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Mr. Peter Viggers (Gosport) : Financial services represent one of the great successes of the United Kingdom economy. The London stock exchange is pre-eminent in Europe, with a market capitalisation of $500 billion compared with $160 billion in Germany and $100 billion in France and Italy. London's pre-eminence is even more noted regarding foreign exchange. The daily
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turnover of foreign exchange in London is $90 billion, compared with $50 billion in Tokyo and New York. Our financial services are a great success and, in terms of banking, we are part of a truly international market in which we are predominant.The circumstances surrounding insurance are somewhat different. The OECD countries hold some 94 per cent. of the $500 billion a year premiums in the world ; the United States has some 45 per cent. of that market, Japan 14 per cent. and the European Community countries 30 per cent. The 30 per cent. held by EC countries is fragmented. The largest market is in Germany, where there is close protectionism, the third largest is that of France where there is a great deal of state ownership, but the second largest market is that of the United Kingdom, the most open. It is therefore important to approach banking and insurance in different ways.
In banking there is a lot to play for. The Cecchini report suggested that there are £15 billion of benefits to be gained on a one-off basis from joining together the European financial markets. That is equivalent to about 22 billion ecu as we must learn, I suppose, to say.
On a personal level, it is important to realise how much there is to gain from harmonising the European markets. If someone undertook a round trip of the European capitals and changed his spending money in each of those capitals he would return having lost more than half of his spending money as a result of dealing charges and losses on the official exchange rate. There is a great deal to play for, but we must remember that there are some risks and losses.
Reference has been made to the Financial Services Act 1986, which is not only a tight regulation of the financial institutions of the United Kingdom, but an expensive one. There is a risk that less well-regulated banks operating here might be able to operate with less expense and therefore be more competitive than our own institutions. It is important that we agree host nation monitoring--essential minimum harmonisation. Should it be necessary for the United Kingdom to change its regulations to ensure that our financial institutions are not at a disadvantage compared with other European countries, I hope that the Minister will bear in mind the risks and take steps to make the necessary modifications.
Mr. Maxwell-Hyslop : What about the consumer? As it is now, years have gone by without any increase in the compensation limits despite nearly 30 per cent. inflation. Is my hon. Friend suggesting that, with that miserable record of compensation we should lower our level still further if continental countries do so?
Mr. Viggers : My hon Friend is referring to insurance rather than banking and I shall refer to that shortly.
I hope that my hon. Friend the Minister will also bear it in mind that it is important that EC developments are consistent with operations in non-EC countries. That is particularly important for the United Kingdom, which has much insurance business outside the EC. Perhaps I should declare an interest as a member of Lloyd's although I cannot see that it is relevant, but that might save some Opposition Member from asking whether I have declared that interest.
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Mr. Viggers : I beg the House's pardon, but I am gabbling to save time.
We are concerned that the changes in the EC should not be to the detriment of United Kingdom institutions operating outside the Community. An undercapitalised Portuguese bank that sought to open in the United States might find that it was unable to do so because of United States regulations. If there was full, obligatory reciprocity of recognition within the EC, it might follow that a United States bank seeking to open in the United Kingdom could be barred from doing so because of those reciprocity rules. I am sure that my hon. Friend the Minister will bear that important point in mind, as it is of concern to the financial institutions.
There is also concern as a result of the investment services directive. Banks operating in the EC should not only be able to join EC stock exchanges and operate as investment advisers and operators within those exchanges, but they should not be barred from operating as investment advisers and from the execution of investment matters on behalf of clients outside those stock exchanges. In some parts of the EC, it is felt that banks should not be able to join stock exchanges, but in other parts of the Community it is felt that they should operate only within those stock exchanges.
So far we have heard little about shareholders. I am proud to say that the Government have doubled and redoubled the number of individual shareholders in the United Kingdom. The fact remains that the percentage of shares held in the stock exchange by private shareholders has fallen from 60 per cent. in 1960 to only 20 per cent. now.
