Financial Services Bill

As the right hon. Member for Birkenhead (Mr. Field) suggested, we found ourselves in agreement on some of the sentiments. Some of what has gone on over recent years has highlighted a number of practices that may not have been well known or well understood, and he gave the example of the pension fund chairman. As the hon. Member for Chichester (Mr. Tyrie) said, short selling has been part of the functioning market for some time, and it is part of how investors have confidence in the market. The loaning of pension fund shares might be looked at under pension fund administration arrangements. The rules could clearly be tightened up. I suspect people would not necessarily demur from that within the totality of their involvement in the market. We discussed the merits of the restrictions in clause 13, which would give the FSA powers to prohibit or require disclosure, very much along existing lines—formalising what the FSA did a little while ago. It addresses perceived market abuse, usually a one-off emergency situation and alongside a disclosure regime. It is probably about as far as we would wish to go at any particular time. Throughout our consideration of the Bill, we have been concerned not to take it that market abuses and other problems were everyday events and that we had to produce reams of draconian legislation. We wanted to ensure that the rules were proportionate and would address certain situations that may arise in the future. The hon. Gentleman said that the alternative would be to close the market in certain things altogether, but if we were for ever doing that it would destroy the whole function of what we are trying to set up. Although I can understand why the new clause was proposed, and there may be opportunities to reconsider it in another place, at the moment it is too restrictive for us. It could have many dire unintended consequences, so at this stage we cannot support it.