My Lords, the body politic has suffered over the past few years from two major crises—a dreadful economic crisis as a result of problems in the financial sector and a major political crisis, which is about to be debated down the hall, on the media side. The amendment suggests that there have to be special considerations in the operation of the new CMA in relation to both these areas. This is a probing amendment to see whether the Government agree that one needs to look at those two sectors in a rather different way—particularly, in this regard, the financial sector.
This issue is complicated by the fact that the Financial Services Bill does not yet have Her Majesty’s signature on it, as well as by the fact that the FCA, as it will be, will not have exactly the same kind of concurrent powers as some of the other sector regulators. There will be some powers in the Bank of England and in the proposed PRA, as well as in the FCA. Well, good luck with all that; the Government seem to be replacing a much reviled tripartite system of regulation of the financial sector with a quintipartite one, and we will see how that works out. One of the factors in that, though, must be the CMA.
The complexity in the financial sector, with ever-increasing interrelations between the different parts of that sector both locally and nationally—plus we are waiting for a banking Bill shortly, and other provisions are coming out of the banking commission—means that there is turmoil in what we believe ought to be the structure of the financial sector. Do we believe in Glass-Steagall or in, as the EU Commission requires lawyers to do, selling off some outlets in order to provide more choice? How does this fit with a general duty on the CMA to look at the structure of, among other things, the financial system? Following the financial crisis—admittedly things could have changed a little
since then—we had about 40% of retail banking and about 30% of the mortgage provisions in one place. That seems to be a market situation that deserves investigation. Indeed, I recall telling the previous Government that at the time. However, it is something that has not been completely and definitively tackled and it will fall in part, at least, in the CMA’s lap.
I do not expect the Government to accept the wording of this amendment, but it indicates that we will need to have some threshold provisions that probably need to be different. It may be in the area of the structure of the financial markets. We need to know which markets, how we define them and who does it—the CMA, the FCA or both?
Although I do not expect the Minister to accept the amendment, I do expect the Government to recognise that whatever happens, the CMA will have to give particular priority to the financial sector and will almost certainly need to have different criteria in relation to that sector than elsewhere, if only for global and political reasons. I beg to move.