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Mr. Cousins: I have followed my hon. Friend's arguments as closely as I can, and I have been impressed not only by her clarity and moderation but by her robustness on behalf of consumer interests. She has taken a reasonably clear position with regard to another place. I want to reinforce her determination to ensure that her stand on behalf of consumers will be defended not only in the Chamber but in another place. I strongly endorse her position.
Miss Johnson: I thank my hon. Friend for his understanding and support for our position and the modifications that we have made. I believe, as does my hon. Friend, that we have moved far enough to ensure that we are proposing a regime that will operate fairly on behalf of those who may fall into a category of committing market abuse. We have defined that properly and rightly. Any further amendments would be made only as a result of technical changes, not changes in the Government's position. We have got the balance right.
Mr. Heathcoat-Amory: The House will be pleased to know that I shall not grind through the case for our amendments again, as it was ably put by my hon. Friends the Members for Arundel and South Downs (Mr. Flight) and for Bury St. Edmunds (Mr. Ruffley). They set out the arguments for a modest package that is largely in line with the requirements of the Law Society. Those arguments should be taken seriously by the Government as these provisions are most important, if only because they could affect everybody, not only the regulated community. Many of the other disciplinary powers relate to comparatively few professionals who form only a small proportion of the population even though they number many thousands, but market abuse could be committed by anyone who engaged in market activity and these measures could catch unintentionally people who have only an association with a market.
The Government have tried to limit the provisions and I again concede that the proposal before us is much better than the one they started with, but further certainty is required. It is a basic requirement of justice that people should know in advance what behaviour is likely to be caught by a Bill and whether they would be subject to either the criminal law or civil law sanctions. That was at the root of many of the objections made by witnesses to the Burns committee. My hon. Friend the Member for Bury St. Edmunds quoted Lord Hobhouse and, although
the Minister came back to describe how the Bill had been altered since, many of the misgivings expressed last year are still valid.
Our amendment would import greater clarity and certainty to the Bill. As the hon. Member for Newcastle upon Tyne, Central (Mr. Cousins) said, the protection of consumers is a perfectly valid objective for the market abuse provisions--indeed, that is one of the Bill's main aims--but the consumer interest will not be well protected if they are unworkable in any respect. If they fall foul of the courts or, worse, are tripped up by an adverse ruling at the European Court of Human Rights, the whole industry will suffer through lack of effective regulation. The consumer interest could also be jeopardised so it is important that the modifications are adequate.
The Government have introduced provision for subsidised legal assistance when people are accused of such crimes and misdemeanours. It is important to recognise that those matters have aspects of the criminal law about them and that the defence that must be available must therefore measure up to criminal standards. That cannot be regarded as simply a matter for the civil law.
I was also a little worried by the Minister's comments on the fact that unintended abuse would still be caught. I understand what lies behind them, but it is dangerous to propose that we should rely entirely on the effect of an action and disregard the intention. She explained that the degree of intention in the market abuse would have to be taken into account in settling penalties, but I cannot help drawing the House's attention to the contrast between the treatment of people accused of market abuse and the protection given to the FSA when it engages in wrong behaviour unintentionally.
The Government have been careful to ensure that the authority is not liable for unintended wrong behaviour when, for example, it acts negligently or even recklessly. They have erected a series of protections for the authority that are not available to the public or those accused of market abuse and that asymmetry--this is not the only example of it--causes some disquiet.
Mr. Nigel Beard (Bexleyheath and Crayford):
Proof of intent has been debated several times and is being covered again now. Several cases of market abuse were notable because they were difficult to prove and people got away with it. Would not it be extremely difficult to prove market abuse if intent were introduced as the basis of proof and would not an awful lot of people still get away with it? The Bill eases the process of prosecution so that those who should be prosecuted and found guilty will be found guilty.
Mr. Heathcoat-Amory:
The hon. Gentleman makes the big claim that guilty people have got away with it.
Liz Blackman (Erewash):
How else can market abuse be evidenced, other than in its effect?
Mr. Heathcoat-Amory:
I shall not go through the case for our amendments again, but I refer the hon. Lady to the arguments of my hon. Friend the Member for Arundel and South Downs, who proposed a modest amendment to tighten the provisions and to place greater emphasis on the concept of intent. If we do not do so, we could violate a fundamental principle of justice. Although I recognise the force of the Minister's arguments, I am nevertheless disturbed at the extent to which they are beginning to rely more on the effect of behaviour rather than intent in defining market abuse. Our amendment, which would not have completely removed the concept of unintended abuse, would have achieved an improvement.
The Law Society has advanced those concerns, and suggestions for dealing with them. We do not intend to press any of these amendments to a Division at present. In her response, the Economic Secretary left the door very slightly ajar, so there may be an opportunity to return to these matters in the other place to get a regime to conquer market abuse that is effective without doing too much damage to the traditional principles of British justice.
