Stock Exchange

– in the House of Commons at 3:33 pm on 27 July 1983.

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Photo of Mr Cecil Parkinson Mr Cecil Parkinson , Hertsmere

With permission, Mr. Speaker, I wish to make a statement about the case brought by the Director General of Fair Trading against the Stock Exchange in the Restrictive Practices Court.

Ministers have for some time been concerned that the court proceedings under the Restrictive Trade Practices Act 1976 may not be the best way to pursue the matters raised by the director general. While these proceedings are pending, it is difficult for the Stock Exchange to make changes to enable its members to compete for business worldwide. There is also a danger that the legal proceedings within the framework of the Act may damage the effective operation of the Stock Exchange, which remains essential to the working of our economy. Accordingly, the Government would wish to see the matter settled out of the court, if the Stock Exchange is able to make acceptable changes.

I decided to discuss the matter with the director general and thereafter with the chairman of the Stock Exchange. I explained that the Government had concluded that in order to safeguard the position of investors the separation of the functions of brokers and jobbers should be preserved at least for the time being in its present form. The House will recall that, in analogous circumstances, it insisted on separating brokers and underwriters at Lloyd's. The Stock Exchange's rules, which prescribe the separation of capacity, may have to be included in statutory provisions under European Community directives. In that case I intend to make regulations under the European Communities Act, 1972.

I said that I should also expect the Stock Exchange to make changes on points of concern to the director general. Following discussions with his council, the chairman of the Stock Exchange has made the following proposals to me.

The council will take action to dismantle by stages and with no unreasonable delay all the rules which prescribe minimum scales of commission, completing this by 31 December 1986. The Stock Exchange will continue the rules prescribing separation of capacity of brokers and jobbers. The council will introduce rules to permit nonmembers to serve as non-executive directors of limited corporate members of the Stock Exchange, provided that there is always a majority of directors who are members of the Stock Exchange.

The council will recommend to the members of the Stock Exchange changes which would, first, introduce lay members to the council of the Stock Exchange, their number and the method of their selection to be agreed with the Bank of England. Secondly, the changes would establish a new appeal body, independent of Stock Exchange members of the council. If the council were to reject an applicant for membership who fulfilled the requirements of the rules, the appeal body could review the decision and over-rule it. This body would include lay members of the council, but Stock Exchange members of the council would not be eligible. Thirdly, the changes would introduce people who are not Stock Exchange members of the council to the Stock Exchange's existing appeals committee on disciplinary matters so that they will constitute at least a majority on the committee. Lay members of the council would be eligible to serve on this committee.

I believe that these changes are to be welcomed, and will enable the Stock Exchange to continue to adapt in an evolutionary manner to changing circumstances while maintaining proper regard for the needs and protection of investors. The next step will be for the membership to approve the necessary changes to the Stock Exchange deed of settlement.

I shall also make arrangements for the Department of Trade and Industry and the Bank of Eng and to monitor the implementation of these measures, and the evolution and development of the Stock Exchange as an efficient, competitive and suitably regulated central market which affords proper protection to investors.

Subject to those two points the Government will seek the approval of Parliament for measures to exclude the Stock Exchange from the operation of the Restrictive Trade Practices Act.

Photo of Mr Peter Archer Mr Peter Archer , Warley West

Is the Secretary of State asking the House to accept that a deal between cronies in a smoke-filled room is a substitute for a full public inquiry into how public interest is affected by a major institution such as the Stock Exchange? Do not these minuscule concessions confirm what we had already suspected, that it was never possible, after years of shutting the door on every suggestion for reform, after setting its face against every proposal of the Office of Fair Trading, after resisting court proceedings at every step, that the Stock Exchange had undergone a change of heart and was embracing some significant reforms? Is not the truth that the Secretary of State has allowed the Stock Exchange to offer a minimum cosmetic deal that will enable him to protect it from a real inquiry?

In addition to the major matter of retaining the distinction between brokers and jobbers, are there to he no changes in the rules restricting the rights of non-members to acquire an interest in brokerage firms or in the rules inhibiting jobbers from entering into international arrangements to increase efficiency?

