[speaker001:] Systems developing in the N H S. The programme went on to produce the evidence, the minister Come on carry on, carry on The programme went on to produce such evidence including a two tier system for radiotherapy treatment where patients were Hear, hear. treated not Has the minister indicated Madam Speaker, this is my point of order, whether or not he intends to come before the house to acknowledge the reality of the two tier system and to admit he has been misleading the house.
[Betty:] Order,or or or order, order, the honourable lady would not expect me to comment on something that has been on television, er in something that I I have no er I I didn't even see last night, it's up to the minister whether he wishes to come and make a statement it is really... not at all a point of order for me. Mr Riddock.
[Riddock:] Thank you. Can you just confirm... that it's never been the practice to have an oral statement in this house on er prescription charges, neither under this Conservative government nor indeed under the pre previous Labour government who were always deeply embarrassed by increasing prescription charges.
[Betty:] If the honourable gentleman looks at the official report tomorrow, he will see that the h leader of the house has dealt with that point. Yes Mr Winnick.
[Winnick:] Speaker you are aware of course of the severe weather which affects most of the country and what I want to ask you Madam Speaker is simply this. In view of the agonizing difficulties faced by so many elderly people on very low incomes, is there any way this house, this week, can ask the minister to make a statement whether the cold weather payments could be made and all the red tape regulations removed... because... those payments are not made unless there are seven days of freezing weather and it does seem to me, the welfare of your old should have first priority.
[speaker001:] Hear, hear.
[Betty:] The honourable gentlemen is asking me for procedural advice across floor of the house, which he knows that I do not volunteer. Yes, Miss Mead.
[Mead:] Further to the first point of order, is it an order for the press to hear about the proposed rise in prescription charges... before this house and wouldn't it have not been better if the Secretary of State to come and made a statement and we could have questioned her about it.
[Betty:] I did deal with that matter er originally and I believe that the the state, the er answer to the question was available precisely at three thirty today. Yes Mr C was it Mr Gilfore, yes.
[Gilfore:] Madam speaker. I I've just received a fax of a letter sent to the... leader of Liverpool City Council,coun er councillor Harry Rimmer by the right honourable member for Sutton Coldfield, in which he invites him... to join an organisation called team two thousand er and as part of this invitation he's invited to attend functions and briefings at Westminster, er at which cabinet m er ministers... ministers e cabinet members ministers members of parliament, will be present. My point of order is... is it i is it er in order Madam Speaker for ministers of the crown to abuse an office like this by inviting people here for party fund raising purposes.
[Betty:] Er, the the the er... er the... fax in the first instance has been sent by a back bench member of this house who is not a minister, but I may tell the honourable gentleman that I get all sorts of things from mail shots inviting me to all er manner of functions, all of which find their way into the waste paper basket. Erm... [LAUGHTER].
[speaker001:] Madam Speaker, arising out of question time today, the leader of the house... the leader of the house told the house that the Prime Minister has made a further statement on the back to basics policy, now since this has er we are told er permeated the whole of government policy since the prime minister's speech to the party conference last October, isn't it time... er that the Prime Minister was asked not to give statements to correspondents and at er press conferences, but made a statement to this... house about the back to basics policy and at the very least, placed a copy of his speech and his thinkings on the back to basics policy in the library. Hear, hear.
[Betty:] Prime Minister is normally here a couple of times a week to answer questions maybe the honourable gentleman will catch my eye one time very soon, he can put that to the... Prime Minister himself. Yes, Mr Wilson.
[Wilson:] I, on a point of order Madam Speaker, I understand that a major announcement in connection with rail privatisation is being made at this moment by way of written answer and press conference erm... the statement will reveal a huge increase in access charges for railway operators and ultimately therefore huge increases in costs for tax payers and passengers. Madam Speaker, this announcement is now almost a year delayed... the firm of Coopers and Lybrand have been paid one point six million pounds to come up with this ass access charging fiasco, surely this house in entitled to the, as entitled as the press to a full statement of the government's intentions so that they can be answered by.
[Betty:] O o o o order, the honourable gentleman will recall that er in an earlier point of order I've already ruled on that matter. It is for ministers to determine themselves, whether they answer by means of a written question or whether they make an oral statement. That it is over something over which I have no control. I I've already made a ruling on that, on that point. I think we must now... move on, er yes Mr.
[speaker001:] Speaker, is there some sanction that the chair can take against honourable members of this house... persistently raising bogus points of order.
[Betty:] Er er that that o o order, order, it's a very good question er but I fear not that it is up to individual members themselves to exercise some restraint and to... and to u order, order, and to use the procedures of this house properly and correctly and not to abuse them. Yes Mr Cryer.
[Banks:] Er Madam Speaker,... I understand the position you ma you the point you make about er... ministers det er determining whether they're going to make a statement by an oral statement or by... a written parliament question, but surely the speaker does have power... if he or she so determines... to summon er a minister here and particularly... if there's pressure in parliament to require a minister to come here and make a statement, that must be right. Otherwise how could speaker Lentor tell the King that the speaker on that's on that occasion could only be instructed by parliament. Surely ministers are inferior to parliament, not superior to a speaker.
[Betty:] O order, order, as the honourable gentleman is fully aware, is fully aware, the speaker of this house has no authority whatsoever in demanding that ministers come here and make statements. It is for ministers themselves to decide whether they do that, the speaker has no authority in in determining that. Yeah mis Mr Banks.
[Cryer:] Madam Speaker we understand that er the Tory whips are busily arranging marriages for certain of their members opposite. Would it be in order if such marriages are arranged for them to be co-joined er downstairs in St. Stephens crypt?
[speaker001:] [LAUGHTER]
[Betty:] that is barely... barely a point of order for me. I think on that note... we might now pass on er to er presentation of bills. Ray Mickey.
[Mickey:] Referendum Scotland bill.
[Betty:] Second reading what day?
[speaker001:] Eleventh of March.
[Betty:] Friday the eleventh of March.... Mr Harry Cohen.
[speaker001:] Marriage amendment bill.
[Betty:] Second reading, what day?
[speaker001:] Friday the eleventh of March.
[Betty:] Friday the eleventh of March.... rule motion, Mr Harry Barnes. I beg to move that lead beginning... did beg given to bring in a bill to extend and improve methods of electoral registration and to allow disabled people to gain access to polling stations. My bill falls into two parts, one which deals with the need for a full franchise... it is sometimes mistakenly believed that we already have a full franchise in this country, but whereas legislation was passed... in the past in order to extend the franchise, in recent years we have let matters slip considerably on the methods that are used for registration and no longer can we claim to have that full franchise. The second part of the bill is to provide er access for disabled people and others... to polling stations. For even if we achieve the objective of a full franchise... then the purpose of that full franchise will not work for disabled people if they don't have full access to polling stations, they only then have the alternative of using postal or proxy votes and not exercising their franchise in the same way that able-bodied people er will do and their full right are part of the measure that I'm seeking the house to agree that I should... pursue. What's wrong with the current methods of electoral registration?... Well, there are millions of people who are missing from electoral registers, who are people who are entitled to be registered and the problem is probably the greatest among those who are known as attainers and are qualifying for registration at eighteen for the first time in their lives, the numbers of attainers er qualifying has reduced percentage wise, year by year, especially since the introduction of the poll tax and has not been rectified by the measures that remove the poll tax. In... official figures it is shown that... only ninety five percent of people who are eligible to be registered in England and Wales appear upon electoral registers. In London the figure is only eighty eight point four percent... but even the ninety five percent figure and the eighty eight four percent figures are artificially inflated because those elements include people who have died and not have not been removed from the register, people who have emigrated, people who have otherwise moved to other parts of the country and who it is unreasonable to expect will all be seeking to make use of postal or proxy vote... facilities. There's a great deal of double counting that takes place, it might be that some honourable members in this house actually appear upon two registers, one in London and one within the area in which they reside, normally within their constituency... and many people are merely carried over from past registers, without any serious canvassing taking place to find out whether they are the people to be on the registers or whether someone else should be put in their place. We also have a mobile... disenchanted society in which people do get on their bikes, move around from bedsitter to bedsitter with growing elements of homelessness and there are serious problems about registration. The office of census, populations and surveys estimates that three point four million people in England and Wales alone are missing from electoral registers. Probably four million people in the United Kingdom and a million alone in greater London. The method we use is outdated. We have a qualifying date for registration of October the tenth and the registers come into operation... on February the sixteenth, registers are coming into operation... tomorrow.... They last for a year, so by the qualifying date has been acted upon, registers are sixteen months old by they are finished with. The Hansard society has shown that a register, an average register, is likely to be sixteen percent out by the end of the its life. Now my bill will seek to tackle this serious problem by introducing a rolling register that would allow addition and deletions of names as poo people move. It would provide for extra authority and resources for electoral returning officers. So that housing movement information, details of deaths that are registered, information from statutory undertakings. Ex exchanges er with... information from other electoral returning officers and regular canvassing take place. All these to be subject to strict confidentiality rules so that the information is to be used for electoral returning purposes... only. Registers will roll... until elections are announced and then when elections are announced it will be the closing date for that particular election and polling cards will immediately be issued with massive publicity around them so that people who don't get polling cards, discover that they're not on registers and will still have time because they've qualified by the qualifying date to get themselves entered onto registers within a week of the election... taking place. Afterwards the registers will continue to roll. There will still be required annual registration but this will be more of a check upon the existing state of the rolling register and will supply extra information that can be acted upon by the electoral returning officer. When it comes to access to polling stations... this will require accessibility audits to be undertaken by electoral returning officers. Full consultations with relevant voluntary organisations representing disabled people. Bodies such as Links and the Spastic Society which produce quite a substantial report at the last election to illustrate what the problems were... then there will be established designated polling stations in which there will be various characteristics required such as wheelchair access, unaided wheelchair access, although the problem of accessibility is for more people than those people who are in wheelchairs and many people who are not registered disabled and are mainly old and infirm, should have the opportunity to exercise their franchise readily and easily. Designated accessible polling stations, er will themselves have to cover fifty percent or so of a constituency initially... and people will be allowed to have access to a designated station if their own station is one that has not qualified at that time, although the aim will be a hundred percent designated er polling stations with full access. Now the... point about this measure... is how will the Secretary of State... for home affairs, respond to this proposal because this is a re-run, this ten minute ruled bill, of the bill that I introduced last year under the private members bill procedure in which the... er junior minister that is currently at the despatch box, said that he accepted the principals of seeking to achieve full registration but felt that the measure itself was premature, premature in that the Home Office were investigating... er numbers and matters concerned with the electoral registration and electoral provision, arising from experience at the last general election but I think it was beginning to be accepted that the poll tax had had a serious impact upon the electoral register although there were many other er elements that provided great difficulty. What we now need to ask is... has the time arrived er for this measure to begin to be acceptable by the Home Office, it would be nice if there was a just a little indication er as I'm er proceeding through er this measure from the minister at the despatch box, that the time was now right for this er particular proposal er which was not anything that was voted against... er on second reading but merely failed to overcome the hurdle of getting a closure when by seventy eight votes to nil er it was carried except that carrying was not sufficient in order arrive at a closure so that the measure could move in the committee. Now it would... maybe not be appropriate if there was to be an alternative government bill that would deal with these type of matters er in front of us and please to say that when I read out the list of sponsors, it'll be shown there are people from all parties, or all parties in Britain in this house, who are true democrats.
