Financial Services Bill

Nigel Evans Excerpts

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).