Professional Standards in the Banking Industry

Debate between Lord Tyrie and Nigel Evans

Thursday 5th July 2012 Commons Chamber

[Mr Tyrie]

Further to that point of order, Mr Deputy Speaker. I think the whole House, and actually the whole country, will welcome the engagement that appears to be taking place across the Dispatch Boxes. I reiterate that I will do whatever the House asks me to do, but I believe it is worth my trying to chair the Committee only if it has the full support of all the major parties in the House of Commons.

[Mr Deputy Speaker]

I am grateful for all three points of order, and the Chair has nothing to add.

Financial Services Bill

Debate between Lord Tyrie and Nigel Evans

Monday 23rd April 2012 Commons Chamber

[Mr Andrew Tyrie (Chichester) (Con)]

I beg to move, That the clause be read a Second time.

[Mr Deputy Speaker (Mr Nigel Evans)]

With this it will be convenient to discuss the following:

New clause 2—Reports by skilled persons—

‘The Financial Services and Markets Act 2000 is amended as follows—

“(1) In section 166, subsection (1), leave out “require him” and insert “inform that person that it has appointed a person”.

(2) In section 166, subsection (1), at end insert “The Authority may require the person to whom subsection (2) applies to pay for the costs of the report in the event that it has resulted in enforcement action being taking against that person.”.

(3) In section 228, subsection (5), at end insert “except that this is without prejudice to the right of the complainant to sue for any amounts in excess of the maximum award limit in the event that the Ombudsman has made a recommendation pursuant to section 229(5) of this Act. The Complainant’s acceptance is also not binding on the Authority which remains entitled to take such action as it would have been had the award limit not existed.”.’.

New clause 3—Enforcement of money awards—

‘Schedule 17 of the Financial Services and Markets Act 2000 is amended as follows—

“(1) In paragraph 16, leave out “which has been registered in accordance with scheme rules”.’.

New clause 13—Meaning of qualifying parent undertaking: assessment and review—

‘(1) The Treasury shall within twelve months of Royal Assent to this Act consult the FCA and the PRA on the possible need to exercise the powers provided for by section 192B(6)(a) of the Financial Services and Markets Act 2000 and shall lay before the House of Commons a report containing an assessment of the need to exercise these powers.

(2) In subsequent years, the FCA and the PRA shall provide an annual assessment of the possible need to exercise the powers provided for by subsection (6)(a), to be reviewed by the Treasury. Any such review must be laid before the House of Commons.’.

Amendment 46, in clause 1, page 1, line 12, at end add—

“(2A) The appointment of the Governor and Deputy Governors shall be made only after the Treasury Committee of the House of Commons has been consulted and has reported on the suitability of the candidates nominated by the Chancellor of the Exchequer for the posts.’.

Amendment 47, page 1, line 12, at end add—

“(2A) Any member appointed under subsection (2) shall be appointed with the consent of the Treasury Committee of the House of Commons.’.

Amendment 29, in clause 2, page 2, line 11, after ‘Authority)’, insert

‘and shall have regard to minimising, as far as possible, the use of public funds to support or rescue parts of the UK financial services industry.’.

Amendment 22, in clause 3, page 3, line 37, after ‘functions’, insert

‘having regard to the economic policy of Her Majesty’s Government, including its objectives for growth and employment’.

Amendment 23, page 8, line 32, at end insert—

(a) If the Treasury considers it appropriate to proceed with the making of an order under section 9K, the Treasury may lay before Parliament—

(i) a draft order, and

(ii) an explanatory document.

(b) The explanatory document must—

(i) introduce and give reasons for the order,

(ii) explain why the Treasury considers that the order serves the purpose in section 9K, and

(iii) be accompanied by a copy of any representations received from the FPC or the Governor.

(c) The Treasury may not act under paragraph (a) before the end of the period of 12 weeks beginning with the day on which the consultation began, unless the order is made in accordance with paragraph (b).

(d) Subject as follows, if after the expiry of the 40-day period the draft order laid under paragraph (a) is approved by a resolution of each House of Parliament, the Minister may make an order in the terms of the draft order.

(e) The procedure in paragraphs (f) to (i) shall apply to the draft order instead of the procedure in paragraph (d) if—

(i) either House of Parliament so resolves within the 30-day period, or

(ii) a committee of either House charged with reporting on the draft order so recommends within the 30-day period and the House to which the recommendation is made does not by resolution reject the recommendation within that period.

(f) The Minister must have regard to—

(i) any representations,

(ii) any resolution of either House of Parliament, and

(iii) any recommendations of a committee of either House of Parliament charged with reporting on the draft order, made during the 60-day period with regard to the draft order.

