§ Within the period of six months beginning with 1st January 1981 the Secretary of State shall lay before Parliament a report reviewing the operation of this Act and its effectiveness as a method of protecting policyholders of authorised insurance companies carrying on business in the United Kingdom.—[Mr. Clinton Davis.]
§ Brought up, and read the First time.
§ Mr. Clinton DavisI beg to move, That the clause be read a Second time.
§ Mr. Deputy Speaker (Mr. Oscar Murton)With the new clause, we may discuss the following amendments:
No. 2, in Clause 5, page 3, line 38, at end insert:
' and before 30th October 1979 '.No. 3, in page 3, line 42, at end insert:'and before 30th October 1979 '.No. 4, in Clause 5, page 4, line 4, after '1974' insert:'and before 30th October 1979 '.No. 5, in page 4, line 6, leave out 'that date' and insert:'29th October 1974 and before 30th October 1979'.No. 15, in Clause 15, page 14, line 24, at end insert:'and before 30th October 1979 '.No. 17, in Clause 16, page 15, line 26, after '974' insert:'and before 30th October 1979'.No. 18, in page 15, line 28, leave out 'that date' and insert:'29th October 1974 and before 30th October 1979'.
§ Mr. HigginsOn a point of order, Mr. Deputy Speaker. I notice that new Clause 6 has been starred on the Order Paper. It is apparently related to the subsequent amendments you have mentioned. May I have an assurance that, whether or not new Clause 6 is carried, we shall be able to have a vote on the other amendments?
§ Mr. Deputy SpeakerPerhaps I could give the hon. Member the answer to his question in a few moments. It is rather an abstruse point. I will give him an answer shortly.
§ Mr. HigginsI am most grateful, Mr. Deputy Speaker.
§ Mr. Clinton DavisA number of us are clearly in difficulty over this matter. I am happy to be able to chip in a few words while you are receiving advice, Mr. Deputy Speaker.
I think the best course for me to adopt in moving the new clause is to present the case fairly shortly, because the debate will, I suspect, range fairly widely over the likely efficacy of the Bill when it becomes law. I would wish to reserve some comments about the amendments.
From the beginning, there have been anxieties and doubts about the whole principle of this legislation. This has not been a party political matter. Anxieties have been expressed forcefully on both sides of the House and I know that a number of members of the trade union movement have also expressed concern. We have thought it right to proceed in this way because we believe it essential that policyholders, like those of the failed companies we have seen recently, should receive some help in their anxiety and distress. The Bill has been refined in a number of material respects, but the essential principle which we underlined at the outset has been maintained.
The amendments seek to bring the scheme to an end after five years. They appeared on the Order Paper at an earlier stage of the Bill's passage through the House. We believe that the doubts which underline them are unfounded. I had a long discussion with my hon. Friend the Member for Farnworth (Mr. Roper) on this matter and I believe that the provisions which are sought to be imported into the Bill through these amendments are unnecessary and wrong.
1810 I know that some hon. Members have strong reservations about the Bill and I have sought to meet their anxieties by providing a procedure for reviewing the efficacy of the Bill after a reasonable period. That is the purpose of the new clause. It provides that the Bill will be reviewed after five years and that the results of such a review will be laid before Parliament so that hon. Members will be able to form a judgment based on practical experience of the legislation.
I believe that experience will indicate that we are right to have this long-stop measure. It was introduced because we were never sufficiently complacent to believe that, however sophisticated the regulations and surveillance we should be able to impose over the years, we should be able to guarantee that an insurance company would not get through a loophole.
In this respect I can do no better than quote the words of the right hon. and learned Member for Surrey, East (Sir G. Howe) when he spoke on the Second Reading of the Insurance Companies Bill. He said:
No conceivable system of supervision can provide a complete guarantee that there will be no failures even if deliberate fraud could be ruled out. It is inherent in insurance business that a view has to be taken of events in the future which must occasionally turn out to be wrong to a degree which defeats what appeared at the time to be prudent judgment."—[Official Report, 21st May 1973; Vol. 857. c 126.]He was absolutely right in that assessment, and the Government share his view, which is why we introduced this long-stop measure.It is right, however, to wait and see how it develops. It is right for a burden to be imposed upon the Government to indicate their views and make their recommendations, and for the House to pronounce upon the efficacy of the Bill after this period. I hope that my hon. Friends and other hon. Members will agree that the clause represents a reasonable effort to meet the reservations which have been expressed and that it goes as far as the Government can reasonably be expected to go in order to meet the spirit of Amendments Nos. 2 to 5 and 15, 17 and 18. I ask my hon. Friends to reciprocate the Government's sensitivity to the views of hon. Members by withdrawing the amendments, which the Government are unable to accept.
