Financial Services Bill

We looked at that on two counts. The Committee took evidence from the FSA and the Association of British Credit Unions on their experience in Britain, as well as from credit unions in Northern Ireland. We found that the FSA was more than happy and ready to move to regulating the credit unions in Northern Ireland. The ABCU said that the two different tiers of regulation that the FSA offered to credit unions in Great Britain were regarded as proportionate and comfortable, in terms of the rate of intervention and of the costs levied. The credit unions in Northern Ireland were certainly encouraged by that, and the Committee was encouraged by the evidence that we heard. Of course, if we moved to having the FSA regulate credit unions in Northern Ireland, the credit union movement there would hope that that would involve a reasonable regional accent, profile or presence. The credit unions have enjoyed a good and close working relationship with the Department of Enterprise, Trade and Investment over the years and they want to build on that. New clause 10 would, in essence, remove the exemption in the Financial Services and Markets Act 2000 that means that the FSA's regulatory writ does not apply to credit unions in Northern Ireland and thereby provide the means in primary legislation to allow for FSA regulation. We recognise that the precise issues involved will take further negotiation and liaison, including with the currently devolved Department, for a number of reasons. The first is that the best way of moving forward would probably be for the registration of credit unions to remain as a function of the devolved Department—the credit unions want that, because they wish to retain that sort of relationship with the devolved Administration—but for regulation to fall clearly under the responsibility of the FSA. Obviously, there would need to be a proper memorandum of understanding as to exactly how that interface might work, in order to ensure a smooth junction. The second reason is that issues will arise in relation to all the relevant secondary legislation that applies to credit union regulation. We will need to ensure that that is suitably updated and translated to take account of the legal requirements of Northern Ireland too. Thus, along with new clause 10, I have tabled amendment 2, which provides for the commencement of these provisions six months after the Bill is passed and becomes an Act. Before the Minister makes this argument, may I say that I accept that six months might be a bit of a tight time scale for addressing some of those issues? However, I accept that the argument might be made for a wee bit more of a hard shoulder to drive on only in respect of amendment 2. On the substantive issue of amending primary legislation to allow for credit unions in Northern Ireland to be regulated by the FSA, I ask the House to adopt new clause 10 now. Credit unions in Northern Ireland have been seeking this change for some time. The Economic Secretary is a former Northern Ireland Office Minister, and I wish to pay tribute to him for the work that he did then. He succeeded me as a Minister in a couple of the very many briefs that he was juggling at that time in Northern Ireland and on some of them he was wise enough to follow my advice—on others he disappointed me, but he did so for reasons that he articulated very well at the time. He may recall that at that time credit unions were starting to lobby on this matter and that we had a meeting with his then colleague, who is now the Minister with responsibility for the third sector—that shows how long this has been going on. The matter subsequently became, in this phase of devolution, the subject of an Assembly hearing, in which there was unanimity. Of course, the papers that the Treasury produced on the future of financial services regulation last July included one on the legislative framework for credit unions and industrial and provident societies in Northern Ireland, in which it fully endorsed what the Assembly's Committee and the Assembly as a whole had recommended. It would, thus, be strange indeed if we were to have to go back to tell the credit union members in Northern Ireland that although everybody—all the political parties in Northern Ireland, the Assembly, the Minister, the Executive and the Treasury—agrees that the measure is needed, the House of Commons still cannot use this obvious legislative vehicle to remedy the gap. Members of the House may be aware that the Treasury Committee visited Northern Ireland recently to examine the problems of the Presbyterian Mutual Society. Obviously, those are very different from the issues that credit union members want addressed, but this matter did arise in the context of those hearings, because the Committee heard about the twilight zone that has existed in respect of where the FSA does and does not regulate, and who knows what and who shows what in relation to those activities. The problem was identified as an outstanding gap that needed to be addressed by the credit unions in Northern Ireland being enabled to offer a wider range of services and for them to come under FSA regulation to facilitate that. That approach was identified by the Treasury Committee not only when it visited Belfast last week, but a number of years ago; the approach was identified when the Committee produced its financial inclusion report. The role and potential of credit unions in Northern Ireland was recognised at that stage and attention was drawn to the need to enable credit unions to offer a much wider range of services. It would be perverse if credit unions in Great Britain, which have a much smaller membership base and a much smaller savings base, are facilitated to provide a much wider range of services to their members than the credit unions in Northern Ireland. The Irish League of Credit Unions is part of an all-Ireland league, and the members in Northern Ireland are jealous of not only credit unions in Great Britain, which can provide a much wider range of services, but their counterparts in the south, which can provide even more services again, including on pensions, wills and community investment. New clause 10 is tabled not only in my name or those of my party colleagues, but in those of the hon. Member for North Down (Lady Hermon), of the Ulster Unionist party, and of the hon. Members for East Antrim (Sammy Wilson), for Belfast, North (Mr. Dodds) and for Upper Bann (David Simpson), of the Democratic Unionist party. I can assure the House that it is supported by all the other parties in the Northern Ireland Assembly too. On an evening when there is a lot of uncertainty about the future of our devolved institutions in Northern Ireland, when all sorts of brinkmanship is going on and when many lectures will be given about what is in the true public interest and how we must be responsible and reasonable and use political processes to look after people's democratic interests and to focus on the real social and economic agenda, it would be good if this House gave a very positive signal to all the parties in Northern Ireland by supporting new clause 10.