§ 13. Mr. BuckleyTo ask the Secretary of State for Trade and Industry whether he has any plans to alter the regulatory structure for the United Kingdom financial services sector.
§ Mr. RedwoodMy right hon. Friend recently welcomed the statement of Sir David Walker and the publication of the new core rules. One of the most important recent changes in the regulatory system is that which encourages clear core rules and the minimum number of additional rules. My right hon. Friend also praised the wish of the regulatory bodies to concentrate compliance work on pursuing those cases that give most reason to cause suspicion. He has drawn attention to the efficacy of stressing disclosure rather than prescriptive rules. I am sure that the House will agree that these are welcome improvements in our system.
§ Mr. BuckleyAre not the regulations full of loopholes and ambiguities which, from Barlow Clowes to the Levitt Group, have not fulfilled the necessary requirements of control? Did not the Government accept and recognise in the body of the text of the companies legislation in 1989 that some changes are needed in the regulations? Does the Minister accept that there should be two regulatory bodies and that there should be compulsory regulation rather than the present system?
§ Mr. RedwoodThat would mean the wholesale abolition of a large number of excellent regulatory bodies. The purpose of the self-regulatory system is to allow people, within defined limits, to make their own decisions about which body they wish to join and the conduct of the regulation in those bodies. I do not agree that the regulations are out of date or in need of wholesale reform in the way that the hon. Gentleman suggests. If he wishes to draw attention to particular loopholes or difficulties in the regulations, I or the regulatory bodies should be happy to look into them carefully. It is not fair to say that Barlow 269 Clowes demonstrated that the current regulatory system is ineffective because that problem developed before the enactment of the Financial Services Act.
§ Mr. Donald ThompsonDoes my hon. Friend realise that the financial sector does not lie only in the City of London? A great expansion in financial services has taken place in and around my constituency and my constituents need clear rules so that they can expand their businesses not only in the United Kingdom but in Europe.
§ Mr. RedwoodI agree with my hon. Friend that the financial services sector extends widely geographically, as well as in terms of its range of service and products. He has my assurance that I shall do everything in my power to further the interests of those legitimate businesses here and in the European Community.