Baroness Noakes (Con)

My Lords, I start with an apology to the Committee, because I failed to declare my interests at the outset of the debate. I declare shares in listed financial services companies, as on the register and in the report. I apologise for not declaring those interests earlier. I will keep my remarks short, because the Minister is on his feet in the Chamber and we do not want to break and come back again to hear my conclusions. I thank all noble Lords who have spoken in this important debate and the Minister for his reply. I do not have time to draw out all noble Lords’ points, but I am particularly grateful to those who picked out some of the things that I did not cover in my summary of the report—in particular an important point that I had largely forgotten about the way in which some in the financial services sector are basically too frightened to say in public what they will happily and quite freely say to us in private. That is an indication of something that is not working well that is therefore not in the national interest. Most people have agreed today that the competitiveness and growth secondary objectives could be an important stimulus to growth in the financial services sector. The problem is that while there are now lots of initiatives, actions and planned actions in play, at the moment we lack the evidence for whether we will get growth either in the financial services sector or in the economy overall. That is one of the things we have to keep a focus on in order to ensure that regulators are accountable for delivering to us on those objectives. I was pleased to hear the Minister confirm that we would be getting a report this summer. I am sure that my committee will look forward to examining that and possibly engaging with the Government on it. As noble Lords have said, there has been a significant increase in regulation since the global financial crisis. This has weighed on financial services firms in very many ways, and can act as a deterrent to inward investment in financial services in the UK as well as within the financial services sector, reducing the capacity to lend into the productive economy. One lesson is that regulation has a real-world impact. I hope that the regulators increasingly understand that what they do has real-world consequences, and that they are committed to modifying the behaviours that are leading to burdens on the industry. I hope that the Government will continue to accept their important role in getting better data, setting better metrics and continuing to apply pressure on the regulators to deliver. Whether the regulators can change their risk-averse culture and become organisations that more creatively balance risks against opportunities in a proportionate way is an open question. I think we have to keep that in constant view. Both the regulators and the Government need to move away from the comfort blanket of operational efficiency. The real issues are much deeper than whether we process paperwork on authorisations in a certain number of days. Because this is all so important to the UK’s economic success, the Government and Parliament have to keep the regulators in full view and ensure that their impact is kept under scrutiny. My committee is fully up to the task of playing its part in that; I am sure that we will return to that in due course.