MOTION MOVED ON CONSIDERATION OF COMMONS AMENDMENT (Hansard, 7 November 1989)

§ Lord Peston
My Lords, on behalf of my noble friend Lord Williams, I beg to move Amendment No. 121A, and I draw your Lordships' attention to the fact that it involves leaving out subsection (6) of Clause 80, which the Government's Amendment No. 121 does as well; so there is nothing between us on that matter. The content of Amendment No. 121A, which stands in the name of my noble friend Lord Williams of Elvel, is a subject that we have raised on more than one occasion earlier in discussing this Bill. But we do not apologise for coming back to it. It is our last chance to make the point and to plead with the Government to take seriously the problem here.
Our concern is that although, of course, where the need arises, various bodies will have to investigate companies in one form or another, it appears that in doing that certain individuals are not merely named—I shall not on this occasion mention cases, but we have all read about them in the financial press —but have their careers ruined, even though, so far as one can see, they are entirely innocent.
650 Our concern is not of course in any way to protect the guilty, but we do not believe that the Government have addressed themselves sufficiently to what we refer to here, which is the disclosure of information which might unfairly damage certain reputations.
We know that we live in an imperfect world, and that in the pursuit of certain offences it may well be that people who involve themselves with companies of one sort or another have to take the rough with the smooth. Nonetheless, we are not convinced that the balance here is right. We are not convinced that there is sufficient concern with the smooth, and we are not convinced that there is sufficient antipathy to the rough.
Several noble Lords have pushed this matter for some months now and have not got anywhere. It was our hope that the Government would have found a way. We appreciate that it is technically rather difficult, because we do not want investigations per se to be held back. But we are not happy with the current state of affairs or with the fact that this Bill does not seem to do anything about improving matters.
We have pressed the point several times. All the amendment says, quite specifically, is that it gives the Secretary of State power to intervene here. I shall not press this amendment, because my noble friend Lord Williams of Elvel has made the point about regulations on more than one occasion today. We do not back down from the fact that we think our view of this matter is entirely correct. But I, at least, have never believed in banging my head against a brick wall for more than a couple of hours, and we are past that couple of hours.
That is the reason why the second part is in the amendment. We want the Secretary of State to have the possibility of intervening, but of course we would still like to have what we regard as proper parliamentary control. That is what lies behind this amendment. I fully accept that we have been over the ground before and that this is our last chance. We think that it is an important matter, and that is why we commend the amendment to your Lordships.

§ Lord Williams of Elvel
My Lords, if I may just reinforce what my noble friend Lord Peston said, the problem since our discussion in Committee has arisen on County NatWest and there have been serious criticisms of what the inspectors have revealed and of how careers have been affected in that case. I believe that the Secretary of State, whoever he may be at any particular time, has to take very seriously the problem of people's reputations. There are public figures in industry and in banking whose careers could be affected by reports which are issued by people who may not be qualified to issue those reports. I also happen to believe, as an addendum, that the 1948 system of DTI investigations of one QC and one accountant is now largely out of date. If there was one change that I should like to have seen in the Bill, it would have been a change in how the DTI conducts its investigations, which, I recognise, it must do.
651 However, failing that —that reform should have been contained in the Bill—reputations have been and will be affected. I hope that natural justice will prevail in the Government and that the amendment will be accepted in the spirit in which it is offered. The reputation of people in high places in banking, commerce and industry should not be affected—if I may again have the noble Lord's attention —by extraneous comments from inspectors who are not necessarily qualified and do not necessarily know what they are talking about.

§ Lord Lloyd of Kilgerran
My Lords, we strongly support the amendment. I spoke at considerable length in the earlier stages of the Bill pointing out that natural justice demands that there should be a safeguard for individuals against extraneous statements made in good faith. This is a proper safeguard in those circumstances.

§ Lord Trefgarne
My Lords, I assure the noble Lord, Lord Williams of Elvel, that even if I do not look at him I still listen to him most carefully. My ears are tuned in his direction and I can hear him in whatever direction I happen to be looking.
I wish to say at the outset that the amendment applies only to information from or to a foreign regulator and, therefore, the example that the noble Lord gave was not a particularly appropriate one. The Government have already made clear their firm commitment to dealing fairly with those whose activities are scrutinised in any of the investigations and inspections dealt with in the Bill and elsewhere.
Clause 80 deals specifically with information obtained from, or on behalf of, other countries' regulatory authorities. Together with Clause 81, it already controls tightly the disclosure of such information without the consent of the person to whom it relates. Those to whom information is disclosed are themselves also subject to exactly the same constraints on any further disclosure. The disciplinary and other non-judicial proceedings for which information may be disclosed are not public, and information disclosed for such purposes will therefore continue to be protected by Clause 80. So, in practice, it will be impossible for such information to become public except when it is used publicly in court or tribunal proceedings. I am sure that it is not the noble Lord's intention to restrict the use of information in court, in accordance with all the relevant rules of evidence.
The amendment therefore does not add anything to the strong protection already provided in Clauses 80 and 81. I hope that the noble Lord will see fit not to press it.

§ Lord Peston
My Lords, on the technical point that the noble Lord made about the precise nature of the amendment relative to the clause or, rather, the other amendment to which it is attached, he is right to say that the reason for that is a procedural reason; namely, that we can amend only what comes back to us from the other place. One has used that point to establish the general principle. We are in no doubt 652 that the amendment is somewhat artificial in the way it is tabled, but it is the general principle that concerns us.
As such, I am not reassured by the noble Lord's answer. It does not seem to me that when the Bill becomes an Act it will protect the innocent in the sense in which we want it to do. It seems to me that the Government are essentially not willing to move on this matter, or have not been willing, for reasons which somewhat escape me. The noble Lord has not even argued in the way that I thought he would—to the effect that, if we gave the innocent too much protection, we would also protect the guilty. That was at least a possible argument, although it is not an argument that one would necessarily accept.
Having said that, I do not think that it would be appropriate to divide the House, much as I disagree with the Government on the matter. I hope that we can rely on the point made by my noble friend Lord Williams of Elvel; namely, that as we seem to have a Companies Bill every year, I assume that one will appear in the coming year, one way or another. I can only say that we shall come back to this theme again. Having expressed my disappointment, we shall leave the matter at that. I beg leave to withdraw the amendment.