Mr. Flight:
In the light of my right hon. Friend's comments, I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Mr. Flight:
I beg to move amendment No. 237, in page 103, line 18,, leave out subsections (4) to (7) and insert--
Amendments made: No. 285, in page 45, line 1, leave out subsection (5) and insert--
"(5) If the code is altered or replaced, the altered or replacement code must be issued by the Authority.
(5A) A code issued under this section must be published by the Authority in the way appearing to the Authority to be best calculated to bring it to the attention to the public.".
No. 286, in page 45, line 5, leave out subsections (6) to (8).
No. 287, in page 45, line 13, at end insert--
"( ) The Authority may charge a reasonable fee for providing a person with a copy of the code.".--[Miss Melanie Johnson.]
Amendments made: No. 288, in page 45, line 28, leave out "publish" and insert "issue".
No. 289, in page 45, line 40, leave out
"any statement of policy for the time being published"
and insert "a statement issued".
No. 290, in page 46, line 1, leave out
"any statement of policy for the time being published"
and insert "a statement issued".
No. 291, in page 46, line 2, leave out "publish" and insert "issue".
No. 292, in page 46, line 6, leave out "of policy".
No. 293, in page 46, line 6, after "section" insert "and in force".
No. 294, in page 46, line 8, leave out subsection (6) and insert--
"( ) A statement issued under this section must be published by the Authority in the way appearing to the Authority to be best calculated to bring it to the attention to the public.".
No. 295, in page 46, line 11, at end insert--
"( ) The Authority may charge a reasonable fee for providing a person with a copy of a statement published under this section.".
No. 296, in page 46, line 12, leave out subsection (7).
No. 297, in page 46, line 16, leave out "of policy".--[Miss Melanie Johnson.]
Amendments made: No. 118, in page 47, line 6, leave out from "of" to "it" in line 7 and insert--
"a power relating to market abuse".
No. 119, in page 47, line 19, leave out from "powers" to "are" and insert "relating to market abuse".
No. 120, in page 47, line 22, leave out "impose penalties" and insert--
"appoint a person to conduct an investigation".--[Miss Melanie Johnson.]
Amendments made: No. 298, in page 53, line 14, leave out subsections (6) to (11).
No. 299, in page 53, line 29, leave out
"(7), (8)(b), (9) and (11) apply"
and insert
"(1), (2)(d), (4), (5), (6)(a) and (10) of section 127 apply (with the necessary modifications)".--[Miss Melanie Johnson.]
Amendment made: No. 300, in page 57, line 14, leave out from beginning to "the" in line 15 and insert--
"(4) A rule-making instrument must be published by the Authority in the way appearing to the Authority to be best calculated to bring it to the attention of".--[Miss Melanie Johnson.]
Amendments made: No. 301, in page 58, line 2, leave out from "analysis" to end of line 3.
No. 302, in page 58, line 5, leave out "a statement" and insert "an explanation".
No. 303, in page 58, line 8, leave out "a statement" and insert "notice".
No. 304, in page 58, line 10, leave out from beginning to second "the" and insert--
"In the case of a proposal to make rules under a provision mentioned in subsection (8A),".
No. 305, in page 58, line 12, leave out "those proposals are" and insert "the proposal is".
No. 306, in page 58, line 15, leave out from first "the" to "to" in line 17 and insert--
"Authority makes the proposed rules, it must publish an account, in general terms, of--
(a) the representations made to it in accordance with subsection (2)(d); and
(b) its response.".
No. 307, in page 58, line 18, leave out
"rules made by the Authority"
and insert "the rules".
No. 308, in page 58, line 21, leave out "publish a statement" and insert--
"(in addition to complying with subsection (5)) publish details".
No. 309, in page 58, line 22, leave out "the statement" and insert "those details".
No. 310, in page 58, line 22, leave out from "analysis" to end of line 23.
No. 311, in page 58, line 24, leave out "(3) and".
No. 312, in page 58, line 27, leave out from beginning to "of" in line 33 and insert--
"( ) Neither subsection (2)(a) nor subsection (6)(b) applies if the Authority considers--
(a) that, making the appropriate comparison, there will be no increase in costs; or
(b) that, making that comparison, there will be an increase in costs but the increase will be".
No. 313, in page 58, line 34, at end insert--
"(8A) Neither subsection (2)(a) nor subsection (6)(b) requires a cost benefit analysis to be carried out in relation to rules made under--
(a) section (Funding of the legal assistance scheme)(2);
(b) subsection (1) of section 187 as a result of subsection (4) of that section;
(c) section 209;
(d) paragraph 17 of Schedule 1.".
No. 314, in page 58, line 38, after "rules", insert "that have been made".
