Financial Services and Markets Bill

Part of the debate – in the House of Lords at 4:45 pm on 16 March 2000.

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Photo of Lord Peston Lord Peston Labour 4:45, 16 March 2000

I did not speak at Second Reading on this matter, not for my usual reason--namely, that there was an important football match to be watched--but simply because I felt that this was a Bill that was substantially correct in all its forms and I did not see the point of wasting 15 minutes of your Lordships' time in saying that. However, I intervene now because we are getting down to the detail.

I too admonish my noble friend Lord Eatwell for suggesting that these amendments are mischief-making. He dealt with the matter admirably by pointing out that the immense benefit of the amendments is to demonstrate without any doubt how right the Bill is as drafted and how wrong the amendments are. It is not mischief-making; it is immensely helpful for these amendments to be tabled so that they can be demolished in the excellent way that they have been so far.

My noble friend Lord Borrie called into question certain issues--it sounded more like a demolition of the amendments--but said that the Bill is very clear. A majority of non-executives will meet as a committee. Unless they meet as your Lordships' House meets, they will have a chairman. I should have thought my noble friend would pursue the role that several Members of the Committee said they would like to see.

I am not as enamoured with modern theories of corporate governance as are many other Members of the Committee. Having been the kind of chairman whose main role was to act as psychiatric adviser to the chief executive or to organise dinner parties, I am not persuaded that chairmen have such a marvellous role. I am also a good deal less enamoured, having been one on more than one occasion, of the merits of the non-executives. That thinking is out of fashion these days and people emphasise that what we need in running firms is someone to actually run them.

But as this will be an enormously powerful body--it is right, as my noble friend said, that it should be powerful--we need at the top a powerful executive figure with full responsibility; one who shows leadership and does exactly the job set out in the Bill. The benefit of the amendments is that we are able to elucidate that. The noble Baroness, Lady O'Cathain, raised the matter and for once I am puzzled by what she said. Normally in these areas she says things with which I totally agree. However, she said, "Suppose we appoint the wrong person". That is always a problem. The answer is, first, do not appoint the wrong person; secondly, have a mechanism for getting rid of the wrong person, but do not have two posts solely because one of them might be filled by the wrong person.