[speaker001:] The the question is that honourable member to bring in his bill say aye. Aye. they ayes 'ave it, the ayes 'ave it. Who will confirm bring in the bill?
[Betty:] Mr Robert McLellan... Mrs Margaret Ewing... Doctor Norman Godman... Mr Dafydd Wigley... Mr Richard Sheppard, Mr David Crimble, Alice Mahon, Mr David Alton, Mr Bill Mickey and myself.
[speaker001:] Can't be bad can it? Representation of the people amendment bill. Seconded in what day? Friday May the twentieth. the twentieth, thank you. Now come to motions one and three representation of the people... Mr. Mr speaker I beg to move that the draft European parliamentary constituency's England order... nineteen ninety four erm the draft European parliamentary constituency's Wales order nineteen ninety four which were laid before the house on the twentieth of January... together with the draft European parliamentary election changes to the franchise and qualification of representatives regulations nineteen ninety four... which were laid on the second of February, be approved. First I shall deal with the two constituencies orders... [clears throat] which establish new boundaries for the European parliamentary constituencies. These two orders give effect to the recommendations contained in the reports of the European parliamentary constituencies committee for England and the similar er er parliamentary constituencies committees for Wales... respectively. The two committees were set up... under the provisions of the European parliamentary elections act nineteen ninety three, to carry out the task of determining the European parliamentary constituencies... into which England and Wales... should initially be divided to give effect to the increase, the section one of that act, made to the number of constituencies. I I'm very grateful to the minister but I want to ask him a straightforward question. There is the suggestion that France may not promulgate the additional seats. If that was so, and we today have passed these orders, would it require new primary legislation to reinstate the old boundaries er which would be necessary if I understand, France refuses to advance the additional seats which were agreed as part of the Maastricht negotiations. The honourable gentleman said that was a straight question, I shall give him a straight answer, er no it wouldn't, er... if I can... return to the line of er explanation I was giving Mr Deputy Speaker. If I may remind the house of the background to this. Agreement was reached at the European council at Edinburgh in December nineteen ninety two that the European parliament should be enlarged by allocating additional seats to some member states. [clears throat] The primary reason for this was the... large increase er in the population of Germany arising out of the reunification of country. Eighteen extra seats have therefore been allocated to Germany to take account of the increased electric there. The United Kingdom received six extra seats under the agreement, of these six, five have been allocated to England and one to Wales, which the government, in a moment, which the government believes is the fairest distribution on an arithmetical basis. I give way. Would my honourable friend be able to explain why it was that in the run up to negotiations with respect to the question of increase in the number of seats er, the German government made it quite clear that they were not interested or didn't want to have the additional number of seats and then subsequently, for reasons that have never been fully explained, we then found that er they had an additional eighteen. Could my honourable friend explain how that came about? Well, no I can't give er my honourable friends the ins and outs of the negotiations. Suffice as it's to say that the... negotiations did provide for extra seats for Germany in account of the additional population that accrued to Germany from the reunification of East and West Germany and er... er at the same time the opportunity was taken to allot some extra seats to some other countries er which erm bore in mind... er more closely than before, the respective differences in population sizes of the various countries that make up the community, er the two special committees that I referred to Mr Deputy Speaker, were set up in July nineteen ninety three. They followed as far as possible in the time available, the practices and procedures... of the permanent parliamentary boundary commission, indeed... of the six members of the committees, five were members of the parliamentary boundary commissions and they were appointed to the committees after consultation with the opposition parties. The committees had to work to a very tight timetable. They published provisional recommendations last September and allowed one month for representations and counter proposals to be made. Copies of all the counter proposals and representations were then placed on local deposit in council offices... and a further period allowed for representations to be made about them. The committees made their final recommendations to my right honourable and learned friend... just before Christmas. [clears throat] In making those recommendations they made clear they took into account the recommend the representations made and views expressed to them whilst complying with the statutory requirement that they should aim to recommend the European parliamentary constituencies with as nearly as possible equal electorates. Although I recognise that they may not have pleased everybody, an aim which I think the house would agree, would be impossible to achieve, I believe they have carried out their task in an objective and impartial way. The orders therefore... give effect without modification to their recommendations and I hope the house will approve them. Er may I turn now to the regulations before the house. it's just I did want clarification on that point and I didn't quite understand the answer. If the French do not proceed erm as they are indicating, what happens then to the status of our own constituencies. Do we have the constituencies as were before the additional six seats or do we continue with the constituencies with the additional seats. We we we're empowered er by these orders to set up the new constituencies, er they do not actually come into effect to enable the elections to be held upon them er until all the countries of the E E C have agreed the changes that are necessary to accommodate the new numbers that er they will be having, er so the act, the ninety three act, has a commencement hour within it. The commencement power er will not... be put into effect by the Home Secretary until he knows that the other countries have accommodated themselves to the new arrangements. Er, if they don't, the commencement... will not take place and we will continue on the existing boundaries, that would, and I'll give way to my honourable friend in a moment, that of course would create massive inconvenience, I see no er real reason why the other states er which have yet to ratify should not do so er but my honourable friend I think wanted to intervene with a further thought on this point so I give way to her. No, all I was... curious to know was, er the commencement yes, but I mean w could you take it right up to the sort of... the tapes until the day before the elections, or what would be the limit on that? Yes we could do so it would be a matter of judgement for the er er for the Home Secretary how far to take it and he would have to balance the likelihood of er other countries all ratifying and the inconvenience to those taking part in the election here er if er there is some uncertainty to the end and maybe having to revert to the current constituencies, er I hope... and expect that these matters will be settled in the next few weeks. I think the er the Home Secretary will be becoming increasingly concerned er if there isn't a a conclusion by mid April but I think maybe er honourable friends on... both sides of the house may want to onto when the last date should be. But there is no late date set into the legislation, only that... ratification when it is required means that from the first of the following month then the elections on the new constituency boundaries may take place under the new er European rules so that a decision is of course for an election in June er is in fact needed by the first of May. Very difficult after that. minister's well aware, this is causing considerable concern amongst the small percent of the population in Southend-on-Sea who are interested in European elections because the proposal is that instead of the links with Chelmsford, as we are at present, we're going to be linked with Thurrock, which of course is something different. Now what my constituents who are interested would like to know is, what actually does President Mitterrand want? What price are we going to have to pay the French to get this through, really don't know and I wonder if the minister could say, what exactly does do the French actually want before they agree to this? I think that er that is a question better directed towards the French, possibly my colleagues in the foreign office but my understanding is that the French assembly have indeed er approved ratification er but the French government i is declining er to append the appropriate signatures to it er er until agreement over the erm the parliament building at at Strasbourg is completed erm but my honourable friend I think in true... parliamentary form, asks questions to which he already feels he knows pretty well what the answer is and I suspect that my answer squares with what he knows already. I give way to the honourable gentlemen. on that point er would the er minister indicate whether or not the British government supports the attitude of the French government because of course the British government at the time of the Edinburgh summit were wholly in favour of the agreement to require the European parliament to meet both in Brussels and in Strasbourg and therefore I assume that there's an identity of interest between the British government and the French government on this question since the French government are maintaining their... er opposition to the er six extra seats simply because they want to see a new parliament building constructed in Strasbourg, is that a position that the British government supports? Er what the gov the British government would like to see is a resolution of these matters er our precise position er and attitude and er erm the assistance we can give in reaching conclusions is much more a matter er for ministers of the foreign office rather than myself so the honourable gentleman er invites me to tread in areas that don't belong to me and do not actually belong to these orders that are before us, no they're not, they're not really relevant to whether we approve or not the orders that are before us, er I'll give way in a moment but the honourable gentleman er for I believe wanted to intervene. Isn't there a precedent for all this muddle?... and opt out clause. Reced er the precedent for the situation that we are in now, yes indeed there is one and it was when er the Labour government was last in power in nineteen seventy eight, when we had er... er er to er set up the European constituencies we had a limited time to do it in and all the countries in Europe had to agree to bring forward the same kind of agreement and put it into effect at the same time. So I am telling the honourable gentleman yes indeed there there is a precedent. Er, I give way to my... er? getting more and more intrigued by this and I'd like to you a question to which I genuinely don't know the answer. I thought I heard him say that there was some discretion in this matter, if the French don't go ahead there is some discretion on the part of the British government, I thought it was automatic... that if the French don't ratify then we won't be able to ratify. Er the, the original question I had is whether if they don't go ahead er whether we would have to have new primary legislation to revert to the current Euro constituencies and I said no we wouldn't because there is a commencement date, there is a commencement date that er the er er Home Secretary would not put into effect until he was er quite certain that all the countries were on the start line and the the and and the new and the new constituencies er could actually come properly into effect and the six extra members would be elected. What I said was there was some discretion was in the hands of the Home Secretary when he brought forward that commencement date and what he would have in mind is of course the er er not merely what happens er er i er erm in the er er our colleague countries in the community on their... commencing er their changes, er but also in the kind of time we would actually need, political parties would need, candidates would need, to run an efficient election campaign here. Obviously we do not want to be in two minds up to the last day and he wouldn't do that but there is quite a a period of discretion where the time gets shorter and er he would have to make a judgement. I suspect that time would come somewhere in April. Yes. Erm... my honourable friend will remember that er under er part two of the Maastricht treaty erm titled to citizenship er article eight er not only are citizens of the union erm given certain powers but they're given rights conferred by the treaty which should be subject to the duties imposed thereby. Then, it states that every citizen of the union erm residing in a member state shall have the right to vote and to stand as a candidate at municipal elections in the member state in which he resides under the same conditions as nationals of that state and that the right shall, not may, but shall be exercised... er before the thirty first of December nineteen ninety four by the council acting unanimously on the proposal from the commission and after consulting the European parliament... which arrangements may provide the derogations where warranted by problems specific to a member state. Now my honourable friend was er indicating that perhaps some solution would need to be found to dealing with the problem of the intransigent French. Now all I'm suggesting to him is that there is here apparently a requirement laid down by the treaty which can't be aggregated by any one individual member state which could actually only be enforced by reference to a court of justice and what I'd like to ask is in the light of this very deep seated concern by the French about Strasbourg er and the European parliament building and the knowledge that this is of such importance to the er... of er voting and of representation in the community of the European elections. Is there an intention by our government through some means or another, to get this matter brought before the court so that we can have the matter er sorted out where it belongs. Hear, hear. Er I I think my honourable friend, if I followed him er is confusing two things, er because erm er what... we, he was beginning by talking about... er are what we will come to in the regulations er which is the right of citizens of other er member countries to vote in the country of which they're not a citizen to vote. Er, but that doesn't er erm er enable anybody to take any legal process against France or the French government er for not ratifying er those arrangements which would lead to six additional members elected from this country and indeed six from France. They're quite separate. But I will be getting on to these regulations now. Because erm... the er the purpose of these regulations which er my old friend has just eluded to and I s I I and I have myself, is to extend to the citizens of other member states of the European union who are resident here, the right to vote and to stand as a candidate in the elections to the European parliament. Our current legislation relating to elections restricts the right to vote and to be to British and other commonwealth citizens and citizens of the Irish republic. But the treaty on European union signed at Maastricht gave voting and candidacy rights to citizens of the union who live in a member state without being a national of that state. Article eight B two of the treaty related to elections to the European parliament which is the subject of the draft regulations presented here. The draft regulations extend these electoral rights... to citizens of the other member states of the European union... who are resident here by making a number of technical amendments to existing legislation. The overall aim of these draft regulations is therefore very simple... but the regulations themselves are somewhat long and complex as those who've tried to read them will have noticed. The reason for this length and complexity is that er electoral legislation very rightly goes into often minute details of prescription and practice. This level of prescription is valuable in safeguarding electoral procedures from ambiguity but it does mean that even simple changes require complicated amendments to a great many... legislative minutiae. This accounts for the complexity of the document before the house. The general principal of article eight B two of the Maastricht treaty is that non-national residents in member state should be treated for electoral purposes in the same way as the nationals of that state. The draft regulations seek to achieve that equality of treatment in practice and we are not introducing of our own accord any requirements on citizens of other member states which we do not require of our own citizens. To register to vote for example, a union citizen must have been resident in Great Britain on the qualifying date of the tenth of October or fifteenth of September for Northern Ireland in exactly the same way as British or other commonwealth citizens... and citizens of other member states who wish to be candidates of the elections for the European parliament must conform to the same nomination procedures as candidates have hitherto. But we're placing one or two small differences to procedure on union citizens directly stemming from the provisions of the E E C directive implementing in article eight B two. In mentioning the directive er can I er pause very briefly er Mr Deputy Speaker to apologise to the house that this document was not made available at the draft stage er an unfortunate combination of human error and several failures of communications meant that the select committee was deprived of the opportunity to consider the directive at its draft stage, er I've noticed the select committee's report which has been put in the vote office in the usual way and acknowledge the government did not meet its scrutiny obligations with regard to this document in the normal means. I can only repeat here, the apologies which have been made outside the house.... As I said, the draft regulations impose on union citizens a few minor procedural changes from those we require of our own citizens. The main difference from our normal arrangements is that union citizens will have to apply to register to vote and will have to do so to their local electoral registration officer by the twenty ninth of March. We will not be placing a duty on electoral registration officers to seek out non-British or Irish citizens for registration. A further small difference is that we will be requiring intending voters and candidates to supply information about their electoral rights in their home member state. Member states will be exchanging information on non-national electors and candidates on the basis of the information provided with the aim of preventing double voting or candidacy and to enforce concurrently disqualifications imposed by a home member state. This requirement stems from the directive... who apply the provisions of the treaty and is designed to meet the concerns of some other member states. As I've said, these regulations are apparently complex but merely affect a simple extension of rights to vote and candidacy in conformity with our treaty obligations and I hope that the house will approve these too. Question is as on the order paper, Mr Graham Allett.
