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Clause 11 - Prohibition Orders

Financial Services Bill – in a Public Bill Committee at 7:30 pm on 6th March 2012.

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Photo of Cathy Jamieson Cathy Jamieson Shadow Minister (Treasury) 7:30 pm, 6th March 2012

I beg to move amendment 145, in clause 11, page 61, line 7, at end insert—

‘(8A) In the event of a prohibition order being made, the FCA or PRA shall—

(a) publish an explanatory statement regarding the decision; and

(b) include the individual on an updated list of those subject to prohibition orders to be presented on HM Treasury website.’.

Photo of George Howarth George Howarth Labour, Knowsley

With this it will be convenient to discuss amendment 146, in clause 12, page 62, line 19, at end insert—

‘If the FCA considers it appropriate to change the way it exercises its powers under section 59(3)(a), it must lay before Parliament a report on its reasons for any changes.’.

Photo of Cathy Jamieson Cathy Jamieson Shadow Minister (Treasury)

I hope to be fairly brief, with one eye on the clock. The amendment highlights the importance of transparency and accessibility of information so that it is disclosed and made transparent. That is why we propose to add new subsection (8A).

We believe that transparency is important, and that information such as lists of those subject to prohibition orders should be easily obtainable at all times. Putting that on the Treasury’s website would achieve that aim. We understand that lists of prohibited persons are already published on the FSA website, and we assume that those lists will also be published on the FCA and PRA websites. Indeed, if someone has become prohibited, there should be an explanatory note about why that person has become prohibited, and information should be given an even higher profile through publication on the Treasury website, because we hope and expect that the general public or anyone wanting that information could trust the information published on the Treasury’s own website.

We also need to ensure that the legislation is fit for the 21st century, and that is why we have specifically mentioned the website. That is important, as many people will use that. Of course, not everyone, as has been outlined in earlier discussions, would have access to the internet, but that is where people who are looking for the information would go. It is a fairly simple amendment and I hope that the Minister will consider accepting at least something during the course of our proceedings.

Photo of Matthew Hancock Matthew Hancock Conservative, West Suffolk

It is a pleasure to follow the Opposition Whip, who has made concise and interesting speeches. Long may they continue.

Amendment 145 seeks to change the clause on prohibition orders. I do not support the amendment, because writing the need to publish on a website into law seems to have the problems that we discussed earlier. However, the principle that prohibition orders on people who are not fit and proper persons should be published is crucial. The clause is very important. Prohibition must not only be a sanction for past irresponsible behaviour, but a deterrent for future irresponsible behaviour. That change in behaviour, by ensuring that sanctions are strong enough to change the culture within finance, is written deeply within the Bill and is extremely important. It is one of the key lessons from the financial crisis.

I hope that the Minister will reiterate that the point of prohibition is not only specifically to stop the actions of those who have already committed acts that make them not fit and proper, but to demonstrate the bounds of behaviour that are deemed responsible and reasonable within authorised firms.

Photo of George Howarth George Howarth Labour, Knowsley

Order. We have had rather a long session. I suggest we have a 45-minute adjournment. Members of the committee can do the maths themselves.

Sitting suspended.