Financial Services Bill — House of Commons, 2020-11-09
Topic: Domestic Commerce
Richard Quentin Fuller (Conservative, Centre-right): It is a great pleasure to follow my hon. Friend the Member for Cities of London and Westminster (Nickie Aiken). As an adviser to a venture capital firm, I draw the House’s attention to my entry in the Register of Members’ Financial Interests I commend the Minister for such a thoughtful and thorough presentation of the Bill on Second Reading. I look forward to the Bill’s passage through the House. I also pay tribute to the Opposition spokesman, the right hon. Member for Wolverhampton South East (Mr McFadden), for his general welcoming of the Bill and for some of the important points that he made. He mentioned two of the contextual factors for the Bill: the financial crisis and Brexit. On the first, one issue that came from the financial crisis was not the absence or otherwise of regulation, but the fact that the regulations themselves were confused, as was the responsibility among different agencies. The various Governments since 2010 have made some progress towards streamlining the regulatory framework, and the Minister talked about further moves to make sure that regulatory organisations and their roles were streamlined A second issue from the financial crisis, about which the right hon. Gentleman will be aware from his time on the Parliamentary Commission on Banking Standards, was the lack of criminal sanction for the people who broke the law and the effectiveness with which criminal sanction could be brought to bear on those who misused their position in financial services. Through the right hon. Gentleman’s work on that commission, that has now been changed somewhat, and today the Minister presented further steps forward in providing criminal sanction for those who misuse their powers or rights in the financial sector. Those steps are to be welcomed On leaving the European Union, I would say from the other side of the argument that Brexit is a great opportunity for the United Kingdom. One of the things we are leaving behind is the scale of the European Union, but that gives us the opportunity to focus on those things that matter most to our country and to have the agility to make changes. On the point of equivalence, about which we have heard some shroud-waving from Opposition Members, my personal view is that the EU will come to regret quite strongly the decision not to provide equivalence on a mutual basis with the UK I wish to add three further issues to those contextual factors. The next is that we now have the opportunity to define the role of the financial services sector. We want the sector to be world beating and world leading—the Minister spoke directly about that—but we also need to make sure that, as many Members have said, it contributes to the wider British economy The fourth issue has not been commented on today but will be an important test for the regulations under the Bill: the context that we are living through an era of very inflated global assets. What is that going to do to the financial services sector in the next five or 10 years as we unwind the context of quantitative easing and other inflated assets? I would not mind hearing a bit from the Minister on that when he responds The fifth point, which the Minister touched on, is on innovation and technology. These regulations will meet a period of much more substantial technological change in finance. This country will be faced with choices between regulation and innovation, and trade-offs will need to be made. Unfortunately, too often in this House, we make vacuous statements about regulations. We talk about maintaining a gold standard on regulations or avoiding a race to the bottom on regulations. Both those statements are completely meaningless because they are entirely in the eye of the beholder. They mean nothing when we communicate them to one another. We should be focusing not on how tough regulations sound when we talk about them, but on how effective those regulations are in doing what we wish them to do. What is important about regulations is that they do what they are supposed to do and no more There are obviously some areas where regulation is important, as we have seen in the Bill in relation to protecting vulnerable customers. I welcome those measures in the Bill, but it is important to have regulation that promotes competition rather than entrenching established interests. There is a balance to be struck there in terms of innovation, which it will be interesting to discuss. There is also an important need to avoid systemic risk, which has been mentioned What concerns me, on the day when we are celebrating the vaccine, is that in our zealousness in this House to impose regulations, we forget that the innovations of private sector companies left to their own devices often provide the best outcomes for the people of our country and around the world. Pfizer, the company that has developed the vaccine we are talking about today, directly refused any Government assistance because it did not want the regulation and bureaucratic hand-holding that came with it. Sometimes we feel that the private sector is unable to deliver things that are a public good, but the truth of the matter is that most public goods are delivered either directly or indirectly by the actions of private companies and private citizens, and not by state diktat. The Bill has to provide the underpinning for that principle of deregulation and freedom for innovation, and for the opportunity for us to take advantage of our leaving the European Union. It must not provide a cloud of regulation that makes us feel good when we talk about it but does not actually do what it says when it is brought to test One of my concerns about the Bill is that we might be putting too much reliance on regulatory agencies. This was mentioned by my hon. Friend the Member for Wimbledon (Stephen Hammond) and I know it will be mentioned by other hon. Friends later. There is a subsidiary tendency for us, in our zealousness to regulate, to then pass these matters on to a regulatory agency. The hon. Member for Glasgow Central (Alison Thewliss) made the point that there is too little parliamentary oversight of such regulatory agencies. We do not have the necessary mechanisms in this Parliament. I hope that, as we progress the Bill, the Minister will consider that, given what is contained in the essence of the Bill.