FSMB Committee debates regulatory accountability

The fifth day of debate in the Grand Committee on the FSM Bill focussed on regulatory accountability and a set of amendments proposed by Baroness Bowles.  The amendments were withdrawn as they had predominantly been moved to encourage debate, but Committee members discussed several issues around what parliamentary scrutiny means. Lord Harlech committed to taking a number of points back to Treasury for response.

Following the debate, clauses 27-35 were all agreed.

The next debate was over a proposal to create a new Financial Services Regulators Committee of Parliament, led by Baroness Noakes. She explained how the Committee would be set up and would report to Parliament. Baroness Penn, replying, said the Government was aware of the enthusiasm for such a Committee and said that Parliament would already have the power to set something up and that to introduce a requirement now into the FSMB would be a significant change to the scrutiny of financial services.  She agreed to consider all the points made carefully before report stage. Baroness Noakes reluctantly withdrew the amendment and discussion moved to the merits or otherwise of the Treasury Select Committee in Parliamentary scrutiny. The next set of amendments were withdrawn or not moved, but the consensus was that some form of amendment would be needed and it was suggested that Baroness Penn should seek Treasury’s views about whether it was really worth a fight over something that “any reasonable person would see is essential for the proper conduct of financial services”.

Clauses 36-40 were then agreed.

The discussion moved on to cost-benefit panels. A series of amendments were debated and withdrawn, but again there was a promise to return to the topic in future.

Clauses 41-46 were agreed.

Baroness Bowles then raised her amendment relating to the ability of the FPC to make recommendations about financial stability and systemic risk. Baroness Penn said that it is vital to learn lessons from recent market turmoil but, again, said all necessary powers were already in the Bill or in existence. Baroness Bowles withdrew the amendment but said she would be thinking to return with at least one amendment at Report stage.

Clauses 47 and 48 were agreed, Schedule 7 was agreed with a small Government amendment, and Clauses 49-50 were agreed.

The clauses debated and now agreed focus on regulators, rule making powers, and panels and complete Part 1 of the Bill. The main clauses now remaining which are likely to cause debate are the access to cash provisions.