HC Deb 15 October 1990 vol 177 cc1016-26

Postponed proceeding resumed on the Question, That this House do now adjourn.

9.19 pm
The Parliamentary Under-Secretary of State for Corporate Affairs (Mr. John Redwood)

It was fortunate that I was here during that long interruption in our debate on financial services. It is a pleasure to have time to respond at greater length to the many good points that were made earlier, and to have an opportunity to allow right hon. and hon. Friends who want to intervene to do so.

The hon. Member for Redcar (Ms. Mowlam) asked about compensation. The Government believe that the United Kingdom's compensation arrangements are among the most generous in the world, and are certainly good by comparison with many available on the continent of Europe. I remind the House that the Securities and Investments Board scheme provides 100 per cent. compensation for eligible claims up to £30,000 and 90 per cent. compensation on the following £20,000.

In the case of bank deposits in the United Kingdom, compensation covers three quarters of the first £20,000 of duly protected deposits, and for insurance policy holders, it amounts to 90 per cent. of contract rights, and 100 per cent. if those contracts are compulsory—as is the case with motor insurance. There is no upper limit to those claims. The compensation rate in respect of building societies is 90 per cent. on the first £20,000 on deposit.

The hon. Member for Redcar asked about the arrangements that we intend to make in the wider European market for adequate compensation and consumer protection. Under the present system, companies offering services in the United Kingdom from other countries within the European Community can do so without offering compensation under any approved scheme, and even without full disclosure of the status of the service that they are offering in relation to compensation.

The Government intend to tackle that problem in two phases. First, in the negotiations on the investment services directive and capital adequacy directive, we want written into the rules the provision that compensation arrangements should be clearly disclosed to potential customers in the United Kingdom, so that they will know whether the country from which the service provider comes offers compensation and, if so, the nature of the scheme. That will be a distinct advance in consumer protection compared with the current position.

Secondly, we should like to negotiate with our partners in Europe more common arrangements for minimum levels of compensation across the Community. We have been told by the Commission that it is working on a proposal in this area but obviously that will take time, as there are many obstacles to be overcome. Therefore, those arrangements will not be in place at the same time that the single market in financial services is in place—I trust, by 1 January 1993. However, we shall encourage the Commission to work as fast as possible on this second phase of our policy, because we share the Opposition's concerns and want to tackle the problem first by disclosure and, in due course, by more common arrangements.

Mr. Tam Dalyell (Linlithgow)

Are we to take it from the Minister's remarks that there is resistance from the Commission in that important matter? What is the likely timetable?

Mr. Redwood

I cannot speak for the Commission, although I do not know of any resistance to the general idea. The main problem is that the Commission is naturally giving priority to all the measures that are necessary for the single market in 1992. We are pleased that it is giving considerable priority to the insurance directives, which the House emphasised again tonight, quite rightly, that it wants to see introduced with due speed. I am sure that the Commission will then turn to the question of compensation, and the Government will give it every encouragement and offer whatever support we can in that work.

I was asked whether we offered to consult consumer bodies. Of course we did, and we shall continue to do so. The Consumers Association is regularly consulted and is being most helpful, and the National Consumer Council has also been informed of our work. Some more general questions were raised about the consultations that we are having in respect of the investment services directive and the complementary capital adequacy directive. Again, I invite all those who have not written in to do so, so that we know their views, because the Government wish to proceed with negotiations in Europe based upon the fullest consultation.

Mr. John Marshall (Hendon, South)

When my hon. Friend is consulting on those directives, can we have an assurance that he will consult practitioners in the industry? For example, is he aware that the unit trust industry is worried that the costs of regulation in the United Kingdom are so high that some unit trusts may decide to set up in Luxembourg where they are lower? In a free market, he runs the risk of over-regulating the United Kingdom market, and encouraging such mobile jobs to go elsewhere, which is of no benefit to this country.

Mr. Redwood

In my earlier remarks I said that we were trying to move on to the next phase of our regulatory progress in this country, when there should be less prescriptive rule-making and expensive, detailed activity by the regulators, and more concentration on compliance. That should answer some of my hon. Friend's questions. As to the desirability of Luxembourg as a place in which to undertake certain types of investment business, I have looked into the question of undertakings for collective investment in transferable securities and into whether it would be more sensible to set them up in Luxembourg rather than in the United Kingdom. The results that I have received show that both on tax grounds and on grounds of regulatory cost, it is by no means clear that Luxembourg is preferable. Several hon. Members raised the question whether we had the right tax regime to encourage and maintain business in this country.

