Previous Section Back to Table of Contents Lords Hansard Home Page

Lord Bach moved Amendment No. 220A:


(".--(1) Subsections (2) and (3) apply to an order under section 416 which makes transitional provisions or savings.
(2) The order may, in particular--
(a) if it makes provision about the authorisation and permission of persons who before commencement were entitled to carry on any activities, also include provision for such persons not to be treated as having any authorisation or permission (whether on an application to the Authority or otherwise);
(b) make provision enabling the Authority to require persons of such descriptions as it may direct to re-apply for permissions having effect by virtue of the order;
(c) make provision for the continuation as rules of such provisions (including primary and subordinate legislation) as may be designated in accordance with the order by the Authority, including provision for the modification by the Authority of provisions designated;
(d) make provision about the effect of requirements imposed, liabilities incurred and any other things done before commencement, including provision for and about investigations, penalties and the taking or continuing of any other action in respect of contraventions;
(e) make provision for the continuation of disciplinary and other proceedings begun before commencement, including provision about the decisions available to bodies before which such proceedings take place and the effect of their decisions;
(f) make provision as regards the Authority's obligation to maintain a record under section 342 as respects persons in relation to whom provision is made by the order.
(3) The order may--
(a) confer functions on the Treasury, the Secretary of State, the Authority, the scheme manager, the scheme operator, members of the panel established under paragraph 4 of Schedule 17, the Competition Commission or the Director General of Fair Trading;
(b) confer jurisdiction on the Tribunal;
(c) provide for fees to be charged in connection with the carrying out of functions conferred under the order;
(d) modify, exclude or apply (with or without modifications) any primary or subordinate legislation (including any provision of, or made under, this Act).
(4) In subsection (2) "commencement" means the commencement of such provisions of this Act as may be specified by the order.").

9 May 2000 : Column 1553

The noble Lord said: My Lords, Amendments Nos. 220A and 226 deal with transitional arrangements for bringing the Bill into force. It is of course our intention to ensure that the transition to the new regime is as smooth as possible and causes the minimum disruption to firms and, indeed, to the regulators who we do not wish to be distracted from doing their core work.

We believe that it is sensible to make transitional provisions in an order as provided for under the new clause. Part of the reason is that we are moving from nine existing regulators--not counting the recognised professional bodies or Lloyd's--each with their own regulatory frameworks under six principal Acts of Parliament.

While our approach is very simple in policy terms, the precise arrangements will be very complex and very detailed. It would add substantially to the length of the Bill to include these provisions. More importantly, we wish to be able to publish the secondary legislation in draft before it is made so that those affected by it, and especially the industry, will be able to consider the arrangements and comment if they see any difficulty with the detail of the proposals. I believe that there has been widespread support for the Government's approach.

I turn to Amendment No. 226. In Committee, the Government moved amendments which introduced arrangements to enable the FSA to work with the self-regulating organisations under the Financial Services Act 1986 to bring about their demise. I can remind your Lordships that the amendments have the effect of removing the risk of challenge as the independence of the SROs diminishes in the months to come.

Amendment No. 226 is consequential to those changes. It ensures that those transitional arrangements for the SROs come into force on the passing of the Act rather than on a day to be appointed. The current statutory framework under the 1986 Act has caused some problems for the FSA as it has sought to restructure the various regulators that are merging together. Understandably, the FSA now wishes to press on with its preparations. I beg to move.

On Question, amendment agreed to.

Clause 417 [Regulations and orders]:

Lord Bach moved Amendment No. 220B:

    Page 225, line 35, leave out from ("make") to ("is") in line 36 and insert ("an order which is conferred on the Treasury by this Act and any power to make regulations which is conferred by this Act").

The noble Lord said: My Lords, I shall first introduce the Government's amendment which simply tidies up a few loose ends. There is an Opposition amendment in the group which will no doubt be spoken to.

9 May 2000 : Column 1554

The Bill confers a number of powers to make orders. Some refer to administrative functions of the authority. For example the FSA may make a prohibition order under Clause 55 in relation to an individual who it considers unfit to perform certain functions. The court may also make orders for particular purposes. It may, for example, make orders under Clause 194(3) in relation to injunctions against incoming insurance companies from other EEA member states.

While I am sure it will be clear to most people that such orders--as opposed to orders made by the Treasury--are exercisable by statutory instrument, that is not the effect of Clause 417(1) as currently drafted. The Government's amendment makes it clear that those order-making powers conferred on the Treasury are exercisable by statutory instrument. However, court orders will be made in the usual way. FSA orders will be made in accordance with the relevant procedural requirements under the Bill.

The same issue does not arise in the case of regulations as all powers to make regulation under the Bill are to be exercisable by statutory instrument, whether they are exercised by the Treasury or other Ministers of the Crown. I beg to move.

Lord Newby: My Lords, I wish to speak to Amendment No. 221. This amendment is self-explanatory. It requires simply that, where the Treasury plans to introduce regulations or orders, it makes proper provision for those regulations or orders to be considered in draft by all those who might have an interest in them. It also makes provision for representations to be duly considered and for the Treasury to respond to the representations before the regulations or orders are considered by Parliament.

The reason for proposing the amendment is extremely straightforward. Much secondary legislation will come forward under this Bill. As we have seen in this House on a number of occasions during this Session, the role of Parliament in scrutinising secondary legislation is in reality extremely limited. The point at which secondary legislation can be given careful scrutiny is before it is laid before Parliament. This amendment enables that to be required of the Treasury as a matter of course.

When the Minister moved Amendment No. 220A, I was very interested to hear him say that the Government would be issuing draft orders or, perhaps, regulations and looking for comments. This amendment seeks merely to make that a requirement rather than an optional extra.

Lord Saatchi: My Lords, I speak briefly in support of the amendment of which we are co-authors. As the noble Lord, Lord Newby, said, one of the points made at an earlier stage of the Bill was that, despite its enormous length, it is in many ways a skeleton

9 May 2000 : Column 1555

Bill--I believe that that was the phrase used--for the reason that he gave; that is, so much is submerged and yet to come in the form of codes, guidance, manuals, regulations or orders.

We believe that this amendment is important because it would require the Treasury to consult on regulations to be made under the Act. In fact, I believe that the Treasury usually does consult, but there is no obligation to do so. Just as important, there is no obligation to make any public response to consultation.

In relation to consultation on this Bill and on the draft orders that have been published, we gather that some of those involved with the Treasury have described it as a "black hole"; in other words, as an entity which absorbs a tremendous amount of comment and suggestion but where the response is not visible to the naked eye. I am sure that the Minister will say shortly that he does not wish to be too prescriptive about the Treasury's role. However, I hope that he will understand that our concern arises because so many important regulations to be made under the Bill have yet to appear.

Therefore, a proper consultation exercise, as proposed by the noble Lord, Lord Newby, with a requirement for a public response should be made in relation to all these future regulations. We can see no reason in principle why the Treasury should not be obliged to consult. It would be a valuable discipline to do so. It would mean, as the noble Lord, Lord Newby, said, that secondary legislation that comes before Parliament would have the added benefit of being considered by Parliament following a proper public consultation. It would be extraordinary if the Government found it difficult to accept this most reasonable amendment.

Next Section Back to Table of Contents Lords Hansard Home Page