Financial Guidance and Claims Bill [HL] — House of Lords, 2017-07-19
Topic: Domestic Commerce
Peta Buscombe (Conservative, Centre-right): My Lords, Amendments 14, 15 and 20, tabled by the noble Lords, Lord McKenzie and Lord Stevenson, all cover issues relating to the body’s money guidance function Before addressing each amendment individually, I will first explain what will be covered under this function. Under money guidance, the single financial guidance body will provide information and guidance on all money matters, including budgeting and saving, insurance, financial advice, bank accounts, protection from fraud and scams, planning for retirement, and debt solutions. This information and guidance will be provided to all members of the public mainly through a central website and call centre, but the body will also be able to delegate this function to external providers. It will also fund financial capability initiatives, designed to help people manage their finances better and gain the confidence, skills and knowledge to engage with the financial services sector Amendment 14, tabled by the noble Lord, Lord Stevenson, would replace the word "provide" with the phrase "ensure provision of" with regard to the money guidance function. I assure the noble Lord that the existing wording of the Bill would allow the single financial guidance body to provide money guidance itself or to ensure provision of such guidance through commissioning, as is further outlined in Clause 4. I agree with the noble Lord that it is important that the body have the flexibility both to run its own central website—an element overwhelmingly supported by the respondents to the Government’s consultation—and to leave open the possibility in future to deliver money guidance through others. Amendment 15, tabled by the noble Lord, Lord McKenzie, would add subsections to the money guidance function to include the statutory objectives of the Money Advice Service as originally set out in Section 6A of the Financial Services and Markets Act—the FSMA. In October 2015, the Government launched the public financial guidance consultation to seek views on how publicly funded pensions guidance, debt advice and money guidance—including financial capability—could best be structured to help individuals make effective financial decisions. There was a common view among consultation respondents that MAS’s statutory objectives required it to deliver on too many fronts, making it difficult for it to truly excel in any areas and causing it to duplicate activity being carried out elsewhere The Government agreed with the respondents at the time that the statutory objectives of MAS are too broad—for example, the generic objective of promoting awareness of the benefits of financial planning. Respondents suggested that publicly funded money guidance should be targeted at filling gaps, where it is most needed. I assure noble Lords that the Bill as drafted will allow any existing MAS functions and services that meet the body’s objectives to continue More specifically, promoting awareness of the benefits of financial planning and the financial advantages and disadvantages relating to the supply of particular kinds of goods or services, and publishing educational materials or carrying out other educational activities, are covered under the money guidance function. The SFGB’s money guidance function also enables it to promote awareness of the benefits and risks of different kinds of financial dealing among members of the public Amendment 20, tabled by the noble Lord, Lord McKenzie, would include in the body’s strategic function the awareness of fraud and scams. The Government believe that the body can already do this under its money guidance function and the financial capability element of the strategic function, and that it is not necessary to specify this further The Bill’s functions were drafted to provide a framework so that the body has clear parameters but also the ability to prioritise. MAS’s objectives were wide ranging but specified in a way that meant it had to deliver against them all with equal weighting However, we consider that giving the new body a specific requirement to advocate for a particular issue is unnecessary and could have unintended consequences. There are several topics that the body may wish to look into as part of its money guidance function, and specifying just one in legislation could risk limiting its ability to look widely at the sector and have regard to emerging issues in the future. That is absolutely key. This is a framework, because we have to think about future-proofing. Issues relating to money guidance and the handling of money will arise—issues we have not even contemplated as of today. That is why we are trying to keep this provision as broad as possible However, I am very grateful to noble Lords for asking what we mean by this or that, as I am able to clarify what we are seeking to achieve while giving the body sufficient flexibility to do the right thing going forward. For those reasons, I urge the noble Lord to withdraw his amendment.