Gas Market Fraud

Pat McFadden Excerpts

Tuesday 13th November 2012 Commons Chamber

[Mr Davey]

My hon. Friend is absolutely right. It is completely wrong to jump to conclusions until the regulators—in this case, the FSA and Ofgem—have had a chance to do their work. I really cannot see that a massive reorganisation would help at the moment. We need to ensure that the regulators have the powers that they need to do their job, and we will ensure that that happens.

[Mr Pat McFadden (Wolverhampton South East) (Lab)]

I first raised the potential for benchmark price fixing with the FSA some weeks ago when it appeared before the parliamentary banking inquiry. Does the Secretary of State agree that it would be appalling if, despite being able to fix the LIBOR issue because the FSA has the necessary powers, we lacked the powers to prevent price fixing in areas such as the energy and food markets? I would like to ask him to do two things. First, will he ensure that any gaps in the regulatory powers are filled, if necessary through amendments to the energy Bill? Secondly, will he ensure the maximum level of international co-operation on benchmark prices, which are often set globally?

[Mr Davey]

I am grateful to the right hon. Gentleman for his contribution. He is right to say that, if we find that the regulator needs more powers, we will act. I have made that absolutely clear. He is also right to mention the issues arising from the Wheatley review and the LIBOR issue. We need to ensure that the price reference agencies, the benchmarks and the indices that are used extensively in a variety of financial and commodity markets are properly considered in the reviews. Martin Wheatley has made a number of recommendations, the European Commission has produced a consultation paper on these matters and the International Organisation of Securities Commissions is looking into them, so there is international work being done. The right hon. Gentleman is quite right to say that we must ensure that our domestic regulation and international regulation are able to tackle these issues.