Who will pay the costs of proceedings up to date? May we debate these matters before any irrevocable steps are taken? If the Restrictive Practices Court is not to be permitted to inquire into the matters, does the right hon. Gentleman have any alternative proposals for a proper public inquiry into the most effective ways of protecting non-professional investors and retaining Britain's share of the benefits from the international trade in securities, or does he consider that that is not the proper business of the British public?

Does not the Government's obsession with open democracy and freedom of choice in trade unions apply in the secret recesses of the City? Is he aware that in the absence of any inquiry the public will understandably conclude that the Government have sold out to their City friends, who are helping them to sell off public assets at knock down prices?

Is this not a calculated slap in the face for the Director General of Fair Trading and his Office? If those marginal concessions were to be offered and accepted, could that not have been done before all the years of dedicated work, before four years of court hearings and before incurring £3 million worth of expenditure?

Why is the Bank of England to monitor the implementation of the new measures and not the Office of Fair Trading? Are the Government hoping to reduce morale in that office to the point where it does not seem to be worth trying? Are we to conclude that the Government no longer wish to conceal the fact that they do not believe in fair trading?

Photo of Mr Cecil Parkinson Mr Cecil Parkinson , Hertsmere

I congratulate the right hon. and learned Gentleman on his outburst of completely spurious indignation. I must point out to him that the trade unions were registered under the Act by his Government as an exempt body and that they are substantial donors to the Labour party. I should no more suggest that that was why they were given an exemption than I hope that he would imply that we were looking after our friends. The case for exempting the Stock Exchange is a strong one.

The concessions that the Stock Exchange is making are substantial. The abolition of minimum commissions will produce fundamental changes in the make-up of the Stock Exchange. If the right hon. and learned Gentleman had been to the New York Stock Exchange and seen the impact of the abolition of minimum commissions, as I have, he would not say that it was a small step. It is a major step.

The right hon. and learned Gentleman talked about the interests of non-members. That is precisely why we are bringing lay members on to the council and why the appeals committee will be composed of lay members—non-members of the Stock Exchange and people who are in a position to look after the interests of Stock Exchange users.

The right hon. and learned Gentleman asked who would pay the costs. The people who would have had to pay the costs of what we believe would have been a completely unnecessary and expensive action, from which only the lawyers would in the end have benefited, are the taxpayers. They are the persons who would have footed the bill in the first place.

The right hon. and learned Gentleman asked for a debate. As I have already said, I am reporting to the House on where we have now arrived. The Stock Exchange must implement the changes and put them in its rule book. Then, and only then, will the Government come to the House and propose the necessary measures. At that point the House will have every opportuniy to debate both the changes in the rules and the measures.

The Director General of Fair Trading can justifiably claim some credit for some major concessions that have been made by the Stock Exchange. The right hon. and learned Gentleman, as a lawyer, must know that there are many instances where costly litigation is avoided because at the last minute common sense prevails, and that is precisely what has happened in this case.

Photo of Mr Edward Du Cann Mr Edward Du Cann , Taunton

What form will the legislation take, and when will we have the opportunity to see it and debate it? Does not my right hon. Friend's constructive and necessary action show that there is a need for a complete restatement of competition policy, with particular reference to the public interest? Is there not something enormously synthetic about the great fuss about commissions, when the real deterrent to stock ownership and wider share ownership is the very high rate of stamp duty?

Photo of Mr Cecil Parkinson Mr Cecil Parkinson , Hertsmere

I am discussing legislation with the Attorney-General. We could go in two directions. First, we could lay an order before the House and follow the affirmative procedure. Secondly, we could introduce a simple, short Bill — primary legislation. Whichever course is the most appropriate will be followed. I agree with my right hon. Friend that competition policy needs detailed examination. It may interest him to know that I have commissioned some urgent work on that subject. I shall report my right hon. Friend's views on stamp duty to my right hon. and learned Friend the Chancellor of the Exchequer, who is responsible for that matter.