In the case of UCITS, one has to look into both the territory in which the investor is placed and the territory in which the business is conducted. One has to draw up a complicated matrix for different tax arrangements, affecting both the provider of the investment product and its consumer. That matrix shows that in many cases it can be better to set them up in the United Kingdom than in Luxembourg.

Those hon. Members who are worried about any tax implication for British business should of course draw it to the attention of my right hon. Friend the Chancellor of the Exchequer.

Mr. Cash

I should be grateful if the Minister could comment on the position of the independent financial advisers. I should declare an interest, because I have followed their concerns very closely over a period, and indeed was concerned with them when I was on the Committee considering the Financial Services Bill 1986. About 20 million consumers receive advice from the independent financial advisers. It worries us, both in respect of capital adequacy and in relation to over-regulation, that they could be squeezed out as a result of some of the directives that have been coming from Europe. I may have an opportunity to elaborate on this later. May we have an assurance that the Minister has this—I am sure he has—very much in mind and that he will be looking after them? After all, they represent a significant part of the market in this country.

Mr. Redwood

My hon. Friend is quite right. The independent financial adviser is an important intermediary in the British marketplace. A lively market for independent financial advice is something that we wish to preserve and strengthen wherever possible.

The main question relates to the negotiation of the capital adequacy directive. It has been largely a British initiative, which has seen the introduction of different levels of capital requirement related to the risks that businesses are running. We thought that it was quite wrong to have a single passport requirement, with a large sum of money, such as 500,000 ecu. That would be impractical for the independent financial advisers.

We are also keen to ensure that independent financial advisers who so wish can have access to the passport under the investment services directive and can carry out their business in other member states. That requires the introduction of three other levels. We have introduced a system whereby businesses that provide only investment advice and that do not handle clients' moneys are exempted from any capital requirement. Another category, supplying advice and perhaps ensuring that deals are executed on behalf of clients, is subject to a requirement of 50,000 ecu, and businesses that also handle client moneys but that do not deal on their own account are subject to a capital requirement of 100,000 ecu.

That is a huge improvement on the starting position of those negotiations, but the British Government are not yet satisfied. We wish to ensure that there are further advances. We are still arguing over how many people should be subject to the minimum 50,000 ecu capital requirement and we still think that too many are caught. We are discussing details of the calculation of the capital requirement for more sophisticated businesses, particularly the illiquid asset calculation, which is too onerous in the current directive. In that connection, the Commission may agree with us and I look forward to reporting progress in due course to the House on that subject.

The hon. Member for Redcar posed a particular problem over insurance provision involving Switzerland, Italy and Spain, and she hoped that EC action might solve it. Unfortunately, by including Switzerland in her case that would be impossible because the Swiss are not governed by Community rules. Had she chosen three Community countries, that would have been the kind of issue that we would consider as we developed the directive programme covering all types of financial business.

Several hon. Members, including the hon. Member for Berwick-upon-Tweed (Mr. Beith), asked about barriers to takeovers. They are right that the Government have been exercised by the relative difficulty that many UK companies find in making takeovers on the continent of Europe compared with the relative ease with which European companies can make takeovers here. Progress is being made. The British Government have raised the issue with the Commission, which has responded by agreeing that it is a problem and introducing a work programme to attack some of the legal obstacles through directive proposals, for example in the 13th directive on company law.

Many hon. Members will agree with the Government that the obstacles are often fundamental and more cultural than legal. Often the law codes of the countries concerned permit companies to operate in one of many ways and they do not have to operate as they do. This weekend I was heartened to see in the newspapers comments that attitudes in Germany are changing as a result of the general discussion on barriers to takeovers. Many people in Frankfurt and, indeed, in Paris, where changes are more rapid, are coming to see the force of an open market to challenge existing management and to provide a more active marketplace in which ownership of companies can change hands as well as secondary shares in more limited packages.

We are making progress in the general argument and in tackling the cultural barriers, which are every bit as important as, if not more important than, the legal barriers that we have already identified with the Commission and that may in due course be tackled in some of the directives that we are considering.

