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European Financial Services Proposals

The Government have a very clear red line in this area. Is the hon. Gentleman saying that the clause should not be there at all? We are very clear that the new framework should not impinge on member states' fiscal responsibilities. Let me turn to the legal basis and respond to some of the detailed questions on that. On the delegation of powers to the ESAs, the Commission is, as the European Scrutiny Committee has recognised, legally able under the treaty to delegate powers to the new supervisory authorities where it had that power in the first place and where the decision-making powers delegated do not involve wide discretion. We are looking closely at the element whereby, under the current legislative proposal, the supervisory authorities appear to be able to exercise discretion. That is what we have to work through in respect of the legal basis. Clearly, the new framework must be able to withstand legal challenge.