Photo of Mr Enoch Powell Mr Enoch Powell , South Down

What are the precedents for seeking to amend the statute under which proceedings can be brought while proceedings are pending under that statute and because proceedings are pending under that statute?

Photo of Mr Cecil Parkinson Mr Cecil Parkinson , Hertsmere

The Act envisages other bodies being added to the list of bodies already exempt from its provisions. There is a substantial list of exempt bodies, including the trade union movement, the legal profession and my profession. The Act envisages that other bodies can be added to that list—[HON. MEMBERS: "Answer the question".] I am answering the question. Opposition Members do not want to listen. The Government are satisfied that the changes proposed by the Stock Exchange to its rules would qualify it for exemption. We shall use the powers envisaged by the Act to add to the list of bodies excluded from its provisions.

Photo of Peter Tapsell Peter Tapsell , Linsey East

Is it not rather strange that almost exactly the same Opposition Members who, a few months ago, were expressing anxiety about the possibility of the Royal Bank of Scotland passing into overseas ownership, are now apparently in favour of the leading stockbroking firms of the Stock Exchange—of which I am a member — being bought by foreign institutions? That is exactly what will happen if the policies being used by the Opposition are pursued.

Photo of Mr Cecil Parkinson Mr Cecil Parkinson , Hertsmere

There are a number of inconsistencies in the Opposition's attitude, such as their attitude to single capacity. It was the hon. Member for Oldham, West (Mr. Meacher) who, in the case of Lloyds, insisted that there should be an underwriter, a broker and a customer. We are following that precedent now. They are comparable markets, yet we are already hearing a wholly different story from the Opposition.

Photo of Mr Robert Sheldon Mr Robert Sheldon Chair, Public Accounts Committee, Chair, Public Accounts Committee

Have not the Office of Fair Trading and the Stock Exchange spent upwards of £1 million in preparing their cases? Do not they have rather more information than is available to the right hon. Gentleman in his Department? Would not that information be very valuable during the ordinary hearings? Is it not strange that a Government who are dedicated to the freeing of market operations should find themselves involved in limiting those operations in the Stock Exchange?

Photo of Mr Cecil Parkinson Mr Cecil Parkinson , Hertsmere

The right hon. Gentleman mentioned the cost to date. The legal expenses that would be incurred between now and the end of the case would run into several millions of pounds. At the end of that time we would have no more satisfactory a solution than we have now. The right hon. Gentleman argued that the proposals do not represent a change. They represent a major step forward in liberalising the stock market. Dispensing with minimum commissions will sponsor a whole range of other changes. They are not simple steps. The Stock Exchange has dealt with two of the central arguments put forward by the Director General of Fair Trading. The Government disagree with him about single capacity. However, the two points raised by the director general are dealt with in the Stock Exchange proposals.

Photo of Mr William Clark Mr William Clark , Croydon South

Does my right hon. Friend agree that those who understand the workings of the City will welcome his statement because for hundreds of years the City of London has acted in a self-regulatory capacity? It produces about £3,500 million of invisibles per year.

If we were to put upon the Stock Exchange or any other part of the City's activity the inflexibility of court rule and regulation, would not that inhibit the City, which is the world's leading financial market? Has not the Stock Exchange protected its investments over the years? I have no vested interest in the Stock Exchange, but its record shows that no investor has lost money because of the Stock Exchange or any broker going bust. The investor has always been protected. Do the Government intend to implement the proposals by regulation or by an Act of Parliament? If my right hon. Friend cannot say which of those courses will be followed, when will he be able to tell us?

Photo of Mr Cecil Parkinson Mr Cecil Parkinson , Hertsmere

I told my right hon. Friend the Member for Taunton (Mr. du Cann) that the Government have not yet decided whether to follow the affirmative order route or the primary legislation route. We shall follow whichever is the most effective.

In 1978 I spent a month in the United States studying the work of the Securities and Exchange Commission. I saw nothing to make me believe that we had anything to gain by copying its example. There is no evidence that its existence has prevented any increase in fraud—indeed, quite the contrary. I agree with my hon. Friend that an efficient central securities market is a vital component in our economy. I hope that the House recognises that.

