01/02/2016

:00:00. > :00:00.house can join me in committing the success of this particular programme

:00:00. > :00:00.and how it has enabled people to get on the life and set up their own

:00:07. > :00:19.businesses and become successful. Urgent question. To ask his

:00:20. > :00:24.Secretary of State for house if you'll make a statement on what

:00:25. > :00:33.steps are being taken to improve the financial situation of NHS trusts.

:00:34. > :00:38.They you Mr Speaker, the house and know that the NHS as that of its

:00:39. > :00:41.plans for the next five years. Because of our strong economy, this

:00:42. > :00:45.government has built to honour that request and will be fun to get in

:00:46. > :00:50.full, including a down payment of ?2 billion in this financial year. Next

:00:51. > :00:58.year there'll be an increase of the 18 billion pounds and we will be

:00:59. > :01:02.providing ?10 billion in five years. Within that context, there is are a

:01:03. > :01:04.number of hospital trusts who are running a number of hospital trusts

:01:05. > :01:09.who are running it has deficits. After what was learned in the

:01:10. > :01:15.aftermath of these gentlemen amid staff. The best hospitals have begun

:01:16. > :01:20.to transform along the lines of the review. Some have not. This is maybe

:01:21. > :01:25.management of their finances all the more difficult. NHS improvement

:01:26. > :01:31.expects that trusts will report an overall deficit of the financial

:01:32. > :01:38.year 2016. Savings achieved in the rest of the NHS have ensured this

:01:39. > :01:48.deficit will be offset. It were to finance the balance. Improved

:01:49. > :01:52.financial position. The department had introduced the controls of the

:01:53. > :02:08.cost of staff agencies, a staff on consultant contract. Improving

:02:09. > :02:14.hospital fantasy. ... By 2020. The chief executive NHS improvement is

:02:15. > :02:22.confident these measures was never hospital trusts can sustain a

:02:23. > :02:27.financial position next year. Thank you Mr Speaker, I'm afraid the

:02:28. > :02:31.Minister has been a state of denial. He claims the settlements secured by

:02:32. > :02:35.the Department of Health in the review will sort the financial

:02:36. > :02:40.pressures, hospitals are under. He either does not understand the scale

:02:41. > :02:45.of the problem or he simply has his head in the sand. Mr Speaker, in the

:02:46. > :02:48.last two weeks it has become him utterly clear that hospitals across

:02:49. > :02:53.the country are buckling under the strain of providing health care

:02:54. > :03:01.within an adequate budget. Four out of five hospitals are now predicting

:03:02. > :03:09.the deficit. Monitor are accordingly a sibling tease Amanda Mitch

:03:10. > :03:15.consultants. To dispatch a 25 trusts now we learn along the TDA because

:03:16. > :03:24.every hospital asking them to take urgent steps to regain control of

:03:25. > :03:30.their budgets, including, headcount rejections of the current plan. What

:03:31. > :03:38.the Secretary of State aware that this letter had been sent as it

:03:39. > :03:42.received approval. We had meetings to discuss headcount reductions, and

:03:43. > :03:47.how many job cuts have been agreed as a result of these meetings? Mr

:03:48. > :03:54.Speaker, when I have a situation where on the one hand the Care

:03:55. > :03:58.Quality Commission is turning hospitals they are unsafe and on the

:03:59. > :04:04.other hand monitor is selling them to cut staff. Which one is it? What

:04:05. > :04:10.proportion of the so-called headcount reductions was involved

:04:11. > :04:15.clinically trained staff. On Saturday the Kings fund said this,

:04:16. > :04:23.three years on from the report of mid staffs which emphasizes same

:04:24. > :04:28.staffing was key to make quality -- maintaining quality of care. The

:04:29. > :04:31.financial meltdown is now saying the policy is being abandoned for

:04:32. > :04:39.hospitals that have run out of money. Will the Minister not accept

:04:40. > :04:42.that his government's financial management of the NHS has been

:04:43. > :04:46.impossible for some hospitals to provide safe patient care. Is it not

:04:47. > :04:52.the case of this government has fundamentally lost control of NHS

:04:53. > :04:57.finances, and it is that it's now clear that the only way ministers

:04:58. > :05:02.are going to make their planned ?22 billion worth of efficiency savings

:05:03. > :05:07.will be to cut staff to Marcotte paid, and closed services. I stated

:05:08. > :05:17.minister is time to stop the NHS doublespeak and just come clean.

:05:18. > :05:23.Again this is bigger. I think the for asking this urgent question. Had

:05:24. > :05:27.she started off by claiming that the Secretary of State and I were in a

:05:28. > :05:32.state of denial. Were she to look at the actual outcomes of the NHS this

:05:33. > :05:36.year compared with the last year when her party was in power she

:05:37. > :05:48.might consider that the performance of the NHS has and proved measure.

:05:49. > :05:51.We have 1.9 million more tendencies. 1.3 million more operations. 7.8

:05:52. > :05:59.million more outpatient appointments. Four plus 7 million

:06:00. > :06:03.more diagnostic tests. They're performing more procedures, helping

:06:04. > :06:09.more patients, doing more for the people of this country than anytime

:06:10. > :06:12.its foundation. I would suggest that the party any person who is in

:06:13. > :06:17.denial is Tyrone and her own stand-in. In front of the service

:06:18. > :06:23.working hard to try and deliver better patient care and what is a

:06:24. > :06:29.challenging environment. She asked a number of subsequent questions about

:06:30. > :06:35.staffing levels in about leathers sent home by NHS improvement. I'll

:06:36. > :06:40.endeavour to ask each of them. She asked about the settlements of the

:06:41. > :06:47.treasury has maybe the NHS I will point out to her that is precisely

:06:48. > :06:51.the settlement VHS asked for. It is exactly that settlement with the

:06:52. > :06:59.party opposite refused to endorse in the last election. Hear, hear! The

:07:00. > :07:04.statement that she proposed that there are teams and management

:07:05. > :07:08.consultants which allows me to remind her the number of consultants

:07:09. > :07:12.has been cut considerably by previous governments. In contrast to

:07:13. > :07:15.that of the party opposite who increased the number of management

:07:16. > :07:20.in the 30 years that they were in power. We make no apology for the

:07:21. > :07:26.fact that NHS improvement in these constituent bodies is working very

:07:27. > :07:30.hard with the providers to address the issues of efficiency and quality

:07:31. > :07:34.that they all have. Is she suggesting that they should not be

:07:35. > :07:38.doing that? Should they not be going around to hospitals trying to help

:07:39. > :07:41.those which are not able to control her own finances? Should they not be

:07:42. > :07:45.doing what is needed to try and improve the quality of care that

:07:46. > :07:49.they provide? If that is her suggestion is quite a remarkable one

:07:50. > :07:53.and one that I think should be more widely shared with the people that

:07:54. > :08:03.she seeks to represent. She talked about the letters sent out by NHS

:08:04. > :08:09.improvement. We were aware of it. Addressing of quality to be seen

:08:10. > :08:13.across the service. I know this is news to the members on the opposite

:08:14. > :08:21.benches but there are not separate parts of the NHS issuing separate

:08:22. > :08:28.dictums. The issues of the last two months have been cosigned by the

:08:29. > :08:38.chief inspector of hospitals, by the director of safety, and the chief

:08:39. > :08:45.executive for improvement. This is one system addressing the particular

:08:46. > :08:50.problems which are evident in making sure they level up the best. If she

:08:51. > :08:54.is not convince her that she should look at the co-signatures of this

:08:55. > :08:59.letter is and how they correspond one with the other. She asked about

:09:00. > :09:06.the line in one of the letters about reductions in headcount. I again

:09:07. > :09:10.will point to her reductions in headcount in the traders that have

:09:11. > :09:15.been achieved by the government of the previous five years. We have

:09:16. > :09:20.managed to reduce by some 24,000 the number of administrators in the NHS

:09:21. > :09:26.while said the same time greasing the number of positions by 16,000.

:09:27. > :09:30.Witchy on the one hand while not promising money onto the NHS for the

:09:31. > :09:35.NHS has asked for, acid to maintain the same level of demonstrators in

:09:36. > :09:40.the years ahead, or which you back NHS improvement plan to find

:09:41. > :09:47.efficiencies in the NHS precisely so the money is spent on administrators

:09:48. > :09:52.be spent better on positions and decrease the number of resources to

:09:53. > :09:55.the front line. I know the Honorable Lady is artist and what she says of

:09:56. > :10:00.the NHS but I cannot believe that she is running out in defence of

:10:01. > :10:05.increasing spending in the back office and expense of the plot line.

:10:06. > :10:10.She asked about the safe staffing ratios and she made a number of

:10:11. > :10:14.statements within the get retrospect might feel somewhat irresponsible.

:10:15. > :10:17.The reason for that as of the letter issued in October last year on the

:10:18. > :10:26.issues they staffing build on the advice given by... Was cosigned by

:10:27. > :10:30.the cheesy sludge of hospitals and by NHS improvement in the twos

:10:31. > :10:34.constituent bodies. It was a cosigned letter because the livery

:10:35. > :10:38.of quality and efficiency are two sides of the same coin. Those

:10:39. > :10:42.hospitals that are providing the highest quality of care in this

:10:43. > :10:47.country tended to be those who are also in control of their finances.

:10:48. > :10:50.Those were struggling with quality also are those who cannot control

:10:51. > :10:54.her own finances. If you were to suggest that somehow there is a

:10:55. > :11:01.binder suggested between the two, a choice to be made. I say to her she

:11:02. > :11:05.is about a decade but I and all current thinking. It is about making

:11:06. > :11:09.sure the quality and efficiency go hand-in-hand and that is why the

:11:10. > :11:13.very best hospitals can do both. And all of this I would say to the

:11:14. > :11:18.Honorable Lady that she should avoid falling into the trap that her

:11:19. > :11:23.predecessors so often did. Of assuming there is some trade-off

:11:24. > :11:28.between quality and efficiency and of attempting a pretty low-level

:11:29. > :11:38.politicizing of the NHS, an approach that was so roundly edged rejected

:11:39. > :11:42.the last election. At this point having one possibly the last

:11:43. > :11:46.election, she would not have had the ?8 million to invest in the NHS that

:11:47. > :11:51.we have managed to do. She would not be there for able to ensure the

:11:52. > :11:55.public of continued improvements and a number of patients treated and

:11:56. > :12:06.increase the number of operations, and number of GP's in excess of

:12:07. > :12:11.5000. None of those she would have been able to promise, and that is

:12:12. > :12:14.light on the side of the house we're proud to reaffirm that it is us who

:12:15. > :12:24.are the true party of the NHS. Hear, hear!

:12:25. > :12:34.We also want to congratulate the NHS alongside coping with rising demand.

:12:35. > :12:40.Task the Minister added NHS improvement are tasking measure

:12:41. > :12:46.consultants to come and advice trust to turn around financial problems

:12:47. > :12:49.when he also asked them to look at the issues of social care and how

:12:50. > :12:53.the interrelation between underfunding of social care impacts

:12:54. > :13:00.on health economies look up trusts and also to look at improvement

:13:01. > :13:11.prevention because both prevention and was also noted by someone. Donna

:13:12. > :13:17.Liddy would be aware of the increase in funding that this government has

:13:18. > :13:23.increased. This will deliver increases in social care. She will

:13:24. > :13:26.also be aware that the view is a holistic understanding of the health

:13:27. > :13:30.care in this country and includes transmission of the NHS and social

:13:31. > :13:37.care for that one. We are proud to be funding the five-year review

:13:38. > :13:44.which he has asked for, 31 ?8 billion next year, in next two years

:13:45. > :13:51.and was sure the challenge identifies around social care would

:13:52. > :13:56.be addressed in the years to come. I'm not sure with almost 80% of

:13:57. > :14:01.trusts running a deficit that we can just say it is failing hospitals

:14:02. > :14:06.that are having problems. While the government talks about giving 10

:14:07. > :14:10.billion upfront to point to that is already rated off any deficit.

:14:11. > :14:14.Normally budgets are described across the Department of Health

:14:15. > :14:20.public health and health education in England are losing money. It is

:14:21. > :14:24.described the 3 billion being clawed back from the areas that are not

:14:25. > :14:29.specifically NHS England bid -- a four and a half billion and not 8

:14:30. > :14:33.million you put in. The five-year identify public health and

:14:34. > :14:37.prevention as crucial. The government has a plan to recruit

:14:38. > :14:47.5000 extra doctors I'm not sure how that can be done. Isn't shown in

:14:48. > :14:50.evidence of impact on unnecessary deaths is a good strong ratio of

:14:51. > :14:56.nurses to patients. I think is important to look at that how that

:14:57. > :15:01.would be funded. They're not allowed immigrant measures, how they going

:15:02. > :15:09.to do that? Why you not we get nice way to finish the work on save

:15:10. > :15:15.nursing levels throughout hospitals? I think the Honorable Lady. She has

:15:16. > :15:22.about the deficits across the system. It is true that there chars

:15:23. > :15:29.writers for the heaviest deaths are committed. Because is a very

:15:30. > :15:38.challenging time. The demographics have gotten worse every year. Also

:15:39. > :15:41.because of the effect of charges of agencies have leveled after the

:15:42. > :15:48.increase in staffing levels in the wake of mid staffs. We seek to

:15:49. > :15:55.address that which is the cause of deficits,. Also very high salaries

:15:56. > :15:58.and consultancy spending, taken together that'll make a significant

:15:59. > :16:02.difference to hospital trust finances. She talked about public

:16:03. > :16:07.health and we have accepted is very important part of achieving it.

:16:08. > :16:17.We'll be investing ?60 million in public health across the England to

:16:18. > :16:28.make sure we can achieve the contrast that she seeks. We do have

:16:29. > :16:40.5000 additional GPs. We are trying to meet our target. I can. ... What

:16:41. > :16:43.became clear in the process of nice-looking at staffing hospitals

:16:44. > :16:48.as the chief nurse identified when look more broadly at teen staffing

:16:49. > :16:56.levels and not just individual positions within wards. That is why

:16:57. > :17:03.the chief nurse had been commissioned together and a safe

:17:04. > :17:10.setting guidance will show a broader and more complex understanding what

:17:11. > :17:15.has you appreciate from her time in the wards. To be very clear, that

:17:16. > :17:21.setting guidance only be signed off what has the approval of all the

:17:22. > :17:30.people who need to approve it. It will require that when it comes up.

:17:31. > :17:35.Mr Speaker there are experiences that feature is that it takes a

:17:36. > :17:42.medium to long-term plan to really pay tribute to the work of the

:17:43. > :17:47.staff... What he assured me that any measures put in place with a savage

:17:48. > :17:58.and across the country will take long-term view... A full five-year

:17:59. > :18:05.plan is vital at the very least stop I cannot agree more. It is important

:18:06. > :18:12.to you larger plan. So they they probably NHS. It is for the first

:18:13. > :18:23.time able to see five-year view. It means that it can begin to transform

:18:24. > :18:27.proper. Was able to do that. We're trying to bring a kind act was to

:18:28. > :18:31.hospitals crossing one. To make sure they provide the sustainable

:18:32. > :18:44.staffing levels is available but water levels. -- quality levels. We

:18:45. > :18:53.had a little government adjusting ten. It is now the worst deficit in

:18:54. > :19:03.England. Can you say anything about service in waiting times. Thank you

:19:04. > :19:08.for your cooperation and help to trying inform the future. This only

:19:09. > :19:16.worked as a cross party effort. We have particular problems in Devon,

:19:17. > :19:21.they're really very urgent. That action needs to be led by local

:19:22. > :19:25.traditions and I'm very glad that they're talking productively

:19:26. > :19:35.together. My job, as his is it to provide support. I want to give the

:19:36. > :19:43.Minister an example from my constituency. My local hospital and

:19:44. > :19:51.that downgrading the nursing banks to save money. And now has a big

:19:52. > :20:00.crisis in staff morale. The quality of care has fallen. Bartz has the

:20:01. > :20:12.largest public finance deal in the country. It is due to pay back ?7

:20:13. > :20:17.billion on a ?1 billion load. Half was interested. Then I ask the

:20:18. > :20:19.Minister very directly what is he doing to help trusts renegotiate

:20:20. > :20:28.these costs and tackle these legal loan sharks of public sector. It is

:20:29. > :20:32.a brave line of attack to go on something by the previous

:20:33. > :20:38.government. All I can say that I've held a number of meetings with her

:20:39. > :20:43.colleagues on Bartz. I can fully understand the difficult position

:20:44. > :20:52.she finds it often. Had a meeting this morning about it, and to last

:20:53. > :21:02.week, and next week. I'm very happy discuss this in greater detail with

:21:03. > :21:10.her and in the future. The government from additional money of

:21:11. > :21:14.the NSH. Should ticket out of hospitals and so could my Honorable

:21:15. > :21:19.friend assured me that the money will not go too hard to deficits but

:21:20. > :21:28.to change services to be delivered as needed. My Honorable friend space

:21:29. > :21:31.from experience. What ?1 billion was at the side of the transformation

:21:32. > :21:36.fund, but the principle behind the transportation fund will go to those

:21:37. > :21:43.trust of our beginning to show transmission. That is to the

:21:44. > :21:46.betterment of patients as a whole. We have to see transmission

:21:47. > :21:52.otherwise money will be wasted as it has done in years previously. What

:21:53. > :22:02.help and assistance can he get to the service in Leicester. Ten

:22:03. > :22:10.ambulances were parked outside the infirmary, ten out of 25 tried to

:22:11. > :22:15.hang of her patients will stop 836 occasions last year they had to be

:22:16. > :22:19.waiting between two and four hours to hand over those patients. All we

:22:20. > :22:26.need in Leicester is not more consultants but a better system of

:22:27. > :22:32.management. There are Honorable gentleman raises issues which have

:22:33. > :22:34.been severe in Leicester and I'm happy to have a separate meeting

:22:35. > :22:38.with him to discuss what is being done about it. Across the country

:22:39. > :22:44.resting a better performance this winter than last. That is because of

:22:45. > :22:48.the matter planning is been put in the NHS. The sure their precious

:22:49. > :22:54.what's happened during winter. I've been aware of this issue and I like

:22:55. > :22:59.to ensure him that it will be fixed in time for next year. I woke in a

:23:00. > :23:08.certain question because clinical and patient decision-making is being

:23:09. > :23:16.dictated by eight catastrophic deal signed in 1998 that will see us

:23:17. > :23:24.paying for Halifax hospital with cost ?64 million ?773 million. We've

:23:25. > :23:32.had to close the infirmary. You please watch and urgent review into

:23:33. > :23:39.these deals. I'll discuss this tomorrow afternoon. That review is

:23:40. > :23:47.already taking place in the Department of Health. They did go

:23:48. > :23:50.around the country at the time aiming to build new hospitals

:23:51. > :23:56.without telling people that all been put on a credit card, one that will

:23:57. > :23:59.be paid by future generations. It is a great shame as create a great deal

:24:00. > :24:09.of uncertainty. Under the specific issues and heart is filled with the

:24:10. > :24:12.address tomorrow. The demon is to be very clear whether he accepts the

:24:13. > :24:18.view of Simon Stevens that they're the funding gap in social care as is

:24:19. > :24:24.projected to be the case into the 20 and 24 that will simply increase the

:24:25. > :24:33.deficit of the NHS. Funding of social care remains unfinished

:24:34. > :24:46.business. Does he accept that case? I said the case. I called for ?1

:24:47. > :25:02.billion additionally to the NHS -- ?8 million. ... Hospital just then

:25:03. > :25:07.Charlie for a very long time between 1998 in 2010 at registered a

:25:08. > :25:15.different set of five at 12 years. In a struggling as well from backlog

:25:16. > :25:19.of maintenance. What more can be done to help hospital trusts the

:25:20. > :25:25.massive backlogs of ongoing maintenance. My Honorable friend is

:25:26. > :25:30.entirely right. I went to Oxford a few weeks ago and indeed buildings

:25:31. > :25:34.are in a poor state of repair. They do not enable clinicians to provide

:25:35. > :25:40.a high state of care in many cases it is difficult to do so. The trust

:25:41. > :26:00.acquires additional capital. Markets is to cousin to me earlier

:26:01. > :26:04.today. She was... That do not happen. This morning, I was told

:26:05. > :26:09.that there were no appointment available anywhere. And no idea

:26:10. > :26:15.where one would be available. My constituent is frantic. The Minister

:26:16. > :26:19.an earlier response mentioned the outcomes. This is the reality of the

:26:20. > :26:24.NHS in 2016 for my constituent and millions like her. There's no

:26:25. > :26:29.funding or staffing available. Not is for those appointments, but for

:26:30. > :26:32.urgent appointments related to cancer. One of the Minister going to

:26:33. > :26:37.do for my constituent and how quickly will you get a

:26:38. > :26:41.And it would take to the other but don't do that over the

:26:42. > :26:46.course of the last Parliament we have come from being one of the

:26:47. > :26:49.worst performance in cancer outcomes in Europe to victory to the table.

:26:50. > :26:52.We have done that the rapid improvements in the kind of forget

:26:53. > :26:57.we have been doing with people suffering cancer. That is a lot more

:26:58. > :27:01.to do. Money is flowing in. It provides to our outcomes are

:27:02. > :27:06.happening. I would look at them as I know might Honorable friend will do

:27:07. > :27:12.as well. And he would be happy to take it on as a personal case. Thank

:27:13. > :27:21.you Mr Speaker. The last decade under the previous Labour government

:27:22. > :27:28.the health care trusts so chronic deficits and services closed such as

:27:29. > :27:33.a any and maternity at Crawley hospitals. Services are now

:27:34. > :27:37.returning to that hospital. Can he confirm that this government is

:27:38. > :27:43.investing ten our NHS over the course of this Parliament? Can he

:27:44. > :27:50.also confirmed that the NHS has been cut in Wales when Labour is in

:27:51. > :27:56.control? I can confirm the amount of money available to the NHS will be

:27:57. > :28:01.-- will increase to ?1.6 billion. It is not just the case of money, it is

:28:02. > :28:04.about concentrating on quality and efficiency across services. Not only

:28:05. > :28:14.has money been cut, but there has not been that concentration on

:28:15. > :28:19.quality and efficiency. The hospital that serves my constituents and

:28:20. > :28:24.Cambridge, one of the chest with one of the most challenging deficits, it

:28:25. > :28:33.is urging people not to attend accident and emergency. They explain

:28:34. > :28:38.that. The Conservatives in Cambridgeshire. We have got a crisis

:28:39. > :28:48.and social care and health coming -- how funding. Full

:28:49. > :28:53.that that Dick Tate will be with John?

:28:54. > :29:01.I can't assure him that we will not stop to find efficiencies across the

:29:02. > :29:05.NHS because the important thing is to make sure that we are channeling

:29:06. > :29:09.money right to the front line, and that means in his hospital as it

:29:10. > :29:13.does others. Sometimes that will mean finding it -- and it fantasies

:29:14. > :29:22.and making sure that money is recovered it. Problems go further

:29:23. > :29:25.than AMD. It is a hospital with special measures. I am confident

:29:26. > :29:34.under the stewardship of the new chief executive but that will be

:29:35. > :29:39.managed. Can I ask my Honorable friend to thank the secretary of

:29:40. > :29:45.state for supporting the cause for investment and my hospital. The

:29:46. > :29:48.additional 15 million pounds will create a state of the art

:29:49. > :29:55.ophthalmology unit, and allow the hospital to socialise out patients.

:29:56. > :30:06.Following from a ?9 million urgent care centre, this is the earth --.

:30:07. > :30:10.The reality of the fact as my Honorable friend has recounted from

:30:11. > :30:14.his own constituency is that satisfaction in the NHS as I near

:30:15. > :30:20.record levels, and this satisfaction is at record lows. We rank number

:30:21. > :30:26.one and the Commonwealth rankings of Commonwealth and -- of rankings in

:30:27. > :30:32.the world. The fact is that people feel the NHS is getting better. That

:30:33. > :30:35.is why it is proof that it is safe in the hands of the conservative

:30:36. > :30:41.party and will continue to do so for the next five years. The health

:30:42. > :30:49.economy has Bencic yearly challenge for a number of years. When I meet

:30:50. > :30:54.with the stress, I get the impressions that they are trying to

:30:55. > :31:01.run up an escalator of finance. Like any government do to help in these

:31:02. > :31:08.circumstances? I recognise the problems identified by the Honorable

:31:09. > :31:12.member. There are particular problems there. I know that NHS

:31:13. > :31:16.improvement is looking in detail at the moment, and I hope that working

:31:17. > :31:20.with the existing trust management will be able to see improvement over

:31:21. > :31:27.the next year. That is the point of what NHS improvement is trying to

:31:28. > :31:30.do. To get him reassurance, if he is able to produce results, than his

:31:31. > :31:39.constituents will see a quality of NHS outcomes. I am afraid to say

:31:40. > :31:43.that I have the great displeasure of seeing first-hand the catastrophe

:31:44. > :31:47.that was NHS connecting for health under the previous Labour come to my

:31:48. > :31:55.current administration. I have to admit that. Would he admit to me

:31:56. > :32:00.that this government has put to me a strong regulatory regime and also

:32:01. > :32:07.investigations team NHS improvements CQC, will also prevent failures. I

:32:08. > :32:10.can give my Honorable friend that reassurance. He should know that

:32:11. > :32:16.every Monday when I meet with leading officials and the NHS the

:32:17. > :32:19.people and of the Care Quality Commission, and they make joint

:32:20. > :32:24.decisions. This system has to work as if you have different parties in

:32:25. > :32:29.different places we will provide the solutions that we need. That has

:32:30. > :32:33.been the place since the history of the NHS. We have a systemwide

:32:34. > :32:41.response to the challenges facing this health service. The CQC is

:32:42. > :32:44.downgrading trusts like the York teaching hospital due to the

:32:45. > :32:48.national NHS staffing crisis. In addition, this trust will have an

:32:49. > :32:52.?11 million deficit for the first time at the end of this year. Can I

:32:53. > :32:57.ask the Minister what was the marker risk assessment heats up around

:32:58. > :33:02.patient safety before it the government agreed to enforce NHS

:33:03. > :33:08.improvement letters advising trust to cut headcount? The CQC is not

:33:09. > :33:12.downgrading NHS. The CQC provides that important function of the NHS

:33:13. > :33:16.which gives open and transparent accounts of how good quality is an

:33:17. > :33:21.individual trust. The first time patients are able to see whether

:33:22. > :33:25.their trust is safe, well and effective. That means that we can

:33:26. > :33:30.have a proper and solid response where there are failings. Into many

:33:31. > :33:35.parts of the NHS, there is not the level of quality that other parts

:33:36. > :33:47.already deliver. CQ she's... -- signed a life. -- shines a light. My

:33:48. > :33:51.trust is predicting a deficit of 21.9 million by the end of the

:33:52. > :33:55.financial year. In light of the CQC reported a few years ago criticising

:33:56. > :33:59.staffing levels, I know it huge amount of effort is going to

:34:00. > :34:03.increasing those levels that are at Kos. Especially the premium that you

:34:04. > :34:06.have to pay for medical staff. I wonder if the Minister can be my

:34:07. > :34:10.constituents that we will not be returning to the staffing levels for

:34:11. > :34:15.the CQC criticised in the past having to do the deficit of nearly

:34:16. > :34:20.21.9 million. I can give that reassurance to the Honorable Lady.

