Financial Services Bill

Debate between Lord Sassoon and Baroness Oppenheim-Barnes

Wednesday 18th July 2012 Lords Chamber

[Lord Sassoon]

My Lords, I believe that a step that takes us from no agreement in this area to a situation where over 90% of the industry has agreed through the code of practice to reflect the cash cost, and for that agreement to be in effect from 25 July, is a huge step forward. Of course, because it is done via a code of practice and a voluntary agreement, BIS has been able to do it relatively quickly. I would suggest that having it 90% done, and done quickly—which one hopes will drive fringe players out of the market if they do not buy into the codes of practice—is the right way, and an energetic and effective way, for my colleagues to address the situation. We should wait and see how that operates, but I believe that it will be effective. It is a major advance and is compatible with the difficult constraints of the European directive.

[Baroness Oppenheim-Barnes]

Could the motive behind the European directive possibly be their desire not to see anything quoted in euros?

[Lord Sassoon]

I am not going to question the motives of the directive, except to note that in this area, as in others, we are not free agents.

I turn to Amendment 118E, which seeks to insert into the list of “regulated financial services”, referred to in the FCA’s objectives,

“debt management companies or debt adjustment services companies”.

There is no explicit reference to debt management or debt adjusting on the face of the Bill. However, I would like to reassure—I am grasping for whose name is attached to this amendment—the noble Lord, Lord Eatwell, but also the noble Lord, Lord Stevenson of Balmacara, that Clause 6 enables all consumer credit activities currently regulated by the Office of Fair Trading to be transferred to the FCA, including debt management. So I hope the noble Lord will accept my assurance that no further provision in this area is necessary, because it is indeed picked up by the definition of Clause 6.

I should turn next to Amendment 197ZA, before I address some government amendments in the group. It concerns the question of the statutory debt management scheme and is also in the name of the noble Lord, Lord Borrie. It would amend enabling powers in the Tribunals, Courts and Enforcement Act 2007 for a statutory debt management scheme, if implemented, to apply to commercial as well as not-for-profit organisations.

As I said, the Government are currently working to deliver non-legislative alternatives with the debt management industry, as we have with the fee-charging pay-day loan industry. We want to give sufficient time and focus to that work to develop a voluntary code and to take account of the wider changes to the regulation of the debt management sector enabled by the Bill, which will lead to more proactive and intrusive regulation for the sector, before we look to a statutory scheme. If the Government were to resort to a statutory scheme, that would be the appropriate point to revisit the provisions in the Tribunals, Courts and Enforcement Act 2007 to ensure that they meet the policy needs, rather than addressing it at this stage through the Bill before we have bottomed out the ability of a non-legislative solution to have effect.

I shall speak briefly to the government amendments in the group, Amendments 142 and 194 to 196. Noble Lords may be aware that the Government brought forward a number of amendments at Report in another place to support the transfer of consumer credit regulation from the OFT to the FCA. Among those amendments was provision enabling local weights and measures authorities—trading standards—to continue to provide services to the national consumer credit regulator and to take action against those who provide credit on an unregulated basis following the transfer to the FCA. The amendments complete the group by creating parallel provisions for the Department of Enterprise, Trade and Investment in Northern Ireland, which plays the same role in Northern Ireland as does trading standards in England and Wales.

With those various assurances abut this rather disparate group of amendments, I ask the noble Lord, Lord Borrie, to consider withdrawing his amendment.

Banking: Liability.

Debate between Lord Sassoon and Baroness Oppenheim-Barnes

Tuesday 7th December 2010 Lords Chamber

[Lord Sassoon]

My Lords, we do not know what the report says because we have not seen it. We cannot say what the report deals with, but it is clear that it concludes that enforcement action is not warranted in this case. The FSA cannot publish the content of the RBS review because information gathered from the bank during the course of the review contains confidential material. The report remains confidential under the Financial Services and Markets Act 2000. I am grateful to the noble Lord for drawing attention to the fact that we are embarked on a process completely to redraw the financial regulatory architecture. I expect that under the new architecture, the new prudential regulatory authority will be able to exercise powers under the tools we give it to minimise the risk of another case like RBS coming up in future.

[Baroness Oppenheim-Barnes]

My Lords, would my noble friend agree with the view that has been expressed by some people from time to time that the FSA and the Royal Bank of Scotland are covering for each other?

[Lord Sassoon]

My Lords, I would not say in any way that the FSA and the Royal Bank of Scotland are covering up for each other. The FSA has conducted a lengthy report. It is clearly unfortunate that under the Financial Services and Markets Act, it is not possible at the moment to make the report public. On the other hand, when enforcement action is taken, it is usually made public and, indeed, in May this year, the FSA announced the conclusion of an enforcement investigation into one of the executive directors of RBS.

Health: Private Medical Insurance

Debate between Lord Sassoon and Baroness Oppenheim-Barnes

Monday 15th November 2010 Lords Chamber

[Lord Sassoon]

My Lords, private medical insurance policies are held by some 6 million people. I am grateful to the noble Lord, who is a very distinguished member of the profession, for drawing attention to this matter because it is clearly important for those 6 million people and for the country as a whole that this is a well functioning market. However, that market is the business of the policyholders, the insurance companies and the doctors. The FSA’s role is to make sure that essentially policyholders are sold policies on terms that are fully disclosed to them and that those terms are upheld. In June this year, the FSA carried out a review of the conduct of business rules and found no evidence of risk of consumer detriment in the PMI market which could be addressed by changing its regulatory approach. However, I am sure that the FSA, like the OFT, hears complaints coming in.

[Baroness Oppenheim-Barnes]

My Lords, is my noble friend aware that quite often medical insurance companies require a direct debit payment and that it is only after the direct debit payment has been made that they inform the person that certain things which they thought were going to continue to be covered no longer are?

[Lord Sassoon]

My Lords, I do not pretend to be an expert on the precise ways in which medical insurers carry out every aspect of their business, but clearly, as I said, it is critical that people understand what policies they are buying and that the policy terms are met. That is the critical interest of the Financial Services Authority in this matter.