Clause 155
Banking Bill
1:00 pm
Ian Pearson (Parliamentary Under-Secretary, Department for Business, Enterprise & Regulatory Reform; Dudley South, Labour)
In addition to the points that I covered this morning, I want to emphasise that the Financial Services and Markets Act 2000 already provides a flexible and wide-ranging framework for the compensation scheme. Most of the improvements to the United Kingdom’s arrangements for depositor protection—a goal to which the Government and other authorities are strongly committed—can be delivered within that framework, including the matters in objectives 3 and 4 of new clause 1, and the change in the limit in new clause 2.
Part 4 of the Bill therefore covers only the matters that cannot be dealt with under existing FSMA provisions, and the changes in this part should be considered alongside other changes being made to the legal framework of the Financial Services Compensation Scheme. The Financial Services Authority, as I said, is consulting on changes that may be made under FSMA powers, including, in the latest consultation paper on the review of limits, the compensation limits for other sorts of investment, payment of compensation by brand, dealing with temporary high balances, and changes to the way in which recoveries from a failed firm are calculated. The FSA is also considering the eligibility criteria for claimants under the scheme, information requirements for firms, and consumer awareness. So there is plenty going on at a detailed level to improve the arrangements for depositor protection in the UK. In our view, it would neither sensible nor desirable to cherry-pick some items and put them in the Bill as objectives or requirements.
Part 4 makes changes to the overall compensation framework that only primary legislation can do. If at a later time the hon. Member for Fareham wants to press new clauses 1 and 2—I do not think he will, because I think he was genuinely trying to promote a worthwhile debate—I would ask the Committee to reject them.