“(1) The Financial Services and Markets Act 2000 is amended as follows.

(2) In paragraph 11 of Schedule 1ZA (FCA annual report), after sub-paragraph (1) insert—

‘(1A) A report under sub-paragraph (1) must include an assessment of the FCA’s performance in fulfilling the competitiveness and growth objective, against the following criteria—

(a) outcomes of regulatory consolidation exercises;

(b) response times in assigning a case officer and authorisation times;

(c) data on the number of new market entrants to the UK and firms which have left the UK;

(d) reviews undertaken by the FCA of regulatory data requirements of authorised firms;

(e) outcomes of rule monitoring and evaluation and how it has contributed to UK competitiveness;

(f) comparative analysis of the regulatory approach of other jurisdictions;

(g) any other matters as the Treasury may from time to time direct.’

(3) In paragraph 19 of Schedule 1ZB (annual report of the PRA), after sub-paragraph (1A) insert—

‘(1AA) In the report the PRA must also report on its performance in fulfilling the competitiveness and growth objective, against the following criteria—

(a) outcomes of regulatory consolidation exercises;

(b) response times in assigning a case officer and authorisation times;

(c) data on the number of new market entrants to the UK and firms which have left the UK;

(d) reviews undertaken by the FCA of regulatory data requirements of authorised firms;

(e) outcomes of rule monitoring and evaluation and how it has contributed to UK competitiveness;

(f) comparative analysis of the regulatory approach of other jurisdictions;

(g) any other matters as the Treasury may from time to time direct.’”—

Brought up, and read the First time.

I beg to move, That the Clause be read a Second time.

It is a pleasure to serve under your chairmanship, Mr Sharma. I draw the Committee’s attention to my entry in the Register of Members’ Financial Interests, which I mentioned at the start of our proceedings.

The reason I have tabled new clause 18 follows on from comments I made in our earlier sittings, particularly on clauses 24 and 26, which relate to the competitiveness duty. Although I welcome that duty, it does need to be strengthened. The new clause would therefore require the FCA and the PRA to include in their annual reports

“an assessment of the FCA’s performance in fulfilling the competitiveness and growth objective” against specified criteria. The new clause sets out seven specific criteria for them to judge their performance against, including:

“outcomes of regulatory consolidation exercises… response times in assigning a case officer and authorisation times… data on the number of new market entrants to the UK and firms which have left the UK… reviews undertaken by the FCA of regulatory data requirements of authorised firms… outcomes of rule monitoring and evaluation and how it has contributed to UK competitiveness” and

“comparative analysis of the regulatory approach of other jurisdictions”.

In its evidence the Committee, the FCA pointed out that it was not aware of any other country having a competitiveness duty, but we were able to provide plenty of examples. As a starting point, it might want to look at the Bermuda regulator’s mission statement, which sets out that their objective is to

“protect and enhance Bermuda’s reputation and position as a leading international financial centre, utilising a team of highly skilled professionals acting in the public interest to promote financial stability, safeguard our currency and provide effective and efficient supervision and regulation.”

That is a clear example of where the FCA could start.

As I said, I welcome the Bill, but if it is to be meaningful and if the regulator is to fulfil its intended aims, we need to set the regulator clear objectives. Having spoken to the Minister, I know that he is keen do that, and this Bill is a fantastic opportunity to increase our competitiveness. I therefore ask him to take the new clause in the spirit in which it is meant—it is meant to strengthen what is a good Bill and make it excellent and, if possible, world-leading—and to give it due consideration.

Like my hon. Friend, I guide the Committee to my entry in the Register of Members’ Financial Interests.

They often say that a week is a long time in politics. Only this time last week, we were discussing clauses 24 and 26 and some of the amendments to them. I had tabled a number of amendments, which were aimed at one of the themes I have been pursuing throughout the Bill: ensuring we have appropriate accountability and transparency for the regulator. One of my amendments sought to put in place performance metrics, but the new Clause tabled by my hon. Friend the Member for North Warwickshire sets out rather more admirably than that Amendment, and in some detail, what those metrics should be.

Equally, my hon. Friend addresses the issue raised by another of my amendments, which probably should have been tighter: having clarity about why a regulator should be allowed to choose from time to time. As the Minister rightly pointed out at the time, there is the annual report available for him to specify some of the performance criteria and whether those criteria have been met. The new clause would go some way to achieving the thrust of my amendments last week, providing a little more clarity and certainty about what we are trying to achieve. In his response to me last week, the Minister said he was keen to make sure not only that there is accountability but that there is seen to be accountability. We were all struck by Emma Reynolds’ remark to us that the regulator must not mark their own homework. The new clause would take us away from that position, would give some certainty to the regulator and would provide an accountability mechanism to which they can be properly held to account. I am very much looking forward to hearing what the Minister has to say.

I thank my hon. Friend the Member for North Warwickshire for bringing those matters to our attention. I do not quite accept his construction, but in his view he is seeking to make a good Bill excellent. That is our aspiration. I should add that, although he used the example of Bermuda, I do not wish for the UK regulatory environment to ape that of Bermuda: I want us to be the very best version of ourselves. I would be very happy to accompany my hon. Friend on a fact-finding trip to understand in great detail the financial regulations in Bermuda. It is a task that would take some weeks, I am sure, as we sought to achieve our purpose, which is to have transparency about how the regulatory regime operates and to work together with the regulators to set the right measures of that performance.

As my hon. Friend the Member for Wimbledon said, the regulators should not mark their own homework—that should fall to Parliament. He was very gracious about his provisions, which we will be considering, but also the provisions tabled by my hon. Friend the Member for North Warwickshire.

As there is still work to be done, I ask that my hon. Friend the Member for North Warwickshire does not press the new Clause to a Division. Is he willing to work with my team and I to see if we are able to perfect the objectives he seeks, which are wholly laudable and understood by the Government?

I assure the Minister that there will be a long queue of Members joining him on the fact-finding tour.

I thank the Minister for his comments and for offering that meeting, which I will take up. I really believe that it is a very important point. On the basis that I can bring this back later, and with the opportunity for a trip to Bermuda—and some of the other financial institutions around the world that have competitive duties—I am prepared to withdraw. I beg to ask leave to withdraw the motion.

Clause, by leave, withdrawn.