Financial Services Bill

My Lords, the noble Baroness referred to the extent to which the memorandum of understanding was revised in 2006, having been introduced in 1997. She also says that she cannot derive from that any particular lessons of weakness with regard to the position. The simple fact is that the Government do not expect the statement to require updating on a regular basis. However, the Bill as drafted is quite clear that it is the duty of the Treasury to keep the statement under review, and that is exactly what the Government intend to do. It is important that the terms of reference are fit for purpose in undertaking this requirement for ongoing review, and the Government of course will remain open to any concerns raised over the scope of the council’s terms of reference by the FSA or the Bank of England or even more widely—perhaps points raised in a parliamentary debate on the council’s annual report. However, a formal requirement to consult every two years on whether to revise the terms of reference does seem excessive. We believe that it is more sensible for any review of the statement to be driven by evidence of need and not by an arbitrary, statutory trigger. Of course I agree with the noble Baroness that the statement needs to be kept under review, but the amendment insists on a formal requirement to operate the full consultation procedure every two years. The Government are not convinced of that case, and I hope the noble Baroness will withdraw her amendment.