Public Limited Companies (Financial Regulation)

Part of the debate – in Westminster Hall at 4:04 pm on 13th March 2003.

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Photo of Norman Lamb Norman Lamb Shadow Spokesperson (Treasury), Liberal Democrat Spokesperson (Treasury) 4:04 pm, 13th March 2003

I congratulate Mr. McFall on securing the debate. Unlike other members of the Treasury Committee, I can be objective in saying how good the report is, because I was not on the Select Committee when it was produced. The report makes a valuable contribution to kick-starting the post-Enron debate. As Mr. Ruffley said, the fact that it is based on evidence heard by the Committee makes the report a particularly strong document.

Other hon. Members have spoken about the impact across the world of Enron's collapse and of the shock waves that it caused on global financial markets. It produced—not just in the United States, but throughout the world—a collapse of confidence in corporate governance and in the role of accountants and auditors, so we should devote our attention to rebuilding confidence in them.

As Mr. Beard explained, the implications of a collapse of a company such as Enron are widespread and affect, both directly and indirectly, the livelihoods of many people. It is an issue of supreme importance, but I noticed an element of complacency from Conservative Members, particularly in the speech of Mr. Djanogly. It reminded me of my views on nuclear power: everything is fine as long as power stations operate without difficulty, but as soon as something goes wrong, it is rather disastrous. We saw that with Enron, and it could happen again. The hon. Member for Bury St. Edmunds argued that it was probably less likely to happen in this country, but it could. Sir Howard Davies made that very point to the Select Committee, so we must approach the subject with urgency and accord it the priority that it deserves.

In shaping our response to the implications of Enron, key points must be recognised.