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Lord Kingsland: My Lords, I shall be suitably telegraphic. My noble friend Lord Saatchi and I have been speculating on why the noble Lord, Lord Newby, has changed his mind since Third Reading. During the past three months, my noble friend and I have much admired the way in which the noble Lord, Lord Newby, has represented his party in your Lordships' House. We dared to entertain the speculation that his decision not to continue to support was not entirely his own.
However, whatever the basis of the noble Lord's decision, I suggest that he cannot have made it on the merits of the case. The noble Lord, essentially, supported the amendment tabled by my noble friend Lord Alexander at Third Reading; and the Minister told your Lordships today that the Government have not changed their position on the matter.
The truth is that, for whatever reasons, the Liberal Democrats have chosen to turn their backs on this most vital question. Having heard my noble friend Lord Alexander and the noble and learned Lord, Lord Donaldson, none of your Lordships can be in any doubt about the crucial importance of this issue to the City of London, with all that that entails for the economy beyond.
For the Opposition to accept the Government's amendment, that amendment must ensure that safe harbours not only provide for compliance with the text of the code, but also for compliance with the interpretation by the panel of the text of the code in any circumstances arising in the course of a takeover bid. Otherwise, no oneeither bidder or defender of a bidcan have any confidence in the guidance issued by the panel.
Lord McIntosh of Haringey: My Lords, no one is better qualified than the noble Lord, Lord Alexander, to launch into the encomium which he rightly made about the distinguished history of the Takeover Panel. After all, he knows much of what he speaks from his distinguished personal knowledge. We agree with what he says about the work of the panel and I made that clear at the outset. Nothing I have said, or shall say, will detract from our respect for its work.
However, the noble Lord's amendment is still subject to the same fundamental objection of principle that I have explained. Under the amendment, the FSA, with Treasury approval, would be able to decidethe word used in the amendment is "may"that the panel should be allowed to determine whether market abuse has taken place. It will be clear from what I said at the
I have to say that we cannot conceive of circumstances when the FSA and the Treasury would agree to take that step. We cannot and will not legislate to provide for something which we believe would be wrong. The determination of whether market abuse has been committed amounts to the determination of a civil right. On any analysis, if a safe harbour of the kind provided for in Amendment No. 180B were to be brought into force, the panel would be determining a person's civil rights.
It has been argued notably and frequently by the noble Lord, Lord Kingsland, that market abuse is criminal for convention purposes. He went much further than our belief, but nevertheless we have taken into account his arguments and provided for all the protections to convention-proof the market abuse regime for which he asked.
We have taken advice at the highest level. Last summer, we took advice from Sir Sydney Kentridge. We believe that these arguments are overstated, but we thought it prudent to introduce criminal safeguards into the FSA's procedures. If the noble Lord's amendment is carried, will the panel do the same? Will the panel introduce criminal safeguards? It is impossible to conceive how that could happen.
It is clear that the general effect of the amendment would be to make the rules and actions of the panel significantly more justiciablemore open to legal challengethan they are now. We do not want that to happen. We support the panel's current approach to the regulation of takeovers. We are not prepared to agree to an amendment which, however well intentioned, will in due course undermine the panel. We cannot believe that when it has the chance to take a long, hard look at this latest amendment the panel will want it either.
In introducing the amendment, the noble Lord, Lord Alexander, said that he did not want to see ping-pong between this House and another place. This is already ping-pong. This matter has been debated at length during its many stages through this House. It has been returned to another place which has had a
Lord Alexander of Weedon: I was interested in the Minister's peroration. Much as I like himas I doand much as I respect himas I doI thought it was a bit rich of him to suggest that my amendment would undermine the work of the panel. In so far as the arguments have been put to the Government with total clarity, this has been a dialogue of the deaf. Even in his response, the noble Lord indicated a lack of comprehension. Perhaps I may quote from a very experienced financial commentator, who said last week:
The noble Lord, Lord Grabiner, suggested that the panel is unaccountable. That simply is not so. My amendment enables, but does not require, the FSA to say that conformity with a panel ruling is conformity with the code. It enables the FSA to withdraw that ruling if it so permits. Therefore, in terms of accountability, a clear link is created between the panel and the law. With regard to accountability, the noble Lord, Lord Grabiner, surely will recollect that it is a condition of Stock Exchange listing that public companies comply with panel rulings. That is a very effective form of enforcement and accountability.
I was interested to hear that the European Convention on Human Rights was relied upon. That hare has come to the fore more prominently as the Government have realised that they do not have many other steeds entered in this race. In a cricketing analogythe noble Lord, Lord Newby, used oneit is a longstop. Of course, we who love cricket know that the worst fielder is always put at longstop. If those fears were ever to be made good, the FSA could withdraw the authority. However, attempting to terrorise this House with the convention may not impress.
In the time that I knew the paneland the panel has been a party to the convention during its entire existencethere was never a suggestion that its procedures, of which I briefly reminded your Lordships, were unfair.
I could go on. I speak to the noble Lord in the hope that he and his colleagues, whom I very much respect, on reflection will decide that the principle that they supported last time round is right. I certainly appeal to your Lordships to respect, if not my view, the view of the noble and learned Lord, Lord Donaldson, the views of the City and of the financial press, and to speak for UK business. In the light of the encouragement that I have received, I should like to test the opinion of the House.