THE PROTECTION OF CONSUMERS (Hansard, 5 June 2000)

§ Miss Melanie Johnson
I beg to move, That this House agrees with the Lords in the said amendment.

§ Mr. Deputy Speaker (Sir Alan Haselhurst)
With this we may discuss Lords amendments Nos. 4, 5, 8, 51, 52, 154, 156, 237, 238, 240, 410 to 415 and 605.

§ Miss Johnson
The amendments fulfil a commitment made in Committee to review the provisions on consumers. When clause 5 was considered in Committee, the hon. Member for Arundel and South Downs (Mr. Flight) said: The Bill advances different definitions of consumer, but it would be much simpler if it contained the same definition throughout. I can imagine muddle developing in the future as a result of the different definitions. The then Economic Secretary to the Treasury, now the Minister for Small Business and E-Commerce, said: we shall consider whether it is possible to have a more consistent definition throughout the Bill. That might be helpful.—[Official Report, Standing Committee A, 15 July 1999; c.205–06.] The amendments achieve greater consistency in references to consumers. They include the core definition in clause 129 and will ensure that those using the services offered, both by the appointed representatives of authorised persons and by trustees and those who deal with authorised persons, come within the definition, thereby eliminating potential gaps in coverage.
The amendments will enable the Financial Services Authority to give appropriate protection to those who use the services of non-authorised persons who nevertheless carry on regulated activities—some lawfully, others unlawfully—such as Lloyd's underwriters, recognised exchanges, clearing houses and persons acting in contravention of the general prohibition.
As well as introducing greater consistency, the amendments bring greater precision to the definition of consumers. They make it clear that the authority's rule-making powers extend to those whose rights or interests may be adversely affected by the use of services by another person only where that person is acting on their behalf or in a fiduciary capacity in relation to them. The amendments make corresponding changes to the definition of "client" for the purposes of clause 319.
40 Minor consumer-related changes to part IV and part XIII will help to meet a commitment given by the Government in Committee to improve and rationalise the supervisory procedures and the authority's decision-making procedures under the Bill more generally.
Amendments Nos. 51 and 52 deal with part VI and bring the reference to consumers in clause 42 into line with clause 43(1) and 185(1)(c). Amendment No. 240 broadens the category of consumers in whose interests the authority can intervene in the business of an incoming European Economic Area or treaty firm under clause 185. That change will mean that the definition can cover all the consumers and potential consumers of regulated activities. It is necessary to ensure that the authority can act as necessary to avert systemic risks arising from such firms activities.