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Mr. Timms: My hon. Friend the Member for Newcastle upon Tyne, Central (Mr. Cousins) would have been comforted if Conservative Members had paid more attention to the interests of consumers. He made a telling point on that subject.

On amendment No. 478, clause 10 provides that any person appointed by the Treasury to carry out a review of the FSA must be independent of the FSA. Subsection (7) defines what that means. The problem with the proposed change is that it is not necessarily self-evident whether a particular person is at any time independent of the FSA. In practice, somebody will need to take a view and, as it is the Treasury's responsibility to appoint any reviewer, it follows that the Treasury should make the judgment. For that reason, I cannot accept the amendment and hope that it will be withdrawn.

Sir Nicholas Lyell: I shall be brief. I am disturbed that the Minister has not been more forthcoming. He should

1 Feb 2000 : Column 965

at least accept an amendment providing for a full-scale review within a reasonable period of the establishment of the structures in the Bill.

These amendments, like the previous group, concern the authority's accountability. I confess that I am becoming significantly alarmed. The Minister was silent on this, but unless the Government recognise that the appeal tribunal structure must be headed by somebody of the permanence and calibre of a High Court judge and that the authority's activities should be regularly and independently reviewed, the checks and balances that we require will not be adequate.

Mr. Flight: We thought that the Government were a great supporter of reviews, but it appears that they do not support reviews of certain matters. Much as we appreciate the Financial Secretary's courtesy, we feel--I certainly feel--that his response was somewhat weak. His refusal to commit the Government at least to a review of this highly complicated new legislation, bringing in the whole industry and changing the position constitutionally after a sensible period, suggest to us that the Government are not very interested in the review process.

The hon. Gentleman seemed to argue that it was necessary to wait for a Barings or a pension-selling problem to break before conducting a review, but the whole point of a regular review is that it is designed to throw up problems and ensure that they are dealt with. The problems with the regulation of the retail industry date back 10 years. Everyone has known about the--the FSA has admitted that. Had there been a statutory regular review, something might have been done.

Such reviews are an important part of efficiency, good regulation and protecting the consumer, as well as ensuring that regulation has not become excessive in the other direction. The review, as clause 10 provides, would be laid before Parliament. According to our thinking, it would provide a document on which the Select Committee on the Treasury could do a great deal of the homework.

It should be borne in mind that the financial services industry changes at a rapid pace. Let us consider what has happened in the last five years, let alone the last 10. Change is needed to update and adjust as the industry changes, and we feel that a statutory five-year review is appropriate to the needs of the situation. We have not specified the Comptroller and Auditor General as the person who should conduct the review, as particular issues may arise; we have merely specified that it should be someone who is truly independent. I felt that the Financial Secretary's response was rather strange, as we see no real problem in determining who is independent of the Treasury.

The amendment is highly important to the interests of all to whom regulation relates. The machinery that we propose would avoid a number of the problems that have been experienced with regulation since the Financial Services Act 1986 came into force, and we therefore wish to press the amendment to a Division.

1 Feb 2000 : Column 966

Question put, That the amendment be made:--

The House divided: Ayes 161, Noes 309.

