HC Deb 09 March 1982 vol 19 cc777-88

Order for Third Reading read.

7.1 pm

Mr. Anthony Grant (Harrow, Central)

I beg to move, That the Bill be now read the Third time.

First, I express my pleasure at seeing on the Government Front Bench for the first time while the Bill has been under discussion my hon. Friend the Member for Reading, South (Dr. Vaughan), who is the new Minister for Consumer Affairs. We are delighted to have my hon. Friend on the Front Bench. If he is as agreeable and helpful in the Department of Trade as he was when he was Minister for Health, we have a happy future ahead of us.

I can debate the Bill's Third Reading briefly for two reasons. The first reason is that it is the wish of the overwhelming number of hon. Members and of members of Lloyd's outside the House that the Bill should now make progress. The second reason is that the Bill has been the subject of exhaustive debate both inside and outside the House. Second Reading took three hours of the time of the House. The two stages in Committee occupied no fewer than 52 hours over 13 days. Three hours were spent on Report and the further consideration of the Bill has occupied the House for six hours. That is a total of 64 hours of scrutiny over 16 days.

I pay tribute to the responsible way in which critics of some aspects of the Bill have conducted the debate. They have argued quite sensibly on principle and not on personality. I pay tribute to them for the way in which they have done so. However, the Bill was given a Second Reading by a majority of 164. The proceedings in Committee were conducted scrupulously and were praised by hon. Members on both sides. Tribute has been paid to the proceedings in Committee during previous stages. Consideration of the Bill was agreed to without a Division after three hours of debate. At the further consideration stage the suspension of the Ten o'clock rule was approved by a majority of 146, which enabled us to continue the debate. The closure was approved by a majority of 107.

New clause 2, which was introduced by my hon. Friend the Member for Nantwich (Sir N. Bonsor), led to one of the crucial debates. The clause was defeated by a majority of 53. My hon. Friend the Member for Faversham (Mr. Moate) did not press new clause 1 to a Division. There has been full discussion and the House has come to clear and decisive conclusions.

The Committee of Lloyd's has been scrupulous in consulting its membership at all stages at meetings and in writing. The Bill as it stands has been approved by the overwhelming majority of the members of Lloyd's. I appreciate that clause 14 has caused concern to some of my hon. Friends. I understand that clauses 10 and 11 have worried my hon. Friend the Member for Faversham. However, I do not believe that that concern and worry justifies further delaying in the Bill in its passage to another place. Delay would create great uncertainty in the markets at home and abroad, which would be very much to the detriment of our interests.

I remind the House that in 1980, the last year for which figures are available, Lloyd's contributed no less than £579 million to our invisible exports. I remind it also that Lloyd's gives employment to 72,000. It would be tragic, for Lloyd's itself and for British economic interests generally, if the Bill were to fall now. Lloyd's would, as a result, be stuck with the 1871 constitution, with which it has been struggling for so many years, and which in 1982 is like entering the Le Mans race with a horse arid cart. Therefore, I believe it right that the Bill should make progress. I urge the House to speed it on its way by giving it a Third Reading tonight.

7.6 pm

Mr. Bob Cryer (Keighley)

I should not let this occasion pass without a few comments about comparisons. My hon. Friends who served on the Opposed Private Bill Committee worked extensively to improve the Bill in order to allow Lloyd's to work.

Lloyd's is an ancient, anachronistic institution with a massive number of sole proprietors who have to work In some form of corporate organisation, and the Bill provides the legal framework to bring it up to date. My hon. Friends recognised that, and they have been praised by hon. Members on both sides of the House for the work that they have done—a classical reformist position.

Clause 14 is most important. It is claimed that it is vital to allow Lloyd's to work. It is the immunity clause, which speaker after speaker on the Government Benches said was necessary, although a tiny group viewed it critically. It has been claimed that immunity is necessary to allow the Committee of Lloyd's to work and to prevent frivolous and vexatious actions by rival organisations. Conservative Members supported immunity for their friends who are part of Lloyd's, which makes between £300 million and £400 million a year, but they trooped into the Aye Lobby to remove immunity from trade unionists. That is a double standard. Trade unionists want to know why ore institution can be dealt with by the House on the basis that, in some aspects, immunities are necessary while trade union institutions, which have been built up over the years and also need immunity to work, have had those immunities removed by the very people who claim that immunities are necessary for Lloyd's to work.

