Question (this day) again proposed,That the clause stand part of the Bill.

It is a pleasure to serve under your chairmanship again this afternoon, Mr Bone. When we adjourned just before lunchtime, I was in the process of saying that I would not prolong this stand part debate, and I intend to stick to that. I seek merely to make a few points on the Minister’s comments in relation to Clause 10, and I seek further information on the record.

For the benefit of those who have had exciting things to do over the intervening period and have perhaps forgotten that we reached clause 12, which is on the appointment of an accounting officer—the Financial Services Compensation Scheme chief executive—I briefly remind hon. Members that the clause amends the Financial Services and Markets Act 2000 to ensure that the FSCS constitution provides for the chief executive, as the Minister outlined. He also made it clear that the FSCS chief executive will be the organisation’s accounting officer and will sit on the board alongside the chairman. I had some questions on the line of accountability from the accounting officer to the Treasury, but to be fair, he addressed some of that when we considered clause 10.

The chief executive will be appointed by the Prudential Regulation Authority and the Financial Conduct Authority. If I understand the Minister correctly, the Treasury will have to approve the appointment. That answers one of my questions, but it begs the question in what circumstances the Treasury would see fit not to approve an appointment recommended by the PRA and the FCA. In that circumstance, who would have the final say? What would the procedure be if the PRA and the FCA were unable to reach an agreement in some hypothetical situation, or if they were to favour different candidates? It would be helpful if the Minister responded to those points.

The Minister addressed some of this when we considered clause 10, but it would also be helpful if he reminded the Committee of the circumstances that might lead to  the removal of the chief executive and the procedures through which such a decision would be approved by the Treasury. I work on the assumption that, if the Treasury has to approve the appointment, it will also have some say in the chief executive’s removal.

I will attempt to refer to the hon. Lady’s points. There are no changes to the arrangements for the appointment of the FSCS chief executive. The designation of FSCS accounting officer will simply be an addition to the chief executive’s current responsibilities, just as, at the moment, the Treasury and the regulators must have confidence in the chief executive on appointment.

On the circumstances in which it might not be seen fit to appoint an individual, it is hard to imagine that the FCA and the PRA might recommend someone who did not meet with the Treasury’s favour. Having said that, if the accounting officer becomes, in effect, a subordinate accounting officer to the Treasury’s accounting officer, it is only reasonable for the concerns of the latter to be addressed if they have no confidence in the other’s ability to discharge their strict responsibilities as an accounting officer under another accounting officer. The PRA and the FCA have a memorandum of understanding that governs their relationship. We would expect them to seek agreement on these matters and, through negotiation, reach a sensible outcome. I cannot see circumstances in which the Treasury’s right of veto in this regard would regularly and routinely used. It would be used in exceptional circumstances where the accounting officer of the Treasury did not feel that the person below him or her in the hierarchy was capable of discharging those functions.

On the removal of the accounting officer, both the appointment and removal would need to be approved by the Treasury, but of course the chairman of the PRA would be responsible for initiating procedures if, on behalf of the organisation, they felt that the chief executive was not doing the right job.

Question put and agreed to.

Clause 12 accordingly ordered to stand part of the Bill.