Clause 3

Financial Services Bill – in a Public Bill Committee at 6:30 pm on 5th January 2010.

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Annual Report

Photo of Colin Breed Colin Breed Shadow Treasury Minister

I beg to move amendment 29, in clause 3, page 2, line 41, leave out ‘Treasury’ and insert ‘Council’.

Photo of Joe Benton Joe Benton Labour, Bootle

With this it will be convenient to discuss the following: amendment 30, in clause 3, page 3, line 3, leave out ‘Treasury’ and insert ‘Council’.

Amendment 31, in clause 3, page 3, line 5, leave out ‘Treasury’ and insert ‘Council’.

Amendment 32, in clause 3, page 3, line 5, leave out ‘lay’ and insert ‘publish’.

Amendment 33, in clause 3, page 3, line 6, leave out ‘before Parliament’.

Amendment 34, in clause 3, page 3, line 7, leave out ‘laid before Parliament’.

Photo of Colin Breed Colin Breed Shadow Treasury Minister

The amendments propose that it should be for the council to publish its own report, and not necessarily for the Treasury. Of course, the Treasury will have a considerable influence over what the report contains and when it is published. The amendments seek to increase the need for the council to recognise its role in financial stability. Amendments 26 and 34 propose that the council produce its own report, including publishing, rather than that being done through the Treasury. That is relatively simple, and I can imagine what the Minister will say, but by that means the council could gain the credibility, acceptability and element of transparency that it needs. In producing its own report, rather than the Treasury doing so, the council will ensure that, although other members may be consulted—I am sure that that will be so and that they will probably agree to the report and may even countersign it—its role will be enhanced.

Photo of Ian Pearson Ian Pearson Economic Secretary, HM Treasury

There are two sets of amendments in this group: amendments 29, 30 and 31 require the council to prepare the report, as opposed to the Treasury, whereas amendments 32, 33 and 34 remove the requirement for the Treasury to lay the report before Parliament and instead require it to be published by the council.

As has been made clear previously, we are keen to improve the transparency and accountability of the current arrangements. Minuting quarterly meetings forms a key element of that strategy, as does a formal report on the council by the Treasury each year. The report will cover the activities carried out by the council and will also describe significant regulatory actions taken and future developments proposed in respect of regulatory legislation.

We think that it is appropriate for the Treasury to lead on drafting the annual report. The Chancellor is the chair of the council, which is ultimately accountable to Parliament and the public. We recognise that other council members have a vital interest in it—that is obvious—but we go back to the point that has been made previously: although the authorities will work together closely on the production of the report, ultimately the Treasury should produce the draft to ensure that it is fully scrutinised and consulted on with the bank and the FSA. Our intention is that the draft will be submitted to the council as part of its regular meetings.

I do not think that the hon. Gentleman’s amendment suggesting that the council should publish the report rather than the Treasury should be agreed to, for similar reasons to those I outlined earlier. There would be a significant weakening of accountability if the report were to be published by the council, rather than allowing  Parliament its proper role in scrutinising it. For those reasons, I invite the hon. Gentleman to withdraw his amendment.

Photo of Colin Breed Colin Breed Shadow Treasury Minister

I guessed what the Minister was going to say and I accept that. I suppose that the Treasury Committee will wish to review the report to ensure that it does what it says it will do and will have contact with the representatives of the council’s membership to ensure that it is happy with the report’s contents.

The amendments are part of a suite of amendments that would enhance the role of what will be an important body. The contents of the published minutes will be much scrutinised by the financial media and will be eagerly awaited. If the report does not contain substantive information, it will be heavily criticised and the council will be all the poorer for that.

We have to wait to see what will happen. I am happy to ask leave to withdraw the amendment on the basis that I have raised these issues. We can only await the initial publication of minutes and the report to see whether the transparency the Minister says he wants actually happens. On that basis, I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 3 ordered to stand part of the Bill.