When the Employment Bill was debated, two of the first three speakers were members of Lloyd's and the other was a solicitor. They all complained about the closed shop. Surely that is the adoption of double standards. The trade union movement seeks only to organise itself to equal the power of the employer. Thus, it requires some immunity. Trade unions are not asking for total immunity—they have never had that—but they require some immunity so that, when they are contemplating the furtherance of a trade dispute, they may have some protection from tort.

That is the argument on behalf of Lloyd's. When Lloyd's is working, it is argued that it must have some immunity for negligent acts. That argument has been deployed by several Conservative Members, including the promoter of the Bill. Apparently they do not extend it to trade unions because those same hon. Members voted against immunity for trade unions.

I want to put down a marker. When I spoke at the National Union of Mineworkers' school recently about this discrepancy, those who attended were extremely interested in the double standards that prevailed.

Lloyd's is a somewhat quaint institution which could be radically reformed into a corporation to provide much the same sort of insurance facilities. It would not need the organisation, with its various members, that has been built up over the years. Nevertheless, ordinary insurance companies incorporated under the Companies Act often provide services that are as wide as Lloyd's.

Like my hon. Friend the Member for Oldham, East (Mr. Lamond), I accept that some reform is necessary, based on the level of immunities proposed in the Bill. However, I take exactly the same stand about the trade unions. I contend that trade unions should have the opportunity to work. The Government should stop hammering them at every possible opportunity and should recognise that they need some degree of immunity. They should abandon the double standards that have been exhibited during the passage of the Bill.

7.11 pm
Mr. Roger Moate (Faversham)

We have just heard a significant speech from the hon. Member for Keighley (Mr. Cryer)—

Mr. Nicholas Baker (Dorset, North)

It was wrong.

Mr. Moate

The hon. Member for Keighley nearly always is wrong, but I suspect that on this issue the House would do well to take note of what he has just said.

My hon. Friend the Member for Dorset, South (Viscount Cranbome) once reminded us of what the hon. Member for Keighley had said on this subject. If we need any reminding that the immunities clause is dangerous and that it will haunt us time and time again, we have only to look at the speech of the hon. Member for Keighley.

Of course, every institution is different. Trade unions are as different from Lloyd's as Lloyd's is from the Stock Exchange. However, the principle of legal immunities is a major political principle and the hon. Gentleman will never let us forget it. He has emphasised that today. That is one strong reason why—leaving aside all the fine legalistic arguments that can be advanced—I hope that the other place will look hard at this proposition. It is a dangerous precedent that such a wide-ranging legal immunity should be left in the Bill to protect the Committee of Lloyd's.

I join my hon. Friend the Member for Harrow, Central (Mr. Grant) in welcoming to the Front Bench my hon. Friend the Member for Reading, South (Dr. Vaughan). I am delighted, as others are, to see him in his new post of Minister for Consumer Affairs. He was the most superb Minister for Health. He was always immensely helpful and I have no doubt that he will perform exactly the same role in this important post. I am also delighted to see alongside him the Under-Secretary of State for Trade, my hon. Friend the Member for Birmingham, Hall Green (Mr. Eyre) who has had responsibility for keeping a Government eye on the Bill. I also congratulate my hon. Friend the Member for Harrow, Central and my hon. Friend the Member for Gainsborough (Sir M. Kimball) who, with remarkable skill have brought the Bill to Third Reading. My hon. Friend the Member for Harrow, Central has been so skilful in his unofficial whipping that he is in great danger of meeting a fate worse than death—he is liable to be invited to join the Whips Office at any time.

Mr. Anthony Grant

I have done that once, but never again.

Mr. Moate

My hon. Friend's success can be measured by the large number of my hon. Friends who have expressed their concern about tonight's proceedings. However, their concern was not so much about the principle of the Bill as about their dinner arrangements. I was very happy to reassure them that, as far as I am concerned, their dinner arrangements will not be in any danger. I am a great believer in brief speeches and longer dinners. I hope that my hon. Friends will enjoy both this evening.

I was grateful for the Whip that was sent to me, which concludes by asking me to let the area Whip know if I was able to help on this occasion. I am pleased to help on this occasion. No one has expressed any doubt about the need to ensure that the Bill succeeds. There might have been disagreement in principle about some of the clauses, but there has been no doubt about the general desirability of the Bill. If any have come to a different conclusion, they must have failed to follow the proceedings carefully. In some respects, the Whip was slightly in error. To provide the background to this debate, I shall refer to some of the errors. For example, it states: Even the opponents of certain sections of the Bill now believe it should proceed on its Parliamentary course. There has never been any doubt that the opponents of certain sections wanted the Bill to proceed. It is unfortunate that the impression has been given that some hon. Members want the Bill to be defeated.

