§ 11. Mr. Dubsasked the Secretary of State for Trade and Industry if he has any plans to seek further powers to investigate insider dealing.
§ Mr. HowardMy right hon. Friend the Secretary of State will in due course be bringing into effect those parts of section 178 of the Financial Services Act which could not be commenced on 15 November, because they depend upon other provisions of the Act, such as those relating to the authorisation of investment businesses, being in force.
§ Mr. DubsIs the hon. and learned Gentleman aware that studies of takeover bids in the first half of this year often reveal dramatic increases in share prices ahead of the bid dates? Does he agree that the only conclusion that can 336 be drawn from that and other evidence is that insider dealing is widespread and that a very nasty smell is coming from the City? Is there not, therefore, a need for rather more purposeful action to bring these people, who are often criminals, to book, or there will be a very bad reputation internationally for the City of London?
§ Mr. HowardWhenever there are indications giving rise to suspicion, they are examined by the stock exchange, which reports appropriate cases to the Department. Any evidence of criminal activity will be investigated by the Department.
§ Mr. GryllsDoes my hon. and learned Friend agree that anyone in the City who indulges in insider trading now, particularly after recent events, will know that, thanks to action by the Government, there is every probability that he will be promptly prosecuted?
§ Mr. HowardYes, Sir.
§ Mr. Robin CookDoes the Minister recall that in January the House was assured that extra fraud lawyers would be recruited by the Director of Public Prosecutions, with additional support staff? Did the hon. and learned Gentleman notice last week's press release which said that, instead of that assurance being fulfilled, a moratorium was imposed on the DPP? There are no extra fraud lawyers and the additional support staff has been cut. Was the Department of Trade and Industry consulted about that moratorium? Did the hon. and learned Gentleman express a view? Given that lack of commitment, is it any wonder that, although the stock exchange investigates a suspected case of insider dealing every working day, his Government have managed to secure a conviction once a year?
§ Mr. HowardResponsibility for prosecution of offences of insider dealing, which is what the question is about, rests with the Department. The hon. Gentleman knows full well that the record of prosecutions between 1980 and 1986 bears no relation to the situation which now pertains following the new powers which are available to us and which we put into effect on 15 November.
§ Mr. HanleyDoes my hon. and learned Friend recall that when insider dealing was introduced as an offence in the Companies Bill 1978 by the then Labour Government the Government proposed that it should be a civil charge? It was the Conservative Government in 1979 who introduced insider dealing as a criminal charge. Does that not show the Government's determination to stop this pernicious crime?
§ Mr. HowardMy hon. Friend is entirely right. It is important to recall that, during the passage of the Financial Services Bill, the Labour party did not suggest a single additional power related to insider dealing over and above the powers that are now contained in the Financial Services Act.