Regulation of Financial Services (Land Transactions) Bill

Of course there was a misprint in the age, but not in the date. I shall now turn to some of the specific issues that have been raised. A number of hon. Members—including the hon. Member for Cities of London and Westminster although this strand of the debate was started by the hon. Member for Sevenoaks (Mr. Fallon), who was a distinguished member of the Treasury Committee—raised an issue that is, of course, dear to all our hearts: the requirement to ensure that we examine the proposals in a way that minimises the regulatory burden and expense. We are well advised to be continually vigilant against unnecessary regulation, and we were reminded of that necessity by the hon. Member for Twickenham (Dr. Cable) and by other contributors to the debate, most recently the hon. Member for South-West Hertfordshire (Mr. Gauke). I am invited to express my view of the Financial Services Authority, and will do so. The FSA is internationally regarded and respected for its approach to regulation. As with every other regulator, the Government will work with the FSA to ensure that our better regulation agenda continues to underpin its approach, and it is not an error for us at any stage to remind it of those principles. However, irrespective of whatever criticisms we may have about the day-to-day application of regulation or, indeed, about any individual case, we should also remember that London’s regulatory environment is regarded as the best among those of the international financial centres. It is ahead of New York and well ahead of Frankfurt and Paris, and it is described as having the potential to remain so until 2008. That assessment comes from a survey by the Centre for the Study of Financial Innovation, published in July 2003. On 24 May, my right hon. Friend the Chancellor launched a better regulation action plan designed to boost flexibility and enterprise with the introduction of a risk-based approach to regulation. I have heard nothing in the debate that jars in any way with that approach to regulation. Indeed, such an approach to regulation would gain support from all those hon. Members who have spoken. Again, irrespective of any criticisms people may have about their experience of the FSA or about individual cases, the FSA is a pioneer of the risk-based approach to regulation and is considered a world leader in this field. But we should not of course forget that we require the FSA by law to meet certain standards. I understand from the contributions made by hon. Members—particularly by Opposition Members, who clearly speak with some experience of financial regulation—that we must share responsibility for the questions that we ask of that regulatory authority. We require the FSA by law to demonstrate, among other things, that the regulatory burdens are proportionate to the benefits that they provide; to operate economically and efficiently; and to take account of the effects of regulation on international competitiveness, innovation and competition. I am grateful to hon. Members for their reminders of those principles.