Compensation Bill [HL]

moved Amendment No. 104:"Page 10, line 29, at end insert ““and for such a scheme to be funded by authorised persons””" The noble Lord said: This amendment seeks to require the regulator to set up a scheme which is funded by authorised or approved persons only. In this respect the amendment mirrors Amendment No. 49 in which we highlighted the need for this regulatory regime to be funded other than by the public purse. The whole purpose of paragraph 13(1) is to provide consumer protection in circumstances where the consumer has suffered loss as a result of the actions of authorised persons. That must assume that the consumer has little or no prospect of compensation by direct action against the authorised person. In practice, I assume that we are still dealing here with a regime that envisages regulation of companies as corporate entities rather than an approved person regime à la Financial Services Authority, which would, of course, make enforcement of rights against authorised or approved persons much easier. I hope it is not suggested that the compensation pot in these circumstances is to come out of public funds. There has already been a good deal of ““phoenix”” activity in this market and if we cannot have personal accountability, we had better have the cash up front in the compensation scheme. It may be for the convenience of the Committee if I discuss also Amendment No. 105. This is a fairly technical amendment to the power of the regulator, designed to make provision about purchase of bonds or insurance/indemnity, to permit the regulator to be responsible for such purchase as an alternative. This amendment serves to highlight the need to ensure that operators in this market have sufficient financial provisions in place to protect the consumer, and underlines the need for the regulatory regime to provide additional protection, in the same way that firms regulated by the Financial Services Authority or the Law Society have additional protection. It also underlines the point that the regulator may come to serve as a guarantor of last resort so far as concerns regulated companies. I suppose that my message is also about the regulator not resting on his or her laurels. I am sure that I speak for the whole Committee when I say that we want to see a robust regulator who is prepared to take action up-front to bring individuals and companies into line. I beg to move.