Financial Services Bill — House of Lords, 2021-01-28
Topic: Domestic Commerce
Margaret Ritchie (Non-Affiliated, Unknown): My Lords, I take this opportunity to congratulate the two new Members of your Lordships’ House, the noble Lord, Lord Hammond of Runnymede, and the noble Baroness, Lady Shafik, on their excellent and thought-provoking maiden speeches Undoubtedly, the financial services sector is important to the City of London and to the UK. It is very much the engine that drives our economy. In the post-Brexit situation—I hasten to add that I did not favour or want Brexit—we need economic and financial stability and a strong means of financial regulation. That must be accompanied by consumer protection. I note that the Bill contains a new regulatory regime for investment firms, and thus provides the Financial Conduct Authority with additional powers to set rules for such firms, while also containing measures to make the FCA much more accountable One area I want to concentrate on—other noble Lords have referred to it this evening—is economic crime. We have all heard stories about individuals who have been fleeced by investment companies that were not properly registered, and therefore could not get the money they invested returned to them when problems occurred. Will the Minister and his colleagues bring forward amendments containing retrospective powers to help such individuals and ensure that such effective financial scams, otherwise known as economic crime, cannot happen in the future? I shall also refer to two other issues about protecting individuals, in relation to credit services and our environment I have been advised about some individuals in the UK who have invested money—pension funds—in Dolphin Trust, now known as the German Property Group. This organisation had its UK office in Hanover. It was an unregulated property investment scheme. Apparently, this company was supposed to use investors’ money to revamp derelict buildings in Germany into apartment blocks. Then, after several years, investors would receive their money back with a hefty interest rate. They were told to invest in this company and that it was safe to do so because their money was aligned to a certain property so they would not lose out. I have talked to one family who did this and they have lost everything. There are over 1,300 individuals, throughout the UK, owed in excess of £165 million. Problems emerged when they found out that the properties did not exist, and the company was not even registered Will the Minister indicate whether the new regulatory regime for investment firms will prevent such actions happening? I doubt that it will. Will the new legislation have retrospective powers to ensure that companies such as the German Property Group are held legally and financially accountable to their investors for the malfeasances that have occurred? What protections can be offered by the FCA under the new provisions in terms of capital levels, liquidity, risk management processes and governance arrangements Other areas addressed in the other place included the need to ensure that buy now, pay later credit services are brought into the scope of the Financial Conduct Authority to protect people from spending more than they can afford. Many people in this net take out further debt to repay the initial credit. What legislative consumer protection can be afforded to these individuals? Will the Minister bring forward amendments in your Lordships’ House to that effect I am of the firm belief that the Financial Conduct Authority should have regard to the UK’s target of reaching net zero greenhouse gas emissions by 2050, particularly in the year when the UK will chair COP 26. This would help to support the overarching goal of a green economy and financial sector. I note that the Minister in the other place stated that climate change is an issue to which the regulator should have regard. What, therefore, is the Government’s exact position and what is their timeframe for bringing forward legislative change in this regard? Will they do it now, through amendments? If not, I know that other noble Lords will do so, and I will support them.