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Lord Phillips: Social investment could yet be included in Financial Services Bill

Finance | Vibeka Mair | 11 Jul 2012

Lord Phillips of Sudbury has said he is hopeful that government will support concessions for social investment in the Financial Services Bill which is currently going through the House of Lords.

The Bill currently makes no specific reference to social investment, and attempts by Labour MP Christopher Leslie and Lord Phillips to get social investment mentioned in the Bill have failed or been withdrawn. Lord Phillips withdrew his latest attempt late yesterday after a debate.

However, he told civilsociety.co.uk that he believed it could be possible to persuade government to make some concessions for the “social investment fraternity” during the Bill’s passage through the House of Lords. 

In the House of Commons, MP Leslie’s social investment amendments was narrowly defeated across party lines, when eight Labour MPs who voted in support were defeated by ten Tory and Liberal Democrat MPs.

However, Phillips said the House of Lords was “much less partisan”:

“This is not a partisan issue,” he said. “And the coalition government has gone out of its way to encourage social investment”.

The Bill reached committee stage in the House of Lords yesterday, where Lord Phillips and fellow peers debated amendments he had tabled in support of social investment.

With regards to the social investment sector and the new Financial Conduct Authority who will regulate all financial activity, Lord Phillips stressed that “one size did not fit all”:

“The message repeated from end to end of the not-for-profit sector. It wants the regulators to have a sensible discretion to distinguish, as I say, between theses very different animals,” he said.

“The minister in the Commons made a plea that we must have a level playing field, with no distinction between massive international banks and a little local social endeavours. To the sector, and indeed to me, that is not a level playing field; it is a level killing field.”

Conservative peer Lord Hodgson broadly supported Lord Phillip’s amendment, as did Labour peer Baroness Hayter of Kentish Town.

However, concerns were raised by Commercial Secretary to the Treasury Lord Sassoon on amendments which indicated that the new financial regulator should not inhibit the development of social investment:

“Although I agree with my noble friend Lord Phillips of Sudbury that the government need to act in support of the social investment sector, we will not create a healthy UK financial services market, including for social financial services, by giving the FCA the job of taking forward what should be and is part of the government’s wider social policy agenda.”

In the end Lord Phillips withdrew his amendments, but told civilsociety.co.uk that when the Bill is debated again in the House of Lords he was hopeful that there would be support from peers and government on the inclusion of concessions for social investment.

"I had a discussion after the debate with the Bill team and Lord Sassoon. There is everything to play for."

The Bill is expected to be debated by peers again in the Autumn.

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