[Riddock:] Er Mr Deputy Speaker I'm glad er at last after some further delay that members of this house have the opportunity to discuss the important matter of the boundaries on which the European elections will be fought on June the ninth and the extension to the vote to E C citizens in the U K for those elections. [cough]... Er, the European project goes on and for many of the newer generations in this place, it's not longer an article of faith er but a part of the political landscape that has to be dealt with on merit and it's all the more ludicrous therefore Mr Deputy Speaker, that the Conservatives' internal divisions over Maastricht have led to a situation where candidates for the ever more important European elections are only now being selected in certain seats, just fourteen weeks before the election. Given the size of the European constituencies, it will be difficult, if not impossible, for some candidates to become widely known and for an informed choice to be made. As we argued throughout the proceedings of the European parliamentary elections bill, the Conservatives are entirely responsible for the fact that this process of drawing up the new European boundaries had to be compressed into such a short time. They are also responsible for the fact that the boundaries were drawn up, not by the independent boundary commission, but by the new European parliamentary constituencies committee. It took from the Edinburgh summit in December nineteen ninety two, when the current Prime Minister first announced the government's intention to legislate on this issue, until the thirtieth of June nineteen ninety three before the European parliamentary elections bill had its first reading. Now we all know that the reason for this inordinate six month delay was that the government couldn't be sure of carrying a vote on anything European in the face of hostility from its Maastricht rebels, those the Prime Minister famously dubbed the illegitimate ones. I understand that it is possible, even at this late stage, that the review itself could be overturned by the refusal of France to agree the new allocation of seats and we've already had an exchange on that, Mr Deputy Speaker, which indicates that whatever we decide today might actually be overthrown and overturned completely by the inability of the French to ratify their part of the arrangement, er the minister referred to it as a massive inconvenience, I suggest that if we have to resort to going back to the old boundaries to fight these elections and indeed the problems that that will cause for the selection of candidates as well, that that will be one of the greatest understatements that even this house has heard. I think colleagues on this side will seek to press the minister even further on the latest developments in France and indeed what influence we can have to make sure that if we pass these orders today, they do become the basis of the European elections.... Mr Deputy Speaker we on this side of the house believed then, as the bill went through committee and still believe today, that there was time had the government been more efficient in the organisation of its parliamentary business, for proper public inquiries to have been held. As we know, the organisation of business er isn't their strong point at the moment, whether its been run ragged by their own rebels or... clumsily breaking down the usual channels, seems our non-cooperation policy is merely an extension of the one that's been working so effectively inside the Conservative party under the present Prime Minister. Amidst all that confusion, I think it is important that the procedures used in this parliamentary review should never be deployed as a precedent for future boundary revision, for either Strasbourg or Westminster. We must be clear [clears throat] that this... occasion must be the exception and not the rule. On this side of the house... we believe that if people are to have confidence in our democratic system then they need to be sure that the electoral boundaries on which our system operates, are beyond reproach. I stated when the bill came before the house that I did not believe that the Home Secretary intended to fiddle the boundaries, some felt I was being a little generous to the Home Secretary, but in his case er we should always be prepared to understand a little more and condemn a little less. It was always our contention that justice should not only be done but that justice should be seen to be done by the due process of the public inquiry.... This process was one... that we'd enjoyed the public inquiry process for over fifty years [clears throat] and it would be most helpful if the minister at some point in his er later remarks perhaps could take this opportunity to tell the house that the Conservatives do not intend to side step the public inquiry stage of any future boundary proposals, European or... I'd be glad to give up.
[speaker001:] boundary changes that we would like to have the full panoply of... o o of inquiry a as the honourable gentleman knows, the the timetable was short here and what we had to do was to follow the model, er that had been provided by the last Labour government in seventy eight when it had a similarly tight timetable, took a similarly er er period, similarly short period of time er for the reviews and where erm the normal enquiries had to be dispensed with. They were not, they were not dispensed with, well one could look back in seventy eight and say retrospectively how that process could have been started considerably earlier, er the honourable gentleman knows perfectly well that er as the Maastricht bill was winding its way through here it wasn't really practical to to run this but indeed the processes were started before the governing legislation was on the statute book and I quite understand why honourable gentlemen opposite wish to make their party points, particularly those... particularly those who were not in the house in seventy eight which er doesn't I think apply to the honourable gentleman from... from Birmingham, when he knows perfectly well that the same kind of machinery is used now was used then and it was used as fairly and as honestly and as completely impartially as the time allowed. I'm more concerned about erm future possibilities, not least the possibility that the, if we fight the next European election under first past the post system then of course there will need to be a further set of boundary changes in the very near future arising from the parliamentary boundary commission proposals and I hope... that again that the minister will take the change in [clears throat] in his remarks a little later, to assure the house that this was, because of the time constraints and there are reasons for that that I'll come to, but because of the time constraints that this was in fact just a one off proposal... because its sad that party political considerations that the minister has eluded to, the difficulties that Conservative party had over the Maastricht bill, caused our boundary procedures to be tampered with at all in the U K. At the same time... as we're seeing er a welcome expansion of democratic forms in the rest of the world in... erm Eastern and central... er Europe, in South Africa for instance we see the erosion of these forms in the United Kingdom. We, in this country and indeed in this house, can be very deeply complacent when indeed we should be ever vigilant about our democracy and the very precious forms that it takes of which one was the er public inquiry stage of the erm boundary commission procedures. Public inquires... certainly. been rather unfair to the Conservative party over their attitudes to Maastricht. Would you accept as a Euro enthusiast, that the opinion poll published by the commission three weeks ago, showed that the Labour party in their tepid support for Maastricht, were wholly out of line with the average Labour voter and in fact it shows quite clearly the majority of people in Britain, not only were opposed to Maastricht, they were also opposed to the idea that the E C was a good idea at all. . I feel er something of a stranger walking in on the Maastricht reunion er annual dinner er at the er... I have to say that erm I er wouldn't wish to cross swords with the honourable gentleman on the detail of the Maastricht bill but certainly... but certainly I 'ave to say that for many people and maybe even some people on this own side who may be prepared to admit it, the... false divide between Euro sceptics and Euro fanatics is one that doesn't appeal to the new generations of members and I suspect on both sides of the house, we are in our considered view in Europe and we need to make the best of it and treat Europe on its merits rather than re-live the battles of the er late seventies and early eighties. The... public inquiry process within the boundary er commission procedures is... certainly not er a declaration, it has a very important function. In the previous round of European parliamentary proposals there were ten European boundary enquiries and five of these overturned provisional recommendations as a result of listening to people at public inquiry. Now the Home Secretary admitted in the committee stage on the floor of the house that to have had the public inquiry stage would have added seven weeks to the boundary process. This Mr Deputy Speaker, could easily have been accommodation had the bill been brought to the house just seven weeks earlier than it actually was brought to the house, seven weeks weren't the problem. The problem was the wasted thirty two weeks between the Edinburgh summit and the introduction of the bill, a delay caused entirely... for party political reasons, the Conservative splits over Europe in general and over Maastricht in particular. I'll be pleased to give way. I, don't go, he knows the answer to this question maybe the Home Office will be able to provide with it. How many E C nationals are presently registered then to vote in this forthcoming election? At the moment there are no... at the moment there are no nationals registered and I'll I will come to this later, er potentially I understand there are some four hundred thousand who could register. Erm, Mr Deputy Speaker, we on this side of the house look forward with confidence to the nineteen ninety four European elections whatever boundaries they take place on. In nineteen eighty nine, at the last European elections, Labour took forty five seats to the Conservatives thirty two and we are looking forward to the elections in June when the party opposite, ridden by divisions and disagreements, will suffer further loses and Labour, we hope, will make further gains. We all know that there's a fundamental divide within the Conservative party which no amount of packaging can camouflage, although the packing last time round perhaps er wasn't quite as good as it could have been. Maybe this time they'll be a rather more serious effort in the European elections given that the er potential for influencing the outcome of the next leadership contest also lies in the balance there. In Europe itself the Conservative M E Ps are led by Sir Christopher Prout... Sir Christopher Prout is the vice president of the European Peoples Party... and they sit... the... the... the... a debate may no doubt take place later on whether he's the vice chairman or vice president. My information, until corrected, is that he is the vice president of the European Peoples Party and... it's a rather ambivalent relationship the er Conservatives have with the European peoples party. They sit with the European peoples party in parliament. They speak on the European peoples party membership of committees, that is the only way in which they can find a voice in committees and they take their share of European peoples party's funding from the European... peoples party. Now... there seems to be a very close relationship between... the European peoples party and the Conservative party, if only on that circumstantial basis. Now the European peoples party manifesto... calls for a single currency,... a central bank,... the incorporation of the social chapter... a common immigration policy... and a constitution for the whole of Europe. All of which have been greeted by... members opposite with great acclaim. Things obviously very close to the hearts of members on the benches opposite. I can only wonder if it will bear very much relationship to the manifesto finally produced by the Conservative party before the next European election. I'm very grateful to the honoured, honourable gentleman. I'm certain that he would not like to finish his speech bef before mentioning the relationship of the Labour party with the socialist parties in Europe... and their own manifesto. Oh what a clever boy. And... I certainly wouldn't dream of finishing my speech without er some substantial mentions of the er very close relationship that we are proud to tell people about.... Very close relationship... between. Order. Before the honourable gentleman goes any further it would be advantage really to get back to the boundaries... Mr Graham G.
