Financial Services Bill

– in a Public Bill Committee on 21st February 2012.

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[Mr Edward Leigh in the Chair]

Photo of Edward Leigh Edward Leigh Chair, Public Accounts Commission, Chair, Public Accounts Commission 10:30 am, 21st February 2012

Before we begin, I have a few preliminary announcements. Members may remove their jackets, if they so wish. I am sure that we will have an orderly and enjoyable Committee, but I warn you that I frown on spitting and swearing. Please ensure that your mobiles phones are switched off or are in silent mode.

I remind Members that, as a general rule, my fellow Chair and I do not intend to call starred amendments which have not been tabled with adequate notice. The required notice period in Public Bill Committees is three working days. Therefore, amendments should be tabled by the rise of the House on Mondays for consideration on Thursdays and by the rise of the House on Thursdays for consideration on Tuesdays.

Not everyone is familiar with the procedure in Public Bill Committees, so it may help if I explain how we will proceed. First, the Committee will consider the programme motion on the amendment paper. That can be debated, but only for half an hour. We will proceed to a motion to report written evidence, and then begin line-by-line consideration of the Bill. I call the Minister to move the programme motion, which was agreed by the Programming Sub-Committee yesterday.

Photo of Mark Hoban Mark Hoban The Financial Secretary to the Treasury

I beg to move,


(1) the Committee shall (in addition to its first meeting at 10.30 am on Tuesday 21 February) meet—

(a) at 4.00 pm on Tuesday 21 February;

(b) at 9.30 am and 1.00 pm on Thursday 23 February;

(c) at 10.30 am and 4.00 pm on Tuesday 28 February;

(d) at 9.30 am and 1.00 pm on Thursday 1 March;

(e) at 10.30 am and 4.00 pm on Tuesday 6 March;

(f) at 9.30 am and 1.00 pm on Thursday 8 March;

(g) at 9.30 am and 1.00 pm on Thursday 15 March;

(h) at 4.00 pm on Tuesday 20 March;

(i) at 9.30 am on Thursday 22 March.

(2) the proceedings shall be taken in the following order: Clauses 1 to 3; Schedule 1; Clause 4; Schedule 2; Clause 5; Schedule 3; Clauses 6 to 10; Schedule 4; Clauses 11 to 13; Schedule 5; Clauses 14 to 20; Schedule 6; Clauses 21 to 27; Schedule 7; Clauses 28 to 32; Schedule 8; Clauses 33 and 34; Schedule 9; Clause 35; Schedule 10; Clause 36; Schedule 11; Clauses 37 and 38; Schedule 12; Clause 39; Schedule 13; Clauses 40 and 41; Schedule 14; Clause 42; Schedule 15; Clause 43; Schedule 16; Clauses 44 to 90; Schedule 17; Clauses 91 to 94; Schedules 18 and 19; Clauses 95 to 99; Schedules 20 and 21; Clauses 100 to 103; new Clauses; new Schedules; remaining proceedings on the Bill.

(3) the proceedings shall (so far as not previously concluded) be brought to a conclusion at 10.25 am on Thursday 22 March.

It is a pleasure to serve under your chairmanship, Mr Leigh, and I look forward to serving under your chairmanship and that of Mr Howarth.

The Bill is a major part of the Government’s legislative programme. The failure of the existing tripartite system of financial regulation was a key factor in the precipitation of the 2007-08 financial crisis, the severe effects of which we are still feeling. It is therefore important to get the legislation right. We seek to introduce significant reforms to the structure and style of regulation in this country, and to give consumers of financial services the confidence and protection that they need.

There have been three public consultations on the Bill. Since the draft Bill was published last year, it has been considered by a pre-legislative scrutiny Committee—the Joint Committee on the draft Financial Services Bill—which I am grateful to my right hon. Friend the Member for Hitchin and Harpenden (Mr Lilley) for chairing. Many of its recommendations have found their way into the Bill. The Treasury Select Committee, some of whose distinguished members are present, has also commented on aspects of the Bill. This Committee therefore has plenty of meat to get its teeth into during its 16 sittings. Notwithstanding the immense scrutiny that has already taken place, the Committee will be important in teasing out the issues behind the Bill and in putting on the record the reasons for the particular structure of the proposed regulatory framework. On Second Reading, the House showed that it is very interested in the Bill and is well informed about the issues that the Bill addresses.

The programme motion was agreed, through the usual channels, as a model of co-operation and negotiation. I should highlight for the Committee that we will not sit on Tuesday 13 March, for which I am grateful because I shall be at an ECOFIN meeting. On the morning of 20 March, Her Majesty will address Members of both Houses of Parliament, so it will be appropriate for us to attend on her rather than to be in Committee. As a consequence, in trying to meet the spirit of our agreement about the number of sittings, we will sit for just under an hour on 22 March. I hope that that will give the Committee time to explore in full all the issues, and that the Committee will endorse the programme motion.

Photo of Chris Leslie Chris Leslie Shadow Minister (Treasury)

May I say what a pleasure it is to serve under your firm but fair chairmanship, Mr Leigh? I also enjoyed your chairmanship of the Programming Sub-Committee yesterday, which, I think, met partly in private. It is probably, therefore, not in order to describe how that meeting ran, but perhaps the minutes will reflect some of our enjoyment.

