It was an honour to serve on the Financial Services Bill Committee and it is a privilege to speak on Report today.
I will speak to specific amendments, but first I would like to say that last century—well before the global financial crisis of this century—I was cutting my teeth in this sector, settling trades, including derivatives, for a US investment bank in New Zealand. We watched in shock as the actions of a lone trader in Singapore caused the collapse of Barings bank. I worked through the subsequent insertion of Chinese walls between departments, saw the creation of compliance and risk management roles and the impact of a change in culture on the institution. I therefore understand the importance of proper regulation and confidence in our regulators. I was pleased to hear the Minister confirm in his opening statement that this corporate governance continues to be strengthened today.
It is only appropriate that the scope of the Bill extends to effectively tackling money laundering and providing clear, streamlined procedures for dealing with entities that engage in this type of activity. As more aspects of our lives, including financial activities, move online, so do illicit activities such as money laundering. Therefore, legislation aiming to prevent and deal with illegal financial activity must have as broad a scope as possible, bolster existing legal provisions and be as clear and as easy to enforce as possible.
New clause 6 rightly aims to broaden the scope of the Bill to prevent money laundering in the context of electronic money institutions. However, the language of the new clause is inconsistent with legislation already in place, potentially generating confusion that could result in diminished enforcement ability. The Government’s new clauses 27 and 28 and new schedule 1 better achieve the desired effect of a more robust and comprehensive enforcement regime, which is why I will support them today. I am pleased that the Opposition Front-Bench team will not move new clause 6.
New clause 7 was introduced by Stella Creasy with her usual passion. I will not support it this evening, although I acknowledge her intention to protect consumers as a good thing. The Government should not legislate until we hear from the experts and have a thorough understanding. The market is so broad for buy now, pay later interest-free products that passing a time-limited amendment could in fact restrict our full understanding of these products, who uses them and how. It is important to acknowledge that, in protecting one cohort of consumers, we might unnecessarily prevent another from acquiring much-needed household goods and so on, curtail choice in the market and penalise those who are capable of budgeting the repayment of a known cost. Much better is the full and thorough public consultation and independent review, which is currently being conducted by Chris Woolard. It was helpful to hear the Minister say that the review is due to conclude soon, and that he is ready to move swiftly on evidence presented in that report.
In conclusion, the Bill is part of ensuring the future success and competitiveness of our financial services sector. An enormous amount of work has gone into producing what is a lengthy and technical Bill, and I look forward to supporting the Government in the Lobby tonight.