Esther McVey: The hon. Lady is correct to say that I made a written statement to the House. I have met many Members, trade unions and ex-members of Remploy to figure out the best way forward. I had one-on-one

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meetings because, as the hon. Lady will appreciate, each of the factories is significantly different, with different commercial processes and outcomes. It makes far more sense to deal with this on an individual basis so that we can put the personalised support in place.

Mr David Nuttall (Bury North) (Con): Does the Minister agree that the policy is all about helping disabled people into mainstream employment and not at all about cutting the budget for disabled employment support, which despite the difficult economic circumstances is being protected?

Esther McVey: I agree with my hon. Friend, and that is precisely what the Sayce review recommended—that we get as many people as possible into mainstream work. There were 2,200 disabled people working at the Remploy factories, and in the last two years alone Remploy Employment Services has put 50,000 similar people into mainstream work.

Thomas Docherty (Dunfermline and West Fife) (Lab): The Minister will be aware that the two factories in Fife, in Cowdenbeath in my constituency and in Leven, are both left in limbo and unclear about their future. Will she meet me and my hon. Friend the Member for Glenrothes (Lindsay Roy) early in the new year so that we can understand better the possible options for the future of those two important factories?

Esther McVey: I will indeed meet the hon. Gentleman at his earliest possible convenience and mine.

Nick de Bois (Enfield North) (Con): Is not the reality that there is a total consensus among disabled people’s organisations and charities that segregated employment is not really the model for the 21st century?

Esther McVey: My hon. Friend is correct; more and more people are calling for disabled people to be in mainstream jobs. I believe in choice and that people should choose where they wish to work, but mainstream work is what most people must aim for.

Mrs Sharon Hodgson (Washington and Sunderland West) (Lab): The facts and figures, rather than the rhetoric, in respect of former Remploy employees throughout the north-east who have so far been helped back into work are truly shocking: Gateshead, none out of 13; Newcastle, six out of 56; Ashington, one out of 26; and Spennymoor, three out of 41. Given that appalling failure to support the workers to find new jobs, does the Minister really think that now, just two weeks before Christmas, is the right time to make 35 workers at the Sunderland factory redundant?

Esther McVey: The hon. Lady is quite right; as I mentioned in my statement, it has been a low start, but the numbers are increasing daily and we are doing as much as we possibly can. When I was given the choice whether to announce to the work force what was happening now, or to do so later, I believed that it was necessary that everybody had as much notice as possible. This is the start of a consultation period of 90 days, followed

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by a further consultation for a month. It is right and fair that everybody knows what is happening and that is why I took the actions that I did.

Mr Gerry Sutcliffe (Bradford South) (Lab): Before I became an MP I used to represent Remploy workers, and I saw the special nature of Remploy factories. We lost our factory in Bradford. The hon. Member for Shipley (Philip Davies) tried to oppose that closure, as I did, and 90% of the people who were there are not in employment. If this is about consultation, as the Minister says, will she ensure, as she tracks these people, that if they do not get employment, the closure process will be stopped until a successful scheme is in place?

Esther McVey: The hon. Gentleman makes a fine point: when the factories were closed in 2008, no plans, process, tracking or special consideration were given to the workers. That is now changing. We are obviously starting from a stop-start position, because we did not have this in place previously. As each day goes by, the process becomes better and more people are in work.

Mr George Mudie (Leeds East) (Lab): The Minister has admitted that 812 of the 960 workers are still waiting for work in the first phase. In view of the Department’s failure to get the most vulnerable people into work, should not the Minister, if she has any heart or sensitivity, postpone any future closures until the figure falls from 812 to nothing?

Esther McVey: I take on board what the hon. Gentleman says. Those are the numbers. I also announced today, because we are working on a daily basis, that five major businesses have come on board to support ex-Remploy staff. More people are getting jobs every day, and we will help them as best we can.

Mr Frank Roy (Motherwell and Wishaw) (Lab): Can the Minister give a specific answer: why has no Remploy worker from Wishaw, whose factory was closed over the summer, been helped into a job?

Esther McVey: I will meet the hon. Gentleman, because I do not understand why none of them has been helped into a job. The offer was there for them to come forward for personal support, and it was their choice whether to do so. More people have come forward; the number was only 800 previously, but it is now up to 961. Perhaps we could work together and he could ensure that they come forward so that we can track and support them. I believe that that is just as much up to him as it is up to me, so let us work together to help those people.

Paul Blomfield (Sheffield Central) (Lab): Remploy Sheffield was described by the Minister in her statement as potentially commercially viable. Does she not accept that her efforts would be better spent securing that potential, rather than risking every job in this ill-considered sell-off, and does she not see that, given the Government’s record, her talk of securing long-term employment for those disabled workers will be viewed with nothing but cynicism?

Esther McVey: When we were deciding whether to proceed with stage 2, many factors had to be taken into account. With the factories that were seen as potentially

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viable, such as those in the hon. Gentleman’s constituency, I was told that, were I to delay, they would become more vulnerable as contracts came to an end and that it was therefore imperative that we pursued stage 2 as soon as possible, because only that would ensure that the staff had a more certain future.

Ian Lavery (Wansbeck) (Lab): In the Ashington factory in my constituency, they bolted the doors, boarded the windows, ripped down the Remploy signs and cast the disabled people on to the dole queue. The promises made from the Dispatch Box for support for individuals have never materialised. Why?

Esther McVey: That support is in place and is increasing daily. If the hon. Gentleman has found that that has not been the case in his constituency, again, I ask him to meet me and the trade unions. I have met many other Members, and he is no different; as we all have the same intention, which is to get those people into work, I think that it would be best if we met up, so I make that offer to him here and now.

Paul Goggins (Wythenshawe and Sale East) (Lab): In spite of the tremendous efforts of the staff, and indeed increased sales, there is now a “For Sale” sign outside the Remploy factory in Wythenshawe. The Minister recently confirmed to me that only one of the 19 disabled staff who used to work there has so far been found work. Given that evidence, how can she possibly justify the closure of further factories?

Esther McVey: The right hon. Gentleman is right that 19 disabled people were employed at the factory, but in his constituency there are 16,700 people with disabilities, so we have to see what we are doing for all those people. I hope that he can take some comfort from the fact that last year alone Remploy Employment Services found jobs for 527 people with similar disabilities. Therefore, we have faith that we can get jobs for those 19 people.

Ian Lucas (Wrexham) (Lab): The closure of these Remploy factories—I believe that they will inevitably close, just as with the closures that took place over the summer—will lead to a payment to the Minister’s Department of a capital receipt on the sale of the premises. Will she confirm that that capital receipt, which is over and above the commitment of £320 million that she mentioned, will be used for the benefit of disabled people?

Esther McVey: I will certainly look into whether the capital receipt can be ploughed into future work and support for disabled people. Equally, I would like the hon. Gentleman to take into account the fact that some of these sales are not freehold but leasehold, so the figures might not be as high as he expects.

Mark Lazarowicz (Edinburgh North and Leith) (Lab/Co-op): We have heard about the initiative taken by the Welsh Assembly Government. Has the Minister had a similar approach from the Scottish Government? What discussions has she had with Ministers in Scotland on trying to provide alternative employment for the many Remploy workers in Scotland who are losing their jobs, including those at the Edinburgh plant, which closed just 11 days ago?

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Esther McVey: I have had many discussions with the Scottish Government about what can be put in place, and they are still coming forward with their plans. Across Scotland, 152 disabled people are employed in Remploy, but there are 668,000 disabled people in Scotland, and last year alone 2,550 disabled people were helped into work by Remploy Employment Services. So I do believe we can help, but the information that the hon. Gentleman seeks has not yet been forthcoming to me.

Bill Esterson (Sefton Central) (Lab): Given the lack of jobs and growth in the economy as a whole, is not this the worst possible time to be pushing ahead with the closure programme? If the Government are serious about supporting disabled people, surely the way to deal with this is to make sure that the jobs are there, readily available, before any closures take place.

Esther McVey: I do not recognise the statistics that the hon. Gentleman is putting forward, because since the election a record number of jobs—1.2 million—have been created in the private sector. As I said, 50,000 jobs were found by Remploy Employment Services in the past two years. We can find these jobs, and that is entirely what we are aiming to do.

Mr William Bain (Glasgow North East) (Lab): With unemployment among the disabled having risen by 63,000 in the past year, this Minister, sadly, has presided over an unmitigated shambles of a tendering process in the Springburn Remploy factory in my constituency, with nearly 50 disabled workers not even given the dignity of her making a written statement to this House. Does she not accept that with the Daily Record in Scotland having made very serious allegations about the propriety of the tendering process at that factory, the only way she can restore confidence in her own policy is to bring in a moratorium so that she does not further preside over the incompetent chaos affecting hundreds of Remploy workers across the country?

Esther McVey: It is a pleasure to debate with the hon. Gentleman again. I have had two Westminster Hall debates with him on this subject, and we have spoken on various occasions. He knows only too well, from the written and verbal replies that I have given to him, what we are doing, what is happening and what has happened in his constituency.

Andy Sawford (Corby) (Lab/Co-op): As the great-grandson of a British soldier who lost his arm in battle but worked all his life, may I say to the Minister how important it is to our national character that we provide employment for disabled people who can work and provide support for those who cannot? Will she undertake to look into the reality gap in Corby and east Northamptonshire between her rhetoric about providing support for people to get into employment and the daily distress of being harassed by Atos and finding it incredibly difficult to find employment?

Esther McVey: We are working with and supporting these people. I am more than happy to meet the hon. Gentleman to see what is happening. However, as I have said, our main and only priority is to get all these people into work and support them as best we can.

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Sheila Gilmore (Edinburgh East) (Lab): The Minister’s view seems to be that we should equalise downwards and that, if some disabled people are not working while others are employed in Remploy factories, it would be better to move those in the second group into the first one, because at least then they would all be treated fairly. Given the failure to get the people affected by the first round of closures into work, surely the fairest thing to do now would be to stop, get it right and then move on. This is not about whether we should or should not try to get people into mainstream work; it is about whether we can get these people into work.

Esther McVey: Of course it is about getting these people into work. It has nothing to do with levelling down. We have taken the advice of the Sayce review and disability organisations, which have said that they want as many disabled people as possible in mainstream work. We are proceeding with that. I do not need to remind the Opposition that their failed modernisation plan, which started in 2008, was a disaster and we, as always, are picking up the pieces.

Mr Clive Betts (Sheffield South East) (Lab): Since March, neither the management nor the unions at Remploy Sheffield have received any information about, or any assistance with, securing the future of their factory. I have identified some local business people who may be interested in becoming involved. They contacted Remploy HQ, but received no reply. I have tried to set up a meeting between a local Remploy manager and these local business people, but he says that he cannot meet them, because everything has to go through KPMG. Is it not time for the Minister to start cutting through the bureaucracy and provide real assistance to people who want to become involved in trying to keep Remploy Sheffield as a going concern?

Esther McVey: Of course we are cutting through any bureaucracy. However, a process has to be fulfilled and carefully followed. The process has only just started and

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a 90-day consultation will begin in January, so those people whom the hon. Gentleman has found who might be interested in taking the factory forward should now make their case and it will be taken up by the Remploy board.

Pamela Nash (Airdrie and Shotts) (Lab): When the last round of closures was announced by the Government, I was visited by several of my constituents who worked at the nearby Remploy factory. They sat in my office and were absolutely devastated, and I tried to console them. Now we hear that hundreds more across the UK face the same fate. We also know that 90% of those who were sacked last time by the Government are still not in work. Will the Minister make it clear why 90% are not in work and, if she cannot, why she is pressing ahead with these closures?

Esther McVey: As to why the previous Government failed, that question should be put in the direction of the right hon. Member for Birmingham, Hodge Hill (Mr Byrne). I reiterate that we are working as closely as possible with these people. We have put in place personal support and that is increasing on a daily basis. We intend to get as many of these people as possible into work.

Jim McGovern (Dundee West) (Lab): On a point of order, Mr Speaker.

Mr Speaker: Points of order come after statements and we have a statement now, so if the hon. Gentleman is patient he may have his opportunity ere long.

Jim McGovern: It is about Remploy.

Mr Speaker: I understand that it relates to this matter, but I am afraid that the rules do not change for the circumstance.

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Winterbourne View

5.4 pm

The Minister of State, Department of Health (Norman Lamb): With permission, Mr Speaker, I wish to make a statement about Winterbourne View.

The scandal that unfolded at Winterbourne View was devastating. We were all rightly shocked, angered and dismayed by the appalling abuse uncovered by the “Panorama” programme in May 2011. Straight after the programme was aired, my predecessor, my right hon. Friend the Member for Sutton and Cheam (Paul Burstow), commissioned an in-depth review to ensure that we learned the lessons and took action. Today, I am publishing the review’s final report.

