Part of Financial Services and Markets Bill – in a Public Bill Committee at 3:15 pm on 27 October 2022.
Stephen Hammond
Conservative, Wimbledon
3:15,
27 October 2022
Again, I direct the Committee to my entry on the Register of Members’ Financial Interests. I warmly welcome the creation of cost-benefit panels. In my view, the greater the understanding of the cost and benefit of a regulation, the greater the understanding of the impact, and therefore the effectiveness, of the regulation, and the greater the transparency of that process.
I am pleased that the Bill includes this Clause because it sets out the agenda, membership, metrics and outputs that each of these panels should make. I guess the real answer I am trying to get from the Minister—I have listened carefully and I think we have had most of the response, but I want to test him a little more—is that, if we are to get all the desirable outcomes from setting up these panels, we must know how much they are a creature of the regulator and how much they are independent of the regulator.
The Minister clearly said that there is an implicit assumption that the regulator would follow an independent line for these panels. If the purpose of the panels is purely to provide evidence and they are controlled by the regulator, those recommendations will be accepted, but it is key that there is an independent panel.
I agree that regulators are not in ivory towers, as Martin Taylor said in his evidence to us. I do not think there is substantial implicit control, nor do I think there is not an implicit desire to see independence, nor do I think that there is not implicit influence by His Majesty’s Treasury. However, if we want to build the world’s leading regulatory regime, it must be seen to be tough and proportionate, and that is why these panels are very helpful. I therefore support the aim of clause 40.
My amendments seek to address the concern that the panel has marked its own homework—the excuse that “the dog ate my homework”—and the point about independence. I understand that members of the panel could already be external, but I want to make it clear that “could” is not enough; there should and must be external members. I hope that the Minister will be able to give me that further reassurance that that is very much the intention of the Bill.
I take on board exactly what the Minister said about my Amendment 52, in that the FCA already has to consider the representations and place them on record. However, I am quite concerned by the wording. I think the Minister got my point, which is about the wording “from time to time”. Those of us who have had the honour to stand at the Dispatch Box will have been asked questions such as, “When is that happening, Minister?”, to which the response is often, “Soon,” or, indeed, as we heard the Minister say this morning, “In due course.”
The regulator might say to us that it is going to publish the responses “from time to time”. I take the point that the Minister does not want to fetter the regulator, but I am concerned that, if there is not something either in implicit guidance to the regulator or potentially set out, “from time to time” could be whenever the regulator chooses and potentially not annually. Therefore, if it were to say “annually or more frequently” I would be a lot happier. I listened to the Minister’s comments and I think he probably has sympathy with what I am saying, but I will listen to his response to my remarks.
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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.
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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.
