New Clause 17 - Reporting requirements

Part of Financial Services and Markets Bill – in the House of Commons at 4:00 pm on 7 December 2022.

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Photo of Richard Fuller Richard Fuller Conservative, North East Bedfordshire 4:00, 7 December 2022

After such a thoughtful presentation by Siobhain McDonagh, I am sure the Minister will consider carefully her entreaties and also the opinions of those on the Conservative Benches.

I congratulate the Minister and his Treasury team on this important and big Bill passing through its Committee stage and maintaining its cross-party support, which is so evident here today.

One of my greatest concerns about the Bill is that we underestimate the importance and the severity of the international competition that our financial services face. We are in a fierce global competition and the balance of risk has to be that the UK will not move fast enough, it will not be smart enough and its moves will not be significant enough to maintain and build the comparative advantage of our financial services sector, which is why I have tabled some of my new clauses. It is also why I am looking forward to hearing what the Minister will say to reassure me in his closing remarks.

We need a Bill, a Government and a country that are pro the financial services sector. That is where the wealth is created in this country. If we do not allow the financial services sector in this country to grow to be globally competitive we are harming the taxes that then pay for all the public services on which our constituents depend. In addition, as my right hon. Friend Vicky Ford has said, and as is the case in my constituency and the constituency of my hon. Friend Craig Tracey, I have many constituents whose incomes are directly related to the success of our financial services sector.

My new clauses put down some requirements on the regulator to get with that spirit behind its new objective of international competitiveness. New clause 12 would make it a requirement to publish regulatory performance information that is material to new authorisations, because new authorisations mean growth for the United Kingdom’s financial services sector. We need a very close focus on how effective the regulators are being on that, and the new clause asks for some general statistics.

New clause 13 talks about how the Financial Conduct Authority and the Prudential Regulation Authority work effectively to support already authorised firms, and is specifically to do with approved persons, rules and timings on change in control, variation of permissions and waivers and modifications. Those are the tools of doing business, and if they are not greased and moving quickly enough, that is a source of competitive disadvantage.

New clause 14 is about determination of applications. It would create a new key performance indicator for the FCA. None of this is a criticism of the two individuals who run the FCA and the PRA. They are doing a fine job, but the FCA has a lot of KPIs, which have nothing to do with how effective it is in building the financial services sector in this country. It needs to rebalance—I know the Minister is supportive of this—and I will talk about that in a minute.

New clause 15 would create a duty for the regulators to report on their competitiveness and growth objectives. For me, this is a crucial new clause, and I would like to hear from the Front Bench today that the Minister will commit to this report. If he could look through some of the specific items in my new clause about what should be included, I would very much appreciate a specific response.

The Minister talked about the proportionality principle, and there is indeed a proportionality principle, but I reworded it, because it was not done in a way that was effective for the success of our financial services sector and made a difference between wholesale and retail financial services firms. I have tabled amendments about the cost-benefit panel, which gets to the root and branch of how Government should work out whether to enact a new regulation: what are the cost and what are the benefits?

I appreciate that the Minister has said that he is excluding people who are direct employees of the regulators from being part of those panels, and it seems a pretty basic principle that people should not mark their own homework. However, we need the voices of those who are being regulated in that cost-benefit analysis—their opinions, their views and their data.