Previous Section Back to Table of Contents Lords Hansard Home Page

Smoking, Health and Social Care (Scotland) Act 2005 (Consequential Modifications) (England, Wales and Northern Ireland) Order 2006

11.02 pm

Lord Evans of Temple Guiting My Lords, I beg to move.

Moved, That the draft order laid before the House on 27 February be approved. [20th Report from the Joint Committee].—(Lord Evans of Temple Guiting.)

On Question, Motion agreed to.
28 Mar 2006 : Column 766

Management of Offenders etc. (Scotland) Act 2005 (Consequential Modifications) Order 2006

Lord Evans of Temple Guiting My Lords, I beg to move.

Moved, That the draft order laid before the House on 27 February be approved. [20th Report from the Joint Committee].—(Lord Evans of Temple Guiting.)

On Question, Motion agreed to.

28 Mar 2006 : Column 285

Tuesday, 28 March 2006.

Grand Committee

The Committee met at half-past three of the clock.

[The Deputy Chairman of Committees (BARONESS THOMAS OF WALLISWOOD) in the Chair.]

Company Law Reform Bill [HL]

(Eleventh Day)

The Deputy Chairman of Committees (Baroness Thomas of Walliswood): If there is a Division in the Chamber while we are sitting, this Committee will adjourn as soon as the Division Bells are rung and resume after 10 minutes.

Clause 617 [The Panel]:

The Attorney-General (Lord Goldsmith) moved Amendment No. A139:

"This is subject to section 618(4) and (5)."

The noble and learned Lord said: In moving Amendment No. A139, which stands in the name of my noble friend, I shall speak also to Amendment No. A140.

The Committee will be aware that, in its ninth report on the Bill, the Delegated Powers and Regulatory Reform Committee made two recommendations concerning the rule-making powers it is intended to extend to the Takeover Panel. It is well known that the Government take the views of that committee extremely seriously. Before turning to the specific amendments, I want to take the opportunity to respond to one of those recommendations. I will address the second when we debate a further government amendment to Clause 627, which is related to the sanctions powers of the panel.

So far as concerns the ongoing fitness of the Takeover Panel to be a body with rule-making powers conferred on it, the committee said at paragraph 16 of its report:

I hope that the Committee will think this an appropriate moment for me to respond to that request for assurances, there being no other amendment which specifically picks it up. Therefore, I give this Committee the assurances that the Delegated Powers Committee has recommended it seeks, and my confidence in doing so is based on six significant and substantial grounds.

The first is the panel's history. The panel has made the rules on takeovers since 1968 without parliamentary oversight. Perhaps I may quote the noble Lord, Lord Hodgson, from our Second Reading debate. He said:
28 Mar 2006 : Column GC286

I entirely share those sentiments. The Government believe that the powers proposed in relation to the Takeover Panel will sustain its role at the heart of our thriving financial markets.

The second ground is the existing authority of the panel. That is acknowledged both in case law and in statute. Section 143 of the Financial Services and Markets Act 2000 already recognises the rules made by the Takeover Panel in the Takeover Code for the purpose of disciplinary proceedings under that Act. So far as concerns the courts, the regulatory authority of the panel has been expressly referred to and, indeed, upheld—notably in the very well known Datafin case.

The third point is the existing working arrangements. The panel has well developed links with other financial regulators and institutions. For example, the panel has operating guidelines or memoranda with both the Financial Services Authority and the London Stock Exchange.

My fourth point is the inclusive make-up of the panel. It currently includes representatives from a wide variety of City and other organisations, such as institutional investors and bankers as well as business. That ensures a balance of views from City and business participants.

Fifthly, the Government believe that there is widespread support for the panel assuming the role of a rule-making authority. The proposed rule-making powers have been extensively aired. A public consultation was undertaken by the DTI from January last year, and draft clauses setting out the panel's proposed powers were published in July. We are not aware of dissent from the view that the panel is a proper and fit body to exercise the statutory rule-making powers intended to be given to it.

Finally, there is the fallback power to replace the panel as regulator. The Government would retain the power through secondary legislation, particularly the European Communities Act 1972, either to remove and replace the panel as regulator or substitute rules made by the panel which were contrary to Community law. I should perhaps say "and/or substitute rules made by the panel" because either or both would be possible. The rules which might be contrary to Community law might be contrary to the takeovers directive. That is a hypothetical example, not likely in reality.

In the event that the panel ceased to be an appropriate regulatory body or there were concerns about the compliance of panel rules with the directive, those powers could be exercised. Having said that, I want to be clear that I see that possibility as remote in the extreme for all the other reasons I have already given. I hope that that will give Members of the Committee the assurances they were seeking. Let me turn to the amendments.

Clause 617 confers statutory functions on the panel. It also provides the means by which, in practice, the panel discharges its functions, by delegation to its
28 Mar 2006 : Column GC287
committees, staff, and so forth. There are limitations on the panel's power to delegate its functions where they involve its new statutory rule-making powers, contained in Clause 618.

Clause 618 contains an important function on the Takeover Panel, to make rules giving effect to certain provisions of the takeovers directive. There is also a wider power to make rules about different types of transactions concerning ownership and control of company and other matters.

Clause 618(4) provides that such rule-making functions must be carried out by a committee of the panel. But there is one further consideration: in its rule-making powers concerning fees and charges, the current practice of the panel is to act as a whole rather than through a committee. The Government wanted to allow the panel to continue to do that, so Clause 618(5) does not require the panel to act through a committee when making rules about fees and charges. Clause 618(5) says that subsection (4) does not apply to rules made by virtue of Clause 632. We need to change that because we do not intend that the panel should, for example, be able to delegate its rule-making powers in relation to fees and charges to, say, a member of staff. That is not the intention of the provisions but it might be the effect.

The purpose of these amendments is to make it clear that in making rules on fees and charges, the panel must act either as a whole, as it does now, or through a committee in the same way that it will exercise its rule-making powers. I beg to move.

Next Section Back to Table of Contents Lords Hansard Home Page