Photo of Mr Ian Wrigglesworth Mr Ian Wrigglesworth , Stockton South

Is the right hon. Gentleman aware that his statement makes a mockery of the Government's advocacy of greater competition? Do not many people in the City and in industry take the view that greater competition in the Stock Exchange would make it a more effective force and a more effective international financial centre? In addition to the right hon. Gentleman's consultations with the chairman of the Stock Exchange, what consultations has he had with the Director General of Fair Trading? Is there anything to stop the director general from continuing his present action?

Photo of Mr Cecil Parkinson Mr Cecil Parkinson , Hertsmere

I saw the director general before I spoke to any other person about this matter, other than colleagues in the Government. He was the first person to hear that I planned to have discussions to determine whether we could find an answer outside the court action. I saw him again yesterday. He would prefer to continue with the court action. However, we believe that it is the Government's duty to make a decision and bring it to Parliament. We must explain that decision and legislation must be laid before Parliament. It will be not the Government but Parliament that decides on a different view from that of the director general.

On the subject of greater competition, the hon. Gentleman underestimates the impact that the proposals —certainly the abolition of the minimum commission—will have in promoting very much greater competition.

Photo of Mr John Stokes Mr John Stokes , Halesowen and Stourbridge

Is my right hon. Friend aware that in the past the Tory party has always preferred the landed interest to the moneyed interest of the Whigs? In any dealings with the Stock Exchange, will he remember the party's historical stance?

Photo of Mr Cecil Parkinson Mr Cecil Parkinson , Hertsmere

I expected all sons of things this afternoon, but not a history lesson. I than my hon. Friend for it, and I shall bear his remarks in mind.

Photo of Jack Straw Jack Straw Shadow Spokesperson (Environment, Food and Rural Affairs)

Is the right hon. Gentleman aware that, by engaging in this unseemly and undignified charade, he has damaged his reputation and the reputation of the high office he holds, and has given the appearance of being more concerned to act in his capacity as chairman of the Conservative party than as Secretary of State for Trade and Industry? Is the reason why he has refused to allow the OFT to police the Stock Exchange, and instead has passed the job over to Mr. Leigh-Pemberton at the Bank of England, that Sir Gordon Borne actually opposed this decision? Will he explain what he means by a prompt and effective time scale when these changes will take up to 1986?

Photo of Mr Cecil Parkinson Mr Cecil Parkinson , Hertsmere

My answer to the hon. Gentleman's totally unworthy allegation about the Conservative party is that, just as I would no more suggest that his right hon. and learned Friend the Member for Warley, West (Mr. Archer), who spoke from the Opposition Front Bench and who is a lawyer, was motivated by the fact that huge fees would come from litigation—that would be a totally unworthy thought which I would not entertain—so he should not allege that I would be motivated in the way that he suggested.

The rest of his supplementary is not worthy of an answer, though I would point out to him that while it took the Securities and Exchange Commission nearly 40 years to break minimum commissions, we are suggesting the phasing out of them in three and a half years. The phasing out of minimum commissions will cause problems for many of the smaller firms and therefore they need to be phased out gradually.

Several Hon. Members:

rose

Photo of Mr Bernard Weatherill Mr Bernard Weatherill , Croydon North East

Order. I propose to allow questions on the statement to continue for another 15 minutes, until 4.35. There is another important statement to follow on public expenditure.

Photo of Mr Fergus Montgomery Mr Fergus Montgomery , Altrincham and Sale

Will my right hon. Friend explain why the Stock Exchange has been treated in this exceptional way? Is he aware that the Society of West End Theatre, in which I declare an interest, is in exactly the same position as the Stock Exchange and that, when that society went to see the two previous consumer affairs Ministers, it was told that the Government could not intervene and that once a complaint had been made by the Office of Fair Trading, the law must take its course? May I have an assurance that this sympathetic treatment of the Stock Exchange will be extended to other organisations?

Photo of Mr Cecil Parkinson Mr Cecil Parkinson , Hertsmere

The short answer is no, Sir. The Stock Exchange, the central securities market, is an absolutely vital part of London's leading role as a world financial centre. It is unique; that is why the Government are taking this very special action.

