Financial Services Bill

I am grateful for the opportunity to contribute to the debate and to speak to the amendments. I welcome the Financial Secretary's opening statement on the establishment of the Financial Conduct Authority, and the development away from the Financial Services Authority and the tick-box approach it adopted under the structure set up by the former Administration, which contributed to failures and had a harmful impact on many families and individuals. That is relevant to the responsibilities that the FCA will inherit. We shall now be able to secure an appropriate degree of protection; to promote choice and competition, which are regulatory concerns within the industry; and to protect and enhance the integrity of the UK financial system. The powers of product intervention could be considered controversial, but I welcome them and will return to them later. There is a significant difference between the powers of product intervention and the powers of price regulation. I pay tribute at the outset to the hon. Member for Walthamstow (Stella Creasy) for her campaigning. She has been at the forefront of championing the issues and highlighting the injustices of payday loans. I have had constituents come to see me about this, so I fully recognise and understand the sort of difficulties that the hon. Lady and many of her hon. Friends have highlighted. It is also important to highlight the difference between the actions surrounding payday loans and the risk and threat of price regulation to the general banking structure, where there is healthy competition. Even further competition will provide better self-regulation. I fear that amendment 40 would send the wrong messages to the whole industry, providing a green light to price regulation—something with which I cannot agree. I shall talk more about price regulation later, but when it comes to product intervention I want to underline why I think that the FCA needs the powers provided in the Bill. I shall highlight one example I have been involved in—the financial scandal of Arch Cru. The FCA's powers will better enable it to react to such a situation. It can intervene, particularly when a product crosses the jurisdictions of more than one body. It could be the UK and Europe, or the UK and the Channel Islands, or the UK and jurisdictions much further away. In exercising those powers of intervention, I hope that the new chief executive of the FCA will be prepared to work with other regulating bodies in the Channel Islands and elsewhere across Europe and beyond, particularly when it comes to cross-cutting products that have become international and products that have been designed to overcome the tighter regulatory structure here in comparison with elsewhere. I view that as essential. Under current legislation, I believe the FSA has the power to play a leading role in resolving some of these issues, but I hope that the new chief executive of the FCA will accept the will and demands of many Members when action needs to take place but has not, as with Arch Cru and others.