Baroness Neville-Rolfe (Con)

My Lords, I begin by paying tribute to my noble friend Lady Noakes, to the Financial Services Regulation Committee, including the noble Baroness, Lady Bowles, and the noble Lord, Lord Vaux, and to my noble friend Lord Bridges of Headley for their persistent pursuit of a very simple but important principle. As regulators gain more power and their remit expands, so too should the scope and effectiveness of the oversight to which they are subject. My noble friend Lady Noakes powerfully articulated the concern that the FSMA model has been stretched too far and that even our expert parliamentary committees are struggling with the volume and complexity of oversight. We need stronger, not weaker, democratic accountability, which is why we saw value in the office of regulatory evaluation and/or my noble friend Lord Bridges’s original model tabled in Committee. We also share his concern about the dismantling of the Bank of England’s IEO. This is an area where the Opposition will continue to develop our thinking for future legislation and would welcome engagement. We are not comfortable with a system whose reaction seems to be to delegate every new or persistent problem to our regulators. We are very pleased that my noble friend Lady Noakes will continue to work with the Treasury and the regulators on improving parliamentary oversight through the relevant committees, and we look forward to working with her and others across the House, including the noble Baroness, Lady Bowles. What she has proposed represents a practical compromise that would allow us to move on. However, a positive response to Amendment 93 on first use of the new powers would also be important. One practical way in which the accountability gap could be narrowed a little—and, indeed, trust in the FCA improved—would be to strengthen the remit of the cost-benefit analysis panels, which already sit within the regulators. Their remit could extend beyond rule changes to include guidance and enforcement activity. They could be given the ability to request an assessment of changes that the regulator has judged to be immaterial. This would strengthen internal challenge, improve confidence in the regulatory process and provide Parliament with more useful and more independent information. I have not brought back yet another amendment on this proposal, but I hope the Minister can commit to looking seriously at it as a follow-up to this useful debate. I welcome the Government’s amendment on competitiveness and growth. I am only sorry that the name of the Financial Services Regulation Committee does not seem to have made its way into the statute.