House of Commons Hansard Debates for 13 Dec 1990

Mr. MacGregor : As for a statement, we must wait to see whether we reach an appropriate moment for a statement.

Mr. Graham Allen (Nottingham, North) : Will the Leader of the House look again at early-day motion 161 on reasonable hours?

[That this House notes the encouraging tone of the Prime Minister's reported remarks in the Mail on Sunday on 2nd December, relating to the introduction of more sensible hours and conditions for the House of Commons ; and calls upon the Lord President of the Council to bring forward, after due consultation, proposals to effect such a change.

Will he welcome on a personal basis the Procedure Committee's decision to look at sitting hours early next year? If he chooses to submit evidence on the matter will he pay particular attention to the needs of hon. Members who travel from the north and from Scotland and Wales and how the arrangements can best suit them?

Mr. MacGregor : I have already said that I am considering how best to take forward all the representations made, and that includes what the Procedure Committee feels it should do. It has become clear from the way in which the debate has proceeded over the past few days, not necessarily in the Chamber but more widely, that there are many different points of view, depending on individual circumstances, not least the issue of where hon. Members' constituencies lie. All those issues will have to be taken into account.

The hon. Gentleman will know that this has been looked at several times in the past and that quite a few initiatives have been taken. I keep stressing that it is important for hon. Members to co-operate on all those initiatives, including those we are looking at now, if they are to be effective.

Mr. Dave Nellist (Coventry, South-East) : Will next Monday's debate on the Criminal Justice Bill allow a comparison to be made between the maiden speech in the House of Lords yesterday of the former Home Secretary, Lord Waddington, on the need for the reduction of custodial sentences, and the sentencing last Friday of a

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20-year-old unemployed man in Grantham for being unable to pay his poll tax? It has cost the state more in the past week to keep him in prison than the debt he owes.

If that is not possible, will the Leader of the House tell us when he intends to bring legislation before the House to bring English law in line with Scottish law? Two years ago--25 months, to be precise--the Government abolished imprisonment for debt in Scotland, so why is it that, in England and Wales, young people can still be put inside for the crime of being poor?

Mr. MacGregor : The hon. Gentleman frequently misses the point. I do not see how those issues can be raised in Monday's debate.

Mr. Harry Barnes : Has the Leader of the House seen early-day motion 223 on the electricity crisis in the east midlands, which has already been referred to by my hon. Friend the Member for Bolsover (Mr. Skinner)?

[That this House re-affirms its deep concern for the plight of masses of people in the East Midlands who are still without electricity supplies five days after the arrival of severe weather conditions ; notes that on 12th December some 250,000 people were still without electricity supplies and that under present arrangements significant numbers of these will be without electricity for well over a week before their supplies are reconnected ; expresses admiration for the considerable efforts of hard- pressed electricity workers in their attempts to re-establish supplies ; but condemns utterly the failure of the Department of Energy to either declare that an emergency exists or to move essential resources into the East Midlands to tackle the crisis ; regrets that East Midland's Electricity has itself failed to ask the Department of Energy to take emergency action ; and believes that this is due to fears of the impact that such a move would have upon the floatation and sale of its electricity shares.]

For five and a half days now, 100,000 people in Derbyshire, Leicestershire, Nottinghamshire and generally throughout the east midlands have been without electricity. The Minister said earlier that 43,000 customers had no supply. A total of 40,000 of them are in the east midlands area. There is a massive crisis and people have been without electricity for considerable periods up to five and a half days, but it will be considerably longer before their supplies are reconnected.

The problem exists not in isolated rural areas but in conurbations. We should have a statement from the Secretary of State for Energy so that we can question him, or an emergency debate on an issue that is a crying shame. If we do not get that, we should get the resignation of the Secretary of State for Energy.

Mr. MacGregor : I do not think that that is appropriate, but I repeat that the regional electricity companies have been making superlative efforts to restore electricity supplies. I cited the fact that about 2,000 employees--relevant experts--from other parts of the country are helping to restore supplies to the east midlands. It has been a splendid effort by all concerned.

