Financial Services Bill

My Lords, I support my noble friend’s amendment. The noble Lord, Lord Newby, has just put a torpedo straight into the whole central purpose of this Bill, because he has described this cornerstone of the Government’s plan—the Council for Financial Stability—as being nothing more than a talking shop. It is there to co-ordinate. We do not need this elaborate structure in order to achieve the things that he is talking about. The issue is that we are trying to look at this problem while the storm is still raging, and we are too close to the events to be able to judge them dispassionately and to be able to see the light and shade in them. The headline in today’s Financial Times says: ""Rally shows moral hazard is still alive"." The article goes on to say: ""In the US and UK, parts of the credit market only function because of the continuing intervention of taxpayers"." We are trying to find a solution while the storm still rages. One of the lessons that could be drawn from the early part of the crisis—a crisis which is still continuing, as my noble friend has said—is that it was not clear what powers were available, who they were available to, whether and to what extent they were used, and how they interlinked. As I understood from what the Minister said in his Second Reading speech, the plan was for this new council to provide the overarch to this, and therefore this was the keystone, or cornerstone, of the new regulatory arch in the Government’s vision. We all had concerns about the lack of consultation; several noble Lords from both sides of the Chamber raised this issue. Some of us pointed out that the Financial Services and Markets Act had been rushed in, and the lack of consultation about that had perhaps led to some weaknesses which were later discovered. We wondered whether the rush on this occasion might lead to similar mistakes being made. But, never mind: the Government were determined to bring this forward. The noble Lord, Lord Barnett, has questioned the relevance of so doing, but they have done so. They have taken the Council for Financial Stability as the key body. Clausewitz, the famous military historian, said: ""Better a bad general than a divided command"." This is currently, at best, a divided command, and at worst—as the noble Lord, Lord Newby said—a talking shop. I therefore think my noble friend’s amendment is entirely relevant to our debates.