A bill to formalise Britain's umbrella financial watchdog - one of the longest-running in parliament's history - finally passed parliament yesterday as a last Conservative amendment was narrowly voted down.
After two years and nearly 2,000 amendments, opposition Conservatives proposed one last but crucial change to the British government's plans for the Takeover Panel within its Bill formalising the Financial Services Authority.
The panel polices hostile takeovers and mergers. Financiers argued the FSA will muscle in on its territory, threatening its worldwide reputation.
In the House of Lords, Conservative Lord Alexander, a former chairman of the panel, attempted to make the panel, not the FSA, the arbiter of its own code.
But with support from the Liberal Democrats, the government won the day by just 188 votes to 183.
The FSA was set up as an all-embracing regulator of the financial services industry by the government, taking on the powers of nine other regulatory bodies.
It also has responsibility for investigating possible market abuses such as insider dealing and has been happily operating since last year but without its remit enshrined in law.
The Conservatives were furious at the Liberal Democrats who had opposed parts of the bill but were assuaged by a government concession last week.
"Liberal votes clearly decided the verdict," Conservative spokesman Lord Kingsland said. "The reality is that this government simply doesn't understand the City. They should have listened to the voice of the House of Lords rather than whipping in droves of new Blair peers."
Last month, Conservatives in the House of Lords forced through a clause to make the panel's takeover code a "safe harbour," meaning companies adhering to those provisions could not face a FSA charge of market abuse.
Last week, the government reversed that amendment using its huge House of Commons majority. But it conceded that while the FSA must retain control, it should take regard of what the Takeover Panel says and does on any individual case.
That was enough to get the Liberal Democrats back on board.
Lord Kingsland said the Takeover Panel was admired across the world, a reputation that could be clouded by the government putting the City of London's interests behind "the macho instincts of treasury ministers".
The complex FSA Bill is 235 pages long and had been held over from the last session of parliament. Some 1,450 amendments were offered in the House of Commons alone, many from the government to allay concerns in London's financial Square Mile. Another 538 amendments were put forward in the House of Lords.
The Treasury has made a number of concessions over the months, including splitting the role of the chairman and chief executive of the Financial Services Authority.