Dr. Jeremy Bray (Motherwell, South) : Will the Government find time for an early debate on science policy, given the severe cuts in prospect in Britain's science base and the declining support for industrial research and new technology, at a time when our competitors are increasing theirs? Of the past six debates on science policy,

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only one has been in Government time, and that was as long ago as Friday 14 June 1985. Is that a fair reflection of the Government's pride in their record?

Mr. MacGregor : As the hon. Gentleman will know, Government expenditure on science, in terms of public funding, has increased substantially in the past two years. It would be appropriate, therefore, to ask that question in a debate on public expenditure. We intend to have a debate on the public expenditure White Paper fairly soon, when it would be appropriate for the hon. Gentleman to make such comments as he wishes. I am sure that he will receive a sound and good response from the Minister.

Mr. Ray Powell (Ogmore) : Will the Leader of the House arrange a debate next week on large firms, particularly in the London area, that are encouraging their staff and officers to work illegally on the next two Sundays before Christmas? We have had numerous debates on Sunday trading and Sunday laws. Only last week, the Secretary of State for the Environment, the right hon. Member for Henley (Mr. Heseltine), said :

"The law is the law There can be no dining a la carte with the law of the land."--[ Official Report, 5 December 1990 ; Vol. 182, c. 325-26.]

There should be no dining a la carte with the law on Sunday trading. Will the Leader of the House ensure that we have a debate and that those who are irresponsible enough to ask their staff to work on Sunday are stopped by him and by the Government?

Mr. MacGregor : The hon. Gentleman will know that the Shops Act 1950 provides that, in general, shops should be closed for the serving of customers on Sunday, except for the transactions listed in the Act. No exception is made for Sundays at any particular time of the year. Equally, the hon. Gentleman will know that we debated the anomalies that have arisen as a result of that Act but failed to reach a solution that commanded general agreement. The Government have made it clear that they are prepared to consider alternative methods of reform if they are practical, enforceable and likely to command a parliamentary majority--a precondition of a successful outcome. The hon. Gentleman will be aware of the difficulties of finding an agreed way forward.

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Consolidated Fund Bill and Christmas Adjournment

4.14 pm

Mr. Speaker : I have a short statement to make about arrangements for the debate on the motion for the Adjournment, which will follow the passing of the Consolidated Fund Bill on Wednesday 19 December. Hon. Members should submit their subjects to my Office not later than 10 pm on Monday 17 December. A list showing the subjects and the times will be published the following day. Normally, the time allotted will not exceed one and a half hours, but I propose to exercise a discretion to allow one or two debates to continue for rather longer, up to a maximum of three hours. Where identical or similar subjects have been entered by different Members whose names are drawn in the ballot, only the first name will be shown on the list. As some debates may not last the full time allotted to them, it is the responsibility of Members to keep in touch with developments if they are not to miss their turn.

I remind hon. Members that, on the motion for the Adjournment of the House on Thursday 20 December, up to nine Members may raise with Ministers subjects of their choice. Applications should reach my office by 10 pm on Monday next. A ballot will be held on Tuesday morning and the results made known as soon as possible thereafter.

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Death Penalty (Amendment)

4.15 pm

Mr. Gerald Bermingham (St. Helens, South) : On a point of order, Mr. Speaker. It is a simple matter. In answering the question raised by the hon. Member for Thanet, South (Mr. Aitken), the Leader of the House said that the amendment which stands for debate on Monday in the name of my right hon. and learned Friend the Member for Warley, West (Mr. Archer), myself and others sought to overturn the Treason Act 1790. That is completely untrue. The record should be amended to show that we seek only to change the penalty.

Mr. Speaker : Assuming that the amendment is called for debate, that matter will be debated on Monday next.

BILLS PRESENTED

Written Constitution

Mr. Graham Allen presented a Bill to provide for the drawing up of a written constitution for the United Kingdom ; for its consideration by the people and Parliament of the United Kingdom ; and for connected purposes : And the same was read the First time ; and ordered to be read a Second time on Friday 25 January and to be printed. [Bill 47.]