I for one feel a great sense of disappointment that the number of individual shareholders continues to fall. There are several reasons for that--one is the cost of dealing for individual shareholders. I am concerned about what individual shareholders who have been encouraged by the Government to become shareholders for the first time will do when they try to calculate how much it will cost them to sell their shares and what the implications might be in terms of dealing cost and the inconvenience of having to declare for tax purposes any profit that they make.
I am also concerned that some companies have felt it necessary to set up their own systems to enable their shareholders to sell and buy shares. I believe that Cable and Wireless, British Gas and Reed have done that. That is not a helpful way ahead.
The insurance industry is riddled with complexity and vested interest. There are various standards in different European countries, including in the preparation of accounts and reserves, the handling of claims and legal procedures. There are many vested interests, in some cases assisted by Government. The French Government have a vested interest in the state insurance company's operations in France. The Italian Government require 30 per cent. of insurance premiums to be ceded to the state company, INA. Switzerland, although not in the European Community, provides a monopoly for fire insurance in each canton.
I welcomed Sir Leon Brittan's suggestion in November 1989 that there should be a single passport or licence--home country authorisation. Ideally, we should have harmonisation, but that would be exceptionally difficult. Therefore, the best route seems to be the creation of minimum standards throughout the European Community. Meanwhile, some companies are taking the
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second best route of cross-border purchases, mergers and acquisitions. That is the second best route because it requires the companies to operate in accordance with the laws of the country in which they made their acquisition. However, it is only the second best route and I urge my hon. Friend the Minister to press ahead as fast as he can with an effective single market as the long-term objective.6.33 pm
Mr. Doug Hoyle (Warrington, North) : I am pleased to join in this debate, not only as a member of the Select Committee but as president of the Manufacturing, Science and Finance union, a large number of whose members work in financial services. I have been interested in the debate and one point that struck me is that, despite the reassurances given to the Secretary of State--I am sorry that he is not here--by the hon. Member for Hastings and Rye (Mr. Warren) that the Secretary of State's future was secure, I thought his was a pedestrian and lacklustre speech. When the Secretary of State goes to bed at night and has nightmares about all his predecessors, he may also find himself the victim of short-termism, as the Government call it.
The hon. Member for Gosport (Mr. Viggers) was right to emphasise the importance of the industry of which we are talking and which makes up 10 per cent. of the gross national product. In 1987, the industry gave a surplus on invisibles of £7.658 billion, which is considerable. I stress that we must not be complacent, because all the signs, including our earlier debate on ERM, point to the fact that Germany--the Bundesbank--is dominating the financial position in the European Community. That is why we must not be complacent or think that what is happening in the City of London, Edinburgh and the regions will be with us for ever. We must wake up to the fact that there will be increased competition and that Germany is growing in importance. If we do not, one day, probably not in the immediate future but certainly early in the next century, we shall wake up to find that, far from the City of London being in the premier exchange position, it will be Frankfurt.
As president of Manufacturing, Science and Finance, I am concerned about what will happen, particularly in the insurance industry. There is no doubt that we can provide life insurance at a third of the price of our European competitors. As has been repeatedly said today, the problem is that we are subject to takeovers in this country in a way that the Germans, French and Italians are not. It is easier to take over the Vatican than an Italian insurance company, which is almost impossible to do.
Takeovers occur all the time in this country because our companies are far more vulnerable than those in other countries. The German Allianz has taken over Cornhill, Signa (American) has taken over Crusader, and the French Axi -Midi has taken over Equity and Law. Another interesting example is that the French state-owned insurance company, UAP, owns 18 per cent. of Sun Life, which has an arrangement with Liberty Life by which they can bid for each other's shares. It will not be too long before Sun Life is taken over by a French state-owned company. I do not know how the Government will react to that.
