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European Financial Services Proposals

Part of Oral Answers to Questions — Foreign and Commonwealth Office – in the House of Commons at 4:49 pm on 1st December 2009.

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Photo of Mark Hoban Mark Hoban Shadow Minister (Treasury) 4:49 pm, 1st December 2009

That reflects the argument that I was making. People support these moves in the abstract, but when it comes to concrete proposals there is a great deal of opposition to individual aspects. Later, I will discuss some of the areas where there may be greater protection in London than that specified in directives, and that is in our interests. Would that protection be removed as a consequence of harmonisation?

In the whole legislative process that has emerged as a response to the financial crisis, it seems that a great deal is happening in haste and not much has been well thought through. There is a danger that we are being pushed to sign up to directives and proposals very quickly without people fully thinking through their impact. The particular concern about this set of proposals is that there seems to be pressure from the Swedish presidency to agree the package at tomorrow's ECOFIN meeting and at the Council meeting later this month. Even trade bodies are concerned about the haste with which this process has been dealt with and they fear that not enough time is being spent on working through the detail.

We should recognise that if we want to get this legislation right, we need to spend more time working through the details instead of being forced to comply with artificially imposed deadlines that relate to whoever is in or out of the presidency at any point in time. Indeed, the Treasury Committee said in its report that

"it is better to be right than quick", and went on to state that

"even on a cursory examination there are serious problems with the Commission's proposals which need to be dealt with before the Council agrees to the draft legislation and it moves on to the next stage."

The European Scrutiny Committee stated that

"we are disappointed that Member States, in the ECOFIN Council and in the European Council, intend to continue to press on precipitately with this legislation and that the Government seems content to acquiesce in this haste."

Will the Exchequer Secretary indicate whether the Government are content, if no agreement is reached tomorrow, to push the conclusion of this debate into next year in the interests of better scrutiny? The ESC continued:

"As we have already said, rushed legislation proves all too often to be poor legislation and we would expect the Government to insist that these proposals are properly negotiated to a sensible timetable."

We must ask why we have been pushed to respond so quickly to the reforms. If the proposals were straightforward and uncontroversial that would be one thing, but as the comments that have been made both by the Minister and in interventions have demonstrated, they are neither. It is not just people in the House who believe that. The Association for Financial Markets in Europe has stated:

"The rapid timetable is driven by the political commitment to have the ESRB and ESAs in operation by the end of 2010. It does however, particularly at a time when an unusually large number of policy proposals are under development in a range of areas in the wake of the financial turmoil, place great strain on the ability of policy-makers and interested parties to give the Proposals proper technical scrutiny. The time pressure is intensified by the fact that a series of Proposals whose content interlocks have been made, and are being scrutinised by the Council and the European Parliament, on a staggered timetable."

There is a strong message from inside and outside the House that proper time should be spent scrutinising the measures, rather than their being rushed through to meet an artificial deadline.

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