to put my judgment before theirs. The committee extent of debate is great and that I take anything said has come up with the right bundle of proposals and on the Floor of the House back to the committee and we should give it our full accord. tell it exactly what was said. Everything said tonight will be taken back, but noble Lords should keep in mind that the range of views we heard tonight 8.53 pm has been wide and deep—it is just the same on the The Senior Deputy Speaker (Lord McFall of Alcluith) committee itself. [V]: My Lords, I thank all noble Lords and noble I will take back the point from the noble Lord, Baronesses who have taken part. We have had an Lord Grocott, that suspension until Easter is too excellent and wide-ranging debate. short, but I do not know where that one will go. I do not wish to detain the House much longer, but However, I admire the noble Lord’s campaigning zeal; I will quickly respond to some of the points made. The he does it with enthusiasm, integrity and civility at noble Lord, Lord Faulkner, complimented the staff. all times. 707 Procedure and Privileges [22 FEBRUARY 2021] Cessation of Membership 708

The noble Lord, Lord Balfe, has raised the issue of Hereditary Peers: By-elections suspending the by-elections with me before. He has Motion to Agree also engaged with me on the issues of reform and reducing the size of the House. The Lord Speaker, 9.05 pm having established the Burns committee, is really keen on that issue. The noble Lord, Lord Balfe, asked me if Moved by The Senior Deputy Speaker I would raise these issues in my weekly discussion with the Lord Speaker. I certainly will, and I will take the Further to the Orders of 23 March, 7 September points he made back to the Lord Speaker; in fact, I and 14 December 2020, that Standing Order 10(6) have a meeting with him tomorrow. (Hereditary peers: by-elections) be further suspended pending a further review by the Procedure and The noble Lord, Lord Stoneham, is correct that we Privileges Committee after any adjournment of the discussed valid issues in the committee. Ping-pong is House for Easter 2021. a live issue. As mentioned, we will be discussing that on 2 March, and I assure Members that it will be an Motion agreed. extensive debate. The noble Lords, Lord Grocott and Lord Balfe, made different suggestions of what may be legally possible. If they feel I have missed anything Cessation of Membership out on the legal aspect, they can write to me or contact Motion to Approve my office and I would be happy to pass on information, as I did to the noble Lord, Lord Strathclyde, at the last 9.05 pm meeting. Moved by The Senior Deputy Speaker I hope that covers most of the points Members made tonight. I was delighted that we had an opportunity To move to resolve that, further to section 2(3)(b) to have this debate. It arose from discussions I had of the House of Lords Reform Act 2014, section 2(1) with the Government Chief Whip, so I thank him of that Act should not apply to any member of the again for that. I thank all Members for their contributions, House who is entitled to receive a writ of summons for the way they delivered those contributions and for but has not been introduced to the House. the positive engagement we have had in this debate. I commend the Motion to the House. Motion agreed.

Motion agreed. House adjourned at 9.06 pm.

GC 99 Financial Services Bill [22 FEBRUARY 2021] Financial Services Bill GC 100

Grand Committee (2) “Duty of care” means an obligation to exercise reasonable care and skill when providing a product Monday 22 February 2021 or service. The Grand Committee met in a hybrid proceeding. (3) “Consumer” has the meaning given in section 2(3) of the Consumer Rights Act 2015.” (3) The FCA must make rules in accordance with Financial Services Bill section 137CA (FCA general rules: duty of care) of the Committee (1st Day) Financial Services and Markets Act 2000 which come into force no later than six months after the day on 2.31 pm which this Act is passed.” The Deputy Chairman of Committees (Baroness Member’s explanatory statement Healy of Primrose Hill) (Lab): My Lords, the hybrid This amendment would impose on financial services providers Grand Committee will now begin. Some Members are a general duty of care to their clients. here in person, respecting social distancing, and others are participating remotely, but all Members will be Lord Sharkey (LD) [V]: Amendment 1 would require treated equally. I must ask Members in the Room to the FCA to … wear a face covering except when seated at their desk, “make rules introducing a duty of care owed by authorised to speak sitting down and to wipe down their desk, persons to consumers in carrying out regulated activities” chair and any other touch points before and after use. under FSMA 2000. The Government understand the If the capacity of the Committee Room is exceeded, value of a duty of care; they are about to introduce or other safety requirements are breached, I will exactly that in the forthcoming online harms Bill. immediately adjourn the Committee. If there is a They understand the immense harm that can be done Division in the House, the Committee will adjourn for to consumers without this duty, especially in complex five minutes. and asymmetric environments. I will call Members to speak in the order listed. We have already seen too many examples of the During the debate on each group, I invite Members, immense harm inflicted by our financial services industry including Members in the Grand Committee Room, on ordinary consumers—I am thinking here of PPI, to email the clerk if they wish to speak after the which was a product sold to consumers at an Minister, using the Grand Committee address. I will 87% commission rate. The scandal ended up costing call Members to speak in order of request. The groupings £53.8 billion in redress and administration costs. I am are binding. Leave should be given to withdraw also thinking of mis-sold interest-rate hedging products amendments. When putting the Question, I will collect and the general and widespread unfair treatment of voices in the Grand Committee Room only. small businesses in financial difficulty. There was also the long-running saga of overcharging for overdrafts I remind Members that Divisions cannot take place and of leaving loyal customers languishing in poor-value in Grand Committee. It takes unanimity to amend the products. Bill, so if a single voice says “Not Content”, an amendment is negatived; if a single voice says “Content”, The existing rules did not prevent any of these a clause stands part. If a Member taking part remotely things, which is not a surprise. There is no explicit wants their voice accounted for if the Question is put, requirement in FSMA or in the FCA’s principles for they must make this clear when speaking on the group. business for firms to prevent harms to customers. The We will now begin. I call the noble Lord, Lord Sharkey. FCA’s “treating customers fairly” business principle is substantially weakened by the legal principle in FSMA We cannot hear the noble Lord, Lord Sharkey, so I that consumers should will have to adjourn the Committee for a few minutes while we sort this out technically. “take responsibility for their decisions”. This fails to take into account the imbalance in power 2.32 pm and information between firms and their customers. Sitting suspended. Things are not getting any better. Recent examples of misbehaviour include the banks’ response to the 2.44 pm authorised push payment fraud, inadequate assessment The Deputy Chairman of Committees (Baroness Healy of affordability by payday lenders, the scandal in of Primrose Hill) (Lab): I call the noble Lord, Lord Woodford Investment Management, sales of risky Sharkey, again. investment products on the boundary of the FCA’s perimeter and the outrageous behaviour of some insurers during the pandemic trying to welsh on their business Amendment 1 interruption policies. Moved by Lord Sharkey The Minister will be aware of the Banking Standards 1: Before Clause 1, insert the following new Clause— Board’s annual survey of 29 member banks’ behaviour “Duty of the FCA to make rules introducing a duty of care and competence. There was some welcome improvement (1) The Financial Services and Markets Act 2000 is in these areas between 2016 and 2017 but none since. amended as follows. In 2019, 13% of employees of these banks said that (2) After section 137C, insert the following new section— they had seen instances of unethical behaviour being 137CA FCA general rules: duty of care rewarded and 14% felt that it was difficult to make career progression without flexing their ethical standards. (1) The power of the FCA to make general rules includes the power to introduce a duty of care owed The FCA knows all this,of course,and has occasionally by authorised persons to consumers in carrying out acted. However, within the existing legal framework it regulated activities under this Act. often takes many years for the FCA to respond to GC 101 Financial Services Bill [LORDS] Financial Services Bill GC 102

[LORD SHARKEY] this will get any better when the furlough and business firms’ harmful practices. An example of this is the support arrangements come to an end. Financial pressures treatment of loyal general insurance customers, which and desperation will inevitably increase; vulnerable the FCA is only just beginning to tackle. people will be disadvantaged, treated unfairly Then there is the question of the high-cost short-term and scammed. credit sector. Wonga may have gone, thanks largely to Dealing with all this would be made significantly pressure from this House, and after intense pressure easier if the FCA were to impose a duty of care on from Parliament there is now a price cap on rent to service providers. The idea has widespread support. In own. But problems persist with, for example, doorstep May 2019, the Treasury Select Committee published lending, guarantor loans and new, automated overdraft its report on the inquiry into consumers’ access to products. financial services. Paragraph 210 of the report says: The FCA tackles unacceptable practices slowly and “All retail financial services, no matter which sector of the piecemeal, allowing harm to persist for many years. It industry they operate in, should be acting in their customers’ best was particularly late in spotting the rapid growth of interests at all times. If the FCA is unable to enforce such buy now pay later and its potential for harm. I believe behaviour in firms under its current rule book and principles, the that the Government have said that they intend to Committee would support a legal duty of care, analogous to that in the legal industry, creating a legal obligation for firms to act in address this problem and I hope that they will use this their customers’ best interests.” Bill as an opportunity to do that. I would be pleased if that were to be the case, but the slow and cumbersome The FCA’s own financial services consumer panel, engine of primary legislation would not have been responding to the FCA’s discussion paper, said: necessary had a duty of care extended over the sector. “Anew duty is required to improve the position of all consumers … The FCA has published eight papers in the last five including those who need more support.” years dealing wholly or in part with the question of The Money and Pensions Service said: duty of care, but it still has not developed a clear view “MaPS remains convinced that a formal ‘duty of care’ on or a recommendation. In its consultation feedback financial firms could provide a better balance between firm and paper of April 2019, the FCA noted: consumer responsibilities and help deliver extra protection and “Most respondents consider that levels of harm to consumers better treatment to vulnerable consumers.” are high and there needs to be change to better protect them.” StepChange is in favour, as is Fair by Design, and so It then sat on the fence about what this change should are manyorganisations with direct and in-depth experience be, reporting that none of the financial service providers of the financial catastrophes that can be visited on the favoured a duty of care. Mandy Rice-Davies would poor and the vulnerable. I am grateful for the explicit have known what to say to that. support and encouragement in pressing for a duty of In any case, as the FCA’s consumer panel noted, care from Age UK and the Alzheimer’s Society and I am especially grateful to Macmillan Cancer Support “Much of the debate on a duty of care has centred on for its unfailing help and advice. I am also indebted to legalistic arguments about whether there is a ‘gap’ in protection. What matters is whether consumers get the treatment they want the former chair of the FCA’s consumer panel, Sue and expect from their financial services providers.” Lewis, for her support. The consumer panel commissioned Populus to ask Despite all this support, the Government will no individual and small business customers about their doubt resist the idea of introducing a formal duty of experiences. The research showed that the customer is care. When this issue was raised at Report in the not at the heart of business decisions and that 92% of Commons, addressed it by saying simply: respondents were in favour of a duty of care in financial “As the FCA is already taking steps to ensure that financial services. services firms exercise due care and regard when offering products, While sitting on the fence, the FCA has also managed services and advice, a statutory duty of care, as proposed by new to hit the ball into the long grass. It promised to clause 21, is not necessary.”—[Official Report, Commons, 13/1/21; col. 366.] initiate yet another consultation on the issue, initially due last year but now postponed. In the meantime, He did not say what these steps were or make any levels of financial vulnerability grow. The FCA’s latest assessment of their actual or likely effectiveness. Today Financial Lives survey, published 11 days ago, makes the Government may add to John Glen’s reasons for grim reading. It notes that Covid-19 has reversed the rejecting a duty of care and may advance the argument previous positive trend in vulnerability. Between March that they need to wait to give the SMCR time to work. and October last year, the number of adults with Surely five years is long enough—five years in which characteristics of vulnerability increased by 3.7 million there has been just one successful conviction. The to 27.7 million. That means that over half of all adults FCA’s consumer panel points out that this is essentially are financially vulnerable—a truly alarming figure. a category error and notes: The same survey also notes that unsolicited approaches “The SMCR is primarily a supervision tool—it will be a have increased during the pandemic, increasing the valuable mechanism to ensure that firms are complying with a risk of fraud and scams. Over a third of adults say that new duty.” they have received at least one such approach and The Minister may also pray in aid the reinforced, 1.4 million say that they have paid out money as a better-resourced and more active FOS. It is true that result of a possible Covid scam. Unsurprisingly but FOS dealt with around 250,000 cases in 2019-20. In regrettably, people with characteristics of vulnerability these cases overall, one-third of judgments were in the have been the more susceptible: 12% paid out money, consumers’favour. This is evidence enough of large-scale compared with 1% of the non-vulnerable. None of misbehaviour, but the figures are much worse for GC 103 Financial Services Bill [22 FEBRUARY 2021] Financial Services Bill GC 104 products aimed at the financially vulnerable: 89% for Turning now to the duty of care, I want to add that guarantor loans, 84% for doorstep loans and 78% for a duty of care should apply to the regulators as well. logbook loans. Of course, they say that they act in the public interest, This is not—absolutely not—evidence of successful but they are every bit as aggressive about protecting regulation. Every one of these judgments is evidence themselves—of all things from the public and from of a failure to sell the right product to the right liability—as the firms that they supervise. My view of individual or small business, to explain it clearly or to this is simple: “If you don’t live by it, you don’t really handle a complaint properly. The FCA’s current rules understand it”. and principles are failing to stop this tidal wave of If one examines the responses to the FCA’s discussion mis-selling, malfeasance and malpractice. We need a paper in July 2019, the majority were in favour, two of new approach that focuses on prevention of harm and the main reasons being that it was critical to triggering delivers extra protection and better treatment for a fundamental culture change away from asking “Is vulnerable customers. We need a duty of care and I this within the regulations?” and into “Is this right?” beg to move. Secondly, it would give a duty to avoid harm that would incentivise firms to evaluate consumer risk at Baroness Bowles of Berkhamsted (LD) [V]: My Lords, every stage. I declare my interests as in the register. I support all What is not to like in that? It seems that just a the amendments in this group and what has already handful of respondents did not want any more than been expertly said by my noble friend Lord Sharkey. I was already in those principles about treating customers will comment on the duty of care later, but first I will fairly. But they were very much in the minority and, introduce my Amendment 72, which calls for warnings sadly, it seems that some of those in favour of a duty relating to non-regulated activity. of care are not in favour of it being actionable. I am in The issue here is one where firms that are authorised favour of a duty of care, I am in favour of it being in respect of regulated activity also conduct unregulated actionable and I am in favour of it applying to regulators activity, and customers are misled by the fact that the as well, because something is going wrong all round firm is authorised for some activity into thinking that and, frankly, I find the FCA’s hesitancy a matter of the authorisation is some kind of guarantee of quality. serious concern. It is what Dame Elizabeth Gloster called in her report “the halo effect”, and about which she said again to 3 pm the Treasury Select Committee a couple of weeks ago That takes me to the amendment of the noble that something should be done. Lord, Lord Tunnicliffe, which I also signed and which One thing that is done by the Bill is enabling unused additionally incorporates a general principle of non- authorisations to be more easily cancelled, but that exploitation, which overlaps with my Amendments 5 does not solve the problem when there are still used and 73 that come later in another group: we have been authorisations. This is a problem that has long been borrowing from one another in these amendments in a known about and does not affect only unscrupulous constructive way.Wehave seen bad behaviour elaborated businesses. Therefore, the amendment aims to make it in the Promontory report in the GRG case and the quite clear to consumers what the situation is in three excruciating way in which the FCA wriggled to excuse ways. itself, claiming that it did not have power to intervene First, authorisation must not be referenced in any in commercial contracts. communication, including on letterheads or websites, The difference between my amendments, when we as a reputational guarantee regarding non-regulated come to them, and that of the noble Lord, Lord activity. In practice that should mean the ending of Tunnicliffe, is that I have included small businesses as straplines. Secondly, when non-regulated activity is well as consumers in protection from exploitation. being conducted, that must be made clear, together That may be his intention, as other amendments would with an explanation that it means that access to the change the definition of “consumer”, and I will have Financial Ombudsman Service and/or Financial Services other things to say later in the third group about abuse Compensation Scheme is not available. Thirdly, it of unequal power.Both duty of care and non-exploitation would be an offence to imply that a non-regulated of vulnerabilities are matters that mark out quality activity is covered by an authorisation. regulation and, unfortunately, we know that, unless The first two provisions relate to authorised firms things are explicitly elaborated in legislation, there will aiming to stop the halo effect in as far as that is be those who fall below the high standards and get possible. I do not expect firms to write to clients away with it. saying, “This is the rogue side of our business”, but I hope that clients will be more aware that that might be so. The third point is a general point and would apply Lord Holmes of Richmond (Con) [V]: My Lords, it is beyond regulated firms, but my aim is to catch passive a pleasure to take part in this first group of amendments, implications, so that active steps to inform have to be and I congratulate the noble Lord, Lord Sharkey, on taken. the way he introduced it. There could barely be a The amendment has been drafted to make the point better amendment to start Committee. clear, rather than as a perfect draft to weave in among In 2017, during the passage of the Financial Guidance other regulatory provisions, and I hope that the Minister and Claims Bill, now enacted, there was much discussion will take up the idea and recognise that reducing a of, and amendments tabled around, a duty of care, problem by eliminating surplus authorisations does with support from all sides of the House. The response not reduce the problem to its smallest possibilities. then was that the time was not right: we had to get GC 105 Financial Services Bill [LORDS] Financial Services Bill GC 106

[LORD HOLMES OF RICHMOND] noble Lord, Lord Sharkey, about the imbalance of through Brexit and then look at financial rules and power between the lender and the individual—a critical regulators in the round. Four years on, with Brexit point that I am sure we will come back to in Committee. done, I think the time is more than now to consider Low financial resilience and overindebtedness are duty of care in all its manifestations, as the noble huge problems for individuals and the country. UK Baroness, Lady Bowles of Berkhamsted, set out. households have nearly £250 billion of outstanding In saying that, like other noble Lords I am extremely consumer credit debt and more than 42.5 million grateful for the briefings and unstinting hard work people have used consumer credit. Those are the figures undertaken by many organisations in this area. It is for 2019, pre Covid. In 2020 and into 2021 the problem invidious to single out two, but I will, not least the has only worsened. The FCA recently found that the Money Advice Trust and Macmillan Cancer Support. number of people suffering from low financial resilience Duty of care was an issue in 2017; it was an issue way increased by one-third to 14.2 million people in before that. The Covid crisis has not brought about October 2021. That is nearly one-quarter of the UK the need for a duty of care; it has merely shone the adult population. brightest and starkest of spotlights on the issues right We know that low financial resilience is not just across the financial services sector. about overindebtedness.It can be caused by a combination It is difficult to put it any clearer than this, from a of low savings and erratic family income. Erratic income client of Macmillan Cancer Support in one of her and low levels of savings are not issues that the FCA darkest moments: “It felt like I was fighting my bank can solve—government intervention and education as well as fighting cancer”. Fighting my bank as well are required to tackle those. However, overindebtedness as fighting cancer—that is a more than good enough is an issue that the FCA can help to address. Amendment reason to think extremely carefully about how to bring 4 and a number of the other amendments in this about a duty of care. That one individual speaks for group, as well as the later Amendment 8, would give hundreds of thousands. the FCA some of the tools to do so. My Amendment 129 in this group seeks to introduce As set out by the Government, the FCA has three rights of action for SMEs for breaches of the FCA key functions: protecting consumers, keeping the industry handbook. I believe the amendment would bring clarity stable and promoting healthy competition between and consistency to how the handbook operates. These financial service providers.Of those three critical functions, rights of action are currently available only to private I would like to concentrate on the first, of protecting persons but, when we consider this in the round, not consumers.Amendment 4 takes that current responsibility least in the world of FS when we think of fintech and would add to the Bill a clause which would give founders, are the “Ss” of SMEs—micro-businesses— the Financial Conduct Authority a duty of care and, essentially that different from private persons? Of course later, under Amendment 8, I understand the concept of the corporate veil and “rules … to promote financial wellbeing”. limitation in all its forms but, in essence, when it These would enhance the FCA’s powers to protect comes to operating in a regulatory framework, as we consumers—something which I am sure we all agree is currently have, are micro-businesses that different from necessary. private individuals,who currently have this right of action? Christopher Woolard, chair of the recent Woolard Imagine this: currently, a micro-business has only review, said: the letter of the contract to take action against the “Most of us will use credit at some point in our lives. So, it’s bank. This seems wholly unsatisfactory and more vital that we have a fair market that works for everyone. New ways than a little asymmetric. The nature of the relationship of borrowing and the impact of the pandemic are changing the between a small business and a bank should be much market, with billions of pounds now in unregulated transactions more effectively reflected in the rulebook. Need I and millions of consumers at greater risk of financial difficulty”. suggest some of the ways this may have helped in the The Woolard report sets out 26 recommendations to past, with Libor, forex, the GRG, and Lloyds/HBOS the FCA, some on working with government and activities in Reading? In particular, RBS’s global other bodies to make unsecured credit markets fit for restructuring group was one of the most shameful the future. I hope that the Minister and Her Majesty’s episodes in this country’s banking history. Government will look at the amendments tabled and, where those issues and recommendations raised by Fundamentally, the amendment can be summed up Woolard align with them, we will see some government in a simple line: in reality, how can an SME or micro- amendments or an acceptance of the amendments laid business take a bank to court? Amendment 129 offers to the Bill. the appropriate level of support and clarity to our SMEs, and consistency in the operation of the rulebook. This is specifically pertinent in relation to “buy Our SMEs are the beating heart of our economy. I now, pay later” products. On 13 January in the other suggest we use the amendment to put some head place, Stella Creasy moved an amendment that would alongside that heart. have required the BNPL industry to be regulated by the FCA. The proposal was defeated by the Government, by 355 votes to 265. The Woolard review makes the Lord McNicol of West Kilbride (Lab) [V]: My Lords, point, on the regulation of the unregulated “buy now, at this stage I have not put my name to any amendments, pay later” sector: but I will speak in support of Amendment 4, tabled by my noble friend Lord Tunnicliffe, and make a few “BNPL products which are currently exempt from regulation should be brought within the regulatory perimeter as a matter of relevant points. Before I start, I make the Grand urgency. The use of BNPL products nearly quadrupled in 2020 Committee aware of my financial interests as set out and is now at £2.7 billion, with 5 million people using these in the Lords’ register and echo the point from the products since the beginning of the coronavirus pandemic”. GC 107 Financial Services Bill [22 FEBRUARY 2021] Financial Services Bill GC 108