Housing (Homeless Persons)

Mr. George Howarth, supported by Mr. Clive Soley, Mr. Joe Benton, Mr. Robert N. Wareing, Mr. Edward O'Hara, Mr. Dennis Turner, Mr. Ian McCartney, Mr. David Clelland, Ms. Clare Short and Mr. William O'Brien, presented a Bill to establish a limit to the period during which homeless people may be accommodated in bed and breakfast accommodation to enable local authorities to make use of accumulated capital receipts in order to provide additional low cost housing for rent ; to enable local authorities to finance private sector leasing arrangements for housing homeless people by restoring the provision for a separate allowance within housing revenue accounts ; and for connected purposes : And the same was read the First time ; and ordered to be read a Second time on Friday 25 January and to be printed. [Bill 48.]

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ESTIMATES DAY

[1 st Allotted Day

] [1 st part--]

SUPPLEMENTARY ESTIMATES 1990-91

CLASS IV, VOTE 2

[Relevant documents : Third report from the Trade and Industry Committee of Session 1989-90 on Company Investigations (House of Commons Paper No. 36) and the Government reply contained in the White Paper, "Company Investigations" (Cm. 1149).]

Companies and Financial Services

Motion made, and Question proposed,

That a further supplementary sum not exceeding £14,304,000 be granted to Her Majesty out of the Consolidated Fund to defray the charges which will come in course of payment during the year ending on 31st March 1991 for expenditure by the Department of Trade and Industry on support for industry, international trade, statutory and regulatory work, consumer protection and administration.-- [Mr. Redwood.]

Mr. Speaker : I must announce to the House that I have selected the amendment in the name of the hon. Member for Hastings and Rye (Mr. Warren), who is Chairman of the Select Committee on Trade and Industry.

4.16 pm

Mr. Kenneth Warren (Hastings and Rye) : I beg to move,

That Class IV, Vote 2 be reduced by £10,000 in respect of Subhead K1 (consumer and investor protection).The Select Committee on Trade and Industry has carried out extensive investigations into the way in which investigators work in policing business standards. Rising at this hour of the afternoon, I almost feel that I should seek the leave of the House. This is the second time that I have spoken in the House today, having spoken after midnight last night. I hope that I do not trespass on your patience, Mr. Speaker, by speaking now. I trust that hon. Members will hear me as kindly now as they did then. My hon. Friend the Minister for Corporate Affairs, who sits on the Government Front Bench, had to endure that speech as well. We are calling for a reduction of £10,000--I believe that it used to be £1,000, but it has been inflated to a more respectable figure. We want to draw the attention of the House to the fact that the public are rightly worried about investigation standards and the qualities of those carrying out investigations on behalf of the Government in the Department of Trade and Industry and in the self-regulating regulatory agencies which result from the financial legislation of the past decade.

It is interesting to note that the increase proposed in the supplementary estimates is £2.7 million. Although that sum covers expenditure on several aspects, it reflects the rise to £9 million in 1989-90 from just under £7 million in the previous financial year. Even taking inflation into account, there has been a small, but important, increase in expenditure.

Hon. Members who supported me on the Select Committee and others wish to take part in the debate, and I trust that I shall not detain them long. I should like to concentrate on three items : who pays for investigations, who investigates and a particular investigation relating to the House of Fraser.

Who pays? It is interesting to note that, in 1988-89, the cost of the Department of Trade and Industry investigations was £6.2 million and the income from

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Companies house fees and charges was set to recover the costs arising from the regulation of companies, including the costs of investigations. Three investigations have principally dominated the headlines of the press. The investigation into the House of Fraser cost £1.5 million, the investigation into Guinness cost £1.6 million and the investigation into County NatWest cost £1.1 million. The Select Committee recommended that more steps should be taken to recover the cost of investigation from the companies and individuals involved unless the inspectors found no evidence of wrongdoing. We persist in that view, and we do not expect those who have not erred and strayed to have to pay for those who have. We hope that my hon. Friend agrees that that requirement should be an expectation of Government and should be under review at all times, so that we ensure that those who have erred and strayed pay for their misconduct.

Mr. Tim Smith (Beaconsfield) : Can my hon. Friend explain what the Select Committee had in mind? Was it that the inspectors should make a recommendation about whether the company under investigation should pay the costs, or was it that the Secretary of State should make such a recommendation? Would not it be rather invidious to leave it to the Secretary of State? It might be better for the inspectors in reaching their conclusions to determine that matter.