1811 In particular I say this to my hon. Friends: there is one provision in the Bill which imports a novel aspect into the surveillance which will be undertaken. That relates to a provision to appoint a group of non-statutory advisers, which we shall be debating later. This is tremendously important. It represents a breakthrough, something which will be of positive help to the Government in exercising these important duties. If the Bill were to go at the end of the five-year period, that provision would go also. The ability to impart information to these advisers would necessarily cease. That is an important criterion to bear in mind. I ask my hon. Friends to consider that the Government have made a genuine effort to meet the anxieties expressed and that the provision of the review should go a long way towards meeting the objections which have been voiced.
§ Mr. HigginsI had hoped that you might give us your guidance at this point, Mr. Deputy Speaker.
§ Mr. Deputy SpeakerIt is imminent, but not quite ready. In the meantime I call the hon. Member for Windsor and Maidenhead (Dr. Glyn).
§ Dr. Alan Glyn (Windsor and Maidenhead)I am not quite clear on one or two points. I can see the case for reviewing everything in five years, and with that I completely agree. Obviously circumstances might change and the Minister might feel that the Bill has not worked out as well as he had expected. He then would lay a report before Parliament stating exactly how the machinery had worked in practice, but I am not quite clear whether that would mean an automatic termination of the Bill since there would have to be revising legislation. I presume that if there were to be revising legislation this Bill would have to be withdrawn and the new measures implemented through a fresh Act of Parliament.
§ Mr. HigginsOn a point of order, Mr. Deputy Speaker. I hope that we shall have your ruling on the question of the Divisions, because it is very difficult to debate a matter without knowing exactly what the voting position will be. I suspect that the Government amendment has been tabled with a view to frustrating the House expressing a view on the other 1812 amendments. I hope that your ruling is imminent.
§ Mr. Deputy SpeakerI know the substance of it, but I am awaiting confirmation.
§ 5.15 p.m.
§ Mr. RoperI wish to concentrate my remarks on the amendments standing in the names of myself and my hon. Friends. As my hon. Friend the Minister said the amendments would limit the operation of the guarantee scheme to insurance company failures occurring within a five-year period starting on the day of the Queen's Speech last year when the Government first announced this legislation. I believe that there is satisfactory provision for a tidying-up period after the five years for any companies which have got into difficulties before the end of the period.
The amendments were put down in response to the serious concern expressed not only in this House but in another place because it was felt that the Bill did nothing to prevent reckless management practices by fringe insurance companies, practices which have led to the failure of several such companies in recent years. Instead it introduces a very unsatisfactory guarantee scheme providing an inadequate level of guarantee, and charges up the cost of providing that guarantee by way of a levy on policy-holders in sound and reputable insurance companies. These policyholders can in no circumstances—this applies particularly to those insuring with mutual or quasi-mutual companies—derive full benefit from the guarantee scheme.
The five-year limit has been suggested because during the next few years regulations made under the Insurance Companies Act 1974 will come into full effect. I believe that they will improve the protection given to policyholders by preventing some of the reckless management practices which have occurred in recent years.
Again, within the next four years, if the matter is pressed on with the determination which is necessary, it should be possible to introduce the new winding-up provisions for insurance companies to which the Secretary of State referred on Second Reading. He has admitted that the current unsatisfactory winding-up provisions have been responsible for so 1813 much of the hardship to policyholders in the Nation Life and London Indemnity companies.
Given, therefore, that within five years there will have been substantive improvements in the protective legislation and in the winding-up arrangements, there seems very little need to continue this sort of back-stop guarantee scheme after 1979. If there is to be a long-term long-stop it should not necessarily be the unsatisfactory one which is incorporated in the Bill.