The report continues by stating that look forward to hearing from my noble friend as to “more than one in ten customers of a major bank using BNPL why in the Government’s view it may not be needed. were already in arrears. Regulation would protect people who use I will focus my remarks on Amendment 72, so ably BNPL products and make the market sustainable.” moved by the noble Baroness, Lady Bowles, and in Seeing the light, the Minister, John Glen, agreed that particular on subsection (2) of the proposed new Her Majesty’s Government need to act and bring clause. It concerns me greatly that there is still a huge BNPL into the scope of FCA regulation. I was hoping area of unregulated provision of financial services to see a government amendment to this effect, as the here, in particular in the case of young people who, noble Lord, Lord Sharkey, said earlier, but I am sure it after they have graduated and are looking to pay off will be forthcoming at later stages of the Bill. their student loans, will be relying on their banking I also bring to the Committee’s attention an article facilities. It does seem that we need either a duty of in the Observer yesterday, Sunday 21 February, entitled care or, as the noble Baroness, Lady Bowles, set out in “High-cost lenders ‘exploit NHS workers on pandemic subsection (2) of the proposed new clause, some means frontline’”. The article highlighted a number of individual by which we indicate to potential consumers and cases, as well as the alarming and eye-watering interest customers exactly what the situation is. I find that this rates of over 1,300% being charged by some high-cost area is compellingly in need of greater regulation—or, credit providers. if not that, then the pointing of actual customers or The article is based on a University of Edinburgh potential future customers towards acting in this regard. Business School research report, which makes it evident I find it extraordinary what information is provided that the signs of financial vulnerability within the to any of us, and in particular to young people. The NHS workforce are being ignored by high-cost lenders noble Lord, Lord Sharkey, did a great service in on an industry-wide basis. Overindebted NHS workers setting out not just PPI but a number of other are now struggling with unaffordable loans. They did irregularities—at the very least—that have come to not receive them from unlicensed backstreet lenders: light in the last five or 10 years that need some form of more often than not, they got them through FCA-licensed redress in order to close this particular loophole. and regulated high-cost lenders. This is why Amendment 4 is so important in stating We are in an extraordinary situation where there are a number of non-regulated financial services. In “the general principle that firms should not profit from exploiting a consumer’s vulnerability, behavioural biases or constrained particular, Amendment 72 would seek to redress this. choices”. But also, Amendments 1 and 4 imposing a duty of care have many strengths to commend them. I look 3.15 pm forward to my noble friend in summing up giving the reaction of the Government to the proposal for such a The reason this is so important is that many who duty of care in the circumstances set out therein. turn to the unsecured loan sector have those constrained choices. Those constraints can come from a poor credit history and poor credit scores, often received by Lord Blunkett (Lab) [V]: I am very pleased indeed an individual years before. Protecting those individuals to join in this important debate. The noble Lord, is even more vital. Lord Sharkey, set out the situation in the macro field Further analysis in the recent University of Edinburgh extremely well and I am pleased to support the speeches Business School report reveals that many NHS workers that have already been made by a number of noble have little access to affordable high-street credit. This Lords. forces them to take out multiple high-cost credit loans I will concentrate on two things. The first is the or rely on persistent overdraft usage, often with exorbitant issue of protection from exploitation with the development fees. In too many cases, high-street banks are failing to of cybercrime. I hope we will be able to come back to make affordable-term facilities and are instead trapping this in Committee and on Report with respect to the individuals in a cycle of persistent overdrafts. risks that people are put into because of the lack of In conclusion, the FCA currently has the power to care within the whole of the financial services sector. ensure that all lenders advance only loans that are Secondly, very small businesses and partnerships are affordable and sustainable. This is clearly not happening, excluded from redress,as the noble Baroness,Lady Bowles, with so many individuals defaulting or becoming mentioned. This is also is relevant to Amendment 129, overindebted. The Woolard review touches on this, moved by the noble Lord, Lord Holmes of Richmond. but, again, the argument is made that the reason that On the first issue, in relation to cybersecurity, there loans become unaffordable or unsustainable is that is a growing trend that those who are affected keep individuals’ circumstances change after the loan has quiet rather than reveal what has happened. This is a been agreed. I do not believe that this is always—or real danger. If, as I hope, we come out of the present even most often—the case. In fact, that is why the dip in relation to financial services globally because of Financial Ombudsman Service has adjudicated time Brexit, we will be able to present to the world a and time again against providers and in favour of marketplace which is both effective and forward individuals. Unaffordable and unsustainable loans are looking—and is also secure. A duty of care to both being forwarded all too often. Amendment 4 will help individual customers and to small and medium-sized strengthen the FCA and hopefully rectify this issue. enterprises is a critical element in taking this Bill forward and strengthening the measures that exist Baroness McIntosh of Pickering (Con) [V]: My Lords, there. I will not egg the measures that I think are I am delighted to follow the noble Lord. I would like necessary this afternoon, because there will an opportunity to support the case for introducing a duty of care and to come back to them. But I will just say that this is a GC 109 Financial Services Bill [LORDS] Financial Services Bill GC 110

[LORD BLUNKETT] interactions between the financial sector and its customers. growing area of real concern. An improved mandate As the noble Lord, Lord Sharkey,said in his introduction, for those operating in the financial services sector when talking about this we often focus on banks, but from the FCA would be very welcome indeed. we have seen some truly outrageous behaviour from On the issue of small and medium-sized businesses insurance companies during the Covid-19 pandemic, and small partnerships, and the relationship between something that I have referred to previously in the House. them and individual consumer, it is little known that When thinking about this amendment I reflected access to the Financial Ombudsman is confined to on being a 19 year-old in Australia, many years ago, individuals rather than small businesses and partnerships. buying a studio flat. It was cheaper then to have a What was said by the noble Lord, Lord Holmes, and mortgage than to pay rent. My father stood as guarantor also the noble Baroness, Lady Bowles, was highly and met the local bank manager—they knew each relevant here. It backs up the need for clarity in terms other personally.This was before the financial deregulation of how we deal not only with prevention but with redress. that allowed the massive boosting of prices, as the I give one small example, which I took up the with excellent 2016 New Economics Foundation report The the noble Lord, Lord O’Shaughnessy, when he was at Financialisaton of UK Homes laid out. That was what the Department of Health. To his credit, he saw the made it possible. wisdom of trying to bring about change. As the noble However, the banking sector then was no ideal Lord, Lord Holmes, has described, it was not received model. It was undoubtedly paternalistic, patriarchal well at the time because of the struggle that was going and discriminatory, against people from BAME and on post the Brexit referendum and because of the certain socioeconomic backgrounds and on the basis difficulties the Government were facing. We have dealt of gender. I am not sure whether my father was forced with banks and financial services, but we need to to be guarantor because I was a single female and a concern ourselves with insurance as well. Perhaps now strange type of person to be taking out a loan, or just is an opportune moment to deal with the situation because of my youth, but there was in the local bank where an insurance company is taken over and the manager an individual knowledge and understanding, new provider offers a slightly revised agreement which and the hope that if something went wrong, an individual is sent out without highlighting the key changes that would know your circumstances and do their best to have been made. help you. For instance, in cover for physical ailments and That is not the situation that we have now. We have physical damage because of accident, there is no change, a “computer says no”approach. Anyone with a problem but in terms of absence from work and insurance by a can expect to encounter an endlessly changing rota of partnership with more than 10 partners insuring together, call centre staff reading from scripts. We could hope the mental health clauses are changed to make any for a locally based institution serving the needs of payment dependent on having to gain, within 12 weeks, local communities, something that other parts of the the sign-off of a psychiatrist and a clinical psychologist. world, such as Germany, still expect from their financial Anyone with any knowledge of this area will know sector. That would be a financial sector that served as that that is an impossible ask. Had it been highlighted a utility, not as a generator of maximum profit. Care to the partnership, it would have been able to look would then be built in and we might not need an elsewhere for an insurer that was not going to exploit amendment such as the duty of care amendment, but the market as this company did. we have to start from where we are. The partnership could not go to the ombudsman. It would have been entitled to if each individual partner 3.30 pm had insured themselves, but because there were more The amendment would lay on the financial services than 10 of them signed up to the insurance contract, sector a legal responsibility to behave like a support that was not possible. We need to put right nonsense for, not a parasite on, our economy, our environment of this kind and ensure that those making enormous and our individual lives. As a former newspaper editor, amounts of money, which they will continue to do, do I am perhaps speaking against my former interests, not do so at the expense of individuals or small and since these amendments, particularly Amendment 1, medium-sized enterprises. address the circumstances that fill many pages of newsprint and screens of websites from financial consumer Baroness Bennett of Manor Castle (GP) [V]: My champions. What is notable if you read those columns Lords, it is a pleasure to follow the noble Lord, is how often financial institutions apologise and provide Lord Blunkett. I very much support his call for a recompense as soon as their behaviour is exposed, financial sector that is secure, that does not threaten implicitly, if not explicitly, acknowledging their failure the security of all of us and that does not exploit to deliver on a duty of care that the public reasonably people who are forced to use its services. expect. Since financial institutions are not doing this, I speak chiefly to Amendment 1 in the name of the it is incumbent on your Lordships’ House and on this noble Lord, Lord Sharkey, also signed by the noble Committee to act. This would look after the most Baroness, Lady Kramer, and me. It was ably introduced vulnerable, only a limited number of whom can ever by the noble Lord. I speak to this amendment because reach the pages of those consumer champions. Everyone it is a subject close to my heart and one that I referred needs the protection that they provide. to at length in my speech at Second Reading. This In his introduction, the noble Lord, Lord Sharkey, group fits together nicely when we look also at noted the work of Macmillan Cancer Support and Amendments 72 and 129, which I also support. We are other campaigners in driving this amendment forward, talking about a huge imbalance of power in the but we need to realise that this is not just for the few; it GC 111 Financial Services Bill [22 FEBRUARY 2021] Financial Services Bill GC 112 is for the many, for all of us. We need to create some The danger is that, despite the best intentions of equity and equality in our society and this amendment helping to ensure that people get good advice, there is would go some way towards delivering that. an increase in costs and risks to compliance to the point where, as happened with the retail distribution Lord Blackwell (Con) [V]: My Lords, I understand review that took place some years ago, financial services the motives of these amendments and sympathise with companies simply withdraw from offering any services a lot of what has been said. However, I will be a to those customers because they cannot take the risks dissenting voice on whether the form of the amendments and costs and the compliance burden pushes customers is proportionate and practical in meeting the objectives out of access to financial services. set out. Not having boundaries around what that duty of As we all recognise, financial services have a social care comprises opens up the risks to financial services purpose. They play a critical role in society and in companies of court judgments and CMC claims that people’s lives and they have to recognise that in their continually push the obligations and costs of compliance responsibilities. There are clearly still failures in the far beyond what is reasonable for a financial services way the industry operates, some unintended and some company to do—one doing its best to offer financial still involving bad behaviour, and, as many noble products and serve its customers—and what is reasonable Lords have pointed out, there is a problem in the for the customer to take on, in terms of their unregulated sector. However, most of the major responsibilities in setting out their needs. institutions now exercise their responsibilities carefully, I believe that, despite the motives behind this, it is trying to do so in the best interests of their customers. much better to be prescriptive about what obligations I do not recognise in some of the comments made the there are for reasonable behaviour, as set out in the tens of thousands—in fact, over 100,000—ordinary current FCA principles, which include the obligation bank workers who go into their branches or call to treat customers fairly and fairly communicate the centres every day and try desperately to do their best information they require. These considerations require for customers, motivated by the most genuine service a high level of care and compliance, not always correctly obligations. In the way that the banks have operated in done—but there are penalties when they are not done providing basic bank accounts and the responsibilities correctly. The SMCR regime is reinforcing that. As that they have shown in their lending practices, the such, despite my sympathy for the motives behind industry is by and large showing how it can evolve and these amendments, I believe that the intent behind act responsibly. them, however good, would not result in a proportionate There are, of course, failures, as there will always be or practical improvement in regulation and carries in any industry, but these can be dealt with under the many dangers and risks both to financial services existing FCA principles, reinforced as they are now by companies and, more importantly, to the customers the SMCR regime. There has to be a boundary on whom we seek to protect. what is reasonable to expect of the duty of care. We cannot expect financial services to take on the duties of the state as a social service for those who need Lord Davies of Brixton (Lab) [V]: My Lords, I agree extended financial support. Yes, it has obligations, but with much of what has been said and it is not necessary there is a limit to what the financial services sector can to repeat it. I support the objective of the amendments—in do for those in financial need. particular,I support my noble friend’sAmendment 4—and My issue with the general duty of care is that it has I look forward to the Minister’s reply. It is difficult to no clear boundaries setting out when a financial service see how the principle of these amendments can be company has reached the limits of what it is reasonable refused. to do under that duty of care. We have to recognise the However, it is necessary to make an overarching reality that any intervention to increase customer support point, which I base on my experience over 50 years as or protection has a cost. The direct costs of subsidising a close observer of the financial services industry. The support to customers in financial need are now covered, truth is that the industry has a systemic tendency to as in utilities, through cross-subsidies—higher charges malfeasance. This is not an attack on the great many on other customers to pay for the extended credit or good people who work within the industry, as the last basic bank accounts for those customers in need. It is contribution mentioned, in banks and insurance accepted within the industry and within society that a companies, who only wish to do a good day’s work. measure of cross-subsidy within the financial services However,the unremitting succession of scandals involving sector is part of being a universal provider. finance is not just a series of unfortunate one-offs; it is However, the indirect costs of compliance are more built into its very nature. This is a big issue, but I damaging; they may disadvantage those that they are emphasise two simple reasons. First, there is an inevitable meant to help. The more questions you need to ask asymmetry of information. As Amendment 4 highlights, your customers, the more detailed information you there are have to ensure they have understood and the more you “a consumer’s vulnerability, behavioural biases or constrained have to penetrate into their lives, the more banks and choices”. insurance companies are forced to rely on formulaic This situation is bound to create the sort of problem compliance bureaucracy that erects barriers to simply that we have seen. The second, even simpler, reason, understanding and addressing customers’ issues. People using the classic but apocryphal words of Willie Sutton, spend more time ticking the boxes than they do just is because it is “where the money is”. People seek to listening and trying to provide a genuine real-world gain money from where there is lots of it and there is answer to the issues in front of the customer. lots of it in the finance industry. GC 113 Financial Services Bill [LORDS] Financial Services Bill GC 114

[LORD DAVIES OF BRIXTON] Dame Elizabeth Gloster’s damning report of last There is much to be done to solve this problem. It is November on the FCA’s regulation of London Capital systemic but it still needs to be addressed because people & Finance Plc said: need help. However, what is in these amendments “The root causes of the FCA’sfailure to regulate LCF appropriately seems to me simply a minimum of what might be done were significant gaps and weaknesses in the policies and practices”. to address the problems that the industry so clearly That is simply true across the board. It is piecemeal, as incorporates. my noble friend Lord Sharkey described. Misbehaviour keeps happening and delayed redress Baroness Kramer (LD): My Lords, I simply do not is the normal pattern. To quote Einstein: understand the resistance we find from the Government “The definition of insanity is doing the same thing over and and the FCA to the duty of care amendment moved over again and expecting different results.” by my noble friend Lord Sharkey, and supported by It is time to make a step change to protect consumers, my noble friend Lady Bowles and the noble Baroness, and I hope very much that the Government do so in Lady Bennett, and to the almost identical Amendment 4 this Bill. proposed by the noble Lord, Lord Tunnicliffe, and supported by the noble Lord, Lord Eatwell, and again 3.45 pm by my noble friend Lady Bowles. I am not going Lord Eatwell (Lab): My Lords, in considering this to repeat the saga of abuse that many noble Lords Bill, we are all placed in a somewhat odd position. The have described. That has been done incredibly well Treasury is, right now, conducting a financial services and is exceedingly powerful. I will say though that this future regulatory framework review. Indeed, phase 2 issue keeps happening. I notice the headline in today’s of consultation on that review concluded just last Times: Friday. While I fully understand that some parts of the “City regulator ‘slow to act’ against car leasing firm”. Bill before us are associated directly with the UK Every time we think that we are perhaps past a period having left the European Union, other parts are not of abuse, another one comes along. To me, it is associated in that way. It is quite likely that we will be utterly unacceptable, as I hope it is to everyone in this back here in a few months’ time debating the same House. issues all over again when the Treasury decides on its What makes me particularly angry is that the regulator response to the consultation and brings forward legislation has largely known, very early on thanks to whistleblowers, to implement the future regulatory framework. when the financial institutions that it regulates are It would be comforting if the Minister could assure treating customers badly. However, again and again, us that we are not wasting our time but, of course, she the regulator takes years to react, reacts minimally at cannot do that, because none of us knows what the first, initiates a lengthy review—often several—asks final outcome of the regulatory framework review will the organisation to review itself and then does too be. None the less it would be helpful if, when she sums little, too late. I want to pick up one issue in illustration: up, the Minister could assure the Grand Committee the treatment of payday lenders. that the Treasury will treat debates on this Bill as, at Many people in this House will remember the the very least, an enhanced consultation to which the experience of trying to pass legislation to get a cap on Treasury will have full regard when reaching its final the interest rates that payday lenders could levy. I conclusions. bring up this issue because it deals with the difference Let us get down to business on the amendments in between treating customers fairly and a duty of care. the names of my noble friend Lord Tunnicliffe, the The FCA took a very strong position that customers noble Baroness, Lady Bowles, and myself. Every first-year were being treated fairly so long as they knew the student of financial markets knows that markets in terms of the contract. There were, perhaps, some retail products—financial products sold to individuals, constraints such as a limited number of rollovers. The households and small businesses—are seriously inefficient. FCA did not look at the far deeper issue of the way One important reason why they are inefficient is due that people were being abused by payday lenders and to asymmetric information, as the noble Lord, the extraordinary level of interest rates. That is why Lord Davies, said just now. To put it simply, the seller the duty of care is very much more powerful. As my of the product typically knows much more about the noble friend Lord Sharkey said, treating customers risks involved in making a particular investment or fairly is undermined in the FiSMA legislation by the other financial transaction than does the hapless investor. caveat emptor parts of the FCA’s rules. An extreme example of this is to be found when the I am not a bit surprised that the noble Lord, chief economist of the , Andy Haldane, Lord Blackwell, objects to these duty of care amendments. confessed that he did not understand the pension that When I sat for nearly two years on the Parliamentary had been sold to him. Commission on Banking Standards, the industry objected As the Committee will be aware, if it is the FCA’s to almost every measure that would have constrained strategic objective to ensure that the relevant markets the abuse which created the crisis in 2008, such as the function well, to do so in the presence of asymmetric Libor crisis and PPI. The saga was endless. I say to the information it has two broad operational options. noble Lord, Lord Blackwell, that in a later group of Either it should regulate each individual financial amendments I will be referring to the HBOS Reading product to ensure that the investor is properly informed case, another example of fraud perpetrated between or it could adopt the principle of Amendment 4—and, 2003 and 2007. A number of bankers went to prison indeed, Amendment 1—and make general rules,including but today, in 2021, victims of that fraud still have not the power to introduce a duty of care owed by the received fair compensation. authorised persons to consumers. Up to now, the FCA GC 115 Financial Services Bill [22 FEBRUARY 2021] Financial Services Bill GC 116 has adopted the former option and dealt with each few words in hearty support of the noble Baroness’s issue as it arises. By its own admission, this has not Amendment 72 in this group. Anyone who has laboured gone very well. From its consultation entitled Our as a financial services regulator, as I have, will be well Future Approach to Consumers in 2017 through to the aware of the abuse addressed by this amendment: an feedback statement published in April 2019, the FCA abuse that has disfigured the promotion of financial has wrestled with the issue of duty of care, and is still products for far too long. wrestling today. Yet it still persists with its failing The failure to deal with this abuse was an important approach of regulating each product, and that simply component of Dame Elizabeth Gloster’s investigation cannot go on. into the FCA’s regulation of London Capital & Finance Action is really imperative, for two main reasons: plc. The abuse of promoting non-regulated activities first, because of the persistent appearance of new while identifying the promoter—albeit correctly—as a products, such as the buy-now, pay-later schemes, regulated entity must also be addressed by the holistic which we will discuss later—persistent innovation, evaluation of regulated entities, taking into account which the FCA meets with persistent delay. It is always both regulated and unregulated activities, because, playing catch-up to introduce the new rules, after typically, the culture of a firm is not divisible. So, taking time for appropriate consultation and so on, to while I support Amendment 72 from the noble Baroness, deal with the new threats to the consumer. Lady Bowles, I note that there is more to be done to The second reason is the now-ubiquitous sale of implement Dame Elizabeth’s recommendations. financial products via the internet, as referred to by my noble friend Lord Blunkett. How many of the Baroness Penn (Con): My Lords, I will start with a Committee have ticked the box verifying that they word of reassurance to the noble Lord, Lord Eatwell, have read the terms and conditions of internet sales, and others that the Government will consider all the without a thought of ever doing so? It is the dense and contributions to the debates on the Bill carefully, and incomprehensible text of those terms and conditions in terms of the work they are doing on the future that is so often the electronic embodiment of asymmetric regulatory framework review and the broader regulation information: the very factors ensuring that the relevant of financial services. That is an important point when markets do not function well and that the FCA does we discuss these amendments. As the noble Lord just not perform its strategic objective. set out, the amendment to introduce a duty of care Amendment 4 provides the FCA with the means to could be interpreted as quite a different fundamental end this failure to meet the strategic objective. The approach to financial services regulation, which, with enactment of the power to introduce a duty of care that scale of change, might be better considered as would place the responsibility of ensuring that markets part of the future regulatory framework review.However, function well firmly on the shoulders of those who much work has been done on this subject and I turn to have the information required to attain that goal. As it now. my right honourable friend Pat McFadden put it when I will speak first to Amendments 1 and 4, which discussing the Bill in another place, with the enactment seek to introduce a statutory requirement for the FCA of a duty of care, financial services providers would to make rules requiring authorised persons to adhere necessarily ask themselves the question, “Is this right?” to a duty of care when providing a product or service. rather than what they ask themselves today, which is, Amendment 4 would also require the FCA to have “Is this legal?” That would create a real shift in how explicit regard for vulnerable consumers when discharging business is done. I say to the noble Lord, Lord Blackwell, its consumer protection objective. that this has nothing to do with subsidies and subsidising. I am grateful to the noble Lords who put forward It is doing what is right. If the FCA had the power to these amendments, which give the Committee the introduce a duty of care, it could begin to live up to its opportunity to discuss this important issue. I know strategic objective. that it was also discussed during the passage of the I am quite prepared to believe that our drafting of Financial Guidance and Claims Act, and the Government Amendment 4 contains petty infelicities. So what? pay tribute to the work undertaken by Macmillan, What is important is the principle that the amendment whose “Banking on Change” campaign includes the embodies. I am confident that Treasury officials can proposal for a statutory duty of care. I agree with the always find the appropriate wording. But we are all charity that aware that too many consumers are being treated “Money worries should be the last thing” inappropriately, whether by the mis-selling of products, on a person’s mind when they are dealing with cancer, denial of rights or obstructionist responses to complaints but I emphasise that the FCA is already taking steps and so on. I am certain that Her Majesty’s Government to ensure that financial services firms exercise due care wish to improve on the consumer protections previously and regard when offering products, services and advice enshrined in EU legislation. The introduction of a to consumers. A statutory duty of care does not add duty of care is a safe and sure way forward: a way to to the FCA’s existing powers in this area, and there are ensure that markets function well. likely to be difficulties in applying a single duty consistently I regret that I cannot agree with the noble Baroness, and proportionately to the wide variety of products Lady Bowles, that the duty of care should be extended and relationships in financial services. The Government to the regulator itself. That is unreasonable because it do not believe that an additional statutory duty of suggests that the regulator should be looking over the care, as proposed by these amendments, is necessary. shoulder of the participants in every single transaction. Financial services firms’ treatment of their customers That would require regulatory omniscience, and I is governed by the FCA through its principles for think it is truly unreasonable. But I would like to say a business, as well as specific requirements in the handbook. GC 117 Financial Services Bill [LORDS] Financial Services Bill GC 118

