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Financial Services Bill

My Lords, Clause 26 radically changes the existing FSMA powers for consumer redress and gives the FSA sweeping powers with virtually no oversight or protection for those who could be brought within its ambit. The justification for the abandonment of parliamentary oversight has never been satisfactorily explained. The Government did not carry out a detailed consultation on these changes before the Bill was published and that accounts for a certain degree of shock in the financial services sector when it saw what was proposed. There was considerable concern about the lack of an appeal or challenge process built into the new arrangements, other than judicial review, which deals with substance and not merits and, therefore, is seen as inadequate. We had tabled around 50 amendments to Clause 26 so that the various concerns were debated and, in particular, those concerned the appeal mechanism. We regret that we are not able to debate them fully in the context of this Bill. Government Amendment 285 introduces an appeal mechanism involving the tribunal, but it is largely conducted on judicial review grounds and, hence, represents no substantive advance over judicial review proper—at least, that is the view of those who are affected by it. If that judicial review lookalike was all that was on the table, we would have had difficulty with Clause 26 remaining part of the Bill. Government Amendment 332C, which removes the immediate commencement of the clause so that the Government must make a positive decision to bring it into effect, ameliorates that position. We see that as allowing an incoming Government, of whatever hue, to decide on the basis of consultation and further deliberation whether Clause 26 can be safely implemented on the basis of the clause plus the amendment just proposed by the Minister, or whether it will require a further amendment. I am inclined towards the latter view, but we shall see how that turns out. Amendment 285 agreed. Clause 26, as amended, agreed. Clause 27 agreed. Amendment 301 Moved by