I have a simple question. Cancelling is used in relation to authorisation in the clause heading page 19, line 36but withdrawing is used in the body of the clause, on line 39. What is the difference between withdrawing and cancelling?
I suggest that my hon. Friend the Member for Chichester move closer to the Front Benchoh, he has gone. That would have brought him closer to the hot air that has been generated by the debate.
I expect that the Minister will deal with this matter during the stand part debate. The clause removes part of section 206 of FSMA. Therefore, if the clause passes into law, when someone loses authorisationwhether it is cancelled or whatever term is usedand loses the right to earn a living from the business, they will also face a financial penalty. That was not the case under FSMA, so what has changed in the Governments thinking since the passing of that Act? If someone is deprived of the right to earn a living, it is much harder for them to pay a fine, unless they have accrued profits in the interim. Will the Minister clarify the Governments position?
The clause removes section 206(2) of part XIV of FSMA, which prevents the FSA from both imposing a fine on a firm and withdrawing its authorisation in relation to the same misconduct. I am sure that hon. Members will agree that if a firm gains a financial advantage from misconduct, the FSA should be able to fine it. The best answer I have for the hon. Member for Fareham is that when given a choice between withdrawing a firms authorisation, to remove the firm from the industry, and fining the firm, the FSA often chooses the former. That is the right choice because consumers need to be protected. It means, however, that a firm can retain any financial gains that it has made as a result of misconduct. It is not right that a firm should not have to suffer a fine when the misconduct warrants it, and it is therefore right to give the FSA the option to use both sanctions when it feels it is appropriate to do so.
On the difference between cancelling and withdrawing, which my hon. Friend the Member for Wolverhampton, South-West pointed out, I am advised that cancelling applies to permissions. Once all permissions were cancelled removedthe FSA would have to withdraw the firms authorisation. I hope that that is clear to my hon. Friend, or as clear to him as it is to me.
Again, I want to make the basic point that the FSA will use the powers proportionately. It will seek to take actions only in cases where they are justified. It is important, however, that the FSA has that power, so it can use it when appropriate. It simply is not right that a firm whose authorisation could be withdrawn because it was guilty of misconduct could be allowed to keep the proceeds of financial gain that it had wrongly made. The clause will remove that possibility. Therefore, I urge that it stand part of the Bill.