Lords Rein In Regulators as Settlement Ban Scrutinised

High-Level Summary

The House of Lords held oral questions on: funeral sector regulation; the consenting of nationally significant infrastructure projects and the role of devolution; NHS reliance on agency medical staff; and support for the automotive and components sector. Peers then questioned Ministers on the Government’s new Israel/Palestine policy following a Commons Statement, including an import ban on goods from illegal settlements and further Iran‑related measures. The Report stage of the Financial Services and Markets Bill [HL] saw proportionality restored as a day‑to‑day regulatory principle and a Government pledge to bring back climate and nature ‘have‑regards’ at Third Reading; the House also agreed new provisions on access to Child Trust Funds/Junior ISAs for people lacking capacity, thresholds for Section 166 reviews, a digital assets strategy, and additional reporting on delegated powers. Two Bills received a First Reading.

Detailed Summary

Oaths and Affirmations

Baroness Fullbrook took the oath and signed the Code of Conduct undertaking: “Baroness Fullbrook took the oath, and signed an undertaking to abide by the Code of Conduct.”. No decisions were required.

Funeral Directors: Regulatory Regime – Oral Question

The Archbishop of York asked about plans to establish a regulatory regime for funeral directors. Baroness Merron (Health Minister) said “detailed proposals for formal regulation of the funeral sector are being developed.”. She added, “We have already accepted the majority of the 75 recommendations from the Fuller inquiry” and would update on timelines when able. Peers raised learning from Scotland’s register, proportionality to avoid burdens on small firms, and inclusive consultation (including hospices). The Minister said safeguards must be effective without disproportionate burdens and that the Government is “working with the full range of funeral providers and not just the large funeral providers”. She undertook to write regarding open‑air pyres and indicated that addressing current gaps would guide the regime: “that is indeed what will guide us.”. Outcome: policy in development; timeline not stated in the transcript.

National Infrastructure Projects: Devolution – Oral Question

Asked about the impact of devolution on nationally significant infrastructure projects (NSIPs), Baroness Taylor of Stevenage said: “No devolved powers have altered the consenting of the decision‑making route for NSIPs, so no assessment of impacts has been made.”. She pointed to new reservoirs and recent reforms, including the Planning and Infrastructure Act and a republished National Planning Policy Framework, to improve delivery [refs: a705.0/1, a706.6/1]. Peers queried Barnett consequentials, community engagement, ‘devolution deserts’, the role of water companies as statutory consultees, and data centre water/cooling innovation. The Minister said “Devolution and infrastructure reform definitely do not remove the role of local communities.”, aimed for strategic authorities nationwide by 2027‑28, and said authorities such as water companies should engage even if not statutory consultees. On delivery pace, she said “we have to get better at this” and highlighted project management alongside planning reform. No decisions were taken.

NHS: Agency Medical Staff – Oral Question

Baroness Merron reported progress towards the commitment to “eliminate agency spending by the end of this Parliament.”. She stated agency spending had fallen and described future plans, with “the forthcoming workforce plan” and a mental health strategy to support permanent staffing [refs: a708.2/1, a708.4/1]. Peers asked about risks in corridor care, flexible working for retention, pay parity with agency rates, total temporary staffing costs, and continuity of care. The Minister said “patient safety has to come first” and, where temporary cover is needed, NHS staff banks are preferred over agency use. She noted “we now have the agency price cap” and that continuity is best achieved through “an established NHS workforce.”. Outcome: continued drive to reduce agency dependence; publication timelines for combined flexible staffing costs not stated in the transcript.

UK Automotive and Components Sector – Oral Question

Following Jaguar Land Rover’s announcement on job cuts, Lord Leong said the Government is determined that “Britain will remain a world‑leading automotive nation,” outlining measures including reduced electricity costs, DRIVE35 funding and EV demand support. On procurement, he said government purchasing will be used “to ensure that British manufacturers can compete fairly” and that UK capability and social value are recognised. Peers raised concerns about Chinese imports, EU market access, the zero‑emission vehicle mandate and offshore production. The Minister said the UK had “strengthened our trade remedies” and the Trade Remedies Authority could act on credible evidence, confirmed “we are not joining the customs union”, and reiterated that individual business decisions are for companies, while the Government works with JLR, unions and local partners. He noted JLR still plans significant UK investment. No policy changes or decisions were recorded.