[BARONESS PENN] 4 pm The principles for business require firms to conduct In addition, action taken through Clause 28 and their business with due skill, care and diligence, and to the associated Schedule 11, as the noble Baroness, pay due regard to the interests of their customers and Lady Bowles of Berkhamsted, noted, gives the FCA treat them fairly. The FCA has recourse to disciplinary enhanced powers to quickly remove a firm’s permission action against firms that breach these principles. when it appears to the FCA that it is no longer The FCA has also announced that it will undertake carrying on the regulated activity for which it has work to address any potential deficiencies in consumer permission. I also reiterate that Dame Elizabeth’s protection, in particular by reviewing its principles for investigation found that the FCA had the right powers business. The coronavirus pandemic has caused the and rules in place with regards to LCF’s financial FCA to delay the next formal stage of this work to promotions. allow firms to focus on supporting their customers Turning finally to Amendment 129, the Government during this difficult period. However,it remains committed are committed to regulating only where there is a clear to progressing this work and has announced that it case for doing so. This is to avoid putting additional aims to consult in the first quarter of this year. costs on lenders that could lead to higher costs of borrowing for businesses—which are ultimately passed I reassure the Committee that the Government on to consumers—and to keep the rulebook as simple believe that the FCA already has the necessary powers as possible to assist customers in understanding their to ensure that sufficient protections are in place for rights. consumers, and has the will to act, without the need for a statutory duty of care or expansion of the The amendment, tabled by my noble friend consumer protection objective. The Government will Lord Holmes of Richmond, has legitimate aims and continue to work closely with the FCA to keep the seeks to protect small businesses by allowing for rights issue under review. of action against breaches of the FCA handbook. This is sought to be accomplished by requiring the Before I turn to Amendment 72, I reiterate the Secretary of State to make regulations bestowing on Government’s sympathy for London Capital & Finance SMEs a right to bring a complaint for an alleged bondholders. In May 2019, the Government directed breach of the FCA handbook. the FCA to launch an independent investigation into the events relating to the FCA’sregulation and supervision Although I support the intention, there does not of LCF. Dame Elizabeth Gloster’s investigation was seem to be a clear case for such a power. The Government provided to the FCA on 23 November 2020. It concludes have given the FCA a strong mandate to prevent that the FCA did not effectively supervise and regulate inappropriate behaviour in financial services and it LCF during the period. She makes nine recommendations has a wide range of enforcement powers—criminal, for the FCA, focusing on how it should improve its civil and regulatory—to protect a wide range of small internal authorisation and supervision processes. The businesses that have taken out a regulated financial Government laid the report, along with the FCA’s product or service. For example, as of April 2019, the response, before Parliament on 17 December. In that FCA expanded the remit of the Financial Ombudsman Written Ministerial Statement, the Government welcomed Service to allow more SMEs to put forward a complaint. the FCA’s apology to LCF bondholders and its This now covers 97% of SMEs in the UK. commitment to implement all of Dame Elizabeth’s The FOS complaints procedures are available to recommendations. Dame Elizabeth also made four SME customers who have taken out a regulated product recommendations for the Treasury,which the Government or service if the business believes conduct has fallen have accepted in full. below an acceptable standard, which could include a breach of the FCA handbook. The FOS can also Turning to the specifics of the amendment, through consider complaints about unregulated products if the its rules and guidance the FCA already requires financial provider has voluntarily signed up to the FOS. The promotions to be clear, fair and not misleading. As FOS provides a free independent dispute resolution part of those rules, authorised firms are specifically service, and is designed to be an alternative to resolution required to ensure that if they refer to their authorised of cases through the courts, which can be expensive status in the context of any communications relating and take time. to unregulated activities, they make it clear that those specific activities are not regulated. Misleading statements In addition, all the major SME lenders are signed by a firm may involve a breach of the FCA’s existing up to the standards of lending practice, which contain rules and the FCA has broad powers to enforce against clear guidance on best practice. As industry standards such breaches. Depending on the severity of the breach, and codes of conduct are taken into account by the it may also be an offence under Part 7 of the Financial FOS,the lending standards practice code is also considered Services Act 2012. by the FOS when deciding what is fair and reasonable in adjudicating. Moreover, with the recent launch of The Treasury has committed to keeping the legislative the Business Banking Resolution Service, medium-sized framework underpinning the regulation of financial businesses now have access to an independent, non- promotions under review. As part of this, the Treasury governmental body which will provide dispute resolution is actively working with the FCA to consider whether for businesses, addressing historical cases for small paid-for advertising on online platforms should be and medium-sized businesses from 2000, as well as brought into the scope of the financial promotions future complaints from medium-sized businesses outside regime. of the FOS’s remit. GC 119 Financial Services Bill [22 FEBRUARY 2021] Financial Services Bill GC 120

Given these factors, the Government do not believe The case for a duty of care still seems clear and that there is a case for the amendment, as there would urgent. Essentially there are, as we said, five key be a number of direct and indirect costs and a replication reasons for adopting the duty. The first is that FSMA of existing protections. These changes could in turn does not protect consumers adequately; the second is impact on additional bureaucracy and affect the price that the FCA is always playing catch-up. The third or availability of credit for small businesses, which is reason is that poor behaviour by firms continues, as I not a desirable outcome. I hope these answers have set out in my opening remarks. The fourth is that been sufficiently satisfactory that noble Lords feel able getting redress after the event is time-consuming and not to press their amendments. very stressful, and the fifth is the incentive for real and lasting cultural change in our financial services industry. The Deputy Speaker (Baroness Henig) (Lab): I have All these seem to be conclusive arguments in favour of received a request to speak after the Minister from the a duty of care. noble Viscount, Lord Trenchard. The Minister’s arguments against seem to have a strange Alice in Wonderland quality to them. They Viscount Trenchard (Con) [V]: My Lords, I declare amount to saying that it is not in the consumer’s best my interests as stated in the register. I apologise to the interests that financial services firms should be obliged Minister and the Committee for failing to get my to act in the consumer’s best interests. That simply name on the speakers’ list for this group on time and cannot be right. We will return to this issue on Report appreciate been given a chance to speak after the but, in the meantime, I beg leave to withdraw the Minister. In the circumstances, I will confine my remarks amendment. to Amendment 1, introduced by the noble Lord, Lord Sharkey, with whom I often agree. However, on this Amendment 1 withdrawn. occasion I strongly agree with what my noble friend Lord Blackwell said. On the duty of care, the FCA has itself, as other Amendment 2 noble Lords said, consulted on this question and Moved by Lord Blackwell provided feedback in November 2019. Many respondents 2: Before Clause 1, insert the following new Clause— thought that, rather than further complicating the “Competitiveness as an FCA and PRA objective FCA’s responsibilities, with the commensurate risk of (1) The Financial Services and Markets Act 2000 is increased litigation, it would be better to let the newly amended as follows. introduced senior managers and certification regime (2) In section 1B (the FCA’s general duties), after settle down. subsection (1)(b) insert “and— I suggest that there is already evidence of cultural (c) supports the standing and competitiveness of the change in many regulated companies as a result of United Kingdom as a leading global financial this, and that those who think we should not at this centre with high market standards.” time bring in changes likely to make the FCA more (3) In section 2B (the PRA’s general objective), in subsection (1) cautious in the exercise of its functions are correct. It at end insert “, while supporting the standing and surprised me that while many respondents thought competitiveness of the United Kingdom as a leading that the FCA should be given a duty of care, most of global financial centre with high market standards.” them thought that the duty should not be enshrined in (4) In section 2C (insurance objective), after subsection (1)(b) law because it would lead, inter alia, to duplication of insert— existing obligations, the loss of regulatory agility, and “(c) which supports the standing and competitiveness costs, delay and the stress of litigation for consumers. of the United Kingdom as a leading global financial centre with high market standards.”” Even the adoption of a non-statutory duty of care would have many of the same effects. Surely the thing we most want to avoid, to ensure that the City retains Lord Blackwell (Con) [V]: My Lords, Amendment 2 its position as one of the two leading global financial is in the name of my noble friend Lord Bridges, who centres, is a loss of regulatory agility. gives his apologies that he is unable to be present this afternoon and has asked me to move the amendment Baroness Penn (Con): My Lords, I believe that in his place. It seeks to introduce the international contribution has put another side of the argument. It competitiveness of financial services as part of the is the balance between these two perspectives that the general duties of the PRA and FCA. I would have Government seek to strike. We also think the FCA is thought that the amendment is unexceptional and in the right position to strike it, with its obligations to uncontroversial, in the sense that it is difficult to protect consumers and its detailed understanding of imagine how one could sustain the opposite view: that the markets that it regulates. it is not desirable for the UK to maintain its standing and competitiveness as a global financial centre, or for Lord Sharkey (LD) [V]: My Lords, I thank all noble the regulators not to have regard to that. I am sure Lords who have spoken on this group and I note a that this is already implicit in the approach to regulation largely positive view of a duty of care. I thank the taken by the Bank of England, as in that taken by Her Minister for her response. Her counterpart in the Majesty’s Treasury, but it is not formalised in the remit Commons took 58 words to respond to a similar of the PRA and the FCA. This amendment would proposition; the noble Baroness took more than that, remedy that deficiency. but notwithstanding the length of her response I was I do not need to labour the Committee with facts not convinced by any of her arguments. Many of them and figures about the huge importance of financial seemed much like medium to long grass. services to the UK economy and the wealth created by GC 121 Financial Services Bill [LORDS] Financial Services Bill GC 122

[LORD BLACKWELL] EU and in the US. At first sight that could look like it its global trading activities. If this were any other would put UK banks at a competitive disadvantage. industry of major economic importance, for example However, not only is that change a sensible way to the automotive industry or telecommunications, the maintain the integrity of the prudential standard, but need for international competitiveness would be taken doing so would reinforce the UK as a leading global as given. For financial services, the nature of the financial centre with high market standards,and, therefore, industry means that the regulators have, of course, its competitiveness. The notion that these would often been tasked to oversee other important objectives: the lead to conflict is mistaken: competitiveness can maintenance of prudential standards to avoid financial complement high standards. collapse and, as we have just been talking about, the In proposing the amendment, alongside my noble protection of consumers in complex and life-changing friend Lord Bridges, I believe that the arguments, financial transactions. including support for international competitiveness in The amendment does not seek to override those. It the regulators’ general duties, are important and would simply add to the general duties of the PRA incontrovertible. I hope my noble friend the Minister and the FCA the need to have regard to the aim of will find some way to accommodate this in the supporting the standing and competitiveness of the remaining stages of the Bill or, if not, give a clear United Kingdom as a global financial centre in the indication of how it will be addressed in other measures way those regulators carry out their specific objectives. that the Government intend to bring forward. I beg to To avoid any suggestion that this would mandate a move. drive to lower standards as a way of becoming more competitive, the amendment is clear that the mandate 4.15 pm is for a global financial centre with high market standards. Baroness Bowles of Berkhamsted (LD) [V]: My Lords, I believe it is widely accepted in this House, and in the Amendment 3 in my name and that of my noble friend industry at large, that our standing and competitiveness Lord Sharkey is an amendment to Amendment 2 and as a global financial centre can be maintained in the probes what is meant by “high market standards”. long run only by maintaining confidence in the soundness Could these mean, “no lower than current standards”, and integrity of the UK’s financial markets. and what are they measured by? Are they just rules, In practice, the amendment would mean that the which we hear a lot about, or do they also include regulators, in considering the design and implementation enforcement? Regrettably, we also hear about that of regulations and rules, would consciously have regard when it has all gone wrong, with the Gloster and to ways of achieving the desired outcomes with minimum Connaught reports being the latest examples of that. unnecessary overhead costs and market restrictions. Like a taster menu, our amendment then leads on to For example, in implementing the measures in this Bill the connection between standards and oversight of for the regulation of investment firms under the investment regulatory performance with respect to both rule-making firms prudential regime, the implementation of remaining and enforcement, and suggests that there should be Basel III banking standards and, more generally,reviewing regular independent reviews every three years. For the imported EU MiFID regulations, the regulators clarification, that would not be instead of whatever would have an explicit concern to pursue the simplification Parliament decides it wants to do; it would be additional. and streamlining of those regulations, moving to the I will put my cards on the table and say that I am UK’s preferred model of regulating through principles nervous about any introduction of competitiveness as and outcomes to achieve the required standards for a a general duty, even with the qualification, or as a more efficient regulatory approach that improves our bidding, to consider ranking. If one thing was learned international competitiveness. from the FSA’s demise and the financial crisis it is that The Bill in fact goes part way there already in new giving a financial services regulator a competition Section 143G, as introduced by Schedule 2, in which duty can lead to disaster through creating incentives the FCA is required, in applying regulations to investment to balance industry profit against safety and consumer firms, to have regard to the likely impact of the rules protection. It can potentially lead the regulator astray “on the relative standing of the United Kingdom as a place for from its essential objective of safety and soundness. If internationally active investment firms to be based”. there is such a remit it will inevitably lead to calls from parts of industry that do not want fetters, or even However, this is applied only to this one limited area from shareholders that want profits. If competition of regulation, rather than as a general duty. appears as a duty there will be pressures to go just a If there were seen to be a conflict between international little bit lighter touch, then just a little bit more, with competitiveness and other objectives on some specific arguments that this is all okay because it is among measure, it is surely right that this should be identified experienced market participants. and an explicit trade-off decision made on the most Unfortunately, light touch in one part of a market appropriate priority, which may of course override that may seem remote from retail consumers does not the competitiveness concern. However, in most prevent contagion. Let us not forget the investment cases,efficient regulation, high standards and international bank “slice and dice” of subprime mortgages, which competitiveness go hand in hand, rather than fuelled the financial crisis by stimulating yet more conflict. subprime lending—what gets made gets sold and invested Take, for example, the current consultation on the in. Later amendments deal with what happens nowadays Bank of England’s proposal to remove the capitalisation with regulated mortgages that are sold on to unregulated of software from the calculation of banks’ regulatory entities, so let us not kid ourselves that different parts capital. This is contrary to the practice adopted in the of the market are in self-isolation or lockdown. GC 123 Financial Services Bill [22 FEBRUARY 2021] Financial Services Bill GC 124

However phrased, a competition mandate is different competitiveness objective for the FCA and PRA. My from a proportionality mandate, which the regulators Amendment 7 also applies to the Bank of England already have. I am all for regulators making it much itself. My amendments differ because they spell out clearer how they categorise activity as part of aspects of competitiveness that I know are important proportionality and transparency. I wish they would from a lifetime in business and from nearly three years do more of it—it can aid competitiveness too—but as UK Minister attending the Competitiveness Council put in an additional competitiveness mandate and in Brussels. what does that mean, other than to go lighter than proportionality requires? Of course,consumer protection, stability and standards are important, but they are very well looked after in On the other hand, it is necessary to recognise that the structure of financial services regulation, even if regulation is a good way to end up with a closed shop, the regulators do not always deliver or enforce properly, preventing new entrants and new products, and there as we have heard from the noble Baroness, Lady Bowles. can be incentives on regulators to seek the stability of I come from a different perspective. Those of us with the graveyard. I can think of areas where I would lay an understanding of economics know that needless that charge, such as fixation on gilts and sluggishness red tape, inefficiency and lack of care for UK interests around approving new banking models. However, I do end up hurting UK consumers with prices that are not see a primary competitiveness mandate solving higher than they need to be, delays that frustrate, and that, even alongside a “high market standards”statement. a failure to get things right first time. These also This takes us back to what is meant by high market hamper innovation and productivity growth, two of standards. Who sets those? Whatever they are, I am the best ways to both benefit consumers—and I come sure they will be lauded as “world beating” even before from a consumer background—and stay ahead the rest of the world has been looked at. However, I internationally. think that a regular, expert independent assessment can check and report on all aspects—the standard of This matters today even more than in the past. rules,whether they are gold plated, how good enforcement Financial services are the leading sector in the British and operational systems are and, yes, what can be economy, not only in London but in many other areas learned by comparison with elsewhere. However, I do of the UK: Edinburgh, Cardiff, Newcastle and not think it is for the regulators to advise on whether Birmingham, to name but a few. In the wake of they are better at doing things than elsewhere. I already coronavirus, Brexit and international competition, we know their answer. need to treasure and enhance our leading position. France, the Netherlands, Germany, Ireland and The final part of my amendment suggests that the Luxembourg are trying to steal our lead—but ineffectively, regulators pay for the reviews—so it is rather like a as this hurts their business and consumers and encourages Section 77 review. Then it says that the review must be investors and services to move to New York or Singapore. published without modification, because there was a As Mr Barney Reynolds has argued, we must look certain amount of photoshopping of the Promontory again at the legacy of EU law, and I know my noble report about GRG and it was made public only via the friend Lord Trenchard will have more to say on his Treasury Select Committee publishing a leaked copy. ideas on another day. However,there are other ways that regular independent reviews could be done—more like an independent Wemust not forget one point: small and entrepreneurial person FiSMA Section 1S review that the Treasury businesses are the backbone of this country. Everyone can require—or through an oversight body led by a should remember that the big, powerful multinationals handful of skilled individuals, as the Australians are find it relatively easy to adapt to new regulations, rules now doing. It seems to me that, if you want assurance and requirements, and to lobby for arrangements that on high standards, which I do, that is the way to do it, suit their interests. in line with what looks like becoming the new best We must also create a benign climate for innovation, practice, and that is where the UK should be. which is a vital part of improving efficiency. There is one great example: the Financial Conduct Authority’s Baroness Neville-Rolfe (Con) [V]: My Lords, I will so-called “sandbox”—clear, simple and easy regulation speak to Amendments 6 and 7 in my name and that of for fintech. Thanks for this are due to the current my noble friend Lord Trenchard, who has a lifetime of Governor of the Bank of England, but Mr Bailey and experience in the financial services sector and understands I were promoting this as good practice in India four the whole issue of competitiveness and UK influence years ago. It is dispiriting that there are not more such from banking for many years in Japan. I am so sorry initiatives. that because of procedural changes he is now unable As my amendment states, we need “efficiency” and to speak to these amendments. “competitiveness” in the interests of UK plc to feature I refer to my interests in the register, particularly as in the purview of our regulators. A competition objective a non-executive director of Secure Trust Bank plc in is not enough; indeed, it can sometimes harm smaller Solihull and of Capita plc and as a member of this players, driving them bankrupt and causing problems House’s EU Financial Affairs Sub-Committee. I was for their customers, as bigger institutions mop up and especially sorry to miss Second Reading of this very take over their client base. Competitiveness is sometimes important Bill. wrongly associated with bad aspects of globalisation. These amendments—like the one moved by my That is wrong: UK competitiveness is what this country noble friend Lord Blackwell and those in the name now needs to strive for to support the UK base, rather of my noble friend Lord Bridges—introduce a than encouraging the sale of wonderful companies GC 125 Financial Services Bill [LORDS] Financial Services Bill GC 126

