Does my hon. Friend recall Sir David Walker, on his retirement as chairman of the Securities and Investments Board, saying that the regulatory organisation is too fragmented, especially as it relates to enforcement and policing? Does my hon. Friend accept that there is a growing feeling among practitioners and members of the public that the Financial Services Act 1986 needs revision, and will he apply himself to that?
The overall effectiveness of the regulatory structure is a matter of great importance, as my hon. Friend acknowledges. Following the Treasury's assumption of responsibility for regulating financial services, I intend to keep the arrangements carefully under review. This is a matter which I shall want to discuss with the new chairman of the SIB in due course.
Is the Minister aware of the reports of Sir Jeremy Morse and Sir David Walker in respect of the Lloyd's insurance market? There have been more than half a dozen such reports in the past 20 years, each followed by small reforms and further scandals. The latest report shows evidence of financial mismanagement, insider dealing and fraud. Is it not time for the Government to introduce proper statutory regulation of Lloyd's to ensure that it stops acting as a law unto itself and that there is modernisation of Britain's financial services sector?
I take careful note of what the hon. Gentleman says. I have read the reports to which he refers. Matters relating to the insurance industry are more properly the concern of my right hon. Friend the President of the Board of Trade.
Does my hon. Friend agree that we are fortunate to have the most developed financial services market in Europe? Regulatory regimes are essential for consumer protection, but is it not also essential that we have a simple regulatory structure to ensure that we maintain our European competitiveness in financial services?
I am obliged to my hon. Friend for reminding the House of the signal importance of the financial services and banking industries to the economy and to the balance of payments. The expertise, prosperity and ingenuity of the financial services and banking industries are of tremendous importance, and very often we denigrate them to the great disadvantage of the national interest.
Given that more than 40,000 old and vulnerable people stand to lose their homes as a result of the home income plan scam and the Minister told us yesterday that some building societies are refusing to co-operate with the building societies ombudsman and he has no power to compel them to do so, will the hon. Gentleman consider bringing forward measures to extend the powers of the ombudsman so that he can protect all vulnerable consumers?
As I made clear to the hon. Gentleman during our extensive debate on this important issue yesterday, the majority of building societies are permitting investigations by the ombudsman concerned. It is to be hoped that the expressions of opinion from both sides of the House will be heard by those few remaining building societies which are having difficulty accepting the inquiries. That is the proper line to pursue for the time being.