Financial Services Bill

I support the amendment in the name of my noble friend Lady Noakes. As was pointed at Second Reading, by more than one speaker, the tripartite system has not worked, and that was before it was torpedoed by the noble Lord, Lord Newby. I find it inconceivable that the Government, having produced a system which has failed so obviously and so dismally, should persevere with it. It is all very well trying to blame the worldwide banking crisis for the problems experienced by this country's financial sector—certainly events outside this country have played their part—but the blame for not seeing what was coming, for not having a regulatory system better able to understand banking and the market place and better able to cope with and foresee the problems which will inevitably occur from time to time, lies fairly and squarely with the tripartite arrangement set up by the Government. As the noble Lord, Lord Desai, reminded the House at Second Reading, no matter what you do, the system will have crises and cycles. Not all countries have suffered as badly as the UK. There is a saying that remarriage is a triumph of hope over experience and reinventing the tripartite system is an example not just of hope over experience, but of the most wildly misplaced optimism over experience. I am sure that during his very successful and distinguished career in business, a career of which anyone would be extremely proud, the Minister never divided into three the running of those companies in which he was involved. His Lordship would have run a mile rather than have an enterprise with three chief executives. Direct lines of authority are the choice of virtually every single organisation of any sort, everywhere in the world. There is a reason for this. That structure is used because, over the centuries, people have worked out that it is the most effective way for their affairs to be managed. That does not mean that you cannot have checks and balances, but such checks and balances do not mean dividing authority. It is beyond me why, when there is a matter as important as the British banking and financial system, there should suddenly be a departure from a proven and sensible method of managing things. I look forward to hearing from the Minister how it is possible to justify compounding failure in the way suggested in this Bill and how he came to believe in the concept of dividing authority three ways when all his experience and the foundation for his success has been using the conventional method of a single authority. If one is stuck with having a tripartite system then the amendments tabled by my noble friend Lady Noakes will go some way towards correcting the inbuilt defects of the system. Rather sensibly, these amendments will have the effect of defining more closely the obligations and responsibility of each member of the authority. This is not a perfect solution; it is like putting a dressing on a wound when it would be better if the limb were amputated; but at least it may contribute towards reducing the weakness of the system if those involved have a clearer idea of their responsibilities and powers. Directing the relevant authorities to act in accordance with their powers and to specify their responsibilities will, I hope, tease out from the Minister how it is envisaged that the relevant authorities will work together, how they will relate to each other and who will do exactly what. It will be difficult when dealing with such a complex subject where there will be overlapping areas of authority and grey areas where there is no authority, but that is the inherent weakness of the system. Doubtless, if the Minister is a true believer in the tripartite system, all will be revealed. I look forward to hearing his answers to the very good points made by my noble friend Lady Noakes.