Mr Leon Brittan: I am sure that I or my hon. and learned Friend the Under-Secretary of State will wish to take the opportunity to put on the record the points that my hon. and learned Friend was unable to deal with yesterday. One is always suspicious of circumstances in which a Minister has answers to give but the Opposition seem reluctant to hear them.
Mr Leon Brittan: The CBI has made no representations to that effect.
Mr Leon Brittan: My hon. and learned Friend, the Parliamentary Under-Secretary of State with responsibility for corporate and consumer affairs, and I dealt with this matter yesterday during the debate on the Second Reading of the Financial Services Bill. I have nothing to add now.
Mr Leon Brittan: I cannot give that assurance. That is a matter for Sir Patrick Neill. He has suggested that he would hope to complete the inquiry in the summer. My hon. and learned Friend has said clearly that we do not think that it is at all likely that the Financial Services Bill would be a proper vehicle for statutory intervention, even if Sir Patrick came to the conclusion that further statutory...
Mr Leon Brittan: We have looked into this matter and explained it, and I am perfectly satisfied that my hon. arid learned Friend is well able to discharge his responsibilities with complete propriety.
Mr Leon Brittan: I am sorry to interrupt the right hon. and learned Gentleman so early in his speech but I wonder if he could identify which charges he is making in relation to the past two or three years, which is what he said.
Mr Leon Brittan: Will the right hon. and learned Gentleman tell me in what way the body which he has in mind will be more independent, more free-standing than the Securities and Investment Board, jointly appointed by the Governor of the Bank of England and the Secretary of State?
Mr Leon Brittan: I beg to move, that the Bill be now read a Second time. The City of London and the financial services sector as a whole comprise one of Britain's most successful industries. It provides jobs for a million people. In 1984, it generated overseas earnings of over £6 billion. It provides the finance for new investment and new ventures on which our prosperity depends. Last year, for example,...
Mr Leon Brittan: Of course, we shall look at that and any other points. Towards the end of my remarks I shall be saying a word about the Government's spirit and general approach towards the Bill in Committee.
Mr Leon Brittan: I shall be coming to the subject of Lloyd's later. It is the belief of the Government that the task of regulation of businesses of the kind I have been asking about can most effectively be conducted by those who have direct experience of the financial services industry and who are in close touch with developments in the market. The Bill therefore enables the Secretary of State to transfer...
Mr Leon Brittan: In view of the broader role of the Governor of the Bank of England in relation to the City, it is a reasonable requirement that he should be enabled to do that jointly with the Secretary of State for Trade and Industry. I was going to say that the transfer of functions will itself be subject to parliamentary approval. If the Secretary of State is not satisfied that the agency to which powers...
Mr Leon Brittan: In the context of that provision, it is a reasonable requirement because it relates to the relationship between the areas of policy covered by the Director General and the rest of the Bill's structure. I believe that the requirement is reasonable, but I have no doubt that it is a matter that will be considered in Committee. There will be two further measures to ensure public accountability....
Mr Leon Brittan: As my hon. Friend perhaps knows, a consultative document was recently issued, and it is designed to explore and consider the way in which the relationship between auditors and the regulators can develop to meet precisely the problem that he has rightly identified. To qualify for recognition, a self-regulating organisation will have to satisfy the agency that its rules and procedure for...
Mr Leon Brittan: The hon. Gentleman will be aware of the provisions relating to investment on behalf of the professions and the requirements for the regulation of that activity. Those represent an adequate and important new protection. The Building Societies Bill and the Financial Services Bill contain powers to enable information to be disclosed to other regulators. The Government intend to enlarge the...
Mr Leon Brittan: We are awaiting proposals on that very point from the MIBOC. No decision has been taken. Of course, the administrative considerations to which the hon. Member for Carrick, Cumnock and Doon Valley (Mr. Foulkes) has referred must be weighed against any advantage that may be seen from the extra protection from the registration or licensing system. I certainly have not reached a conclusion as to...
Mr Leon Brittan: I am happy to do so. The right hon. and learned Member for Monklands, East (Mr. Smith) is not entirely right. The agency will be able to apply to the court for a compliance order. By that mechanism the SIB can deal with a situation in which the rules are felt to be inadequate. As this is an important point, I should like to explain why we have reached that conclusion. The SROs will only...
Mr Leon Brittan: As the hon. Gentleman has fairly put it, it comes down not to a fundamental difference of principle—
Mr Leon Brittan: No, not of principle. It is a question of where the balance and onus shall be in terms of invoking the courts. It is right to say that if it were done the other way, it would be the SROs that would go to the courts. I think—and I believe that those who have heard my recital on the SIB's powers would agree—that the powers given to the SIB are so substantial that there is little risk that...
Mr Leon Brittan: I have seen the report to which my hon. Friend refers. It is not free from difficulty, but I am sure that we will want to look at it further. The Bill also provides a special regime for the application of competition policy to the financial services sector. It reforms the regulation of unit trusts and other kinds of collective investment schemes. It brings together under one statutory roof...
Mr Leon Brittan: I would certainly like to look into the point. I am grateful to my hon. Friend for raising it. I am only sorry that parliamentary convention prevented me from giving the legislation the title that it justly deserves. It would be absurd to put forward this Bill, which, as I have said, is a complex and highly technical but also important one, on a "take it or leave it" basis, and I shall not...