Compensation Bill [HL]

I am grateful to Members of the Committee for their attempts to look again at this area. The noble Lord, Lord Goodhart, will not be surprised if I begin by quoting the Delegated Powers Committee on this aspect. It stated:"““It is for the House to decide whether or not the definition in the bill of ‘claims management services’ is appropriate but it seems to us acceptable for the bill to set the outer limits and for subordinate legislation to designate services within those limits. This is similar to a provision in section 22 of the Financial Services and Markets Act 2000 and would enable the Secretary of State to target areas which he considers are from time to time at a particularly high risk””." That is exactly the approach that we have taken, which I interpret the Delegated Powers Committee to support. I have indicated to Members of the Committee that I plan to deal with all the other issues raised by the Delegated Powers Committee by amendments on Report, which I shall share with the Committee beforehand, in order to ensure that, as always, we fit in with what it has advised us to do. In this aspect, it is right that that is the approach that the Government have sought, which is to define the services and to narrow down in order to catch the services that we believe need to be dealt with where there is a risk to consumers, so defining wide and specifying by order. To accept the amendments put forward by the noble Lord, Lord Hunt, would be to change the approach in a way that would not achieve what we want to do. As I have already indicated, it is an approach done through the Financial Services and Markets Act as well. The noble Viscount raised a point on how long it would take to bring in new areas. We would say that it would take months and not years. One of the issues for the regulator is that we would be able, I hope, to gather intelligence in a way that would enable us to bring in any necessary regulation at an early stage. Of course, that is the indication of an effective regulator, which I think that the Committee would support, for dealing with inappropriate operations as quickly as possible. As I have indicated, we have set this out so that we can set the net wide but have the flexibility to ensure that we deal only with areas of risk. I reiterate that we would hope to remove areas as it was clear that they did not any longer need to be regulated. To be able to do that in both directions is an important aspect of better regulation. I do not know what else I can say to the Committee, other than that we believe that approach to be appropriate and that it will achieve what Members of the Committee want in an appropriate manner. I hope that, on consideration, the noble Lord, Lord Hunt, will feel that we will achieve what his amendment seeks to achieve, but in a more flexible way that might enable us to capture areas more efficiently and to deal with the difficulties that consumers face as effectively as possible.