Photo of Mr Greville Janner Mr Greville Janner , Leicester West

What costs were incurred before the Government's decision so unceremoniously to override and humiliate the Director General of Fair Trading by this extraordinary form of plea-bargaining with the Stock Exchange?

Photo of Mr Cecil Parkinson Mr Cecil Parkinson , Hertsmere

A great deal less than they would have been if the action had carried on. [HON. MEMBERS: "Answer."]

Photo of Mr Ivor Stanbrook Mr Ivor Stanbrook , Orpington

Are not the Government themselves at least partly to blame for the misleading impression that has been given of a comparatively simple matter? Does my right hon. Friend agree that, in all civil cases, the object is not so much to bring a matter to trial as to secure satisfaction of one's claim? As the Stock Exchange is prepared to mend its ways, is it not obviously preferable that no more time and expense should be wasted but that the matter should be brought to a head as soon as possible?

Photo of Mr Cecil Parkinson Mr Cecil Parkinson , Hertsmere

I entirely agree with my hon. Friend.

Photo of Mr Paddy Ashdown Mr Paddy Ashdown , Yeovil

Does the right hon. Gentleman agree that this points to the need for the long-term reform of the securities market? Will he now give a commitment to give serious consideration to any proposals along those lines that may be put forward by Professor Gower in his second report, to be published this autumn?

Photo of Mr Cecil Parkinson Mr Cecil Parkinson , Hertsmere

I have not yet received the Gower report, so it would be unwise of me to commit my self to accepting its contents. The Stock Exchange has been evolving even under the threat of legislation; the unlisted securities market was created by the Stock Exchange to meet a particular need, and the need to allow people to have 30 per cent. of the shares in a limited company which trades on the Stock Exchange has been accepted. The Stock Exchange has been moving forward and we believe that the changes that I have outlined and which have been agreed by the Stock Exchange—which its council has passed a resolution supporting—represent a major step in the right direction.

Photo of Mr Neil Hamilton Mr Neil Hamilton , Tatton

Professor Gower has been prayed in aid from the Opposition Benches. Is my right hon. Friend aware that last week the professor said: A court case is a dotty way of going about trying to change a rule book which is far too complex to be dealt with in this way? Does he agree that the conclusion that this complicated matter should be dealt with out of, rather than in, court will receive widespread support from many interested observers?

Photo of Mr Cecil Parkinson Mr Cecil Parkinson , Hertsmere

I thank my hon. Friend for that remark. I was pleased to have Professor Gower's support in the matter. I hope that he and I will be able to agree in the future about everything.

Photo of Mr Tam Dalyell Mr Tam Dalyell , Linlithgow

Does the Secretary of State recollect that it was one of the conclusions of Sir Harold Wilson's committee of inquiry into the City, after considerable and detailed agrument — I refer to paragraph 1411 — that there should be more explicit control by the Council for the Securities Industry and that its staff should be strengthened? Is he aware that, after a great deal of detailed and serious thought, the case was put forward that it should have more control over the Stock Exchange? What role do the Government see for that council?

Photo of Mr Cecil Parkinson Mr Cecil Parkinson , Hertsmere

The Council for the Securities Industry, as the hon. Gentleman is aware, is playing an active role in the City and I do not believe that anything in the proposals that I have laid before the House today—the proposals of the Stock Exchange council—do anything either to undermine its authority or to prevent it from getting on with its work. These changes will create a more open and more liberal Stock Exchange, and I am sure that the CSI will be pleased about that.

Photo of John Maples John Maples , Lewisham West

I congratulate my right hon. Friend on securing the abolition of minimum commissions. Does he agree that that was only one of the three major problems of the Stock Exchange that were making it uncompetitive in many international markets, the other two being the outside ownership of member firms and the broker-jobber relationship? Very often, the broker's costs were far in excess of the commissions. Will it be possible for my right hon. Friend to look again at those two elements in the settlement? Did I understand him to say that there would be a debate on the matter before the settlement was completed?