Mr. Warren rose--

Mr. Robin Maxwell-Hyslop (Tiverton) : It is quite important that the Chairman of the Select Committee should not be asked what the Committee had in mind. What it had in mind it said in its report. Although any member of the Committee may give his own view, it is quite improper to ask the Chairman of the Committee what the Committee had in mind that it did not say in its report.

Mr. Warren : I am extremely grateful for both those interventions. One has ensured that I do not commit the Committee to something that it did not have in mind and the other has ensured that I am allowed to say what I have in mind.

In reply to my hon. Friend the Member for Beaconsfield (Mr. Smith), I must say that I do not mind who makes the recommendation as long as somebody does. If my hon. Friend wants me to choose, I will say that, bearing in mind the fact that we believe that the inspectors should come to conclusions, I believe that they should also come to a conclusion on the costs. However, I am prepared to be swayed on the matter in our debate.

Who investigates? The Committee was very concerned that it took a long time for the inspectors, who are the investigators, to be appointed, especially in insider dealing cases, in which it can take weeks or months. That response time is not in line with business needs. Business should not be held up if there are no problems, so one must get the answers as quickly as possible. The fact that weeks or months often elapse before inspectors are appointed is not acceptable in this country where the highest standards are expected of business and where the Government are expected to act promptly in response to the perceived problems.

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We came to the conclusion that the right staff--there are many in the Department of Trade and Industry--need to be supported by more people from various professionally skilled occupations. It was good to see that the Government conceded in their reply :

"it would be desirable for a somewhat higher proportion of investigation staff to have full professional qualifications". That is important. We have noticed in the past decade of inspections that too often we did not see inspectors reappear to help, so the Government and the public are losing the lessons that have been learnt. The learning curve for inspectors is always steep ; they come into the job and they have to find out how to do it. It takes them a long time to acquire the internal expertise they need to carry out investigations.

I hope that it will be possible for the Government, and especially for the Department of Trade and Industry, to look at the calibre of the staff in the investigation service, and either to bring in more people or to encourage people within the Department to enhance their own qualifications so that the highest possible standards of investigation can be available at all times. Perhaps the Department could establish a panel of inspectors who could be on call so that there should be no delays such as those that we encountered in our review.

Sir Anthony Grant (Cambridgeshire, South-West) : I am not endeavouring to probe the collective mind of the Committee, of which I was a member, but does my hon. Friend agree that, if we are to have the very best inspectors, they are inevitably people who are busy and successful in their own professions and cannot therefore spend a vast amount of time probing and fathoming things as my hon. Friend has suggested? That is another reason why it is important that there should be very good back-up, since otherwise we shall have second-rate inspectors or the inspectors will be deterred from carrying out that work ever again because it takes up so much time.

Mr. Warren : My hon. Friend is absolutely right. That is why we hope that more inspectors will be drawn from within the Department, thus keeping the learning that has been acquired at public expense within the Department.

Let us consider the time that recent investigations have taken to complete. The 10 investigations in 1987 took an average of 14 months to be completed under section 177 of the Financial Services Act 1986. In 1989, 16 investigations were launched, of which seven are not yet complete, but the average time is already running at over 12 months. I know that it looks on the surface as if there has been more malpractice, but perhaps one could look at it the other way round and say that there is a higher quality of investigation in the Department. In any case, there is no shortening of the time taken in investigations. In saying that, I am not taking any account of the point that I made earlier about the time that it takes to appoint the inspectors.

I turn now to the point raised by my hon. Friend the Member for Beaconsfield (Mr. Smith) about the duties of inspectors. The Committee came to a firm conclusion, after hearing evidence from both sides, that conclusions should be expected from the inspectors, taking account of the evidence before them. We are pleased that the Government agree with that recommendation, because the inspectors must have an end duty in sight, which is what one would expect of men of the calibre required to take part in the investigation.

