HC Deb 28 January 1987 vol 109 cc327-8
7. Mr. Cohen

asked the Secretary of State for Trade and Industry if he will make a statement on progress in current investigations into share dealing in the City.

The Parliamentary Under-Secretary of State for Trade and Industry (Mr. Michael Howard)

All the investigations are being pursued as rapidly as possible, but I cannot estimate how soon they will be completed. It would not be desirable to report on progress of investigations before they are completed.

The inspectors appointed to investigate certain dealings by Mr. Geoffrey Collier have submitted their report to my right hon. Friend, and a summons has been served on Mr. Collier. As announced on 7 January, Mr. Brooke and Mr. Kennedy have been asked, in the light of that report, to investigate other possible contraventions.

Mr. Cohen

Are all the big firms involved in the Guiness illegal dealings fully co-operating with the Department of Trade and Industry investigations? If not, why do the Government not use their muscle to compel them to co-operate? If they are co-operating, why, when the Minister says that he wants prompt action, is it going to take up to a year, perhaps more, to bring some of the culprits to justice? Is it not the case that the Government just want the scandal to die down and are lightweight in tackling big City fraud?

Mr. Howard

I reject utterly the hon. Gentleman's last suggestion. The inspectors appointed by my right hon. Friend the Secretary of State and myself are independent of the Department of Trade and Industry. They are distinguished professional people. They are making full use of the sweeping powers available to them under the Companies Acts and they will bring the complicated investigations to a conclusion as soon as they can in a manner consistent with full, thorough and effective inquiries.

Mr. Tim Smith

Does my hon. and learned Friend agree that if the serious frauds office proposed in the Criminal Justice Bill is to do its job effectively it must have substantial powers? Is it not extraordinary that at a time when it is protesting strongly about insider dealing and other fraud in the City, the Labour party is doing its best to undermine the serious frauds office by stripping it of its powers?

Mr. Howard

There is a good deal in what my hon. Friend says. There is a marked contrast between the attitude taken by Labour Members when it comes to asking for powers to deal with matters such as insider dealing and the attitude taken by their Front Bench spokesmen on the Criminal Justice Bill, where the Labour party seeks to whittle away the powers which the Government would like to give to the serious fraud office to investigate allegations of serious fraud.

Mr. Campbell-Savours

Will the Minister confirm that today I have given him privately the name of a licensed security dealer in the City who is trading fraudulently; who at this very moment is trading shares in the City? Does the Minister accept that, if he fails to take action today to close down the activity of that company and people lose money by buying in, he will have acted negligently and people can fairly look to the Government for compensation?

Mr. Howard

I can confirm that the hon. Gentleman was in touch with me earlier today, and I have made urgent inquiries as a result of that conversation. My Department is fully aware of the case to which he refers, and I can assure him that such steps as may be necessary will be taken.

Mr. Dorrell

Does my hon. and learned Friend agree that one of the principal lessons of the events in the City during the past 12 months is that there is a need for a substantial review of the rules governing disclosure of share bargains at the moment they are completed? Without such a review, is it not the case that the takeover panel is not only toothless but is in danger of being blindfolded? Will my hon. and learned Friend take steps to initiate such a review?

Mr. Howard

There are powers now available to deal with such matters. Of course, we shall be ready to learn the lessons, which no doubt will have to be learnt, as a result of recent events.

Mr. Robin Cook

As the Minister resisted Labour amendments to put the takeover panel on a statutory basis, is he satisfied with its performance during the Guinness bid last spring? If so, can he explain how it was that the takeover panel found nothing suspicious about £500 million chasing about one third of the Guinness stock? After that fiasco, how can he leave the supervision of takeovers to a voluntary self-regulating body with no serious powers of investigation and no statutory powers of discipline? Why does he not now accept that the public interest must be protected by an independent public watchdog?

Mr. Howard

The takeover panel has hitherto performed effectively. We shall seek, as I said a moment ago, to draw any lessons that are to be learnt from recent events at the appropriate time. My right hon. Friend the Secretary of State will have something to say about the takeover panel during the debate later this afternoon.