Photo of Mr Cecil Parkinson Mr Cecil Parkinson , Hertsmere

The way in which the matter will be concluded is by legislation, and therefore, to answer the last part of my hon. Friend's supplementary question, that legislation will be debated. To answer his point about outside ownership, I remind him that the Stock Exchange has been adapting its rules and that it is now possible for outside owners to own up to 30 per cent. — 29·9 per cent.; not more than 30 per cent. —of the shares in a limited company which trades on the Stock Exchange. Thus, part of that case has been conceded.

With regard to single capacity — the broker-jobber relationship—we believe that there is a strong case, in the interest of the investor protection, for maintaining single capacity. That is the view that the Government have taken, a different view from that held by Sir Gordon, but the Government have told the Stock Exchange that, in their view, the broker-jobber relationship should be continued. In doing so, as I say, we are following the example that the House urged on the Government in the case of the Lloyd's market.

Photo of Mr Laurie Pavitt Mr Laurie Pavitt , Brent South

I confess to the Secretary of State—no doubt to the surprise of many of my hon. Friends—that at one period I was a dealer on the floor of the London Stock Exchange. [HON. MEMBERS: "Hear, hear."] I soon had better sense, although I have not earned a decent salary since. During my period there, my experience showed that from time to time the interests of Government and of certain sections of the stock market had to be aligned. In those days it always happened — I could quote at least a dozen experiences to the Secretary of State —that when the Stock Exchange wanted something it always succeeded in imposing its will on the Government of the day, although that was a long time ago. Is the right hon. Gentleman aware that his statement today shows precisely that plus ca change, plus c'est la même chose?

Photo of Mr Cecil Parkinson Mr Cecil Parkinson , Hertsmere

The hon. Gentleman is revealing all sorts of unsuspected facets of his already admirable character. The Stock Exchange is making some fundamental changes in the resolutions, which the council has accepted and passed. Indeed, I stress that the Stock Exchange has accepted a substantial part of the case that has been advanced by the Director General of Fair Trading. We disagree with him about single capacity and we are prepared to put our view to the House and seek its approval. It is wrong for the hon. Gentleman to claim that the Stock Exchange has got its way because it has agreed to make fundamental changes. As a result, we believe that the action has become entirely pointless.

Photo of Mr Timothy Eggar Mr Timothy Eggar , Enfield North

Surely a decision of this sort, which will affect the future livelihoods of many hundreds of thousands working in London and outside, should be taken in the House and not in a court. Will my right hon. Friend state categorically that a debate will first take place in the House and that the court case will not be withdrawn until the debate has been concluded?

Photo of Mr Cecil Parkinson Mr Cecil Parkinson , Hertsmere

I am not sure whether that which my hon. Friend asked me to confirm at the end of his question is what he really wants. I can confirm that we shall take such legislative action as will make the case before the court unnecessary, but that will have to be agreed by the court. In that event, the case can be adjourned, we hope, indefinitely.

Photo of Mr Nicholas Baker Mr Nicholas Baker , North Dorset

Does my right hon. Friend accept that what he has announced will be judged on the protection and encouragement that is given to small investors? Will he continue to resist all calls for increasing the control over the City by means of organisations such as the Securities and Exchange Commission?

Photo of Mr Cecil Parkinson Mr Cecil Parkinson , Hertsmere

I am happy to agree with my hon. Friend that the SEC road is one down which we should not travel. I agree that the protection of the small investor is an important part of the working of the Stock Exchange and that there is a need to protect him. I believe that our proposals will lead to more competition, which will be for the good of the small investor.

Photo of Mr Colin Moynihan Mr Colin Moynihan , Lewisham East

Does my right hon. Friend agree that the Stock Exchange should be encouraged to change its rules so as to allow companies such as banks and North American security firms to have full membership?