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My last point on this area deals with the time taken by the investigations, to which I have already referred. In their reply, the Government said that they did not believe that it was wise to have time targets. The Committee was concerned that if targets were not set, the open-ended nature of the investigations would not concentrate the minds of the investigators in the way that we believe they should be concentrated. This is merely standard management practice, and I am sure that the whole Committee will stand with me in commending it to the House.

I refer now to the investigation into the House of Fraser. You will remember, Mr. Speaker, that the then Leader of the House replied, in answer to requests from hon. Members of all parties about the publication of the House of Fraser report, that he had taken note of the fact that the Select Committee was itself carrying out an investigation. I drew his attention to the fact that we were not looking at specific investigations, but at the nature of investigations and the way in which they proceed with a view to making recommendations thereon. However, during those investigations and subsequent to the publication of our report in May this year and the Government's response to it three months later, we have been receiving further information on the subject.

As you know, Madam Deputy Speaker, the House of Fraser report was passed to several authorities in March this year. The Bank of England had received a copy earlier. Those who received the report besides the Bank of England included the Solicitors Complaints Bureau of the Law Society, the Securities and Investments Board, the Securities Association and the body with that most complicated title of all--the Financial Intermediaries, Managers and Brokers Regulatory Association, or FIMBRA. I shall go through the last four in that group and return to the position of the Bank of England.

The Solicitors Complaints Bureau said in a memorandum which the Department of Trade and Industry kindly passed to the Select Committee that it recently received a report from the solicitors instructed by it to investigate the part played by Herbert Smith in the matters dealt with in the inspectors' report. I have been pleased to learn in the past few days that no evidence has been found of professional misconduct by that firm of solicitors. However, the time taken to carry out that evaluation is worrying. It took some seven months. It must cause considerable anxiety to a firm such as Herbert Smith, which is well known internationally, to know that it is under investigation. It was probably dealing with all sorts of contracts of major importance during that time, some of which may not have been placed with it while the investigation was proceeding.

I have no duty to speak on behalf of any firm, but it occurred to me that the time taken to investigate a company such as Herbert Smith is unduly long, particularly when the Solicitors Complaints Bureau--a professional organisation--has the duty to carry out that study.

Ms. Marjorie Mowlam (Redcar) : In view of what he just said, will the Member--

Mr. Maxwell-Hyslop : Honourable Member.

Ms. Mowlam : I beg his pardon.

Will the hon. Member accept that one of the difficulties of the Solicitors Complaints Bureau in the report was over

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the distinction between a solicitor acting as a referee and a solicitor acting as an advocate and that that was part of the confusion? Does he have any views on that point which the Solicitors Complaints Bureau should consider?

Mr. Warren : The hon. Lady is right. I refer to her as an honourable Lady, and I accept her comment.

The Securities and Investments Board believed that it did not have much more to contribute on the matter, and I accept what it said for the moment. I am reticent to pass any comment because the Select Committee on Trade and Industry will have the pleasure of the company of members of the board as witnesses next week. I would not wish to dull the enthusiasm of any members of the Select Committee to hear the excellent questions that I am storing up for that occasion. Turning to the Securities Association, it is good to see that, since the events leading up to the appointment of the inspectors, both Kleinwort Benson and Macarthur and Co. Ltd have been through the Securities Association's rigorous and vigorous authorisation process and that both firms are now subject to the principles and rules established by the Financial Services Act 1986. It is worrying that it took an investigation to bring them to that happy position. I turn lastly to FIMBRA, before coming to the Bank of England. FIMBRA has told us that it is monitoring the position continuously--a nice phrase. But it is the regulator of only a small proportion of the business of Harrods bank.

The area of principal concern to me, and on which I believe that other hon. Members wish to comment, is the position of the Bank of England. It has had several inquiries by the Select Committee. We asked it on 21 March 1990 what action was being taken about Harrods bank following publication of the inspectors' report on the House of Fraser. There ensued an exchange of letters. The Governor of the Bank relied on section 82 of the Banking Act 1987 and told the Chairman of the Select Committee and, therefore, the whole Committee, in a letter dated 3 August 1990 :