I place on record my thanks to my colleagues for agreeing—or perhaps being press-ganged—to serve on the Committee. The Bill is extensive and it sets serious considerations before us, many of which were referred to on Second Reading. I, too, thank the right hon. Member for Hitchin and Harpenden for chairing the pre-legislative scrutiny Joint Committee, which gave great service in informing the process of the Bill. Hon. Members who have not had a chance to pick up their copy of its report should do so, as it is worth reading. Some of the amendments that we have tabled were partly inspired by the Joint Committee’s recommendations. Generally, our usual process of holding evidence sessions in Committee before we debate Bills is good. On this  occasion, however, it is fair enough not to repeat the exercise that, essentially, the pre-legislative scrutiny Committee undertook. It might have been slightly better if a few more members of that Committee had been on this one, but we cannot have everything. It is important, however, for people to refer to the Joint Committee’s report.

I pay tribute to members of the Treasury Select Committee, who have taken time and care to consider the Bill’s proposals. I think the Committee was off on a trip to China or somewhere similarly exotic at the time of Second Reading, so it did not have as much input into the debate as it might have had, but its recommendations will inform our deliberations in a number of ways in relation to amendments and possible discussions.

I place on record my thanks to the Clerks of the House for their assistance and guidance so far to those of us who needed to blow away the cobwebs on Bill Committee processes. I declare an interest in relation to the support that we have received from PricewaterhouseCoopers, in the normal way, in the amendment and drafting process. While I am at it, I should declare that I am a Member of Parliament not only for the Labour party but also for the Co-operative party. Some of the Bill’s provisions touch on principles relating to mutuality, building societies and so on. Although those issues are tangential, it is important to place them on the record.

We find ourselves in a Committee with only one Minister, and I wish him all the best and good health over the next month. His civil servants might have characterised as very brave the decision to put only one Minister on the Committee. Let us hope that seasonal flu, colds and so on do not knock him sideways, because it is important that he stay and attend absolutely every minute of the next 16 or so sittings. I do not wish to put any pressure on him, and it is good of him to take the Bill through single-handedly.

The Bill is extensive, with 103 clauses and two volumes, including the schedules. It is regrettable that the Treasury has chosen to format it as an amending Bill rather than as a rewrite, because trying to fathom one’s way around the Bill’s various provisions is difficult. Many clauses delete sections of previous legislation and replace them with provisions that not only import some of the original text, but contain amendments within them. Trying to discern which parts of clauses are genuinely new policy areas and which are not is an extremely difficult task. The explanatory notes do not shed much light on that. Perhaps at some point—not today—we can revisit the process of what explanatory notes should contain, because I found them not massively helpful in shedding light on the Bill. I am sure that that is not intentional on the Treasury’s part, and that it wants to be as helpful as possible to the Opposition, so that we can delineate those elements of the Bill that are new and those that are not. The Minister might have some thoughts on that.

Photo of Mark Hoban Mark Hoban The Financial Secretary to the Treasury

To be helpful to the hon. Gentleman and to the Committee, I advise him that a consolidated version of the Financial Services and Markets Act 2000, including amendments that would be made by the Financial Services Bill, has been published on the Treasury website today. I am sure that the hon. Gentleman will print it all off in his lunch hour and bring it with him this afternoon.

Photo of Chris Leslie Chris Leslie Shadow Minister (Treasury)

I am delighted to hear that news, which is an exceptionally positive and wonderful piece of policy development. We are more than delighted to welcome the Government’s taking that initiative. We can work together from time to time and welcome things where we think that they are doing them well, and that certainly is one, although it would have been helpful if the document had been published slightly before the first day of Committee. It would have been nice to have had some copies on the table. Perhaps the Minister can have a word with his officials to see whether a few copies might be available for the Committee.

In fact, the Clerks have helpfully placed before the Committee copies of the Banking Act 2009 and the Financial Services and Markets Act 2000, which are some of the core texts that the Bill amends. We might also, however, need the Bank of England Act 1998 and the Consumer Credit Act 1974, with a couple of others thrown in as well. It might be that we need an adjunct of the Vote Office located up here for a short period of time.

With those comments—I thank my colleagues for their patience—I support the programme motion. It is a pity that there was a little difficulty in its gestation, but we are where we are and we have it before us today. I cannot say to my hon. Friends that the issues that we are talking about will all be ones that they are regularly confronted with in their postbag by constituents, but some of the questions that we have are fundamentally related to the prospects of the British economy: whether we have good and full employment, if that can be obtained, and whether we can have growth in the economy. I look forward to discussing the Bill’s provisions as we progress in Committee.

Question put and agreed to.


That, subject to the discretion of the Chair, any written evidence received by the Committee shall be reported to the House for publication.—(Mr Hoban.)

Photo of Edward Leigh Edward Leigh Chair, Public Accounts Commission, Chair, Public Accounts Commission

Copies of the memorandums that the Committee receives will be made available in the Committee Room.