We must ensure that the financial industry, which matters to us, has a prosperous future. I do not speak from the point of view of the investors in the industry or those
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who deal in shares in the City of London, but from that of the employees in the industry. We must ensure--because they built up the companies--that those employees have a future. In any of our dealings, we must ensure that we protect their interests.The Minister was cavalier in jumping up and asking our Front-Bench spokesperson, my hon. Friend the Member for Redcar (Ms. Mowlam) what she would do about the self-regulating bodies. The answer has come from Conservative Members. I do not think that one Conservative Member has stood up to defend such organisations, which are far too bureaucratic and costly, and of which there are too many. There should be rationalisation. I do not think I am alone in the House in believing that the era of self-regulation must come to an end. There must be statutory regulation, with far fewer organisations that are more efficient and less costly.
I hope that the Minister will bear in mind the fact that we should not bear an unnecessary burden when competing against other countries in the European market. I hope that he will also agree that, with our great insurance base, we in this country cannot allow other companies to operate from behind the barriers, which must come down. I hope that he will be fighting our corner to ensure that we maintain not only a great industry, but London as the financial centre. I warn the Minister that time is short.
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Sir Anthony Grant (Cambridgeshire, South-West) : Yes, time is short- -we have three minutes, to be precise--so I shall immediately declare an interest in Bowring (UK) Ltd and Barclays bank, both of which are affected by financial services legislation.
I agree with the hon. Member for Warrington, North (Mr. Hoyle) that there is a need for change in the regulatory system. I favour abolishing the two- tier system, but I cannot develop that argument, because I want to talk about insurance, a matter that has dominated the debate.
Our insurance is the best ; it is the most skilled and best regulated in the world. When I was at the Department of Trade and Industry, I believe in the same position as my hon. Friend the Under-Secretary of State for Corporate Affairs, there was the Vehicle and General insurance scandal, when everyone woke up and decided that it was important to regulate insurance. Now, we probably have one of the best regulated industries there is, particularly after the Lloyd's Act 1982, which I took through the House. That made our industry well respected, but also the subject of considerable envy. It creates £3 billion net earnings and provides 340,000 jobs. The restrictions in the EC have inhibited development and deprived the consumer of a better service.
If we are looking to the single market for the opportunity to break down barriers, we must accept that progress has been slow. On a visit to Brussels, the hon. Member for Rotherham (Mr. Crowther) tackled the issues vigorously, but I felt that--apart from Sir Leon
Brittan--officials did not have the required sense of urgency. The latest proposals published for non-life insurance are designed to widen consumer choice and cut premiums ; however, it seems likely that there will be all sorts of objections from Germany and Belgium. I hope that the Minister will carefully study the suggestion that the Germans--because they do not understand anything
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about broking--must pass a great deal of legislation and will use it as a spurious reason for delaying what is a most important reform. Competition is the name of the game : it is immensely important, and is the main thrust of our policy. However, open competition must be accompanied by good conduct. Here, to some extent, I agree with the hon. Member for Rotherham, although not in party political terms. The overwhelming majority of people working in the City are of the highest integrity--I spent some 20 years of my working life there--but in recent years the square mile has become infested with a small minority of newcomers who--as I have said in the House before--are long on cunning but short on morals.The old saying in the City was that a man's word was his bond ; as I have also said, if a man says that nowadays, one tends to take his bond. Some of the loot from dishonest activities there makes the great train robbery seem like minor pickpocketing. The Lloyd's Act 1982 prevented further incidents like the Peter Cameron-Webb scandal, which did immense harm to Britain's insurance reputation, especially in the United States.
This Government have done probably more than any other to crack down, through legislation, on insurance and company scandals. I give them credit for that. But we must not be just the most efficient providers of financial services in Europe ; I want us to be regarded as the most honest and the most honourable.
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Ms. Joyce Quin (Gateshead, East) : This has been an interesting debate. I share the view expressed by many hon. Members on both sides of the House that it is a shame that we have had so little time to deal with the issue, especially given the comprehensive nature of the report of the Select Committee on Trade and Industry.
Not surprisingly, a major thread of the debate has been the concern expressed by hon. Members--again, on both sides of the House--about the unevenness of the playing field likely to be created in the single market in financial services. The Government's assurances at the beginning of the debate struck me as inadequate ; I do not believe that they will tackle the problem.
An example is the Government's response to recommendation 7 of the report :
"We recommend that the Government should address itself to the vulnerability of United Kingdom financial institutions to hostile takeover by a company from elsewhere in the Community."