"I am told by a senior counsel that I am at risk under section 82 if I disclose information concerning Harrods bank unless I am able to do so under one of the exceptions provided for in the Act". Section 82 makes it a criminal offence to disclose information received under the Banking Act other than to people specified in section 84 or, under section 83, to others to enable the bank to discharge its functions under the Act-- something with which you are immediately familiar, Madam Deputy Speaker. That did not satisfy the Committee. In response to my further letter of 17 October, the Governor replied that the legal advice which he sought did not cover whether the Select Committee could compel him to disclose confidential Banking Act information, nor whether in so doing he might be protected by parliamentary privilege. My hon. Friend the Member for Tiverton (Mr. Maxwell-Hyslop) is much more adept at these matters than I am, and he will wish to catch your eye, Madam Deputy Speaker, to comment on this particular area.

I have taken advice from those who serve us in this House, and I am told that, if the Governor gave the information to the Select Committee, his evidence would be covered by parliamentary privilege. On page 132 of "Erskine May", the general rule is that the House

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"will treat the bringing of legal proceedings against any person on account of any evidence which he may have given in the course of any proceedings in the House or before one of its committees as a breach of privilege."

Whether the courts would entertain an action against the Governor for having given evidence contrary to the provisions of a statute, and how the House would enforce its authority if necessary, would depend on the circumstances. I hope that you would agree, Madam Deputy Speaker, that, in the traditions of the House, it would be surprising if the House did not take some action in support of the Select Committee and its privileges.

I have not yet covered the powers of the Select Committee to send for persons, papers and records. Before embarking on any such matter the Select Committee would consider the consequences carefully. I speak for myself when I say that I hope that the Governor of the Bank of England will look carefully at his position. As, since before March 1990, he has had an opportunity to look at the situation relating to Harrods bank, it is high time that he responded on behalf of the Bank of England to this worrying matter, whether or not the bank and its directors, including the Fayeds, are trading in a proper manner as required under the Banking Act 1987.

Mr. Maxwell-Hyslop : Before my hon. Friend reaches the substance of the matter, may I ask whether it is not absolutely clear that the order of the House establishing the Select Committee gives the Committee power to send for persons, papers and records and that, in the light of the precedent of the moneylenders' case, the House enforces the order of the Committee to answer to the satisfaction of the Committee, not the House, such questions as it is pleased to put? There is no question whatever that the Governor of the Bank of England is not above the law of the land or of this House, but is bound to answer questions from the House. A judge who entertained a criminal proceeding against him in the light of that would expose himself to dismissal by a motion of both Houses of Parliament.

Mr. Warren : I am most grateful to my hon. Friend for his intervention. He is perfectly correct. You will be aware, Madam Deputy Speaker, that the Committee on which I serve as Chairman has many parts to it. I am the nicest of people and I am surrounded by elegant gentlemen, like my hon. Friend, who are of a much tougher calibre than I am and who express forcefully what I feel. It is hard to hold on to my job with such elegant advice all around me. We have yet to hear from our friends on the Opposition Benches.

Mr. Anthony Nelson (Chichester) : My hon. Friend will recall that, in the section of our report that dealt with the House of Fraser, two main conclusions and two recommendations were made. Neither of the Committee's important conclusions was addressed in the Government's published response. Both the Committee's recommendations have been summarily dismissed by the Government in their response. Those of us who do not want that matter to be whitewashed, who are not prepared for it to be quietly forgotten--many regulatory bodies would seem to prefer that--are not happy that the House, or the Committee, should persist, pursue and prosecute it. Surely

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it is most unsatisfactory that such important conclusions and recommendations were not given the attention, or assent, that they deserved in the Government's response.

Mr. Warren : I am most grateful to my hon. Friend, who has summed up accurately the feeling of the entire Committee. I should draw to my hon. Friend's attention, however, the fact that, since the publication of our report, new brooms have swept through the Department of Trade and Industry in Victoria street, of which my hon. Friend the Minister is one, ably supported by my right hon. Friend the Secretary of State.

If my hon. Friend the Minister has an opportunity to participate, I am sure that he will want to assure all hon. Members, and not just my hon. Friend the Member for Chichester (Mr. Nelson) and me, that there is no cause for the concern that my hon. Friend was right to express. It is not right that this issue should drag on for ever in this manner.