[Winnick:] I'll... resist the temptation er Mr Deputy Speaker to to follow members opposite in er what could have been a very interesting line of debate.
[speaker001:] Erm, has the honourable gentleman noted that er on the ninth of February, it's only a few days ago, the European parliament itself erm through its rapporteur Mr Fernand Herman er the Christian Democrats, but also of course with er socialists from the... er European parliament, endorsed a constitution er which contains even worse things than the European peoples party's manifesto. Is he and his party, going to repudiate these. Order, my just recent remarks it would apply to the honourable gentleman, just in reply to the honourable gentleman on the front bench, Mr Graham Allett.
[Riddock:] Erm I think the bad news for the honourable member from Stafford is that er Messier Herman is in fact a member of the European peoples party and no doubt no the honourable member... with great respect, said that he was a Christian democrat and he's also a member of the European Peoples party and therefore I hope that the honourable member for Stafford will take that up with his Conservative colleagues, who are very closely connected to the European peoples party, because I hopefully have made clear earlier in my remarks. I'd be very glad to give way to the honourable lady.
[speaker001:] is the honourable member aware that whereas all the Conservatives voted against the Herman report, the Labour party, the socialists er er out there on the that side, voted for it.
[Riddock:] I'm very grateful for that point of information from the honourable lady.
[speaker001:] Er Mr Deputy Speaker it's also... quite important that I make clear the Labour party's position in respect to the article which calls for uniform electoral procedures to be set up for elections to the European parliament. Members of this house will recall that this matter was raised er in relation to an amendment er at committee stage... and we argued during the committee stage of the bill that it was not feasible for an entirely new electoral system to be set up for the European elections in June nineteen ninety four... and that it was er silly to apply a different system for the additional six seats to that applying to the other eighty one. However we also made it clear that as one part of Labour's wider democratic agenda, that we were sympathetic to looking at a plurality of electoral systems and that this might include legislating for a regional list system of proportional representation for future European elections. As I stated in the house during the debate on the seventh of er July, the plant commission established by the Labour party to look into electoral systems proposed as one of its many recommendations, a system of proportional representation, the regional list system for the European parliament. Its report said, such a system could be introduced by an incoming Labour government for the nineteen ninety nine elections at the earliest. That report was sent to our national executive committee and on May the nineteenth the leader of the Labour party stated and I quote, the plant committee concludes that different elected bodies can be chosen by different electoral systems, that is the view which I share and I support the proposals made both for a reformed second chamber and the European parliament. The proposal on the European parliament sensibly recommends cons consistency of voting for the one election that we share with other members of the European community. Mr Deputy Speaker that strong sympathy expressed at the time of the last debate on these matters was approved overwhelmingly by the Labour party conference last October and I state that for the record less there be any misunderstanding about our position on the issue of voting systems. Hear, hear. It also illustrates the fact that the Conservative government are yet again... lagging behind even the right wing and Christian democratic parties in Europe and are utterly isolated in their unwillingness to contemplate electoral change of any kind. Mr Deputy Speaker the European parliamentary constituency committees... have now made their recommendations. We on this side of the house, have a number of specific dis disagreements about the er way in which specific boundaries have been drawn... in addition members will remember our strong call for an additional Scottish seat. Nevertheless we are generally satisfied that both committees, that's the English and the Welsh committees, have done a thorough job and on behalf of my colleagues I would certainly like to pay tribute to those who served on those committees who I believe discharged their responsibilities with great professionalism in circumstances made unnecessarily difficult by ministerial dithering and delay. Mr Deputy Speaker we live in dark days for our democracy. Days of executive decree,... Henry the eighth clauses and bills being agreed without proper parliamentary debate. I suppose in that context we should be grateful that ministers have not used the power that they have... to modify the recommendations of the boundary committees. It is a sad day when we are grateful for not being abused in this house, but it's about all we have to be thankful for until this wretched system is altered, root and branch. Hear, hear, hear. If I can... move onto the... final of the orders, the erm enfranchisement of E C citizens resident in the U K.... We on this side of the house welcome the change which allows E C citizens resident in the U K... to vote in the European elections. These regulations which will give effect at the European council directive of December the sixth... will of course alter the long standing position in the U K whereby only British and Commonwealth citizens and citizens of the Republic of Ireland are entitled to vote in European parliamentary elections. It is a sensible and desirable change... welcome on this side of the house... and I understand, and the minister may correct me if I'm wrong, but the order relating to local government elections and E C citizens er will be before the house before the end of nineteen ninety four. We on this side of the house... believe that this extension of the franchise to E C citizens resident in Britain... is a clear affirmation of our practical commitment to greater European cooperation... and rights that apply to all European citizens. Consequently we've been greatly concerned by the government's delay in bringing forward this legislation which was adopted in draft on the twenty third of June nineteen ninety three and became a council directive on the sixth of December nineteen ninety three. It's indicative of this government's approach to all matters European. That every obligation of the Maastricht treaty appears to be discharged grudgingly... and after unnecessary delay. Often the wheels appear to grind exceeding slow, particularly where democratic change is concerned. It was in nineteen seventy seven that the European parliament... first passed a resolution on voting rights in European elections. I hope that many of those pioneers of that time... feel a sense of satisfaction this evening, seeing this bill and these orders going through. It may interest them... that within the last few months the European parliament has agreed to press for a bill of rights for the citizens of Europe and for a written constitution for Europe. Who knows how quickly that may come to fruition. The principals underlying this change are relatively straightforward, as the minister's already er eluded, article eight of the treaty on European union passed last year, entitled citizenship of the union, guarantees the right to move and reside freely within the territory of member states. I'd be pleased to give way. Thank you honourable gentleman. Isn't it also true that the... European union or community or whatever you like to call it, is also intending to introduce a compulsory identity card in the form of a smart card carrying details of the citizen's health, but which would have ample room to put all sorts of other things on. There are no proposals... there are no prop. A list of recommendations. When he introduced the report in the house, my right honourable friend, the member for Kingston upon Thames made is clear that he accepted them all and that the government was committed to carrying them out. In a subsequent debate on the report on the sixth of November nineteen ninety two, I spelt out in some detail how the government intended to fulfil that commitment and one of the regulations before the house today represents the culmination of our actions to give effect to one of Sir Thomas er Bingham's recommendations that the existing right in section forty seven of the banking act nineteen eighty seven, for auditors to report relevant information to the bank of England should become a statutory duty.... As honourable members will recall, Sir Thomas was persuaded to this view... by in part a conclusion of the treasurer and civil service select committee, that although the existing permissive nature of section forty seven had worked well it seems desirable in his words, to tighten the wording of the act so that there can be no doubt, either from the point of view of the auditor, his client or the regulator, as to the auditor's duty to report. In announcing the government's intention I also made it clear that my right honourable friend had decided that a similar duty should be introduced for auditors of building societies and financial service companies and that my right honourable friend the president of the board of trade would want the approach extended er to the, this approach extended to the auditors of insurance companies. Hence the four statutory instruments which are before us today. In his speech er in that debate the honourable member for Edinburgh central and the... bench er in his place today, er welcomed the government's acceptance of Sir Thomas' and the select committee's recommendation and agreed er that it was in his words, important that the statutory duty of auditors ought to be clear so that er to use his colourful phrase, if whistles are to be blown they're to be blown without doubt. Well since that debate the government has taken the decision to introduce the duty into a fifth regulated sector... friendly societies and a negative resolution order under the friendly societies act nineteen ninety two is also is also prop be N reasons for taking action across this wide front Madam Deputy Speaker, first and most important, the relevant provisions in the various acts are very similar and if we are to bolster the arrangements in relation to banks then we should do the same for other sectors entrusted with the public's investments. All with ensuring their daily risks. It would be difficult for me or for any other minister to have to defend leaving things unchanged in these other areas if the affect of having done so was subsequently to lead to a case of fraud in an investment firm, building society or insurance company which the existence of the duty would have helped to prevent. I most grateful to the minister for giving way and it's good to see the government er at last acknowledging the justice of the amendments to do exactly what we're proposing now that we put in... to most of the committees like the... building societies c c c b b bill a and like the banking bill when they were discussing the nineteen eighties but Lord Justice Bingham also recommended er and I quote, the determination of the correct relationship between client, auditor and supervisor raises an issue of policy more appropriate for decision making by parliament than by the bank and the accounting profession. Why in the view of that clear recommendation that parliament should decide these matters, has he left the regulation of that duty to the auditing practices board, a non-statutory body? Well the honourable gentleman for Great Brimsea is quite right to say that these matters... er had some consideration given to them during the passage of the... the legislation er but it is also true to say that er er th in the Bingham report there was a broad acceptance that the present s system of supervision of banks should continue. Now with regard to auditors in particular, er he will know because he's had some correspondence with me er on this particular subject, it is the view of the government that the er recognised professional body, the Institute of Chartered Accounts in England and Wales, is best placed as a professional body, to supervise er this sector er an argument can be mounted and no doubt he may seek to use this debate to do just that, to say that er this should be the subject of some direct er rule from Whitehall. But that is neither the history nor the practice of