Select committee: Treasury Committee
Recommendation 3
Fifth Report - The Future Framework for Regulation of Financial Services
Published 6 Jul 2021
Paragraph 36
Addressed to HM Treasury
Treasury Committee Future of Financial Services All items in this report Report on parliament.uk ↗ Inquiry on parliament.uk ↗
Recommendation (the committee's words)
We understand the need for Treasury Ministers to be well informed of the regulators’ policy intentions as a matter of routine. However, we have not been provided with compelling evidence to justify changing the law to allow Ministers the absolute right to see financial services regulators’ policy proposals before they are published for consultation as opposed to the current arrangements whereby significant interaction between Ministers and regulators happens informally as a matter of routine. By doing so, the perception of regulatory independence from government could be damaged. The independence of regulators to be free from political interference is one of the key aspects of UK financial services regulation, and it is, arguably, one of the reasons why the UK is a world-leading financial centre. Regulators must continue to be free to choose what they share with the Treasury in this respect.
From: Treasury Committee, Fifth Report - The Future Framework for Regulation of Financial Services (HC 147), paragraph 36, 6 July 2021
Government response
The government responded to the whole report on 20 September 2021 (deadline 6 September 2021).
Summary written by Accountability Index from the government's response. It is not the government's own words.The government says it is considering the Committee's recommendations alongside the consultation responses and does not intend to respond to each in detail, as that "would pre-judge" a second consultation due in the autumn.
- The government "agrees with the Committee that the independence of the regulators is vital" and is "committed to preserving the regulators' operational independence".
- On moving on-shored EU law into regulators' rulebooks, it "notes" the Committee's view and says its proposed approach is that independent regulators set direct requirements within a policy framework set by government and Parliament.
- It "welcome[s]" the Committee's recommendation of a "targeted approach" to Select Committee scrutiny, and "notes" the Committee's conclusion on a new committee or body, saying structure of scrutiny is "rightly a matter for Parliament".
- It commits to bring forward "detailed proposals in a second consultation in the autumn".