12. What recent steps he has taken to regulate financial services. (901525)

Following the failure of the previous Government’s tripartite system, this Government have created a new architecture for financial regulation. The Bank of England has responsibility for financial stability, and two new regulators—the Prudential Regulation Authority and the Financial Conduct Authority—have been set up with clear responsibilities for prudential and conduct regulation.

Good regulation can only enhance the vital contribution that financial services make to the employment, tax revenues and balance of payments of our country, but constituents of mine find that there is still insufficient protection for so-called non-sophisticated investors when they are sold products without sufficient explanation. What is the Financial Secretary doing to improve protection for customers and to ensure that the Financial Ombudsman Service is their champion?

My hon. Friend is right to highlight the contribution of the financial sector. Last year it paid over £60 billion in taxes and employs over 1 million people throughout the country. Where consumer detriment occurs, the Financial Ombudsman Service provides a valuable service, providing swift resolution to complaints, but of course we must stop consumer resolution occurring in the first place. That is why we have created a new regulator—the FCA, a regulator with real teeth.

23. Will the Financial Secretary commit to looking more at financial services on the high street—I speak of high-cost credit—and to looking at more than just imposing a cap, including such business practices as no affordability checks, encouraging roll-overs and advertising aimed at the most vulnerable in our communities? (901536)

I agree with the hon. Gentleman: he is right to raise this important issue. I am sure that, like me, he will welcome the action we have already taken to transfer regulation from the Office of Fair Trading to the FCA and the consultation the FCA is holding on new rules, including on continuous payment authorities, roll-overs, advertising and strict affordability checks.

What view should be taken of banks with a record of misbehaviour that are now promising their shareholders that they are considering moving their domicile away from Britain because they fear that the regulatory proposals by Vickers will limit their freedom to misbehave in the future?

The action we have taken on the back of the report issued by the Independent Commission on Banking is the right one, and I think it will be very hard indeed for the banks to try to avoid the new regulations and the new structure of banking that we are bringing in.

The Minister will be aware of the scandalous behaviour highlighted in the Tomlinson report, in which RBS was alleged to have bankrupted customers in order to seize their assets. What action does he intend to take, first, to obtain redress for those affected and, secondly, to regulate the banks so that this does not happen again? Will he assure us that any discussions on this matter will include Ulster bank, which it has been alleged was at the head of queue when it comes to such behaviour?

The hon. Gentleman raises an important issue. He will know that the Tomlinson report is independent—it is not a Government report—but the Government and the FCA are taking it very seriously. The report raises some very serious allegations. The FCA has already committed to look carefully into them and if they are proven, it will take appropriate action.

With the Government now in chaos over the banking Bill, with one U-turn following another, does the Minister agree that Labour was right all along to insist on a tougher licensing regime for senior bankers? Why were the Government so keen to resist Labour’s amendments, only to be defeated?

I have to say that I do not recognise the description that the hon. Lady has attached to the banking Bill. When she refers to Labour being right all along on banking regulation, perhaps she is referring to the changes that Labour made 13 years ago, which my right hon. Friend the Member for Hitchin and Harpenden (Mr Lilley), then shadow Chancellor, described at the time as “a field day” for “spivs and crooks”.