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Mr. Fallon: The Economic Secretary said that the consultation is genuine; I assure her that the amendments are genuine also. We believe that they will improve the consultation process. Of course it is easier for the Treasury to send out only two letters rather than 500. That is a matter of judgment--and we know who will win the argument. We still believe that, in this instance where large sums of money are involved, it would be better to make the consultation as wide, rather than as narrow, as possible.

The Economic Secretary took a rather hard tone in referring to amendment No. 7. However, she has almost satisfied me with her last assurance. If she will publish a summary of the representations received in the Government's response document, she is 90 per cent. there. At least those who have made representations will

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be aware of the balance of views. In light of that assurance--for which I thank her--I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Schedule 7

Restriction on Disclosure of Information

Mr. Heathcoat-Amory: I beg to move amendment No. 11, in page 42, leave out line 12.

Mr. Deputy Speaker: With this, it will be convenient to discuss the following amendments: No. 12, in page 42, line 12, after 'any', insert 'legally binding'.

No. 13, in page 42, line 12, after 'obligation', insert


'specifically requiring the disclosure of information relevant to the purposes of this Act.'.

Mr. Heathcoat-Amory: This small group of amendments touches on an issue that the Treasury Committee considered at some length, but unsatisfactorily. To be charitable to the Government, I do not believe that they had spotted the issue before we raised it. The debate was answered by the Paymaster General, whose mind was on other things by the time we reached this part of the Bill. It is an important matter, which was not resolved in Committee.

The matter concerns the disclosure of confidential information to the European Union in circumstances of which the House may not approve. It is about the powers of the House, and about the apparently privileged position of the European Union regarding information gathered by the Bank of England in confidence. The Bill makes provision for the Bank to obtain information from institutions, banks and so on, and criminal penalties attach to those who decline to provide that information. That is understandable: the Bank needs a lot of information in order to carry out its tasks.

That means that the Bank of England will possess much important information about the City of London, all of which could be useful to competitors, including other financial centres. There are quite proper restrictions on the uses to which that information can be put and to whom it may be disclosed. There is a table in schedule 7 that sets out the authorities to which information can be disclosed. It also lists the functions in pursuance of which those institutions need the information. All that is right and has our full support.

9.30 pm

However, there is an overriding permitted disclosure that does not have to be listed in this way or approved by the House. That appears at the end of the schedule, where it is specified that all information may be disclosed


The House knows that that goes extremely wide. We have a great many obligations under the European treaties. To give just one example, article 102a of the Maastricht treaty states that member states must


    "conduct their economic policies with a view to contributing to the achievement of the objectives of the Community".

Those objectives are defined in article 2 as including


    "an economic and monetary union".

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    There are a number of other very general obligations.

It is easy to see that some organ of the European Union--whether it is the Commission, the Council of Ministers, the European Parliament, or the Committee of the Regions--might want information about monetary policy or about the City of London. A European institution might, for example, believe that the City was gaining certain advantages outside the euro zone because of what it might term a competitive and unnecessary devaluation.

Therefore, in pursuit of our obligation to assist economic and monetary union, European institutions could foreseeably demand information about British monetary policy and about banks and institutions operating in London. That follows logically.

Our amendments would restrict disclosure, by removing the privileged position of the European Union and requiring its institutions to be listed in the table alongside UK authorities and institutions. We do not disagree with the proposition that information should be disclosed to the EU, if it is proper and if the House agrees. The House will shortly approve the institutions listed in the table. Why can it not also approve the European Union as an authority, and list the functions under which disclosure is required? That would put the EU on a par with any domestic institution. What could be fairer than that?

If that does not appeal to the Government, there is an alternative that I commend to the House. That would make it clear that the relevant obligations are legally binding, and it would narrow the obligations to ensure that they specifically require the disclosure of information, pursuant to the purposes of the Bill.

Those are modest requests. They would not inhibit or damage our relations with the EU, if that is what the Government fear. I hope that the Minister will respond positively, as an important matter is involved--the role of Parliament in regulating our relations with other institutions, especially those abroad.

Sir Teddy Taylor (Rochford and Southend, East): After my right hon. Friend the Member for Wells (Mr. Heathcoat-Amory) has made the point so ably, I have two questions to ask the Government. The first is why it is necessary to put in the words in line 11. We have been told time and again that European Community law is superior to our law. Surely, if the Bank of England revealed some information and someone challenged it, and if the disclosure was a Community obligation, there would be no problem, so why are the words included?

We are constantly passing laws without thinking through their consequences, and without realising how silly and nebulous they are. It is a huge mistake to think that it is possible to specify Community obligations. I say that, having attended the meeting of the Sub-Committee of the Treasury Committee this morning, and a delightful meeting yesterday at the Bank of England, which was also attended by all the top bankers who operate in this country.

At that meeting, the Bank of England handed out a delightful paper with a red cover stating clearly and precisely that, although the House had been told that Britain was exempt from article 109L of the Maastricht treaty--which, although it sounds small, is terribly important because it refers to fixed exchange rates and

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member states' obligations to pursue the single currency; all kinds of complicated things--in practice it would have to apply. It said that, because it was part of the monetary regulations relating to the euro, it would be enforceable in English courts. The Minister may wonder why the Bank of England referred to English courts, not British courts, but it did refer to English courts.

Basically, the Bank of England was saying that, although the House of Commons thought, and thought rightly, when the previous Prime Minister, a dedicated and sincere person, came back and said that we need not worry about article 109L because we were exempt from it, nevertheless it will apply. This is a constantly moving situation, and there is no way in which we can specify our Community obligations.

The next thing that I hope the Minister will bear in mind is that, as we approach the two years of convergence with the other currencies before we join, a complex and difficult situation will arise with fixed exchange rates. The one thing that seems abundantly clear from our own experience in the UK is that a certain number of those currencies will be under enormous pressure. There is no doubt that the United States will have an interest in such matters.

Why on earth should the Bank of England be obliged to surrender information when it may be against our national interest, simply because it may believe that it is relevant to a Community institution?

Who decides on these matters? Does the Bank of England decide, or does the European Community simply say what must go? I have always been suspicious of any legislation relating to the EU because, unfortunately, we have been misled time and again. I can think of many examples when we have been given the clearest of promises, only to find, sadly, that those promises are thrown out of the window.

The day before yesterday, a large number of farmers came to the House, and we have had some fishermen recently. Those poor old fishermen were given clear and precise assurances, but, unfortunately, the European Court threw them out, and the obligation simply disappeared.

The Minister must say why on earth we need this line at all when there is no need for it, and when the obligation is superior to our law. Secondly, is it fair and reasonable to include words which impose an obligation, when other countries will not be aware that information relating to them will be passed over without their knowledge?

The line should be removed, as suggested in the amendment, but if not, I hope that the Minister will at least accept the wise and intelligent suggestions of my right hon. Friend the Member for Wells, who I hope will some day have responsibility for looking after such matters and sorting out the horrible mess that we have ended up in with European legislation.


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