Numerous anomalies have been revealed throughout the Bill. Although attempts have been made in both Houses, and not on a party basis, to improve the Bill, I am convinced that serious anomalies remain. There may even be some that we have not yet discovered lurking in the more obscure passages.
There are anomalies in the scope of the guarantee. Some policies are covered, and others, for no good reason, are not. There are many anomalies in the basis of the levy. For example, there are the problems over pensions. Even if a pension scheme is insured under a master policy, it is not subject to the levy at all unless the insurance of the scheme is transferred to another insurance company, when the whole of the contributions paid to the pension scheme will become subject to levy.
Those were some of the points that we explored in some detail in Committee. Unfortunately, the Government have not been able to produce any amendment at this stage to cover such anomalies, concerning different implications for different pension schemes.
If an insurance company is constituted under the Companies Act its policy-holders are liable to levy. But a virtually identical insurance company registered as a friendly society—there is at least one substantial insurance company registered as a friendly society—is never subject to levy.
I could go on giving examples, but I shall not do so because the House wants to make progress. I believe that the Bill contains almost an infinity of anomalies, which seem to have arisen because of the absence of the necessary consultation between the Government and the industry and, in particular, the trade unions in the industry.
1814 Therefore, it would be right for the Bill to have only a limited life, and then during the next few years proper consideration can be given to the extent to which the protective legislation is satisfactory to protect policyholders. Action can be taken to improve the present appalling winding-up laws, which have caused such hardship in the recent insurance company failures. If the necessity for it were shown to exist, a sensible form of guarantee scheme could be devised to cover the residual problems
That is why my hon. Friends and I tabled our amendments. Since we did so my hon. Friend the Minister has proposed an alternative remedy which he tells us will meet some of the problems that I have outlined, although I do not believe that he accepts that the problems are as grave as I have suggested. He tells us that the proposed report to be made after five years would assess the necessity for a continuing scheme, and discuss whether it was right. But before voting on the new clause we should have assurances about the nature of the report. First, we need a clear undertaking that it will include an assessment of the continuing need for such a scheme, and we need in the report an assessment of the effectiveness and fairness of the provisions of the Bill to do the job which might then need to be done, if it were shown that such a job remained
A firm assurance that the report would do that would go some way to meeting the point that we make in our amendments. We shall await with interest what my hon. Friend says when he winds up the debate.
§ Mr. Deputy SpeakerPerhaps I may now give my ruling on the point raised by the hon. Member for Worthing (Mr. Higgins).
New Clause 6, which is now under discussion, assumes that the Act will still be in operation in 1981, but the effect of the amendments would be to bring the effective life of the Act to an end in 1979. Therefore, the amendments would be inconsistent with the clause, should it be agreed to. Accordingly, they would fall, but it is in order for them to be discussed, as they are grouped with the clause
§ Mr. HigginsI am most grateful for your ruling, Mr. Deputy Speaker. The 1815 true intention behind the clause is becoming increasingly apparent in the light of what you have just said.
The effect of the amendments grouped with the clause would be to bring the operation of certain provisions in the measure to an end in 1979, two years before the projected review, but we all know that liquidations and other proceedings take a considerable time. Therefore, although no further new business was being taken on, the Board would presumably still be operating and carrying out its duties, if the amendments were accepted. If that is so, there is no reason why the proceedings should not be reviewed in 1981.
To make a second point, I do not see why we should say that a review cannot take place even though the Act has ceased to function.
However, it is on the first point that I seek your guidance, Mr. Deputy Speaker. It would seem that in fact various procedures will still be carried out under the Act by the time the review is due to take place. If so, I believe that the amendments would not fall. I shall be grateful if you will confirm that and that we can vote on Amendment No. 2 and the subsequent amendments, whether or not new Clause 6 is agreed to.
I should be grateful if you could also clarify the position if the clause is defeated. I presume that there would then be no doubt that we could vote on Amendment No. 2 and the subsequent amendments—but I do not want to weaken my case by making that suggestion.
§ Mr. Deputy SpeakerI find it much easier to answer the second point straightaway. If the new clause is defeated, of course there can be a Division on Amendment No. 2.
§ Mr. HigginsI did not want to weaken my main point by making that helpful suggestion.
