Previous Section Back to Table of Contents Lords Hansard Home Page

Lord Newby: My Lords, this is the second of the three groups of amendments to which I referred when I moved Amendment No. 1. They seek to improve the accountability and transparency of the FSA's operations. As the noble Lord, Lord Kingsland, said, the way in which the practitioner and consumer panels are established under the Bill means that they could be marginalised, if the FSA so chose.

It seems to us that the amendments, which require the panels to be formally consulted and then for the FSA to give reasons why they may not have agreed with their representations, are very important. Without the amendments, it would be very easy either in many cases for the FSA to ignore the panels altogether or simply to swat aside any recommendations that the panels make. Therefore, we support the amendments.

Lord McIntosh of Haringey: My Lords, all the amendments in this group seek to enhance the arrangements made by the Bill for the practitioner and consumer panels. I start by saying that the arrangements already in the Bill were introduced in direct response to the recommendations of the Joint Committee. They sought to put the FSA's existing voluntary arrangements on a permanent footing.

By introducing amendments before the Bill came from another place, the Government also reinforced the requirements for the authority to consult on its proposed rules, codes and statements of policy. I believe that they represented a prime example of our willingness to make extensive and non-contentious improvements to the Bill. Those amendments introduced extensive requirements for the authority to publish a feedback statement about its consultations. Such statements are required to report in general terms the representations made and the authority's response to them.

In our view, the provisions of the Bill effectively deliver the outcome that the amendments before the House today seek to achieve. Therefore, I could respond to the amendments by saying that the Government are sympathetic to the points that have been made but that we do not consider the amendments necessary. However, I recognise that the force of the arguments go a little further than that. In particular, I accept that the Bill does not impose on the

13 Apr 2000 : Column 320

authority an obligation to respond to either panel where it had issued a report on a matter that did not stem directly from a consultation in relation to specific codes, statements of policy or enforcement rules.

I should like to give further thought to the points that have been made and to the precise effect of the amendments before us. For example, Amendments Nos. 38 and 40 would enable the panels to publish reports at the expense of the authority. That raises questions about whether the authority would be able to maintain proper control of expenditure because the amendments have the effect of requiring the authority to give a blank cheque. However, the point is well taken. The panels should have resources to publish reports and the panels are to be funded by the authority. Therefore, it is implicit that the obligation under the Bill for the authority to establish and maintain the panels requires the authority to ensure that the panels have appropriate resources to perform the functions for which they are to be established--indeed, are established.

Amendment No. 23 would require a copy of any report to be laid before Parliament and, as proposed by Amendments Nos. 25 and 26 to which we shall turn shortly, before the Joint Committee. The Treasury will be under a duty to lay the authority's annual report before Parliament, and the authority has undertaken to include in that annual report a statement from the chairman of each of the panels. Indeed, statements from the chairmen of the panels were included in the last report. Of course, the Treasury can make a direction under paragraph 10(2)(b) of Schedule 1 imposing requirements about the content of the authority's annual reports.

On the general principle of not being too prescriptive, I am not attracted to the proposition of imposing an obligation on either panel to produce its own annual report. However, there is no reason that the panels should not do so if they so wish. Where the reports are produced and published, they will be available as public documents. I certainly would not rule out the possibility of the authority appending such reports when it submits its own in accordance with Schedule 1.

Amendment No. 36 would extend the requirements for arrangements for consultation on the general policies and practices of the authority, as defined in Clause 2. The arrangements under Clauses 7 to 9 were intended to supplement the specific consultation requirements under the Bill; for example, under Clause 151. However, we shall look at the various provisions to see whether matters can be clarified, and we shall come back with suitable amendments if they appear to be necessary.

Finally, I turn to Amendments Nos. 37 and 39 which are also in this group. These require the authority specifically to respond to representations made by the panels. As I said a few moments ago, it was our intention that the obligation to produce a feedback statement in response to representations would include a response to any representations made by the panels. I have noted that there are ways in which the arrangements could be reinforced.

13 Apr 2000 : Column 321

As I said, I do not believe that the amendments before us are perfect in every way. However, having had the opportunity to consider the amendments before coming to the House today, and in the light of today's debate, I have concluded that there is scope for improvement to be made to the arrangements for providing feedback to the panels. On that basis, I hope that noble Lords will not press their amendments.

