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Clause 30 - Power to take disciplinary measures against recognised bodies

Part of Financial Services Bill – in a Public Bill Committee at 3:45 pm on 8th March 2012.

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Photo of Mark Durkan Mark Durkan Shadow SDLP Spokesperson (International Development), Shadow SDLP Spokesperson (Work and Pensions), Shadow SDLP Spokesperson (Foreign and Commonwealth Affairs), Shadow SDLP Spokesperson (Home Affairs), Shadow SDLP Spokesperson (Justice), Shadow SDLP Spokesperson (Treasury) 3:45 pm, 8th March 2012

I assure the Whip that I am conscious of my own flight risk, so I will not dwell too long on the amendments, although that is not to minimise their importance. I have tabled amendments 131 and 130, the first of which relates to the publication of statements.

If a statement is published and a further investigation takes place, the various interpretations of the published statement—by the media, others in the market or people in this House and elsewhere—might be overtaken by the results of an investigation. That investigation might show that there is no case for a penalty or that the issue raised was not a matter for regulatory concern. The amendment would ensure that, in that instance, the fact of an investigation and inferences drawn from any particular previous statement would at least be mitigated by an effort at exoneration, with the regulator at least publishing a statement to the effect that the matter was not going anywhere and had no need to go anywhere, and that there was some commensurate exoneration. Otherwise, there is a danger that reputational damage will be incurred and unduly suffered. Such damage could be exaggerated by competitors—either direct competitors to a business or people in other sectors—because facts could be used not just to create reputational damage against a business, but against particular classes of business in that way. We have to be concerned about that.

There has been much concern in the past few years about the financial services sector. Many people have said, “Let’s be careful about tarring everyone with one brush. Let’s be careful about putting a cloud over an entire sector and everybody in it.” The amendment was tabled in an effort to make good a difficulty that people have seen. People, not least independent financial advisers, feel there is an environment in which, rightly, significant attention will be paid if anything goes to investigation, but little attention will be paid whenever a matter is clearly resolved.

In another context, hon. Members have been jumping up and down about the media over the past few years, saying, “There should be clear, commensurate statements of correction in relation to anything wrong that is said against anyone.” If we insist on that in relation to the media and other wide-ranging issues, when legislating to protect consumer and other competitive interests we do not want to cause free injury to the reputation of those practising in the sector, without any regard to remedy or redress. In this instance, there would not even be complete remedy or redress; the amendment would just mean the FCA, as it sees fit, seeking to publish the exonerating conclusions of its investigation in a manner best fitted to bringing it to the public interest. We are not detailing how it would do that, how many advertisements it would take our or where those would be placed, or anything else—that is a matter for the FCA’s judgment.