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The hon. Gentleman says, from a sedentary position, that that is what this motion is all about, but the nub of the debate is whether that is the case. I shall deal with that in a moment, but we all acknowledge that these enormous financial institutions have tentacles that reach into many different markets. That is why it is appropriate for us to ask ourselves whether the regulatory regime that monitors them should have a similar scope, and a dimension to its activities that reflects the scale and nature of the organisations being regulated.
Because we have the most advanced financial services sector in Europe and are the dominant players in the market, the proposals before us today could have some benefits for the UK. A market whose general regulation applies the same rules to all European countries could present opportunities for us to achieve greater profitability and wider expansion, as long as there is no improper restriction of our financial services sector. That is important, because regulation must not restrict legitimate competition.
I believe that people sometimes reach for regulation-in financial services or any other sector-as a way to try and bring about a lowest-common-denominator uniformity. There should be robust competition between institutions, as that will ensure that they are profitable and successful and offer value for money to their customers. There need to be safeguards, and we have to learn the lessons of the massive failure that has taken place, but we must not restrict financial services institutions to the extent that they are unable to compete and develop in a meaningful and beneficial way.
The point has been made by others, including the hon. Member for Fareham, that the system being proposed has been advanced with great haste. Of course, that is also the view of the Treasury Committee. Its initial report, which was published on
"While the intention of the new regulations is widely welcomed, there is a great deal of unease about the detail. There is still more unease about the speed with which it is hoped to agree them; the Presidency is pressing for their adoption by ECOFIN at the Council on
I do not know whether the deputy Chairman of the Committee, Mr. Fallon, will speak about that observation further, but it is a reasonable point. The horse has already bolted, so there is not such a degree of urgency to deal with the risk because, I hope, the chances of a similar failure happening in the immediate future are modest. We are trying to deal with the long-term response to the dramatic failure that has already happened, but there is no great pressure on us to act right now. I share the view of the hon. Member for Fareham that it would be better to spend more time on this and get it right than to try to put in place unsatisfactory measures with great, and perhaps excessive, haste.
The Government need to take seriously several issues relating to the proposals that will be considered by the EU tomorrow. My fellow Somerset Member, Mr. Heathcoat-Amory, who is no longer in the Chamber-he clearly lacks my zeal for this subject-asked the Minister about the system for appointing the people who will sit on these regulatory bodies and to whom those people will be accountable. I hope that the Minister will respond to those points. I understood from what she said that while she had some views on accountability, she was less clear about the appointment process.
The right hon. Gentleman's question was legitimate, not least because, as I tried to suggest in my intervention, we all know that member states have different opinions on the way in which the financial services sector should be regulated. There is widespread suspicion in France about the so-called Anglo-Saxon model of capitalism, and those in France feel somewhat vindicated by the events of the past few years. There is, however, a different consensus in Britain. The three main parties sometimes have more in common with each other than we do with the consensus in other EU member states. It is important that there is transparency in the appointment process regarding who gets to occupy a position and to whom they will be accountable.
It is also important that the status of the City of London is recognised and not damaged. The hon. Member for South Derbyshire expressed the view that, given that Britain is so dominant in this regard, it would be weird if that was not reflected in our ability to contribute to the deliberations. However, others in the EU might dispute that principle. On that basis, member states that share land borders with non-member states might say that their input into discussions on border security should be greater than that of the United Kingdom, which is in a different position. The hon. Gentleman cited fisheries as an area in which some countries have a greater stake than others. I imagine that Austria, for example, is less preoccupied with that matter than Britain, Spain or France. There are therefore problems with the hon. Gentleman's proposal, but we nevertheless have a clear national strategic interest that the Minister needs to address.
I agree with those who say that fiscal policy is a matter for member states, in which regard I hope to catch the attention of Mr. Cash. He is right that taxpayers in his constituency and mine, not French and German taxpayers, have financed the bail-out of the banks in the United Kingdom. We therefore have to be confident that the taxpayers whom we represent will not be left to pick up the tab without our having the ability to regulate the institutions that they ultimately have to protect. It is right and sensible that fiscal policy is the preserve of member states, and that should be a settled matter.
The Minister needs to give greater clarity, perhaps in her winding-up speech, about the interaction between what is proposed and national systems of regulation. If we in this country are to review the way in which we regulate our financial services sector-for example, the Conservative party has radical and far-reaching proposals in that regard-that process cannot be seen in isolation from what is considered suitable on a European scale.
The Minister needs to satisfy herself on several details during both the European negotiations and her deliberations in London. For example, what are the procedures for data management and security? If the financial services and banking sectors are to be regulated, that will presumably require large amounts of information to be imparted, some of which might be highly sensitive or confidential. It is only right that we should be satisfied that such information will be handled in a suitably discreet and appropriate way. I accept that that point is not the absolute nub of the argument-perhaps it is a secondary issue-but it is important that any system put in place functions effectively. We should not find British institutions, or even British individuals, being put in an unfortunate or undesirable position as a result of malfunctioning European regulation.
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