Baroness Noakes (Con)

My Lords, this is the first time I have spoken on Report, so I need to declare my interests as shown in the register, namely, that I hold shares in listed financial services companies, which may well be affected by the content of this Bill. I start by thanking the Government for tabling Amendment 31, which is in fact identical to an amendment that I tabled in Committee. The Minister, the noble Lord, Lord Stockwood, who is in his place, said then that he could not accept my amendment because the Government were “looking into this point to determine if this is fully clear within the drafting of the clause”.—[Official Report, 24/6/26; col. GC 333.] That was nonsense, and I feel sorry for Ministers who are told by their officials to say these sorts of things. It was clear that the drafting of the Bill was wrong, and that my amendment put it right. I am very glad that the Government have now caught up with me. The rest of the amendments in this group deal with the knotty issue of accountability of the regulators. The noble Baroness, Lady Bowles of Berkhamsted, has tabled several amendments to try and improve what is in the Bill and reverse some of the changes in the Bill that will undoubtedly weaken the accountability arrangements. Of course, I support those amendments. But accountability means much more than plans and reports, which is what the noble Baroness’s amendments tend to focus on. Some of us put forward various ideas in Committee about how we could improve accountability—the point being that we are looking to get a step change in the accountability arrangements. This all comes back to the FSMA model, which my noble friend Lady Neville-Rolfe spoke about in the first group. I support the FSMA model in principle, but it is under increasing strain, as has been mentioned already today. It was first invented long before Brexit, when swathes of financial regulation were drawn up in the EU and scrutinised in detail via the EU Parliament. When FSMA 2023 paved the way for this additional delegation to the regulators of all of those EU competences, it was partially offset— only partially—by strengthening the role of Parliament. When the regulators use their powers to create rules and guidance, they now have to send that into the parliamentary committees, including the Financial Services Regulation Committee, which, as has already been said, I currently chair. I am clear that holding the regulators to account for how they are using their powers—that is, real-time accountability rather than the ex-post accountability that annual reports deal with—is an uphill battle for very many reasons, not least an imbalance between the scale of resources devoted to parliamentary committees compared with the vast resources that are deployed within our financial system regulators. As we know, this Bill creates yet more areas of delegated powers to the regulators—consumer credit, which we debated earlier today, but also the payment systems which the Minister spoke to a few moments ago. This, again, is why we need to strengthen the accountability arrangements rather than weaken them, as the Bill currently does. The Government have partially recognised that the Bill went too far and have tabled amendments on proportionality, which we will debate on our next Report day. The balance, however, has still shifted away too far from Parliament being able to operate effective accountability mechanisms. That is why I tabled Amendment 68, and I thank my noble friend Lord Bridges of Headley, the noble Baroness, Lady Bowles of Berkhamsted, and the noble Lord, Lord Vaux of Harrowden, for adding their names to it.