|Integration of Financial Markets
Mr. Timms: I have already said that I will reflect on the suggestion made by the hon. Member for Chichester. A lot of work is going on throughout the Government and is focused in particular on the Better Regulation Task Force to ensure that we adopt those principles for better regulation, not least in implementing European Union legislation. I will certainly look at the two specific examples to which the right hon. Member for Wells (Mr. Heathcoat-Amory) drew the Committee's attention.
Mr. Hopkins: I draw my hon. Friend's attention to the executive summary, paragraph VI of which states:
Mr. Timms: I confirm that that is the case.
Mr. Walter: May I move away from the question of gold-plating and refer the Minister to the money laundering regulations? Mr. John Tiner of the Financial Services Authority who is responsible to the Minister for implementing the regulations in the City has described them as just ridiculous. They are onerous on those who want to open bank accounts and conduct banking transactions and seem to work counter to the Government's objectives on social inclusion in that the poorest people, whom the Government would like to open bank accounts, are often prevented from doing so by the regulations.
Mr. Timms: There has certainly been a good deal of concern about that, which is reflected in John Tiner's comments.
Anti-money laundering controls play an important role in the fight against crime and we must not minimise the problems. However, as well as being effective, controls need to be proportionate to the threat posed. I welcome the work that the FSA is undertaking to put in place an ID regime which is effective and which everyone can support. In particular, I welcome the recognition of the benefits of electronic verification, the proposal that we could rely instead on a single document for proof of IDthat helpful and welcome point was made by the FSA last weekand the acknowledgement of greater scope for the passporting of ID checks from one setting to another. I recognise the work that the financial services sector is doing to revise its guidance on ID more generally in the joint money laundering steering group. As the hon. Gentleman says, the pressing need for progress has been widely recognised, and from what the FSA has been saying during the past couple of weeks, it is making good progress in making that aim a reality.
Column Number: 11Mr. Hopkins: I draw my hon. Friend's attention to paragraph VIII of the second summary, which has an emphasis on financial stability, saying that that
Mr. Timms: I bow to my hon. Friend's ability to decode the meaning of some of the statements in documents that come from Brussels. However, we and the whole European Union strongly support the Lisbon agenda, specifically on growth, and the agreement that we should all work for the European Union to be the most competitive economy in the world. We constantly need to underline, remind ourselves of and re-emphasise the need to take the action required to achieve the Lisbon goals. Certainly the further we can go to achieve a single market for financial services in Europe, the better we will be able to contribute to the Lisbon goals. The report helpfully makes that point.
Mr. Tyrie: I am grateful to the Minister for being prepared, which is very much in character, to consider seriously my suggestion on gold-plating. That was made not as a party political point but as an attempt to try to get some greater clarity on where we go on that. I do not want to make a speech on that now, but in parenthesis, I point out that aspects of gold-plating are generated by the industry, rather than by the regulator, and great attention will need to be paid to what the industry says constitutes gold-plating.
The Minister said a moment ago that he hoped that all these moves would benefit the UK-based industry. I wonder whether, in the same spirit as that which he showed on gold-plating, he might be prepared to consider a thoroughgoing assessment, as he is new in his job, of the extent to which British industry is benefiting from this process. Are we winning or losing, and where?
Mr. Timms: On gold-plating, I have had the opportunity to reflect for a few moments since the hon. Gentleman made his suggestion, and I propose that we set out case by case on each individual directive or for future proposals the places where the Treasury and/or the FSA decides that the benefits of going beyond the minimum will be desirable. I hope that that will have the effect that the hon. Gentleman wants, because it will set out clearly those examples where we think that it is desirable to go beyond the letter of the directive and give the reason why we think that makes sense. I am grateful to him for making that suggestion, and I hope that he will welcome that way forward.
In terms of evaluating where we are, this has been a difficult exercise, but my judgment, based on what I have seen so far during the past month or so, is that it has been worth while. There have been gains for the competitiveness of the financial services industry in Europe and, therefore, gains for the strong participants in the market that are based in the UK.
Column Number: 12However, I will certainly want to consider that further as events unfold during the next few months. We are so concerned that the five priorities should be reflected in our approach because we can see that there would be ways of going forward that would do more harm than good. We think that the approach that we set out gives the best assurance that the process will lead towards a more competitive environment, which, by the way, would be good for the UK.
Mr. Walter: The Minister acknowledged in an earlier answer that there is evidence that certain member states are not meeting the deadlines laid down for implementation, for bringing the regulations and directives into force in their national law. Will the Minister consider arguing in the Council of Ministers for a common implementation date for domestic regulations throughout the European Union, rather than the current situation, whereby the United Kingdom is, in many cases, first out of the trap on implementing regulations and other member states are way behind?
Mr. Timms: There is, of course, always a deadline by which implementation should be achieved. The problem is that sometimes it is not achieved by that deadline. It is the job of the Commission to make sure that those deadlines are adhered to. However, there is a date in the agreement that everyone has signed up to by which time implementation must be achieved.
Mr. Hopkins: I draw my hon. Friend's attention to page 8 of the report. Paragraph 6 recommends:
Mr. Timms: We have an exemplary arrangement in the UK. There is more and more recognition in other EU member states of how effective our arrangements are and a wish to move European arrangements in the same direction. I commend my hon. Friend for the speed at which he is progressing through the document. If I read the bullet-point to which he referred correctly, it is talking about improved communication, which is always good.
Mr. Flight: What initiatives, if any, is the Minister considering on a Europe-wide basis to address the nonsense of anti-money laundering arrangements, practices and requirements? Everyone is aware of the issues, but no one seems to have any idea what to do about it.
Mr. Timms: I do not agree with the hon. Gentleman. I think that a lot of work is going on. I talked about what the FSA has said in the last couple of weeks about the pressing issue raised by the hon. Member for North Dorset about requirements for opening a bank
Column Number: 13account and the welcome proposal for an arrangement where only one document is needed rather than the two that have been required for some time.
The hon. Member for Chichester, made an important point in passingoften the rules come from the industry or from an industry working group and not directly from the regulator. Work is going on in that area. Applying a strong regime on anti-money laundering is important. It protects the reputation of the UK financial sector and is an important part of our fight against crime. However, we need to balance the need for effective systems with the costs and to make sure that those costs are proportionate. We think that industry guidance that recommends best practice ways of meeting obligations is the right approach.
There is absolutely no complacency on our part. My Department and the Home Office have been working with the private and public sectors and the regulators to produce a better regime, particularly through the Money Laundering Advisory Committee. The FSA has set up several working groups, including one on customer identification, whose thinking we have heard about during the past couple of weeks. A great deal of work is being done, and we need to keep a close eye on the matter.
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