My hon. Friend the Member for Wirral, South (Mr. Porter) and many other hon. Members agreed with the Government's position that progress on insurance is too slow. He would also agree that speed is picking up a little. The British Government intend to help that along its way. I reassure him that if the opposition comes only from Belgium and Germany—they have been opposing some of these measures—they do not constitute a blocking minority in the Community, so progress can still be made. We must ensure that a blocking minority does not build up against the principle of freedom of provision in insurance. The British Government's strategy is designed to achieve greater unanimity among member states in favour of the proposal, and to prevent a blocking minority against the proposal.

Ms. Marjorie Mowlam (Redcar)

In the absence of the hon. Member for Wirral, South (Mr. Porter) and as I listened to his speech, may I say that he is well aware that two countries do not make a blocking minority in the EC? He was worried, as are we, about the structural differences that are built into the insurance industry. It is the structure, particularly between the banks in Germany and France, which makes it difficult for our insurance industry to compete in what in directive terms may look like an open market, but which in practice is backdoor protectionism. That anxiety was voiced by hon. Members on both sides of the House. It would be useful if the Minister could explain how cultural differences that are slowly waning will prevent our insurance industry from having a fair and open competitive market in Europe in the next couple of years.

Mr. Redwood

That is not the concern that. I was addressing. However, I have heard the hon. Lady's point. I believe that our insurance companies in many areas have superior products at extremely attractive prices. That will come out within the single market once there is a legal framework that entitles them to work on a services or a branch basis under the necessary directives. It is with that in mind that the House agrees that we should make due speed in negotiating the directives to give them that chance.

The hon. Member for Rotherham (Mr. Crowther) was worried about the dangers of concentration, particularly in accountancy. The purpose of our competition regime is to prevent damaging or dangerous concentrations. The mergers and competition regime applies to accountancy just as it applies to anything else. Each case is looked at on its merits and the Director General of Fair Trading offers advice to the Secretary of State accordingly.

The hon. Member for Rotherham claimed that fraud is widespread. He cast aspersions on practically the entire City and much of the corporate sector. I say to him and other hon. Members who make such allegations that if they bring us the evidence in these cases, I promise that they will be investigated and, if necessary, brought to court. However, general allegations are far from helpful. They put British business in a bad light when viewed by others from abroad, and, if nothing can follow because there is no evidence, everybody is left feeling dissatisfied that the allegation has been made but there has been no follow-through.

My hon. Friend the Member for Brentwood and Ongar (Sir R. McCrindle) made an extremely important contribution. He asked about taxation.

Mr. Dalyell

In the absence of my hon. Friend the Member for Rotherham, (Mr. Crowther) I should say that he was a member of the Select Committee. I was not a member of that Committee but I understand that it looked at the matter in some depth. Are the Government saying that the Select Committee was ill-informed?

Mr. Redwood

I have nothing to add to what I have already said. If there is evidence of fraud, we need it because we shall pursue it vigorously. If there is no evidence, it is a silly allegation.

I should like to remind my hon. Friend the Member for Brentwood and Ongar that the changes in stamp duty and the taxation of options and futures introduced by my right hon. Friend the Chancellor in his Budget are welcomed in the City of London because they will help the competitiveness of the City no end. They are examples of the way in which the Government will listen carefully to those who make out a case that our competitiveness is being damaged by our taxation regime and will respond if the Treasury thinks that it is right to do so.

My hon. Friend the Member for Brentwood and Ongar also mentioned the illiquid assets test. I promise the House that we shall pursue that adequately. In our consultation document, we set out a number of areas in which we think that illiquid assets are too stringently defined. We started with a capital adequacy directive that may have required City of London firms to increase their capital by around 40 per cent. or more. As a result of the major changes that have come about largely at the Government's insistence, the capital requirement may be 10 per cent. or so above the current levels. We believe that the current levels are about right. We think that they are safe and prudent and allow people to make some return on their money. If we can get the right result of the illiquid assets test, we may be nearly there on the capital requirement that we seek.

Mr. Cash

Does my hon. Friend agree that the question of capital adequacy should be weighed against the question of competence? After all, people can come by money in all sorts of ways, which enable them to support the requirements laid down by law but not to deliver the goods to the customer. Surely it is important—I tried to suggest this with a fated amendment to the Financial Services Bill—that competence is a requirement as well.

Mr. Redwood

Part of our system relies upon assessing the fitness of people to run businesses and, in some cases, to assess their solvency. These are the basic principles needed to run a successful regulatory system.

