Financial Services and Markets Act 2000 (Regulated Activities) (Amendment) Order 2009

I am grateful to both noble Lords for their support for the measure. I noted the noble Baroness’s reservations, and I recognise the figures. After all, they are government estimates of the costs. She is absolutely right that this is a question of balance between the cost to those who might provide these opportunities and the particular problem that has been recognised. That came through strongly in consultation, but it was also a reflection of the fact that anxieties have been expressed about this business from a number of quarters, particularly consumers’ associations, which highlighted difficulties in this area. The noble Baroness is absolutely right that we have difficulties with estimating the nature of the business, because it is a recent development with quite quick growth. We cannot produce definitive positions on the size of the business nor directly how the business will react to the costs involved. The consultation gave clear indications as to what was involved. I certainly accept the point made by the noble Baroness about the FSA and regulated activities. I know that the FSA regularly reviews its regime; it is obliged to. The noble Baroness will appreciate that the FSA has been under considerable pressure of public scrutiny in recent months, not to say the past few years. Of course we expect the FSA to keep its regulation under review and to make sure that its actions are appropriate and proportionate. I can give assurances on that front, and that full consultation occurred before the orders were drafted. There is the additional dimension of care. The issue is serious enough for us to want to act promptly—that is why we have the interim position—but we are all too well aware of the fact that the costs involved and the situation is such that before the full regulatory regime comes into place, a month should elapse for people to adjust to that market. The noble Baroness used a phrase that I would ordinarily have sought to use: it is a question of striking a balance between protecting the vulnerable consumer, of whom we have notice of sufficient numbers, and ensuring that provision is made to help homeowners—provided that consumers are fully aware of their rights. I entirely accept what the noble Lord, Lord Oakeshott, said: it is important that the best advice is available. We are talking about low-income families. I am in no doubt about the obligation on the solicitor; I have more doubts perhaps about the relationship between the solicitor and people who are probably carrying out the first or second transaction of their lives of such import. When one is dealing with a new concept, with the best consumer advice in the world, one is all too well aware that an awful lot of people remain in comparative ignorance of their rights. I emphasise that none of us thinks that this strategy ought to obtain in very large numbers of cases. We can see the growth of the industry. With safeguards, it may be that it provides support and help to some, but we all know that sale and leaseback will not be appropriate in some cases. We know already of cases where complaints have been registered—and the complaints have been about the most fundamental thing: "We did not appreciate that we had lost the capacity to safeguard our home". I cannot think of a more fundamental right than that. If the Consumers’ Association is telling us that cases are emerging where people are in that situation, it shows how seriously we must address safeguards for the consumer. All the points that both noble Lords made about the legislation are important. It is important that the potential costs involved do not choke off supplies of what may be a service to the consumer. Awareness of rights and the ability to conduct transactions with professional advice need the greatest consideration. The FSA should not, because this may be a relatively small market at present, neglect its obligations to control this market; it must take those responsibilities seriously. As we all recognise, the FSA is carrying some most significant burdens and some others which affect a much smaller percentage of the population. I entirely accept that it must act in the most professional way with regard to its regulatory regime. It certainly needs to review those powers if its effectiveness is adversely affected by the amount of work that it has taken on. We all know the strengthening of the professionalism of the FSA that has gone on in recent months. We will need to ensure that that is properly supervised. I commend the order. Motion agreed.