Financial Services Bill attacked for reliance on Bank of England

LABOUR peers yesterday called the Financial Services Bill a “dog’s breakfast” that fails the four tests of “accountability, clarity, efficiency and transparency”.

The legislation, which will revamp the existing regulatory system and hand new powers to the Bank of England, was receiving its second reading in the House of Lords.

Opposition spokesman Lord Eatwell said that “instead of drafting a new template for the financial services industry” the government had constructed a “dog’s breakfast of amendments to earlier legislation”.

Treasury minister Lord Sassoon defended the Bill, saying that the current system had failed because “no one had the single responsibility to monitor the financial system”.

“Instead of dividing responsibility for financial stability, we are putting the Bank of England clearly in charge,” he added.

But former City minister Lord Myners claimed Bank chief Mervyn King spent more time in board meetings talking about tennis “than about issues of financial stability”.

• Former cabinet secretary Lord O’Donnell used his maiden speech in the Lords yesterday to warn that the Treasury “is in danger of being swamped by the pressures placed upon it”. He said the “turnover rate is far too high and its pay levels too low”, and suggested that the Treasury offices overseeing financial services could be funded through payments from the banks and other firms they police.