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Mr. Heathcoat-Amory: If the hon. Lady wishes to live up to her rhetoric, will she explain why the Government are suppressing the report on tobacco smuggling by Mr. Martin Taylor? That report was drawn up at public expense, so why does she not publish it?
Miss Johnson: I am puzzled, because earlier we heard that there was not enough time to discuss the Bill. The matter raised by the right hon. Gentleman is being discussed at considerable length by members of the Committee considering the Finance Bill. However, he has returned to it, even though it has nothing to do with the issue that we are considering.
The hon. Member for Arundel and South Downs (Mr. Flight) asked for clarification of the way in which the provision measures up to the principles of corporate governance. Principle A.2 of the combined code on corporate governance states:
- There should be a clear division of responsibilities at the head of the company which will ensure a balance of power and authority, such that no one individual has unfettered powers of decision.
- ensure a balance of power and authority, such that no one individual has unfettered powers of decision.
- A decision to combine the posts of Chairman and Chief Executive Officer in one person should be publicly justified. Whether the posts are held by different people or by the same person, there should be a strong and independent non-Executive element on the Board, with a recognised senior member other than the Chairman to whom concerns can be conveyed.
The Chairman, Chief Executive and Senior Independent Director should be identified in the Annual Report.
Public justification is on page 107 of the FSA's annual report. There is a strong and independent non-executive element on the board. Indeed, paragraph 3(1)(a) of schedule 1 specifies that the majority of members of the governing body must be non-executive. Moreover, there is a recognised senior member other than the chairman: the non-executive deputy chairman of the FSA--Stewart Boyd QC. We have repeatedly made clear the important role that we expect him to play on the board.
The chairman, chief executive and senior independent director are identified in the FSA's annual report. On the latter, page 108 states:
- Stewart Boyd QC acts as the company's lead non-Executive Director".
I therefore stress that there is no incompatibility. The proposed structure is the best means of meeting the FSA's objectives of securing clear accountability and of ensuring speed of decision making. I therefore urge the House to agree with the Lords amendment and to oppose the Opposition amendment to it.
Lords amendments Nos. 4 and 5 agreed to.
New clause
Lords amendment: No. 6, after clause 9, to insert the following new clause--Duty to consider representations by the Panels--
(".--(1) This section applies to a representation made, in accordance with arrangements made under section 7, by the Practitioner Panel or by the Consumer Panel.
(2) The Authority must consider the representation.
(3) If the Authority disagrees with a view expressed, or proposal made, in the representation, it must give the Panel a statement in writing of its reasons for disagreeing.")
Motion made, and Question proposed, That this House agrees with the Lords in the said amendment.--[Miss Melanie Johnson.]
Mr. Flight: I beg to move an amendment to the Lords amendment, in line 8, at end insert--
- '(4) The Authority's statement must be published in such manner as the Authority considers appropriate.'.
Miss Melanie Johnson: The new clause proposed in Lords amendment No. 6 responds to points raised in another place in connection with representations made to the FSA by the practitioner and consumer panels. In line with suggestions made by Opposition Members, it will improve arrangements for giving feedback to the panels.
The new clause will require the FSA to consider representations made to it by either panel in accordance with arrangements under clause 7 and, where the FSA disagrees with those representations, to make a written statement of its reasons for disagreeing. The new clause will add, in a structured way, a greater degree of transparency and therefore improves on the arrangements for the panels.
I was rather surprised to discover that the Opposition had tabled their amendment, especially given that their colleagues in another place welcomed the new clause so warmly--I believe that Lord Kingsland described himself as delighted by it. When the new clause was introduced, Lord Kingsland asked whether reasons given by the FSA would be made public; my noble Friend Lord Bach explained that they would. It is self-evident that if the FSA issues a formal response to a formal representation, by the very act of doing so it puts its reasons into the public domain.
It is a different matter to require, as the amendment would, that every such response is to be published by the FSA. To do so would be as likely to confuse as to shed light on discussions between the FSA and the panels. For example, it would be odd if the FSA were to publish its response to a representation that had, for whatever reason, not been published in the first place by the panel. Requiring automatic publication, without any regard to the nature of the issue involved, might also involve unnecessary and inappropriate expenditure by the FSA.
It is quite possible that one of the panels might make a representation to the FSA in connection with a serious flaw or loophole that it had identified in the rules; the FSA might not agree with the panel's proposed solution, in which case it would have to write to the panel to explain why. However, I find it hard to imagine that the FSA, the panels or the vast majority of consumers and practitioners in general would want the existence of such a loophole to be exposed before an appropriate solution had been identified.
Mr. Flight: Will the Economic Secretary explain clearly what the Government meant by giving a verbal assurance in the other place that the reasons would be made public? Either they will be set out, published and made public, or they will not--I do not understand why the Government appear to want to have their cake and eat it.
Miss Johnson: Ultimately, it will be for the panels to decide whether to publish statements made by the FSA when the FSA has decided, for its own reasons, not to do
so. I have no doubt that both the FSA and the panels will give full and proper consideration on a sensible, case- by-case basis to whether publication is appropriate. I urge the House to accept the new clause and to reject the Opposition amendment.Lords amendments Nos. 7 and 8 agreed to.
Clause 14
Lords amendment: No. 9, in page 7, line 8, leave out subsection (4).
The Financial Secretary to the Treasury (Mr. Stephen Timms): I beg to move, That this House agrees with the Lords in the said amendment.
Mr. Deputy Speaker: With this we may discuss Lords amendments Nos. 189, 211 to 227, 229 to 233, 265, 266, 269, 314 to 325, 374, 551, 565 and 652.
Mr. Timms: The main effect of the amendments is to rationalise the treatment in the Bill of legal professional privilege and to strengthen it. The changes are, in part, a response to concerns raised by the Opposition in Committee about the fact that privilege might not be adequately protected in all cases. Therefore, the amendments bring the Bill's definition of legal professional privilege into line with the Police and Criminal Evidence Act 1984. I believe that they will be broadly welcomed.
At the same time, the amendments consolidate existing provisions of the Bill into a single clause that extends to all the information and document-gathering powers in the Bill. The existing, separate provisions that prevent different powers being used to require a person to disclose or permit the inspection of material that is subject to legal professional privilege are, therefore, made redundant and omitted.
The amendments also simplify the drafting of clause 159 and other clauses in part XI that deal with the investigation powers of the FSA, and they align the investigation powers under part XVII in respect of collective investment schemes with the main provisions in part XI. I believe that all those amendments will be welcome and I urge the House to agree to them.
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