The abuse at Winterbourne View was criminal. Staff whose job was to care for people instead routinely mistreated and abused them. Management allowed a culture of abuse to flourish. Warning signs were not picked up by health or local authorities, the residents’ families were not listened to, and the concerns raised by a whistleblower went unheeded. The fact that it took a television documentary to raise the alarm speaks volumes.

The abuse that was uncovered at Winterbourne View is only part of the story. This case has made us look again at how we care for one of society’s most vulnerable groups. Winterbourne View hospital provided care for people with either learning disabilities or autism, together with either mental health problems or challenging behaviour. Around the country, at any one time, there are about 15,000 people with similar needs, about 7,000 of whom live with their families. Of the remainder, many live in the community, but about 3,400 are in in-patient settings. Their behaviour can sometimes pose a risk to themselves, and sometimes also to others. There will therefore be times when they require intensive treatment and support.

However, hospitals are not where people should live. There are far too many people with learning disabilities or autism in hospital, and they are staying there for too long—sometimes for years. We should no more tolerate people being placed in inappropriate care settings than we would people receiving the wrong cancer treatment. What is necessary is nothing short of a fundamental change of culture.

We have known for more than a decade that, with the right support, the vast majority of such people can live happy, fulfilled lives, close to their families and in their own communities. I saw that at Tower Hamlets just this morning. Much of what we know works in this area is based on the pioneering work of Professor Jim Mansell. Professor Mansell helped to set up our review and supported us right up until his death in January this year. I pay tribute to him for his tireless work in this area and for the huge contribution that he has made to improving people’s lives.

We know what change is needed; it is now time to ensure that it happens. Today, we are setting out how we will address poor care and abuse, and ensure that excellent care becomes the norm. First, we need to send a clear message to those who provide care. Owners, boards of directors and senior managers must take responsibility for the quality and safety of their services. When they fail, they should feel the repercussions.

A number of front-line staff at Winterbourne View rightly received criminal convictions, but the case revealed weaknesses in our ability to hold to account those who

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are higher up. We will address that. We will examine how corporate bodies and their boards of directors can be held to account under law for the provision of poor care and for any harm that is experienced by people using their services. We will also explore whether we can ensure that directors are “fit and proper persons” to oversee care, including through consideration of their record with other providers.

We will also tighten regulation. The Care Quality Commission will include reference to the best model of care in its revised guidance about compliance, and will consider it as part of the regulation and inspection of services from April next year. The CQC will also check whether all providers are following the established national guidance or similar good practice, including by carrying out unannounced inspections involving people with learning disabilities or autism and their families. Where standards are not met, it will take enforcement action.

Secondly, we will tackle the wider failings. We must stop people being placed in hospital inappropriately and ensure that services are commissioned which properly meet people’s needs. That requires the NHS and local government to work together.

All current hospital placements will be reviewed by 1 June 2013, and everyone who is there inappropriately will be moved to community-based support as quickly as possible and no later than June 2014. We will also ensure that in future health and care commissioners design services that allow people to live safely with support in their communities, with the individual and their family included in the development of their care plan. By April 2014, every area will have developed an agreed plan to ensure that that group receives high-quality care. As a result, we expect to see a dramatic reduction in hospital placements.

The report sets out specific actions that we will take to support that high-quality care, including tackling the excessive use of physical restraint, addressing concerns about the over-use of antipsychotic and antidepressant medication, and improving safeguarding arrangements. We will support a positive and open culture in which staff provide excellent care but feel able speak out when care is poor. We will support providers to achieve that, including in relation to staff training.

Creating a positive culture means listening to and involving people and their families. At Winterbourne View, families’ concerns were ignored. However, we must go further than heeding warnings or complaints and ensure that people and their families are involved at every stage of their care, and that they get the support they need, including advocacy support. We will make these changes as quickly as possible.

The organisations responsible for delivering change share our commitment to making it happen and are working nationally and locally across health and social care. A concordat signed by more than 50 organisations sets out the specific actions that each organisation commits to deliver. The NHS Commissioning Board and Local Government Association will come together to lead a joint improvement programme, with financial support from the Department of Health, to ensure delivery of the changes. I will chair a programme board to oversee that progress is made.

Winterbourne View fills us all with sorrow and anger but we are using it as a spur to make things better. Some places are already getting things right—I have

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seen some of them for myself, including at Tower Hamlets this morning, and the report discusses many more. They show what can, and should, be done for all, and that a better life for people with learning disabilities and autism is possible. I regard it as a national imperative that we transform care for those with learning disabilities or autism and behaviour that challenges, and I commend this report to the House.

5.12 pm

Liz Kendall (Leicester West) (Lab): I would like genuinely to thank the Minister for advance sight of his statement and the briefing I received earlier today. Members on both sides of the House were appalled and angered by the terrible incidents at Winterbourne View, and we share a determination to ensure that all necessary steps are taken to prevent a similar tragedy from happening again. Our goal must be to ensure that everyone with a learning disability or autism, including those with challenging behaviours, receives high-quality, decent and humane care and support, and that we finally end the practice of sending people to long-stay institutions, far away from their family and friends.

The Minister has announced a number of welcome measures that are a step in the right direction, but I remain concerned that some of the proposals are not clear or strong enough to guarantee the fundamental changes that people with learning disabilities urgently need. The NHS mandate published two weeks ago states there should be

“a substantial reduction in reliance on inpatient care.”

Can the Minister give a figure for that reduction? Without one, that laudable aim will be open to such wide interpretation that it risks appearing meaningless. Similarly, the Government say they want every local area to provide “appropriate” care and support. Will the Minister tell the House who will define what care is “appropriate” and how that will be measured?

How will the Minister ensure that all local commissioners have the necessary skills to make these changes? That was a problem with 150 primary care trusts, yet in future there will be 212 clinical commissioning groups. Those can, of course, draw on expertise in local councils, but the authorisation process for CCGs does not even mention learning disabilities as an area in which competence is required. If this is such an urgent national imperative for the Government, will the Minister explain why that is the case?

Some parts of the country continue to use long-stay institutions because they have not developed alternative care in the community and at home. In a time of constrained resources, when we need to make the best use of taxpayers’ money, there should be one budget for people with learning disabilities, not separate budgets for NHS and council care. Will the Minister explain how he will make that happen on the ground? For example, will he require the NHS Commissioning Board to instruct CCGs to provide funding to local councils if they are slow to do so or if they refuse?

The serious case review of Winterbourne View said that light-touch regulation by the Care Quality Commission was not appropriate for closed establishments, and that they should be treated as high-risk institutions, requiring frequent, unannounced probing investigations. The review says that the investigations should involve speaking

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to residents’ families and patients, and in particular to people who have left the institution, who may feel more able to speak out. The CQC recently completed a focused programme of inspections of long-stay institutions. Will that specific programme continue along the lines the serious case review recommends? Will the Government, in their review of the use of restraint, consider banning t-supine restraint, as the serious case review recommends?

One of the most disgraceful aspects of Winterbourne View is that vulnerable people were neglected and criminally abused while the hospital’s owners, Castlebeck, charged huge fees and made huge profits. The serious case review says that Castlebeck made decisions about profitability, including shareholder returns, over and above decisions on the effective and humane delivery of treatment. The average weekly fee for residents at Winterbourne View was £3,500—the fee rose to £10,000 for one patient. The review could not determine how much of that money went back into the hospital and how much was creamed off for profit because of the company’s complex financial structure—Castlebeck is owned by private investors based in Jersey and Geneva. That has made it virtually impossible to hold the company to account. Will the Minister confirm that the company has so far failed to meet two of the serious case review’s key recommendations —that it should fund therapeutic services for all ex-Winterbourne View patients, and that it should pay for the costs of the serious case review, which have so far been borne entirely by the taxpayer?

I welcome the Government’s commitment to examining how corporate bodies and their boards of directors can be better held to account. As a first step, will the Minister consider requiring private companies to publish the names of their owners, the members of their boards, and the details of their financial structures, before they can be licensed and registered to provide publicly funded care? The excuse that such information is too commercially sensitive should not be acceptable when the care of vulnerable people is at stake, and when it is paid for using substantial amounts of taxpayers’ money.

How we care for the most vulnerable people is the hallmark of a decent society. I do not doubt the Government’s commitment to addressing this issue. I hope they listen to our concerns and strengthen their proposals, so that people with learning disabilities get the decent and humane care and support we would all wish for our families and friends.

Norman Lamb: I thank the shadow Minister for her contribution and appreciate the welcome she gives for the main thrust of the Government’s response. This is a moment when everybody must come together to be clear that a change of culture is necessary from top to bottom. This is not a party political issue. The culture must change, and everyone within the system—from top to bottom—must recognise their personal responsibility to achieve that.

The shadow Minister raised a point about the mandate. One very good thing about the mandate is that it gives us accountability and transparency in the system for the future, and enables us to hold the NHS Commissioning Board and other parts of the system to account on delivering what is in it.

The hon. Lady asked how we will measure success in relation to the reduction in numbers in long-stay institutions. There must be a focus on assessing an individual’s

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personal care needs—that is what counts. The arbitrary setting of a target on numbers would be completely inappropriate when we should be focusing on the needs of individuals. The guidance we have received is that while there are 3,400 people in in-patient facilities of one sort or another, we are talking about probably reducing that down to 300 or 400 people. That is the best assessment that has been made, but I stress again that it must be based on assessment of individual needs.

The hon. Lady rightly makes the point about the skills of commissioners. One of the big failures has been that of commissioners properly to look after the interests of highly vulnerable people. The programme, which will be led by the Local Government Association and the NHS Commissioning Board and funded by the Department with between £2 million and £5 million of support, will be there to provide support and guidance to ensure that local commissioners get this right. We should applaud the parts of the country where this is being done brilliantly at the moment. They can demonstrate best practice to areas that need to change.

The hon. Lady asked whether the Commissioning Board will hold CCGs to account. The answer is, absolutely. This is part of the transparency of the new system and they must deliver on what they will be required to do.

I agree with what the hon. Lady said about the budget. The report makes it clear that the starting point should be that pooled budgets are the appropriate way forward. This is patchy at the moment. If there are not pooled budgets, they should explain why. In my view, there is no good justification for not pooling the resources of the NHS and social care to ensure the best and most appropriate care for individuals. There is also a duty for the two sides—social care and NHS—to work together. The health and wellbeing boards help to bring them together, and that is valuable.

The hon. Lady asked about Care Quality Commission inspections. Unannounced visits will continue, and they will include people with learning disabilities and their families, so that their perspective is gained. This is not a time-limited programme—it will continue. I think that the CQC recognises that this is an area that requires focus because of the vulnerability of the individuals concerned.

On physical restraint, we will look at all elements, including those mentioned by the hon. Lady, so that the best possible guidance is given to ensure that the excessive use of restraint, which currently happens in too many places, comes to an end.

On Castlebeck, I absolutely agree that it should consider financial support for the costs incurred following the scandals uncovered in its care settings. The hon. Lady rightly points out the responsibility that goes with charging an average of £3,500 per week per patient. One of the great failures of the current system is that there is not sufficient corporate accountability to ensure that people are held to account when things go wrong. When we consider proposals to address that lack of corporate accountability, we will look at the hon. Lady’s transparency proposal on publishing a lot more information about financial structures. Indeed, in the consultation we announced a fortnight ago on the follow-up to Southern Cross, we are proposing that there should be transparency regarding financial structures and that that information is shared to ensure that we avoid being caught by surprise, which is what happened under the system in operation when Southern Cross crashed, leaving many people in an unacceptable state of anxiety.

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Jack Lopresti (Filton and Bradley Stoke) (Con): May we have an assurance, first, that local agencies, such as the police and local government, have to take a large chunk of responsibility for this situation occurring in the first place and, secondly, that there will never be a repeat of the situation where the local council can fail to pick up on up to 40 alerts over several years? That could have avoided much of the pain and suffering at Winterbourne View.

Norman Lamb: I agree absolutely. One of the great scandals of this whole saga has been the extent to which local authorities and primary care trusts let people down. The father of a patient at Winterbourne View told me how the concerns he raised were ignored, how he watched as his son became more zombie-like because of the use of antipsychotic drugs and how he felt guilty himself—how shocking that a parent ends up feeling guilty through no fault of his own. He was powerless to do anything. It is shocking that public authorities let people down in that way. That is why I say that everyone in the system has to step up to the plate and recognise the need for a complete change of culture to recognise that everyone with learning disabilities has exactly the same rights as the rest of us.

Grahame M. Morris (Easington) (Lab): I thank the Minister for his statement and hope that he will reflect on some of the questions posed by my hon. Friend the Member for Leicester West (Liz Kendall), who made a powerful case for private providers being subject to freedom of information requests—I draw his attention to early-day motion 773, which embodies that principle.

