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Mr. Patrick McLoughlin (West Derbyshire): Will the Economic Secretary remind the House of the running total so far of Government amendments to this well- thought-out Bill?
Miss Johnson: I am happy to do that--in fact, I was about to discuss that very topic. However, before I do so, I should like to draw the Opposition's attention to a related matter; they clearly have short memories. The Financial Services Act 1986 was extensively amended during its passage through Parliament, even though it was a much less far-reaching Bill. Unlike the Financial Services and
Markets Bill, it dealt only with the investment sector and not with banking, building societies, insurance and Lloyd's, yet the Government of the day made 582 amendments to that smaller Bill in the second House.It is right that legislation as important as the Financial Services and Markets Bill should be subject to intense scrutiny. Opposition parties tabled almost 1,300 amendments; we have considered those amendments and listened to the arguments put to us in almost 200 hours of parliamentary debate and in wider consultation. That process has been constructive and co-operative in both Houses. There is a consensus on our underlying policy aims, and a shared determination to get the detail right.
Several improvements were made in the other place, and are explained at some length in explanatory material made available by the Treasury on 24 May, which hon. Members will have had plenty of time to study in advance of today's debate. They should be reassured that we have not introduced new policy in the other place. The majority of our amendments are to meet commitments made in this House, or are in one way or another consequential on changes made before the Bill left this House in February.
Those changes generally follow up recommendations of the Joint Committee, or respond to developments during the passage of the Bill, notably the stock exchange's decision to demutualise. Some improvements arose out of earlier debates in this House, such as those to the Financial Services Authority's procedures and accountability. Other amendments that had to be made in the other place are purely technical or drafting amendments, such as corrections to definitions.
The nature of the Bill means that a single, insignificant change may require scores of separate amendments, which I am sure need not detain the House.
Mr. Eric Forth (Bromley and Chislehurst): What!
Miss Johnson: I am not sure whether the right hon. Gentleman is asking me a question or making an exclamation.
Mr. Forth: The Minister has just said that the amendments need not detain the House, as if that were a statement of fact. I suggest that that is a decision for the House to make, not her.
Miss Johnson: I appreciate that the right hon. Gentleman believes that he is the keeper of the soul of this Chamber, but I reiterate that the nature of the Bill means that a single, insignificant change may require scores of separate amendments. Those amendments are basically the same, so they need not detain the House. That was my point.
The Government make no apologies for the extent to which the Bill has been improved in the other place. That is how the revising process is supposed to work. I hope that my explanation helps to clarify the nature of the task involved in considering the amendments, and that we can proceed to consider them as expeditiously as possible.
Mr. Andrew Tyrie (Chichester): Does the Minister's first experience of taking a Bill through Parliament over the past nine months lead her to conclude that it may have been a good idea if the Government had introduced the Bill in better shape in the first place?
Miss Johnson: My experience of taking the Bill through Parliament since July last year is that, because of
the Joint Committee scrutiny of the draft Bill--a process with which the hon. Gentleman will be familiar--we were able to tackle enormously complex subjects. As I explained, the Bill replaces three main separate pieces of legislation and covers a wide range of financial services. It has received the degree of scrutiny that it ought to have received. It has been scrutinised in great detail in this Chamber, in Committee and in the other place, so we have before us a much improved Bill that I believe is now ready to go on to the statute book.3.38 pm
Mr. David Heathcoat-Amory (Wells): The Economic Secretary has failed to explain why the Government have tabled almost 700 amendments, new clauses and new schedules at this late stage in the Bill. The volume of amendments that hon. Members will have received from the Vote Office is like a substantial paperback. It runs to more than 90 pages, but none of it has been scrutinised by this House--these amendments have been passed in the other place. The Government are pushing through this paperback under a guillotine in one day.
The Economic Secretary dismissively said to my right hon. Friend the Member for Bromley and Chislehurst (Mr. Forth) that most of the amendments are trivial and need not detain the House. That is for us to decide. It is not up to a Minister to tell us what we consider important, especially as many Opposition Members have been engaged with the subject for rather longer than the Minister. There have been three ministerial changes since the Bill began its rocky passage through Parliament, but my hon. Friend the Member for East Worthing and Shoreham (Mr. Loughton) and I are two Members who have been present right from the start.
Mr. Michael Fabricant (Lichfield): My right hon. Friend has served in the Treasury. Does he recall a time when such substantial changes were made to a Bill at such a late stage? Does not this demonstrate--as with the Utilities Bill--that the Bill was ill thought out in the first place?