[BARONESS NEVILLE-ROLFE] Two years later, during Committee stage of the such as Arm to overseas interests. Alex Brummer has Financial Services Bill 2012, the then Financial Secretary argued this forcefully in a series of books, and I agree to the Treasury told the Commons: with him. “We only have to turn to the FSA report on the failure of the While we come at the issue from different angles, I Royal Bank of Scotland to see what use has been made of really do want my noble friend the Deputy Leader to the requirement to have regard to competitiveness. On page 29, the report refers to ‘a strong focus on the importance of the listen to those of us who are seeking a change to the “competitiveness” of the UK financial services sector and so of Bill to bring in considerations of “competitiveness”. avoiding “unnecessary” regulation. This focus reflected in part So I will finish with the word’s dictionary definition: the FSMA requirement to have regard to competitiveness issues.’” “1. Possession of a strong desire to be more successful than He went on to say that the Government did not others … 2. The quality of being as good as or better than others consider that a competitiveness objective would be a of a comparable nature.” desirable feature in FiSMA. He explained: What could be better than that? “We do not consider that a requirement to have regard to competitiveness is necessary to achieve the right balance between over-regulation and under-regulation, or to ensure that proper Lord Sharkey (LD) [V]: My Lords, Amendment 2, consideration is given to the needs of the financial services in the names of the noble Lords, Lord Bridges and industry or the wider economy”, Lord Blackwell, and the noble Viscount, Lord Trenchard, and concluded: provides an opportunity to reopen an issue that was “To include a requirement to have regard to international settled in 2012 by Parliament deciding against adopting competitiveness in this Bill would send completely the wrong a version of what their Lordships now propose. signal about the nature of the regulatory regime in the UK.”—[Official Their amendment does not come as a surprise, not Report, Commons, Financial Services Bill Committee, 1/3/12; just because this Bill provides an obvious vehicle for cols. 228-29.] its proposals but because it fits into the usual timescale That was true for that Bill and is true for this. All of loss of institutional memory. Prior to 2012, we had these objections are still valid. We should show more a “have regard” on competitiveness built into FiSMA confidence in the City and our regulators, as Jes Staley 2000; it required the FSA to have regard to recently suggested when he said that “the international character of financial services and markets and “in a funny way we’ve gotten pretty good at working inside the the desirability of maintaining the competitive position of the regulatory framework that is here. It protects the financial industry United Kingdom”. … as we learn how to deal with this regulation, and it makes the This “have regard” was widely seen as contributing to bank safer.” the financial crash of 2007-08, which is why FiSMA I think he was referring to his bank, not the Bank. He was amended in 2012 to remove it. also said that he “wouldn’t burn one regulation” to achieve the aim of competing with New York and During the discussion around and preceding its Singapore. removal, there were some very forceful observations; three deserve particular attention. The first was from Our amendment to the rather swashbuckling the Treasury, which, in its 2010 report, A New Approach amendment from the noble Lord, Lord Bridges, is a to Financial Regulation: Judgement, Focus and Stability, non-regression provision. If, by some lapse in said that there was strong evidence that judgment, the Government were prepared to accept “one of the reasons for regulatory failure leading up to the crisis the noble Lord’s proposal, our amendment would was excessive concern for competitiveness leading to a generalised ensure that our current high standards are not lowered acceptance of a ‘light-touch’ orthodoxy, and that lack of sufficient in pursuit of any competitiveness objective. Our consideration or understanding of … complex new financial amendment, as my noble friend Lady Bowles so eloquently transactions and products was facilitated by the view that financial explained, would also require a regular independent innovation should be supported at all costs.” review of the standards of governance of the regulators in relation to their rules and the enforcement of those 4.30 pm rules. When he gave evidence in 2010 to the Future of We do not believe that the amendment from the Banking Commission, the noble Lord, Lord Turner, noble Lord, Lord Bridges, or others with similar intent said: are desirable or necessary. We appear to have more “I’m not sure at all that a regulator should have regard to the confidence than the noble Lord in the City’s ingenuity, competitiveness. Now let’s be clear, that is something different creativity, sheer expertise and professionalism, and in from the quality of competition … I think that it can be a our world-class regulators and current regulatory legitimate aim of a regulator because competitive intensity is a framework. reasonable tool, but I think when you start saying that the role of a regulator is to help, as it were, the competitiveness of a location or of the nationally registered firms, I think that can in a subtle Lord Hodgson of Astley Abbotts (Con): My Lords, way create a conflict of interest.” this is the first time I have spoken in Committee, so I In its final report in the same year, the Future of draw the Committee’s attention to my entry in the Banking Commission concluded that giving regulators register. I will speak to my two amendments in this specific duties to promote international competitiveness group. Amendment 87 is broadly drafted and follows risks creating conflicts of interest and that: on from the line of discussion and approach taken by “International competitiveness is best served by ensuring that my noble friend Lord Blackwell. By contrast, domestic banks are able to compete effectively, without subsidy Amendment 106 is a highly specific focused proposal or special treatment. Promoting the success of British industry is for improving the UK’s regulatory regime, on which I a job for the … industry trade bodies, not for the regulator.” seek the Government’s response. GC 127 Financial Services Bill [22 FEBRUARY 2021] Financial Services Bill GC 128

Totake these in order, the purpose of Amendment 87 year the number of SARs rises; in 2019, it reached is to require the FCA and the PRA to take into 573,085, about 2,300 per working day. What use is account the impact on the UK’s competitiveness of made of these? The cost of all this to the regulated any regulatory measures they seek to impose, and in entities and so to consumers and clients is huge. Let us particular, under proposed new subsection (2)(b), to suggest that each SAR costs £250; that would create a assess the overall cost-benefit ratio of the UK’scompliance total cost of £143 million for the sector, its customers regime. and clients. Interestingly enough, that is almost exactly I know that even raising this issue risks one being the same figure as the total money recovered by the labelled the money launderer’s or financial criminal’s National Crime Agency, cited in the same report, friend. I plead not guilty to that, but I seek to ensure which was £150 million. Therefore, there is equality of that our compliance regime is and remains cost effective. cost, and there really seems little benefit at present. As evidence that I am not soft on financial crime, I However,to suggest that the system needs an overhaul draw the Committee’s attention to the fact that I have and pandemonium breaks out. As the NCA report put my name to Amendment 84 in the name of the says, noble Baroness, Lady Bowles, which seeks to make “SARs intelligence has been instrumental”— failure to prevent financial crime a criminal offence, note the word “instrumental”— which we will discuss at a later date. “in locating sex offenders, tracing murder suspects, identifying First, I want to consider culture. For too long it has subjects suspected of being involved in watching indecent images tended to be argued that any money spent on compliance of children online and showing the movement of young women is money well spent. As business practices evolve so to, being trafficked into the UK to work in the sex industry.” and quite rightly, should compliance practices, but no There is no mention at all of financial crime, but one has the responsibility to step back and consider the clear inference is that if you wish to challenge the whether some of the requirements of an earlier age SARs regime, you are abetting these appalling crimes. remain effective and are still needed—so one has ever- No wonder that people are nervous about challenging increasing layers of regulation. Regulators are, by their the status quo. very nature, risk averse. But somehow we have to create Finally,all this feeds into the compliance departments a climate in which we can find the right balance between of regulated firms. For the past 14 years, I have been a financial services industry which on the one hand the treasurer of the All-Party Group on Extraordinary might be seen as a system like the wild west, driving Rendition. I remain extremely supportive of the group, business away, and, on the other hand, a system so but I would ask for a change, and I am pleased to say muscle-bound by regulation that the consequent time, that the noble Baroness, Lady Kramer, has kindly expense and administrative hassle have an equally agreed to take over. Accordingly, she will take over the deterrent effect. It is to establish a formal mechanism bank account of the group and will assume signing to address this challenge that I have tabled Amendment 87. authority. The fact that we are both politically exposed We may well be told by my noble friend when he persons—PEPs—is causing enormous difficulty.It could replies to this debate that the regulators are now well be argued that the noble Baroness and I could use the aware of this challenge. Of course, that is to be welcomed, APPG’sbank account for money laundering and financial but I question how far down that organisation this crime generally, but the fact that we have fewer than new mood or culture or approach has spread—and, 20 transactions per annum would suggest a limited no less importantly, how far it has spread into the scale for what we are going to do. However, it is clear compliance departments of the regulated firms. Too that the noble Baroness and I will be faced with a often, waving the regulatory stick has come to be seen paper trail of considerable proportions. It is this sort as some sort of virility symbol. of mindless form filling and box ticking that is being The professional body, the Office for Professional repeated millions of times over and somebody,somewhere, Body Anti-Money Laundering Supervision, or OPBAS, needs to be charged with addressing this problem. in its latest annual report in March last year pointed I turn finally to Amendment 106. It has the specific out, in terms of disapproval, that 41% of professional purpose of trying to improve London’s competitive bodies being supervised did not take any kind of position by removing, wherever possible, the obvious enforcement action. No attempt was made to suggest inequities, unfairnesses and inappropriateness of a what target figure was the right one; there was just the one-size-fits-all approach by the regulators and creating impression that not enough was being done and efforts in its place a regulative framework that is appropriate and money spent must be increased. However, if you and effective as regards those to be regulated. look at the list of professional bodies being supervised, This amendment concerns the insurance sector,which it is not clear why many of them would need to take is a key part of the UK’s financial services industry, enforcement action except on the rarest of occasions. and I have been helped with the wording of this For example, one body being supervised is the Faculty amendment by the London Market Group. The group Office of the Archbishop of Canterbury. I doubt that brokers in the main deals of sophisticated corporate enforcement by the most reverend Primate the Archbishop clients, who have professional advisers at their disposal. of Canterbury needs to be a frequent event. As the FCA’s own wholesale insurance broker market The second general point is that, too often, the study in 2019 demonstrated, these clients seek the attitude among regulators is, “What I have, I hold.” services of a London market broker not because they The House will have heard me before on several occasions are want to manage issues caused by information speak about the poor cost-benefit ratio of the present asymmetry—something that we have heard about already suspicious activity report regimes, or SARs. Every this afternoon—but because they recognise that the GC 129 Financial Services Bill [LORDS] Financial Services Bill GC 130

[LORD HODGSON OF ASTLEY ABBOTTS] I turn to my amendments in this group: first, to advanced expertise housed within broking firms can Amendment 113, the review of financial services assist them in reaching the optimal outcome for their regulations. It seems an opportune time to look across risk-management programmes. They are not consumers, financial services regulations and the totality of the but they need protection in the way that individual or rulebooks of the regulators, not least the FCA and less sophisticated corporate customers may do. PRA. I have not suggested an exhaustive list of the However, the FCA makes almost no distinction regulations and rulebooks that should be reviewed, between the way it supervises the London market but I thought it would be helpful to give a number of broker, active in the specialty markets in London, and examples of where it seems sensible to conduct a the way it supervises a retail insurance broker dealing review post Brexit and as we move to our own regulation with an individual’s domestic and motor insurance of our financial services industry. requirements. Amendment 106 is drafted to ensure First, there should be proportionality. It should be that that there are no regulatory loopholes that the a general rule—any regulatory framework should stack mal-intentioned can exploit by those with malefic up to this, not just in financial services—that regulation intentions. Proposed new subsection (2)(c) makes clear should do exactly what it is intended to do and no the distinction between retail and professional clients, more. Economic growth should always be implicit while subsection (2)(d) asks whether the client has within regulation as well. If there needed to be a professional advisers and whether they are PRA or greater illustration of this, the current Covid crisis is SCR regulated; and importantly,subsection (2)(e) covers most certainly it: a horrific health crisis alongside an any potential impact on the UK’s financial stability. economic crisis. Wewill need economic growth wherever This amendment does not break new ground because it comes from. It is not just about preventing regulations the concept of the experienced investor is already well stymying economic growth; they should be considered established. Those who qualify in this category can be in the light of everything they can do to encourage, offered opportunities to participate in new issues and enable and unleash economic growth. refinancings with the minimum of fuss. Such a minimalist Finally, in some ways the most important element approach would never be appropriate for the general of my amendment is proposed new subsection (2)(c) public. That is the approach the amendment adopts as on innovation and competition. The competition point regards the insurance industry.It makes a clear distinction has been eloquently and extensively made by most between the different requirements of the professional previous speakers. I included innovation because of and the general client. I hope that my noble friend will the environment which we are currently in: the foothills be able to give this amendment a fair wind. of the fourth industrial revolution. We have fabulous competitive advantages in areas such as artificial intelligence, distributed ledger technology, the internet Lord Holmes of Richmond (Con) [V]: My Lords, in of things, data and so on. Regulations need to be participating with pleasure in this group of amendments, understanding of this environment, enabling it and I declare my interests as set out in the register. I empowering all those elements of the fourth industrial congratulate my noble friend Lord Blackwell on how revolution. If we needed any greater example, although he introduced the group and I agree with everything not a direct comparator, we should look at the approach that he said—and indeed what is contained in the taken to regulation in the mobile telephony market amendment tabled by my noble friend Lord Bridges. and the positive results for the UK that came out of it; I also endorse what my noble friend Lord Blackwell there are many learnings within that. said on our view of the Basel framework, not least in Amendment 114 is largely a probing amendment to terms of the issue of software. This is an excellent unpack the whole issue of the payments market and to example of our move towards standards which really look at what can be done—again, in many ways, deliver, rather than standards which are perceived to harking to the technologies of the fourth industrial be but are not necessarily higher or greater than other revolution—for strong customer authentication, not regulatory frameworks. adding increasing compliance burdens but starting from a position of what is required, what attributes one would need to rely on and what is the optimal way 4.45 pm of achieving them. It should be in a way where it can I entirely agree with the comments of my noble all be done in real time, rather than, as all too often in friend Lady Neville-Rolfe on the competitive approach the current system, a payment being made without that the FCA has taken to the regulatory sandbox. No necessarily knowing much, if anything, about where it greater compliment could be paid to that sandbox is going—and, indeed, to whom. than the fact that it has been replicated more than Similarly, I would welcome my noble friend the 80 times around the world. We need to push forward Minister’s comments on the capital and liquidity in this vein of competitiveness and enable that sandbox requirements of the entities at the two ends of the to be there all the time for all comers, and similarly payments landscape.As I say,this is a probing amendment push forward on the need for a growth box—more of at this stage, but there is a large potential for which in later amendments in forthcoming days. transformation in this world, putting together what I also encourage my noble friend Lord Trenchard: has already been said about competitiveness,the economic if I can tempt him to speak after the Minister, I think opportunity for the UK and all the elements of the the Grand Committee would benefit from and welcome fourth industrial revolution that we have to bring to hearing from him, with his vast experience over many bear. Yes, that applies to financial services but, again, decades. it also applies right across our economy. GC 131 Financial Services Bill [22 FEBRUARY 2021] Financial Services Bill GC 132

Baroness Bennett of Manor Castle (GP) [V]: My society’s expense—that is, at the expense of small and Lords, Amendments 2, 6, 7 and 87 seek variously to medium-sized enterprises, even larger enterprises, and urge the FCA, the PRA and the Bank of England to the vast majority of individuals. take into account the competitiveness of the United There is also an important regional aspect to this Kingdom. This is a dangerous concept that can only inequality. A competitive financial system will benefit harm Britain and our collective national security and wealthy parts of London while harming Britain’s well-being. Competition implies people winning and struggling regions. A better, upgraded financial system, losing, trying to beat down others to push ahead of spread out around the country, with local banks meeting them, taking risks and cutting corners. We all know local needs securely and safely, would be a significant where that ended up in 2008. improvement indeed. Instead, we should aim for a more secure financial The idea of competitiveness ensures that costs are sector that provides more useful, effective and safe spread across the majority of the UK population, services to individuals and the real economy. That with lost tax revenues and financial crises, while the would have a global benefit. If we have a decent benefits are realised in corporate headquarters mostly financial sector with good standards across the globe, in the wealthy parts of London, overseas and, very everyone wins. If we treat this as a zero-sum game, we often, offshore. No strategy that seeks to level up the lose and the world loses. regions based on a “competitiveness of the financial sector” agenda can possibly succeed. The noble Lord, Lord Hodgson of Astley Abbotts, spoke—complained, it would be fair to say—about We will come later to my Amendment 123, which regulators being, by their nature, risk-averse. Well, I, starts from an extensive analysis of the “finance curse” like many other Britons seeking to avoid a replay of and calls for an impact report on the costs of the financial 2008, applaud that existing risk aversion and seek to sector—something I do not believe the Government strengthen, not weaken, it. Competitiveness has been, have any kind of handle on, despite the hard work of and continues to be in the calls of many, exactly a small number of underfunded campaigners and comparable to downgrading. That includes relaxing academics. A large body of cross-country evidence capital requirements for financial institutions; reducing from such radical organisations as the IMF and the enforcement of criminal behaviour by financial actors, Bank for International Settlements shows that there is creating tax loopholes for billionaires or multinational an optimal size for a country’s financial sector, where corporations; and having weak competition policy it provides the services that an economy and population that allows a small number of firms to dominate need. Expansion beyond this size causes damage,increases markets and exploit British consumers, workers and inequality, boosts criminal behaviour and creates many taxpayers. This all reflects the model of free ports that other ills. We need a safe, balanced financial sector the Government seem so keen on. that does not suck in skills, resources and capital, taking them away from the businesses that need our The winners in this race are plutocrats and essential—and currently often badly served—needs, giant multinationals. This kind of competitiveness whether food security or construction, public transport is fundamentally anti-democratic and profoundly or care. destabilising in its contributions to inequality.Trickle-down Weare not Tudor buccaneers, whatever some members economics have long been discredited; financial services of our governing party might think. We live in an that concentrate money in the hands of the few only unstable, insecure world buffeted by environmental, harm the rest of us. I note that Amendment 3 in the economic and social shocks. We are seeking a new name of the noble Baroness, Lady Bowles, tries to place in the world—we have much talk of global Britain provide a form of insurance, as she outlined, but the —so it is worth thinking for a second about what the best answer, as the noble Lord, Lord Sharkey, said, is world sees when it looks at the UK financial sector. I not to insert “competitive” into the Bill at all. looked through a report from the Tax Justice Network The last global financial crisis was substantially the in 2019, which noted: fruit of competitive financial deregulation in Britain “The UK with its ‘corporate tax haven network’ is by far the and elsewhere, as Britain and other countries increasingly world’s greatest enabler of corporate tax avoidance”. relaxed rules to attract capital, thus allowing financial I note figures out just overnight from the Jubilee Debt actors to take highly profitable risks at the great Campaign, which show that of the debt owed by expense of the rest of us. Separately, Britain has 73 countries eligible for debt relief under the initiative, abjectly failed to prosecute money laundering via the 30% is owed to private lenders in the UK. If we want a City of London. Non-enforcement is a deliberate respected, admired place in the world—something that competitive strategy used by many tax havens. This could be only to our benefit—then an outsized financial corrupts our institutions and gives potentially hostile sector, one “competing hard”, will cost us dear. secret actors leverage over our economy and politics. I will speak briefly to Amendment 102 in the name In short, we need an upgraded financial system, of the noble Lord, Lord Tunnicliffe, which importantly with tighter controls and a demand that it meets the promotes transparency about how the Government needs of individuals and the real economy, as our seek to direct our international oversight and financial debate on the first group of amendments focused on. governance. I also express very strong support for This would support the financial integrity of our Amendment 121 in the name of the noble Baroness, systems and benefit the UK economy, particularly our Lady Bowles of Berkhamsted, which refers to country- security and ability to meet everyone’s basic needs. A by-country reporting. We know that giant multinational system driven by competitiveness benefits a few at companies shuffle money around like a fast-moving, GC 133 Financial Services Bill [LORDS] Financial Services Bill GC 134

