Lords examines Financial Services Bill

16 April 2021

APR

16

2021

The House of Lords continues report stage, a further chance to closely scrutinise and make changes, of the Financial Services Bill on Monday 19 April.

Members are expected to discuss a range of topics, including a new body to provide oversight of UK’s financial services industry, regular impact assessments and safeguards for payments made from child trust funds and junior ISAs.

• Watch on Parliament TV
• Read the transcript in Lords Hansard from three hours after the debate
• List of suggested changes (PDF)
• Bills and legislation: Financial Services Bill
• Explore the Lords Library briefing
• What is report stage?

Third reading, a chance for members to make sure the eventual law is effective, workable and without loopholes, will take place immediately afterwards.

Report stage day two: Wednesday 14 April

Members discussed limiting retention of personal data to five years, regulation of bailiffs and bailiff firms and the contribution of financial services companies to climate change targets.

• Catch up on Parliament TV
• Read the transcript in Lords Hansard
• Lords divisions (votes) results

There were two votes (divisions ) on proposed changes (amendments) to the bill.

Sharia-compliant financial services

The first vote was on amendment 15, which requires the Treasury, within six months of the passing of the Act, to facilitate the availability of Sharia-compliant financial services in the UK, including availability to students eligible for government finance.

Members voted 249 in favour and 279 against, so the change was not made.

Interest rates for mortgage prisoners

The second vote was on amendment 21, which requires the Financial Conduct Authority (FCA) to introduce a cap on the Standard Variable Rates charged to mortgage prisoners and, under specified circumstances, ensure their access to fixed rate interest deals.

Members voted 273 in favour and 235 against, so the change was not made.

Report stage day one: Wednesday 24 March

Members discussed a range of subjects including rules for Gibraltar-based persons operating in the the UK and regulation of bailiffs and bailiff firms, and voted to provide for rules for financial service providers to have a statutory duty of care.

• Catch up on Parliament TV
• Read the Lords Hansard transcript
• Lords divisions (votes) results

There were two divisions (votes) on proposed changes to the bill.

Duty of care

The first vote was on amendment 1, which seeks to strengthen the Financial Conduct Authority’s (FCA) consumer protection objectives by requiring the FCA to create rules regarding the duty of care for financial service providers.

Members voted 296 in favour and 255 against, so the change was made.

Fossil fuel risks

The second vote was on amendment 3, which requires the Prudential Regulation Authority to review the climate change risks applied to fossil fuel exposures in capital requirements.

The vote was tied, with 276 members in favour and 276 against.

This is known as an Equality of Votes. Under Standing Order 56 of the House of Lords the amendment is therefore disagreed to, so the change was not made.

Committee stage day six: Wednesday 10 March

Members discussed subjects including caps on the Standard Variable Rate for mortgages, impact assessments on the financial sector and designated artificial intelligence officers for financial service companies.

• Catch up on Parliament TV
• Read the Lords Hansard transcript
• Bills and legislation: Financial Services Bill
• Explore the Lords Library briefing
• What is committee stage?

Committee stage of this bill took place in Grand Committee, away from the chamber. In Grand Committee, any member can take part and decisions on amendments (changes) can be made, but no votes can take place.

Committee stage day five: Monday 8 March

Members discussed a range of topics including criminal financial offences, protecting access to cash and the determination of accounting standards by the Bank of England.

• Catch up on Parliament TV
• Read the Lords Hansard transcript

Committee stage day four: Wednesday 3 March

• Catch up on Parliament TV
• Read the transcript in Lords Hansard

Members discussed a range of topics, including climate-related financial risk, review of supervisory bodies and tax reporting for Gibralter-based persons.

Committee stage day three: Monday 1 March

Members discussed a range of topics, including funding of fossil fuel exploration, taxation reporting for Gibralter-based persons and disclosure of climate-related financial risk.

• Catch up on Parliament TV
• Read the Lords Hansard transcript

Committee stage day two: Wednesday 24 February

• Catch up on Parliament TV
• Read the Lords Hansard trascript

Members considered a range of topics, including parliamentary approval of powers given to the Financial Conduct Authority (FCA) and climate-related financial risk.

Committee stage day one: Monday 22 February

• Catch up on Parliament TV 
• Read the Lords Hansard transcript

Members discussed a range of topics, including the duty of care of financial services providers, exploitation of consumers and small businesses, and international competitiveness of financial services.

Second reading: Thursday 28 January

Members discussed a range of subjects highlighted by the bill, including market access between the UK and Gibraltar, powers granted to the Financial Conduct Authority and the economic impact of the COVID-19 pandemic.

• Catch up on Parliament TV
• Read the Lords Hansard transcript
• What is second reading?

Lord Agnew of Oulton (Conserverative), Minister of State in HM Treasury, opened the debate and responded on behalf of the government.

Speakers included a former vice president of Citibank and a member of the Bank of England Enforcement Decision Making Committee.

Lord Hammond of Runnymede (Conservative), former Chancellor of the Exchequer, and Baroness Shafik (Crossbench), board member of the Institute for Fiscal Studies, gave their maiden speeches in the House.

Financial Services Bill

This bill aims to:

• ensure the UK's regulatory framework continues to function
  effectively following withdrawal from the EU
• promote financial stability by implementing the full set of Basel III standards, a new prudential regime for investment firms, and empowering the Financial Conduct Authority (FCA) to oversee the transition away from the London Inter-bank Offered Rate (LIBOR) benchmark
• promote openness with international markets by simplifying the way overseas investment funds are marketed in the UK
• deliver a ministerial commitment to provide long-term access
  between the UK and Gibraltar for financial services firms
• introduce measures to maintain the effectiveness of the
  financial services’ regulatory framework and sound capital markets.