:34:21. > :34:26.When I was in whole a few months ago there was a fantastic series of

:34:27. > :34:35.conversations with those leaving the hospital and is an different lines

:34:36. > :34:44.and warts. -- awards. It is about tailored response -- responses. I am

:34:45. > :34:51.committed to ensuring that she sees it. Thank you Mr Speaker. I would

:34:52. > :35:02.like to ask the Minister to join me in visiting the CQC cc she -- CCG.

:35:03. > :35:10.The reason I ask is that since my hospital has been rated good in

:35:11. > :35:17.care. The chief exec -- executive is now managing on the interim to try

:35:18. > :35:22.to help them. She has previously helped -- worked to help them out

:35:23. > :35:30.with a problem. We are not properly vetted chief executive. They are

:35:31. > :35:33.having to recruit nurses. We have a wonderful working relationship

:35:34. > :35:39.between the CCG, the hospitals, and the adult social care and health.

:35:40. > :35:44.Lots of pulling going on. Never the less, we are facing a 7 million

:35:45. > :35:52.deficit, and it is not a tariff that is is doing it. Would you please for

:35:53. > :36:02.it -- enjoy me for a constructive discussion to see what is happening?

:36:03. > :36:08.I think the Honorable Lady. I know that my Honorable friend was

:36:09. > :36:14.enlisted last year, and I plan to go back to Manchester in the next few

:36:15. > :36:22.weeks and the Northwest. I will go and do a regional tour so that I

:36:23. > :36:28.would very much like to meet her and talk to her chief executive. She

:36:29. > :36:33.raises an interesting point which is that the chief executives and many

:36:34. > :36:38.trust across the NHS have exceptional quality. It is easy to

:36:39. > :36:42.knock some of the managers and the NHS. There are some fantastic

:36:43. > :36:49.managers and I'm sure she has one and her constituency. He is aware of

:36:50. > :36:58.the upcoming tour. It sounds like a most exciting prospect. Can I ask

:36:59. > :37:04.the Minister to think very carefully about what is happened up and down

:37:05. > :37:09.the country where health trusts like my own and Huddersfield were very

:37:10. > :37:14.successful for many years, but only very recently and I think it's

:37:15. > :37:18.something to do with the destabilisation of the clinical

:37:19. > :37:21.commissioning groups, that so many problems have been entered into the

:37:22. > :37:27.general light of the hospital just to. We and Huddersfield do not want

:37:28. > :37:33.a closure of a and he and our hospital. We don't want the closure

:37:34. > :37:36.will of the main hospital and of a prisoner by a smaller one. Will he

:37:37. > :37:42.look carefully and forensically at what has happened and Huddersfield.

:37:43. > :37:50.And it's not just the whipping boy of the unfortunate independent

:37:51. > :37:56.financial arrangement that was made under John Major, but signed under

:37:57. > :38:00.Tony Blair. The Honorable gentleman is an experienced member of

:38:01. > :38:04.Parliament. He will know that there is a time when every organizations

:38:05. > :38:08.and changes in the structure of the NHS and the way the hospitals were

:38:09. > :38:16.disposed was decided in Whitehall. That has changed as a result of the

:38:17. > :38:20.2012 act. It is led by clinicians. Changes are led by local clinicians,

:38:21. > :38:23.and ultimately be sold secretary of state must defer to their opinion.

:38:24. > :38:26.There is an independent reconfiguration panel which

:38:27. > :38:32.stretches them and the secretary of state has also concluded that the

:38:33. > :38:35.local panel of clinicians have been correct. That is the right thing to

:38:36. > :38:40.do. In this case, I hope that we will do the same. I expect that we

:38:41. > :38:43.will. The look carefully at the individual concerns that he visits

:38:44. > :38:52.in the debate and mentor that I take them on board and really than to the

:38:53. > :38:59.CCG. The trust asserts my constituency, A constituencies are

:39:00. > :39:02.at a lack of -- a high. Stay away from A and mustered his life or

:39:03. > :39:07.death. The trust is predicting a deficit of ?29 million by the end of

:39:08. > :39:10.the financial year. By the staff work hard and difficult --

:39:11. > :39:20.circumstances, that the Minister believed that this is an example of

:39:21. > :39:28.a run NHS? There are many examples of success and the NHS. There are

:39:29. > :39:29.hospitals and CCG Z and community health organizations delivering

:39:30. > :39:35.exceptional care within the existing budgets. What we need to do is to

:39:36. > :39:40.make sure that the spread that practice and approach to care across

:39:41. > :39:48.the NHS. There are some parts that are not doing that, and it is in

:39:49. > :39:51.that ability to level up to universalize to ensure that everyone

:39:52. > :40:01.has the level of care that those in the best areas of the NHS already

:40:02. > :40:06.received. Last week my hospital trust reported a ?25 million

:40:07. > :40:13.deficit, and exact anon clinical regulatory freeze. This solution was

:40:14. > :40:31.to pay its chief executive 350 have been archived ?250,000. -- ?350,000.

:40:32. > :40:35.Given the honourable gentleman's record of statements given to his

:40:36. > :40:39.constituents I have to say I would prefer very much the clinicians

:40:40. > :40:47.running Imperial than I do his own comments about this. On the one

:40:48. > :40:53.hand, we had the secretary of state suggesting that he wants a seven day

:40:54. > :40:58.a week NHS which I presume is not an empty slogan, and on the other hand

:40:59. > :41:01.we hear that ministers are calling for headcount reductions. That

:41:02. > :41:06.suggests that we are asking for pure people in the NHS to work longer

:41:07. > :41:15.hours. That is a recipe for staff over shop -- stretch. If the

:41:16. > :41:20.Honorable gentleman that it mischaracterizes situation than he

:41:21. > :41:31.might then ask -- able to ask aboard coherent question. NHS improvement

:41:32. > :41:35.that was looking for state .gov -- savings. The number of clinicians

:41:36. > :41:44.under this party have increased by 16,000 since 20 time, and that is a

:41:45. > :41:48.record that we are proud of. Order! I am grateful to the Minister and

:41:49. > :41:54.colleagues. The click without proceed to of the day. Bank of

:41:55. > :42:02.England and financial services build board second reading. Thank you.

:42:03. > :42:06.Order! I must inform the House that I have selected the amendment in the

:42:07. > :42:11.name of the Leader of the Opposition. To move the second

:42:12. > :42:23.reading of the bill. I called the Minister. Hear, hear! I beg to move

:42:24. > :42:31.that this bill not regret a second time. Following the crisis the

:42:32. > :42:38.government reforms the UK system of financial regulation, replacing

:42:39. > :42:41.these failed tripartite system. We have also taken concerted action to

:42:42. > :42:46.improve conduct across the banking sector and deal with the abuses and

:42:47. > :42:50.unacceptable behaviour of the past. The Bank of England has rightly been

:42:51. > :42:54.put back in charge of financial stability, and the financial conduct

:42:55. > :42:57.and Authority is a watchdog protecting consumers from sharp

:42:58. > :43:02.practices and making sure that bankers comply with the rules. Quite

:43:03. > :43:05.rightly, the powers and governance of these important organizations are

:43:06. > :43:13.closely reviewed and this bill makes some modest changes to these. The

:43:14. > :43:18.bills has three main aims. The first is to further strengthen the

:43:19. > :43:24.government's transparency to put it in the best possible position to

:43:25. > :43:27.fulfil its vital role in delivering monetary and financial stability. It

:43:28. > :43:31.allows the National Audit Office into the bang for the first time in

:43:32. > :43:35.its centuries old history. The second aim is to build on a

:43:36. > :43:39.concerted action that the government has already taken to drive up

:43:40. > :43:43.standards and financial services by extending the senior managers and

:43:44. > :43:47.certification regime across the sector including a tough new duty of

:43:48. > :43:52.responsibility for senior managers. The third aim is to support a

:43:53. > :43:57.creation of a secondary market for annuities protecting consumers for

:43:58. > :44:00.extended agreement of the pension wife died in service at introducing

:44:01. > :44:03.a requirement which an effect and sure certain individuals who are

:44:04. > :44:09.seeking to sell their annuities have received appropriate financial

:44:10. > :44:13.advice. I will give way. Will the Honorable Lady agreed with me that

:44:14. > :44:17.one of the real problems in the culture of thinking that we all want

:44:18. > :44:24.to get right has been the role of the auditors? Auditors that should

:44:25. > :44:28.have been there and spotted the dangers, and should have blown the

:44:29. > :44:32.whistle, and they did not do that. Is it not the accountancy profession

:44:33. > :44:40.and auditors that at the moment is still not addressing. He is right to

:44:41. > :44:43.highlight the importance of auditors. I know there are other

:44:44. > :44:47.activities in this place which will be considering the roles of auditors

:44:48. > :44:51.and the crash, but I think that what he will welcome in this bill is the

:44:52. > :44:57.fact of the National Audit Office for the very first time will have

:44:58. > :45:03.the ability to devalue -- two studies within the bank of England.

:45:04. > :45:09.I gave way. I'd welcome the interviews for my Honorable friend.

:45:10. > :45:14.Audits are always employed by the managers of banks or companies and

:45:15. > :45:19.they should be representing shareholders. If they want their

:45:20. > :45:26.contracts renewed private auditors provide a soft option for the

:45:27. > :45:33.managers... Independent in the public sector. He has absolutely

:45:34. > :45:38.correct that this bill specifically focuses on the role of the National

:45:39. > :45:45.Audit Office. One independent arm of government. He is right that this

:45:46. > :45:50.bill is not particularly focused on the role of auditors and private

:45:51. > :45:55.companies, but I that there are other parts of parliament that would

:45:56. > :45:58.be considering that in this session. Going back to be Bank of England,

:45:59. > :46:03.but me turn first to the reforms of the bill remain to the bank of

:46:04. > :46:06.England. The bill brings port a set of evolution changes to the

:46:07. > :46:09.government transparency and accountability of the bank. To

:46:10. > :46:14.ensure that it is on the best possible footing to discharge its

:46:15. > :46:18.expanded responsibilities. These changes, but those taken by the bank

:46:19. > :46:24.itself as part of its one admission, one thing strategic plan. The PRA

:46:25. > :46:29.stops being a subsidiary of the bank and is run by a committee of the

:46:30. > :46:33.bank. Another deputy governor is able to join the court, and the

:46:34. > :46:40.Treasury will be able to see and a vehement letter to another

:46:41. > :46:42.committee. To strengthen the transparency we will give the

:46:43. > :46:47.National Audit Office the power to the deck value for body studies at

:46:48. > :46:52.the bank, and following debates and the other place and with the NAL in

:46:53. > :46:54.the bank we have made sure that this important change is implemented in a

:46:55. > :47:02.way that protects the independence of the bank policymaking and the

:47:03. > :47:10.independence of the NAL. If it is on this point. I welcome the fact that

:47:11. > :47:16.the NAO is going to be looking at the bank, but they will need extra

:47:17. > :47:22.resources. Will she guarantee that the picture people who are employed

:47:23. > :47:30.will be representing the shareholders and that they will not

:47:31. > :47:34.come from the banking exceptionally. He points out the importance of

:47:35. > :47:38.having the right resources and the NAO. I have not have any specific

:47:39. > :47:41.representations of this, but I'm sure that the NAO will have a way of

:47:42. > :47:46.making its feelings known shouldn't require those resources. We are also

:47:47. > :47:52.making some changes and this bill to the bank's governing body known as

:47:53. > :47:57.the court. With most strengthen the governance of the bank by

:47:58. > :48:02.transferring the court to oversee performance of the bank. Following

:48:03. > :48:07.discussions and the other place to help guard against good thing, we

:48:08. > :48:11.have amended the bill so that aim majority of nonexecutive directors

:48:12. > :48:14.on court will continue to be able to initiate reviews of the bank's

:48:15. > :48:19.performance without needing to secure the agreement of the court as

:48:20. > :48:23.a whole. We will integrate prudential regulation more fully

:48:24. > :48:28.into the bank by ending beeper Digital regulation Authority status

:48:29. > :48:31.as a subsidiary of the bank. The PRA board will be replaced by an new

:48:32. > :48:36.committee with soulless possibility of it in the bank for the PRA's

:48:37. > :48:40.budget. This is modelled on the monetary policy committee and the

:48:41. > :48:43.financial policy committee. These changes will be made while still

:48:44. > :48:55.protecting the PRA's operational independence for one darkroom

:48:56. > :49:02.in order to strengthen governance and make the structures of the

:49:03. > :49:04.government were consistent. The bill harmonizes the legislations which

:49:05. > :49:13.underpins the three policy committees of the bank. The MPC,

:49:14. > :49:17.SBC, and the proposed PRC. The film is the committee to at least eight

:49:18. > :49:22.meetings a year from encouraged 12, and updates requirements for the

:49:23. > :49:27.timing MPC publications implementing the remaining recommendations of the

:49:28. > :49:32.Walsh review. Transparency and the bank of England monetary policy

:49:33. > :49:36.committee which was published in 2014. Alongside these changes, the

:49:37. > :49:42.bill builds on the existing arrangements and a strong working of

:49:43. > :49:44.transiting the bank and the Treasury but updating a formal framework for

:49:45. > :49:48.how the bank and Treasury should engage with the judge at the macro

:49:49. > :49:55.each other on public funds and financial stability -- stability

:49:56. > :49:59.risks. While maintaining the existing clear and separable of the

:50:00. > :50:03.bank and the Treasury in the event of a crisis. I move now to the

:50:04. > :50:15.second element of the bill... On that point. There is only slight

:50:16. > :50:22.concern that we are moving towards less tension since the microsystem

:50:23. > :50:27.between any bank in the Treasury. That would worry me and other

:50:28. > :50:34.members of this house. Is that true? Is are still... I would have thought

:50:35. > :50:41.this was a healthy tension between the two. He is right to highlight

:50:42. > :50:46.the importance of the operational independence of the bank of England.

:50:47. > :50:53.That is something that Gordon Brown brought in and 1997 that was I think

:50:54. > :50:58.his greatest legacy to our country. He will note that the motion that

:50:59. > :51:05.his colleagues have put out on the order paper today actually gives a

:51:06. > :51:13.stronger role for Treasury in the parliament and less independence. I

:51:14. > :51:18.hope that he will not support his front bench in terms of the recent

:51:19. > :51:23.amendment that they put on the order paper today. If I a Mr Speaker, I

:51:24. > :51:28.would move now to the second element of the bill. Is this on the first

:51:29. > :51:31.element? Following the plan my honourable friend just made, more

:51:32. > :51:36.wary and would be if there was a close relationship between the NAO

:51:37. > :51:39.and the Treasury. The NAO should be resizable to this house. The

:51:40. > :51:46.Treasury should not be able to get its tentacles on the NAO. He is

:51:47. > :51:49.absolutely right to recognise that the NAO is completely independent of

:51:50. > :51:54.the Treasury. I have a nominal roll on the Public accounts committee

:51:55. > :52:04.that the NAO is accountable to Parliament. I now move... On this

:52:05. > :52:13.perception in. I welcome the move with the MPC and the FTC. Does she

:52:14. > :52:20.not have any anxiety about these FCA held on a limb with a different

:52:21. > :52:24.status to the other committees? He is absolutely right to highlight the

:52:25. > :52:26.fact that the FCA is set up completely differently. I want to

:52:27. > :52:31.stress the similarity is the operational independence. In terms

:52:32. > :52:37.of the FCA, the Treasury is obviously able to appoint the chief

:52:38. > :52:42.executive, but the operational decisions are for the FCA Board and

:52:43. > :52:47.as we has made that very clear in recent weeks. I move now to the

:52:48. > :52:51.second element of the bill which will make changes to the senior

:52:52. > :52:55.managers and certification regime. As honourable members will know, the

:52:56. > :53:04.government is committed to driving up standards of conduct across the

:53:05. > :53:06.financial sector. That is why the government is replacing the

:53:07. > :53:13.discredited approved person was seen with a much more group last system

:53:14. > :53:20.legislated for in the previous government. Mr Speaker, I find it

:53:21. > :53:24.quite extraordinary that in the amendment they tabled Honorable

:53:25. > :53:29.members opposite see fit to describe it as reducing regulation financial

:53:30. > :53:38.services. This bill is a vital opportunity to remove what the

:53:39. > :53:44.parliamentary committee described as a complex mess for 60,000 financial

:53:45. > :53:48.services firms. All insurers, FCA regulated investment firms, and

:53:49. > :53:52.consumer credit firms, and replace it with a more targeted and robust

:53:53. > :53:57.senior manager and certification regime. Let me set out the benefits

:53:58. > :54:01.of the new regime and maybe they will reconsider their position. The

:54:02. > :54:05.approved person regime is a relatively broad unfocused regime

:54:06. > :54:09.and which all individuals who were considered to hold significant

:54:10. > :54:11.influence functions in the firm or dealt with customers would be

:54:12. > :54:20.subject to the regulators preapproval at a tick box exercise.

:54:21. > :54:32.Clarity of the top of hers was inadequate. Firms could pass the

:54:33. > :54:38.buck. The senior managers and certification regime tackles these

:54:39. > :54:41.problems head on. Firstly, it focuses regulatory preapproval on

:54:42. > :54:46.senior managers the key decision-makers of the top of firms.

:54:47. > :54:49.It enhances the accountability of these individuals through statements

:54:50. > :54:53.of responsibilities, documents that give clarity on which a senior

:54:54. > :54:59.manager is responsible for each area of the firm's business. And through

:55:00. > :55:03.the proposed statutory duty which require senior managers to take

:55:04. > :55:10.reasonable steps to prevent breaches of regulations and their areas of

:55:11. > :55:13.response ability. I give way. I am grateful. Does the Minister agree

:55:14. > :55:17.with me that the senior managers regime now cuts through the

:55:18. > :55:26.accountability far more than the commission discovered. The

:55:27. > :55:30.regulatory regime at the time had the effect of enforcing senior

:55:31. > :55:33.managers to create ignorance on what is going on within their

:55:34. > :55:37.institutions. This act absolutely reverses that so that senior

:55:38. > :55:43.managers have to know what is going on but their institutions of a

:55:44. > :55:47.content responsibility. My honourable friend who was a

:55:48. > :55:49.distinguished member of the Parliamentary Commission on Banking

:55:50. > :55:56.is right to highlight that one of the issues that his committee --

:55:57. > :56:00.commission highlighted was a fax back the approved persons regime may

:56:01. > :56:08.be difficult to pin down besides ability. The purpose of this to

:56:09. > :56:14.regime with everything articulated that when managers are reported on

:56:15. > :56:20.an annual basis is a much stronger regime. It delivers more flexibility

:56:21. > :56:27.as well and the regulated infest the macro enforcement powers. Including

:56:28. > :56:32.those with whom they have not approved. In brief, this expansion

:56:33. > :56:36.of the new regime to all authorised financial services firms will

:56:37. > :56:41.enhance personal responsibility for senior managers as well as providing

:56:42. > :56:44.a more effective and proportionate means to raise standard of conduct

:56:45. > :56:53.for key staff are private. Given the imperative is that the regime with a

:56:54. > :56:59.statutory duty of response responsibility delivers, the reverse

:57:00. > :57:03.burden of proof is not necessary. Extending the new regime to all

:57:04. > :57:07.authorised financial services firms it is important to consider whether

:57:08. > :57:12.under these new circumstances the application of the reverse burden of

:57:13. > :57:15.proof to any or all friends as appropriate. The majority of the

:57:16. > :57:18.firms that the region will not apply to our small and it would not be

:57:19. > :57:23.proportionate to apply to these firms by retaining it for the

:57:24. > :57:26.banking sector alone Weavers raise serious

:57:27. > :57:34.I think the Minister for giving -- taking the point. The sheets

:57:35. > :57:41.labelled as happened in the two and a half years since the 2013 act was

:57:42. > :57:48.passed by her government to change to reverse the burden of proof what

:57:49. > :57:56.this change this to have years? The original measures are due to come in

:57:57. > :57:59.as he knows on the 7th of March 2016. What is becoming increasingly

:58:00. > :58:04.clear in terms of the reversed burden of proof is that, I think

:58:05. > :58:11.we've got some quotes here from Andrew Bailey, from the committee

:58:12. > :58:17.which the honourable gentleman sets, where he said and I quote, I support

:58:18. > :58:23.the change because what the change does is turn the process around

:58:24. > :58:29.empathy boxes on us, the regulator. I'd rather us have that. With legal

:58:30. > :58:32.questions around it over human rights. I do not want to come back

:58:33. > :58:36.or have one of my successes come back to you in the future and have

:58:37. > :58:41.to say I am sorry, we cannot use this regime in the way it would was

:58:42. > :58:47.intended. Because is always doubtful we can make it stick. I do not think

:58:48. > :58:52.this has the sufficient probability of being effective. I could read up

:58:53. > :58:59.rather quotes from other members of Parliament. I have to make some

:59:00. > :59:08.fairly rapid progress at this point. I would give when that point. It is

:59:09. > :59:16.the case, it surprised a good number of us on the treasury committee that

:59:17. > :59:25.both the PRA and the MCA -- SCA cable for us and supported the

:59:26. > :59:36.reversal of the burden of proof. -- at CA. She has made great emphasis

:59:37. > :59:45.on the need of the certification resume. Can she say whether she is

:59:46. > :59:57.asked for a report on a blessing those. And put in the public domain.

:59:58. > :00:03.Progress is inaccurate. -- United inadequate. In terms of

:00:04. > :00:10.implementation it is due to come into force on the 7th of March 2016

:00:11. > :00:16.that is pretty soon. In terms of rolling out, is going to photos of a

:00:17. > :00:20.larger organizations first. He is aptly writes that his committee, and

:00:21. > :00:27.I'm sure the treasury as well will want to see the regime rolled out as

:00:28. > :00:35.particularly two the systemic fans. For the 7th of March. Madam Deputy

:00:36. > :00:41.Speaker I'm going to turn out to the third topic of the bill, which is

:00:42. > :00:43.the extension of the important new freedoms this government is giving

:00:44. > :00:49.to allow people to take control of their retirement savings. It will

:00:50. > :00:53.help to make sure that those consumers who are able to a cell

:00:54. > :00:57.annuity income from the second market are supported. There are two

:00:58. > :01:02.key measures here, the first will extend the page and white service

:01:03. > :01:05.from those two April 2017 will be eligible to sell their annuity

:01:06. > :01:10.income to the secondary market and annuities. This whole include the

:01:11. > :01:17.offer of guidance to those of the income to the annuity. Bad Bennett

:01:18. > :01:27.varies -- beneficiaries as was the primary annuity holder.

:01:28. > :01:38.On the 19th of January at the Chancellor set out the

:01:39. > :01:41.governments... I would like to take this opportunity to announce this

:01:42. > :01:51.new duty will be introduced as a government amendment of this bill.

:01:52. > :02:06.I'm going to try and make some progress very quickly. The concern

:02:07. > :02:09.many had was advice required from modest annuities. Can she have a

:02:10. > :02:20.guarantee that what have been offered is actually advice and not

:02:21. > :02:23.merely guidance? He is right to highlight this distinction. His

:02:24. > :02:26.content to my constituents want help. They do not know whether

:02:27. > :02:32.they're asking for regulated advice or guidance. He will also be aware

:02:33. > :02:39.that we have done consultation market review. What closed in

:02:40. > :02:43.December. We are currently studying the responses to that consultation.

:02:44. > :02:51.With a view to seeing whether or not the current staging is appropriate

:02:52. > :02:56.and indeed legally. He would hear more this topic in due course. I

:02:57. > :03:00.need to make rapid progress now because I know there are many people

:03:01. > :03:07.want to contribute. The bill makes a number of changes. We are giving the

:03:08. > :03:23.secretary the power to make regulate. Those would be nonbinding

:03:24. > :03:27.Bremen letters. I'm more competitive framework for insurance businesses.