our professional system, not just er for accountants but for the legal system as well and I think it has stood the test of time, er he will know that there has been er there is a procedure for the joint disciplinaries scheme er which enables the er institute to investigate whether there has been compliance by member firms with the standards promulgated er with er er by the er er auditing practices board and that seems to me to be the er right way forward. But no doubt we can return to these matters if the honourable gentleman raises them further in the course of the debate. Er, madam deputy speaker erm er... having determined the scope of the duty, er the government er published a consultation document at the beginning of March at last year. This made it clear that it was not the governments objective to alter fundamentally the red relationship between auditor and client, nor were we looking to increase the costs of audit. Our object was the same as Sir Thomas Bingham's, namely to clarify and strengthen the position of the auditor, not to change it. So the government held back from imposing a duty on auditors to seek out fraud, malpractice and wrong doing. This would have meant straying too far from the auditor's traditional role. The responses we received to the consultation document were considered carefully and my officials discussed the issues raised with the auditing practices board and with other interested parties in the regulated sectors. Some comments could be dealt with readily by changes to the draft statutory instruments but others were not so easy to resolve as they raise more fundamental questions and in these cases my officials were able to explore with the auditing practices board, whether issues could be more easily addressed in the statement of auditing standards... which is being developed to accompany the legislation than in the statutory instruments themselves. I'd like if I may, to take this opportunity of paying tribute to the er helpful, cooperative attitude that the auditing practices board displayed in what were often long and very complex discussions and to thank them for the clear and helpful statement with which they shortly er plan to issue er to er accompany these order and to bring them into practical effect. for the convenience of the house I'd be most grateful if he could tell us, is this board a quango that he's referred to? Is it one of the new quangos or is it a S F R A, a self financing regulatory authority that has powers to issues and regulations and charge people for the job that it then does. I think the house would like to know whether it's a S F R A or quango? [LAUGHTER] I I I'm... well I'm not entirely familiar with such jargon, I think it falls within the latter rather than the former definition. It is not that case that er er the auditing practices board is a body set up by the statute. But it is certainly er a body which is er recognised as responsible and indeed in er tax law and in various other ways er its promulgations and the standards that it sets are are generally regarded as acceptable but these matters of course are kept under review.... Er Madam Deputy Speaker, one of the... difficulties addressed during the consultation exercise was that neither the term auditor, nor the phrase in his capacity as auditor, were defined in the banking statutory instrument or in the banking act itself and the government's mindful of the need to clarify who it is who will be placed under a duty by the statutory instruments and in which circumstances the duty will apply and while this is ultimately a question for the courts, we take the view that the duty clearly covers any auditor of a bank appointed under U K company law. That is any auditor of an authorised institution incorporated in the U K. It also covers auditors of authorised institutions whose place of incorporation is outside the... European community and who's initial authorisation has been granted by another regulator, even though such auditors may be appointed under a foreign law. The government also takes the view that the duty applies to U K accountants acting as agents of the appointed foreign auditors. As for the circumstances in which an auditor might come under a duty to report, the banking act as well as the financial services act and the insurance companies act, uses, use the phrase in his capacity as auditor, here again we have no powers to clarify this on the face of the regulations. If any greater certainty could be given... then it could be done only by an unacceptable narrowing of the duty to restrict it to a part of the auditors responsibilities and we're also concerned that to do so could have potentially wide ranging implications for the scope of auditor's functions more generally. It may however be... helpful madam speaker, er Madam Deputy Speaker, if I seek to clarify er when an individual auditor is operating in his capacity as such and whether a partner in an auditing practice who is not involved in audin er in auditing the regulated institutions is deemed nevertheless to be operating in his capacity as auditor. In our view it's reasonable to expect an individual who is conducting an audit, to consider information relevant to an audit which is obtained in the course of other work for the same client. It seems realistic to expect the auditor to take such information into account in his review of the audit... and the person acting as auditor also needs to be aware of other non-audit work on his client that partners in his firm may be doing such as for example tax work and they in turn should consider whether any information that may arise from their work is relevant to the conduct of the audit and where it is, they should also consider whether it is relevant to the duty to report to the regulator, the partner carrying out the audit should also if possible, discuss it with his client. In the case of information relating to er say client A which is... obtained by the auditor while auditing client B, the auditor ought as a matter of sound practice normally to use the information to make further enquiries for the purpose of the audit of A. These interpretations have been set out more fully in the statement of auditing standards and the professional guidance issued by the auditing practices board that will accompany this legislation... and as matters of courtesy to the house er Madam Deputy Speaker, I ask that a copy of that be placed in the library. Once this extensive consultation process was over the government circulated amended versions of the draft statutory instruments for a second more limited round... before setting them in their final form. In producing these drafts we bore firmly in mind the fact that if this duty on auditors is to be effective then it's vital that the auditors can continue to rely on the trust of their clients. So we've tried to set the duty at a level... which makes it clear to those who seek to commit financial crime that they're more likely to be caught but which does not impose additional reporting burdens or costs on those who conduct their business honestly and that is a most important balance to strike. Hear, hear. I I'm very grateful to the minister for... [LAUGHTER] his patience [] but... er on the other hand it could be argued that it's no use having a duty to report fraud unless you also have a duty to detect fraud. The auditing profession er argues, and I must say the audit practice board's er... er proposals are very, for very passive auditing, the audit profession argues that it's difficult to detect fraud but on the other hand er the local government er act er local government finance act of nineteen eighty two requires local authority auditors to have er er er a duty to search for unlawful acts and report on them. Now if that's good for the local authority goose, why isn't it good for the banking gander when so much more money is involved. Well the honourable gentleman as always makes er more than a debating point, I think he makes a... serious point which er deserves to be answered, erm it is not, if I can put it this way, the intention of these orders... er to turn auditors into... er snoopers or narks... er and to do so I think runs some very serious risks, not only of reducing and undermining the relationship between auditors and their clients, not only of imposing very substantial additional cost burdens on auditors which will have to be borne by companies and ultimately their clients, but also there... has an example he's given I think to be some difference, put it no more than that between public money and private money, even though I acknowledge that were talking here... about the trusteeship in some cases of of er d er public deposits and funds. So I think there are difficulties and I might er just finally add that were we to go along the lines he mentioned, we would of course need primary er legislation because we couldn't introduce in orders under the relevant legislation this, so it would have to be a matter for another day, were we to er consider that seriously, but it is not the intention of the government. to all er o o on both sides, erm... there's one point he made which is terrible important which is that the... costs of this statutory instrument and all the guidelines and rules and regulations and orders that flow from it, will not impact onto small b business because that was the key to the deregulation bill and I wonder whether the deregulation unit has looked at this and whether it is satisfied it's not gonna be an additional cost onto the running of small enterprise. Well my, my honourable friend is is a prime champion of small businesses in this house and he raises a very important point er, the answer is yes it has been considered er by er er those concerned with deregulation. In fact my honourable friend, the parliamentary under secretary of state for the department of trade and industry who's responsible for deregulation is also the sponsoring minister for one of these orders, namely the one on the insurance companies, and secondly our intention is that the cost here should be negligible, or nil... er in that they don't go beyond er what is already required or or possible by way of a right to report, here we're imposing a duty to report. That itself shouldn't er impose er any greater cost on auditors, but it should, and this is the crucial point I think, it should bolster the ability of auditors... to insist that their client companies er... are forthcoming and open and where necessary correct if they can... er problems which might otherwise bring their authorised status er into question and therefore it is a welcome enhancement of the law, it toughens up the law without imp imposing the costs about which he's rightly concerned. Madam... deputy speaker, before I sit down I should... also just mention that there is a a European dimension to this issue... as in November nineteen ninety two the... Vice President of the E C commission, Sir Leon Britton, sketched out some general proposals for community legislation in response to the B C C I affair. These proposals were subsequently turned into a commissioned proposal for a directive. One element of which would be to require member states to impose a duty on auditors of financial undertakings, to report breaches of laws or regulations or other adverse circumstances to supervisors. As the house will know, following discussions in Brussels, political agreement has been reached in the council on the amendment draft directive which, if implemented in its present form, would impose on auditors a slightly wider duty to report than that contained in the regulations we're currently debating. However the proposed European directive has a number of further hurdles to be negotiated before it can be finalised and even when it is it's unlikely to be implemented before nineteen ninety six. Even though some minor changes may subsequently be necessary in order to conform with the directive, the government doesn't want to risk a further period of delay before bringing these necessary measures into effect. Given the widespread support on both sides of the house... for Sir Thomas' recommendations, the government believes that we should now act promptly to pass these changes into law. Can I conclude Madam Deputy Speaker, once again, by expressing my gratitude to the auditing practices board and the many other professional bodies who've been involved in considering this legislation. We believe that these measures will greatly strengthen and clarify the position of the auditor and represent an important step forward in the fight against financial wrong doing. I commend them to the house.
[Mead:] The question is in the terms set out on the order paper. Mr Alistair Darling.
[speaker001:] Hear, hear.