On the failings that brought about this terrible tragedy, the Care Quality Commission was overly concentrating on process rather than its main job of ensuring that the required standards were met and looking at quality and risk profiles. There was a big disconnect between the perceptions of carers and families and the views of the CQC. Fundamentally, unless we address the lack of resources, will we not see a series of these disasters in the future?

Norman Lamb: In the aftermath of Southern Cross, we have seen the need for much greater transparency in these large corporate bodies to ensure that we know exactly what their financial structures are like and where the risk exists. The hon. Gentleman mentioned funding. The great scandal is that we are spending vast sums of public money putting people at risk and into inappropriate care settings. Visiting places such as Tower Hamlets, we discover that the right care package for individuals—most often, supported living in their own community—is much cheaper and gives them a quality of life they never experienced in these institutions. This is not about money, therefore, but about the system stepping up to the plate and ensuring that individuals are respected in their own right.

Paul Burstow (Sutton and Cheam) (LD): The Minister is absolutely right that transparency is essential, but there is also a recognition—I think—that that is not sufficient; accountability is essential as well. In this case, the company, Castlebeck, has hidden in the shadows and left everyone else to take the blame. I welcome what he has said about corporate responsibility, therefore, but I urge him—and commend to him—to make a

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much closer examination of the corporate legal framework to ensure that there is a corporate legal offence. It is not good enough for the thugs who did this to be in the dock and receive a criminal conviction; the company itself has a criminal responsibility, and it should be held to that standard and brought to court as well.

Norman Lamb: I commend my right hon. Friend for the work he did on this subject. When I started this job, it struck me that there was an absence of effective corporate accountability in the law and that that had to be addressed. I was determined to ensure that the Government response addressed that issue head on. In doing that, we need to look both at the regulatory framework—issues such as whether there could be a fit-and-proper persons test for those on the boards of companies—and at the criminal law. It is striking that in the Winterbourne View case the authorities determined that it was not possible, under existing law, to bring prosecutions. I am absolutely clear, however, that responsibility rests at the top of the company for facilitating this sort of outrage. That is why the law needs to change. We need to look both at criminal offences and the regulatory framework.

Mr Barry Sheerman (Huddersfield) (Lab/Co-op): May I press the Minister on one aspect? Will he look much more closely at the role of the third sector, particularly charities, in providing services? Hollybank school and community in Mirfield in west Yorkshire, close to my constituency, does a brilliant job. Does he recognise that, in considering the report, it is the quality of management that one worries about and the fact that the most vulnerable people in our society are so often looked after by poorly trained people on the minimum wage working 12-hour shifts? That is often at the heart of the problem.

Norman Lamb: I thank the hon. Gentleman for that question and completely agree that we have to address the issue of skills. It is worth pointing out that there are some fantastic providers in the voluntary sector, and in the private sector as well. We should applaud that and recognise that there are many well trained people on low wages providing a fantastic quality of care, but there are also places where that is not the case. That needs to be addressed.

I absolutely agree with the hon. Gentleman that we should look closely at the voluntary or not-for-profit sector. I had a meeting recently with the head of Shared Lives, an organisation that places people with learning disabilities into people’s homes. Surprise, surprise—when people are treated with dignity and treated as human beings, their behaviour improves and sometimes all the complex problems subside. There is an awful lot we can do. In the new year I will bring together the providers of the best care available so that we can learn the lessons from them.

Sir Tony Baldry (Banbury) (Con): As patients had come from different parts of the country to Winterbourne, there was a sense that they had got lost in that locality. Whatever happens, it is a tragedy that it took a television programme to discover all this. We are now going to have health and wellbeing boards and HealthWatch.

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Can my hon. Friend tell the House how, between them, they can ensure that they inspect and have a grip to ensure that something like this never happens in my county of Oxfordshire? It has never happened there because the structures of local government and health and social services are constantly monitoring and inspecting whatever is happening in our areas, irrespective of whether they are delivering health or social care.

Norman Lamb: I thank my hon. Friend for his question. He is absolutely right. The new structure provides far greater local accountability than we have ever had. One of my great criticisms of the old primary care trusts is that they are, in effect, completely unaccountable to their local communities. Health and wellbeing boards scrutinising what clinical commissioning groups and the local authority are doing can be very powerful. He also mentioned HealthWatch. Like its predecessor organisations, the local involvement networks or LINks, it will have the power to go into all care and health settings and inspect what is going on, often behind closed doors. We encourage HealthWatch to use those powers to shine a light on what is happening in some of those places.

Helen Jones (Warrington North) (Lab): The Minister has rightly referred to the amount of money paid for patients in Winterbourne View, but does he also recognise that good-quality care in a community is also expensive and requires a lot of highly trained staff? Given the cuts to local authority budgets, is he convinced that sufficient resources are available, even if budgets are pooled? When he knows how many patients need to be transferred back into the community, will he commit to come to the House to make a statement on whether the right resources are available?

Norman Lamb: I thank the hon. Lady for that question. What was striking when I visited Tower Hamlets this morning and talked to the leaders on the health and local authority sides was that, despite being the third most deprived borough in the country, Tower Hamlets is one of the lower spenders on institutional care because it is doing things the right way. Tower Hamlets has not referred a single person from the borough to an assessment and treatment centre for three whole years. Tower Hamlets has demonstrated not only that that is possible, but that it often ends up costing much less to provide the right care in the community—[Interruption.] Well, that is what the borough leaders find. That is what I have been told by them and by many other people in the sector. An individual should have the care that they need, and if the cost of that package in the community is substantial, it should be met. We should never compromise on that. All I am saying is that the overall cost of providing the right kind of care in the community often looks lower, when compared with those institutions in which the cost is extraordinarily high—as much as £3,500 per week per patient.

Rehman Chishti (Gillingham and Rainham) (Con): The Minister mentioned unannounced inspections. Will they involve speaking at random to patients at the centres? Linked to that point, some hospitals around the country have a whistleblower policy that allows people who work in them and others to take their concerns to senior officials in confidence.

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Norman Lamb: I thank my hon. Friend for his question. I am quite sure that those inspections will involve talking to the people in those settings. The fact that the Care Quality Commission is saying that it will involve people with learning disabilities and their families in those inspections will help to ensure that they have a human face. My hon. Friend also mentioned whistleblowing. It is essential that individuals feel able to blow the whistle when they see examples of abuse or neglect. Indeed, the Government have funded a helpline for any whistleblower in either the health or the care setting to ensure that people can always get access to guidance on how to go through the proper process of blowing the whistle on unacceptable standards of care.

John Healey (Wentworth and Dearne) (Lab): I welcome many of the steps that the Minister has announced today in response to the shameful scandal at Winterbourne View. He says that he wants those who are high up in the organisations to be held to account. Does he therefore accept the argument put forward by my hon. Friend the Member for Leicester West (Liz Kendall) that now is the time to regulate for the best business standards, as well as for the best care standards? He also says that he wants to use regulation to secure higher and tighter standards. Will he ensure that, in putting those standards in place, any regulation of physical restraint deals not only with the excessive use of such restraint but with the appropriate use of the best techniques and with the best training?

Norman Lamb: I thank the right hon. Gentleman for his welcome for the broad thrust of my proposals, and for his questions. On standards of business in the sector, it strikes me that the levels of corporate accountability seem to be significantly lower in this sector than in many others. How bizarre is that, in a sector in which the protection of individuals is absolutely vital? In our response to Southern Cross and to this case, we will require owners to adopt a much more transparent approach and to disclose details of their financing arrangements. We are introducing that level of engagement and transparency as well as addressing the need for accountability. The right hon. Gentleman also asked about restraint, and we will certainly look at the appropriate methods of restraint. It should really be used only for the protection and safety of an individual or of others. It should not be used for chastisement or punishment, as appears to have been the case in some locations. That is completely unacceptable.

John Pugh (Southport) (LD): One of the big problems is the fact that many local authorities house vulnerable people at a considerable distance from their families. What element of the proposals will constrain that unfortunate practice?

Norman Lamb: I thank my hon. Friend for that question. He is absolutely right that one thing uncovered, both at Winterbourne View and in the Care Quality Commission survey of similar institutions, was that people were sometimes placed hundreds of miles away from their families. That still continues; that is what we have to address. My hon. Friend asks about what in the proposals will address that and ensure that it does not happen. Every part of the system is signed up through the concordat to changing what has been an unacceptable

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practice. People will be held to account. I said in my statement that I will chair a programme board throughout this period of change, and we will publish regular updates so we can, in a sense, hold to account every primary care trust or clinical commissioning group and every local authority that fails to change in the way expected.

Mr Tom Clarke (Coatbridge, Chryston and Bellshill) (Lab): I welcome the Minister’s pledge—made twice during his statement—that the Government will go ahead with a review of those “inappropriately placed” and to make it available by 2014. Will there be any element of advocacy during the review, including that endorsed under the Disabled Persons (Services, Consultation and Representation) Act 1986? Finally, do the Government think it possible—if not by this means, by other means—to consider the fairly large number of people inappropriately placed in prison?

Norman Lamb: I thank the right hon. Gentleman for his important questions. First, we want to ensure that advocacy is available to help those families and individuals, ensuring that they are placed in appropriate settings and away from these long-stay institutions that we all find completely unacceptable. I very much agree with him on that, and I find myself in agreement with him again on prisons. We shall come forward next year with some clearer proposals on approaches to diversion—assessing someone’s needs before they end up in prison, diverting them, if at all possible, to much more appropriate settings.

Andrew Selous (South West Bedfordshire) (Con): I was not sure I heard the Minister correctly when he said that the average fee was £3,500 a week, which is £182,000 a year. Is it not possible to pay some of the caring staff slightly more and demand not only the highest level of skills, but the highest level of compassion for that level of fee from the state?

Norman Lamb: I thank my hon. Friend for that question. He is absolutely right that an extraordinarily high sum was being paid to put people at risk of abuse —and to be abused, as it turned out in Winterbourne View. Pay rates are not ultimately the responsibility of Government, but one would hope that responsible organisations look to train their staff to a high standard—that is absolutely a prerequisite and they will be held to account by the Care Quality Commission for proper training—and, wherever possible, to provide better pay rates so as to ensure that people are rewarded for the incredibly important work in our care sector.

Mrs Anne McGuire (Stirling) (Lab): Before I became an MP, I worked with parents of learning disabled adults to establish supported community care homes, as those parents would have done anything rather than allow their adult children to go into institutional care. I welcome the Minister’s comments today. There is an emphasis on process, which is important, but does he agree that there is a challenge in the wider cultural sense? As long as we do not give those with learning disabilities the respect to which they are entitled as equal members of society, we almost create an environment in which people think they can with impunity do the sort of things they did in Winterbourne. Will the Minister

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work with the Minister for Disabled People, the Under-Secretary of State for Work and Pensions, the hon. Member for Wirral West (Esther McVey) and look at how we can challenge those attitudes, which are sadly still around in the 21st century?

Norman Lamb: I thank the right hon. Lady for that. She is absolutely right in what she says about institutional care. I keep mentioning Tower Hamlets, as it was rather inspirational to visit and see how things are done there. I was told that Tower Hamlets has one of the lowest rates of children going into care because of the support for families that it provides, preventing that from ever being necessary.

As for the right hon. Lady’s second point, she is absolutely right: this is moment that demands a change of culture, not just in the health and care system but in society as a whole. There must be a change in all our attitudes. We will make progress only if we understand the fundamental point that someone with learning disabilities has exactly the same rights as anyone else, and should be treated with dignity and respect.

Glyn Davies (Montgomeryshire) (Con): We are for ever reading in reports such as this about poor behaviour in social care. In the last year or so, we have had Southern Cross and then Winterbourne View, which is probably the most shocking example of all. We greatly welcome the measures that the Minister has announced, but can he tell us what arrangements exist to enable us to share the knowledge that we have gained and the lessons that we are learning with the Welsh Government? I am sure that there are very good examples that we can pass over Offa’s Dyke, and that Wales has very good examples from which we can learn.

Norman Lamb: I know that some people from Wales were placed in Winterbourne View. This issue is important and relevant to Wales, Scotland, England and Northern Ireland. I would encourage officials of the devolved Administrations and the United Kingdom Government to liaise closely in order to ensure that the lessons that we are learning here can be applied elsewhere, and that good lessons from Wales and elsewhere can be learned in England.

Mr George Mudie (Leeds East) (Lab): The Minister is a very humane man, and I entirely accept the fine things that are in the report. However, we are ultimately responsible

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for the proper treatment of vulnerable people, both in hospitals and in care homes, and fine words go only halfway. We have seen people in that sector take advantage of and abuse vulnerable people who cannot speak or fight back.

