Financial Services Bill

Baroness Noakes Excerpts

Monday 15th October 2012 Lords Chamber

Moved by

[Baroness Noakes]

190: Schedule 15, page 272, line 4, at end insert—
“Omit paragraph 5.”

[Baroness Noakes]

Like the noble Lord, Lord Whitty, I, too, am fighting one of the battles left over from the Financial Services Act of 2010. As the Committee will find out, mine is a very much more modest affair.

I shall move Amendment 190, which is a probing amendment to Schedule 15 to this Bill. This schedule makes a number of amendments to the law governing the consumer financial education body which likes to go by the name of Money Advice Service. This body was created by the 2010 Act. As noble Lords who were involved in that Bill will be aware, it received little detailed scrutiny in your Lordships’ House and was eventually passed into law, as the noble Lord, Lord Whitty, said, under the wash-up procedure and the Bill ended up in somewhat truncated form. The provisions relating to Money Advice Service received no scrutiny whatever in your Lordships’ House. My noble friends and I had tabled 40 amendments at the time, all of which went undebated. I said when we did the final wash-up procedure that I hoped that if we formed the Government after the general election, we would revisit these remaining unsatisfactory aspects of Money Advice Service. Of course, other more pressing issues faced the Government in 2010 and going back over legislation creating minor public bodies was clearly never going to be a priority. However, as we have the opportunity of this Bill before us, I have decided to raise just one of the 40 issues that I wished to explore in April 2010.

--- Later in debate ---

[Lord Newby]

My Lords, I hope that I can reassure my noble friend. As she says, this amendment removes the provision that specifically aims to allow organisations that wish to act on Money Advice Service’s behalf to do so, even if there is otherwise a limitation on their ability to do this. This is to enable bodies such as charities, credit unions or friendly societies to work with MAS without constraints imposed by, for example, tightly specified charitable objectives. This provision, as my noble friend pointed out, was inserted into FiSMA by the Financial Services Act 2010. I vaguely remember her tabling amendments on that point when the Bill that became that Act was being considered by this House but, as she said, there was insufficient time to debate them during the wash-up.

I think that I can put my noble friend’s mind at rest relatively straightforwardly: there is a direct precedent for what is being proposed here in relation to the National Lottery. National Lottery distributors encountered similar difficulties working with particular bodies whose constitution was narrowly drawn. Accordingly, amendment was made to the National Lottery Act 1993, in Section 25A, to permit charities and similar bodies to act on behalf of the distributor. A similar provision was included in paragraph 7 of Schedule 3 to the Dormant Bank and Building Society Accounts Act 2008. An example of the circumstances in which such a power might be used is where a charity’s objects may be wholly in sympathy with Money Advice Service’s objectives, but when read narrowly the objects are narrower than a particular project on which Money Advice Service wishes to work with the body. This provision lifts that constraint and, given the active interest of a large number of charities in the financial capability agenda, I hope that the noble Baroness would not wish such organisations to be prevented from working with Money Advice Service in future. Having received this explanation, I hope that my noble friend will feel able to withdraw the amendment.

[Baroness Noakes]

My Lords, that explanation has left me as concerned as I was to begin with. While his examples seek some sort of plausible minor extension of a body’s activities, paragraph 5 is not confined to minor changes to a body’s constitution and it is not confined even to charities whose objectives are related to those of Money Advice Service. It is very broad indeed and would apply under a very much broader basis, including to a large number of bodies set up by statute. I shall consider carefully what my noble friend has said and look at the precedents that he has offered as justification for this, but I have to say that I am not entirely happy with his explanation. I beg leave to withdraw.

Amendment 190 withdrawn.