To ask the Secretary of State for Trade and Industry what assessment he has last made of the effectiveness of self-regulation of the financial institutions.
I am generally happy with the arrangements approved by the House in legislation put through in the past 10 years to strengthen the regulatory structures in a variety of City areas. The House has passed the Financial Services Act 1986, the Companies Acts of 1985 and 1989, the Insurance Companies Act 1982 and the insider dealing legislation of 1981. There is a big new system led by the SIB and the SROs in the City.
Does the Minister accept that self-regulation has led to a confused regulatory structure? Will he consult the new Secretary of State and take steps to avert any future collapses such as British and Commonwealth Holdings and Dunsdale Securities by changing the former Secretary of State's disastrous policies and by introducing a fair, effective and independent regulatory body?
The regulatory bodies are already fair and independent. I wish that the hon. Gentleman would withdraw that slur on the work of many fine regulators and regulatory bodies in the City. It is also misleading to call it a self-regulatory system. The system was set up under statute, with very clear powers to the regulator, and with a practitioner involvement. The point of having practitioner involvement is that we need people involved in regulation who know the business world, who get the right sort of rumours about what is going on, who know about the products, and who can help the professional regulators, who are independent and fair-minded and are paid to be so by the regulatory bodies.
Is my hon. Friend aware that there is continuing public disquiet and bewilderment at the fact that no action yet appears to have been taken following the report of his Department's inspectors on the Harrods case? Does he recall that, when the previous Secretary of State spoke to the House on that report, he referred many aspects to the financial regulatory bodies? When will we have a decision from those bodies about issues such as the Harrods bank and the merchant bank that advised the Fayeds throughout?
The bank is not a matter for me or for my Department. The House of Fraser matter is sub judice, as my hon. Friend knows. There is nothing that I can add to the comments that were made to the House by the previous Secretary of State. In many other respects there has been strong follow-up action when problems have arisen, and the Government's policy is to follow up whenever there is a reasonable chance of successfully doing so.