View more on these topics

War of tactics as Labour looks to sway the TSC2

The public bill committee is the place where technical amendments to the Financial Services Bill, which will create the new Financial Conduct Authority, are debated, then added or rejected.

So far, the Government is using its majority on the committee to the frustration of those MPs who are looking to introduce requirements to increase the new regulator’s accountability.

Already pored over by the Treasury select committee and a joint committee of Lords and MPs, proposals to put the new, so-called twin peaks structure in place are now being looked at by an 18 MP public bill committee.

The make-up of the committee is based on each party’s share in the House of Commons, giving the Government a majority of 10 MPs over the opposition’s eight. Amendments pressed to a vote by the opposition have so far been defeated and the frustration is beginning to show.

In the committee last week, when Treasury financial secretary Mark Hoban agreed to reconsider a part of the bill in light of a Labour amendment, although he did not back the amendment, Labour Shadow Treasury financial secretary Chris Leslie (pictured) said he felt like smiling it was such a major achievement.

When Hoban refused to budge on another amendment aimed at minimising regulatory costs, Leslie accused the Government of “sticking its heels in the mud, yet again”. “Not an iota of criticism is allowed of the new edifices and expense involved. We almost feel we should apologise for daring to table amendments,” he said.

Labour has decided to use the hunter tactic of splitting off from the group those who look to have the weakest positions. In this case, it is two members of the Treasury select committee, Conservative MPs Mark Garnier and Jesse Norman. As TSC members, they proposed recommended changes to the bill, including replacing the Bank of England’s court of directors with a supervisory board and placing in the bill a requirement for the Financial Conduct Authority’s board to publish minutes – both measures which are not backed by the Government.

Norman has written newspaper columns backing the changes to the court while Garnier told Money Marketing last year about the benefits of the FCA board publishing its minutes.

In a meeting of the PBC earlier this month, Leslie saw his chance and tried to split Garnier and Norman off from the Government herd. In proposing amendments which echoed TSC proposals, he raised the Tory MPs’ public support of the TSC’s recommendations. Neither voted against the Government.

Speaking to Money Marketing, Garnier says: “Labour is focusing in on a lot of the TSC recommendations and putting them forward as amendments in a deliberate attempt to split Jesse and myself off from the rest of the committee.

“I have signed up to a report which recommends the opposite to how we are voting in this committee and, as a Government backbencher, you get put in rather a difficult position to be able to support both the TSC’s recommendations and the Government.”

Given the movement on his position, it is perhaps surprising that Garnier accuses Leslie of “playing politics” with his amendments rather than seeking to improve the bill.

It is a game which is likely to continue.

Although they are not the only MPs on the committee from the 2010 intake, Garnier and Norman are the only ones with the baggage of TSC reports hanging round their neck. More important, they are not part of the Treasury’s inner circle.

Conservative MP Matthew Hancock was Osborne’s chief of staff and is widely credited with coming up with the idea to scrap the FSA in the first place. Fellow Tory Greg Hands was a Shadow Treasury minister before the 2010 election and Osborne’s Parliamentary aide between 2010 and 2011. His party colleague Alok Sharma is aide to Mark Hoban. All are unlikely to waver.

Given these difficult political dynamics, Labour is likely to continue asking questions of the TSC Two.

The public bill committee

  • The 18-member public bill committee has 10 Government party MPs and eight opposition MPs.
  • It is debating and voting on scores of amendments to the Financial Services Bill, which introduces the new regulatory set-up by amending the Financial Services and Markets Act 2000 and several other pieces of legislation.
  • The opposition has yet to win a vote on its amendments.
  • The committee has had 10 of the 16 sessions scheduled before the bill goes back to the floor of the house where MPs not on the public bill committee can table amendments. The date, the committee has to finish by has slipped twice, from March 15 to 20 and then to 22.
  • It is the third committee to rake over the proposals after the Treasury select committee and a joint committee of MPs and Lords which scrutinised a draft of the bill. There have also been three Government consultations on the shake-up.
  • The Government wants Royal Assent for the bill by the end of the year so the new regulators can be up and running by early 2013. Treasury select committee chair Andrew Tyrie, who sat on the public bill committee for FSMA 2000, says this is rushing the process.

Newsletter

News and expert analysis straight to your inbox

Sign up

Comments

There are 3 comments at the moment, we would love to hear your opinion too.

  1. Anyone believing Mark Garnier is on the side of IFAs’ should think again.
    When Chris Leslie called for more accountability from the FCA, Garnier played party politics and voted AGAINST this.
    Never trust a politician

  2. Madness! Doing the same thing and expecting a different outcome is madness. It’s like scraping your car wing on the drive wall and driving on, you do more damage. STOP NOW! Re access the situation and make financial services relevant again.

  3. I really do despair at the incompetence and lack of guts of some of the TSC members. They had the FSA in front of them, sticking 2 fingers up at them and they now don’t want them accountable? You couldn’t make it up!

Leave a comment