Financial Services and Markets Bill – in a Public Bill Committee at 2:30 pm on 27 October 2022.
Andrew Griffith
The Financial Secretary to the Treasury, The Economic Secretary to the Treasury
Under section 1JA of FSMA 2000 and section 30B of the Bank of England Act 1998, the Treasury must make recommendations to the FCA and the Prudential Regulation Committee at least once in each Parliament on aspects of the economic policy of His Majesty’s Government. The FCA and the PRC, as the governing committee of the PRA, should have regard to these matters when carrying out their functions.
Currently, there is no statutory requirement for the FCA and the PRC to respond to the Treasury’s recommendations and explain how they have had regard to them. Clause 33 therefore amends section 1JA of FSMA 2000 and section 30B of the Bank of England Act 1998 to create a requirement for the FCA and the PRC to respond annually. The response must outline the action the regulator has taken or intends to take, or the reasons it has not taken and does not intend to take action, on the basis of the recommendations. The response will be laid before Parliament by the Treasury.
The clause is therefore intended to increase transparency of how the FCA and the PRA have taken into account these recommendations. As a result, this clause aligns the FCA and the PRC with the statutory requirement for the Bank of England’s Financial Policy Committee, which is already required to respond to the recommendation letters sent to it by the Treasury. Finally, this measure formalises an emerging practice, as the FCA and PRC have previously responded to recommendation letters from the Treasury. I therefore commend the clause to the Committee.
Tulip Siddiq
Shadow Minister (Treasury)
I have one quick question for the Minister. Are the Government required to consult or give advance notice before sending a policy letter to regulators? If not, is there a risk that the new “have regards” for different policy areas could be dropped on the regulators from nowhere, and could distract the FCA and PRA from their primary and secondary objectives?
Andrew Griffith
The Financial Secretary to the Treasury, The Economic Secretary to the Treasury
2:45,
27 October 2022
That is, of course, possible, but it would be unusual. There is regular discourse between His Majesty’s Treasury and regulators, and I consider the risk that the hon. Lady raises relatively small. The regulatory bodies would consult on that change if required.
A parliamentary bill is divided into sections called clauses.
Printed in the margin next to each clause is a brief explanatory `side-note' giving details of what the effect of the clause will be.
During the committee stage of a bill, MPs examine these clauses in detail and may introduce new clauses of their own or table amendments to the existing clauses.
When a bill becomes an Act of Parliament, clauses become known as sections.
A parliamentary bill is divided into sections called clauses.
Printed in the margin next to each clause is a brief explanatory `side-note' giving details of what the effect of the clause will be.
During the committee stage of a bill, MPs examine these clauses in detail and may introduce new clauses of their own or table amendments to the existing clauses.
When a bill becomes an Act of Parliament, clauses become known as sections.
Ministers make up the Government and almost all are members of the House of Lords or the House of Commons. There are three main types of Minister. Departmental Ministers are in charge of Government Departments. The Government is divided into different Departments which have responsibilities for different areas. For example the Treasury is in charge of Government spending. Departmental Ministers in the Cabinet are generally called 'Secretary of State' but some have special titles such as Chancellor of the Exchequer. Ministers of State and Junior Ministers assist the ministers in charge of the department. They normally have responsibility for a particular area within the department and are sometimes given a title that reflects this - for example Minister of Transport.