:03:28. > :03:34.Something that will help... Following debates and the other a

:03:35. > :03:37.change support our ambitions for a diverse financial sector financial

:03:38. > :03:40.sector by putting consideration of mutuality and other business

:03:41. > :03:46.organizations into both regulators guiding principles and there are

:03:47. > :03:54.also changes within existing banking groups... Pain of Scotland and

:03:55. > :04:00.Northern Ireland. Illegal moneylenders prey on vulnerable

:04:01. > :04:04.people in society. We will act now and is built to ensure that illegal

:04:05. > :04:09.money when the teams will have the funding they need to protect

:04:10. > :04:15.consumers and prosecute loan sharks. We will introduce an amendment in

:04:16. > :04:22.committee to give the treasury the power to protect people. The

:04:23. > :04:28.inimitable also to the power that the SCA would like a lady to fund

:04:29. > :04:31.their financial assistance. Madam Deputy Speaker in conclusion the

:04:32. > :04:35.measures that I've outlined today by the previous performance of

:04:36. > :04:38.financial regulations. The government has a commitment to

:04:39. > :04:40.delivering a settlement for financial services. By indicating I

:04:41. > :04:45.see now that the right honourable member is now on the opposition

:04:46. > :04:48.front bench by indicating he does not support this bill deposition

:04:49. > :05:06.have put themselves on the wrong side the argument. Hear, hear! By

:05:07. > :05:18.voting against this bill... They'll be voting against extending the

:05:19. > :05:21.benefits... By voting as the builder will be voting is making sure that

:05:22. > :05:25.those consumers who will be able to sell their annuity income through

:05:26. > :05:29.the new secondary market had access to pension white guidance and where

:05:30. > :05:34.appropriate take financial advice to support the decision. As well as

:05:35. > :05:39.that there'll be voting against proposals to put the new duty on the

:05:40. > :05:43.SCA to cap early exit charges for those of to access the pension

:05:44. > :05:47.freedoms. And ensure that illegal moneylending teams have the funding

:05:48. > :05:55.they need to protect consumers and prosecute loan sharks. Madam Deputy

:05:56. > :06:01.Speaker Labour Party was wrong then on financial services and it is

:06:02. > :06:10.wrong again today. The question is that the bill now be read as second

:06:11. > :06:15.time. They demanded that the Speaker. I date to remove the recent

:06:16. > :06:18.amendments on the order paper. Financial services have been

:06:19. > :06:25.discussed at length and let's upon in this house since the financial

:06:26. > :06:31.crash. The financial services act in just 12 and the reform in 2013 have

:06:32. > :06:35.been passed. The bank in England idol services bill now being brought

:06:36. > :06:39.to the south. This bill is made up of two parts. Firstly amendment and

:06:40. > :06:45.the charges of the Bank of England and family financial services. We

:06:46. > :06:52.believe the bickering led to carry out its work in the most efficient

:06:53. > :06:54.way possible with transparency and accountability in its

:06:55. > :06:57.decision-making. Serving it as of the people whose it is here to

:06:58. > :07:17.represent them. We also believe that the new bankers and the financial

:07:18. > :07:22.sector... And to... DeBakey crisis of historic proportions is thousand

:07:23. > :07:28.eight. Is it not the case that it was Labour who rescued banks in

:07:29. > :07:37.2008. It is now conservatives who are selling the shares of taxpayers?

:07:38. > :07:47.I think my Honorable friend for intervention, he she is quite

:07:48. > :07:51.correct. I think he is showing as well as his ablation in his numerous

:07:52. > :08:02.meetings and their outcome with Google. Effect of a revelation and

:08:03. > :08:06.services industry the sector serve the interest of the economy does not

:08:07. > :08:13.hurt people with small or medium-size businesses. Our country

:08:14. > :08:16.needs for long-term growth. Getting the balance of the Galatian right is

:08:17. > :08:21.an important task for any government. As a task which

:08:22. > :08:26.governments the world fail to fulfil the last decade. A task which has

:08:27. > :08:35.been attempted since the bankers crisis of 2008, but however it is a

:08:36. > :08:42.task that which today the government threatens to send back. The context

:08:43. > :08:45.of this bill is vital. To understand our concerns on the side of the

:08:46. > :08:50.house and the very reasonable concerns of the demands of the

:08:51. > :08:57.public, we are not eight years off and economic crises. The brought the

:08:58. > :09:05.financial services sector and the country to its knees. Saw banks to

:09:06. > :09:14.begin failed build up by the state. What has he learned about the

:09:15. > :09:19.mistakes but it is made under Labour we saw the successes he is not

:09:20. > :09:31.talking about? I think the Honorable member for his intervention.

:09:32. > :09:37.Concerned members at the time... This bill shows that the banking

:09:38. > :09:44.crisis have not been learned on this side of the house. So eight years

:09:45. > :09:49.later because behaviour and bankers bonuses remain in the news. It's

:09:50. > :09:53.additional fines continue with hundreds of millions of pounds

:09:54. > :10:03.issued and finds but still only one person in prison despite all the

:10:04. > :10:11.damage done and despite a series of commissions. We should all know the

:10:12. > :10:15.public remain angry about what a number of top bankers did to our

:10:16. > :10:20.economy and to our society I would give way to my Honorable friend.

:10:21. > :10:26.Thank you. You make an excellent speech. It was astonishing double

:10:27. > :10:31.for 2008 the bringing sector did not appear to spot the crisis that was

:10:32. > :10:37.coming because it was to busy making money for themselves. They demanded

:10:38. > :10:42.that these bigger and I think my Honorable friend who has extensive

:10:43. > :10:46.experience in these matters. It is rather troubling the same people who

:10:47. > :10:49.now say there is no risk of financial trite crisis ever again

:10:50. > :10:52.with the very same people in the very same sector that were saying

:10:53. > :10:56.before the government agent that everything was fine. There was no

:10:57. > :11:04.risk of disaster at the time. How wrong they were. Despite the

:11:05. > :11:11.entirely justified anger about what the bankers did to our economy and

:11:12. > :11:14.to our society, the Chancellor has turned the beggars crisis into a

:11:15. > :11:23.crisis of public spending. With the policy of sending cards which there

:11:24. > :11:26.seems to be no end in sight. Looking at this bill it appears the

:11:27. > :11:32.Chancellor believes he can now turn back the clock in the banking and

:11:33. > :11:38.financial sector. Under this Chancellor things are going in the

:11:39. > :11:47.wrong direction. He is old enough shares with a very significant loss

:11:48. > :11:54.of the taxpayer. He appointed Angela Knight and defended the top bankers

:11:55. > :11:57.of the tax crisis. And decided he could do without the continue

:11:58. > :12:06.services of the respected chief executive of the Financial Conduct

:12:07. > :12:13.Authority, margin weekly. We've been told that his successor planned sure

:12:14. > :12:18.the Chancellor is finally being appointed its fine with the reverse

:12:19. > :12:24.burden of proof. I wonder if it's prematurely departed predecessor

:12:25. > :12:30.would have said the same was back the SCA's public review assets that

:12:31. > :12:33.other counsel in its investigation of the promotion of tax evasion by

:12:34. > :12:38.HSBC has been brought to a premature conclusion. I know that we will be

:12:39. > :12:48.hearing more about the SCA any debate in this house this evening.

:12:49. > :12:56.The government presents the services bill. To make changes to the Bank of

:12:57. > :12:59.England's structure however this is a key concern added this bill is a

:13:00. > :13:11.major change the regulation of senior bankers. In order to attempt

:13:12. > :13:14.to change senior bankers conduct and deliver treasure in the and

:13:15. > :13:21.accountability in decision-making. I'm talking of the presumption of

:13:22. > :13:27.response ability. An so-called reverse burden of proof. Firstly I

:13:28. > :13:31.wish to say we welcome the extension of the senior manager regime to

:13:32. > :13:37.senior managers of all regulators financial firms. We do not accept

:13:38. > :13:42.the governments case for ending the presumption of responsibility the

:13:43. > :13:47.top managers in baking. The presumption of responsibility has

:13:48. > :13:54.currently set out a place managers. While there has been a regular later

:13:55. > :14:02.contravention responsible. In order to be found if you missed out

:14:03. > :14:10.misconduct in. This bill removes that own this on senior bankers. The

:14:11. > :14:17.onus is entirely reasonable and entirely proportionate. This

:14:18. > :14:20.experience tells the reddish people it is entirely necessary. Misconduct

:14:21. > :14:27.and misdemeanors and financial services are not merely a till from

:14:28. > :14:37.history, and 2015 the FCA had to find firms over ?900 million. There

:14:38. > :14:46.were the scandal, and finds I will give way. The minister indicated

:14:47. > :14:53.that voting against this bill members would be put in members of

:14:54. > :14:59.the public at risk from further abuses. Voting against this bill and

:15:00. > :15:03.getting a change so that the reverse burden of risk is put back in place

:15:04. > :15:11.that we are actually safeguarding against the abuses of the past. They

:15:12. > :15:15.demanded that the Speaker, I think my Honorable friend for playing this

:15:16. > :15:20.that's a point. People outside this place will be shocked to hear that

:15:21. > :15:24.as a result of his bill senior bankers in the top firms will have

:15:25. > :15:32.less guards on a personal response ability. I will give way. I think

:15:33. > :15:41.the honourable gentleman for giving way. The measures he objects to our

:15:42. > :15:50.clause 22 of this bill. Why is the voting against these measures? They

:15:51. > :15:56.demanded that these bigger, maybe others to to her that derailed parts

:15:57. > :16:00.of the wrist of that amendment of the circuits as it is the right

:16:01. > :16:03.thing to do. It is so reasonable and necessary in fact the policy was

:16:04. > :16:11.introduced with Kosovo supports that she had forgotten and was really

:16:12. > :16:20.proposed by the punditry of any standards led by the party opposite

:16:21. > :16:25.of the Labour Party. And with the Democrats new debates of the new

:16:26. > :16:31.minister who moved into law. I have to echo a point BBC made by the

:16:32. > :16:38.Honorable member sitting in the front bench that was passed as

:16:39. > :16:44.recently as December 2000 13. The resumption of responsibility has yet

:16:45. > :16:47.to come into effect. It into effect in March this year. And remains

:16:48. > :16:51.untested. The muster member this is a safeguard brought in by the very

:16:52. > :17:02.same Chancellor who is now seeking to scrap it. The results of

:17:03. > :17:10.responsibility has now gone. Ashley has the result of responsibility has

:17:11. > :17:19.everyone... Some of these banks have been affected by this are actually

:17:20. > :17:23.interestingly what has been interesting that the reverse burden

:17:24. > :17:29.of proof is now been reversed. That man is to be take box operation and

:17:30. > :17:33.now although they've got is a much more responsibility for management

:17:34. > :17:49.than they ever had before. As a far stronger measure... Thank you. Every

:17:50. > :17:53.time we have received correspondence from bankers those matter, every

:17:54. > :17:56.time we have been listening to bankers in this matter, they seem

:17:57. > :18:00.desperate for the reverse burden of proof to be scrapped. They were

:18:01. > :18:04.saying how dreadful it would be and how it is totally unjustified in

:18:05. > :18:08.their view. This regime is fine and we can just return the things and

:18:09. > :18:11.there's no of repeat of the financial crisis a thousand eight

:18:12. > :18:17.interview. Virtually I do believe they were wrong. We need to remember

:18:18. > :18:20.that this presumption of responsibility of the reverse burden

:18:21. > :18:24.of proof with a safeguard brought in by the very same Chancellor who is

:18:25. > :18:30.now seeking to scrap it. In 2013 the Chancellor said that he had called

:18:31. > :18:36.for a thorough and intense investigation into how to improve

:18:37. > :18:41.standards the banking system and how the Parliament has delivered. The

:18:42. > :18:48.Chancellor has announced that he was pleased. Of course as many

:18:49. > :19:01.recognitions was this promote -- presumption of response ability. The

:19:02. > :19:06.Chancellor was not alone. Indeed the Honorable member for the party

:19:07. > :19:08.opposite Day and financial secretary, explained he was

:19:09. > :19:13.introducing new rules to promote higher standards of all bank staff.

:19:14. > :19:18.He said his government was reversing the burden of proof to the senior

:19:19. > :19:27.staff are held accountable regulatory breaches. Will the

:19:28. > :19:32.Honorable member from a party opposite who was briefly on the

:19:33. > :19:38.treasury, said it is critical to bringing about the individual

:19:39. > :19:42.accounts ability that members want to see across our financial sector

:19:43. > :19:50.that you want to see across the regime reversing the burden of

:19:51. > :19:54.proof. Although steps are vital. His party colleague, the Honorable

:19:55. > :19:57.member from Northeast Cambridge said that there cannot be any doubts

:19:58. > :20:01.about the rep -- merits of reversing the burden of proof. They reversed

:20:02. > :20:07.the burden of proof is assuming welcome. I could go one further.

:20:08. > :20:13.Instead I'll ask a question that deputy speaker, what has changed?

:20:14. > :20:20.What or who has so dramatic a change there mind of the Chancellor that

:20:21. > :20:23.the treasury committee in October the Honorable member with the

:20:24. > :20:28.question many of us are thinking when he asked the Chancellor whether

:20:29. > :20:32.they proposed scrapping the other prisoners of responsibility was in

:20:33. > :20:37.his words, largely a result of long grain by the banks which has the

:20:38. > :20:46.flavour of getting stronger. I will do. I interesting argument that he's

:20:47. > :20:49.making, and a very powerful speech. We agree with me in the Chancellor

:20:50. > :20:54.has said that he had not met with the banks in the lead up to the

:20:55. > :20:58.general election. He met with bankers on five separate occasions.

:20:59. > :21:08.Does the general election presumably to discuss this bill. The Chancellor

:21:09. > :21:16.is a victim of Stockholm syndrome. Thank you. Of course it is correct

:21:17. > :21:23.that Chancellor meets with senior bankers. What does concern me and

:21:24. > :21:33.concerns many people as it is late, is that the Chancellor appeared to

:21:34. > :21:38.be acting in their interests. Following the comments by the

:21:39. > :21:45.Honorable member for Newark who told the media of the Begu it is in their

:21:46. > :21:50.political masters were captured by banking leaders in the run-up to the

:21:51. > :22:02.meltdown, it is my Honorable friend that concerned that's... Thank you.

:22:03. > :22:09.He hits upon a very important point, the role of the city minister. The

:22:10. > :22:13.role of a shadow city minister, and the role of the government is not to

:22:14. > :22:19.represent the interests of the city to population, but it is to bill

:22:20. > :22:23.their Democratic function. The government is not there to take the

:22:24. > :22:27.orders of the City of London. Guess you must listen to the City of

:22:28. > :22:33.London and value their contribution. But they're not the public. --

:22:34. > :22:37.representative on earth. I will continue my reflections on a change

:22:38. > :22:45.of mind or cut -- Chancellor has had. He asked his Chancellor and

:22:46. > :22:51.very logical sensible risible question. He asked why did you not

:22:52. > :22:57.wait for the regime to come divorce. To enable assessment of it. How it

:22:58. > :23:03.works. Before admitting this for the change. It is a change based upon no

:23:04. > :23:09.evidence. That is the worst kind of change possible. That was a very

:23:10. > :23:16.serious question posed, indeed. Of course banks are having to put

:23:17. > :23:22.significant effort to meet requirements of the 2013 bill. When

:23:23. > :23:31.that bill was supported on a cross party basis in parliament, this was

:23:32. > :23:34.already abundantly clear. Now the concern has a medical U-turns and

:23:35. > :23:39.decided to test the procedures that supported in the first place. It is

:23:40. > :23:43.rare indeed for a poor measure to be abolished before it even been

:23:44. > :23:48.introduced. How the public feel when they learn the Chancellor is

:23:49. > :23:54.strapping a duty on senior managers in banks, a duty that was welcomed

:23:55. > :23:59.as necessary across party basis before it even been admitted. The

:24:00. > :24:05.public's D concern of the behaviour of senior bankers should extend it

:24:06. > :24:12.to the Chancellor who it appears are doing the bankers bidding. Doesn't

:24:13. > :24:15.that Chancellor and does this government understand the widespread

:24:16. > :24:19.anger and distrust amongst the public when it comes to the banking

:24:20. > :24:27.system. The public are quite right to remember that because of the

:24:28. > :24:33.bankers behaviour people lost their homes. Because of the bankers

:24:34. > :24:37.behaviour people lost their jobs. We should not ever forget that was the

:24:38. > :24:41.bankers crisis that caused the deficit which this government has

:24:42. > :24:48.relied upon as justification for the political choice to go public

:24:49. > :24:51.services, to come public funding, to the incomes of working people, and

:24:52. > :24:54.to cut support of the most vulnerable people and our

:24:55. > :25:03.communities. I will give way. Thank you. In 2005 there was a ?43 billion

:25:04. > :25:08.budget deficit. Number for the banking crisis, there was a struggle

:25:09. > :25:21.deficit to the breaking prices brought out. Thank you. He makes a

:25:22. > :25:27.point that does not bear too much political scrutiny. It was the case

:25:28. > :25:37.the global financial crash caused the huge increase in the deficit and

:25:38. > :25:42.also stalled and halted the economy. It also gave the government the

:25:43. > :25:50.opportunity to have a reason to carry out its ideological desire to

:25:51. > :26:00.cut the way of the states and to cut public services. This bill comes to

:26:01. > :26:08.us from the other place but has been considered an debate from every

:26:09. > :26:15.state. The bill has changed. In our recent amendments recognise that

:26:16. > :26:18.changes are indeed welcome. The bill has not changed significantly

:26:19. > :26:22.enough. The bill is into parts and with regard to the first part of

:26:23. > :26:35.bill we do recognise some positive movements. That was insufficient.

:26:36. > :26:42.Any powers of oversight of new modes. -- movements. The government

:26:43. > :26:51.has moved on his proposed power of veto. On a national audit of

:26:52. > :26:58.investigations. It remains under negotiation and remains unpublished.

:26:59. > :27:01.With the other assets of the House of Lords that was not under

:27:02. > :27:05.agreements. Average the Chancellor asking for the memo of referendum be

:27:06. > :27:09.presented to this house while this bill is making its passage through

:27:10. > :27:14.Parliament. The minister has responded explaining that the

:27:15. > :27:21.memorandum of understanding is not complete. The discussions... The

:27:22. > :27:30.Minister has explained that she will write the government of the Bank of

:27:31. > :27:40.England to see if they will be a position to share the passage of the

:27:41. > :27:45.bill. In a case of this, it can only be right of this house job site to

:27:46. > :27:51.understand any question that transpires would be a cause of

:27:52. > :27:55.concern. The bill replaces the authority with a new relation

:27:56. > :28:03.committee and appears of all sides including those in the government's

:28:04. > :28:09.side had expressed concern... Have I have arguments that link met Deputy

:28:10. > :28:11.Speaker the bill also replaces the results of responsibility for the

:28:12. > :28:19.duty of responsibility and the opposition peers challenge this at

:28:20. > :28:30.report stage there was the government on the script through on

:28:31. > :28:35.this measure. It would be that the scrapping of the responsibility is

:28:36. > :28:40.it highly controversial and entirely reasonable. A Slade is not the case.

:28:41. > :28:43.Is any wider context of the Chancellor new financial services do

:28:44. > :28:49.this in particular gives us real cause for concern. Madam Deputy

:28:50. > :28:53.Speaker, we believe we need healthy and effective banking sector that is

:28:54. > :28:58.appropriately regulated and serve the interest of the whole economy,

:28:59. > :29:05.does I hurt ordinary people, and though this vital needs for

:29:06. > :29:10.long-term growth. We believe the conservative government climbs down

:29:11. > :29:15.from responsibility that previously supported will hinder, not help the

:29:16. > :29:22.film its. Personal responsibility is vital for the operation of our

:29:23. > :29:29.regulatory system. This policy by the Chancellor reduces the personal

:29:30. > :29:38.responsibility which the prominent commission recommended in its 500

:29:39. > :29:41.major sport -- page report. It does not make any sense unless of course

:29:42. > :29:48.the Chancellor is just following bankers orders. The startling and

:29:49. > :29:51.precipitous scrapping of a widely welcome measure show that there is a

:29:52. > :29:58.very real risk of failing to learn the lessons of the bankers crisis.

:29:59. > :30:02.That concern of our parts is very much wider than the presumption of

:30:03. > :30:06.responsibility but also to the role of the government and the work of

:30:07. > :30:14.the SCA in the programme of selling off for example RBS shares at a loss

:30:15. > :30:19.to the taxpayer. It says let's get back to business as usual. Is the

:30:20. > :30:22.bankers business as usual that brought Britain to the brink. And

:30:23. > :30:29.with the bankers business as usual that caused the deficits, and

:30:30. > :30:32.returning to business as usual will make another financial crisis with

:30:33. > :30:38.disastrous consequences for those we to represent in this place even more

:30:39. > :30:41.likely. And that's in order to clear up any confusion, as why we are

:30:42. > :30:50.asking government to date for our recent That is remind that the 12

:30:51. > :30:55.children people wishing to speak in this debate. It's important debate

:30:56. > :30:59.to follow. So everyone restricts himself to ten minutes including

:31:00. > :31:03.interventions, everyone will get in and will have plenty of time for the

:31:04. > :31:09.backbench debate. And to set an example the chairman of the banking

:31:10. > :31:16.I feel I may disappoint you slightly but I will do my very best. LAUGHTER

:31:17. > :31:21.. I just want to fine a point of agreement. I strongly agree that

:31:22. > :31:24.there is widespread mistrust of the banks still and a great deal of

:31:25. > :31:27.damage has been done. I think it is agreed that there is a lot more work

:31:28. > :31:34.to do to sort it out. There is a lot more work to do from the banks as

:31:35. > :31:37.well. To demonstrate that they are worthy of trust, the recent kind of

:31:38. > :31:41.scandals and the IT failures are just too examples of how much

:31:42. > :31:45.further we have to go. Rather than talking in great detail about the

:31:46. > :31:49.Clause of this bill, I think it might be helpful to take advantage

:31:50. > :31:51.of the second reading debate to say something more generally about the

:31:52. > :31:57.progress we have met with regulation. The last time that a

:31:58. > :32:01.banking bill was brought before parliament into thousand 12, on

:32:02. > :32:06.behalf of the Treasury committee, asked the government to think again,

:32:07. > :32:10.and described the bill as defective. And that parts of the bill are

:32:11. > :32:17.virtually useless. They listened to what the Treasury commission had

:32:18. > :32:19.said and they change the bill. Electrification, adequate

:32:20. > :32:23.electrification of the rink is now part of legislation. This time I

:32:24. > :32:27.don't think there is need for fundamental rethinking. This bill is

:32:28. > :32:32.very much in the right direction. It brings the bank more up-to-date as

:32:33. > :32:35.an institution and in doing so it should greatly improve the scope for

:32:36. > :32:41.making the bank accountable to follow and the public. Into thousand

:32:42. > :32:45.11, the committee published a report Anaheim's proportion of the

:32:46. > :32:50.proposals in this bill originate or have reached in that report. This is

:32:51. > :32:53.the sixth piece of legislation in the House that the House is been

:32:54. > :32:58.asked to look at in response to the financial crisis. As I said a moment

:32:59. > :33:03.ago, before examining the specific measures, it is helpful to keep all

:33:04. > :33:06.this in perspective. Banking supervision has been rethought and

:33:07. > :33:11.fundamentally reconstructed three times in the past 30 years. That is

:33:12. > :33:15.a heck of a lot in historical perspective. The bank of England

:33:16. > :33:21.initially resisted most of these changes. First they resisted the

:33:22. > :33:25.creation of the vacancies supervision, that in 1998 the bank

:33:26. > :33:29.complained it had not been consulted about the new supervisory body of

:33:30. > :33:34.the FSA. On that occasion of course maybe they were right. Gordon

:33:35. > :33:37.Brown's creation of the FSA separated banking supervision from

:33:38. > :33:44.central banking and it brought a new light touch approach to supervision

:33:45. > :33:49.in body principle, that will make some clear rules. If you'll comply

:33:50. > :33:53.with them, we went into fear. This left far too much scope for

:33:54. > :33:59.responsible buccaneers to pursue reckless business strategies,

:34:00. > :34:03.sometimes by myopic shareholders. At the same time the bank decided to

:34:04. > :34:07.define his role much more narrowly and concentrate on his new

:34:08. > :34:13.responsibilities. In doing so they were seduced by the benign economic

:34:14. > :34:17.conditions at the time, which recall the great moderation and just as bad

:34:18. > :34:21.was reassured by the audited, but nevertheless misleading and in some

:34:22. > :34:25.cases useless accounts of the Big Bang. The Treasury committee is

:34:26. > :34:31.trying to do something about inadequate auditing right now. The

:34:32. > :34:35.bank neglected its stability responsibilities right through the

:34:36. > :34:40.period up to thousand seven. It felt to rise to the challenge, what

:34:41. > :34:44.liquidity seized out into thousand seven. Perhaps worst of all, the

:34:45. > :34:49.statutory responsibilities of the FSA and the banks created a large

:34:50. > :34:53.supervisory gap. Nobody paid enough attention to the banking systems as

:34:54. > :34:59.a whole. Even when it was known for example that the banks were becoming

:35:00. > :35:03.excessively reliant on wholesale deposits for funding. In principle

:35:04. > :35:08.it was to be filled by the circle tripod hide. That money in value.