One of the key points raised by my hon. Friend the Member for Leicester West (Liz Kendall) concerned unannounced inspections, which the Minister seemed to suggest were a matter for local authorities or other public bodies. Can he tell us whether real resources will be put into that part of the operation? Whatever has been signed up to, vulnerable people have been treated so badly that we should be ashamed. If we do not provide resources that will enable us to know that someone independent has the power to enter premises at any time or on any day and inspect the treatment of vulnerable people who are in our care, we cannot be taking this issue seriously.

Norman Lamb: Let me respond first to the hon. Gentleman’s observation about fine words by saying that this is just the starting point. It does not do the job; it merely sets out the scale of the ambition that is necessary to address a national scandal. It is good that all parts of the system are signed up to it, because that gives it a better chance of success. I will chair a national programme board that will keep a close watch on what goes on and hold every part of the system to account.

The hon. Gentleman spoke of the horrors of what goes on in some care homes and in hospitals, but we must remember the horror of family members who went to local authorities or the NHS to complain and were ignored. That, in a way, is just as scandalous, and it must be addressed.

I have talked to the chief executive of the Care Quality Commission, David Bearn, who has confirmed that he has enough resources to maintain a programme of unannounced inspections. They will continue; they must continue, and they must include people with learning disabilities and their families. I mentioned the role of HealthWatch earlier. In every local area, its representatives will have the power to go into these places to see for themselves what is going on behind closed doors. That too will introduce a new accountability.

The final point I would make is that we are developing the idea of online quality indicators for every care and health setting, with user reviews so that individuals who have been in those care settings and their families can give their views. That scale of transparency can be transformational in driving up standards.

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Point of Order

5.50 pm

Jim McGovern (Dundee West) (Lab): On a point of order, Mr Deputy Speaker. First, may I apologise for jumping the gun earlier? You were not in the Chair at the time, but I had not realised there was a statement to follow the two urgent questions, and as my point of order is about Remploy, I wanted to give the Minister concerned, the hon. Member for Wirral West (Esther McVey), who was present at that time, the opportunity to respond.

I seek your guidance, Mr Deputy Speaker. Last Tuesday afternoon I attended a Westminster Hall debate on Remploy, and I invited the Minister to come to Dundee to see the magnificent work being done by the work force at the Remploy factory in the city. The Minister stood up, cheerily smiling, as is her disposition, and accepted the invitation, saying she would happily come to Dundee. The Dundee press picked up on that and covered it the next day, and the Remploy work force took it as suggesting positive news for their factory.

However, 24 hours later the Minister announced that the Dundee factory would be closing. It beggars belief that she did not know on Tuesday what she was going to announce on Thursday. I have my own views on the morality of that, but was she guilty of breaching any procedural protocol either by misleading Parliament or withholding information that should have been made known to me? She could have said, “I’ll meet you privately after this debate,” or “There will be a statement on Thursday.” There were numerous ways in which she could have let me know that news, but when we learned the news on Thursday it came as a bombshell to me and the work force.

Mr Deputy Speaker (Mr Nigel Evans): I thank the hon. Gentleman for apologising for jumping the gun before the statement and also thank him for the point of order. It is not for the Chair to make a judgment on the question he has asked. I know he is passionate about this issue, and that he attended the Westminster Hall debate he mentioned and the urgent question on Remploy that the Speaker allowed today. There will be other opportunities for him to raise this issue with Ministers in the coming days and weeks. He knows the devices that are available to him, and he has put his discontent on the record.

Financial Services Bill (Money) (No. 2)

Queen’s recommendation signified.

Resolved,

That, for the purposes of any Act resulting from the Financial Services Bill, it is expedient to authorise the payment out of the Consolidated Fund of any increase attributable to the Act in the expenditure which in urgent cases is payable out of that Fund under the Banking Act 2009.—(Greg Clark.)

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Financial Services Bill (Ways and Means)

Motion made, and Question proposed,

That, for the purposes of any Act resulting from the Financial Services Bill, it is expedient to authorise the payment into the Consolidated Fund of sums in respect of penalties imposed under the Financial Services and Markets Act 2000 or the Banking Act 2009.—(Greg Clark.)

5.51 pm

Chris Leslie (Nottingham East) (Lab/Co-op): I am conscious that time is moving on apace, but I have a quick question for the Minister. Under this motion, the destination of proceeds arising from fines imposed on financial services companies will henceforth not solely be the financial service regulators; it will also be the Consolidated Fund. What proportion of fines will still go to the regulators and what proportion will go to the Consolidated Fund, and is there a note on the methodology by which the regulators calculate the level of these fines? Barclays was fined almost £60 million for the LIBOR scandal in the summer, but there are issues in respect of how fines are set. Some £150 million has been levied so far this year, and it is understandable that these sums ought to come into the wider public purse, but will the Minister briefly say how that will happen?

5.54 pm

The Financial Secretary to the Treasury (Greg Clark): I am grateful for the chance to explain that. There is not a formula, because the funds that come to the Exchequer are net of the enforcement costs the Financial Services Authority incurs. In any given year, things would depend on what has been spent and what revenues come in, therefore.

Question put and agreed to.

Financial Services Bill (Programme) (No. 4)

Motion made, and Question put forthwith (Standing Order No. 83A(7)),

That the following provisions shall apply to the Financial Services Bill for the purpose of supplementing the Orders of 6 February, 21 February and 23 April 2012 (Financial Services Bill (Programme), Financial Services Bill (Programme) (No. 2) and Financial Services Bill (Programme) (No. 3)):

Consideration of Lords Amendments


1. Proceedings on consideration of Lords Amendments shall (so far as not previously concluded) be brought to a conclusion at 10.00 pm.


2. The proceedings shall be taken in the order shown in the first column of the following Table.


3. The proceedings shall (so far as not previously concluded) be brought to a conclusion at the times specified in the second column of the Table.

TABLE

Lords Amendments

Time for conclusion of proceedings

Nos. 1 to 23

7.00 pm

Nos. 24 to 58

8.45 pm

Nos. 59 to 290

10.00 pm

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Subsequent stages


4. Any further Message from the Lords may be considered forthwith without any Question being put.


5. The proceedings on any further Message from the Lords shall (so far as not previously concluded) be brought to a conclusion one hour after their commencement.—(Greg Clark.)

Question agreed to.


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Financial Services Bill

Consideration of Lords amendments

Mr Deputy Speaker (Mr Nigel Evans): I must draw the House’s attention to the fact that financial privilege is involved in Lords amendments 122, 125 to 128, 138 to 140, 146, 182 and 203. If the House agrees to them, I shall ensure that the appropriate entry is made in the Journal.

Clause 1

Deputy Governors

5.55 pm

The Financial Secretary to the Treasury (Greg Clark): I beg to move, That this House agrees with Lords amendment 1.

Mr Deputy Speaker: With this it will be convenient to consider the following:

Lords amendment 2.

Lords amendment 3, and amendments (a) and (b) thereto.

Lords amendments 4 to 15.

Lords amendment 16, and amendment (a) thereto.

Lords amendments 17 to 21 and 148 to 178.

Greg Clark: It is a pleasure to be muscling in at this late stage of our proceedings on the Bill, but I feel it is a bit of a cheek to do so given that many Members have laboured many hours over these clauses in Committee—

Chris Leslie (Nottingham East) (Lab/Co-op) indicated assent.

Greg Clark: The hon. Gentleman was one such Member.

We are in agreement with all their lordships’ amendments, and this first group demonstrates that the Government have listened to Parliament’s concerns and have amended the Bill accordingly.

The governance of the Bank of England was one area of concern, and it was debated at length in this place and the other place. The Government agreed that the Bank’s expanded responsibilities warranted taking another look at its governance arrangements. The Treasury Committee produced an excellent report on this subject just over a year ago—I note that the Committee Chairman, my hon. Friend the Member for Chichester (Mr Tyrie), is present—recommending that the Bank’s non-executive directors be given a greater role in scrutinising the Bank’s work, including the ability to commission and publish reviews of the Bank’s performance.

The current version of the Bank of England Act 1998 does not actually describe the non-executive directors as non-executive, but various amendments before us in this group will finally clarify the terminology in respect of the Bank’s court of directors by distinguishing explicitly between the non-executive and executive members.

On more substantive governance matters, amendments 3, 6 to 9, 148, 149, 151, 152, 154, 155, 169, 172 and 173 fulfil the substance of the Treasury Committee’s recommendations in this area via the creation of a powerful new oversight

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committee made up of the non-executive directors of the Bank’s court of directors. The oversight committee’s remit covers the entirety of the Bank’s objectives and strategy. This remit is already broad enough to allow the oversight committee to look at any aspect of the Bank’s work it believes appropriate to examine, including the effectiveness of its crisis management co-ordination with the Treasury, as suggested in an amendment proposed by the hon. Member for Nottingham East (Chris Leslie). I am sure he will comment on that.

The oversight committee will have a statutory right to access the meetings and papers of the Financial Policy Committee and the Monetary Policy Committee, and it will have the power to commission reviews of the Bank’s performance from external experts or from the Bank’s own policy makers, and publish the reviews and monitor the Bank’s response to them. In line with the Treasury Committee report, these performance reviews will be undertaken retrospectively. The Committee recommended that they should take place at least a year after the period to be reviewed, in order to avoid second-guessing at the time of the policy decision. Just to be absolutely clear, the oversight committee’s remit to review the Bank’s performance is limited to the Bank’s objectives and strategy only; it does not extend to the Prudential Regulation Authority. The only role of the oversight committee in respect of the PRA is to determine the remuneration of the members of the PRA board. Because the PRA will be operationally independent in carrying out its statutory functions of regulation, it will be directly accountable to Parliament. The Government expect that the Treasury Committee will wish to summon the senior PRA executives and, where necessary, the non-executives to account for the PRA’s actions.

Amendment 167 will require the court of directors to publish a record of each of its meetings, fulfilling another of the Treasury Committee’s recommendations from its report. We have also listened to concerns in respect of the Financial Policy Committee, which focused on the role of economic growth in its decision making and the balance of its membership. Amendment 10 gives the FPC a secondary objective to support the Government’s economic policies, including growth, which will sit alongside existing requirements, such as the brake on the FPC taking action that would damage long-term sustainable growth. Amendments 4, 5, 150, 156 and 157 aim to rebalance the FPC by removing one of the Bank members, leaving a voting membership of 10 people—five Bank members and five non-Bank members.

Amendments 16, 17 and 19 to 21 go further to increase the transparency and accountability of the FPC. The FPC will be required to prepare an explanation of each of its actions, setting out publicly the reasons for its decision to take the action and its reasons for believing that the action is compatible with the FPC’s objectives, including to contribute to economic growth, and the various factors to which it must have regard, including proportionality. The FPC is also required to include an estimate of the costs and benefits of the action, where it is reasonably practicable to do so.

Amendment 17 requires the FPC to review the decisions that it has already taken in order to consider whether the actions are still necessary, or whether they should be revoked or removed. That will help to ensure that the FPC’s directions and recommendations do not remain

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in place for any longer than is necessary. The FPC must publish the explanations of its actions and a summary of its reviews in the next financial stability report.

The remainder of the amendments in this group represent further agreements made in the House of Lords in response to points raised in debate. Amendment 168 makes it absolutely clear that the Chancellor must always appoint a non-executive member of the court to be its chair. Amendments 174 to 176 continue the immunities from liability for damages that the existing regulators have and extends them to the new regulators. The Government have made amendments in the House of Lords to ensure that if the PRA or FCA commissions the other regulator, or the Bank of England, to carry out an investigation or produce a formal report on its behalf, the body that has been commissioned is also covered by the immunity.

This group of amendments represents a significant package of changes to the legislative framework for the Bank and the FPC, in response to points raised both in this House and in the House of Lords, and I commend it to this House.

Chris Leslie: It is a great pleasure to welcome the new Minister to these rather long-winded proceedings. I believe we started on this Bill back in February, but he should not worry, as this is shortly to be followed by the banking reform Bill and possibly even a banking standards Bill—to be determined—so we will probably have plenty more opportunities to chew over these issues then. It is a little preposterous to have a knife coming down at 7 o’clock, by which time we have to put the Question on 150 or so of these Lords amendments. That gives us about 25 seconds per amendment [Interruption.] I will get on with it; I lost about a dozen amendments just then.

That is why we have tabled several amendments to those Lords amendments—you will be impressed with that, Mr Deputy Speaker—and I wish briefly to explain why we have done so. The first Lords amendment that we are seeking to amend is Lords amendment 3, which, as all hon. Members here know, deals with the creation of an oversight committee within the Bank of England as a sort of subset of the court of directors, where it is to have a reviewing and, supposedly, a scrutinising role. There is a problem: the oversight committee has a series of responsibilities, not one of which is set out, in overseeing what the Bank of England does. The committee has a set of responsibilities to monitor, to review procedures and to conduct performance reviews, but all of that is retrospective—it looks backwards, not forwards. May I gently suggest to the Minister that it might be more appropriate if he were to call this a “hindsight committee” rather than an oversight committee, because as things stand I do not think there is a sense in which this is a proper check and balance within the governance of the Bank of England?