In a further error, the Whip states: Unfortunately there was one objection"— that was mine— solely on the divestment issue. According to the procedure of the House we do not state our reasons for objecting. The closure motion was moved on our earlier proceedings and as a result I was unable to express my view on immunity. Other issues—notably that of the electorate—should have an airing on Third Reading. The Whip also states: It would be tragic and gravely damaging to Lloyd's … if the Bill on which so much progress has been made were to fail for lack of the necessary support. That presupposes that a vote is likely and that some hon. Member has expressed opposition to the Bill's Third Reading. However, as far as I know no hon. Member has expressed that sentiment. Therefore, there has been an over-reaction. Some feel strongly about the immunity provisions, just as I do about divestment—

Mr. Richard Needham (Chippenham)

Has my hon. Friend declared an interest?

Mr. Moate

By now, I should have thought that hon. Members' interests were well known. However, as my hon. Friend wishes me to do so, I repeat my interest as a director of Alexander Howden insurance brokers, which petitioned against divestment. Having spoken, will my hon. Friend the Member for Chippenham (Mr. Needham) declare his interest—which is much more substantial than mine—as a member of Lloyd's? However, that has nothing to do with the situation.

The Whip was erroneous. Unfortunately the impression has been given that we wish to endanger the Bill's passage. That has never been so. Procedure is often used to try to secure changes in legislation and to persuade others to negotiate and, perhaps, to compromise. However, that should not be seen as trying to defeat legislation. The Bill has never been in danger from its critics. Indeed, it is endangered more by its defects which, in many ways, should alarm the House, some members of the Lloyd's community, the other place and the Government. If we had chosen to be obstructive about divestment we could have endangered the legislation in other ways. However, it was deliberately decided not to do so. My hon. Friends and I could have argued when time was short and thus endangered the Bill. I thought that that was wrong, because it would have endangered the legislation.

As my hon. Friend the Member for Harrow, Central knows from his knowledge of Private Bill procedure, the petitioners could have taken other opportunities to endanger the Bill's passage. However, they were deliberately avoided. The petitioners could have presented a memorial, complaining of failure to comply with the Standing Order in relation to the additional provision on divestment. The petitioners could have opposed the application to the Standing Orders Committee for dispensation of the Standing Orders that had not been complied with. However, as such procedural moves might have unintentionally secured the Bill's rejection, that action was not taken. I emphasise that because I wish the House to understand that most of us believe that the Bill is needed and we wish it to go through. That is an important background to this Third Reading. The Bill should now pass, but I hope and believe that it will receive thorough scrutiny and be subject to major amendments in another place.

I wish to express general concern about the scope of the Bill and cast some doubts upon whether the House should approve such major changes being carried into effect through private legislation. It worries me that major principles are being carried through into law by way of a Private Bill. I do not suggest that it is in any way out of order. Clearly it is not, or the Bill would not have proceeded as far as it has.

However, in "Erskine May", we are told that four principles must be followed in determining that a Private Bill should not be introduced as such but should be introduced as a Public Bill. The first criterion is "that public policy is affected". Anyone who listened to the speech of the hon. Member for Keighley about legal immunities will have understood that public policy is affected. I would have thought immediately that that major principle should not readily be accepted in a Private Bill.

Another criterion for judging whether the Bill is public or private is the magnitude of the area and the multiplicity of the interests involved. The area and the sheer magnitude of the proposition affects so many people that we should have been wary of allowing such a matter to proceed by way of private legislation. I made private representations about the matter. The judgment was that there were borderline areas where the House should decide whether matters come under private legislation. I accept that judgment. However, when the House considers such legislation, it should examine the magnitude of the interests affected and decide whether the Bill should be private.

To talk about magnitude, about 40,000 shareholders of the public companies concerned are to be subjected to the forcible sale of some of their assets. That is a substantial area of interest, which is inappropriate for a Private Bill. For example, the immunities extend right down to management and I have seen a figure of about 20,000 people who would lose the right to sue the Committee of Lloyd's for damages. There too, many people have not been consulted. That is also not a matter that is suitable for a Private Bill.

