Financial Services and Markets Act 2000 (Regulated Activities) (Amendment No. 3) Order 2006

I am grateful to the noble Baroness and to the noble Lord for speaking in the debate. The indulgence which the noble Lord, Lord Newby, extended to me was quite unnecessary and even ill placed. There was never a hope that I would get the same indulgence from the noble Baroness, Lady Noakes. The noble Lord might as well have been as critical as he wished because I was certainly going to be tested on my defence of the regulations by the noble Baroness. I thank her through gritted teeth for her contribution. I heard what the noble Baroness said about our recent history on Europe and the development of MiFID. Her interpretation of history reflected a general party position which is somewhat distant from things European. Some members of her party still have reservations about progress towards a single market, of which this measure is a significant contribution. Her interpretation of recent history is in sharp contrast to that of the noble Lord, Lord Newby. His party thinks very differently about the benefits of Europe. Between the Scylla of being hostile to Europe and the Charybdis of being over enamoured of Europe the Government pursue a steady course between two such dangers and emerge into the safety of what we propose on the implementation of MiFID. I hear what the noble Baroness says. She is absolutely right that we anticipate only relatively minor players being involved, if I can describe Bulgaria and Romania as minor players in financial markets. We expect them to sign up on the same date as we do. The noble Baroness is right that there are indications that France, Germany, Italy and Spain may sign up a little later in the year. Is that a disadvantage to London and the United Kingdom? I think not. We will be able to take advantage of the already greatly advanced dominant position which London enjoys in the capital markets of Europe. We will be able to exploit that situation. However, I recognise that it is entirely right that we should give satisfactory assurances on the queries which the noble Baroness raised on some of these issues. On the timing issue, as the noble Lord, Lord Newby, said, it does the reputation of this country nothing but good that we should seek to sign up to the implementation of the directive on the designated date. It will also give a very clear indication and steer to all British firms on what adjustments have to be made. We have been in extensive consultation with them. I hear what the noble Baroness says—that there are reservations about certain parts of the directive. However, she will recognise that we have been in substantial consultation with the industry in the lead-up to this position. We can see no advantage—we have not been lobbied intensively by the industry as a whole—in being tardy in signing up to the directive. However, the industry has sought assurances on certain aspects of the operation of the directive. The noble Baroness put forward the major premise that the Government had not driven a hard enough bargain in Europe during the negotiations. I put aside the rather trivial point about the fact that a meeting of agriculture Ministers signed up to the measure. That is true but it was merely a question of procedure. The agriculture Ministers had a very clear note from the Treasury explaining exactly what the British position and that of the rest of Europe was. It was merely the sanctioning day. I do not think that anything can be read into the fact that the final signing of the directive took place at an agriculture committee meeting. However, I should emphasise what the directive does and what we achieved in our negotiating position. We have achieved an improved passporting regime and effective competition between execution venues. We have aided the liberalisation of the means of trade and transaction reporting and advanced principles based on implementing the measures. Behind all this is the great strength of London and the United Kingdom in this area, which we brought to bear in the negotiations. I recognise that the noble Baroness expressed anxieties. She asked whether the cost-benefit analysis stood up. At this stage, certain aspects of cost-benefit analysis are open to challenge. That goes without saying. That applies to the noble Baroness’s figures even more than to mine. I scarcely recognise the figure of £24 billion of costs that she produced.