(g) If after the expiry of the 60-day period the draft order is approved by a resolution of each House of Parliament, the Minister may make an order in the terms of the draft order.

(h) If after the expiry of the 60-day period the Minister wishes to proceed with the draft order but with the material changes, the Minister may lay before Parliament—

(i) a revised draft order, and

(ii) a statement giving a summary of the changes proposed.

(i) If the revised draft order is approved by a resolution of each House of Parliament, the Minister may make an order in the terms of the revised draft order.

(j) For the purposes of this section an order is made in the terms of a draft order or revised draft order if it contains no material changes to its provisions.

(k) In this section, references to the “30-day”, “40-day” and “60-day” periods in relation to any draft order are to the periods of 30, 40 and 60 days beginning with the day on which the draft order was laid before Parliament.

(l) For the purposes of paragraph (k) no account is to be taken of any time during which Parliament is dissolved or prorogued or during which either House is adjourned for more than four days.’.

Amendment 24, page 12, line 2, at end insert—

‘(f) an assessment of the impact of each macro prudential measure on employment and economic growth.’.

Government amendment 12.

Amendment 39, in clause 4, page 14, line 36, at end add—

‘Within a year of commencement of this Act the Bank of England shall publish a review of the effectiveness of co-ordination by the regulators of the exercise of their functions relating to membership of, and their relations with, the European Supervisory Authorities (namely, the European Banking Authority, the European Insurance and Occupational Pensions Authority and the European Securities and Markets Authority), and their relations with other regulatory bodies outside the United Kingdom.’.

Amendment 28, page 15, line 4, leave out clause 5.

Amendment 35, in clause 5, page 16, line 15, at end insert—

‘(c) the ease with which consumers, particularly those on lower incomes, can have access to financial services and products which are affordable and appropriate to their needs.’.

Amendment 67, page 16, line 41, after ‘is’, insert

‘intelligible to them, appropriately presented’.

Amendment 41, page 17, line 1, after ‘transaction’, insert

‘, any common law fiduciary duties owed by the provider in question’.

Amendment 68, page 17, line 35, at end insert—

‘(e) the ease with which consumers throughout the UK can identify and obtain services which are appropriate to their needs and represent good value for money.’.

Amendment 69, page 27, line 19, at end insert ‘and by the Consumer Panel’.

Amendment 70, page 27, line 19, at end insert—

‘(1A) Unless the PRA has established a panel as provided for in section 2K(2) to reflect consumer interests, it must consider representations from the Consumer Panel established under section 1Q where such representations relate to the PRA’s general policies and practices, the co-ordination of the exercise of PRA and FCA functions as provided for in section 3D(1), or the exercise of the PRA power in section 3I.’.

Amendment 34, page 28, line 38, at end insert

‘to minimise unnecessary additional expenses that might be incurred by virtue of the separate administration of the FCA and the PRA, and to maximise any common administrative savings achievable through close co-ordination.’.

Amendment 36, page 29, line 15, at end insert—

‘(g) the principle that, where appropriate, authorised persons should have a fiduciary duty towards the consumers who are their clients.’.

Amendment 71, page 29, line 42, at end insert—

‘(d) that each regulator engages with the other where they identify any gaps in or between their regulatory remits, or the exercise of these, that may become apparent in relation to any product, provider, institution, market practice, responsible shareholder interest or consumer concern;

(e) that as appropriate both regulators can identify areas where they can share services and information, acting to minimise burdens on firms supervised by both regulators and/or to maximise the understanding of consumers and facilitate the exercise of their responsible interests.’.

Amendment 33, page 31, line 24, at end insert—

‘(8A) The memorandum shall contain an estimate of the additional annual costs involved in the administration of the FCA and PRA when compared with the estimated costs of the administration of the Financial Services Authority.’.

Government amendment 1.

Amendment 42, in clause 25, page 108, leave out lines 29 and 30.

Amendment 43, page 108, leave out lines 34 to 39.

Amendment 49, in schedule 3, page 174, line 1, at end insert

‘with the consent of the Treasury Committee of the House of Commons.’.

Amendment 50, page 174, line 2, at end insert

‘with the consent of the Treasury Committee of the House of Commons.’.

Amendment 27, page 176, line 9, at end insert—

‘Publication of minutes and agendas

10 The FCA shall make arrangements to publish the agendas and minutes of its meetings, unless publication would be inappropriate.’.