:35:09. > :35:12.This is very relevant to the NL you that is being referred to. In

:35:13. > :35:16.practice it was considered as an irrelevant backing to the

:35:17. > :35:22.tripartite, by all three of the parties at the time. Its principles,

:35:23. > :35:28.we later learned, never met prior to the crisis. Parliament was largely

:35:29. > :35:37.asleep on the job. We were all looking through a glass darkly. Some

:35:38. > :35:45.raise is of concern. For what it's worth I argue that the tripartite

:35:46. > :35:48.was an accident waiting to happen. The government was neglecting

:35:49. > :35:52.systemic risk. Those were all partial warnings. There was no

:35:53. > :35:56.particularly comprehensive picture. The multiple failures up to thousand

:35:57. > :36:01.seven were certainly not just a result of bad supervisory

:36:02. > :36:08.arrangements. These were aggravated by complacent government and the

:36:09. > :36:15.city Parliament. -- sleeping public. To some degree but still feel

:36:16. > :36:20.failing. Shareholder discipline in particular was and is still lacking.

:36:21. > :36:25.Limited liability brings a limited sense of responsibility. It implies

:36:26. > :36:30.an unlimited possibility on taxpayers. The bailouts have added

:36:31. > :36:35.to moral hazard. They have made it essential that the objectives and

:36:36. > :36:40.organizations of banking supervision of the fundamentally rethought.

:36:41. > :36:46.Hence we got to where we are now, Twin Peaks. Crudely supervision is

:36:47. > :36:56.lacking. Thanks and the SCA is it possible for conduct. This is an

:36:57. > :36:59.amazing experiment. Its parents need particular care. That means a

:37:00. > :37:05.particular responsibility for Parliament to keep an eye out. The

:37:06. > :37:09.number of issues have already presented themselves for attention,

:37:10. > :37:13.for example it is becoming clear that the progenitor risk management

:37:14. > :37:19.is not just about adequate capital, but proper conduct of business. The

:37:20. > :37:23.shocking treatment that we have seen, meeting out to customers has

:37:24. > :37:28.triggered massive fine. UK banks have paid about ?30 billion in fines

:37:29. > :37:34.since to thousand nine. In theory does fines should be enough to wake

:37:35. > :37:41.up even the sleepiest shareholders. But so far they have not. Certainly

:37:42. > :37:44.not enough. The systemic implications of conduct risk also

:37:45. > :37:47.make it essential that the Bank of England and the FCA be better

:37:48. > :37:51.coordinated than they were in the days of the calamitous tripartite.

:37:52. > :37:59.Parliament needs to keep a close eye on that. But important of all, the

:38:00. > :38:03.bank has huge new parts, some which are enhanced in this bill. Our runs

:38:04. > :38:08.itself can no longer be left to the bank. It is a matter of considerable

:38:09. > :38:12.public importance. That is why the Treasury committee has been present

:38:13. > :38:19.for years. The bank should abandon the style of government with a

:38:20. > :38:27.failing are not as a court of. They need a modern system. One fit for

:38:28. > :38:32.the. That is where this bill comes in. It does a good of the statutory

:38:33. > :38:36.heavy lifting to enable a modern board to be created. The bill

:38:37. > :38:41.rationalizes the demarcation. This is the main effect of the bill. The

:38:42. > :38:45.bill but rationalizes the debarkation of the backcourt and the

:38:46. > :38:47.executives of the bank, which previously contained some curious

:38:48. > :38:54.anomalies created after after to thousand seven, by underground

:38:55. > :39:00.policymaking. The PRA will no longer be a subsidiary of the bank. There

:39:01. > :39:04.will be a part of the bank. PS PC will no longer be a subcommittee of

:39:05. > :39:07.court. The oversight of the executives will be a responsibility

:39:08. > :39:16.of the courts itself, rather than the subcommittee. The bill also

:39:17. > :39:20.provides for the appointment of another deputy governor. Perhaps in

:39:21. > :39:24.passing I say over the 300 years that the banks have been around.

:39:25. > :39:31.They have managed to rub along quite well with one governor. In 1998 it

:39:32. > :39:33.acquired a second one. Then the financial services act into thousand

:39:34. > :39:41.Aitken financial services. Now we told it needs a fourth. I wonder how

:39:42. > :39:44.many we really need. Maddow deputy Speaker, it is great to the credit

:39:45. > :39:48.of the current government that they grasp the importance of being

:39:49. > :39:52.required to explain themselves before Parliament in greater depth.

:39:53. > :39:59.The bank initial resistance to the Treasury committee, have largely

:40:00. > :40:07.evaporated. With accountability they have graphs and can come greater in

:40:08. > :40:12.a greater enhanced authority. Scrutiny, far from weakening the

:40:13. > :40:15.banks effectiveness can enhance. The bill also provides for the

:40:16. > :40:18.Comptroller and auditor General to have for the first time in a role in

:40:19. > :40:24.the audit of the bank accounts. That sounds sensible at first, but that

:40:25. > :40:29.was an easy win for the chips are budgeted. But Madam Deputy Speaker,

:40:30. > :40:35.I think it's flatters to deceive. We certainly should not expect too much

:40:36. > :40:40.of it. The NAL lacks the expertise to do this kind of work. They are

:40:41. > :40:45.already trying to rectify that by hiring some people. There are extra

:40:46. > :40:49.cost involved. There is a bigger risk. I'm sure they can learn the

:40:50. > :40:54.skills. It is essential that the controller should not be induced

:40:55. > :40:57.whether by accident or by design. They should not bring pressure on

:40:58. > :41:06.the bang in a way that had the first leak -- adversely affect. All the

:41:07. > :41:11.funding. This is not an idle concern Madam Deputy Speaker. After 1997, I

:41:12. > :41:15.am told the bank was encouraged with all the changes that were being

:41:16. > :41:23.made, with supervision going to the FSA to save money. The bank cut back

:41:24. > :41:29.about -- amount they were spending on financial stability and lost some

:41:30. > :41:32.of its institutional experience of financial crashes, high-quality

:41:33. > :41:36.people as a result. What might have looked like a good value for money

:41:37. > :41:44.ideally, with time turnout in retrospect to be a big mistake. Sign

:41:45. > :41:49.up at the end AO treads carefully. Strong value for money might I add.

:41:50. > :41:54.Then there is the risk that the over mighty government problem is now

:41:55. > :42:01.reinforced by the removal of the PRA subsidiary status. The independence

:42:02. > :42:06.of the PRA or PRC as it will now be its essential. A singles point of

:42:07. > :42:11.systemic risk in the government exist. Parliament will need to keep

:42:12. > :42:16.alert to protect the PRA for independence. On that score, I think

:42:17. > :42:25.more transparent to good health. I have a proposal of my own. The PRA

:42:26. > :42:33.could itself consider making more of its rulings, not just to the

:42:34. > :42:36.managers but also to shareholders. That is the people supposed to be

:42:37. > :42:43.responsible for these companies. It would also cost me, making the

:42:44. > :42:47.information public. At the same time, a rebuilt and provide

:42:48. > :42:52.opportunity for challenge to the PRA as reasons for its rulings. Said

:42:53. > :42:56.this should be considered. I think there's a lot more to think through

:42:57. > :43:01.before it can be done. In the meantime, the PRA appears to be

:43:02. > :43:05.accepting and relating and more modest proposal of the Treasury

:43:06. > :43:09.committees. That relates to banking and competition. It is well-known

:43:10. > :43:14.that the challenge of banks knew in the market can be impeded by orders

:43:15. > :43:18.capital requirements. A few weeks ago, I wrote to the chief executive

:43:19. > :43:20.of the PRA to suggest that the average of capital requirements

:43:21. > :43:25.established be published, together the average -- average of challenges

:43:26. > :43:30.so a comparison could be made between the too. I am pleased to say

:43:31. > :43:33.the PRA are now looking into that. Madam Deputy Speaker, right at the

:43:34. > :43:36.heart of the bill is a strengthening of the court. A strong support is

:43:37. > :43:41.needed to ensure the policy committees are doing what they

:43:42. > :43:43.should be doing and they will need to be forthcoming when the Treasury

:43:44. > :43:51.committee asked them for technical and other support. When we need

:43:52. > :43:54.information and reports, occasionally for investigations, we

:43:55. > :44:04.will expect the court to be cooperative. Before I sum up, just

:44:05. > :44:08.one relatively minor point I'll request has not been renamed the

:44:09. > :44:14.board of the Bank of England. That is a mistake. What's in a named? I'm

:44:15. > :44:18.a strong supporter of most traditions except when they get in

:44:19. > :44:27.the neck -- a way of good out come. This one is on the cusp at best.

:44:28. > :44:30.Perhaps the Chancellor has been slipped -- to slipped up in

:44:31. > :44:37.18th-century court. I think it's time it went. Now with six

:44:38. > :44:40.relatively new pieces of legislation called sometime should pass now to

:44:41. > :44:45.establish their effectiveness. That will mean a lot of lead work to buy

:44:46. > :44:48.supervisors and regulators to implement. A couple of quick

:44:49. > :44:54.examples will suffice and that I will sum up. First, regulators have

:44:55. > :44:59.not reached the point where they can allow a bag to fail. They have told

:45:00. > :45:05.us this. What does that mean? That means that the taxpayer could still

:45:06. > :45:12.be at risk. Secondly, several banks still seemed to be to manage, posing

:45:13. > :45:17.a threat to financial stability and increasing the risk of misconduct.

:45:18. > :45:21.The proposals of the banking could -- commission will address that

:45:22. > :45:24.direct. Detailed invitation toward certification and particularly has

:45:25. > :45:29.been produced under so far. I was concerned that the Minister is not

:45:30. > :45:36.pressing more vigorously to make sure that certification of the FSA

:45:37. > :45:41.model will be fully implemented. I would like to end with just one part

:45:42. > :45:46.observation. With all the legislation, we are making some huge

:45:47. > :45:49.demands on both the bank and the SCA. It may be that we are close to

:45:50. > :45:55.the point of revelatory and supervisory overload. By that I mean

:45:56. > :45:59.the government and parliament could be raising expectations of what they

:46:00. > :46:06.can achieve and to appoint where they will never be perceived to have

:46:07. > :46:10.succeeded. We need to ask just how much national regulation can achieve

:46:11. > :46:17.in an open financial world. The truth is, perhaps not that much.

:46:18. > :46:21.Certainly less than we think. We probably can't stop the next

:46:22. > :46:28.financial crisis. The best we can hope for is to delay it, to reduce

:46:29. > :46:31.its impact by developing somewhat stronger institutions, including

:46:32. > :46:34.financial institutions, and to give us a better prospect from regulators

:46:35. > :46:37.who are a bit more alert and prepared than they were into

:46:38. > :46:43.thousand seven and to thousand eight. In the long one, competition

:46:44. > :46:47.must take more of the regulatory strength. In markets for most

:46:48. > :46:53.products and services, customers can go with their feet. Barriers to

:46:54. > :46:58.market entry are tolerably low. Businesses with weak balance sheets

:46:59. > :47:02.or poor standards they go to the wolves. But neither of those are the

:47:03. > :47:07.case in banking. We are a long way from that point, where competition

:47:08. > :47:11.can be a full substitute even for conduct regulation. The contagious

:47:12. > :47:16.risks inherent in the banking system would make supervisory withdrawal in

:47:17. > :47:21.the market even more hazardous. So until competition is much stronger,

:47:22. > :47:26.and marketed disciplines warmer straight, there'll be no substitute

:47:27. > :47:31.for strong and interventions Bank of England as an effective condo

:47:32. > :47:35.regulatory. Therefore overruled and with some weaknesses, and this bill

:47:36. > :47:42.takes a step in the right direction. It takes a step in the direction of

:47:43. > :47:54.supporting that direction. Hear, hear!. We have about ten minutes.

:47:55. > :48:00.LAUGHTER. It is always a great pleasure to follow the member who

:48:01. > :48:06.chairs the Treasury committee. 99 times out of a hundred I would bow

:48:07. > :48:10.to his wife words indeed. His father Terry of knowledge also leads me to

:48:11. > :48:14.think that he should be one of the regulatory rather than sitting on

:48:15. > :48:18.the back bench in Palma. However in this instance I cannot follow him

:48:19. > :48:25.and I cannot follow the Honorable member. It pains me. I have to try

:48:26. > :48:29.and get the Honorable member to understand why it was on the side of

:48:30. > :48:35.the House, and those of us cannot accept the bill. It is to do

:48:36. > :48:41.fundamentally to do with the shift away from the reversed burden of

:48:42. > :48:47.proof. To do that now, given the backlog of distrust of the banking

:48:48. > :48:51.system. To do it after the reversed burden of proof was put into

:48:52. > :48:57.legislation and just as it was about to come into operation, would only

:48:58. > :49:01.make the public less accepting of what is going on. It will make the

:49:02. > :49:09.public sphere that yet again and the banks have let themselves off the

:49:10. > :49:15.hook. It would be better to let the legislation went out for a few years

:49:16. > :49:18.and see how it works in practice. The madams gave us very good reason

:49:19. > :49:22.to say after so much legislation, maybe it is now a time to pause and

:49:23. > :49:26.see how the legislation works in practice. We are changing

:49:27. > :49:31.legislation at the last moment, having passed it to years ago, and

:49:32. > :49:35.not having implemented it. We should do that. We should see how the

:49:36. > :49:42.burden of proof works first. That is why I will be supporting my

:49:43. > :49:50.Honorable friend. I'm supporting him in pause in the bill as it stands.

:49:51. > :49:54.Would he accept that some of the evidence that would have been in

:49:55. > :49:59.effect on the excesses of the bank, the fact of the banking cells were

:50:00. > :50:09.not keen on it and therefore they knew it would be ineffective? I am

:50:10. > :50:14.trying to avoid pointing the finger and making inferences. What I will

:50:15. > :50:21.do is that I will quote the Honorable member. " After the Labour

:50:22. > :50:28.scandal emerged into thousand 14, subsequent to the banking commission

:50:29. > :50:35.said the following "As Time passes the pressure for reform will weaken.

:50:36. > :50:42.Is it not?. The old system failed. Maintaining part of the stealth

:50:43. > :50:47.system or for the convenience of realtors, must not be allowed to

:50:48. > :50:52.happen." I think we are getting both. I think we are getting banged

:50:53. > :51:06.loudly but we're also getting the I think, one in the quiet time. Member

:51:07. > :51:12.Maguire made a reasonable point. He said the bill will actually place

:51:13. > :51:15.the duty of responsibility, a very detailed duty of responsibility and

:51:16. > :51:19.Law for senior bankers to take all reasonable steps to prevent

:51:20. > :51:24.wrongdoing. But at the same time it places the onus on proving that that

:51:25. > :51:32.responsibility was discharged, on the regular tours. This suddenly

:51:33. > :51:38.gives the regulators a job. From a sedentary position absolutely. But

:51:39. > :51:45.as the member pointed out time after time after time, the regulators have

:51:46. > :51:48.been implicated. So I don't want a situation where it is then up to the

:51:49. > :51:55.regulators to prove that something went wrong in the new regulatory

:51:56. > :51:59.regime. Meanwhile they were probably responsible for it. I wanted honest

:52:00. > :52:08.upon the bankers themselves. I think it is worth that some of the reasons

:52:09. > :52:14.against the presumption of the reversed burden of proof. One thing

:52:15. > :52:22.that has been put forth by Andrew Bailey is that senior bankers, when

:52:23. > :52:29.the next prices, long, will rush off to the European courts and claim

:52:30. > :52:36.that there are having their human rights taken away. That is rubbish.

:52:37. > :52:42.I think possibly the parliamentary commission was a little bit unwise

:52:43. > :52:50.to use the phrase reversed the burden of proof. But in fact we are

:52:51. > :53:00.not talking about a criminal law, where you are guilty until proven

:53:01. > :53:13.innocent. We are talking about when an infraction occurs in banking, the

:53:14. > :53:17.responsibility the infraction is there under the present government.

:53:18. > :53:20.The infraction is being responsible for an activity in which wrongdoing

:53:21. > :53:27.has taken place not for the wrongdoing itself. I will give the

:53:28. > :53:35.slip an example. It is a criminal in fence -- a fence to be in charge of

:53:36. > :53:41.the boathouse. They have to prove that you were in charge of the House

:53:42. > :53:51.that does not have to prove that she will argue anything. LAUGHTER What

:53:52. > :53:54.the regime offers us is placing managers and responsibility for

:53:55. > :53:57.their banks, for activities of their banks, and when disaster takes

:53:58. > :54:02.place, they have to prove why they failed. They have to prove why they

:54:03. > :54:12.failed from stopping it from happening. Then everyone hides

:54:13. > :54:23.behind. The other arguments for Mr Bailey, I think he is making angst

:54:24. > :54:28.extraordinarily intelligent speech. I think he does hit on the point. It

:54:29. > :54:34.is possible for bankers to be able to provide a tick box operation in

:54:35. > :54:38.order to prove that they have undertaken every measure they

:54:39. > :54:41.possibly can to prevent that action from taking place. Therefore it is

:54:42. > :54:45.very easy for them to get around this. Under the reversed burden of

:54:46. > :54:52.proof rulings and legislation they can get around this. The point

:54:53. > :54:55.behind reversing this, is that actually you can't have a tick box

:54:56. > :55:00.operation to say that you are trying to make sure that you comply with

:55:01. > :55:04.this, because it is a much more esoteric way of writing a bank. It

:55:05. > :55:11.is a lot for it difficult for the bankers to escape from the rules if

:55:12. > :55:17.something does go wrong. I respect the logic of the Member for his

:55:18. > :55:21.argument. Sadly we will never get a chance to put into practice. Seven

:55:22. > :55:25.we will never get a chance to see the legislation which he voted for

:55:26. > :55:31.in the last Parliament put into practice and want to fulfil. I do

:55:32. > :55:37.look forward to the Honorable member and I will hurry up. I would like to

:55:38. > :55:41.find out why he changed his mind. I'm interested briefly in Mr

:55:42. > :55:50.Bailey's other arguments. This was the tick box. In the sense that if

:55:51. > :55:55.you reversed the burden of proof yet again, will happen is that senior

:55:56. > :56:00.bank officials will hold in the seminars, with their trading for, is

:56:01. > :56:09.planning to them why doing this sort of thing that happened in the

:56:10. > :56:13.scandal are wrong. They will come when an inevitable crisis happens

:56:14. > :56:16.with a list of who these folks are, and that they told the traitors that

:56:17. > :56:22.this should not happen and they did. Well this is not enough to actually

:56:23. > :56:27.fundamentally have lots of meetings. You have to change the culture of

:56:28. > :56:34.the banks. It is important I think to remember and I hope the Minister

:56:35. > :56:38.remembers this, the type of the parliamentary commissions report on

:56:39. > :56:44.banking standards. The title was changing banking for good. The

:56:45. > :56:50.problem is this bill. There's a lot of good things in this pool. It does

:56:51. > :56:53.not change in banking for good. I'm afraid another half loaf will lead

:56:54. > :56:58.us more quickly to get another banking crisis, with nobody being

:56:59. > :57:03.responsible. Responsibility is what we have to have. So the choice

:57:04. > :57:10.between us. I will finish on this point. We are being offered the duty

:57:11. > :57:15.of responsibility a presumption of responsibility. Once upon a time,

:57:16. > :57:20.there was a convention, when the ship sank the Captain went down with

:57:21. > :57:26.the ship. He went down with the ship weather was his fault not. Dad was

:57:27. > :57:32.presumed it was his fault no matter what happened. He was in charge of

:57:33. > :57:35.the ship. What happens these days is that the ship goes down and the

:57:36. > :57:43.Captain gets out and gets into the first laughable. Then says it wasn't

:57:44. > :57:50.me I did my best. LAUGHTER I think that once upon a time ministers also

:57:51. > :57:53.resigned. I bet we have to go back to a situation where if there is a

:57:54. > :57:58.banking crisis, the Captain goes down with the ship and we assume he

:57:59. > :58:02.goes down with the ship whether it is his fault or not because he or

:58:03. > :58:07.she leading the bank, is the one in charge. If we don't change that

:58:08. > :58:15.culture, that will go a banking crisis is. Hear, hear!

:58:16. > :58:24.He made some very important points. Not least about the fact before

:58:25. > :58:37.2008, banking was one of the most highly regulated industries. While I

:58:38. > :58:41.agree with his view, it is also worth reflecting one of the reasons

:58:42. > :58:48.that we have not had the great challenge of banks is that at least

:58:49. > :58:51.in the retail banking, the banking world is insufficiently profitable

:58:52. > :58:55.to make it worthwhile for such competitors to come through. One of

:58:56. > :58:58.the reasons is because the regulation and ever more compliance

:58:59. > :59:06.in the retail world itself. Therefore it is critical --

:59:07. > :59:09.predictable have and concentrate upon the parole and the

:59:10. > :59:15.institutional architecture of the financial authority and in the

:59:16. > :59:17.changes that have been referred to about the government's original

:59:18. > :59:26.proposals on the singular managers raging. At the City of London MP,

:59:27. > :59:29.I've had my ear to the ground over 15 years as governments, labor,

:59:30. > :59:34.Coalition, and now conservative have not grappled with five fights a

:59:35. > :59:38.framework of regulation. -- have not grappled.

:59:39. > :59:48.At that all except this is easy work. It is important that we do not

:59:49. > :59:55.undermine our global competitive advantage in financial services. As

:59:56. > :00:02.my friend put out earlier, the most effective regulatory framework is

:00:03. > :00:11.going to be one that will be a international major. The fact is we

:00:12. > :00:16.be much poorer if regulation is designed to punish and bankers. By

:00:17. > :00:22.the same token, I do accept that sensible voices from the City of

:00:23. > :00:26.London, there are more than might be appreciated, but sensible voices

:00:27. > :00:31.rapidly recognise that the bridges public to need to see the risk

:00:32. > :00:35.future bailouts is kept to a minimum. For all the talk of

:00:36. > :00:38.maintaining free markets and global capital flows, the sheer importance

:00:39. > :00:43.of the financial system to the economy of the whole means there

:00:44. > :00:48.will be continued to be some guarantees from taxpayers in the

:00:49. > :00:52.event of a future financial crash. The price to be exacted by the

:00:53. > :00:59.public for that guarantee this rigorous regulation and compliance.

:01:00. > :01:03.Also at another price is the ongoing banking levy which is to introduce

:01:04. > :01:08.and will probably stay. At the Minister will recall, I have

:01:09. > :01:13.consistently argued eight gets the reversal of the burden of proof that

:01:14. > :01:19.have been proposed as a key element. I am pleased that we have not

:01:20. > :01:23.implemented well going to come into place for the 7th of March onwards.

:01:24. > :01:36.I therefore sure badly paid some tribute to the treasury. Likewise,

:01:37. > :01:42.I'm pleased that the government have fiercely resisted attempts to the

:01:43. > :01:45.other place to resist this. There is already plentiful evidence that

:01:46. > :01:48.senior executives of global banks were thinking twice about

:01:49. > :01:56.relocating, or continuing to be based here in the UK. The notion of

:01:57. > :02:00.criminal liability being added upon them perhaps working even in another

:02:01. > :02:05.jurisdiction in such liability be regarded to the court system as a

:02:06. > :02:12.strict risk, I think living to an exodus of senior management from

:02:13. > :02:16.London. Have my understanding that the SMR as originally proposed with

:02:17. > :02:19.the single biggest consideration in the ongoing considerations by HSBC

:02:20. > :02:24.and Barclays that they might headquarter outside the UK. Oil

:02:25. > :02:32.portrait of concerns in a bank levy, on scabs, -- were concerned.

:02:33. > :02:38.Probably the Chancellor has been correct... He is essentially saying

:02:39. > :02:44.from his knowledge of the treasury with blackmail to changing the

:02:45. > :02:50.legislation the? Viktor of legislation that is effective and

:02:51. > :03:03.enforceable. -- we need to make a legislation. If you're going to try

:03:04. > :03:09.to encourage the banking industry, we need to ensure that we're not it

:03:10. > :03:15.under a burdensome regulations that apply here in the UK and all applied

:03:16. > :03:20.across the globe. I also agree with what the Chancellor has done in

:03:21. > :03:26.relation to his denial is little of the contract for the first CD of.

:03:27. > :03:31.The concern went well beyond the well-publicized league of previous

:03:32. > :03:41.policy. Three big account being wiped off insurance company shares.

:03:42. > :03:46.-- ?3 billion. I suspect again that some on the other side of the house

:03:47. > :03:50.will go on as a badge of honour, but at four an industry regulated to let

:03:51. > :03:53.it be known that he regarded those working in the services as

:03:54. > :03:56.dishonest, is not the way to win hearts and minds. To be called up as

:03:57. > :04:00.he was, he would shoot first and ask questions later and chapping

:04:01. > :04:01.customers against the banking fraternity have played to the

:04:02. > :04:10.gallery. I'm also convinced that this

:04:11. > :04:14.approach originally benefited customers.

