Labour peers have rounded on the government this week over its Financial Services Bill, which will overhaul the way the City is regulated.
Opposition spokesman Lord Eatwell attacked the Bill as a “dog’s breakfast” which failed the four tests of “accountability, clarity, efficiency and transparency."
The Bill was receiving its second reading in the House of Lords yesterday. Lord Eatwell said that “instead of drafting a new template for the financial services industry” the government had constructed a “dog’s breakfast of amendments to earlier legislation”.
He promised to press for improvements to be made to the Bill, which he said was "flawed."
Former City minister Lord Myners joined the criticism, claiming Bank chief Mervyn King spent more time in board meetings talking about tennis “than about issues of financial stability”.
However, Lord Sassoon, Treasury minister, defended the Bill, saying that the current system had failed because “no one had the single responsibility to monitor the financial system”. The new legislation would put power firmly with the Bank of England, he said.
The Bill, which has completed its Commons stages, was carried over from the previous parliamentary session. It tears up the tripartite system of regulation where powers is shared between the Treasury, the Bank and the Financial Standards Authority.
Instead, a new Financial Policy Committee (FPC) within the Bank of England, will be tasked with monitoring systemic risks, while the Bill also creates a Prudential Regulation Authority (PRA) as a subsidiary of the Bank of England, and a Financial Conduct Authority (FCA) covering consumer protection.
Yesterday, it was announced that the outgoing chairman of KPMG, John Griffith-Jones, has been appointed as the first non-executive chair designate of the FCA.
Helen Roxburgh is the online editor of Economia