§ Mr. Deputy SpeakerI seized on it with alacrity while considering the hon. Gentleman's first point.
§ Mr. MoateFurther to that point of order, Mr. Deputy Speaker. The House is in some difficulty. It seems clear that the starred new clause has the effect of 1816 depriving the House of an opportunity to vote on a matter of considerable importance to many hon. Members. An amendment was tabled in good time, and it is supported by hon. Members on both sides of the House, yet it would seem that the Government's tactics are to prevent a debate. Presumably a vote must be taken on the clause, because it is a new clause, before a vote on the amendments.
§ Mr. Clinton DavisFurther to that point of order, Mr. Deputy Speaker. There was no design on my part to frustrate debate on this matter. As the hon. Member for Worthing (Mr. Higgins) pointed out, the remedy is that if the new clause is defeated the House will proceed to a vote on the other matters.
§ Dr. GlynFurther to that point of order. Because of winding-up procedures, certain of the amendments would still have an effect, and therefore would still be valid.
§ Mr. Deputy SpeakerI am advised that the report is to review the operation of the Act, and if the Act is not in existence I find it difficult to see how it could be reviewed.
§ Mr. HigginsIt could be done because various operations under the Act would still be continuing.
§ Mr. MoateThe Minister gave a helpful assurance that it had not been the Government's intention in tabling the new clause to deprive the House of an opportunity to vote on the other group of amendments.
§ Mr. Clinton DavisI said that it was not our intention to deprive the House of a debate.
§ Mr. MoateBy implication, the Minister is suggesting that it was the Government's intention to deprive us of a vote. That is an unfortunate admission.
If the Government wished to be helpful, in order to allow full debate on the amendments they could withdraw the clause and reintroduce it in another form at another stage, because I imagine that the principle enunciated in the clause is unexceptionable and acceptable to the House.
§ Mr. Clinton DavisI had no intention of frustrating the debate. If the House 1817 deems it appropriate to reject the new Clause and to follow the advice just given by the hon. Member for Faversham (Mr. Moate), I cannot frustrate and would not wish to frustrate the House. It is not within my capacity to do so.
§ Mr. Deputy SpeakerWe must try to be as clear as we can on this matter. If new Clause 6 is defeated, a vote will be allowed on Amendment No. 2. That is clear. But on the first point which was raised, I must adhere to the ruling that I gave earlier. The effect of the amendments would be to bring the effective life of the Act to an end in 1979. We must adhere to that ruling, because there is no alternative to it.
§ 5.30 p.m.
§ Mr. Keith Stainton (Sudbury and Woodbridge)I find myself still in a state of considerable confusion, in that proceedings may still be under way in the courts, in the manner mentioned by my hon. Friend the Member for Worthing (Mr. Higgins).
I am disquieted by many features of the Bill, and my perturbation is heightened by the tabling of new Clause 6. It is rare for a Government to show such humility as to offer to bring an enactment before the House for review five years later. It is not unique—we have had review situations in this Chamber from time to time—but it is unusual in a matter of this sort to find that the Government are not sufficiently resolute and convinced of what they are laying before the House to be able to say that they feel they have found a solution and that the proposals should be adhered to. I agree with the hon. Member for Farnworth (Mr. Roper) that there are many obscurities and contradictions within the legislation that we are being asked to press forward tonight.
New Clause 6 has particular reference to amendments which will be discussed later. The insurance industry and policy-holders in particular have over the past few years been given a number of assurances that all has been made well and that the doors have been barred and bolted. The Under-Secretary is shaking his head. I have here something written by the insurance correspondent of The Times in 1974:
Last year the Insurance Companies Amendment Act 1973 was rushed through 1818 Parliament with the precise intention of preventing any further insurance company collapses in the wake of the Vehicle and General affair. The Scott Committee presented its report which was also designed to secure adequate safeguards for policyholders.
§ Mr. Clinton DavisI do not know whether the hon. Member for Sudbury and Woodbridge (Mr. Stainton) was in the Chamber, but I cited his right hon. and learned Friend, who specifically asserted that there could be no guarantees given along the lines that are now being suggested.
§ Mr. StaintonI am not asking for guarantees. In this life the unforeseen is all too likely to arise. But the policing powers have been given to the Department of Trade and the House has been repeatedly assured that they are more than adequate. I have had numerous meetings—not with the present incumbent in office but with various predecessors—and every time I have received these assurances.
