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Lord Hunt of Wirral: I, of course, recognise that commercially confidential information could not possibly be disclosed. But if one excludes that and accepts that the Minister has every right to exclude that, will she please assure the Committee that she will make as much of the report available to Members of the Committee as possible? We will then be better informed as we reach the later debates on the regulation of claims management companies.

Baroness Ashton of Upholland: I would not even have mentioned the report if I was not going to make as much of it available as possible. The noble Lord will accept that the basis upon which reports are written is important for those writing them, and I must respect that. But, of course, I am keen to ensure that the Committee is fully au fait with the direction of our thinking, even if we have not yet reached conclusions on the regulator.

5.30 pm

Lord Hunt of Wirral: It may be for the assistance of the Committee also if the Minister were to give a little further detail about her determination to introduce transparent charging and a number of other provisions. She will be aware, particularly so far as concerns the endowment alleged mis-selling scandal, that all the claims will have been processed and the commission taken by these companies within the next 12 to 18 months. It is unlikely that the regulator will be in place by that time.

Will the Minister at least consider whether there is any way that provisions, which would I am sure meet with the agreement of the Committee, on the transparency of charges and a number of other key issues, might be put in the Bill so that they have immediate effect?

Baroness Ashton of Upholland: The difficulty with legislation in the Bill, as the noble Lord knows better than I, is whether it rules out the flexibility one wishes to have. I have a personal view as a Minister that the more we can do through secondary legislation effectively and properly within the framework, especially of what the Delegated Powers and Regulatory Reform Committee says, that that enables us to develop the policy over time. The noble Lord will know too that I have a general adverse reaction to lists. My experience in any Bill I have ever done is that the minute we put something in the Bill, lo and behold somebody wants to put something else in it. It grows. We end up losing things that should be there and we leave ourselves in a more inflexible position. I do not
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wish to be difficult about this, but that would be a difficulty in trying to think that through. We hope that the regulations will be in place by the end of 2006.

Lord Hunt of Wirral: I thank the Minister for what she said about lists. Thank goodness she is not in charge of the Charities Bill which is full of lists, and needs to be. I accept her aversion to lists. But there are certain fundamental things which should really be taken as read. I welcome her open mind on putting those provisions in the Bill.

Perhaps I may press the noble Baroness further. If these companies were giving financial advice, they would be subject to regulation by the Financial Services Authority. It may well be that we can find some way of at least firing a shot across the bows of some of these cowboys by making them aware of their obligations as organisations within the financial services structure. I am not asking her to give any commitment now, but could she indicate she has an open mind on that? It might send a warning signal, particularly if she were to say that the authority will be extended to cover these companies. Although if she cannot say that, that at least as stiff a regulatory structure will be set up as already exists as though they were giving financial advice.

Baroness Ashton of Upholland: I cannot give the noble Lord that commitment. I am sure that the noble Lord is not surprised by that. What I can say is that we are currently talking to the Financial Services Authority about exactly these issues, and I will keep the noble Lord updated.

Viscount Eccles: Could the Office of Fair Trading and the Competition Commission come into this as bodies that could make a reference and consider this emerging and changing market where apparently there are bad practices? One of the difficulties I have is that I listened to my noble friend Lord Hunt telling me about endowment policies. I would love to see a list of bad practices and not just be referred to one. If it really is an unregulated market that is not going to settle down and has to be regulated, some clear idea of the abuses taking place in that market is a fairly essential part of the information which the Committee needs.

Baroness Ashton of Upholland: I would be very happy to write to the noble Lord with as much information as I can. I think it is not only the Committee but also the consumer who needs to understand what these practices are. That is one of the issues we have to deal with; hence, the noble Lord, Lord Hunt, and myself both describing some of these operators deliberately targeting people at a vulnerable time, which makes it more likely for them to fall into their clutches—if I can put it like that. If one looks at the advertisements on endowments, if you are not au fait or feel financially illiterate, which, frankly, covers a large number of the population, it seems a very easy thing to hand the matter over to somebody else and not be aware that the service is available and free. So there is not only a lot of work more generally to be done on understanding the kind of practices, but also to
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recognise—hence the way we set it up—that these people move into other areas. Therefore, the ability to be able to capture that area and regulate it very quickly will be a critical part of the achievement of the Bill as we move forward.

Lord Hunt of Wirral: There is so much to ponder and consider. This has been a very helpful debate in raising some of the more general issues that we will confront in specific examples as we move through Part 2 of the Bill. I would just say to my noble friend Lord Eccles that in many ways the abuses are already documented. They really make people feel that the shortfall, to which they are rightly entitled, is a windfall and fail to ensure they are aware that it is compensation designed to bridge the gap between the endowment policy proceeds and the sum required to pay off the mortgage. By depicting it as a windfall, the companies in question feel that they can legitimately charge up to 25 per cent plus VAT. They fail to make people aware that there is a completely free service where a valid claim is dealt with within eight weeks. A letter needs to be sent giving details and then a cheque arrives within eight weeks. It is a fast procedure set up with the co-operation of the individual companies. It is these abuses which prevent the individual receiving the compensation to which he is rightly entitled to cover that shortfall.

There are a number of other abuses, not least failing to ensure that the individual is aware of the free service that is available through the Financial Services Ombudsman. There are a number of others. I am sure that he, like me, welcomes the Minister's commitment to deal effectively with this problem and to write to us with further details. There will be a lot of further debate about this when we return after the Recess, but I think we have made a very good start. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Lord Goodhart moved Amendment No. 27:

The noble Lord said: I have been sitting here silently for the last five or six hours. Now that we have reached Part 2 the time has come for me to speak again. I should make it absolutely clear that we strongly support the principle of regulation of businesses providing claims management services. There are clearly abuses here which need the firm hand of regulation. We shall do all we can to assist in achieving that result.

There are a number of matters in the Bill—mainly, though not all of them, of detail—which in our view need explanation or cause some concern. As has already been mentioned by the noble Lord, Lord Hunt, the Select Committee on Delegated Powers and Regulatory Reform has criticised severely the Bill.

The Minister said at Second Reading that she will consider how to meet the concerns of the Delegated Powers Committee. I would like to know whether she plans to bring forward any amendments. If so, when
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are we likely to see them? If she is not planning to do so, is that not in effect rejecting the proposals of the Select Committee?

In moving Amendment No. 27 I also wish to speak to Amendments Nos. 68, 69 and 77. This is not among the most important groups of amendments tabled by us. Amendment No. 27 is a probing amendment. The effect of these amendments is to remove all provisions from the Bill that relate to the waiver of authorisation. My question is why is a waiver necessary? Clause 2 provides for a ban on the provision of services unless the provider is authorised or exempt or has received a waiver. The exemption is provided for in Clause 4 and, under subsection (2) of that clause, the exemption can be given,

That seems to cover every possibility. Why, then, is it necessary to provide in paragraph 3 of the schedule for waiver as well, and what exactly is the distinction between exemption and waiver? Can it not be left out to make the Bill a little bit simpler so that we stick with two categories of authorisation or exemption? I beg to move.

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