Why does that matter? It matters because the Government are giving phenomenal new powers to the Bank of England within our economy as an overarching financial regulator. The Minister says that the PRA is independent and will report to Parliament, but let us be honest: this is a creature of the Bank of England and the Bank will control very much what happens in the regulatory framework. Although we welcome the concession that was made to create an oversight committee, people

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have misgivings—we will probably hear about some of them, perhaps from members of the Treasury Committee, in a moment—that there is still a very hierarchical and centralised set of governance structures in the Bank of England.

We therefore need to make sure that this crucial verb “oversee” is included in the oversight committee’s remit. That would help to shift the balance of power between non-executives and executives in the Bank of England framework just that bit more. These are important lessons of governance, certainly from the private sector. While we are moving towards that executive and non-executive balance, it is important that we recognise that the Bank of England is being dragged into the 21st century. If we are taking the opportunity to do that in legislation, making that particular change would be very welcome.

The other amendment we wish to make to Lords amendment 3 relates to crisis management. As I said, the Bill gives massive new powers to the Bank of England, but in a crisis there will be very little time to figure out and design standing orders, or to work out arrangements for who will meet whom and for how decisions can involve the right people. You will recall, Mr Deputy Speaker, how during the global financial crisis crucial decisions affecting billions of pounds of taxpayers’ money and whether people could access the cash machines were made in the space of hours over weekends. In hindsight, it would have been nice to have had a carefully planned set of arrangements, and this Bill needs to learn the lessons from that. We are concerned that the crisis management arrangements are still thin and inadequate. We have suggested that if there is going to be an oversight committee in the Bank of England, the Bill needs to set out explicitly that it is to have a duty to ensure the adequacy and effectiveness of arrangements with the Treasury for crisis management.

There is no role for the new financial conduct authority in the drafting of the arrangements. Apparently it does have a veto, but it is not part of the drafting of that memorandum of understanding. The Government are still resisting proposals to ensure that deputy governors and the chief executive of the FCA can consult directly with the Treasury in circumstances where there might be differences of opinion. Given the import and the size of the FCA, the PRA and the FPC within the Bank, it is important that the deputy governors have an ability and a right to talk to the Treasury, so that everything is not hidden and suppressed within one view of the Governor of the Bank of the England.

There is a very bizarre set of provisions excluding the ability of the memorandum of understanding to make provision about the relationship between the Bank of England and the PRA, which goes to prove that the PRA is very much a creature of the Bank. It also suggests that the Governor will have powers to suppress the voice of the PRA in a crisis. Shockingly, there is no parliamentary approval process for that MOU; no statutory instrument arrangement has been made, as I understand it. The crucial paragraph of the MOU that deals with what happens in the white heat of an emergency simply says, “Oh well, there will be ad hoc or standing committees just to sort these things out.”

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That is not good enough. The whole of best practice in preparedness and in emergency and contingency planning would suggest that now is the time for Her Majesty’s Treasury and the Bank of England to sit down and calmly and methodically work through what would happen in those circumstances. There should be some draft standing orders to pre-empt those scenarios.

Mr Andrew Tyrie (Chichester) (Con): The hon. Gentleman will recall, of course, that the poorly drafted MOU that lay behind the tripartite agreement certainly played a role in the lack of understanding of how to handle the crisis. Does that not point all the more towards a need to think things through very carefully now? That MOU was scrutinised in Parliament; I was in Committee at that time and most of the points made were largely ignored. Surely now, while we have the time, we should think through what is required in such an MOU and take the opportunity to consider that in Parliament.

Chris Leslie: I entirely agree with the Chairman of the Treasury Committee, who is very knowledgeable and has some strong views on these questions. It is a pity that when we flick through the luminous list of Lords amendments, we find a gaping hole on those crisis management arrangements, where none was accepted by the Government. Some clauses in the Bill deal with that set of scenarios, and it is noticeable that such provision is not included there. That is in part why we have sought to amend Lords amendment 3, as one of the few areas where we can make an amendment is in respect of the role and duties of the oversight committee. I accept that that is only half of the scenario, as we also want Her Majesty’s Treasury to have a process for reviewing the adequacy and effectiveness of its arrangements with the Bank of England, but we do not have the opportunity today to propose such an amendment.

If we are to have an oversight committee, it should be able to play a role in ensuring that the crisis management arrangements are up to scratch and that there is joined-up thinking between these variously important branches of governance to ensure that someone at the Bank of England is tasked with thinking these things through very carefully.

Alison McGovern (Wirral South) (Lab): Does my hon. Friend agree that it is incredibly important that Parliament gives its view on such issues, given the weight of academic insight into the arrangements in place at the time of the crash? We are trying to learn some of the lessons from that, and one of the key lessons is the importance of rules and thinking them through ahead of the scenarios, since it is literally impossible to know what the next unforeseen shock might be and where it might come from.

Chris Leslie: My hon. Friend is correct that this is about learning the lessons of preparedness and of what level of forward thinking we can undertake at this point in time. It is still amazing—I know she agrees—that although the FSA conducted a comprehensive review of its role in the financial crisis and the Treasury and Government did the same, we have to this day still not had a comprehensive review by the Bank of England of its role in the financial crisis. That is amazing. It begrudgingly had three minor reviews dragged out of

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it—it was like getting blood out of a stone—considering small particular areas where it had some failings. Those reviews concluded that there were serious issues to be addressed, and one of the individuals conducting one of those three small arrangements talked about the fact that the governance arrangements in the Bank of England were still too centralised. I hope that the Government will think more carefully about crisis management provisions.

Alison McGovern: I thank my hon. Friend for being so generous in giving way again. This is a crucial point: Parliament rarely discusses the strategic role of the Bank of England and rarely legislates, in part because the independence of the Bank of England is still a valid economic principle on which we hope to rebuild our economy. We must therefore get the discussion right at this time.

6.15 pm

Chris Leslie: It is worth noting that when we talk about the independence of the Bank of England we are talking about operational decisions of the Monetary Policy Committee. They have to be made, of course, without political interference. We can come on to the questions of quantitative easing and the Chancellor’s recent decisions on that, but we will put them to one side for now. The questions of governance of the Bank of England are a matter for Parliament to take very seriously indeed.

As the debate progresses, we will discuss the vast powers that the Bank will be taking, which are known rather opaquely as macro-prudential powers of regulation. Essentially, the Bank of England can intervene in any number of financial services, products and transactions and affect the financial well-being of businesses, consumers and households in the constituency of my hon. Friend the Member for Wirral South (Alison McGovern). We are talking about mortgages, lines of credit and supply and so on. That is why we need to get the arrangements right, and it is a shame that the Government did not do that.

I want to skip on, if I may, to Lords amendment 16, to which we have suggested another small amendment.

Mr Gareth Thomas (Harrow West) (Lab/Co-op): While my hon. Friend has his arguments firmly in his mind, may I remind him that for some time many Members of this House have been concerned that the Bank of England has not done enough to encourage our high street banks to invest in deprived communities. Does he think that his amendment to Lords amendment 3 might help to encourage the Bank of England to pay a little more regard to those concerns?

Chris Leslie: Indeed, and I am grateful to my hon. Friend for taking the time to participate in this debate. A string of amendments that we will discuss later cover consumer credit and the interests of consumers, and we will talk about ease of access to financial services when we consider them. He is right, as the Bank of England is a key player in this regard.

That point neatly takes me on to our amendment (a) to Lords amendment 16. It tries to ensure that under the new arrangements the Bank of England—in particular, the new powerful committee that is being established,

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called the Financial Policy Committee—will, when it explains the decisions it is taking, also have to include an assessment of the impact of its decisions on economic growth. I know that the whole question of jobs and growth is somewhat of a blind spot for Treasury Ministers, but notwithstanding their rather peculiar inability to see the importance of these issues, we feel that it is important to put that requirement in the Bill.

We are delighted and overjoyed that the Government finally relented and granted a concession in the other place, after months of labour in Committee in this place, by agreeing to Lords amendment 10. It was a major victory for the Opposition when the Government were forced to change the Bill to ensure that the FPC would not only contribute to the financial stability objective but, subject to that, support the economic policies of Her Majesty’s Government, including their objectives for growth and employment. That concession was made because of the amendments we tabled and the evidence heard in Committee from a wide number of organisations, including the British Bankers Association, the CBI, the London stock exchange and others. They all said in submissions to Parliament that the new regulators should have regard to growth, so we are glad that the FPC has that general backstop requirement on its shoulders. However, we do not think it goes far enough.

As I said earlier, the powers the Bank of England will take—that rather opaquely described set of macro-prudential tools—will be very wide ranging. Each time it pulls one of those levers, each time it makes a particular decision, it should explain the impact of that change. The Bank of England will be able to affect a number of key areas. Perhaps the Minister will tell us when the draft order at the back of the Treasury’s consultation document is likely to find its way on to the Floor of the House for debate, because I know that a number of hon. Members will be interested in that.

The Bank will have powers called counter-cyclical capital buffers. I know that the Treasury Bench has a difficulty with the concept of counter-cyclicality, but it essentially means that banks will be required to build up capital when times are rather exuberant and things are going well in the economy, but to unwind those capital buffers in a downturn. The Bank will say that there should be sectoral capital requirements. In other words, the FPC can make the residential mortgage sector have a certain amount of capital or structure its business in a particular way. The commercial property sector will have to do the same. This is a Bank of England decision, not the result of parliamentary or legislative changes. Consumer credit decisions will be made. If my hon. Friends have constituents who pay off their credit card, perhaps currently a 2% or 5% minimum repayment on a monthly basis, at the flick of a switch the Bank of England will be able to say, “No, you have to pay off 10% each month,” or perhaps even more. That is the sort of power that the Bank of England will have.

Mr George Mudie (Leeds East) (Lab): The situation with mortgages will be similar. I am certain that the FSA’s and the Bank’s insistence on a higher deposit will harm the construction industry. The average price of a two or three-bedroom house is £160,000, and 10% of that is £16,000 and 20% £32,000. We are getting more and more tales of young couples who simply cannot get on to the housing ladder because they are paying excessive rents and cannot save that deposit.

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Chris Leslie: My hon. Friend will not be surprised to learn that there was a little argy-bargy between the Treasury and the Bank of England. As I understand it, the Bank initially said, “Loan-to-value ratios on mortgages, and loan-to-income ratios, are an awfully big decision. There is a lot of politics in that. We are not that keen. Push that back to the Treasury.” I think the Treasury has been saying, “No, Bank of England, this is a decision for you to take.” These are inherently political issues and our constituents would rightly ask whom to hold to account for such big decisions that affect their daily lives: whether or not someone can get a mortgage, what is happening in the housing market, and so on. That is why we still have some reservations about the governance structures and the lack of accountability on policy making. That is why we are asking for an assessment of the impact on economic growth whenever these levers are pulled and whenever these decisions are taken. I accept that there are careful balances to be struck. The FPC of course has to have an eye to stability, but it also needs to recognise, as the Chancellor has said, that we do not want the risk-aversion of the graveyard so that there is no economic activity. That is why we have suggested this particular change.

I am conscious of the time and I know that a number of hon. Members want to speak. Those are the main points that I have to make about our particular arrangements and it would useful if we could hear the views of others.

Mr Tyrie: The Bill came out of the other place only last Wednesday night and it was heavily amended there. It is the most complicated, and one of the most important, pieces of financial legislation for decades.

Much of what we are considering today amends provisions in the Bill, which themselves amend the Financial Services and Markets Act 2000 and the Bank of England Act. The Bill is incomprehensible without constant referral to FSMA. I would go further and say that it is incomprehensible in parts even after considerable referral to FSMA. We now have a piece of legislation that passeth all man’s understanding, like God’s will. FSMA itself was arguably the most complex piece of legislation ever passed by Parliament. I was on the Bill Committee and it was certainly pretty testing.

We are now legislating in a huge rush to get this on the statute book by the end of the year in order to meet an entirely arbitrary deadline. The deadline has been rendered all the more absurd by the fact that we will be back here next year anyway amending it as part of the banking Bill, which is required to give effect to the Vickers commission’s recommendations, parts of which have to be done by amending FSMA and cannot be done in any other way. I am not making some recondite point about parliamentary procedure; I am making a point about how to make the Bill effective. It is a point that is being made to me right now by senior regulators, who would very much prefer that we just take a little bit more time to get the legislation right.

