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Sir Nicholas Lyell (North-East Bedfordshire): My hon. Friend the Member for Arundel and South Downs (Mr. Flight) has put the points clearly and succinctly on what can be reasonably expected as a matter of legal fairness and in terms of whether or not the Government's proposals comply with article 6 of the European convention on human rights. The question at issue is whether, unless the amendment is accepted, the Government's proposals will give the accused--of whatever name or description--a fair trial.
It is now fundamental to our law, happily, that where someone is accused of something, those acting as prosecutor should disclose all relevant documents, and should particularly be astute in disclosing any relevant documentation or other information in their possession which would assist the accused. The failure to do that on many occasions in the past underlies a large number of the serious miscarriages of justice with which we have had to wrestle over the past 15 years.
The FSA will be an extremely powerful body. We do not object to its power--we are raising questions about the manner in which it exercises that power. It is important that these matters of quasi-prosecution--whether they come under a civil or criminal heading--should be conducted with scrupulous fairness. The FSA should follow rules that are likely to lead to fairness in practice.
I await with interest what the Minister says on the cogent points that my hon. Friend the Member for Arundel and South Downs has made and which I have sought to support.
Mr. Timms: These amendments fulfil an undertaking that we gave in Committee to table amendments to rationalise the decision-making procedures across the Bill as a whole. They do not just makes things neater and more consistent, but clarify a number of important issues raised during the Bill's passage.
I wish to refer to the nature of the tribunal. Following our consultation on the Bill in 1998, we amended it to make clearer the first instance nature of the tribunal. However, concern was raised that we had not eliminated all room for doubt, so we have gone further. The amendments to part IX make absolutely explicit the ability of the tribunal to consider any evidence that it considers relevant. The amendments also make it absolutely clear that disciplinary decisions and decisions to withdraw authorisation or approval cannot take effect while the matter is still open to review by the tribunal or higher courts.
Supervisory decisions, such as the imposition of requirements under part IV while a possible threat to the interests of consumers is evaluated, can take effect before that point--as Opposition Members acknowledged in Committee that they must--but only where the particular grounds for the action justify it taking effect earlier.
We have replaced the various separate provisions dealing with notices for payment with a single provision in amendment No. 522--a concern raised by Opposition Members. The amendments make clear that the FSA cannot publicise the actions it proposes in warning and decision notices while the matter is open to review. I refer hon. Members to amendment No. 523, as there has been confusion on that point.
In line with the recommendation of the Joint Committee, publication is generally required when any proposed action does take effect to ensure the necessary degree of transparency. However, information may not be published if that would be unfair or would prejudice the interests of consumers.
The amendments also include extended provisions, giving rights of access to material held by the FSA in disciplinary-type cases. We have taken on board representations made to us by the Law Society and Opposition Members. These rights would include not only
the material on which the FSA relied in reaching its decision, but material it considered but did not rely upon, or which it obtained in the course of an investigation into the matter and which it considered may assist the other party.Those are generous rights of access, going beyond those generally available in administrative proceedings. They are modelled on those that apply in criminal cases, and we have introduced them for these cases to reflect the wide range of powers and sanctions under the Bill.
5.30 pm
Lords amendment No. 101 is a consequential change arising from the transfer of the official listing function. Other amendments in this group are consequential changes arising from the alignment of the sanctions for market abuse under part VIII with those available under parts V and XIV.
Lords amendments Nos. 134, 135, 137, 138 and 140 make consequential changes to the procedural provisions in part VIII to reflect the wider range of available sanctions.
I believe that the House will welcome these changes, which show how ready we have been to listen to the points made by the industry, other interested bodies and opposition parties, and how we have worked to improve the Bill at a technical level.
The amendment to Lords amendment No. 59 is identical to one that was debated in another place and my response will be along similar lines to the points made there.
When the authority grants a permission or variation in terms that the applicant has requested, that amounts to granting an application so the procedure that applies is the simple written notice procedure under clause 50(4) and not the warning/decision/final notice procedure under clause 50(6)(a).
That includes requirements imposed on the permission under clause 47 when those requirements are requested by the applicant. When the request is made after the initial application is made but before it is determined, that should not delay the date on which the applicant will be able to benefit from the new permission. Equally, when the applicant asks for permission narrower than that originally sought, there is nothing to prevent the FSA from treating that as an application for the narrower permission and proceeding to grant it through the simple written notice procedure.
The important point is that the amendment to Lords amendment No. 59 is unnecessary and, moreover, unhelpful because it casts doubt on whether clause 50(4) would apply in that situation. I agree with the hon. Member for Arundel and South Downs (Mr. Flight) that a person should be able to accept the requirements that the FSA proposes to impose if it grants the application. In practice, that will be achieved by the FSA telling the applicant that it is minded to impose a requirement, and the applicant will be able to accept the requirement either by submitting a notice under clause 50(3) withdrawing the application and a new application reflecting the requirements, or by submitting an application under clause 49(2) for a variation along the lines proposed by
the FSA. In either case, the Bill allows appropriately streamlined procedures to apply, enabling the application to be suitably expedited.The substance, although not the precise wording, of the amendment to Lords amendment No. 526 is also familiar from debates in another place. It would require a summary of any material withheld to be given to a person on whom the FSA proposes to impose a penalty. Subsections (2) and (3) of the new clause that amendment No. 526 will introduce will enable the FSA to withhold material in certain circumstances.
Requiring the FSA to provide a summary of any such evidence would be going too far. Subsections (4) and (5) require notice to be given of the fact that material is being withheld on grounds that it is subject to privilege, or because the FSA has taken the view that access would be unfair or against the public interest. When such a view has been reached, subsection (5) also requires those reasons to be included in the notice. That will enable the person who is subject to the notice to consider whether he should refer the matter to the tribunal, but, in line with the general approach under other legislation, notice will not be given of material that is excluded because it has been intercepted under a warrant or indicates that such a warrant has been issued.
I should remind the House that the FSA does not itself make use of such warrants, but in the interests of effective co-operation between law enforcement agencies we cannot exclude the possibility that it may have access to such material.
The summary that the amendment to the Lords amendment would require would appear to have to cover material withheld under any of the cases set out in subsections (2) to (5) of the new clause. It cannot be right that the FSA should give anyone a summary of material that indicates the existence of an interception warrant, material obtained under such a warrant or information that is subject to legal professional privilege, including legal advice, or is subject to public interest immunity--for example, because it suggests the existence of an informer. Even if the amendment applied only to material considered for comparative purposes under subsection (2), it still would not be right.
To the extent that the consistency of FSA decision-making is properly a matter for public concern, ample material will already be in the public domain on which to judge consistency with the FSA's general policy. The FSA will have to consult on and publish a statement of its policy on financial penalties. It will also publish material on the disciplinary actions it has taken in its annual report each year. That material will also be available to the tribunal, but the primary focus of the tribunal's decision will properly be the merits of the particular case before it. It is the merits of the case against which the proposed penalty must ultimately be judged.
Hon. Members asked about the position with regard to the European convention. Convention rights will be fully met at the stage at which a reference is made to the tribunal, including rights of access to evidence. That is the fair and impartial tribunal required by article 6, before which, and for the purposes of which, evidence will be disclosed. The new clause introduced by the amendment to amendment No. 526 would go further than we are required to go by the convention and further than it is sensible to go. I hope that the House will resist that amendment.
Question put, That the amendment to the Lords amendment be made:--
The House divided: Ayes 141, Noes 250.
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