No. 315, in page 58, line 38, at end insert--
"(11) 'The appropriate comparison' means--
(a) in relation to subsection (2)(a), a comparison between the overall position if the rules are made and the overall position if they are not made;
(b) in relation to subsection (6)(b), a comparison between the overall position after the making of the rules and the overall position before they were made.".--[Miss Melanie Johnson.]
Amendment made: No. 418, in page 59, line 7, leave out "under this Act".--[Miss Melanie Johnson.]
Amendment made: No. 419, in page 59, line 34, leave out "Notice of an alteration" and insert "The notice".--[Miss Melanie Johnson.]
Amendment made: No. 316, in page 60, line 21, leave out
"the Treasury and the Director may assume"
and insert "it may be assumed".--[Miss Melanie Johnson.]
Amendment made: No. 317, in page 60, line 24, leave out Clause 132.--[Miss Melanie Johnson.]
Amendment made: No. 447, in page 61, line 13, leave out "132" and insert
"(Reports by Director General of Fair Trading)".--[Miss Melanie Johnson.]
Amendments made: No. 318, in page 61, line 40, leave out Clause 134.
No. 319, in page 62, line 27, leave out Clause 135.--[Miss Melanie Johnson.]
Amendment made: No. 448, in page 64, line 15, at end insert--
"( ) an operator, trustee or depositary of a scheme recognised under section 243 or 245 who is not an authorised person;".--[Miss Melanie Johnson.]
Amendment made: No. 121, in page 74, line 31, leave out
"does not qualify for authorisation under"
and insert
"is not a person authorised as a result of paragraph 1 of".--[Miss Melanie Johnson.]
Amendment made: No. 122, in page 77, line 31, leave out subsection (2) and insert--
"(2) In imposing any conditions, the Authority must have regard to its duty under section (The threshold conditions).".--[Miss Melanie Johnson.]
Amendments made: No. 123, in page 78, line 12, at end insert "and".
No. 124, in page 78, line 16, leave out from "control" to end of line 24 and insert--
"( ) In deciding whether the approval requirements are met, the Authority must have regard, in relation to the control that the acquirer--
(a) has over the authorised person concerned ('A'), or
(b) will have over A if the proposal to which the notice of control relates is carried into effect,
to its duty under section (The threshold conditions) in relation to each regulated activity carried on by A.".--[Miss Melanie Johnson.]
Amendments made: No. 125, in page 83, line 22, leave out "authorised person" and insert "firm"
No. 126, in page 83, line 23, after "such" insert "a"--[Miss Melanie Johnson.]
Amendment made: No. 127, in page 88, line 3, leave out "(1)" and insert "(1B)".--[Miss Melanie Johnson.]
Amendments made: No. 128, in page 88, line 14, at end insert--
"(1A) If it appears to the Director that a restriction imposed under section 178 on an EEA consumer credit firm has not been complied with, he may by written notice given to the firm impose a consumer credit prohibition.".
No. 129, in page 88, line 30, at end insert "or (1A)".--[Miss Melanie Johnson.]
Amendment made: No. 130, in page 89, line 35, leave out subsection (5).--[Miss Melanie Johnson.]
Amendments made: No. 320, in page 91, line 13, leave out "publish" and insert "issue".
No. 321, in page 91, line 24, leave out "any material published" and insert "a statement issued".
No. 322, in page 91, line 26, leave out "any such material" and insert
"a statement issued under this section".
No. 323, in page 91, line 26, leave out "publish it as altered" and insert
"issue the altered or replacement statement".
No. 324, in page 91, line 28, leave out subsection (5) and insert--
"(5) The Authority must, without delay, give the Treasury a copy of any statement which it publishes under this section.".
No. 325, in page 91, line 30, leave out subsection (6) and insert--
"(6) A statement issued under this section must be published by the Authority in the way appearing to the Authority to be best calculated to bring it to the attention of the public.".
No. 326, in page 91, line 33, leave out subsection (7).
No. 327, in page 91, line 40, leave out "material" and insert "statement".
No. 328, in page 91, line 40, after "section" insert "and in force".
No. 329, in page 91, line 41, at end insert--
"( ) The Authority may charge a reasonable fee for providing a person with a copy of the statement.".--[Miss Melanie Johnson.]
Amendment made: No. 131, in page 95, line 16, leave out "65" and insert "55".--[Miss Melanie Johnson.]
Amendments made: No. 132, in page 99, line 3, leave out "punish" and insert "deal with".
No. 133, in page 99, line 4, leave out from "he" to end of line and insert "were in contempt".--[Miss Melanie Johnson.]
Amendment made: No. 134, in page 99, line 30, leave out ", (3)".--[Miss Melanie Johnson.]
Amendment made: No. 135, in page 99, line 31, leave out Clause 198.--[Miss Melanie Johnson.]
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