This group of amendments deals largely with Bank of England governance. Everyone is agreed that Bank of England governance is in a huge mess. That is why last April the Treasury Committee took the highly unusual step of tabling a new clause in an effort to try to sort it out. I am particularly grateful to colleagues from four parties on the Committee who all co-operated to

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enable that amendment to go down with unanimous support. I am also particularly grateful to my deputy Chairman, who is sitting on the Opposition Benches, who assisted with the tabling of that clause. It was needed because the Bank has ramshackle governance arrangements that reflect their 17th century origins, as the name “court” demonstrates. As has already been pointed out, better governance would improve its accountability to Parliament. But much more important in some respects, it would also improve the Bank of England’s authority to act and to speak to the rest of the country as it takes tough decisions, such as those that have just been referred to. This is a point that is not lost on very senior people in the Bank of England right now, on the Monetary Policy Committee, the Financial Policy Committee, and also a number of deputy governors.

The Treasury Committee clause would not have solved all that, but it would have gone some way to bringing the Bank into line with good practice on corporate governance generally. It would have placed a duty on the court to conduct retrospective reviews of Bank performance and to publish the results, and it would have required the court to publish its minutes. I withdrew the amendment in the Commons only when the Government gave undertakings to make those changes in the Lords. I will come back to that.

In May, the Treasury Committee took another highly unusual step of reporting on the Financial Services Bill, after we had looked at it in the Commons, in order to assist the other place with its examination. Most of the conclusions that we came to in that report were raised as amendments in the Lords. The Government responded to some of them and that is what we are debating now. The Government’s Lords amendment 3 sets up, as we have heard, an oversight sub-committee of the court’s non-executives. That would give the court the power to commission retrospective reviews of the Bank’s performance —that is a step forward—to be carried out either externally or internally. The Government have also inserted an amendment to require the publication of court records of its meetings. While these amendments improve the Bill, they fall well short of what we were hoping for, and what in our view is still required, for several reasons.

First, the amendments place the power of review in the hands of a sub-committee of the court, rather than the court itself. This will further confuse the lines of accountability, not least to Parliament and to the Treasury Committee. These accountability lines are now very complex. I urge the Minister to try drawing them on the back of an envelope. I wager that he will have quite a task on his hands. Senior regulators agree that they will not do as they stand, and they have been telling us that publicly and privately. They want an improvement. They want the legitimacy for their decisions that comes with effective parliamentary scrutiny. Senior people in the Bank of England have seen how the Monetary Policy Committee has been strengthened and bolstered as a result of effective scrutiny by the Treasury Committee.

6.30 pm

Secondly, the amendments fall short of what is needed because they require publication not of the minutes of court meetings, but merely of a record of such meetings, which I do not think would necessarily amount to much. A moment’s thought can tell us how unrevealing a mere record might be.

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Thirdly, the Bill does not properly reform the court. It does not bring governance of the Bank into line with what most of us would consider to be the norms of corporate practice, whether public or private, right across the country.

Fourthly, no statutory obligation is placed on the court or the oversight board to respond to reasonable requests for information from the Treasury Committee. In practice, they can stonewall. I do not think that is acceptable if we are to have high-quality governance. I think that good-quality scrutiny by Parliament will be much more difficult without such an obligation being placed on the court. I worry that, at worst, the sub-committee could end up owing more to form than to substance. That is, of course, what has been wrong with the court as a whole; it has been as dignified over the years as it has been ineffective.

Fifthly, the Governor’s central and enhanced position is unaffected and the Bank’s hierarchical nature, with him at the apex, will remain. He is a single institutional point of systemic risk in the new governance arrangements. The danger of group-think will remain. Bill Winters recently drew attention in his review to that hierarchical problem and the need to place a requirement on the Governor to consult others, particularly the deputy governor.

Alison McGovern: May I take the hon. Gentleman back to his fourth point? He mentioned the Treasury Committee’s ability to get information from the Bank. What specifically is he concerned about, and does he think that his Committee ought to be able to access data from the Bank as part of its oversight role? First, how would he improve on that point? What specifics of governance does he think we must look for? Secondly, is it a question of getting data out of the Bank so that group-think can be laid bare and investigated? Am I right to take those points from what he has said?

Mr Tyrie: If the hon. Lady will forgive me, I will not linger on those points for too long, because the Committee has set that out in some detail in a number of reports. On her first point, in a nutshell, one need only look at the corporate governance arrangements of almost any public sector body, or indeed any public company, to see that the lines of accountability are powerfully drawn between their non-executives and the executive arm. That is almost completely lacking in the court, whose role is heavily circumscribed and, until recently, involved nothing more than oversight of the Bank’s budget. Indeed, I have been told informally that until recently an unspoken requirement of membership of the court was to have no great knowledge of financial matters, and certainly not to interfere with them. That strikes me as the negation of genuine oversight, but perhaps those who whispered such thoughts in my ear were making mischief.

On the hon. Lady’s second point, it is of course crucial that somewhere in the accountability framework there is a group of people who are capable of asking for detailed information in order to make the scrutiny meaningful. The Treasury Committee, in our investigations into Royal Bank of Scotland, found that we needed to send specialist advisers into the FSA to obtain the necessary papers to ensure that they were taken into account in its report on RBS. I do not think that it

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would be a healthy state of affairs if the Treasury Committee ends up having to send specialist advisers into the Bank of England to perform such a role. It would be far better to have a group of non-executives in the Bank of England whose explicit task is to look for those documents and to be available to help us do the scrutiny directly. My reply to her questions touches only the surface of the more detailed reply that could be given, but it has been set out in some detail in at least two Treasury Committee reports.

Next year we will have a new Governor. He could, of course, grasp the opportunity to improve all this, and no doubt he will form views about governance, ones that might benefit from legislative change. The Banking Commission will also make recommendations on standards, culture, competition, governance, regulation and sanctions for rule-breaking by bankers. Any or all of those might require statutory action. I would be grateful for an assurance on that from the Minister, so will he commit the Government to broadening the scope of the banking Bill to ensure that further amendments to FSMA, including in the areas I have just mentioned, can, if necessary, be made next year?

Greg Clark: I can give my hon. Friend that assurance. The Government have already said, I think in response to the question of data on lending to deprived communities, that if we do not succeed in establishing agreement with the British Bankers Association, we will use the forthcoming banking Bill to make those changes. If the distinguished members of my hon. Friend’s Commission, following their considerations, have recommendations that will require legislative changes, we will of course have vehicles available for that.

Mr Tyrie: That reassurance is helpful. I will take it back to both the Treasury Committee and the Banking Commission.

Mark Durkan (Foyle) (SDLP): The hon. Gentleman has referred to the new Governor. If it had been a condition of his appointment that he understood the Bill and could explain it, does the hon. Gentleman believe that he would have been appointed?

Mr Tyrie: Well, he is a very clever man. I am confident that at the time of his appointment he would have been unable to pass the FSMA test, but I have no doubt that by the time he comes before the Treasury Committee for his pre-appointment hearing he will have mugged up fully on it all.

I have spoken for 14 minutes already, which is four minutes longer than I make a point of ever speaking in the House these days, so I will move swiftly to one last point. The Minister, as he pointed out, started looking at the Bill three quarters of the way through the process of putting in place a new system of financial regulation. I will wager a pound to a penny that he has found the tangled web of legislation that we have just been discussing extremely confusing. In fact, I wager that he has found it, in places, to be a nightmare and impossible to understand. I wager the same amount that the officials advising him do not always understand it either, and that is no reflection on the high-quality advice he is no doubt getting. Will he be prepared at least to consider rewriting FSMA afresh when he comes to adapt it to take account

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of the banking Bill, because that is what regulators have told us they would prefer, what the Governor of the Bank of England said he would prefer and what would enable the industry, the public and Parliament to have a much more intelligible piece of legislation?

It is a great shame that that approach, which was vigorously put forward at the time, was rejected when the Government first announced that they would proceed with amendments to FSMA. The Governor was pressing for it very strongly, and he had allies in Parliament. We now have a second chance, and I very much hope that the Minister will consider taking it. He will need to bear in mind that there will be 100—perhaps 1,000—official voices telling him not to do that, but just occasionally there are moments when a Minister can greatly improve the quality of the statute book. Would he be prepared at least to consider rewriting the Bill so that we have one fresh piece of legislation that everyone can understand?

Greg Clark: This has been a short but interesting debate, and I am grateful to the hon. Member for Nottingham East (Chris Leslie) and to my hon. Friend the Member for Chichester (Mr Tyrie) for contributing to it. I think that my hon. Friend does himself a disservice. If anyone can follow, and indeed have imprinted in his mind, every clause of FSMA, and be able to relate it to any future amendment, I know that he is capable of it. Let me first respond to some of the points made in the debate, including his.

The Bank of England is obviously at the heart of the financial system, and the changes are among the important reforms of its powers in history, alongside nationalisation in 1946 and independence in matters of monetary policy in 1998. Notwithstanding the few remaining issues of debate, I think that the whole House would agree that the changes made in the Lords represent a significant improvement in this part of the Bill. The amendments will strengthen the governance and accountability of the Bank. They will give the Financial Policy Committee a more positive and proactive mandate around economic growth and shift its membership to reduce the influence of the Bank’s executives. In addition, there are clarifications to simplify the drafting and terminology, if perhaps not going as far as my hon. Friend would wish to go. The name “court” is retained, despite his preferences.

On the Opposition amendments, I do not think that there is, in practice, a huge degree of difference between us. As the hon. Member for Nottingham East said, amendment (a) to Lords amendment 1 would add the word “overseeing” to subsection (2) of new section 3A of the Bank of England Act 1998. That was well debated in the House of Lords, as he will know. Some clarity was achieved there, in that the kind of oversight in which the oversight committee is expected to engage is common to non-executive directors elsewhere. Baroness Noakes made particular reference to that. The opportunity to review decisions and to consider how they are made is well understood in the context of the term “oversight”. The hon. Gentleman is proposing something that goes beyond that: that oversight should contain a more real-time role as well as a backwards-looking role. That could involve second-guessing the Bank’s policy decisions while they are being taken, which would not be appropriate. Indeed, it would go against the recommendations of the

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Treasury Committee, which said in its report that it agreed with the Governor that the Bank’s governing body should place more emphasis on oversight and ex-post scrutiny that would not authorise it to become involved in second-guessing immediate policy decisions. That is the advice that we have taken.

Mr Mudie: That should be qualified by the fact that the current Governor of the Bank of England does not want to be second-guessed by anyone. In fact, he would suggest that the best decision-making process is himself sitting in a room taking the decisions, questioned by no one.

Greg Clark: The hon. Gentleman has more experience of questioning the Governor than I have. The Joint Committee on the draft Financial Services Bill, of which he was a member, volunteered to agree with the Governor on that assessment, at least. We followed the Committee’s advice on that, as was recognised in the other place.

Chris Leslie: I understand the Minister’s argument. However, we are talking about a lot of power in the hands of a single individual—the single point of potential institutional disruption, as the Chairman of the Treasury Committee called it. Surely the sun king is capable of responding to some internal questioning, scrutiny and challenge, and that would be a healthy thing to have. Some kind of more proactive oversight might therefore not be such a bad idea after all.

6.45 pm

Greg Clark: All those things are provided for in the Bill; the question is whether the word that the hon. Gentleman seeks to introduce is a matter of semantics or would bring in scrutiny of current decisions. That is a point of difference between us. In the House of Lords there are many people with experience of being very effective non-executive directors, as I know from my distinguished constituent, Baroness Noakes. Most people would recognise that she is meticulous and robustly independent in the scrutiny that she brings to matters, and she regarded the wording of the Bill as entirely compatible with that. It is not right to go against what the Treasury Committee recommended and to have the second-guessing of immediate decisions.

Let me say something about the existing powers. The report by the Treasury Committee recommended that ex-post reviews of the Bank’s performance should be carried out, and those are provided for. In fact, the current wording of subsection (2) of new section 3A of the 1998 Act requires the oversight committee to

“keep under review the Bank's performance”,

and that is consistent with the Committee’s recommendations. We think that this wording strikes the right balance between ensuring effective retrospective scrutiny of the Bank’s policy performance and avoiding a situation whereby the non-executive members of the court would be constantly second-guessing the decisions taken by the Bank’s expert policy committees and executives.

Amendment (b), tabled by the hon. Member for Nottingham East, would give the oversight committee an additional function to keep under review the adequacy and effectiveness of the Bank’s arrangements with the Treasury for crisis management. It is very important

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that that should be under review, for all the reasons he said. Subsection (2) of new section 3A gives the oversight committee a broad remit to keep under review the Bank’s performance in relation to all its objectives and strategy. It is absolutely clear—I would like to confirm this from the Dispatch Box—that the effectiveness of the Bank’s relationship and co-ordination with the Treasury in crisis management is fundamental to the Bank’s achievement of its objective to protect and enhance stability. As such, the oversight committee can already undertake or commission a review into the effectiveness of these arrangements if necessary. In fact, in January this year the Bank said in its response to the Treasury Committee that the oversight committee should, among other things, assess whether the Bank is fulfilling effectively its duty to notify the Treasury of risks to public funds at the appropriate time. There is no substantial difference between us that the amendment is seeking to expose.