Their response was :
"The Government believe that we should press for the removal of barriers rather than erect new ones of our own."
That, surely, is not an adequate response to the problem of the bid-proof nature of many companies in other European countries. When opening the debate for the Opposition, my hon. Friend the Member for Redcar (Ms. Mowlam) rightly said that the Government were being complacent. I think that they are also being naive if they feel that other countries will automatically accept their view of what the rules of the game should be. It has been interesting to listen to some of today's contributions, especially from Conservative Members. It is clear that many of them agreed with us that the Government were being both complacent and naive.
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An example--not related to financial services, but none the less important in the European Community--is state aid. The Government have frequently criticised the level of state aid given by other countries, but recent figures show that other countries have given high and consistent levels of state aid during recent years. All the Government's preaching on that subject has been to no effect. It is not good enough to say that we hope and expect everyone else somehow, magically, to follow our example.Today--in submissions to me and, no doubt, other hon. Members--the Association of British Insurers said that it was worried about the possible unevenness of the playing field in taxation matters. While I agree that a totally harmonised taxation system is not needed to make the single European market work, the Government must nevertheless be vigilant about the big differences in taxation that may undermine whatever other directives are agreed. Clearly many hon. Members share our concern : I noted particularly the speeches of the hon. Members for Wirral, South (Mr. Porter) and for Hastings and Rye (Mr. Warren), who seemed to express concerns that are dear to our own hearts. My hon. Friend the Member for Redcar rightly laid stress on consumer protection, and I am glad that her view was reinforced by the hon. Member for Tiverton (Mr. Maxwell-Hyslop). I should like the Minister to tell us what consultations have taken place with consumer organisations in the United Kingdom.
In response to the report by the Select Committee on Trade and Industry, the Government said that they accepted the recommendations on consumer involvement. Perhaps they can tell us what organisations they will be meeting and what will be the time scale involved, if we are to ensure that when the single market in financial services is created there will also be proper standards for consumer protection. To date, the signs are that the proper standards will not be in place, and--not surprisingly--many hon. Members have expressed concern about that. It is important that there should be information on redress, and proper levels of compensation below which European Community states should not go.
The consumer-protection budget in the European Community is tiny. I am disappointed that the European Council allocated such a small amount in the budget for 1991 : 0.018 per cent. of the total budget, which compares very badly with the amount available for the support of tobacco production, for example. There needs to be a change of priorities--not just by our own Government, but by other Governments examining the European Community consumer budget. I accept, of course, that it is not just money in the budget that will solve the problem ; directives, too, will benefit the consumer at the end of the day. Not surprisingly, the insurance sector has exercised the minds of many contributors to the debate. It is of particular importance, because the United Kingdom insurance sector has a great interest in the opening up of the market in financial services. It is also true--unfortunately--that there has been a worrying decline in our invisible export earnings in recent months, and the share of that decline accounted for by the insurance sector is considerable. All is not well, and the Government should address that point.
Several reasons given by hon. Members tonight show that it will be a long, slow haul to achieve a common market in insurance. We need greater vigilance than seems
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to have been exercised up to now. For those reasons, I was surprised at the statement by the Chancellor of the Exchequer, who said that the European market in financial services was almost complete ; if he reads the recent publication by the Department of Trade and Industry he will note the number of directives that are still outstanding, and will mean thorny and difficult negotiations in the European Community in the coming months.The problems of the Export Credits Guarantee Department are also mentioned in the report. They have not had a great deal of attention during the debate--although, if the Government go ahead with their threat to privatise part of it, no doubt that will be the subject of controversial legislation later on. So far, in the internal market, there is no pressure to privatise the ECGD ; the Government seem to be doing so as a result of their own dogma rather than any other imperatives.
It appears that the French state export agency is to be allowed to underwrite risks for foreign exporters : if a French export agency can do that, why cannot our own state export agency? There is no doubt that exporters in Britain are worried about the proposals for the ECGD, as a recent article in this week's Financial Times makes clear.