Mr. Heathcoat-Amory: Yes. Indeed, I would go further--I think that this Bill bears increasingly little resemblance to the Bill that received a Second Reading last year. It has been constantly redrafted, and that can in no way be described as a response to consultation. Tabling nearly 700 amendments at such a late stage has nothing to do with consultation; it is simply bad legislation. Good legislation is produced when the Government know what they want to do, consult on how to do it and then produce a Bill for consideration by both Houses. As my hon. Friend says, in this case the Government have abused the process by substantially rewriting parts of a Bill. Indeed, in some instances--such as the provisions relating to the new competition regime--they are beginning to amend their own amendments. The Bill is diverging from the measure to which the House thought it was assenting last summer.
There is no excuse for the guillotine. As the Economic Secretary acknowledged, the Opposition have co-operated fully, and have given the Government no provocation whatever. Why, then, should the Government slam on a guillotine and push through all the Bill's remaining stages in one day? That is no way to treat an industry that employs more than 1 million people and is such an
enormous foreign exchange earner for the United Kingdom. Many people's livelihoods will be affected by the Bill, and it needs proper, careful scrutiny.The casual way in which the Government have treated the House goes back some time. The Bill was published nearly two years ago, and was examined by a joint Lords-Commons Committee chaired by Lord Burns. We supported that procedure. The Government said that they would support most of the Committee's recommendations, and would present a Bill in good order. I attended a meeting of Ministers, parliamentary counsel, draftsmen and House authorities, at which I asked whether the Bill was in a suitable state to be debated and scrutinised by the House of Commons. I was assured that it was in such a state, but I am afraid that that has turned out not to be the case.
On the basis of those assurances, we allowed the Bill to be carried over from the previous to the current Session. However, the Government not only constantly and consistently amended it in Committee, but tabled more than 300 amendments on Report in the Commons. That is exactly what they are doing today--at a very late stage, they have tabled pages of new amendments that have not been subjected to proper scrutiny in either House.
Changing a Bill after it has completed the stages that allow proper debate and scrutiny does not constitute consultation. This is now the most amended Bill in the history of the House, I am advised. The Economic Secretary tried to draw a parallel between the Bill and the Financial Services Act 1986. The arithmetic is on our side. Hundreds of amendments of a substantial, not trivial, nature have gone entirely unscrutinised.
Mr. Tim Loughton (East Worthing and Shoreham): On the comparison with the 1986 Bill, that legislation first regulated the Financial Services Authority. We have had 14 years of experience since then to ensure that the current Bill builds on that experience and gets it right, so it is an even worse scenario that we have more amendments now than we did when we came to the matter afresh in 1986.
Mr. Heathcoat-Amory: My hon. Friend is right. Given also that the Burns committee looked at the matter and gave the Government a lot of advice and recommendations, there is even less excuse for treating Parliament in this way.
Two other matters are relevant to the motion. Two additional matters have come up in recent weeks, to which the Government have not fully responded. The first is the proposed merger between the London and Frankfurt stock exchanges. No one from the Government side will tell us how or whether the Financial Services Authority will regulate the merged exchange. It is a very important matter. It is not good enough for the Government, who presumably had warnings of that merger, to have no real response to the question about which rules and regulations will apply to the merged exchange.
The second matter that has caught the Government on the hop is the issue of the overlap and possible conflict between the Financial Services Authority and the takeover panel during bids and mergers. The Government were defeated on that matter in another place. The amendment inserted there will provide that if the parties to a bid comply with the City code issued by the takeover panel, that will be a defence against allegations of market abuse. In other words, that will provide a safe harbour against market abuse.
The Financial Services Authority will still be in charge. It will be able to issue the statement and its own code, which provides that safe harbour, and it may include conditions and limitations on it, so it will still be the league regulator, but that is an enormously important issue that has not yet been properly debated in the House. It is made worse by the fact that, instead of accepting that improvement to the Bill in another place, the Government apparently will seek to reverse it. Apparently, they do not like the fact that it is the takeover panel that will determine whether the behaviour of the parties to a bid actually complies with the City code and so gives a safe harbour against market abuse.
The Lords amendment is a good one because it provides a clear demarcation between the responsibilities of the Financial Services Authority and that of the takeover panel. Without that clear distinction about who does what, there will be endless scope for confusion, delay and litigation during a bid, which will undermine the role and success of the takeover panel. That is acknowledged in all parts.
It is also rumoured that the Liberal Democrats will collude with the Government in another place in overturning that amendment. If there is any party in the House of Commons that has few credentials for determining the future of the Bill, it is the Liberal Democrats. As my hon. Friends will recollect, the Liberal Democrats failed to provide anyone at all to attend the proceedings of the Standing Committee that considered the Bill. I see that we are now graced by the presence of one Liberal Democrat. I do not recollect him attending any of our previous debates. He has obviously been co-opted at a late stage to try to put up some defence for that collusion, but it is a shabby deal.
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