I have sought to identify the need for constant public assurance that the United Kingdom regulatory system is of world class calibre. That assurance of quality must be the hallmark of the United Kingdom if it is to be the premier financial services nation of Europe. We cannot count on London, Bristol, Edinburgh or any other of our financial centres holding on to that premier position. Frankfurt is coming up fast behind, and it is anxious to establish itself as the major focus of Europe.

The Government must demonstrate that they understand that assurance is required today and at all times. The Government must recognise their duties, so that there is a constant assessment of the self-regulatory organisations' performance. Investors require such essential confidence in those organisations at all times. The powers of protection and vigilance must be sufficient to the task expected of the Government.

4.42 pm

Mr. Stan Crowther (Rotherham) : The hon. Member for Hastings and Rye (Mr. Warren) has, on behalf of our Committee, covered the specific recommendations in the report. I should prefer to make a few general comments.

No one really knows the full extent of financial crime committed here or elsewhere. The one thing that is certain, however, is that far too much of it is going on. On page 4 of the Government's response to our report, they make an apt comment when they say : "The financial services area is a particularly attractive target for fraud, since its raw material is other people's money". That sentence sums up the problem well, but it is a pity that the Government's response has, in general, failed to recognise that the problem is as serious as that sentence suggests.

It is clear that the development of information technology, which allows vast sums of money to be switched around the world in a matter of seconds, has made financial crime much easier. It is also clear that that crime is now committed internationally on an unprecedented scale. I fear that the villains are in front of the forces of law and order and are getting even further ahead, which is disturbing. On 15 October, the House debated one of our previous reports on financial services in relation to the single European market. I contributed to that debate and the

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Minister, then Parliamentary Under- Secretary of State--I congratulate him on his well-deserved promotion-- accused me of casting aspersions

"on practically the entire City and much of the corporate sector."--[ Official Report, 15 October 1990 ; Vol. 177, c. 1020.] Nothing could be further from the truth. I did not doubt then, nor do I now, that the vast majority of people employed in financial services are perfectly honest, and as anxious as we are to root out the criminals. That does not alter the fact, however, that such crime is widespread. I do not believe that the country is tackling it as vigorously as necessary.

A few weeks ago, before our debate in October, the newly appointed director of the Serious Fraud Office said that the cases under investigation by her office, or awaiting trial, involved sums totalling £1.16 billion. By any standards, that is not peanuts ; such is the scale of the problem.

During our long inquiry, I felt that the cases that were coming to light represented a minority--the tip of a large iceberg. One of the problems facing the prosecuting authorities is the slow pace at which investigations proceed--the hon. Member for Hastings and Rye has referred to that. The most obvious recent example of that is the notorious Barlow Clowes affair, but there are many others. We are far too slow in proceeding with such investigations, and that creates problems for the prosecuting authorities.

Another problem that confronts those authorities is that, once the wrongdoer is caught and convicted, the courts often impose derisory sentences. We appear to operate different scales of penalties for different classes of offence, even though all the cases relate to dishonesty of one kind or another.

A few weeks ago, there was a press report about a member of a local authority who received a fairly lengthy jail sentence for fiddling his travel expenses to the extent of a few hundred pounds. When we contrast that with the sentences that were imposed at the end of the Guinness trial on some extremely rich people who engaged in serious crime involving millions of pounds, no one can pretend that there is any real fair play when it comes to court decisions. The public find that most disturbing.

Mr. Maxwell-Hyslop : May I say that I entirely agree with the hon. Gentleman?

Sir Anthony Grant rose--

Madam Deputy Speaker (Miss Betty Boothroyd) : Order. One intervention at a time, please.

Mr. Crowther : I am happy to give way again.

Sir Anthony Grant : I am extraordinarily grateful to the hon. Gentleman for his courtesy.

I agree with the hon. Gentleman, but judges must take into consideration the length of time that people have been in agony or at risk because the case has taken such a long time to come before court. In those circumstances, much of the punishment has been suffered before the actual conviction. That fact, however, reinforces the hon. Gentleman's point that it is necessary for procedures to be speeded up. The Guinness case was far too long ; it is an example of why justice should be speedy as well as just.

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