Some worries have rightly been expressed about the regional implications of the creation of a single market in financial services. My hon. Friend the Member for Linlithgow (Mr. Dalyell) referred in an intervention to worries in Scotland, for instance. The Government must give far greater priority to this. There is evidence that the European Commission is studying it, and the Government should too.
Not surprisingly, the Select Committee's report gives considerable space to the problems of transport infrastructure in Britain which affect both the financial centre in London and the other centres outside it. I do not know whether the Minister has seen the recent edition of Lloyd's Log, entitled, "Jams today The threat to the City's financial future". After 11 years of neglect of our transport infrastructure the Government are now trying to catch up and deal with a problem which is largely of their own creation.
The Government have presided over a massive decline in our balance of payments. It is alarming not only that the manufacturing deficit is so great but that the surplus on the service side and on so-called invisibles has deteriorated sharply. While we believe that the single European market will be immensely important to the future of our financial services industry, we do not believe that the Government are doing enough to deal with the problems. It would be good to think that the Secretary of State, new as he is to his job, would take a fresh look at the issues affecting his Department. Unfortunately, it looks as if he is already weighed down with the dogma and short-termist attitudes of his predecessors--attitudes which have disadvantaged both our manufacturing and our service sectors. 6.51 pm
The Parliamentary Under-Secretary of State for Corporate Affairs (Mr. John Redwood) : The hon. Member for Redcar (Ms. Mowlam) and several other Opposition Members seemed to think that cases of malpractice being unearthed or of criminals being brought to book implied that something was wrong with the system. It is the first time that I have heard the theory that, if the police are
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successful on detecting crime, that means that they are not doing a good job. Such cases show that we have put in a tougher regulatory framework and that we are pursuing wrongdoers as we should. If only the Labour party had done that before, we should not have had our work cut out to put through the legislation that we have. The hon. Member for Redcar also said that the Government were making no effort to improve regulatory co-operation with overseas bodies. I have just returned from Washington, where I was pleased to sign with our Japanese and American counterparts the Airlie House declaration. We recognise that financial business is driven by technology and business pressures towards global trading. It is becoming ever more important, therefore, to hammer out common accounting, capital adequacy and other prudential standards on a worldwide basis. The agreement that we have signed is a major advance in that direction.The document recognises the growing volume of cross-border business in financial markets around the world, and pledges the three major market authorities in London, New York and Tokyo to work more closely together to facilitate further growth in that business.
The agreement enshrines two important principles. The first is mutual recognition backed up by some common standards. When each country is thinking of changing its rules or systems, it will consult the other two to see whether changes can bring practices more into line. The second is co- operation to assist each other in tracking down malpractice and crime. The United Kingdom is well advanced in widening its memorandum of understanding with the United States to exchange information and to carry out investigations on behalf of each other. About one case a week now causes that co-operation to be undertaken.
There will also be close co-operation to monitor the prudential position of major multinational firms. The Government will do everything in their power to ensure that the international regulators talk to one another and track down criminal activity even when it tries to run across borders in search of safety.
The hon. Member for Redcar seemed unaware of the many new dealing services for small shareholders which are now growing up. The Government welcome them and agree with comments made in the House that there should be easy access to good dealing facilities for all who have shareholdings, however modest they may be. Progress is being made in that respect.
The hon. Lady and her colleagues also seemed unclear about what structure of regulation they want. She tells the House that she agrees with the Government that the present system should be given time to settle down--we believe that strongly. More change would mean more disruption, more cost and more elaborate structures. However, the hon. Lady goes on to say that she wants to change the system in a fundamental way but is not prepared to tell the House exactly how. We await her reconsideration of a new structure, when she will have to demonstrate why it would be cheaper and better. Given the way in which institutional changes by the Labour party have gone when it has been in government, it would be surprising if the system turned out cheaper and better as a result of the changes that Labour suggested. The hon. Lady concluded by saying that, under a Conservative Government, the City would need a boundary review. I agree. I think that the boundaries of
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the wider City will grow ever wider because of the success of the industry, which has grown in ways that many of my hon. Friends have pointed out in the debate. I look forward to positive and confident 1990s for the City under this Government's tutelage, because we shall work closely with the City to ensure that its businesses can expand and take advantage of all the directives and opportunities that the single market will undoubtedly produce.My hon. Friend the Member for Hastings and Rye (Mr. Warren) raised the issue of the number of regulators. I must tell him that we need the current exchanges ; they are important bodies and they have a range of functions that facilitate choice and competition. But if self-regulatory organisations wish to merge because they think it in their members' interests to do so--it may, for example, lower the costs or improve the quality of regulation--the Government are delighted. The Government will not insist on it, however, because they recognise the divergent interests and concerns of the different members of the different self-regulatory organisations. These things will work only if done on a voluntary basis.