:04:15. > :04:35.... I have concerns who is awaiting for address of the Masonic products

:04:36. > :04:40.in 2007, when I find themselves at a time under the six-year rule to

:04:41. > :04:44.start legal proceedings because the Financial Services Authority advised

:04:45. > :04:48.him to live and set up on its own processes and the SCA has failed to

:04:49. > :04:53.devise a satisfactory structure for compensation. I'll personally was

:04:54. > :05:00.pleased to see the respected head of the regulation authority upon as a

:05:01. > :05:03.successor. I know with my own dealings with him he is no soft

:05:04. > :05:09.touch and I trust that his experience, at the Bank of England

:05:10. > :05:16.font size reputation for fairness restore credibility to this vital

:05:17. > :05:18.part of the infrastructure. His experience should hopefully ensure

:05:19. > :05:23.that he is able to take a comprehensive view of the financial

:05:24. > :05:27.system that avoids some of the mistakes of the discredited

:05:28. > :05:32.tripartite system. Going forward, I believe that city regulators and

:05:33. > :05:36.central bank governors would do well to give careful consideration to the

:05:37. > :05:41.famous Tobias by giving the wet soffits. Why say one word, when none

:05:42. > :05:45.will do. I fully endorse the caught closet of this bill that

:05:46. > :05:52.recalibrated duties at the SCA, how the government is now to a sceptical

:05:53. > :05:56.public and where financial community in this new iteration, the SCA will

:05:57. > :06:04.achieve more of what was intended when it was set up. Follow the

:06:05. > :06:10.spirit of the gentleman to point out there have been changes in other

:06:11. > :06:16.places, I'm not sure it goes quite far enough. I still think there's a

:06:17. > :06:20.risk of power is given to the government of the Bank of England to

:06:21. > :06:25.appoint over move deputy governors. Such appointments and dismissals

:06:26. > :06:36.will start a procedure in this house, but such a process... Why,

:06:37. > :06:41.should be tolerated here? And this is not an academic concern, we are

:06:42. > :06:47.enabling a governor of the central bank to attack his ball with people

:06:48. > :06:51.having to do his bidding. He have and those of the bank's independent

:06:52. > :06:59.directors. As he begins his second term, we've also seen in the past

:07:00. > :07:04.week, as the president of the European Central Bank. The skull of

:07:05. > :07:11.the bank is nothing new, goes back to the 1920s. When we saw the

:07:12. > :07:19.aftermath of World War I with the central banks and had great control.

:07:20. > :07:23.I have long been sceptical of the practicality or desirability of a

:07:24. > :07:28.fully fledged bank being independent alone. Some strategic economic

:07:29. > :07:33.decision-making light with elected politicians within financially

:07:34. > :07:41.responsible ministry. The coming Wednesday another the -- the Bank of

:07:42. > :07:46.England, a plaything of any governor. And supporting this bill,

:07:47. > :07:51.I system and there will give some thought to the general domains do

:07:52. > :07:57.you concerns at bill makes its way through the house. -- genuine

:07:58. > :08:05.concern. I should stick to your request. Hope to catch your eye in

:08:06. > :08:13.the second debate and therefore I will not speak about the SCA in the

:08:14. > :08:22.context of this debate. Though it would be relevant. By reiterating.

:08:23. > :08:31.If the ship goes down, should be Captain and go down with the ship?

:08:32. > :08:41.My constituent last night sent me a link to the footage at the treasury

:08:42. > :08:48.committee of 2009, and no hearing at anytime can ever calculate the

:08:49. > :08:56.question more profoundly than that hearing and their performance and to

:08:57. > :09:07.escape from real responsibility for their failures and office. This

:09:08. > :09:12.reverse burden of proof changes the culture review dropping in the SCA

:09:13. > :09:17.-- FCA there are two sides of the same point. The same Chancellor,

:09:18. > :09:24.what he is doing is consistent with what he has done and said in the

:09:25. > :09:32.past. Let the house remember that this Chancellor, I'm regulation and

:09:33. > :09:39.2007, cited Ireland as an example of why they should be less regulation,

:09:40. > :09:46.more deregulation, a precisely the authorities that we are talking

:09:47. > :09:48.about now. A gear before the crisis, and we can see what would have

:09:49. > :09:55.happened if we had followed his advice, because we saw what happened

:09:56. > :10:01.in Ireland and a much bigger economy would have been far worse for our

:10:02. > :10:11.people. History is not repeating itself, ideology is repeating

:10:12. > :10:18.itself. In this bill, there are some interesting causes. The reduction of

:10:19. > :10:23.number of policy from 12 to eight, to disagree that happened over a

:10:24. > :10:31.10th of the last decision to change anything. Therefore one could be

:10:32. > :10:36.into question whether this body needs to put quite as much effort in

:10:37. > :10:42.and whether we should be putting out as much effort as we do and to

:10:43. > :10:47.scrutinising month in and month out, their inability and unwillingness,

:10:48. > :10:53.or correctness to make no decision at all, month after month, year

:10:54. > :10:59.after year. It shows how we are rather missing the point. The bigger

:11:00. > :11:05.issues, the big things I had this bill, transparency, and transparency

:11:06. > :11:13.is missing within this bill. There is no transparency when it comes to

:11:14. > :11:17.it, minor improvements proposed, but the work angst of the Bank of

:11:18. > :11:23.England and the financial sector and its regulation remain in great

:11:24. > :11:32.secrecy. That is a fundamental problem. I have proposed in the

:11:33. > :11:39.past, particularly in retail banking, differential rates. A be

:11:40. > :11:43.allowed to speculate an Icelandic bank, the bookies or anybody else to

:11:44. > :11:52.be allowed to speculate my money away. Should expect the taxpayers to

:11:53. > :11:58.pick up the tab if things go wrong. -- should not. We have the principal

:11:59. > :12:05.with Premier Bond, but we have not expanded that. It should be an

:12:06. > :12:10.alluring -- a lower interest rates to anything else. That should be

:12:11. > :12:15.absolute guarantees, and we have failed to look at differentiating

:12:16. > :12:20.the risk for the consumers and that will come back to had this in the

:12:21. > :12:26.future. With that as well, competition. It is lip service and

:12:27. > :12:33.the bill. With the Chancellor and treasury want to dominate the SCA --

:12:34. > :12:40.FCA in new clause 18 in this bill. To tell the FCA what it should be

:12:41. > :12:47.doing. What is missing in the big picture, as competition. There is

:12:48. > :12:51.competition objectives, but to sell all bags to off worse, not just the

:12:52. > :12:57.same openness, because the building society section has largely

:12:58. > :13:02.disappeared. Under the retail sector compared to where it was 10-30 years

:13:03. > :13:13.ago. Many of my constituents, I am certain, ... If it was resurrected,

:13:14. > :13:20.to have the money there as I did my whole life. As many people in the

:13:21. > :13:23.North it. Hope I wonder whether he'll be able to answer my point,

:13:24. > :13:29.essentially if you have a more rigorous regulation, and a more

:13:30. > :13:34.onerous compliance, it he said the new chalice of banks had to pay

:13:35. > :13:37.large amounts of bank levy, does that not be a massive this to the

:13:38. > :13:43.competition that many will want to see to the bank? We all want

:13:44. > :13:47.competition. But how they going to happen in the banking sector it is

:13:48. > :13:55.so heavily regulated now and the future? I have made many times in

:13:56. > :14:00.the past for this versatile in the risk for retail banking. That's

:14:01. > :14:07.differential. We know what is going on here. The Chancellor has a

:14:08. > :14:12.problem, has accounts do not add up. He is not going to meet the

:14:13. > :14:20.surpluses, and well find that out in the report. -- we will. Therefore,

:14:21. > :14:24.he is desperate to sell off the shares, and that is what is going

:14:25. > :14:30.on. That is why all of this is happening, that is why he wants a

:14:31. > :14:38.new settlement with the banks. It is in order that he can maximise the

:14:39. > :14:43.price, in order to create this are blessed that he has created in his

:14:44. > :14:52.head and his budget for all of us. That is what is going on

:14:53. > :15:01.politically, and I should and on the bait for others. Of the bank

:15:02. > :15:05.profits. We've heard about Google in the last week. We haven't heard

:15:06. > :15:10.about the bank take, because we have been told that the banks are the

:15:11. > :15:16.engines of the British economy. They're certainly not the engine of

:15:17. > :15:22.tax receipts, because most of the element am I not paying tax. We have

:15:23. > :15:29.seen therefore ten of the biggest investments and commercial banks,

:15:30. > :15:41.zero taxa. We have seen loans, zero taxa Corporation tax. Zero UK

:15:42. > :15:46.Corporation tax. Credit rates, zero. HTC, a.

:15:47. > :15:59.That is all detected happening. -- the tax. We see Goldman Sachs, who

:16:00. > :16:08.generated two billion and UK profits last year. What is that tax paid on

:16:09. > :16:16.that? It is less pay to the individual partners. Less to the

:16:17. > :16:20.state, and the exchequer, and the defence of the brown and the health

:16:21. > :16:25.service, and the bribery Brenet infrastructure, and the education

:16:26. > :16:32.and welfare state. Less to one individual. A measly 27 million. Not

:16:33. > :16:39.good enough. That is what this bill is missing. I look forward to

:16:40. > :16:46.contravening further. -- contributing. Also was to catch the

:16:47. > :16:53.eye of the chair and the following debate. I'm very pleased to support

:16:54. > :16:56.the government on this bill. I do think he's our revelatory system in

:16:57. > :17:00.the right direction, but I want to focus of some of the other parts of

:17:01. > :17:04.the bill. This bill does not just there with the Bank of England, but

:17:05. > :17:08.that has causes and other related finance matters. I met last week

:17:09. > :17:12.with my colleagues on the cross party management working group to

:17:13. > :17:17.discuss the growing issue of problem consumer debt. It currently stand at

:17:18. > :17:21.either 42% of overall household income. I believe this bills to

:17:22. > :17:26.provide an opportunity to affect will be as mild legislative tweak to

:17:27. > :17:35.bring about an urgent change in that sector. -- 100 42%. The shift began

:17:36. > :17:38.along the sidelines of talking about taking more action on behalf of

:17:39. > :17:43.consumers but we'll see what happens a committee. That management is

:17:44. > :17:47.becoming an increasingly inefficient industry, and consumers are more

:17:48. > :17:52.frequently getting a bad deal. Some debt schemes, while others are

:17:53. > :17:56.pretended that are charged to creditors. The quality of service

:17:57. > :18:03.offered by debt device providers greatly add to the cost. Most

:18:04. > :18:08.people, when they reached a point of desperation and would like to have a

:18:09. > :18:15.problem, they do not see that every search the sector and desk for 24

:18:16. > :18:19.hours. They come across and choose the first providers may find

:18:20. > :18:24.attempted to connect to the first helper that will come across the

:18:25. > :18:27.past. It is a fraud or appetite, but it's often because they know that

:18:28. > :18:36.free help is available. Free debt management plans by not be the

:18:37. > :18:42.solution for everybody, but their availability to those who can and

:18:43. > :18:47.want to be paid their debts is important to become accredited.

:18:48. > :18:56.Fischer operators -- fair share, that allow services to be provided

:18:57. > :19:01.to consumers without charge. Fischer revenue -- fair share, has reduced

:19:02. > :19:05.as a consequence of consumer average disposable income falling

:19:06. > :19:09.constructing the capacity to take on more economically viable cases.

:19:10. > :19:14.These operators will have to restrict the new cases they are able

:19:15. > :19:19.to take on as funding becomes increasingly unsustainable. Unless

:19:20. > :19:21.we move to correct this, consumers who get themselves into difficulties

:19:22. > :19:26.was an absolute need to increase debt use of providers who charge

:19:27. > :19:30.high fees for the same service. It can be up to half of the debt

:19:31. > :19:37.repayments. If you plan provide for you to repay ?70 a month off your

:19:38. > :19:40.debt, you may have to take on top of that at ?35,000 a month -- ?35 a

:19:41. > :19:46.month to the plan company which goes a course to them rather than

:19:47. > :19:49.reducing the debt. It increases the time and cost of recovering from

:19:50. > :19:55.their problem. One solution is to put in place a new system, and this

:19:56. > :19:58.is what I like to minister to consider. She is aware at a spot

:19:59. > :20:03.member that have been put forward that could be considered at the

:20:04. > :20:06.stage. All operators of that advice must operate at low cost, but

:20:07. > :20:10.sustainable debt management plan that is free to the consumers and

:20:11. > :20:20.funded by creditors at a lower cost than now. Absolutely vital that we

:20:21. > :20:26.do tackle the debt advice industry and the lending industry. We haven't

:20:27. > :20:30.outstanding body and Sheffield. -- would have a outstanding. The semi

:20:31. > :20:35.concerned that they'll be hired and admitted that the Chancellor budget

:20:36. > :20:43.last would increase by ?40 billion by 2020? How much personal lending

:20:44. > :20:46.increases, the important thing is that the helpless there for those

:20:47. > :20:51.who get themselves into difficulties. I think we are facing

:20:52. > :20:56.an uplift in those difficulties that we haven't answered straight rise to

:20:57. > :20:59.her stint at the end of the year. Another will cause pain to a lot of

:21:00. > :21:05.people out there, so it is important that we get the system right. With

:21:06. > :21:09.the support and see a friend were in rate, a memo to the bill before it

:21:10. > :21:14.could affect a fee structure activate the provision of free debt

:21:15. > :21:18.management plans by authorised arms. -- Michael one. All my colleagues

:21:19. > :21:21.agreed that action is it assumed that this bill represents a time

:21:22. > :21:28.pinnacle for making necessary change. Oblivious to be a cross

:21:29. > :21:31.party issue. I believe the bill before us need to be amended in

:21:32. > :21:35.order to get people and that more security and access to free

:21:36. > :21:41.high-quality plans that have soon to merge their finances. If interest

:21:42. > :21:44.rates do go of some, it may be the debt management sector will be

:21:45. > :21:52.called upon to give even more support than now, this will be a

:21:53. > :21:59.good time to strengthen the system. Also concentrate on four main

:22:00. > :22:02.things. Firstly, was backed up. Accountability of the Bank of Wells

:22:03. > :22:08.and to the people. The name of the bank. And when it comes to setting

:22:09. > :22:12.interest rates. On the first issue, the bill for some possibility in

:22:13. > :22:16.terms of who can issue banknotes and and Northern Ireland. Issued by

:22:17. > :22:21.banks and Scotland are legal, active queues across the whole of the UK.

:22:22. > :22:26.Among the many historic anomaly full-size West nations is the fact

:22:27. > :22:32.that wealth from the only nation that is prohibited from producing

:22:33. > :22:36.its own best think bank does. There are specific one, so no major

:22:37. > :22:41.principal in relation to the proposal. Well find other parts of

:22:42. > :22:46.the UK was once banks that have a small geographical areas to issue

:22:47. > :22:54.their own backbones. The bank charter act of 1844 Barack Obama to

:22:55. > :22:58.welsh banknotes. -- Brian into wells. Formation bricks and three

:22:59. > :23:01.and Scotland had the authority to issue their own bagels provided they

:23:02. > :23:12.are backed back by the Bank of England. That's banknotes. The

:23:13. > :23:16.Lloyds banking group, should be given the right to issue well take

:23:17. > :23:20.notes in the same way that has permitted for the acts of Scotland

:23:21. > :23:23.and before you Northern Ireland. I believe such an outcome would come

:23:24. > :23:31.at the much welcome boost to welsh national character. And Northern

:23:32. > :23:37.Ireland, the Bank of Ireland does get back, I knows the recognition of

:23:38. > :23:47.individuals such as Dave... Are celebrating architecture is

:23:48. > :23:53.funded such as Belfast City Hall. And Scotland, the Bank of Scotland

:23:54. > :23:56.are entitled to issue bank notes. They pay tribute to their fantastic

:23:57. > :24:02.bridges of the country and recognise the contributions of notable people.

:24:03. > :24:14.The question that advises the American I bring up is why can't we

:24:15. > :24:20.issue bank notes and wealth... And historic race denigrates... Or David

:24:21. > :24:37.Lloyd George. Would also accept that the downside

:24:38. > :24:42.of having our own banknotes printed in Northern Ireland is tied to pass

:24:43. > :24:51.them on an England, it looked as some kind of con man? I'm always

:24:52. > :24:56.grateful for intervention. A man who speaks with great knowledge of

:24:57. > :24:58.financial matters. There are legal tender, legal currency sc, so I

:24:59. > :25:04.think we need to move forward with that. The reality is that banknotes

:25:05. > :25:14.and Scotland and Northern Ireland are legal to be used anywhere. I was

:25:15. > :25:16.making the case of some people might be on banknotes in the case could be

:25:17. > :25:33.made about the most famous was painting a wall. -- of all. His

:25:34. > :25:35.paintings, it is a national icon. Current notes and Wells include

:25:36. > :25:53.recognition for others. When Shakespeare, George Stephenson,

:25:54. > :25:57.Sir Christopher Wren. All great people, but not to my knowledge when

:25:58. > :26:03.it directly to my country. Many pounds of many welsh people over

:26:04. > :26:07.managers have contributed the UK. -- pounds. Id. Inappropriate that Wells

:26:08. > :26:14.raises conservationist tenant within the starlit zone and is recognised.

:26:15. > :26:20.I patiently to the work of my colleague on this issue. I look

:26:21. > :26:22.forward to seeing him take his place in the National Assembly after the

:26:23. > :26:27.elections. Secondly, on the issue of accountability to my country my put

:26:28. > :26:34.forward proposals in a spirit of the so-called party of bagels. -- party

:26:35. > :26:39.of equals. The British that is rapidly changing. As power and

:26:40. > :26:44.responsibility flow from Westminster to the devolved countries. Perhaps

:26:45. > :26:47.the place isn't as quick as someone like myself would want. It is

:26:48. > :26:53.undeniable that the UK is not vastly different place than what it was 20

:26:54. > :26:56.years ago. Recent developments have an increasing devolution to Wales

:26:57. > :26:58.and Ireland. The letter Scotland actually devolved income tax and

:26:59. > :27:02.contacts in Northern Ireland has recently been awarded full powers

:27:03. > :27:07.over corporation tax. Wells as always is in the slow lane, but even

:27:08. > :27:12.we will soon have a welcome tax sharing arrangement if the draft

:27:13. > :27:16.Wells build bridges these. There are major economic this levers that are

:27:17. > :27:19.flown from the treasury devolved countries. It increases the

:27:20. > :27:24.blue-collar accountability of the devolved governments to the

:27:25. > :27:27.respective and critically incentivizes those government to

:27:28. > :27:31.boost economic performance and order to invest in public services.

:27:32. > :27:37.Coronation of fiscal policy is vital and an economic policy. While

:27:38. > :27:41.understanding the bank is an independent, it is obvious that

:27:42. > :27:46.coronation between the treasury and central bank, similar likes me to be

:27:47. > :27:49.developed will do welsh, the Scottish Exchequer. The national

:27:50. > :27:53.parliament helps to nominate a member to the committee to ensure

:27:54. > :27:56.that the clinical decision-making process has a understanding of the

:27:57. > :28:01.economic conditions and wells, Scotland, Northern Ireland. All

:28:02. > :28:06.anti-Sikh members currently are out of bank staff or nominated by the

:28:07. > :28:09.treasury. The centre applied to the financial committee and assumed to

:28:10. > :28:15.be implemented which is part of the bill. Political scrutiny of a policy

:28:16. > :28:20.remains to preserve of Westminster, despite increasing decision-making

:28:21. > :28:25.at the bald levels. Not being privy to the ministers and government, and

:28:26. > :28:28.she attained, we can safely assume there are for committing. In terms

:28:29. > :28:30.of scrutiny, the governor and his team missed the Treasury Select

:28:31. > :28:35.Committee here at Westminster at least five times a year. Considering

:28:36. > :28:39.the powers that failed when the process, had hoped that the central

:28:40. > :28:42.bank would agree that it is in their interest to strengthen relations

:28:43. > :28:45.with devolved governments and parliaments. I'm not aware of any

:28:46. > :28:49.formal structures of meetings between the governor and ministers

:28:50. > :28:53.of the ball governments, and interest and mutual respect needs to

:28:54. > :28:55.be formalized. Critically I strongly believe the governor should want

:28:56. > :29:01.again attend a meeting of the relevant economic community of the

:29:02. > :29:04.devolved parliaments. To the bottle and parties with devolved

:29:05. > :29:07.demonstrations to formulate their own fiscal policies and would

:29:08. > :29:12.recognise the realities of fiscal and economic policy is no longer the

:29:13. > :29:16.sole preserve or a Westminster and comes to Wales, Scotland, Northern

:29:17. > :29:23.Ireland. The issue of the central bank. That's the name. It is an

:29:24. > :29:27.issue as a proud watchman that the central bank event at the end of the

:29:28. > :29:36.country. The Bank of England was created in 1694, before the current

:29:37. > :29:41.British was constructed. Wales 19... Arnon and 810 01. A central bank was

:29:42. > :29:46.there for them to serve a critical density that only existed up Wales

:29:47. > :29:49.and England. If a British as a partnership of equals, then all

:29:50. > :29:52.institutions must reflect that reality. Perhaps it is most

:29:53. > :29:58.important in terms of underpinning its financial system. It is helpful

:29:59. > :30:02.for the Minister, I do have a suggestion. My suggestion would be

:30:03. > :30:05.to rename the bank of England, the central star fact. This would

:30:06. > :30:13.reflect the fiscal reality that we live in. -- central startling bank.

:30:14. > :30:17.To close, I am very interested in the emerging debate in relation to

:30:18. > :30:23.changing the code to setting when interest rates. The MPC is charged

:30:24. > :30:27.with keeping inflation of 2%. Other central banks such as the US Federal

:30:28. > :30:32.Bank has a pool mandate which go beyond price stability. In 1977,

:30:33. > :30:35.Congress amended the 1913 Federal Reserve act, meant the central bank

:30:36. > :30:40.to achieving long-term moderate interest rates and critically

:30:41. > :30:43.maximizing employment in addition to bringing inflation targets. At the

:30:44. > :30:48.bill progresses, I hope to return to these. In relation to the memos, put

:30:49. > :31:00.forward by the SNP and Labour I am pleased to speak in support of

:31:01. > :31:04.this important bill which delivers a new settlement for the financial

:31:05. > :31:09.services sector and our country. A vital factor in the economy by

:31:10. > :31:13.strengthening the Bank of England and the regulatory regime. Madam

:31:14. > :31:17.Deputy Speaker, in particular the bills are of support because they

:31:18. > :31:22.put the Bank of England and give them new powers and more responsible

:31:23. > :31:25.use and better procedures. This transcends the accountability of the

:31:26. > :31:30.government and the bill increases the accountability of staff working

:31:31. > :31:34.in the financials services factor. When the idea of a bank of England

:31:35. > :31:39.first emerged as the William and Mary came to the firm and 1688, the

:31:40. > :31:43.public finances were in disarray. Monetary credits were weak and the

:31:44. > :31:49.financial markets were on the verge of collapse. Things were not much

:31:50. > :31:53.better under Labour. The banking system became very concentrated and

:31:54. > :31:56.took too many risks and were acting against taxpayer interests. It was

:31:57. > :32:00.under that system that people like Fred Goodwin were able to merge and

:32:01. > :32:05.receive huge businesses by running the bank into the ground. It

:32:06. > :32:11.requires up-to-date model effective government in which this bill

:32:12. > :32:18.proposes. According to the UK trade body, the sector includes two thirds

:32:19. > :32:24.outside of London. It is right that this bill supports a growing

:32:25. > :32:29.financial services sector. I support clause one, which makes the deputy

:32:30. > :32:36.government for markets and baking a member of the banks clause. A new

:32:37. > :32:41.and forth deputy government for markets and banking was reported

:32:42. > :32:50.with a methodically for reshaping. It is an important role. Clause one

:32:51. > :32:55.of that situation and ensure equal status and fully forth deputy

:32:56. > :33:01.governments. The government also has the necessary flexibility for the

:33:02. > :33:05.member of the court, this ensures flexibility for future need and also

:33:06. > :33:09.ensures that the court is fit for purpose. With the Bank opened for

:33:10. > :33:18.business and 1694 as the Honorable member said, it had a staff of 17

:33:19. > :33:23.clocks and to date keepers. The person out as much water and the

:33:24. > :33:29.bank of England has welcome to the reforms and cause one of the bill.

:33:30. > :33:33.It updates the powers of the court and also increase its flexibility to

:33:34. > :33:36.ensure new expertise at when necessary, these are practical and

:33:37. > :33:45.deserve the support of the entire house. I also welcome the reforms of

:33:46. > :33:48.the oversight committee. My right honourable friend the Member for

:33:49. > :34:00.Chichester who was no longer had in his plays are outlined. One of the

:34:01. > :34:05.changes is the change to the PRA, as Honorable members will know, the PRA

:34:06. > :34:09.is responsible for the supervision of about 1700 banks, building,

:34:10. > :34:21.societies, credit unions, and investment firms. It will ensure

:34:22. > :34:25.that it is fully integrated. This is a bill that deserves the support of

:34:26. > :34:29.the house including the members opposite on the front bench, this

:34:30. > :34:33.will continue the process of building a unified institution which

:34:34. > :34:38.allows the new authority to focus more closely on policy work, rather

:34:39. > :34:41.than thinking about back office issues like IT procurement. I'm sure

:34:42. > :34:45.the Honorable to them and will agree with me that the changes proposed in

:34:46. > :34:48.this bill support the government is one mission bank strategy which

:34:49. > :34:53.means that supervision is conducted in a more effective and efficient

:34:54. > :34:58.way and befits a modern global economy. It also comes with

:34:59. > :35:00.important safeguards, for example the strategy objectives are

:35:01. > :35:09.undiminished and the name of the bride will not become change in the

:35:10. > :35:15.regulation will be undimmed. As the Minister mentioned in the opening

:35:16. > :35:18.remarks, what attracts the financial crisis is that nobody at the

:35:19. > :35:25.insistence involved face any punishment. There appeared to be no

:35:26. > :35:31.link between the axis of those of the top face of the institutions

:35:32. > :35:35.that they lead. The FCA said that individual accountability was

:35:36. > :35:41.unclear and confused. This bill clarifies that strengthens the

:35:42. > :35:44.individual clarity of those working in these sectors. I also hope that

:35:45. > :35:52.these reforms were actually change the culture. Not just reshaping the

:35:53. > :35:56.legal and regulatory framework. Before I enter this house, I had the

:35:57. > :36:02.privilege of working with the city UK, the member of the others working

:36:03. > :36:07.in the next generation vision financial services which the

:36:08. > :36:12.financial services sector was a part of society and not apart from it.