We are told that the Act commands the wholehearted support of the Government, and that it follows from what was enunciated in the Queen's Speech, but then the Government say that it is proposed to have another look at it in five years' time. That can mean to me only that the Government have reservations about the contents of the Bill. I am glad that they have, because I think that it is monstrously wrongly written and conceived in many respects. My reservations, and the reservations of policyholders in general, are heightened not only by the content of new Clause 6 but by the manner and timing of its presentation to this Chamber.
§ Mr. HigginsNaturally, we accept your ruling, Mr. Deputy Speaker, on the point raised with you earlier, but I should like to stress, as strongly as I can, that there have been very grave doubts expressed on both sides of the Chamber and on both sides of the Committee as to the whole of the Bill. It has now been radically changed compared with the form in which it was first introduced. Despite the immense amount of effort hon. Members have put into improving it, it still contains, as has been pointed out, a great many anomalies with regard to the scope of the guarantee, the position of friendly societies, and so on.
1819 We recognise that the present state of the law is imperfect. We need a better set of regulations, and they should be brought in with the greatest possible speed. The Bill is not a Policyholders Protection Bill but a Bill to protect Ministers and civil servants, as has been repeatedly stressed. It contains a great many imperfections and a great many anomalies. That being so, one would have thought it appropriate to put a time limit on the Bill. The amendments are, if anything, related to too long a period. I hoped that we could see how it worked, and that, as a result of improvements in the law or otherwise, these provisions might wither away—an expression not unfamiliar to Labour Members—and we could then get down to a more sensible basis.
I recommend my hon. Friends to support the proposals that the Act should expire by 1979. That is what I had every intention of doing and still hope to do this evening, because the Government would then have to look at the whole thing afresh and bring in new legislation in the light of experience. What has happened instead is that the Government have tabled, at the last minute, a starred amendment to a Government Bill—a new clause proposed by the Secretary of State. It is a shabby device to prevent the Government from being defeated on the other amendments that have been put down.
§ Mr. Clinton DavisThat is a figment of the imagination.
§ Mr. HigginsIt is not a figment of the imagination. There is no other reason why it should be made a starred amendment at the last minute. That being so, the right course of action is to vote against the new clause. It is inadequate. All that is proposed is that there should be a simple review of the operation of the Act. There is no question, as in the other amendments, of the Act being terminated and the matter looked at afresh. It is not to happen until 1981, which is a long way ahead. I do not feel that the new clause produces anything of much worth. On the other hand, the amendments—which will fall if the new clause is carried—are of value, for all the reasons advanced by hon. Members on both sides of the House.
1820 I hope, therefore, that my hon. Friends will oppose the passing of new Clause 6, and that if we succeed in defeating it we shall support the other amendments on the Order Paper. You, Mr. Deputy Speaker, have already said in your ruling that it would be in order then to vote upon them.
§ Mr. MoateI endorse what has been said about the tactics employed by the Government in putting down the new clause in this way. It is most unfortunate, because it has introduced a quite unnecessary note of acrimony. It is unfortunate also because it will possibly deprive the House of the opportunity to make two quite useful amendments to the Bill. The two do not conflict. It would have been helpful to have a review in the context of a report to Parliament later. We might now be presented with the necessity to defeat that proposition. It would not have been incompatible with a five-year limitation to the operations of the Bill. But the way in which the Minister has tabled this amendment means that we all lose, and this is to be regretted.
Nevertheless, I agree that by voting against the Government's new clause we are not depriving ourselves of a provision which is of any significance. It is an attractive idea. It does not embody any necessity for parliamentary approval of the report. It is seven years away. It was tabled as a feeble attempt to head off those Government supporters who had tabled a very worthy amendment. I added my own name to the list of those supporting the amendment which proposed to limit the Act to a life of five years, though I voted against the Bill on Second Reading because I was not convinced that it would be good even for five years.
It is a bad Bill. It will encourage the reckless, discourage the prudent and penalise the provident. Primarily, it protects the civil servants. For the victims of insurance company collapses it is an inadequate and leaky lifeboat.