Photo of Mr Cecil Parkinson Mr Cecil Parkinson , Hertsmere

I do not agree with that view. I believe that the Stock Exchange should gradually evolve. The abolition of minimum commissions will produce some substantial changes. The Stock Exchange has shown in a variety of ways that it is not resistant to changes. I consider that we should retain single capacity. The Stock Exchange has recognised part of the case put forward by my hon. Friend in allowing outside investors to hold 30 per cent. of shares in limited companies which can trade on the Stock Exchange.

Photo of Mr Kenneth Carlisle Mr Kenneth Carlisle , Lincoln

What is the significance of permitting non-members of the Stock Exchange to serve as non-executive directors of limited corporate members of the Stock Exchange?

Photo of Mr Cecil Parkinson Mr Cecil Parkinson , Hertsmere

At present directors of limited companies which trade on the Stock Exchange have to be members of the Stock Exchange. Therefore, an outside investor, who could hold up to 30 per cent. of the shares, could not have a director on the board of the company unless he was himself a member of the Stock Exchange. This will enable non-executive directors who represent those who hold a chunk of the equity to have a seat on the board.

Photo of Mr Nicholas Budgen Mr Nicholas Budgen , Wolverhampton South West

Why do the Government believe in self-regulation of the City when they deny self-regulation to the trade unions by refusing to make the closed shop enforceable?

Photo of Mr Cecil Parkinson Mr Cecil Parkinson , Hertsmere

That is an interesting question, which I will discuss with my right hon. Friend the Secretary of State for Employment when I next meet him.

Photo of Mr Peter Archer Mr Peter Archer , Warley West

I asked the right hon. Gentleman to answer two questions which have been asked and not yet answered. First, has the CSI been asked to express a view? If so, what view has it expressed? Secondly, why is there to be monitoring by the Bank of England and not by the Office of Fair Trading?

Photo of Mr Cecil Parkinson Mr Cecil Parkinson , Hertsmere

I have not discussed this matter with the CSI

Photo of Mr Cecil Parkinson Mr Cecil Parkinson , Hertsmere

Because at this stage we are talking only about a proposal from the council of the Stock Exchange which has been made to me. I shall discuss the matter with the CSI, but the CSI does not have the right to overrule the Government and the House of Commons. I should have thought that the hon. Gentleman who, thank goodness, seems to have got rid of his Argentine fixation, would have recognised that.

Photo of Mr Peter Archer Mr Peter Archer , Warley West

The second part of my question was directed to monitoring.

Photo of Mr Cecil Parkinson Mr Cecil Parkinson , Hertsmere

The Director General of Fair Trading has no monitoring role in this instance. We are taking the matter away from him because we are saying that the Stock Exchange should be excluded from the orbit of the Restrictive Practices Court. We believe that the Government, the DTI and the Bank of England are in a better position to do the monitoring.

Photo of Mr Ian Wrigglesworth Mr Ian Wrigglesworth , Stockton South

On a point of order, Mr. Speaker. As you know only too well, relations between the House and the courts are always delicate and sensitive when proceedings are under way. I seek your guidance, Mr. Speaker, on the exact position in relation to the action that was being discussed in the course of the questioning of the Secretary of State on his statement. Is it proper for the Government to intervene, which it appears they will do, in a court action that is proceeding in the manner in which the Secretary of State described this afternoon?

Photo of Mr Bernard Weatherill Mr Bernard Weatherill , Croydon North East

The hon. Gentleman will not be surprised to know that when I knew there was to be a statement on this issue I considered the matter carefully. I am satisfied that it was proper and in order for the Government to make the statement.

Photo of Mr Tam Dalyell Mr Tam Dalyell , Linlithgow

On a point of order, Mr. Speaker. Is it proper for senior members of the Cabinet to suggest, after having made a statement, that someone who asks a perfectly civil and agreeable question about the CSI is insulting the House of Commons by suggesting in his question that the CSI takes precedence over the House of Commons? That was not the question that was asked and the Secretary of State knows that. He should not get away with not answering a question by saying that the hon. Member who asked it is insulting the House.

Photo of Mr Bernard Weatherill Mr Bernard Weatherill , Croydon North East

I think that the hon. Gentleman knows that as we near the summer recess there are many things said in this place that at other times we might phrase rather differently.