Many hon. Members should concentrate on the fact that it is not so much the institutional framework as the style of regulation that matters when examining the trade-off between its costs and its benefits. The Government believe that we are coming to the end of a period when a lot of effort had to go into rule-making and institutional change. We are working closely with the Securities and Investments Board, David Walker and others so that, in the new phase, we can concentrate less on prescription and detailed rule -making and more on investigation, compliance and detection, because that is what is needed.
It does not help matters if the regulators are continually thinking of yet new ways to tie up in knots the existing compliant businesses--the broad mass of businesses in the City that are doing a good job. The regulators are and will be judged by their success in tracking down the tiny minority who are guilty of business malpractice or criminal deeds. We are putting our efforts into tracking those people, and we are urging the regulators to do the same--
Mr. Redwood : Yes, the Government have put a great many resources into detection and investigation--by setting up the Serious Fraud Office and ensuring that it can pursue the cases that come to light thanks to the tougher climate created as a result of our work. I promise the hon. Member for Workington (Mr. Campbell-Savours) that if he can bring forward evidence
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of malpractice in any particular deal we, or more importantly the stock exchange authorities whose job it is to do so, will look at it. If the hon. Gentleman knows anything about insider dealing or other criminal practices, he should refer the evidence to the proper authorities and not cast aspersions in the House unless he can back them up with evidence that the authorities will look at.Several hon. Members asked about the timing of the directives and whether we can bring the whole single market in financial services together ready for 1 January 1993. The Government intend to do all that they can to see that the negotiations are concluded. The banking directives have been agreed ; the investment services directive and the capital adequacy directive could be agreed within the next few months.
One of the important purposes of the debate is to give us guidance on the details that need to be put right, particularly to help independent financial advisers, and to help some larger businesses with matters such as liquid assets. We have listened carefully to what has been said and we shall of course carry these issues forward in our negotiations. If we can get the right deal by the end of the year, we shall sign up to it ; if it takes a little longer, so be it, because it is important that our independent financial advisers and our major players in the stock market should have access on the right terms, under which capital requirements are related entirely to the risks being run and they are not burdened with unnecessary capital requirements when they are not carrying undue risk.
I agree with many hon. Members including my hon. Friend the Member for Wirral, South (Mr. Porter) that on the insurance side, matters are proceeding too slowly. There are doubts about whether the whole of the insurance regime can be up and running by 1 January 1993. However, failure to reach that target will not be for lack of trying by the Government--we are urging our partners to work with us towards a speedy resolution of all outstanding issues on the passport directives. As a result of our efforts, one directive has been tabled and we shall get it to a working party for extensive negotiation. It is also largely because of our requests that the Commission has promised to bring the other directive for First Reading in the Council of Ministers before the end of the year. The Government will put their full weight behind reaching a fair settlement in this area. As many hon. Members have said, there cannot be a completely open market in financial products if insurance is stymied for lack of the legislative action that we all seek. The hon. Member for Rotherham (Mr. Crowther)--
It being Seven o'clock, and there being private business set down by The Chairman of Ways and Means,-- under Standing Order No. 16 (Time for taking private business), further proceeding stood postponed.
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Redbridge London Borough Council Bill (By Order) Order read for consideration of Lords amendment.