First Readings

Two Bills were introduced without debate. The Regulation of Event Venue Governing Bodies (Conflicts of Interest) Bill [HL] was “introduced by Lord Bassam of Brighton, read a first time and ordered to be printed.”. A Health Bill was “brought from the Commons, read a first time and ordered to be printed.”. Next steps: printing and scheduling for further stages.

Israel and Palestine – Ministerial Statement (Lords scrutiny of Commons Statement)

Peers questioned the Government on measures outlined in a Commons Statement. The Statement declared “the occupation is unlawful” and announced: “we will introduce an import ban on goods from illegal settlements in the Occupied Territories”; sanctions on “Lebanese Hezbollah’s financing arm, Al‑Qard Al‑Hassan” with wider Iran steps; and that over 30 arms licences used by the IDF in Gaza remain suspended. The Government intends the new sanctions regime to be in place “within six to nine months”. In the Lords, Lord Callanan asked about UK influence after reports of consulate closure. Lord Wood of Anfield said the Government would be “stronger in standing up for what is right” and noted “we were disappointed” that Israel ordered the UK consulate in East Jerusalem to close with 30 days’ notice. He stressed there “must be no connection between the actions of the Israeli Government and any attribution of responsibility to British Jews”, said an extension of the global human rights regime is expected “in the next few weeks”, and confirmed “very strong and continuing security co‑operation with Israel”. No division was held; primary legislation and sanctions steps will follow as outlined.

Financial Services and Markets Bill [HL] – Report (Day 2): Regulatory principles and climate/nature ‘have‑regards’

Peers debated Clause 17 (regulators’ principles). The Minister said he was “prepared to return to this issue at Third Reading” and to “table amendments to Clause 17” so the PRA and FCA “continue to consider their existing climate change and environmental targets” at a day‑to‑day level with reporting. Government amendments were agreed so “the two proportionality regulatory principles will continue to apply to the regulators’ day‑to‑day actions.”. Further changes require regulators to recognise differing abilities of firms to engage/comply, including owing to size. On deforestation, Ministers confirmed Defra “plans to consult during the autumn” and that “legislation will be delivered in 2027” for a Great Britain regime. Several related amendments were withdrawn on the basis of these commitments. Next steps: Government amendments at Third Reading; Defra consultation and subsequent legislation.

Financial Services and Markets Bill [HL] – Report (Day 2): Consumer access and supervisory thresholds

The House agreed a new clause requiring the FCA to make rules to enable limited access to Child Trust Funds and Junior ISAs for account holders lacking capacity, with safeguards. Division: Ayes 248, Noes 163 [refs: a756.0/2, a756.2/1]. Peers also agreed a statutory threshold for Section 166 skilled person reviews, requiring material risk of serious detriment and proportionality before commissioning. The Government argued existing processes were sufficient, but the House agreed the new test. Division: Ayes 226, Noes 162 [refs: a763.0/2, a763.2/1]. Next steps: provisions proceed to the next stage of the Bill.

Financial Services and Markets Bill [HL] – Report (Day 2): Digital assets and innovation

A Government package created a new secondary objective for the Bank of England to facilitate innovation in payment systems and related services, with associated annual reporting (Amendments 58–59 agreed) [refs: a752.1/2‑a752.1/4]. Ministers also highlighted work by the wholesale digital markets champion, noting he “published his first report… setting out a comprehensive cross‑sector approach to digital assets”. The House additionally required the Treasury to develop and consult on a comprehensive digital assets strategy within 12 months, covering regulation, tokenisation, access to banking and international developments. Division: Ayes 194, Noes 138 [refs: a776.2/2, a777.1/1]. Next steps: Treasury to prepare and consult on the strategy if retained at Third Reading and in the Commons.

Financial Services and Markets Bill [HL] – Report (Day 2): Delegated powers and commencement reporting

Peers required the Treasury to publish and lay before Parliament a report on the intended use of specified delegated powers before they are first brought into force (Amendment 93). Division: Ayes 196, Noes 138 [refs: a779.2/2, a779.4/1]. Consequential commencement amendments were agreed so the listed powers cannot commence until that reporting duty is met (Amendments 100–103 agreed) [refs: a786.1/2‑a786.1/6]. The House also removed Clause 50 (general consequential power), citing concerns about a broad Henry VIII power. Division: Ayes 188, Noes 125 [refs: a783.0/2, a783.2/1]. Next steps: measures move to Third Reading; the Government may respond or seek changes in the Commons.