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Lord McIntosh of Haringey: The answer to the first question is, as I said, that Clause 7 states that the authority must make and maintain effective arrangements for consultation. That is not a statutory requirement at the moment. The fact that the authority does so before there is a statutory requirement hardly leads us to think that when there is one it is likely to break the statute and refuse funding to either of the panels.
Lord Elton: I am sorry. Again I am asking a question to which the noble Lord obviously thinks I know the answer. Whose money is it that the authority will be giving?
Lord McIntosh of Haringey: The noble Lord asked two questions. I had answered one and before I had a chance to answer the second one the noble Lord stood up again. That is his privilege--we are in Committee--but I should like an opportunity to answer the second question. The answer is that the Financial Services Authority is a company, limited by guarantee, which is funded by fees from the regulated community.
Lord Elton: I am most grateful. The Minister made a small gesture. Like the noble Lord, Lord Peston, I read into his movement that he was sitting down when he was not. I am grateful for that answer.
I shall read with great interest the answers that we have had so far. I reserve the right to come back to this issue at Report stage. In the meantime, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 74D not moved.]
Lord Hunt of Wirral moved Amendment No. 74E:
On Question, Whether the said amendment (No. 74E) shall be agreed to?
Their Lordships divided: Contents, 57; Not-Contents, 110.
Resolved in the negative, and amendment disagreed to accordingly.
7.16 p.m.
Clause 9 [The Consumer Panel]:
Lord McIntosh of Haringey moved Amendment No. 75:
The noble Lord said: I spoke to this amendment with Amendment No. 62. I beg to move.
On Question, amendment agreed to.
[Amendment No. 75A not moved.]
Lord McIntosh of Haringey moved Amendment No. 76:
The noble Lord said: I spoke to this amendment with Amendment No. 62. I beg to move.
On Question, amendment agreed to.
Clause 9, as amended, agreed to.
Lord Saatchi moved Amendment No. 78:
(a) who are consumers for the purposes of section 129; or
(b) who, in relation to regulated activities carried on otherwise than by authorised persons, would be consumers for those purposes if the activities were carried on by authorised persons.").
After Clause 9, insert the following new clause--
The noble Lord said: On behalf of my noble friend Lady Wilcox, who is unavoidably absent, I shall address Amendment No. 78.
The noble Baroness's amendment seeks to provide the Committee with an opportunity to debate the extent to which the Financial Services Authority will be open about its activities. We should like it to be required to operate under a presumption of openness. That means that everything should be open unless there is a good reason for it not to be. The Minister may like to confirm that the FSA will be among the bodies that will be covered by the provisions of the Freedom of Information Bill. That will be most welcome. There are well-documented concerns relating to provisions in that Bill which we shall no doubt consider in more detail when the Bill comes before this place.
As a general principle, however, we favour the introduction of a more stringent openness requirement on regulatory public bodies. The Food Standards Agency--curiously, another "FSA"--is required to operate more openly than it would be under the freedom of information legislation. So the wording of the amendment deliberately echoes the wording to be found in the Food Standards Act. The public would be placed in a position to make informed judgments about the performance of the Financial Services Authority.
Following the widespread mis-selling of pensions and endowments, the FSA has a vital role in restoring public confidence in the industry. Market confidence is indeed one of its prime objectives in Clause 2(2)(a). An open regulatory system is a fundamental aspect of the attempt to rebuild trust. Because the public need to be satisfied that their interests are being given due weight in decisions that impact on them, recommendations made by the consumer panel to the authority and the authority's response to them ought to be in the public domain. Transparency about information flowing between the FSA and government would also be very welcome.
We think that the new clause is balanced. It recognises that there are sometimes important considerations of confidentiality which may justify a decision not to publish or disclose information. But
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