[BARONESS BENNETT OF MANOR CASTLE] Some in the House will know that I served a year as shady casino dealer, making their profits in one place Lord . During that time, acting as but seeking to shift them to places competing—we are an ambassador for British business of all types, the back to that word again—on the basis of minimal challenges to the UK’s position as a centre for financial regulation and taxation. Who then pays for the schools services, as well as the undoubted opportunities which and hospitals their customers need? Who pays for the that position provides, were clear. Other centres have a maintenance of roads, the police, the courts? They constant eye to their global competitiveness. The noble take their profits and run, and the rest of us pay. Lord, Lord Holmes of Richmond, noted the significance of innovation; I am focused on the importance of The Deputy Chairman of Committees (Baroness Henig) innovation and am pleased to report that research (Lab): The noble Baroness, Lady McIntosh of Pickering, published this month by the City shows the UK is a has scratched from this group so I now call the next global leader in this area. The same research indicates speaker, the noble Lord, Lord Mountevans. that in terms of having an enabling regulatory and legal environment, the UK comes in third place, after Lord Mountevans (CB) [V]: My Lords, I support Singapore and Hong Kong. Now is the right time to Amendment 2. The strength and robustness of the ensure that the UK has competitiveness hardwired UK’s regulatory regime is vital to the health of our into its regulatory arrangements. financial services sector. High-quality regulation is On SMEs, in November Mr Sam Woods, the Bank part of the attractiveness of the UK for inward investment of England’s deputy governor for prudential regulation and is crucial for enabling access to other markets; it is and, as your Lordships will know, chief executive a competitive strength. It would be helpful for the Bill officer of the PRA made a Mansion House speech—or to signal an ambition in line with the Chancellor’s rather, since we are living in the era of Covid, a Mansion Statement in the other place on 9 November 2020 for House-labelled e-speech—in which he highlighted the the UK to become more globally competitive and have importance of designing a proportionate “strong and a long-term, ambitious strategy for financial services. simple” prudential regime for small firms. Moves such The Chancellor’s Statement was a welcome signal of as this are important because they show that regulators the kind of direction the industry is seeking. have an eye to their rules working in a way that The Bill should not be considered in isolation. The supports competition, which I detect as the underlying UK is undergoing broad developments in regulation: theme of this clause. the Treasury’s future regulatory framework review, for Lord Hunt of Wirral (Con): My Lords, I drawattention example, will shape the UK regulatory framework for to my interests as set out in the register. I recognise financial services and indicate how the sector needs to that these are probing amendments, but I exhort my adapt to the UK’s new position outside the EU. This noble friend the Minister not to underestimate either review is an important stage in the redesign of the the strength of feeling on the question of international UK’s regulatory regime and will play a key part in competitiveness or its importance to a sector vital to making the UK more globally competitive and attractive our economic recovery, as my noble friend Lady Neville- to international firms. Rolfe stressed in her impressive speech earlier in this debate. The foundation stone for the regulation of 5 pm financial services is still FiSMA—the Financial Services The review, and the Bill, are part of a much larger and Markets Act 2000—albeit in a form substantially range of activities which require scrutiny.The development amended by subsequent legislation. As the noble Lord, of the UK’sregulatory regime should be done holistically, Lord Eatwell, reminded us, the regulatory structure is taking account of a range of competitiveness drivers. currently subject to a fundamental review. The addition of a competitiveness factor will help to The financial services future regulatory framework ensure that our regulators have regard to the effects of review and phase 2 consultation closed at the end of their regulation, as well as giving them flexibility to last week. The early indications of a general direction react to developing trends and help make the UK’s of travel are welcome. The original version of FSMA regulation robust, as well as globally attractive. set out those four clear objectives for the new Financial Global regulatory coherence and co-operation is Services Authority, the FSA: market confidence; public more important than ever. It is through the development awareness; the protection of consumers; and the reduction and implementation of global standards that the industry of financial crime. In addition, the FSA was required can support the global economic recovery from Covid-19 to have regard to a number of other considerations, and enable investment into priority areas such as which included such obvious factors as efficiency, green finance and digitisation. A global and co-ordinated proportionality and innovation. They also included, approach to regulation makes risks easier to manage as the noble Lord, Lord Sharkey, reminded us—and I and supports greater financial stability. The UK’s new quote verbatim regulatory regime must maintain the highest of global “the international character of financial services and markets and standards to maintain the sector as a strategic national the desirability of maintaining the competitive position of the asset and ensure robust capital markets. Strong standards United Kingdom” attract business to the UK and give UK businesses and better access overseas. The noble Lord, Lord Blackwell, “the need to minimise the adverse effects on competition that may elected to avoid rehearsing the statistics, which I hope arise from anything done in the discharge of those functions”. we are all familiar with, so I will do the same. However, As other speakers have reminded us, after the crash the facts speak for themselves about the need to ensure of 2008, the incoming coalition Government inherited that the UK remains globally competitive in this sector. a severe recession and an unstable and untenable GC 135 Financial Services Bill [22 FEBRUARY 2021] Financial Services Bill GC 136 financial situation. They therefore undertook a deep explicit recognition that our international competitiveness consideration of regulation. In the debates in another matters. It is entirely spurious to claim that a regulator place on what became the Financial Services Act 2012, mindful of international competitiveness is likely to be concerns were repeatedly expressed to the effect that a weak regulator. It could and should be a very regulation under the FSMA had been not so much effective one indeed. light touch as soft touch. Since 2012, the entire financial As the noble Lord, Lord Mountevans, has just services sector, broad and diverse as it is, has effectively pointed out, our competitiveness relies on our strength. been punished—put into the naughty corner, as it were Our greatest strength is surely our reputation for providing —almost entirely because of the alleged failures of the the best advice and the best products at the best price, banks. The regulatory brush used was simply too something no regulatory race to the bottom could ever broad and therefore not fit for purpose. The requirement deliver. If we really have the ambition to become the to take account of international competitiveness was global centre for insurance and financial services—a jettisoned because, it was argued, it might dilute the realistic ambition, I argue, if we work together to robustness of regulation. deliver upon it—then we simply must get this right. I I have also taken a close look at the Second Reading very much hope that the Bill does not go down as a debate on the then Financial Services Bill, on 11 June 2012, missed opportunity. in which one colleague after another raised this question of competitiveness, including my noble friends Baroness Kramer (LD): My Lords, inevitably with Lord Trenchard, Lord Hodgson and Lady Noakes. So so many amendments to one Bill, this group is something this is a “Groundhog Day” debate, but I hope no less of an omnibus collection. I have some sympathy with persuasive for that. My noble friend Lord Trenchard some of them—for example, the country-by-country certainly wins a prize for consistency and constancy, reporting amendment tabled by the noble Lord, because he eloquently argued that day: Lord Tunnicliffe. While I disagree very much with the “Some of us believed that competition and the competitiveness noble Lords, Lord Hodgson and Lord Holmes, on of our financial markets should have been made an objective of their overall support for an international competitiveness the FSA rather than merely one of the principles to which it had objective in other areas, they are pointing out a need to have regard. I welcome the fact that the FCA is given a for the regulator to look again at issues such as competition objective in the Bill, but it is inadequate in that it falls proportionality and how to adapt to the new digital short of a responsibility to maintain or enhance the competitiveness of the UK’sfinancial markets”.—[Official Report, 11/6/12; col. 1245.] world. However, that does not seem to need to be put into law. This is really advice to the regulator, and I As both the Association of British Insurers and the hope that they will take a great deal of that good London Market Group have rightly pointed out, advice on board. promoting the international competitiveness of the I want to reply to the noble Lord, Lord Hunt, UK financial services sector to nurture its contribution because he echoed an opinion raised by the noble to our economic strength must now be restored to the Lord, Lord Blackwell, but very effectively countered objectives of the regulators. This would bring our by my noble friend Lady Bowles. He talked about regulators into line with other, competitor jurisdictions, activity-specific regulation creating the opportunity such as Hong Kong, the United States, Singapore and for some significant divergence in the regulatory Australia. In its phase 2 consultation paper, the environment. The lesson of 2008 was that the financial Government explicitly acknowledge: services sector is linked systemically.As my noble friend “A gap in the original FSMA model is that, while it set Lady Bowles pointed out, the crash in 2008 started high-level general objectives and principles, it did not provide for with largely fake and junk mortgages in the United government and Parliament to set the policy approach for specific areas of financial services regulation.” States.It worked its way into various securities instruments that were sold to people in the UK who did not A move towards increasingly activity-specific regulatory understand them, but should have. principles is helpfully adumbrated, as my noble friend The underpinning consequences of risk were also Lord Blackwell pointed out, ahead of the outcome of completely misunderstood. The way that derivatives the FRF consultation, in Schedule 3 to the Bill. This were traded and structured created a potential risk of would require the PRA, when considering capital losing liquidity overnight. This is exactly what happened requirements regulation, to have regard to with the high street banks in the UK. They became “the likely effect of the rules on the relative standing of the competitive with others in the financial sector to develop United Kingdom as a place for internationally active credit the kinds of profits that they saw being made by rival institutions and investment firms to be based or to carry on companies, pushed their credit standards to the point activities.” where, frankly, they were no longer standards, and chose This seems a welcome step back towards an old principle methods of funding themselves that made them vulnerable and, quite possibly,a Rubicon of significance crossed—or, to any volatility in the overnight markets. This is not more accurately, re-crossed. On that basis the Bill, an industry in which we can separate the different while welcome in its own terms, is merely the beginning pieces into silos. They are all interlinked and that must of a vital process which will determine the character underpin any form of regulation that we have. of the post-Brexit UK financial services sector,potentially for a generation or more. 5.15 pm Once the results of the consultation have been Like others, I and my colleagues remain deeply digested, I hope to see far more acknowledgement in suspicious of any amendments that put an obligation regulation of the great differences that exist between on the financial regulator to support an international different elements of financial services, along with an competitiveness objective. When the change was made GC 137 Financial Services Bill [LORDS] Financial Services Bill GC 138

[BARONESS KRAMER] create some internal systems that, one hopes, make risk in 2012 to remove the relevant “have regard” it was not more explicit and deal with issues around whistleblowing done lightly. It was done because one could trace the but, in terms of having the authority that I think so impact that that had had on regulatory decision-making many of us hoped it would have, that is now long gone. and, indeed, some regulatory deference. It was removed This is still true. One of the most damning descriptions because it was a threat to financial stability in the UK I ever heard of UK regulators—in contrast with, for and to the role of the regulator, which surely has to example, the US regulator—is that when a US regulator put financeability first and above all else. comes to an institution, that institution is in fear; I ask this Committee not to indulge in short memories, when a UK regulator comes to an institution, people since this country is particularly vulnerable to failures go and make tea. It has not proved the strong resource in financial services. No other country depends for so we all hoped for in disciplining the industry. much of its economic prosperity, its jobs and its tax I take very strongly the position that we must not revenue on the financial services sector. We saw that put any regulator, even a strong one, in a position graphically in 2008 and the years that followed: we where it is basically being told by the objectives that it were hit the hardest by far. Risk for us has far greater can, without parliamentary intervention, set out consequences than it might do in many other countries. regulations to match the weakest practice evident I am sure that if the noble Lord, Lord Blackwell, internationally. We also have to remember the other were able to respond and if the noble Lord, Lord Bridges, recommendations for accountability the Bill puts forward. were here—I understand perfectly that he has a very A lowest common denominator strategy is not acceptable. good reason for not being present—they would probably Very unfortunately, this language, combined with the say that the industry learned its lesson after 2008 and lack of parliamentary accountability in other parts of changed its culture. They might argue that the regulator the Bill, would allow one to happen. We have to take a now has many more powers. To some degree that is, very strong stand. indeed, true. But I am very conscious, and I know that I sometimes refer to it too often, that those two years Lord Eatwell (Lab): My Lords, I will begin by on the Parliamentary Commission on Banking Standards speaking to Amendment 102 in my name and that of really scarred my mind and my thinking. Leading my noble friend Lord Tunnicliffe. It is a probing figure after leading figure in banking came before that amendment and seeks to persuade Her Majesty’s commission—anyone is welcome to go back and read Government to spell out their priorities as a participant the verbatim testimony—and sought to escape any form in international discussions on the direction and detail of personal responsibility. They pretty much argued of financial services regulation. After all, at the very against any remedy, whether it was around the issue of heart of the Bill is legislation covering a wide range of personal responsibility, higher capital requirements or aspects of international financial regulation. ring-fencing. It was absolutely clear that they and Her Majesty’s Government being clear about their those who would follow them into those institutions priorities would greatly assist the Committee. After would seek to undo any constraint as soon as they all, the Bill is about incorporating the conclusions of thought they could manage it—as soon as memory the Basel Committee on Banking Supervision into faded. UK legislation. What could be more international I want to point to something that the noble Lord, than that: submitting British law to the decisions of a Lord McNicol, said in a previous cluster of amendments: committee of which Her Majesty’s Government are that so much money washes through the financial not a member? That is a rather exotic interpretation of sector that the temptation to push boundaries is palpable. taking back control. It is also about the travails of It does not mean that there are not good people in the equivalence and, as amendments in the group testify, industry; of course there are, and we are all very the relationship between financial regulation and grateful for that. However, over time, charismatic and international competitiveness. seemingly short-term successful individuals have a Yet we lack a clear statement of Her Majesty’s long history of being able to take the industry to a Government’s approach to international financial point of risk that no one would ever have accepted had regulation, particularly on its future now that the UK they sat down and explicitly defined where it all was has left the European Union. What are the Government’s going. regulatory priorities? What are their future plans? In We do not have a good history of regulators standing the documents associated with the regulatory framework up to the big institutions. Again, go back and look at review, we are given some insights into the Government’s that testimony: it is underpinned by deference. On the goal for the institutional responsibilities for regulation, previous set of amendments I believe that the noble but what is the policy framework, not the institutional Baroness, Lady Penn, talked warmly of the tool that structure, that will guide their proposed reforms? This the FCA has in the form of the senior managers and probing amendment provides Her Majesty’sGovernment certification regime. She is right: if that were used with the opportunity to clear some of the fog. If noble properly, it would be some tool. However, if we look at Lords are to scrutinise satisfactorily the Bill and the the ways in which the FCA has chosen to use that, it is outcome of the regulatory framework review when it so rare for it to turn and exercise the standard of “fit comes before the House, they need this comprehensive and proper” which in effect removes a chief executive insight into the Government’s thinking. from office because of regulatory failure. Within the If we look for the core of Her Majesty’sGovernment’s industry, that standard is now regarded as essentially international regulatory policy, it is obvious from the non-threatening. It is not that the regime does not do Bill that much is to be found in the analysis developed some good things—it pushes various institutions to by the Basel Committee. Yet, as is well known, it is GC 139 Financial Services Bill [22 FEBRUARY 2021] Financial Services Bill GC 140

European Union directives that most closely follow Bank of England Act, I cannot agree that Her Majesty’s Basel proposals—exactly those directives from which Government should be ready to rank competitiveness the Government declare independence and their desire equally with the bank’s statutory objective: to protect to diverge. However, divergence from EU directives and enhance the stability of the financial system of will inevitably involve divergence from Basel. So what the United Kingdom. Should they be happy to pursue is it to be: acceptance or divergence? It would be international competitiveness while putting family finances hugely helpful if the Minister, in summing up, could at risk? Should they be happy to pursue international clarify the position. competitiveness by putting the soundness of our financial Then there is the role of the G7. Ever since the institutions at risk? I believe not. The current hierarchy G7 Halifax summit in 1995, following the Mexican of regulatory objectives signals clearly where this country’s financial crisis of the winter of 1994, financial regulation regulatory priorities lie. has been an ever-present item on the agendas of G7 Let us remember that one of the most overpowering meetings. By the way, it is Halifax, Nova Scotia, just in advantages that can accrue to any international financial case the people of Yorkshire think they missed something. centre is the reputation that it is well and securely Given that the UK is to chair the G7 this year, how regulated. That is an accolade not to be sacrificed. As will Her Majesty’s Government approach questions of has been said already, the danger in these amendments post-pandemic regulatory reform now that the UK is that of the lowest common denominator. For all has an independent voice in these matters? What lead the reference to high standards, it is international will Her Majesty’s Government provide as chair to our competitiveness that will be a primary statutory objective, G7 partners on financial regulation? equal to or even above the stable operations of the The issue of country-by-country reporting referred money markets or the financial risks to which the to in the amendment is primarily a question of the British people are exposed. That would be unwise. taxation of large multinational entities, but there is an important echo of the country-by-country issue in the 5.30 pm section of this Bill that deals with insider dealing and money laundering. At the heart of the problem of I regret that I also have little sympathy for financial crime is the question of beneficial ownership: Amendment 87, proposed by the noble Lord, an area of regulatory policy within which, as the noble Lord Hodgson of Astley Abbotts. Benchmarking is in Lord, Lord Callanan—the Minister for Climate Change fashion these days. We are regularly told that one or and Corporate Responsibility—admitted, our framework other government service is world-leading or world-class; is “attractive to exploitation”. He is right. Knowledge what we are not told is whether standards in the rest of of beneficial ownership is as fundamental to the prevention the world are good, decent or disreputable, and whether of money laundering as it is to the prevention of tax our world-class performance is just a little bit better avoidance and evasion. I will return to this issue later than good, decent or disreputable. Benchmarking the in our deliberations. The important point that arises at UK’s financial system against others that are seriously this time is that this is but one more example among deficient is no goal at all. Why should we settle for a many of the lack of clear policy perspective on behalf deficient regulatory system? Why not have one that is of Her Majesty’s Government. I hope that the Minister sound and successful on its own terms? will be able to respond to the probing amendment and However, Amendment 106, also in the name of the outline that policy perspective. noble Lord, Lord Hodgson, is worthy of careful I now turn to Amendments 2, 3, 6, 7 and 8, all of consideration. It calls for recognition of the nature of which deal with the relationship between regulation financial products and clients within the regulatory and international competitiveness.I find myself somewhat framework. The key point that I believe the noble out of sympathy with these amendments, primarily Lord wishes to incorporate in the Bill is that different because the manner in which the issue of international financial activities carry different risks and hence should competitiveness is addressed in the current version of be regulated differently. This is the main point of FSMA is about right. In it, competitiveness is already Clause 1, of course, which excludes certain investment an operational objective of the PRA and the FCA. firms from the capital requirements regulation. Given the performance of the City of London over This amendment incorporates a widely held view. the past 20 years, this objective would seem to have However, it goes a bit too far. Financial services are, been comprehensively achieved. It may be that the by their nature, highly fungible. As the noble Baroness, proposers of these amendments fear that the competitive Lady Kramer, pointed out, regulatory arbitrage is a position of our financial services industry will be fact of daily life. Activities that carry different risks undermined by the UK having left the European one day carry the same risks the next. Even the customary Union, and they are now desperately trying to repair distinction between retail and wholesale activities is the damage. Let us all hope that they are mistaken. Of far more permeable that its common use would suggest. course, the key point in FSMA is that competitiveness After all, all transactions ultimately impinge on the is subordinate to ensuring that markets function well, well-being of some households somewhere. So although as in the case of the FCA, and subordinate to the the amendment raises matters that must always be promotion of the safety and soundness of PRA- kept in mind, raising the differentiation of regulatory authorised persons, as in the case of the PRA. That is approaches to the status of an objective is a step too surely right. far. Similarly, with respect to the attempt by the noble Finally, the amendments in this group in the name Baroness, Lady Neville-Rolfe, to insert by means of of the noble Lord, Lord Holmes of Richmond, call Amendment 7 a competitiveness objective into the for reviews of financial services regulation and the GC 141 Financial Services Bill [LORDS] Financial Services Bill GC 142