Division No. 57
[7.23 pm


AYES


Ainsworth, Peter (E Surrey)
Allan, Richard
Arbuthnot, Rt Hon James
Ashdown, Rt Hon Paddy
Atkinson, David (Bour'mth E)
Baker, Norman
Baldry, Tony
Beith, Rt Hon A J
Bercow, John
Beresford, Sir Paul
Blunt, Crispin
Boswell, Tim
Bottomley, Peter (Worthing W)
Bottomley, Rt Hon Mrs Virginia
Brady, Graham
Brake, Tom
Brazier, Julian
Brooke, Rt Hon Peter
Browning, Mrs Angela
Burnett, John
Burns, Simon
Burstow, Paul
Butterfill, John
Cable, Dr Vincent
Cash, William
Chidgey, David
Chope, Christopher
Clappison, James
Clark, Dr Michael (Rayleigh)
Clarke, Rt Hon Kenneth
(Rushcliffe)
Collins, Tim
Colvin, Michael
Cormack, Sir Patrick
Cran, James
Curry, Rt Hon David
Davey, Edward (Kingston)
Davis, Rt Hon David (Haltemprice)
Day, Stephen
Dorrell, Rt Hon Stephen
Duncan Smith, Iain
Emery, Rt Hon Sir Peter
Faber, David
Fabricant, Michael
Fallon, Michael
Fearn, Ronnie
Flight, Howard
Forth, Rt Hon Eric
Foster, Don (Bath)
Fowler, Rt Hon Sir Norman
Fox, Dr Liam
Fraser, Christopher
George, Andrew (St Ives)
Gibb, Nick
Gill, Christopher
Gillan, Mrs Cheryl
Gorman, Mrs Teresa
Green, Damian
Greenway, John
Grieve, Dominic
Gummer, Rt Hon John
Hague, Rt Hon William
Hamilton, Rt Hon Sir Archie
Hammond, Philip
Hancock, Mike
Harris, Dr Evan
Hawkins, Nick
Hayes, John
Heald, Oliver
Heathcoat-Amory, Rt Hon David
Hogg, Rt Hon Douglas
Horam, John
Howard, Rt Hon Michael
Howarth, Gerald (Aldershot)
Hughes, Simon (Southwark N)
Hunter, Andrew
Jack, Rt Hon Michael
Jackson, Robert (Wantage)
Jenkin, Bernard
Keetch, Paul
Kennedy, Rt Hon Charles
(Ross Skye & Inverness W)
Key, Robert
Kirkbride, Miss Julie
Kirkwood, Archy
Laing, Mrs Eleanor
Lait, Mrs Jacqui
Lansley, Andrew
Letwin, Oliver
Lewis, Dr Julian (New Forest E)
Lidington, David
Lilley, Rt Hon Peter
Lloyd, Rt Hon Sir Peter (Fareham)
Llwyd, Elfyn
Loughton, Tim
Luff, Peter
Lyell, Rt Hon Sir Nicholas
MacGregor, Rt Hon John
McIntosh, Miss Anne
Maclean, Rt Hon David
McLoughlin, Patrick
Madel, Sir David
Major, Rt Hon John
Maude, Rt Hon Francis
Mawhinney, Rt Hon Sir Brian
May, Mrs Theresa
Moore, Michael
Moss, Malcolm
Nicholls, Patrick
Norman, Archie
Oaten, Mark
O'Brien, Stephen (Eddisbury)
Ottaway, Richard
Page, Richard
Paice, James
Paterson, Owen
Pickles, Eric
Portillo, Rt Hon Michael
Prior, David
Randall, John
Redwood, Rt Hon John
Robathan, Andrew
Robertson, Laurence
Roe, Mrs Marion (Broxbourne)
Ruffley, David
Russell, Bob (Colchester)
St Aubyn, Nick
Sanders, Adrian
Sayeed, Jonathan
Shepherd, Richard
Soames, Nicholas
Spelman, Mrs Caroline
Spicer, Sir Michael
Spring, Richard
Stanley, Rt Hon Sir John
Steen, Anthony
Streeter, Gary
Swayne, Desmond
Syms, Robert
Tapsell, Sir Peter
Taylor, Ian (Esher & Walton)
Taylor, John M (Solihull)
Taylor, Sir Teddy
Townend, John
Tredinnick, David
Trend, Michael
Tyrie, Andrew
Viggers, Peter
Walter, Robert
Wardle, Charles
Waterson, Nigel
Webb, Steve
Wells, Bowen
Whitney, Sir Raymond
Whittingdale, John
Widdecombe, Rt Hon Miss Ann
Willetts, David
Willis, Phil
Wilshire, David
Winterton, Mrs Ann (Congleton)
Winterton, Nicholas (Macclesfield)
Yeo, Tim
Young, Rt Hon Sir George

Tellers for the Ayes:


Mr. Keith Simpson and
Mr. Geoffrey Clifton-Brown.


