Clause 46 - Parliamentary control of statutory instruments

Financial Services Bill – in a Public Bill Committee at 3:30 pm on 15th March 2012.

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Question proposed, That the clause stand part of the Bill.

Photo of Chris Leslie Chris Leslie Shadow Minister (Treasury)

The Minister will be aware of my general concerns about the need for proper, thorough parliamentary accountability of the Bill’s changes. Although we welcome the extension of the use of the affirmative procedure to many of the order-making powers in the Bill, in my view, in some cases, the affirmative procedure is insufficient, given the detailed and technical nature of many of the changes that the orders could make; they could have a profound impact on constituents and businesses alike.

I reiterate our view that we should consider a super-affirmative procedure, at least in the House of Commons, to ensure that new regulatory provisions—particularly macro-prudential powers emanating from the Financial Policy Committee—are fully scrutinised by a Standing Committee. That could be done by a financial services regulation scrutiny Committee, akin to the European Scrutiny Committee, which would provide a proper, thorough way of vetting and scrutinising regulations as they come through.

I know that it is always difficult to discuss the kind of hypothetical scenarios in which such orders might come up, but my worry is that some future orders will be of extreme public or business concern. In the past, we have seen significant interest in the retail distribution review and other changes that the regulators have brought forward. If sufficient safeguards do not allow for the venting of steam and heat in debate—if Parliament does not feel able properly to address the questions—we will be in danger of seeing primary legislative amendments and changes bodged, or bolted on to relevant Bills further down the line. It would be far better to design a safety valve process, to allow proper scrutiny and accountability for important financial changes, at this stage in the Bill, and clause 46 relates to parliamentary control of statutory instruments.

I urge the Minister to establish a dialogue somehow—perhaps on a cross-party basis, or however these things are done—so that we can look at procedures in the House. It is not possible to legislate for how the House scrutinises orders; it is for the House to do that in its Standing Orders. Notwithstanding that, the affirmative procedure is insufficient for the level of scrutiny that these important matters deserve.

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

We discussed the super-affirmative process in relation to macro-prudential tools, so I do not intend to go through that debate again.

The clause applies the affirmative procedure to a number of new powers. On the issue of parliamentary scrutiny, there is no legislative vehicle, for example, with the RDR. It is a rule by the FSA, but if the hon. Gentleman wants Parliament to be a quasi-regulator, he should table amendments to that effect. Opportunities exist for the FSA to be held to account; the Treasury Committee does a very good job of that. We have had two Adjournment debates on the retail distribution review, and I would be very happy to have a Westminster Hall debate on something like Arch Cru. There are plenty of opportunities to hold debates on significant regulatory changes, so that the House can express its views. Those mechanisms are already there within Parliament.

Question put and agreed to.

Clause 46 accordingly ordered to stand part of the Bill.