HC Deb 05 December 1990 vol 182 cc301-2
11. Mr. Cran

To ask the Secretary of State for Trade and Industry what steps he proposes to take in the light of the reaction to his consultation document "The Law on Insider Dealing".

Mr. Redwood

The Government are currently considering the responses to the consultative document, and we will bring forward legislation when parliamentary time permits.

Mr. Cran

Does my hon. Friend agree that although insider trading is difficult to prove—as evidenced by just nine successful prosecutions in the past 10 years, not one of which attracted a prison sentence—we ought to strengthen the armaments against insider dealing by, for instance, introducing civil law penalties on the lines suggested by the Select Committee on Trade and Industry as well as by the chairman of the Securities and Investments Board, a remedy which is widely used in the United States?

Mr. Redwood

I cannot agree that we have been unsuccessful in pursuing insider dealing in recent years. Out of 21 cases taken to court, convictions were secured in 12 of them, involving 14 defendants. The Government intend to prosecute any case in which good evidence exists. In sifting through the consultation replies, we shall take on board all sensible advice from whatever source. There may need to be a strengthening of our law in some respects, to bring it into line with the directive—which, for example, seeks to create an offence for insider dealing in Government and local authority securities, which is not covered by existing British law.

Mr. Butterfill

Does my hon. Friend agree that the panoply of legislation that the Government have brought to bear on the whole question of insider dealing and regulation of the City shows that the Government care about that area of activity and about regulating it properly, in contrast with the Opposition's lamentable failure to do any such thing when in office? Does he agree that the financial practices of the National Union of Mineworkers, Liverpool city council and other Labour authorities give one no confidence that the Opposition would tackle the subject in the future?

Mr. Redwood

My hon. Friend makes his point extremely well. There are worries about financial probity in a number of organisations. The Government intend to use the full force of the law wherever they can do so to root out those malpractices. It is a sad testimony to the Opposition, who are always on about insider dealing, that when they had the power to bring proposals before the House, they did not do so. In contrast, the European directive was in large measure influenced by the legislation that the Government put through the House earlier in their period in office.