I see the hon. Member for Norwood (Mr. Fraser) laughing, but he never seems to take any of these points seriously. As long as he feels satisfied with the general legislation, he does not bother with the details.

Mr. John Fraser (Norwood)

I take the matter just as seriously as the hon. Gentleman, especially as I also take an impartial view of it.

Mr. Moate

That is a typical remark from the hon. Gentleman, to which I need not respond. I hope that the House understands that I am talking about the principles, about which I feel strongly. I hope that my arguments are impartial.

The other point is the forced sale of assets. Is it right that private legislation should be used, as it is being used now, to force upon a large range of companies—some public and some private—the sale of assets? It is an extreme sanction to be imposed upon rather flimsy evidence. I again question whether Parliament should accept legislation that takes such extreme steps in the form of a Private Bill.

Sir Anthony Royle (Richmond, Surrey)

I am rather puzzled about my hon. Friend's last remark. Is it not tree that the underwriter of his firm—in which he has naturally declared an interest—pressed the Committee to make changes in the Bill to do just that? It was only because a e underwriter of his firm did that that changes were made in the original Bill that was tabled in the House.

Mr. Moate

My hon. Friend raises an important point, although I am not sure how it relates to my point. However, it allows me to emphasise the independence of the broker-underwriter relationship. The hon. Member for Norwood accused me of being partial in the matter. I suggest that in many Lloyd's organisations people take stands and do their own thing because they believe in what they are saying. My hon. Friend is right that the case for divestment was made by a board member of the Alexander Howden holding company. He made the case contrary to the views currently held by the petitioners—the same company. There is no clearer evidence of the fact that people are not creatures of one another in the Lloyd's community. I rather resented it when the Committee said that Mr. Peter Green, the chairman of Lloyd's, because he is a member of the Hogg Robinson board, is a broker and not an underwriter. People are independent-minded both within one group and in the community. However, I take my hon. Friend's point. I am not sure that it contributes anything to what I have said.

My hon. Friend the Member for Harrow, Central is right to say that we have dealt with the Bill fairly extensively in Committee and in the proceedings so far and there is no need to cover again the many issues that have been thoroughly aired and which I hope will be more thoroughly aired in another place. However, we did not deal with the electorate in Committee. I have read some of the material about that and I feel that the Bill is not satisfactory in its present form. Or, at the very least, it should be thoroughly examined in another place. We know that with 16,000 external names and 4,000 working names, the vast majority of the representations will be held by the working names. There will be 16 working names on the council, eight external names and three nominated members. It was described as dividing the membership between the sheep and the goats, which is an unfortunate phrase. However, the working members of the council will have the lion's share of the representation. They will elect the chairman of the council and the chairman of the committee. Hitherto, there has been no distinction in practice, although I recognise that there has been a great distinction in theory.

We are talking about the substantial disenfranchisement of the external members. My hon. Friend the Member for Harrow is right to point out that it was accepted without much dissension by those members. His legitimate point was that if they do not complain, why should we? Do we not talk about the same thing when we discuss voting and non-voting shares and rights in public companies? I suspect that the vast majority of people who buy shares without voting rights do so voluntarily and willingly in the full knowledge that they are disadvantaged in that way. However, that has not stopped us deploring that feature of commercial life. It has not stopped us saying that the practice of having non-voting shares is rather regrettable. I am sure that it will come to an end.

It may be that members of Lloyd's have accepted at the moment that they will be disadvantaged in that way, but I wonder whether it will persist. As we enter areas of controversy—as we seem increasingly to do in Lloyd's—more and more outside names will be more conscious of the way in which Lloyd's is operated, more concerned about having a full say in the workings of the council and might ultimately regret having given up their full voting rights so easily. One has only to look at a recent fairly close-run and dramatic by-election to the Committee of Lloyd's to see that the external names were exercising considerable influence over the outcome of that election. In future, they might not have such powers. That is a matter that should be looked at carefully, and I am surprised that Fisher was able to recommend without doubt that there should be a division between the sheep and the goats, and that that should be accepted.

Mr. Anthony Grant

I am a little puzzled and require clarification. It would be a mistake if the impression were to be left that this issue was in any way a parallel with Companies Act non-voting shares. Members, whether they are external or internal, have a vote. The question concerns the number of people represented on the council. It is not the same as non-voting shares in companies.