Most of the other hon. Members made points—

Ms. Mowlam

rose—

Mr. Redwood

I should like to leave time for other contributors. Two other hon. Members would like to speak and I think that I should press on.

Most of the other contributors to the debate reiterated points that had been made by others. My hon. Friend the Member for Gosport (Mr. Viggers) was keen to ensure that reciprocity does not damage us. The Government agree with that. He was worried about the position of off-market trading. The Government recognise that difficulty and will strive to protect our interests on that important issue, which will be one of the difficult negotiating points in the next phase of the negotiations on the directive.

The hon. Member for Warrington, North (Mr. Hoyle) thought that we needed statutory regulation rather than self-regulation. That misconception is shared by some other hon. Members. We have a system, established under statute, of professional regulation backed by practitioners who are involved in the process of regulation. It is not a pure system of self-regulation; it is professional regulation with practitioner involvement to keep people's feet on the ground.

Mr. John Marshall

Does my hon. Friend agree that one of the greatest problems facing the financial services sector is the quality of auditing? Professional regulation does not seem adequate to stop auditors from signing rather duff dockets.

Mr. Redwood

The accountancy profession will shortly come under new arrangements, and the Department will be considering carefully those seeking recognition under the legislation because we are keen to ensure the highest standards of audit. However, I should not wish to associate myself with the attacks made by some Opposition Members on standards of auditing and the way in which the profession is conducted because much of the work that it does is first class and should be recognised as such.

Our system, which is rather similar in many ways to the Securities and Exchange Commission and its SROs, is based on the Securities and Investments Board, established under statute and backed by self-regulatory organisations—professional regulation with practitioners to keep people's feet on the ground. We wish to strengthen those elements because we believe that we need rather more compliance and detection work and rather less rule-making.

9.41 pm
Mr. Anthony Nelson (Chichester)

The financial services industry has a doughty champion in my hon. Friend the Under-Secretary, who has had the good fortune of an extended opportunity to answer in some depth the important debate that we have had today.

I am pleased that we have been able to continue this debate and to allow further contributions, because it allows Parliament to be seen to be scrutinising carefully the contents of an important report from a Select Committee and to be taking the Government reasonably to task on their policies and views.

Everyone acknowledges that the financial services industry is vital to our economy and that it will be so in the ensuing decade. It accounts for some £7.7 billion of our invisible trade surplus, it employs more than 1 million people and an enormous proportion of our gross national product, some 10 per cent., is generated by it. In recent years it has had to adapt to enormous changes in the marketplace, perhaps above all in technology and in the regime of national and supranational control. Great accolades should be given to British financial services—the banking and investment industries—for the way in which they have responded to these challenges, have surfaced with profit and appear well set to weather the wind of competition in the next few years.

The Select Committee report, albeit lengthy and strewn with many recommendations, was an important study for it to undertake, and I should like to see it be a more permanent feature of the landscape rather than a one-off investigation. I have long felt that our parliamentary processes for scrutinising and considering Government policy on these matters are woefully inadequate. The American system of a congressional banking committee, which allows for scrutiny and a legislative role, is an excellent model, but, because of the demarcation of the Treasury and Civil Service Select Committee and the Trade and Industry Select Committee, the former scrutinising banking and the latter financial services, we have never had the proper vehicle for considering this important aspect of our economy.

I urge my hon. Friend the Member for Hastings and Rye (Mr. Warren) to consider the possibility of establishing a Sub-Committee of the Select Committee on Trade and Industry whose remit would be to consider and report on the financial services and banking industry throughout the year.

As I said earlier, I believe that there should be a more formalised approach to the consideration of annual reports—particularly those of bodies such as the Securities and Investments Board. We set those bodies up under the Financial Services Act. They have enormously important powers of investigation, prosecution and restitution and it is absolutely right that they should be accountable to the House as well as to the Government of the day. Not only are Government moneys invested in bodies such as the SIB; the integrity of the City as a fair market for investment services is at stake. I believe that the bodies themselves would not wish to be the only judges of their policies and would welcome the opportunity to explain themselves, at least annually, to a Select Committee of the House.

I am pleased to note that one of the Committee's recommendations was that we should become a full member of the exchange rate mechanism. That was a timely recommendation, speedily acted on by the Government. I tabled the original early-day motion calling for immediate membership of the ERM—some 12 years ago, believe it or not—which drew the support of signatories such as the present Chief Whip and a large number of members of the Cabinet, so I was delighted when the event took place, albeit not before time.