[Gilfore:] Madam Deputy Speaker. As the minister said these orders impose a new statutory duty on auditors and as he quite rightly reminded us, it is something that er we... welcomed when we held the debate on the Bingham report in November nineteen ninety two, some fifteen months ago, er, I think it is fair to say that whilst we welcomed that recommendation from Bingham, we didn't say that was all that was required and it is certainly our view that whilst these orders are very welcome, they are only a start in the battle against detecting fraud and other crimes of dishonesty.... Action was promised as the minister said, in October nineteen ninety two by the former chancellor when the Bingham report was published, but I believe that these proposals are under the bear minimum requested by Bingham... and they hardly live... up er to the er minister's announcement at the beginning of his speech. Indeed they were only introduced after much discussion and some opposition from the auditing industry. Now whilst the minister quite understandable pays tribute er to those who spent some considerable time and effort in getting the practice notes right and responding to the government's proposals, it is fair to say that there are many, not just in the auditing industry, but those who represent the companies who are audited who have expressed a number of concerns, a minister has mentioned some, the relations with the client for example. Indeed that is something that bears closer examination because there are many people who believe that the relationship between a client and an auditor can be too close and that there ought to be a respectable distance between them. There is the question of professional indemnity which I shall return to shortly because I think it might be helpful if the minister were to say something about that. But Madam Deputy Speaker, these order don't pay any attention to a number of matters in what I would regard as the public interest and whilst the minister as I say, has quite rightly paid tribute to professional organisations involved in this process, we must never forget that we're here to represent the public interest and not just... er er specific professional interests that may be relevant in each case and indeed in the light of what has happened in this field of enforcement er over the last two years, the minister must be aware that the public are requiring higher standards of commercial probity. I believe the government should have conducted a proper and wide review into the role and duty of auditors, not just in the area covered by these orders, but also throughout the whole of industry. I understand the various accou er professional bodies in the accountancy industry are in fact doing that but I think the government should also do that because it is not just the probity of financial institutions we are concerned about, it is also er the auditing of other commercial concerns... and it seems to be that in this case the public interest has taken second place to the government's wish to do as little as possible, yet again the minister said in the debate that if we were to do anything further in response to a question put by my honourable friend the member for Grimsby, it would need legislation, primary legislation. So what. That's what this house is here for, it is here to introduce primary legislation if we need it and in my view we do need it in this area and it is it's high time the government recognised that and should not be afraid t t t to take action simply because primary legislation is required. The government has for example, nothing to say about a central enforcement body which is part and parcel of what I believe should be a proper and focused attack against crimes of dishonesty er in in er financial institutions in this country. The government has said nothing about the need to end the fiction of self regulation and to replace it with an efficient and effective and cheaper direct regulation. But Madam Speaker there are a number of questions specifically related to these orders that we need to address. The first one is what exactly the duty is so far as the auditor is concerned. I notice that the phraseology adopted in each of the orders is different. If we look at the insurance order and the one relating to building societies, it is quite clear there that the auditor has to be acting in his capacity o er as auditor. Now the minister er er when in his speech earlier, er made the point that he thought that the proper interpretation in respect of all of these orders was a fairly wide one. If that is the case... why is it that the order relating to insurance and building society er building societies, specifically makes the point that the auditor must be working erm in his capacity as such... whereas the orders on banking and financial services er it may be implicit the er the auditor is working er in his or her capacity as such er but it is not explicitly stated because the phraseology is different. But of course the minister in his speech earlier went far wider than that... er he seemed to imply that it wasn't just er th er duty on the accountant er acting in capa his capacity as an auditor but er the the accountant would have the same duty if acting as an accountant, tax advisor or indeed in any other capacity. Now that is to paint a far wider duty than I had been er er er thought and indeed er those who follow these matters have suggested that's rather wider than the than the er secondary legislation here before us actually provides for. Clearly it will be of crucial importance in any er court proceedings because the court will have to decide whether or not an auditor was in breech of his or her duty having regard to what is on the face of the statute. Now I know erm... following a fairly recent er er er case in the house of lords that the courts are er entitled to rely on what ministers say in debate but perhaps the minister could er spell out a little bit more clearly the apparent discrepancy between what he said in his speech and what is on the face of these orders and indeed why it is that the orders in r relation to banking and financial services, adopts a different phraseology er to that used in the orders relating to insurance and building societies. I know it could be something to do with regime er banks of course are supervised by the Bank of England at the moment and er the financial services er regime is supervised by the S I B and it could be that is the reason why it is not explicitly stated er that the accountant has to be acting in his capacity as erm... as auditor. But I do think the minister er should er b be quite clear about that point er because er it may be of crucial importance, not just to the industry, er but also to the public interest who will want to know what the position is so far as er er these matters are concerned. And indeed er the Association of er Chartered er... er the Chartered Association of Certified Accountants wrote to me recently er... asking exactly what the position is and I quote from the letter, they say firms of accountants are quite likely to be engaged by the same client to perform services other than a statutory audit and then they go on to list financial planning and so on. Now if the minister is right and a partner in the firm or indeed an assistant in the firm a acting as a tax advisor or financial planner, might come across something er tha that er if er he were acting as auditor he would be bound to report. Now as I understand it the minister's position is that he be bound to refer that matter to the partner responsible for audit and that partner er would then be put on notice that er he ought to report it to the relevant authority. Now if that is correct perhaps a minister could say so and clear in explicit terms... er because it is very, very important because increasingly er a number of firms act in er in er in in both capacities and indeed for the large firms I think many of us are aware of the difficulty that's now arising and there are only half a dozen very large accountancy firms that are capable of providing accounting and auditing services in this country and indeed most of them are beneficiaries of this government's largesse in awarding public service contracts er to a surprising degree and so the government will be well aware of the problem.
[speaker001:] to my honourable friend because not only are these er large er particularly the big six er... centres of accountancy power pretty well uncontrolled, they dominate the institutions that are meant to regulate them... er but when it comes to international... er affairs they don't exchange information with each other. When the senate came to enquire... er into the audit performance of Price Waterhouse... er the British partners of Price Waterhouse claimed that they were an entirely separate organisation, have no obligation to give information to the er t to the senate and nothing was effectively passed on, er so an enquiry was conducted there without our partners, er Price Waterhouse's partners in this country, cooperating in any way. What my, my honourable friend raises a very interesting point because er when I we studied er the law relating to partnerships one of the basic er er principals was the personal relationship between partners and I'm bound to say that when one looks at the headed notepaper of these big multi national accountancy firms sometimes the names of which cover most of the letter and there's very little room in fact left er for the message. Er one wonders how on earth they speak to each other, or if indeed they even know who each other is or where their offices are and there isn't that personal relationship that one might expect to find in the normal concept of a legal firm and indeed er without... clearly we go to off the point somewhat to have a discussion as to whether or not er a partnership is a suitable legal entity for these people to trade under. It does raise a very important matter because in the B C C I inquiry, it was quite obvious er that parts of Price Waterhouse weren't fully aware of what other parts of Pri Price Waterhouse were doing and indeed worse than that and in fairness to Price Waterhouse, some of the regulators in different parts of the world didn't know what each other w w were doing and the only people that did know what was happening were the principals behind B C C I who exploited that situation.... So clearly that is something that er er e i i is a matter for the accountancy profession in some way er but of course we've got the problem as well then that er er Price Waterhouse operating in the United States presumably er comes within the jurisdiction of Price Wate the accountancy profession in the United States and it is something that the government is going to have address itself to. It is already accepted in money laundering for example, that er the f fraud is an international crime and it would be interesting to hear er what steps the minister is proposing to take to have a look at the problem that undoubtedly was er raised in the B C C I report. But... before I leave this particular part of my criticism er perhaps er in case the minister er er doesn't accept what I'm saying I could quote er the words of the right honourable gentleman, the President of the Board of Trade er who writing before he was a President er in his book where there's a will he said accountancy firms ought I believe, the debarred from doing any other work for a company for which they act as auditors and in a number of other countries there are laws... which circumscribe auditors in this way and prevent to prevent any possible conflict of interest. This discipline should be extended across the publicly quoted private sector. Now that was certainly the views of the President of the Board of Trade before er he er returned to the cabinet er at another time and I'm not sure if he's departed from these views but I think they're worthy of some weight. I understand there are problems er but as a general principle it does seem to me that it's something that needs to be looked at... and the minister has said that a lot of these matters will be dealt with by a statement of practice and er he was asked by the honourable gentleman, the member for South Hams I think, er er er what the status of er these people were. Well er to me it doesn't matter s er that much, what I'm concerned about is that this is a matter of public interest, it shouldn't just be a matter of professional interest and it's for these reasons I think the government should take a rather more lively interest er than perhaps it does. There's a whole question of rotation of auditors. That is something that has been canvassed on many, many occasions. Is it wise to have the same firm of auditors year in, year out er all of us are familiar with the er the last item on the annual general meeting, a motion to propose the re-election of the auditors, er I wonder whether or not that's something that ought to be looked at. I understand the exquence, the expense question but there's also the question of transparency and efficiency because firms ought to look at audit as a useful discipline, it's not a question of snoopers or narks, as the minister said, er audit is an essential function for the efficiency of the firm as well as for the protection of the public.... The... next point that I wanted to turn to is who the duty of care is owed owed to, er as I understand it the present law is quite clear. The auditors owe a duty of care to the shore share holders collectively, not to individual share holders or what are called stake holders, employees for example, er nor do auditors have a general duty so far as the public interest is concerned. I believe that's something that needs to be looked at and if the government were prepared to embark on a review of auditing er generally then that is something that I think there is some useful point in pursuing further... er it's interesting that er er erm when Bingham examined this point at paragraph three er point three nine in his report er he has a long paragraph er discussing these matters and er he says that er he... at the end of the day he doesn't come to a concluded view er although he does er acknowledge the fact that there are many people er depositors or example, share holders and employees who might have an interest in a particular company. Then in paragraph three forty he goes on to s to point out that the law er er which was then recently established was that auditors due owe a duty of care to their client company and the whole body of share holders but not to individual share holders and not to non share holding depositors. Now he was talking in the context of er of of a, er but it is something that I think the government does need to look at because given the nature of multi-national companies or even the nature of public companies and private companies in this country where there is a public interest, not just in efficiency but also in probity. That it's time perhaps that we should look at the role of bankers and see whether or not they should have a wider duty than at present. I and we er don't have a concluded view on the matter but it is something that I think that we need to look at. I also think that there is substantial merit in the point that was put in intervention by my honourable friend the member for Grimbsy, on the duty of auditors. He drew attention to the fact that in terms of the local government act, er local government finance act of nineteen er eighty two, that auditors have a far wider duty... than is proposed in these orders before us, because the duty is to detect fraud. Now to my mind that is not a question of being a snooper, a nark or even being a policeman, er it is er er indeed if we look at section fifteen of the local government finance act of nineteen eighty two er it it's quite interesting to see the the words used because the auditor is under a duty, amongst other things, to see that the accounts are prepared in accordance with regulations er made under the act er to see that proper practices that have been followed and to see that the body of accounts that have been audited have made proper arrangements f for securing economy, efficiency and effectiveness. Now that's something that erm... particularly that last point, that audit committees that are established in most efficient companies want to look at and I come back to the point that audit ought to be looked at as something that assists companies in efficiency as well as a mechanism for detecting fraud and yet the government doesn't appear to be examining that. It seems to be saying this is entirely a matter for the profession. I would have thought that it is in the government's interest to promote efficiency, it's certainly in the government's interest to maintain the public interest with regard er to fraud or other wrong doing er but it's something that the government ought to look at and again it seems to me that it ought to be a matter that er could be looked at if there was a proper inquiry. I note that in these orders Madam Speaker, there is a reference to er information or er material that may of significance. It will be interesting to know how the wha how the minister proposes to define er materials er material significance, er who will issue guidance on that point er will it be the professional associations, is it something that the government is going to turn it's mind to and what is, what does it actually mean er for example if the auditor was looking at the Maxwell accounts er what what is a matter of material er er er significance, er for example would it be materially significant that just about every one er er who you spoke to at the time thought that Maxwell was a crook although interestingly that wasn't er apparently the view of the regulator or that are directly responsible for these matters, er but even before Maxwell was exposed for the the crook that he was... er many, many people knew from him that his conduct, er the way his conducted himself, the D T I itself of course had said that he was a... a a manifestly unsuitable person er to be in charge of a company. Is that is that an example of what er might be er information that would be of material significance. It would be helpful I think if the government er would say something about that. Madam Deputy Speaker there is course another matter of er of er broader significance and that is that er whilst these orders er er er cover erm certain financial institutions, they don't erm they don't cover others, they don't cover Lloyds of London in so far as I could see, erm I'd half expected to see the honourable member for Gloucester West er in his place to pursue his campaign that apparently he er he he is not able to be here and indeed