Thank you to all those who contacted me about the Financial Services and Markets Bill. The Bill implements changes to the regulation of financial services arising from the United Kingdom’s departure from the European Union.
I broadly welcome this legislation. I am committed to helping the UK’s financial sector maintain its position as a competitive global financial centre. At the same time, this should not mean any compromise on financial stability or consumer protection post-Brexit.
I note concerns about sections of the Bill that remove existing measures to reduce risk in commodity markets.; the Government rejected several amendments aimed at limiting commodity markets speculation. It argued that the amendments would “place unnecessary restrictions on investors, to the detriment of all market participants”, and put the UK “at a disadvantage compared with other international financial centres, such as the EU, that apply restrictions only to contracts that genuinely pose a risk”. The amendments therefore did not make it into the Bill.
However, the Government was pressed on this issue during the passage of the Bill through the House of Commons and said it would keep it under constant review. I hope Ministers will carefully consider the points which have been raised and be able to provide some reassurance that these reforms will not adversely impact commodity prices, such as energy and food, in the middle of a cost-of-living crisis. I also believe they should set out how they will keep the issue under review.
More widely, I am concerned that the Government is introducing more risk and potentially more instability into our financial system through some of its recently proposed reforms, such as removing ring fencing and the senior managers regime. These measures were introduced for good reason. The competitiveness of the UK finance sector will depend not on deregulation and a race to the bottom but on high standards and the certainty needed to invest in the jobs and industries of the future.