NOES


Adams, Mrs Irene (Paisley N)
Ainger, Nick
Ainsworth, Robert (Cov'try NE)
Alexander, Douglas
Allen, Graham
Anderson, Donald (Swansea E)
Anderson, Janet (Rossendale)
Armstrong, Rt Hon Ms Hilary
Ashton, Joe
Atkins, Charlotte
Banks, Tony
Barnes, Harry
Barron, Kevin
Bayley, Hugh
Beard, Nigel
Beckett, Rt Hon Mrs Margaret
Bell, Martin (Tatton)
Bell, Stuart (Middlesbrough)
Benn, Hilary (Leeds C)
Benn, Rt Hon Tony (Chesterfield)
Benton, Joe
Bermingham, Gerald
Berry, Roger
Best, Harold
Betts, Clive
Blackman, Liz
Blears, Ms Hazel
Blizzard, Bob
Blunkett, Rt Hon David
Borrow, David
Bradley, Keith (Withington)
Bradley, Peter (The Wrekin)
Bradshaw, Ben
Brinton, Mrs Helen
Brown, Rt Hon Gordon
(Dunfermline E)
Brown, Russell (Dumfries)
Browne, Desmond
Burden, Richard
Burgon, Colin
Butler, Mrs Christine
Campbell, Alan (Tynemouth)
Campbell, Mrs Anne (C'bridge)
Campbell, Ronnie (Blyth V)
Cann, Jamie
Caplin, Ivor
Cawsey, Ian
Chapman, Ben (Wirral S)
Chaytor, David
Clark, Rt Hon Dr David (S Shields)
Clark, Paul (Gillingham)
Clarke, Charles (Norwich S)
Clarke, Eric (Midlothian)
Clarke, Rt Hon Tom (Coatbridge)
Clarke, Tony (Northampton S)
Clelland, David
Clwyd, Ann
Coaker, Vernon
Coffey, Ms Ann
Colman, Tony
Connarty, Michael
Corbett, Robin
Cousins, Jim
Cox, Tom
Cranston, Ross
Crausby, David
Cryer, Mrs Ann (Keighley)
Cryer, John (Hornchurch)
Cummings, John
Cunningham, Rt Hon Dr Jack
(Copeland)
Cunningham, Jim (Cov'try S)
Curtis-Thomas, Mrs Claire
Dalyell, Tam
Darling, Rt Hon Alistair
Darvill, Keith
Davey, Valerie (Bristol W)
Davidson, Ian
Davies, Rt Hon Denzil (Llanelli)
Davies, Geraint (Croydon C)
Davis, Rt Hon Terry (B'ham Hodge H)
Dawson, Hilton
Dean, Mrs Janet
Dismore, Andrew
Dobbin, Jim
Doran, Frank
Dowd, Jim
Eagle, Angela (Wallasey)
Eagle, Maria (L'pool Garston)
Edwards, Huw
Efford, Clive
Ellman, Mrs Louise
Etherington, Bill
Field, Rt Hon Frank
Fisher, Mark
Fitzpatrick, Jim
Fitzsimons, Lorna
Flint, Caroline
Flynn, Paul
Foster, Rt Hon Derek
Foster, Michael Jabez (Hastings)
Foster, Michael J (Worcester)
Foulkes, George
Gapes, Mike
Gardiner, Barry
George, Bruce (Walsall S)
Gerrard, Neil
Gibson, Dr Ian
Gilroy, Mrs Linda
Godsiff, Roger
Goggins, Paul
Golding, Mrs Llin
Gordon, Mrs Eileen
Griffiths, Jane (Reading E)
Griffiths, Nigel (Edinburgh S)
Grocott, Bruce
Grogan, John
Gunnell, John
Hall, Mike (Weaver Vale)
Hall, Patrick (Bedford)
Hamilton, Fabian (Leeds NE)
Heal, Mrs Sylvia
Healey, John
Henderson, Doug (Newcastle N)
Henderson, Ivan (Harwich)
Heppell, John
Hesford, Stephen
Hill, Keith
Hinchliffe, David
Hodge, Ms Margaret
Home Robertson, John
Hood, Jimmy
Hope, Phil
Hopkins, Kelvin
Howells, Dr Kim
Hoyle, Lindsay
Hughes, Ms Beverley (Stretford)
Hughes, Kevin (Doncaster N)
Humble, Mrs Joan
Hurst, Alan
Hutton, John
Iddon, Dr Brian
Illsley, Eric
Ingram, Rt Hon Adam
Jackson, Helen (Hillsborough)
Jenkins, Brian
Johnson, Miss Melanie
(Welwyn Hatfield)
Jones, Rt Hon Barry (Alyn)
Jones, Helen (Warrington N)
Jones, Ms Jenny
(Wolverh'ton SW)
Jones, Jon Owen (Cardiff C)
Jones, Dr Lynne (Selly Oak)
Jones, Martyn (Clwyd S)
Keeble, Ms Sally
Keen, Alan (Feltham & Heston)
Kennedy, Jane (Wavertree)
Khabra, Piara S
Kidney, David
Kilfoyle, Peter
King, Andy (Rugby & Kenilworth)
King, Ms Oona (Bethnal Green)
