Select Committee on Treasury Ninth Report



PROCEEDINGS OF THE COMMITTEE RELATING TO THE REPORT

WEDNESDAY 6 MAY 1998

Members present:

Mr Giles Radice, in the Chair
      Mrs Liz Blackman
      Mr Malcolm Bruce
      Mr Jim Cousins
      Mr Quentin Davies
Ms Ruth Kelly
Mr David Kidney
Sir Peter Lloyd
Sir Michael Spicer

Mr Quentin Davies declared a pecuniary interest as adviser to NatWest Markets, the investment banking subsidiary of NatWest plc.

Mr Jim Cousins, Mr David Kidney and Ms Ruth Kelly declared non-pecuniary interests as members of the trade union MSF, which recruits in the insurance industry.

Sir Peter Lloyd declared a pecuniary interest as a member of Lloyd's of London.

* * * *

THURSDAY 12 NOVEMBER 1998

Members present:

Mr Giles Radice, in the Chair
      Mrs Liz Blackman
      Dr Vincent Cable
      Mr Jim Cousins
      Mr David Kidney
Sir Peter Lloyd
Jacqui Smith
Sir Michael Spicer
 

The Committee deliberated.

Draft Report (The Mis-selling of Personal Pensions), proposed by the Chairman, brought up and read.

Ordered, That the draft Report be read a second time, paragraph by paragraph.

Paragraphs 1 to 4 read and agreed to.

Paragraph 5 read, amended and agreed to.

Paragraphs 6 to 10 read and agreed to.

Paragraphs 11 and 12 read, amended and agreed to.

Paragraphs 13 to 15 read and agreed to.

Paragraphs 16 and 17 read, amended and agreed to.

Paragraphs 18 to 21 read and agreed to.

Paragraph 22 read, amended and agreed to.

Paragraphs 23 and 24 read and agreed to.

A paragraph—(Dr Vincent Cable)—brought up, read the first and second time, amended and inserted (now paragraph 25).

Paragraph 25 (now 26) read, amended and agreed to.

Paragraphs 26 to 30 (now 27 to 31) read and agreed to.

Paragraphs 31 and 32 (now 32 and 33) read, amended and agreed to.

Paragraph 33 to 35 (now 34 to 36) read and agreed to.

Paragraphs 36 and 37 (now 37 and 38) read, amended and agreed to.

Another paragraph—(Mr Jim Cousins)—brought up, read the first and second time, and inserted (now paragraph 39).

Paragraph 38 (now 40) read, as follows:

"On 17 June Mrs Liddell put out a press release criticising the attitude of IFAs to Phase 2 of the review as "passing the buck" and "tarnishing those IFAs with integrity". When we put this to the IFAA, they described the Minister's remarks as "unfortunate" in pre-empting the consultation process, and in the particular case of transfers felt that they were being blamed for (and being expected to compensate for) changes in rates of return and annuity rates which were not known at the time the advice was given.

An Amendment made.

Question put, That the paragraph, as amended, stand part of the Report.

The Committee divided.

      Ayes, 4

      Dr Vincent Cable
      Mr David Kidney
      Sir Peter Lloyd
      Sir Michael Spicer

Noes, 3

Mrs Liz Blackman
Mr Jim Cousins
Jacqui Smith
 

Paragraph 39 (now 41) read, amended and agreed to.

Paragraph 40 (now 42) read and agreed to.

Paragraph 41 (now 43) read, amended and agreed to.

Paragraphs 42 to 45 disagreed to.

Other paragraphs—(Mr David Kidney)—brought up, read a first and second time, amended and inserted (now paragraphs 44 to 48).

Another paragraph—(Mr David Kidney)—brought up and read a first and second time, as follows:

"Insurance companies hold large amounts of other people's money. We were concerned to learn that the regulation of this aspect of their business is ill-designed, little known and rarely exercised. We believe that there is scope for improvement in the protection given to policyholders. We recommend that the Treasury examine whether legislation or further rules are necessary to define what is meant by policyholders' "reasonable expectations", the extent to which surplus "orphan" assets should be distributed, and to whom, and whether the role of the appointed actuary of an insurance company (see paragraph 29) in safeguarding policyholders should be strengthened."

Amendment proposed, in line 4, to leave out from the word "legislation" to the end, and add the words "is necessary to tighten rules about fraudulent selling and rules of competition rather than engage in the interventionist, financially crippling and bureaucratic regulatory procedures which comprise the emphasis and the theme of this Report.".—(Sir Michael Spicer.)

Question put, That the Amendment be made.

The Committee divided.

      Ayes, 2

      Sir Peter Lloyd
      Sir Michael Spicer
       
       
       

Noes, 5

Mrs Liz Blackman
Dr Vincent Cable
Mr Jim Cousins
Mr David Kidney
Jacqui Smith

An Amendment made.

Paragraph, as amended, inserted (now paragraph 49).

Paragraph 46 (now 50) read, amended and agreed to.

Question put, That the Report, as amended, be the Ninth Report of the Committee to the House.

The Committee divided.

      Ayes, 6

      Mrs Liz Blackman
      Dr Vincent Cable
      Mr Jim Cousins
      Mr David Kidney
      Sir Peter Lloyd
      Jacqui Smith

Noes, 1

Sir Michael Spicer
 
 
 
 
 

Ordered, That the Chairman do make the Report to the House.

Several papers were ordered to be appended to the Minutes of Evidence.

Ordered, That the Appendices to the Minutes of Evidence be reported to the House.—(The Chairman.)

[Adjourned till Tuesday next at half-past Ten o'clock.


 
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Prepared 17 November 1998