[Mr Tyrie]

As a number of colleagues across the House will have noticed, the Treasury Committee took the highly unusual step of tabling a new clause, which is signed by all but one member of that Committee. As hon. Members will be aware, the Committee feels strongly that this Bill is defective in a number of respects, and needs a good deal of attention and improvement. That is because the Bill will hand the Governor of the Bank of England

“unprecedented new powers to shape the British economy. While continuing to set interest rates, the Bank will take over the supervision of commercial banks and insurers, be responsible for…tackling threats to financial stability…and have the power to restrict lending on mortgages, or order banks to increase their capital…one…man or woman will wield all these powers. This individual will arguably be as powerful as the chancellor”.

As drafted, the Bill seems to fly

“in the face of all ideas of modern governance, let alone parliamentary accountability.”

Those are not just my personal views; they summarise reasonably well the views of the whole Treasury Committee. As it happens, I have not said anything off my own bat yet; everything that I have said so far is a verbatim quotation from an article by the previous Chancellor, the right hon. Member for Edinburgh South West (Mr Darling).

Jobs and Growth

Debate between Lord Tyrie and Nigel Evans

Wednesday 12th October 2011 Commons Chamber

[Mr Tyrie]

I broadly agree with that. There is always a problem with measuring inflation—there is always a dispute about exactly how to capture it best—and we will never get it exactly right. I will not go into any further details now, but I agree with the core of what my hon. Friend has said.

Work on both the deficit reduction plan and the recovery plan have been firefighting to deal with our inheritance—less from the right hon. Member for Edinburgh South West than from his predecessor, the right hon. Member for Kirkcaldy and Cowdenbeath (Mr Brown). Let me now deal with the third aspect of the growth strategy, which consists of policies to improve the long-run growth rate and long-run economic performance: what the policy wonks call supply-side reform. The coalition's inheritance needed attention in that regard as well.

A few days ago I made a number of proposals for supply-side reform in a pamphlet, and they seemed to make everyone very excited. The Government growth agenda set out in the spring was a start, but, as the Chancellor said in his party conference speech,

“We need to do more”.

In that pamphlet, in a personal capacity, I made a few suggestions. In a nutshell, we need to work much harder to produce a comprehensive strategy embracing tax, reform of the labour markets, financial regulation, energy policy, transport and competition policy. We have been firefighting so far, but now is the time to start developing that longer-term strategy.

It is worth bearing in mind that it took the Thatcher Administration the best part of four years to get round to doing much of this, and I realise that this type of policy is easy to talk about but difficult to deliver. What matters most is that the creative energies of small businesses in our constituencies are released to increase the long-run growth potential of the economy. That is a big reform job. We have to bear in mind all the time that it involves millions of people—small traders and people working in small businesses—and that it is they who will restore the economy to health, not Governments and not Parliament. We need to make it much easier for them. Let us consider just one area: taxation. The Treasury Committee has flagged up some of the—largely inherited—contradictions and inconsistencies in the tax system, and argues that further tax reforms should be based on a few simple and coherent principles: certainty, simplicity, stability and fairness. We are a long way from achieving that in our tax system and there is a lot still to do. Encouragingly, the Chancellor said he strongly supported tax simplification; he has made that point on a number of occasions and he has created the Office of Tax Simplification.

The Chancellor announced in his speech at last week’s Conservative party conference that he would push ahead with further labour market reforms, and he has mentioned that again today. Of even greater significance could be the Chancellor’s commitment not to push ahead of other European countries on carbon reduction targets. I and many other people have been arguing for that for a long time, all the way back to our deliberations on the Climate Change Act 2008. The rapid pace of carbon reduction will push up business costs and also provoke great controversy, for example in respect of wind farms. Therefore, the Government are right to think again about that policy. It is now crucial that the coming autumn statement gives a decisive push to measures for improving long-run economic performance. It is equally important that that is seen not as a programme for a year, but as a remorseless project for the long term.

For much of the last decade, politicians of both major parties talked as if the economy need no longer be the top priority. For it was an age of abundance: it seemed that we could concentrate on how to spend it and quality-of-life issues. We forgot that most politics is hot air unless the economy can afford to deliver on the promises made by politicians. The complacency about growth that infected both parties encouraged the irresponsible lending and borrowing of the last decade. The electorate have noticed that they were led up the garden path, most notably by the absurd claim that Governments could put an end to boom and bust—so my final point is a presentational one. Politicians and Parliament must demonstrate that the public’s No. 1 priority is also their own No. 1 priority. The electorate’s No. 1 priority at present is to protect their living standards and their children’s prospects.

[Mr Deputy Speaker (Mr Nigel Evans)]

I now have to announce the result of the deferred Division on the question relating to tribunals and inquiries. The Ayes were 309 and the Noes were 20, so the Ayes have it.

[The Division list is published at the end of today’s debates.]