Chris Leslie: The problem is the threadbare nature of the memorandum of understanding, particularly the infamous paragraph 20, which says:

“However, the Chancellor and the Governor may agree to establish ad hoc or standing committees.”

That is so thin that it is important for the oversight committee to make it a top priority to ensure that there is preparedness and that it is thinking through the circumstances in which a crisis may occur, and that needs to be placed explicitly in the Bill.

Greg Clark: I am grateful for the hon. Gentleman’s clarification. We should bear it in mind that the Bill requires the Treasury to lay the MOU before Parliament and to publish it. It will be subject to full transparency. For example, I would be very surprised if my hon. Friend the Member for Chichester did not call the Chancellor or the Governor to explain it. The oversight committee will be responsible for overseeing the Bank’s performance and, clearly, the MOU is a key part of its work in bringing to bear the Bank’s financial stability work. The committee will, therefore, consider from time to time whether it is working well and Parliament will itself have every opportunity to address the issue.

Amendment (a) to Lords amendment 16 would require the Financial Policy Committee to produce explanations of its decisions to exercise its recommendation and direction powers. Proposed new section 9QA(1) of the Bank of England Act makes it clear that the FPC’s explanations must set out how its decisions are compatible with its objectives, including the new objective to support the Government’s objectives for growth. It is clear that it has an explicit responsibility to do that. The FPC’s explanations will have to set out publicly how it has considered the impact on economic growth when deciding to take action and its reasons for believing that the action is compatible with its obligations in relation to economic growth.

Lords amendment 16—specifically subsection (3) of proposed new section 9QA of the 1998 Act—already requires the FPC to produce estimates of the costs and benefits of the decisions, including those areas to which the hon. Member for Leeds East (Mr Mudie) has referred. This will cover the impact on financial stability, both directly and indirectly, and the impact, both positive and negative, on economic growth.

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I reassure the House that the FPC is giving considerable care and thought to the impact of these tools. The Bill requires the committee to produce and maintain policy statements for its direction tools. The statements will discuss the likely impact on both financial stability and economic growth. The Bank is preparing a draft of the statements, to be published early next year, so that they can be considered alongside the secondary legislation that will set out the FPC’s direction powers. We do not, therefore, think that amendment (a) to Lords amendment 16 is necessary.

Mr Mudie: Both the Treasury Committee and the Joint Committee on the draft Financial Services Bill were concerned about the important parts of the Bill that will be delivered through statutory instruments. That means a discussion in Committee for an hour and a half, with no provision for amendment. We would either have to accept the whole instrument or vote against it, and we would not have a majority on such a Committee. We pressed the Chancellor for a different, more flexible structure of decision making on secondary legislation so that the House or the Treasury Committee could debate it with the prospect of convincing the Chancellor, at some stage, to amend his direction of travel.

Greg Clark: I am grateful for the hon. Gentleman’s point. I am not able to produce a novel parliamentary procedure, but I can certainly tell him and the Chairman of the Treasury Committee that when the time comes to publish the statutory instruments, if they or their Committee would like to consider and advise on the discharge of the commitments, I would be happy to engage with them in good faith and take on board any suggestions.

Chris Leslie: I am delighted to hear that concession from the Minister. We have suggested a super-affirmative procedure for some of the regulations. That would give the Treasury Committee and others more time to look at the issues and ask the other Select Committees about the effect on, for example, housing and communities and local government. If the Minister is willing to open that door, we would support him.

Greg Clark: I give the hon. Gentleman an inch and he takes a mile. I will not commit to a different procedure but, as I have said, I will certainly commit, in good faith, to considering personally any points that are made. [Interruption.]

Mr Mudie: Has the Minister just been handed fresh instructions?

Greg Clark: They may be fresh instructions, but I have decided not to read them. I may be countermanded, but I will not retract my statement.

I will conclude by addressing what the Chairman of the Treasury Committee has said. I am reliably informed by my predecessors that this Bill, though complex and voluminous, has been well considered in numerous Committee sittings in this House, and I think that most people will conclude that their lordships have done a good job in their scrutiny. The Bill is important and it is right that it has been scrutinised to the extent that

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I think it now commands the broad support of the House, as evidenced by the relatively few amendments that have been tabled to their lordships’ amendments.

As I said in response to an earlier intervention, opportunities will be presented to the House in the years ahead—new Bills are already gathering speed on the runway—to accommodate further changes, should they be necessary. If so, I am sure we will have further conversations about them.

My hon. Friend the Member for Chichester issued me a challenge to rewrite the Financial Services and Markets Act 2000 and anticipated that I would be besieged by objections from officials and others.

Mr Tyrie: Turn around.

Greg Clark: I will not turn around and look at my officials in the Box, because I am sure I would get some black looks. My hon. Friend would not expect me to make a commitment, but I know—this is the case with everything he says—that he speaks from experience and that he examines the issues meticulously. I will look at what he has said, but I ought not, at this late stage, to raise his hopes too high.

Lords amendment 1 agreed to.

Lords amendment 2 agreed to.

After Clause 2

Oversight Committee

Amendment (b) proposed to Lords amendment 3.—(Chris Leslie.)

Question put, That the amendment be made.

The House divided:

Ayes 224, Noes 293.

Division No. 118]

[

6.57 pm

AYES

Abbott, Ms Diane

Ainsworth, rh Mr Bob

Alexander, rh Mr Douglas

Alexander, Heidi

Anderson, Mr David

Ashworth, Jonathan

Austin, Ian

Bailey, Mr Adrian

Bain, Mr William

Balls, rh Ed

Banks, Gordon

Barron, rh Mr Kevin

Beckett, rh Margaret

Begg, Dame Anne

Benn, rh Hilary

Benton, Mr Joe

Berger, Luciana

Betts, Mr Clive

Blackman-Woods, Roberta

Blears, rh Hazel

Blenkinsop, Tom

Blomfield, Paul

Blunkett, rh Mr David

Bradshaw, rh Mr Ben

Brennan, Kevin

Brown, Lyn

Brown, Mr Russell

Bryant, Chris

Buck, Ms Karen

Burden, Richard

Burnham, rh Andy

Byrne, rh Mr Liam

Campbell, Mr Alan

Campbell, Mr Ronnie

Caton, Martin

Champion, Sarah

Chapman, Jenny

Clark, Katy

Clarke, rh Mr Tom

Clwyd, rh Ann

Coffey, Ann

Connarty, Michael

Cooper, rh Yvette

Corbyn, Jeremy

Crausby, Mr David

Creagh, Mary

Creasy, Stella

Cryer, John

Cunningham, Alex

Cunningham, Mr Jim

Cunningham, Sir Tony

Curran, Margaret

Darling, rh Mr Alistair

Davidson, Mr Ian

Davies, Geraint

De Piero, Gloria

Denham, rh Mr John

Dobbin, Jim

Dobson, rh Frank

Docherty, Thomas

Donohoe, Mr Brian H.

Doran, Mr Frank

Doughty, Stephen

Dowd, Jim

Doyle, Gemma

Dugher, Michael

Durkan, Mark

Eagle, Ms Angela

Eagle, Maria

Edwards, Jonathan

Efford, Clive

Elliott, Julie

Ellman, Mrs Louise

Engel, Natascha

Esterson, Bill

Evans, Chris

Farrelly, Paul

Field, rh Mr Frank

Fitzpatrick, Jim

Flello, Robert

Flint, rh Caroline

Flynn, Paul

Fovargue, Yvonne

Francis, Dr Hywel

Gapes, Mike

Gardiner, Barry

Gilmore, Sheila

Glass, Pat

Glindon, Mrs Mary

Godsiff, Mr Roger

Goodman, Helen

Green, Kate

Greenwood, Lilian

Gwynne, Andrew

Hain, rh Mr Peter

Hamilton, Mr David

Hamilton, Fabian

Hanson, rh Mr David

Harman, rh Ms Harriet

Healey, rh John

Hendrick, Mark

Hepburn, Mr Stephen

Hillier, Meg

Hilling, Julie

Hodge, rh Margaret

Hodgson, Mrs Sharon

Hoey, Kate

Hunt, Tristram

Irranca-Davies, Huw

Jackson, Glenda

Jamieson, Cathy

Jarvis, Dan

Johnson, rh Alan

Johnson, Diana

Jones, Graham

Jones, Helen

Jones, Mr Kevan

Kaufman, rh Sir Gerald

Keeley, Barbara

Kendall, Liz

Lammy, rh Mr David

Lavery, Ian

Lazarowicz, Mark

Leslie, Chris

Lewis, Mr Ivan

Long, Naomi

Love, Mr Andrew

Lucas, Ian

MacNeil, Mr Angus Brendan

Mactaggart, Fiona

Mahmood, Shabana

Malhotra, Seema

Mann, John

Marsden, Mr Gordon

McCann, Mr Michael

McCarthy, Kerry

McClymont, Gregg

McCrea, Dr William

McDonagh, Siobhain

McDonald, Andy

McDonnell, John

McFadden, rh Mr Pat

McGovern, Alison

McGovern, Jim

McGuire, rh Mrs Anne

McKechin, Ann

McKenzie, Mr Iain

McKinnell, Catherine

Meacher, rh Mr Michael

Mearns, Ian

Miliband, rh David

Miller, Andrew

Mitchell, Austin

Morden, Jessica

Morrice, Graeme

(Livingston)

Morris, Grahame M.

(Easington)

Mudie, Mr George

Murphy, rh Mr Jim

Murphy, rh Paul

Murray, Ian

Nandy, Lisa

Nash, Pamela

O'Donnell, Fiona

Onwurah, Chi

Osborne, Sandra

Owen, Albert

Pearce, Teresa

Perkins, Toby

Phillipson, Bridget

Powell, Lucy

Qureshi, Yasmin

Raynsford, rh Mr Nick

Reed, Steve

Reeves, Rachel

Reynolds, Emma

Reynolds, Jonathan

Riordan, Mrs Linda

Robertson, Angus

Robertson, John

Robinson, Mr Geoffrey

Rotheram, Steve

Roy, Mr Frank

Roy, Lindsay

Ruane, Chris

Ruddock, rh Dame Joan

Sarwar, Anas

Sawford, Andy

Seabeck, Alison

Sheerman, Mr Barry

Sheridan, Jim

Shuker, Gavin

Skinner, Mr Dennis

Slaughter, Mr Andy

Smith, rh Mr Andrew

Smith, Angela

Smith, Nick

Smith, Owen

Spellar, rh Mr John

Stringer, Graham

Stuart, Ms Gisela

Sutcliffe, Mr Gerry

Tami, Mark

Thomas, Mr Gareth

Timms, rh Stephen

Trickett, Jon

Turner, Karl

Twigg, Derek

Twigg, Stephen

Umunna, Mr Chuka

Vaz, Valerie

Walley, Joan

Watson, Mr Tom

Watts, Mr Dave

Weir, Mr Mike

Whitehead, Dr Alan

Williams, Hywel

Williamson, Chris

Wilson, Phil

Winnick, Mr David

Winterton, rh Ms Rosie

Wishart, Pete

Woodward, rh Mr Shaun

Wright, David

Wright, Mr Iain

Tellers for the Ayes:

Nic Dakin

and

Susan Elan Jones

NOES

Adams, Nigel

Afriyie, Adam

Aldous, Peter

Andrew, Stuart

Bacon, Mr Richard

Baker, Norman

Baker, Steve

Baldry, Sir Tony

Barclay, Stephen

Barker, rh Gregory

Baron, Mr John

Barwell, Gavin

Bebb, Guto

Beith, rh Sir Alan

Bellingham, Mr Henry

Benyon, Richard

Beresford, Sir Paul

Berry, Jake

Bingham, Andrew

Binley, Mr Brian

Birtwistle, Gordon

Blackman, Bob

Blackwood, Nicola

Boles, Nick

Bone, Mr Peter

Bottomley, Sir Peter

Bradley, Karen

Brady, Mr Graham

Brake, rh Tom

Bray, Angie

Brazier, Mr Julian

Bridgen, Andrew

Brine, Steve

Brooke, Annette

Browne, Mr Jeremy

Bruce, Fiona

Bruce, rh Sir Malcolm

Buckland, Mr Robert

Burley, Mr Aidan

Burns, Conor

Burns, rh Mr Simon

Burrowes, Mr David

Burstow, rh Paul

Burt, Lorely

Byles, Dan

Cable, rh Vince

Cairns, Alun

Carmichael, rh Mr Alistair

Carmichael, Neil

Carswell, Mr Douglas

Chishti, Rehman

Clark, rh Greg

Clarke, rh Mr Kenneth

Clifton-Brown, Geoffrey

Coffey, Dr Thérèse

Collins, Damian

Colvile, Oliver

Crabb, Stephen

Crouch, Tracey

Davey, rh Mr Edward

Davies, David T. C.

