The Government has voted down an amendment to the Financial Services Bill which would have inserted the coalition agreement pledge to promote mutuals and foster diversity in financial services into the new regulatory architecture.
The coalition agreement, published in the wake on the 2010 general election, committed the Government to promoting mutual ownership and diversity of business models in financial services.
The Financial Services Bill is replacing the tripartite regulatory set up with a twin peaks model which will have the Bank of England at its heart. Last night, an amendment put down by Labour Shadow Treasury financial secretary Chris Leslie, which he says was intended to make the Government deliver on its pledge, was defeated in a Parliamentary vote.
Leslie says: “People will rightly question whether the coalition agreement is worth the paper it is written on.”
The Government has come under pressure from the cross-bench all-party Parliamentary group on building societies and financial mutuals to set out a plan for how it intends to deliver on the coalition agreement’s promise.
A proposed Labour amendment to provide an official channel for bank deputy governors and the Financial Conduct Authority chief executive to warn the Treasury when there is a material risk to public funds was not called. Under current proposals the Treasury will get a power of direction over the Bank when the governor informs the Chancellor there is a risk to public money.
An amendment put forward by Labour MP Stella Creasy to give the FCA a power to limit the cost of loans if the regulator considers they are causing consumer detriment was also defeated.
Last night was the last chance MPs had to make amendments to the bill. It will now move to the House of Lords where peers will be able to make changes which must then be approved by MPs.