Regulation of Financial Services (Land Transactions) Bill

I accept your wise counsel, as ever, Madam Deputy Speaker; but, seriously, I thank the hon. Member for Cities of London and Westminster for his constructive approach to what is a consensual Bill. The hon. Member for Twickenham (Dr. Cable) raised a reasonable issue about property investment clubs. When he spoke about the glossy leaflets offering obscure information, strange telephone numbers and dodgy advice that were being delivered, it brought to mind the ““Focus”” leaflets that are distributed in many of our constituencies—but I will not go there, Madam Deputy Speaker, in view of the advice that you have given to me. On a serious point, the FSA is considering the concerns about those property investment clubs and will, of course, take appropriate action, if necessary, and advise Ministers accordingly. I want to respond to the hon. Gentleman’s comments on ijara products generally and the danger of unintended consequences. Obviously, I do not ignore his concerns, but it is important to say that those schemes are legal and already in use. In those circumstances, the FSA regulations will ensure that consumers benefit from full and clear advice. Despite the danger of unintended consequences, that is undoubtedly a significant step forward, although we will keep an eye on the concerns that he has expressed. The hon. Member for South-West Hertfordshire (Mr. Gauke) tends to move about during debates—he was nearly called twice on one occasion recently, as a consequence of such a manoeuvre. He referred to the FSA. It is important that we are clear about the fact that this is not a complex issue: the FSA is regarded globally as a world leader, but does that mean that it is perfect or that it need not engage in the Government’s better regulation agenda, as other regulators must do? Of course, it does not mean that. Do we accept that there is always a concern in any organisation that the principles and objectives articulated at the most senior level do not always play further down the organisation in terms of day-to-day interactions? That is a genuine, authentic concern. The management of any significant organisation of any nature, whether in the public sector or the private sector, must have regard for that concern. It is important that the objectives and principles that apply in respect of that organisation’s leadership are also reflected in the day-to-day dealings between the regulator and those who are regulated. The hon. Gentleman’s overall point was about those in the financial services choosing to invest in this country. The FSA has arguably contributed to the fact that the financial services sector continues to regard this country as almost the best place in which to do business. Far from detracting from that, the fact that we have leading regulatory practice in the financial services sector makes this country a very attractive place to do business. Yes, we need to continue to ensure that the better regulation agenda applies. We do not want to be smug or complacent because the FSA has rightly earned global respect. Equally, we do not want to face false and bogus choices. We should not suggest that, on one hand, the FSA is somehow not doing its job in the most effective manner possible, while on the other, not recognising the fact that we must achieve the right balance between consumer protection and not stifling innovation and enterprise in the financial services sector. Thus far, the FSA has maintained that balance reasonably well, and we should support the work that it does. The FSA does a lot of important work on behalf of this country in responding to regulations emanating from the European Union. Our partnership with the FSA is important in that respect because much of the regulation in the financial services sector flows from the EU rather than from domestic legislation. It is extremely important that the Government and the FSA have a constructive relationship in ensuring that this country’s vision of an appropriate landscape for financial services regulation is the one that prevails in any argument that arises, not only at EU level, but in the international or global economy. Now that I have responded to the points made during the debate, let me say a little about why the Bill is important and why putting it on the statute book is justified. We believe that its provisions will help people to make informed choices, offer valuable consumer protection and ensure that there is a level playing field in the equity release market, most of which already falls within the scope of FSA mortgage regulation. FSA regulation will extend valuable consumer protections to elderly consumers when they are making one of the most important financial decisions that they are likely to take—a point that has not been mentioned in the debate. It will ensure that Muslim consumers are able to access all elements of the growing market in sharia-compliant home finance products while benefiting from the protections afforded by FSA regulation. It will also help people to make informed choices about the home finance products they purchase, create a level regulatory playing field in the equity release market and, by helping to improve consumer confidence in such products, facilitate future market growth. On that basis, I am pleased to commend the Bill to the House.