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Clause 1 — Council for Financial Stability

Sustainable Communities Act 2007 (Amendment) Bill – in the House of Commons at 3:28 pm on 8th April 2010.

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Photo of Ian Pearson Ian Pearson Economic Secretary, HM Treasury 3:28 pm, 8th April 2010

I beg to move, that the House agrees with Lords amendment 1.

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Photo of Michael Lord Michael Lord Deputy Speaker (Second Deputy Chairman of Ways and Means)

With this it will be convenient to discuss Lords amendments 2 to 4 and 36.

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Photo of Ian Pearson Ian Pearson Economic Secretary, HM Treasury

The amendments remove from the Bill the clauses relating to the council for financial stability-that is, clauses 1 to 4-and the reference to those clauses in clause 38. As my noble Friend Lord Myners set out in another place yesterday and again this morning, given the limited amount of time remaining in this Parliament, the Government have agreed with the official Opposition through the usual channels and in the usual way which parts of the Bill should be enacted.

The council for financial stability was a casualty of that process, as were clauses 8 and 18 to 25, which respectively deal with the Financial Service Authority's international remit and with collective proceedings. The second group of amendments deal with those changes. We continue to believe that the council for financial stability provisions are necessary, sensible and desirable; however, in the interest of securing other important elements of the Bill on which there is greater consensus, the Government have agreed to withdraw them. I hope that the House will support the amendments.

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Photo of Mark Hoban Mark Hoban Shadow Minister (Treasury) 3:30 pm, 8th April 2010

Of course, the Opposition agree with the amendments. We argued from the start of proceedings on the Bill that the council for financial stability was a cosmetic reform, not the fundamental structural reforms that we felt were needed to reflect the lessons of the financial crisis. The fiction the Government sought to create was that we would know who was in charge and who took responsibility in crises; in the evidence sessions, however, that fiction was slowly unpicked. The banks said that responsibility rested with the Treasury, and the FSA suggested that it had only a secondary role to play in financial stability-rather than clarity, there was confusion among the tripartite authorities. We therefore welcome the amendments that remove those clauses, which creates the opportunity for a fresh start in the next Parliament.

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Photo of Ian Pearson Ian Pearson Economic Secretary, HM Treasury

I welcome the Opposition's support for the amendments. I am not surprised by it, given that the deal has been agreed. We still believe strongly that the council for financial stability is an important and necessary addition to financial regulation in this country, but given where we stand today, I appreciate the hon. Gentleman's support for the other clauses in the Bill, which I hope will become law very shortly.

Lords amendment 1 agreed to.

Lords amendments 2 to 4 agreed to.

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