Compensation Bill [HL]

This has been an interesting debate; indeed, it has almost been two separate debates. The debate initiated by the noble Lord, Lord Goodhart, on the question of competition shows that the problem is probably greater than it at first seemed to be. The noble Lord has highlighted an area of concern and my noble friend Lord Eccles has reinforced my worries. I would not want to see a situation where, because the regulator is concerned about competition, he allows firms that do not reach the high standards that he would otherwise demand to participate in the marketplace because of their effect on competition. My noble friend instanced a truism that the more one regulates, the fewer the firms that are able to participate in the market because of the regulation. We must think through the consequences of that. So far as the list that I set out in Amendment No. 41 is concerned, I was aware of paragraph 47 of the Explanatory Notes. The problem is that that paragraph is phrased in very tentative terms. It states:"““Regulations might also specify criteria . . . No such criteria are specified on the face of the Bill, but relevant considerations might include, for example, that an applicant: is fit and competent””," and so on, and finally,"““has appropriate indemnity insurance””." Because there are serious problems at present, many Members of the Committee would like to see clearer action and a firmer commitment. Having said that, the Minister made her views absolutely clear. However, capital adequacy is not just a question of handling client money; it is also a question of whether the body is capable of providing a service. Some of these issues go wider, so we need a little more in the Bill. With that in mind, I welcome what the Minister said about amendments that she is thinking of bringing forward on Report, which we look forward to seeing. In the meantime, I beg leave to withdraw the amendment. Amendment, by leave, withdrawn.