It would be better limited to five years than to have it permanent. There are strong reasons for a five-year limitation. In that period, we are likely to see evolved further regulations under the Insurance Companies Act 1974, and those should tighten up any loopholes which exist. 1821 More important, the intervening period can be used to tidy up the winding-up and liquidation arrangements which have been seen to be grossly unsatisfactory.
All this can happen in the next few years. For that reason, it would be logical to review the Act in five years. Limiting it to a five-year life does not mean that a future Parliament cannot re-implement it if necessary. Therefore, it is not a wrecking amendment. It provides an opportunity in five years to review the Act and to see how it has operated.
I hope that the House will oppose the Government's clause simply because, otherwise, we should be deprived of an opportunity to vote on very worthy amendments which provide a time limit to the Bill.
§ Mr. Richard Wainwright (Colne Valley)I wish to make it clear that the reason why my hon. Friends and I propose to vote against the new clause is not that we have any quarrel with the clause but that to attempt to defeat it is the only way open for us to debate the very significant and worthy amendments tabled by the hon. Member for Farnworth (Mr. Roper) and others of his hon. Friends.
For that reason alone we Liberals intend to vote against the Government's clause.
§ Mr. Deputy SpeakerI understand that the hon. Member for Windsor and Maidenhead (Dr. Glyn) has already contributed to this debate. It is not possible for him to speak twice.
§ Mr. Deputy SpeakerI am afraid not even by leave of the House.
§ 5.45 p.m.
§ Mr. Clinton DavisI deal first with the assertion that the Government have engaged in a shabby manoeuvre to frustrate debate. Clearly it is a reflection of the stiffening resolve imposed on the hon. Member for Worthing (Mr. Higgins) by one of his right hon. Friends arising out of the conference that they had recently.
It has to be remembered that we are dealing here with a series of amendments tabled only on Monday. Obviously I 1822 had to consider the situation. The hon. Member for Worthing has given me no credit for that at all. He has embarked upon his usual nit-picking exercise which is totally characteristic of him. In fact, it was quite reasonable for the Government to discuss with my hon. Friend the Member for Farnworth (Mr. Roper) the principles behind the position. We did that, and there was nothing illegitimate or surreptitious about it. I resent and reject the charge made by the hon. Member for Worthing.
My hon. Friend the Member for Farnworth has been obliged to leave the Chamber to attend a Committee meeting. He has asked me to give certain assurances about the nature of the report. I give those assurances without hesitation because anxiety has been expressed, some of it misplaced, and it is therefore incumbent upon my right hon. Friend to provide a full review of the operation of the Act within the period stipulated in the new clause.
My hon. Friend the Member for Farnworth asked me for an assurance that the report would include an assessment of the continuing need for the scheme. I give that assurance. He asked for there to be included in the report a review of its effectiveness and its fairness. That will be included in the report. So I meet the points which have been made by my hon. Friend.
My hon. Friend said that the Bill as such did nothing to prevent reckless management practices. I have never hidden the fact that the first line of defence is a suitable and increasingly sophisticated system of surveillance—
§ Mr. E. Fernyhough (Jarrow)And the integrity of companies.
§ Mr. DavisCertainly. The purpose of this improving system of regulation is to establish those criteria which my hon. Friend the Member for Farnworth asked us to meet. I could go through the regulations that we have introduced already. They follow, on a totally non-party basis, from the Act introduced by the previous administration. We have a series of further regulations which we shall be introducing. We are by no means complacent—
§ Mr. Arthur Lewis (Newham, North-West)We have had dozens of regulations before.
§ Mr. DavisNo. The purpose of the 1973 and 1974 Acts was to invest my right hon. Friend with the power to produce these regulations. It was recognised that they were inadequate, and increasing experience shows more and more that they are.
§ Mr. Arthur LewisIn his Department, my hon. Friend will find files inches thick of documents in which I and other hon. Members have asked Governments of both parties year after year, to take action against dozens of these companies which have filched money from the pockets of ordinary people. My hon. Friend's Department has done nothing. The matter has been brushed under the carpet in the hope that it would be forgotten. Cases have been occurring year after year, and all that we have is more and more regulations.
