The Reverend Canon Peter Pilkington, having been created Baron Pilkington of Oxenford, of West Dowlish in the County of Somerset, for life--Was, in his robes, introduced between the Lord Peyton of Yeovil and the Lord Runcie.
Sir Philip Charles Harris, Knight, having been created Baron Harris of Peckham, of Peckham in the London Borough of Southwark, for life--Was, in his robes, introduced between the Baroness Blatch and the Baroness Perry of Southwark.
The Minister of State, Department of Trade and Industry (Lord Fraser of Carmyllie): My Lords, allegations relating to one group of syndicates were recently investigated by the Serious Fraud Office and resulted in a decision in April 1994 that no proceedings were justified. The Director of the Serious Fraud Office is currently considering whether certain other matters referred to him warrant investigation.
Lord Spens: My Lords, I thank the Minister for that answer. Is he aware that the disaster at Lloyd's represents the single biggest enforced transfer of personal wealth this century? It was bigger than the party to the right of me has ever managed to achieve in 70 years. Is the noble and learned Lord further aware that one of the problems of criminality arises in that it is the outside Names of Lloyds who have made all the losses in principle? Rather than spending £40 million chasing the ghost of Robert Maxwell, would it not be better to spend that money investigating Lloyd's properly?
Lord Fraser of Carmyllie: My Lords, I am aware, as the whole House will be, of the extent of the losses that a large number of people have suffered in recent years. The task of the Serious Fraud Office is to
Where I do not agree with the noble Lord is that there should be yet a further investigation for a review of Lloyd's. There have been extensive reviews in the past and a number of lengthy judgments in the courts. While there are proposals of which the noble Lord will be aware--that is, the reconstruction and renewal plan--it seems to the Government that we should see the outcome of the changes that have been proposed before instituting any further review.
Lord Clark of Kempston: My Lords, will my noble and learned friend agree that the investigation of the Walker Committee, of which I was a member, looked into Lloyd's, particularly the LMX spiral? The committee's recommendations were unanimously accepted by Lloyd's Council. The remedies suggested by that committee have been implemented. Surely there is no reason that there should be another in-depth investigation.
Lord Fraser of Carmyllie: Yes, my Lords, significant changes have already been made. I repeat what we said in our reply to the Treasury Select Committee. We agree that the regulatory framework should be reviewed at some time in the light of the committee's findings, but we would not consider this time to be appropriate.
Lord Peston: My Lords, as an outsider in this wheeling and dealing, I find it all sounds a little complacent. Is the noble and learned Lord saying that £11 billion--assuming that that figure is in the right ballpark--can simply disappear and one shrugs it off and leaves it? Is there no misbehaviour involved? Is that the Government's view or is it like a will-o'-the-wisp and no one can find it? As an outsider, I find it amazing, because £11 billion is not tuppence ha'penny. Is there no interest in what happened to the money?
Lord Fraser of Carmyllie: My Lords, I recognise that there have been substantial losses. I do not believe that I offered any agreement to the figure suggested to me. However, we must be clear that the Serious Fraud Office is concerned to determine whether there has been any criminality in those who acted within Lloyd's. Similarly, a number of large claims have been made which would indicate that there has been breach of contract, negligence and various other errors which have been addressed in civil law. Most recently, a very large claim was brought before the English courts. I would rather not comment on it because I understand that it will possibly be subject to an appeal.
Lord Marlesford: My Lords, as a victim of Lloyd's with open syndicates, may I ask my noble and learned friend whether he is satisfied that Lloyd's has been wholly frank with the DTI as to the assets it has to cover its solvency? Over the past two years, Lloyd's has asked a large number of the many thousands of resigned Names to provide very large additional sums--in many cases individually over £100,000--to augment their
Lord Fraser of Carmyllie: My Lords, some of the detail that my noble friend provides is new to me. However, the documentation required by the Insurance Companies Act demonstrating that Lloyd's met the solvency requirements for the year ending December 1994 were received last summer. They indicate that at that time Lloyd's met the solvency requirements. The returns for the year ending 1995 are, however, not due until the summer and therefore I cannot offer a complete answer with regard to the position last year. I have no reason to believe one way or another that the adequacy of the solvency requirements will not be met.
Lord Monkswell: My Lords, bearing in mind that prosecutions for fraud have taken place in virtually every other field of financial services, can the Government give the House some explanation as to why syndicate managers and underwriters at Lloyd's are not subject to prosecution for fraud? Has it to do with the people involved, the complexities of the arrangements, or lack of ability on the part of the prosecutors?
Lord Fraser of Carmyllie: My Lords, the Serious Fraud Office suffers the accusation from time to time that it prosecutes people where there are no criminal charges. By a rather curious turnabout it now seems that it is accused of not prosecuting when it should.
The Serious Fraud Office will prosecute on the basis of a sound case in criminal law. In one case in which it prosecuted the defendants were not convicted. There is another prosecution outstanding, but those charged are, I regret to say, at present beyond the reach of our extradition arrangements.
Earl Alexander of Tunis: My Lords, in view of the fact that a recent court judgment found that the deputy chairman of Lloyd's had deliberately concealed information from his syndicate Names, are the Government aware that many people, including myself, are very anxious to see some form of inquiry launched into the entire Lloyd's market?
Lord Fraser of Carmyllie: My Lords, my understanding of the position is that Lloyd's has already announced that it is considering whether any disciplinary action should be taken in the light of the judgment to which I referred some moments ago. The Department of Trade and Industry is also scrutinising the self-same judgment to determine whether there are any issues that need to be considered under the Insurance Companies Act. However, I understand that an appeal is pending and therefore I repeat that it would not be appropriate for me to comment further.
Baroness Trumpington: My Lords, the 1964 Public Libraries and Museums Act refers to the "keeping of adequate stocks". On 31st March 1994, English public libraries held 105 million books; that is, 2.2 books for every person in the country.
During the current financial year officials have, however, looked carefully at a number of authorities to ensure that their service complies with the legislation. No intervention by the Secretary of State has been necessary, but the Department of National Heritage will continue to monitor changes in service provision.
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