Parliamentary Commission on Banking Standards

Mark Durkan Excerpts

Monday 16th July 2012 Commons Chamber

[Mark Durkan (Foyle) (SDLP)]

I have quite fundamental reservations about the motion before us this evening, because, a bit like the hon. Member for Bassetlaw (John Mann), I have serious concerns about the implications for the work of the Treasury Committee. The way in which we are moving to set up the Commission, with a selection of members of the Treasury Committee—almost a Treasury Committee A team—being assigned to the Commission, will obviously have an impact on the Committee’s working capacity at a key time.

We heard from the Chancellor in the Chamber two weeks ago that he was appointing Martin Wheatley, the incoming chief executive of the Financial Services Authority, to conduct a review that would report within six weeks. That review was going to make recommendations that could feed into reconsideration of the Financial Services Bill. I would have thought that the outcome of the Wheatley review would be the subject of serious consideration by the Treasury Committee. I also wonder how the House would consider the implications of that urgent review, which the Chancellor has instigated, under Martin Wheatley. Will the Financial Services Bill Committee be reconstituted or will we just receive scrambled amendments? There will be confusion, because the Wheatley review is meant to come up with recommendations for legislative change—through the Financial Services Bill first, but possibly also through the banking reform Bill, which the Government have told us is due in the new year. Surely the journey to the banking reform Bill should involve serious consideration and pre-legislative scrutiny by the Treasury Committee, and perhaps others too.

I am not sure how the Treasury Committee can perform its usual role of giving such key legislative consideration if so many of its members and its Chairman are absorbed in the inquiry that this motion establishes—an inquiry that will be intensive and could even turn out to be extensive, in terms of the issues it gets into. We as a House are asking the Commission to surf a very dense, murky and smelly swamp in short order and come up with clear findings and recommendations. We are assigning it quite an inordinate task, which not only will be hard to achieve in itself, but will end up damaging the work of the Treasury Committee.

As someone who sat on the Financial Services Bill Committee, I was conscious of the fact that we had many members of the Treasury Committee serving on that Committee. I was also struck, however, by the fact that they resiled from positions that they had agreed to, as members of the Treasury Select Committee, in their very good report into aspects of the Financial Services Bill. It was quite common for the hon. Member for Nottingham East (Chris Leslie) to make points in that Bill Committee in which he quoted extensively from the Treasury Select Committee report, only for members of the Select Committee to disown the report or distance themselves from it. I was almost expecting them to say that they were not inextricably linked to their membership of the Select Committee in that particular capacity. That experience gives me concern about splitting the attention and capacity of the Treasury Select Committee in this way, and I worry that this might be a well-motivated misadventure in regard to its implications for the work of the Committee.

I hope that the Leader of the House will be able to clarify the Government’s hopes and intentions in relation to the timing of the Financial Services Bill and any amendments that they believe should be made to it in the light of the LIBOR scandal, given the Chancellor’s statement two weeks ago, and in relation to the banking reform Bill. There appear to be potentially overlapping and intersecting reviews going on, and if we in this Chamber are mandating them, we need to take responsibility for the possible confusion that could be caused to others and to ourselves.

I do not believe that these arrangements will be enough to deal with the scale of the problem or the questions that it raises not only about banking but about the competence and due diligence of this Parliament. Are we as parliamentarians up to the task of properly scrutinising legislation and introducing regulatory changes? Is it enough for us to devolve the task to a group of people hand-picked from the Treasury Select Committee by the Whips and expect them to come up with all the answers while we take responsibility only for receiving them? I do not think that that is good enough.

I did not vote for a parliamentary inquiry device when we voted on the matter the week before last, but I accept that this is the chosen outcome. I have serious reservations about the way in which the terms of reference for the Commission have been laid out here, and about the possibility of its composition weakening the Treasury Select Committee at a key time when two Bills are due to come back to us in the autumn, along with another Bill in the new year. I am also worried about the Committee’s ability to deal with other unfolding revelations that might emerge not only from the LIBOR scandal but from issues relating to quantitative easing, to which the hon. Member for Hayes and Harlington (John McDonnell) referred, and to deal with the outflow from the machinations in the eurozone.

There is a lot of work for the Treasury Select Committee to concentrate on, and I am not sure that it will be assisted by the creation of this device. If the Committee is content with the arrangement, I will have to accept its opinion. However, that does not absolve us in this Chamber from our legislative responsibility in respect of those two Bills, which the Chancellor has told us could be directly relevant and whose scope and reach will need to be adjusted to take account of the LIBOR scandal and possibly other scandals as well.

I have profound reservations, but I wish those who are undertaking the inquiry well. They have a difficult task ahead of them, and I do not know how they are meant to perform it if, as the motion suggests, they will sometimes be expected to work as sub-Committees of one. That would create the bizarre scenario of a sub-Committee of one relying on the hired specialist advisers and other agents who will be licensed by this motion. That would create some fairly peculiar scenarios that Parliament might find hard to stand over. Members of the Commission might also find it hard comfortably to take ownership of all the undertakings of the Commission, given the odd construct that is provided for in the motion. I accept that this is a scramble in particular circumstances, and that time is pressing. However, I am not sure that it has been a good scramble. I think that there should have been better thought and more consideration, and I think that many of the people who are comfortable with this device now may end up regretting their decision.