Financial Services Bill — House of Lords, 2021-04-14
Topic: Domestic Commerce
Molly Christine Meacher (Crossbench, Unknown): My Lords, I thank the noble Baroness, Lady Morgan, the right reverend Prelate the Bishop of St Albans and the noble Lord, Lord Stevenson, for putting their names to this amendment and for their tremendous support throughout the discussions we have had since Perhaps, I should begin by reminding the House what this amendment is all about, although I do not intend to repeat what I said in Committee. For many years, I have been aware of grave concerns about the operations of some bailiffs and certain bailiff companies, and the appalling experiences of some vulnerable individuals when they find themselves in debt and need help to solve their problems. I recognise that the law must support creditors in order to recover money owed; however, there has been inadequate protection of vulnerable people in financial difficulty I think the Government recognise that the 2014 regulations have failed to incentivise affordable repayment and to ensure consistently fair treatment of people in vulnerable situations. The MoJ review of the bailiff issue, set up in 2018, was most welcome but we are now in 2021 and, sadly, the review has not yet reported. Amendment 16 seeks to break the impasse on this issue, and I pay tribute to the Centre for Social Justice and the enforcement oversight working group for the support they have provided It is a remarkable first that the leaders of the enforcement and debt advice sectors have come together as part of this group, with the CSJ, to design a new oversight body for the enforcement industry. This cross-sector initiative is an important and historic breakthrough, and the group has made significant progress in developing the principles, objectives and functions of the new body, the enforcement conduct authority Crucial to the effect of an enforcement industry regulator is some statutory underpinning, as I know the Minister knows we feel strongly. Our amendment is designed to focus minds and take forward that vital element. All sides agree on the importance of giving the body real authority and teeth. I want to thank the noble Lord, Lord Wolfson, his colleagues and the noble Lord, Lord True, for our helpful meetings, the second meeting in particular. I also thank the Treasury and the Ministry of Justice for their constructive response to this amendment, and their commitment to build on the good faith of the industry and the advice sector and to work with the group on independent regulation I know that Ministers welcome the EOWG’s initiative; however, we accept the Treasury’s view that the Financial Services Bill is not the ideal vehicle for this amendment. We have also heard concerns from Ministers about putting this body on a statutory footing. I want to address that important point in a moment, but first, I want to assure Ministers that I will not be taking the amendment forward at Third Reading. We have listened to concerns about the FCA backstop, and I would be very happy to for the Government to come forward with an alternative amendment, maybe to another Bill, that removes the offending article I would also like to reflect briefly on how this initiative fits with the progress the Government have made in Clause 34—on the debt respite scheme—in improving protections for people in financial difficulty. This House strongly welcomed the Government’s initiative in 2018 to lay the powers for breathing space in statute through the Financial Guidance and Claims Act. It will not have passed Ministers by that they were pleased to do this before the policy framework was fully worked out, which is what we want to happen in relation to the regulator Let me now turn to the vital need for statutory underpinning for a new regulator. We are now two and a half years into the Government’s review of bailiff regulation, and my hope is that our amendment will have helped to focus minds on an idea whose time has come. Colleagues from across the House and across the sector are strongly united in the view that the current situation is unacceptable. We also believe that the establishment of an enforcement industry regulator without any statutory underpinning would be totally inadequate. I want to set out the reasons why statutory underpinning is so important for this industry. The enforcement industry itself is saying that statutory underpinning is essential, which should surely be sufficient proof of the veracity of this crucial point. The whole point of this initiative is to constrain the activity of offending bailiffs and bailiff companies and improve practices to a universally high standard. The EOWG has recognised that this will be much hindered without statutory oversight. Any new regulator will lack the necessary powers to achieve effective regulation without this statutory support I appreciate that time has been short for Ministers to consider the initiative for this Bill, but I urge the Government to reflect on what industry leaders are saying and think again. The powers to enforce firms’ compliance with regulatory standards and to sanction firms and agents who are in breach of the standards—or prohibit them from operating—are essential to protect the public from the inappropriate practices we still see. Without statutory underpinning, the independent authority of any new enforcement industry regulator threatens to be undermined. Funding for the body; access to intelligence; acceptance of standards and decisions: these all continue to be heavily dependent on voluntary consent and compliance, which is very difficult to achieve in this industry. Ministers may say, "Let’s see how voluntary regulation works"—in fact, I think that is what they are saying. I am afraid that argument does not hold water, for the reasons I have set out Finally, it is worth noting the strong precedent for statutory underpinning in the Ministry of Justice and Treasury spheres. To take one example, the Legal Services Act 2007 provided for the Legal Services Board to oversee approved regulators and established an independent complaints body. Given the extraordinary and necessarily intrusive powers of the enforcement sector, there is an overwhelming case for a regulator backed by statute To conclude, this amendment would put in place the necessary framework for the Government to make a real breakthrough to resolve a long-standing issue. The amendment has cross-sector, cross-party support; this has nothing to do with politics. All sides agree that any new body requires statutory underpinning to be effective. It is crucial that this moment of opportunity is not squandered, and I really mean a moment of opportunity. Leaders of the industry may change in a few years and we would have lost that opportunity I have no wish to test the will of the House on my amendment. We have listened to Ministers about having a more palliative legislative option. The Police, Crime, Sentencing and Courts Bill is coming down the track and we believe that it may offer a more suitable vehicle for reform of the enforcement industry regulatory system. However, I hope that the Minister, in winding up, will assure the House that the Treasury and the Ministry of Justice will work together with the EOWG on the necessary statutory underpinning for an enforcement industry regulator. I ask Ministers to commit now to using the PCSC Bill to build on the talks we have had on this Bill and returning to the House with their own amendment on this issue. I know colleagues will listen to the remarks of the Minister very carefully before deciding whether any further Back-Bench parliamentary involvement is needed. I beg to move.