(Monmouth)

Davies, Glyn

Davies, Philip

de Bois, Nick

Dinenage, Caroline

Djanogly, Mr Jonathan

Dorrell, rh Mr Stephen

Dorries, Nadine

Doyle-Price, Jackie

Drax, Richard

Duddridge, James

Duncan Smith, rh Mr Iain

Dunne, Mr Philip

Ellis, Michael

Ellison, Jane

Ellwood, Mr Tobias

Elphicke, Charlie

Eustice, George

Evans, Graham

Evans, Jonathan

Fabricant, Michael

Fallon, rh Michael

Farron, Tim

Featherstone, Lynne

Field, Mark

Francois, rh Mr Mark

Freeman, George

Freer, Mike

Fuller, Richard

Gale, Sir Roger

Garnier, Sir Edward

Garnier, Mark

Gauke, Mr David

Gibb, Mr Nick

Gilbert, Stephen

Gillan, rh Mrs Cheryl

Glen, John

Goldsmith, Zac

Goodwill, Mr Robert

Graham, Richard

Grant, Mrs Helen

Gray, Mr James

Grayling, rh Chris

Greening, rh Justine

Grieve, rh Mr Dominic

Griffiths, Andrew

Gummer, Ben

Gyimah, Mr Sam

Halfon, Robert

Hammond, rh Mr Philip

Hammond, Stephen

Hancock, Matthew

Hands, Greg

Harper, Mr Mark

Harrington, Richard

Harris, Rebecca

Hart, Simon

Harvey, Sir Nick

Haselhurst, rh Sir Alan

Hayes, Mr John

Heald, Oliver

Heath, Mr David

Hemming, John

Henderson, Gordon

Hendry, Charles

Herbert, rh Nick

Hinds, Damian

Hollingbery, George

Hollobone, Mr Philip

Holloway, Mr Adam

Horwood, Martin

Howarth, Sir Gerald

Howell, John

Hughes, rh Simon

Huhne, rh Chris

Hunt, rh Mr Jeremy

Huppert, Dr Julian

Hurd, Mr Nick

Jackson, Mr Stewart

Javid, Sajid

Jenkin, Mr Bernard

Johnson, Gareth

Johnson, Joseph

Jones, Andrew

Jones, rh Mr David

Jones, Mr Marcus

Kawczynski, Daniel

Kelly, Chris

Kirby, Simon

Knight, rh Mr Greg

Kwarteng, Kwasi

Lancaster, Mark

Lansley, rh Mr Andrew

Latham, Pauline

Laws, rh Mr David

Leadsom, Andrea

Lee, Jessica

Lee, Dr Phillip

Leech, Mr John

Lefroy, Jeremy

Leigh, Mr Edward

Letwin, rh Mr Oliver

Lewis, Dr Julian

Lilley, rh Mr Peter

Lloyd, Stephen

Lopresti, Jack

Lord, Jonathan

Luff, Peter

Lumley, Karen

Macleod, Mary

Main, Mrs Anne

Maynard, Paul

McCartney, Jason

McCartney, Karl

McIntosh, Miss Anne

McPartland, Stephen

McVey, Esther

Menzies, Mark

Mercer, Patrick

Metcalfe, Stephen

Miller, rh Maria

Mills, Nigel

Milton, Anne

Mitchell, rh Mr Andrew

Mordaunt, Penny

Morgan, Nicky

Morris, Anne Marie

Morris, David

Morris, James

Mosley, Stephen

Mowat, David

Mulholland, Greg

Mundell, rh David

Munt, Tessa

Murray, Sheryll

Murrison, Dr Andrew

Newmark, Mr Brooks

Newton, Sarah

Nokes, Caroline

Norman, Jesse

Nuttall, Mr David

Offord, Dr Matthew

Ollerenshaw, Eric

Opperman, Guy

Paice, rh Sir James

Parish, Neil

Patel, Priti

Paterson, rh Mr Owen

Pawsey, Mark

Percy, Andrew

Perry, Claire

Phillips, Stephen

Pincher, Christopher

Poulter, Dr Daniel

Pugh, John

Raab, Mr Dominic

Randall, rh Mr John

Reckless, Mark

Redwood, rh Mr John

Rees-Mogg, Jacob

Reevell, Simon

Reid, Mr Alan

Robathan, rh Mr Andrew

Rogerson, Dan

Rosindell, Andrew

Rudd, Amber

Ruffley, Mr David

Rutley, David

Sanders, Mr Adrian

Sandys, Laura

Scott, Mr Lee

Selous, Andrew

Shapps, rh Grant

Sharma, Alok

Shelbrooke, Alec

Shepherd, Mr Richard

Simmonds, Mark

Simpson, Mr Keith

Skidmore, Chris

Smith, Miss Chloe

Smith, Julian

Smith, Sir Robert

Soames, rh Nicholas

Soubry, Anna

Spelman, rh Mrs Caroline

Spencer, Mr Mark

Stanley, rh Sir John

Stevenson, John

Stewart, Bob

Stewart, Iain

Stewart, Rory

Streeter, Mr Gary

Stride, Mel

Stuart, Mr Graham

Sturdy, Julian

Swales, Ian

Swayne, rh Mr Desmond

Swinson, Jo

Syms, Mr Robert

Teather, Sarah

Thurso, John

Timpson, Mr Edward

Tomlinson, Justin

Tredinnick, David

Truss, Elizabeth

Turner, Mr Andrew

Tyrie, Mr Andrew

Uppal, Paul

Vaizey, Mr Edward

Vara, Mr Shailesh

Vickers, Martin

Villiers, rh Mrs Theresa

Walker, Mr Charles

Walker, Mr Robin

Wallace, Mr Ben

Walter, Mr Robert

Watkinson, Angela

Webb, Steve

Wharton, James

White, Chris

Whittaker, Craig

Whittingdale, Mr John

Wiggin, Bill

Williams, Mr Mark

Williams, Stephen

Williamson, Gavin

Willott, Jenny

Wilson, Mr Rob

Wollaston, Dr Sarah

Wright, Simon

Yeo, Mr Tim

Young, rh Sir George

Zahawi, Nadhim

Tellers for the Noes:

Mr David Evennett

and

Mark Hunter

Question accordingly negatived.

10 Dec 2012 : Column 80

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10 Dec 2012 : Column 83

7.12 pm

Proceedings interrupted (Programme Order, this day).

The Deputy Speaker put forthwith the Questions necessary for the disposal of the business to be concluded at that time (Standing Order No. 83F).

Lords amendment 3 agreed to.

Lords amendments 4 to 23 agreed to.

Mr Andy Slaughter (Hammersmith) (Lab): On a point of order, Madam Deputy Speaker. On 29 February this year, I asked the Secretary of State for Justice whether he would name the 25 highest-paid lawyers and the amounts they received. I was told the information would be available in due course. I asked again on 19 April, and was told the information would be available later this summer—[Interruption.]

Madam Deputy Speaker (Dawn Primarolo): Order. Will hon. Members who are leaving the Chamber please so do quietly? Those remaining in the Chamber should listen to the point of order and if they wish to have private conversations, they should leave the Chamber. I cannot hear what the hon. Gentleman is saying. I got as far as 29 February so perhaps he will pick up his point from there.

Mr Slaughter: My initial question on 29 February asked for the names of the 25 highest-paid lawyers and I was told the information would be available in due course. I asked again on 19 April and was told the information would be available later in the summer. Yesterday, the answer to my question was spread over the pages of The Sun and The Sunday Telegraph with the Justice Secretary’s inimitable spin put on it. This afternoon, I received a reply to my question from Lord McNally. Is it appropriate to wait nine months for a question to be answered, and for it to be leaked all over the Sunday press the day before that answer is received? Even by the standards of this Government that is poor. Will you give me some advice, Madam Deputy Speaker, on how I can avoid a repetition of that?

10 Dec 2012 : Column 84

Madam Deputy Speaker: Clearly the Government thought long and hard about how to answer the question—a little too long, in fact—and information was released to the press before the hon. Gentleman received it in writing, although he has it now. There is not a great deal that I can do from the Chair, but I recommend that the hon. Gentleman takes the matter up with the Procedure Committee. Nine months is a little long, as I am sure most Members of the House would agree.

Let us move on to the next group of amendments.

Greg Clark: I beg to move, That this House agrees with Lords amendment 24.

Madam Deputy Speaker: With this we may take Lords amendments 25, 41, 63, 78, 86, 128 to 138, 147, 231 to 233 and 236.

Greg Clark: The amendments in this group relate to key considerations that have underpinned the design of the new conduct regulator. The Government have been clear that regulation should focus on making financial markets work well, and on securing better outcomes for consumers.

Access is critical. Without access to a bank account, for example, it is difficult for individuals to participate fully in the economy and even in society. To support access, Lords amendment 25 adds a new “have regard” to the Financial Conduct Authority’s competition objective. Therefore, when considering whether effective competition is in the interests of consumers, the FCA must have regard to

“the ease with which consumers…including consumers in areas affected by social or economic deprivation, can access”

the services they may wish to use.

That reflects discussions in the other place, and it is right to make it clear that the regulator’s duties embrace those affected by deprivation.

Mr Thomas: The Minister gave the example of access to a bank account, but may I draw his attention to the issue of access to a bank branch in order to access one’s bank account? Already, a series of communities no longer have bank branches. Will he say how the FCA will use this new power to consider communities that lack not access to a bank account but access to a bank branch in the first place?

Greg Clark: The hon. Gentleman makes a reasonable point. However, having set up the FCA to put supervision into practice and added this concern to its objectives, it would be unreasonable for me to tell it how to exercise its powers before it has even come formally into existence. It will consider the issue of access and come to a view. That will be open to scrutiny by the Treasury Committee and, I dare say, other Committees of the House.

Where the FCA has identified a problem with access, the regulator will consider whether it could take action to close gaps in provision by promoting competition in the interests of consumers. It may also consider whether its own rules and requirements are imposing a burden on competition and restricting access.

Nicholas Soames (Mid Sussex) (Con): Does my right hon. Friend agree that it matters that it is not too difficult to open an account in the first place? Every

10 Dec 2012 : Column 85

bank treats anyone who wants to open an account as a first-class money launderer, but it is essential that opening an account is not too complicated.

Greg Clark: My right hon. Friend is absolutely right. That is the import of the amendment I mentioned—we have stressed its importance. The Bill has substantially improved regard for competition, including by addressing the possibility that regulators, whether inadvertently or by neglect, might impede it. An explicit requirement to have regard to competition will help in that matter.

Consumer credit is a topic of great interest. A number of provisions in the Bill enable the transfer of the regulation of consumer credit from the Office of Fair Trading to the FCA. That will take place by April 2014 and constitutes a major transformation in the regulation of consumer credit. As all hon. Members know, there was strong cross-party consensus in the House of Lords on the need for strong regulation of the payday loans market. Members on both sides of this House feel just as strongly.

Tracey Crouch (Chatham and Aylesford) (Con): There has been a proliferation of payday loans companies setting up in Chatham high street. Hon. Members have raised the issue for some time, so I welcome the Government’s decision. When will the university of Bristol research into a cap be published? Will it be published before Christmas?

Greg Clark: My hon. Friend is a real campaigner—anyone who suffers poor treatment in Chatham can count on her vigorous support in defending themselves against people who have more power. My understanding is that the research being conducted by the university of Bristol is pretty close to completion. I am not certain whether it will be published just before or just after Christmas, but I will ensure that my hon. Friend is alerted as soon as it is laid before the House.

Lords amendment 78 clarifies that the FCA will have the power to impose restrictions on the cost and duration of a regulated credit agreement. It ensures that potential loopholes that could be exploited by unscrupulous firms are addressed—for example, by ensuring that the FCA’s rules under the power cover linked charges and connected agreements. The amendment provides for the agreement to be unenforceable by the lender, for any money or property secured against the loan to be returned to the borrower, and for compensation arrangements to be put in place.

Helen Goodman (Bishop Auckland) (Lab): Will the Minister clarify for the House whether the rules apply to organisations such as BrightHouse, which sells furniture and white goods at very high interest rates as well as via straightforward money transactions?

Greg Clark: The hon. Lady would not expect me to comment on a particular firm when I do not know the details, but she makes a perfectly reasonable general point. If a firm is a regulated provider of credit, the provisions apply to it in the same way.

Helen Goodman: But it sounds as if people selling goods at exceptionally high interest rates on hire purchase agreements are not regulated credit providers. Therefore, is there not a bit of a loophole in what the Minister offers?