Clause 4

Financial Services Bill – in a Public Bill Committee at 6:30 pm on 5th January 2010.

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Definitions

Question proposed: That the clause stand part of the Bill.

Photo of Rob Marris Rob Marris Labour, Wolverhampton South West 6:45 pm, 5th January 2010

This is the definitions clause. I refer to clauses 2(5)(a) and 3(3)(a), both of which use the weasel words “commercially confidential”, which does not appear as a defined term in clause 4. I am disappointed by that but it is not unexpected because, as I say, they are weasel words used by Governments of all political parties to sweep things under the carpet, often unnecessarily. When we were discussing clause 2 and amendments 24 to 26, the Minister said that the Bill significantly improved transparency. Later in that debate he said that he would not speculate on the scenario outlined by the hon. Member for Fareham. That is the sort of difficulty that one has in trying to get information, which should be in the public domain.

I appreciate that, particularly when we are dealing with big finance, there will be commercially confidential matters that could affect shareholders or the stability of the economy, which the Bill is all about. However, to have no definition of what is meant by “commercially confidential” is to drive a coach and horses though the publication of anything worth while. I say again: they are weasel words, often used by Governments unnecessarily.

When I was on the Work and Pensions Committee in the previous Parliament, we had a sub-committee on the computerisation programmes that the Department for Work and Pensions was running. We got in several big suppliers, and the tenor of what several of them said was that there were matters that they as commercial entities—profit-making companies—would have been happy to have in the public domain but of which the  Government blocked publication claiming commercial confidentiality. That is the kind of nonsense, Alice in Wonderland affair that we have when “commercially confidential” appears twice in the Bill—in important pieces of the Bill—and becomes what the Government say it means, because there is no definition in clause 4.

I am not going to vote in favour of clause 4 standing part of the Bill; I am going to abstain. The other definitions are fine but that lacuna is bitterly disappointing. It should be defined in the Bill and just because it is difficult to define does not mean that we should not do so. I urge the Minister to come back on Report with an amendment to clause 4 and a definition of commercially confidential.

Photo of Ian Pearson Ian Pearson Economic Secretary, HM Treasury

For Labour Members, it is always worth discussing clause 4; we have done so on many occasions over the past 100 or so years of our party’s history, so I am delighted to do it. It is particularly appropriate that clause 4 is about definitions. It might not be the means of production, distribution and exchange in this case but it is right that my hon. Friend refers to issues that concern him.

I do not see “commercial confidentiality” as being weasel words. If he is suggesting that on occasion Governments might have used commercial confidentiality as a defence for not putting things in the public domain that they perhaps ought to have done, I might have some sympathy with the view. However, I strenuously say to the Committee that there is a purpose and point to commercial confidentiality. It is extremely important that commercial confidentiality should be maintained, if used in the right way. Without commercial confidentiality, it would be impossible for the Government to do business with many businesses. I am happy to reflect on whether we should define that in the terms of reference. At this point in time, I am not particularly sited on whether the term is so sufficiently defined and used elsewhere that it is not required in clause 4, or whether it might be appropriate to be included in clause 4, but I will take advice from officials and reflect on that.

Photo of Rob Marris Rob Marris Labour, Wolverhampton South West

I am grateful that the Minister will reflect on that. I appreciate the importance of commercial confidentiality, but he just said that that was when it was used in the right way. The problem is that there is no definition of what the Government think is the right way.

Photo of Ian Pearson Ian Pearson Economic Secretary, HM Treasury

As I have said, I am happy to take away my hon. Friend’s point on whether we should define that in the terms of reference, but I want to make the point strongly that commercial confidentiality is important for how the Government deal with business. The Council for Financial Stability could not operate in the way we would want it to if it did not respect commercial confidentiality.

I would also like to clarify for the record the definition of international financial regulation and supervision, which is intended to include two related but distinct concepts. First, the definition includes regulation or supervision by an international body of the financial systems operating in a number of different countries or territories. An example of such a body would be one operating within the European Union. Secondly, the  definition includes the regulation of the financial system of a particular country or territory outside the UK by the relevant authority or authorities in that country.

Question put and agreed to.

Clause 4 accordingly ordered to stand part of the Bill.