[LORD EATWELL] importance of protecting the safety and soundness of regulations relating to financial payments. Although our financial system, the integrity of financial markets, the matters of concern raised by the noble Lord are and of protecting consumers,as reflected in the regulators’ worthy of consideration, I hope that they are just the existing objectives. sorts of issues being addressed in the current regulatory Those two facets of the debate point up the critical framework review. balance that needs to be struck and the arguments that This is an important group of amendments since are necessary to build a consensus on the right approach most of them challenge the Minister to clarify the for the UK’s financial services sector. This is a delicate Government’s thinking following the UK’s exit from calibration that needs a great deal of thought, which is the European Union. I am sure that we all await the why I say to the Committee that these are not arguments Minister’scomprehensive reply with considerable interest. for today.The Government’sfuture regulatory framework review is considering how the UK’s financial services Earl Howe (Con): My Lords, I am grateful to all regulatory framework must adapt to reflect our future noble Lords who spoke in this debate, which has outside of the EU. That has to be the right place to opened up an extremely important set of issues relating consider issues such as the regulators’ objectives. to the competitiveness of our financial services sector. The noble Lord, Lord Eatwell, asked me for a few I am sure we all recognise that the UK has long been a further details on the Government’s approach to an global leader in financial services; I am the first to overall policy framework. Their proposed approach agree that, as we adapt to our new position outside the will involve putting new policy framework legislation EU and the opportunities that it brings, it is essential in place for key areas of regulation and moving regulatory that we continue to provide the right environment to requirements from the UK statute book to regulator support a stable, innovative and world-leading financial rulebooks. Parliament will have the final say on the services sector. That is why I embrace this opportunity approach adopted and how it is applied through to speak about this vital industry’s place in the world. legislation. The Government will bring forward further First, I remind the Committee of my right honourable detail on our approach to implementation, and invite friend the Chancellor’s speech last November. He was stakeholder views on this, in due course. We expect clear about the Government’s commitment to ensuring that applying the FRF approach to the full body of that the UK continues to be the most open, competitive onshored EU legislation will take several years to and innovative place to conduct financial services deliver. anywhere in the world. I say in response to the noble We are committed to full, timely and consistent Baroness, Lady Bennett, that the Chancellor could implementation of the Basel regime. I refer the noble not have been clearer about the huge value of our Lord to the Governor of the Bank of England’s recent financial services sector to the entire UK economy, speech, which I am sure that he has already read, including nearly £76 billion in tax receipts in the last which sets out examples of some departures from the financial year and more than 1 million jobs. At the EU approach that we are contemplating, one of which very heart of this vision are the UK’s world-leading is to exclude the value of software assets in the valuation regulators: the Financial Conduct Authority, or FCA, of bank capital. and the Prudential Regulation Authority, or PRA. They are respected across the world for their expertise In saying that, it is worth recognising that a and thought leadership on the regulation of financial competitiveness objective for the regulators would not services. be a silver bullet to maintain and enhance the UK’s competitiveness; it is also not necessary in order to I will now address the proposals that the amendments develop it. A range of factors determine the attractiveness invite us to consider. Amendments 2 and 6 would of our financial ecosystem and make the UK a leading introduce a statutory objective for the FCA and PRA financial hub. This includes access to highly skilled to support the standing and competitiveness of the talent, access to a broad international investor base, UK as a global financial centre. Amendment 7 would and dynamism and innovation to give us a leading introduce a similar competitiveness objective for the position in the markets of the future, including fintech Bank of England relating to financial conduct and and green finance. prudential regulation. Amendment 87 has a similar purpose and would require the regulators to take In fact, I reassure the Committee that the Government international competitiveness issues into account when are already taking action now to ensure that making rules, as well as reporting to Parliament on competitiveness is a core consideration in our approach this and benchmarking the UK against other international to financial services, and a consideration of the regulators. financial hubs. The supplementary Amendment 3 seeks In the prudential measures in this Bill, for example, to explore what is meant by “high market standards” the UK’s competitiveness is one of the issues that the and to instigate a formal review of regulator activity regulators must have regard to when making rules in every three years. these areas. We really are not standing still in this I listened with interest to the many good arguments space. from noble Lords in favour of including competitiveness The Government have also kicked off a wide range as an element of the regulators’ statutory objectives. of activity seeking to seize the opportunities presented I have also listened to other contributions, including by having left the EU. This includes the review of the those from the noble Baronesses, Lady Kramer, noble Lord, Lord Hill, into listings to make the UK a Lady Bowles and Lady Bennett, and the noble Lord, more attractive location for companies to list and Lord Sharkey, which reminded us of the need to be trade in, and the UK funds regime review, which is cautious. They also reminded us of the paramount considering tax and regulatory opportunities to make GC 143 Financial Services Bill [22 FEBRUARY 2021] Financial Services Bill GC 144 the UK more attractive for funds. The long-term asset Given the size, complexity and global nature of our fund will encourage investment in long-term investment financial system, we must of course make sure that opportunities. The Solvency II review is seeking views customers understand the risks of the financial services on how to tailor the prudential regulatory regime to products that they use. Having left the EU, the support the UK’s insurance sector. Ron Kalifa OBE is Government believe that there may be opportunities leading an independent strategic review to identify for responsibly applying more proportionate regulation opportunities to support further growth in the UK in some areas. For example, Sam Woods, CEO of the fintech sector. The payments landscape review is seeking PRA, made the case last year for a “strong and to ensure that the UK maintains its status as a country simple” approach to the regulation of small banks. at the cutting edge of payments technology. The I hope that noble Lords will take from these remarks consultation on cryptoassets and stablecoins seeks to that the Government are committed to exploring and understand how the UK can harness the benefits of embracing the opportunities we now have to enhance new technology and support innovation while mitigating the UK’s competitiveness while remaining committed risks to consumers and stability. The call for evidence to the highest international standards of regulation. on the current overseas framework seeks to ensure that our regime is coherent, fair and easy to navigate. I 5.45 pm should also mention the independent ring-fencing review, Amendment 102 considers international co-operation which will consider the rules separating retail and on country-by-country reporting and other topics. It investment banking activities and any impact that they would require a report on the Government’s priorities may have on banking competition and competitiveness. as a participant in international discussions on the I hope that this long list assures noble Lords that the direction and detail of financial services regulation. Government are absolutely committed to protecting The Government have set out the clear principles that and promoting the competitiveness of our financial define our international strategy. We believe in quality services sector as we seek to ensure that the UK regulation based on international standards, and we continues to be the most open, competitive and innovative believe in deference to the regulatory regimes of other place to do financial services anywhere in the world. jurisdictions where appropriate—that is, recognising Amendment 33 looks at this question from the that different regulatory regimes can achieve similar other side of the debate. It seeks to probe the legal outcomes. This is the best way to deliver for all market effect of the obligation placed on the PRA to “have participants. The Government want to ensure that our regard”to the UK’s international competitiveness when legislative and regulatory framework for cross-border making its CRR rules. I have already spoken about the financial services achieves the goal of attracting liquidity UK’s status as a global financial services hub and the and activity to the UK while supporting financial work that we are doing to maintain it. The Government stability and upholding our principle of openness in want to ensure that the PRA has specific regard to financial markets. those ambitions when implementing its Basel rules In relation to the co-ordination of regulatory efforts because, while the Government and the regulators to tackle financial crime and its facilitation, the Financial remain committed to the full and timely implementation Action Task Force is an intergovernmental body that of Basel, now that we are outside the EU, we have the develops the international standards for combating opportunity to implement these standards in a way that money laundering and the financing of terrorism and takes account of the specificities of the UK market. proliferation. The UK is a founding member of the FATF and is committed to following and upholding That does not mean a regulatory race to the bottom. its standards. This requirement is entirely subordinate to the PRA’s This Government have championed tax transparency existing primary and secondary objectives of promoting through initiatives at the international level and through safety and soundness, and effective competition, domestic action such as the requirement for groups to respectively. Amendment 106 in the name of my noble publish tax strategies. In relation to public country-by- friend Lord Hodgson would require the PRA and the country reporting, the Government continue to believe FCA to consider when developing new rules the nature that only a multilateral approach would be effective of a product or service being provided, the level of risk in achieving transparency objectives and avoiding this entails for UK consumers and the level of disproportionate impacts on the UK’s competitiveness sophistication of a client. This is a sentiment with or distortions regarding group structures. which it is hard to disagree, but I do not agree that an I turn now to Amendment 113, which would require amendment to this effect is necessary or would significantly a review of all financial services regulations, and alter our current approach to regulation. Amendment 114, which would require a review of When exercising their functions, both the FCA and payment services. Although I am supportive of their the PRA are currently obliged to consider proportionality objectives, the amendments tabled by my noble friend under their regulatory principles. For instance, one of Lord Holmes of Richmond would duplicate a significant the core measures in the Bill enables the introduction amount of work that this Government are already taking of a tailored prudential regime for investment firms. forward to take advantage of our new freedoms and ensure This regime—the IFPR—will account for differences that our financial services regulation is fit for purpose— in the size and business models of investment firms at some of which I mentioned earlier in my remarks. its very heart. Only non-systemic investment firms will On payments, as I touched on earlier, the Treasury be put on this new FCA-regulated regime, while those is presently conducting a payments landscape review that are of systemic importance will remain regulated that aims to ensure that the UK maintains its status at by the PRA. the cutting edge of payments technology. A call for GC 145 Financial Services Bill [LORDS] Financial Services Bill GC 146

[EARL HOWE] I had wanted to speak properly and fully within this evidence has already closed and the Treasury will respond debate but am now hesitant to do so, as I am sure my to this in due course. The call for evidence set out the noble friend the Minister will appreciate. I had wanted key drivers of new payment systems and services, to make several points, and wished to explain why I including the broader trend towards new service providers think the noble Lord, Lord Sharkey, the noble Baroness, and payment chains, and asked questions about the Lady Bennett of Manor Castle, and, indeed, the noble opportunities and risks they create and the next steps Baroness, Lady Kramer, are so wrong in believing that that the UK should take to ensure that it maintains its the FSA’s having regard to competitiveness was a position as a world leader in payments networks. Given cause of the financial crisis, or that competitiveness, of the significant work already under way on regulatory itself, heightens inequality. Either Amendment 2 or reforms in the financial services sector, and this Amendment 6 would be an improvement to this Bill. I Government’s commitment to continue to assess and would like to ask my noble friend the Minister which review these regulations now that we have the left the of the two he prefers, because they are not precisely European Union, I ask my noble friend not to move the same. In any case, as my noble friends Lord his amendment when we reach it. Mountevans and Lord Hunt have said, there is strong I have given a long answer, but I hope that it has expectation and hope that the Government will do been helpful to the Committee. As I hope I made clear, more to secure the City’s future in relation to improving I have some sympathy with many of the issues raised the competitiveness of the markets. in this debate.Later,we will debate a group of amendments focusing on innovations in financial services so there Earl Howe (Con): My Lords, I am grateful to my will be an opportunity to return to the broad theme of noble friend Lord Trenchard, and sorry that he was this debate, but noble Lords should be in no doubt not able to enter the main list of speakers for the that the Government are committed to promoting reasons that he stated. I hope that we will hear more the UK’s competitiveness and seizing the opportunities from him in later debates but I also hope that he will that Brexit can bring us—but doing so in a responsible take some encouragement from the actions that the and measured way. For these reasons, I ask my noble Government are already taking to promote the friend Lord Blackwell to withdraw his amendment at competitiveness of our financial services independently this stage. of any conclusions reached from the FRF review. Those are proof of the Government’s commitment The Deputy Chairman of Committees (Lord Russell and intent to put actions where our words have been. I of Liverpool) (CB): I have received requests to speak after very much look forward to debating his ideas further the Minister from the noble Viscount, Lord Trenchard, in the course of these Committee proceedings. and the noble Baroness, Lady Neville-Rolfe. I call first the noble Viscount, Lord Trenchard. Baroness Neville-Rolfe (Con): I thank my noble friend the Deputy Leader for his full and courteous Viscount Trenchard (Con) [V]: My Lords, I am responses, which I shall read very carefully before grateful to the Committee for once again permitting returning to the issue at Report, as I think that there me to speak after the Minister. Even though I have my may be something missing in the Bill and that it would name to two amendments in this group, I had not not be wise to defer the whole matter of the next set of realised that the procedural change that the House is financial services reforms. What in my noble friend’s about to approve at 8 o’clock this evening—which I long and helpful list assists smaller financial services think is rather strange—now prevents one from doing businesses, which do not necessarily want to list on the so unless one takes an additional step, in a narrow stock exchange yet suffer the full cost and burden of window, of specifically putting one’s name down to FCA and PRA regulation as they struggle to do a individual groups as well. good job for consumers and their clients? I had wanted to speak in support of Amendment 2 in the name of my noble friend Lord Bridges of Headley, Earl Howe (Con): My Lords, I can probably expand as moved so ably by my noble friend Lord Blackwell, this answer to advantage in writing. The Government and to Amendment 6, ably moved by my noble friend fully understand the disproportionate effect of some Lady Neville-Rolfe. I thank my noble friend Lord Holmes of our regulation on small firms, which is why we are of Richmond for his kind words, and most heartily looking critically at whether a more proportionate thank my noble friend Lord Hunt of Wirral both for approach is available to us. It is probably best if I spell what he said and for quoting from my 2012 speech on out our thoughts in a letter, which I would be happy to this subject. copy to all Peers in this debate. Your Lordships may wonder why I have added my name to two different amendments which seek to The Deputy Chairman of Committees (Lord Russell achieve approximately the same result. This is because of Liverpool) (CB): I have received one additional there are many ways to raise the importance of request to speak after the Minister, and I call the noble competition and the competitiveness of markets, and I Baroness, Lady Bennett of Manor Castle. have in my mind some further variations of the theme. In any case, I strongly believe that we must move Baroness Bennett of Manor Castle (GP) [V]: My quickly to maximise the attractiveness of London’s Lords, I thank the noble Lord the Deputy Leader for markets to be sure that the City, including our wider his full response in our previous discussion, but there financial services industry, will remain one of the truly was one figure that he raised in that response that I leading global financial centres, with all that that wanted to ask him about the source of and justification means for our prosperity as a nation. for.That was the claim that the financial sector contributed GC 147 Financial Services Bill [22 FEBRUARY 2021] Financial Services Bill GC 148

£76 billion in tax receipts. I am basing this question on withdraw my amendment. I do not expect to repeat this work done by a fellow Member of your Lordships’ amendment but, as Members will already know, other House, the noble Lord, Lord Sikka, who may not be amendments are coming up around review where I joining us until later—so I wanted to raise this point will wish to pursue that point further. I beg leave to now. I understand from his work that this figure withdraw my amendment. comes from a report prepared by PricewaterhouseCoopers and includes £42 billion borne by customers in the Amendment 3, as an amendment to Amendment 2, form of VAT and paid by employees in the form of withdrawn. income tax and national insurance contributions. The remaining £33 billion is an estimate, and the report says that PwC Lord Blackwell (Con) [V]: My Lords, I thank my “has not verified, validated or audited the data and cannot noble friend the Minister for his very fulsome responses therefore give any undertaking as to the accuracy”. and other noble Lords for their contributions. In many of Could the Minister tell us what further justification the contributions there was agreement that competitiveness the Government have for that figure? was important for the financial services industry. I cannot agree with the noble Lord, Lord Sharkey, that Earl Howe (Con): My Lords, this is clearly a detailed because the House reached one view 10 years ago, we and analytical question, which is probably not appropriate cannot learn the lessons and think again about this for Grand Committee. I would be happy to write to issue. Neither can I agree with the noble Baroness, the noble Baroness, giving her chapter and verse as far Lady Bennett, that a smaller financial services as I am able to do. industry that created less wealth would be beneficial for the UK. Baroness Bowles of Berkhamsted (LD) [V]: My Lords, However, I was very struck by the contributions I thank all who have spoken in this debate, and the from my noble friend Lord Holmes and others about Minister for the extensive replies. As he said, we have the importance of innovation in the area of payments, heard a lot of views, a lot of which I felt coincided among others. I am reminded that you cannot have with one another, at least in terms of what was said, innovation without some element of risk. This is an more perhaps than appears in the amendments.Ultimately, example of where, if there were no consideration of a lot of the things that were complained against could international competitiveness, there might be no reason be dealt with through proportionality. Yes, it is not for the regulators to allow any risk into the system. competitive if the actions of the regulator are not They would play completely safe, whereas a measured proportionate—be that in rules or supervision. Therefore, management of risk to allow innovation is important. I think there is less need to give a specific competitiveness You cannot innovate without risk. Financial services mandate, because that confuses whether you are seeking is not about eliminating risk but about managing risk. something else on top. I refer to what the noble Lord, If it were about eliminating risk, no bank would ever Lord Blackwell, said in introducing his amendment, grant any loan and no insurance company would ever when he said that these things were probably taken issue any insurance policy. I think that is a good into account but not formally, or they would be taken example of how innovation is an important part of as given in any other industry. competitiveness. I was grateful to the noble Baroness, Lady Bowles, 6 pm for her amendment on the definition of “standards”, Who is assuming that they are not taken as given on which we had a constructive debate. This is not within this industry? The Government have the possibility about the lowest common denominator; it is about of giving remit letters in the consultation that is ongoing. high standards, and she challenged how we define There is the proposal that there may be more remit that. It cannot be about keeping every rule exactly as it letters. It is the place of government to say what it is now; it has to be about outcomes, and I think thinks of the economic position of competitiveness, everyone would agree that high standards must mean but without binding the regulators. I think that probably maintaining or improving standards of outcomes. is about right, while we continue to explore what has However, if you take the example that was given on already been said is a new and more adaptive system, the impact of SARs regimes or, indeed, the way MiFID because it is only for the UK, where more proportionality is implemented, there will be many opportunities to can be exploited. We know that the regulators do not improve the effectiveness of regulation to produce better get it right and the noble Lord, Lord Hodgson, was outcomes. This will not necessarily involve keeping able to seize the opportunity to remind us all of the exactly the same rules and regulations; it will involve politically exposed persons regime—with which we improving them. This comes back to the point made by are all, unfortunately, very familiar—as an example of my noble friends Lady Neville-Rolfe and Lord Hodgson: where the requirements in some instances greatly exceed this is about the efficiency of regulation and doing it what is necessary. better, which is, and should be, the driving force for a It has been a useful debate. The Minister reminded more competitive regulatory regime. us that there are numerous sectoral reviews. I agree I was grateful for the Minister’s acknowledgement that those are necessary, but my amendment had that the Government support promoting the something slightly different. It was saying that there competitiveness of financial services. I note his comments should more oversight of what the regulators are that this needs to be balanced against other objectives; getting up to on a regular basis rather than from time I simply say that it is not balanced if the objective is to time when things have gone bad. For now, I will completely missing—it has to be there so that it can be GC 149 Financial Services Bill [LORDS] Financial Services Bill GC 150

