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Mrs. Liddell: I inadvertently missed out the references to schedule 6. I was conscious that colleagues on both sides of the House were beginning to look at the clock.

Under schedule 6, the relevant procedures are set out and state what the regulations can cover, as well as the consultation requirements. To repeat what I said earlier, we are transferring existing functions. The hon. Gentleman should reflect on the fact that this approach was adopted by his Government in the Financial Services Act 1986, and that is the model which we have followed. The purpose of providing for fee regulation to be made by the FSA is to mirror schedule 9 to the 1986 Act, which governs the collection and use of fees by the FSA under that Act. We do not see any sense in applying a different system in the Bill.

9.15 pm

Mr. Fallon: I am grateful to the hon. Lady for that intervention. The only difficulty is that it leaves us with two different regimes. There is an affirmative resolution procedure for the fees recovered through the cash deposit system, whereas the order to be laid according to the FSA procedure under schedule 6 will be not be subject to any parliamentary scrutiny.

Be that as it may, we have tried to tempt the hon. Lady with a range of different methods of cost constraints. We have suggested capping, indexation, proportionality and

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the reduction of fees for good compliance. The amendment would not have required reduction, but merely provided for it. It would have been up to the FSA to devise its own scheme.

Our amendments even offered the hon. Lady the possibility of using her own words as a form of cost control, because, in the end, that is all that we and those who have to pay the fees have to fall back on. We have heard the speeches of the Chief Secretary and the Economic Secretary. We have heard about her wishes, and we even heard about something else that she called "an explicit statement". We have heard her say that it is the Government's intention to bear down on fees. In the end, however, they are not the Government's fees to set; they will be set by the authority. That is why we think that it is important to get it right and put it in statute.

The debate has quite convinced me that this is a matter that may well attract attention in other place. In the meantime, I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Schedule 2

Cash ratio deposits

Amendment made: No. 44, in page 19, line 11, leave out 'within the meaning of' and insert 'authorised under'.--[Mr. Betts.]

Mr. Fallon: I beg to move amendment No. 21, in page 21, line 5, leave out

'to be representative of persons'.

Mr. Deputy Speaker: With this, it will be convenient to discuss amendment No. 7, in page 21, line 7, at end insert

', and shall place in the Library of each House of Parliament a summary of all representations received.'.

Mr. Fallon: I welcome the Treasury's early publication of its consultative document. It is not the weightiest of documents, but at least it was published in good time, and it appears to be suitably green. It is important that it is green. When the Minister replies, I hope that she will confirm that the Government are still reasonably open-minded on the definition of eligible liabilities and about the thresholds and the banding levels that will apply. Huge sums of money are involved, and it is important to get it right, because, although the first order can be revised once it is laid, according to the consultation procedure laid out, I suspect that that order will largely set the pace.

The City needs some reassurance that the consultation process is absolutely genuine, because of the sums involved. It needs to know that the views of institutions will be heard. That is the objective of amendments Nos. 21 and 7.

Amendment No. 21 would ensure that all eligible institutions are consulted, not simply their representative bodies. I do not believe that that represents a huge extra burden of paperwork--indeed, the Bill limits the consultation to those institutions that are materially affected. I look forward to the Economic Secretary finally welcoming one of our amendments.

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Amendment No. 7 ensures that the representations received are not simply ignored. We are simply asking that, as happens in the case of many other consultative processes, a summary of those representations be placed in the Library of the House, so that all involved can see the balance of the views expressed, and the extent to which the order that is laid takes account of those views.

While we are on the subject of cash ratio deposits, perhaps we should address the little matter of the explanatory memorandum, which I gather is to be altered when the Bill is reprinted. Perhaps the Minister will explain why we must alter the explanatory memorandum; why we are bound by the statistical office of the Commission to do so, or indeed whether we are bound by Eurostat to do so; why that issue was not clarified before the Bill was drafted; and whether the change means that the Government can get away with a lower central Government expenditure total and--who knows?--easier qualification under the Maastricht criteria. Some clarification in support of the Chief Secretary's letter would be welcome.

Mr. Gibb: I merely ask whether the Economic Secretary has addressed the economic concerns expressed by the Building Societies Association. Specifically, I wonder whether she can give the House, the City and the country an idea of the percentage that the Government are likely to choose. The Building Societies Association believes--as I do--that the percentage, which was 0.35 per cent. of eligible liability, should be considerably lower in view of the reduction in activities. Can the Government confirm that it will be lower, and will they give an idea of the percentage that is likely to be applied in future?

Mrs. Liddell: I shall address that point with the point that the hon. Member for Sevenoaks (Mr. Fallon) made about the consultation process. There has been genuine consultation--I am glad that the hon. Member for Sevenoaks acknowledges that--and we shall be guided by the advice that we receive from those directly affected by cash ratio deposits, especially bearing in mind the fact that many new institutions--the building societies--now become eligible for cash ratio deposits as they move away from a voluntary structure.

Before I discuss the amendments, I take on board the point about the explanatory memorandum. I admit that, when I saw the letter that my right hon. Friend the Chief Secretary to the Treasury wrote to the right hon. Member for Wells (Mr. Heathcoat-Amory)--and to the hon. Member for Kingston and Surbiton (Mr. Davey) and my hon. Friend the Member for North Durham (Mr. Radice)--which said that we were complying with Eurostat, I thought that the Pavlovian response of Conservative Members to matters European would cause a reaction; I am delighted to see that I was not disappointed.

The Office for National Statistics has taken Eurostat's advice because Eurostat is developing a system that will give central bank coherence throughout Europe, so that there is a clear read across Europe. It is important for Governments to take seriously the advice of professional statisticians on these matters, and we have done so, in

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terms of the advice that the ONS has received from Eurostat and advice that we, as a Government, have taken from the ONS.

Regrettably, despite the honeyed words of the hon. Member for Sevenoaks, all these references to charm are getting him nowhere, and I shall resist amendments Nos. 21 and 7. We believe that the suggested procedure in amendment No. 21 would be much too cumbersome. We are happy to take representations from all interested parties, but if we must then consult each individual party, the Treasury would be obliged to consult separately more than 500 banks and building societies.

I believe that Governments, past and present, have, and have had, a great deal of respect for the British Bankers Association and the Building Societies Association. We have forwarded the documents to both organisations, and they have in turn forwarded copies to all their members. We expect to receive responses from the representative organisations and from individual institutions that feel strongly about specific aspects. That process is much more efficient than the one suggested in amendment No. 21.

I am sure that the hon. Member for Sevenoaks is as concerned about Government efficiency and value for money as we are. We believe that it is much more efficient to limit the statutory requirement to consult to those who are representative of persons likely to be materially affected. Therefore, the Treasury is responsible for finding the right representative bodies. If the hon. Gentleman is suggesting that the British Bankers Association and the Building Societies Association are not properly representative, we shall all be interested to hear why he thinks so.

Amendment No. 7 asks that a summary of all representations be placed in the Library of the House. We have done some checking in this area, and we are not aware of any other references in legislation to the placing of documents in the Library. Therefore, we do not believe that it would be appropriate to put that kind of obligation into the legislation.

However, I assure the House that the Government's response to the cash ratio deposits consultation will include a summary of representations received, subject to preserving the confidentiality of those who seek it. We are anxious to be as open as possible while respecting the confidentiality of those involved. We must also respect the need for value for money and efficiency on the part of Government. Therefore, I ask the House to resist the amendments.

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