Mr. Moate

I accept the correction. I was trying to make a point of principle. It is true, of course, that external members have a vote but their vote is worth far less. My hon. Friend will concede that there is a clear majority for the working names. There is a strong argument for that. I do not dispute it. There is a strong case, or it would not have been recommended by Fisher or accepted by the members. I feel that it is a matter that in time to come will be a cause of regret and future dissention. I make no more of it than that.

I turn to the subject of divestment, without rehearsing many of the arguments with which hon. Members will be familiar if they have bothered to listen to earlier speeches, although I suspect that many of them sensibly have not done so. I wish to repeat my arguments against divestment. When the Bill was debated on Second Reading, it did not contain provision for mandatory divestment. When this matter was first raised in Committee, the sponsors defended the original proposals and opposed mandatory divestment, and did so with considerable eloquence and skill.

My view is the same as that originally expressed by the sponsors, the chairman of Lloyd's and others. To those who say that mine is a lone voice, I say that it may be so in the House at the moment but it is a voice expressing the views that were arrived at after a great deal of discussion in the Lloyd's community, before the Bill reached the House. They were the right conclusions then and they are the right conclusions now. The Committee made an error in forcing mandatory divestment into the Bill.

I have listened to a large number of views, and my experience is that a vast majority of Members of the Lloyd's community still believe that mandatory divestment is undesirable and unnecessary. There are some who think that it is positively damaging. However, that is a matter that will be dealt with by their Lordships.

Under the Insurance Companies Act 1974 there is no stipulation that insurance brokers should not own insurance companies. It was never in doubt at that time that it was proper and reasonable for brokers to own insurance companies and underwriting interests. Some explanation was given by my hon. Friend the Under-Secretary of State for Trade but there was no satisfactory explanation of how we could require the sale of underwriting interests while brokers could still properly under the law retain control of insurance companies. That is a contradiction that we have not yet resolved.

I emphasise again that I thought we were talking about self-regulation. That was the great theme running through the Bill—let Lloyd's regulate its own affairs. The original proposals allowed Lloyd's the powers of self-regulation on divestment. They said that Lloyd's could achieve the desired objectives by management separation and that it should be left to the committee to make decisions. That was right. That is self-regulation. We are saying that Lloyd's is not capable of making that judgment about mandatory separation and that the House must make it. If we believe in self-regulation, we have made a mistake in forcing the mandatory sale of underwriting or broking assets.

I emphasise that the growth of Lloyd's in recent years has been helped and encouraged by and been largely dependent on the strength of the large groups that have developed. They are sophisticated insurance conglomerates. They are called insurance brokers, but basically they are a sophisticated group of insurance interests that provide a world-wide service and have all the skills necessary to compete in a tough world. It is strange that we are forcing the break-up of the groups that have done so much to strengthen Lloyd's to attract new underwriting capacity to Lloyd's, to provide a service to the world and to keep the premiums flowing to London.

What we are doing is damaging. Those past relationships have been beneficial, not detrimental, to many interests. We are pandering to a naive and phoney consumerism, particularly that espoused by the hon. Member for Norwood, who has done so much damage in the legislation that he has introduced.

Mr. John Fraser

With no help from the hon. Gentleman.

Mr. Moate

I am glad to hear the hon. Gentleman say that, because I have done everything possible to stop some of the nonsensical and interfering legislation that he has introduced.

An important answer was given by Mr. Boydell, QC, on the first day of the Committee's proceedings. Speaking for Lloyd's, he said: I think all we would add to that is and indeed for the protection of policy holders who are in the end most important of all, and the Committee will, I know, attach importance to the historical fact that although inevitably things may have gone wrong occasionally in the past in the organisation, there has never been any single occasion where a policy holder has suffered and it must be in the end the interest of the policy holder which is paramount.

When we consider the problem that Lloyd's has had in recent years, we realise that the policy holder—the consumer—has not suffered. That is recorded clearly in Committee.

It is strange that, at a time when the United States is building up insurance exchanges in emulation of Lloyd's, it does not require separation of underwriting and broking interests and is encouraging brokers to come in as underwriters, we should say that that is wrong in Britain and that we will force the break-up of vital and valuable insurance conglomerates.

I repeat that we are pandering to a conflict of interests—a conflict of interests that does not exist, because it is more a community of interests. The extreme sanctions that we are talking about are unwarranted on the basis of the evidence that we have received so far. Parliament is inflicting an injustice on the Lloyd's community. Later we shall come to regret it. In the long term, we are severely damaging the commercial prospects of Lloyd's, the interests of the names and the insurance interests of the United Kingdom.

