Financial Services and Markets Bill (Tenth sitting) - 3rd November 2022

14:13 Tulip Siddiq (Labour)

Members will be happy to hear that this is my final speech. The new clause would require the Treasury to publish an updated green finance strategy that must include a green taxonomy and sustainability disclosure requirements. The Opposition welcome the provisions in the Bill that formalise the responsibilities of the FCA and the PRA under the Climate Change Act 2008, which was introduced by the last Labour Government, but the Government have promised much more radical action. Indeed, we were promised that the UK would become the world’s first net zero financial centre; instead, we are falling behind global competitors. Too often British businesses, especially small and medium-sized enterprises, struggle to access the green capital they need. Not only has that damaged growth; it has made us more reliant on foreign fossil fuels and has directly contributed to the record levels of inflation that are strangling our economy.

I remind everyone that the Prime Minister had to be publicly shamed, including by the former Secretary of State for Business, Energy and Industrial Strategy, before committing to attend the COP27 summit. A Labour Government will give the clear direction that the sector needs by providing £28 billion of green capital investment every year until 2030. That will include investment in gigafactories to build batteries for electric vehicles, a thriving hydrogen industry, offshore wind with turbines made in Britain, planting trees, building flood defences, getting energy bills down, and guaranteeing Britain’s energy security by supporting the expansion of nuclear power.

Alongside the confidence that investment can bring, we must provide regulatory certainty to the sector. That will require internationally agreed definitions and regulatory standards on green finance. The Minister will agree that the FCA and the PRA are highly respected and influential on the world stage, and they can play a leading role at various global regulatory forums in setting the pace of change to ensure that the UK is a leader in green finance. However, that will require a concrete green finance strategy for regulators and the sector to work towards, and a clearly defined green taxonomy and sustainability disclosure requirements, to ensure that the City can fully support the transition to net zero. I look forward to hearing the Minister’s comments, and I hope he will vote with us to give financial services the confidence they need to make the UK the global centre of green finance.

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Andrew Griffith (Conservative)

The Government are committed to reaching net zero greenhouse gas emissions by 2025. The Bill underlines that commitment by introducing measures under which the financial regulators must consider the need to achieve compliance with the net zero emissions target as they advance their objectives.

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14:21 Andrew Griffith (Conservative)

We published the green finance strategy back in 2019, and “Greening Finance: A Roadmap to Sustainable Investing” in 2021. Since then, because of the changes to the economic and political landscape, the Government have commissioned my right hon. Friend the Member for Kingswood (Chris Skidmore) to lead a rapid review of how the Government approach delivering their net zero targets in the appropriate way. In addition, a call for evidence was launched on 11 May this year, and closed on 22 June. That consultation will inform the uptake of the green finance strategy and the Government are currently reviewing the responses they received. It is a big piece of work and the Government’s intention is to publish an update to the green finance strategy within the timelines that the hon. Member for Hampstead and Kilburn asks for in her new clause.

The hon. Member also mentioned specific policy issues relating to the green taxonomy and sustainable disclosure requirements, on which I hope I can give some reassurance. On the green taxonomy, the Government will be engaging with the market on the design of a framework to guide investors on how they can best support the transition to net zero. That includes the important role for SMEs that we heard about from my hon. Friend the Member for West Bromwich West.

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