Financial Services Bill Lords committee day four

24 July 2012

The Financial Services Bill continues committee stage, line by line scrutiny of the bill, in the House of Lords today (Wednesday 25 July)

Lords will continue to examine Clause Five and look at the Financial Conduct Authority's (FCA) role relating to the interests of different types of consumers. 

Some members will suggest that the FCA publish an 'access and choice' code. This will ensure that consumers are provided with access to products and services and that regulated financial service providers continue to promote competition in the consumer interest.

Lords will also discuss a 'deprived communities objective'. This will suggest that financial services are provided in deprived communities and to small and medium sized enterprises by means of 'social investment'.

Committee stage day four: Wednesday 18 July 

Members of the Lords began by examining Clause Five covering the role of the new regulatory body to replace the existing Financial Services Authority (FSA) - the FCA.

Baroness Hayter of Kentish Town (Labour) moved the first group of amendments detailing training for those at the FCA. She explained: 'The amendments would raise the standards of professionalism in the financial industry; partly by adding professional standards to the definition of integrity, partly by introducing a code of conduct and partly by mandating a training and competence regime.' She argued that the government needed to consider a code of conduct and raise standards within the FCA before withdrawing the amendment for further consideration.

Provision of financial literacy in primary and secondary schools was addressed in Amendment 104BA, moved by Lord Flight (Conservative). He probed the government on what they were doing to address financial literacy and argued: 'If people have not had financial education at school, it is unrealistic to think that they will get it as adults when they need it.'

Lord Stevenson of Balmacara (Labour) supported the amendment and said: 'Education is about giving young people the skills and knowledge they need to get on in life, which is why we should get behind a campaign, so that every child should not only learn the three Rs at school, but also learn about pensions, savings, borrowing and mortgages.'

Responding on behalf of the government, Lord De Mauley (Conservative) explained that the role of education belonged to The Money Advice Service (MAS) which was established by the FSA. The FCA will oversee MAS in the same way the FSA does now. Lord Flight withdrew his amendment.  

Further amendments covered the FCA's role in protecting consumers. They also discussed duties for the FCA and the Prudential Regulation Authority (PRA) to provide services honestly and with the best interests of the consumers in question, and powers for the FCA to regulate new unregulated services like social lending.

Previous stages of the Financial Services Bill

News: Lords committee stage day three

What is committee stage?

Detailed line by line examination of the separate parts (clauses and schedules) of the bill takes place during committee stage. Any member of the Lords can take part.

It usually starts no later than two weeks after the second reading and can last for one to eight days or more.

The day before committee stage starts, amendments (changes) are published in a marshalled list (amendments on related subjects are grouped together).

During committee stage every clause of the bill has to be agreed to and votes on the amendments can take place. All proposed amendments can be discussed and there is no time limit, or guillotine, on discussion of amendments.

About the Financial Services Bill

The bill was introduced in the Lords at first reading on 23 May.

The bill will amend the Bank of England Act 1998, the Financial Services and Markets Act 2000 and the Banking Act 2009 to make provisions about financial services and markets. It will also exercise certain statutory functions relating to building societies, friendly societies and other mutual societies.

The Financial Services Bill will amend section 785 of the Companies Act 2006, enabling the Director of Savings to provide services to other public bodies.

Further information

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