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5.45 pm

Let me finish by saying a word about the European convention on human rights. I wish to encourage the Government to be up-front, in your face and open about their willingness to be fair, reasonable and proportionate. I believe that the Government have little to fear from unreasonable judicial review. However, if they keep using legal techniques such as the phrase "which the Authority considers" to oust judicial review, counsel, who are proliferating in the human rights field--I declare an interest here--will draw on the European convention on human rights to get round the anti-JR provisions. Incidentally, in this case JR does not wear a 10-gallon hat; it is usually a scratch-wig.

Article 6 of the European convention provides for due process for a fair hearing in public. Article 7 provides for no punishment without law. Article 1 of protocol 1 deals with the right to own property and not to be deprived unfairly of property. All those articles are relevant to the areas in which the Financial Services Authority operates. Those articles--which are JR-proof, stand in an overarching position above our statutory legal frameworks and, according to the Chancellor of the Exchequer in the statement that he has to make, complied with in the Bill--will all be brought to bear. One does not quite know where they will stop.

I think the Government would be better off with judicial review in accordance with United Kingdom law in the context in which our courts have thought it reasonable to proceed, and not with great extensions. The Government would be wiser to accept a reasonable measure of judicial review and not to exclude it. They cannot, of course, exclude the European convention on human rights, and I do not ask that they should. But the Government's reasonableness regarding the terms of the convention will cause Strasbourg to be less likely, rather than more likely, to intervene inappropriately.

What I propose is in support of good legislation; it will improve the Bill.

Mr. Hawkins: It is always a pleasure to follow my right hon. and learned Friend the Member for North-East

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Bedfordshire (Sir N. Lyell), who has just spoken so well about the importance of the European convention as applied to the Bill and, in particular, the amendments, which I strongly support. I have not, until now, played much of a part in the deliberations on the Bill, but I particularly want to speak to these amendments, both as a lawyer and--as I mentioned in an earlier intervention--an officer of the all-party group on insurance and financial services. I am delighted to see the hon. Member for Newcastle upon Tyne, Central (Mr. Cousins) in his place. He and I have been actively involved in that group, and I know that he would agree that we try to have a positive effect on the consideration of all financial services and insurance issues in the House. It is one of the more active all-party groups and, as recently as last Thursday, we had a meeting with senior FSA officials.

As a corporate lawyer, I specialised in this field for a number of years and dealt with all the problems arising from regulatory rule books. At that time, however, we did not have the additional problems of a Government trying to exclude new legislation from the supervision by judicial review, nor was there the overarching supervision of the European convention, to which my right hon. and learned Friend referred.

I wholly agree with my right hon. and learned Friend that the Government are running a huge risk; they cannot exclude the operation of the convention. It is inevitable that at some stage the measure will be challenged, and if the Government do not accept the new clause and the amendments--if the concept of reasonableness and judicial review is not accepted--all the provisions will be struck down. The Government would be extremely wise to accept the importation into the measure of the concept of reasonableness. The amendments are essential because they would introduce the concept of what is reasonable, proportionate and open.

I was one of the many lawyers of my generation who were influenced by the late great Lord Denning. I can still hear him saying, in his dulcet Hampshire burr:


A generation of lawyers was brought up with that phrase ringing in their ears. Many of us were privileged to appear in the Court of Appeal when Lord Denning was presiding as Master of the Rolls; he ensured that the principles of natural justice were observed--especially in cases of judicial review.

It is extraordinary that, as my right hon. Friend the Member for Wells (Mr. Heathcoat-Amory) pointed out, the Government propose to create a situation whereby a decision can be made that will not be subject to any scrutiny, appeal or review. They are setting out, specifically and in terms, to exclude the operation of judicial review. That is wrong. It runs contrary not only to the European convention but to all the principles of English law and all the principles of natural justice. My right hon. Friend did not exaggerate when he made that point.

The Government's proposal should be anathema to all hon. Members. It is absolutely wrong in principle. I urge Ministers seriously to reconsider the matter. The new clause and the amendments are a vital improvement to the Bill. My right hon. and learned Friend the Member for North-East Bedfordshire referred to the words in amendment No. 13:


How could anyone possibly object to that?

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I am also reminded of the principles set out in one of the most notable post-war cases of Government abuse--about which all law students of my and subsequent generations were taught--the Crichel Down case. The case concerned an abuse of process--I think, by the Ministry of Agriculture, Fisheries and Food. After many years, it was declared that the Ministry had behaved wrongly and the then Government were severely embarrassed.

