Government confirms regulatory ‘call in’ power amendment to be delayed
1 November 2022
The Treasury Committee today criticises the Government’s “sub-optimal” approach to the scrutiny of major changes to financial regulation.
In a letter received yesterday evening (Monday 31 October), the Government outlines it will not use the next, Committee, stage of the Bill’s passage to amend the Financial Services and Markets Bill to introduce its proposed regulatory ‘call in’ power.
The power, which has been trailed by Ministers but not shared with Parliament or regulators, would enable the Treasury to “direct a regulator to make, amend or revoke rules”. In the letter, the Government signals its intention to amend the legislation and to introduce this power at a later stage.
In response, the Interim Chair of the Treasury Committee, Dame Angela Eagle MP, criticises the Government’s approach to Parliamentary scrutiny, and asks for confirmation that the power will be introduced in the House of Commons, where it can be examined by MPs.
The Interim Chair asks whether the Government will consult the regulators on the proposed ‘call in’ power, and calls for adequate time for the Committee to take evidence, scrutinise and table amendments to this new element of the legislation.
Dame Angela Eagle's comment
Commenting on the correspondence, Dame Angela Eagle MP, Interim Chair of the Treasury Committee, said:
“The Government’s proposed ‘call in’ power is controversial and potentially risky. That’s why we are calling for the Government to be open and transparent in its decision making, and to provide timely Parliamentary scrutiny in the Commons, in order to avoid any adverse unintended consequences of legislating for this power.”
The Committee’s report on the Future of financial services regulation, published in June, stressed the importance of safeguarding regulatory independence and cautioned it would remain alert to evidence that regulators are coming under undue pressure to inappropriately weaken standards.