HC Deb 15 April 1980 vol 982 cc1153-60

As amended (in the Standing Committee), considered.

Motion made, and Question proposed, That the Bill be now read the Third time.

10.15 pm
The Under-Secretary of State for Trade (Mr. Reginald Eyre)

This is the first time that the Bill has been discussed on the Floor of the House. Hon. Members may welcome a brief indication of its provisions, although at this hour I shall not detain the House for long.

The Bill is a technical measure with a limited objective. It creates a uniform United Kingdom regime for the authorisation and supervision of insurance companies by extending the existing Great Britain legislation to Northern Ireland and repealing the virtually identical Northern Ireland legislation.

The Bill is necessary to fulfil the requirement of the European Community's insurance establishment directive that an authorisation to carry on an insurance business shall be valid throughout the national territory. The Bill is useful because it eliminates the duplication of effort between Belfast and London. All the companies supervised by the Department of Commerce are already supervised by the Department of Trade.

10.16 pm
Mr. J. Enoch Powell (Down, South)

I wish to refer first to the manner in which the Bill reached its present advanced stage and then to say something about its content. As the Minister has observed, this is the first time that the House, as a House, has made its acquaintance. It is one of those measures that went to a Second Reading Committee and thereafter was dealt with by a Standing Committee.

No hon. Member representing a Northern Ireland constituency, the part of the Kingdom which the Bill primarily concerns, was on the Second Reading Committee or the Standing Committee. I appreciate, given the composition of the House, that representation of minorities on the Standing Committees is in the ordinary way one of difficulty: it is rarely possible for representatives of those minorities to be included. But I suggest that it is intolerable and should not be repeated—I hope that the Committee of Selection will take account of this—that in a measure concerned almost exclusively with Northern Ireland no steps were taken to ensure any representation from Northern Ireland on either of the Committees which considered the Bill.

I can confirm—I have the authorisation of my hon. Friend the Member for Antrim, South (Mr. Molyneaux) to do so—that at no stage was any approach or suggestion made, at any rate to the Ulster Unionists, on whether we wished to participate in the Bill's proceedings and, if so, how that could be arranged. I leave the matter there. It is inconsistent with the general idea of fairness that a measure such as this, the prime purpose of which concerns Northern Ireland, should reach Third Reading without any Northern Ireland Member having had an opportunity to address himself to it. I hope that there will be no repetition of that ugly precedent.

I turn to the contents of the Bill. For the last six or seven years the standing contention of my hon. Friends and myself—indeed, it is a contention with which, not entirely unintentionally, we have from time to time rather wearied the House—that Northern Ireland should be legislated for, as are all other parts of the United Kingdom, by the procedure of Bills and Acts of Parliament and not otherwise. While we appreciate that initially a great deal of, so to speak, tidying up legislation can conveniently be done—and not altogether improperly done—by Order in Council under the 1974 Act, it should be accepted that the proper method of legislation, even during the interim period, for Northern Ireland is that method which alone is applicable to all other parts of the kingdom, even when, as in the case of Welsh or Scottish measures, the Bills are to apply only to part of the kingdom.

When we have put this contention forward—a contention which the House of Commons in justice to itself can hardly reject or question—we have been met with two objections by Northern Ireland Ministers. The first was that, since Northern Ireland legislation has hitherto been substantially separate from legislation for Great Britain, it would be awkward to include in a United Kingdom Bill the necessary application provisions for Northern Ireland.

We pointed out, it is true, that that does not seem to prevent Scottish application clauses finding their way into Great Britain Bills; but here we have a piece of legislation which has been brought before the House and will be passed in order to apply, through the Bill procedure, Great Britain legislation to Northern Ireland. We observe that it takes exactly one page of the Bill and one schedule to do the trick.

So there must be many cases in which at present Great Britain legislation is applied to Northern Ireland by order where it would be perfectly convenient, and involve no substantial addition to the bulk of the Bill for this House to have a United Kingdom Bill applying in the proper manner to all parts of the Kingdom, in debate on which hon. Members from all parts of the kingdom could take part on a common basis.

That deals with one of the objections with which we have hitherto been confronted—the objection of clumsiness and complexity. The second objection was more portentous. We were told that there is a sacrosanct thing known as the Northern Ireland statute book and that during this interim period—which may well be as durable as most things provisional are—it would be sacrilege not to maintain this Northern Ireland statute book intact.