I sincerely hope that when the Bill goes to the other place, those in the other place will re-examine and put the Bill back into the original state in which it was approved by the House on Second Reading. I hope and believe that if that happens, the House will readily accept the logic of the position and ensure that the Bill is passed rapidly.

There is one more matter on which I wish to comment briefly. As so many eminent lawyers are present, it would be foolish to trespass too far on the question of legal immunities, but I wish to record my views and to refer to the significant speech of the hon. Member for Keighley. Before doing so, I point out that we do not use the word "immunity", which is what the hon. Gentleman talked about, in relation to trade unions. We have the splendid euphemism "restraint on suit". We do not use that euphemism when we talk about the trade unions. We talk about legal immunities. However, there is no distinction.

There is no doubt that clause 14 gives wide ranging immunity to the Committee of Lloyd's against any suit for damages brought by a member of Lloyd's community. That includes—and I hope it will change—libel and slander, negligence and other wrongful acts. I again emphasise that this immunity is not accepted by members of Lloyd's after consultation. What about the other members of staff—the senior management, for example—who are being deprived of their legal rights without being consulted? I should have thought that that, too, would be a matter of concern to the House and, I hope, to the other place.

There should be no dispute that we are giving a unique privilege to Lloyd's. No-one has yet quoted a comparable institution—apart from the trade unions, to which a different argument applies—that enjoys this legal immunity. The argument put forward by Sir Peter Vanneck, who has been a member of the Stock Exchange Council, was supposed to help the argument for immunities. He expressed the wish that on certain occasions the Stock Exchange Council had such powers. If that is the argument, there is no doubt that many other institutions will deploy that same argument.

I feel sure that, year after year, we shall have representations from other organisations, all of which will be different, which have to exercise disciplinary powers over their members—the Law Society, the Bar Council or the Pharmaceutical Society of Great Britain. Many organisations will ask for limited immunities. There is no doubt that we shall hear that cry, and they will refer back to this proposal.

I recognise that if one wants a council that will exercise powers quickly and effectively, it must feel that it has the strength that comes from legal immunity. There are ways of limiting it in the manner suggested by my hon. Friend the Member for Nantwich (Sir N. Bonsor). I feel that the promoter and sponsors ought to examine carefully proposals of that kind when the Bill goes to another place.

There is an element of inconsistency in what we are doing. If powers are undefined or ill-defined, one can well understand the need for a committee to have some sort of legal immunity. However, we are passing a Bill that carefully and clearly defines the powers of the new stronger committee. It will have byelaw-making powers. In other words, we can clearly lay down in statute the duties, tasks and purposes of that committee. In the circumstances, that committee ought to be able to exercise those disciplinary powers without any doubts about it; legal status. It ought to be able to take action fully confident in the knowledge that it is doing its job properly.

In the circumstances, it is even more unnecessary for the Lloyd's Committee to have legal immunity. If the committee does its job properly, why does it need immunity? If it does not do its job properly, I cannot see the argument for preventing those who would be harmed, perhaps by the negligence of that committee, from taking action and suing for damages.

I hope that their Lordships will look at this matter carefully. It will make life easier for all of us in future if the immunity provision is severely limited. We are doing something that is contrary to the true interests of Lloyd's By keeping the immunity clause, we are ensuring that Lloyd's is propelled—almost permanently—into the cockpit of political controversy. It will stay there. The hon. Member for Keighley will ensure that it does. We would be doing a favour to the Lloyd's community if we. took out this provision at some later stage. It is undesirable and possibly in the long run, damaging for this provision to remain. Conservative Members should regret—and will regret even more later—the existence of the immunity clause. That is why I hope that their Lordships will change it.

I hope that their Lordships will re-examine the proposition on divestment and will dispense with the amendment put forward by the Committee. I hope, too, that they will re-examine the electoral issue.

In the belief that the Bill will receive a thorough and rigorous examination in the other place and, I hope, substantial amendment, I agree that the Bill should have a Third Reading.

7.36 pm
Mr. Richard Needham (Chippenham)

I start by declaring an interest as a new underwriting member of Lloyd's. It is a negative interest as I have yet to receive any money and Lloyd's tells me that it is more likely that I shall be paying it rather than it paying me. It is because I am a member of Lloyd's that I became more interested in the Bill than I might otherwise have been.