I hope that, now that the light has been seen, a constructive attitude will be taken to the much more important negotiations that will take place at the December conference on economic and monetary union. We should not take entrenched views on the commonality of the medium of exchange. No one really minds what colour a bank note is or what faces or names are inscribed on it. The important thing about a bank note is that it should be worth something and that it should maintain its value; its worth should not dive one day and soar the next. It is also important that one should not have to pay an extortionate rate of interest if one wants to borrow to buy a business or a house.

Most people who have adjusted to pounds and pence rather than pounds, shillings and pence will see that they have a distinct self-interest—as our country will see it has a national interest—in having a secure and valuable medium of exchange. For the industries that we are debating, a commonality of medium of exchange would be far preferable to a number of different media of exchange operating within the single market.

Let me give an example. Part of the debate about the entrenched protective position of the German insurance industry has to do with the rules that apply to the way in which assets are held in Germany. From the German perspective, it has not only been necessary but has been a good and right financial judgement that a large part of the assets should be held in deutschmark-denominated liquid currencies as well as in equity currencies. That is because not only the companies concerned but the money-denominated assets held have maintained a very strong value. One can understand why German insurance companies should be loth to accept an outside directive that tells them that they must hold a higher proportion of their assets in the currency-denominated assets of other countries, which may be more vulnerable. With the more rigid system that the ERM provides, or if we moved to a common currency system—the common pound or the common ecu—that problem would disappear because we would have one medium of exchange. That would make the operation of the single market a good deal easier.

Mr. Cash

My hon. Friend should cast his mind back to the middle ages or the 16th century, or perhaps to the Spanish inflation problems of the 17th century or to the gold standard and the problems of the 1920s, as well as considering the current situation. It is only too apparent that it does not matter what the currency is. What matters is the relative strength of the economy, which in turn is the determining factor in the strength of an individual currency. In other words, the strength of an economy, its competitiveness, how much one is saving, the manner in which productivity is operated and the extent to which unit labour costs are involved reflect the genuine strength of an economy. It does not matter a fig whether one refers to an ecu, a pound or a lire.

Mr. Nelson

I concur with my hon. Friend and I do not detract from his analysis. However, the currency that is commonly used in the United Kingdom is used in regions that have different economic performances, just as we live within a European Community with regions with different economic performance. My hon. Friend is right to state that there is a correlation between economic performance and the actual value and the exchange rate value of one's currency over a period of time.

However, we are in no position to be vainglorious. It is not as if the performance of our economy has been outstanding in comparison with other European countries. Why must business men and constituents in my area pay nearly double the rates of interest to be found in other ecu currencies? Why do we have nearly double the rate of inflation of some other European countries? It is not as if we are in an enormously strong position and are worried that somehow the exchange value of the pound will be diluted by joining the other currencies. Far from it. We are the supplicants. We need the disciplines and higher standards of prudential control which I believe membership will bring about. It is extraordinary for some elements of my party and others abroad to suggest that we need tighter financial control and greater prudential requirements and then to refuse to ally us to the mechanisms to enforce that discipline.

With regard to takeovers, I was interested in the Select Committee's recommendations on the Commission's report, which I hope will be published. I should like my hon. Friend the Parliamentary-Under Secretary of State for Corporate Affairs to consider two aspects. The first relates to the takeovers directive which states that a key feature of that directive shall be the fundamental principle that shareholders should be treated equally.

I have always been slightly mystified by that statement as a principal objective of the takeovers directive. My view, as I have explained previously, is that the fundamental principle must be the right and ability of shareholders first and foremost to decide how to dispose of their assets. There must always be compelling reasons if that right is to be taken away from them. That is not a matter of equality between classes of shareholders; it is a right which attaches to all shareholders.

My second point relates to a directive on disclosure requirements. The threshold at which disclosures have to be announced on a European level is 10 per cent., while it is 5 per cent. in the United Kingdom.

Mr. Redwood

No, it is 3 per cent.

Mr. Nelson

I am grateful to my hon. Friend for correcting me.

I assume that that position will continue and we shall continue to operate a stricter and more open system of disclosure. However, if we are playing on a level playing field and we are not giving other companies an undue right to be exempted from takeovers and for minority stakes to be built up elsewhere in the European Community when they are a matter of disclosure here, I hope that we shall press for some changes in that regard.