§ Mr. DavisI know that when my hon. Friend writes to the Department the relevant file is likely to achieve the proportions that he has indicated. But it is a gross slander on my officials, who have served Governments of both parties, to allege that they have taken no action.
§ Mr. Arthur LewisWhat about Lonrho?
§ Mr. DavisI can point, as I did on Second Reading, to the number of times that action has been taken to deal with companies in respect of which we have had suspicions. It has been effective action, and it will be increasingly effective action. At present we do not have a sufficient system of surveillance which will guarantee or come close to guaranteeing the sort of situation which the hon. Member for Sudbury and Woodbridge (Mr. Stainton) was envisaging. The right hon. and learned Member for Surrey, East (Sir G. Howe) said precisely the same—namely, that there can still be loopholes.
It is not always possible to foresee the devices which can be employed in avoiding legislation. I have been asked why I do not have more confidence in the Bill and say that it is bound to work. In my view that would be a thoroughly complacent and arrogant attitude to take. I believe that the Bill represents an essential long-stop, but the first line of defence must be regulations, and they must necessarily be the subject of detailed consulta- 1824 tions with the industry. We shall now have the benefit of these additional consultative procedures. I hope that the regulations will be brought into force so that we can try to avoid as best we can the situation developing along the lines about which concern has been expressed.
§ Mr. StaintonI hope that the Minister will concede that I would not be so precocious or presumptuous to say that anyone could get every piece of legislation absolutely right, especially when it is as complex as this Bill. I hope that it is absolutely clear to the Minister that I am fed up beyond the point of exasperation with tripping down to No. I Victoria Street since the mid-1960s on such matters as the Dover plan and the like, meeting posses of officials in the Department as well as the Minister's own contemporaries and those who preceded him. It is just not good enough. There are so many anomalies that one wonders whether, in tabling the review clause, the Government are indicating their continuing doubts about the situation.
§ Mr. DavisThe Government are saying that the House is entitled to information because both in the House and outside anxieties have been expressed. It is reasonable to accommodate those anxieties, and that is what we have been trying to do. The hon. Gentleman has on no occasion that I can recollect—I shall apologise if I am wrong—come to see me about any specific problem which he has had in this respect.
I do not recall that my hon. Friend the Member for Newham, North-West (Mr. Arthur Lewis) has come to see me at No. 1 Victoria Street regarding any of the problems about which he has been concerned. I believe that he has written to me on one or two occasions, but I do not think that his correspondence has reached the sort of proportions he was trying to illustrate.
§ Mr. Arthur LewisMy hon. Friend must look up the files. I became so fed up year after year getting nowhere with the various Ministers that I thought it was hopeless to try him. I must apologise to my hon. Friend. From my experience the same civil servants give the same answers.
§ Mr. DavisMy hon. Friend should be a little more optimistic and confident 1825 in the present incumbents in office. I hope that what I said will not encourage him to make too many visits, but at least I am not preventing him from making one.
§ Mr. Arthur LewisIt will not happen now.
§ Mr. DavisI believe it is important to proceed with a proper system of regulation, and I undertake that my Department will do that. However, it is unfair and somewhat illogical to seek that the Bill should come to an arbitrary end after a period of five years. Why choose five years? Why not three, seven or ten years? There has been no justification for that suggestion from those who have proposed it. If they are right in their belief that after 29th October 1979 there will be no more failures, there is no loss to the policyholders of safe companies in letting the Bill run on. On the other hand, if they turn out to be mistaken and my view happens to be right, that despite improved supervision there may still be occasional instances of companies falling through the net—
§ perhaps some which have failed through no one's fault, but the difficulties which we experienced in 1974–75—it will be the policyholders of those companies who will suffer from what I consider to be an error of judgment.
§ Dr. GlynI raised this question earlier. I understand that if the new clause is passed we are precluded from discussing the amendments. Am I correct in saying that if the Bill becomes an Act it will remain an Act until such time as the Government bring in a new Act either to amend it or to abolish it?
§ Mr. DavisThe hon. Gentleman is right. It is wholly unrealistic to take the attitude that the hon. Member for Worthing has taken. The action which we are envisaging is fair to the House and to the country. I hope that the House will endorse it.
