HC Deb 12 June 1986 vol 99 cc612-4
Mr. Ashdown

I beg to move amendment No. 184, in page 74, line 32, at end insert '; and every delegation order in respect of a designated agency shall cease to have effect at the end of the period of 28 days beginning with the day on which a report relating to the discharge of the functions trasferred to that designated agency is laid before Parliament under this section, unless before the end of that period that report is approved by a resolution of each House of Parliament.'. The purpose of the amendment can be stated quite briefly. It is to enshrine within the legislation the right of Parliament to debate a report — for which there is provision elsewhere in the legislation—that will be laid before the House on an annual basis. This is a matter of some importance, but it is one that can be dealth with briefly. I am seeking to probe and if the Minister will provide some useful words on the matter, I shall be satisfied.

We are dealing with a framework which has been changed substantially. It has already been said that there are no fewer than 278 amendments, of which 249 are in in the name of the Government. We all know that there are more amendments to come in another place.

The real effectiveness of the general and overall structure which conducts the important function of regulating the financial services industry will not be known from the Bill and cannot be known from that source. That is because much of the framework needs to be filled in by the rules. Until the rules are drawn and properly enacted, we shall not be able to judge what the effect of the legislation will be.

It is clear that we are moving into uncharted waters. As the hon. Member for Dagenham (Mr. Gould) said, nowhere else in the world have we set up a self-regulating body to regulate capital markets. I believe that it is the right solution in this instance, but I would rather see a stronger body than that which is proposed. It must he said that previous self-regulating bodies that have operated in the City, such as Lloyd's, have been manifestly unsucessful in regulating matters properly and effectively, and some would say that the same can be said of the stock exchange. Massive immunities are to be granted, and the stock exchange will now join the committee of Lloyd's, the Post Office, and the armed forces when fighting an enemy as the only bodies in Britain which have complete immunity from claims from ordinary members of the public for damages. That is an extremely significant immunity. My colleagues and I would say that it is too great an immunity, but that argument has been advanced already.

We are entering uncharted waters in another sense, because we know that ahead of us is the big bang. Indeterminate factors will come into play and no one can predict exactly what will happen after the big bang takes place. It will be important to create a structure which is flexible and capable of being able to respond to and meet the needs that may be created. There are many who believe—I am one of them and I suspect that there are others on the Opposition Benches, and even some on the Government Benches — that the balance that the Minister has sought to draw is to fight the last war, not the next one, against City corruption.

We must be flexible. The House has a right to comment yearly on what has taken place to ensure that the important institutions of our financial services industry, which have served Britain so magnificently in the past and are such an essential part of our economy, are regulated in a proper and appropriate fashion. I hope that the Minister recognises that we are moving into a difficult area and that it will be important to debate the issues that arise. He has gone a great deal towards allowing that to happen. In Committee, he said: The agency is required to submit an annual report which must be laid before Parliament, and which Parliament will no doubt wish to debate." — [Official Report, Standing Committee E, 6 March 1986; c. 534.] I hope that the Minister will make a statement of equal clarity this evening. I hope also that he will say that he believes that it will be important, certainly in the early years, for Parliament to have the opportunity to debate the reports. If he says that it is important for the House to have that opportunity, I shall be satisfied. It is important that that should be so, especially in the early years of the development of such an important institution.

Mr. Howard

Many bodies are required to produce annual reports which have to be laid before Parliament. It would be extraordinary for legislation to require that all such reports be debated and approved if dire consequences were to be avoided. If we followed such an approach generally, there would be little time left for debates on other matters. It would be open to Parliament to debate a particular report of the agency if that were desired, and I am sure that it would often want to do so. It would not be sensible to provide that every report must be debated, regardless of whether such use of parliamentary time is justified. I invite the House to reject the amendment.

Mr. Ashdown

I do not wish to prolong the debate, but the Minister has dismissed the amendment with rather less care and consideration than we expect of him. He was more forthcoming in Committee. I hope that he will recognise that it is important that the House should have an opportunity to debate the annual reports, especially in the early years. The financial services structure which he is putting into place will be extremely important. In the light of his comments in Committee, rather than those which he has just made, and in the interests of getting on to Third Reading as soon as possible, I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

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