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Lord Graham of Edmonton: My Lords, I rise in the absence of my noble friend Lord Chandos, who is due to be here. I shall continue until he arrives, but I shall not take more than four to five minutes because I am conscious of a major social event that hangs upon the speedy conclusion of today's business in this Chamber.
I listened carefully to the Minister's remarks. This is one of those areas in which one needs to be a practitioner in the business of managing money and securities in order to understand the intricacies. The noble Lord, Lord Stewartby, is well conscious of matters of state, not least because of his present declared involvement as a member of the Securities and Investments Board, and also as a result of his eminent position in the other place and in the Government over many years. However, even he is able to raise one or two points of unease and uncertainty.
On this side of the House we always subscribe to the strengthening of what we call consumer protection, consumers in this context being not merely little men or little women but big men and big women--in other words, the industry. We are very conscious that anything that can be done to strengthen the integrity and reputation for probity of London as a financial centre should be done. I note that the Minister says that London is one of the top three in the world. I am surprised that we are not first. Certainly, we in this country look upon the City of London as a major, if not the major, financial centre.
It all sounds necessary. It all sounds as though it has been well thought out. However, the noble Lord, Lord Stewartby, referred to the Securities and Investments Board. I recall the Financial Services Bill and the creation of, among other bodies, the SIB. Frankly, there was a time when questions were raised as to whether Parliament had got matters right. The noble Lord is not the only Member of this House to have served on securities and investments boards.
Will the Minister assist the House by saying more about the steps that he and his colleagues believe they have in place, not necessarily to police the industry and not necessarily to interfere or intervene? I am quite certain that the best advice available has been given. But at the end of the day I believe the Minister will be frank and acknowledge that he, like myself, while we try to do our duty, is nowhere near competent to deal with people who may very well be sharp. One hears about fraud; one hears about mistakes; one hears about major catastrophes. I do not want the Minister to detail instances. But clearly what we are involved in here is putting in place the best possible improvement in technique and technology. That can be good, not only for this industry and this business, but for the reputation of this country.
I hope that one of these days when we think of CREST, we do not think that we are CREST-fallen! To be crestfallen in this respect may very well be dicing, not just with the money of "big people". I am well aware that most of the funds that are managed, invested and re-invested by big operators come ultimately or originally from the money put into pension funds and other small savings.
I am satisfied. The Minister sounded very confident that the Government had got it right. When we talk about the balance of costs between the big and the small investor, what the general public want is reassurance that to the very best of its ability Parliament is protecting their interests. We are not practitioners, but we have
Lord Chesham: My Lords, I thank my noble friend and the noble Lord, Lord Graham, for generally approving the legislation. I shall try to deal with questions raised. I stated that the role of the SIB is to approve CREST under the regulations. The Government's public policy objectives remain the Government's responsibility. The Government are satisfied that the objectives for investor protection, competition, company-shareholder relationships and London's standing as a financial centre are met.
Turning to the role of the retail investor, discussions are still taking place to ensure that in particular small registrars and stockbrokers are not unfairly disadvantaged by network costs. Thus, retail shareholders who use small registrars and stockbrokers will not be unfairly disadvantaged.
In response to the question from the noble Lord, Lord Graham, on transaction charges, I understand that the network now plans that the differential between large and small users should be no greater than 2:1. In talking about costs for small investors, we are talking about pence rather than pounds.
The noble Lord, Lord Graham, also asked for some comfort with regard to the protection of shareholders. The Stock Exchange is responsible for ensuring that dealings on its markets are conducted in an orderly manner, affording proper protection to investors. That has not changed. The technology that is being used for CREST is the latest technology so far available. Considerable discussion has taken place with regard to experience overseas where it has been operating for some considerable period. I am delighted to say that Australia is one of the countries involved. I am confident that the Exchange will continue to take that responsibility very seriously. The Department of Trade and Industry has always had the responsibility for investigating and, if appropriate, prosecuting cases of alleged insider dealing. I hope that I have answered the noble Lord's question.
Lord Graham of Edmonton: My Lords, before the noble Lord sits down, let me say that he has reassured me that, to the best of their ability, the Government are satisfied that they have consulted as widely as they need. The noble Lord, Lord Stewartby, from the standpoint
I am grateful to the Minister for his patience. I wish to raise just one final point. I do not want him to reveal the areas of worry--perhaps I may think of worry with a capital W--but to satisfy me that the Government are not so complacent as to believe that they have a perfect system. There is no such thing as a perfect system where money and people are concerned.
Lord Chesham: My Lords, I thank the noble Lord. I shall do my best to amplify my remarks. The point made by my noble friend was not about the security angle; it was much more about whether the public policy objectives had been totally met. I believe that I answered him when I said that discussions are still taking place regarding small shareholders--not regarding the security of small shareholders. The question was about that rather than about security.
No system will ever be perfect. But I do not believe that this system will stand still. This is the start of a system which will greatly assist matters. Enormous concern about the possibility of computer hacking and so on has been taken into account. I believe that those questions have now been answered. It will be an ongoing process. It is not standing still. As the noble Lord knows, with computers one has to keep going. One cannot just stop at any point and say, "This is fine." One has to keep going. The process will be continued.
The noble Lord said: My Lords, the Company and Business Names Regulations 1981 set out a list of words and expressions which a company or unincorporated business may use in its name only with the approval of the Secretary of State. These new regulations make some minor amendments to that list.
The main amendment is the addition of "Chamber of Commerce, Training and Enterprise". "Chamber of Commerce" is already listed, but mergers between chambers of commerce and training and enterprise councils (TECs) mean that we must extend the protection.
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