If the Government persist with the measure unamended, they will face the same type of criticism. One day, a judge in Strasbourg will refer to the fact that--as Pepper v. Hart decrees--Ministers' words can be taken into consideration in the courts' interpretation of statute. If Ministers do not accept the new clause and the amendments, they may face severe embarrassment when some judge in Strasbourg asks, "How can it be that an Administration who believed in open government and reasonableness suggested the exclusion of judicial review and scrutiny?"

The proposal is outrageous. I am sure that even those who are running the FSA would be embarrassed at the suggestion that it should not be open to scrutiny by judicial review. I earnestly urge Ministers to think again--even if they do not do so today--and, in due course, to accept the proposals tabled by my right hon. and hon. Friends. The new clause and the amendments are vital. No one could possibly object to the concept of reasonableness and challenge by judicial review; authorities should not act above the law. If the Government do not accept our amendments, Lord Denning will turn in his grave.

Mr. Jim Cousins (Newcastle upon Tyne, Central): On a point of order, Mr. Deputy Speaker. Some hon. Members have been advised that the right hon. Member for Horsham (Mr. Maude), who served as the shadow Chancellor, has been swept away and replaced by the right hon. Member for Kensington and Chelsea (Mr. Portillo)--

Mr. Deputy Speaker: Order. That is not a matter for the Chair or for this debate.

Mr. Tyrie: I begin with the perhaps slightly unusual comment that I am extremely wary of the growth of the power of the courts and of the intrusion of the judiciary into what has traditionally been the prerogative of this place--to make and frame laws. I do not instinctively want the courts to exercise judicial review over everything that they can lay their hands on.

However, the pass has largely been sold. Through judicial review, the courts intrude increasingly into many matters that were traditionally considered to be the concern of legislators. Furthermore, as it is now clear that the European Court of Human Rights will become closely involved, the Government have no choice but to examine the matter--whether they want to or not--in regard to the Bill.

I will not reiterate the many good points that have been made by my right hon. Friend the Member for Wells (Mr. Heathcoat-Amory) and by my right hon. and learned Friend the Member for North-East Bedfordshire (Sir N. Lyell). I have one or two minor comments. I strongly agree with my right hon. and learned Friend--

Mr. Nigel Beard (Bexleyheath and Crayford): The hon. Gentleman is following the same line that was

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pursued by many of his hon. Friends--to open up legislation to progressive legal interference; to lower the point at which there is the possibility of such interference; and to pile on consultation and review. The danger is that such proposals seem to be a wrecking tactic--to sink the Bill because there will be no possibility that the FSA can operate.

As the head of the shadow Treasury team has changed, would it not be sensible for Opposition Members to confer with their new authority to find out whether they are pursuing the true line?

Mr. Tyrie: I hardly think that that question is worthy of reply.

It is obvious that we want to find a balance, so as to enable the courts to examine egregious poor performance by the FSA in certain cases. I agree with my right hon. and learned Friend the Member for North-East Bedfordshire that the last thing that we want to do is to hamstring the regulator. We want some recognition of the need for judicial review over part of the FSA's activities, because that is lacking.

It is beholden on the Government to justify why immunity should be granted in a case where, for example, the FSA has behaved unreasonably. When such bad behaviour is clear, why should the authority be immune from judicial review? Why should it be immune if it acts recklessly? We must remember that, at the other end of that unreasonable or reckless behaviour are individuals or firms, who are unable to obtain redress in the courts. The Bill as drafted does not offer us the right way to proceed. In any case, the European Court of Human Rights will not permit that lack of immunity in the long run, and the Government will have to return to it. They will either be dragged to accept it or they will choose to show some flexibility in their response to our proposals.

In Standing Committee, it was pointed out that the existing bodies had much immunity and some hon. Members asked why that immunity could not be passed on to the new body. I noted that Tim Herrington, a partner at Clifford Chance, made the important point that


for existing institutions--


    "has been clearly made in the light of the increased powers of the FSA.--[Official Report, Standing Committee A, 13 July 1999; c. 143.]

He was right.

That is the nub of the matter. The FSA is a new, extremely powerful institution, unprecedented in Britain in many ways. It has a quasi-legal role, being able to make law, and a quasi-judicial role, being able to judge on it, and even powers of investigation and powers effectively to pass sentence. It is an extremely powerful institution, and the Government really should think twice before they give it the level of statutory immunity that they currently intend to.


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