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Mrs. Roe: With the leave of the House, I shall quickly sum up. I thank my hon. Friend the Minister for his remarks and assurances and express my deep gratitude to all the hon. Members who have participated in this important debate on a vital subject.
In conclusion, I make one important point. There has been a great deal of interest in breast cancer recently, and rightly so. It is a dreadful disease--the third largest cause of death for women in this country. However, I would not like the Committee's recommendations to be seen as relating exclusively to breast canner. I believe that, building on the success of breast screening, a national network of specialist breast units can be established with a national co-ordinator and a quality assurance programme integrated with that of the national health service breast screening programme. I also sincerely hope that that will lead the way for networks of site-specific units for other common cancers.
Question deferred, pursuant to paragraphs (4) and (5) of Standing Order No. 52 (Consideration of Estimates).
Financial Services Regulation
Motion made, and Question proposed,
Sir Thomas Arnold (Hazel Grove):
The Treasury and Civil Service Select Committee is most grateful for the opportunity to debate the regulation of financial services in the United Kingdom. It goes almost without saying that the growth of financial services in our country in recent years has assumed an importance that none of us could have foreseen. The reputation of the City of London-- indeed, the reputation of our country--is inextricably bound up with that growth and it is an area of life and an activity about which we can truly say that the eyes of the world are upon us. It is for that reason that the Committee has been especially concerned during a long-running inquiry to consider the issues of transparency and accountability. I shall make some further reference to those principles in my remarks.
I thank my colleagues on the Committee for their patience and diligence during the two years in which we have been examining the issues. I thank our Clerks for the long hours that they have put in and the many witnesses who have appeared before the Committee. I also thank my hon. Friend the Economic Secretary to the Treasury for her response on behalf of the Government to our report, dated 12 December, which the Committee received just in time for this debate. I shall make further reference to that in a moment.
I want to give the House something of the flavour of the way in which the Committee carried out its work. We approached the subject in a remarkably non-partisan way
and, mostly, with open minds. We listened carefully to the evidence and for the most part reached our conclusions without votes. Clearly, there were some differences of opinion, as one would expect, but they were not generally major ones. The entire proceedings were remarkable for the degree of open-mindedness and fair-mindedness on the whole Committee.
It is for that reason that I should like to draw the attention of the House to what was arguably the one substantive vote, which took place when we came to debate, discuss and agree the final report. It involved a series of amendments moved by the hon. Member for North Warwickshire (Mr. O'Brien). It raises some important issues that we should consider this evening and with which I propose to deal head on.
It is perfectly true that there are some differences in emphasis, style and tone between the Government and the Opposition on the regulation of financial services, but I do not believe that they should be exaggerated. There is not an unbridgeable gulf across the Floor of the House on the matter. A degree of consensus is apparent, which is to be welcomed in the national interest. For the reasons that I gave at the start of my speech it can only be in the public interest that the Government and Opposition for the most part find themselves in broad agreement on how to tackle some difficult problems and respond to new opportunities and challenges.
The amendments moved by the hon. Member for North Warwickshire went further in the direction of proposing that we should replace the present arrangements with a structure that would more closely resemble the American Securities and Exchange Commission. That led to a vote in the Committee. The key sentence in his amendments is to be found in our report on page xliii in amendment 93B, which states:
In the event, the amendment was lost because I exercised a casting vote with the Noes.
The report shows, however, the progress of the argument and the difference between Conservative and Opposition members of the Committee. I do not believe that the difference is serious because, while structure in these matters may be important, what ultimately matters is the quality of regulation. We all agreed that we required good, well-trained and properly motivated and paid regulators and staffs, who would enjoy respect in their profession in the City of London and be regarded throughout the world as thoroughly professional men and women doing an important job. We concluded that the regulators in the new organisations have coped well with the immense changes that have swept across the financial markets and the City of London in recent years, although there have been some trying and testing moments and there will no doubt be more in the future.
The majority of the Committee did not feel that the time was right to go as far as the hon. Member for North Warwickshire proposed, but we understood perfectly what motivated him, the intellectual argument that he was putting and the manner in which his proposal was put.
In a fair-minded and positive response to the Select Committee report, the Government have left open for the future many aspects of this debate. At a time of rapid
evolution, it is sensible to allow the changes being made to work their way through before deciding on the timing for the changes that the Committee proposes.
The Select Committee holds the firm view that, henceforth, ministerial responsibility for all aspects of financial regulation and supervision should be concentrated in the Treasury. That view has already provoked a certain amount of controversy. I draw the House's attention to paragraphs 118 and 119 of our report. Paragraph 119 says that we want to encourage
That a sum not exceeding £30,079,000 be granted to Her Majesty out of the Consolidated Fund, on account, for or towards defraying the charges for the year ending on 31st March 1997 for expenditure by Her Majesty's Treasury on economic, financial and related administration, including debt management; payments to certain parliamentary bodies; and certain other services including expenses in connection with Honours and Dignities and a grant in aid to the Private Finance Panel Executive.--[Mrs. Angela Knight.]
"The Committee recommends that the ultimate objective should be for the SROs to be folded into SIB to become serving departments."
"HM Treasury to adopt a more interventionist and active role in the co-ordination of financial services supervision and regulation."
Some commentators immediately fell on the word
"interventionist" with an unwarranted zeal. The key word in that paragraph is not "interventionist" but
"co-ordination". Evidence that the Committee took revealed that we require better co-ordination and one department of state to build up a core of expertise and understanding of the issues and personalities involved so that, when and where it is necessary to bring people together or, more trenchantly, knock heads together, that can be done with a full and proper understanding and awareness of exactly what is involved. As time went by, we were increasingly uneasy about the division of responsibilities between the Treasury and the Department of Trade and Industry. We felt that the time had come to concentrate resources and activity in the Treasury so that a group of civil servants and their ministerial chief would have an even better grip on current events.
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