er others who sit on the benches opposite who lost a large sum of money in Lloyds, er but they might have had something to say about it as it does seem odd that Lloyds has not been covered, no doubt the minister would tell us that needs primary legislation and I I'm quite sure this government would move heaven and earth not to introduce another Lloyds bill er because of er the problems that that would no doubt attract. But perhaps the minister could tell us er why they're not covered and indeed I understand that in particular er non-U K banks with branches in the in the in this country er are not covered either. I may be wrong about that erm but perhaps the minister could address himself specifically to that point and also to the question of pension schemes, perhaps er covered under some other legislation but I think these are matters that are of erm of of of some concern. Er, as I said the government has already accepted when we introduced the legislation last year in the criminal justice act on money laundering, that there are far wider er interests and fidrer fi far wider implications than there have been ever before and I think the government needs to do a little bit more to show that it is aware of international implications and the sheer scale of what we're dealing with... and er I touched earlier on the question of indemnity, er perhaps the minister could specifically address that point. I notice that er section a hundred and nine of the financial services act nineteen eighty six er quite explicitly provides an indemnity. What is the position with regard to auditors in this case er what is the indemnity. I assume that if they can bring themselves within the terms of erm... of these orders then they will er be indemnified. The question that arises though is if they can bring themselves only within er the er words used by the minister, will they be protected? Now er I'm thinking in in the case of er perhaps a young accountant advising on financial management who finds something odd and perhaps he reports it direct to the authorities, will he be covered or will he have to go through some procedure in order to bring himself within the protection? It is an important matter because clearly if er if the matter er if the suspicion er turns out to have been reasonable but not to bear t further examination then an accountant er could find themselves in great difficulty er both with regard to pecuniary difficulty and also professional difficulty and it's something the minister needs to look at. I think there are two substantial points that er the house ought to address itself to in conclusion. Firstly, and I return to this point which I have mentioned again and again in debates such as this and that's the the question of the lack of there being a central agency er in existence to see to the enforcement of these matters. It's been brought to my attention on a number of occasions by reputable bodies such as the stock exchange, that because of the multiplicity of regulations, er because of the complex nature of the legislation concerned and the er er the the comparatively large number of regulatory or supervisory bodies er that there is no er an and because of the fact that there are so many differences and standards and so on, that there is a need for a central enforcement body to bring together whatever evidence is available er so that these matters can be prosecuted, if I use that that general term. Now... yes. I think that, if I may say so, is a mistaken view... because... because of the proliferation of rules and regulations he's probably right, another quango or another body is needed. What I think we're saying on this side of the house, I don't know if we're saying it loud enough or it's going to have effect, is that we must reduce the number of rules and regulations, you don't actually need the body... which the honourable member's talking about. You don't want another body because of the number of rules and regulations, you want to reduce the number of rules and regulations, you don't need another body. Well... I agree with the honourable gentleman to this extent and that as he knows er we would scrap the self regulatory system and make the S I B responsible for er regulating er er the industry and in time merge it with a banking er regulatory body, er so that would answer that point er and I think that the S I B er could also be responsible for the enforcement of these matters. Again, an extra quango wouldn't be needed and er he's probably aware of that there is a develo er there is a group of er of er various regulators who erm who operate under the acronym finn [spelling] F I double N N [] and which is referred to er in the fact that I think the chancellor made some announcement about it. Er, I think it would be far better to have a streamlined regulatory system which would make the much cheaper and more efficient and I'm glad that the honourable gentleman seems to be agreeing and perhaps he could try and persuade his honourable mefem member on the front bench that legislation, primary legislation is needed, I'm glad to hear he's working on it erm on on the second on the second point he made about the number of regulations, I'm not sure I would agree with him that the best way of resolving this problem is to have less regulations er... er though I would agree with the general er thrust of what he might be saying and that is that if the regulatory system was to concentrate on promoting higher professional standards and have less emphasis on rules and regulations then I think that would help. But when we're dealing as we are in this case, with fraud, then clearly there has to be regulations, there has to be er primary legislation er so that was the point I'm making but as I say, it's not just me, it's the stock exchange, the S I B, all of them believe that we need a single enforcement body to look at these matters and I do wish perhaps the minister does but the government must acc eople and a number of ople obviously with a number of traumas and a number of di exploit the different rules and regulations and to get through them because they know they are never going to be caught and the little chance of being prosecuted and even if they are prosecuted er then the chances of being convicted are remote and even if they are convicted I'm afraid that the judicial shi system shows er that the worst they can expect is a few hours mowing the grass in front of an old folks home or perhaps a few months er in the country residence, albeit owned by Her Majesty. It is something that the government needs to look at and indeed it goes hand in hand er with the need to overall the whole regulatory system er which is something that I've referred to often enough before er and I have no hesitation in repeating it again. Madam er deputy speaker, there is a feeling abroad in the country that an audit certificate is rather like an M O T certificate, it's good for the minute that it was granted but it is perfectly useless thereafter. I think that feeling has got to be dispelled and it's for these points that the, for these reasons the government needs to turn its attention a little bit more er to the issues that I that I have raised and I would refer in conclusion Madam de deputy speaker, the minister to the Bank of England's er memorandum submitted to the treasury and civil service er select committee in its report published on eighth of December last year when at page a hundred and eighty five they draw attention to the European directives that the minister himself referred to. I understand it's run into some difficulty but I urge the minister to press the commission to get a move on because this this is a problem that doesn't just affect this country, it is certainly a problem that affects the whole of Europe and the European union in particular but also the the er the whole of the world and it's something that needs international action. We er er erm... in this country have a very bitter experience with B C C I, it wasn't just the knock it took to the regulatory system but I need hardly remind this house there are thousands of people who lost everything they had and that and there are many people who lost everything they had and feel that this house has not taken their concern seriously and it's something the minister must show that the government is willing to pursue these matters, even if it means introducing primary legislation. Madam Deputy Speaker I re read in the newspapers today that there has been s some criticism er that the matters such as this have been taken on the floor of the house. I think it's important these matters are taken on the floor of the house because they are very, very serious. Perhaps this debate won't be as lively and er as controversial as the one that er we arranged to have on the question of insider dealing but it is an important matter because auditing as I said, is not just as assistance to companies but it is a reassurance to the general public and the public at the moment are in need of grave reassurance that the insur that the er the financial services industry as well as industry generally, is being properly looked after and for these reasons er although we support er the orders before er the house tonight, we have no hesitation at all in ensuring that they are debated properly than not something that should simply go through on the nod. Hear, hear.
[Mead:] Mr Anthony
[Wilson:] Madam Deputy Speaker. I I think erm... a a as you've kindly called me... er I think I will try and make this debate a little more lively erm... but I'm not sure about being controversial er because here I was last week, I was making a speech about the significance of er the deregulation of contracting out bill... and er I said then... that the bill is so important because it is the first major attempt by government to slay the red tape dragon. The maxim that man learns nothing from history is often proved... true that the bill I said shows the government learning from history.... Er, I went on to say throughout the ages the government has repealed legislation, there's nothing new about repealing legislation... it is repealed either because it is proved unworkable or because it's simply outlived its shelf life.... I went on to say in the new world in which we live legislation has grown like topsy and thus requires more drastic pruning. Those in the house who are gardeners know that shrubs grow irregularly and to keep trees and shrubs in fine condition, pruning is essential. Madam Deputy Speaker, nineteen eighty nine... there were five times more pages of legislation than in nineteen seventy nine. Brussels churned out five volumes of legislation before we joined the European community. It now churns out thirty seven volumes... each year. However the cause is not simply too many Eurocrats in Brussels, directors of the commission are often sensible and come in general terms to Britain suggesting a simple way of dealing with the problem. Trouble is once a directive hits Whitehall bevies of officials are stirred into action, taking time and effort to interpret and rewrite the directive. Madam Deputy Speaker, throughout my speech last week I got approval er from the front bench, I got approving nods from my colleagues and winks and a hear hears whenever I said anything... about deregulation. We have the president of the board of trade and industry making a stirring speech and saying that four hundred and forty proposals as a result of the booklet called cutting red tape were either being implemented or under active consideration... and he talked about the explanatory guide... to the bill, the new scrutiny committee that might be set up in each house, he spoke about the business task forces that had made over six hundred recommendations... the debate I thought heralded... was er er I thought the debate heralded er er a new age... where over zealous officialdom would be a thing of the past. Where Whitehall mandolins would be sat on... especially those who were involved in over interpreting general directives from Brussels... and this side of the house has been jostling for position I am told, in order to get on the standing committee which is about to start upstairs. The aim of that bill is to cut back on rules and regulations, to reduce the number of statutory instruments which in nineteen ninety two reached a record level of three thousand three hundred and fifty nine, yes three thousand three hundred and fifty nine statutory instruments and here we are debating banks.
[Mead:] the honourary member continues er are we being treated to a rerun of the speech made recently because I think it would be more appropriate if the honourable member discussed the orders tonight, otherwise there will be a bit a pruning from the chair.
[speaker001:] [LAUGHTER]
[Wilson:] Madam Deputy Speaker, erm there'll be no need for any pruning from the chair... because I had just mentioned the word banks at the very point... that you madam speaker, got up and I can assure that er pruning would not be in order.
[speaker001:] [LAUGHTER]
[Wilson:] here was that er we're debating banks and banking regulations... building soc soc society orders, auditors regulations and financial services rules. Madam Deputy Speaker I didn't mention... those... at all in the speech I gave last week which was so warmly received by the house.... Here are all my colleagues rushing upstairs with great enthusiasm, diving into the committee room, anxious to get on to curb the ever growing number of rules and regulations and whilst they're upstairs merrily getting on with it, here we are downstairs passing more... things which we say we don't want to do.
[speaker001:] Will the honourable member give way?
[Wilson:] Yes.
[speaker001:] in favour er in his pursuit of er deregulation in scrapping all regulations er er about fraud, attempts to stop fraud, controls on fraud and is like this, is deregulation going to be a fraudsters fun day?
[Wilson:] where is the problem. Every regulation that this house pass is always a good reason for it. You'll find whether it be anything with safety, hygiene... or security and fraud, there will always be quite rightly a pressure group or an interest group that will push for that rule or regulation. So I'm not a for a moment suggesting that some rules and regulations aren't needed and I think that er the trouble is that every rule and regulation that is passed in this house, there's always an excuse for it and there's usually a very good reason for it, but that is the problem that the government faces and it's quite fairly er a problem the treasury face when they introduce these statutory instruments because er no one can disagree that fraud must be stamped out, all I'm actually saying is that unfortunately upstairs we have a deregulation bill... going ahead at all pace with hundreds of clauses and hundreds of new rules... to try and red hundreds of new clauses to reduce the number of rules and here we are downstairs on the floor we have... passing for very good reason perhaps, more rules and regulations and there are four more tonight... and I believe that every government department Madam... deputy speaker, has a minister... specially appointed to keep an eye on deregulation and I just wondered although er my honourable friend on the front bench mentioned that er the even the D T I minister responsible for deregulation has looked at these, I wonder if there is a minister in the treasury, they've actually put a minister in the treasury responsible for deregulation or is the ministry actually above deregulation because I think... that er I got the impression that the... that every ministry would have a deregulation minister and I think it would be rather useful to know who the deregulation minister is in the treasury. I I I I know er it's been looked at by the D T I but has it been looked at by the treasury itself? You see Madam Deputy Speaker, deregulation... unless we're very careful, could just become another layer of bureaucracy with a whole new sub culture of civil servants being consulted as to whether something should be deregulated or not. Gloriously obliv oblivious of what's going on next door, it could be a huge substructure, deregulation the new in thing. There'll be a new quango, there'll be a new S F R A, there'll be a government ministers er er and a lot of ci civil servants, we already have the deregulation unit. My concern Madam Deputy Speaker is whether we're all being hoodwinked into believing that deregulation bill is opening a new chapter in our legislative history when in fact it's no more than perhaps a weasel word describing one thing but er er another thing is happening. I'm sure the minister... does have a very good reason as to why these four statutory instruments are needed and I'm sure both sides of the house recognise that they're needed. But I've been on an immense number of statutory instruments upstairs... er and everybody says they're greatly needed, they usually say they're greatly needed because they want to go out in three or four minutes and ten thirty comes and ten thirty five they're out. Er, I mean, deregulation... a bill er is not perhaps gonna affect the numbers of statutory instruments going through the house and I think that er the city would continue without the statutory instrument, er I think the country would continue, it would go on if we'd hadn't passed these regulations and in essence are these four new statutory instruments really going to... help run the country more effectively... er are we imposing duties on auditors... er and regulators er with the securities er er tied up with the investment board, another quango, er do we need all this? And then of course the insurance regulations have a compliance cost assessment. Have the other statutory instruments have a compliance cost assessment? And the most interesting thing is that er the consultees found it difficult... to assess the extent of any additional cost arising from deregulation so... you had a regulation... you had a compliance cost assessment... and you had employed people, consulted as to whether in fact that statutory instrument was gonna cost any more. I wonder how much that cost. So I do think it's an industry which is very dangerous now and which could well get out of hand. I think Madam Speaker we seem to live in... gobbledygook land. We seem to be able to argue vigorously and passionately about anything... and equally passionately on reflection that we didn't really need the rule and regulation in the first place. As a nation we are now obsessed to the point of paralysis... with rules and regulations. It's surprising one can move without some rule impeding on one's freedom, so concerned is the state on on the issues of welfare, hygiene, security and safety matters.
