§ 2.51 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 whether they will state their attitude towards the recent disclaimer by Lloyd's of any responsibility for the fraudulent trading practices already reported to the Director of Public Prosecutions and whether they will publish a detailed report on the effectiveness of Sections 83 to 86 of the Insurance Companies Act of 1982 in the years following its introduction.
§ The Parliamentary Under-Secretary of State, Department of Trade and Industry (Lord Lucas of Chilworth)My Lords, responsibility for the regulation of the Lloyd's market is primarily for the Council of Lloyd's by virtue of the Lloyd's Acts 1871–1982. It is thus not for the Government to comment on matters between Lloyd's members and their agents or the Council. The Government have, however, appointed inspectors under Section 165 of the Companies Act 1948 into activities of two groups. My department has also been in touch with the Director of Public Prosecutions in respect of the inspections, and police investigations are in progress. I do not consider that there is any need for a report on Sections 83 to 86 of the Insurance Companies Act.
Lord Bruce of DoningtonMy Lords, I thank the noble Lord for his most informative reply. Is he not aware that the unresolved scandals of 1932 have still to be attended to? Is it not also clear that the provisions of Sections 83 to 85, the breach of which occasions no offence which enables the noble Lord's department to proceed, are now due for very considerable revision? Also, in order to satisfy very wide sections of members of Lloyd's in London, will the noble Lord please see to it that the relevant documents, and in particular the Price Waterhouse report and the report by Sir Peter Green, are made public? Therefore, instead of being able to judge matters on leaked reports, people will know exactly what is happening in what appears to be a highly privileged institution.
§ Lord Lucas of ChilworthMy Lords, in response to the noble Lord's first supplementary question, I am afraid that I do not recall, nor do I have a note of, what the noble Lord described as a 1932 scandal.
§ Lord Lucas of ChilworthMy Lords, the noble Lord said 1932; but if it is a 1982 scandal then events which are now under investigation will prove whether or not that is in fact a scandal. To turn to the review of Sections 83 to 86, again, until the investigations by my department's inspectors and investigations by the police are completed and have been reviewed, it would be premature for me to suggest or even agree that those sections should be reviewed. In regard to the Price Waterhouse report, it is not yet available although I confirm that my department are in touch with Price Waterhouse and have knowledge of what they have been investigating. However, until all those investigations have been completed by the various agencies, I feel it would be premature of me to give any further judgment.
Lord Bruce of DoningtonMy Lords, is not the noble Lord aware that the underwriting syndicates concerned for a number of years have been in breach of Section 83 of the 1982 Act? Is he also aware that the auditors of the syndicate were drawn from a list specifically approved by Lloyd's as a precondition for their appointment? Will the noble Lord at least consider the appointment of auditors who are subject not to the authority of Lloyd's but to the authority of his own department?
§ Lord Lucas of ChilworthMy Lords, no, I could not agree with the latter suggestion of the noble Lord. These matters are for Lloyd's and Lloyd's members and their agents to resolve. It was for exactly that reason that Lloyd's came to Parliament in 1981, asking for additional powers. Parliament gave those powers to them and they became effective at the beginning of 1983. That of course is the consequence of self-regulation. It is for Lloyd's, and I know that Lloyd's are seized of both their responsibilities and their obligations under the powers which were given to them by Parliament in the 1982 Act.
§ Lord Mowbray and StourtonMy Lords, may I ask my noble friend—and I declare an interest here, as a name at Lloyd's—whether he is fully aware that the chairman, the chief executive and the committee of Lloyd's are going through the most agonising time at this particular juncture? Is he aware that they are doing absolutely everything possible to clear their names and Lloyd's name, because it is the most important underwriting position in this Kingdom? Can the noble Lord confirm that the Government agree that Lloyd's are doing absolutely everything they can, even if they have not gone so far as the noble Lord, Lord Bruce of Donington, would wish?
§ Lord Lucas of ChilworthMy Lords, I gladly confirm what my noble friend Lord Mowbray and Stourton has said. Lloyd's have implemented a great number of the powers for which they asked in a Private Member's Bill in 1983. They are pursuing even further those remaining powers. It is in the interests of Lloyd's, of the members and of others connected with them to ensure that the conduct of the market is satisfactory in all respects.