Clause 5 - The new Regulators

Part of Financial Services Bill – in a Public Bill Committee at 1:00 pm on 1 March 2012.

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Photo of Mark Hoban Mark Hoban The Financial Secretary to the Treasury 1:00, 1 March 2012

It is a pleasure to serve under your chairmanship, Mr Howarth. Let me be clear, as the hon. Member for Nottingham East was, that there is widespread support for social investment. I served on the Committee that considered the Dormant Bank and Building Society Accounts Bill, and it is interesting that the hon. Gentleman almost prayed it in aid. The first priority of that legislation, which was introduced by the now shadow Chancellor, was on youth facilities, not social investment. We welcome the conversion to the cause of using that money to fund the Big Society Bank, and to promote investment in social investment projects.

There are several projects around, and I am working closely with people in my area to help to create a new social investment project serving south-east Hampshire. However, I counsel caution, because the FCA is not being set up to promote financial services companies or particular sectors. If the words “social investment” were substituted for “other sectors and financial services”, I wonder whether it would receive such a warm welcome from the hon. Gentleman. I think we all agree that there should be a level playing field, and that consumers, whether they invest in a social investment fund, an ISA, or a pension, need the same level of protection. We should not distinguish between one set of providers compared with another. There should be a level playing field for all.

We are setting up the FCA to encourage competition, to promote access, and to find ways of creating a market in which people may choose between different forms of investment and investment providers. The amendment is unnecessary because the whole ethos of the FCA is to promote new providers coming forward, to encourage competition in the market, and not to close the market to others.