Page last updated at 20:24 GMT, Monday, 26 November 2012

Financial Services Bill

Peers have concluded a fourth day of report-stage scrutiny of the Financial Services Bill, which overhauls regulation of the sector.

A bid by Labour peer Lord Kennedy of Southwark to make it easier for the government to take action against claims management companies pursuing fraudulent payment protection insurance claims, was rejected by peers.

Making the case for the amendment on 26 November 2012, Lord Kennedy said current rules were "not robust enough" with firms breaching guidelines on cold calling, text and email messages.

"We've all had the nuisance calls and text messages," he told peers, that promise "thousands of pounds" in compensation.

He said parts of the industry needed to "get its act together", and urged the government to accept his amendment.

The peer was supported by the opposition frontbench.

Opposition spokesman Lord Eatwell said of his amendment: "It preserves the potential of self regulation but it's a shot across the bows which I think should make those who are behaving improperly take much greater care."

However, Treasury spokesman Lord Newby said he was not convinced that institutional reform was the answer, arguing it could be "a distraction from the task in hand".

He acknowledged there were "serious conduct problems" among "a minority" of claims management companies.

But he insisted the government was already taking action to ensure that consumer protection was strengthened.

Lord Kennedy was not satisfied with Lord Newby's response however, and decided to test the opinion of the House.

Peers voted by 186 to 126 to reject his amendment, giving the government a majority of 61.

The Financial Services Bill will give the chancellor the power to veto decisions made by the Bank of England when dealing with bank bailouts and other interventions.

It proposes replacing the tripartite structure, introduced by the previous Labour government, under which oversight of the banking system is shared between the Bank of England, the Financial Services Authority (FSA) and the Treasury.

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