Kumar, Dr Ashok
Laxton, Bob
Leslie, Christopher
Levitt, Tom
Lewis, Ivan (Bury S)
Lewis, Terry (Worsley)
Linton, Martin
Lloyd, Tony (Manchester C)
Lock, David
Love, Andrew
McAvoy, Thomas
McCabe, Steve
McCafferty, Ms Chris
McCartney, Rt Hon Ian
(Makerfield)
McDonagh, Siobhain
Macdonald, Calum
McDonnell, John
McFall, John
McGuire, Mrs Anne
McIsaac, Shona
McKenna, Mrs Rosemary
Mackinlay, Andrew
McNulty, Tony
MacShane, Denis
Mactaggart, Fiona
McWalter, Tony
Mahon, Mrs Alice
Mallaber, Judy
Marsden, Gordon (Blackpool S)
Marshall, Jim (Leicester S)
Marshall-Andrews, Robert
Martlew, Eric
Maxton, John
Meale, Alan
Merron, Gillian
Michie, Bill (Shef'ld Heeley)
Miller, Andrew
Mitchell, Austin
Moffatt, Laura
Moonie, Dr Lewis
Moran, Ms Margaret
Morley, Elliot
Mountford, Kali
Mowlam, Rt Hon Marjorie
Mudie, George
Mullin, Chris
Murphy, Denis (Wansbeck)
Murphy, Jim (Eastwood)
Naysmith, Dr Doug
Norris, Dan
O'Hara, Eddie
O'Neill, Martin
Organ, Mrs Diana
Palmer, Dr Nick
Pearson, Ian
Pendry, Tom
Perham, Ms Linda
Pickthall, Colin
Pike, Peter L
Plaskitt, James
Pollard, Kerry
Pond, Chris
Pound, Stephen
Powell, Sir Raymond
Prentice, Ms Bridget (Lewisham E)
Prentice, Gordon (Pendle)
Prescott, Rt Hon John
Prosser, Gwyn
Purchase, Ken
Quinn, Lawrie
Radice, Rt Hon Giles
Rammell, Bill
Rapson, Syd
Raynsford, Nick
Reed, Andrew (Loughborough)
Reid, Rt Hon Dr John (Hamilton N)
Roche, Mrs Barbara
Rooker, Rt Hon Jeff
Rooney, Terry
Ross, Ernie (Dundee W)
Roy, Frank
Ruane, Chris
Ruddock, Joan
Russell, Ms Christine (Chester)
Ryan, Ms Joan
Salter, Martin
Sarwar, Mohammad
Savidge, Malcolm
Sawford, Phil
Sedgemore, Brian
Shaw, Jonathan
Sheerman, Barry
Sheldon, Rt Hon Robert
Shipley, Ms Debra
Short, Rt Hon Clare
Simpson, Alan (Nottingham S)
Singh, Marsha
Skinner, Dennis
Smith, Rt Hon Andrew (Oxford E)
Smith, Angela (Basildon)
Smith, Miss Geraldine
(Morecambe & Lunesdale)
Smith, Jacqui (Redditch)
Smith, Llew (Blaenau Gwent)
Snape, Peter
Soley, Clive
Southworth, Ms Helen
Squire, Ms Rachel
Steinberg, Gerry
Stewart, David (Inverness E)
Stinchcombe, Paul
Stoate, Dr Howard
Strang, Rt Hon Dr Gavin
Stringer, Graham
Sutcliffe, Gerry
Swinney, John
Taylor, Rt Hon Mrs Ann
(Dewsbury)
Taylor, David (NW Leics)
Temple-Morris, Peter
Thomas, Gareth R (Harrow W)
Timms, Stephen
Tipping, Paddy
Todd, Mark
Touhig, Don
Trickett, Jon
Truswell, Paul
Turner, Dr Desmond (Kemptown)
Turner, Dr George (NW Norfolk)
Turner, Neil (Wigan)
Twigg, Derek (Halton)
Tynan, Bill
Vis, Dr Rudi
Walley, Ms Joan
Ward, Ms Claire
Wareing, Robert N
Watts, David
White, Brian
Whitehead, Dr Alan
Wicks, Malcolm
Williams, Rt Hon Alan
(Swansea W)
Williams, Mrs Betty (Conwy)
Winnick, David
Winterton, Ms Rosie (Doncaster C)
Wise, Audrey
Wood, Mike
Woolas, Phil
Worthington, Tony
Wray, James
Wright, Anthony D (Gt Yarmouth)
Wright, Dr Tony (Cannock)
Wyatt, Derek

Tellers for the Noes:


Mr. David Jamieson and
Mr. Greg Pope.

Question accordingly negatived.

1 Feb 2000 : Column 969

New Clause 6

Exercise of EEA rights by UK firms


'. Part III of Schedule 3 makes provision in relation to the exercise outside the United Kingdom of EEA rights by UK firms.'.--[Mr. Timms.]

Brought up, and read the First time.


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