Lord Kingsland: My Lords, I listened as carefully as I could to what the Minister said and I believe that his tone was generally conciliatory towards the objective that lies behind our amendments. On all the amendments except Amendments Nos. 37 and 39 I wish to wait and see what changes, if any, the Minister advances at Third Reading.

However, I want to encourage him to say a little more about Amendments Nos. 37 and 39 because they are absolutely crucial. On many occasions, the Government have committed themselves to the principle of transparency. As a result of the introduction of the European Convention on Human Rights, if not by the natural development of the jurisprudence of our own courts, we know that it will now be a matter of routine for government authorities to have to give reasons for the decisions that they make. If those two constitutional facts are combined, your Lordships inevitably come to the conclusion that, in circumstances where the authority disagrees with the practitioners' panel, it should make those disagreements public and give the reasons why it disagrees.

In my submission, that should be on the face of the Bill. If the Minister is saying that he will come back on Third Reading with his own amendments which will put those matters on the face of the Bill, then I am content to withdraw my amendments. Otherwise, I fear that I shall feel obliged to press them.

5.30 p.m.

Lord McIntosh of Haringey: My Lords, it certainly is our intention that the obligation to produce a feed-back statement in response to representations that have been made would include a response to representations made by the panel. I believe that that is the point of Amendments Nos. 37 and 39.

The noble Lord is saying that the arrangements should be reinforced by reference on the face of the Bill. I believe that there is scope for improvement. The noble Lord is right that it may well be right to put those matters on the face of the Bill. If that proves to be the case, then we shall bring forward amendments to that effect at Third Reading.

Lord Kingsland: My Lords, my understanding is that the Minister has undertaken to bring forward amendments which will state that the authority is obliged to give reasons for any disagreement it has with a recommendation of either of the panels. If that is the Minister's understanding, then I shall withdraw the amendment.

13 Apr 2000 : Column 322

Lord McIntosh of Haringey: My Lords, what I want to say is that we believe that the authority should give reasons. How that shall be achieved precisely, I do not quite know. But we are accepting in principle the thinking behind the amendments.

Lord Kingsland: My Lords, I am much obliged to the Minister. He has given me the undertaking that I wanted. I am sure that he will keep to that undertaking when we see the text of the Government's amendments at Third Reading. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Lord Newby moved Amendment No. 24:

    Page 231, line 41, at end insert--

("( ) A joint committee of both Houses of Parliament shall examine all the reports submitted under this section at least once a year.").

The noble Lord said: My Lords, we now move to the third group of amendments to which I referred at the beginning of today's debate. They relate to the way in which Parliament responds and has the opportunity to respond to the work of the FSA.

It is our view, and, I believe, the view of the House that the FSA is a body whose work should be looked at regularly and seriously by Parliament. With these amendments, we propose that that should be done by a Joint Committee of both Houses. In doing so, we have in mind the success of the Joint Committee under the chairmanship of the noble Lord, Lord Burns.

At present the Bill simply provides that the annual report of the FSA shall be transmitted to Parliament via the Treasury. When we discussed these matters on the last occasion, the Minister explained that it was difficult, if not impossible, for a Bill to determine how Parliament would exercise its scrutiny powers. He tried, as best he could, to be encouraging, in terms of the Government's response once the Bill is in place, when it comes to considering whether a Joint Committee should be established. He said that it was not for him to say whether any committee of either House or, indeed, both Houses should be established. He praised the work of the noble Lord, Lord Burns and said:

    "If I am asked what the usual channels will think, I believe I can assure your Lordships that I will speak severely to the Deputy Chief Whip and urge him that the usual channels should take this matter very seriously".--[Official Report, 16/3/00; col. 1778.]

The principal point of these amendments is really to ask whether he has now spoken to the Deputy Chief Whip. Has the Deputy Chief Whip consulted more widely? And, as a result of those consultations, are the Government now able to give a clearer steer as to how they may respond on this matter when the Bill is enacted? I beg to move.

13 Apr 2000 : Column 323

Next Section Back to Table of Contents Lords Hansard Home Page