Admittedly it is a curious collection when one looks at it. It includes Acts of the United Kingdom Parliament before 1922 and after 1800; Acts of the United Kingdom Parliament before 1800, and Acts of the Irish Parliament before 1800. It includes Acts of the Northern Ireland Parliament between 1922 and 1972 and the odd rag bag of measures which managed to get through the ill-fated Assembly of 1973–74. Anyone who imagines that there is a beautiful corpus, self-consistent and of single origin, is grievously mistaken.

However, let us take the argument as it stands. We are told that any additions to the law of Northern Ireland, so far as that takes the form of Northern Ireland law, must during this interim period be made in a specifically Northern Ire- land form so that they find their place upon the shelves alongside the Northern Ireland statutes. We have even—hon. Members may inspect this phenomenon in the Oriel Room in the Library—got to printing Orders in Council in series as if they were Northern Ireland statutes and treating them as such.

That is not an argument that will stand up from now on. The Government have discovered that in a matter that has hitherto featured exclusively upon the Northern Ireland statute book, hey presto, we can amend the law and replace it by an Act of the United Kingdom Parliament. If that can be done in this case, it can be done in any other. The Government have put their foot through their own argument of the sacrosanctity of the Northern Ireland statute book, and I hope that we shall hear no more of that nonsense.

How did this happy conversion come about? How were a Government who have obdurately argued that it was too clumsy to legislate for Northern Ireland by Bill, and that in any case it was undesirable to do so because that impugned the purity and the totality of the Northern Ireland statute book, suddenly converted? How did the light dawn upon them? What Damascus were they visiting so recently?

The Minister said in the Second Reading Committee—and he repeated it this evening—that the main point of the Bill is to fulfil our European Community obligations."—[Official Report, Second Reading Committee, 20 February 1980; c. 6.] By a whisker of interpretation it is held that the EEC requires there to be a single statute in the matter of insurance company law for Northern Ireland as for the rest of the United Kingdom. The EEC spake the word and the thing was done. Her Majesty's Government, obdurate about the wishes of the citizens of this country, deaf to the arguments and entreaties of hon. Members sent to this House to represent a part of the United Kingdom, collapsed immediately, grovelled and knocked their foreheads upon the floor in front of the EEC. "Of course", said they, "if the EEC wants it done that way, we forget all our scruples; all inconvenience goes out of the window; it shall be done at once." And done it is. What a humiliation that we should have to be told by the EEC how to legislate uniformly for a unitary United Kingdom!

At the same time, but just as a secondary argument, the Government discovered—and set the point out at some length in the Second Reading Committee—that this change would actually be a convenience for Northern Ireland, that it would be nice for Northern Ireland to have the same statute as that under which insurance companies operated on what we like to call the mainland.

Normally when one makes such a suggestion one is attacked as being an integrationist. It is not many weeks since the Minister of State, Northern Ireland Office threatened in the most menacing tones hon. Members on this Bench who said that we might have uniformity—it was not on an important matter—between Northern Ireland and the rest of the United Kingdom. He told us that the whole process of constitutionmongering that was being carried on by that absurd conference at Stormont would be threatened if there were any question of this House having the temerity to produce uniformity between the administration of the law in Northern Ireland and that in the rest of the Community.

However, when the EEC says that it has to be, the beauties of uniformity are discovered. It turns out that it is convenient and economical. The word "integration", instead of being a curse word, becomes a term of blessing.

This is a great night for Northern Ireland. The Bill should—I am sure that it will—feature in future constitutional text books as the breakthrough point in legislation for Northern Ireland. This was the night when the House and the Government discovered that the proper way to legislate for all parts of the United Kingdom was also the convenient way. So the Bill which came to us—perhaps significantly, in view of its wisdom—from another place, which derives from the hereditary part of the legislature, will be wafted on to the statute book with the blessings and good wishes of those sent to this House from Northern Ireland.

10.30 pm
Mr. Tom Pendry (Stalybridge and Hyde)

As the right hon. Member for Down, South (Mr. Powell) said, we are asked to support the Bill basically because it conforms to two EEC directives. Those directives require that a business should be valid throughout the entire national territory.

My first reaction, when asked to support a measure which is prompted by an EEC directive, is one of hesitation, especially when there is a Northern Ireland connection. The Community is not well placed to judge the special circumstances that sometimes prevail in Northern Ireland.