§ Question put, That the clause be read a Second time:—
§ The House divided: Ayes 133, Noes 115.
| White, Frank R. (Bury) | Wise, Mrs Audrey | |
| Willey, Rt Hon Frederick | Woodall, Alec | TELLERS FOR THE AYES: |
| Williams, Alan (Swansea W) | Young, David (Bolton E) | Mr. James Hamilton and |
| Williams, Alan Lee (Hornchurch) | Mr. Thomas Cox. |
| NOES | ||
| Aitken, Jonathan | Hawkins, Paul | Reid, George |
| Arnold, Tom | Higgins, Terence L. | Renton, Rt Hon Sir D. (Hunts) |
| Atkins, Rt Hon H. (Spelthorne) | Hordern, Peter | Renton, Tim (Mid-Sussex) |
| Bain, Mrs Margaret | Howell, David (Guildford) | Rifkind, Malcolm |
| Banks, Robert | Howells, Geraint (Cardigan) | Roberts, Michael (Cardiff NW) |
| Bell, Ronald | Hurd, Douglas | Ross, Stephen (Isle of Wight) |
| Berry, Hon Anthony | Hutchison, Michael Clark | Rost, Peter (SE Derbyshire) |
| Biffen, John | Irvine, Bryant Godman (Rye) | Sainsbury, Tim |
| Biggs-Davison, John | James, David | Shepherd, Colin |
| Bottomley, Peter | Jessel, Toby | Shersby, Michael |
| Braine, Sir Bernard | Knight, Mrs Jill | Sims, Roger |
| Brotherton, Michael | Knox, David | Sinclair, Sir George |
| Budgen, Nick | Lane, David | Smith, Cyril (Rochdale) |
| Butler, Adam (Bosworth) | Latham, Michael (Melton) | Smith, Dudley (Warwick) |
| Carlisle, Mark | Lawrence, Ivan | Speed, Keith |
| Channon, Paul | Lawson, Nigel | Spicer, Jim (W Dorset) |
| Clark, Alan (Plymouth, Sutton) | McAdden, Sir Stephen | Steen, Anthony (Wavertree) |
| Clark, William (Croydon S) | McCrindle, Robert | Stewart, Ian (Hitchin) |
| Cooke, Robert (Bristol W) | Macfarlane, Neil | Stradling Thomas, J. |
| Cope, John | McNair-Wilson, M. (Newbury) | Taylor, Teddy (Cathcart) |
| Costain, A. P. | Mather, Carol | Tebbit, Norman |
| Douglas-Hamilton, Lord James | Mayhew, Patrick | Thatcher, Rt Hon Margaret |
| Dykes, Hugh | Meyer, Sir Anthony | Thompson, George |
| Emery, Peter | Miller, Hal (Bromsgrove) | Thorpe, Rt Hon Jeremy (N Devon) |
| Farr, John | Moate, Roger | Townsend, Cyril D. |
| Finsberg, Geoffrey | Molyneaux, James | Tugendhat, Christopher |
| Fisher, Sir Nigel | Morgan, Geraint | Viggers, Peter |
| Fookes, Miss Janet | Morrison, Hon Peter (Chester) | Wainwright, Richard (Colne V) |
| Fowler, Norman (Sutton C'f'd) | Mudd, David | Wall, Patrick |
| Fox, Marcus | Neave, Airey | Warren, Kenneth |
| Freud, Clement | Neubert, Michael | Weatherill, Bernard |
| Gardiner, George (Reigate) | Newton, Tony | Welsh, Andrew |
| Gardner, Edward (S Fylde) | Osborn, John | Wilson, Gordon (Dundee E) |
| Glyn, Dr Alan | Page, Rt Hon R. Graham (Crosby) | Winterton, Nicholas |
| Grant, Anthony (Harrow C) | Pardoe, John | Young, Sir G. (Ealing, Acton) |
| Grimond, Rt Hon J. | Penhaligon, David | |
| Grist, Ian | Percival, Ian | TELLERS FOR THE NOES: |
| Hall-Davis, A. G. F. | Peyton, Rt Hon John | Mr. Spencer Le Marchart and |
| Hamilton, Michael (Salisbury) | Raison, Timothy | Mr. Richard Luce. |
| Hannam, John | Rathbone, Tim |
§ Question accordingly agreed to.
§ Clause added to the Bill.