Clause 4
Compensation Bill [Lords]
3:15 pm
Oliver Heald (Shadow Secretary of State for Constitutional Affairs & Shadow Chancellor of the Duchy of Lancaster (Assisted By Shadow Solicitor General), Constitutional Affairs; North East Hertfordshire, Conservative)
These two amendments touch on an issue that would have been covered had I moved amendment No. 16. That is the need to get on with this, and to introduce some robust arrangements that will act relatively quickly in this area. Amendment No. 25 says that the FSA should be the regulator. I tabled this slightly probing amendment because the FSA is the most appropriate body to regulate the claims management industry. It may be difficult to persuade the FSA to take it on, but I wonder whether that is the end of the matter. Baroness Ashton of Upholland said in the other place that the FSA does not wish to take it on, but is that the end of it?
I suppose that my point is a bit more fundamental. Who tells the regulator what it should and should not do? I hate to say it, because I am sure that the Minister does not look at the matter entirely in this way, but it seems as though the FSA has been allowed to say, “Sorry, chum. Okay, we do the insurance industry and a lot of this work is, in effect, in the insurance sector—after-event insurance—but we are not prepared to take it on.” Who governs the country? Is it Ministers or Parliament who say what happens or is the FSA entitled to pick and choose? If Ministers genuinely do not feel that it is appropriate for the FSA to do this it would be a different matter, but if it is just that it has rather a lot on and it would be inconvenient to take up such institutions, I wonder whether we should accept that and let it get away with that.
Amendment No. 20 would impose a duty to appoint a regulator, rather than making it a permissive power. Ministers have searched the regulation world high and low looking for a regulator to take this function on. It seems that, in the interim, we will be left with the Lord Chancellor, plus a trading standards organisation. Is the Minister able to give us any more idea than previously about what the final position will be? From what I have read in the draft Legal Services Bill, the Legal Services Commission is not to be the front-line regulator; it has a more supervisory role, overseeing the activities of organisations like the Bar Council and the Law Society. Its role is, in a sense, to give those organisations a licence or supervise them, not to do the job. What is the Minister really proposing as the long-term solution? Does he envisage a separate front-line regulator in this area? Clearly, it cannot be the Claims Standards Council, because that does not seem to be a robust or effective body.
These two amendments are trying to clarify why the FSA, which deals with insurance, is not the regulator, why the Minister will only have discretion to appoint a regulator and what the final outcome is supposed to be.