Proposed changes to the financial services and markets bill which an MP has said will ensure “scandals such as the British Steel pension scheme will not happen so easily again” will become law after the House of Commons approved them.
The bill has also been amended to include proposals which will enhance the role of the Financial Regulators Complaints Commission and will mean HM Treasury, rather than the regulators themselves, will appoint the complaints commissioner.
It will now shortly receive Royal Assent and then become law.
An amendment tabled by Conservative peer Andrew Tyrie to grant statutory independence to the FCA's regulatory decisions committee in order to make the regulator's enforcement powers subject to greater oversight was withdrawn because it would require public consultation.
Nick Smith, who is MP for Blaenau Gwent, had campaigned for an amendment to the bill that would require regulators such as the FCA to report to Parliament, allowing improved scrutiny of their work.
Following amendments tabled by Smith and the House of Lords, the government has agreed to amend its bill to introduce new laws requiring statutory panels to produce annual reports.
Economic secretary Andrew Griffiths said the Treasury intended to use this power “in the first instance to direct the publication of annual reports by the cost benefit analysis panels and the FCA consumer panel”.
The call for the amendment by Smith stems from his campaigning on behalf of steelworkers who were victims of the 2017 British Steel Pension Scheme scandal.
Smith said during this campaign he became frustrated with the way the crisis was handled by the regulators.
Speaking in Parliament this week (June 26) Smith said that at the onset of the scandal “the FCA faced the City of London, not the homes of vulnerable steelworkers in Ebbw Vale, Port Talbot and Scunthorpe”.
He continued: “As parliamentarians, we found it hard to influence the dilatory regulator in support of our steelworker constituents, who deserved much better protection against the financial sharks.”
Smith has welcomed the amendment to the bill saying he was “glad that there will be a mechanism for greater parliamentary oversight of our financial services regulators”.
He also hoped the changes would “encourage the FCA to become more outward looking and capable of adapting to the changing needs of Britain’s consumers”.
“I am more optimistic that there will be a different way of working; that oversight and scrutiny will be embraced; and that scandals such as the British Steel pension scheme will not happen so easily again,” he said.
Smith added: “After more than five years campaigning on behalf of steelworkers, two things have become clear - that the FCA failed them in their hour of need and that Parliamentary scrutiny has been vital in pushing them to act.
“Getting the FCA to properly take notice of the scale of this injustice and respond accordingly has been like pulling teeth at times.
“The new laws will mean that we have better oversight of the financial regulators and their work, leaving our financial services sector all the better for it and, most importantly, better protecting Britain’s consumers.”
