Financial Services Bill

My Lords, I rise briefly to argue one point. The Bill is the appropriate legislative vehicle to extend the operation of the FSA to credit unions in Northern Ireland. I was greatly encouraged when I listened to the opening speech of the noble Lord, Lord Myners, to hear that one of his concerns was the broad spread throughout the population of financial competence. It is perfectly clear that the credit unions have been agents of good authority in this respect. Noble Lords may not be aware that credit unions in Great Britain essentially engage only 1 per cent of the population. In Northern Ireland it is very different; they engage 26 per cent of the population. They play a significant role, in part, it might be said, because of the role that the Nobel laureate John Hume played in his youth in promoting credit unions. They operate as agents of stability in a society which, as all noble Lords know, at many points in the past 30 years has not been the most stable part of the United Kingdom. The credit unions of Northern Ireland are worthy of our benign intentions. As matters stand, the credit unions in Northern Ireland can operate in only three main areas, namely share accounts, loans and life assurance. Credit unions in Great Britain operate in around a dozen areas: current accounts; internet and telephone banking; standing orders for payment of wages; ATMs; home, travel, health and car insurance; mortgages; debit cards; direct debits; bill payments; junior saving accounts; and child trust funds. Credit unions in the Republic of Ireland have a similarly wide—indeed, even wider—range of potential operation. The passport to credit unions in Northern Ireland having this wider range is for them to come under FSA regulation. In other words, I propose that, in the context of the Bill, it should be possible to remove the exemption in the Financial Services and Markets Act 2000, which prevents FSA regulation of Northern Irish credit unions. When this matter was discussed in another place, the Minister, Mr Ian Pearson, who also had the benefit of having been a Northern Ireland Minister at an earlier stage of his career, expressed sympathy for this broad argument but noted that there were certain technical difficulties. I must concede that there are, not least to do with time. Mr Pearson noted that the Northern Ireland Assembly’s legislative consent would have to be sought. The Bill asks already for the Northern Ireland legislative Assembly’s consent to be sought in three other instances of practice that the Bill intends to institute. However, it does not at this point ask for legislative consent in this area. He also argued that there would be a difficulty in finding time for sufficient statutory public consultation on the credit union issue. It is normal in Northern Ireland to have a period of statutory consultation on an issue of this kind; that is entirely correct. None the less, in recent weeks in the Grand Committee of this House, there have been several discussions about the operation of the public consultation in Northern Ireland. It has been revealed to be in certain cases remarkably perfunctory. There has been simply a notice on a website and perhaps one or two comments from interested parties. Certainly it would be possible to carry out a public consultation on this issue within a month, and there need be little fear as to what the public’s reaction would be. All parties in the Northern Ireland Assembly are agreed on the desirability of this change. It is quite unusual to get complete agreement across all parties in the Northern Ireland Assembly. I have to concede that there is usually one occasion when one can obtain such agreement—that is when one is proposing an extraction of cash from the UK Exchequer. Ever since the Financial Relations Committee in the 1890s, there has been a pattern whereby, on such occasions when people in Northern Ireland approach the Treasury, they put aside their differences. However, in this case, the Treasury, in a paper published last year, also agreed that this plan was a desirable development. We are faced with something unusual—not only is there agreement among all the parties in the Northern Ireland Assembly but also the agreement of the Treasury in London. I should be very grateful if the Minister would consider, as the Minister in the other place said, if the Government receive—as in principle they should receive—encouragement from the Northern Ireland Assembly, asking the Assembly for legislative consent in this matter.