Lords amendment : In page 4, lines 9 to 17, leave out clause 6. 7.1 pm
Mr. Vivian Bendall (Ilford, North) : I beg to move, That the amendment be now considered.
Hon. Members may wonder why I rise to speak to the Bill. It is because my hon. Friend the hon. Member for Ilford, South (Mr. Thorne) is with an IPU delegation in Uruguay. He sends his apologies for not being able to be here. I shall say nothing more about the Bill because it has been debated in both Houses and in Committee.
Mr. Michael Neubert (Romford) : I am pleased to have this early opportunity to speak, on our first day back after the long summer recess. It is seven and a half years since I spoke from the Back Benches ; for a great deal of that time I was a Government Whip and was therefore not able to speak in the Chamber at all, other than to move procedural motions. To my surprise and disappointment, I found that such motions are not the stuff of tomorrow's headlines. After my being consigned to silence for so long, I know that my constituents will be reassured to hear me more often in future and to know that I am alive and well and working on their behalf at Westminster. When I was at the Ministry of Defence I had the occasional opportunity to speak and to appear on the parliamentary peep show and, through the merciless medium of television, I sometimes appeared in every living room in the land. However, on private business the same Trappist vow of silence descends on Ministers, leaving them inert and mute, even though the business may affect one's own constituents. The disability is that much greater when the title of the Bill does not immediately reveal the reasons for one's presence. Colleagues who saw me sitting silently during earlier debates on the Bill may have assumed that I was overcome by momentary tiredness or that during the long hot summer I was taking advantage of the air conditioning in the Chamber, seeing no connection between me and the Redbridge Bill. Hon. Members who have taken part in the debates know that the Bill should be called the Romford (Extinguishment of Centuries-old Exclusive Royal Market Franchise) Bill. If that were its title, my interest in it and opposition to it would be apparent to everyone. I am sorry that my hon. Friend the Member for Ilford, South (Mr. Thorne), the promoter of the Bill, is not here, but I am glad that he was able to persuade his next- door colleague, my hon. Friend the Member for Ilford, North (Mr. Bendall) to speak on his behalf. We regret his absence, but understand that South American affairs have called him away from the Chamber. Even at this late stage in proceedings on the Bill I am glad to have this opportunity to speak, even if only in relation to clause 6.
I express my warm gratitude to my fellow Members for the London borough of Havering--my hon. Friends the Members for Hornchurch (Mr. Squire) and for Upminster (Sir N. Bonsor). They ably sustained the heat and burden of battle on many occasions without any direct assistance from the Member for Romford in whose constituency the
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charter market stands. I felt as guilty as any first world war general, quaffing claret in comfort behind the lines while sending other officers to face the flak at the front.I am indebted to my Havering colleagues for all that they have done on behalf of my constituents, and theirs, while I sat through the proceedings unable to contribute to the debate. My hon. Friends have distinguished themselves by what they have achieved, because the Bill is now very different from the one that was introduced to the House about two years ago.
We are considering yet another amendment, this time from the Lords. No doubt it responds to the strength of the arguments deployed at an earlier stage and not simply to arguments deployed in the other House alone. My hon. Friends' efforts deserved a wider audience, but it is in the nature of things that there has been limited participation in the debate and, not surprisingly, at times the debate degenerated into a dispute between neighbours, the Members for Redbridge on one side and the three Havering Members on the other. As we all know from our surgeries, disputes between neighbours are sometimes the most intractable issues with which we have to deal.
Mr. Robin Squire (Hornchurch) : My hon. Friend has mentioned several hon. Members. I hope that he will not overlook the noble contribution by our hon. Friend the Member for Maidstone (Miss Widdecombe), whose sterling speech highlighted some of the problems with clause 6. No doubt in due course we shall come to those and it would be unfair not to recognise that contribution.
Mr. Neubert : I am glad to record my gratitude to my hon. Friend the Member for Maidstone (Miss Widdecombe), who, on a memorable evening, contributed to a discussion on clause 6, which comes before us now as a result of the Lords amendment. I am sure that she wishes us well in our opposition to the Bill, because she is one of many hon. Members who have charter markets in their constituencies and who will see them threatened by the Bill.
