Financial Services Bill

My Lords, I am grateful to all noble Lords who have spoken to this group of amendments. I will deal them out of sequence, starting with Amendment 27. I will ask the noble Baroness not to press that amendment but I will be more constructive about Amendment 6. Therefore, she may think this an acceptable package taken in the round. On Amendment 27, we do not believe that there are gaps in the responsibilities and powers of the authorities to deal with financial stability. We looked at this very carefully when we produced Reforming Financial Markets. We concluded that, beyond the sensible measures in the Bill, no further powers or responsibilities were necessary. We do not believe that there is a gap, but if the work of the council proved that there were problems, the Government would of course act. However, to ask for a specific report to be produced appears somewhat bureaucratic and unnecessary. As I have indicated, I see more merit in Amendment 6. There was obviously extensive discussion in another place on these issues, which has been partly reflected in the contributions here this evening about who does what with regard to financial stability. We share the view that there is merit in setting out the roles and responsibilities of the authorities, which we are being enjoined to do. The draft of the statement provided for by Clause 1(5)—the council’s terms of reference—is available on the Treasury website. It provides an overview of the authority’s financial stability responsibilities. This is intended to put the detail of the council’s objectives and procedures into context. The statement also sets out that the authorities intend to revise the Memorandum of Understanding between them. As previously mentioned, the memorandum between the Bank of England, the FSA and the Treasury was first agreed in 1997 and updated in 2006. It sets out the roles of each authority and how they work together to pursue financial stability. We made clear in another place that, as suggested in the draft terms of reference, the Memorandum of Understanding would be updated with consolidated detail of each authority’s roles for financial stability. We thought that that was a convincing position to take. In the other place, reservations were entered about this. These have been reflected in the speeches of the noble Baroness and others in Committee today. Clearly, we have not convinced the House on this point. There is still a desire for the detail of roles and responsibilities to be included in the terms of reference. In light of those representations and their force, we are willing to accept Amendment 6 and we will include the necessary detail in the statement produced under Clause 1(5). I hope, therefore, that the noble Baroness will feel that she has persuaded the Government of the merits of her first amendment, and will perhaps be indulgent enough not to press Amendment 27.