[Mead:] Order... er the honourable gentleman seems to have forgotten my previous warning, we're not discussing all manner of rules and regulations, we have four statutory instruments and he must address himself to those.
[Wilson:] I do hear what you say but these four regulations... are in the framework of the whole government policy towards rules and regulations. One can't actually separate them, although you will try to, from all the other rules and regulations we are passing all over the place. What I am trying to do is to, is to question... the wisdom of introducing more rules and regulations and every time I try and raise this issue, whether it be in standing committee or on the floor of the house, quite understandably the chairman or the... speaker, deputy speaker in your case, raises the point... that in fact I'm going outside the rules and regulations and the result is... you can never challenge the whole principle because every time one tries to challenge it one gets up and that's the disease I'm afraid we've now er facing in this country. But Madam Deputy Speaker I will appear.
[Mead:] May I remind the honourable member that there is no reason why he should not tear to pieces these four statutory instruments if that's what he wishes, but that is what he must do... not deal with all the others.
[speaker001:] [LAUGHTER]
[Wilson:] I am grateful for that direction. In fact in my own way, though I'm not as clear as some honourable members, I was actually doing that erm but er er I was pointing out that these were better than most although all of them could we could have perhaps done without. Madam Deputy Speaker I was gonna give a very illustrative example... of what I'm talking about but perhaps I will allow the house to have that example on another occasion because I actually would prefer not to be er er er prevented from giving you the most vivid story of what I'm talking about. But clearly this isn't the right place er er... but I'm never sh.
[speaker001:] [LAUGHTER]
[Wilson:] I'm never sure Madam actually when is the right place is but it's certainly not now, erm Madam Deputy Speaker. I'm just wondering... er the statutory instruments we're passing tonight... er and I did raise this point to the minister about the drain on the private sector every time a rule and regulation is passed. I think it was reassuring to learn that er these er er these rules and regulations will not impact on private enterprise. Because it would be bad news for the country if we are witnessing another fight between the private sector and the state and I hope that we're not going to see in the whole rules and regulation industry, versus er the public... a sort of repeat of the Moriarty, Sherlock Holmes final fight er with never knowing who in fact er wins as the battle of o of continues. Madam Deputy Speaker I only wanted to make a short intervention er er on this point and I think I will return to it from time to time because it is a perennial, annual problem of every time the minister introduces a a rule and regulation we can understand it's extremely useful and how can one... say that er regulations about fraud are not useful, it's just the culture of our country has been besieged by these rules and regulations and I'm surprised that anybody can actually make any profit or do any business simply because of the weight of officialdom and the weight of rules and regulations which prevents them from getting above er the the surface. I I think that that's really the message which I'm quite sure er the the economic secretary has got er and I do apologise if I have laboured the point but I will be doing so until we can have a situation where we don't go on passing more rules and regulations but in fact all the legislation coming to the house is purely repealing legislation so we don't actually need any fresh legislation, we just repeal what in fact er we have introduced er because it is... it is er not helpful to the prosperity of this country.
[Mead:] Mr Austin Mitchell.
[Banks:] won't attempt to follow the honourable rerun er of his speech last week on deregulation bill. Except to note that now that the right honourable member for Chesterfield is publishing his former speeches as a video, it is rather a cheap operation to come and repeat them in the chamber er rather than putting them out er for public consumption there are places... where he could repeat the kind of speeches just given, unfortunately the government is closing most of them down at the moment and putting the cut the inhabitants out in the community er but it had no relevance to the er the subject we're dealing with today. Talking of reruns Madam er deputy speaker, er I almost feel I'm involved in a series of reruns with the er with the minister himself because er in a series of bills er committees in the eighties, standing committees... on the building societies bill, on the banking bill, on the financial services... er bill, as they all were, er he was speaking at that time er in favour of more effective regulation, backing the votes of this side... er for kind, the kind of policies it's introducing today. They were speaking in favour of it, now here he comes along er and er we we're I I find myself, regrettable I think because er er his er [LAUGHTER] a minister very well informed in these areas with er... who made in those committees a very powerful and effective contribution, [LAUGHTER] now we find ourselves [] on the er opposite side but I have to say now that we are on opposite side that what is introducing today er is really er too little er and far too er too too late. It's inadequate... er and it [LAUGHTER] it creates the impression [] in my mind, the very possibility that the government is actually is in favour of fraud because they're doing to little, far too little er and these regulations are far too little er to actually stop it down. Is it that the fraudsters are the only section of society that is going to vote for the Conservatives er at the at the at the next election because certainly er the reputation of the city of London er is going down all the time because of the squalid frauds that are being perpetrated there a and the government is lagging behind er in catching up and in providing an effective regulatory framework er that's that's going to deal er with them. This Madam Deputy Speaker, is no way to regulate for for a major issue. We've had no inquiry. These er er orders today aren't based on a thorough inquiry er into how audits on the the financial institutions are conducted, what's wrong with them, what goes wrong, not even a thorough er inquiry into what happened in the B C C I case, er we can't legislate, we can't legi or [LAUGHTER] regulate I put it [] without er er er a thorough inquiry and yet here we have er orders brought in er without inquiry. The the the they're not fitted in to any framework of stronger structures to back er the proposals put before us er er t today. We have a confused and overlapping structure er er, the honourable member might be interested in just how confused it is er and how it can be simplified by er going along with the proposals we're putting forward on this side of the er er the house because there's so many overlapping authorities it's just not clear who's actually responsible for enforcement and compliance. I mean if you take the regulatory we did it with today... that it consists of the Bank of England, the Securities and Investment Board, twenty four organisations of the S I B S, siblings you might call them er under it, the Building Societies Commission, the police, the serious fraud office, the Department of Trade and Industry, the London Stock Exchange, the Inland Revenue, five recognised supervisory bodies, all those dealing with er auditors and the others, it's chaos er and nobody knows who is responsible for what and in that chaos you get overlapping decisions er er and conflicting regulations, everybody tries to ensure themselves by regulating too much er er and it's a situation which drastically needs simplification, but we don't have any proposals... for strengthening and making that work er er frame work more effective, to back up er this er simple proposal today. All we have is the government time from time to time tweaking up the regulations as its er as its er it it it its doing here. You cannot rely on them deputy speaker if the government is doing er in these orders er on auditors to be er the effective and certainly not the only er police force of financial institutions. They can't relied on as a guarantee of public interest and propriety as a counter against fraud because their powers, their role, their functions, the way they carry on their business is inadequate to deal with that particular area.
[speaker001:] honourable member... what he's really saying as I understand it Madam Speaker is there's too much bureaucracy and the bureaucracy is going to prevent anybody acting because they're all overlapping, they're all paid out of presumably the public purse as well, there's a there's a enormous number of public off officials that is preventing... er a a clear direct,exes executive arm. Is that what he's saying?
[Banks:] Yes there are far too many overlapping institutions that self regulation hasn't worked, it ha has no... adequate on the annualt we welcomed 21 effective against fraud by replacing it by an independent... statutory statutory based regulator which has the power to strike and strike hard rather than everything er by the the the plethora of regulations we now deal with in the financial... er in the financial sector and in the respect of what's proposed today, you can't rely er on auditors to be the effective police force that they've been required to be by these er regulations. We don't even have an effective definition of who the auditors er are are are responsible to. What the government is proposing... er is the bare minimum and because it's so minimal you have to ask are they really serious er about dealing with the the kind of fraud that er lead er to this attempt to close the er stable door er after the er the the horse has has bolted. I I turn that that the point I made about the... the the lack of inquiry because er [clears throat] er in effect we know very little about what went wrong... with B C C I and particularly what went wrong with the audit er of B C C I because we haven't had an inquiry er into this country and to what went wrong in that instance. That instance is the justification... er for these orders [LAUGHTER] but we don't know [] er exactly what happened, the government hasn't seen fit to institute an inquiry which will tell us. We need the information... the last Labour government er when they were banking er banking crisis in the early er in the early seventies, instituted a series of inquiries, there was an inquiry into London and counties, there was one into London and capital, a series of inquiries which were published, the information was there, we knew what had gone wrong and we knew therefore how to deal with it. In this instance there's nothing... er and... er justice Bingham er did say specifically that he wasn't pursuing er the matter of er audit, it wasn't his responsibility er the government should certainly have repaired that omission by pursuing it themselves, by inquiring... er into er what went wrong. Ministers say well the serious fraud office is looking into it but that hasn't precluded inquiries er in other cases like London United Investments and Maxwell er so there should be an inquiry er into the audit of B C C I so we know exactly what went wrong. [LAUGHTER] I indeed er in the er [] companies act in nineteen eighty nine the minister himself er argued... that for any system to be effective there had to be a distance between regulators and regulations but the only people who have done any inquiry into B C C I which is the Institute er it itself is the mafia regulating the mafia [LAUGHTER] [] auditors trying to regulate er the the auditors. There isn't that degree of distance which the minister himself asked for er in the committee er on which we both sat er in er nineteen eighty nine. The only inquiry has been the American one and that was handicapped because the British er er partners of er Price Waterhouse didn't pass on to either that inquiry or to the American partners of Price Waterhouse, the information they had about what had gone wrong with B C C I so that inquiry itself... was inadequate but it is the only one and what that found er was appalling... er indeed they were pretty critical about British audit regulation, about the auditors performance. It says B C C I's accountants failed to protect B C C I's innocent depositors er and creditors from the consequences of poor practice.