[LORD BLACKWELL] about Amendment 5 and the similar Amendment 73 is balanced. He made the point that, rather than introducing to bring small businesses within the non-exploitation this measure now, he would like time to consider it in principle—defined by the noble Lord, Lord Tunnicliffe, the policy framework. I and other noble Lords will in his amendment—and to highlight some things that need to reflect on that and what words of assurance he regularly happen in contractual terms and which can can give us, as the Bill passes, that there will be a be exploitative. Amendment 73 is more explicit and commitment to do something about competitiveness would allow the FCA to intervene where there is as an objective. However, in the meantime, I beg leave “Unconscionable conduct”, even if a consumer or to withdraw Amendment 2. small business has entered into a contract. The issues that are highlighted as wrong behaviour, Amendment 2 withdrawn. although within an exemplary list, are: patterns of conduct Amendment 4 not moved. that rely “upon unequal power”; terms of notice “or other compliance … which make it impractical … to comply”; Baroness Penn (Con): My Lords, I suggest that we the use adjourn these proceedings for 10 minutes for a short “of notice terms to coerce … unfavourable contracts”; break. compliance terms that are “not reasonably necessary”; and risks that the larger supplier should have realised 6.06 pm would not have been “apparent to the customer or small business”. Sitting suspended. This is not a random list of points—there are rather 6.15 pm more in my Private Member’s Bill on the same subject— but a key list of matters that were used by GRG in the exploitation of small businesses, and which the FCA Amendment 5 said it could do nothing about because they were Moved by Baroness Bowles of Berkhamsted outside the regulatory perimeter. 5: Before Clause 1, insert the following new Clause— Once more I must look to other countries to see “Non-exploitation of consumers or small businesses how we compare, and once more I find that Australia (1) The Financial Services and Markets Act 2000 is has tried harder. It has a general law of unconscionable amended as follows. conduct in commerce that deals with all these issues (2) In section 1C (the consumer protection objective), after and more, and which extends to not only consumers subsection (2)(e) insert— but business to business. I do not know how many “(ea) the general principle that firms should not exploit noble Lords read the various detailed contracts that a consumer’s or small business’s vulnerability, one is forced to sign as an individual or small business behavioural biases or constrained choices;”. to access almost anything nowadays. In the earlier (3) After subsection (2) insert— group, these were similarly referred to by the noble “(3) Exploitation under subsection (2)(e) includes, but Lord, Lord Eatwell. I have seen barely one that is is not limited to, situations where— reasonable. It is only getting worse as everything becomes (a) there is a system of conduct, or pattern of behaviour, a leased service rather than a product. that relies upon unequal power between the parties With these amendments I make the point for small to impose disadvantage on consumers or small businesses as well as individuals, and in the context of businesses or gain advantage for the larger party; financial services, which are among the most fundamental (b) notice or other compliance terms are imposed which of services, that bullying contracts must stop. They make it impractical for consumers or small businesses must be within the regulatory perimeter and the FCA to comply; must be prepared to intervene. Excuses about GRG (c) there is use of notice terms to coerce consumers or and what the FCA did not do there hold no power. We small businesses into unfavourable contracts; saw what happened; we need strong measures that (d) conduct by a supplier causes a consumer or small mean it must not happen again and that imitations of business to comply with conditions that were not it must not be tolerated in day-to-day operations. I beg reasonably necessary for the protection of the legitimate to move. interests of the supplier; or (e) there are risks that the supplier should have foreseen would not be apparent to the customer or small Baroness McIntosh of Pickering (Con) [V]: My Lords, business. I find myself in some sympathy with the noble Baroness, In this section, “small business” is as defined in Part 15 Lady Bowles, on Amendment 5 because this is a grey of the Companies Act 2006 (accounts and reports).”” area where small businesses are perhaps not well served. Member’s explanatory statement My noble friend Lord Howe claimed, in his full and This amendment is to protect consumers and small businesses comprehensive response to the last debate, that this from exploitation. was not the right time or place to look at the regulatory objectives, as this would better take place under the Baroness Bowles of Berkhamsted (LD) [V]: My Lords, Government’s future regulatory framework review. I Amendment 5 builds upon Amendment 4, tabled by would argue, in support of the noble Baroness, the noble Lord, Lord Tunnicliffe, which was discussed Lady Bowles, that small businesses are not well served within the first group and in turn built upon by the current provisions. If you look at some of the Amendment 1, moved by my noble friend Lord Sharkey. work of the Financial Ombudsman Service, which the I will not revisit the “duty of care”part of the amendment, Committee has referred to, I would not hold out much as it has already been well discussed, but the point hope for a small business claiming redress and a GC 151 Financial Services Bill [22 FEBRUARY 2021] Financial Services Bill GC 152 decision under that agreement. I would be delighted if scandal—I believe my noble friend Lord Sharkey my noble friend were to prove me wrong in summing mentioned this in his earlier list, when talking about a up this debate. duty of care—over 40,000 swaps were sold to SMEs. Amendment 5, in particular,has strengths to commend The banks had broken the regulatory requirements in it and I would very much like to lend it my support. I over 90% of cases. It is almost impossible to imagine look forward very much indeed to hearing what my that having happened if the banks’ legal departments noble friend will say and whether the Government knew that the banks would be sued by their customers might look favourably on it, a lacuna having been as a result. identified in the regulatory framework. None of the SMEs that have taken swaps cases all the way to court have won. Judges have repeatedly said The Deputy Chairman of Committees (Lord Russell that, had the customer been able to sue for breach of of Liverpool) (CB): I call the next speaker, the noble the COBS rules, that would have made all the difference. Baroness, Lady Bennett of Manor Castle. Baroness The evidence is there in Green & Rowley v RBS, Bennett? We appear to have lost the noble Baroness, Crestsign Ltd v NatWest, London Executive Aviation so if— Ltd v RBS, and Fine Care Homes Ltd v NatWest. Those cases and the other swap cases that failed at Baroness Bennett of Manor Castle (GP) [V]: Apologies, trial show that—even where a judge is convinced that my Lords, but I have sorted the problem out now. I the customer did not understand the product they speak briefly in support of Amendments 5, 73 and 95, were buying and even where the bank salesperson in the names of the noble Baronesses, Lady Bowles, knew that the customer was relying on them to explain Lady Altmann and Lady Kramer. Although not a the product—the common law fails to provide the generalisation that is 100% true, the gender division of customer with a remedy. I realise that the swaps scandal the people on various sides speaking on the Bill is is, hopefully, in the past but, without the amendment interesting. It made me reflect back to the financial proposed, there is nothing to stop banks from perpetrating crash of 2007-08 and the role that the extreme gender similar behaviour in future. imbalance in the financial sector was seen to have played within it. My amendment addresses only part of the issue of When I thought to look at these issues about the limitations of the regulatory perimeter, which both exploitation, unconscionable conduct, and legal my noble friend Lady Bowles and the noble Baroness, protection against mis-selling, I went to the website Lady Bennett, have discussed, and it is why I support moneysavingexpert.com. In a previous contribution, I Amendments 5 and 73 in the name of my noble friend. referred to the role of such commentators who, using I find it ridiculous that the regulatory perimeter treats the power of public opinion, often seem to be a small businesses as, in effect, akin to multinationals in stronger check on the behaviour of the financial sector their capacity to understand financial products and than the Government. But, of course, they are able to fight on an equal footing with big institutions. work only after the fact. Just looking down the list, we are talking about payment protection insurance, mis-sold My noble friend Lady Bowles has cited the case of ID fraud insurance, the mis-selling of package bank RBS GRG. For those not familiar with this case, GRG accounts and excessive charges on bank accounts—and was the turnaround unit of RBS. A number of firms that is just talking about individual consumers. A were persuaded to allow themselves to go into the similar list would come up for small business. It is a turnaround unit even though they were both viable long tale of woe that has caused a great deal of and paying their loans on time; but RBS believed that suffering and harm to individuals and small businesses, under the terms of their loan agreement they were at the operators of which have often put their whole risk because the value of their assets had declined, heart and soul into the business. which created a covenant default. In a remarkable number of cases, those companies that were viable and What we seem to have now is a strategy of shutting paying on time were made bankrupt, their assets were the stable door sometime after the horse has bolted, stripped after having been assessed at very low market and after a long delay for debate and inquiry. All three values and—surprise, surprise—the bank was able of these amendments are a very strong bolt that we some time later to sell those assets for a much higher should be sliding home now to protect consumers and value, thereby generating profits. It was indeed not small businesses from the overweening, immense power just a turnaround unit but a profit centre. of the financial sector. After great pressure from , the FCA Baroness Kramer (LD) [V]: My goodness, this has initiated an investigation. It asked a group called moved fast. My Lords, let me start by addressing Promontory to produce a two-stage report: one to Amendment 95, because it is in my name. It would look at the case and the other to make recommendations. give SMEs the right to sue in respect of all regulated However,after the first phase of the report was complete, financial services, not just banking. It would—and the FCA explained that it could not publish it as it this is an important example—entitle them to sue for contained commercially sensitive information, and it breaches of the rules relating to insurance, otherwise therefore produced a summary.Miraculously,the original known as COBS, in respect of business interruption report made its way into the hands of the Treasury insurance policies. Select Committee. This, to me, is almost the worst part Another big practical implication relates to the of the story: the summary that had been provided by cross-selling of regulated products or services as part the FCA and the report itself did not match. There of the add-ons to a loan. In the swaps mis-selling was essentially a whitewash of the conclusions of GC 153 Financial Services Bill [LORDS] Financial Services Bill GC 154

[BARONESS KRAMER] number of firms grow to a large size. The problem Promontory. The FCA may have disagreed with the with size is that it enables bullying; you find it in many report that it received, but that would have been a very sectors, including airlines and supermarkets and with different declaration. Amazon and Facebook. The problem with bullying is We have talked before about the senior management that, used skilfully and ruthlessly, it enhances profit and certification regime; the FCA could have used and, because it enables profit, it is pursued, often that regime to try to deal with senior management covertly.It is the classic example of why benign regulation who had been involved in this entire process, but it is so important in our economic and financial landscape. chose not to. That, I am afraid, is the history of the These amendments are a bold move to add to that use of the senior management and certification regime. benign regulation by directly addressing the evil of However, my noble friend Lady Bowles could equally bullying. This will be good for individuals but also—and well have cited the HBOS Reading fraud perpetrated this is a very important point—for SMEs. I was at the between 2003 and 2007, which I mentioned earlier. large end of the scale, and we were able to see off any Six bankers ended up in jail for that fraud, but we are attempt at bullying because we were big enough and now in 2021 and fair compensation has not yet been ugly enough to be able to fight the problem with an paid to the victims. This is now a Lloyds problem and equality of arms. The problem with an SME—and has been for some time. often we are talking about individuals—is that the We have been through multiple reviews and are now concept of equality of arms in the courts is almost awaiting the work of yet another review of compensation, impossible; they can easily use up their revenue for a the Foskett panel, which hopefully will make sure the whole year on one court case. These amendments compensation is appropriate—but, as I said, it is 2021. address the issue together. There have been issues; for example, a whistleblower I know the Government are likely to say, “Not now. who examined who knew what and when has been We will do it later. We are looking at another area.” compensated twice by Lloyds for retaliation against That just cannot go on, and I urge the Government to her. There is currently a review by Dame Linda Dobbs think about these ideas and work out some way to into who in senior management knew or ought to have introduce this. The banking industry, in particular, has known what was going on. an appalling reputation. The evil things it has done over the years are frightening. It is difficult to believe, 6.30 pm in a sense, that those evils were done by malice; but it is This kind of history is simply not acceptable, and it very easy to understand how the opportunities present is a consequence of this extraordinary regulatory themselves to behave in this way and generate more perimeter. My amendment does not deal with all that: profit, more praise and more reward. Amendments 5 and 73 help that circumstance, but there is a fundamental issue at play here. The FCA has looked into the perimeter and will say that it has Baroness Penn (Con): My Lords, Amendments 5, 73 decided to treat micro-businesses like consumers.However, and 95 relate to the protection of consumers and small I believe, as do many others, that it needs to go much businesses against misconduct. The Government are farther. It is particularly important at this time, as we committed to ensuring that consumers and businesses are looking to many people as entrepreneurs and can use financial services and products with confidence starters of small businesses to drive the recovery from and that there are appropriate protections in place. Covid. Surely they ought to have the kind of protection Before I comment on the specific amendments, I that is necessary against a financial services institution want to take a moment to set out the wider context. that does not always have their interests at heart. As I The Government have given the FCA a strong mandate argued at the beginning, they are far more akin to to prevent and take action against inappropriate behaviour consumers than they are to multinationals, and that in financial services,and it has a wide range of enforcement needs to be embedded in the way in which they are powers to protect consumers and small business. Noble treated by the regulator. Of course, the financial services Lords will appreciate that the majority of business ombudsman can look at many of these cases but, by lending is unregulated—that is what the amendments the time we get to that point, the mischief and damage test and probe—but the Government are committed has been done, and this is not the way to handle this to providing appropriate safeguards for SMEs in accessing underlying problem. financial services, while seeking to avoid driving up the costs of lending and unnecessarily reducing affordable Lord Tunnicliffe (Lab) [V]: My Lords, faced with credit options. speaking on this group, I looked at the Bill as a whole In the UK, loans of less than £25,000 to small and, to a surprising extent, there is little reference to businesses are treated as regulated consumer credit consumers or people who depend on the banking agreements for the purposes of the Financial Services sector. The failure to contain these areas was brought and Markets Act 2000. This means that most small out by the first group of amendments, where there was businesses already receive regulatory protection. In a very strong thrust to require the sector to exercise a addition, in April 2019, the remit of the Financial duty of care. Ombudsman Service was expanded to allow more This group, which I support, seeks to isolate a SMEs to put forward a complaint. This covers 99% of singular problem and address it directly. It is a problem small businesses in the UK. If a complaint is upheld, that is not just unfair but evil, and one we find across the FOS could make an award of up to £350,000 in many sectors—the problem of bullying. In many sectors, relation to acts or omissions that took place on or size is an advantage, and because of that, a small after 1 April 2019, when its remit was expanded. GC 155 Financial Services Bill [22 FEBRUARY 2021] Financial Services Bill GC 156

Small and medium-sized businesses also now have Viscount Trenchard (Con) [V]: My Lords, again, I access to the Business Banking Resolution Service, an am grateful to the Committee for allowing me to speak independent, non-governmental body which will provide after the Minister. I will speak only to Amendment 73 dispute resolution for businesses which meet the eligibility because it introduces another subjective concept: criteria. The BBRS will address historic cases from “unconscionable conduct”. 2000 which would now be eligible for FOS but were not at the time, and which have not been through I searched for instances of “unconscionable” on the another independent redress scheme. It will address FCA’s website and found only one: John Griffith-Jones, future complaints from businesses with a turnover the former chairman of the FCA, for whom I have the between £6.5 million and £10 million. highest regard, said in a 2014 speech: “In 1951 in the Money Lenders Act we described a 48% interest It is with that context in mind that I turn to the rate as ‘unconscionable’.” specific amendments. Amendment 5 seeks to protect It occurs to me that, as recently as 2018, the main consumers and small businesses from certain types of banks were charging 1p per £7 borrowed per day for exploitation by financial services firms providing services arranged overdrafts. This was about 50% per annum, to those groups. It proposes imposing new obligations but it was not disclosed; indeed, when the banks on the FCA when it exercises its general functions. stopped telling people what their APR was and instead However, it risks putting up the cost of borrowing and started telling them what the fee per £7 borrowed per limiting the availability of products and services. For day was, this was welcomed by the FSA, which thought example, it could require the FCA to make rules that requiring to tell consumers the real interest rate creating additional safeguards designed to ensure that was unhelpful because they would not understand it. exploitation, as defined by the amendment, does not occur.Given the different levels of financial sophistication Now that the banks have reverted to informing of different small businesses, the rules may need to be customers of real annual interest rates, albeit in very designed to protect those with minimal levels of small print, the cost of an arranged overdraft has gone sophistication. Given the potential complexity of such down from around 50% to around 40%, which is new rules, financial institutions may be more reluctant possibly still unconscionable in today’s world of negative to lend to small businesses. interest rates. As such, I certainly do not think that we should rely on the FCA to decide what is and is not Amendment 73 would duplicate similar existing unconscionable. Does the Minister agree that the banks protections that I have previously outlined, in a way should make clearer what real interest rates on overdrafts that could be confusing to consumers, SMEs and are? lenders. On the issue of unconscionable conduct, in response to the banking crisis and significant conduct failings, Parliament passed legislation leading to the Baroness Penn (Con): My Lords, clarity around all FCA and PRA applying the senior managers and terms and conditions is, of course, to be welcomed. I certification regime. The regime aims to reduce harm agree with my noble friend that one challenge with to consumers and govern market integrity by making these amendments is potentially introducing new concepts, individuals more accountable for their actions. which might need to be defined through regulation, where we think that there are existing protections in Amendment 95 would broaden the scope of those place and the effect could be duplicative. parties who can seek action for damages related to mis-selling of financial services. However, I argue that these changes are unnecessary, as businesses already Baroness Bowles of Berkhamsted (LD) [V]: My Lords, have robust avenues for pursuing financial services I thank all those who have taken part in this debate; it complaints, which I have already set out. has been short but interesting, and I thank those who have supported the concept that I am trying to elaborate. The Government are committed to regulating only What the noble Viscount, Lord Trenchard, has just where there is a clear case for doing so. This is to avoid said is probably true to some extent—why should putting additional costs on lenders that could ultimately we rely upon the FCA for this? It is true that this lead to higher cost for businesses; these would likely be probably should be more of a general legal offence of passed on to consumers and could restrict access to unconscionable conduct, which is what they have in affordable finance—a key Government priority. Australia. So there is no point trying to argue that, in a The Government’s view is that each of these common law country with a similar kind of legal amendments risks duplicating the existing protections system, you cannot work out how it happens and that I have set out, while also making lending to SMEs whether it is effective: I can tell you that it is. more complex, which could make it harder for them to access affordable credit. Our view is that the existing As the Minister elaborated, the problem with having protections get the balance right between protecting a subjective measure—as the noble Viscount, Lord consumers and small businesses and not unduly restricting Trenchard, called it—is that you then have to put a access to affordable credit options. For these reasons, I whole load of rules around it. That is exactly the ask that these amendments be withdrawn. problem with the FCA. It has done it with the senior managers regime, something that I always understood Parliament wanted to be a subjective measure—that The Deputy Chairman of Committees (Lord Russell is, if you behaved badly and something happened on of Liverpool) (CB): I have received one request to your watch, you were responsible. That has now been speak after the Minister from the noble Viscount, tied up with contracts approved between the regulator Lord Trenchard, who I now call. and the employees in the businesses. Instead of capturing GC 157 Financial Services Bill [LORDS] Financial Services Bill GC 158

[BARONESS BOWLES OF BERKHAMSTED] I declare my interest as a former chair of StepChange, the people at the top, it has pushed responsibility the debt charity. Amendment 8 would place on the down the chain. The same has happened with “fit and FCA proper”. The FCA has chosen to redefine what that “a duty to promote financial wellbeing”— means so it will catch only very extreme cases rather a new term— than bad behaviour. “which would strengthen the FCA’s consumer protection objective and empower the FCA to introduce rules for financial services 6.45 pm firms informed by that duty.” I hear that the Government are unwilling to do As I have already said, this is a probing amendment, something that really is just saying, “Behave yourself”. seeking at this stage what I would describe as a high-level It should not be too expensive to make companies response from the Government. I am not looking for behave themselves. It should not be too expensive to detail at this stage; it is really a question of whether make sure that there is a conscience and that you ask there is merit in further work being done on this the questions we got to when we were discussing the concept. If there is, I am looking for some pointers duty of care: “Is this right? Is it within the rules? Can I about how the Government would like it to go forward. pull a fast one here?” I am very disappointed by the The background to this amendment is a suggestion Government’s attitude on this. I am grateful that some from the Money and Pensions Service that there is a small remedies have been introduced but they are case for giving the FCA the power to nudge—its term, really not sufficient. They do not deter bad behaviour. not mine—financial services firms to underpin their It is still worth taking the chance, taking the risk and activities with regard to the financial well-being of making the profit. However, for now, I withdraw my their customers and to go beyond current considerations amendment. of consumer protection or vulnerability, which I think they have already adopted to some extent. The intention Amendment 5 withdrawn. is to remove any asymmetry of knowledge, expertise and capacity between the service providers and their Amendments 6 and 7 not moved. clients. It is a very ambitious goal and would take a lot of work across many sectors not normally involved in The Deputy Chairman of Committees (Lord Russell the consideration of financial competence. of Liverpool) (CB): Wenow come to the group beginning During my time as the chair of StepChange, we with Amendment 8. I call the noble Lord, Lord Stevenson used the term “financial inclusion” to cover the need of Balmacara. to have a society where everyone felt that they were knowledgeable enough to be secure and in control of their financial affairs; indeed, we have used the term Amendment 8 since then. However, if we change that to “financial Moved by Lord Stevenson of Balmacara well-being”, we go much further. We could say that the aim would be to have the knowledge, confidence and 8: Before Clause 1, insert the following new Clause— resilience for all in society to pay bills as they fall due, “Duty of the FCA to make rules promoting financial wellbeing cope with unexpected shocks and plan across our (1) The Financial Services and Markets Act 2000 is assets and income over time for a healthy financial amended as follows. future right through to well after retirement. (2) After section 137C, insert— It is a very ambitious and much wider term than “137CA FCA general rules: financial wellbeing “financial inclusion”or anyamount of financial education. (1) The power of the FCA to make general rules The importance of the term is that it better captures a includes the power to require authorised persons to promote financial wellbeing of consumers in life cycle approach to the modern needs for economic carrying out regulated activities under this Act. health, generating confidence and empowerment within (2) The FCA must make rules in accordance with this the population at scale coupled with a financial services power which come into force no later than 6 April industry that goes well beyond just designing and 2022.”” delivering good products and excellent services—which Member’s explanatory statement we accept they do, of course. It all should be backed This new Clause would introduce a duty to promote financial by a regulatory system with a holistic overview and the wellbeing for the FCA which would strengthen the FCA’s consumer powers to match. protection objective and empower the FCA to introduce rules for Is this just smoke and mirrors, or is it a realistic financial services firms informed by that duty. vision of the way that things might be? Whatever the case, it is a good time to ask the question. As we Lord Stevenson of Balmacara (Lab) [V]: My Lords, discussed earlier today, the FCA’s 2020 Financial Lives with this amendment, we come to the end of the group survey found that just over half of UK adults—24.1 of amendments that precede the Bill. This is another million people, in its figures—display one or more of slightly detached issue that I hope will get a response the characteristics of vulnerability to their financial from the Government. Amendment 8 is supported by situation: a health condition, negative life events, low the noble Lord, Lord Holmes of Richmond; I am very financial capability or low resilience. Other surveys grateful to him for his support. His amendments on have already been mentioned. The Salad Projects’ financial inclusion, which are also in this group, raise report was mentioned by my noble friend Lord McNicol, many similar issues. I look forward to hearing his and hopefully will be again when he comes to speak on comments and to the subsequent debate. this group. It shows the reality of coping with low GC 159 Financial Services Bill [22 FEBRUARY 2021] Financial Services Bill GC 160 incomes and why a shortage of low-cost credit is such their commitment and the briefings that they provide a major issue for so many citizens who, even when in to parliamentarians are a credit to everybody involved regular employment and often with blameless credit in that space. references, cannot find appropriate ways to cope with I turn to my Amendment 9 in this group, which even the basic costs of living, let alone saving for a would place a duty on the Financial Conduct Authority rainy day and retirement. to work toward the objective of financial inclusion. In The Government are currently consulting on a phase doing this, I seek to raise the whole level of financial 2 review that includes financial inclusion on the levelling-up inclusion across our regulators. The context has moved agenda, but we also have some other material. As has on significantly during the Covid crisis. People who, been mentioned already, The Woolard Review: A Review fortunately, have never had to think about financial of Change and Innovation in the Unsecured Credit inclusion or have never been at a loss as to where the Market is a major contribution to the understanding next bill payment will come from find themselves very of this area; it will come up again in later amendments. much at the sharp end of financial difficulty.Fortunately, There is a lot going on. With this probing amendment, in many of those instances, the Government have I seek a sense from the Government of whether they stepped in through the furlough scheme and the self- accept the case for a broader approach to financial employed and business loan schemes. well-being being championed by the Money and Pensions The reality is that, in a broad sense, these are Service and by some firms such as NatWest and enablers of continued financial inclusion. I would Nationwide. In particular, do they accept that, whether argue that, in this new world, it is difficult to consider or not a formal duty of care is placed on financial the concept of financial stability while we still have service firms—I would support this—the forms of such issues around financial inclusion. Financial exclusion regulation in this area need to be expanded to deliver has dogged our society for decades. It ruins lives, what the FCA calls paralyses potential and corrodes communities. This “fairer outcomes for consumers, including support for customers amendment would give the FCA the objective of with poor financial well-being that might extend well beyond considering the barriers, blockers and bias that continue simple commercial transactions”? to mean that people are shamefully excluded from Thirdly, would they consider taking this one step mainstream financial products. further and seeing what would be required from other Similarly, in the second point in my amendment, I partners and agencies? want to place a requirement on organisations If we really want a system capable of helping “to report on their use of financial technology to increase financial consumers to develop the skills and confidence to inclusion.” interact with financial service providers, people must Not for one minute do I believe that fintech is the be secure in the expectation that, if they need help in silver bullet—I am well aware of the issues around managing their decisions on their finances, they will financial and digital exclusion—but fintech must be not be ripped off and that there will be quality support part of the solution and must be turbocharged at all for them. We must also ensure that education, advice, levels of financial services. It must be understood debt counselling services and other things focus on much better by HMT, as well as the role it can play in helping all citizens to develop the skills and confidence varying degrees across financial services. This was to interact effectively with financial service providers—not proven at the beginning of the Covid crisis when, in a only providing the products that they need over the matter of hours, various fintechs came up with innovative life cycle but developing their skills and confidence solutions to address some of the issues that then rolled about their financial well-being and empowering them out as the crisis developed. to take control and plan what they want to maximise their resources. Having a financially inclusive nation makes sense. Having a financial inclusion objective within the scope This is a big agenda that probably also needs action of the FCA makes complete sense. I hope that this on many other issues such as low-cost credit sources. amendment will add to all the extraordinarily good However, at this stage, we need a clear signal from the work that everybody involved in financial inclusion is Government about how far this issue can go and on currently undertaking. what terms they would like to see further work done. I beg to move. Baroness Neville-Rolfe (Con): My Lords, I thank the noble Lord, Lord Stevenson, and my noble friend Lord Holmes of Richmond (Con) [V]: My Lords, it is Lord Holmes of Richmond for tabling these amendments a pleasure to speak on this group of amendments. I and for the important debate that they have initiated congratulate the noble Lord, Lord Stevenson of this evening. Both have considerable expertise in the Balmacara, on the excellent way in which he introduced field; I am only sorry that we are not all here together the group. The concept of financial well-being is a physically and able to debate the issues in our Pugin growing area and there is a lot for us all to reflect on. I corridors. thank him for all that he has done in this whole area of I accept that financial inclusion is important, given financial well-being, not least during his excellent time the difficulties that a failure to understand finances at the helm of StepChange. can cause anyone, and indeed everyone. However, to We should thank all the organisations involved in my mind, this ought not to be a matter for the FCA, financial inclusion, not least Macmillan Cancer Support which should focus its efforts on providing a good, and the Money Advice Trust. They go to people who strong, unbureaucratic regulatory regime that allows are at the sharpest end of financial exclusion, and those providing financial services to flourish and serves GC 161 Financial Services Bill [LORDS] Financial Services Bill GC 162

