Financial Services Bill

I might put it slightly differently. I certainly understand the concerns of consumers who have been affected by the Supreme Court judgment—they do not feel that they have got the remedy to which they felt entitled—which is why the Government have announced that we will take action to work with the OFT, consumer groups and the banks to seek to agree a fairer, simpler and more transparent system of bank charges in future. We have not ruled out further measures if a voluntary approach does not produce results. We believe that a voluntary solution has many advantages. It can quickly adapt to changes in the market place. As my hon. Friend knows, any regulatory solution will need to be carefully thought through and will take more time. We must maintain price competition and avoid unintended consequences if firms compensate for any revenue reduction by developing new types of charges. However, there is a determination on the part of the Government that we should seek progress through the voluntary route. On the broader point about the regulation of contingent charges across all financial services sectors, as I have indicated, I do not think that the case has been made. It has always been the policy of successive Governments to rely on competition to make prices fair and to intervene only where there is a demonstrable market failure that cannot be fixed by other means.