Financial Services Bill

May I say, first of all, that it was a privilege to serve as a Minister in the Northern Ireland Office for some two and a half years? I thoroughly enjoyed the role, and I would like people to think that I performed it in an effective and diligent manner. I am sorry if I did not always agree with my hon. Friend the Member for Foyle (Mark Durkan), but I made the best decisions, as I saw them, for the people of Northern Ireland. My hon. Friend is right to point out the importance of the credit union movement in Northern Ireland. As he is aware, at the time of the Financial Services and Markets Act 2000, Northern Ireland credit unions opted out of the arrangements. That is why they have been exempt since 2001. I want to try to be as sympathetic and helpful to my hon. Friend as I can, but I think I need to make a few points to outline some of the difficulties with his new clause. The new clause is intended to revoke the exemption from FSA regulation that credit unions in Northern Ireland currently enjoy. On a purely technical level, the new clause would not work as intended since it revokes provisions that amended the original FSMA exemption order rather than revoking the exemption itself. Let me say two more things. First, the transfer of regulatory functions of Northern Ireland credit unions to the FSA is considerably more complex than the removal of paragraph 24A of the schedule to the exemption order. There would have to be changes to Northern Ireland legislation and because the rules on Northern Ireland credit unions are different to those that govern Great Britain credit unions there would also have to be some significant changes to the FSA's handbook, too. As my hon. Friend the Member for Foyle mentioned, issues surrounding the interaction between the registration regime, which he still wants DETI to perform, and regulation, which would be the responsibility of the FSA, would also need to be considered and resolved. He mentioned the work of the Assembly Committee and I would certainly like to pay tribute to him in his role as Chairman of that committee. It has produced a very good report. However, I am advised that the relevant Northern Ireland Department, DETI, sees no need for the proposed amendment or new clause because it intends to consult on changes to Northern Ireland credit union legislation later this year—very shortly, I understand. The policy objective of permitting Northern Ireland credit unions to offer additional services to match those available from credit unions in Great Britain will also require amendment to several pieces of legislation in Great Britain. I want to be sympathetic, and I appreciate the argument that says, "If you've got a bus coming along, why not jump on it? You don't know when the next one will be." However, my concern is that doing what the new clause proposes would be difficult. There has not been a statutory public consultation in Northern Ireland, even though it was always made very clear to me in my time there that such a consultation should be carried out for every significant issue. It is one thing to have an Assembly Committee—the equivalent of a Select Committee in the UK—with a consensual view on matters, but it is another thing entirely to hold a statutory public consultation before legislation is introduced. However, if the Government were to receive from the Northern Ireland Executive a request to move forward that was fully backed by the Assembly—and if the FSA agreed that that would be appropriate, and if the Northern Ireland Executive and Assembly tabled any legislative consent motion that might be required—we would want to look at it. There are a great many legislative intricacies when it comes to allowing the FSA to handle the proposed changes in Northern Ireland as well as in Great Britain. Despite the common agreement on the matter, my suspicion is that too much work probably remains to be done sorting out the nuts and bolts of those intricacies for the proposal to be included in this Bill, although something might be ready in time for a future Finance Bill. As I said, I will try to be as helpful as I can. I recognise that the credit union movement in Northern Ireland strongly wants to be regulated by the FSA, and I am sure that any public consultation in Northern Ireland would demonstrate that. If there is a way to do what the new clause proposes more speedily in this Bill, we will look at it. However, I suspect that the difficulties involved mean that the process might take a little longer than my hon. Friend the Member for Foyle would like.