Financial Services Bill

Mark Durkan Excerpts

Monday 10th December 2012 Commons Chamber

[Mr Tyrie]

That reassurance is helpful. I will take it back to both the Treasury Committee and the Banking Commission.

[Mark Durkan (Foyle) (SDLP)]

The hon. Gentleman has referred to the new Governor. If it had been a condition of his appointment that he understood the Bill and could explain it, does the hon. Gentleman believe that he would have been appointed?

[Mr Tyrie]

Well, he is a very clever man. I am confident that at the time of his appointment he would have been unable to pass the FSMA test, but I have no doubt that by the time he comes before the Treasury Committee for his pre-appointment hearing he will have mugged up fully on it all.

I have spoken for 14 minutes already, which is four minutes longer than I make a point of ever speaking in the House these days, so I will move swiftly to one last point. The Minister, as he pointed out, started looking at the Bill three quarters of the way through the process of putting in place a new system of financial regulation. I will wager a pound to a penny that he has found the tangled web of legislation that we have just been discussing extremely confusing. In fact, I wager that he has found it, in places, to be a nightmare and impossible to understand. I wager the same amount that the officials advising him do not always understand it either, and that is no reflection on the high-quality advice he is no doubt getting. Will he be prepared at least to consider rewriting FSMA afresh when he comes to adapt it to take account of the banking Bill, because that is what regulators have told us they would prefer, what the Governor of the Bank of England said he would prefer and what would enable the industry, the public and Parliament to have a much more intelligible piece of legislation?

It is a great shame that that approach, which was vigorously put forward at the time, was rejected when the Government first announced that they would proceed with amendments to FSMA. The Governor was pressing for it very strongly, and he had allies in Parliament. We now have a second chance, and I very much hope that the Minister will consider taking it. He will need to bear in mind that there will be 100—perhaps 1,000—official voices telling him not to do that, but just occasionally there are moments when a Minister can greatly improve the quality of the statute book. Would he be prepared at least to consider rewriting the Bill so that we have one fresh piece of legislation that everyone can understand?

--- Later in debate ---

[Chris Leslie]

In Labour’s view, amendment 25 ought to allow that. If we are talking about ease of access to affordable financial services, it should be a responsibility of the FCA to think of new ways to map what is happening across the country and to ensure that there are not these deserts or vacuums of poor availability or no availability. That is why there should be a requirement for a map to be drawn up of where and what lending is available, perhaps on a postcode-by-postcode basis. It would provide transparency and enable hon. Members to find out what is happening in their constituencies. Anecdote is not adequate; we need a more rigorous system of regulation and monitoring. That is how it is often done in other developed countries, such as the US, as my hon. Friend said.

In the past, Ministers have said that they are opposed to that level of transparency. I am not sure about this Minister—I know he will want to take a fresh perspective—but previous Ministers said: “It’s too burdensome to require transparency in respect of lending patterns, and there might be anti-competitive issues as well.” It would be entirely feasible to collect anonymised data in the way suggested, however, and I hope that Lords amendment 25 could be so interpreted.

[Mark Durkan]

Like my hon. Friend, I welcome amendment 25, which, I note, was something he laboured on valiantly when we spent our Lent in Committee. Does he recognise, however, that in one part of the UK —Northern Ireland—the five high street banks he referred to are not part of the banking profile? In Northern Ireland, we are facing a twilight zone of banking, with changes happening almost by default squared—as a result of changes here and in Dublin—and that will change further in the context of banking union. That is why we need to question how the FCA would use the powers being given to it under amendment 25.

[Chris Leslie]

Exactly. I imagine that what my hon. Friend describes is absolutely correct. Incidentally, I pay tribute to him for his endeavours in trying to improve the legislation, month after month after month, as we proceeded through Committee and on Report. The situation in Northern Ireland will be compounded by different factors, so how much more useful would it be if he and his neighbouring parliamentary colleagues had access to data about lending availability in a more rigorous form? That is how we want to interpret amendment 25 and how we will press the FCA to interpret it.

--- Later in debate ---

[Alison McGovern]

I thank the hon. Gentleman for his intervention and his compliment that he thinks my point is not wholly without merit, but it might test your patience, Mr Deputy Speaker, if I tried to shoehorn into the debate on the amendment possible solutions to the global food crisis and productivity in agriculture.

On derivatives, in agriculture production there is a need to hedge. There needs to be some kind of financial security to take account of unforeseen weather events and so on, so of course there is a need to hedge, but that is not what I am talking about. The question is whether some of the recent high-volume, high-speed forms of speculation and trading have had an impact on the global food price. I suspect that they might have, but it would be nice to have more information.

[Mark Durkan]

When some of us raised these issues in the previous Parliament, the then Government pooh-poohed the whole problem of speculation in relation to derivatives and so on. Does the hon. Lady share the concern that, as banks, hedge funds and all our pension funds try to work their way towards replenishing themselves after the crisis, there is a danger that they will go back to the bad ways of speculating in all sorts of commodities? Does she think the Government should prioritise this issue during their G8 presidency next year, and discuss with other Governments how to circumscribe the capacity of financial institutions to play dangerous games with this sort of speculation?

[Alison McGovern]

I thank the hon. Gentleman for his intervention, which was characteristically well made. I share his fear, and his point about the G8 is absolutely correct. It will be great to have the G8 summit in Northern Ireland. I am sure that the Minister has heard the hon. Gentleman’s point and will duly feed it back to the Prime Minister, because there is no doubt that it is important.

In conclusion, underlying what we are trying to achieve is a financial system that has appropriate oversight. Given the importance—we now know this—to our everyday well-being and comfort of what appear to be financial technicalities and bits of information that people do not necessarily connect with the realities of life, I hope that the Government will pay the most careful attention to the results of the consultation on commodities, because we might have a genuine opportunity to set in train rules that will help us to spot the awful crashes and difficult phenomena of the future.