:36:13. > :36:17.I'm pleased that the reforms that I want this bill will help our sector

:36:18. > :36:22.get closer to division and we articulate it. I particularly

:36:23. > :36:26.welcome the exodus of senior managers and certification regimes.

:36:27. > :36:31.Not just to deposit takers but to expand the regime for all financial

:36:32. > :36:37.services and all staff and will enhance the responsibility for our

:36:38. > :36:39.managers. Hopefully increase the accountability for staff working in

:36:40. > :36:48.the financial services sector. It also ensures that as the sector

:36:49. > :36:54.expands, it is matched and increases the size of the industry. From

:36:55. > :36:57.investment firms and beyond it is involved in the shadow banking

:36:58. > :37:03.sector and it can pose a threat to financial stability sector. In

:37:04. > :37:07.conclusion, the growth of financial services sector in terms of its size

:37:08. > :37:11.and complexity, the globalisation of the economy and the labor's

:37:12. > :37:13.financial crisis means of the government functions and powers of

:37:14. > :37:22.the Bank of England needs to be updated. This bill achieves both

:37:23. > :37:26.gold and ensures that the Bank of England is fit for purpose and

:37:27. > :37:29.effective central bank and a growing 21st-century economy sitting at the

:37:30. > :37:36.heart of the worlds most successful industry. This bill deserves support

:37:37. > :37:41.of the whole house. I am pleased to be able to contribute to this

:37:42. > :37:49.debate. I'm pleased to follow the Honorable member who if I might say

:37:50. > :37:52.so gave a very Panglossian view of the city. When I first read the bill

:37:53. > :37:58.I thought it was very disappointing but the more carefully I looked, the

:37:59. > :38:03.worse I thought it became. Of course there are some good steps in it, but

:38:04. > :38:06.I think one of the things that we see here is the Tory government

:38:07. > :38:15.circling their wagons, to protect their friends in the city. It gives

:38:16. > :38:19.us no hope of an seducing the separation between retail and

:38:20. > :38:26.investment banking, which we so obviously need after the crash.

:38:27. > :38:29.Which many including Professor of Oxford University and others and the

:38:30. > :38:36.former Tory chancellor are still calling for. The main flaws in the

:38:37. > :38:42.bill are among transparency and the bank and the responsibility of the

:38:43. > :38:45.near managers across the sector. In the treasury select committee I

:38:46. > :38:49.question both the Chancellor and the governor about the original draft of

:38:50. > :38:57.the bill which allowed the court on a ad hoc basis to this term in these

:38:58. > :39:01.scope of it to the general. We are pleased to see the redrafting of

:39:02. > :39:07.clause 11 of which clarifies what the policy will be. However, I

:39:08. > :39:10.believe this is not enough. First, we were promised a memorandum of

:39:11. > :39:15.understanding agreed between the and AG and the bank of England. Where is

:39:16. > :39:21.it? This house must see the memorandum before we pass this

:39:22. > :39:26.legislation. The government is treating the house with the same

:39:27. > :39:29.disdain as they do when they put substantial measures and to status

:39:30. > :39:34.hearing instruments and don't share those with the house either. And why

:39:35. > :39:38.has the Government brought the bill back to this house before the

:39:39. > :39:43.memorandum of understanding has been drafted? Is absolutely obvious, it

:39:44. > :39:47.is because the senior managers regime comes into force in March,

:39:48. > :39:56.they'd are desperate to get wireless and before that happens. -- Royal

:39:57. > :40:01.assent. I am not sure that the access will be enough. The bank of

:40:02. > :40:04.England is independent and its existing judgements with respect to

:40:05. > :40:11.monetary, financial and credit matters. That is how it should be.

:40:12. > :40:13.It is also democratically accountable and I believe for will

:40:14. > :40:19.only be able to exercise their democratic right if we make the bank

:40:20. > :40:25.subject to the freedom of information act. This is why. When

:40:26. > :40:29.the ministers announced the sale last summer, they waved about a

:40:30. > :40:34.letter from the governor endorsing the sale. Writing this letter was

:40:35. > :40:38.not part of the governments role on the monetary financial or credential

:40:39. > :40:42.policy. It was an intervention and government policy at the chances

:40:43. > :40:46.request on the issue of a share snow. I asked the government if he

:40:47. > :40:52.considered this to be policy. He said that it was. I asked them also,

:40:53. > :40:58.if he would share the analysis was underlay the letter. He refused,

:40:59. > :41:03.point blank. This is what he said, "It is a policy judgement, I was

:41:04. > :41:10.asked by the Chancellor with respect to the potential, and the terms of

:41:11. > :41:14.the questions are outlined. I was asked as governor, it was not a

:41:15. > :41:19.question of the FTC or NDP are a board, it was not a question in

:41:20. > :41:26.terms of safety, but in terms of the overall impact. I consulted with the

:41:27. > :41:34.death of the governor, -- I consulted with the governor. The

:41:35. > :41:40.analysis rested on the supervisory judgement and the input the

:41:41. > :41:46.perspective of the Insta Snow had been stabilised. The overlap that we

:41:47. > :41:50.have obtained as part of the discharge of our supervisory

:41:51. > :41:56.responsibilities and the analytic is perfect." It is very far from

:41:57. > :42:02.perfect. It is a raggedy hodgepodge. The letter that the Chancellor wrote

:42:03. > :42:05.went far beyond these matters. It said that it is and the public

:42:06. > :42:12.interest for the government to begin now, to return private ownership, a

:42:13. > :42:16.safe return of private ownership would promote financial stability

:42:17. > :42:21.and a more competitive banking sector and the interest of a wider

:42:22. > :42:25.economy. No information has been shared with any of us as to how or

:42:26. > :42:29.in what way this sale promotes a more competitive banking sector

:42:30. > :42:33.because it does not. But what the benefits will be for the wider

:42:34. > :42:38.economy. I still live in the hope that when the Stiaan AG undertakes

:42:39. > :42:44.his order of the sale, he was the this analysis which I believe we

:42:45. > :42:47.need a structural reform and an application for freedom of

:42:48. > :42:52.information act to the Bank of England. I believe this bill should

:42:53. > :42:57.be the vehicle for that chance. Let me now turn to the issue of personal

:42:58. > :43:04.responsibility and the catastrophic capitulation of the ministers to

:43:05. > :43:10.their friends and families. The expansion of the new senior managers

:43:11. > :43:13.regime for banks and building societies, to all authorised persons

:43:14. > :43:19.and the financial institutions is a good thing. Unfortunately, the quick

:43:20. > :43:26.throw Crow is the significant weakening in the way this will

:43:27. > :43:32.operate. They will have to sell they took reasonable steps to prevent

:43:33. > :43:36.breaches as recommended by the parliamentary commission by banking

:43:37. > :43:40.standards. The burden will be on the regulator to show that the senior

:43:41. > :43:48.manager failed to do this. In another place, it will be pointed

:43:49. > :43:52.out that the only reason put forward by ministers for this change, is

:43:53. > :44:03.that it places what they have described as an excessive regulatory

:44:04. > :44:07.burden. As noble Lord said, the bill will result as less documentation

:44:08. > :44:10.and less awareness by the bank as of their responsibility and less

:44:11. > :44:14.examination of the relationship between the risk that they take and

:44:15. > :44:18.the responsibilities that they have. This government continues to believe

:44:19. > :44:25.that it is acceptable for banks to privatise their profits and

:44:26. > :44:31.socialise their losses. Let us never forget the cost to all of us for the

:44:32. > :44:38.British taxpayer, the ?133 billion wish we had to stump up to save the

:44:39. > :44:42.banks. The banks continue to benefit from the implicit taxpayer subsidy,

:44:43. > :44:47.including to there with the investment activities undertaking as

:44:48. > :44:54.Lord Lawson said, just for themselves. But they continue also

:44:55. > :45:01.about the cost of documentation that would fall. It was also worth noting

:45:02. > :45:07.that the ministers should take note of the fact that this regime where

:45:08. > :45:12.the managers must show that they have taken reasonable steps is what

:45:13. > :45:16.applies in traffic legislation, health and safety at work, the

:45:17. > :45:22.bribery act, the Terrorism Act, the misuse of drugs act, the trademark

:45:23. > :45:28.act, the criminal justice act and the official secrets act. What they

:45:29. > :45:36.want to know is what is so special about the bankers. Another argument

:45:37. > :45:40.put forward is that this is unfair and out with the positions of

:45:41. > :45:48.English law. The noble Lord said that the regime requires some

:45:49. > :45:54.justification, the regime as put forward by the parliament very wide

:45:55. > :45:57.but not by banking standards require strong justification. What is the

:45:58. > :46:08.justification? I don't understand it. A part of from the ?133 billion

:46:09. > :46:15.bill, there is quite a lot to be said. Perhaps, if members of the

:46:16. > :46:20.other players have constituents, they would understand that the

:46:21. > :46:22.appalling prosperity not being freaked on our constituents

:46:23. > :46:31.particular disabled people is something to which some of us must

:46:32. > :46:37.respond never again. If the 133 billion to British taxpayers what

:46:38. > :46:41.about the fact that none of the senior bankers have taken

:46:42. > :46:48.responsibility or been punished for their criminally selfish and

:46:49. > :46:54.irresponsible behaviour. In other words, what we see is yet another

:46:55. > :47:00.decision by this Chancellor of the Exchequer and this government

:47:01. > :47:05.putting party interested for the national interest. After hours of

:47:06. > :47:08.hearings and work in the last Parliament, the piece by the

:47:09. > :47:12.parliamentary commission on banking standards, the Chancellor was

:47:13. > :47:22.lobbied by his friends and funders in the city and has let them off of

:47:23. > :47:29.the hook again. I think it is a bit of rich of the parties opposite to

:47:30. > :47:36.be going on about this as if it is something like a party political

:47:37. > :47:39.issue. Every body, and I what excites you why, every body,

:47:40. > :47:48.everybody shares the frustration at what happened in the lead up to the

:47:49. > :47:54.banking crisis. You cannot get away from the fact that the Labour Party

:47:55. > :47:59.had a large part to play in that. Even though the regulation was

:48:00. > :48:06.there, and the actual powers were there, these regulations were not

:48:07. > :48:11.pursued, these practices were not pursued assiduously enough, and the

:48:12. > :48:15.financial stability was raised as a result. Then stability is the

:48:16. > :48:19.absolute crucial thing. It is not for the about bankers bonuses, it is

:48:20. > :48:26.about the fact that ordinary people suffer the most when the finance

:48:27. > :48:33.failed. I have to say that I have some sympathy with the Member for

:48:34. > :48:37.Bishop which he raised the issue of investment banking and retail

:48:38. > :48:43.banking. When I started off from University I joined the training

:48:44. > :48:48.course and beaver giving a lecture by a very wise old man, called Lord

:48:49. > :48:54.Rove. He was in the other place obviously. He knew about all the

:48:55. > :49:02.things that had gone wrong throughout the 1930s and etc. What

:49:03. > :49:05.he said to us was that any time you see the separation of retail banking

:49:06. > :49:13.and investment banking, weekend, that is going to cause a problem.

:49:14. > :49:18.That has really stuck with me. So, I personally think that we should be

:49:19. > :49:23.looking at ways to introduce more petition and to put that separation

:49:24. > :49:28.back there, so that there is not such a burden on regulators to use

:49:29. > :49:37.those powers and to really use them with these. This is a useful step

:49:38. > :49:42.for the time being. I want to deal with the bill before us and two

:49:43. > :49:46.pieces. The first is the piece about regulation and the second is the

:49:47. > :49:51.piece about governance. The senior managers regime that is being

:49:52. > :49:55.proposed, I actually think it is a very good thing. I don't agree with

:49:56. > :50:02.members opposite who said that this is a reduction in the power of the

:50:03. > :50:07.regulations. The thing about working at financial services is that it is

:50:08. > :50:14.an ongoing thing. You don't just have a duty to your clients and to

:50:15. > :50:17.the system generally. When things go wrong, you have a duty all the way

:50:18. > :50:24.along. The beauty of what is proposed now, is that that duty of

:50:25. > :50:30.responsibility is a thing that each manager will half to prove, all of

:50:31. > :50:35.the time effectively to their regulators, and if it there is any

:50:36. > :50:41.breach, that is a very important point. What was proposed previously

:50:42. > :50:50.is that there should effectively be a two tier system set up. So that

:50:51. > :50:54.those firms with a potential Prudential impact would have to

:50:55. > :50:58.comply with this legislation but effectively, both with the

:50:59. > :51:03.investment world and the investment fund, what not. That is incredibly

:51:04. > :51:08.important especially in the modern world which we see now, especially

:51:09. > :51:11.in a way since the financial crisis. Banks have been less willing to land

:51:12. > :51:17.and have had to build up their capital. A large burden of the

:51:18. > :51:24.lending and the credit business has fallen onto investment funds. As the

:51:25. > :51:31.old legislation would have proposed, those aspects would not be covered.

:51:32. > :51:34.I am a bit concerned actually, at the moment as I have stated in the

:51:35. > :51:40.financial markets, the prudential regulation Authority and the PRC as

:51:41. > :51:48.it becomes does not regulate some of these investment firms which I

:51:49. > :51:51.believe do have a potential systemic impact on the market. I would

:51:52. > :51:57.preferred that they took a much more active to look at those.

:51:58. > :52:02.Particularly the derivative funds quite often they operate with a

:52:03. > :52:06.large degree of leverage, and what we are raising at the moment at some

:52:07. > :52:16.parts of the credit market because of the volatility oil prices we have

:52:17. > :52:23.seen some of the lower grade and oil really suffering and yields have

:52:24. > :52:27.really been blown out. The regular Wings in America are saying to the

:52:28. > :52:33.banks don't mark these two market because they don't want to highlight

:52:34. > :52:37.a problem. Now, I'm afraid at the moment we won have some firms in

:52:38. > :52:42.London who have been getting involved in similar business, and I

:52:43. > :52:46.would like the Minister to look at that particular issue because I do

:52:47. > :52:54.think that it is a risk for us as we go forward. In terms of the PRA

:52:55. > :53:00.coming in house, I think that it is a good thing. When the retail

:53:01. > :53:06.investment banks are together as they are now, we really need that

:53:07. > :53:10.PRA, for the PRC as it becomes to have the sharpest teeth that it

:53:11. > :53:13.could possibly have and the best people working in it that it could

:53:14. > :53:19.possibly have. That means that the less time that they have to focus on

:53:20. > :53:23.the corporate governance of a separate company or institution, the

:53:24. > :53:31.better. Also coming in house, the people who work there, and let's

:53:32. > :53:35.face it, most of these jobs and regulations do not pay as much as in

:53:36. > :53:39.the financial markets that they have to regulate, they actually can be a

:53:40. > :53:44.bit of a revolving door. But she wanted the best brains there. And

:53:45. > :53:51.those with the most application, and they have to see a way to having

:53:52. > :53:54.bells in a bank of England which will be a great success and will be

:53:55. > :54:01.lucrative. But is much better done from within the bank and outside of

:54:02. > :54:07.it. In my view. I think otherwise and the government front, the

:54:08. > :54:12.development are useful. I think that particularly, the oversight of the

:54:13. > :54:17.MPC and trying to type than that of a bit, I think it is very useful. I

:54:18. > :54:22.actually have a lot of sympathy with what the Member for the city of

:54:23. > :54:26.London said. We do and this place needs to have an active role in

:54:27. > :54:29.looking at what the Bank of England does and does not do. That is

:54:30. > :54:35.especially true at the moment when we are looking at the sheets around

:54:36. > :54:42.the world and dramatically expanded in a very experimental way. We have

:54:43. > :54:52.seen recently the ECB and the Bank of Japan both going full tilt at the

:54:53. > :55:02.windmills trying to create inflation. The jury is out on that.

:55:03. > :55:07.We must not forget, that our own MPC made a terrible mistake back in

:55:08. > :55:10.2005. They cut interest rates at exactly the wrong time sending

:55:11. > :55:15.exactly the wrong signal to the markets to the housing market, to

:55:16. > :55:23.the bank. Money was racing away in terms of its creation, we really

:55:24. > :55:29.need to be all over this and this place both on the regulatory front

:55:30. > :55:30.and guide looking at what happened in the monetary policy decisions.

:55:31. > :55:41.But I commend the first One of the disadvantages of being

:55:42. > :55:46.called in a debate is always find myself completely rewriting what I

:55:47. > :55:51.thought it was an excellent speech. I felt I had to reflect on some of

:55:52. > :55:58.the earlier contributions. I noted the ministers in her opening remarks

:55:59. > :56:02.mentioned she got the FCA foot deal with things such as sharp practices.

:56:03. > :56:07.She talked about the importance of doing with the. The Honorable member

:56:08. > :56:14.talk about the importance of reestablishing trust of the proper

:56:15. > :56:20.conduct of business. On the sole member of the lead she talked with

:56:21. > :56:24.his concerns of the public do of the behaviour of banks. -- leads east.

:56:25. > :56:28.This makes the case for the fundamental importance we are trying

:56:29. > :56:37.to address, it is a issue of culture. Culture is not something

:56:38. > :56:46.that can be satisfied the changes of structure or regulation alone. I was

:56:47. > :56:53.intrigued to hear a friend, with an answer, which I think there is some

:56:54. > :56:57.repetition and my part. That is getting people who people the great

:56:58. > :57:02.institutions, things like after the Bishop. What was it that

:57:03. > :57:10.characterised them? They took responsibility. They acted with high

:57:11. > :57:14.standards. They work with -- were equipped to lead and accept the

:57:15. > :57:18.highest of standards. And we could reinstitute that with many of our

:57:19. > :57:23.institutions today, it would be much less demand for some of the details

:57:24. > :57:29.regulation and structures that we find ourselves having to deal with.

:57:30. > :57:36.I look a few minutes to deal with some of the issues of culture. Some

:57:37. > :57:44.lead matters have been rehearsed in the debate so far. I also have been

:57:45. > :57:49.concerned about the willingness of the government to remove the reverse

:57:50. > :57:58.burden of proof for senior managers before it has even been tested.

:57:59. > :58:02.Without it, we could perpetuate a culture of failing to accept

:58:03. > :58:07.responsibility under the cloak of a form of collective responsibility

:58:08. > :58:12.that favours the consensus of the guilty, over this good in the of

:58:13. > :58:19.behaviour. Culture is fundamentally important to understand the crash of

:58:20. > :58:23.2008. Would do I mean by culture? To me it is about the groups of people

:58:24. > :58:29.solve problems and recognised dilemma. It involves the conscious

:58:30. > :58:34.taking for granted beliefs. Their thoughts and feelings that forced

:58:35. > :58:40.the values and behaviours within their organisations. It is has been

:58:41. > :58:44.argued by many researchers that somewhere in the region of 70% of

:58:45. > :58:51.all major organisation prices, they are a function of culture. That is

:58:52. > :58:56.why hydration but the for the Minister, haven't to do with

:58:57. > :59:02.something that is a cultural figure to mere regulation and changes to

:59:03. > :59:11.organisation alone. -- cultural failure. Failures of culture

:59:12. > :59:20.orphanages of Enron, Lehman Brothers, RBS,... In these cases,

:59:21. > :59:24.they face precisely the cultural problem the Minister mentioned in

:59:25. > :59:31.her opening remarks. And that was the problem of groupthink at the

:59:32. > :59:33.highest levels. One aspect of groupthink is when groups are

:59:34. > :59:40.unwilling to listen to critical voices. Preferring the easy comfort

:59:41. > :59:47.of a blind consensus on born of common bonds. A classic example was

:59:48. > :59:56.a sponsor. It is widely recognised that the risk manager was sacked for

:59:57. > :00:00.bringing concerns regarding the company's strategy. He told the

:00:01. > :00:05.Treasury Select Committee in 2008 how they predicted the banks of

:00:06. > :00:12.practices could lead to disaster. Here aboard the banks concern but

:00:13. > :00:22.was sacked. The banks former chief executive. -- by the banks's. It has

:00:23. > :00:29.a lock that somebody who acted in such ways should have reached

:00:30. > :00:35.heights. In his evidence, he told MPs anybody whose eyes were not

:00:36. > :00:38.blinded by money, power, or pride, whatever lies problems will be

:00:39. > :00:46.mounted for Xbox and the other high street banks. Since his dismissal,

:00:47. > :00:55.he has been shunned by the financial community to their shame. After ...

:00:56. > :01:03.Management know what is happening. And even know what to do to select a

:01:04. > :01:06.catastrophe but a too emotionally paralysed act. It is often because

:01:07. > :01:13.the boss does not want to hear bad news. Perhaps it has been most

:01:14. > :01:23.eloquently summed up by the humble member for Huddersfield. It has been

:01:24. > :01:26.quoted saying indirect review, the rottenness and deceit and corruption

:01:27. > :01:31.of the maligned game that took over us official illnesses this will

:01:32. > :01:34.bring us back into with the world in a few short years. This bank has

:01:35. > :01:43.never been properly held to account or been brought to justice. --

:01:44. > :01:47.again. And he has diamonds, said it for his sacrifice. The lack of being

:01:48. > :01:51.held to account, the lack of effective XM is good in the and to

:01:52. > :01:56.this day, and lack of a fundamental inquiry into the culture the

:01:57. > :02:05.goings-on in these major institutions. Eight NFL gear upon

:02:06. > :02:12.which -- it is a failure. There have been other cultural felons also. Too

:02:13. > :02:17.many to recite. -- felons. Sacrificing the analysis programme

:02:18. > :02:21.properly. Making decisions as a book that any critic. Dealing with

:02:22. > :02:26.complex decisions and overly intuitive matter with their

:02:27. > :02:35.prejudice in favour of an easy consensus. And willingness to the

:02:36. > :02:42.late... -1 of the fundamental concerns that everybody has alluded

:02:43. > :02:45.to, but still remain to grapple with is how and when I'm going to fully

:02:46. > :02:51.understand the nature of the cultural crisis that afflicted our

:02:52. > :03:01.institutions. That is something we wait to address. As a pleasure to

:03:02. > :03:06.speak in this region. -- it is. I was reminded this weekend in my

:03:07. > :03:12.constituency, that Mike is situated from the work was one of the first

:03:13. > :03:17.provincial Baker, founder the first bank outside London and Nottingham

:03:18. > :03:22.in 1658, called Smith's bank. That letter expanded to a branch in

:03:23. > :03:29.Newark and one in Bradford is his constituency of my neighbour.

:03:30. > :03:33.Several of his illustrious ancestors became governors of the Bank of

:03:34. > :03:39.England. Both of us who follow such geeky facts, it thought it was

:03:40. > :03:43.fitting that mark on if you choose to make his first speech as governor

:03:44. > :03:47.has the Bank of England and Nottingham, and to declare our city

:03:48. > :03:56.and county as he dealt with it for the British economy. In that speech

:03:57. > :04:02.in 2013, he committed us all refusing to tools that are available

:04:03. > :04:06.to the bank to secure a sustainable economy for all parts of the

:04:07. > :04:14.country. Particular the regions of the UK. This bill, is reasonable and

:04:15. > :04:19.modest ways, helps us to redefine and improve the tool box that is at

:04:20. > :04:23.the hands of the government of the Bank of England. Knowing a few

:04:24. > :04:29.people who have worked at the Bank of England and recent years, some

:04:30. > :04:34.postal worker today, but I would say it is a good institution at which we

:04:35. > :04:37.should all be proud as members of the United Kingdom, it would be fair

:04:38. > :04:42.to say that it had been a somewhat inward looking institutions. For

:04:43. > :04:48.being critical, and one was say it's culture has been stuffy and over

:04:49. > :04:55.theoretical. Animals are slowly, to say the least. -- and it moves quite

:04:56. > :05:01.slowly. That is not always a bad thing. As a Young been governor, he

:05:02. > :05:06.has made an impact on tackling these concerns where they were

:05:07. > :05:14.appropriate. But, any suggestions, -- if I can make anything. It is to

:05:15. > :05:19.continue to do as he has tried, which is to recruit more people the

:05:20. > :05:23.practical experiences of life in the financial service sector and in the

:05:24. > :05:26.corporate world. Those who have worked in banks and law firms, or

:05:27. > :05:31.elsewhere, who can provide the essentials counterbalance to those

:05:32. > :05:42.who are overly theoretical and not always so practical. With a proper

:05:43. > :05:47.core government body aboard, this larger and more powerful

:05:48. > :05:50.organisation enhanced by the structure changed to this bill, can

:05:51. > :05:55.operate in a much more modern and dynamic way than its predecessor.

