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Lord Forsyth of Drumlean: My Lords, I do not propose to detain noble Lords. Suffice it to say that the contributions made by my noble friend Lord Kingsland and the noble and learned Lord, Lord Donaldson, reflect very much what I wish to say.
Perhaps I may make two points. First, I thank the Minister for bringing forward Amendment No. 40. It demonstrates that the Minister is trying to respond to the points that have been made. That said, the
The second point that I should like to put to the Minister, in the politest possible way, is that the Government have been at great pains to tell everyone how much they respect the Takeover Panel, how good it is and what an important institution it is. As I came into the Chamber, I was handed a page of briefing from the Takeover Panel stating that:
Subsection (2) of Amendment No. 40 gives the game away. Perhaps I have missed something--I know that it is the practice throughout the Bill--but when we were in government we did not introduce clauses referring to government departments; they referred to Ministers. Subsection (2) states,
I say in the friendliest possible way to the Government: please listen to the points that have been made. My noble friend has proposed a solution. It is important that our markets are seen to have integrity and to be efficient. That is in the interests of shareholders--that means every pensioner in this country with a private pension. For a Bill that purports to be concerned about ensuring market efficiency and integrity, it is extraordinary that we have arrived at this stage with these kinds of statements being made by people with no axe to grind other than the good name of the City of London.
With respect, one of the difficulties that the Opposition have had in putting forward amendments is that one of the great benefits of the Takeover Panel is that it is not a statutory body. It is a self-regulatory body, devised and deriving its composition from a number of City institutions and, as I said, it has given great value. But any amendments in this or any other Bill referring to the Takeover Panel involve the panel in a statutory role and statutory functions. A responsible legislative Chamber must accept that when such a body is, as it were, inserted into legislation, that is done without any controls over its composition, formation, procedure and so forth.
The Opposition have rightly been concerned about the detailed composition, function, objectives and concerns of the Financial Services Authority. I have no doubt that they are concerned about those matters in relation to the Takeover Panel, but Parliament is not concerned with it. Therefore, there is something of a dilemma in slotting in the Takeover Panel and giving it certain powers under the Bill, without having any say in how it works or how it is composed.
The reason I mention this is that there has been a measure of agreement about wanting to preserve the Takeover Panel's role during the offer period. In so doing, both the Government and the Opposition have been faced with the question of how to slot the panel in, how to devise a way in which the panel is not lost to life, is not coming to an end after 30 years but has a continuing and valid role. That can possibly be achieved by legislation, but we must make sure that we get it right. This is not the only way of getting it right. It could be done by means of agreement, practice or concordat between the Financial Services Authority, which is a statutory body, and the Takeover Panel.
The noble Lord, Lord Newby, said that we were concerned with two matters: the first is the safe harbour provision that we want to devise, so that if people comply with the provision in the code they will not be guilty of market abuse; the second is the gatekeeper provision. In regard to the safe harbour provision, there has been a measure of support, although not necessarily enthusiastic, for the Government's Amendment No. 40. The main difference of approach seems to lie in who is to have the final say--not who is to have any say, but the final say--as to what constitutes market abuse. The Bill contains definitions of market abuse, and over the years the Financial Services Authority has developed practice and precedents in regard to market abuse. However, we have no say over the composition and procedures of the Takeover Panel. Surely the final determination must be that of the statutory body; namely, the Financial Services Authority.
On the gatekeeper provision, noble Lords opposite are right to express concern and regret that there is no government amendment dealing with the matter. I expressed concern in Committee that one does not want a position whereby the authority is in any way fettering its discretion, which could subject it to judicial review. I make no apology for repeating that the FSA is a statutory authority and the Takeover Panel, while it has many advantages, is not. It is inappropriate to insert into the Bill the word "request", which appears in the Opposition amendment, so that the authority can deal with matters only at the request of the panel, because the FSA is accountable and responsible at the end of the day.
Given the view expressed by everyone in this House about the value of the Takeover Panel, I have no fears about the FSA wading in during the course of a bid when the panel with its 30 years' experience is already there. We are to have a new regime and it is important to devise a convention, concordat or agreement--I do not know the appropriate word--to ensure that the excellent practice, the value of which we have all seen, continues and that there is deference by the authority, as it were, to the panel with all its experience. But we must not write this into the Bill when we have no control over the composition and procedures of the Takeover Panel, or anything else to do with that body. Let us ensure that the authority that is set up under the Bill devises codes of practice or concordats with the Takeover Panel.
Lord Boardman: My Lords, in our debates on this particular subject we tend to lose sight of the achievements of the Takeover Panel. The noble Lord, Lord Borrie, and other noble Lords have referred to the achievements of the panel. Its strengths which are now attacked by the government amendment are two-fold. The first, which I describe with some reluctance since I qualified as a lawyer, is that the panel proceeds without the advocacy of lawyers. Secondly, the panel has a code of conduct which, unlike statutory regulation that people seek to get round, everyone feels honour bound to try to observe. As a result, under the chairmanship of the noble and learned Lord, Lord Shawcross, and successive chairmen the Take-over Panel has been made up of experienced businessmen who come to decisions which have been challenged in
The government amendment would destroy the very virtues which have made the Takeover Panel so effective. It would give rise to the involvement of lawyers, injunctions and a whole variety of matters which have been avoided in the past. My noble friend's amendment enables the panel, as far as possible, to proceed effectively in the way that it has done in the past. The panel comprises distinguished and experienced City men and women who know what is going on and can ensure that there is fairness and avoid litigation and all the costs that that involves. I hope noble Lords accept my noble friend's amendment and recognise the weaknesses in the government amendment which invites the trouble that so far we have managed to avoid.
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