§ 2.48 p.m.
Lord Bruce of DoningtonMy Lords, I beg leave to ask the Question standing in my name on the Order Paper.
§ The Question was as follows:
§ To ask Her Majesty's Government what action has been taken in regard to cases of alleged infringement of Section 72 of the Companies Act 1980 passed by the Stock Exchange to the Department of Trade and Industry, stating, in particular, the number of prosecutions initiated by the department directly, the number of prosecutions brought by the Director of Public Prosecutions, and the number of cases still under investigation.
§ The Parliamentary Under-Secretary of State, Department of Trade and Industry (Lord Lucas of Chilworth)My Lords, cases of suspected insider dealing referred to the department are considered with a view to investigation and prosecution if there is sufficient evidence. In five cases, six prosecutions have 209 so far been brought by the department under the legislation on insider dealing, and two by the Director of Public Prosecutions. Six cases are under investigation.
Lord Bruce of DoningtonMy Lords, is the noble Lord aware that his Answer in this connection is thoroughly unsatisfactory? Is he aware that the Stock Exchange itself, over the past few years, has investigated some 25,000 prima facie cases of suspicious share movements? It has provided details of 80 cases to the DTI and very little action appears to have been taken. Is the Minister not aware that there is a general impression that when it comes to breaches, shall we say, of Section 2 of the Official Secrets Act, the DPP appears to be able to act as a matter of alacrity, but when it comes to matters of this kind it appears that somebody somewhere is dragging his feet?
§ Lord Lucas of ChilworthMy Lords, I would not dispute the first two figures the noble Lord has given; but he, above many other people, will realise the great difficulty there is in bringing to court a prosecution that succeeds. There is no lack of effort put into the investigations, which take on average over a year to come to any conclusion as to whether there is a prospect of a prosecution.
Lord Bruce of DoningtonMy Lords, in view of the time the noble Lord has given for a case to be investigated (which I regard as excessive in the average case) is he satisfied that the DPP has adequate staff to deal with these matters? There have been reports that the department is grossly understaffed, and the figures he has given this afternoon seem to underline that.
§ Lord Lucas of ChilworthMy Lords, of course it is not only the DPP who brings prosecutions. They are also brought by my department. However, as my right honourable friend the Prime Minister stated in response to the chairman of the Stock Exchange, the Government are committed to pursuing financial fraud vigorously and effectively. We have already taken steps to make prosecutions more effective. In that response, my right honourable friend the Prime Minister said that the Government accepted the importance of ensuring that resources for investigating fraud were adequate. Those resources are now under review.
§ Lord KinnairdMy Lords, would the Minister not agree that if the department is very understaffed, perhaps they could bring fewer prosecutions?
§ Lord Lucas of ChilworthMy Lords, prosecutions are brought where there is a probability of securing a conviction. That does not depend upon the number of staff.
§ Lord Harris of GreenwichMy Lords, is the noble Lord aware that a senior official of the office of the Director of Public Prosecutions has referred to the quite monstrous workload facing officials in that department? What are the Government doing to rectify that situation?
§ Lord Lucas of ChilworthMy Lords, as I understand that reference, it had to do with matters concerning Lloyd's, whereas the Question on the Order Paper this afternoon really deals with insider dealings. I think the noble Lord's question is a little wide of the original one.
§ Lord DiamondMy Lords, perhaps I may pursue that matter. Do I understand correctly from the noble Lord the Minister that the same staff at his department would be concerned with fraud, be it allegations of fraud on the Stock Exchange or allegations of fraud in connection with Lloyd's? Therefore, if one section of the department is understaffed, can the noble Lord tell us whether that has any effect on the speed with which other prosecutions and investigations can take place? Does the noble Lord share my view that it is vital to this country's interests that the good names of Lloyd's and the Stock Exchange should be maintained and that they are likely to be maintained by investigations of this kind being taken up as quickly as possible?
§ Lord Lucas of ChilworthMy Lords, the fraud investigation group, which was set up in January of this year, was in part set up to deal with this growing problem. It is staffed by about 50 people. Altogether, there are about 100 people involved in investigation of fraud in various and different areas. It would not be possible for me to itemise exactly how many personnel are engaged at any one time on one specific aspect. However, I repeat that we are undertaking a review of the resources available in this area. Those resources will be made adequate to attend to this growing problem highlighted by noble Lords this afternoon.
Lord Bruce of DoningtonMy Lords, is the noble Lord aware that the figures he has just given completely reinforce my original complaint? Is he aware that, in view of the existing work load, the numbers he has quoted need to be multiplied by at least three in order that there can be an effective organisation to deal with these matters?
§ Lord Lucas of ChilworthMy Lords, I do not know whether it is by three. I said that the resources available were being reviewed. I am afraid I cannot guess at the outcome of that review.
§ Lord Elwyn-JonesMy Lords, in view of the anxieties that have been expressed in the House, can the noble Lord make a Statement at an early date about the result of the review of staffing, not only in his own department but, in view of the question asked by the noble Lord, Lord Harris of Greenwich, possibly also about the situation in the office of the Director of Public Prosecutions?
§ Lord Lucas of ChilworthMy Lords, I do not think it is for me to determine whether a Statement should be made. However, I feel quite confident that if the noble and learned Lord, any of his colleagues or any other noble Lord, were, in perhaps some weeks' time, to put down a Question inquiring of the progress of this survey, I may be able to give him further information and would be delighted so to do.