It is clear to the House, and everyone involved in the market at Lloyd's, that the Committee and the Council could not continue to operate under the rules laid down in 1871. Something had to be done in a market that had grown from 500 to 20,000, to make the market operate in a more effective and up-to-date way than it had done in the past. No one could argue that a new Bill was not needed.

The question is what form the new Bill should take. For example, would it have been advisable to have had a statutory framework to the Bill rather than to reply on the concept of self-regulation? In a complex market such as Lloyds, which has enormous variety in it, it is much more sensible to ensure that the market controls itself rather than having a statutory blanket which might not always be applicable. It is usually better to have a gamekeeper to catch the poachers rather than to rely on the local council to do it for us. I accept that as originally presented to the House there were things excluded from the Bill that I wanted included. The Bill is now better than it was when it originally come before the House.

One of the fundamental principles of self-regulation is that one cannot have a conflict of interest. If there is conflict of interest within self-regulation, it will lead to quarrels, arguments and doubts, and in any council or committee where a conflict of interest is embedded people will feel that they have been unfairly treated. For this reason, it seems that the need for divestment, although it may be argued that there are other ways of doing it, is crucial to the concept of self-regulation.

Another point about self-regulation is that the elections must be fair and the various bodies in the market place must be properly represented. This is now the case. The increase from six to eight for the non-working members is right. That Lloyd's has now written into the schedule the method of election, and that people standing for election can put forward their election manifesto is also right. Therefore, I believe that the Committee will be much more representative of the community than it has been in the past. My hon. Friend the Member for Faversham (Mr. Moate) must accept that 11 of the 16 are currently controlled by brokers or broker associated organisations and that the whole basis, therefore, is to have a properly and fairly elected Council which does not have a conflict of interest.

The final area in which the Bill has been amended significantly and importantly is that of fraud.

The Bill is now better on all those key issues.

I come to the vexed question of immunity. Does the new Council of Lloyd's really require it? The opponents of the Bill, when speaking on Report, were examining the Council of Lloyd's not as it will become, but as it then was. They constantly referred to the fact that, in their view, because of the Sasse affair, Lloyd's could not be entrusted with the immunity that is proposed. If it cannot be entrusted with that immunity and trusted to get it right without being negligent, the whole argument for self-regulation disappears. If the Council of Lloyd's, even when elected on the new basis and even when divestment has been put into effect and fraud has been covered in the Bill, still cannot be trusted to discipline fairly and without the likelihood of negligence, the whole argument for self-regulation falls.

For that reason, the immunity that Lloyd's now seeks, at a time when it needs to strengthen the Council and to discipline the market fairly and when it wishes to introduce byelaws, is one with which it should, for the time being, be trusted.

I shall now deal with some of the points made by the hon. Member for Keighley (Mr. Cryer). This type of immunity is not the same as the immunity enjoyed by trade unions. That immunity does not affect just trade union members, or the society of Lloyd's as in this case, but a far broader cross-section of the public. In this case, the immunity has been granted by the members at Lloyd's on two, if not three, occasions. They have decided voluntarily to pursue self-regulation to ensure that their Council has powers to discipline and control the market fairly and honourably, but they have voted that immunity away. That does not affect anyone outside. To suggest that this is a great new right that will be demanded by others and that it is in line with the trade union immunity is a gross exaggeration. If the trade union immunity were replaced, it would be replaced by a positive right—a right to strike. That has nothing to do with this Bill.

The immunity is part of the Bill's package which includes the proper free elections of the Council as laid down in the statute. That cannot be argued in the case of the trade unions. Unfortunately, much of the argument about trade union immunities revolves around the fact that it affects the public at large through bodies which are not so democratic as, for example, the Council of Lloyd's in the way that it looks after its members.

Of course, self-regulation is not necessarily the ideal way of proceeding. Of course, the Bill can be criticised, but Sir Henry Fisher went through these matters in great detail and in all the hours of debate opponents of the Fisher working party have advanced nothing that vitiates the Bill as it is now amended and approved. Although I accept that there may be small cavils, I believe that the Bill is good for Lloyd's. It will stand the test of time, which is important for Lloyd's, and it will protect one of our great institutions. I hope that it will be passed with our blessing and support and that it will soon be on the statute book to the benefit of the economy.

Question put and agreed to.

Bill accordingly read the Third time and passed.