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Finance Bill

Thank you, Mrs. Heal. I always bow to the Chair—especially when you are in it, if you do not mind me saying so. [Hon. Members: ““Get on with it.””] I shall move straight on to the amendment. To respond to the debate appropriately, however, it is only right that I should refer to the contribution by the hon. Member for Braintree (Mr. Newmark); he is entitled to a response from me. I just want to tell him that the word is ““ombudsman””, not ““umbudsman””, as he pronounced it. If he looks at the piece of paper that the Whips wrote out for him, he will see that the word is spelt with an o, not a u. Clearly he could not read their writing as easily as he would have liked. The amendment attempts to transfer responsibility for the resolution of disputes against National Savings and Investments to the compulsory rather than the voluntary jurisdiction of the Financial Ombudsman Service. In response to what the hon. Member for Richmond Park (Susan Kramer) said, I shall spell out why that cannot be done. National Savings and Investments is not currently eligible to enter under the compulsory jurisdiction because it is not regulated by the Financial Services Authority. It could not join the compulsory jurisdiction alongside FSA regulated bodies without substantial amendments to both the Financial Services and Markets Act 2000 and subordinate legislation. This is beyond the scope of the Finance Bill. Furthermore, National Savings and Investments cannot be directly FSA regulated under its current business model, because as the Government’s retail debt financing arm, it does not hold liabilities and does not have the capital adequacy requirements of privately owned financial institutions, both of which are necessary conditions for being FSA regulated. Under the voluntary jurisdiction of the FOS, customer complaints against National Savings and Investments will be handled in the same way as under compulsory jurisdiction—that is a direct response to a question that I have been asked. This will deliver greater simplicity for customers, who will have access to the same dispute resolution process in the case of complaints against National Savings and Investments as with those against other financial service providers. To give a further guarantee to hon. Members, it is important to say that National Savings and Investments is committed to voluntary jurisdiction, and that that commitment will be embodied in its framework document, which publicly states the aims of the agency, how it is managed and its relationship with Government, to ensure that it is bound not to unsubscribe at any time. A further guarantee is the fact that the rules of the voluntary jurisdiction scheme put conditions on participants withdrawing from that scheme. The transfer is being implemented so as to ensure that National Savings and Investments customers have continuous right of recourse to a single dispute resolution scheme. I hope that Opposition Members will now understand that the amendment is not feasible, practical or possible in the context of the Bill.