We welcome the Bill. It is an important piece of legislation that gives the UK the opportunity to create a more competitive financial services sector post-Brexit, while preserving high regulatory standards tailored to our needs.
The Bill’s landmark measure – a new secondary growth and competitiveness objective for the Financial Conduct Authority (FCA) and Prudential Regulation Authority (PRA) – enjoyed widespread support, including from the Labour benches.
The Report Stage, which spanned three sessions, progressed more quickly than the forensic debates during the preceding Grand Committee stage. The government brought forward several “concessionary” amendments, in an effort to assuage concerns raised by peers at Grand Committee around regulatory accountability, access to cash, and sustainability issues.
On regulatory accountability, Treasury minister Baroness Penn introduced an amendment that would require the FCA and the PRA to produce a new report on how they are fulfilling the new secondary objective in the first two years after the Bill’s passage. This and other government amendments building on existing accountability measures were enough to settle the issue for now. One notable government amendment in this area was to ease the establishment of a joint parliamentary committee to scrutinise the regulators, if Parliament sees fit to set one up.
Consumer issues were also subject to debate and amendment. In particular, government amendments making explicit that cash-access arrangements should be free for personal customers were approved.
An Opposition amendment requiring the FCA to have regard to financial inclusion in the context of its consumer protection objective was added to the Bill. It remains to be seen whether the government will use its majority in the House of Commons to overturn the amendment.
Elsewhere the government brought forward an amendment allowing the Financial Ombudsman Service to charge claims management companies (CMCs) for the costs of processing vexatious cases. This was something we argued for, as currently there is no financial disincentive to deter CMCs from clogging up the Ombudsman’s caseload with baseless cases.
The Bill will now be refined in the Lords’ at Third Reading, before returning to the Commons. At this stage, the Commons can overturn any of the amendments added by the Lords. If it does so, the Bill will undergo ‘ping-pong’ between the two chambers until they reach agreement on the Bill’s exact wording.
Depending upon the length of this process, we expect this landmark legislation to become law before the summer recess in late July.