I want to make several points about the single passport which is the ability to obtain authorisation as a bank or investment company in one European country and to offer those services throughout the Community. We must remember that our interests involve investor protection. We are not about trying to grease the wheels of the financial services industry. We are here principally to protect and enhance the rights of investors and companies to raise money. In doing that we must consider the best financial deal on the market. We want to see competition in the banking and financial services industry and the best competition need not necessarily come from within the European Community. It might come from Japanese or American companies.

Therefore, there is the matter of extending the passport to countries such as Japan and the United States. I should not like to feel that, in creating the single market, we were erecting barriers against Japanese or United States financial services and banking industries. Some right hon. and hon. Members may say, "That is not necessary, because they are in a strong competitive situation anyway." However, we can tie some access to the European single market with reciprocity, which is sorely needed and would overcome criticisms that we are just creating a customs union, a tariff barrier and a preference for companies within the European Community.

I was struck by what the hon. Member for Redcar (Ms. Mowlam) said about consumer interests. As far as I am aware there is no specific directive on consumer interests. As I understood her speech, in addition to implementing the directives and arriving at 1993, she would like a greater international and public awareness of their protections, their opportunities and the safeguards that are being extended to them. I wholeheartedly agree with that. The hon. Lady's intentions were sound, but whether they should be the subject of a recommendation or a directive, I know not. The principal responsibility should rest with self-regulatory organisations. After all, it is in their interests to promote use of the markets of which their members are subscribers.

Ms. Mowlam

A consumers directive has been knocking around the Commission for some time. Its initial stages of negotiations will start in December 1991. The point I was making is that that means that it will not be in place when the other directives on investment services, capital adequacy and secondary banking are implemented in 1993. They are not being given the same importance, weight and balance as the other directives that we discussed earlier.

Mr. Nelson

I am obliged to the hon. Lady. Nevertheless, I have been supporting her comments and she might agree with what I say.

There are two other small points. One is about the directive on payment systems. I believe that there is a recommendation rather than a directive on payment systems. I should like to see that upgraded to a directive. Whether we like it or not, the credit card industry is a medium of exchange and payment which is here to stay. Credit card fraud is a multi-million pound business with professional crime involved, people being ripped off on a massive scale, and numerous new entrants to the market coming forward to tie loyalty to their business by issuing a card. We must regard much more seriously credit card fraud and professional operators. The Government should look much more carefully at that matter.

The other point relates to the winding-up directive. Although it may seem a little negative to consider such matters, I believe that winding up has an equally important part to play in the protection of investors as sponsoring the burgeoning of new industries. I should like to feel that winding up was instigated at the appropriate moments, that there were common rules and that it was given the importance that should be attached to it.

The Securities and Investments Board, in its role in the financial services industry in this country, deserves a word of support and commendation. Its chairman and members have worked extremely hard to provide orderly markets and communications with the SROs which they scrutinise. It is interesting that, under section 105 of the Financial Services Act relating to investigation powers, in the years since the Act has been in operation there have been 40 investigations and action has been taken in 21 cases by the self-regulatory organisation or by winding up. In five cases there has been restitution and in eight cases there have been criminal prosecutions on matters of fraud or conduct of business. In addition, there have been 330 cases of alleged unauthorised operation of businesses which can amount to a criminal offence. Fifty-seven of those have been resolved. There have been eight prosecutions and two civil injunctions, and 27 cases have been withdrawn. Many other cases have been resolved.

Many hon. Members who have called for the sweeping away of the system set up under the Financial Services Act and its narrowing down into a smaller number of bodies should respect the fact that a great deal of hard work has been done day by day to identify and follow up cases of alleged fraud.

Let those who call for the sweeping away or amalgamation of self-regulatory organisations remember that, if that were to happen, there would be a real danger of our moving towards even more centralist control. After all, if the SIB were to absorb all the self-regulating organisations we would end up to something more akin to a Securities and Exchange Commission.

For all those reasons, I believe that the existing structure set up under the Financial Services Act 1976, uncomfortable as it may have been in its inception, has worked to the advantage of the City and will continue to work to the advantage of our economy.

I welcome the response of the Government today and the contribution that the report of the Select Committee has made, but it must not end here; the scrutiny must continue.

9.59 pm
Mr. William Cash (Stafford)

I think that I must be very brief—I think it is time for me to sit down.

It being Ten o'clock, the motion for the Adjournment of the House lapsed, without Question put.

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