[BARONESS NEVILLE-ROLFE] increased fees and on businesses with increased consumers well. Rather,a basic understanding of financial administration. I do not believe that that is the case matters should, in my view, be inculcated first in with the amendment as laid out by the noble Lord, school. We all need to understand the basics of loans, Lord Stevenson. If you look at the text of it—and I interest, probability and risk, how to manage budgets understand it is a probing amendment—you see that and pay our bills, the risk of fraud, what to watch out the power of the FCA to make general rules includes a for, the value of a pension and many other things. power to require authorised persons to promote the financial well-being of consumers in carrying out regulated 7 pm activities under this Act. We do good work on teaching children about climate I am very new to this sector and I may be a little change and digital, but financial education, economics naive, but I believe that one of the most significant and risk have a back seat, with a brief reference in the drivers of costs to the industry is from non-repayment citizenship curriculum for 11 to 16 year-olds. They or defaulting on loans. We need financial well-being should be a central part of the curriculum. They could and literacy to be increased. The noble Baroness, Lady also be a focus in work-experience schemes. Employers Neville-Rolfe, is right that it needs to start in schools can help through their training schemes throughout and carry on through employment and employers, but the life cycle, since skills in financial matters are important that should not preclude the Financial Conduct Authority to well-being, and therefore to a successful and happy being able to step in and help. There is a benefit to workforce. This is the logic of the earlier points. businesses as well. If financial well-being can be increased, In the 2019 Conservative manifesto, the Prime Minister the number of defaults from people falling into said he wanted to ensure that every child had access to indebtedness or failing to pay reduces, thus increasing a great state school and that every pupil gets the profitability of a product, then in turn reducing the qualifications they need for a prosperous future, while cost of that product to individuals and businesses. learning in an environment where they are happy and There is a lot in where the amendment proposed by my fulfilled. Some of that investment needs to go into noble friend Lord Stevenson is trying to take us. educating our nation in financial matters. We touched a little on the Woolard review and its I am not averse to financial services firms helping 26 proposals, and I hope that we will see a bit more of through their social responsibility programmes, but I those. The noble Lord, Lord Holmes, touched on believe these amendments take us down the wrong fintech. With the increase in open banking and the road. I have less concern about Amendment 134, ability to look at individuals’ accounts, better and which provides for a review. But, if that were to more detailed decisions can be made on how a product proceed, it would need to take proper account of the or a business moves on. My noble friend Lord Stevenson role of schools in financial education and financial referred to the University of Edinburgh Business School inclusion. report, which it carried out for Salad Projects, looking at the health and well-being of NHS workers who had Lord McNicol of West Kilbride (Lab) [V]: My Lords, applied for a loan. The report provides a unique I will be brief, as I set out many of my concerns and insight into their financial lives, based on millions of issues when speaking earlier on the first group. individual transactions. What came out of that was I support Amendment 8, proposed by my noble information about their low financial resilience—the friend Lord Stevenson of Balmacara. Before I start, I ability of those working in the NHS to deal with a would like to make the Grand Committee aware of my financial shock to their lives. Often it was just a small financial interests, as set out in the Lords register. shock, but they were unable to tap into the bank loans As touched on in Amendment 4 earlier, low financial that many of us can take; they were forced into the resilience and overindebtedness are a huge problem high-cost credit loans market. for both individuals and the country at large. We If we have the development and promotion of should all do all that we can, especially under the financial well-being, I hope we will see a reduction in current circumstances, to push back against those those who are driven into that sector. This amendment issues. will help to deliver that, but it does not preclude Either we are saying that there is a problem and we delivering that in schools or the workplace. The FCA need to do something about it, or we are saying that is a powerful body that can help push it even further. there is not a problem and we just carry on as before. With the figures and the personal stories of overindebtednessandunaffordable,unsustainablefinancial Baroness McIntosh of Pickering (Con) [V]: My Lords, predicaments, I believe that there is a problem that I am delighted to support this group of amendments. I does need resolving. take this opportunity to pay tribute to the noble Lord, The FCA recently found that the number of people Lord Stevenson, and my noble friend Lord Holmes suffering from low financial resilience had increased for their huge contribution to this field of financial by one-third to 14.2 million people. That is one-quarter inclusion. I single out the noble Lord, Lord Stevenson, of the UK adult population. |In earlier amendments, not just for his role on the Front Bench but previously we heard a number of noble Lords, and a little from in chairing StepChange. He will be greatly missed the noble Baroness, Lady Neville-Rolfe, saying that from his Front-Bench responsibilities, and I am sure it any increase in regulations, bringing in a duty of care will not be long before we see him return. or a duty to promote financial well-being, was either I also congratulate my noble friend Lord Holmes not the responsibility of the FCA or, in some earlier on being indefatigable in his campaigning for financial comments, would put more costs on individuals in inclusion and bringing our attention to fintech. I join GC 163 Financial Services Bill [22 FEBRUARY 2021] Financial Services Bill GC 164 the authors of these amendments in identifying a need Baroness Kramer (LD): My Lords, I find the thrust to address this issue, and I hope that my noble friend, of all three amendments in this group really interesting in summing up, will answer this point. The noble and worthy of thought. I would particularly have Lord, Lord Stevenson, has asked for a high-level added my name, had I been fast enough, to Amendment 9 response, and I shall use that expression later—I like in the name of the noble Lord, Lord Holmes. I think it. Perhaps we might get something more from my that is a strong and very positive amendment. Parliament, noble friend. financial institutions, regulators and civic society have No less of an authority than “You and Yours”, of been discussing financial inclusion for years, and all of which I am an avid listener—I think there are two us recognise that there has been some progress. The compulsory programmes we should listen to, one is Government’sfinancial inclusion report of 2019 identified that and the other, I have momentarily forgotten what 1.23 million people without even a basic bank account. it is, is the one that gives us all the figures and That is half of what it was about 15 years earlier, but responses—spent the best part of a programme looking I think we all know that it is still unacceptably high. I at credit ratings. What struck me is that often it is will say more about basic bank accounts in an amendment through no fault of an individual that they find that in my name in a later group, as I think there are some their credit rating has been so badly affected that they real issues there. can no longer qualify for any credit. It can take Debt management advice has significantly improved months, if not years, to redress this. and much of our thanks is owed there to the noble I am concerned that if my understanding is correct Lord, Lord Stevenson, as other noble Lords have said. Expedia is no longer acting for the Government in this We will discuss amendments that would strengthen regard. Can my noble friend confirm that we are down that in another group. The FCA has made changes to to two credit rating agencies? Do the Government the high-cost credit market. Many of those changes share my concern that we should address this area of both in the debt advice arena and the high-cost credit financial inclusion, financial awareness and each of us arena were not actually initiated by the regulator. being aware of what our credit worthiness and credit They were driven by this House, and I think that this ratings are? Amendments 8, 9 and 134 have identified House deserves to take credit for recognising that need issues that are worthy of attention in this Bill and I and for driving through what has been real and effective look forward to the response from the Minister. action.

Lord Blackwell (Con) [V]: My Lords, I have a lot of 7.15 pm sympathy for the importance of inclusion. Financial However, the progress falls far short of expectations. services are clearly important to everyone, and I endorse The credit union sector in this country has not grown the comments from my noble friend Lady Neville-Rolfe as hoped, and neither have the CDFIs—community about the critical importance of financial education in development financial institutions. These two sectors achieving that. However, I have some difficulties with are the backbone of financial inclusion in other countries Amendment 8 on the definition of and requirement to around the world. A number of groups are seeking to consider financial well-being. Those reservations are implement new socially driven mutual banks, others similar to the ones that I expressed on Amendment 1 are proposing fintech solutions, but the surge in new on the general duty of care. services once anticipated to eliminate financial exclusion Of course, the objective of well-run financial services is moving at a snail’s pace. companies is, and should be, to promote financial well-being. That is what their business is. That is the With Covid, the problem has become more acute. purpose of financial products. Financial services firms The FCA’sexcellent Financial Lives 2020 survey,published lend in order to allow people to buy houses and cars recently,showed us how the problem is being aggravated. and to spread the purchases out over time. They help In February 2020, 10.7 million people were classed as people to save in order to cover emergencies and to having “low financial resilience”, down from 11.6 million provide pensions in old age. They support businesses three years earlier. However, by October 2020, that to help them create wealth. Financial well-being is the number had risen again—turning in the wrong business of financial services companies. However, to direction—by an additional 3.5 million, and there impose a regulatory requirement to promote financial were millions of others with limited financial resilience. well-being runs the risk of extending the boundaries The situation must be even worse today than in last of what a regulated individual might be expected to do October, and it will get worse as Covid pushes forward beyond what is reasonable to expect. the switch to digital banking and bank branch closures accelerate—at least two have closed in my neighbourhood, Despite the comments from the noble Lord, Lord and this must be true almost everywhere else. If you McNicol, I am afraid that the amendment would are financially excluded in today’s world, your options create huge compliance costs and complexity.Of course, to improve your life and the lives of your family are we need rules and regulations that protect consumers constantly constrained. from unscrupulous firms that seek to exploit customers, but we should do that—as we do—through penalties The FCA has taken the view that, where financial for improper behaviour rather than by extending a businesses come up with new ideas to tackle financial general obligation on financial well-being. Having said inclusion, it will makesure that its regulation is appropriate. that, I understand the motive behind it and I certainly This is a difficult but important standard. However, support the objective of improving financial well-being the FCA has also taken the view that it is not its job to through the financial services industry. stimulate or incentivise new players to enter the market GC 165 Financial Services Bill [LORDS] Financial Services Bill GC 166

[BARONESS KRAMER] am a great believer that the curriculum on what one or to persuade existing players to initiate new approaches. might loosely call citizenship should be much wider in The FCA would say—and I have had this conversation many ways, and there is no question but that financial on multiple occasions—that that is the Treasury’s role. literacy and understanding should be part of it. This I argue, as does the amendment from the noble curriculum cannot be completed in school because Lord, Lord Holmes, that the FCA should be more you only really learn when you come across real-life proactive. Nobody is better placed than the FCA to challenges; so, after school, a concept of financial drive the industry to close gaps in provision, especially well-being is needed that will be part of the future in financial inclusion. We have seen regulators do it in world. I believe that these amendments could lead us the United States with the Community Reinvestment strongly towards that better future. Act, which was originally a civil rights Bill but has had an extraordinary effect in making sure that there are community banks targeted at disadvantaged communities Baroness Penn (Con): My Lords, I welcome the right across the United States. Numerous proposals opportunity presented by this group of amendments have been put to the FCA over the years. I am not to discuss the importance of financial well-being and trying to fix on any one solution, but that change from inclusion. The Government are proud of our strong passive to proactive really is necessary, and action is record, and I know that making progress on these needed now. issues is a personal priority for both the Economic Secretary to the Treasury and the Minister for Pensions and Financial Inclusion. However,I recognise, of course, Lord Tunnicliffe (Lab) [V]: My Lords, the noble that there will be people who are struggling with their Baroness, Lady McIntosh, mentioned that my noble finances and need further support, particularly at this friend Lord Stevenson has retired from the Front challenging time. Bench, much to my personal disgust—because we are Given that these are probing amendments and given short of talent and he has a great deal of it. However, the invitation, at least from some, for a high-level it is my duty to point out that the amendment he has response, I thought it would be helpful to set out proposed has the full support of the Labour Front briefly the Government’s approach, working closely Bench, although it touches on a subject that has with the FCA as well as a wide range of stakeholders, terrified me for most of my life, although for no good to promote financial inclusion and financial well-being reason. in the UK. The Government produce an annual financial The idea of poverty is very remote to most of us. inclusion report; the most recent of these was published When you think of the number of people who live in in November 2020, outlining our response to the poverty, particularly in this crisis, in the areas where Covid-19 pandemic as well as the progress we have the support schemes have not worked properly, it is made on issues such as access to affordable credit, terrifying and difficult to understand how people survive. support for credit unions and enhancing the use of The problem with poverty is that the individuals involved financial technology. Since 2018, the Government have lose their equity in society—they get to a point of convened the biannual Financial Inclusion Policy Forum, having nothing to lose, and then we worry about the bringing together key leaders from industry, charities, fact that they do not behave in the way we would like consumer groups and the FCA, as well as government them to. Ministers, including the Economic Secretary to the I was brought up in—how can I put it?—a low-income Treasury, who was responsible for the passage of this household, where we had probably the equivalent of Bill through the other place. the living wage, but it was not nearly as bad as today. The Government also work with a number of First, I believe there is more financial inequality today. stakeholders to promote people’s financial well-being. Secondly, employment among the working class in my This includes engaging closely with the Money and youth and that of my parents was much more secure. Pensions Service, an arm’s-length body of government, Finally, it was a cash society. Whatever else you might which published its national financial well-being strategy say about cash, it is very easy to understand. In the in January last year. The strategy sets out its five non-cash society that we are drifting into—indeed, we agendas for change to improve the UK’s financial are largely already in it—you can barely survive without well-being over the next 10 years. This includes goals a bank account. Creating basic bank accounts is very to increase the number of children and young people important but, whether we like it or not, many people receiving financial education, to encourage saving, to will not understand the mechanisms. The situation of reduce the use of credit to pay for essentials, to enhance not working in cash means that it so much easier to access to affordable credit, to increase the number of spend money and to lose control of what your liabilities people receiving debt advice and to support people to and payments are. Much as we may deride the jam-jar plan for later in life. Delivery plans will be published approach to running a domestic budget, it was easy to by the Money and Pensions Service later in the spring understand and, therefore, easy to manage. and the Government are supportive of this work. Anyway, what can we do about inequality and The Government also work with Fair4All Finance, security? That, of course, is the big issue in society; it an independent organisation funded by £96 million has been in the past, it is particularly bad now, and it is from the government-backed dormant assets scheme, something that we will probably be working on for the which was founded to improve the financial well-being rest of our lives. However, we can do something about of vulnerable consumers through increased access to understanding society. I agree with the noble Baroness, fair and affordable financial products. To date, Fair4All Lady Neville-Rolfe, that this should start in school. I Finance has focused on affordable credit and developed GC 167 Financial Services Bill [22 FEBRUARY 2021] Financial Services Bill GC 168 an affordable credit scale-up programme to help the not too obvious on screen. The noble Lord, Lord sector develop a sustainable model for serving people Holmes, rightly pointed out the excellent work being in vulnerable circumstances. carried out by many other agencies and bodies in this The Government also work closely with the FCA, area as well as StepChange. I completely endorse his and I reassure the noble Lord, Lord McNicol, that the comments; there is a lot of good work going on. FCA is committed to improving the way that regulated I normally find myself aligned very closely with the firms treat vulnerable consumers. It is one of the noble Baroness, Lady Neville-Rolfe—sometimes rather FCA’s key areas of focus in its current business plan. embarrassingly,given our respective party positions—but Its rules ensure that the fair treatment of vulnerable this time I seem to have completely confused her, for consumers is required by firms and embedded into its which I apologise. The noble Lord, Lord Blackwell, policies and processes. I will give a couple of practical was right that there are two quite separate tracks here, examples, as mentioned in previous groups. First, the as my noble friend Lord McNicol picked up on. One is FCA’s consultation on the fair treatment of vulnerable setting up a regulatory environment within which consumers closed in September 2020 and the FCA more good behaviour and activity by firms enhances intends to publish further guidance on this matter the overall capacity of the system to work well in imminently. Secondly, as discussed in the context of terms of financial capability and well-being. The other the amendments on a proposed duty of care, the FCA is hoping for the wider context that is necessary for all has announced that it will undertake further work to this to happen—particularly starting with education, address any potential deficiencies in consumer protection, which is always a hard nut to crack. As the noble Lord particularly by reviewing its principles for business. rightly said, this could be picked up by employers, While the FCA delayed this work because of the trade unions, wider agencies, anybody with an interest pandemic, it aims to consult in the first quarter of in seeing a holistic society using the non-cash elements 2021. I also assure the noble Lord that a number of that my noble friend Lord Tunnicliffe was so scared of other matters that he raised, such as the issue of buy but yet so sprightly embraced in his unique . now, pay later, will be discussed in subsequent groups Weall must learn how to operate with new technologies of amendments. and new operations. My children do not use cash; they I understand that these are probing amendments. I have not used cash for 10 years. They are all flashing hope that noble Lords will take reassurance, from the out ridiculously brightly coloured cards and seem to measures that I have set out so far, of the Government’s have a much better track on what they are spending commitment to this area and the commitment by the and how well they are doing than I ever did. I completely FCA from the work under way. However, as my noble admit that. However, that is no excuse for me—I must friend Lady Neville-Rolfe has argued, the Government get up there and be part of that process. But there is a do not believe that further statutory duties on the role for Government, there is definitely a role for the FCA in this area is the right approach. FCA and the regulator; there is a role for companies On the challenge of the noble Lord, Lord Stevenson, that want to go down that track and have the capacity the Government see the value of considering the broader to do so, but there is no fixed agenda for that yet. concept of financial well-being to include access to I wanted to hear a high-level endorsement by the affordable credit and consumer protection, as well as Minister that this was something worth exploring and financial education, as an important area for future working for. She has given that, and I am very grateful. work by the Government, the FCA and associated We can see this as a burgeoning programme of work stakeholders. which might well surprise us all in terms of where it I hope that the Government have demonstrated might reach and what it might do. We are all rightly their commitment to taking this work forward, working trying to support it in a way that will be most appropriate. closely with the FCA and a wide range of stakeholders, With that, I beg leave to withdraw the amendment. and that this provides sufficient reassurance to noble Lords of the Government’s commitment on this topic Amendment 8 withdrawn. for them to withdraw their amendments. Amendment 9 not moved.

The Deputy Chairman of Committees (Lord Russell Clause 1 agreed. of Liverpool) (CB): I have received no requests to speak after the Minister, so I call the noble Lord, Lord Schedule 1 agreed. Stevenson of Balmacara. The Deputy Speaker (Lord Russell of Liverpool) Lord Stevenson of Balmacara (Lab) [V]: My Lords, (CB): I remind Members to sanitise their desks and I thank all noble Lords who have contributed to this chairs before leaving the room. debate. I am deeply embarrassed by all the personal comments and blushed to my roots, which I hope was Committee adjourned at 7.31pm.