LIBOR (FSA Investigation)

Stephen Williams Excerpts

Monday 2nd July 2012 Commons Chamber

[Mr Osborne]

The Serious Fraud Office is absolutely independent of Government, but it will be in no doubt that this House and the Government want to ensure that the law is properly enforced and that if there are legal avenues that it can explore, it should use them. We must accept that the Financial Services Authority, which is also a prosecuting authority in respect of financial crime, does not feel that it was given enough powers to undertake a criminal prosecution, as Lord Turner has said very clearly. That is why I want to give the regulators the powers they need. Instead of spending two or three years getting to that point—a long public inquiry would take a year or two, after which the Government would go away, consult, publish a White Paper and introduce legislation, and it would be 2015 or 2016 before we did anything—I propose that we use the Financial Services Bill that is already before the House and next year’s banking Bill to put things right.

[Stephen Williams (Bristol West) (LD)]

The Chancellor mentioned new legislation on the destination of fines on the banking industry and other financial services providers. I raised the issue with our hon. Friend the Financial Secretary in January and got the answer that in the past 10 years, £377,734,373 was levied in fines across the banking sector—a staggering amount. Does the Chancellor agree that a suitable destination for future fines might be the not-for-profit sector and the debt advice agencies that do such valuable work in all our constituencies?

[Mr Osborne]

My hon. Friend is right to point out that under the current arrangements, these fines, including the one that Barclays is paying, will be used to reduce the levy that the rest of the banking industry pays to the Financial Services Authority, so the rest of the banking industry will be the beneficiary of the fines. I do not think that that is right and that is why we are making the changes. We are making them retrospective from the beginning of April to ensure that the fine paid by Barclays will be available to be used for the benefit for the public, and I am sure that we will have a lively debate about how that money should be spent.