Contribution
It is very nice to be back to do another Financial Services and Markets Bill. As it is the first time I have spoken, I should declare a registered interest in Fidelity National Information Services, Inc., which is a large American company that provides services and software to a wide range of financial services companies around the world.
I have tabled Amendment 26 and given notice of my intention to oppose that Clause 3 stand part of the Bill. I have also added my name to a number of amendments in the name of the noble Baroness, Lady Noakes.
I have another interest to declare. I lost my local bank branch in my village some years ago, and I have just been informed that the last remaining bank in my nearest town is also about to close. To visit a bank branch for me will now involve a 100-mile round trip, so I am sympathetic to the idea that we need to do something to ensure continuation of access to banking services, especially in rural areas such as mine. At the same time, I am conscious that I probably visit a bank branch less than a couple of times a year, so I understand why banks feel it necessary to close them. They are not economic. We need to find a sensible balance to this. I accept that we may need to do something, but what?
There is the old joke: “We need to do something; this is something, so let’s do it”, but Clause 3 is not even something. It is just a vague—I was going to say promise, but it is not even that—intention to do something completely unspecified at an unspecified time, or indeed times, in the future. This Government have an unfortunate track record of putting sweeping powers into legislation before deciding what they actually intend to do with them, and this is yet another example. As the Delegated Powers and Regulatory Reform Committee pointed out really strongly, this is a very sweeping power with no meaningful limitations at all other than, as we have heard, the need to have regard, and only to have regard, to the independent review currently being undertaken by Richard Lloyd.
Clause 3(3), which has only examples rather than limitations, is one of the widest I have seen. It includes the express ability to make changes to any Act of Parliament, a really strong Henry VIII power. It starts by saying:
“Regulations under subsection (1) may (among other things)”
do the things listed below that. Will the Minister explain what these other things might be? Am I being old-fashioned to suggest that this is not the right way to create law? It would surely be better to wait until after the review has been undertaken, decide what is needed and then legislate—if legislation is actually necessary, since, as the noble Baroness, Lady Noakes, says, we got these banking hubs without legislation—and have the legislation subject to proper scrutiny by Parliament, which it will not be if we go down this route.
The Minister will no doubt try to reassure us about how this power will be used. Of course I—and, I am sure, everybody else in this Room—will have complete faith that the Minister would not try to misuse the power, but he will not always be the Minister. That may be a comment that has particular resonance today. Who knows? It is even possible that this Government may not always be the Government, but this power is unlimited and will be the law for the foreseeable future. Who knows what a future Government might wish to do with such an unlimited power? Indeed, as written, they could even use it to reduce the rights of access to banking.
I have a few specific questions for the Minister. First, will he explain in more detail how the Government currently expect, subject of course to the review, to use this power? What do they expect to do with it and when? Secondly, will he explain which Acts of Parliament he has in mind that might be changed under Clause 3(3)(b) and what changes he would expect to make to them? I put on record now that if I do not get a very convincing answer as to why this wide Henry VIII power is required, I will push Amendment 26, which would remove the power to amend primary legislation, to a Division on Report.
Finally, the Explanatory Memorandum recognises that this is a broad power. It says it is “necessarily broad”. At the same time, and in contrast to that, it also seems to recognise that it is broader than really needed, as it goes on to say,
“the Government would expect to narrow it once the review has concluded”.
I am somewhat baffled by that. We are in Grand Committee now, and the timetable for the Bill seems pretty tight. Will the Minister explain how it would be possible to narrow it, given that the Bill is likely to have completed all its stages before the review is completed and they have worked out what they want to do with it? Once the Bill has become law, the power cannot be narrowed.
This is another example of the Government trying to show they are doing something before they have decided what they want to do, and therefore giving themselves inappropriately broad powers that avoid proper scrutiny when they do finally decide. It is not the right way to make laws that will outlast this Government, and I do not believe this clause should stand part of the Bill without at least very significant narrowing and safeguards.