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Lloyd's of London
16. Mr. Cousins: To ask the President of the Board of Trade if she will reconsider the case for an independent inquiry into the past conduct of the committee and council of Lloyd's of London. [10041]
Mr. Ian McCartney: My hon. Friend has already received a full response on the subject from my hon. Friend the Minister for Small Firms, Trade and Industry, and I have nothing to add to that reply. As for the future, however, the Government will be considering further the regulatory arrangements for Lloyd's in the context of the wider changes to financial services regulation that were announced by my right hon. Friend the Chancellor of the Exchequer, on 20 May 1997, Official Report, columns 507-11, and the changes to insurance regulation that were announced by my right hon. Friend the President of the Board of Trade on 23 July 1997, Official Report, column 676.
Mr. Cousins: I welcome the Minister's comments on bringing Lloyd's under a single powerful regulator and enforcer of regulations in the City of London, because such action will strengthen the City's case in world markets. However, serious questions about the past remain. Have Ministers received recent new evidence about the date on which the true extent of Lloyd's long-term liabilities arising out of American contracts became known to some members of the council and committee of Lloyd's and about what they did with that information? Has that evidence dealing with serious matters reached the Government? Are Ministers considering an inquiry under the Financial Services Act 1986? Have they referred the new evidence to the Serious Fraud Office?
Mr. McCartney: When I receive from my hon. Friend or from anyone else any new evidence of fraud or alleged fraud, the Department and I shall pass it to the Serious Fraud Office. We expect any such evidence to be passed to the Serious Fraud Office for consideration and appropriate action.
Bus Services (Scotland)
17. Mr. Galloway: To ask the President of the Board of Trade what plans she has to review the findings of the Monopolies and Mergers Commission report into the supply of bus services in Glasgow and Central Scotland. [10042]
Mr. Nigel Griffiths: FirstBus has requested a review of my predecessor's decision--which he announced on 24 January 1997, following the MMC's merger report--on its acquisition of SB Holdings Ltd. I have asked the Director General of Fair Trading for his advice on the request.
Mr. Galloway: I am glad to hear the Minister's answer. He should be aware of the widespread concern in the city of Glasgow about the cowboys from Stagecoach,
who were assisted in every way by the previous Government to muscle in on a bus market that was already being well served by Strathclyde Buses--which has an excellent relationship with its large work force, with the city's users' groups and with the general public. Stagecoach is freely riding the range in Glasgow without the assistance of the provisions of the MMC report; therefore, arguments about competitiveness are no longer applicable.
Specifically, does the Minister accept that, because Stagecoach is already active in the city, the draconian demand that Strathclyde Buses divest itself of one of its Glasgow bus depots is unnecessary to foster competitiveness? Does he agree that the matter should be the subject of a very thorough review?
Mr. Griffiths:
I shall certainly consider carefully FirstBus's request in the light of advice given to me by the Director General of Fair Trading.
Mr. Gray:
When was the Minister last a fare-paying passenger on a bus?
Mr. Griffiths:
Last weekend, when I paid 60p in Edinburgh.
18. Mr. Jenkin:
To ask the President of the Board of Trade if she will make a statement on her policy with regard to further liberalisation of electricity markets. [10043]
Mr. Battle:
The Government inherited an electricity programme that had been left in drift by the former Administration. A top priority was for us to sort out the programme and, within weeks, we have done that because full competition in the UK electricity market and completion of the single European market in electricity remain key priorities for the Government.
Mr. Jenkin:
Is the Minister aware of the difficulties with the settlement system in 1994 when the 100 kW market was opened up to some 50,000 customers? Is he absolutely confident that, on 1 April 1998, when some 23 million customers will have access to the pool, the settlement system will operate effectively? What steps has he taken to ensure that that will be the case?
Mr. Battle:
We were well aware of exactly what was happening because we were pointing it out to the previous Government when some 5,000 commercial bill payers did not get their bills on time. We told the Government that that would happen if they did not put proper systems in place.
I have made it clear that the necessary systems must be robust and delivered in a timely manner. I commissioned a report from the Director General of Electricity Supply on the status of the programme and on his proposals for the way forward. That report was published on 29 May, as I am sure the hon. Gentleman knows. I then discussed the director general's proposals with him, the chief executives of all the public electricity suppliers and the electricity pool on 12 June. It was agreed that the director general's report provided a sound basis on which to take forward the rest of the work to deliver that competition in 1998. We are monitoring it closely to ensure that we get it right.
19. Dr. Cable:
To ask the President of the Board of Trade when she proposes to report on the tax-exempt status of those independent research and technology organisations which she is currently reviewing. [10044]
Mr. Battle:
I expect to approve new arrangements for approving bodies under section 508 of the Income and Corporation Taxes Act 1988 and to issue guidance for applicants by the autumn. I shall then deal with the outstanding applications for approval.
Dr. Cable:
I thank the Minister for that reply but suggest that there is considerable anxiety among scientists that, in widening his net for soft targets, which recently included pension funds, the Chancellor of the Exchequer has his eye on such admirable institutions as the National Physical Laboratory in my constituency. They contribute enormously to the science base of the country and plough back all their surpluses into scientific investment. Will the Minister give us clear assurances that they will be kept free of taxation?
Mr. Battle:
The matter that the hon. Gentleman questions under section 508 of the Income and Corporation Taxes Act 1988 was raised by the previous Government who, to be fair to them, set up a review of how to tax research establishments. They published their proposals for comment on 28 April 1997, before the change of Government, but research associations will be affected. I know that the Association of Independent Research and Technology Organisations, which represents research establishments, is lobbying hard on this matter. I have met its representatives and, as far as I understand it, it is working constructively with officials, hoping to come to a mutually acceptable conclusion to ensure that genuine research is properly supported through the tax system, not priced out.
Mr. Ian Bruce:
Is the Minister aware of the success of AEA Technology which, as a result of being floated and
Mr. Battle:
I welcome the success of AEA Technology, but the answer to the hon. Gentleman's question is no.
20. Mrs. Gilroy:
To ask the President of the Board of Trade if she will make a statement about the doorstep selling of mains gas. [10045]
Mr. Battle:
I am concerned that some doorstep sellers seem to be engaging in misleading practices. I trust that the Director General of Gas Supply will put a stop to that. We intend to ensure that gas consumers get a fair deal and are not hoodwinked in the newly emerging energy markets.
Mrs. Gilroy:
To ensure that future gas competition delivers benefits to the many, not the few, will my hon. Friend the Minister look at the recent request by the Gas Consumers Council for a licensed code of practice? That is needed before the extension of liberalisation to the electricity market.
Mr. Battle:
I am grateful to my hon. Friend for her question. I welcome her comments because I know that she has taken an interest in those matters and has championed consumers for a long time. I welcome the establishment of the Energy Selling Association and its code of practice, which is aimed at enhancing standards. Suppliers will need to make an effort to ensure that their agents act properly. We shall shortly announce consultation on proposals to strengthen the general law on doorstep selling. I hope that my hon. Friend will welcome that.
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