:05:56. > :06:05.Please enter that into Billy had been appointed to the FCA -- I was

:06:06. > :06:09.pleased that Andrew Bailey. When he came to Parliament last week to

:06:10. > :06:15.address the AP PG on governments of which I'm an officer, I found him to

:06:16. > :06:18.be clever, practical, down-to-earth, affable but willing to speak frankly

:06:19. > :06:23.when necessary to clearly possessing a deep and broad knowledge of the

:06:24. > :06:28.financial services sector. It also has to meet this has the making and

:06:29. > :06:34.a good appointment. He should have done a good job at taking over and I

:06:35. > :06:39.would ensure regulation at the PRA. Having worked at a commercial

:06:40. > :06:42.lawyer, dealing with the old FCA, that organisation and some of his

:06:43. > :06:48.person that was in a very poor state before these moves them around a

:06:49. > :06:54.particular was extremely low. It is still a struggle to recruit and

:06:55. > :07:01.retain the best talents. When the rewards I do sleep less than those

:07:02. > :07:07.who are on the front lines. Are usually less. It is essential that

:07:08. > :07:10.we give all the tools necessary to Andrew Bailey and others to enable

:07:11. > :07:16.them to recruit more talented individuals. It was same and why

:07:17. > :07:20.step in that direction to bring the PRA under the guise of the Bank of

:07:21. > :07:25.England, because it is a more attractive institution to work for

:07:26. > :07:35.and be part of and have find your seat beat than any other lesser

:07:36. > :07:38.regulator. -- your CPU. Does the continues the burgomaster shares of

:07:39. > :07:42.what seems to be very sensible steps. Some have argued that today

:07:43. > :07:47.and elsewhere and depressed that we should go much further and changing

:07:48. > :07:52.the Bank of England, or reimagining people of a central bank and the

:07:53. > :07:55.21st-century. I'll caution that the bank has been subject to a great

:07:56. > :08:02.deal of change in recent years. I don't have the exact figures, but I

:08:03. > :08:08.would imagine for example that a staff of around 2000 has already

:08:09. > :08:12.increased to around 3500 or thereabouts. The challenge of

:08:13. > :08:16.integration, a building a large organisation and assuring quality,

:08:17. > :08:19.because quality and standards at the end of the day is all that matters

:08:20. > :08:24.here is very great. We have to be careful that we do not give our

:08:25. > :08:28.regulators too much to contend with. The formalisation of the PRA pot by

:08:29. > :08:32.petition as part of the banks therefore seems sensible and always

:08:33. > :08:39.seemed rather strange that it was merely a subsidiary of the bank. I

:08:40. > :08:45.did note that it makes sense that what previous legislation had kept a

:08:46. > :08:49.supervisory role cup, then exercised by the FCA separate from the

:08:50. > :08:52.resolution vote, the new landscape brings them together. In other

:08:53. > :08:58.words, it gives to be believed by the sector that is what appropriate

:08:59. > :09:02.that the organisation supervising a bank should be different from that

:09:03. > :09:07.task with resolving whatever problems or mess got itself into,

:09:08. > :09:12.facility the view that this is no longer necessary. The bank is

:09:13. > :09:15.capable of handling both sides. The proposal to provide a treasure it

:09:16. > :09:20.with more information within the bill seems logical to me. It was the

:09:21. > :09:25.Bank of England provides temporary liquidity, and supports a bank

:09:26. > :09:29.crisis, it is the treasury and the taxpayer ultimately step in and pick

:09:30. > :09:35.up the cap. These measures are all part of the Governor's efforts to

:09:36. > :09:39.assure the banks are properly supervised to every extent possible

:09:40. > :09:43.to fail. The value for money component, which many members have

:09:44. > :09:49.mentioned is very welcome. At the bank to and larger, -- after that,

:09:50. > :09:54.it is appropriate it is open to greater scrutiny and of the

:09:55. > :10:01.questions and freedom of information will rise at the banks Powers

:10:02. > :10:05.continue to increase. Perhaps it is me that the Bank of England prospect

:10:06. > :10:09.accounts attesting to be difficult to understand. It always seems to

:10:10. > :10:18.the make a profit. Abortion suspicious of that. -- I have always

:10:19. > :10:22.been suspicious. The wider question of openness, I would like to see

:10:23. > :10:33.greater governance of the bag down from the regions of the UK. The

:10:34. > :10:37.written, -- not for superficial reasons. So that their art

:10:38. > :10:43.experience forces at the heart of our central bank with direct

:10:44. > :10:53.knowledge of the regional economy. -- experience forces. Finally, on

:10:54. > :10:58.the senior managing Regine, Greta adhered -- racing. Has been said

:10:59. > :11:02.here. The position to me seems fair. When that puts the pressure on

:11:03. > :11:07.senior managers to be named to take direct responsibility, but one that

:11:08. > :11:11.is also workable. I'm not interested in grandstanding. I'm looking for

:11:12. > :11:14.what will have the greatest effect on our financial services sector.

:11:15. > :11:23.The vast majority of my constituents, have all the hurt of

:11:24. > :11:28.this regime I would say. That never heard of this. To assure financial

:11:29. > :11:34.sector, which are stable and secure and resilient. I believe this is the

:11:35. > :11:41.best way to deliver it. And back one final point -- if I can. That is to

:11:42. > :11:47.welcome the additional chains that is brought into this bill, which is

:11:48. > :11:56.the regime regarding pensions. But this has been barely touched upon

:11:57. > :11:59.today. The pension service can be more widely applied to those looking

:12:00. > :12:04.to take advantage of the great opportunity that with the last

:12:05. > :12:07.parliament a bank able to use your annuities and whatever weight you

:12:08. > :12:15.want. It is a concern to meet that would not allow one of the great

:12:16. > :12:19.developments and pension reform to be sullied by miss selling. One can

:12:20. > :12:26.imagine mistakes make made by constituents who are not always

:12:27. > :12:33.financial literate as they wish. I can imagine this could be the next

:12:34. > :12:39.great miss selling scandal. While the citizens advice Bureau were

:12:40. > :12:43.given the difficult task of providing support for members of the

:12:44. > :12:51.public on the pensions, as a prime organisation. -- a superb. And cents

:12:52. > :12:53.additional support we can give to pension wise to assure our

:12:54. > :12:56.constituents make the right decisions for them at this crucial

:12:57. > :13:03.juncture in their financial lives must be welcome. In closing, this

:13:04. > :13:08.bill contains a printer was seen to be modest and reasonable proposals

:13:09. > :13:11.to further the government's and to provide a secure and reptilian

:13:12. > :13:16.financial services sector to secure a successful economy for the UK. I

:13:17. > :13:25.cannot imagine why the members of this house would vote against it

:13:26. > :13:27.tonight. Also try to compensate for some of the earlier speeches. -- I

:13:28. > :13:36.saw tried to. It has now been over seven years

:13:37. > :13:43.since the most devastating financial crash of our lifetime. Since the

:13:44. > :13:50.crash, regulations have been updated by the Chancellor and treasury

:13:51. > :13:56.ministers. Debit responsibility and accountability at the heart of the

:13:57. > :14:03.UK's financial system. Because the government's economic plan, thinking

:14:04. > :14:08.in the UK is now far more robust, but it is clearly not invincible. I

:14:09. > :14:12.shall be supporting the bill this evening, so that we can build upon

:14:13. > :14:19.the progress, continuing with all the valuable work that treasury has

:14:20. > :14:24.done so far. And to improve on the status quo we find. Certainly the

:14:25. > :14:28.way the Bank of England is governed, increasing accountability in the

:14:29. > :14:31.financial services sector. An extending the role of the pension

:14:32. > :14:36.wise to buy service, which I know is that I gave accused by many of my

:14:37. > :14:42.constituents. The Bank of England has been the cornerstone of global

:14:43. > :14:48.finance says 1694. It structures that governments must adapt to the

:14:49. > :14:53.needs of the 21st century. So that it can continue as such. Some of the

:14:54. > :14:56.banks historic practices have not been in line with current

:14:57. > :15:02.international standards. This bill helps to address the balance.

:15:03. > :15:07.Strengthening the role of the Bank of England's court of directors will

:15:08. > :15:12.enable the bank to function as an effective and modern unitary board.

:15:13. > :15:19.And more effective structure to allow the bank to deliver on his

:15:20. > :15:23.final regulatory policy roles. Most of our constituents, the people of

:15:24. > :15:27.the Bank of England other than perhaps issuing banknotes in

:15:28. > :15:34.England, is to set interest rates. The monetary policy committee

:15:35. > :15:37.currently meets 12 times a gear. But as we have already heard, as cynical

:15:38. > :15:47.but it's really long enough to properly review and consider a

:15:48. > :15:51.change in assessment. So moving the MPC to 18 meetings per year it would

:15:52. > :15:57.have desirable outcomes. Policymaking at this level does

:15:58. > :16:02.require time for reflection. A greater period between meetings

:16:03. > :16:06.would allow this. Such a sensible change will really bring the Bank of

:16:07. > :16:12.England and line with other central banks. Such as the Federal Reserve,

:16:13. > :16:17.and the ECB. And along for the results of votes, and resuming to be

:16:18. > :16:22.published alongside decisions over interest rates will open up this

:16:23. > :16:30.Opec process, granting access to the thinking of the MPC. The crash of

:16:31. > :16:36.2007-8 highlight a irresponsible behaviour of some individuals

:16:37. > :16:41.industry. Thankfully, the days to industry. Thankfully, the days to

:16:42. > :16:47.which my friend preferred with a party, said allowed people to take

:16:48. > :16:55.you bonuses while on the banks to free are behind us. The new senior

:16:56. > :17:00.management certification regime legislative for by the Coalition

:17:01. > :17:03.will come with a force in March, but under the existing legislation,

:17:04. > :17:08.while it would apply to banks, building site is, credit unions, and

:17:09. > :17:16.a regulated investment firms, it will not extend to other financial

:17:17. > :17:21.services. Expanding the scope of the figure management and certification

:17:22. > :17:27.regime will help to create a fairer, more consistent, more effective, and

:17:28. > :17:33.more rigorous regime brought the man for all. The government has already

:17:34. > :17:41.made a change to improve and support the pension system. Allow

:17:42. > :17:43.constituents to access the pensions and annuities without being

:17:44. > :17:48.penalised for doing so has given more flexibility, people being given

:17:49. > :17:53.more choice over how they spend their own money. It is because of

:17:54. > :17:59.this that the changes that the pension wise scheme was introduced

:18:00. > :18:04.following the 2014 budgets. Expanding the scope of the service

:18:05. > :18:08.means that more people overseas impartial, and high-quality

:18:09. > :18:13.financial advice and guidance which will allow them to discuss the new

:18:14. > :18:16.options. I encourage all members to join me this evening and voting in

:18:17. > :18:23.support of this bill, a bill that will bring the Bank of England and

:18:24. > :18:26.financial services up into the 21st-century. A bill for

:18:27. > :18:40.transparency, and accountability to bring in financial sector. -- reined

:18:41. > :18:44.in. It is a pleasure to follow him. We welcome the improvements made to

:18:45. > :18:46.this bill and the other place and we welcome the government's

:18:47. > :18:53.preparedness to listen. There are some good things in this bill and I

:18:54. > :18:57.will be brief. A partial welcome for the chant of the National Audit

:18:58. > :19:04.Office being able to do bag for money investigation. There'll not be

:19:05. > :19:10.allowed to look at the goals of the Bank of Becca into what they

:19:11. > :19:14.achieved, but what the locals were achieved should be part of this. We

:19:15. > :19:19.welcome the extension of the scope of the senior managers and

:19:20. > :19:27.certification regime. We probably welcome the changes of a possibility

:19:28. > :19:30.of credit agreements, and the revelation of transformer vehicles,

:19:31. > :19:37.which are devices for risk mitigation. We welcome the extension

:19:38. > :19:43.of the pension wise guidance service and increase duty of the Bank of

:19:44. > :19:52.England to provide information to the treasury is welcome. We welcome

:19:53. > :19:59.banks bring authorised to the a back operation hand out notes and island

:20:00. > :20:08.and Welsh. -- Scotland. -- Ireland. When he also welcome -- would he

:20:09. > :20:12.also, that doesn't afford as a goat that BBCi, the six largest private

:20:13. > :20:16.bank of the world close, and the report was commissioned. It was the

:20:17. > :20:20.way in which we live that the supervision of the Bank of England

:20:21. > :20:25.and its powers, that was one part that has not been published over the

:20:26. > :20:32.last 24 gears. That is the confidential part two, dusty pink it

:20:33. > :20:39.should now be published? I agree with him. Many of his constituents

:20:40. > :20:41.were affected by the collapse. Unless we publish this material,

:20:42. > :20:58.will not learn. There were considerable problems.

:20:59. > :21:06.She said the crisis of standards and testing back in and is a crisis, it

:21:07. > :21:09.is so the necessary remedy. Board for negligence and a system of

:21:10. > :21:15.regulation was found wanting the first time it was tested. He was

:21:16. > :21:19.right, and sadly it is still the situation now. There have been too

:21:20. > :21:24.few prosecutions, and it amuses me at them or why the authorities

:21:25. > :21:36.cannot use section 15 of the theft act. There have been a dilemma has

:21:37. > :21:41.been a series of posts 2008 crash infractions, by banking institutions

:21:42. > :21:54.and sentenced to death of 13, the new financial kind of authority...

:21:55. > :21:57.That includes a big fines to Barclays, Lloyds, HSBC, and banks

:21:58. > :22:02.like standard charter had been paying fines and the states. This is

:22:03. > :22:07.for wrongdoing which took place after the crash and 2008. Some of

:22:08. > :22:16.these people simply do not learn. Today, we learned a Barclays and

:22:17. > :22:22.Credit Suisse have been totalled find hundred 54 million US dollars

:22:23. > :22:25.by US regulators for the American Bible trading operations, which may

:22:26. > :22:31.have been done before 2008 by continued their brand. -- 100 54

:22:32. > :22:36.million. These people do not learn. There are problems with this bill.

:22:37. > :22:42.The test of the regulations should be whether it will lead to better or

:22:43. > :22:48.worse compliance. The debate today has been about reverse predator

:22:49. > :22:55.proof, but we actually want compliance and measures with a

:22:56. > :22:59.strict regime. -- reverse burden of proof. That is not going to happen

:23:00. > :23:05.with getting rid of the reverse burden of proof. The question is

:23:06. > :23:08.whether it will this change may prosecutions easier or harder. It

:23:09. > :23:13.will make him harder. Will this change may compliance harder for

:23:14. > :23:16.likely? My hunch is that it'll make compliance less likely it the

:23:17. > :23:19.reverse burden of proof be abolished, but we do not know

:23:20. > :23:29.because the government is rushing to get this change made before the SMC

:23:30. > :23:37.archives and seven to March. It is a good afternoon, the senior managers

:23:38. > :23:46.and certification regime,. We have some level of an decision by the

:23:47. > :23:58.Chancellor have a it over the years, because back in July 2013, on the

:23:59. > :24:01.government website, the government's response was cultural reform in the

:24:02. > :24:05.banking sector margin except in the government's plan to move the whole

:24:06. > :24:08.sector from rescue to recovery and assure that you can't thanks

:24:09. > :24:13.demonstrate the high standards and are able to see what businesses and

:24:14. > :24:17.drive economic growth. This bill if passed, will take us backward. We

:24:18. > :24:23.look at what the FCA is going and it appears to have pressure put on it.

:24:24. > :24:32.In the business plan 2015-16 for this very year, the chair said, and

:24:33. > :24:37.I Rotella, we identified the books most important forward-looking areas

:24:38. > :24:42.of focus and a few. He went to save poor culture and controls continue

:24:43. > :24:48.to concern us, that's one on to say. And one to look at culture and the

:24:49. > :24:53.banking sector. That now appears to have gone out of the window. In

:24:54. > :25:01.terms of the reverse printable, I say with all due respect. -- reverse

:25:02. > :25:04.predator proof. As far as I know, Doctor Bailey is not a lawyer, but

:25:05. > :25:18.he is pronouncing upon legal matters. He said in a letter, the

:25:19. > :25:21.introduction of the duty of response ability and place of a presence and

:25:22. > :25:25.makes little difference to the substance of the new regime. Once

:25:26. > :25:29.introduced, it will be for the regulators rather than distinct

:25:30. > :25:37.advantages to bridges were not taken. This changes when our

:25:38. > :25:43.process, not substance. I had this say to him, as a lawyer, I disagree.

:25:44. > :25:50.I know the burden of proof is, I know what is it, cases. I know the

:25:51. > :25:54.cost of a strict liability is and I know what the reverse burden of

:25:55. > :26:01.proof is. It's not as bad a strict liability. We do have strict

:26:02. > :26:11.liability on things like health and safety act. We want the government

:26:12. > :26:15.to be tightening the race name, not loosening it. That is what this bill

:26:16. > :26:25.will do if passed unaltered. -- regime. Some of the proponents of

:26:26. > :26:33.the bill seem to think that regulation of banking was to type

:26:34. > :26:42.before the crash in 2008. -- type. Though there published in March 2005

:26:43. > :26:47.by the centre of policy studies, called the Leviathan is still at

:26:48. > :26:53.large. In that report, called amongst other things for an industry

:26:54. > :26:58.with responsible senior management to ensure that consumers protection

:26:59. > :27:01.is provided through market forces and competitive brands are jealous

:27:02. > :27:07.of the reputation and where risk-taking is not viewed as

:27:08. > :27:10.dangerous but as commendable. It also recommended an industry where

:27:11. > :27:13.competition abroad and competitiveness at home are not

:27:14. > :27:19.hampered by the cost and burdens of being regulated. Bye-bye the cost

:27:20. > :27:21.and conflicts of educating consumers, or policing or

:27:22. > :27:33.prosecuting money laundering, and financial crime. Before I can to the

:27:34. > :27:40.house, I looked up the definition of the reverse ferret. A reverse

:27:41. > :27:42.barriers initiative reversal an organisation's policy and instead

:27:43. > :27:50.issued generally involving no acknowledgment of the previous

:27:51. > :28:01.position. Tonight, we have a double reverse ferret. It is a double

:28:02. > :28:12.reverse because that report, the luck is still at large, 2005. It had

:28:13. > :28:15.ten authors. -- Leviathan. Two of those authors, I shudder at

:28:16. > :28:28.ministers tonight. They were not MPs at the time. That is a double

:28:29. > :28:34.reverse ferret. Before 2005, they were saying Labour has regulation to

:28:35. > :28:40.tie. Many of us were saying they were too loose. To my great sadness,

:28:41. > :28:44.I was right in my government was wrong. This government is making it

:28:45. > :28:51.worse. They tighten up with the reverse burden of proof in 2013, to

:28:52. > :29:01.get later -- two years later and has to be done away with.

:29:02. > :29:08.With a leave of the house I would like to speak a second time, and

:29:09. > :29:13.command that this evening we have had a range of speeches, 12 from the

:29:14. > :29:18.back benches and I was pleased to say that almost all over the country

:29:19. > :29:23.we have heard from the Member for Chichester, the Member for East

:29:24. > :29:24.Lothian, the cities for London and Westminster, the Member for

:29:25. > :29:44.Southwest Dublin, and other places. I will address some of the questions

:29:45. > :29:50.that they've wrote and asked later on. I want to start by saying that I

:29:51. > :29:54.think that this has been a very revealing debate, because we just

:29:55. > :30:00.heard from the honourable gentleman that he is not satisfied with

:30:01. > :30:04.creating the system of regulation that was rightly criticised in 2005

:30:05. > :30:11.and resulted in the financial crash on their watch. But the Labour Party

:30:12. > :30:14.by declining to to give this bill a second reading tonight, are now

:30:15. > :30:18.showing once again that they would be a risk to the likelihood of

:30:19. > :30:23.everyone, most especially the poorest and the oldest estate were

:30:24. > :30:27.to ever returned to power. How is the case, because their shadow

:30:28. > :30:31.chancellor opposed to giving its second reading to this entirely

:30:32. > :30:36.sensible bill because he opposes the independence of the Bank of England.

:30:37. > :30:41.Gordon Brown's best position, his recent amendment on the order paper

:30:42. > :30:44.tonight says that this bill fails to increase oversight and

:30:45. > :30:50.accountability of the work of and I doubt it might be interesting to see

:30:51. > :30:55.exactly what he means by that. And 2012, the shadow chancellor said,

:30:56. > :31:00."In the first week of a Labour government, democratic control of

:31:01. > :31:05.the major economic positions would be restored, by ending the bank of

:31:06. > :31:10.England's control over interest rates, and bringing the nationalised

:31:11. > :31:16.and subsidize banks under direct control" that's what he is implying

:31:17. > :31:21.here tonight. And setting up his review of policy, the shadow

:31:22. > :31:25.Chancellor said, "Perhaps we should be even bolder creating a national

:31:26. > :31:32.investment Bank and using newly printed money to fund it. " He does

:31:33. > :31:36.not need me to criticise that as a terrible idea that would cause

:31:37. > :31:40.inflation, he should look no further than his predecessor as shadow

:31:41. > :31:46.Chancellor, the Member for Nottingham East who said," printing

:31:47. > :31:50.money and ending Bank of England independence would push up inflation

:31:51. > :31:54.and push up lending rates, and squeeze out money for schools and

:31:55. > :31:59.hospitals and means bending more on debt servicing, higher inflation and

:32:00. > :32:04.a higher cost of living would hit those on the lowest incomes, the

:32:05. > :32:13.poorest people who cannot afford those goods and services" that is

:32:14. > :32:17.the reality of the policy as regard to the Bank of England. Inflation is

:32:18. > :32:24.an attack on the poorest, does she agree with that policy? Surely the

:32:25. > :32:30.Honorable Lady knows, that it is this Chancellor who has printed a

:32:31. > :32:43.hundred and ?75 billion of money, and in doing so, the top 5% in this

:32:44. > :32:48.country welcomed by ?185,000 each. I do worry about the honourable lady

:32:49. > :32:52.sometimes because I think she is a greater criticising the decisions of

:32:53. > :32:59.the independent bank of England. That is before we get to their other

:33:00. > :33:02.economic policies by bringing back secondary picketing and banning

:33:03. > :33:07.dividends and nationalizing businesses without compensation,

:33:08. > :33:16.even then he glanced lower the head of the Independent review, the

:33:17. > :33:22.shadow Chancellor, has set him up to look at the bank of England and that

:33:23. > :33:30.in a recent article for the new statesman, we are in search of good

:33:31. > :33:36.ideas. The new Labour Party still does not have many economic policies

:33:37. > :33:42.to speak of. The new labor leaders are not economists, and they are

:33:43. > :33:48.going to have to learn fast. Tonight nights debate shows that they have

:33:49. > :33:52.not learned anything. While the SMP reason for the second reading so

:33:53. > :33:56.that there is some common ground Labour Party, they are at the other

:33:57. > :34:00.end of the spectrum and I think the bill fails to provide sufficient

:34:01. > :34:07.independence for the Bank of England. They cannot both be right,

:34:08. > :34:10.indeed they are both wrong, the bill strikes the right bylines on

:34:11. > :34:14.operational independence at the Bank of England, and the SCA and scrutiny

:34:15. > :34:20.by the people in the form of the treasury select committee and the

:34:21. > :34:24.elected government. I want to address some of the points that were

:34:25. > :34:29.raised in the debates, and in the opening speech the member did not

:34:30. > :34:34.point out that we have the toughest rules on bankers play in any major

:34:35. > :34:39.financial centre. He did not mention that we brought in new criminal

:34:40. > :34:43.offences in terms of financial crisis. And he did not mention that

:34:44. > :34:47.we are widening the duty of responsibility to the whole of the

:34:48. > :34:50.financial services sector. He did ask one reasonable question which is

:34:51. > :34:58.about the member and for understanding against the... I have

:34:59. > :35:04.written to the governor and the accountant, and they will try to

:35:05. > :35:10.publish that memorandum during the course of this bill in the house.

:35:11. > :35:15.The member for Chichester who made a superb sweeping master class of a

:35:16. > :35:20.speech on the history of financial regulation also came up with some

:35:21. > :35:24.interesting suggestions about making the PRC rulings public. I think

:35:25. > :35:28.there are would be some rulings Leroy Sane issues to stare around

:35:29. > :35:36.the sensitivity of things that they deal with. He wanted to rename the

:35:37. > :35:39.border of England. Not least and the fact that the government continues

:35:40. > :35:46.to own large chunks of banking systems. He mentioned about the time

:35:47. > :35:53.tables and emphasise competition which is important. The member for

:35:54. > :36:00.East Lothian pointed out that responsibility is what we need. We

:36:01. > :36:05.believe we are delivering that. He points out the importance of

:36:06. > :36:08.changing culture. I like his analogy of the captain of the ship. We

:36:09. > :36:13.believe that setting out the responsibilities for senior managers

:36:14. > :36:17.achieve that balance. The member for the Cities of London and Westminster

:36:18. > :36:21.spoke of for his constituency, he mentioned a problem with interest

:36:22. > :36:26.rates and running out of time which I would like to take up with him

:36:27. > :36:30.separately if I may. I want to clarify that the government power to

:36:31. > :36:34.appoint deputy governors is not his alone, it is the government of the

:36:35. > :36:38.Queen was to consent of the Chancellor. The honourable member

:36:39. > :36:43.for Bath in law who I don't see in his plays wanted to have more

:36:44. > :36:50.transparency and I point out to him gently, perhaps when he breathed it

:36:51. > :36:55.is the buildings inside her sector that has welcomed the effect that

:36:56. > :36:58.the proof is no longer in this bill. The honourable member of Southwest

:36:59. > :37:05.dev and made a great point about debt management and I share his

:37:06. > :37:10.enthusiasm for free debt advice and for the organizations he mentions

:37:11. > :37:18.like pay plan, Christians against poverty and others. I would be very

:37:19. > :37:23.keen to hear more from him in terms of what we could do to make sure

:37:24. > :37:26.that as the SCA takes on responsibility for debt management

:37:27. > :37:30.that the fee structure works well for consumers. The honourable member

:37:31. > :37:37.for Kamara been eased mention about most banknotes which is a very

:37:38. > :37:46.interesting idea. He will be aware that it was the north and South

:37:47. > :37:58.Wales Bank Bush lost the ability to issue bank notes. The honourable

:37:59. > :38:03.lady she and I will never see eye to eye on this. In terms of the sale,

:38:04. > :38:07.how could she not think that it is not in the wider interest of the

:38:08. > :38:12.economy to have the ownership away from government. She is the one that

:38:13. > :38:14.is complaining about socialising losses. I think she should be

:38:15. > :38:21.congratulated the government for having started on the sale last

:38:22. > :38:26.August. The honourable member made a great speech about competition and

:38:27. > :38:32.systemic risk. He is right that the investment firms and their systemic

:38:33. > :38:39.risk must be addressed. So far, eight investment firms have been

:38:40. > :38:43.identified, they made a very good speech on the importance of culture

:38:44. > :38:47.and we would agree with him on that. The honourable member for Newark

:38:48. > :39:00.made a great Nottinghamshire based beach. Vast speech. It will continue

:39:01. > :39:04.to be separate under different deputy governors on the Bank of

:39:05. > :39:10.England. I also want to endorse his point about the regions, he will be

:39:11. > :39:20.pleased to know that Mr Andrew Bailey is from Leicester. The

:39:21. > :39:32.honourable member for a deadly South said how popular pension wise is in

:39:33. > :39:35.his area. -- Dudley. Mr Deputy Speaker, in conclusion, this bill

:39:36. > :39:38.brings the national office and to scrutiny for the Bank of England for

:39:39. > :39:44.the first time. It protects independence for the first time. It

:39:45. > :39:48.extends the responsibility for the senior managers, to change the

:39:49. > :39:55.culture of financial services firms, it brings extra help for consumers

:39:56. > :39:59.and the market and in capping exit charges and ensures that the most

:40:00. > :40:04.affordable and society are protected from a legal loan sharks. These acts

:40:05. > :40:09.measures will be lost if the opposition has its way and opposes a

:40:10. > :40:14.second reading tonight. We cannot take irresponsible risk with

:40:15. > :40:19.financial regulation at the Labour Party once. This is a good and

:40:20. > :40:25.sensible bill and I urged honourable and right Honorable members to back

:40:26. > :40:28.the second reading tonight. Of the question is that the amendment be

:40:29. > :40:34.made. As many as of the opinions they Ayes. On the contrary the noes.

