Financial Services (Banking Reform) Bill

Debate between Steve Barclay and Richard Fuller

Monday 8th July 2013 Commons Chamber

[Stephen Barclay]

Does my hon. Friend share my incredulity that when David Strachan conducted his review at the Financial Services Authority following the Legal and General case and brought forward his recommendations for a light-touch enforcement regime, the vice-chair of the FSA was Sir James Crosby, who is one of the three figures who are especially criticised in the banking commission’s report? We have a multi-layered, light-touch enforcement regime that often creates a disincentive to the regulator—this is why market abuse often involves criminal sanctions, not civil sanctions. One of the people criticised in the banking commission report actually designed the system that applies to the regulator.

[Richard Fuller]

I am appreciative of that intervention, which adds not only to my body of knowledge, but to the commonly held disgust that, following all these efforts involving the best minds we can put in place, no one is going to jail. In the absence of anyone going to jail, we have gone through all the fraud, all the mis-structured, light-touch regulation and all the mis-positioning of responsibilities without a single person being truly accountable. If there is a point on which I disagree with my hon. Friend, which I rarely do, it is that he said in his speech that financial penalties are likely to be more successful. He might have a point in saying that there will be more successful prosecutions, but the loss of one’s liberty cannot be put in a discounted cash flow—there cannot be a beta high enough. If we want to change behaviour, we have to show that people will go to jail and lose their liberty. If, having gone through the worst financial recession that we have experienced in our lifetimes, not a single person goes to jail as a result of all our work, I do not care that there is a cross-party consensus because, in my view, this is failing the people.