When the Bill was introduced in another place, Lord Lyell, who spoke for the Government, said that its main object was to fulfil our EEC obligations, and that it was not an initiative that the Government would have taken in the absence of those Community directives. Why not? If the Bill eliminates the duplication of effort by the Department of Trade in London and by the Department of Commerce in Belfast in the supervision of insurance companies, why apologise for its introduction? The Government could have easily complied with the directives by merely extending the authority of both supervisory bodies to the entire United Kingdom. Perhaps the Minister, when he replies, will say why he did not follow that course of action.

Although we have received an assurance that there will be no manpower reductions following the passage of the Bill—and Labour Members totally welcome that—it baffles me that, following a measure designed to verticalise and rationalise the insurance industry's structures with a view to eliminating duplication and effort, no saving in this area is made possible. Perhaps the Minister will enlighten the House on that aspect.

A beneficial effect for Northern Ireland could be the powers contained in paragraph 4 of schedule 3, which allow insurance companies operating in Great Britain to have similar operating powers in Northern Ireland. As the House knows, the converse is already the case. Will the Minister indicate the likely effects of the movements away from Great Britain towards Northern Ireland in this area of business? I do not expect him to answer that question tonight, but perhaps he will tell us of any assessment that he may have made about that movement.

We shall support the Bill because it is proper that by repealing the existing Northern Ireland legislation—the Insurance Companies (Northern Ireland) Order 1976—and extending to Northern Ireland the provisions of the Insurance Companies Act 1974 we shall streamline the legislation in a sensible way.

10.33 pm
Mr. Eyre

With the leave of the House, Mr. Deputy Speaker, I shall endeavour to reply to the issues that have been raised.

First, I refer to the matters raised by the right hon. Member for Down, South (Mr. Powell), especially those concerning the representation of Northern Ireland Members on either of the Committees that have considered the Bill. I know that the right hon. Gentleman will understand that it is not for me to comment upon the mode of operation of the Committee of Selection. Northern Ireland Ministers were present when the right hon. Gentleman spoke. They heard his remarks and I am sure that they will consider them carefully.

The hon. Member for Stalybridge and Hyde (Mr. Pendry) asked about the assessment of the movement of business. Little or no change is expected. If it is possible to answer his question more fully, I shall he glad to contact him. As the hon. Gentleman said, the Bill is necessary to implement two European Community directives. The first is the European non-life directive—that is, non-life assurance business. It sets out common rules for the supervision of general insurance corn-panics in all the member States of the Community. In Great Britain the directives have been implemented largely by a series of regulations under the European Communities Act 1972, notably those on class of business, authorisation and solvency of camponies. The second measure, the European Communities life directive, was adopted in March 1979. It deals on broadly the same lines with life assurance business. We hope to implement the terms of the life directive in a Bill to be introduced early next Session if the legislative programme permits.

Mr. J. Enoch Powell

Will the hon. Gentleman confirm that that Bill will also be a United Kingdom measure?

Mr. Eyre

That will be a United Kingdom Bill.

It is a requirement of both the directives that an authorisation to carry on business should be valid throughout an entire national territory. That is not the present position in the United Kingdom as insurance companies need separate authorisations to carry on business in Great Britain and Northern Ireland. The main purpose of the Bill is to fulfil our European Community obligations. Primary legislation was necessary to bring about the validity of the authorisation to carry on all such business throughout the United Kingdom. The Bill is necessary to implement the European Community directives.

The Bill is useful because it will eliminate the duplication of effort by the Department of Trade and the Department of Commerce in Belfast in the supervision of insurance companies. In theory it would have been possible to comply with the European Community requirement by extending the jurisdiction of both supervisory authorities to the whole of the United Kingdom. That would have only compounded the unnecessary duplication of effort as all companies authorised and supervised in Belfast already have the separate authorisation that is at present needed to carry on business in Great Britain. For that reason, it has been the Department of Trade that has taken the initiative in supervising all the companies concerned. The Department of Commerce has tended to follow the lead from London. It makes sense for the Department of Trade to be solely responsible for the authorisation and supervision of companies. That is what the Bill will achieve.

The transfer of a quite minor function from a Northern Ireland Department to a Department of State is judged to be the most simple way of meeting the requirement of the Community directive. A complicated system could have been created that would have enabled the Department of Commerce to continue its supervisory activities, but administrative good sense suggested that the course that has been followed would be the best solution of the problem. A minor function has been transferred, and such a transfer does not give the slightest case for either hopes or fears that the Government are prepared at this moment to make a general alteration to the traditional responsibilities of Northern Ireland Departments.

Question put and agreed to.

Bill accordingly read the Third time and passed, with amendments.