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Financial Services Bill

I heard the hon. Gentleman mention that yesterday, but I have not had time to check it out, so I must pass on answering that question. On the general point, however, I do not believe that the Government's financial interventions to recapitalise the banks and the Bank of England's action to provide liquidity to the banking system have been anything other than absolutely necessary to ensure the continued stability of the financial system in this country. I will check the detail of what he says about the FSA's financial risk outlook and, if it not too late in this Parliament, I will get my officials to write to him. Let me describe briefly some of the concessionary amendments made in the Lords to which I hope this House will agree today. Amendments 9 and 10 ensure that the regulations provided for under clause 9 are subjected to the affirmative procedure. Amendment 12 ensures that the FSA, when making short-selling rules, has regard to international agreements in that area. Amendments 16 to 23 further strengthen safeguards for individuals who performed a controlled function without the necessary FSA approval and reduce the proposed increase in the limitation period from four to three years. I well remember the hon. Member for Fareham (Mr. Hoban) expressing concern about those two points during Committee scrutiny of the FSA's enforcement clauses. The extra safeguards reflect the importance of casting the FSA's enforcement net widely enough to reach those who knew or could reasonably be expected to have known that they needed FSA approval and to deter individuals and firms from breaking the rules, but without catching those who reasonably should not be penalised. I believe that the amendment to the limitation period also strikes the right balance between allowing the FSA the time it needs to conduct proper investigations and answering the concerns expressed by Opposition Front Benchers, both in this House and in another place. Amendment 24 will ensure greater transparency in disclosure of the FSA's enforcement actions. That, too, is a point raised by the hon. Gentleman and by my hon. Friend the Member for Edmonton (Mr. Love). In Committee, I promised to look into the matter; I did so, and amendment 24 is the product of that thinking. It improves the position by widening the circumstances in which the FSA must disclose details of its enforcement actions against authorised firms and individuals. It requires the FSA to disclose such information relating to decision notices as it considers appropriate. At present, the FSA can disclose only information relating to a final notice, which follows any appeal to the tribunal, rather than information relating to a decision notice, which is issued after a firm has had the opportunity to make representations to the FSA but before the firm has had the opportunity to appeal. The new clause provides earlier transparency before any appeal has been heard but, importantly, after the FSA has heard the firm's views and concluded that there is a clear case to answer. It will empower consumers with additional information about which firms may have breached rules, and I think it strikes the right balance. The Government have carefully considered points made in another place and by the industry on the ability to review rules made by the FSA establishing a consumer redress scheme. Although we feel that the approval of the court before a scheme can be established is not appropriate—indeed, we believe that that is a regulatory decision, which should be a matter for the FSA—the Government have accepted that the Bill should expressly set out a means of challenging such a decision, rather than requiring parties to rely solely on the judicial review process. Amendment 33 provides that any person may apply to the upper tribunal for a review of rules made by the FSA under new section 404 of the Financial Services and Markets Act 2000. We consider, again, that this strikes a reasonable balance between the ability of the FSA to implement a consumer redress scheme, where appropriate, and the rights of others to require a review of those rules. Furthermore, in the light of industry concerns about the use of the power, we have also agreed to change the commencement of the clause so that it must be commenced by an order rather than automatically on Royal Assent. I hope that that explains the amendments and I hope that the House will support them.