The original Bill contained just two pages and its substance was contained in only one. It included clause 6 about the transfer of rights, but did not have the last two lines that are now contained in the clause :
"provided that no such transfer or disposal or rights shall take effect without the consent in writing of the council."
After amendment, the Bill now covers the best part of four pages. The major additions to its length are the revised proposals for compensation.
The concern that this question aroused in the Chamber and in Committee underlines the seriousness of the main purpose of the measure, which is to remove an advantage conferred on Romford by royal charter by Henry III in 1247. That royal charter predates our Parliament and it has been a major factor in the prosperity of Romford and the London borough of which it has been part for the past 25 years. It is ironic that, after seven and a half years, I should find myself speaking for the first time in defence of a royal franchise, which has benefited the people of Romford for seven and a half centuries.
I am not a Conservative for nothing ; I wish to conserve the best of our traditions and institutions until persuaded that there are good reasons for not doing so. The Bill does not constitute such a reason. The rights to which clause 6 refers are not related to the right to hold an open-air market in the borough of Redbridge. Redbridge is an extensive and highly desirable area of north-east London
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and is represented in the House by three assiduous and active Members. It is unacceptable for it not to be also adorned by a lively open-air market where customers can enjoy the cut and thrust of the stallholders' repartee while looking for a bargain among the cauliflowers and cucumbers.It would indeed be unneighbourly of the next-door London borough of Havering to object to and place an obstacle in the way of such a market anywhere in Redbridge. That is not the case. Many residents of Redbridge widen their consumer choice by patronising the market at Romford, which has a long-standing and deserved reputation for good prices and value for money.
The Bill would establish a new market in Ilford, within the six and two thirds miles radius of Romford market, which, for no fewer than 743 years, has been the subject of an exclusive royal franchise. Some have suggested that the whole concept of a charter market with a radius of six and two thirds miles is unbelievably archaic--a description given by an eminent legal luminary. However, it does not lack all sense or relevance to today's trading conditions. The distance was decided on the basis that that was as far as a man could drive his cattle and back again in a day, allowing sufficient time in between for him to conduct his business and pursue his livelihood. Allowing markets within shorter distances of each other would have undermined the viability of the markets and the individual livelihoods of their traders because it would have diluted the spending power of those attending them. There are no longer any cattle at Romford market, and the straight high road from London, which used to pass through the market, has been bypassed with a ring road. The market is now a pedestrian precinct where shoppers can walk without risk, other than that of occasionally slipping on a cabbage stalk or, for politicians, a banana skin.
The old style of the market is not really that long in the past. I first visited Romford when I was a small boy. My grandmother took me there on the top of a bus, and the market still had cattle and other livestock. Romford was still part of the rural county of Essex ; now it is part of metropolitan London, having been swallowed by the metropolis 25 years ago. Cattle were last sold at the market in 1959, only slightly more than 30 years ago, so it is not as archaic as might be thought.
Mr. William O'Brien (Normanton) : The location of the proposed market was an important point of debate on Third Reading. Labour Members were concerned that there was no plan identifying its proposed site. Some of us were under the impression that the market would be part of a larger commercial development in the area, rather than a market in the general terms that most of us understand. That matter caused a great deal of concern, and I hope that the hon. Gentleman will comment on it.
Madam Deputy Speaker (Miss Betty Boothroyd) : I regret that I cannot allow the hon. Member for Romford (Mr. Neubert) to answer that point. As he said at the beginning of his remarks, we are debating a narrow procedural motion, and we must deal with the matter before us.
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Mr. Neubert : I hear your guiding words, Madam Deputy Speaker, and, as ever, will seek to observe them. Of course, we are discussing not simply whether we should consider clause 6, but presumably--
Madam Deputy Speaker : Order. We are considering whether we should debate the Lords amendment. It is a narrow procedural motion.
Mr. Neubert : For the reasons that I have already given, I shall seek to argue that we should defer consideration for six months. That will require a certain amount of attention to the wider case, not simply clause 6.
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