Financial Services and Markets Act 2000 (Regulated Activities) (Amendment) Order 2006

I am wilting under the pressure—my noble friend has arrived. The first question asked by the noble Baroness, Lady Noakes, was regarding the cost of implementation. Additional costs will be minimal for existing pension providers. It was generally recognised in the regulatory impact assessment and consultation responses that some new providers would face additional costs, to the extent that they would have to become regulated and thus pay FSA fees for the first time. While the RIA made a number of assumptions about possible regulatory fees, those could only be illustrative. FSA fees are reviewed annually, together with the levies for the Financial Services Compensation Scheme and the Financial Ombudsman Service. The FSA consults each year in January or February on regulatory fees and levies that are finalised in May for the fee period of 1 April to 31 March. The FSA will be required to demonstrate that its fee-raising arrangements are compatible with better regulation principles; fees are expected to be proportionate and not to pose a barrier to entry into the market. For existing members there will be no impact and, under the new rules, new firms will not have to go through third parties. Obviously there will be a saving compared with the current arrangements. The noble Baroness, Lady Noakes, also asked about new entrants. Consultation respondents identified various categories of persons who should be eligible to establish registered pension schemes. Those included firms already eligible to provide ISA and child trust fund accounts, as well as SIPP providers having to operate through eligible intermediaries. The noble Baroness, Lady Noakes, was also concerned about protection for consumers now, before this order takes effect. Under the Financial Services and Markets Act, introduced by the Government in 2000, most aspects of personal pensions are already under FSA supervision. For example, insurance companies and banks that are active in personal pensions are FSA-regulated. However, a small number of pension schemes investing in commercial property since 2006 are currently outside regulation, as I stated in my opening remarks. Those schemes are expected to grow. A very small number of activities in the pensions chain, such as advice, may be outside supervision also, as that presently depends on whether the underlying investment in the fund is regulated. This activity is also expected to grow. We are creating this new provision so that all aspects of personal pensions come under FSA supervision. I think that those points answer the questions put by the noble Baroness, Lady Noakes. If not, as both noble Lords have kindly suggested, my noble friend Lord McKenzie will write to them. I will write to the noble Lord, Lord Oakeshott, as he suggested, about his first question. The changes today will absolutely maximise consumer protection. These changes will ensure that everyone advising on pensions will be under FSA supervision. The noble Lord also asked about investing in residential property through clubs. That is a Finance Bill matter, but, again, I shall write to the noble Lord. I am grateful to both noble Lords for being so gentle with me in the absence of my noble friend. On Question, Motion agreed to.