:40:35. > :41:23.The vision, clear the lobby! The question is that the amendment

:41:24. > :41:27.be made, as many as of the opinions they Ayes, on the contrary is a

:41:28. > :48:41.noes. Tell us for the eyes, and tell us for the noes. -- Ayes.

:48:42. > :53:43.Order! Order! The eyes to the right, the noes -- ayes to the right 252,

:53:44. > :53:50.the noes to the left, 289. The ayes to the right, 252. The noes to the

:53:51. > :54:01.left 289. The noes habit, the have it! Unlock! . The question is now

:54:02. > :54:08.the bill be read a second time. As any of that say accurate to. As many

:54:09. > :55:18.as to the opposite say No. Clear the lobby!

:55:19. > :55:25.The question is that the bill be read a second time. As many of that

:55:26. > :04:54.opinion say Aye. To the contrary say No.

:04:55. > :05:17.Order! Order! The ayes to the right, 292, the noes to the left 257. The

:05:18. > :05:29.eyes to the right to under 92, the noes to the right 257. The ayes have

:05:30. > :05:38.it, the ayes have it. Unlock! We know, to the motion to move. The

:05:39. > :05:46.question is on the order paper, as many of the opinion say Aye. To the

:05:47. > :05:50.contrary No. The ayes have it. The question as is on the order paper,

:05:51. > :05:59.as many of the opinion say Aye. To the contrary No. The ayes have it.

:06:00. > :06:08.The question is as on the order paper, as many of the opinion say

:06:09. > :06:15.Aye. We come to the backbench debate on the future of Financial Conduct

:06:16. > :06:24.Authority. Back to move, 15 minutes. I beg to move the motion as stands

:06:25. > :06:29.on the paper. It is four years since I first raised the issue of interest

:06:30. > :06:35.rates in this chamber. Six then I have had three backbench business

:06:36. > :06:38.debates on the issue. This is another a symbol of financial miss

:06:39. > :06:44.selling. I would like to debate on the global restructuring group, and

:06:45. > :06:49.I would like to have a debate on the future of the Royal Bank of

:06:50. > :06:52.Scotland. I think it is clear I have attempted to utilise this house in

:06:53. > :06:58.order to bring to attention the House and the wider public the issue

:06:59. > :07:01.of financial mismanagement, and also financial regulation within the

:07:02. > :07:05.marketplace. I think that some people have argued that this debate

:07:06. > :07:09.and this motion is premature. I would argue that in terms of the

:07:10. > :07:14.evidence that I will present that this motion is actually a long

:07:15. > :07:18.overdue. You have to remember that the FCA has a specific mission

:07:19. > :07:22.statement. At missing statement is very clear. The aim to make sure

:07:23. > :07:28.that the financial markets work well so that consumers get a fair deal.

:07:29. > :07:31.This means that that will be insured, because the financial

:07:32. > :07:37.industry is run with integrity, firms will have appropriate products

:07:38. > :07:41.and services, and print wrote consumers will know that they have

:07:42. > :07:48.their best interests at heart. I have the five examples that I will

:07:49. > :07:53.give as part of my opening speech. The Financial Conduct Authority are

:07:54. > :07:57.going. I want to highlight five areas. I would like to touch upon

:07:58. > :08:03.the voluntary regressive scheme for the miss selling of interest rate

:08:04. > :08:06.products. When it is positive, I think it is half full, but most of

:08:07. > :08:14.the time I believe it is a glass half empty. Because of this, after

:08:15. > :08:18.four years, I take it personally. I thank him, I wonder if you would

:08:19. > :08:24.agree with me that the glass half full is OK for some constituents,

:08:25. > :08:27.but for those who have looking for consequential action, it is

:08:28. > :08:35.absolutely empty. She makes a good point. One of the failures of the

:08:36. > :08:43.skiing. It is too often that the case that the FCA are not willing to

:08:44. > :08:49.admit is that people have accepted that outcome under duress, because

:08:50. > :08:53.they need to get their lives back on track. That is an important point. I

:08:54. > :09:01.will take an intervention by will highlight the for allegedly

:09:02. > :09:10.I want to talk about the FCA involvement of the failure of age

:09:11. > :09:22.boss. I also want to touch upon the decision made. I'd decided on New

:09:23. > :09:27.Year's Eve. Is he aware of the case that I have shared with him the

:09:28. > :09:33.appoint waited to have been treated by RBS. Also the complete lack of

:09:34. > :09:39.interest by the FCA. I am grateful he is taking this on, and I urge

:09:40. > :09:43.them to continue this campaign. I am grateful to my honourable friend for

:09:44. > :09:47.making those comments, and the issue of RBS involvement within the

:09:48. > :09:50.redress scheme is something I will touch upon. There are cards earns

:09:51. > :10:02.about the way in which the interest rate redress scheme was put into

:10:03. > :10:07.action. I have concerns about the arbitrary way which businesses were

:10:08. > :10:12.excluded from that scheme. The suit were excluded from any supported me

:10:13. > :10:15.redress scheme, and I think of that decision has not been fully

:10:16. > :10:20.understood. That is an issue I have previously raised and I would be

:10:21. > :10:25.more than happy to have the Mr's statement on that. Of more concern

:10:26. > :10:29.is the fact that we have, throughout this process, a lack of willingness

:10:30. > :10:32.from the FCA to explain what they were doing, and to communicate about

:10:33. > :10:38.what they were doing. One of the real concerns I have is that for two

:10:39. > :10:42.years we have a redress scheme in existence, and for two years the FCA

:10:43. > :10:46.did not share the rules of the scheme. Businesses that had been

:10:47. > :10:49.declined to read just within the scheme were making efforts to appeal

:10:50. > :10:58.those decisions without knowing what the rules were. I am grateful, does

:10:59. > :11:04.he accept the frustration of constituents like my own, who have

:11:05. > :11:08.found the whole process so long and drawn out that it is almost as if he

:11:09. > :11:13.is hitting his head against a brick wall to try to get justice, because

:11:14. > :11:22.of the way it has become. I sympathise fully. I suspect they

:11:23. > :11:27.will be a year, and four years later I am having a debate. I surely

:11:28. > :11:31.concern about knocking the head against the wall. The Treasury

:11:32. > :11:41.select committee intervened on this issue, and the ST a published their

:11:42. > :11:47.rules in February of 2015. Two years, decisions were being made

:11:48. > :11:51.without knowing the rules. Upon looking at the rules, it became

:11:52. > :11:54.apparent that the way in which consumers or customers of RBS were

:11:55. > :11:58.being treated within the redress scheme was significantly deferred

:11:59. > :12:03.from the customers of other banks were being treated within the

:12:04. > :12:07.schema. We did a significant piece of analysis on cases to the scheme.

:12:08. > :12:14.That showed that the chances of being given a swap for swap if you

:12:15. > :12:20.are in RBS customer is much stronger at your customer of another bank.

:12:21. > :12:25.The redress you would be entitled to is significantly less otherwise. The

:12:26. > :12:31.reason for this is the RBS appeared to be relying on a generic condition

:12:32. > :12:35.of lending, a Clause within the lending practices. That generic

:12:36. > :12:39.condition of lending was not deemed appropriate or significant enough by

:12:40. > :12:44.some of the banks. For some reason, for RBS, it was deemed to be

:12:45. > :12:50.significant and sufficient to swap outcome. We met with RBS, myself and

:12:51. > :12:54.other members in order to highlight the discrepancies. We were told that

:12:55. > :13:00.the rules about the Treasury select committee were not rules, they were

:13:01. > :13:04.principals. Although they were principals established for this

:13:05. > :13:08.scheme, apparently there were 11 different methodologies agreed upon

:13:09. > :13:12.by different banks. We have a situation in which it is arguable

:13:13. > :13:16.that the Treasury select committee were misled on this issue, because

:13:17. > :13:19.when we asked for the rules we got principals. In terms of the

:13:20. > :13:24.methodology I would ask again, if you are a business and you do not

:13:25. > :13:29.have an adequate level of settlements, how can you challenge

:13:30. > :13:34.that decision? If you don't know what the methodology is? I have met

:13:35. > :13:39.with the FCA because RBS were perfectly happy about this issue.

:13:40. > :13:43.They sent a methodology that they agreed with the FCA, and they are

:13:44. > :13:47.delivering upon it. When I met with the FCA the confirmed on a different

:13:48. > :13:51.ideologies within the scheme. He did not share that with me. If you are

:13:52. > :13:54.in RBS customer unhappy with an outcome, it would appear to me that

:13:55. > :13:57.you are in a difficult situation to argue your case, because you are not

:13:58. > :14:04.being provided information that you need to argue that case. Does he

:14:05. > :14:11.agree with me that what the FCA ought to be looking at is

:14:12. > :14:16.transparency, one, speed number and fairness. It seems to me that the

:14:17. > :14:19.FCA take no regard at all toward the fact that many of our constituencies

:14:20. > :14:24.are probably running into hundreds of thousands throughout the country,

:14:25. > :14:28.are actually the losers of tens of thousands of pounds, and in many

:14:29. > :14:34.cases these are people who are elderly and relying on that money

:14:35. > :14:44.into their old age. I would endorse those comments. Our situation is

:14:45. > :14:47.that swap for swap are likely to be an RBS customer. Noncompliant sales,

:14:48. > :14:51.which do not result in a cherub of the agreement within RBS has gone

:14:52. > :14:57.from about 40% to about 60% of all cases. It is not a line with the

:14:58. > :15:01.example. I would argue that this voluntary scheme that the FCA put

:15:02. > :15:11.together is not delivering, and indeed it is not being monitored. I

:15:12. > :15:15.have spoken at length about this, I have made my concerns known time and

:15:16. > :15:21.time again, but I need to touch upon the issue of consequential losses.

:15:22. > :15:23.When the redress scheme was announced, we thought that the

:15:24. > :15:29.inclusion of consequential losses was a pleasant surprise. I'm afraid

:15:30. > :15:33.that we were being overly optimistic, because the analysis

:15:34. > :15:40.that we have taken of the redress scheme shows that of the 2000 cases

:15:41. > :15:45.that we have looked at, 50% have received absolutely no consequential

:15:46. > :15:50.losses. 85% of cases have her received consequential losses of

:15:51. > :15:54.less than ?10,000. I have personally seen dozens of cases where a well

:15:55. > :15:59.argued case has been made, and yet the banks within the region click

:16:00. > :16:02.macro redress scheme can reject the changes without giving an

:16:03. > :16:06.explanation. What is worse is that the as this is made one appeal

:16:07. > :16:10.against the decision, without knowing the basis upon which the

:16:11. > :16:15.appeal has been rejected, and yet they have one opportunity in order

:16:16. > :16:20.to challenge. Invariably, that fails. In consequential losses, I'm

:16:21. > :16:24.afraid again that we are failing businesses. The final point that we

:16:25. > :16:27.should take great point to note is that time and time again we are

:16:28. > :16:32.seeing cases that go to court, and are often settled outside of court

:16:33. > :16:35.where the consequences will be a better settlement than what was

:16:36. > :16:39.being offered within the redress scheme. It should be a cause of

:16:40. > :16:44.concern. What should be of even more concern to this house is that the

:16:45. > :16:49.fact that time and time again we are having orders placed on those

:16:50. > :16:55.settlements, placed by a taxpayer-funded bank. I find that

:16:56. > :17:01.utterly unacceptable. I want to move on to income stream. The conduct

:17:02. > :17:04.income stream is something that creates a real problem about

:17:05. > :17:09.regulation within this country. What we have is a situation in which the

:17:10. > :17:13.regulator was informed of mismanagement, but of fraudulent

:17:14. > :17:17.behaviour. Yet it took the regulator for months before putting a notice

:17:18. > :17:21.up on their website highlighting their concern, saying that the

:17:22. > :17:26.funding was not as safe as a bank account. It took a further year

:17:27. > :17:32.before that fund was fond of. Any meantime, between the

:17:33. > :17:36.whistle-blowing informing of the issue, and the winding up of the

:17:37. > :17:43.scheme, more than half of the total investments in the conduct and

:17:44. > :17:52.scheme was referred. I will take an intervention. A doctor, one of my

:17:53. > :17:58.many constituents who have made significant losses under the

:17:59. > :18:03.investment scheme are not just frustrated by the inordinate length

:18:04. > :18:07.of time that the FCA is taking to investigate this, and to decide what

:18:08. > :18:12.concession might be payable, but they are still unclear as to whether

:18:13. > :18:17.that compensation, when it has been decided, will be paid directly to

:18:18. > :18:23.the investors, or will it be put into the spending funds? She makes

:18:24. > :18:27.an important point, and on this issue there is a lack of clarity.

:18:28. > :18:32.Only last week the FCA published on their website the fact that there

:18:33. > :18:38.has been settlements between the liquidators. The interesting thing

:18:39. > :18:42.is that that decision to publish on their website the fact that there

:18:43. > :18:48.has been a settlement reaches the confidential agreement that was in

:18:49. > :18:51.place. We have regulators agreeing on a settlement, but the party of

:18:52. > :18:55.the settlement cannot offer any advice, because there is

:18:56. > :18:58.confidentiality. In relation to publishing issues about public delay

:18:59. > :19:03.confidentiality agreements, we have a track record of the FCA abusing

:19:04. > :19:08.confidentiality. To publish the fact that they are taking a degree of

:19:09. > :19:12.responsibility for the outcome, I find utterly unacceptable in view of

:19:13. > :19:15.the fact that the liquidators are stating categorically that they are

:19:16. > :19:21.not associated themselves in any way shape or form, that they do not

:19:22. > :19:24.agree with aspects of the statement, and they are stating categorically

:19:25. > :19:28.that the only reason that they had a settlement is because the mediation,

:19:29. > :19:34.which the conduct authority had to try to arrange that was not

:19:35. > :19:37.successful. The decision to finish the mediation was made without

:19:38. > :19:42.consultation. To have the regulator make a statement on their website am

:19:43. > :19:47.a categorically denied by the parties to the agreement is a matter

:19:48. > :19:53.of concern. Will he agreed that within this inquiry the FCA has been

:19:54. > :19:59.too slow, and has not been transparent enough with investors? I

:20:00. > :20:02.of course agree. I will quickly run to my point. There are questions to

:20:03. > :20:08.be asked of the radiator on this issue. Will the settlements result

:20:09. > :20:16.in full compensation for settlements of the investors? Probably not is

:20:17. > :20:20.the answer. Is it correct to say that the FCA were involved, or is

:20:21. > :20:24.this because the mitigator is wearing a situation where the

:20:25. > :20:26.failure mediate the decision and going down the rue of an

:20:27. > :20:32.investigation was done without any consultation? There is a question

:20:33. > :20:36.whether this settlement is better than what was agreed with the FCA

:20:37. > :20:40.mediation process. Why are we 18 months down the line in a situation

:20:41. > :20:48.where investors have waited longer to have a settlement? He has done a

:20:49. > :20:52.lot of work on this. The fact that we are still here and we're still

:20:53. > :20:56.going on with the FCA blundering around in the dark. We are talking

:20:57. > :21:01.about money and investment of people. I have a constituents who

:21:02. > :21:07.are out of pocket to a large amount of money. The FCA, frankly, our

:21:08. > :21:10.plane around in not doing anything about or doing what they are

:21:11. > :21:17.supposed to do in first place. It is clear what the role of the houses. I

:21:18. > :21:21.am afraid that the regulator has not responded. I am aware and conscious

:21:22. > :21:27.of time will stop I promised to touch upon the three areas, but I

:21:28. > :21:31.will do a quickly. There is a real? And really lays into concerns

:21:32. > :21:35.raised. Why the decision to cancel the review of banking culture was

:21:36. > :21:40.taken? At short notice with announcements made on New Year's

:21:41. > :21:45.Eve? That was a surprising, but what is more surprising is that the

:21:46. > :21:49.decision was made by the FCA executive branch, executives without

:21:50. > :21:53.consultation by the FCA Board. That raises the question that the fact

:21:54. > :21:56.that the FCA are questioning the governments in the organisation. If

:21:57. > :22:00.a decision of that importance is made without consultation with the

:22:01. > :22:03.board, and that governance is an important question. Furthermore, it

:22:04. > :22:10.is worth pointing out that this banking culture was part and parcel

:22:11. > :22:15.of the business plan for the FCA. Suddenly, he disappears. Even more

:22:16. > :22:18.importantly, in a public meeting on the 22nd of July, the FCA stated

:22:19. > :22:22.categorically that this was an essential part of their new

:22:23. > :22:26.management of the banking sector. Though the 22nd of July. When this

:22:27. > :22:30.was pointed out to the FCA when they announced their decision to curtail

:22:31. > :22:37.this inquiry, the ST eight denied it had been said at a public meeting.

:22:38. > :22:44.Yet, that was very clear. We have the regulator stating an untruth to

:22:45. > :22:48.our number one financial paper. That is not a situation that gives me any

:22:49. > :22:52.confidence in the regulator. Two other points as to why we need this

:22:53. > :22:57.banking review. BH boss reports in a review of the reports commission

:22:58. > :23:05.highlighted careless and selective use, factual inaccuracies out of

:23:06. > :23:08.context, express and implied involvement of individuals not

:23:09. > :23:19.substantiated by fax. Undue reliance on individuals. We have to ask the

:23:20. > :23:26.question if we will ever see the report? Many members have come upon

:23:27. > :23:31.the global restructuring group. As yet, even though that was ordered in

:23:32. > :23:37.2014, we are yet to see any evidence of that, even though the acting

:23:38. > :23:41.chief executive stated on the 21st of January it was in the pipeline.

:23:42. > :23:44.Should we have any confidence, because less than six months ago the

:23:45. > :23:48.review of banking culture was in the pipeline? I have a concern about

:23:49. > :23:54.global restructuring group as well, as to whether we will ever see this

:23:55. > :23:59.report. To close, and I am Russian because of time, to close I think

:24:00. > :24:03.that all of these issues raises significant questions. Does the

:24:04. > :24:07.regulator have a deal with RBS? I think that is a reasonable question,

:24:08. > :24:13.a serious and reasonable questions to ask. Looking at the way that the

:24:14. > :24:15.redress scheme has been operating, there is a question mark as to

:24:16. > :24:22.whether they have been treated differently? Has the FCA let off the

:24:23. > :24:26.banks as into the issue? Is the regulator acting in a timely

:24:27. > :24:30.fashion? Those are all questions that need to be responded to, and I

:24:31. > :24:35.would argue that there are real doubts in terms of all of those

:24:36. > :24:38.questions. The regulator needs to work with integrity, it needs to be

:24:39. > :24:42.independent in order to deliver in the interest of a healthy financial

:24:43. > :24:46.market, and it needs to make sure that we have a system that reaches

:24:47. > :24:52.customers fairly. To do that, the regulator needs both the confidence

:24:53. > :24:56.and the respect of the stakeholders. I say that that respect, that

:24:57. > :25:00.confidence has been lost. It has been lost in the outside world,

:25:01. > :25:05.whether it has been lost in this chamber remains to be seen. I think

:25:06. > :25:09.when a regulator's integrity has been questioned to this extent,

:25:10. > :25:12.there are questions to be answered by the regulator, and by the

:25:13. > :25:17.Treasury who are responsible for the regulator. I think the chamber for

:25:18. > :25:20.this time, and I hope that other members will raise other important

:25:21. > :25:31.issues in terms of the way the FCA is operating.

:25:32. > :25:38.I cite the case of my constituents Stephen Jones as a successful

:25:39. > :25:46.entrepreneur in my area who was provided advice and sold a interest

:25:47. > :25:52.hedge rate I RBS in 2009. RBS's own investigation was said the swapped

:25:53. > :25:55.dot-coms of these mop was never mentioned. There are e-mails that

:25:56. > :26:00.showed that that section was desperately keen to see such

:26:01. > :26:05.products sold. The evidence of miss selling is provided by RBS and it

:26:06. > :26:14.has done so without ambiguity. For the FCA system allows RBS and other

:26:15. > :26:18.banks to run their own systems under address. That means that Mr Jones

:26:19. > :26:22.who has lost a significant amount of money through no fault of his own

:26:23. > :26:27.because he was nestled and misled on the product and the RBS document

:26:28. > :26:31.explicitly annotated from inside showed that that was the case that

:26:32. > :26:37.it was never advised is left with only the choice of going to court

:26:38. > :26:46.against a government owned major bank. Something which in itself is

:26:47. > :26:48.financially extreme. It highlights and strengthens the case that the

:26:49. > :26:54.honourable gentleman has made. There are many people, individuals,

:26:55. > :27:00.entrepreneurs, not being dealt with properly because of the rules of the

:27:01. > :27:08.FCA have been brought in. Let me highlight a second case. An entirely

:27:09. > :27:13.new area brought to me by a man. When people buy a property abroad,

:27:14. > :27:16.payment will be needed in the national currency where the purchase

:27:17. > :27:23.is taking place. It means people will need to access for ex-markets

:27:24. > :27:27.which is something that people cannot do generally and need to use

:27:28. > :27:32.other means. This is a market that is estimated to be ?60 billion a

:27:33. > :27:38.year. Some of the biggest specialist brokers and methodically misleading

:27:39. > :27:43.consumers with currency comforters in that adverts and on their

:27:44. > :27:52.websites which supply a rate that will not actually be offered. This

:27:53. > :27:58.complaint is taken by Mr Scott to the FCA and they refused to act.

:27:59. > :28:03.This is also taken the case to the standing authority who have judged

:28:04. > :28:08.in her favour on the 17th of September. That this action is

:28:09. > :28:13.noncompliant with the consumer protection from unfair trading

:28:14. > :28:22.regulations of 2008. Precisely the regulations given to this sector in

:28:23. > :28:27.September 20 12. This means that the companies are noncompliant with the

:28:28. > :28:30.commitment advertising practice and code of advertising and by

:28:31. > :28:36.definition therefore it is a condition of authorisation by the

:28:37. > :28:46.FCA under the payment of services directed, 2009. Game set and match.

:28:47. > :28:49.You would think. However, the FCA provided the evidence that under

:28:50. > :28:55.their rules, these companies are in breach, proven by standards and

:28:56. > :29:00.authority, given all the evidence, advise they must act by the NSA,

:29:01. > :29:10.says nothing whatsoever to do with those. They have knowingly failed

:29:11. > :29:16.Miss Scott and others who have been unfairly kept out of business and

:29:17. > :29:22.the consumer who is going for the rate advertised in a misleading

:29:23. > :29:27.fashion that they will never get. A lack of consumer choice, a lack of

:29:28. > :29:31.entrepreneurial expansion to those businesses who can be competitive

:29:32. > :29:40.and the regulator and this is in the last three months that has refuse to

:29:41. > :29:47.even look at the case. This is more than a passing problem. The FCA

:29:48. > :29:51.ought to be strengthened at the moment. It would appear that it has

:29:52. > :29:59.been weakened with its culture review dissipated and destroyed, it

:30:00. > :30:04.is being neutered. The former chief executive, to Treasury officials and

:30:05. > :30:11.to Treasury appointees were the people who decided who the new chief

:30:12. > :30:16.executive should be. Everything is becoming credential risk under the

:30:17. > :30:22.bank of England and the Treasury. So much so that the head of prudential

:30:23. > :30:28.risk has been appointed the head of the financial conduct authority. The

:30:29. > :30:33.consumer champions within the FCA have been systematically removed

:30:34. > :30:42.over the last four months, leaving none of them. Therefore one can only

:30:43. > :30:46.conclude the rights of the individual, the rights of the

:30:47. > :30:53.entrepreneur, the rights of the consumer are being subsumed to the

:30:54. > :30:59.big brother of the Bank of England and the Treasury. It begs the

:31:00. > :31:04.question, looking at the members of the House on the government benches.

:31:05. > :31:12.Are these people here listening to the debate really going to be on the

:31:13. > :31:17.side of big brother doing down the entrepreneur, doing down the

:31:18. > :31:22.individual, the consumer. Or are they going to be on the consumer's

:31:23. > :31:30.side because big Brother is taking over and those two examples I gave

:31:31. > :31:35.highlight the depth of the problem. Entrepreneurs seeking to make money