Baroness Bowles of Berkhamsted (LD)

My Lords, I shall speak to my Amendment 48. It addresses a simple but important point: the quality of regulation depends on the quality of consultation. At present, consultation periods vary unpredictably. Some run for many weeks; others, even on significant policy shifts, have been compressed into days. That inconsistency makes a system difficult for firms to plan around, inaccessible for consumer groups and individuals, and challenging for Parliament to scrutinise. I am a serial responder to consultations—I have been for over 20 years, not just on financial services—and I have experienced this difficulty myself. The Lords Financial Services Regulation Committee, on which I serve, along with several other Members who are present in this Committee, heard extensive evidence on this. In our report Growing Pains, we concluded that the FCA and PRA need a better understanding of the lived experience of regulated firms in coping with consultations, policy statements, “Dear CEO” letters and the plethora of regulatory tools now used. That is a polite way of saying that the system is overloaded and fragmented. My amendment would introduce proportionate, predictable windows: four to six weeks for minor changes and six to eight weeks for material ones. I seem to recall that, in Brussels, the time allowed was two months and for more complicated things an extension was available of three months. It would also be in line with that, so not out of line with international thinking. The amendment also sets out the factors that regulators must consider when deciding whether a proposal is minor or material. That embeds proportionality but without rigidity. I envisage that there could be, again, the opportunity for extensions in difficult cases. The FCA quite often does that, but usually quite late, after you have had a panic. Crucially, regulators may depart from these windows in exceptional circumstances, as I have said, but they must explain why. That is transparency, not constraint. It ensures that urgency can be accommodated but not used as a blanket justification for compressed consultation. Predictable consultation matters because it is the only point where Parliament, industry, consumer groups, individuals and civil society generally can influence policy and rule-making. If windows are unpredictable or too short, smaller firms and resource-constrained consumer bodies are effectively excluded. Trade associations cannot consult their members, but their responses are important, as we know that many firms are reluctant to respond directly, for fear of being seen as criticising regulators and suffering supervisory consequences. The various advisory panels have their place, of course, but they are not a substitute for open consultation. They rely on the knowledge of individuals, not the pooled experience of the market or the public. Industry has asked for this amendment, which tells us something important: the current system is not working as it should. Consultation should not be a matter of luck or timing; it should be predictable, fair and transparent. This amendment would support better engagement and better outcomes. It is a modest but essential part of the culture change that the Lords committee called for, and I hope that the Government will look on it favourably.